STONE V. STONE [1999] NSWSC 180

New South Wales Supreme Court CITATION : STONE V. STONE [1999] NSWSC 180 revised - 31/08/99 CURRENT JURISDICTION : Equity Division FILE NUMBER(S) : No. 2890 of 1998 HEARING DATE(S) : 9 March 1999 JUDGMENT DATE : 9 March 1999

PARTIES : Michael Stone - Plaintiff Beatrice Stone - Defendant JUDGMENT OF : Hodgson CJinEq

COUNSEL : Mr. Dowdy for plaintiff Miss J. Needham for defendant SOLICITORS : Bray Jackson & Co., Double Bay for plaintiff Dickson Fisher Macansh, Sydney for defendant CATCHWORDS : EVIDENCE - Rejection as prejudicial - PRACTICE - Application before hearing to exclude affidavit.; Affidavit sworn by plaintiff before commencement of proceedings not disclosed to defendant until seven months later, four months after death of plaintiff. Before putting on evidence, defendant applies to have affidavit excluded from evidence. HELD that there could be circumstances in which a Court could restrain the use of an affidavit as an abuse of process, but such circumstances not shown here; and that s.135 of the Evidence Act would rarely, if ever, be applied in advance of the hearing, and not in this case Evidence Act 22.9 ACTS CITED : 11 135 DECISION : See par.15 of judgment

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IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

CORAM: HODGSON, CJ IN EQ.

Tuesday 9th March 1999

NO. 2890 OF 1998 STONE V. STONE

JUDGMENT

1 HIS HONOUR: I am dealing with an application brought in proceedings which were commenced on 22nd June 1998 by Statement of Claim. In the Statement of Claim, the plaintiff in substance sought to set aside a transaction whereby he transferred a house property to his daughter, the defendant, albeit reserving a life estate to himself. The Statement of Claim is based on undue influence, unconscionability and the like. 2 At the time of the commencement of the proceedings, the plaintiff was aged 95, and he died about three months later on 18th September 1998. The defendant put on a Defence (essentially denying undue influence and unconscionability and the like) on 31st July 1998. It now appears that, prior to the commencement of the proceedings, the plaintiff had sworn an affidavit on 10th June 1998, containing the major factual allegations on which his claim is based. It seems clear that that affidavit was not brought to the attention of the defendant until 5th January this year, about three and a half months after the plaintiff had died. 3 The application I am dealing with is an application brought by the defendant for an order pursuant to s.135 of the Evidence Act that the Court refuse to admit that affidavit as evidence in these proceedings. Essentially, the basis of the application is a claim that it would be unfair to admit the affidavit, in circumstances where the affidavit was available at the time when the defendant could have arranged for the cross-examination of the plaintiff, but was withheld from the defendant until after the plaintiff had died. 4 Miss Needham for the applicant submits that in those circumstances, it can be seen, at this stage, that the evidence would be unfairly prejudicial to the defendant within the meaning of s.135 of the Evidence Act; and that when one has regard to the medical state of the plaintiff suggested by the evidence at the time he made the affidavit, and the denial of cross-examination to the defendant, its probative value would be substantially outweighed by the danger that the evidence would be fairly prejudicial to the defendant. 5 Miss Needham submitted that it was appropriate that that ruling be made at this stage, because if it was not, the defendant would suffer the prejudice of having to answer the material in the affidavit and be subject to cross-examination on her answer, whereas because of the lack of opportunity to cross-examine, the defendant should not have to answer that material at all. 6 Miss Needham referred me to a detailed chronology of events in these proceedings, which include the plaintiff's making an application for interlocutory relief on 11th September 1998, supported by numerous affidavits, but not including that of the plaintiff. She pointed out that particulars had been sought by the defendant on 7th July last year, questions about the plaintiff's capacity had been raised in a letter from the defendant's solicitor on 4th August, and that the plaintiff's solicitor had, on 8th September, proposed directions for the filing of affidavits. Over this whole time, no mention was made that the plaintiff had already sworn an affidavit, and so the opportunity that the defendant would have had to arrange for cross-examination was lost when the plaintiff died on 18th September. 7 Miss Needham submitted that the probative value of this evidence was not in any event great, having regard to the state of health of the plaintiff, what she submitted were internal inconsistencies in the affidavit, and the vagueness of the evidence about signing documents. 8 Miss Needham referred me to the case of Lane v. Jurd (No.2) (1995) 40 NSWLR 708, dealing with the situation where a witness had died prior to the hearing. She referred particularly to the statement of McLelland, CJ in Eq. that a rule of Court cannot make admissible was the Evidence Act says is not admissible, and she submitted that under s.135 of the Act, this material should be ruled as not admissible. 9 Mr. Dowdy for the plaintiff has provided a written outline of submissions which I will leave with the papers. He submitted that in substance this was an application for determination of a separate question under Pt.31 of the Supreme Court Rules, and that a case was not made out for the determination of such a question. Further, he submitted that it was not appropriate to apply s.135 except in the context of the actual hearing of a case. He submitted that there was an established practice of this Court to receive an affidavit, although the deponent had died after it was sworn; and he submitted that that probably was, in effect, preserved by ss.9 and 11 of the Evidence Act. 10 In any event, he submitted that a case was not made out for excluding the evidence under s.135. The case would be heard by a judge who could then make a decision under s.135, and, if the affidavit was admitted, give it appropriate weight. There was no unfair prejudice to the defendant. The defendant was a party to the transactions with which the affidavit deals, and she was fully aware of the relevant circumstances. 11 I do not propose to decide this application on the ground that it could never be appropriate to rule in advance as to whether or not an affidavit should be admitted. It seems to me conceivable that if an affidavit of a witness was withheld from the other party where this was the only evidence of important matters, where the party holding back that affidavit knew the witness was dying and intended to avoid having the witness's evidence tested by cross-examination, and where, unless that affidavit was excluded, the other party would be put to great expense to refute it, it seems to me possible that the Court might decide in advance that the party not be permitted to rely on that affidavit. It may be that the basis of such a decision would not be s.135 of the Evidence Act, but rather an inherent jurisdiction of the Court to prevent an abuse of process. 12 However, it seems to me that the facts in this case fall very far short of those facts that I have postulated. It is not alleged, much less proved, that there has been any deliberate withholding of the affidavit in order to deprive the other party of an opportunity to cross-examine. The opportunity which allegedly has been lost must be considered, in my view, a very doubtful one. Even if the affidavit had been made available by, say, some time in July, it seems very questionable to me whether cross-examination on commission would have been ordered until the defendant had put on material showing precisely what was in issue. If cross-examination was to be permitted of a person in a medical condition which the evidence suggests the plaintiff was in, in my opinion the Court would have been very astute to ensure that the cross-examination be limited to matters which had been shown in an appropriate way to be really important. It seems to me unlikely that that could have happened in time before the death of the plaintiff. 13 Next, there was other material in the case that will plainly require answer by the defendant. For example, there is an application for a new Certificate of Title signed by the deceased, asserting the loss of the Certificate of Title, a very short time after a facsimile communication to him from his solicitor advising that the solicitor was holding that Certificate of Title. The only material before me at present to suggest that the matters asserted in the affidavit are really disputed is a sworn Defence, which I have to say is, in vital respects, evasive. It denies an allegation of nil consideration without saying what the consideration was. It denies certain particulars, including particulars alleging no independent legal advice, no explanation, and improvidence, without giving any indication what independent legal advice was alleged, what explanation was alleged, or what about the transaction which, on its face, was for nil consideration, made it other than improvident. The Defence denies that the entry into a mortgage was unknown, without giving any indication of how it was known. It alleges that there was benefit from the mortgage to the plaintiff, without saying what that benefit was. Apart from that Defence, there is no other material from the defendant to suggest exactly what is in issue in the plaintiff's affidavit. 14 In those circumstances, it seems to me that a case certainly is not made out for restraining the use of the affidavit as an abuse of process. So far as s.135 is concerned, it seems to me that it is very doubtful whether it would be appropriate to apply that section so as to reject evidence in advance of the hearing. As submitted by Mr. Dowdy, it requires a balancing exercise which can generally only be properly undertaken at the hearing. However, even if it is in some cases appropriate to do that, I am not satisfied that it would be appropriate to do it in this case. 15 For those reasons, I propose to dismiss the application. 16 The orders that I make are these. 17 I dismiss the defendant's Notice of Motion filed 22nd February 1999. 18 I order that the defendant pay the plaintiff's costs of this Notice of Motion. (Application made for indemnity cost) 19 I am not prepared to make any order for indemnity costs. 20 I stand the matter into the Registrar's list on 16th March 1999 for directions. *************** I certify this and the preceding five pages to be a true copy of the reasons for judgment of Justice D.H. Hodgson