Supreme Court New South Wales Medium Neutral Citation: Solarus Projects v Vero Insurance (No 7) [2014] NSWSC 1265 Hearing dates: 05/09/2014 Decision date: 05 September 2014 Jurisdiction: Common Law Before: Campbell J Decision: For these reasons I admit the letter and it will form part of Exhibit A-2. Catchwords: EVIDENCE - admissibility - relevance - inferences - whether document that does not name party relevant for the drawing of inferences - business records exclusion to the hearsay rule - judicial discretion to exclude Legislation Cited: Evidence Act 1995 (NSW), ss 58, 69, 135 Category: Interlocutory applications Parties: Solarus Projects Pty Ltd (Plaintiff) Vero Insurance Limited (Defendant) Representation: Counsel: A Leopold SC with Ms A Horvath (Plaintiff) AS Martin SC with J Hynes (Defendant) Solicitors: DLA Piper Australia (First Plaintiff) Sarvaas Ciappara Lawyers (Second Plaintiff) Carter Newell (Defendant) File Number(s): 2011/154276 EX TEMPORE Judgment 1This case is a separate determination of the question of whether the plaintiff, Solarus Projects Proprietary Limited, is an insured within the extended definition of insured contained in the project contract works insurance policy issued on 2 May 2007 by the defendant, Vero Insurance Limited. 2An issue to be determined is whether Solarus is an affiliated or associated company of Glen Alpine Properties Proprietary Limited, the corporation named in para (a) of the definition of insured in the schedule to, and in, the policy. 3Mr Leopold of senior counsel has tendered a letter dated 27 October 2008 from Boroughs, Charted Accountants to Glen Alpine Properties Proprietary Limited. Mr Martin of senior counsel objects to the tender of the letter. 4Boroughs are chartered accountants who apparently acted for Glen Alpine Properties Proprietary Limited in relation to its taxation affairs in the 2009 financial year, and at other times. The letter contains the following statement, signed by someone I would infer for the purpose of s 58 of the Evidence Act 1995 (NSW) who is an accountant employed by the firm: "This business activity statement covers the "Glen Alpine Properties GST Group" which incorporates all of the entities in the Glen Alpine Group as noted previously. All GST credits and liabilities are to be included in this BAS." 5Mr Martin objects on a number of grounds, but significantly and specifically he says that the letter is not relevant to any question I have to decide in the case, that is to say, that it could not rationally affect directly or indirectly the assessment of the probability of the question whether Solarus is an affiliated or associated company within paragraph (b) of the definition in question. 6I should interpolate that the parties are at odds as to the proper interpretation of para (b). 7Mr Martin also submits that, were I otherwise against him, I should exercise the discretion I have to exclude otherwise admissible evidence under s 135 of the Evidence Act. 8Without down playing the significance of all that was said by either senior counsel, Mr Martin, with respect, correctly submits that the letter does nothing to identify who the members of any such group might be; specifically, it does not identify Solarus as a member of that group. 9Mr Leopold, I think, accepts the force of that submission given that Solarus is not in any way named in the letter. However his submission is, if I accept the evidence that there is a group, then it is a strand of evidence which, taken with other strands he has referred me to, might rationally affect my decision - at least might indrectly affect the probability of the existence of a fact in issue, i.e., that Solarus is an affiliated or associated company. It would affect it indirectly if I was satisfied that there is a group of companies and that by reference to the other evidence he has taken me to, probably, Solarus is part of that group. I think there is force in this argument. 10All questions of admissibility are to be determined on the assumption that the evidence is accepted and it seems to me that the letter is admissible as an item of circumstantial evidence capable of weighing in the balance as to the probability of Solarus being part of that group and an associated or affiliated entity. It is one piece of evidence only and it certainly does not, on its own, determine or demand such a finding. 11So far as the question of excluding otherwise admissible evidence is concerned, I am of the view, although I am bound by Section 135 (and it certainly has a part to play in the administration of civil justice), that the occasions for the exercise of the discretion it confers in the case of a judge-alone civil trial are likely to be infrequent, if not rare. Having said that, it is necessary for me to consider whether the probative value of the letter is substantially outweighed by the danger that the evidence might be unfairly prejudicial to Vero or might be misleading or confusing. 12One of the matters referred to by Mr Martin is, of course, that he has not had the opportunity to cross-examine Mr Austin and in that regard, I do not think Mr Leopold's response that the letter was served some time ago is a complete answer to Mr Martin's submission, because Vero has previously indicated it would object to the tender. However, it seems to me that the letter forms part of the record of the business of Boroughs, and it certainly contains a previous representation made for the purpose of the business. Mr Austin might well be reasonably supposed to have personal knowledge of the content of the activities statement to which he refers and probably also had that information on the basis of instructions he received from those responsible for managing the group he refers to - whatever its members might be. 13I am satisfied that it is a business record and that the inability to cross-examine Mr Austin is simply an incident of the exception to the hearsay rule established by Section 69 of the Evidence Act. 14In the circumstances, I do not regard the forensic prejudice that might flow to Vero by not having the chance to cross-examine Mr Austin as unfair. This is necessarily inherent in the operation of Section 69 where it properly applies. 15Naturally even in a trial before a judge alone, evidence might be misleading or confusing, or apt to confuse the judge. One of the reasons why Section 135 is not given wide application (in my experience) to judge-alone trials is that when the judge is misled or confused by the evidence, it is palpable on the face of his or her reasons and readily correctable by the Court of Appeal. That does not mean to say that appeals and retrials are not unfortunate. 16 It is clear to me that Mr Martin is correct in his argument that proving there is a group of companies does not, of itself, prove that Solarus is one of them and whether I can engage in an inferential reasoning process which includes using the letter for that purpose, must depend upon further argument not only from Mr Leopold, but from him. For these reasons I admit the letter and it will form part of Exhibit A-2. ******* 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. Decision last updated: 16 September 2014