Federal Court of Australia|1991-03-12|Before: Gummow J

Re DF Lyons Pty Limited; David Francis Lyons and Barbara Ann Lyons v Commonwealth Bank of Australia [1991] FCA 74; (1991) 132 Atpr 41-102/100 ALR 468; 28 FCR 597 (12 March 1991)

Re: D.F. LYONS PTY LIMITED; DAVID FRANCIS LYONS and BARBARA ANN LYONS

Evidence - admissibility - application on voir dire - similar fact evidence - conversations between customer and bank manager alleged to constitute misleading or deceptive conduct - foreign currency loans - application to lead evidence of conversations between bank manager and other customers - fact is similar to another because the two possess a common characteristic but that common characteristic is insufficient to render the fact relevant in the legal sense as proof of the other - evidence only admissible where common characteristic is a significant one for inquiry at hand - whether evidence otherwise admissible in civil case nevertheless may be excluded if probative value small compared with complexity of additional issues which would arise if it were admitted.

State Bank of New South Wales v Commonwealth Savings Bank of Australia [1986] HCA 62; (1896) 161 CLR 639

Thompson v The Queen [1989] HCA 30; (1989) 169 CLR 1

Director of Public Prosecutions v Boardman (1975) AC 421

Harriman v The Queen [1989] HCA 50; (1989) 167 CLR 590

Mood Music Publishing Co. Ltd v De Wolfe Ltd (1976) Ch 119

Makin v A-G for N.S.W. (1894) AC 65

Sheldon v Sun Alliance Limited (1988) 50 SASR 236; (1989) 53 SASR 97

Manenti v Melbourne and Metropolitan Tramways Board [1954] VicLawRp 19; (1954) VLR 115

The King v Westfield Freezing Company, Limited (1951) NZLR 456

Boyce v Cafred Pty Ltd [1984] FCA 318; (1984) 4 FCR 367

Turner v Jenolan Investments Pty Ltd (1985) 7 ATPR 40-571

Peet and Co. Ltd v Rocci (1985) WAR 164

Aroutsidis v Illawarra Nominees Pty Ltd (1990) 21 FCR 500

Fisher v Commonwealth Bank of Australia (Federal Court of Australia, 11/4/1990, unrep.)

Counsel and solicitors for the R.C. McDougall QC and

first, second and third applicants M.J. Windsor Esq. instructed

(first, second and third by Messrs Davies and Spicer

cross-respondents) : of Taree N.S.W.

Counsel and solicitors for the J.R. Sackar QC and J.E.

respondent (cross-claimant) Marshall Esq. instructed by

L.E. Taylor Esq.

What follows are the reasons for the ruling given on the eighth day of the trial to reject an application by the applicants to lead certain evidence in chief. The material was conveniently described by counsel as "similar fact" evidence. To appreciate the significance of the ruling, it is necessary to have an appreciation of the state of the litigation as it stood at that stage of the trial. It also is to be borne in mind that, at least in the criminal field, the considerable number of recent High Court authorities dealing with "similar facts" is indicative of the development and refinement of a new framework of principle; see Mirfield, "'Similar Facts' In the High Court of Australia", (1990) 106 LQR 199.

2. The respondent ("the Bank") is a body corporate preserved and continued in existence by force of s. 27 of the Commonwealth Banks Act 1959 ("the Banks Act"). Section 28 of the Banks Act states that the Bank shall carry on general banking business. The banking business carried on by the Bank includes the making of advances in freely convertible and readily available major foreign currencies, such as the United States dollar, the Japanese Yen, the Swiss Franc, the Pound Sterling and the Deutschemark.

3. The Bank is an instrument by which, together with the Commonwealth Savings Bank of Australia and the Commonwealth Development Bank of Australia, the Commonwealth participates in the business of banking: State Bank of New South Wales v Commonwealth Savings Bank of Australia [1986] HCA 62; (1986) 161 CLR 639 at 644-645. That decision also affirms that when in a matter such as the present, the Bank is sued, and brings a cross-claim, the whole of the matter is within federal jurisdiction. This follows from s. 75 (iii) of the Constitution. Further, s. 2A of the Trade Practices Act 1974 ("the TP Act") provides, with exceptions not here material, that the TP Act binds the Crown in right of the Commonwealth insofar as it carries on a business, either directly or by an authority of the Commonwealth. The expression "authority of the Commonwealth" is defined in sub-s. 4 (1) so as to include a body corporate established for a purpose of the Commonwealth by or under a law of the Commonwealth.

4. The second applicant ("Mr Lyons") and the third applicant ("Mrs Lyons") are husband and wife. They were married in 1979 and there are two children of the marriage. Mr Lyons was born in 1934 and Mrs Lyons in 1945. Mr Lyons has been a customer of the Bank since 1964, and Mrs Lyons since 1979. They have lived near Taree in the north of New South Wales since 1978. The first applicant ("the Lyons Company") is incorporated in the State of New South Wales and is a family company controlled by Mr and Mrs Lyons. The Bank holds four registered mortgages over parcels of land under the provisions of the Real Property Act 1900 (N.S.W.), whereby the Lyons Company as mortgagor covenanted to pay to the Bank all moneys owing or payable to the Bank on any account. The mortgages are dated 12 October 1981 (registered No. W592317), two on 1 August 1984 (registered Nos. W598377 and W598378) and 12 May 1987 (registered No. W901862). In addition, by a third party mortgage dated 6 June 1985 (registered No. W592316) Mr and Mrs Lyons as mortgagors covenanted to pay to the Bank all moneys owing or payable to it by the Lyons Company on any account.

5. On 7 August 1984, the Lyons Company and the Bank entered into a written agreement ("the first foreign currency loan agreement") pursuant to the terms of which the Bank advanced on 15 August 1984 to the Lyons Company the amount of U.S.$419,500. Then, on 15 November 1984, this advance was rolled over pursuant to para. 6 (c) of the first foreign currency loan agreement into CHF1,013,302. The advance was rolled over again on 15 March 1985, but remained in Swiss Francs.

6. On 6 June 1985, the Lyons Company entered into a further written agreement with the Bank ("the second foreign currency loan agreement") pursuant to the terms of which the Bank, on 17 June 1985, advanced to the Lyons Company CHF188,144. On 15 November 1985, 15 May 1986 and 17 November 1986, the two foreign currency loan agreements were rolled over together. On the last of these three rollovers, the total for both agreements was CHF1,201,446.25.

7. In addition, commencing 6 February 1987 and ending on 14 May 1987, the Lyons Company entered into six forward exchange contracts with the Bank with delivery date 18 May 1987. Swiss currency and United States currency were purchased as against each other on the various contracts, and on 18 May 1987, the Lyons Company had a settlement gain in the sum of CHF62,220.56. The foreign currency loan agreements were both rolled over on 18 May 1987, and the settlement gain of CHF62,220.56 was applied in reduction of the advance which when so reduced totalled CHF1,139,225.69.

8. Between 27 May 1987 and 13 November 1987, the Lyons Company entered into a further ten forward exchange contracts with the Bank with a delivery date of 18 November 1987, the next rollover date for the foreign currency loan agreements. At that rollover, a settlement gain of CHF12,273.76 was applied by the Lyons Company in reduction of its indebtedness under the foreign currency loan agreements thereby reducing it to CHF1,126,951.93. At the next rollover on 18 May 1988, the advances pursuant to the foreign currency loan agreements were rolled over so as to produce an indebtedness in United States dollars of U.S.$804,104.12.

9. The Bank complains that the Lyons Company has failed from 18 May 1988 to pay interest on its indebtedness under the foreign currency loan agreements and that it has failed to repay the amount of all outstanding advances on the due date of 31 July 1989. The Bank claims that the amount owing by the Lyons Company to the Bank as at 29 October 1990, the day before the commencement of the trial, was U.S.$1,050,911.66.

10. By its cross-claim in these proceedings, the Bank seeks to recover this amount together with interest at the daily rate of U.S.$318.94, from 29 October 1990 until judgment. The Bank also seeks recovery of Aust.$283,643.14 together with interest at the daily rate of Aust.$147.27 from 29 October 1990 until judgment. This alleged indebtedness is claimed to arise by reason of an undischarged settlement obligation as follows. In December 1987, the Lyons Company entered into five forward exchange contracts with the Bank with delivery date of 18 May 1988, and on that date there was settlement obligation in favour of the Bank of Aust.$131,621.76. That obligation initially was met by a bill of exchange and subsequently converted into a fully drawn loan, the indebtedness under which as at 29 October 1990 is pleaded as Aust.$283,643.14. The Bank claims these sums in its cross-claim not only against the Lyons Company but also against Mr and Mrs Lyons, they being guarantors pursuant to the third party mortgage dated 6 June 1985.

11. By their Statement of Claim (as amended), the Lyons Company and Mr and Mrs Lyons seek relief which would have, inter alia, the effect of eliminating or substantially reducing their liabilities to the Bank. To that end, they rely upon various causes of action against the Bank. For present purposes, it is necessary to refer only to some of them.

12. The applicants allege that certain representations were made on 16 March 1984 and subsequently before the entry of the Lyons Company into the first foreign currency loan agreement on 7 August 1984. The representations are said to have been made principally in oral form, in conversations in the Taree Branch of the Bank between Mr Lyons and Mr T.N. Green. Mr Green was loans officer at the Taree Branch of the Bank between December 1978 and May 1985. The applicants further rely upon representations allegedly made primarily in oral form in about early April 1985, again by Mr Green to Mr Lyons at a meeting between them at the Taree Branch. The Lyons Company pleads that it acted on the faith of these representations by, inter alia, entering into the two loan agreements. It is then alleged that the making of the representations constituted conduct by which the Bank contravened s. 52 of the TP Act, by reason of which the Lyons Company suffered the loss and damage, in particular the obligations flowing from the loan agreements and supporting securities.

13. Further, it is alleged that in making the representations upon the occasions I have mentioned, the Bank was giving advice and information to the Lyons Company and was doing so negligently, inter alia, by failing to take proper steps to ascertain the accuracy of that advice and information, and failing to take sufficient steps to ensure an understanding (i) that a foreign currency loan required "constant monitoring and management by skilled personnel", (ii) that the risk of loss to a borrower under a foreign currency loan was "open ended or limitless", (iii) that the Bank perceived it was at all times prudent to hedge any foreign currency exposure, and (iv) that the Bank would or might make profits at the expense of the customer by entering into foreign currency transactions on behalf of the Lyons Company.

14. Thirdly, it is alleged that the Bank owed a duty of care to the three applicants to advise them in certain respects from time to time after the making of the representations in question. The duty of care is pleaded as owing to the three applicants, but the particulars are confined to a failure to advise the Lyons Company in relation to the desirability of hedging its loans, and of the various forms of hedging available to the Lyons Company in the circumstances.

15. Fourthly, in para. 43 of the Statement of Claim, the applicants characterise the two sets of representations made before entry into the first foreign currency loan agreement, as warranties by the Bank to all three applicants in consideration of the first applicant entering into that agreement; it is then alleged that the warranties have been broken. Paragraph 45 makes an allegation of the same nature but in regard to the representations before the entry into the second foreign currency loan agreement, and the collateral contract which is pleaded is limited to a contract between the Bank and the first applicant, rather than the Bank and all three applicants.

16. These proceedings were instituted by application filed 29 June 1988. In answer to the whole of the claim by the Lyons Company for relief under ss. 82 or 87 of the TP Act, the Bank pleads that any relief that relies upon a cause of action accrued prior to 29 June 1985, is barred by reason of sub-s. 82 (2) and sub-s. 87 (1CA) of the TP Act, and that in relation to the two foreign currency loan agreements, any cause of action which the Lyons Company may have arose no later than 17 June 1985, when the Lyons Company drew down an advance of CHF188,144 pursuant to the second foreign currency loan agreement. Other special defences are raised by the Bank, but it is unnecessary to detail them at this stage.

17. In the applicants' case, Mr Lyons gave oral evidence in chief concerning the terms of conversations with Mr Green in 1984 and 1985. Whilst there appear to be discrepancies between his evidence and the Statement of Claim as it then stood, it is apparent that it is upon this evidence that the applicants base the first, second and fourth causes of action.

18. Mr Lyons said that at a meeting with Mr Green on 16 March 1984, Mr Green told him, inter alia, and with reference to graphs which he displayed, that the loans were for a minimum of $500,000; that the Australian dollar was much more stable and had found its true level since it had been floated (in December 1983); that there was not much of a risk at all now; that the Swiss Franc was much more stable than the Yen and the United States dollar; that a borrower could change currencies only at roll-over, which the Bank did not recommend; that, at the outside, the difference between the Swiss and the Australian currency would not vary by more than about 10%; and that even if Mr Lyons lost 10% he would be no worse off than he would have been with an on-shore loan. Mr Lyons also said that later, on about 7 June 1984, Mr Green told him that hedging was a form of insurance, that he should not worry about it and that to hedge would be as dear as an on-shore loan, something Mr Lyons could not afford; before signing the first foreign currency loan agreement, Mr Lyons says that he was also told that the Bank "would look after him". As I have said, the first foreign currency loan agreement was dated 7 August 1984. The Bank does not dispute that at the meeting on 16 March 1984, Mr Green referred to graphs but it was apparent from the cross-examination of Mr Lyons that what was in dispute was what the graphs showed and what was said about them; it also was apparent that there was a serious dispute as to much of what passed between Mr Green and Mr Lyons in this and other conversations. Mr Lyons' credit has been put in issue. His cross-examination had not concluded on the eighth day of the trial.

19. Mr Lyons also gave evidence in chief that in early April 1985, before entering into the second foreign currency loan agreement and at a time when the Australian dollar was in decline, Mr Green told him that now was a good time to borrow, the Australian dollar being low so that by borrowing now he would "reduce the average cost of each dollar". Mr Lyons said he was also told at this time that the trick was to borrow a bit more than he needed so that he would have it in the case of a parity adjustment; the Bank could give him 12% interest on an investment with it.

20. I permitted the interruption of the cross-examination of Mr Lyons to deal with the application by the applicants to call "similar fact" evidence in their case in chief. Upon the outcome of that application would depend the preparation of the case for the resumption of the trial in 1991.

21. The applicants tendered, on the voir dire, written statements by three persons each of whom had had dealings at Taree with Mr Green in relation to foreign currency loans. The statements were those of Mr M.R. Bignell, Mr A.W. Toft and Mr M.B. D'Arcy, who is Mr Lyons' son-in-law. On the eighth day of the trial, I rejected the application to lead this evidence in chief. What follows are my reasons for that ruling.

22. The evidence indicates that Mr D'Arcy revised his statement on numerous occasions, for the purposes of other litigation between him and the Bank, which has now been resolved. In the version which was tendered on the present voir dire, Mr D'Arcy says that he called upon Mr Green in March 1985, after conversations he had had with his father-in-law and with a local solicitor, Mr Ray Stack. In April 1985, Mr and Mrs D'Arcy received from the Bank a draft foreign loan agreement which they signed after Mr D'Arcy had consulted Mr Stack. Mr Stack had said that the loan agreement looked alright, and that he could not see anything wrong with it. At his meeting with Mr Green in March 1985, Mr D'Arcy had commented that the Swiss Franc apparently had fallen a bit since his father-in-law had taken out his loan. Mr Green replied to the effect that whilst the Swiss Franc might fluctuate a bit, if it went down it came back up again and now was the time to take out a loan in Swiss Francs. Mr Green did not refer to any graphs in the course of the conversation.

23. Mr Bignell does not say in his statement that he entered into a foreign currency loan agreement with the Bank but counsel agreed that this was the case. He had a few conversations with Mr Green in October 1984, and another conversation in mid-November 1984. Mr Green told him the minimum loan was $250,000. On the last occasion, Mr Bignell and his wife were shown a graph by Mr Green showing small variations in the value of the Swiss Franc; Mr Green said that the only risk with a foreign currency loan was that the Australian dollar might vary by more than 5% and that whilst this would have to be made up in Australian dollars as a parity adjustment "it shouldn't happen".

24. Mr Toft drew down his foreign currency loan from the Bank in March 1985. He had preliminary dealings in relation to the loan in late 1984. In a conversation with Mr Green in November 1984, Mr Green said to him that the capital cost of a foreign currency loan "could blow out by up to 10%". Mr Toft was shown graphs by Mr Green in the course of this discussion, and Mr Green said these demonstrated "the 10 per cent movement". Neither Mr D'Arcy nor Mr Bignell recount discussion by Mr Green of this 10% movement.

25. These conversations took place after the entry of the Lyons Company into the first foreign currency loan agreement but of itself that is no bar to reception of the evidence of those conversations: Thompson v The Queen [1989] HCA 30; (1989) 169 CLR 1 at 15, per Mason C.J., Dawson J.

26. The material which the applicants sought to introduce would have been circumstantial rather than direct evidence. For the applicants, it would serve two related functions. The veracity of the evidence of Mr Lyons was in dispute, and the applicants would rely upon the further material to corroborate or confirm the veracity of that evidence; secondly, the applicants would put it forward as circumstantial evidence from which one might infer the happening of the facts in issue, the making of certain representations to Mr Lyons by Mr Green: cf. Hoch v The Queen [1988] HCA 50; (1988) 165 CLR 292 at 296, per Mason C.J., Wilson, Gaudron JJ.

27. We have it on the authority of Lord Wilberforce that in judging whether one fact is probative of another "experience plays as large a part as logic": Director of Public Prosecutions v Boardman (1975) AC 421 at 444. Further, it is a truism that relevance is not necessarily the passport to admission into evidence. As Toohey J. emphasised in Harriman v The Queen [1989] HCA 50; (1989) 167 CLR 590 at 606-607, with reference to the hearsay rule as an obvious illustration, evidence relevant to a fact in issue may nevertheless be rendered inadmissible by one of the exclusionary rules. Thus, whilst evidence of a tendency or propensity to conduct of the kind alleged and in issue may be relevant and admissible as such, it is circumstantial evidence of a dangerous kind, particularly in a criminal case, because of the prejudice that it engenders; accordingly, "similar fact" evidence will be admitted only if of a sufficiently high degree of relevance to outweigh that prejudice: Harriman v The Queen, supra at 597-602 per Dawson J., 607 per Toohey J.

28. Mr Ligertwood points out in his work "Australian Evidence", p 59, that the formulation of rules in this area has proved elusive to common lawyers accustomed to treating the rules of admissibility as regulating categories of information rather than modes of reasoning. Dawson J. made a similar point in Harriman v The Queen, supra at 599.

29. We are told that in civil cases the courts have not been so chary of admitting similar fact evidence: Mood Music Publishing Co. Ltd v De Wolfe Ltd (1976) Ch 119 at 127. There, in a copyright infringement case where the issue was whether the resemblance between two musical works was mere coincidence or the result of copying, evidence was admitted of resemblances in three other instances between the works of the defendant and of others. The evidence in question was relevant as indicating the improbability in the instant case of mere co-incidence, and thus the probability of copying. This reasoning was recently applied by Aldous J. in another copyright case, Perrin v Dreunan (Ch Div, 4 May 1990, unrep). In Makin v A-G for N.S.W. (1894) AC 65, the evidence as to the other dead infants may have been admissible on the same footing rather than to show disposition: see Zuckerman, "The Principles of Criminal Evidence", 1989, pp 227-229.

30. In his article "The Rule of Exclusion of Similar Fact Evidence: England", (1932-3) 46 Harv L Rev 954 at 982-3, Professor Julius Stone said that it could hardly be challenged "at this late date" that the law as to similar fact evidence was the same in civil and criminal cases, but, he continued, in practice "there is probably a very real difference". To the same effect are the remarks of von Doussa J. in Sheldon v Sun Alliance Limited (1988) 50 SASR 236 at 246; on appeal (1989) 53 SASR 97.

31. In particular, in Manenti v Melbourne and Metropolitan Tramways Board [1954] VicLawRp 19; (1954) VLR 115, a negligence case, Sholl J. held inapplicable to civil causes the principle that the prosecution should not be allowed to tender evidence which, though otherwise admissible, is of little weight and might be unfairly prejudicial to the accused. But earlier, in Kitto v Gilbert [1926] NSWStRp 49; (1926) 26 SR (NSW) 441 at 447, Street C.J., speaking for the Full Court in another civil case, had referred to the rule that facts similar to but not part of the same transaction as the main fact are not in general admissible to prove the main fact, and had continued:

"The rule, I think, is sometimes rested upon the

ground of remoteness or want of reasonable

connection between the principal and evidential

facts in such cases, sometimes upon the

inconvenience that would result if a different

rule prevailed, and sometimes upon the tendency

that there would be to confuse juries by raising

collateral issues; . . ."

Later, in the New Zealand Court of Appeal, in another negligence case, The King v Westfield Freezing Company, Limited (1951) NZLR 456 at 466, Fair J., speaking of "similar fact" evidence, said:

"(T)his is a type of evidence which may be

excluded at the discretion of the Judge if, in

his opinion, its probative value in respect of

the matters in issue is small compared with the

additional issues which would arise, and the

additional time required for their

investigation, and if it might tend to confuse

the jury as to the real issues."

Hence, the force of Cox J's statement in his Paper, "Similar Fact Evidence in Criminal and Civil Cases", delivered to the A.I.J.A. Conference in Auckland, January 1991, that

"There is high authority for saying that

sometimes evidence may pass the test of

relevance but nevertheless be excluded because

it is too remotely relevant or would give rise

to a multiplicity of issues that it would be

profitless to pursue."

32. I return to the primary issue of the probative value or cogency of the evidence the applicants seek to call before me. In Hoch v The Queen, supra at 294-295, Mason C.J., Wilson, Gaudron JJ. stressed, with particular reference to what had been said by Dixon J. and Evatt J. in Martin v Osborne [1936] HCA 23; (1936) 55 CLR 367 at 375, 385, that "similar fact" evidence bears its probative value or cogency not as a matter of deductive logic but because it allows for the admeasuring of the probability or improbability of the fact or event in issue. Counsel for the applicants contended that its strength in the present case would lie in the revelation not of "striking similarities", so much as of an "underlying unity" in the dealings between Mr Green and foreign loan applicants; it was then submitted that this underlying unity would be sufficient to raise as a matter of common sense and experience the objective improbability of the meetings between Mr Lyons and Mr Green having been conducted without Mr Green making the representations alleged against him by Mr Lyons. Counsel stressed, with reference to what was said by Gaudron J. in Thompson v The Queen, supra at 39-40 that "underlying unity" may be disclosed without identification of points of striking similarity. In the case in question, Gaudron J. held (with the agreement of Deane J.) that the subsequent murder by the accused of four other members of the family of his alleged victims, with attempted incineration of the corpses in all these cases, indicated an underlying unity which raised the improbability of the earlier deaths having occurred in a manner other than as alleged by the prosecution.

33. But the first question to be asked when it is sought to draw any particular case within this universe of discourse is to ask when "facts" are to be treated as "similar". This is so whether or not it is then said that there are striking similarities between those facts or an underlying unity between them. The issues that are involved were analysed nearly sixty years ago by Professor Julius Stone in his article "The Rule of Exclusion of Similar Fact Evidence: England", supra. It was this article to which Evatt J. paid close regard in his judgment in Martin v Osborne, supra. The learned author pointed out that the determination of similarities is essentially a process of classification, and that any particular inquiry must be preceded by an ascertainment of the significant features of the class under which a given fact is to be subsumed. He perceived two meanings of the term "similarity". First, in the wider sense and the popular sense, a fact is similar to another whenever the two possess a common characteristic; but that common characteristic may be insufficient to render the first fact relevant in the legal sense as proof of the other. Secondly, in the narrower sense, a fact is similar to another only when the common characteristic is the significant one for the purpose of the inquiry at hand.

34. If facts similar, in the wider understanding, to the fact in issue are irrelevant in the legal sense, they are inadmissible for that reason and there is no occasion to deal with the restrictions imposed by the "similar fact" doctrine. As will become apparent, in my view the present is such a case. Facts similar, in the narrow meaning, to the fact in issue will be relevant thereto in the legal sense; it is only when this kind of relevance has been found that the question arises as to whether such similar facts, though relevant, are not admissible, because of the operation of the exclusionary rule or discretion restricting the admissibility of "similar fact" evidence. See also Mr Justice Hoffmann's article, "Similar Facts After Boardman", (1975) 91 LQR 193 at 204ff; Zuckerman, supra at 226; Robertson, Review (1990) 106 LQR 510 at 514. It may be observed, in this connection, that in Mood Music Publishing Co. Ltd v De Wolfe Ltd, supra at 127, the Master of Rolls stated the first step as being the determination of whether the evidence in question was logically probative or relevant in determining the question in issue; if so, it would be admitted "provided that it is not oppressive or unfair to the other side: and also that the other side has fair notice of it".

35. In Boyce v Cafred Pty Ltd [1984] FCA 318; (1984) 4 FCR 367; Turner v Jenolan Investments Pty Ltd (1985) 7 ATPR 40-571; Peet and Co. Ltd v Rocci (1985) WAR 164 and Aroutsidis v Illawarra Nominees Pty Ltd (1990) 21 FCR 500, the fact in issue was the terms of conversations between A and B, and it was held in the Supreme Court of Western Australia and in this Court that the terms of conversations between A and other witnesses upon apparently related topics were not probative of the facts in issue. In terms of Professor Stone's analysis, the facts sought to be tendered were similar to the fact in issue only in the wider sense, and they were irrelevant. Again, in Fisher v Commonwealth Bank of Australia (11 April 1990, unrep.) Beaumont J., to adapt the above illustration, drew a distinction between discussions between A and other witnesses which could be of some probative value as tending to establish the general tenor or thrust of discussions between A and B, and the failure of such material to be probative of the particular terms of the conversation that took place between A and B (the fact in issue), the particular terms being of critical importance because it was they which were relied upon to constitute the alleged misrepresentations founding the case. Rowland J. spoke to like effect in Peet and Co. Ltd v Rocci, supra at 172-176.

36. In Hollingham v Head [1858] EngR 535; (1858) 140 ER 1135, 4 CB (NS) 388, the Court of Common Pleas dismissed a motion for a new trial on the ground of improper rejection of evidence. The action had been for the price of a quantity of artificial manure sold by the plaintiff to the defendant, and which had turned out to be worthless. The defence set up was that the article had been purchased by the defendant subject to an oral condition that it was not to be paid for unless it proved equal to Peruvian guano; the Court upheld the ruling of the trial judge that the defendant might not call witnesses to prove that the plaintiff had made contracts with other persons for the sale of his guano upon the terms suggested. Willes J. said, supra at 1136, 391-392:

"I am of opinion that the evidence was properly

disallowed, as not being relevant to the issue.

It is not easy in all cases to draw the line,

and to define with accuracy where probability

ceases and speculation begins: but we are bound

to lay down the rule to the best of our ability.

No doubt, the rule as to confining the evidence

to that which is relevant and pertinent to the

issue, is one of great importance, not only as

regards the particular case, but also with

reference to saving the time of the court, and

preventing the minds of the jury from being

drawn away from the real point they have to

decide. This rule is nowhere more clearly laid

down than in the very able treatise by Mr Best

upon the Principles of Evidence, second edit.

'Of all the rules of evidence,' he says, 'the

most universal and most obvious is this, - that

the evidence adduced should be alike directed

and confined to the matters which are in

dispute, or form the subject of investigation.

Its theoretical propriety can never be matter of

doubt, whatever difficulties may arise in its

application. The tribunal is created to

determine matters in dispute between contending

parties, or which otherwise require proof; and

anything which is neither directly nor

indirectly relevant to those matters ought at

once to be put aside, as beyond the jurisdiction

of the tribunal, as tending to distract its

attention and to waste its time.' . . .

Now, it appears to me that the evidence proposed

to be given in this case, if admitted, would not

have shewn that it was more probable that the

contract was subject to the condition insisted

upon by the defendant."

37. Plainly, in applying the principles I have described, each case has to be considered with close regard to its particular circumstances. In the present case, Mr Green had dealings with various customers of the Bank at Taree concerning foreign exchange loans and that they took place in the period in which he was dealing with Mr Lyons. In that sense, there was an underlying unity in Mr Green's activities, but as one might expect, the dealings with customers varied with the particular circumstances as they arose. The nature of the causes of action propounded by the applicants means that specific representations must be established. That is why both in the oral evidence of Mr Lyons, both in chief and in cross-examination, great attention was paid in eliciting what was or was not said in precise terms on particular occasions. As a matter of ordinary experience of human behaviour, the evidence which the applicants seek to lead would not tend to prove the making of the representations upon which the applicants rely.

38. I should add that, in any event, had I been of the contrary view as to the relevance of the material in question, I would, in exercise of the discretion described in the authorities, have refused to receive it into evidence. The trial raises complex issues of fact and crucial issues of the credit of central witnesses. The trial commenced on 30 October 1990 and it soon became apparent that counsel's estimate of 8 - 10 days for the trial would prove to fall very short of the mark. On the fourth day of the trial, before I heard submissions of the "similar fact" material, I indicated that several further weeks would be required for the completion of the trial in 1991. The Bank might be expected to test vigorously the evidence that would be given by Mr Bignell, Mr Toft and Mr D'Arcy. A cobweb of subsidiary factual disputes would be spun and further issues of credit could arise. The trial would be further prolonged and, in the end, there might be no substantial countervailing benefit in assisting the resolution of the primary issues.

Re DF Lyons Pty Limited; David Francis Lyons and Barbara Ann Lyons v Commonwealth Bank of Australia [1991] FCA 74;

At a glance

Court

Decision date

Before

Source

Judgment (72 paragraphs)

Re DF Lyons Pty Limited; David Francis Lyons and Barbara Ann Lyons v Commonwealth Bank of Australia [1991] FCA 74; (1991) 132 Atpr 41-102/100 ALR 468; 28 FCR 597 (12 March 1991)

Parties

Legislation Cited (9)

Cases Cited (10)