Business records

8.125 Section 69 of the uniform Evidence Acts provides exceptions to the hearsay rule relating to the admissibility of business records.^[147] The relevant parts of s 69 read:

(2) The hearsay rule does not apply to the document (so far as it contains the representation) if the representation was made:

(a) by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact; or

(b) 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.

(3) Subsection (2) does not apply if the representation:

(a) was prepared or obtained for the purpose of conducting, or for or in contemplation of or in connection with, an Australian or overseas proceeding; or

(b) was made in connection with an investigation relating or leading to a criminal proceeding.

…

(5) For the purposes of this section, a person is taken to have had personal knowledge of a fact if the person’s knowledge of the fact was or might reasonably be supposed to have been based on what the person saw, heard or otherwise perceived (other than a previous representation made by a person about the fact).

8.126 Concerns have arisen about how s 69 relates to opinion evidence contained in business records.

Opinion evidence in business records

The uniform Evidence Acts

8.127 Section 69(2) provides that the hearsay rule does not apply to a representation in a business record if the representation is based on ‘personal knowledge of the asserted fact’. Examples include plans drawn up by an architect as part of a development application process or a business database compiled by a business broker.^[148]

8.128 Section 69 is an exception to the hearsay rule and so it is only triggered if the hearsay rule (in s 59) itself applies. A question is raised whether s 59 and, consequently, s 69, apply to an opinion expressed in a business record.

8.129 On current authority, ss 59 and 69 apply to opinions expressed in business records in the following way. For the purposes of s 59:

• the expression of the opinion (in the business record) is taken to be a ‘representation’;^[149] and

• that representation is an asserted fact.^[150] In other words, the representation is sought to be admitted as evidence of a fact to which the opinion relates.

8.130 This makes evidence of the opinion from the business record prima facie hearsay. It is then necessary to consider whether s 69 applies. Provided that the test of ‘personal knowledge of the asserted fact’ is satisfied (and no other exclusions in s 69 are applicable), the opinion expressed in the business record may be admissible as evidence of a fact to which the opinion relates.

8.131 This issue arose in two cases in particular. The first is Ringrow Pty Ltd v BP Australia Ltd.^[151] There it was held that because the experts stating their opinions in the relevant business records had formed and expressed the opinions themselves, the experts had ‘personal knowledge of the asserted fact’ for the purposes of s 69(2) and (5).^[152] The opinions were therefore admissible as evidence of the facts about which the opinions were given, although Hely J excluded the evidence in exercise of s 135.

8.132 As noted above, in order for s 69 to apply, the hearsay rule must have applied. Ringrow proceeded on that basis because the parties agreed that s 59 applied to ‘opinion’ as well as ‘fact’. Although it was unnecessary for Hely J to decide, his Honour seemed to agree with that concession, stating that ‘[t]he distinction between a fact and an opinion is not clear cut’.^[153] Hely J also adopted the view that ‘there is no doubt that the word “fact” is wide enough to cover opinion’.^[154] And his Honour also noted that there was nothing to show the ALRC intended s 69 not to apply to opinion as well as fact, with the result that s 69 should be ‘construed broadly’.^[155]

8.133 Finally, Hely J noted that s 111 of the uniform Evidence Acts assumes that the hearsay rule is capable of applying to opinion evidence.^[156] Hely J concluded:

Given that s 69 is to be construed broadly, and that at least in some contexts ‘fact’ may include an opinion (without statutory extension [of the definition of ‘fact’]), in my view s 69 of the Act is capable of operation even if the asserted fact is an opinion in relation to a matter of fact.^[157]

8.134 Concerns about the scope of s 69 again arose in Australian Securities and Investments Commission v Rich.^[158] In this case Austin J said that the effect of Ringrow was that, ‘[a] statement of opinion in a document may be an asserted fact for the purposes of ss 59 and 60’.^[159] Austin J followed Ringrow and other authorities perceived to support Hely J’s interpretation of s 59.^[160] However, Austin J went further to state that even if a statement of opinion in a document is not an asserted fact for the purposes of ss 59 and 60, the opinion would not be subject to the exclusionary opinion rule found in s 76. This was because

an interpretation of the opinion rules which confines them to the evidence of witnesses in court receives some support (though it is limited) from extrinsic materials concerning the enactment of the Evidence Act. In its Final Report, Evidence (Report No 38, 1987), the … Law Reform Commission presented its recommendations^[161] in terms of the taking of ‘expert testimony’, and said^[162] that the Interim Bill would have enabled ‘an expert to give opinion evidence’. The relevant part of the Interim Report on Evidence (Report No 26, 1985) is headed^[163] ‘The Expert Witness Exception’, and para [362] is headed ‘Expert Testimony Based on Inadmissible Evidence’. Additionally, this construction appears to accord with the common law, under which the opinion rule was stated in terms of a ‘witness’ being precluded from giving an opinion,^[164] while an out-of-court opinion was excluded by the hearsay rule.^[165]

8.135 An application for leave to appeal from Austin J’s decision was refused ‘essentially for procedural reasons’.^[166] However, Handley JA also said (Giles and Basten JJA agreeing):

One of the potentially important questions raised by [the applicant] concerns the relationship of s 69, the business records section, to Part 3.3 of the Evidence Act dealing with the opinion rule, particularly s 79 dealing with opinions based on specialised knowledge. The primary judge may have thought that the principles stated by Heydon JA in Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 apply with full force to statements by experts in business records made when litigation was not in contemplation. It is far from clear that these principles apply with their full force, or at all, to out of court statements by experts in business records even if such statements do have to meet the standard in s 79.^[167]

8.136 While not overstating the significance of the statements in obiter dicta of Handley JA in refusing to grant leave in this case, two further problems may be caused by Austin J’s approach in Rich. First, s 76 is expressed to apply to ‘evidence of an opinion’. Words of that generality do not reveal a distinction between expert opinion testimony and evidence of expert opinion expressed outside the witness box. There is no reason in terms of policy why the same restrictions should not apply to all expert opinion evidence.

8.137 The second problem introduced by Rich is the assumption that under legislation upon which s 69 was based, opinion evidence in business records was admissible as evidence of the facts about which the opinion was expressed without the need to comply with lay or expert exceptions. This assumption is incorrect.

8.138 It is true that the NSW and Commonwealth statutory precursors to s 69 permitted ‘statements’ or ‘representations’ contained in business documents to be used as evidence of the truth of a fact asserted by a statement or representation. These statutory reforms, introduced in the 1970s, have been described as ‘among the most successful statutory reforms of the law of evidence ever attempted in this country’.^[168] Because ‘fact’ was defined to include ‘opinion’ under this legislation,^[169] the precursors to s 69 also made a statement or representation of opinion made in a business document admissible for the purpose of establishing the truth or falsity of the facts to which the opinion related.^[170]

8.139 However, that does not support the assumption made in Rich. The Commonwealth legislation in particular had a number of limiting features. For example, the statement had to be made by a qualified person or be reproduced or derived from information from a qualified person. ‘Qualified person’ was defined as the owner, servant or agent of the business, or someone associated with it. Significantly, if the statement was of expert opinion, the qualified person had to possess the appropriate expertise required by the common law.^[171] If the statement was not a matter of expert opinion, the qualified person was required to be someone who had, or might reasonably be supposed to have had, personal knowledge of the facts about which the opinion was stated. Broadly, it required the statement of opinion in the business record to satisfy the common law requirements for the admission of lay opinion evidence. Thus, the assumption that there was no need to comply with the expert or lay opinion exceptions or statutory analogues to those exceptions is incorrect. Therefore, the situation under the uniform Evidence Acts is not materially different in this respect from that which applied under the legislation upon which s 69 was based.

Submissions and consultations

8.140 In DP 69, the Commissions asked what concerns are raised by the operation of s 69(2) of the uniform Evidence Acts with respect to business records, and whether these concerns should be addressed through amendment of the Acts.^[172] A number of submissions and consultations take the view that s 69(2) operates satisfactorily and requires no amendment.^[173]

8.141 One submission welcomes the exclusion of opinion in business records as evidence of the facts about which the opinion was expressed.^[174] Others do not address the issue, but assert that s 69(2) requires no amendment.^[175] A consultation with a judge of the Supreme Court of NSW raised this issue as a serious question about the operation of the Act.^[176]

The Commissions’ view

8.142 Generally, submissions and consultations disclose a high level of satisfaction with the operation of the business records provisions of the uniform Evidence Acts and take the view that s 69 does not require amendment. The Commissions’ view to this effect, as expressed in DP 69, did not elicit negative responses.

8.143 The reasoning in Ringrow and Rich, taken together, may indicate some potential problems in the interaction of s 69 and the opinion rule in Part 3.3. However, the solution adopted by Hely J in Ringrow has not provoked great concern and the Commissions believe that it seems to operate satisfactorily. In particular, Hely J’s approach highlights that there are important safeguards to prevent evidence being wrongly admitted through the business records provision, namely the requirement of ‘personal knowledge’ and, even if this is satisfied, the provisions in Part 3.11 may still be exercised.

8.144 The Commissions remain of the view that a case for amending the uniform Evidence Acts to overcome the ‘difficulties’ in Ringrow and Rich has not been made. With the exception of some muted concern expressed in obiter dicta by the NSW Court of Appeal in Rich,^[177] there has been relatively little judicial consideration of this issue at appellate level. This fortifies the Commissions’ view that it is not appropriate at this time to recommend an amendment to s 69.

Police records

8.145 In the final report of the previous Evidence inquiry (ALRC 38), it was proposed that the business records exception not be available ‘if the representation was prepared or obtained for the purpose of conducting, or in contemplation of or in connection with, a legal or administrative proceeding’.^[178] The rationale for this proposal included that, without this provision, ‘any note of information and rumour in police or private records gathered during the investigation of a crime would be admissible’.^[179] Section 69(3) enacts that proposal.

Submissions and consultations

8.146 The Victorian Privacy Commissioner raises an issue about the application of s 69(3) to business records kept by police. The Commissioner supports the s 69(3) safeguard from a privacy protection perspective, submitting that making unsubstantiated police records admissible as evidence of the truth of what they assert may lead to injustices ‘to parties and to third parties incidentally involved in the data’.^[180]

8.147 By contrast, the NSW DPP supports the enactment of a discretion to admit documents made in connection with an investigation relating or leading to a criminal proceeding. The discretion proposed would apply

where it is required in the interests of justice, having regard to the circumstances in which the document came into existence, and any other matter considered relevant.^[181]

8.148 The CDPP goes further, submitting that ‘[a] compelling case can be made for the removal of [s 69(3)]’.^[182] The CDPP argues that the concerns about fabrication of self-serving evidence are misplaced because if such evidence is tendered, it can be rejected as not relevant.^[183] Further, the CDPP submits that the provision has ‘unintended consequences because legitimate relevant records are rendered inadmissible’, examples given being records of a telephone trace put on a telephone during the course of an investigation and official records of the movement of a drug seizure.

The Commissions’ view

8.149 The Commissions are not satisfied that there is any compelling reason to depart from the existing formulation in s 69(3). Departure from the existing formulation would mean departure from the policy of the provision.

8.150 In Vitali v Stachnik, Barrett J stated that the purpose of s 69(3)(b) is to prevent the introduction of hearsay material

which is prepared in an atmosphere or context which may cause it to be self-serving in the sense of possibly being prepared to assist the proof of something known or at least apprehended to be relevant to the outcome of identifiable legal proceedings.^[184]

8.151 For instance, without s 69(3), a note deliberately written in a police officer’s notebook with the intention of implicating a person in alleged criminal activities could be admissible as evidence of the fact asserted by the note. If such documents were deemed to be reliable by including them within the s 69(2) exception, fabricated evidence could be admissible as evidence of the truth of the representation made, even though the maker of the representation might not be available for cross-examination. Unless there were clear indications that the representation was a fabrication or unreliable, the evidence could not be excluded as irrelevant under s 56(2) and might not justify orders under Part 3.11.

8.152 Where hearsay representations made in business records are not admissible under the hearsay exception in s 69(3), the exceptions in s 65 will generally not be available.^[185] The relevant provision in s 65 is subsection (2).^[186] A basic criterion for the exception in subsection (2) is that the evidence ‘is given by a person who saw, heard or otherwise perceived the representation being made’. In the case of a note made by a police officer in his or her notebook, this criterion would only be satisfied if a witness were available who perceived the note being written. This could happen if, for instance, another officer who attended an incident about which the note was written saw it being written, but not otherwise. On the other hand, s 66(2), for example, could frequently apply to representations contained in police notes provided the relevant note was made when the occurrence of the fact asserted by the note was fresh in the memory of the note’s author.

8.153 Where evidence is admissible under ss 65 or 66, s 69(3) does not operate to prevent that evidence from being admitted. Because the evidence is admitted under a hearsay exception, it may be used as evidence of the asserted fact. It should be noted that in such circumstances, the evidence would be admissible subject to Part 3.11.

Criminal proceedings

Related issues

8.154 A question raised in response to DP 69 is whether s 69 should have stricter application in criminal cases.^[187] In the context of prosecutions for alleged fraud against Centrelink, it is said that s 69 coupled with ss 48(1)(e), 48(2), 146 and 147 operates unfairly against the defendant where the prosecutor,

in the absence of original documents, is relying on a previous representation (that of the data entry clerk) of a previous representation (continuation form from the welfare claimant) to prove the existence of a fact. This approach, apart from being unreliable, appears to beg the question, insofar as the premise that the reasoning is to be based on (x claimed w) is also the conclusion that is being attempted to be proven (that x claimed w).^[188]

8.155 It is submitted that while the efficiency policy underlying s 69 justifies the admission of hearsay contained in business records in civil cases, in criminal cases the overriding justification for admitting such evidence should be reliability. The suggestion is made that the standard of proving the accuracy of computer-produced evidence in criminal prosecutions should be higher than in civil cases.

8.156 Conversely, the CDPP also proposes amendment to the provisions of the uniform Evidence Acts, particularly to make banking records more freely admissible. Section 69(2) is raised in this regard.^[189]

8.157 Other submissions and consultations do not suggest that these questions reveal a particular problem with s 69. The Commissions do not believe that a case has been made out in favour of modifying the application of s 69 to criminal cases. The Commissions recommend no change to s 69 in this regard.