Tetra Pak Manufacturing v Challenger Life Nominees

Judgment (ex tempore - revised 25 march 2013) 1HIS HONOUR: Stated very briefly, the issue between the parties is who is liable for the cost of the remediation of contaminated land. 2One question in the proceedings is (as one might expect) what sort of contaminants were used on the land. That in turn involves the question of when contaminants were delivered to the land. In that connection, the plaintiff (which was the occupier of the land for some years at least) wishes to rely on the evidence of a Mr Ken Lay. From 1983 until 2012 (which covers substantially if not wholly the recent time when the plaintiff carried on potentially contaminating activities on the land), Mr Lay was employed by the plaintiff at the site. He was a quality controller and then some form of investigations and liaison manager (whatever that may mean). 3In his affidavit affirmed on 3 May 2012, Mr Lay wishes to give evidence, among other things, of when a polymer wash out solvent known as Klenasol was used on the land. He would give that evidence on information and belief, based on communications from the supplier of that product, Solvents Australia. 4That evidence is based on an e-mail exchange between Mr Lay and a Mr Barry Walker of Solvents Australia. The starting point of the e-mail exchange does not appear, nor is it at all clear what was Mr Walker's position in Solvents Australia. 5The first e-mail in the chain is from Mr Walker on 3 March 2009. Leaving aside formal parts, it says: "Our records indicate that we ceased trading with your Company on the 20th of July 1998. The formulation of Klenasol 2000 does not contain [PCE]." 6The acronym PCE is an abbreviation for one of the possible contaminants in issue in this case. 7Some days later, on 11 March 2009, Mr Lay replied. Among other things he referred to the fact that the plaintiff was moving out of the site and was "preparing the exit documents for the landlord". Mr Lay said that, "We need some kind of verification from the supplier" of the solvents used, and then stated: "Therefore I would appreciate it if you can provide the information of qty and the type of Klenasol delivered to Fairfield for each year until the end of your supply." 8Mr Walker replied two days later, on 13 March 2009. He said: "The last recorded delivery of Klenasol 7525 to the Fairfield site was on 10/7/1999, our invoice 991431. We can offer no further assistance." 9The defendant takes a number of points. First, it does not accept that the email exchange (more accurately, perhaps, either of Mr Walker's emails) is a "business record" within s 69 (1) of the Evidence Act 1995 (NSW). 10Secondly, the defendant submits that the Court could infer that s 69 (3) applies, because, it says, there is material to show that the email exchange was generated at least in contemplation of legal proceedings. 11Thirdly, and as a general back-up, the defendant relies on s 135 of the Evidence Act. 12Fourthly, and as a last desperate fall back, the defendant relies on s 136. 13I can start with the easy point. Section 136 can be put to one side. If the document is not admissible to prove the truth of the relevant representations made by Mr Walker, then it has no other relevance. The communication of the represented facts to Mr Lay goes nowhere. 14For the plaintiff, Mr Potts (who handled this part of the debate) submitted that it was in the ordinary course of the business of a corporation that supplied goods to customers to deal with questions from customers in relation to the supply. That may be accepted at a level of some generality. For example, if a customer questions an apparent short delivery, it would quite clearly be in the ordinary business of the supplier to deal with the query, and that reply must be said to be one made for the purposes of the business. 15However, taking the asserted fact for the moment as being proved on the voir dire, the material shows that the last delivery was in July 1999, almost ten years before the chain of inquiry began. I might add that there is some inconsistency, because the first email in the chain suggests that trading ceased a year earlier, on 20 July 1998. But leaving that aside, one does not know what it was that provoked the first of the emails. Thus, one does not know what was the question which persuaded Mr Walker to impart the information that the two companies ceased trading on 20 July 1998, and that Klenasol 2000 did not contain PCE. 16In the ordinary way of things, one might ask why it is anything to do with the business of a supplier of goods, such as Solvents Australia, to answer questions, some ten or eleven years after the event, about the constitution of products supplied by it, particularly where that information was required (as the intermediate email makes clear) not to enable the plaintiff to carry on its business, but, on the contrary, to help the plaintiff to wind up its business at the particular site 17For similar reasons, one might wonder whether the second of the relevant emails (Mr Walker's second email, dealing with Klenasol 7525) was one written for the purposes of his company's business. 18However, as against that, it must be acknowledged that where an email is written to a company asking questions about its products, then ordinarily the company would be expected to respond. Thus, despite what I have said, a wider view of what is the company's business may allay the doubts to which I have referred. 19It is unfortunate that what appears to be the complete chain of emails is missing. Nonetheless, on balance, I think the better view of Mr Walker's two emails is that they were written for the purposes of his company's business, simply because they were directed to answering questions asked of his company about its products, by a former customer. To put it another way, the business of a company is not only the particular activities that generate money; it must include, I think, answering questions such as those of the type asked at least where the questions are not entirely erratic or irrational. 20Thus, I think, the better view is that the communications do embody previous representations made in the course of or for the purposes of the business of Solvents Australia, in so far as they refer to Mr Walker's emails. 21I turn to s 69(3). 22It is clear from tax invoices provided by the plaintiff's previous lawyers that, from January 2009 on, the plaintiff was seeking advice in relation to contamination issues. The tax invoices, to the extent that they have not been redacted, do not indicate what was the particular focus of the advice, or what were the particular questions. Thus, one does not know, for example, whether the advice sought was in relation to the plaintiff's obligations at large, or in relation to some notice perhaps issued by some statutory authority, or in relation to the plaintiff's possible exposure to indemnify the defendant under the terms of the lease between them. 23Some months after the email exchange in question, the plaintiff's then lawyers sought advice from a company known as CM Jewell & Associates Pty Ltd. That company states its business as "water and environment management". On 5 June 2009, a solicitor wrote to Mr Jewell of that company noting that the lease had terminated and the plaintiff was "currently in the process of negotiating make-good arrangements with" the defendant. The email stated that "an issue has arisen regarding the liability for remediation of areas that may have been contaminated as a result of the underground storage tanks currently on the site". 24It noted, further, that the defendant had requested copies of historical reports relating to those tanks. 25As the email rightly stated, responsibility for contamination would be determined by the contract for sale and the lease. It stated, again correctly, that the plaintiff would be liable to remediate contamination that had occurred during the term of the lease and (the plaintiff would say insufficiently) that the defendant was liable to remediate contamination that occurred prior to the commencement of the lease. 26Whilst it is obvious from the terms of that email that the parties were considering whether the indemnities in the contract for sale and the lease were activated, with a view to determining who was liable to pay for the cost of remediation, there is nothing in the email to suggest that the parties were contemplating bringing proceedings to enforce their rights. The present proceedings were not commenced until some time in 2011. Although I do not have the date when the original summons was filed, the amended summons was not filed until 18 August 2011. 27The gap between the time when advice was sought and the time when the proceedings were commenced seems to me to be sufficiently long that the Court is not entitled to draw the inference that, at the earlier date, there was contemplation that proceedings would be brought. It was presumably the case that, at that time, the process of negotiation was under way. No doubt, the parties hoped that the dispute between them would be resolved through that process of negotiation. Indeed, to the extent that it matters, the lawyer's email suggests simply that the question of liability would be answered by a decision as to the time when contamination occurred. 28Thus, the onus being on the defendant to demonstrate that subs (3) applies, I am not satisfied that it has discharged that onus. 29I turn to s 135. In this context, it is necessary to bear in mind that Mr Lay's affidavit was affirmed on 3 May 2012, and presumably served not too long thereafter. A perusal of the documents exhibited to it would have indicated the reliance, for the truth of what it says, on the email exchange that is in question. It seems to me that there has been ample time for the defendant to investigate the matters referred to in the email. If it has not done so, that is not because it was prevented from doing so by the late delivery of the relevant evidence. 30If the defendant has not availed itself of the opportunity to investigate the matter, but has instead simply stood by and relied on the objection that it proposed to take, then such prejudice as there may be from admitting the email would seem to be to the defendant's account. 31The probative value of the email exchange, at least in so far as it relates to the information imparted by Mr Walker, is significant. There does not seem to me to be anything misleading or confusing about it. Nor does it seem to me that to admit it would cause undue waste of time. On the contrary, I think, it is likely to shorten things. 32For those reasons, I conclude that the document at tab 77 of volume 10 of the Court Book should be admitted to prove the truth of the two communications recorded in it from Mr Walker of Solvents Australia to Mr Lay of the plaintiff, but not to prove the truth of the communications in it from Mr Lay to Mr Walker. That latter restriction can hardly cause a problem when Mr Lay is to be called, as no doubt he will be tomorrow.