Latest big expert evidence case: expert report excluded in mega litigation

Here’s a judgment of Justice Emmett of the Federal Court sitting in Sydney: Pan Pharmaceuticals Limited (In Liquidation) v Selim [2008] FCA 416. The court-provided keywords are:

EVIDENCE – expert evidence – opinion rule – admissibility of experts’ reports under section 79 of the Evidence Act 1995 (Cth) – whether evidence is based on specialised knowledge based on training, study or experience – whether the facts and assumptions upon which the opinions are based are adequate – whether evidence is more than a bare ipse dixit

EVIDENCE – general discretion to exclude evidence – section 135 of the Evidence Act 1995 (Cth) – leave to file evidence out of time – whether probative value is substantially outweighed by prejudicial effect – whether admissible opinion evidence is of significant probative value if the facts and assumptions upon which the opinion are based are inadequately detailed in an expert’s report – effect of expert’s involvement in preparation of one party’s case including involvement in drafting of that party’s statement of claim – whether expert is sufficiently independent

Documentary evidence in the Magistrates’ Court of Victoria

Rule 16.06 of the Magistrates’ Court Rules provides a discretion in every Magistrate to admit evidence which would otherwise be inadmissible by virtue of the best evidence rule.  Sub-rule (3) says:

‘(3) The Court may, on the hearing of a complaint, if it considers it is proper to do so and there is no real dispute as to the contents or authenticity of an original document, admit as evidence a copy of the document without enquiring into the non-production of the original document.’

Sub-rule (1) provides an exception in relation to documents produced from ‘proper custody’.

‘Admission of documents

(1) If any document is produced to the Court from proper custody it shall be read without further proof if it appears genuine and if no objection to its admission is made.

(2) If objection is taken to a document produced under paragraph (1), the Court may adjourn the hearing for proof of the document and if the document is afterwards proved then, unless the Court otherwise orders, the party who made the objection shall pay the costs incurred by the objection.’

‘Proper custody’ is not defined. Williams provides no commentary, which is unsatisfactory. Section 152 of the Evidence Act, 1995 (Cth.) says:

’152 If a document that is or purports to be more than 20 years old is produced from proper custody, it is presumed, unless the contrary is proved, that:

• (a)
  the document is the document that it purports to be; and
• (b)
  if it purports to have been executed or attested by a person — it was duly executed or attested by that person.’

Discussing the common law version of the same proposition, Cross says:

‘”Proper custody” is that which was reasonable and natural under the circumstances of the particular case. Expired leases may be expected to be in the custody of either lessor or lessee and those claiming under them. A family Bible may properly be in the custody of any member of the family. Proper custody in this context does not mean the most appropriate custody possible. Papers relating to a bishopric have been held to come from proper custody when found among the family papers of a deceased bishop and not, as they should have been, in the possession of the bishop for the time being² but, in the absence of further explanation, the parish clerk’s house is not a place of proper custody for the parish registers.³‘

Application of Evidence Act, 1995 (Cth.) in Victorian state courts

Certain provisions of the Evidence Act, 1995 (Cth.) apply throughout Australia, wherever decision makers are required to apply the rules of evidence, or wherever evidence is taken: s. 5.  So antique are the documentary evidence provisions of the Evidence Act, 1958 (Vic.) that anything must be better than it.  So if I can see my way clear to establishing that something I want to tender is a Commonwealth record, I’ll be jumping over to the federal Act.

Those which this post deal with apply in relation to ‘Commonwealth records’, and documents which were Commonwealth records when they were produced. The term is defined in the Dictionary to the Act as:

Business records: medical records

In Hurley v Southwick [1999] VSC 326, a bloke was found unconscious in the vicinity of a stairwell overlooked by a balcony. There were no witnesses to the circumstances giving rise to that state of affairs. He sued the owners of the premises, saying their negligence had caused him to fall over a balcony. They said he was drunk and therefore guilty of contributory negligence.

More than six years later, at the trial, the defendants subpoenaed the hospital records. They contained notations to the effect that the plaintiff had been drinking during the day of the fall including drinking heavily, that he had a past history of alcohol abuse and high blood pressure and that he fell from the first floor balcony. They were taken at a time when the plaintiff was unconscious. The defendant’s counsel cross-examined the bloke’s wife. She admitted she assumed that she was the source of the information which was recorded in the hospital records, but said she was in a state of shock, and could no longer remember what she had said.

The defendant indicated that it would call the doctors who made the notations. At the time of the ruling, however, the doctors had not been called. Justice Warren admitted the statements as evidence of their truth.

Various observations of the patient’s conditions were entered by the doctors from their own observations. They were admitted under s. 55(1) on the basis that the doctors were the statement makers, had personal knowledge of the statements they made, and were to be called as witnesses in the proceedings. There was one record the doctor author of which could not be located. Without referring to s. 55(5)(c) which specifically relates to that circumstance, Justice Warren exercised her s. 55(7) discretion to admit a statement in the document if not to do so would cause undue expense and delay, on the basis that it was just one in a series of documents which corroborated one another.

The more difficult question was the statements presumed to have been made by the girlfriend and recorded by doctors who were to be called as witnesses. The doctors did not have personal knowledge of the plaintiff’s drinking before the fall. The question was whether the girlfriend, as the provider of information which made its way into the business record had such knowledge, or might reasonably be supposed to have had such knowledge. Justice Warren said the girlfriend might reasonably be supposed to have had such knowledge, based on her other evidence:

‘It follows from consideration of the evidence of the wife of the plaintiff that she had knowledge as to whether the plaintiff was intoxicated, of whether she knew or said she knew that he had been drinking all day or drinking heavily all day before the accident and of whether he had a history of high blood pressure. It unclear as to whether she had knowledge of a history “alcohol abuse” but she did have knowledge of the drinking habits of the plaintiff and said in evidence that she was anxious to give as full a history as she possibly could to the doctors attending to the plaintiff at the time of his admission, particularly as he was about to undergo surgery.’

Her Honour relied on an inference under s. 55C too:

‘I am satisfied that a reasonable inference can be drawn from the contents of the hospital reports when considered in the context of the evidence given by the wife of the plaintiff that she had or may reasonably be supposed to have had personal knowledge of the matters dealt with in the reports.’

Evidence Act documentary evidence provisions should be read expansively, in favour of admissibility

In Hurley v Southwick [1999] VSC 326, Justice Warren observed at [16]:

The starting point in determining the question of admissibility is that provisions such as  s.55 of the  Evidence Act should not be restrictively construed (see Moreley v National Insurance CoR v Ernst & Ors (1984) VR 593, 596; and Wielgus v Wielgus (1959) VR (1967) VR 556, 567; and 193).’

Business records exception: ‘course of business’

In R v Kaplan [2005] VSCA 316 Justice of Appeal Buchanan, with whom Charles and Eames JJA agreed, dealt with an appeal against a man convicted of theft on the basis of business records which came about in the following manner:

’7    Matthew Lee-Archer was employed in the nursery as a sales assistant.  He gave evidence that the tills in the nursery were equipped with a  refund button and  a no sale button.  The former generated a refund slip and the latter opened the till drawer.  Lee-Archer said that the applicant attended the nursery each day and pressed the no sale button or asked one of the employees to do so.  He would then ask the staff to record a refund.  The applicant took the refund slip and money from the till and put them in his pocket.

8    In December 2000 Lee-Archer commenced to record the applicant’s transactions in a diary and continued to do so until 19 February 2001.  Later he converted the entries to a spreadsheet.  The entries recorded occasions on which Lee-Archer was asked by the applicant to press the refund button and other occasions on which he was told by other members of staff that they had done so at the applicant’s request.  The witness said:

“I returned from holidays on the first week of December and the refunds started to increase dramatically over the course of the period, so I believed that something was not right.  There was no explanation, so I just started writing everything down, documenting everything that was going on.”

The diary and the spreadsheet were tendered and admitted in evidence.

9    David Compasso was another person who worked in the nursery.  He gave evidence in similar terms to that of Lee-Archer.  Compasso also kept a record of the applicant’s transactions.  He noted refunds on scraps of paper and then entered the details in two diaries, which were admitted in evidence.’

His Honour noted that:

’14   … the only evidence to establish count 61 was an entry in Lee-Archer’s diary recording “$1,000 plants“.  Lee-Archer said in evidence that he was informed of the transaction by Ashley Lyall.  Lyall did not give any direct evidence of the transaction.  He said that he recorded refunds as requested by the applicant in a diary, which he could not now find.  Lyall only said in general terms that, being requested by the applicant to do so, he pressed the refund button on the till and gave the receipt and money to the applicant.’

His Honour concluded:

’17    The main thrust of the applicant’s objection to the admissibility of the statements contained in the documents was that the documents were not records relating to a business and had not been made in the course of the business.  The documents, it was said, were private records of Lee-Archer and Compasso and were not made in the ordinary course of the Institute’s business for they were made by suspicious employees anxious to record the facts in order to avoid blame.  ….

18    In my opinion a document will be “a record relating to any business” even if one of the motives of the person making the record is to serve his own interests. All that the phrase requires is that the document records matters pertaining to a business.  Further, I think that the records in the present case were made in the course of business conducted by the Institute.  The fact that the documents were created in part to protect Lee-Archer and Compasso did not deprive them of the quality of documents made in the course of the business.  Lee-Archer and Compasso were the operators of the tills in the nursery and in the ordinary course of their employment were responsible for the money that flowed to and from and the records generated by the tills.  To record, in the context of their duties as the till operators, transactions involving the use of the tills in my view was to create a record in the course of the business.

19    One definition of “course” in the Oxford English Dictionary is “habitual or ordinary manner of procedure; way, custom, practice”.  More pertinent, in my view, is the definition of “in the course of”, which is: “in the process of, during the progress of”.  The records of Lee-Archer and Compasso were made in the process or during the progress of their conduct of the nursery business of the Institute.

20    Section 55 may be contrasted with s.58A of the Act, which defines “book of account” as the documents used in “the ordinary course” of a business for recording the financial transactions of the business.   I do not regard the word “ordinary” as otiose.  The diaries and spreadsheets were not documents, such as a sales ledger or a cash book that were one of the standard accounting books of the business  established as part of a permanent system.  In my view, however, s.55 does not require proof of  a standard procedure.’

Business Records

The business records exception to the rule against hearsay and the best evidence rule is in s. 55 of the Evidence Act, 1958. In relation to civil cases, it says:

’55. Admissibility of documentary evidence as to facts in issue

(1) In any legal proceeding … where direct oral evidence of a fact would be admissible, any statement contained in a document and tending to establish that fact shall be admissible as evidence of that fact if-

(a) the maker of the statement had at the time of the making of the statement personal knowledge of the matters dealt with by the statement, and is called as a witness in the proceeding; or

(b) the document is, or forms part of, a record relating to any business and made in the course of that business from information supplied (whether directly or indirectly) by persons who had, or may reasonably be supposed to have had, personal knowledge of the matters dealt with in the information they supplied, and the person who supplied the information recorded in the statement in question is called as a witness in the proceeding.

…

(4) Nothing in this section shall render admissible as evidence in any legal proceedings any statement made by a person interested at a time when the proceedings were pending or anticipated involving a dispute as to any fact which the statement might tend to establish.

(5) Notwithstanding anything to the contrary in the foregoing provisions of this section, the condition that the maker of the statement or the person who supplied the information, as the case may be, be called as a witness need not be satisfied where-

(a) he is dead, or unfit by reason of his bodily or mental condition to attend or testify as a witness;

(b) he is out of Victoria and it is not reasonably practicable to secure his attendance;

(c) he cannot with reasonable diligence be found or identified;

(d) no party to the proceeding requires the attendance of the witness; or

(e) the parties to the proceedings consent to his not being required to attend.

(6) Notwithstanding anything to the contrary in paragraph (b) of subsection (1) … the condition that the person who supplied the information be called as the witness need not be satisfied where it cannot reasonably be supposed (having regard to the time which has elapsed since he supplied the information and to all the circumstances) that he would have any recollection of the matters dealt with in the information he supplied.

(7) The court may at any stage of the proceeding, if having regard to all the circumstances of the case it is satisfied that undue delay or expense would otherwise be caused, order that such a statement as is mentioned in subsection (1) … shall be admissible as evidence or may, without any such order having been made, admit such a statement in evidence, notwithstanding that the maker of the statement or the person who supplied the information (as the case may be) is available but is not called as a witness.

(8) In deciding whether or not a person is fit to attend or to testify as a witness, the court may act on a certificate purporting to be a certificate of a medical practitioner registered under the Health Professions Registration Act 2005.

(9) The court may in its discretion reject any statement or defer the admission of and subsequently reject any statement notwithstanding that the requirements of this section are satisfied with respect thereto, if for any reason it appears to it to be inexpedient in the interests of justice that the statement should be then admitted or, as the case requires, should be admitted at all.

Section 3(1) of the Evidence Act defines ‘business’, as including

‘public administration and any business profession occupation calling trade or undertaking whether engaged in or carried on by the Crown, or by a statutory authority, or by any other person, whether or not it is engaged in or carried on for profit.’

Section 55C says:

‘For the purpose of deciding whether or not a statement is admissible in evidence by virtue of Section 55 or section 55B, the court may draw any reasonable inference from the form or contents of the document in which the statement is contained, or from any other circumstances.’

Section 55D says:

’55D. Where a statement is to be given in evidence

Where in any civil or criminal proceeding a statement contained in a document
is proposed to be given in evidence by virtue of section 55 … it
may be proved by the production of that document or (whether or not that
document is still in existence) by the production of a copy of that document,
or the material part thereof, authenticated in such manner as the court may
approve.’

Copies of books relating to the affairs of a body corporate deemed to be originals

Note this post may not be up to date as at the date it bears, and you should double check all the statutory definitions not all of which are set out below, even for those definitions which I have treated.

The ASIC Act contains a provision which allows many kinds of documents associated with companies and financial services providers to be proved by copies accompanied by an affidavit by a person who has compared the copy with the original. It is not a terribly useful provision but since no one seems to exhibit original documents to affidavits these days, it would be good if affidavits were drafted in this way:

‘Now produced and shown to me marked “SAW1″ is a true copy of the annual report for 2006 which I have compared against the original.’

Australian Securities and Investments Act, 2001

80  Copies of, or extracts from, certain books

(1)    A copy of, or an extract from, a book relating to:

(a)    affairs of a body corporate; or

(aa)    an audit related matter referred to in subparagraph 30A(2)(a)(i); or

(b)    a matter referred to in any of paragraphs 31(1)(g) to (m), inclusive [(g)    the business or affairs of a financial market or clearing and settlement facility; or (h) a dealing in financial products; or (j) advice given, or an analysis or report issued or published, about financial products; or (k) the character or financial position of, or a business carried on by, a person of a kind referred to in paragraph (c) or (d); or (m) an audit of, or a report of an auditor about, a dealing in financial products or accounts or records of a person who either carries on or has carried on (either alone or together with any other person or persons) a financial services business, or who is a representative of such a person.]: or

(c)    a matter referred to in paragraph 32A(c) or (d) [(c)  the supply of the financial service; or (d)  the financial service];

is admissible in evidence in a proceeding as if the copy were the original book, or the extract were the relevant part of the original book, as the case may be, whether or not the copy or extract was made under section 37.

(2)    A copy of, or an extract from, a book is not admissible in evidence under subsection (1) unless it is proved that the copy or extract is a true copy of the book, or of the relevant part of the book, as the case may be.

(3)    For the purposes of subsection (2), a person who has compared:

(a)    a copy of a book with the book; or

(b)    an extract from a book with the relevant part of the book;

may give evidence, either orally or by an affidavit or statutory declaration, that the copy or extract is a true copy of the book or relevant part, as the case may be.

‘books‘ are defined:

‘books includes:
(a)    a register; and
(b)    financial reports or financial records, however compiled, recorded or stored; and
(c)    a document; and
(d)    banker’s books; and
(e)    any other record of information.’

‘proceeding‘ is defined:

‘proceeding means:
(a)    a proceeding in a court; or
(b)    a proceeding or hearing before, or an examination by or before, a tribunal;
whether the proceeding, hearing or examination is of a civil, administrative, criminal, disciplinary or other nature.’

‘financial services’ are defined for the purposes of the Act except Division 2 of Part 2 to have the same meaning as it has in Chapter 7 of the Corporations Act.   Eventually, you get to s. 766 of the latter Act which says

a person provides a financial service if they:

(a)  provide financial product advice (see section 766B); or

(b)  deal in a financial product (see section 766C); or

(c)  make a market for a financial product (see section 766D); or

(d)  operate a registered scheme; or

(e)  provide a custodial or depository service (see section 766E); or

(f)  engage in conduct of a kind prescribed by regulations made for the purposes of this paragraph.

‘affairs‘ are defined:

‘affairs, in relation to a body corporate, has the same meaning as in section 232 of the Corporations Act.’

That section directs you to s. 53, which says in part:

‘the affairs of a body corporate include:

(a)  the promotion, formation, membership, control, business, trading, transactions and dealings (whether alone or jointly with any other person or persons and including transactions and dealings as agent, bailee or trustee), property (whether held alone or jointly with any other person or persons and including property held as agent, bailee or trustee), liabilities (including liabilities owed jointly with any other person or persons and liabilities as trustee), profits and other income, receipts, losses, outgoings and expenditure of the body; and

(b)  in the case of a body corporate (not being an authorised trustee corporation) that is a trustee (but without limiting the generality of paragraph (a))–matters concerned with the ascertainment of the identity of the persons who are beneficiaries under the trust, their rights under the trust and any payments that they have received, or are entitled to receive, under the terms of the trust; and

(c)  the internal management and proceedings of the body; and

(d)  any act or thing done (including any contract made and any transaction entered into) by or on behalf of the body, or to or in relation to the body or its business or property, at a time when:

(i)  a receiver, or a receiver and manager, is in possession of, or has control over, property of the body; or

(ii)  the body is under administration; or

(iia)  a deed of company arrangement executed by the body has not yet terminated; or

(iii)  a compromise or arrangement made between the body and any other person or persons is being administered; or

(iv)  the body is being wound up;

and, without limiting the generality of the foregoing, any conduct of such a receiver or such a receiver and manager, of an administrator of the body, of an administrator of such a deed of company arrangement, of a person administering such a compromise or arrangement or of a liquidator or provisional liquidator of the body; and

(e)  the ownership of shares in, debentures of, and interests in a managed investment scheme made available by, the body; and

(f)  the power of persons to exercise, or to control the exercise of, the rights to vote attached to shares in the body or to dispose of, or to exercise control over the disposal of, such shares; and

(g)  matters concerned with the ascertainment of the persons who are or have been financially interested in the success or failure, or apparent success or failure, of the body or are or have been able to control or materially to influence the policy of the body; and

(h)  the circumstances under which a person acquired or disposed of, or became entitled to acquire or dispose of, shares in, debentures of, or interests in a managed investment scheme made available by, the body; and

(j)  where the body has made available interests in a managed investment scheme–any matters concerning the financial or business undertaking, scheme, common enterprise or investment contract to which the interests relate; and

(k)  matters relating to or arising out of the audit of, or working papers or reports of an auditor concerning, any matters referred to in a preceding paragraph.’

Best evidence rule: counterpart originals

Sometimes, a written record will be made up of several original parts.  Often enough, a deed will be executed by one party executing one original and the other party executing the other, and then exchanging originals.  Cross says at [30915] that ‘A counterpart lease, executed only by the lessee, is the original so far as the lessee and those claiming under the lessee are concerned,³ although the other part is the original as against the lessor.’  In other words, in the case of an agreement executed by the exchange of parts, the person seeking to prove the agreement will have to tender the part executed by the other party. Throughout my career I have always tried to get signatures on one document, and to keep the original. Sometimes, though, the other side succeeds in getting the original, and I keep the copy.  Seems it would be better to have a part signed in original pen only by the other side than a copy of a document signed by all the parties.

In Durston v Mercuri [1969] VR 507, Menhennit J considered an appeal from a Magistrate who had convicted someone for drink driving.  One of the elements of the offence had been made out by the tender of a carbon copy of a certificate.  The legislation provided a shortcut to proof via the certificate procedure set up by the legislation.  No notice to produce the original certificate had been served by the prosecution on the defendant.  An oral call was made for the document when the defendant’s solicitor objected to the tender of the carbon copy, and when it was not produced, the carbon copy was let into evidence after the policeman testified as to how the carbon copy had been created.  Menhennit J said the Magistrate got it right.  The carbon copy was made at the same time as the top copy and was an original.  The writing was made by the same strokes of the pen on each of the original and the copy.

Menhennit J also gave an example in relation to a solicitor’s bill:

In Philipson v Chase (1809) 2 Camp 110; 170 ER 1097, Lord Ellenborough decided that a copy of an attorney’s bill made at the same time as the original was admissible in evidence. It appears to me that his Lordship based his decision on two grounds, first, that it was a duplicate original and, secondly, that it came within the exception that secondary evidence may be given of a document which is itself a notice without giving notice to produce: see Phipson on Evidence, 10th ed., para. 1707(b); Cross on Evidence, 3rd ed., p. 500.

Case Base says that decision was ‘explained’ in Andrews v Wirral Rural District Council [1916] 1 KB 863.

Best evidence rule: notice to produce

Non-compliance by the other side with a notice to produce the best evidence, which is in their possession, solves best evidence rule problems.

Your client kept a file copy of a letter he sent to the other side.  You want to tender the letter but it is not the best evidence, which is the letter itself.  The other side is an unrepresented litigant exercising the magic of the best evidence rule with all the enthusiasm of the recently acquainted.  Had you anticipated this problem, you could have served a notice to produce the original.  That would either have resulted in the other side handing over the original or, if they failed to do so, an entitlement to rely on the failure to produce the best evidence by the person possessing it as an exception to the application of the rule. So what do you do?  You make an oral call for the document.

The downside is that the party called on can demand that a document be tendered once it has been called for.  You might call for it, read it for the first time, see that it proves the opposite of what you hoped it might prove, try to give it back without further ado, and find that the other side tenders it.  It might then occur to you that the document is hearsay, but your objection will go nowhere.

At trial, you can call on any document physically within the court room and in the possession of the other side. This is something to think about when your client asks ‘Should I bring my file?’

In fact, s. 11 of the Evidence Act, 1958 says that any person who is present in court at trial may be called to give evidence or to produce documents without the need for a subpoena:

11.    Persons present may be examined without a subpoena

On the trial of any issue joined or of any matter or question or on an inquiry arising in any suit action or proceeding in any court or before any person having by law or by consent of parties authority to hear receive and examine evidence, any person who happens to be present and who is competent to give evidence may be called and required to give evidence or to produce any document or to give evidence and produce any document; and if any such person when called and required as aforesaid does not appear and give evidence or (if then able so to do) produce the document, he shall except where other provision is expressly made be subject to the same proceedings and liabilities as if he had been duly served with a writ of subpoena ad testificandum or duces tecum or a summons or other process, and had received his conduct money and payment for expenses and loss of time.

I assume notices to produce of the kind which is the subject of this post would normally be given in the form of a letter.  It should not be confused with a notice to produce under r. 35.08 of the Supreme Court Rules (the equivalent to a subpoena, but addressed to a party), or notices to produce documents referred to in pleadings, affidavits, or affidavits of documents.  Rule 35.08 says:

35.08    Notice to produce documents

(1)    A party to a proceeding may serve on any other party a notice requiring that other party to produce the documents mentioned in the notice on any application in or at the trial of the proceeding.

(2)    Unless the Court otherwise orders, the party on whom the notice is served shall produce on the application or at the trial such of the documents mentioned in the notice—

(a)    as are in that party’s possession, custody or power; and
(b)    which that party does not object to produce on the ground of privilege.

(3)    Where the party on whom the notice is served fails to comply with the notice, the Court may order that the party produce the document or give such directions for the proof of any matter in relation to the document, including the contents of the document and its making, delivery or receipt, as it thinks fit.