a REASONS FOR JUDGMENT Judgment delivered at... J. 5 Gourley, Gort, Print., Mab. ..THURSPAY....3R2.. < On...... Appeal Supreme Court of the action had. event of the new FERGUSON ORDER allowed with costs. The judgment of the Queensland set aside and a new trial of The costs of the first trial to abide the trial. FERGUSON BARWICK C.J. SRGUSON The appellant sued in the Supreme Court of Queensland to recover damages for the making by the defendant of a fraudulent representation as to the affairs of a company of which the defendant was both chairman of directors and managing director. The representation was in substance that the company was then in such a financial situation that it could use the amount of money which it is suggested the plaintiff invest on the promotion of certain irrigation equipment which had been made and sold by the company and of the quality of which the plaintiff had formed a particularly favourable opinion. Answers to interrogatories made by the plaintiff were put in evidence by the defendant. These substantiated the making of representation. Answers to interrogatories made by the defendant which were put in evidence by the plaintiff could be regarded as admitting that such a representation had been made at the time the plaintiff's investment in the company was being solicited by the defendant and prior to the plaintiff's actual investment in the company. The defendant in his evidence said at one of the eritical meetings at which the plaintiff says the representa Sion was made he produced to the plaintiff samples of the comoany'ts preducts, brochures concerning them end financial statements of the company. The defendant said that the equipment was brought in a "port" and that the vlaintiffis wife who was admittedly in the house to which the defendant came on this oceasion could not have failed to see the documents which he said he brought with him. He said that he commended these financial statements to the plaintiff's careful scrutiny and attendance and that he left them with the plaintiff for that purpose. During his cross-examination the plaintiff admitted that brochures were brought to his house on this occasion by the defendant but denied that financial statements were then brought or left with him by the defendant. At the conclusion of the defendant's case, the plaintiff sought to lead evidence by the plaintiff's wife that she recalled the occasion in question, that she saw the defendant arrive, that he did not bring with him any "port" or any papers, that he left no pavers when he departed and that there were no papers observable on the table on the verandah where the two men had been talking for some time before the defendant departed. The defendant objected to the admission of this evidence on the ground of its irrelevancy, that it was merely an attempt to discredit the defendant and that, if admissible, it should have been led in chief. The learned Chief Justice rejected the evidence witrout stating the ground of his rejection. He gave judgment for the defendant in the case on the footing that he was unahle to be satisfied the representation alleged was made. In arrivi that view he expressed preference for the evidence of based on observation of the parties in the witness box. He said 3. he also relied on the evidence of witnesses for the defen he accepted and which in his view tended to support the defe evidence. He also thought there was improbabilities in the story told by the plaintiff which counted forcibly against the truth of the plaintiff's case. Treating the matter as one of fact, as it was and depending, as he said, on the credibility of the witnesses in the whole case he reached the conclusion to which I have already referred. The issues in the case were first, the making of representation; second, its truth or falsity and third, its inducement of the plaintiff to invest in the company; and, of course, damages. We have no finding. The defendant admitted that at the time of the critical interview with the plaintiff he intended to use a substantial part of the money which the plaintiff might invest in the company in payment of debts due by the company to himself or the company in which he had a financial interest: that is to say, to that extent at least the money provided by the plaintiff would not be used in promotion of the irrigation equipment. Further on the evidence produced at the trial and, indeed, from the financial accounts which the defendant claimed to have commended to the attention of the plaintiff, the company was insolvent. Indeed evidence in the defendant's case showed that the company at the time of representations were being made, if they were made, wes barely able to keep its creditors at bay. It is clear from wnat I have so far said that the defendant's evidence of the production of the financial statements of the company to the plaintiff at one of the critical interviews, and well before the plaintiff's investment of money in the company, a was directly relevant to the issue of inducement. Further because of the plaintiff's denial it was a matter to which the eredit of each of the parties was relevant. The evidence proposed to be given by the plaintiff's wife would, if believed, deny a substantial part of the defendant's case and also I should think form an important element in the consideration of the credibility of the defendant; and thus indirectly of that of the plaintiff. This would be so, in my opinion, though thet evidence was to some extent in conflict with the admission made by the plaintiff in cross-examination. In my opinion, the proposed evidence was relevant to an issue in the case and with due respect to the trial judge was plainly admissible. Whilst no doubt it bore on the credibility of the parties, it was not simple evidence contradicting a party on a matter which went solely to his credit: it was relevant in the case. Further, even if it were admissible in chief, it was not merely confirmatory of the plaintiff's case. It was in direct denial of evidence led by the defendant upon material facts in his case: and so ought not to have been rejected as a splitting of the plaintiff's case. The remaining question is whether the rejection of the admissible evidence should lead to a new trial. No doubt new trials should be avoided where they can be consistently with justice according to law. In the case of the wrongful rejection of evidence there need be no new trial if there is no miscarriage of justice because of that rejection. But I am quite unable to conclude in this case that the rejection of this evidence did not cause this case to miscarry. Whilst the answers to interrogatorie of which I have spoken have to my mind a powerful bear the first issue between the parties there is a-considerable body of evidence relating to all the issues in the case, some of it tending strongly in one direction and other parts of it tending in the other direction there the credibility of the parties was particularly important. I am unable to conclude that the introduction of the rejected evidence could not substantially influence the view taken of the acceptability of the evidence of one of them rather than that of the other. As I think there must be a new trial I do not propose to go into all the material produced in the case which satisfies me that, because of the rejection of the evidence of the plaintiff! wife, the judgment in the case for the defendant should not be allowed to stand and that there should be a new trial. Accordingly in my opinion, the appeal should be allowed, the judgment for the defendant set aside and a new trial ordered. The respondent, in my opinion, should bear the costs of the appeal. The costs of the first trial should abide the result of the new trial. FERGUSON v. LEVER FERGUSON v. LEVER I agree with what the Chief Justice has said. Ve the evicence of the Ioagree. It seems to me plaintiff's wife, would have been relevant in an issue in che action and at its rejection should lead to a new trial JUDGMENT. (ORAL) FERGUSON FERGUSON Ve LEVER I agree with the reasons given by the Chief Justice. FERGUSON ve LEVE JODGME! WALSH J. CORAL EERGUSON v. LEVER I agree that the evidence from Mrs. Ferguson was admissible. I have been in doubt whether the rejection of it requires that there should be a new trial. It was admitted by the appellant in evidence that at a meeting which took place before he agreed to purchase the shares in the company the balance sheet and profit and loss account were read out. The plaintiff must have known from those that the company was operating at a loss and had debts which were very substantial. I think there was a strong case for the respondent on the question whether the appellant was induced to buy the shares by any representations made by the respondent. I think it is probable that if his Honour had heard the evidence of Mrs. Ferguson his decision would still have been in favour of the respondent but I have decided that I should not be justified in regarding this as certain. In the circumstances, I do not dissent from the opinion of the other members of the Court that the case requires a new trial.