NYERLUCZ v DEI ROCINI SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MAHONEY AP, CLARKE and MEAGHER JJA 3 August 1995, 8 September 1995 [1995] NSWCA 340 Fresh evidence found after trial — Investigation at trial did not seek evidence from plaintiffs residential neighbours — After trial, residents volunteered to give important evidence Appeal from Common Law Division — Application to adduce fresh evidence — Fresh evidence found after trial — Investigation at trial did not seek evidence from plaintiff's residential neighbours — After trial, residents volunteered to give important evidence — Held: Leave to adduce evidence on appeal. ORDERS Leave to adduce fresh evidence on the appeal granted. The plaintiff/respondent to pay the costs of the motion of 3 August 1995. Mahoney AP The plaintiff John Dei Rocini was injured in a motor vehicle accident for which he was entitled to recover damages from the defendant. There was, at the trial, serious contest as to the extent of the injuries suffered by him and accordingly as to the the damages to be awarded to him. On 22 December 1993 Grove J gave judgment for the plaintiff for $203,859. The defendant appealed to this Court against his Honour's judgment. The plaintiff cross-appealed upon the ground that the damages were appealably inadequate. After the judgment was given, the defendant became aware that the next-door neighbours of the plaintiff, Mr and Mrs Mulhearn, could and would give evidence suggesting that the plaintiff was much less seriously injured than at the trial he had contended. The defendant, by motion, sought an order that it have leave to adduce as fresh evidence at the trial the evidence of the next-door neighbours. Because of the nature of the issues involved, the Court directed that the motion be heard prior to the hearing of the appeal. The evidence sought to be tendered on the appeal relates to matters which occurred prior to the hearing. Accordingly, it is evidence which the defendant cannot adduce unless it establishes that there are "special grounds" within s75A of the Supreme Court Act 1970. The principles upon which the Court should act are not in contest. Counsel have referred to the decision of this Court in Radnedge v Government Insurance Office of New South Wales (1987) 9 NSWLR 235 and to cases in which the principles there referred to have been applied. It has been submitted that the discretion of the Court to allow fresh evidence of the present kind should be exercised having regard to the criteria there referred to and in particular to whether the evidence could with reasonable diligence have been produced at the hearing, whether it would, with the appropriate degree of probability, have affected the outcome of the trial and whether it is credible. It will be convenient to approach the matter, as counsel have done, by reference mainly to these three criteria. 2 UNREPORTED JUDGMENTS It is likely that, had Mr and Mrs Mulhearn been interviewed prior to the trial, they would have agreed to give at the trial the evidence now in question. The defendant, at the trial, contested the extent and indeed the genuineness of the injuries which the plaintiff claimed to have suffered. It investigated that matter to the extent of what he was seen to do. It did not approach Mr and Mrs Mulhearn, his next-door neighbours was that at the time it was the defendant's practice not to do so: presumably it believed that to do so would warn the plaintiff of its investigation of him and so be likely to defeat that investigation. It is necessary to consider the adequacy of this as an explanation for not approaching Mr and Mrs Mulhearn before the trial. In determining whether, within the relevant principles, a defendant should approach potential witnesses close to the plaintiff no inflexible rule can be laid down. There may well be circumstances in which a reasonable and prudent investigation conducted before the trial will involve an interview of such persons. As the argument has suggested, one of the main matters to be considered in deciding whether such an approach should prudently be made is the effect it is likely to have upon the plaintiff and accordingly upon the ultimate ascertainment of the extent of his injuries. In some cases, such an approach may defeat what the defendant is trying to do; in other cases it may have little or no effect on it. At the risk of over-simplification, the matter may be illustrated by an example. Ordinarily, the defendant will desire, by observation and by video photography, to ascertain and to record what the defendant does and so the true extent of his injuries. If such investigations are otherwise concluded, the defendant may (subject to one qualification) prudently approach a person who is apt to warn the plaintiff that he is being investigated. If the observation of him is otherwise complete, it will not matter that he is warned and so may, for example, assume more carefully the appearance of an injured person. The qualification to this lies in the possibility of forensic advantage. The plaintiff's state is to be determined ultimately by how he presents to the judge at the trial. If a plaintiff feigning injury is warned that he has been investigated, he will be prepared. He may more readily account for what has been observed of him and may be better prepared to present himself in court as injured. On the other hand, if he is confronted at the trial without warning, the chance of the defendant convincing the trial judge may be improved. If this is a factor to be taken into account in the circumstances of the particular case, the effect of it may be lost if, by approaching a next-door neighbour, the plaintiff is alerted. What is the significance of forensic advantage in this regard? Litigation is not a game. It involves the serious examination of the cases advanced by the parties and the testing of the truth of them. The rules of litigation are directed to finding where, in the cases advanced by the parties, the truth lies. They may, by producing unacceptable surprise, hinder rather than assist in doing so. But experience has shown that a legitimate confrontation, particularly a legitimate surprise confrontation, may assist the court to test the truth of a party's assertions. The legitimacy of the use of it must be judged according to the circumstances of the case. In the present case, I do not think that it was wrong for the defendant to seek to go to trial with the plaintiff ignorant of the fact of and the substance of the investigations it had undertaken. The Court should not, I think, too readily conclude that the approach adopted by a defendant will not assist in the elucidation of the objective truth at the trial. In the present case, notwithstanding the view ultimately adopted by Grove J, the view might well be formed that the URJ NYERLUCZ v DEI ROCINI (Mahoney AP) 3 plaintiff exaggerated or, perhaps, gave the evidence he did as to his incapacities and suffering for the purpose of deceiving the Court. If that be the correct view - a matter on which for this purpose it is not necessary to form a final conclusion or one binding upon the Court on the appeal - the plaintiff may well have moulded his evidence in advance to take account of investigations which he knew the defendant had initiated. If the defendant reasonably believed the plaintiff intended to lie or to exaggerate, it was legitimate for it to conduct the proceeding upon the basis that he should give evidence without knowing that the defendant had been investigating him in the manner or to the extent that it had. lam satisfied that, had it inquired of Mr and Mrs Mulhearn before the trial, the defendant could have learned of what they would say. But I am not satisfied that, in refraining from approaching them at the time, it acted unreasonably; I am of opinion that it pursued reasonably a proper course of action in the conduct of its case. These conclusions do not, in terms, establish that the relevant evidence could not have been obtained "with reasonable diligence for use at the trial": Radnedge v Government Insurance Office of New South Wales (1987) 9 NSWLR at 251; Council of the City of Greater Wollongong v Cowan (1955) 93 CLR 435. It could. But this aspect of the matter is not to be determined merely by that fact. In the particular circumstances of this case, that does not determine the matter against the defendant. I am satisfied that the evidence, if produced at the trial, would have had the relevant likelihood of producing an outcome in favour of the defendant. I have refrained from detailing it. It goes to establish conduct by the plaintiff inconsistent with the injuries which, at the trial, he claimed to have suffered. The evidence was such that, if accepted, it would have been likely to reduce the quantum of damages awarded to the plaintiff and to reduce it significantly. But, as Mr Poulos QC, for the plaintiff, has by his submissions rightly suggested, in the present case this factor is more complicated. At the trial, there was a serious contest as to whether the plaintiff had the relevant injuries to his cervical spine and whether, if he did, those injuries produced pain and suffering of the kind and to the extent that he claimed. The matter was investigated at length: there was a difference between the medical witnesses; and the genuineness of his complaints was contested, by video evidence and otherwise. The trial judge, with some doubt, concluded that the plaintiff had suffered injuries to his cervical spine and that he, the plaintiff, believed that he had significant pain and suffering. His finding was of a special nature. His Honour did not accept that, considered objectively, the injuries established did cause pain and suffering to the extent that the plaintiff claimed but he concluded that the plaintiff believed that he was in the condition he claimed. On this basis, the judge awarded damages for economic loss upon the basis that the plaintiff had not been able to work up to the date of the trial and would not be able to work for some two years or so thereafter. Mr Poulos QC submitted that the issues arising in this regard were thoroughly investigated at the trial; his submissions suggested, I think, that the evidence now tendered goes only to the degree to which the plaintiff was mistaken in his belief as to the objective nature of his condition and his symptoms. In my opinion, the evidence of Mr and Mrs Mulhearn, if accepted according to its terms, would go further than this aspect of Mr Poulos's submissions suggested. The Court had the benefit, on this motion, of the affidavit and oral evidence of Mr Mulhearn and the affidavit evidence, not cross-examined upon, of 4 UNREPORTED JUDGMENTS Mrs Mulhearn. That evidence, if accepted, would lead me to the conclusion that the plaintiffs evidence was not based upon a misunderstanding of the extent of the injuries or symptoms; it would lead me to conclude that the evidence given was not true or was consciously exaggerated. It is not necessary for purposes of this motion, to detail the evidence given by the plaintiff at the trial and to contrast it with the detail of the evidence of Mr and Mrs Mulhearn. It is sufficient to contrast, by way of example, what was said as to the plaintiff's lawn mowing activities and as to his lifting and moving rocks and the like. The thrust of the case advanced by the plaintiff at the trial, as to those matters and otherwise, is inconsistent with the thrust of the case appearing from the evidence of Mr and Mrs Mulhearn. The two bodies of evidence are, in my opinion, inconsistent in relevant and important respects. Had the judge had before him and accepted the evidence of Mr and Mrs Mulhearn, his conclusion would, in my opinion, have been different. The evidence of Mr and Mrs Mulhearn is, in the relevant sense, credible. Mr Poulos QC cross-examined Mr Mulhearn but did not, in terms or, I think, in substance, suggest that what Mr Mulhearn had said of his observations of the plaintiff was untrue. In any event, I found his evidence credible. Mrs Mulhearn was not cross-examined. It is agreed that no inference is to be drawn from the mere fact of failure to cross-examine. But ha evidence was similar in details and in effect to that of her husband. Ihave referred to these three considerations and to matters directly relevant to them. However, in the end, the matters relevant to the exercise of the discretion given by s75A cannot be divided into inflexible categories. Circumstances are various. In the present case, the evidence now provided goes, in my opinion, against the overall thrust of the evidence presented at the trial; the picture it presents is different in substance from that presented by the plaintiff at the trial. There are, in my opinion, special grounds warranting the reception of it upon the appeal. There is one further aspect of the matter to which reference should be made. On one view of the evidence given by the plaintiff and to be given by Mr and Mrs Mulhearn, the evidence of the plaintiff and the judgment obtained involves something in the nature of a fraud or a deliberate misrepresentation. It is, for the reasons I have indicated, arguable that the plaintiff's evidence at the trial involved conscious misstatement of the nature of his condition or conscious exaggeration of it. The significance of such a finding, if it be made, requires consideration. Reference was made to such a consideration in McDonald v McDonald (1965) 113 CLR 529 at 533, 535-6, 540-2. I am satisfied that, if the evidence of Mr and Mrs Mulhearn be accepted at its face value, the plaintiff misstated or consciously misstated his condition at the trial in a way which would fall within the principles there referred to. I emphasise that I make this finding, of course, in the absence of evidence from the plaintiff upon this motion and of the answers which he may seek to give, if any, to their evidence. But, dealing with the matter as on the motion, and upon the basis that the evidence which is before the Court on the motion is the totality of the evidence which can be advanced, I would reach such a conclusion. However, I do not find it necessary to rely upon this matter in coming to the conclusion that there exist special grounds within s75A. For these reasons, I am of opinion that leave should be given to the defendant to adduce on the appeal the evidence here in question. URJ NYERLUCZ v DEI ROCINI (Clarke JA) 5 There may, on the appeal, be argument as to the nature and effect of that evidence when presented. Such matters have not been the subject of consideration upon the present motion. It may be necessary for the Court, upon the hearing of the appeal, to deal with that and other aspects arising from the reception of the relevant evidence. The plaintiff should pay the defendant's costs of the present motion. Those costs do not include the costs of the proceedings before me in March 1995 when the order for a separate hearing of the motion was made. Those costs had been reserved in the terms then announced. Clarke JA The appellant, George Nyerlucz, who was the defendant at first instance, filed a notice of motion in which he sought an order that the hearing date of the appeal by vacated and that he be granted leave to adduce further evidence on the appeal. The Court, on the return of the motion, vacated the hearing date and adjourned until a later date the hearing of the application for leave to adduce further evidence. It is that application with which this judgment is concerned and the appeal itself has been stood over to await its determination. I agree with Mahoney JA that the leave sought should be granted and I am in general agreement with his Honour's reasons for that conclusion. Notwithstanding, I wish to explain my own approach to the problem. In an appeal from a judge of this Court the Court of Appeal conducts a rehearing (as that word has become to be understood) pursuant to the powers contained in s75A of the Supreme Court Act 1970. The Court may receive further evidence (s75A(7)) but where the appeal is from a judgment after a trial or hearing on the merits the Court shall not receive further evidence concerning matters occurring prior to the trial or hearing except on special grounds (s75A(8)). Where the further evidence concerns matters occurring after the trial or hearing there is no requirement that the applicant seeking to adduce further evidence establish the existence of special grounds. The Court does not, however, automatically admit evidence of matters which have occurred following the trial or hearing. It admits such evidence only in the exercise of a judicial discretion which takes into account, in particular, the need to balance the important principle of finality against the needs of justice in the circumstances of the case (see, eg, Radnedge v Government Insurance Office of NSW [1987] 9 NSWLR 235 and Doherty v Liverpool District Hospital, [1991] 22 NSWLR 284. The power to admit further or fresh evidence concerning matters which occurred prior to the trial or hearing is more circumscribed in that the Court may only exercise its discretion to admit that evidence if it is satisfied that there exist "special grounds' in the particular case. There is no precise formula which needs be satisfied in order to establish special grounds. I agree with Hunt J when he said in Martin v Abbott Australasia Pty Ltd [1981] 2 NSWLR 430, at 436: "No precise formula has been or could be laid down as to what would amount to 'special grounds': Re Chennell; Jones v Chennell 1878 8 ChD 492 at 505. From the Law Journal Report of that judgment (47 LJ Ch 583, at 586), it appears that his Lordship originally added that the words of that expression themselves show they cannot be defined. See also Murphy v Stone Wallwork (Charlton) Ltd [1969] 1 WLR 1023 at 1035; Mulholland v Mitchell [1971] AC 666 at 676, 679, 681." The cases have, however, usually proceeded upon the basis that it is necessary to satisfy the three tests on which, according to a long line of authority, fresh evidence is admitted on applications for a new trial from the verdict of a jury. 6 UNREPORTED JUDGMENTS Those tests are well understood but they have been expressed in many different ways. It is convenient for present purposes to take the concise definition of the tests expressed by Jordan CJ in Preston v Green [1944] 61 WN (NSW) 204: "(1) Is the new evidence prima facie likely to be believed? (2) If believed, would it be likely to be a determining or at least a very important factor in the result of the trial? (3) Is it evidence that might have been produced at the hearing if the applicant had been reasonably diligent?" In Commissioner for Government Tram and Omnibus Services v Vickery (1952) 85 CLR 635 (at 643) the High Court considered the second test in the context of a claim that the fresh evidence was relevant to the assessment of damages and said: "The effect of the evidence newly discovered upon the assessment of damages must appear to the Court to be such that it cannot reasonably be supposed that, had it been adduced at the trial, the damages would not have been fixed at an amount substantially more favourable to the party seeking the new trial." I agree with Mahoney JA that tests (1) and (2) have been established. His Honour did not think, however, that the third test had been satisfied. In his Honour's view the reason advanced by the appellant (I will continue to refer to the moving party as the appellant although the reality is that his insurer conducted the investigations and defence) did not establish that he was unable to lead the evidence at the trial despite his exercise of reasonable diligence. The reason which was given in explanation of the failure to lead the evidence at the trial was that it was evidence from neighbours of the respondent who had not been approached prior to the trial because of a practice or policy which the appellant maintained not to speak to neighbours for fear of alerting claimants to the fact of investigations. The existence of that practice explains the failure to present the evidence at the trial but it does not establish that the evidence could not have been produced if the appellant had exercised reasonable diligence. It seems to me that, while questions of fact and degree are concerned, the fact that the neighbours would have been likely to give evidence if approached by the appellant's investigators stands in the way of a finding in the appellant's favour on this issue. That conclusion is not, in my opinion, fatal to the appellant's claim. The strict inquiry upon which the Court has embarked is not whether the three tests have been satisfied but whether, in the circumstances of the present case, special grounds exist. Although I would agree that it would only be in rare cases that the court would find that special grounds existed in the absence of the satisfaction of the three tests the court is obliged to exercise its powers under the Statute and is not constrained by s75A(8) to find against the appellant because of its failure to satisfy the third test. Furthermore, as the High Court pointed out in Commonwealth Bank of Australia v Quade and Ors (1991) 178 CLR 134, at 140, there is a passage in the leading judgment of Dixon CJ in Greater Wollongong Corporation v Cowan (1995) 93 CLR 435, at 444, which: "Leaves open the possibility of exceptional circumstances justifying a departure from the general rule even in the class of case to which the general rule is directed." I would conclude that in this case there are "special grounds' basically for two reasons: URJ NYERLUCZ v DEI! ROCINI (Meagher JA) 7 (1) Although the appellant has not satisfied the 'reasonable diligence' test he has provided an explanation for his failure to lead the evidence at the trial which is both sensible and reasonable. There can, in my view, be no doubt that approaches to neighbours in many cases would put claimants on notice of the investigation taking place. The result could well be forensic disadvantage to the defendant. In those circumstances a practice not to approach neighbours in the absence of some indication that a neighbour might be prepared to give relevant evidence without putting the claimant on notice could be regarded as a sensible one. (2) The evidence of the respondent's neighbours, which includes their oral testimony and telling photographs, would support a finding that the respondent maintained a false facade in public and was deliberately feigning injury. This evidence would, or could, have had a dramatic effect if given at the trial, even to the extent of reducing the respondent's damages to a minuscule amount. In order to explain the last statement I should refer shortly to the issue at trial and to his Honour's judgment. The respondent claimed that he had suffered a serious neck injury and was markedly disabled. The appellant contended that he was a malingerer. There was a contest between some of the medical examiners and there was shown in evidence a video film which his Honour regarded as important. That film, although it did not lead his Honour to believe that the respondent had no injury, led his Honour to conclude that the respondent had little real pain. Notwithstanding he concluded that the respondent genuinely believed in his disability. It was that conclusion which led his Honour to make a substantial award of damages in the respondent's favour. The evidence of the respondent's neighbours and, in particular, their photographs (in which the respondent was shown carrying very heavy rocks and doing heavy digging) would, if led and accepted, have made a such a finding highly unlikely. In the circumstance that there is a reasonable explanation for the failure to lead the evidence coupled with the strong tendency of the evidence to establish that the respondent manufactured, and presented, a false case I consider that the interests of justice require a conclusion that 'special grounds' have been made out and that the application be granted. Accordingly, I would grant the application and permit the appellant to lead the further evidence. The costs of the hearing before the Court on 3 August should be paid by the respondent. Meagher JA This is an application by a defendant/appellant to adduce further evidence pursuant to s75A(7) of the Supreme Court Act. The plaintiff, Mr Dei Rocini, aged about 44 at the time, alleged that he had sustained injury on 8 December 1987, when a vehicle in which he was a passenger overturned at a place called Blacksmith. Negligence was admitted and the matter proceeded before Grove J as an assessment only. Although at first sight his case appears to be that of a whiplash injury, Grove J held it was more than that. It also involved a serious dislocation of the c5-6 zygoapophyseal joints, causing serious pain. The trial took place in December 1993, and the plaintiffs case was that he had had since the accident and up to the trial pain in the back of the neck, shoulder and left arm. He said that the pain in the neck had been constant, heavy and burning; that his neck movements were restricted: that he had constant pressure in his head; that there never was a day in which he was free from pain, even when sitting or standing; that it was painful to drive a car; that he was unable to mow his lawn or lift his left arm fully. 8 UNREPORTED JUDGMENTS His Honour gave judgment in his favour in the sum of $203,859.00. Both plaintiff and defendant have appealed. The issues at the trial were quite clear. The defendant in effect alleged that the plaintiffs evidence was fabricated. According to the defendant, almost everything the plaintiff said was greatly exaggerated if not mendacious. The dispute extended to the medical evidence, where the doctors called by the defendant ridiculed both the plaintiff and his doctors. In addition the defendant showed his Honour two hours of video films showing the plaintiff sitting, standing, driving, gardening, splitting wood, and using a hammer. His Honour held that the plaintiff's evidence of incapacity was incompatible with the activities shown on the film; that the plaintiffs real sense of pain was very small indeed, that his symptoms were not such as to disturb him or to incapacitate him for any activity including his pre-injury employment while his attention was distracted. His Honour then said "His perception of pain is real - when he is not distracted - and I am satisfied that it was caused in the relevant sense by the accident and his incapacity for work is a reflection of this perception and he is entitled to wages calculated in the conventional style up to the present time. He ought within the next two years reach a stage where his perception of pain is compatible with its real level which is very small indeed. If he ceases to devote obsessive attention to his claim of disability then he will be in the same state as he is when presently distracted and consequently fit for such activity as he chooses, including his pre-injury employment. General damages will follow the pattern that I have indicated in relation to economic loss." In effect, then, his Honour found that the plaintiff suffered from a functional overlay; there was little or no actual pain, but a genuinely imagined pain. Although we have not heard argument on the matter, nor have we seen the witnesses, I cannot help feeling that his Honour's judgment might be a trifle charitable. However, his Honour's findings are as I have set out. This is the background against which the present application has to be judged. The plaintiff lives at number 9 Paterdale Close, Elermore Vale (which I assume is a suburb of Sydney). It was the plaintiff's misfortune to have as a neighbour at number 11, one Mr A J Mulhearn who was both a professional photographer and a person who disliked the plaintiff. After the trial before Grove J, Mr Mulhearn and his wife provided affidavit evidence to the defendant that during 1987 and 1988 the plaintiff wore a neck brace in front of the house, but removed it when he went to the back of the house in order to work; that they saw him working heavily in his backyard, shovelling soil, carrying bricks, moving debris, using a hammer, unloading vehicles, splitting wood, carrying logs and doing many other things which are difficult to reconcile with his evidence. Such was their zeal, or their enmity, that they photographed many of these activities. This is the evidence which the defendant seeks to adduce on appeal. In my view leave to adduce this evidence should be refused. The principles are hardly in dispute. In particular there is the necessity to balance the undesirability of the Court being misled with the desirability of preserving the finality of litigation. The decisive factor, in my view, against allowing the admission of this evidence is the fact that the evidence would have been available at the time of the trial if only the defendant had exerted himself to obtain it. It is not enough for his insurers to state that there is a general policy not to ask a plaintiff's neighbours URJ NYERLUCZ v DEI! ROCINI (Meagher JA) 9 to spy on plaintiffs. There was no justification of this policy put in evidence before us, nor any explanation why it was not departed from in the rather exceptional circumstances of this case. In my view, the notice of motion should be dismissed with costs. Leave to adduce fresh evidence on the appeal granted. The plaintiff/respondent to pay the costs of the motion of 3 August 1995. Counsel for the Appellant: JD Hislop QC/GA Laughton/VM Heath Counsel for the Respondent: J Poulos QC/WF Chipchase/D Forbes Solicitors for the Appellant: GM Meadows Solicitors for the Respondent: Bruce Herrald and Co (Newcastle)