SIMMONDS v SPOONER [No 3] SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KirBy P, CoLe JA and ROLFE AJA 28 March 1995, 28 March 1995 [1995] NSWCA 429 EVIDENCE — unadmitted evidence — credit in issue judge uses affidavit not read in trial — relevant to credit — held: Irregularity requires retrial: GIO v Bailey (1992) 27 NSWLR 51 (CA) considered. NATURAL JUSTICE — procedural fairness — use of affidavit not read at trial — relevant to evidence — held: retrial ordered. Stead v State Government Insurance Commissioner (1986) 161 CLR 141. EVIDENCE — evidence not admitted at trial — trial judge (McInerney J) finds against credit of plaintiff in personal injuries damages action — refers in the course of his reasons to an affidavit filed in the Court — no earlier reference to the affidavit during trial — affidavit not formally tendered or read in the trial — affidavit used before registrar in earlier proceedings for expedition of hearing of the appeal — complaint of departure from rules of procedural fairness — whether admitted departure deprived plaintiff of possibility of a successful outcome — held (1) The use of evidence, which was not formally admitted in the trial, was an irregularity and the failure to provide the plaintiff with the opportunity to answer or make submissions thereon was a procedural irregularity. Escobar v Spindaleri (1986) 7 NSWLR 51 (CA); Government Insurance Office of New South Wales v Bailey (1992) 27 NSWLR 304 (CA); Mikic v Government Insurance Office of New South Wales, unreported, Court of Appeal (NSW), 12 December 1994; [1994] NSW JB 112 appld; (2) The irregularity was not one which the plaintiff had waived or which could not possibly have affected the outcome of the trial. Australian and Overseas Telecommunications Ltd v McAuslin (1993) 47 FCR 492 (FC) consd; (3) Accordingly, a new trial must be ordered. NATURAL JUSTICE — procedural fairness — reliance on material not in evidence at trial — material relevant to judge's view on credit of plaintiff — judge expresses adverse opinion on plaintiff's credit — views on credit relevant to outcome of trial; held (Cole JA; Kirby P and Rolfe AJA agreeing), The trial Kirby P I will ask Cole JA to give the first judgment. Cole JA This is an appeal from a decision of McInerney J delivered on 26 October 1990. The appellant suffered injuries in a motor vehicle accident on 17 June 1984. Relevantly he alleged that he suffered a serious back injury and some injury to his neck. It was the case of the respondent at the trial that the appellant had not suffered that back injury in that motor accident but that he had suffered it at some later point of time, probably when weightlifting, in accordance with a complaint which he made to the Westmead Hospital on 15 August 1985. In deciding the issue of whether the injury was caused by the motor vehicle accident his Honour had regard to the medical evidence. He had regard to the history given by the appellant to various medical practitioners and he had regard to the evidence given by the appellant in the witness box. 2 UNREPORTED JUDGMENTS The learned trial Judge found that, having regard to the demeanour of the appellant, he could not accept him as a witness of truth; having regard to the inconsistencies in the appellant's evidence he could not regard him as a witness of truth; and having regard to the inconsistencies in the histories which he had given to the various medical practitioners he could not regard him as a witness of truth. Having considered those matters his Honour made a finding in relation to the alleged back injury. His Honour's finding was: "The evidence of the plaintiff and his witnesses, unfortunately for him, does not establish, in my view, on the balance of probabilities, that he suffered a back injury in this accident. I am not satisfied that the evidence satisfies me, on the probabilities, that he injured his back in the accident and that injury brought him to an operation at L4-5. In this respect I note in particular that he omitted to mention to any of the treating doctors the injury to his back in August 1985 no more than three months prior. I just cannot accept that his memory was so vague that he had forgotten that."! Having made that finding at 25 of his Honour's judgment, at 26 his Honour then made reference to an affidavit sworn by the appellant on 29 March 1990. That affidavit had not been tendered in evidence. It was thus not before his Honour for the purpose of determining the issues in the litigation. The affidavit dealt with four matters. First, the period during which the appellant worked after the motor vehicle accident. Second, his financial circumstances. Third, his expenditure on a weekly basis for petrol and car maintenance and fourth, his reasons for stopping work. Some of those matters had been addressed in the evidence. His Honour addressed each one of those four topics and made a comment which was critical of the divergence which his Honour found between the material in the affidavit on each of those four topics and the evidence which otherwise had been placed before him at the trial. The effect of the affidavit upon his Honour, apart from that comparison leading to a criticism of the appellant, was summarised by his Honour at 283 of the Appeal Book. At the top of page 28 of his judgment he said: "Tt is on the basis of what I believe was false material that he obtained an expedited hearing over other deserving litigants, a matter which I view with considerable concern." It is apparent from what I have said that the affidavit affected his Honour's mind in a manner critical of the appellant. His Honour then went on to deal with the remaining aspects of the appellant's claim, that is, the claimed injury to his neck. His Honour said: "From an examination of the material before me and from my observations of the plaintiff I am not satisfied that he suffered any back injury in this motor vehicle accident, and in particular that it resulted in the operation on his lumbar spine."2 It is thus apparent that having made a preliminary finding that he was not satisfied that the back injury was caused by the motor vehicle accident, his Honour, after dealing with the affidavit which was not in evidence before him, then returned and made a second finding in relation to the causal connection between the back injury and the motor vehicle accident. 1. Appeal Book, at 280-281 2. Appeal Book, at 283 URJ SIMMONDS v SPOONER [No 3] (Cole JA) 3 It is in my view clear from that, that it may well be that the comments that his Honour made in relation to the affidavit did have some effect upon his Honour's approach to the credit of the appellant, which credit his Honour rejected. On this appeal it was conceded on behalf of the respondent that his Honour's reference to the affidavit, which was not tendered in evidence before him, constituted a technical breach of the rules of procedural fairness. Then it was argued that the comments on the affidavit were not relevant to any issue, except the appellant's credit, and that had already been dealt with by his Honour. Third, it was put that even if his Honour had not referred to the affidavit the result in the proceedings would have been the same. The test which this Court must apply in determining whether or not the judgment of his Honour is infected with an impermissible taint in consequence of having made reference to material which was not before the trial Judge in the proceedings is laid down in Stead v State Government Insurance Commission3. There five Justices of the High Court said: "The general principle applicable in the present circumstances was well expressed by the English Court of Appeal (Denning, Romer and Parker LJJ) in Jones v National Coal Board, in these terms: 'There is one thing to which everyone in this country is entitled, and that is a fair trial at which he can put his case properly before the Judge... No cause is lost until the Judge has found it so; and he cannot find it without a fair trial, nor can we affirm it.' That general principle is, however, subject to an important qualification which Bollen J plainly had in mind in identifying the practical question as being: Would further information possibly have made any difference? That qualification is that an appellate court will not order a new trial if it would inevitably result in the making of the same order as that made by the primary Judge at the first trial. An order for a new trial in such a case would be a futility. For this reason not every departure from the rules of natural justice at a trial will entitle the aggrieved party to a new trial. By way of illustration, if all that happened at a trial was that a party was denied the opportunity of making submissions on a question of law, when, in the opinion of the appellate court, the question of law must clearly be answered unfavourably to the aggrieved party, it would be futile to order a new trial. Where, however, the denial of natural justice affects the entitlement of a party to make submissions on an issue of fact, especially when the issue is whether the evidence of a particular witness should be accepted, it is more difficult for a Court of Appeal to conclude that compliance with the requirements of natural justice could have made no difference. True it is that an appeal to the Full Court from a judgment or order of a Judge is by way of re-hearing and that on hearing such an appeal the Full Court has all the powers and duties of the primary Judge, including the power to draw inferences of fact: Supreme Court Rules, 0.58, R6 and R14. However, when the Full Court is invited by a respondent to exercise these powers in order to arrive at a conclusion that a new trial, sought to remedy a denial of natural justice relevant to a finding of fact, could make no difference to the result already reached, it should proceed with caution. It is no easy task for a Court of Appeal to satisfy itself that what appears on its face to have been a denial of natural justice could have had no bearing on the outcome of the trial of an issue of fact. 3. (1986) 161 CLR at 141 4 UNREPORTED JUDGMENTS And this difficulty is magnified when the issue concerns the acceptance or rejection of the testimony of a witness at the trial." Their Honours further stated at 147: "Alternatively, if the Full Court is properly to be understood as saying no more than that a new trial would probably make no difference to the result, their Honours failed to apply the correct criterion. All that the appellant needed to show was that the denial of natural justice deprived him of the POSSIBILITY of a successful outcome. In order to negate that possibility, it was, as we have said, necessary for the Full Court to find that a properly conducted trial could not possibly have produced a different result." (emphasis added) It is apparent from the test there laid down that if there is the possibility that the reference to impermissible material could have affected the outcome of the trial, so far as the appellant's prospects of success is concerned, then the appeal must be upheld and there must be a new trial. In my view it is not possible for this Court to say that the comments made by his Honour in relation to the four matters referred to in the affidavit in respect of which his Honour drew unfavourable inferences, by way of comparison between statements in that affidavit and the evidence placed before him by the appellant, did not infect his Honour's view in relation to the credit of the appellant. The credit of the appellant was one of the bases upon which his Honour indicated that he had achieved a finding that he was not satisfied that the back injury, of which the appellant complained, was not caused by the motor vehicle accident. In those circumstances it seems to me that this Court should hold that the appeal must be upheld and that there should be a new trial. The test relates to a possibility, and in my view this Court is not in a position to exclude the possibility that his Honour's judgment in relation to the appellant, particularly in relation to the question of credit, was not affected by the reference his Honour made to the affidavit. The orders that I would propose would be: That the appeal be upheld; that the verdict and judgment of the trial Judge be set aside and that there be ordered a new trial. The appellant should have the costs of the appeal. KirbyP. I agree with the orders which have just been proposed and which the reasons that Cole JA has provided. In Government Insurance Office of New South Wales v Bailey4, in seeking to state the principles which are to be applied in the case of the use of undisclosed matter by a Court at trial, I suggested two principles relevant to the consideration of what should be done when it was disclosed that such material had been used by a judge which was not in evidence: "The question then arises as to what should occur, if it is found that an irregularity by the use of undisclosed matter in the conduct of the trial vitiates the judgment under challenge. Upon this point, the High Court of Australia instead has adopted a stringent requirement. Subject to 'an important qualification', a new trial must then be ordered. This is not only to uphold the requirements of justice to a particular party. It is to uphold the integrity of the administration of justice itself. It should cause no surprise that the High Court has adopted this stringent rule. It has done so in other areas of the administration of justice, for example, in the case of apprehended bias on the part of a judicial officer where 4. (1992) 27 NSWLR 304 (CA) at 315 URJ SIMMONDS v SPOONER [No 3] (KirbyP) 5 no suggestion is made that the judicial officer was actually biased. The test is what a reasonable observer might have concluded from the circumstances as to the judicial officer's capacity to bring an independent mind to bear upon the issues for trial: see Livesey v New South Wales Bar Association (1983) 151 CLR 288 at 300 and Vakauta v Kelly (at 584). The stringency of this standard, which is defensive of the reputation of the courts for integrity and manifest impartiality, was called to attention in Australian National Industries Ltd v Spedley Securities Ltd (In Liquidation) (1992) 26 NSWLR 411: see especially my own reasons (at 418D) and per Mahoney JA (at 439B); and The exception allowed by the 'important qualification' which the High Court acknowledged instead (at 145) was whether the information would 'possibly have made any difference'. An appellate court will not order a new trial if it would 'inevitably result in the making of the same order as that made by the primary Judge at the first trial'. It would hold its hand in that circumstance because a new trial would then be 'a futility'. The test of 'possibility' is the same in this area of the law's operation as in the case of imputed bias. It is so because the same interest is at stake: the protection of the reputation of the integrity of the judicial process and the entitlement of each party which comes to our courts to have a fair trial by an impartial tribunal. New trials have been called an 'evil'. The legal system struggles against the delay, inconvenience, expense and emotional burden which new trials occasion: cf. Balenzuela v De Gail (1959) 101 CLR 226 at 233; see also the Supreme Court Rules 1970, Pt51 R16. But where the complaint is one, in effect, that a party has not had a fair trial, and that the rules of procedural fairness have been breached, a 'new' trial may be required because only by this means can the parties have the resolution of their dispute as the law provides. Furthermore, only by this means can the integrity of the judicial process be upheld. At stake is not only the micro-concerns of the particular litigants but the macro-concern of the administration of justice. In Stead (at 145), the High Court acknowledged the powers of a Full Court to conduct an appeal by way of re-hearing. Such a power is enjoyed by this Court: see Supreme Court Act 1970, s75A. But the High Court also cautioned (at 145-146) that, in cases where the first trial has miscarried for denial of natural justice, the appellate court should proceed 'with caution': "... It is no easy task for a Court of Appeal to satisfy itself that what appears on its face to have been a denial of natural justice could have had no bearing on the outcome of the trial of an issue of fact. And this difficulty is magnified when the issue concerns the acceptance or rejection of the testimony of a witness at the trial.' It was held that the refusal of a new trial was mistaken instead. In Camilleri, this Court applied the test propounded instead. Although it had all of the relevant evidence before it, it could not conclude that the same result was inevitable. A re-trial was therefore ordered." In Bailey I was in dissent in the result. However, I do not understand that the statement of principles which I there endeavoured to set forth were controversial. In effect, as Cole JA has pointed out, they are simply an illustration of what the High Court of Australia has said in Stead v State Government Insurance Commission. In Australian and Overseas Telecommunications Ltd vy McAuslan® 5. (1986) 161 CLR 141 6. (1993) 47 FCR 492 (FFC) 6 UNREPORTED JUDGMENTS one of the Judges in the majority of the Full Federal Court, Miles J, cited some of the discussion of principle advanced by me in Bailey, apparently with approval. In McAuslan Burchett J was in dissent in the result in the application of the Stead principle. So I was in Bailey. So, in effect, was Samuels JA in an earlier case of Escobar v Spindaleri', although strictly speaking Samuels JA was there basing his dissenting opinion on the separate question of waiver. There is no question of waiver in the present case because the first that the appellant came to know of the use which his Honour had made of the undisclosed material was when the judgment was handed down. He did not waive the use of the evidence in the way which occurred. He comes to this Court protesting at the use. The fact that there are dissenting opinions in the application of the Stead rule in the foregoing cases simply indicates that, in each case, a judgment is called for. Sometimes the judgment appears clear. In this Court in Mikic v Government Insurance Office of New South Wales', the Court unanimously held that the exception envisaged by Stead applied and that the party had not lost the possible opportunity of obtaining a more favourable decision. But, as I have shown in other cases there are contrary opinions and sometimes differences of view. In Bailey (above) Clarke JA, at 324, explaining the reasons for the majority opinion, referred. (in the manner that Rolfe AJA pointed out during argument) to the fact that: "The Court was assessing damages in a case in which there was no conflict of evidence and no relevant issue of credit or fact." That was not the case in the matter now before this Court. Here, there was a serious issue as to credit. It was therefore relevant to McInerney J's consideration of the appellant's credit that he might possibly have taken into account the affidavit which was not formally in evidence before him. The respondent urged that there was much evidence otherwise to support his Honour's decision. That is true. The case of the respondent at trial was very strong. However, the rule upholding procedural fairness of the trial is a stringent one. It is one directed at preventing possible contamination of the result. By that criterion, I believe the rule in Stead requires the orders which Cole JA has proposed. The respondent urged that McInerney J's reference to the material which had been admitted in evidence came at a later part in his judgment, fifteen pages after he had referred to an opinion adverse to the credit of the appellant. On this basis, as I understood the argument, as it was suggested that his Honour had already made up his mind about the appellant's credit before he came to consider the unadmitted evidence. However, the locus of the reference cannot affect the matter. A Judge does not write a judgment in a way that involves no prior reflection upon the whole of the material before him or her. It seems clear that in this case McInerney J took an adverse view of the appellant. In reaching that view, to which he later gave expression in his reserved opinion, it would have been extremely difficult for him, simply as a matter of psychological fact, to put out of his mind and compartmentalise the opinion which he later expressed based upon the material which was not formally in evidence in the trial before him. There is no evidence that he did so. 7. (1986)7 NSWLR 51 (CCA) at 59 8. (Unreported) Court of Appeal (NSW), 12 December 1995 JB 112 URJ SIMMONDS v SPOONER [No 3] (Rolfe AJA) 7 For these reasons I too believe that the trial miscarried. I say this with great sympathy for the Judge. No doubt the affidavit material was in the court file. The judgment was reserved. When his Honour came to consider the preparation of his reserved judgment he doubtless took the affidavit out of the file and assumed that it had been read before him. The rigorous examination of the transcript, however, discloses, (as has not been in dispute before this Court), that the affidavit was not formally in evidence before the Judge at the trial. Indeed the file of the Court appears to suggest that the affidavit was never before the Judge at all but had been placed before a Registrar of the Court in the earlier application for expedition. In these circumstances, whilst the mistake was an understandable one, it is one which leads to the result which Stead commands. There is a possibility that his Honour was affected. That possibility requires that this Court, in defence of due process of law, should set aside the judgment. It requires that the matter be re-tried. I agree in the orders that Cole JA has proposed. Rolfe AJA I agree with the reasons of the President and Cole JA and with the orders proposed by Cole JA. Kirby P: The orders of the Court are accordingly as Cole JA has provided. I formalise the orders of the Court as follows: 1. Appeal upheld; 2. Set aside the judgment that was entered pursuant to the orders of McInerney J; 3. In lieu thereof, order that the proceedings be returned to the Common Law Division of the Supreme Court for re-trial as to damages; 4. Confirm the costs order at trial; and 5. Order that the respondent pay the appellant's costs of the appeal. 1. Appeal allowed; 2. Set aside the judgment entered pursuant to the orders of McInerney J; 3. In lieu thereof, order that the proceedings be returned to the Common Law Division of the Supreme Court for retrial as to damages; 4. Confirm the cost's order at trial; and 5. Order that the respondent pay the appellant's costs of the appeal. Counsel for the Claimant: KP Rewell Instructed by: Beilby Polden and Costello Counsel for the Opponent: HJ Mater Instructed by: Roslyn O'Reilly