New South Wales Supreme Court CITATION : Edmunds-Jones Pty Limited & 1 Ors v Australian Women's Hockey Association Inc [1999] NSWSC 285 revised - 01/04/99 CURRENT JURISDICTION : Equity FILE NUMBER(S) : 2180/96 HEARING DATE(S) : 19/3/99 JUDGMENT DATE : 19 March 1999 Edmunds-Jones Pty Limited (P1) PARTIES : Helen Elizabeth Jones (P2) Australian Women's Hockey Association Inc. (D) JUDGMENT OF : Santow J COUNSEL : J B Simpkins/M Packer (P1 and P2) D E Grieve, QC/G Rundle (D) SOLICITORS : Minter Ellison (P1 and P2) Lane & Lane (D) CATCHWORDS : EVIDENCE - Hearsay rule and exception for business records - s69(3) of Evidence Act 1995 precludes exception where prepared for Australian proceeding - Application of s69(3) of Evidence Act 1995 where pre-existing computer stored material retrieved and other adjustments made in responding to subpoenas - Effect of s48(1)(d) and (e) of Evidence Act 1995 in relation to proof of documents retrieved from electronic storage - Discretion to permit waiver of rules of evidence under s190(3) of Evidence Act 1995. Evidence Act 1995 s48(1)(d) and (e) ACTS CITED : s69(3)(a) s190(3) and (4) McDonald System of Australia Pty Ltd v McWilliam's Wines Pty Limited (1979) ATPR 40-136 Pacific Acceptance Corporation Ltd v Forsyth (1970) 92 WN(NSW) 29 CASES CITED : Cheryl Joan Roma v H J Wilson Carriers Pty Ltd (Sperling J 9 August 1996 unreported) DECISION : Hearsay rules waived under s190(3) of the Evidence Act on terms primary documents produced unless both parties advise they do not require such primary documents. - 1 - REVISED — 1 April 1999 IN THE SUPREME COURT OF NEW SOUTH WALES IN EQUITY SANTOW J No. 2180/96 EDMUNDS-JONES PTY LIMITED ACN 002 672 684 First Plaintiff HELEN ELIZABETH JONES Second Plaintiff AUSTRALIAN WOMEN'S HOCKEY ASSOCIATION INC. ARBN 053 965 610 Defendant JUDGMENT — ex tempore Friday, 19 March 1999 INTRODUCTION 1 These are my reasons for admitting a number of items identified as PXVD1 through 4, on the terms set out. These items were first admitted on the voir dire for the purpose of argument as to admissibility,. They are sufficiently identified in the transcript. They, and Annexure A referred to below, are advanced by the Plaintiffs to quantify the claimed damage, insofar as that damage is determined by reference to sponsorship payments from Telstra Corporation Ltd ("Telstra") in relation to the Defendant. 2 Annexure A to an affidavit of Mr Bryce dated 16 March 1999 consists of what purports to be a schedule of payments, prepared by Telstra in response to the Plaintiffs' subpoenas. It is sought to be adduced as recording Telstra's sponsorship payments, in relation to the Defendant. The principal issue is whether Annexure A is admissible either as a business record (s69 of the Evidence Act 1995 ("the Act") assisted by s48(1)(d) and (e)) or under general discretion (s190 of the Act). The Defendant contends that it should be excluded as hearsay falling outside the exception for business records, on the basis that it was prepared for the purpose of the present proceeding; see s69(3)(a) of the Act. This is on the basis that the affidavit was furnished in response to the Plaintiffs' subpoenas identified in paragraph 6 of that affidavit; those subpoenas have now been produced and are contained in PXVD2. FACTUAL AND FORENSIC CONTEXT 3 The Plaintiffs seek to read both the affidavit of 16 March 1999 and an earlier affidavit of Mr Bryce dated 21 September 1998, though the latter affidavit bears primarily on documentation recording certain payments made by Telstra for the period between 1 January 1995 to 30 June 1996. For present purposes, I can simply note that those latter payments are separately to be proven by the Plaintiffs in a manner which they have yet to indicate in any detail and are not the subject of my present ruling. 4 Annexure A to the affidavit of Mr Bryce of 16 March 1999, as I have said, purports to set out details of payments made in connection with the sponsorship undertaken by Telstra after 1 July 1996, as recorded in the relevant accounting system described in paragraph 7 of that affidavit following the methodology elaborated in paragraphs 8 and 9. 5 I should note at this point that Mr Bryce gave oral evidence and submitted himself for cross-examination, and I will refer, where relevant, to that evidence. 6 The material in Annexure A is described in paragraph 9 of Mr Bryce's affidavit of 16 March 1999 as essentially the capture of earlier computer recorded data incorporated into reports produced in response to the relevant subpoenas but after making two categories of alteration to the data. The first is described as a formatting alteration, and the second an alteration which seeks to remove certain accrual reverse entries. 7 I should note as to the latter, that the Plaintiffs do not seek to have admitted into evidence the totals (and sub-totals) that appear in Annexure A, correctly recognising that the deletion of the "accrual reversal entries" could affect such totals. 8 The admissibility of Annexure A is opposed by the Defendant on a number of grounds. Insofar as the material in Annexure A is objected to on the ground of relevance, I am satisfied that such objection could not be sustained. 9 Clearly enough the evidence in Annexure A could rationally affect the assessment of the probability of the existence of a fact in issue in the present proceeding. That fact in issue is whether payments were made in connection with a sponsorship of a kind which would give rise to commission payable to the Plaintiffs, were the Plaintiffs successful in establishing liability. That said, it is of course the case that the proper construction of clause 4 of the relevant consultancy agreement will ultimately have an important bearing upon whether the Plaintiffs are or are not able to make out that crucial aspect of their case. 10 However, the objections of the Defendant go beyond relevance. In particular they are based firstly upon the premise that the relevant Annexure A is excluded as hearsay and fails to be reinstated as admissible under the "business record" exception contained in s69(3)(a) of the Act. 11 The Defendant did not in the end press the argument that Annexure A was not a business record. Rather it framed its objection on the basis that s69(3)(a) of the Act was applicable to exclude application of the business records exception from the hearsay rule. Subsection (3)(a) provides that the relevant exception does not apply to a representation "prepared or obtained for the purpose of conducting, before or in contemplation of or in connection with, an Australian …… proceeding." 12 Resolving whether or not Annexure A was prepared for the purpose of the present proceeding is not without difficulty on the present state of the evidence before me. Clearly enough Annexure A constitutes a report prepared in order to answer the subpoena of the Plaintiffs. However, that does not of itself preclude Annexure A from coming within the relevant exception. This is provided that the representations constituted by it were representations in business records that were previously made and not in contemplation of, or in connection with the proceeding. In the present case, they have simply been reproduced from existing computer records but with formatting changes and/or other deletions of irrelevant material. This is said to be as contemplated by the provisions facilitating proof of documents in s48(1)(d) and (e) of the Act. 13 There is some tension between s69(3) and the various gateways contained in s48(1) of the Evidence Act 1995. (It is not disputed that the gateway contained in s48(4) would not appear to be applicable in the circumstances, having regard to the definition of the expression "not available to a party" contained in clause 5 of the Dictionary in Part 1 to the Act.) In particular s48(1) could not override s69(3), in specifically precluding the exception to the hearsay rule applying where s69(3) in its terms are made out. Retrieval to meet a subpoena with no change save from electronic to printed form could not cause s69(3) to apply. Likewise, mere omission of items which do not alter the effect of what is sought to be admitted should not cause s69(3) to apply. But when adjustments go further than that, in order to meet the requirements of litigation, the position may well be different and requires to be tested. 14 These earlier gateways permit the proof of contents of documents by a device that reproduces such contents. Thus s48(1)(d) contemplates that a device to reproduce information in electronic storage may, in the process of rendering it available for use by the court, both retrieve the electronic information and collate it so it is thus useable. 15 The evidence given by Mr Bryce did not go beyond that contained in paragraph 9 of his affidavit in referring to the data being formatted for use in an excel spread sheet. It therefore would remain a matter for further examination whether the "formatting" in question was, or was not, such as to satisfy s48(1)(d), or was rendered inadmissible by virtue of s69(3)(a) of the Act as having been reproduced with greater adaptation than mere retrieval and collation. The Plaintiffs did not satisfy their onus of proof in that regard but that is not the end of the matter as I explain. Waiver of Evidence Rules — s190(3) 16 In all the circumstances, I consider that the proper course is rather to deal with the matter by way of a waiver of the relevant rules of evidence under s190(3) of the Evidence Act. This is in the following terms. "(3) In a civil proceeding, the court may order that any one or more of the provisions mentioned in subsection (1) do not apply in relation to evidence of: (a) the matter to which the evidence relates is not genuinely in dispute; or (b) the application of those provisions would case or involve unnecessary expense or delay." 17 The matters a court may take into account in deciding whether to exercise that power of waiver are set out more exhaustively in s190(4), which I quote below "(4) Without limiting the matters that the court may take into account in deciding whether to exercise the power conferred by subsection (3), it is to take into account: (a) the importance of the evidence in the proceeding; and (b) the nature of the cause of action or defence and the nature of the subject matter of the proceeding; and (c) the probative value of the evidence; and (d) the powers of the court (if any) to adjourn the hearing, to make another order or to give a direction in relation to the evidence." 18 The present evidence is clearly important. Without it, the Plaintiffs cannot quantify the amount of commission claimed and the evidence is clearly only obtainable for practical purposes in any comprehensive sense from Telstra. Its probative value is subject to further testing. But on the material before me is likely to be of considerable importance in relation to damages, were liability established. Finally, adjourning the hearing is not likely to give scope for a direction which would yield any more reliable — and non hearsay — version of this material. 19 There is no doubt that the power to dispense with the rules in exceptional cases is desirable, where this can fairly be done to both parties. Thus situations may arise which are not dealt with in the rules of evidence, requiring flexibility to meet such situations; see ALRC report 38 "Evidence" at para 1025 citing Moffitt J in the Pacific Acceptance Corporation Ltd v Forsyth (1970) 92 WN(NSW) 29. Thus, for example, the Federal Court exercised power of waiver to facilitate survey evidence; McDonald System of Australia Pty Ltd v McWilliam's Wines Pty Limited (1979) ATPR 40-136. Prima facie, electronically recorded accounting data collated to provide only the relevant material in answer to a subpoena, but not so as to render misleading or inaccurate what is represented, falls into a similar category, where strict application of the hearsay rule would otherwise work injustice. The question is whether the conditions for s190(3) are made out, such that my discretion to admit can then be exercised, with such considerations in mind. 20 The evidence given by Mr Bryce was to the effect that while recourse to the primary records to attempt to reconstruct or verify the position between 1 January 1995 and 30 June 1996 in relation to sponsorship payments would be a difficult and expensive task, for the period after 30 June 1996 the position becomes relatively straightforward. It would involve perhaps some two days of work to identify the primary records from which Annexure A was compiled. 21 Mr Bryce explained in his evidence that Annexure A depends upon identifying sponsorship payments by reference to a particular project, here sponsorship of the Defendant. That identification involves allocation of a job number, as occurred in the present case after 30 June 1996. That job number was then used so that an invoice was identified as belonging to that job number, and was thus allocated to the relevant sponsorship. 22 His evidence was that such allocation when originally made was unlikely to be erroneous. He also said that reference to the relevant primary material to-day would be unlikely to show an allocation error, though he did not exclude that possibility in a particular case. But he also said that such verification would in many cases not be possible. 23 I have some doubt as to whether therefore that exercise of correlating the primary documents with the Annexure is capable of demonstrating error though it conceivably could. That does not preclude the Defendant having the opportunity to essay that task if it wishes. Accordingly, in making the orders that I do, I will include that the relevant primary material in the possession of Telstra from which Annexure A has been compiled, should be made available to both parties. 24 The critical matter to determine under s190(3) is whether either the matter to which the evidence relates "is not genuinely in dispute" or whether application of the relevant provisions, in this case of the hearsay rule, "would cause or involve unnecessary expense or delay," such as otherwise to justify the discretionary admission of this evidence. 25 So far as the latter is concerned, I am satisfied that the application of the hearsay rule in the present circumstances to exclude the admissibility of Annexure A would cause or involve unnecessary expense or delay. It may indeed not only do that, but be fundamentally prejudicial to the Plaintiffs' proper opportunity to establish, if it can, the damage that it has suffered. This is in circumstances where, concededly, payments totalling $570,000, according to the Defendant's acknowledgment, were made in 1995 and 1996. The Defendant asserts that these constitute "the total sponsorship between the Defendant and Telstra (see PXVD4) whilst the Plaintiffs say the total is much higher, and rely on Annexure A to establish that case. 26 The dispute accordingly relates to an amount above that figure. It would be certainly productive of unnecessary expense or delay to require the Plaintiffs somehow to prove their case by reference to the primary material, when that primary material has already been collated in the form of Annexure A by a party, namely Telstra, which could certainly not be said to be in the Plaintiffs' camp. 27 Whether it could be said that the matter to which the evidence relates is not genuinely in dispute is perhaps more arguable. The Defendant contends that it does genuinely dispute not only the name of the payee being in truth the payee, where the payee is not identified as the Defendant, but also whether the correct allocation has been carried out. As against that, the PXVD4 in conjunction with PXVD2 indicates that the point had not been taken by way of dispute earlier than the present hearing before me, in relation to material of a similar character but terminating at an earlier date. 28 The expression "the matter to which the evidence relates", appearing in s190(3) was paraphrased by Sperling J in Cheryl Joan Roma v H J Wilson Carriers Pty Ltd (Sperling J, 9 August 1996, unreported) as "the matters of fact contained in the materials in question". Here the matters of fact contained in the materials in question are recorded in Annexure A to the affidavit of Mr Bryce. When one reads PXVD4, the Defendant's disputation of the overall amount is not expressed to be by reference to the unreliability of such a schedule but is more generally expressed. Thus it is said by the Defendant's solicitors, "Your letter does not identify the nature of the claim nor the legal justification for the amount claimed". CONCLUSION 29 However, even if one accepts that the Defendant genuinely disputes, now if not then, the matters of fact contained in Annexure A, I am satisfied that s190(3)(b) affords a sufficient basis in the present context to permit the admissibility of Annexure A, for the reasons earlier stated. ORDERS 30 I order that the application of s69 of the Evidence Act 1995 be dispensed with in relation to Annexure A to the affidavit of Mr Bryce of 16 March 1999 (omitting the final and cumulative totals) on terms that Telstra Corporation Limited produce to the Plaintiffs and Defendant within twenty-one days the primary documents, to the extent Telstra Corporation are reasonably able to do so, from whence Annexure A was obtained, unless both parties advise Telstra Corporation Limited that they do not require such primary documents. ********** I certify that this and the 7 preceding pages are a true copy of the reasons for judgment herein of The Hon. Justice Santow Associate Date: 1 April, 1999 Last Modified: 01/04/99 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.