7 The jury also had available to them a photocopy of a typewritten letter dated 20 March 1998 written by a solicitor, Mr Stewart Smith to Mr Short which became ex A. Mr Smith gave evidence that he was sitting on the opposite side of Mr Short's desk when Mr Short took a telephone call. He heard Mr Short's side of the conversation but did not see him make any note although there was an office computer between them. After the call had finished he and Mr Short discussed it. Ex A relevantly stated:
"I have been thinking about the various conversations we have had over the past few weeks concerning your association with Alex Preston.
It is very disturbing to me to hear from you that some insurance investigator has telephoned discussing with you suggestions that Alex was behind the incident which destroyed his printing business.
I am very concerned about the suggestions that his claim for compensation is fraudulent.
During our many discussions I have gained the impression from little things you have said during the past that in some way you have financed Alex and probably more likely his companies in his endeavours to get his photographing procedures into a marketable achievement.
Consequently I feel the best advice in your interests is to cease having any association with Alex while the highly suggestive accusations are flowing around that Alex is involved in fraud or any incident leading to fraud."
8 There is no reference in the letter to Mr Smith being present during the conversation.
9 These two documents were the only written evidence about the conversation before the jury.
10 The evidence in support of the application includes an affidavit by the appellant dated 15 December 2006 which deposed to a conversation he had with Mr Short on 6 February 2006 later on the day the jury returned their verdict. The evidence also includes an affidavit by Mr Short of 29 May 2006 dealing with the same conversation.
11 On 6 February 2006 the two men met in a coffee shop in the building where Mr Short has his office. The appellant had with him a copy of a report dated 12 December 1997 prepared by Mr Maher addressed to McCabes the solicitors acting for the underwriters on the fire claim (the Maher report). At Mr Short's request the appellant handed this document to him. As a result of the conversation that followed the appellant formed the belief that Mr Maher had sent Mr Short a copy of the Maher report with other documents (the bundle of documents) and that Mr Short had sent them or copies to the liquidator or the receiver of Australian Picasso Collections Pty Limited (the company) or possibly to both. This had been one of the appellant's companies, and was the principal claimant in the fire claim.
12 Mr Short said in his affidavit that after examining the document the appellant handed to him on 6 February 2006 he identified the words "sent to liquidator" on it as his handwriting. He asked the appellant where he had got it. The appellant said he thought he had found it in one of the company's files which had been returned by the receiver or liquidator. Mr Short said that a search might reveal the other documents he had received from Mr Maher. "A few days later" the appellant showed him copies of the bundle of documents and Mr Short's statutory declaration dated 15 April 1998 which Mr Short said he had sent to the liquidator (the statutory declaration).
13 Mr Short annexed copies of the bundle of documents (the "Maher Bundle") as follows:
(a) Mr Maher's business card;
(b) Mr Maher's covering letter for the bundle,
(c) A letter from McCabes to the solicitors acting for the company in connection with its fire claim;
(d) The gambling records of the appellant from the Sydney Casino;
(e) The police report;
(f) The Maher report.
14 He also annexed a copy of the statutory declaration. He said in this that he received a phone call from Mr Maher "and had a conversation as recorded in my note" and later received the Maher bundle. He then referred a second time to "my note relating to the conversation Maher had with me".
15 In 1997 one of Mr Short's companies held a registered charge over the company. In December 1997 an order was made for the company to be wound up on the application of the National Australia Bank. In December 1998 Mr Short appointed a receiver and manager pursuant to the registered charge. He concluded his affidavit by saying that he forwarded "almost all my files in their original form relating to the business affairs of [the appellant] and his companies to the receiver and manager".
16 In his second affidavit of 15 October 2007 the appellant stated that in July or August 2007 he was asked by his solicitor Mr Coffey, a partner in the firm of Gells, to ask Mr Short to collect his files from the fire claim proceedings. The appellant spoke to Mr Short about this. In his second affidavit of 16 October 2007 Mr Short confirmed this conversation.
17 In September 2007 the appellant inspected a number of the company's files at the offices of Gells. He said that in the course of this inspection "I located copies of two documents which bore original handwritten notations, … of which I was provided with copies".
18 He identified these documents and annexed to his affidavit a photocopy of what purported to be a file note dated 3 March 1998 of the conversation (the longer note). The handwritten words "Rec'd 20/5/98 Handwritten notes by BS" appeared on the longer note. A copy with "original handwritten notations" was never produced. He also annexed a photocopy of a letter dated 6 May 1998 written by the liquidator to the solicitors acting for the insurers on the fire claim. The photocopy showed a handwritten note: "Re: BS's handwritten notes". Mr Coffey identified both notations as his handwriting. However he could not recall having seen them before the appellant showed them to him. The appellant said that he had not been aware of either document until he saw them in the file.
19 Mr Short said in his second affidavit that he wrote ex 1(D1) during the conversation and he wrote the longer note later that day and placed both in his file relating to the company. He sent a copy of the longer note to the liquidator on or about 15 April 1998 and that this was "the note" referred to in the statutory declaration. He sent the whole file to the receiver in late 1998, and had not seen the longer note since. He had not given it to anyone else in 1998. (T 192-193)
20 The evidence upon which the appellant relies to support an order for a new trial is the longer note, the Maher bundle, and the statutory declaration.
21 The common law principles which this court is bound to apply on an application for a new trial on the ground of fresh evidence are well settled. They are to be found in Orr v Holmes [1948] HCA 16, 76 CLR 632; Wollongong Corporation v Cowan [1955] HCA 16, 93 CLR 435, McDonald v McDonald [1965] HCA 45, 113 CLR 529 and Commonwealth Bank of Australia v Quade [1991] HCA 61, 178 CLR 134. In Cowan's case (above) Dixon CJ said at 444:
"… it is essential … that the verdict, regularly obtained, must not be disturbed without some insistent demand of justice. The discovery of fresh evidence in such circumstances could rarely, if ever, be a ground for a new trial unless certain well-known conditions are fulfilled. It must be reasonably clear that if the evidence had been available at the first trial and had been adduced, an opposite result would have been produced or … it must have been so highly likely as to make it unreasonable to suppose the contrary. Again, reasonable diligence must have been exercised to procure the evidence which the defeated party failed to adduce at the first trial."
22 In Quade's case (above) at 141-2 the court said in its joint judgment:
"… the reconciliation of the demands of justice and the policy that there be an end to litigation at least prima facie … dictate that the successful party should be deprived of the verdict in his favour only if the unsuccessful party persuades the appellate court that there was no lack of reasonable diligence on his part and that it is reasonably clear that the fresh evidence would have produced an opposite verdict. Such a stringent rule in that ordinary class of case is supported by considerations of both justice and public interest. Considerations of justice support it in that it would be unfair to the successful party if he were to be deprived of a verdict obtained after a trial on the merits and be subjected to the expense, inconvenience and uncertainty of a further trial merely because some relevant evidence had, without fault on his part, been unavailable to the unsuccessful party at the time of the trial. Considerations of public interest support it in that it is desirable in the public interest that there be finality in litigation in other than the truly exceptional case … The position is, however, different in a case such as the present where the unavailability of the evidence at the trial resulted from a significant failure by the successful party to comply with an order for the discovery of relevant documents in his possession or under his control."
23 The court has also received an affidavit by Mr Coffey, the solicitor who acted for the appellant on the s 7A trial, and an affidavit by Mr Mark Wells who purchased the business known as National Art Galleries from the appellant in 2003. The deponents other than Mr Wells were extensively cross-examined, and further documentary evidence was received. Counsel for the respondents have challenged the authenticity of the longer note and the credibility of the oral evidence of the appellant and Mr Short about it. They have also submitted that the note, the bundle of documents and the statutory declaration do not satisfy the demanding requirement that the fresh evidence must be virtually conclusive.
24 It is not necessary to decide the authenticity and credibility issues because in my judgment the appellant has failed to establish that he and his legal advisers used reasonable diligence before and at the trial to obtain the further evidence now relied on. This ground for refusing a new trial does not depend on the general merits of the appellant's case, the weight of the new evidence, or its probable effect on the trial if it had been produced.
25 The requirement for the exercise of reasonable diligence reflects the principle that there must be an end to litigation and recognises that the pursuit of perfect justice can come at too high a price if it prolongs litigation with its attendant cost, inconvenience, and uncertainty. It prevents parties who have gone to trial under-prepared being rewarded for their lack of diligence with a second chance before another jury. The trial of an action is not a dress rehearsal for a second trial, or for a rehearing in an appellate court with additional evidence: Coulton v Holcombe (1986) 162 CLR 1, 7.
26 The first point to note on the reasonable diligence issue is that the appellant adduced no evidence from Mr Coffey, his solicitor in the defamation proceedings, as to the investigations he undertook both before and during the trial to locate all documents relevant to the critical issue of the alleged slander. As will be apparent from the following discussion, the further evidence on which the appellant seeks to rely at the new trial was at relevant times, prior to, and during, the s 7A hearing, in his or his solicitor's possession, or readily obtainable from Mr Wells.
27 The only note Mr Short mentioned in his evidence in chief at the trial was ex 1(D1). However he said more than once during his cross-examination that he had made two sets of notes, one more detailed than the other, and that ex 1(D1) was the shorter of the two. His cross-examination commenced at the bottom of p 120 of the transcript and his first reference to a second note appears at the top of p 126. Further references to a second note appear on pages 127, and 146 on 31 January 2006, and on pages 185, 186, 187 and 191 of his evidence on 1 February.
28 The first affidavits from the appellant and Mr Short establish that on 6 February 2006 Mr Short was immediately able to identify his handwriting on the copy of the Maher report he was shown by the appellant. He could also identify the document as one he had received from Mr Maher as part of the Maher bundle.
29 As a result of this information the appellant spoke to Mr Wells. A few days later he received from Mr Wells 226 pages of documents which became ex MW1 to the latter's affidavit. The appellant showed Mr Short a number of these documents, and he identified copies of the Maher Bundle and the statutory declaration.
30 The appellant's evidence thus establishes that he had in his possession before the trial a copy of the Maher report bearing a note in the handwriting of Mr Short "sent to liquidator". When shown this document Mr Short was immediately able to suggest a line of inquiry which led to the discovery of copies of the Maher bundle, and the statutory declaration. They were found in a file which had been in the appellant's possession in 2003 and for an unknown time before that.
31 The original statement of claim was filed on 15 November 2001 (black 331). The s 7A trial began at the end of January 2006. Mr Short was the vital witness in the plaintiff's case, and would be giving evidence of the conversation nearly 8 years after the event. It was therefore essential for the matrix of the relevant documents to be assembled to enable Mr Short to refresh his recollection of the conversation and the surrounding events.
32 The ease and speed with which the appellant was able to obtain possession of the bundle of documents and the statutory declaration after the trial, establishes, in my judgment, that reasonable diligence was not exercised to obtain them before the trial.
33 The appellant also relies on the documents he discovered in Mr Coffey's file in mid-September 2007. The copy of the letter from the liquidator to the solicitors for the underwriters dated 6 May 1998 is of marginal relevance, if that, and may be disregarded. The critical document is the longer note.