Hearsay Hypothetical Problems Case One The plaintiff company alleges it bought a business in reliance on a representation that there were no unusual items in the accounts. It says that the accounts included an illegal rent received by the vendor defendant. Issues include whether the plaintiff knew of the facts which made the rent illegal and whether the relevant officers believed the rent was illegal. The defendant alleges that Mr Wentworth, who has not been appointed as a director of the plaintiff, is the true mind of the plaintiff. It alleges that he (amongst others) knew all the relevant facts and believed the rent was illegal. The plaintiff has called an employee (Smith). She is cross-examined by counsel for the defendant. Look at Exhibit A (a letter of offer to buy the business signed by Jones, the General Manager of the plaintiff). Did Mr Wentworth authorise Mrs Jones to send that letter? Objection. To your knowledge did Mr Wentworth authorise Mrs Jones to send that letter? Objection. Later counsel asks: Did Mr Simple (the plaintiff s legal officer who acted on the purchase) ever report to you any conversation with Mr Wentworth about the legality of the rent? Yes. What did he say? Objection. [Evidence Act, s.87] Page 1 of 8
Case Two The plaintiff seeks an interlocutory injunction to restrain the defendant from harassing her customers. She swears an affidavit which includes this paragraph: Annexed hereto and marked as shown are copies of the following documents: A Statutory Declaration of Peter Smith dated 1 February 2000; B letter from Miranda Jones to me dated 1 February 2000. Neither Smith nor Jones have sworn affidavits and they are not available to be cross-examined. The statutory declaration and the letter describe incidents of harassment by the defendant, some of which Smith and Jones say they witnessed and some of which they say were reported to them by customers whom they name. [Evidence Act, s.75; Geoffrey W. Hill & Associates v King (1992) 27 NSWLR 228] Page 2 of 8
Case Three Longlife Insurance Co is suing for damages arising from its purchase in 1998 of $5 million of subordinated debentures issued by Goldberg Limited, in reliance, it claims, on a prospectus which falsely represented there was no senior debt. Reliance is a critical issue. It serves a witness statement containing the following: The person who was responsible in 1998 for recommending purchases of high-yield investment bonds was Anne Harper. I was her immediate superior. In about September 1998 she said to me: I have read the Goldberg prospectus. There is no senior debt. I think we should buy up to $5 million of the issue. Based on her recommendation I instructed our broker to buy $5 million of the debentures. Anne Harper resigned her employment in 1999 to travel overseas indefinitely. I do not know where she is and have no means of contacting her. [Evidence Act, ss.62, 63 and 64] Page 3 of 8
Case Four The plaintiffs (husband and wife) seek to set aside a default judgment. Only the wife swears an affidavit on the merits. On the hearing of the application and in an endeavour to avoid a Jones v Dunkel inference, the wife swears an affidavit attaching a medical certificate from a doctor. The certificate says that the husband suffers from depression and in the doctor s view is not fit either to attend on his solicitor to prepare an affidavit, or to attend Court to give evidence. [Evidence Act, ss.62 and 64] Page 4 of 8
Case Five The plaintiff sues for the price of a windmill delivered to the defendants to provide the defendants with electricity to their house on land owned by a co-operative. The defendants say that contrary to the plaintiff s representation that the windmill would be quiet, it was very noisy, and because of the noise the co-operative required its removal. The plaintiff says that if the cooperative required its removal, it was not because of noise but because the members regarded it as visual pollution of the environment. One of the defendants is asked: What did Ms Smith (a member of the co-op) say? She told me that she had attended a meeting of all the other co-operative members who had discussed our windmill. Did she tell you whether the members had made a decision about that? Yes. What did she say? She said that they had all agreed that the windmill would have to go. She said that all of the other members said that the windmill was too noisy. Ms Smith is dead. Page 5 of 8
Ajax v Hercules Federal Court Of Australia Proceedings No. Of 2000 Notice To Respondent Pursuant To Section 67 Of The Evidence Act 1995 (The Act ) The applicant hereby notifies the respondent of the applicant s intention to adduce evidence of previous representations contained in the following paragraphs of, and exhibits to, the affidavit of John Henry Smith sworn 1 February 2000 (the Affidavit ) at the hearing of these proceedings. As to each item of evidence the subject of this notice, the applicant relies upon sub-section 64(2) of the Act upon the grounds that it would cause undue expense or undue delay or would not be reasonably practicable to call the persons who made the previous representations. Particulars The proceedings were commenced on an urgent basis on 1 February 2000 and have been set down for hearing on 9 March 2000. The applicant was required to have its evidence available immediately in order to allow the matter to be heard urgently and to permit the respondent to file and serve its evidence in a reasonable time prior to the hearing. In the circumstances, it is not reasonably practicable and would cause undue expense and delay to call the persons who made the previous representations. The evidence which is the subject of this notice is as follows: Paragraph 7 of the Affidavit Substance of evidence: as set out in the paragraph. Substance of all other relevant representations: none, so far as the applicant is aware. Page 6 of 8
-2- Particulars of the representation: the representation was made by Martin Jones of Blank Street, Blanksville, NSW to John Smith of 1 Martin Place, Sydney on [HERE SET OU DATE, TIME, PLACE AND CIRCUMSTANCES AT WHICH REPRESENTATION WAS MADE AS REQUIRED BY RE. 5(2)(c)(i) OF THE EVIDENCE REGULATIONS]. Paragraph 10 of the Affidavit Substance of evidence: as set out in the paragraph. Substance of all other relevant representations: none, so far as the applicant is aware, except as otherwise seet out in this notice. Particulars of the representation: the representation was made by Robert Hunt of 2 Pitt Street, Sydney to John Smith of 1 Martin Place, Sydney on [PARTICULARS]. Paragraph 39 and Exhibit JHS1 of the Affidavit Substance of evidence: a copy of exhibit JHS1 is attached hereto. The evidence as to price earnings multiples and premium/discount to the applicant s net assets at 31 December 1999 are set out graphically in exhibit JHS1 and are explained in the accompanying documents forming part of the exhibit. Substance of all other relevant representations: none, so far as the applicant is aware. Particulars: the graphs and accompanying information were prepared by John Hamilton of 20 Bond Street, Sydney on [PARTICULARS]. Paragraph 40 and Exhibit JHS2 of the Affidavit Substance of evidence: a copy of exhibit JHS2 is attached hereto. The two charts which form part of the exhibit show the accumulated returns of the applicant and the respondent against the two indices referred to in the letter of instruction which forms part of the exhibit. Page 7 of 8
-3- Substance of all other relevant representations: none, so far as the applicant is aware. Particulars of the representation: the charts were prepared by [INSERT NAME] of the Australian Stock Exchange on [PARTICULARS]. Dated: 20 March 2000 J.H. Smith Solicitor for the Applicant Page 8 of 8