HEADNOTE
[This headnote is not to be read as part of the judgment]
The appellant was the sole director of Project.Built Pty Ltd ("the builder"), a company contracted by the respondent in 2015 to construct an apartment building at Kitchener Parade, Bankstown. In the course of the work, the builder made claims for progress payments, for amounts which included payments made to subcontractors. The appellant swore statutory declarations in support of the claims averring that all subcontractors had been paid. Payments were made by the respondent to the builder in reliance upon the statutory declarations. The subcontractors later claimed payment from the respondent for unpaid invoices rendered to the builder. The respondent met those claims.
In 2019 the respondent commenced proceedings for deceit and misleading or deceptive conduct, claiming that statements in certain statutory declarations by the appellant were untrue and that the builder had not paid the subcontractors. The loss suffered by the respondent was calculated by reference to the later payments it had made directly to the subcontractors.
On 24 July 2020 the trial judge entered judgment in favour of the respondent in the sum of $388,318.31, which included $50,000 for exemplary damages. On the appeal, the appellant challenged the findings made with respect to the admissibility of the business records of the subcontractors and submitted that no loss arose unless the cost of the development exceeded the price under the fixed price contract with the builder, which had been terminated.
The principal issues before the Court were:
(1) whether the records of the subcontractors were admissible to establish that the subcontractors had not been paid by the builder; and
(2) whether the respondent had suffered financial loss where the contract was for a fixed price and there was no evidence that the fixed price had been exceeded.
Consideration was also given to whether:
(3) the records should have been excluded in the judge's discretion as prejudicial; and
(4) the records had insufficient weight to demonstrate the elements of deceit.
Held, dismissing the appeal:
Issue (1) - admissibility of subcontractors' records
per Basten JA (Gleeson JA agreeing):
(1) Although representations contained in the subcontractors' records were hearsay because made out of court by persons not called as witnesses, they were admissible as business records: [20]-[23]; [31].
Evidence Act 1995 (NSW), s 69 applied.
(2) Where the authenticity of a document was in issue this may be determined on the basis of inferences drawn from its form, contents or source. Although the documents relied upon were not obtained in response to a subpoena, their authenticity was not in doubt. The acquisition of documents by means of subpoena in other cases did not distinguish these facts from others: [25]-[26].
Evidence Act 1995 (NSW), s 183 applied.
Capital Securities XV Pty Ltd (formerly known as Prime Capital Securities Pty Ltd) v Calleja [2018] NSWCA 26; Gregg v R [2020] NSWCCA 245 followed.
per Brereton JA:
(3) Whether a previous representation is admissible under s 69 depends on whether (i) it is contained in a document which forms part of the records belonging to or kept by a person, body or organisation in the course of, or for the purposes of, a business, or at any time was or formed part of such a record; (ii) it was made or recorded in that document in the course of, or for the purposes of, that business; and (iii) it was made by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact, or on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact: [58].
(4) For the purposes of determining whether the conditions under s 69 of the Evidence Act are satisfied, the Court may examine the documents and draw reasonable inferences from them: [59].
(5) Here (i) invoices issued by subcontractors to the builder were not admissible as business records of the respondent, but were admissible as business records of the subcontractor; (ii) emails from the subcontractors to the respondent or its agent were admissible as business records of the subcontractor and as business records of the respondent; (iii) bank statements and internet payment summaries were admissible as business records of the respondent: [60]; [62]-[64]; [70]-[74]; [76]-[77].
Evidence Act 1995 (NSW) ss 69, 183.
Australian Competition and Consumer Commission v Air New Zealand Ltd (No 1) (2012) 207 FCR 448; [2012] FCA 1355; Asden Developments Pty Ltd v Dinoris (No 2) (2015) 235 FCR 382; [2015] FCA 1025; Jadwan Pty Ltd v Rae & Partners (No 3) [2017] FCA 1045; Tasmania v Lin (2011) 225 A Crim R 1; Tubby Trout Pty Ltd v Sailbay Pty Ltd (1992) 42 FCR 595, applied.
Issue (2) - assessment of loss
per Basten JA (Gleeson JA agreeing), Brereton JA:
(6) The relevant contract was between the respondent and the builder; the proceedings were between the respondent and the appellant. The claim against the appellant was in tort and under the Australian Consumer Law, it was not in contract. The contract did not control the loss suffered by the respondent for the false statements of the appellant: [32]-[34], [89]-[90].
Issue (3) - failure to exclude on basis of prejudice
per Brereton JA:
(7) Statements of fact in a business record are admissible against anyone, not only against the party in whose records they appear: [79]-[80]. Ample notice having been given of intention to tender the business records, where the appellant did not make any request under Evidence Act, s 167, to enable the provenance or accuracy of the documents to be tested, there was no reason to exclude them in the judge's discretion under Evidence Act, s 135: [84].
Issue (4) - weight to establish deceit
per Brereton JA:
(8) Weight is essentially a matter for the trial judge. There was no reason to doubt the authenticity or accuracy of the documents, and the appellant adduced no evidence to contradict them. The trial judge was justified in treating the documents as reliable: [86]-[87].