Stephen Warne on professional negligence, regulation and discipline around the world

The Australian Professional Liability Blog random header image

Evidence paper, part 4 (hearsay basics)

August 30th, 2010 · 1 Comment

I cannot say that readers have been vocally demanding part 4 of my evidence paper in the period since part 3 appeared on 7 April 2010.  Nevertheless, in case anyone remains interested, here it is, with the balance to follow with a little more regularity.  I have created a category specific to this series of posts, being the serialisation of my evidence paper: click on it in the index page (or in the list of categories in the side bar of this page) to be taken to all of the posts comprising the series.

* * *

‘Let us say that the client wished to tender a copy of a letter she had written to the solicitor before sacking him, saying, in part:

‘Last year, you told me your fees would be $100,000 and I told you that was the limit I could afford. Now they’re $150,000 and I am forced to get out of these proceedings disadvantageously because I cannot afford to continue.’

The first statement (‘You told me your fees would be $100,000’) would prima facie be hearsay if used only to prove that the solicitor said ‘My fees will be $100,000’.

There is a necessary but not always much thought about exception to the hearsay rule for statements in the nature of contractual promises, or misleading and deceptive conduct. A statement in a written contract ‘I will pay you $100 for cleaning my windows’ is an out of court statement which may be tendered to prove the truth of the fact that the contracting party promised to pay $100 in return for cleaning the windows. The proviso is because these kinds of statements are not relied on as evidence of their truth, but as evidence of the making of a statement with legal consequences irrespective of its truth.[1] Though this proviso is only shortly stated in this paper, its potential application in commercial litigation is not to be underestimated, especially in relation to direct communications between solicitor and client.  It is liable to be missed since it does not appear in the exceptions to the hearsay rule.  Rather it is something which goes to whether the rule has operation in the first place.  I mention this rule because I thought for a while that it had application to this statement in this letter.  But it does not have application, because the letter is not a contractual promise by a promisor but a report of such a promise which was made by the promisee out of court and which is — on the analysis being undertaken — being relied on to prove its truth, that is that the solicitor promised, or represented, that his fees would be $100,000.  So if the client were to say in the witness box (or in an affidavit, which is the equivalent thing[3]) ‘The solicitor said his fees would be $100,000’, the exception discussed in this paragraph could have application, but the fact that the client said it out of court, and sought to tender her out of court written statement in evidence, the hearsay rule applies.

The letter’s second statement (‘I told you that was the limit I could afford’) would prima facie be hearsay if used only to prove that the client said ‘That is the limit I can afford.’  And  the letter’s third statement (‘Now they’re $150,000’) would prima facie be hearsay if used only to prove that at the time of the statement, the solicitor had billed fees in the sum of, or done work to the value of, $150,000.

The letter’s fourth statement (‘I am forced to get out of these proceedings disadvantageously because I cannot afford to continue’) is complex, and requires careful analysis.  What is to be analysed for the purposes of the hearsay rule is not necessarily the words written on the paper (which I refer to as ‘the statement’, though it is not a term used by the legislation); it is the ‘previous representation’. The previous representation may be implied from the words used (see the definition of ‘representation’).  Perhaps the most useful analogies for commercial lawyers are the imputations rather than the words on the page which found a defamation claim, and the representation, which may diverge from the words communicated, which founds a misleading and deceptive conduct claim. In the circumstances of the case (the details of which are absent from the problem), the ‘previous representation’ might in fact be argued to be:

‘Effectively, I have no real choice except to accept my former de facto’s offer, which you have advised me is less than what I should accept, because I have used up all my money and exhausted my ability to borrow, and have no capacity to represent myself.’

‘Disadvantageous’ might be argued impliedly to have been shorthand for ‘which you have advised me is less than what I should accept’ on the basis that that is the way conversations progress.  That might be so if the advice was given in the first part of the same conversation, for example, and the client had no real independent capacity to judge for herself, and ‘disadvantageous’ was a convenient short-hand.[2]

The arguable previous representation set out above would be prima facie hearsay if used only to prove that:

  • the client had no real choice except to accept the offer (or the factual premises which underpin such a conclusory statement);
  • the solicitor had advised the client not to accept the offer;
  • the client had no more money;
  • the client was unable to borrow.

Similarly, if the solicitor tendered in response a file note of what he contended was the same conversation recording that he had emphasised to the prospective client that $100,000 was only an estimate and that depending on the contingencies of litigation, the costs could be more than that, the note would prima facie be hearsay if used only to prove that he said those things.

In each case, the evidence could be adduced in a manner which would not let the hearsay rule have any operation for want of a ‘previous representation’.  The client and the solicitor could each recount from the witness box, or by a trial affidavit, their recollection of the controversial conversation, and/or each could cross-examine the other and obtain his or her evidence of it, assuming the other gave evidence.  This would be the orthodox way of adducing the evidence, and once the solicitor had given evidence, neither the client’s letter nor the file note, insofar as they recorded statements by the solicitor, would be excluded by the hearsay rule, because of the wide exception in s. 64(3), which provides that the hearsay rule does not apply to evidence of previous representations by a witness or any other person who heard any such representation being made.  Once again, although only briefly treated by this paper, the importance of this provision for hearsay statements by witnesses cannot be overstated.

[1] See s. 59(1); Subramanian v Public Prosecutor [1956] 1 WLR 965, 970; Stephen Odgers, Uniform Evidence Law (8th ed, 2009) [1.3.10920], [1.3.790]; Jeremy Gans and Andrew Palmer, Uniform Evidence (2010) [5.2.6], 89-90.

[3] See Odgers, above n 8, [1.3.820] citing Protective Commissioner v B (unreported, Supreme Court of New South Wales, 23 June 1997, Hodgson J) for the proposition that affidavits read at hearings are treated as in-court testimonial evidence in written form, rather than hearsay.

[2] For an example of this kind of analysis, see R v Hannes [2000] 158 FLR 359.

See also:

Tags: Evidence · Evidence paper