Roach & Ors v Page & Ors (No.2)

His Honour : Section 39 of the Evidence Act 1995 provides that evidence may be adduced in re-examination about matters arising out of evidence given by the witness in cross-examination. In Hadid v Australis Media Limited (5 November 1996, unreported), I held that the section is to be construed conformably with the common law as stated in Cross on Evidence in the following sentence: The purpose of re-examination is not merely to remove ambiguities and uncertainties, but is allowed wherever an answer in cross-examination would, unless supplemented or explained, leave the court with an impression of the facts, whether facts in issue or facts relating to credibility, which is capable of being construed unfavourably to the party calling the witness and which represents a distortion or incomplete account of the truth as the witness is able to present it.

The evidence relied on as adduced in cross-examination can be summarised as follows.

The assets of the group of companies controlled by Mr Roach and his wife were held in Sugetu Pty Ltd (Tr 238-9). By December 1990, Australia was in a severe recession (Tr 263). On 6 December 1990, Mr Roach wrote in his diary, “Ad placed in Herald to sell all factories and land at Lidcombe” (Tr 264). That was the property owned by Sugetu.

Asked, in effect, whether it was his intention to sell all of those factories and land at Lidcombe, the witness did not answer directly; he said that one can put everything on the market but one cannot expect to sell everything the next day (Tr 265).

Asked whether the factories and land at Lidcombe were the only assets owned by the group of companies, Mr Roach answered that he also owned a house property at Wahroonga and another at North Avoca, and possibly also an office at Turramurra at that time (Tr 265). Asked when he had sold the house properties, Mr Roach said probably around 1992.

Mr Roach was also directed in cross-examination to an entry in his diary for 8 July 1992, “Can’t buy any more currency until sale of Braeside. Now have enough gradually increasing next week.” (Tr 266). (That was a reference to foreign currency transactions in which Mr Roach was engaged at that time.)

Asked again about the diary entry in 1990, Mr Roach said that he did sell some factories at that time prior to the recession biting (Tr 418).

Later, the witness agreed that he had sold the Braeside and North Avoca properties in early 1992 (Tr 419). He agreed that he had done that to reduce debt (Tr 419). Asked whether that was because he was being pressed by the banks, Mr Roach answered that we were in the middle of a recession and that seemed a prudent thing to do (Tr 419).

Mr Roach was not asked directly whether it was his intention, during the period 1992 to 1993, to sell off whatever he could of the assets owned or controlled by himself and his wife, or whatever assets were most readily saleable. The evidence to which I have referred is, however, capable of giving rise to the inference (albeit not necessarily the inference which the court would draw at the conclusion of the proceedings) that this was his intention during the period late 1990 to early 1992, and (by continuance) for some little time thereafter.

Any such finding would give support to the defendants' case that Winnote Pty Ltd’s peat mining enterprise would have been sold in 1993 or thereabouts, as Mr Roach agreed to do at that time, irrespective of whether a mining lease had to have been obtained (as the plaintiffs say would have been the situation but for breach of duty on the part of the defendants).

If Mr Roach is in a position to give evidence which, if accepted, would show that such an inference would represent a distortion or incomplete account of the true situation, such evidence would, on the principles to which I have referred, be admissible in re-examination. Any such evidence would extend to direct evidence by Mr Roach that it was not his intention to sell off assets in that way during the period 1990 to 1993 and would also extend to such evidence concerning the financial condition and activities of the companies in the group as would tend to make such an intention implausible or unlikely. Activities would include particulars of actual sales.

There is, however, a consideration in the present case which did not arise in the decided cases to which I have been referred and, as to which, I am unaware of any existing authority. The additional consideration is this. Such evidence as the plaintiffs may now adduce in re-examination of Mr Roach would not merely be evidence to put a construction on evidence adduced in cross-examination different from that which might otherwise arise unfavourably to the plaintiffs. It is also evidence in support of the plaintiffs' case that the reasons for Mr Roach having agreed to sell the peat mining enterprise in 1993 were only as the plaintiffs contend and, further, that, at all relevant times, the plaintiffs had the financial capacity to hold and exploit the resource. As such, the evidence could as readily have been led in the course of Mr Roach's evidence in chief.

In these circumstances, the evidence has the character of further evidence in chief as well as being evidence which the plaintiffs are entitled to adduce in re-examination. Fairness dictates that the defendants should be entitled to test such further evidence.

In these circumstances, I propose to allow the plaintiffs to adduce further evidence in re-examination of Mr Roach along the lines mentioned above, but that will be subject to the defendants' right to cross-examine on such further evidence.

Subject to what may now be said to the contrary in argument, any further evidence to be adduced in re-examination of Mr Roach along the lines mentioned above should, if the defendants wish it, be by witness statement with notification of any documentary materials proposed to be tendered. That would involve deferring Mr Roach's further evidence for a short time, with a view to some other witness or witnesses being called in the meantime. -oOo-