Maaz v Fullerton Property Pty Ltd

1. [1]

   BASTEN JA: In 2015 the respondent, Fullerton Property Pty Ltd (“Fullerton”), entered into a contract with Project.Built Pty Ltd (“the builder”) for construction of an apartment building at Kitchener Parade, Bankstown. The appellant, Tony Maaz, was the sole director of the builder. The contract was terminated by Fullerton and the builder is now in liquidation.

2. [2]

   In the course of the construction work, the builder made claims for progress payments pursuant to the terms of the contract and the Building and Construction Industry Security of Payment Act 1999 (NSW) (“Security of Payment Act”). Such claims included recovery of payments made by the builder to subcontractors. In accordance with the contract, the appellant supplied statutory declarations asserting that such payments had been made. On the basis that such statements were correct, the builder was reimbursed the amounts of those payments by Fullerton.

3. [3]

   In 2019 Fullerton commenced proceedings in the District Court against the appellant, claiming that certain of the statutory declarations were untrue in that the payments to subcontractors verified by the appellant as having been made had not in fact been made. The proceedings against the appellant were brought in (i) deceit and (ii) for breach of the prohibition on misleading or deceptive conduct in trade and commerce under s 18 of the Australian Consumer Law. The loss suffered by Fullerton was calculated by reference to the payments later made by it to subcontractors in respect of amounts earlier paid by it to the builder on the basis that the subcontractors had already been paid.

4. [4]

   On 24 July 2020 the trial judge (S J Gibb DCJ) entered judgment in favour of Fullerton against the appellant in the sum of $388,318.31, which included an amount of $50,000 for exemplary damages.

5. [5]

   On 21 October 2020 the appellant filed a notice of appeal containing four grounds. Grounds 1-3 asserted that Fullerton’s evidence, relying on the business records of the subcontractors, was not admissible to establish that the subcontractors had not been paid by the builder. Ground 4 alleged that Fullerton was not entitled to claim damages unless it could be shown that the cost of the development, including the further payments to subcontractors, exceeded the price under its fixed price contract with the builder.

6. [6]

   The appellant’s written submissions appeared to add a further ground, namely that, if the material relied on to demonstrate non-payment of the subcontractors were admissible, it nevertheless failed to satisfy the heightened standard of proof required where the allegation against the appellant was of conduct involving grave moral delinquency; the appellant relied on the reasoning of the High Court in Briginshaw v Briginshaw [1] affirmed in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd. [2]

7. [7]

   In his written submissions in reply, the appellant’s solicitor acknowledged that an authority relied on by him in asserting the inadmissibility of the records was no longer good law. Nevertheless, he sought to maintain the claim of inadmissibility based on the fact that the material from the subcontractors had not been obtained under subpoena. He identified the issues as (i) application of the Briginshaw standard of proof, (ii) the admissibility of the third party business records (and the effect of them), and (iii) the calculation of damages in the light of the fixed price contract.

8. [8]

   In the course of oral submissions, the appellant’s case was refined to two issues, namely (i) failure to prove the falsity of the statutory declarations, [3] and (ii) the failure to establish that the respondent suffered expenditure greater than the price under the fixed price contract. If loss were established, no issue was raised with the finding as to exemplary damages. [4]

(a) background

1. [9]

   The entitlement to progress payments depended upon the operation of the contract and the Security of Payment Act. Pursuant to cl 38.1 of the contract, the builder was required to give “in respect of a progress claim, documentary evidence of the payment of moneys due and payable to … the subcontractors”. That documentary evidence was to be in the form of a statutory declaration. Fullerton was entitled to “withhold moneys certified due and payable in respect to the progress claim until [the builder] complies with sub-clause 38.1”: cl 38.2. The standard form of statutory declaration provided with each progress claim was, so far as relevant, in the following terms:

2. [10]

   The evidence before the trial judge was almost entirely documentary, the bulk of the documents being annexed to an affidavit of (Michael) Yu Wang sworn on 15 March 2020. Mr Wang was the sole director and secretary of Fullerton. Mr Wang exhibited to his affidavit:

3. [11]

   A schedule of double-payments included in Mr Wang’s affidavit was reproduced, but not identical terms, as a schedule to the statement of claim. There were variations made to that schedule in the course of the proceedings, resulting in a final document being prepared by Fullerton which became MFI 8 and was the subject of a response by the appellant’s solicitor, which became MFI 9. This was the final form of the schedule relied upon by the judge in calculating Fullerton’s loss. However, as nothing turns on the calculations, as opposed to the underlying principle, there is no need to refer to that material further.

(b) case pleaded

1. [12]

   To understand the scope of the issue as to the falsity of the declarations, it is convenient to identify the matters in dispute as a result of the pleadings.

2. [13]

   First, the amended statement of claim identified 16 subcontracts entered into by the builder and asserted that under each the builder was liable for payment for the work performed. Those allegations were not admitted in the defence, but they were proved by Fullerton and nothing arises in relation to them on the appeal. The statement of claim then made allegations in relation to each payment claim for the months from March – August 2017. The statement of claim alleged that each payment claim included (i) amounts referable to work performed by subcontractors; (ii) a statutory declaration by the appellant; (iii) a tax invoice issued by the builder for the amount of the claim, and stated that Fullerton had paid the claim in reliance on the appellant’s assertion that the builder had paid the subcontractors. [5] None of those allegations was admitted, but none was denied. [6]

3. [14]

   The pleading further alleged that each statutory declaration contained representations by the appellant that, “to the best of his knowledge and belief and having made all reasonable inquiries” the builder had paid the relevant subcontractors in full and alleged that reasonable inquiries would have revealed that the subcontractors had not been paid. [7] The appellant admitted executing the supporting statements on behalf of the builder but asserted that he had relied on representations of his bookkeeper who had been stealing money from the builder and denied that reasonable inquiries would have revealed the true situation. [8]

4. [15]

   The affirmative claim of being the victim of fraud was not supported by evidence. At the trial the appellant gave no evidence and called no evidence; his forensic strategy was to put Fullerton to proof. The only issue remaining in this Court, as to which proof was said to be lacking, was the fact that the subcontractors had not been paid.

(c) reasoning as to falsity

1. [16]

   Because of the limited nature of the appeal, it is convenient to identify one example of the reasoning as to the non-payment of invoices by the builder. The judge undertook this task by examining the documents relevant to the particular subcontractors. The payments were organised by Fullerton’s contract superintendent, Foresight Management Pty Ltd, which was also identified by the judge as Fullerton’s project manager. [9] There was evidence that, in September 2017, Foresight Management organised the request by the builder that Fullerton pay subcontractors directly.

2. [17]

   In relation to Complete Plumbing Solutions Pty Ltd, which issued invoices totalling some $50,000 in January and June 2017, the judge noted: [10]

3. [18]

   It is not in dispute that the subcontract work was done, nor that the amounts charged were appropriate. There was no evidence that the invoices had been paid by the builder. There was evidence that Fullerton later paid those invoices directly. The only question was whether there was any evidence from which it could be inferred that the invoices had not been paid by the builder.

4. [19]

   The failure of the appellant to respond to the letter of 7 June 2018 might form the basis for an implied admission, but the figure referred to in the letter is well in excess of the amount accepted by the trial judge and there was no breakdown of the claim annexed to the letter. The question is, therefore, whether the records involving Complete Plumbing constituted admissible evidence.

(d) legal principles

1. [20]

   In principle the statements by Mr Borg, who was not called, were hearsay. The admissibility of his email and the attached invoices turned on the application of s 69 of the Evidence Act 1995 (NSW) with respect to the admissibility of business records by way of an exception to the rule excluding hearsay evidence. Section 69 provides as follows:

2. [21]

   There was no attempt to examine the operation of s 69 in the course of the appeal. Indeed, there was no attempt to identify any particular document which may have been admitted under s 69 which was said to be inadmissible. Rather, the appellant’s case at trial was that the documents could not prove their own authenticity and therefore admissibility. Reliance was placed on the following reasoning of Bryson J in National Australia Bank Ltd v Rusu: [11]

3. [22]

   The trial judge did not accept that approach; rather, she correctly preferred the reasoning of Leeming JA in the Capital Securities XV Pty Ltd (formerly known as Prime Capital Securities Pty Ltd) v Calleja. [12] As Leeming JA explained at [100]-[101], Bryson J had not been referred to s 183 of the Evidence Act (to which reference will be made below) nor had he obtained any useful assistance from the parties objecting to the tender of the documents. In any event, the appellant accepted that Rusu had been expressly overruled in Gregg v R. [13]

4. [23]

   Adopting the approach to s 69 accepted by Leeming JA in Calleja, the following conclusions may be drawn with respect to the present documents.

   1. (1)

      Section 69(1) states that the section applies if a document satisfies two criteria. The first is that it forms part of the records kept by a person, body or organisation for the purposes of a business. There may be little doubt that the email produced by Mr Wang constitutes such a record. However, the important consideration, to which no reference was made in Rusu, was the way in which the court may approach such a document. For that purpose, s 183 of the Evidence Act provides:

   2. (2)

      On its face, the document may be seen to be a business record. The subject matter identified by Mr Borg from Complete Plumbing was “FW: Invoices” and the email from Mr Clifton to Mr Wang was headed “Complete Plumbing – Project Built debt”. There could be no error in the identification of the document as a business record in the hands, probably, of Complete Plumbing, Foresight Management and Fullerton.

   3. (3)

      The second criterion requires that the document contain or record a representation made or recorded in the course, or for the purposes, of the business. The document contains a number of representations: the relevant one for present purposes is that made by Mr Borg, namely that Project.Built had not paid the attached invoices. That representation was made by Mr Borg in the course, and for the purposes, of the business of Complete Plumbing. It may be inferred that the email and the attached invoices were documents constituting part of the business records of Complete Plumbing.

   4. (4)

      Section 69(2) then provides that the hearsay rule will not apply to the document (or so much of the document as contains the representation) if the representation was made by a person who had, or might reasonably be supposed to have had, personal knowledge of the asserted fact. It may readily be inferred that Mr Borg had such knowledge. It might also be inferred that Fullerton’s agent, Mr Clifton, had such knowledge from his dealings with the appellant and with the subcontractors. However, it is sufficient for present purposes that the representation qualifies as a representation contained in a business record of Complete Plumbing.

   5. (5)

      Accordingly, the representation was admissible (and properly admitted) by way of an exception to the hearsay rule.

5. [24]

   It was not entirely clear that the appellant, by the time the matter reached the hearing of the appeal, resisted that conclusion. Further, as the appellant did not challenge particular findings, it is not necessary to identify each of the relevant findings of non-payment made by the trial judge to test the assertion of inadmissibility.

6. [25]

   Finally, it was submitted that the reasoning in Calleja could be distinguished because the documents in that case were obtained by response to a subpoena and therefore their source was not in issue. [14] Mr Hall further submitted: [15]

7. [26]

   Procedures by which documents may be obtained (including discovery, subpoenas and notices to produce) are often the only way to obtain a document that a party does not possess. It is also true that production under compulsion may confirm the authenticity of a particular record. However, in this case, Fullerton had the documents it needed; furthermore, their authenticity was not in doubt. The fact that the documents the subject of consideration in Calleja were obtained under subpoena was of no consequence for the soundness of the reasoning in that case, nor the appropriateness of its application in the present case.

(e) comfortable satisfaction

1. [27]

   As the appellant submitted, admissibility of the document was one thing, the weight to be attached to it was another. The appellant’s submission was that a finding of deceit involved deliberate dishonesty on the part of the appellant and that sufficient weight could not be derived as an indirect inference from an email attaching two invoices and stating they had not been paid.

2. [28]

   The trial judge made it clear that she understood that Fullerton’s claim in deceit involved a “grave allegation” and said the appellant “rightly urged caution”, referring to Briginshaw and the requirement that the tribunal achieve a state of actual satisfaction having regard to the seriousness of the allegation and the gravity of the consequences flowing from a particular finding.

3. [29]

   The ensuing discussion involved detailed reference to the evidence, which was not restricted to the matters which have been adverted to above. The judge stated: [16]

4. [30]

   None of this material was addressed in the course of submissions, either in writing or orally. That may well have been because the challenge was as to the falsity of the statutory declaration, there being no reference in the notice of appeal to error in drawing an inference that, for the purpose of the claim in deceit, the appellant knew that the statutory declarations were false. Even in oral argument, it was far from clear that such a submission was made, the appellant’s solicitor, Mr Hall, concluding that “on the exemplary damages point, we say that we are not in a position to cavil with the trial judge’s finding on exemplary damages, if and where a positive finding of damages is made.” [17] The point with respect to damages is the matter which will be dealt with below: relevantly for present purposes, that concession, combined with the absence of evidence from the appellant, who must have known whether the subcontractors had in fact been paid, provided an ample basis for the judge to reach a comfortable satisfaction as to the allegations made by Fullerton. There was no error either in her statement of the relevant principle, or in the application of the principle.

5. [31]

   In these circumstances, the challenge to the admissibility of the business records must fail and the judge’s findings based on those records must be upheld.

Calculation of loss

1. [32]

   The second and independent point raised on the appeal was the claim that no loss had been proved and thus no right to compensation by way of damages had been established. The appellant asserted that no loss was established unless the respondent proved that the additional payments to the subcontractors had resulted in expenditure in excess of the fixed price provided in the contract.

2. [33]

   The argument was based upon a misapprehension. The relevant contract was between Fullerton and the builder; the proceedings are between Fullerton and the appellant. The claim against the appellant was in tort, including the statutory cause of action under the Australian Consumer Law in that category: it was not in contract. The representations which induced the payments involved expenditure on account of the subcontractors, being amounts which, if not paid by the builder, Fullerton was required to pay pursuant to s 5 of the Contractors Debts Act 1997 (NSW). The wrong involved the builder obtaining payment of those moneys in circumstances in which it was not entitled to them, not itself having paid the subcontractors. It is true that the improperly made payments did not go to the appellant, but to the builder, but they were paid out as a result of misrepresentations made by the appellant for the sole purpose of obtaining payments to the builder. Fullerton made payments which it was neither obliged to make, nor would have made, but for the misrepresentations by the appellant. Whether or not those payments resulted in it expending more on the project than the fixed price contract with the builder (which was never completed), is irrelevant.

3. [34]

   The only basis upon which an issue could arise under the contract would be if Fullerton were to claim in the insolvency of the builder for moneys had and received by the builder which were not due under the contract. No such claim is before this Court: the possibility of such a claim does not relieve the appellant of its liability.

Conclusion

1. [35]

   The various grounds of appeal having failed, the appeal must be dismissed. The appellant must pay the respondent’s costs in this Court. Accordingly, the Court should make the following orders:

   1. (1)

      Dismiss the appeal from the judgment and orders in the District Court;

   2. (2)

      Order that the appellant pay Fullerton’s costs in this Court.

2. [36]

   GLEESON JA: I agree with Basten JA.

3. [37]

   BRERETON JA: The respondent Fullerton Property Pty Ltd was the owner of a property in Kitchener Parade, Bankstown, which it proposed to develop into an eight-storey apartment block. Fullerton contracted Project.Built Pty Ltd (now in liquidation), of which the appellant Tony Maaz was the sole director and shareholder, as its builder, and appointed Foresight Management Pty Ltd as its project manager, to act as the superintendent under the contract, to “monitor project costs” and to “check and process all progress claims” by the builder.

4. [38]

   Work on the project commenced at the end of 2016. Project.Built sub-contracted various parts of the building work to consultants and sub-contractors. Clause 38.1 of the contract between Fullerton and Project.Built provided that the builder would, when making progress claims, provide a Statutory Declaration (a) confirming that all subcontractors had been paid in full all moneys which had become payable under the terms of the relevant subcontract, and if it was unable to do so (b) evidencing the moneys that were due and payable. Clause 38.2 provided that Fullerton was entitled to withhold moneys certified due and payable in respect of a progress claim until Project.Built complied with sub-clause 38.1, up to the amount that was unpaid. Clause 38.3 provided that before final payment Fullerton could pay any unpaid sub-contractors directly, and that any amounts so paid were deemed to be in part satisfaction of Fullerton’s obligation to pay Project.Built.

5. [39]

   During 2017, Project.Built made progress claims, including in respect of work completed by subcontractors. Mr Maaz made a number of Statutory Declarations that stated that Project.Built had paid all moneys owed by it to subcontractors. Relying on those declarations, Fullerton paid progress claims made by Project.Built, without withholding any amount under clause 38.2. A number of subcontractors, in respect of whose work Fullerton had already made payments to Project.Built pursuant to progress claims, without withholding amounts which had the statutory declarations been accurate it would have been entitled to withhold, subsequently claimed not to have been paid, and Fullerton paid them directly. In the District Court, Fullerton sued Mr Maaz for damages, including exemplary damages, for contravention of s 18 of the Australian Consumer Law [18] (on the basis that his statutory declarations were misleading and deceptive) and for deceit (on the basis that they were intentionally false).

6. [40]

   At the hearing, Fullerton read two affidavits of its sole director Yu Wang, to which were exhibited various relevant documents, in particular invoices issued by subcontractors to Project.Built, and emails emanating from subcontractors to Foresight containing statements to the effect that they had not been paid. The affidavit did not explain the provenance of the documents exhibited; in particular, it did not state the source from which they had been obtained. The subcontractors who had prepared and issued the invoices or sent the emails were not called. Mr Maaz adduced no evidence in his defence.

7. [41]

   The trial judge gave judgment for Fullerton for compensatory damages of $322,208; interest of $16,110; and exemplary damages of $50,000. From that judgment Mr Maaz appeals to this Court. Ultimately, there were two issues on the appeal:

   1. (1)

      whether there was admissible evidence sufficient to prove to the requisite standard that the subcontractors had not been paid, and thus that the statutory declarations were false; and

   2. (2)

      whether the respondent had proved that it had suffered any loss.

The evidence of non-payment

1. [42]

   The appellant contended that, in the context of allegations of deceit to which the “Briginshaw standard” [19] of proof applied, the trial judge erred in making findings based on the drawing of inferences in respect of business records that were not created by Fullerton. At trial, and initially in the appeal (in written submissions), the appellant submitted, on the authority of National Australia Bank Ltd v Rusu (‘Rusu’), [20] that in the absence of evidence as to the authenticity and provenance of the documents tendered, they were inadmissible. This submission, which was made in ignorance of the judgment of the Court of Criminal Appeal in Gregg v R, [21] which overturned Rusu, was subsequently refined to one that some evidence was still required to demonstrate the authenticity and provenance of a business record before it is admitted; and that in any event the fact that they were “third party” records, which were not created by Fullerton but came into its possession as contract principal or through its project manager Foresight, “militated against their reception or weight”, in the absence of direct evidence from the subcontractors who generated them.

The evidence and reasoning

1. [43]

   This submission invites attention to the manner in which the trial judge used the documents in question to conclude, as her Honour did, that specific invoices issued by each relevant subcontractor had not been paid when Mr Maaz made a relevant statutory declaration, and remained unpaid until they were subsequently paid by Fullerton, and thus that the statutory declarations were false. That process, which her Honour set out precisely and transparently with reference to the relevant documents for each subcontractor and invoice, may be summarised as follows.

2. [44]

   Golden Touch Rendering and Painting Pty Ltd: Golden Touch issued invoice 1, dated 20 June 2017, to Project.Built for $19,800. Her Honour inferred that this invoice remained unpaid when Mr Maaz made the statutory declaration of 3 August 2017 from a Westpac bank statement for an account in the name of Fullerton dated 31 October 2017, which contained an entry evidencing a “Withdrawal Online” on 24 October 2017, being “Pymt Golden Tou Rendering” of $25,000. The conclusion that until then the invoice remained unpaid was an inference, drawn from the proved fact of payment by Fullerton on that date, in the absence of any evidence that it had earlier been paid.

3. [45]

   Complete Plumbing Solutions Pty Ltd: Complete Plumbing rendered invoice 0051 to Project.Built on 30 December 2016 for $15,945.50 and invoice 0085 on 27 June 2017 for $34,100. On 16 April 2018, Mr Borg of Complete Plumbing sent an email to Mr Ben Clifton of the project manager Foresight, attaching those two invoices:

4. [46]

   M Sola Electrics Pty Ltd: Sola Electrics issued invoice 6 to Project.Built on 23 April 2017 for $18,549.30, and invoice 7 on 24 May 2017 for $19,198.30. It issued invoice 8 on 24 June 2017 for $49,481.30, and invoice 9 on 24 July 2017 for $28,563.70, addressed to Fullerton directly, but marked for the attention of Project.Built.

5. [47]

   Her Honour inferred that these invoices remained unpaid when Mr Maaz made the statutory declaration of 3 August 2017 from internet payment summaries dated 8 February 2018, 11 April 2018, 1 March 2018 and 27 November 2017, of payments by Fullerton identifying Sola Electrics as the payee, in amounts which correspond precisely with the invoices. That for 11 April 2018 states that it was authorised by Yu Wang, Fullerton’s sole director. That for 1 March 2018 specifically refers to “Claim No 8”. The conclusion that until then the invoices remained unpaid was an inference, drawn from the proved fact of payment by Fullerton on that date, in the absence of any evidence that it had earlier been paid.

6. [48]

   National Aluminium: National Aluminium issued invoice 1919 to Project.Built on 20 April 2017 for $35,000; invoice 1945 on 29 May 2017 for $12,000; and invoice 1966 on 22 July 2017 for $12,000. By email of 6 October 2017, Mr Hraibi of National Aluminium sent copies of the invoices to Mr Clifton at Foresight, and in response to a request from Mr Clifton stated:

7. [49]

   Kone Elevators Pty Ltd: Kone issued claim no 2 to Project.Built on 11 July 2017 for $96,954. By email dated 9 October 2017, Ms San Gil of Kone responded to a query from Foresight as to whether the lift in question had not been installed because Kone was awaiting payment of the invoice:

8. [50]

   JJ Marino & Associates Pty Ltd: Marino & Associates issued invoice 15-123-6 to Project.Built on 18 July 2017 for $9,240. Her Honour inferred that this invoice remained unpaid when Mr Maaz made the statutory declaration of 3 August 2017 from an internet payment summary dated 8 February 2018 of a payment by Fullerton which identifies JJ Marino & Associates as the payee, in an amount which corresponds precisely with the invoice. The conclusion that until then the invoice remained unpaid was an inference drawn from the proved fact of payment by Fullerton on that date, in the absence of any evidence that it had earlier been paid.

9. [51]

   Rose Atkins Rimmer: Rimmer issued invoice 2005472 to Project.Built on 1 August 2017 for $2,277. Her Honour inferred that this invoice remained unpaid when Mr Maaz made the statutory declaration of 5 September 2017 from an internet payment summary of a payment by Fullerton dated 7 February 2018 which identifies Rose Atkins Rimmer as the payee, references RAR2005472 (the invoice number), is in an amount which corresponds precisely with the invoice, and states that it was authorised by Yu Wang. The conclusion that until then the invoice remained unpaid was an inference drawn from the proved fact of payment by Fullerton on that date, in the absence of any evidence that it had earlier been paid.

10. [52]

    Two MS Pty Ltd: Two MS issued invoice 02023 to Project.Built on 17 August 2017 for $1,320. Her Honour inferred that this invoice remained unpaid when Mr Maaz made the statutory declaration of 5 September 2017 was drawn from a Westpac bank statement for an account in the name of Fullerton dated 31 May 2018, which contained an entry evidencing a “Withdrawal Online” on 16 May 2018 being “Pymt Two Ms Pty Two Ms Fire” of $1,320. The conclusion that until then the invoice remained unpaid was an inference drawn from the proved fact of payment by Fullerton on that date, in the absence of any evidence that it had earlier been paid.

11. [53]

    Her Honour then accepted the evidence of Mr Wang that the payments recorded in the relevant bank statements were “payments made by Fullerton to the subcontractors in satisfaction of said invoices", and that all the invoices the subject of the claim had not been paid when the last relevant statutory declaration was made on 5 September 2017.

12. [54]

    It will be seen that there were essentially two categories. In one (constituted by Golden Touch, Sola Electrics, Marino & Associates, Rimmer, and Two MS), the conclusion that the invoice remained unpaid at the time of a relevant statutory declaration was an inference drawn only from the proved fact of subsequent payment by Fullerton, in the absence of any evidence that it had earlier been paid. In the other (constituted by Complete Plumbing, National Aluminium, and Kone), the conclusion was founded on a statement in a communication from the relevant subcontractor to Fullerton’s agent Foresight, to the effect that the relevant invoice remained unpaid.

13. [55]

    For the purposes of the first category, neither the notice of appeal, nor the appellant’s submissions, contended that if there were admissible evidence of subsequent payment by Fullerton, it was not open to her Honour to infer that the invoices remained unpaid by Project.Built until that payment was made. The appellant’s complaints were directed to admissibility. Mr Hall’s submissions for the appellant in substance raise the questions:

    1. (1)

       were the documents in question admissible under (NSW) Evidence Act 1995 (‘Evidence Act’), s 69 (“the admissibility question”);

    2. (2)

       if strictly admissible, ought they nonetheless have been excluded under Evidence Act, s 135 (“the discretionary exclusion question”); [22] and

    3. (3)

       if admitted, did the absence of evidence of their provenance and by their makers so deprive them of weight that the trial judge ought not have regarded them as proving the matters for which her Honour relied upon them (“the weight question”).

The admissibility question

1. [56]

   The first question, then, is whether the conditions for admissibility under Evidence Act, s 69 were satisfied. The appellant’s submissions direct attention to the extent, if any, to which those conditions are affected by the circumstances that a document is one that is not created by the party that tenders it, or that the maker of the document is not called to authenticate it. The question of admissibility is distinct from those of discretionary exclusion and weight, and the gravity of the allegation and potential application of the Briginshaw standard does not affect whether the documents were admissible.

2. [57]

   Section 69 is as follows:

3. [58]

   Ultimately, the question whether a previous representation is admissible under s 69 depends on whether:

   1. (1)

      it is contained in a document which forms part of the records belonging to or kept by a person, body or organisation in the course of, or for the purposes of, a business, or at any time was or formed part of such a record (s 69(1)(a));

   2. (2)

      it was made or recorded in that document in the course of, or for the purposes of, that business (s 69(1)(b)); and

   3. (3)

      it was made by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact, or on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact (s 69(2)).

4. [59]

   For the purpose of determining whether those conditions are satisfied, the Court may examine the document, and draw any reasonable inferences from it, as well as from other matters from which inferences may properly be drawn. [23] Thus, if the court can infer from the document itself that the conditions are satisfied, further evidence of the provenance of the document is not required to establish its admissibility. [24]

5. [60]

   As to the first condition, the document in which the previous representation is contained must be, or at some time have been, part of the records belonging to or kept by a person, body or organisation in the course of, or for the purposes of, a business. Nothing in s 69(1)(a)(i) requires that a document can qualify as a document that “forms part of a record of (that) business” only if it was created, as distinct from kept, within the business in question. [25] Documents which have not been generated by a business but are received by it from an external source and are retained by the recipient business for its purposes become part of the records of that business. [26] Earlier authorities, which suggested that documents received from a third party were admissible business records of the recipient business only if adopted, for example, by being marked “paid” or “checked and found correct” by a qualified person in the recipient business, [27] took too narrow an approach, [28] and in any event were influenced by the (then) requirement of the applicable legislation that the statement tendered have been made by a “qualified person”.

6. [61]

   Although, at least in the context of “hard copy” communications, the original of a document, such as a business letter or invoice, sent by a business to another person (whether or not the other person is a business) is not part of the records of the sending business, because it neither belongs to nor is kept by that business, which by sending it parts with possession of it, [29] a carbon copy of the letter or invoice, retained by the sending business for its purposes, is part of the records of the sending business. [30] In the context of electronic communications, however, it is more accurate to describe as the original that which is not only created but retained on the computer system of the sending business, and what the recipient receives as an electronic copy of that original.

7. [62]

   Accordingly, for the purpose of the first condition:

   1. (1)

      documents, such as emails and invoices, sent by a subcontractor to Fullerton or its agent Foresight, and retained by Fullerton, are business records of Fullerton;

   2. (2)

      the electronic originals of such documents, retained by the relevant subcontractor, are business records of the relevant subcontractor; and

   3. (3)

      bank statements and internet payment summaries issued by Westpac but received and retained by Fullerton are business records of Fullerton.

8. [63]

   Turning next to the second condition (s 69(1)(b)), it is essential to identify the relevant business, because the business to which it refers must be the same business as that referred to in the first condition (s 69(1)(a)), as Perram J accepted in Australian Competition and Consumer Commission v Air New Zealand Ltd (No 1) (‘Air New Zealand’): [31]

9. [64]

   The fact that a document forms part of the records of a business does not necessarily mean that a representation contained or recorded in it was made for the purposes of that business. This is the proper explanation of those cases which hold that a statement in a letter from A to B retained in the records of B is not admissible merely because it is retained by B in its business records. [32] Thus a letter of complaint from a customer, retained by the supplier, is not an admissible business record of the supplier, because the statements in it were not made in the course of or for the purposes of the supplier’s business.

10. [65]

    However, it does not follow from the fact that a documentary statement is made by a person outside the business that it is not made for the purposes of the business. [33] In Tubby Trout Pty Ltd v Sailbay Pty Ltd, [34] the issue was whether a statement made in a letter received by a business conducted by Sailbay Pty Ltd was admissible as evidence of the truth of a matter asserted in that letter, by reason of being contained in a record of that business. The crucial question was whether the statement was made for the purposes of the recipient business. Drummond J said: [35]

11. [66]

    This approach was followed, by Evans J, in State of Tasmania v Lin, [36] holding that a document such as an invoice retained by the business to which it was sent as a record of that business, was prepared partly for the purposes of the recipient business as well as for the purposes of the sender business, and thus that statements in it were admissible notwithstanding that the person with the requisite personal knowledge was engaged in the sender and not the recipient business. After setting out the passage from the judgment of Drummond J which is extracted above, his Honour said: [37]

12. [67]

    These authorities were followed, by Perram J, in Air New Zealand. After referring to statements which appeared contrary to the view that a third-party document would engage s 69(1), by Needham J in Re Marra Developments Ltd and the Companies Act: [38]

13. [68]

    State of Tasmania v Lin and Air New Zealand were followed by Reeves J in Asden Developments Pty Ltd (in liq) v Dinoris (No 2), [41] holding that a document, of which an invoice is an example, complies with s 69(1)(b) if it is prepared in the course of one business, partly for the purposes of that business and partly for the purposes of the recipient business of which it becomes a record: [42]

14. [69]

    Similarly, they were followed by Kerr J in Jadwan Pty Ltd v Rae & Partners (A Firm) (No 3): [43]

15. [70]

    On the basis of these authorities, it may be stated that:

    1. (1)

       statements made in an invoice sent by a subcontractor to Project.Built were made, partly for the purposes of the business of the subcontractor and partly for the purposes of the business of Project.Built. However, I do not think that it can be said that they were made partly for the purpose of the business of Fullerton, to whom they were not addressed;

    2. (2)

       statements made in an email sent by a subcontractor to Fullerton or its agent Foresight, to the effect that certain invoices remained unpaid, were made partly for the purposes of the business of the subcontractor and partly for the purposes of the business of Fullerton; and

    3. (3)

       statements made in bank statements or internet payment summaries issued by Westpac were made partly for the purposes of Westpac but also partly for the purposes of its customer Fullerton.

16. [71]

    Dealing finally with the third condition, while s 69(2) requires the previous representation to have been made by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact, or on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact, it does not require that the person said to have the relevant personal knowledge have any particular relationship with the relevant business. [44] Under the current provision, there is no longer any requirement that the statement be made by a “qualified person”, as there was under the former provisions. [45] The former requirement prevented the receipt of records as evidence of facts recorded in them where the person with the requisite personal knowledge of them was not associated with the business in question. The Australian Law Reform Commission considered that the “qualified person” requirement had marginal value as a safeguard but significant disadvantages, and proposed its removal; this was given effect with the introduction of the (CTH) Evidence Act 1995. [46] There is thus no longer any requirement that the maker of the relevant representation have any particular association with the relevant business. Representations made by strangers to the business which are recorded in a business record are admissible so long as the stranger had personal knowledge of the asserted fact. [47] Moreover, it suffices that it can be concluded that the maker of the previous representation was a person who had personal knowledge of the fact, even though that person cannot be identified; so long as the nature and content of the recorded representation permits that inference, the supplier of the information need not be identified. [48]

17. [72]

    It may readily be inferred that:

    1. (1)

       statements made in an invoice sent by a subcontractor to Project.Built were made by someone (in the business of the relevant subcontractor) who had the requisite degree of personal knowledge;

    2. (2)

       statements made in an email sent by a subcontractor to Fullerton or its agent Foresight, to the effect that certain invoices remained unpaid, were made by someone (in the business of the subcontractor) who had the requisite degree of personal knowledge; and

    3. (3)

       statements made in a bank statement or internet payment summary as to the particulars of a payment were, at the least, made on the basis of information directly or indirectly supplied by a person (in the business of Fullerton) who entered them when causing the payment to be made, who had or might reasonably be supposed to have had personal knowledge of the asserted fact.

18. [73]

    The invoices issued by subcontractors to Project.Built were in my judgment not admissible as business records of Fullerton. That is because, although they at some stage came into the possession of Fullerton and were retained by it as part of its records, it cannot be said that the statements made in the invoices were made, even partly, for the purposes of Fullerton, to whom they were not addressed. They were made partly for the purposes of Project.Built as well as for the purposes of the subcontractor, but not for the purposes of Fullerton.

19. [74]

    However, the subcontractor invoices were nonetheless admissible under s 69, at least on the basis that:

    1. (1)

       it was amply open to infer that the electronic originals were retained on the computer systems of the relevant subcontractor, and constituted business records of the subcontractor;

    2. (2)

       statements in them were made for the purpose of the business of the subcontractor;

    3. (3)

       those statements were made by a person (as it happens, in the business of the subcontractor, though that is not necessary) who had the requisite degree of personal knowledge; and

    4. (4)

       the contents of the originals retained on the computer systems of the relevant subcontractor can be proved by tendering the copy received by the recipient. [49]

20. [75]

    The subcontractor invoices were probably also admissible business records of Project.Built, but it is unnecessary to decide that question; it suffices that they were admissible business records of the relevant subcontractor.

21. [76]

    The emails from subcontractors to Fullerton or its agent Foresight were admissible business records, on the dual bases that:

    1. (1)

       the electronic originals retained by the subcontractors were business records of the subcontractor, and the relevant statements in them were made for the purpose of the business of the subcontractor, by a person (Mr Borg in the case of Complete Plumbing, Mr Hraibi in the case of National Aluminium, and Ms San Gil in the case of Kone) who had the requisite personal knowledge; and

    2. (2)

       they were business records of Fullerton, and the relevant statements in them were made partly for the purpose of the business of Fullerton (as well as for the business of the subcontractor), by a person (Mr Borg in the case of Complete Plumbing, Mr Hraibi in the case of National Aluminium, and Ms San Gil in the case of Kone) who had the requisite personal knowledge.

22. [77]

    The Westpac bank statements and internet payment summaries were admissible under s 69, at least on the basis that they were business records of Fullerton; the statements made in them as to particulars of payments were made at least partly for the purposes of the business of Fullerton; and those statements were, at the least, made on the basis of information directly or indirectly supplied by a person (in many if not all cases, Yu Wang) who entered them when causing the payment to be made, who had or might reasonably be supposed to have had personal knowledge of the asserted fact.

23. [78]

    It follows that all the documents relied on by the trial judge which were received under Evidence Act, s 69, were admissible.

The discretionary exclusion question

1. [79]

   The appellant submitted that “even if the records were and are admissible, the question of the weight of someone else’s records being produced by a party to litigation must mitigate against the reception of the document or the inferences that are able to be drawn from it. These are third party records”. Reference was also made to the absence of evidence as to the provenance of the documents, and to the circumstance that the appellant was deprived of the opportunity of cross-examining the persons who made the relevant statements in them. This appears to be, at least in part, a submission that if admissible, the documents ought nonetheless have been rejected as a matter of discretion under Evidence Act, s 135.

2. [80]

   Statements of fact in a business record are admissible against anyone, not only against the party whose records contain them. [50] It is a fundamental rationale of the business records provisions that statements in such records are admissible notwithstanding the hearsay rule, and notwithstanding that the maker of the representation is not called. [51] The view has consistently been taken that the fact that the maker of the statement is not called as a witness is not of itself a basis for rejection under the exclusionary discretion, since the legislation recognises this consequence. As the Court of Appeal said of the former provisions in Vinidex Tubemakers Pty Ltd v Marshall: [52]

3. [81]

   Neither the ‘prejudice’ supposed to arise from not being able to cross-examine persons who would otherwise have had to give oral evidence, nor the ‘prejudice’ that a person might be forced to enter the witness box to answer a case which would not otherwise have required an answer, justifies exclusion of a business record on discretionary grounds. [53]

4. [82]

   For reasons already explained, evidence as to the provenance of the documents was not required where inferences could readily be drawn. Moreover, this was not a case in which there was any serious issue as to the authenticity of the documents in question.

5. [83]

   It was to address the perception that it might sometimes be unfair to an opposing party that business records were received without any opportunity to cross-examine the maker that the Australian Law Reform Commission recommended the inclusion in the uniform evidence law of provisions for a “request” to be made for the production of the maker of a previous representation for cross-examination. Thus, provision is made that a party may make a reasonable request to another party for the purpose of determining a question that relates to a previous representation, or the authenticity, identity or admissibility of a document, including to call as a witness the person who made the previous representation. [54]

6. [84]

   In this case, ample notice of intention to tender the business records had been given by their service as an exhibit to Yu Wang’s affidavit. No ‘request’ was made. In those circumstances, where the appellant did not avail himself of an opportunity to test the provenance or accuracy of the documents, there was even less reason to exercise the exclusionary discretion.

The weight question

1. [85]

   The complaint about absence of evidence as to provenance, and the inability to cross-examine, was also relied on as detracting from the weight of the documentary evidence. As I understand it, the submission was essentially that, if admissible, the documents were unreliable.

2. [86]

   Weight is essentially a matter for the trial judge. As her Honour rightly observed, with reference to the observations of Dixon CJ in Hampton Court Ltd v Crooks, [55] in circumstances where the facts were not within the knowledge of the plaintiff but peculiarly within the knowledge of the defendant, very little evidence might suffice. [56] Especially is that so where there is none to the contrary.

3. [87]

   The context was one in which there was no obvious reason to doubt the authenticity of the documents, nor the accuracy of what was stated in them. The relevant statements in the documents as to dates, amounts and particulars of payment appeared routine and regular. The appellant did not take advantage of the opportunity afforded by the “request” mechanism. And the appellant adduced no evidence, let alone evidence to contradict them. The trial judge was entirely justified in treating the documents as reliable for the purposes for which her Honour relied on them.

The question of loss

1. [88]

   The cause of action sued on was in deceit, and alternatively for contravention of the prohibition on misleading and deceptive conduct in trade or commerce. In cases for contravention of that provision, conventionally the same approach to the assessment of damages is adopted as in a case of deceit in tort.

2. [89]

   By operation of (NSW) Contractors Debts Act 1997, s 5, Fullerton, as principal, had a direct legal liability to pay unpaid sub-contractors of its builder Project.Built. By clause 38.2 of the contract, it protected itself in respect of that liability by insisting on proof of payment, by statutory declaration, in the absence of which it was entitled to withhold payment from Project.Built. The immediate and direct consequence of the deceit or contravention was that Fullerton did not withhold payments that it was entitled to withhold, and would otherwise have withheld, under cl 38.2. Yet because the subcontractors had in fact not been paid, Fullerton remained exposed to direct liability to the subcontractors, which it ultimately had to pay itself.

3. [90]

   In those circumstances, the amounts which it had paid to Project.Built in respect of subcontractors, which but for the contravening conduct it would have withheld, but later had to pay directly to those subcontractors, was at least a proper starting point for calculating Fullerton’s loss caused by the contravening conduct. The lump sum price in the contract, which was terminated for default before it was completed, has nothing to do with it. If, which is not at all apparent, there was some countervailing benefit to Fullerton to be brought to account, that was a matter for the appellant to plead and prove, which it did not.

Conclusion

1. [91]

   My conclusions may be summarised as follows:

2. [92]

   All the documents relied on by the trial judge which were received under Evidence Act, s 69, were admissible business records. The trial judge did not err in not exercising the exclusionary discretion under s 135, and was entirely justified in treating the documents as reliable for the purposes for which her Honour relied on them.

3. [93]

   The amounts which Fullerton paid to Project.Built in respect of subcontractors, which but for the contravening conduct it would have withheld, but later had to pay directly to those subcontractors, were at least a proper starting point for calculating Fullerton’s loss caused by the contravening conduct. The lump sum price in the contract is irrelevant. Any countervailing benefit to Fullerton was a matter for the appellant to plead and prove, which it did not.

4. [94]

   It follows that the appeal should be dismissed. I agree with the orders proposed by Basten JA.