FEDERAL COURT OF AUSTRALIA EVIDENCE Ð documentary evidence Ð business records Ð exception to hearsay Ð effect provisions creating time limit for objections on admissibility of evidence Ð whether Pt 4.6 Div 1 of Evidence Act 1995 (Cth) requires Court not to admit evidence for twenty-one days Evidence Act 1995 (Cth), ss 26, 47-51,55,56,59,63,64,67,69,70-75,135,166,167,168,169,190 Evidence Act 1905 (Cth), ss 7A-7D Evidence Act 1995 (NSW) Corporations Law, s 1274(4C) Federal Court Rules, O 32 r 4(1) Myers v DPP [1965] AC 1001, considered Potts v Miller (1940) 64 CLR 282, considered Commissioner of Taxation v Karageorge (1996) 22 ACSR 199, distinguished Telstra Corp v Australis Media Holdings (NSW Supreme Court, 18 March 1997, McLelland CJ in Equity, unreported), considered aUSTRALIAN PETROLEUM PTY LTD v PARNELL TRANSPORT INDUSTRIES PTY LTD and JOHN WHITFIELD SETH PARNELL and GREG PATTEN and PARNELL MOGAS PTY LTD and J & J PARNELL NOMINEES PTY LTD SG 36 of 1996 MANSFIELD J ADELAIDE 20 NOVEMBER 1998 IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY SG 36 of 1996 BETWEEN: AUSTRALIAN PETROLEUM PTY LTD Applicant AND: PARNELL TRANSPORT INDUSTRIES PTY LTD First Respondent JOHN WHITFIELD SETH PARNELL Second Respondent GREG PATTEN Third Respondent PARNELL MOGAS PTY LTD Fourth Respondent J & J PARNELL NOMINEES PTY LTD Fifth Respondent JUDGE: MANSFIELD J DATE: 20 NOVEMBER 1998 PLACE: ADELAIDE REASONS FOR DECISION These reasons concern a ruling made as to admissibility of certain documents tendered by the applicant (Ampol) under s 69 of the Evidence Act 1995 (Cth) (Òthe ActÓ) in the course of the trial. The documents fall into two categories: a) documents produced from the records of the National Australia Bank Ltd (Òthe BankÓ) in the nature of internal memoranda purporting to record information provided to the Bank by, or on behalf of, the first, second, third and fifth respondents (Òthe Parnell respondentsÓ) as to its contractual relationship with Ampol at material times, and b) documents produced from the records of a financial adviser to the Parnell respondents or from the records of the Bank in the nature of submissions to the Bank for, or with respect to, financial accommodation sought to be provided to the Parnell respondents, and which purports to record or assert information as to the Parnell respondentsÕ contractual relationship with Ampol at material times. There is a question whether that information or those assertions relate to all of the Parnell respondents. It is apparent that they are made at least for, or provided on behalf of, the second respondent (Mr Parnell). The significant point at issue does not depend on the particular text of the documents, nor their status in relation to the Parnell respondents severally. It is not necessary to address those matters at this point. Those considerations may go to the weight of the evidence sought to be adduced through the documents, or to whether that evidence may be used against each of the Parnell respondents. Those matters will need to be addressed in the light of all the evidence. Each of the documents forms part of records belonging to and kept by the Bank, and by the financial adviser, in the course of and for the purposes of their respective businesses. Each contains a Òprevious representationÓ recorded in the course of, and for the purposes of, their respective businesses. Further, each of the documents, in so far as it contains the representation, contains that representation made on the basis of information directly or indirectly supplied by a person who had personal knowledge of the asserted fact or who might reasonably be supposed to have had that knowledge. Thus the hearsay rule does not apply to the documents: s 69(2). Again, the weight to be given to the evidence will ultimately depend on all the evidence. The evidence proposed to be adduced through the documents is relevant (s 55) and is therefore admissible (s 56), because s 69 provides an exception to the rule excluding from the operation of s 56 evidence of a previous representation. Section 59 would otherwise render that evidence inadmissible. The issue arises under Pt 4.6 Div 1 (ss 166, 167, 168 and 169) of the Act. The Parnell respondents had no notice of the proposed tender of the documents. They contend that, in those circumstances, s 168(5) entitles them within 21 days of the proposed tender or service of the documents to make a request under s 167 of one or more of the types of request defined in s 166. They further contend that, because that request may concern the admissibility of the documents (s 167(c)), and because one consequence of the failure to comply with a reasonable request may be that the documents may not be admitted in evidence or may be subject to a direction that they not be admitted in evidence unless certain steps are taken (s 169(1)(c) and (3)), the documents cannot be admitted unless and until the procedure contemplated by that Division has taken place, or until the 21 day period for a request has expired, or until the Parnell respondents indicate that they do not wish to make a request. The Parnell respondents have indicated that they propose to decide whether to make a request promptly, and if one is to be made, to make such request promptly. They do not intend to take the full 21 days, but are anxious to complete the process available under that Division as soon as possible. In the event of a request being made, if it is not acceded to, s 169 contemplates that within a reasonable period thereafter there will be an application to determine whether the responding party has reasonable cause to fail to comply with the request, and the Court will then determine that question. If it determines that there has been a failure or refusal to comply with the request, the Court may make any one or more of the orders specified in s 169(1). It is clear that the process contemplated by Pt 4.6 Div 1 may be one which extends at least beyond 21 days, and may take several weeks to be completed. The Court does not have power under s 190(3) to order that the provisions of Pt 4.6 Div 1 do not apply in relation to proposed evidence. That power to waive rules of evidence is limited to the provisions expressly identified in s 190(1). They do not include ss 166, 167, 168 and 169. The Court has power to waive the operation of s 59 itself in relation to the documents, as that provision is in Pt 3.2 of the Act, but no submission was put that the Court should do so in this instance. In any event, the question of any such waiver requires the Court to address the considerations to which s 190(4) refers. That, of itself, might require some opportunity to be provided to the parties to explore the types of consideration to which Pt 4.6 Div 1 is directed, even though not necessarily within the time structure specified. Consequently, the Court has been asked by the Parnell respondents to defer ruling upon the proposed evidence for the time being. Ampol contends that as the documents fall within s 69, they are admissible provided they are relevant and Pt 4.6 Div 1 cannot delay their receipt. Although I accept that the parties are anxious for the trial to proceed expeditiously, and in particular that the Parnell respondents will address Pt 4.6 Div 1 promptly, my ruling must be in the context that there may arise circumstances where the full period which the procedure in that Division contemplates will have to expire before receiving relevant and admissible evidence by reason of s 69, if the contention of the Parnell respondents is correct. Circumstances arise where documents come to light only towards the end of a partyÕs case, or where the particular relevance of documents may emerge only at such a point. That relevance may emerge only because, over opposition, certain evidence of an opposing party is ruled to be relevant and admissible, eg. a particular line of cross-examination. Counsel for the Parnell respondents accepted that, if their contention is correct, there may be circumstances where a trial will have to be adjourned for some time while the Pt 4.6 Div 1 procedure is undertaken in relation to the admission into evidence of certain business records. That may occur, even though the issue at trial is a narrow one and the trial itself might otherwise take only a short period. In my judgment, Pt 4.6 Div 1 does not apply in the present circumstances so as to entitle the Parnell respondents the opportunity to adopt the procedure it provides before the documents may be admitted. The imposition of such a practical time hurdle to the receipt of business records would not be an effective response to the sort of issues which Myers v DPP [1965] AC 1001 gave rise to, and which is the genesis of the various legislative prescriptions to facilitate the admission of business records, including ss 7A-7D, Evidence Act 1905 (Cth). That legislation did not impose such a hurdle. It would fail adequately to reflect the reasons why, even at common law, certain business records should be admissible in the light of their inherent integrity: Potts v Miller (1940) 64 CLR 282 at 301-304 per Dixon J. Legislative intervention has progressively approached the admissibility of such documents generously, but subject to appropriate judicial power to safeguard abuse. The submission of the Parnell respondents, if correct, would reflect a significant regression in that legislative attitude. I would be reluctant to find that that was intended unless it were clearly spelled out. There is nothing in the Interim or Final Reports of the Law Reform Commission, which largely provide the genesis for the Act, which touch upon the particular consequence identified. In particular, there is nothing in the text of either of those Reports which indicates that such a potentially substantial time hurdle to the receipt of Òbusiness recordsÓ was intended to be introduced: Law Reform Commission, Evidence, Interim Report No 26, (1985), Vol 1, pars 657-658, 715-718 and 779-780 and Evidence, Report No 38, (1987), pars 241(c). On the other hand, it is apparent that in general terms the safeguards of Pt 4.6 were intended to be available to a party against whom a document is tendered: Interim Report, Vol 1, par 707 at pp390-391. In that paragraph, there is implicit distaste expressed for a provision which reserves to a court the discretion to require further evidence to be called before admitting a record Òif it thinks fitÓ, such as s 59b(6) of the Evidence Act 1929 (SA), without the benefit of a structure such as that Division imposes and the legislative identification of matters then to be considered within the implementation of that structure: now expressed in s 169(4) and (5). So far as my researches determine, this issue under Pt 4.6 Div 1 of the Act has not relevantly been the subject of judicial consideration in relation to the admissibility of business records under s 69. The same provisions appear also in the Evidence Act 1995 (NSW). In Commissioner of Taxation v Karageorge (1996) 22 ACSR 199, Hamilton J held that the Division did not apply to the tender of a document made under s 1274(4C) of the Corporations Law. Telstra Corp v Australis Media Holdings (NSW Supreme Court, 18 March 1997, McLelland CJ in Equ., unreported) concerned an interlocutory application, during which notice to produce certain documents was given. Objection to production was taken, on the ground of client legal privilege, supported by an affidavit of a solicitor which included hearsay statements (which constituted Òprevious representationsÓ under the Act) as to the purpose for which the documents were prepared. Section 75 of the Act excludes from the hearsay rule in s 59 evidence adduced in an interlocutory proceedings provided the party adducing that evidence also adduces evidence of its source. Section 75 is in the same division of the Act as s 69. McLelland CJ in Equity found that ss 166-169 of the Act do apply to interlocutory hearings, and considered either that one or other of the participants to the conversation at which the purpose of the documents was discussed should be called, or that the previous representations in the affidavit should not be received in evidence. It does not appear that the particular practical difficulty which the present issue presents was discussed. The requesting party appears to have made its request at the time the affidavit was proposed to be read. There is nothing to indicate that the participants in the relevant conversation were not available to give evidence promptly. Nevertheless, that decision appears to accept that Div 1 of Pt 4.6 will apply to the present circumstances. Part 2.2 ss 47-51 of the Act deals with the means of proof of documents. In the case of documents in a foreign country, and in the case of voluminous or complex documents of which a summary is to be adduced as evidence (ss 49 and 50), notice to the other parties of the intention to tender that material must be given before the hearing. The procedures available under Pt 4.6 Div 1 could be appropriately applied to such instances. In Div 2 of Pt 3.2, dealing with the ÔFirst-handÓ exceptions to s 59 excluding hearsay evidence, s 67 also expressly requires notice to be given of the proposed use of oral or documentary evidence of a representation in a civil proceeding where the maker of the representation is not available to give evidence: s 63(2), or if the expense or delay in calling that person would be undue or it is not reasonably practicable to call that person: s 64(2), or of oral or documentary evidence of a representation in criminal proceedings in certain limited circumstances: s65(2), (3) and (8). Again, the procedure under Pt 4.6 Div 1 could be appropriately applied to such instances. The Court is also expressly given power to waive the failure to give such notice: s 67(4). I note also that s 68(2) also apparently creates a regime for determining the admissibility of certain documents without the witness being called. Sections 97 and 98 also provide for the giving of notice of intended evidence of character, reputation or conduct, or of a tendency to act in a particular way, or of coincidences or similar facts. There are separate provisions for the terms of those notices: s99. The Court has power to waive the giving of the notice in certain circumstances: s 100. This may provide another illustration where the procedure under Pt 4.6 Div 1 may usefully apply. Section 69 is express. It renders a relevant business record admissible: s 56 (provided the document is properly proved : ss 47-51), notwithstanding the hearsay exclusion: s 59. There are other provisions in Pt 3.2 (ss 70-75) which render relevant hearsay evidence admissible, notwithstanding s 59. They are (other than s 75) in respect of material which has an inherent likelihood of its integrity and accuracy. There is no express provision which makes that admissibility subject to Pt 4.6 Div 1, although s 56 provides that evidence that is relevant in a proceeding is admissible, Òexcept as otherwise provided in the ActÓ. The relevant (but qualified) exception is s 59: the hearsay exception. There is no general power in the Court in a civil proceeding to decline to admit admissible evidence or to limit its use, except under s 135 which applies where the Court is of the view that the probative value is substantially outweighed by the danger that the evidence might be unfairly prejudicial to a party, or be misleading or confusing, or cause or result in undue waste of time. There is nothing in ss 166-169 which demands that admissibility under s 69 can only be effected after the procedure which those sections impose has been undertaken. It would have been easy to express the provisions facilitating the admission of documents as evidence, including under s 69, as being subject to some prior notice requirement, and as requiring the prior opportunity for the procedure contemplated by ss 166-169 to have been undertaken. Section 69 does not do so. I have noted above particular provisions where pre-trial notice is required as a precondition to admissibility. Even in such cases the provisions empower the Court to waive that requirement in certain circumstances. There is no reason why the more general provisions of s 69 should be subject to the procedure under Pt 4.6 Div 1 as a condition of admissibility, especially where the Court has no discretion to waive compliance with it. Those considerations, in my view, strongly counterbalance the implication sought to be drawn to the contrary from ss 167(c) and 169(1)(c) and (3). The practical consequences to the orderly and efficient conduct of trials if the submission of the Parnell respondents is correct would often be dramatic. The Court might be faced, theoretically, with a series of adjournments of a relatively short trial while the opportunity to implement the procedure under Part 4.6 Div 1 was undertaken, even though ultimately no request might be made. As I noted above, it is a not uncommon circumstance for the desirability of tendering a particular business record to arise only during the trial, or for the availability of a particular and relevant business record to emerge only during the trial. Tender of documents on short notice is not always indicative that a party is in some way unprepared, or at fault in preparation for trial. The contention of the Parnell respondents might result in an adjournment of the trial while that tender was ruled upon. The Court does not have the power to rule inadmissible a business record which falls within s 69, except under s 135. Section 135 will not generally be available to reject such evidence. The Court may well therefore be restricted to making an award of costs by reason of any adjournment while the procedure is undertaken. The additional delay, and cost, would not serve the public interest or the interests of the particular litigants. It is also, in my view, significant that there are within the extensive provisions of ss 59-139 dealing generally with means of proof of relevant facts requirements imposed, depending upon the type of evidence to be adduced and its purpose, which themselves constitute safeguards to ensure that the evidence adduced is of a particular quality and that it is fair to the party against whom that evidence is tendered that that evidence be admitted. Accordingly, in my judgment, the provisions of Pt 4.6 Div 1 do not preclude the receipt into evidence under s 69 of the documents presently in issue for the time being and while the procedure which that Division provides is undertaken. The Parnell respondents may pursue their entitlements with respect to the documents in issue under that Division in any event. In the present circumstances, it is possible to accommodate the possibility that the Parnell respondents may seek to have the documents, or some of them, Òde-admittedÓ by admitting the documents provisionally, that is subject to any order on an application later made under s 69 that the documents not be admitted into evidence. That course of action will not necessarily, or routinely, be appropriate but it causes no difficulty in the present circumstances. Any such application should be made before the close of the applicantÕs case so that it is not disadvantaged in any way. I note the alternative submission put on behalf of Ampol that the general powers of the Court, for example under O 32 r 4(1) of the Federal Court Rules, to control the conduct of a proceeding are preserved. Section 11 of the Act so provides, but only so far as the Act does not provide to the contrary. In addition, s 26 empowers the Court to make such orders as it considers just, including in relation to the production and use of documents in connection with witnesses. That power is not expressed to be subject to the other provisions of the Act. I think that it must be construed having regard, inter alia, to the limited waiver power in s 190. It is unlikely therefore that that s 26 was intended to permit the court to make orders which would have the effect of removing the Pt 4.6 Div 1 procedure from applying to delay the tender of business records under s 69 of the Act if otherwise it had that effect. The documents in issue will each be received into evidence, subject to any order later made on an application by the first to third and fifth respondents under s 169 of the Act that those documents not be admitted into evidence. I certify that this and the preceding eight (8) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield Associate: Dated: Counsel for the Applicant: Mr RA Conti QC with him Mr A Harris Solicitor for the Applicant: Cosoff Cudmore & Partners Counsel for the first, second, third & fifth Respondents: Mr WJ Wells QC with him Mr P Slattery Solicitor for the first, second, third & fifth Respondents: OÕLoughlins Dates of Hearing: 19 & 20 November 1998 Date of Judgment: 20 November 1998