James Farmer

Legal Commentary

Witnesses in Civil Cases - the Consequences of Not Calling and of Not Cross-Examining - A Paper Presented to the Pacific Islands Lawyers Association, Auckland, 22 November 2019

Friday, November 22, 2019

Introduction

1. This paper deals with two key issues in civil trials in which witnesses will or can be called to prove (or disprove) facts.   They are:

(1) When to call (or not call) a witness who has personal knowledge of disputed factual questions and what are the consequences of not calling such a witness (known as the Rule in Jones v. Dunkel)?

(2) To what extent is it necessary to cross examine a witness called by the opposing side and what are the consequences of not doing so (known as the Rule in Browne v. Dunn, now section 92 of the Evidence Act 2006)?

2. There are of course other important questions that arise in a trial in which proof of facts is a critical component of the ultimate outcome.  Evidence is not only given by live witnesses but is also provided by the tender of documents, both formal (contracts, deeds, etc.) and informal (letters but most commonly today email exchanges).  Documentary evidence, especially if they were generated contemporaneously with the events in issue, are also regarded by Judges as a valuable aid to corroborating (or not) oral evidence.  Equally, they provide a powerful source material for cross-examination.   This paper is not however concerned with documentary evidence as such.

3. Both the questions referred to are at the heart of strategic decisions that have to be made in a trial.  The first question in particular – whether to call a particular witness who may give evidence or answer questions on cross-examination that are not entirely favourable to the case of the party calling him or her – involves a difficult judgment not unlike the decision of a defence counsel in a criminal case whether to call the accused to give evidence and be exposed to cross examination that may do fatal harm to the defence case.   There are different consequences however.  In a criminal case, the Judge will direct the Jury that there is no legal requirement on an accused person to give evidence and no inference can be properly drawn from the failure to do so.  Almost the reverse is true in civil cases.  I will deal with that first.

The Rule in Jones v. Dunkel

4. The so-called Rule in Jones v. Dunkel arose from Judgments of the High Court of Australia in in a case in 1958 of that name1.   The case was a civil claim but heard by a Judge with Jury.  It was a claim under the Compensation to Relatives Act by the widow of a truck driver who was killed as a result of a head-on collision with another truck.  The owner and driver of the latter was sued.  A key factual issue in the case was whether the defendant had crossed over into roadway on which the deceased was driving.  There were no independent eye-witnesses but the position of the vehicles after the accident tended to support the plaintiff’s allegation that the defendant had caused the accident.  The defendant did not give evidence to explain the events that led to that outcome.  The summing up by the Judge to the Jury stressed that the onus was on the plaintiff to prove her case.  He also said to the Jury that the defendant was “within his rights” not to give evidence.  At the end of the summing up, a juryman asked the Judge: “Rightly or wrongly I have it in my mind that the defendant could have come here today and given evidence.  Am I entitled to regard that in my mind as a weakness in the case of the defendant, that he did not?”  The Judge, in responding, did not express agreement with that question and gave an answer that was at best equivocal.   The Jury found for the defendant.

5. The position taken by the Judge would have been entirely proper if the defendant was being prosecuted under the criminal law rather than being sued for damages in a civil case.  However, this was not a criminal case.  On appeal to the High Court of Australia, it was held that the trial Judge should have answered the juryman’s question in one word: “Yes.”   The primary Judgment was given by Justice Windeyer who referred to earlier Australian case law but also cited the classic American work, Wigmore on Evidence.  In that work, it was said that the failure to lead evidence, whether oral or documentary, that would clearly elucidate disputed facts “serves to indicate, as the most natural inference, that the party fears to do so, and this fear is some evidence that the circumstances or document or witness, if brought, would have exposed facts unfavourable to the party.” 2

6. Jones v. Dunkel has been recognized and applied in New Zealand.  In Innes v. Ewing3  Eichelbaum J, in a Judge alone contract case, referring to it, said: “When a pertinent witness is not called the natural inference is that he would have exposed facts unfavourable to the party having the choice”.   On the evidence overall, however, the Judge thought that there was other express evidence that rebutted that inference.  That underlines the point that the rule is a rule of inference only.  Facts may be proved in different ways and inference will usually be subservient to express evidence.   

7. Thomas J, in Dairy Containers Ltd v. NZI Bank Ltd,4  also adopted Jones v. Dunkel but restated the rule more moderately than had Eichelbaum J, saying that the Court may in such a case “draw an inference … that the uncalled evidence would not have assisted the party’s case.”  Both Innes and Dairy Containers (along with a number of other cases) were cited by Potter J in Ithaca (Custodians) Ltd v. Perry Corporation5 .  The Judge said that the failure of the defendant to call a number of witnesses who could have been expected to give relevant evidence, including in particular the sole shareholder and President of the defendant corporation, led her to conclude that those persons could not have assisted the defendant’s case and indeed “may have exposed facts unfavourable to the defendants’ case”. 6

8. One famous New Zealand case worth mentioning in this context is Coleman v. Myers.7   That case preceded Jones v. Dunkel but it is a good illustration of the dangers in civil cases of not calling a party, particularly, who clearly has knowledge of the relevant facts. In that case, Douglas Myers and his father, Sir Kenneth Myers, were managing director and chairman of an old-established private company, the shareholders of which were family members.  Among other assets, it owned the Strand-Coburg block in Queen Street Auckland.  Douglas devised a complex corporate takeover which resulted in, through a corporate vehicle, his acquiring all the shares (including the last 10% by compulsory acquisition) at what was a significant undervalue on an asset-backing basis.  Immediately after the acquisition, he sold the Strand-Coburg at a substantial premium of almost $6 million above its book value in the vendor company’s accounts.  Sir Kenneth and Douglas Myers, as directors, had recommended the sale to the shareholders and Douglas had given assurances to the shareholders that there was no intention to sell assets of the company.  Rather, he said, he intended to use the Strand-Coburg as the company’s head office.  To the contrary, he was at that time aware of keen buyer interest in the building which he did not disclose to his fellow shareholders.  The plaintiffs alleged, among other things, fraud on the part of the two directors, principally on the basis of statements made that the sale of assets was not in contemplation.  As to that, the trial Judge (Mahon J.) said that it had not been proven that there had been any misrepresentation by the directors and that intentions can change.  He referred to the fact that the directors had not given evidence but said that “it was the view of their advisers that the entire history of their involvement of the take-over was adequately established by the agreed collection of documents and correspondence submitted by consent in evidence and that their production as witnesses could serve no useful purpose, a proposition [the Judge said] with which I am inclined to agree.” 8

9. The Court of Appeal reversed Mahon J’s Judgment.  Two of the Judges (Woodhouse and Casey JJ) found that fraud had been established.  The third Judge, Cooke J, stopped short of that finding while holding that the directors had breached their fiduciary duties to the shareholders by not making full disclosure.   Casey J pointed out, in relation to what Douglas Myers had allegedly told the plaintiffs (that the properties would not be sold), that there was no challenge by cross examination of the plaintiffs’ belief which was based on their dealings with Myers.  Further, he said, the plaintiffs’ evidence “stands uncontradicted by Mr AD Myers, who gave no evidence at all”.9    Woodhouse J said similarly that the plaintiffs had not been cross-examined as to the representations that they said had been made by Mr Myers and that neither he nor anyone else in his camp had given evidence.  He recorded counsel for the plaintiffs’ submission that “allegations of fraudulent misrepresentation might be expected to receive some answer or explanation from the representor; yet here the only evidence called on the other side of the case was provided by expert witnesses whose opinions were largely related to share values.” 10

10. The case is a neat illustration of defendants succeeding at first instance but the Court on appeal feeling able to reverse factual findings made by a trial Judge – findings that normally an appellate court would feel reluctant to interfere with – because of two omissions of the defendants or their counsel: namely: 

(1) a failure to cross-examine the plaintiffs on their key evidence as to what had been represented to them and their reliance on those statements when deciding to sell (Browne v. Dunn);

(2) a failure to give evidence disputing or explaining what had been said (Jones v. Dunkel).

The Rule in Browne v. Dunn (section 92 Evidence Act 2006)

11. The predecessor to section 92 of the Evidence Act 2006 was the rule in Browne v. Dunn.  Section 92(1) states:

“In any proceeding, a party must cross-examine a witness on significant matters that are relevant and in issue and that contradict the evidence of the witness, if the witness could reasonably be expected to be in a position to give admissible evidence on those matters.”

12. This requirement goes back at least 125 years to the House of Lords decision in Browne v. Dunn 11 itself.   An excellent account of the articulation of the rule and the reasoning that supports it is to be found in the Judgment of Hunt J in the New South Wales Supreme Court in Allied Pastoral Holdings Pty. Ltd. v. Commissioner of Taxation.12   The issue in the case was whether, in acquiring a property, the taxpayers had the dominant purpose of reselling it at a profit.  They gave evidence to that effect but were not cross-examined on the issue.  The Commissioner of Taxation argued that their evidence should be disbelieved even although they did not resell the property for 7 years after they purchased it.  The Commissioner submitted to the Judge that the taxpayers should be disbelieved because they had sold other properties in that period and had not wished to “flood the market”.   The Judge pointed out that none of that “staged development theory” was put to the taxpayers. Nor did he even signal that that was part of his case, which meant that the taxpayers had no reason to address that in their evidence in chief.

13. Hunt J found for the taxpayers and, in so doing, applied Browne v. Dunne.  He quoted at length from the Judgments of Lord Herschell LC and Lord Halsbury.  The former emphasised the requirement of fairness to the witness in saying:

“Now, my Lords, I cannot help saying that it seems to me to be absolutely essential to the proper conduct of a cause, where it is intended to suggest that a witness is not speaking the truth on a particular point, to direct his attention to the fact by some questions put in cross-examination showing that that imputation is intended to be made, and not to take his evidence and pass it by as a matter altogether unchallenged, and then, when it is impossible for him to explain, as he might have been able to do if such questions had been put to him, the circumstances which it is suggested indicate that the story he tells ought not to be believed, to argue that he is a witness unworthy of credit.  My Lords, I have always understood that if you intend to impeach a witness you are bound, whilst he is in the box, to give him an opportunity of making any explanation which is open to him; and, as it seems to me, that is not only a rule of professional practice in the conduct of a case, but is essential to fair play and fair dealing with witnesses.” 13

14. It is to be noted that the requirement to cross-examine may not arise if the witness is on notice before he gives evidence that “there is an intention to impeach the credibility of the story which he is telling”.14   As Lord Herschell put it: “… it will not do to impeach the credibility of a witness upon a matter on which he has not had any opportunity of giving an explanation by reason of there having been no suggestion whatever in the course of the case that his story is not accepted.”  15
 
15. This suggests – correctly in my view – that the rule in Browne v. Dunn, in terms of cross-examining duties, is not absolute.  The essential component of the fairness obligation is that the witness is on notice that his or her evidence may be challenged by way of submission to the court at least, thus providing an opportunity to address that challenge up front in evidence in chief.   If that opportunity is not taken, it is certainly my view that it is not necessarily incumbent on the opposing counsel to remedy that omission by raising the matter with the witness and giving him or her the opportunity to give evidence of a matter on which they were on notice was regarded as being critical to the acceptance of their evidence but which they chose not to address.

16. It does not follow either that where there is a breach of the rule that it follows that the Court must accept the unchallenged evidence of the witness.  If that evidence is “inherently improbable” or “inherently incredible”, it is open to the Judge to reject it.16   As Samuels JA put it in two decisions of the New South Wales Court of Appeal17 :

“While I do not think that it would be right to conclude that the absence of cross-examination entails the acceptance of the evidence given, it certainly enables that evidence to be regarded by any tribunal of fact with a greater degree of assurance than might otherwise have been the case.”

17. Attention needs also to be drawn to the use of the term “significant” and “relevant” in section 92.  That is, the obligation to cross-examine is restricted to “significant matters that are relevant and in issue and that contradict the evidence of the witness”.   It is a common misconception that all evidence of a witness with which there is some disagreement must be challenged by way of cross-examination.   If that were so, trials would be needlessly protracted.  

Consequences of infringements of the rules in Jones v. Dunkel and Browne v. Dunn (section 92 Evidence Act) 

18. Both questions raise the possibility, first of all, of an application being made to recall a witness (in the case of a Browne v. Dunn situation) or of calling the witness for the first time after the evidence has been completed (where Jones v. Dunkel is raised).

19. In the case of the former, section 92(2) of the Evidence Act deals with it explicitly.  It provides:

“If a party fails to comply with this section, the Judge may –

(a) grant permission for the witness to be recalled and questioned about the contradictory evidence; or

(b) admit the contradictory evidence on the basis that that the weight to be given to it may be affected by the fact that the witness, who may have been able to explain the contradiction, was not questioned about the evidence; or

(c) exclude the contradictory evidence;

(d) make any other order that the Judge considers just.”

20. The effect of an unexplained failure to call relevant evidence was also given consideration by Hunt J in Allied Pastoral Holdings.  As had been said in Jones v. Dunkel, it can be assumed or inferred by the Court that such evidence, had it been called, would not have helped the party’s case.  It may also assist the Court in drawing an inference from the evidence that has been given that might not be open to it had the witness been called and contradicted that inference.   As Hunt J said: “In either case, the result of such unexplained failure may well be fatal to that party’s case… [particularly where] the facts are usually peculiarly within the knowledge of that party.”   Coleman v. Myers is such a case.  That case also shows that the findings of fact made by the trial Judge may be overturned by an appellate court drawing inferences from the evidence that could have been rebutted by a party giving evidence – but were not. 

21. The possibility of recalling witnesses, whether to deal with a Browne v. Dunn situation or a Jones v. Dunkel one, is not without its problems. An example of the latter is Equiticorp Industries Group Ltd v. Hawkins 18 where an application was made by the defendant to lead evidence to deal with a Jones v. Dunkel submission that was made by the plaintiff in closing.  Counsel for the defendant advised the Court that the omission to call a witness to challenge the accuracy of the evidence of a witness led by the plaintiff as to a telephone conversation was an oversight.  The Court declined to give leave, particularly because there had been an exchange of briefs of evidence before trial and the absence of any reference to the telephone discussion in the brief of the witness who it was sought to recall had affected how the cross-examination of another related witness had been conducted by the plaintiff’s counsel. 

22. In the case of a failure to cross-examine, as stated above, section 92(2) of the Evidence Act sets out the possibilities.  The wording of the section is somewhat odd in that it seems to be only addressing a situation where a plaintiff’s witness has not been cross-examined on a point and the defendant then leads evidence that contradicts the evidence in chief of that witness.   A more common situation – and the one that the case law more often considers - is where counsel for either party submits in closing that evidence given by a witness should not be accepted notwithstanding that it was not challenged by cross-examination.   In that situation, questions of recall will not normally arise but will be dealt with by way of submission, with one side pointing to the lack of cross-examination as being in itself a reason for acceptance of the evidence and the other side taking an “inherent improbability” position.   Similarly, a Jones v. Dunkel situation will normally be dealt with by way of submission.

Conclusion

23. It is apparent from the above analysis and from the examples given from decided cases that great care needs to be given to any decision not to call witnesses who are able to give evidence on important factual issues and who might in the normal course be expected to give such evidence.  Any desire to shield a potential witness from cross-examination by not calling him or her has to be weighed against the danger of adverse inferences being drawn against the party who takes that decision.   Similarly, a decision not to challenge important and relevant evidence on cross-examination may – and normally will – lead to the Court accepting the evidence that is not challenged and in preference to contradictory evidence to the opposing party.

Footnotes
1(1958-1959) 101 CLR 298.
2Ibid. 320-321.
3[1989] 1 NZLR 598, 607.
4(1994) 7 PRNZ 465 at 468.
5[2003] 2 NZLR 216 at 267.
6Ibid. 268.
7[1977] 2 NZLR 225.
8Ibid., 256-257.
9Ibid., 364.
10Ibid., 311.
11(1994) 6 R 67.
12[1983] 1 NSWLR 1 at 16 et seq.
136 R at 70-71; [1983] NSWLR at 17.
146 R at 71; [1983] NSWLR at 17.
15Ibid.
16Ellis v. Wallsend District Hospital (1989) 17 NSWLR 553 (CA) at 561 per Kirby P and 587 per Samuels JA; Levinge v. Director of Custodial Services (1987) 9 NSWLR 546, 560 per McHugh JA.
17Paric v. John Holland Constructions Pty Ltd [1984] 2 NSWLR 505, 507; Ellis (supra) at 587.
18[1996] 2 NZLR 82 (HC).

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