November 8, 2012 · 12:37 am

The rule in…Jones v Dunkel

This is another instalment in my attempt to compile a list of entries about the cases (mostly old) which are used in litigation as part of the vernacular.

What is it?

The rule in Jones v Dunkel is one which lawyers cite regularly when seeking to highlight a perceived gap in their opponent’s evidence.

It is essentially a common law rule of evidence under which an unexplained failure by a party to put evidence before the court whether it’s a witness or document, may lead to an inference that this evidence would not have assisted that party.

Elements

Glass JA in Payne v Parker [1976] 1 NSWLR 191 at 201 said that for a failure to call a witness there are 3 elements required to enliven the rule:

(a)     The missing witness would be expected to be called by one party rather than the other

Normally this is because the witness would be expected to be in the defaulting party’s camp or at least more available to that party.  Based on this aspect, if the uncalled witness is a party themselves or a senior executive likely to have knowledge of the impugned transactions of a corporate party, the adverse inference may prove particularly strong.

(b)     His evidence would elucidate a particular matter

The court must be able to conclude that, based on the other evidence available at the hearing, the witness would probably be able to shed some light on the facts in issue.

(c)     His absence is unexplained

The rule has no application if the absence is explained. This will normally need to be coupled with a reasonable explanation of why the missing witness was not compelled to attend by subpoena. This can involve such things as illness, refusal to waive privilege or that the witness is likely to be hostile to the calling party. However, positive evidence of ‘unavailability’ is required.

Practical Application

If the requirements of the rule are satisfied the non-defaulting party may then ask the court to:

i.         Take the failure into account when deciding whether to accept any other evidence put before the court by the defaulting party about which the witness could have spoken; or

ii.         More readily draw a favorable inference from evidence adduced by the non-defaulting party that could otherwise have been contradicted by the witness not called.

However, there can be no inference that the evidence not put before the court would have been damaging or adverse to the defaulting party’s case.

One technical matter: a failure to call a witness also includes a situation in which they are called by the plaintiff during its case in chief, but there is a failure to re-call them in answer to a fresh matter arising out of the defendant’s evidence.

Why is it important?

Although Jones v Dunkel is all about inferences, you might as well say that the rule is as much about impressions. If the court thinks a party is withholding something from the evidence, it will make some or all of the rest of that party’s evidence no matter how strong, start to seem a lot less credible.

Leave a comment

Filed under Civil, evidence, The Rule In

Tagged as , ,

October 30, 2012 · 1:20 am

Causation, causation, causation: NSW v Mikhael

In a NSW Court of Appeal decision handed down last week, New South Wales v Mikhael [2012] NSWCA 338, the causation issue once again proved to be the plaintiff’s Achilles’ heel.

This is the second time this year in which the Court of Appeal has overturned a first instance decision, whilst still upholding the trial judge’s decision on duty of care and breach (cf: Garzo v Liverpool/Campbelltown Christian School Ltd [2012] NSWCA 151, in respect of which there is a pending special leave application to the High Court).

It’s as if the Court is trying to send a message: just as in real estate terms it is important to buy a property in a good spot (‘location, location, location’) so too is causation something that plaintiffs need to consider closely before litigating.

The facts in Mikhael are interesting. A schoolboy sued the State of NSW regarding an incident in which another student (named “T” in the judgment) violently assaulted him after class. This had occurred following an argument between the plaintiff and T about 10 minutes before the end of the period. The teacher determined that by the end of the lesson things seemed to have cooled down between the two boys so did nothing further about it.

Only a few weeks prior, T had punched another student after football practice. So the duty of care in this case required the school to implement reasonable measures to avoid a foreseeable risk of T doing a similar thing again; it was unsuccessful in so doing.

The school did have in place a system for dealing with this kind of problem. Pursuant to this system, teachers at the school were in fact alerted to T’s involvement in the football-training assault. However, it was significant in the Court’s eyes that whilst the system had been followed and teachers advised, they were not told that the football practice assault occurred after only slight provocation of T. This is information with which the Court thought the teachers should have been armed but were not: breach of the school’s duty of care.

The question remained- what would the teacher of the class have done if armed with the additional piece of information that T was easily provoked? The plaintiff (as the respondent on appeal) filed a notice of contention setting out the kinds of measures the teacher could have taken: checking if T was hanging around after class waiting for a fight, escorting the plaintiff student to a position of safety and asking the plaintiff if he had any fear about T.

However, the Court found that even if these steps were taken, the assault would not in all likelihood have been averted (at [110]). For example, there was no description of where or what a position of safety might be and whether this required the plaintiff to be kept separate from other students for a certain period and if so for how long. The problem was compounded by the fact that the teacher in question had not been cross-examined at the trial about whether in her opinion, these kinds of measures would have stopped T from assaulting the plaintiff. She was adequately experienced and knowledgeable, and indeed in the best position, to give such a comment.

In re-stating the relevant legal principles, the Court confirmed that the ‘but for’ test was the applicable test when considering causation under section 5D of the Civil Liability Act; even in cases of negligent omission such as the instant. Guidance was found in the High Court’s decision in Adeels Palace v Moubarak (2009) 239 CLR 420 in which an angry restaurant patron had left premises and returned with a gun that once inside, he discharged to injure the plaintiff. The plaintiff contended that the restaurant should have had more security guards on duty but the HCA found that this would not have averted the shooting in any event. They would not or could not have stopped him.

But the most important ‘take-away’ from Mikhael is that the Court (at [96] and [107]) said that the ‘but for’ test is not concerned with possibilities about what might have happened had the necessary preventative action/measures been put in place. In this case, Beazley JA (with whom Allsop P and Preston CJ of the LEC both agreed) said that the plaintiff’s causation case amounted to ‘no more than a series of possibilities’. Instead, he needed to prove that any such steps would, on the balance of probabilities, have averted the harm suffered.

An “Achilles heel” is a fatal weakness despite overall strength. A perception of overall strength will often be somewhat justified when the case on duty and breach is strong. Nevertheless, a weak case on causation can have fatal consequences.

1 Comment

Filed under causation, Negligence

Tagged as , , ,

October 10, 2012 · 4:39 am

Misleading and deceptive conduct: know your audience

The recent High Court decision in Forrest v ASIC [2012] HCA 39 provides a useful illustration of the principle that in considering whether a statement/conduct is misleading and deceptive, it is not the opinion of a lawyer about what its effect would have been, but rather a court will stand in the shoes of the audience to whom it is directed.

Among the questions for determination by the Court was whether Fortescue had misled and/or deceived the market by announcing it had entered into a binding contract with a Chinese state owned company to build and finance the railway component of the Pilbara Iron Ore and Infrastructure Project.

The High Court said (at [36]) the audience for the claim in this case did not need be too tightly defined:

“The intended audience can be sufficiently identified as investors (both present and possible future investors) and, perhaps, as some wider section of the business and commercial or business community. It is not necessary to identify the audience more precisely.”

ASIC submitted that these investors would have taken the use of the words “binding contract” to mean that such a contract would withstand a legal challenge in an Australian Court. The HCA did not agree, saying at [45]:

“…it by no means follows that such an audience would have understood the impugned statements as inviting any attention to what the courts of Australia could or would do if a party to one of the agreements did not perform its part of the bargain.”

This was particularly so because as the Court noted at [46-48], the agreement was made with an entity owned and controlled by the People’s Republic of China. There being no jurisdiction clause in the contracts, any enforcement proceedings may well have had to have taken place over there.

Although this decision is one driven by fine margins and semantics, it serves as a cautionary tale that any plaintiff alleging misleading and deceptive conduct needs to show what effect the statement/conduct had on him/her/it in all of the circumstances in which it was received. In a way, a court will need to use the evidence to step into the mind of the plaintiff back when the impugned conduct took place.

As an aside, the Court noted at [39] that no evidence was led at trial to show how investors would have understood the words “binding contract”.

Although it is often expensive and open to attack on admissibility issues, perhaps in proceedings of this significance, some survey evidence may well have assisted ASIC.

The other alternative would be expert evidence. However, some judges do not like being told what to think about matters that permit them to bring their own experience to their deliberations. Take for example Heerey J’s decision in Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2006) 228 ALR 719, where the court was asked to consider whether consumers would be confused between the products of Cadbury and Darrell Lea based on the latter’s alleged use of Cadbury’s colours and get-up. His Honour rejected expensive expert evidence from a person experienced in matters of consumer behaviour taking the view that the Court did not require an expert to tell it whether or not a chocolate wrapper was confusing.

At the very least, the process of preparing this kind of evidence might well have acquainted ASIC and, if adduced, the High Court with what the investor audience for Fortescue’s impugned announcement would have thought about the claim that a “binding contract” had been signed. Instead ASIC forced the Court to take a view that ultimately proved fatal to its case.

1 Comment

Filed under Civil, misleading and deceptive conduct