2267/05 Joan Street & Ors v Luna Park Sydney Pty Limited & Ors
JUDGMENT
(as to admissibility of paragraph 5 of the affidavit of Ms Dwyer sworn 18 August 2006)
1 HIS HONOUR: The defendants object to paragraph 5 of the affidavit of Roslyn Elizabeth Dwyer sworn 18 August 2006, and the annexures referred to in it. Those annexures are letters from a real estate agent to Ms Dwyer and her husband Mr Simpkin reporting on the progress during May and June 2006 of the program for the marketing of their apartment, and in particular, that the major negative impact on the marketing of the apartment was noise from Luna Park. The objection is taken on the basis that the evidence contravenes the hearsay rule. The plaintiffs submit that it is admissible under the business record provisions of (NSW) Evidence Act 1995, s 69.
2 Despite the submission of Mr Clarke, for the third and fourth defendants to the contrary, I am prepared to infer from the form and appearance of the document, as authorised by Evidence Act, s 183, that the annexures are documents, or copies of documents, which are or were a record of the business of LJ Hooker Neutral Bay [cf Compafina Bank v Australia & New Zealand Banking Group Limited [1982] 1 NSWLR 409; Supetina Pty Ltd v Lombok Pty Ltd (1984) 5 FCR 439; 59 ALR 581, 587].
3 The essential question is whether the application of the business records exception to the hearsay rule is excluded by s 69(3), which relevantly provides as follows:
Subsection (2) does not apply if the representation:
(a) was prepared or obtained for the purpose of conducting, or for or in contemplation of or in connection with, an Australian or overseas proceeding; …
4 As Barrett J explained in Vitali v Stachnik [2001] NSWSC 303, [12], the purpose of this provision is to prevent the receipt, in exception to the hearsay rule, of hearsay material that cannot be tested by cross-examination, which is prepared in an atmosphere or context that may cause it to be self-serving, "in the sense of possibly being prepared to assist the proof of something known or at least apprehended to be relevant to the outcome of identifiable legal proceedings".
5 It will be seen that the prohibition is not limited to evidence obtained "for the purpose" of use in proceedings, but extends to a representation prepared or obtained … in contemplation of or in connection with a proceeding. In S & Y Investments (No 2) Pty Ltd v Commercial Union Assurance Company of Australia Limited (1986) 82 FLR 130, Maurice J said (at 152):
I have no difficulty in ruling that the clerk's representations of the policy details in the facing sheet were not made for the purpose of this or any other legal proceeding, by which I understand the subsection to mean brought into existence with a view to being used in evidence. I am satisfied that this document was a purely internal record entered up without thought of its having any evidentiary value in such proceeding.
But what of the words "in contemplation of". They ought to be construed as adding something to the words "for the purposes of", though what they add is far from obvious. It is not, I think, sufficient to exclude a statement that it was made at a time when legal proceedings were contemplated; the words "made in contemplation of" express more than a temporal connection. They suggest that the prospect of legal proceedings must at least be the occasion for the statement being made.
6 In Vitali v Stachnik Barrett J said (at [17]):
17. Analogies drawn from other areas of the law would suggest that a statutory provision referring to "the purpose" pays attention to the main or dominant or leading purpose: see, for instance, Buckland v Federal Commissioner of Taxation (1960) 8 AITR 66. But the purpose of the creation or acquisition of the content is not the only thing relevant to s69(3)(a). It is also necessary to look at whether it was prepared or obtained "in contemplation of" or "in connection with" the proceeding. The expression "in connection with" is, of course, a notoriously wide one which in other statutory contexts is used specifically to broaden and amplify "for the purpose of": see, for example, Companies Act 1961, s67(1).
18. The fact that this litigation had begun when the content of MFI 2 was prepared and that its preparation was recognised by the defendant at the time as bearing a relevance to and as potentially playing a part in that litigation must mean, as I see it, that the "in contemplation of" aspect or the "in connection with" aspect (or each of them) is satisfied.
7 On the other hand, in Nye v State of New South Wales [2002] NSWSC 1268; (2002) 134 A Crim R 245, O'Keefe J referred (at [13]-]15]) to the retreat of the High Court from the earlier view that the phrase that "relating to" had the widest possible meaning of any expression intended to convey some connection or relation between two subject matters, and applied that approach to the phrase "in connection with", as follows:
16. The phrase "in connection with" and similar phrases are also of wide ambit. However, whilst such phrases are wide in their ambit they are also imprecise. Australian National Railways Commission v Collector of Customs (SA) (1985) 69 ALR 367. It has been said to be:
"...capable of describing a spectrum of relationships ranging from the direct and immediate to the tenuous and remote." ( Collector of Customs v Pozzolanic Enterprises Ltd (1993) 115 ALR 1 at 10)
Where the connective phrase fits in this wide spectrum will, as in the case of its counterpart "relating to", depend on the context in which it is used and this in turn will involve a value judgment by the court.
17. The Evidence Act 1995 did much more than codify the pre-existing law. It introduced significant reforms to the law of evidence, facilitated proof and made less onerous and technical the task of a party who seeks to adduce evidence. The policy embodied in the Act is to expand the ambit of admissible evidence. Thus, the form of the relevance rule in Pt3(1) is expansive. The dominant approach is that if evidence is relevant it should, subject to express exceptions, be admitted (s 56). The concept of relevance is broadly stated (s 55). The exceptions to the hearsay rule are also widely stated and s 69 itself is significantly more favourable to the admission of evidence than its predecessor in the PtIIC of the Evidence Act 1898 (s 14CD to s 14CV, especially s 14CF and s 14CG). In these circumstances, I am of opinion that the approach to the construction of s 69(3) ought not unduly to curtail the admission of evidence that could rationally affect the assessment of the probability of the existence of a fact in issue. Such an approach does not, in my opinion, bring about any unfairness to a party because of the wide discretions conferred by the Act to exclude evidence that is otherwise relevant and hence probative. Sections 135 and 136 are examples of such discretions in both civil and criminal cases, whilst s 137 is an example relating to criminal proceedings. Such a policy supports a construction of the exception to the exclusion to the hearsay rule in s 69(3)(b) which favours a wide ambit of admission of evidence.
8 In Atra v Farmers & Graziers Co-op Co Limited (1986) 5 NSWLR 281, Wood J (as he then was), dealing with the predecessor section 14CF(1), which provided that a statement "made or obtained for the purpose of, or in contemplation of a legal proceeding … is not admissible", rejected a submission that regard should be had to the dominant motive or purpose for the making of the statements in the documents so as to read down the exclusion as not precluding the admissibility of statements made or obtained for a dominant or even a substantial purpose other than legal proceedings. His Honour said (at 290):
To my mind this is not an answer to s 14CF. I see no basis for introducing any notion of dominant or substantial purpose into the section. In my view the section should be read as a blanket prohibition in relation to any statements contained in documents within the Part which are made in the circumstances referred to in the section, and not as reserving a discretion for their reception to be exercised under s 14CP.
In considering s 14CF it is necessary to bear in mind that it deals with a statement made or obtained for the purpose of, or in contemplation "of, a legal proceeding or any other legal proceeding arising out of the same or substantially the same facts". This is an important part of the provision since it is related to a particular legal proceeding of the kind seen in the present case. Clearly the section does not apply to preclude statements made or kept in documents as part of a regular system merely because they might be of utility if legal proceedings were to occur. The present case is not however, such a case. There were proceedings on foot, and the documents were clearly prepared with those proceedings in mind and with a view to being used in connection with them. While they were also of use for income tax purposes, it strains credulity to believe that they would have been brought into existence in the time that they were prepared without the fire and the litigation.
9 From this survey of the authorities, the following conclusions may be drawn. First, the purpose of s 69(3) is to exclude from admissibility, in circumstances that they may not be tested because of their hearsay nature, previous representations contained in business records which were made in an atmosphere or context that could affect their impartiality by reason of possibly being influenced by interest in the outcome of legal proceedings [Vitali v Stachnik]. Secondly, the words "in contemplation of" add something to "for the purpose of" [S & Y Investments]; the additional words "in connection with", in the 1995 Act, must add something more. The evolution and structure of the section (which by referring not only to "for the purpose of" but adding "in contemplation of" and "in connection with" seeks to widen its reach; the naturally wide terms "in connection with"; and the balance of authority [Marsden v Amalgamated Television Services Pty Limited [2000] NSWSC 425; Vitali v Stachnik; Atra v Farmers & Graziers] is against adoption of a narrow approach to the construction of s 69(3). With respect to O'Keefe J, I do not agree that the broad concept of relevance in the Evidence Act significantly informs the construction of an exclusion to an exception to an exclusionary provision, namely the hearsay rule, where the starting position is that hearsay is inadmissable.
10 Thirdly, a representation is made or obtained "in contemplation of" legal proceedings not only if the prospect of proceedings is the occasion for the representation being made [S & Y Investments], but also if legal proceedings or the prospect of them is "in mind" when the representation is made or obtained [Atra v Farmers & Graziers]. An act is done is contemplation of something if that thing is in the mind of the actor when it is done.
11 Fourthly, an act is done "in connection with" something if there is a link or a nexus, other than a remote or tenuous one, between the act and the thing [cf Nye].
12 Fifthly, no question of dominant or substantial purpose arises; once any aspect of s 69(3)(a) is attracted, it matters not that the dominant or substantial purpose of making or obtaining the representation in question was unconnected with legal proceedings.
13 The present proceedings, in which Ms Dwyer and her husband Mr Simpkin are plaintiffs, were commenced in 2005, then as a noise nuisance case, the cause of action being in nuisance for the emission of noise from Luna Park. By late 2005, the nuisance case had been effectively defeated by Act of Parliament, and the proceedings were reframed as proceedings for an injunction to restrain an alleged contravention of the (NSW) Crown Lands Act 1989, and proceedings for damages and injunctive relief under the (CTH) Trade Practices Act 1974. In late 2005, Ms Dwyer and Mr Simpkin decided to list their apartment for sale. Their reason for doing so was the impact of noise from Luna Park on the amenity of their apartment. By letter from their solicitors to the defendants' solicitors dated 21 February 2006, responding to a request for particulars, the plaintiffs identified that at least part of their case on damages would involve a comparison of the actual value of their properties at the date of hearing, and the value they would have had if not affected by noise. Although I have held that, at least as presently advised, this is not a correct approach to the measure of damages, it was the case that the plaintiffs sought to make and indeed that they opened. Thus, the more the impact of noise depressed the true value of their properties, the greater would be the plaintiffs' damages. It was only a month or so after that letter that Ms Dwyer and Mr Simpkin listed their property with LJ Hooker, and as a result obtained from LJ Hooker presentations as to the likely selling price, and the impact of noise.
14 The atmosphere or context in which Ms Dwyer and Mr Simpkin obtained those reports from LJ Hooker was one in which they had a manifest interest, in these proceedings, in showing the greatest possible depression in the current market value of their apartment due to the impact of noise.
15 In my opinion it is inconceivable that these proceedings were not "in their mind" when obtaining representations from a real estate agent as to the likely selling price of their property when that was a matter that they were propounding as relevant to the assessment of damages. Even if they were not "in mind", however, there is an obvious nexus between the obtaining of the representations and the proceedings, other than a remote and tenuous one: the current value of their apartment as a result of the impact of noise was a matter which they needed to establish, according to the particulars they provided, in the proceedings, and the price at which they could sell their apartment would affect their recoverable damages, at least on the case they sought to advance.
16 It follows that in my opinion the representations contained in the letters from LJ Hooker annexed to Ms Dwyer's affidavit were obtained in contemplation of and/or in connection with these proceedings, that the exception to the hearsay rule for business records contained in s 69(2) is therefore not available, and that the representations are accordingly inadmissable.
17 I reject paragraph 5 of the affidavit of Roslyn Elizabeth Dwyer sworn 18 August 2006, including the annexures referred to in it.
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