Federal Court of Australia

Tang v Yu (evidence rulings) [2023] FCA 1541

ORDERS

THE COURT ORDERS THAT:

Suppression

1.    Pursuant to ss 37AF(1)(b) and 37AG(1)(a) of the Federal Court of Australia Act 1976 (Cth), for a period of twenty years or until further order of the Court, in order to prevent prejudice to the proper administration of justice, the following documents not be published or made available and not be disclosed to any person or entity except with written consent of the parties:

AND THE COURT RULES THAT:

Evidence

2.    The first respondent’s objection to the Tab 24 documents on the basis that they contain hearsay evidence is dismissed.

3.    The first respondent’s objection to the Tab 24 documents on the basis that they contain opinion evidence is upheld. The documents are admissible but not as proof of the facts stated in the opinions.

4.    The first respondent’s objection to the document GT-17 is upheld. The document is admissible but not as proof of the facts stated in it.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

(Delivered ex tempore, revised from transcript)

STEWART J:

1    Mr Chen for the first respondent has objected to certain evidence which is sought to be tendered by Mr Meyerowitz-Katz for the applicant.

2    The first category of such documents are referred to as the tab 24 documents. Objection is taken to all of those documents as hearsay or, more accurately, as containing representations in the nature of hearsay. It is submitted that the documents, or the hearsay statements, are to be excluded under s 59 of the Evidence Act 1995.

3    The documents were all obtained from amongst publicly available records in relation to companies maintained by ASIC and the ASX. They are in the nature of (1) ASIC company extracts showing the shareholding, officers, status, etc, of various companies, (2) liquidators’ and administrators’ statutory reports to creditors, (3) minutes of meetings of creditors, and (4) ASX market announcements.

4    They are all “business records” under s 69(1) of the Evidence Act as forming part of the business of ASIC or the ASX and containing previous representations made or recorded in the documents in the course of or for the purpose of that business. Under item 1(1)(d) of Pt 2 of the dictionary to the Evidence Act, ASIC is a business: Panayi v Deputy Commissioner of Taxation [2017] NSWCA 93, 319 FLR 228 at [42]. There can be little doubt that the representations contained in the documents were made or recorded for the purpose of ASIC’s or the ASX’s business. Also, representations in the documents by liquidators and administrators were made by them on the basis of information supplied by people who might reasonably be supposed to have had personal knowledge of the asserted facts.

5    Some of the representations such as may not have been made or recorded for the purpose of ASIC’s business would have been made or recorded for the purpose of the business of the ASX or the companies concerned that made the announcements or even possibly the liquidators and administrators.

6    Mr Chen’s principal objection is that the records are not records of the businesses to which they are said to be relevant in this proceeding, that is, the companies that are the subject of the documents. However, that is not a requirement of the business records exception to the rule against hearsay as contained in s 69.

7    Mr Chen also relies on s 69(3)(a) which provides that the hearsay exception to the rule against hearsay does not apply if the representation was prepared or obtained for the purpose of conducting, or for in contemplation of or in connection with, an Australian or overseas proceeding. The argument is said to apply to the liquidators’ and possibly administrators’ reports on the basis that they were prepared, at least in part, for the purpose of investigating and thus contemplating proceedings to be brought against directors or creditors on the basis of unfair preferences or otherwise voidable transactions. However, I am not satisfied that that is so. Although the reports cover those matters to some degree, the reports were prepared for the purpose of meeting the statutory requirements or obligations of the liquidators and administrators to report to creditors and are, therefore, in my view, not excluded from the exception to the rule against hearsay.

8    The second category of objections is to opinions expressed by the liquidators or administrators in the ASIC documents under the opinion rule in s 76 of the Evidence Act. The opinions are as to such matters as estimated recoverable value of assets or claims and the likelihood of recovery.

9    Mr Meyerowitz-Katz submits that the opinions are admissible under the specialised knowledge exception in s 79(1) of the Evidence Act. Under that provision, if a person has specialised knowledge based on the person’s training, study or experience, the opinion rule does not apply to the evidence of an opinion of that person that is wholly or substantially based on that knowledge.

10    It is well established that an opinion expressed in a business record is not admissible because of that characteristic. Put differently, the opinion rule in s 76 applies to opinions expressed in business records and is not restricted to witness evidence: Lithgow City Council v Jackson [2011] HCA 36; 244 CLR 352 at 19. The specialised knowledge of the relevant officers, based on their training, study or experience is, in my view, not established. All that can be inferred is that they are registered liquidators. Mr Meyerowitz-Katz says that is enough. I disagree. There is nothing in that fact to establish that they have specialised knowledge relevant to the particular opinions that they express as recorded in the reports. Because of that, the requirements of s 79(1) are not made out and the opinions are not admissible as proof of the facts asserted. They are, however, admissible as having been stated by the relevant officers.

11    I am fortified in my conclusions by Bale v Kimberley Developments Pty Ltd [2022] NSWSC 820 at [218]-[224] and [234]-[235]. In that case, Ward P rejected opinions expressed by medical practitioners in medical records on the basis that it was not established that the practitioners’ opinions were based on relevant specialised knowledge, namely, specialised knowledge of geriatric medicine or dementia. Her Honour was otherwise prepared to accept, based on their medical qualifications, that the practitioners had specialised knowledge in their respective areas of practice.

12    The position of the liquidators and administrators is far weaker. There is no evidence of their qualifications and there is, in particular, no evidence of specialised knowledge in relation to the specific opinions that they express.

13    President Ward would also have rejected the medical practitioners’ evidence on the basis that they had not acknowledged and were not bound by the expert code of conduct and were not available for cross-examination (at [235]). Those circumstances apply equally in the present case. Mr Meyerowitz-Katz has, however, referred to authority to the effect that the requirements with regard to the expert code apply only to expert witnesses and not non-witness expert opinion evidence: Roads and Traffic Authority v Barrie Toepfer Earthmoving & Land Management Pty Ltd (No 2) [2012] NSWSC 937 per Price J. However, the authorities on that question are not consistent, as discussed by Griffiths AJ in Eco-Pact Pty Ltd v Law Society of New South Wales [2023] NSWSC 283 at [187] to [192]. In view of my conclusion that the relevant opinions do not meet the requirements of s 79(1), it is not necessary for me to enter upon that debate, less still resolve it.

14    The third objection is to the “balance sheet” of Hyperbuild Unit Trust as at June 2019, which is exhibit GT-17. The objection is on the basis that the facts stated in the balance sheet, namely, the figures representing assets and liabilities and the like, are hearsay. The balance sheet is a document produced on discovery by the second respondent, Oliver Roths, who is no longer an active party in this proceeding, having had his estate sequestrated. In his schedule of discovered documents the document in question is apparently one of 355 documents described as “electronic business records and files pertaining to Hyperbuild Group and PLC Financial Solutions Limited”.

15    On one view, the document might be thought to be a business record of the Hyperbuild Unit Trust and, on that basis, be admitted under s 69 of the Evidence Act. However, Mr Roths’ affidavit verifying his discovery does not explain what he meant by “business records” in the schedule and there is no basis to suppose that he had the provisions of s 69 in mind. There is simply inadequate information about the document and its provenance to be able to assess whether it meets the description of a business record in s 69. It must thus be excluded as hearsay.

16    In conclusion, in the circumstances, I make the following rulings:

(1)    The objection to the tab 24 documents as containing hearsay representations is dismissed.

(2)    The objection to the opinions expressed in the tab 24 documents by liquidators and administrators is upheld. Those opinions are admissible in evidence but not as proof of the facts expressed in them.

(3)    The objection to exhibit GT17 as hearsay is upheld. That document is admissible but not as proof of the facts stated in it.

Associate:

Dated:    5 December 2023