Marvoe Management Pty Ltd v Plantation Management Services (WA) Pty Ltd (4)

This case concerns the supply of watermelon seedlings by the defendants to the plaintiff. It is the plaintiff's case that the seedlings, or a good proportion of them, were contaminated by a disease referred to in the proceedings in various ways but which I will call fusarium wilt. The case is framed as one for a breach of contract for the sale of goods; there is an issue about the proper characterisation of the contract; and no reliance is placed upon the tort of negligence.

The defendants accept that a proportion of the plaintiff's watermelon seedlings were affected by the disease, but a significant issue as to liability, if I may put it that way, is whether the affectation arose from contamination of the seeds which had been supplied to the defendants by the plaintiff's seed merchant on behalf of the plaintiff; or whether the contamination had been introduced by the defendants during the processes it adopted for the propagation of the seedlings.

In its case the defendant has read the affidavit of its Managing Director, Mr Lindsay Forrest. Mr Forrest in part described how he became aware of a problem with watermelon seedlings propagated by the defendants during the early part of 2011. The first seeds delivered to the defendant’s nursery came from a grower at Katherine in the early part of 2011. Subsequently the seeds of that grower were tested and proved positive for the Fusarium wilt contamination. In explaining how he became aware of the problem at [44] of his affidavit, Mr Forrest refers to information he received from a person named Melissa Debarros who was then the manager of the defendant’s Northern Territory nursery.

The email of 15 February 2011 to which Mr Forrest refers was exhibited to him at the time of swearing his affidavit and has been admitted into evidence. It appears at page 1392 of the court book (p 24 of the exhibit to Mr Forrest's affidavit). At the risk of being tedious, I will set it out in full. Ms Debarros wrote:

The words I have emphasised have taken on some particular significance inasmuch as they are relied upon by Professor Everts in expressing the view that probably the contamination occurred during the defendant’s processing. Professor Martyn takes a different view and I interpolate he expressed the opinion that bleaching, provided it was properly carried out, was a good alternative to steaming. Professor Everts agreed with this with the proviso that one could not steam the potting media used to propagate the seedlings and the contamination may have found its way into the media.

Troy Barbagallo was another witness called by the defendants. As at February 2011 he was a casual employee working about 10 to 15 hours per week in the propagation process. He became permanent in May 2011 and when Ms Debarros left the nursery in 2011 he became manager. In describing the sanitation processes adopted at the nursery at [35] of his affidavit (page 1464 of the court book) he described part of the process in the following terms:

It is common ground that Mr Barbagallo was not challenged on the generality of his statement to the effect that trays are always steamed. He was not taken to the email of 15 February 2011 and was not cross-examined to suggest that there was a time in February 2011 when the steam room was not operational.

Mr McNally SC sought to cross-examine Professor Martyn on the email at transcript 503.45T – 507.10T. Mr Cavanagh SC objected to Prof Martyn being cross-examined to suggest that this was a specific problem in the steaming room in February 2011. In making his objection, Mr Cavanagh of Senior Counsel invoked the rule in Browne v Dunn (1983) 6 R. 67, as it is known, and said, "If it was going to be specifically suggested that this was a specific problem which we had, then it had to be raised with our witnesses.”

I did not make a ruling on the matter at that time as Professor Everts and Professor Martyn had attended Sydney to give concurrent evidence from the United States of America, and for that reason I did not want to interrupt their evidence to hear detailed legal argument. But I did permit Mr McNally to continue his cross-examination by reference to an assumption that there may have been a problem with the steaming room in February 2011 as a hypothetical matter rather than as cross-examination on the truth of the representation contained in the email under s 44 of the Evidence Act 1995 (NSW).

The point has now been fully argued before me. Mr Cavanagh, as I said, invokes the rule in Browne v Dunn and says that given the matter was not raised specifically with Mr Barbagallo, and indeed not raised specifically with Mr Forrest, that this line of attack had not occurred to him as a matter he would need to meet in the conduct of the defendant's case.

Mr McNally acknowledges there was a contradiction between the email and generality of Mr Barbagallo's statement but submits that it was not necessary for him to cross-examine either witness, but in particular Mr Barbagallo, about the matter, given that this was evidence led in the defendant's case.

In relation to Mr Forrest he says it was part of his evidence and it is not necessary for cross-examining counsel to draw matters not helpful to the party calling a witness in evidence in chief to the witness's attention. I think so much must be correct and is tacitly accepted by Mr Cavanagh.

The rule in Browne v Dunn was discussed authoritatively I think I can say, by Hunt J, as his Honour then was, in Allied Pastoral Holdings Pty Ltd v Commissioner of Taxation (1983) 1 NSWLR 1. As the name suggests, that was a taxation case and in closing addresses counsel for the Commissioner put a submission to the Court that because of inferences that should be drawn from other circumstances proved in the evidence, the evidence of the directors that they did not acquire a property for re-sale for profit should be disbelieved.

At page 16 his Honour said:

His Honour then undertook a characteristically, with respect, exhaustive and incisive review of the relevant authorities before concluding at pages 22 and 23:

I have set out these passages at some length to illustrate that in the analysis of Hunt J, the rule in Browne v Dunn extends beyond challenges to credit and to mere contradiction of the witness's evidence, if I may put it that way. It also extends to circumstances where a party will submit that a witness's evidence should be put to one side and other evidence led in the case preferred as to some particular fact in issue whether by way of an inferential reasoning process or otherwise.

It seems to me in considering whether this rule of fairness has been observed, the understanding of opposing counsel is at least not irrelevant.

I am of the view that the rule does apply in the situation with which I am confronted. I fully accept that learned Senior Counsel for the plaintiff was not attempting to obtain any unfair advantage in the case, but that is not necessarily relevant. The question is whether in substance the matter should have been raised with the witness to enable his opponent to deal with the matter in the course of the evidence. I do accept the force of Mr McNally's submission that the case is somewhat unusual in that all of this evidence has been led in the defendant's case; that Mr Barbagallo did not become manager until after the events the subject of the contradiction; and that his evidence in any event is at such a level of generality that it is not necessarily inconsistent with the evidence of a specific problem with the steaming room in February 2011.

It may be that, had it been formally put to him, due to the effluxion of time, or for other legitimate reason, he might not have been able to deny it in any event. However, having said that, I think that it was necessary that he and the defendants were given the opportunity of dealing with the matter, especially as it is an important aspect of the plaintiff's case that on the probabilities I should infer that the contamination was introduced to the nursery, not by their seed, but in about February of 2011 when the steaming room was not in operation.

I should also record here that Ms Debarros has not been called as a witness but evidence has been led of attempts to locate her in Western Australia where Mr Forrest said he had last heard of her.

Given my ruling, Mr Cavanagh asks me not to treat the email of 15 February 2011 as evidence of the truth of the representations it contains. That, however, is not the only option available for curing any failure to observe the rule in Browne v Dunn, especially as in this case the point has been taken, albeit at the end of the evidence but before final addresses have commenced.

In Kuhl v Zurich Financial Services (2011) 243 CLR 361;[2011] HCA 11 at [71], Heydon, Crennan and Bell JJ pointed out that there was more than one option to remedy a failure to observe the rule and those options included a recall of the witness to the witness box to deal with the matter. It seems to me that it would be unduly prejudicial to the plaintiff's case to accede to Mr Cavanagh's application that I should limit the effect of the email of 15 February 2011 under s 136 of the Evidence Act. In coming to this conclusion I have taken into account what I have described as the force of Mr McNally's submissions, particularly the consideration that these contradictions emanate from the defendant's own case.

Given that I think the rule of fairness has been unwittingly infringed by learned Senior Counsel for the plaintiff, I think it appropriate that Mr Barbagallo be recalled so that the matter can be raised with him in further cross-examination.

Given the degree of oversight acknowledged by Mr Cavanagh, and I appreciate that there is a mountain of paper in this case, as is frequently the case these days, so that oversight is perhaps not only foreseeable but to be expected at times, I think it appropriate that the defendant should make Mr Barbagallo available for further cross-examination by Mr McNally, if that can be done. As he lives in the town of Eureka in Queensland, which I understand is somewhere between Brisbane and Rockhampton in that vast State, I would be content that his further evidence be taken by telephone, if that can be arranged.