New South Wales Supreme Court CITATION : Vitali v Stachnik [2001] NSWSC 303 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 1484/99 HEARING DATE(S) : 20/04/01 JUDGMENT DATE : 20 April 2001 PARTIES : Johan Hendrik Berhat Vitali - Plaintiff Elizabeth Joanna Stachnik JUDGMENT OF : Barrett J COUNSEL : Mr B.J. Knox - Plaintiff Ms L.M. Snelling - Defendant SOLICITORS : Ellington Boardman Allport - Plaintiff Claire & Associates - Defendant CATCHWORDS : Admissibility of documents- business records - whether prepared or obtained "for the purpose of" or "in connection with" proceeding - discretion to reject evidence if admission "unfairly prejudicial". LEGISLATION CITED : Evidence Act 1995 National Australia Bank Ltd v Rusu (1999) 47 NSWLR 309 Penrith City Council v Penrith Waste Services Pty Ltd, Land and Environment Court, 24 October 1995 Marsden v Amalgamated Television Services [2000] NSWSC 425 Sellers Fabrics Pty Ltd v Hapag-Lloyd AG [1998] NSWSC 644 CASES CITED : Buckland v Federal Commissioner of Taxation (1960) AITR 66 Papakosmas v The Queen (1999) 196 CLR 297 Ordukaya v Hicks [2000] NSWSC 180 ACCC v Australian Safeway Stores Pty Ltd [1999] FCA 1269 R v Toki [2000] NSWSC 999 DECISION : MFI 2 rejected. MFI 3 admitted. THE SUPREME COURT REVISED OF NEW SOUTH WALES EQUITY DIVISION BARRETT J FRIDAY, 20 APRIL 2001 1484/1999 - JOHAN VITALI v ELIZABETH STACHNIK JUDGMENT - (On admissibility of MFI2 and MFI 3. See page 217 of transcript.) HIS HONOUR: 1 Ms Snelling, counsel for the defendant, is by leave adducing oral evidence from her client. In the course of doing so, she seeks to introduce into evidence two documents which have been marked MFI 2 and MFI 3. 2 Mr Knox, counsel for the plaintiff, objects to the tender of those documents. He says that the previous representations they contain are inadmissible by virtue of the hearsay rule in s.59 of the Evidence Act 1995. Ms Snelling presses the tender on the basis of the exception in relation to business records created by s.69. 3 MFI 2 is a document dated 21 January 2000 which carries the name of Karen Young and refers to and comments upon a detailed listing of items totalling $34,793.46 referable to the period ending 30 June 1998 described as "a wages liability of the company". The reference to "the company" is, clearly enough, a reference to Campaign Nursing Agency Pty Ltd, a company of which the defendant is conceded to be the sole director and sole shareholder. MFI 3 is the detailed listing referred to in MFI 2. Both documents contain information about payments to or due to freelance nurses whose services Campaign Nursing arranged for hospitals, nursing homes and other clients. 4 In the course of the debate about the admissibility of these documents, I allowed certain questions of a clarificatory kind to be put on the voir dire by both counsel to the defendant, whose alter ego the Campaign Nursing effectively is. This is both appropriate and desirable in light of the observation of Bryson J in National Australia Bank Ltd v Rusu (1999) 47 NSWLR 309 that a finding of admissibility or otherwise under s.69 needs to be made on the basis of evidence relevant to the conditions laid down by that section. 5 I am satisfied that each of MFI 2 and MFI 3 is a document of the kind described in s.69(1)(a)(i) in that it forms part of records belonging to or kept by Campaign Nursing in the course of or for the purposes of its business. The relevant connection with that business appears from the documents themselves. The element as to their belonging to or being kept by Campaign Nursing was established by answers given by the defendant. 6 Non-applicability of the hearsay rule depends, in the first instance, on certain findings being made about the content of the documents or, more precisely, about the quality of the relevant representations they contain. Each such representation must have been made so as to attract the operation of either s.69(2)(a) or s.69(2)(b); and that goes to a characteristic of the person who made the representation or can be regarded as its direct or indirect source, the characteristic being that that person had or might reasonably be supposed to have had personal knowledge of the asserted fact. 7 The defendant has said, in the course of the voir dire, that MFI 2 was created by Karen Young, a casual accounting assistant who, at the relevant time, attended the Campaign Nursing office about once a month and that MFI 3 was, as best she could tell, created by either the plaintiff or Monique Piwonka, both of whom were employees of the company up to September 1998 or thereabouts and were involved in administrative or accounting matters. In any event, the defendant identifies all three persons as belonging to Campaign Nursing and as having worked on matters which are the subject of the documents. 8 I accept what the defendant has said as to the positions held by the persons concerned. I also accept what she says about the status and functions of those persons, noting that there is nothing in s.69(2) to suggest that the person having the relevant personal knowledge must bear any particular relationship to the enterprise whose business is involved, a point also noted in the Land and Environment Court in Penrith City Council v Penrith Waste Services Pty Ltd, 24 October 1995. It is nevertheless reassuring that each author did have a relationship with the company's business as I have already described. 9 On the basis of the analysis so far, MFI 2 and MFI 3 are both admissible by virtue of s.69(2), unless s.69(3) operates to deny the operation of s.69(2). 10 As to s.69(3), I can discard s.69(3)(b) and move immediately to s.69(3)(a) which poses the question whether the representation (that is the assertive content of each document) "was prepared or obtained for the purpose of conducting, or for or in contemplation of or in connection with, an Australian or overseas proceeding" - being here this present proceeding. 11 I have little guidance as to the operation of this provision, although what guidance there is suggests that it should be construed somewhat broadly. I refer in this connection to the inclination of Levine J in Marsden v Amalgamated Television Services [2000] NSWSC 425 in regard to the analogous provision in s.69(3)(b), an inclination which is even more compelling, in the context of s.69(3)(a), when one looks at the words "in contemplation of". 12 The purpose of the exclusion is, as I see it, to prevent the introduction through this exception to the hearsay rule of hearsay material which is prepared in an atmosphere or context which may cause it to be self-serving in the sense of possibly being prepared to assist the proof of something known or at least apprehended to be relevant to the outcome of identifiable legal proceedings. 13 I must refer to the observation of Rolfe J in Sellers Fabrics Pty Ltd v Hapag-Lloyd AG [1998] NSWSC 644 that the s.69(3)(a) exclusion only operates in relation to a proceeding to which the person entitled to the document in question is a party. 14 In the present case, the person entitled to MFI 2 and MFI 3 is, on the face of things, Campaign Nursing but that company itself is not a party to these proceedings. I note, however, the characterisation of Rolfe J's decision in this respect as "surprising" in Mr Odgers' work Uniform Evidence Law - added to which is the practical reality that Campaign Nursing is, as I have said, the alter ego of the defendant who is its sole director and shareholder. I therefore do not see the observation of Rolfe J as an obstacle to the operation of s.69(3)(a) in this case. 15 It is now necessary to address directly the factual question of whether MFI 2 and MFI 3 were prepared or obtained as mentioned in s.69(3)(a) and, on that, I must refer to what was said by the defendant. 16 In relation to MFI 2, the defendant said that after these proceedings had been commenced, she asked Miss Young to prepare the information which is now in MFI 2. When asked the reason for doing so, she said: "I think for two reasons; to establish the case and also there was a concern in the company that needed to be followed through." The defendant thus says, in effect, that MFI 2 was prepared or obtained for a mixed purpose or, more precisely, with several purposes in view. 17 Analogies drawn from other areas of the law would suggest that a statutory provision referring to "the purpose" pays attention to the main or dominant or leading purpose: see, for instance, Buckland v Federal Commissioner of Taxation (1960) 8 AITR 66. But the purpose of the creation or acquisition of the content is not the only thing relevant to s.69(3)(a). It is also necessary to look at whether it was prepared or obtained "in contemplation of" or "in connection with" the proceeding. The expression "in connection with" is, of course, a notoriously wide one which in other statutory contexts is used specifically to broaden and amplify "for the purpose of": see, for example, Companies Act 1961, s.67(1). 18 The fact that this litigation had begun when the content of MFI 2 was prepared and that its preparation was recognised by the defendant at the time as bearing a relevance to and as potentially playing a part in that litigation must mean, as I see it, that the "in contemplation of" aspect or the "in connection with" aspect (or each of them) is satisfied. I hold, therefore, that s.69(3)(a) precludes the operation of s.69(2) in relation to MFI 2 so that the hearsay rule applies to make that document inadmissible. 19 For MFI 3, however, the position is different. The defendant said that that document was prepared by the plaintiff or Monique Piwonka, so far as she could make out. It was therefore prepared at a time when these proceedings could not have been in contemplation. The basis on which I have rejected MFI 2, therefore, does not apply in relation to MFI 3. 20 The final matter to be addressed is whether I should, in the exercise of the discretion conferred by s.135 of the Evidence Act, nevertheless refuse to admit MFI 3. 21 Given that MFI 3 has clear probative value in relation to the payments to or due to nurses, any such refusal under s.135(a) would have to be based on a finding that admission of the evidence would be so unfairly prejudicial to the plaintiff as to outweigh "substantially" that probative value. On this, Mr Knox for the plaintiff says that there was no prior indication that the material would be tendered and that, with three days of the trial having elapsed, it is unreasonable for the plaintiff to tender it now, particularly as he will have no opportunity to meet it. 22 The trend of recent authority is, I think, against my exercising my discretion under s.135(a) to reject MFI 3 in this case. That authority lays particular emphasis on the adverb "unfairly" in the phrase "unfairly prejudicial". I refer in particular to the judgment of McHugh J in Papakosmas v The Queen (1999) 196 CLR 297 and the judgment of Sheller JA (in which Meagher JA concurred) in Ordukaya v Hicks [2000] NSWCA 180. In the latter case, as in ACCC v Australian Safeway Stores Pty Ltd [1999] FCA 1269, there was approval of the notion that inability to cross-examine on material sought to be introduced is not of itself unfairly prejudicial, at least in civil proceedings where there is no jury, even though that inability may well be a very relevant consideration in the Court's decision as to the weight it should ultimately afford to the evidence (see also R v Toki [2000] NSWSC 999). 23 Mr Knox also referred to s.135(b) and submitted that admission of the document MFI 3 would cause or result in undue waste of time relevant to the application of that provision. I doubt that this is so. The plaintiff could, I think, present fairly concisely and quickly his side of the story in which the document will play a part and, if asked, I would be minded to grant leave under section 46 for him to do so. 24 I decline to exercise the discretion under s.135 to exclude MFI 3. 25 The result is that MFI 2 is rejected and MFI 3 is admitted. ****** Last Modified: 04/24/2001 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.