This post addresses by far the most common problem that I see in affidavits or witness statements. The problem is what is often referred to as "inadmissible assertions". The solution has application beyond just evidence and will assist all aspects of your litigation practice.
In short, if you want to avoid inadmissible assertions and to improve the standard of the evidence you prepare more generally, you must always make sure to set out the underlying facts from which any conclusory statement is drawn. That means witnesses should only give evidence of things they saw, heard, or perceived, and not the conclusions they reached as a result.
That said, you should pay careful attention to what is or is not genuinely in dispute, and can use conclosury or short-form evidence to prove things about which there is no real contest.
A Worked Example
Here is Brereton J talking about inadmissible assertions in relation to claims of privilege in Hancock v Rinehart (Privilege) [2016] NSWSC 12 at [7]:
"To sustain a claim of privilege, the claimant must not merely assert it; but must prove the facts that establish that it is properly made. Thus a mere sworn assertion that the documents are privileged does not suffice, because it is an inadmissible assertion of law; the claimant must set out the facts from which the court can see that the assertion is rightly made, or in other words “expose … facts from which the [court] would have been able to make an informed decision as to whether the claim was supportable”. The evidence must reveal the relevant characteristics of each document in respect of which privilege is claimed, and must do so by admissible direct evidence, not hearsay."
The point was that to prove that a document is privileged it is not enough for someone to swear an affidavit saying "this document is privileged".
So what does the deponent have to say?
Well the test for privilege is whether the document was created for the dominant purpose of giving or receiving legal advice, or the provision of legal services in connection with legal proceedings. But it also is not enough for the deponent to say "I created the document for the purpose of receiving legal advice". That has the same problem as "this document is privileged". Both of them assert a conclusion and do not "expose … facts from which the court would have been able to make an informed decision as to whether the claim was supportable".
A good example of what is or is not enough was given in Hastie Group Ltd (in liq) v Moore [2016] NSWCA 305; 339 ALR 635, which concerned a claim for privilege in relation to an audit report. At [31]-[39], Beazley P and MacFarlan JA held that the report was privileged based on evidence other than the evidence tendered to establish that it was privileged.
The express evidence regarding the report (which was insufficient to establish privilege) was:
"13. Attachment referred to in [12] above is a report of Westworth Kemp undated and unsigned – this document was prepared for the purpose of obtaining legal advice in connection with the public examination and Proceedings …
The documents were created solely in connection with anticipated or pending legal services and litigation. The litigation anticipated at the time the documents were created was the Proceedings."
That was not good enough to prove privilege because it was just a bare assertion that the report was created for a privileged purpose. It did not expose the facts from which the claim for privilege was supportable. It told the court that the document was privileged without showing that it was privileged.
However, their Honours identified the following matters from other evidence which supported the claim for privilege:
the report was prepared by “a firm who provides independent reporting, compliance advice and independent accounting and auditing services”;
the liquidator of the plaintiff company had instructed his solicitor to send an engagement letter to the firm who prepared the report;
the engagement letter had requested a report in relation to anticipated public examination proceedings (see at [20]-[25]); and
the report had been provided in response to that letter.
This may answer the question of what the deponent should have said in the affidavit in support of the privilege claim: the deponent needed to depose to those four facts. From those facts the court can infer that the report was prepared for the dominant purpose of providing legal services in relation to legal proceedings. So the court is now not relying on something that is just an assertion of a conclusion, it is reaching that conclusion based on an inference drawn from a series of facts.
Extrapolating more broadly, we can say the following.
Rule 1: The way of avoiding inadmissible assertions in affidavits or witness statements is to avoid saying things that are conclusions and to instead set out the underlying facts from which the conclusion is drawn.
What is the difference between a conclusion and an underlying fact? Keep in mind that a "witness" is supposed to be giving evidence of things that they "witnessed". That is, to borrow language from s 78 of the uniform Evidence Acts, they give evidence of things that "saw, heard, or otherwise perceived".
That is how to tell what is just an asserted conclusion and what is not. Strictly speaking, affidavits or statements should, as far as possible, only set out things that the witness has an actual memory of perceiving using his or her senses—that is, conversations he or she had, things he or she saw or heard, etc.
When Rule 1 Can Be Avoided
See if you can spot the slight problem with the above reasoning in relation to the Hastie example. I'll give you a few lines to think.
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Here it is: the four "facts" I set out were not really "underlying facts". They were mostly just conclusions that would themselves have been inferred from underlying facts.
Take the first one, which is that the report was prepared by “a firm who provides independent reporting, compliance advice and independent accounting and auditing services”. There are a few conclusions there.
The first conclusion is that the authors were a "firm", which in this context is defined by the Oxford English Dictionary as "a business concern, especially one involving a partnership of two or more people". So for the court to conclude that the authors were a firm, there would need to be evidence that they drafted the report as part of a business concern, and possibly that the business concern involved a partnership of two or more people.
To prove this could involve, for example, tendering a written partnership agreement and audited financial statements, which would show that there were people carrying on a business as a going concern and in partnership. If there is no written partnership agreement then there would need to be evidence either of oral conversations by which a partnership agreement was formed, or a course of conduct from which a partnership agreement would be implied.
The next conclusion is that the firm provides services which are "independent". That begs the obvious question: independent of what? In this context it is likely to mean independent of the parties to the litigation. To prove that would require someone to give evidence of the relationship between the firm and the parties to the litigation. So someone from the firm would have to say that to their knowledge the members of the firm were not family members of the principals of the parties, did not regularly socialise with them, and did not regularly work with them except to the extent of their engagement to prepare the report.
The next conclusion is that the firm provided "reporting, compliance advice and accounting and auditing services”. Each of those terms is quite general and describes a broad range of services. Thus, "compliance advice" could refer to advice in relation to many different things. In this context it is probably a reference to compliance with accounting standards, or perhaps with tax law. To prove that the firm provided compliance advice, and what that in fact refers to, would require someone from the firm to give examples of the kinds of advice that the firm had provided to its clients in the past.
Each of the four "facts" from Hastie referred to above could be similarly broken down into its constituent conclusions, and I could then identify the underlying facts, and devise what evidence would be required to prove those facts. I don't propose to do that for all of them, but it may be helpful to also consider the second "fact", being that "the liquidator of the plaintiff company had instructed his solicitor to send an engagement letter to the firm who prepared the report". Breaking that down, you would need to prove:
that the plaintiff company is incorporated as a company (eg by a company search or a certificate of incorporation;
that the company is in liquidation (eg by the company search or the registered appointment of the liquidator);
that a particular person had been appointed as the liquidator (same evidence as [2]);
that the person who had been appointed was in fact a registered liquidator (eg by tendering a record from the register);
that the liquidator had engaged a particular solicitor (eg by tendering the retainer agreement);
that the person who had been engaged was in fact a solicitor (eg by tendering their practising certificate); and
that the instruction to send the engagement letter had been given by that liquidator to that solicitor.
In the Hastie case there would have been evidence before the Court of each of those seven things, although it is likely that instead of the evidence referred to at points 4 to 6, there would have just been statements in an affidavit by the liquidator saying "I am a registered liquidator" and "I have retained [name], solicitor, to act for me in this matter". It probably would not have been more detailed than that.
Likewise, it is very unlikely that there was the detailed evidence in relation to the accounting firm that I have described above. More likely there was just a statement from the liquidator describing them with precisely the level of generality as “a firm who provides independent reporting, compliance advice and independent accounting and auditing services”.
In other words, it was sufficient for the plaintiff to rely on conclusory evidence about the liquidator being a registered liquidator, the liquidator having retained a solicitor, and the solicitor having engaged a firm that provides particular services; but the plaintiff could not do that to prove that this was done for the dominant purpose of providing legal services in connection with legal proceedings. Why?
Well, there is a qualification about the use of inadmissible assertions in affidavits.
Rule 2: Otherwise inadmissible assertions are generally acceptable to prove things that are uncontentious or cannot seriously be disputed.
This is more a rule of pragmatism than a rule of law. The reality is that if every affidavit or witness statement had to prove every single fact underlying every conclusion stated in it then they would all be extremely lengthy and tedious, not to mention expensive to prepare.
As a result, in a case where there is no dispute that a particular person is the liquidator of a company, it will be acceptable for the person to give evidence saying "I am the liquidator of the company". On the other hand, if there is a dispute as to whether the liquidator was validly appointed, then there would need to be evidence of all the underlying facts regarding their appointment (eg on [date 1] a director sent a notice convening a meeting of shareholders, on [date 2] the shareholders met and resolved to place the company into liquidation, etc).
The problem with Rule 2 is that it creates a trap: viz, falling into the habit of thinking that it is sufficient for affidavits to include assertions like "I am a director of Pennyless Pty Ltd". In 99% of cases you will be correct, but then one day your opponent will object to it, and you will have failed to prove that your leading witness is in fact a director of your client. The way to avoid that trap is to know your case well and think carefully about what the real issues are when you are preparing your evidence. If something is controversial then you will need more detailed evidence to prove it.
A Word About Admissibility
I should point out that although I have been writing about "inadmissible assertions" for a while now, there is not actually a legal rule of evidence saying that "assertions" are inadmissible. So where does the term come from and why is it so commonly applied?
Often an objection to an "assertion" is more properly expressed as an objection on the basis of the opinion rule. That is the sense in which Brereton J used the word in the above quote from Hancock. His Honour referred to "an inadmissible assertion of law". That is not permissible as evidence because it is an expression of an opinion as to the legal status of a document, rather than of a particular fact.
Assertions also often have hearsay problems. That is because the conclusion expressed is disguising the source of the deponent's knowledge. When this is interrogated a little it transpires that the deponent is just repeating something they have been told and not something of which they have first hand knowledge.
A common example would be where a director of a company says something like "Pennyless Pty Ltd owes Creditor Pty Ltd $200,000". This has an opinion problem, because whether a company owes money to another company is an expression of an opinion as to the existence of a legal relationship. But it may also have a hearsay problem.
Here is an example of honest evidence of what may have led someone to include a statement to that effect in their affidavit:
"On [date] I went for some drinks with my friend, Ms C. She said to me words to the effect of: 'Ms A, the director of Creditor Pty Ltd, is a good friend of mine. She has been telling me that those people at Pennyless Pty Ltd owe her $200,000.'"
Obviously you would not include that in an affidavit, because it is second hand hearsay. But unless you ask the witness where their conclusion comes from you will not know that what they are saying is hearsay. That kind of thing can often come out in cross-examination, meaning that what you thought was good evidence will be worthless.
An example of an admissible way of proving the existence of a debt could be:
"On [date] I saw Ms A, director of Creditor Pty Ltd, handing a cheque in the sum of $200,000 to Mr B, director of Pennyless Pty Ltd. When she did that I heard Mr B say something to the effect of 'Don't worry, we'll pay you back before you know it.'
Mr B then gave me the cheque and said something to the effect of 'Go and deposit this in our account'.
I then went to the bank and deposited the cheque into the Pennyless account. Annexed and marked 'A' is a copy of a bank statement showing the deposit.
To my knowledge, Pennyless has not made a payment to Creditor of $200,000 since that date."
(Of course, this assumes that it is uncontentious that Ms A was a director of Creditor Pty Ltd and Mr B was a director of Pennyless Pty Ltd, or that those matters have already been proven some other way.)
The above also shows why it is important to be disciplined and detailed when interviewing witnesses and taking evidence. In normal conversation most people will not talk using the level of detail required to prove things in an admissible way. If a witness believes that Creditor owes Pennyless some money they will tell you that, without explaining the basis of their knowledge. The only way to know whether they are telling you something that they can prove by admissible evidence is by going through how they know it step by step. It also should go without saying that you should try to get as many contemporaneous documents as possible so you are not just relying on the witness's memory.
These examples also lead me to the third basis of objections to "inadmissible assertions", which is the discretionary exclusions or limitations which (in the Australian uniform evidence jurisdictions at least) are in ss 135 and 136 of the Evidence Act (the former excludes the evidence entirely and the latter permits its use to be limited to a particular purpose, such as evidence of the deponent's understanding but not the truth of the matters asserted). These relevantly apply where the probative value of inadmissible assertions is substantially outweighed by the danger that they will be unfairly prejudicial to the other party. That may be the case because of their tendency to disguise what is really inadmissible hearsay or opinion, and because the other party does not have a fair opportunity to challenge the basis for the assertion if it is not specified in the affidavit.
To illustrate this, take the above example about the person who says they banked the cheque from Creditor to Pennyless. Someone disputing the existence of the debt could meet that evidence by, for example, showing that the deposit in the bank account related to something else, or challenging the witness's account of the conversation at the time the cheque was handed over, or proving that the amount paid on that day was in fact repaid at some later time. But in order to know whether they needed such evidence they would need to know the witness's full account of what happened when the payment was made. If the witness's affidavit just includes an assertion that the debt exists, devoid of any context, then the opposing party does not know what it has to prove in order to show that the alleged debt does not exist. That causes it significant prejudice.
This brings me back to what I said before about Rule 2 being more a rule of pragmatism than a rule of law. Assertions that are permitted under Rule 2 are generally just as inadmissible as those that are not permitted, but most judges take the attitude that if something is not genuinely in dispute then it can be proven in a more shorthand way.
There is in fact a legal basis for that, which is s 190(3) of the uniform Evidence Acts (and, in New South Wales, s 70 of the Civil Procedure Act 2005), which allow the court to order that certain provisions of the Act do not apply to evidence that is not genuinely in dispute, or where the application of those provisions would cause unnecessary expense or delay. But the court must do the "by order", and such orders are rarely made in practice. In my experience, more often what I have described is just how the case is conducted, and no one takes any issue with it.
I expect that there will someday be an appeal based on inadmissible assertions that are allowed in because no one realised they were contentious at the time, but they turned out to be contentious later, on the basis that no order was made dispensing with the rules of evidence. But that is a matter for another time.
Where that leaves us is the following, which is the last rule I am going to give you on this topic:
Rule 3: If in doubt, always err on the side of Rule 1 and not Rule 2.
Preparing evidence giving a detailed account of things a witness actually saw, heard, or otherwise perceived, and not just conclusory assertions that the witness makes, will vastly improve your litigation practice. Not only will it mean your evidence is objected to less, it will assist you at every step of case preparation to get to the bottom of what actually happened.
Remember, human memory is a deeply flawed data storage system, and human speech is not an ideal way of conveying information. The best way to discover what actually happened is to make sure your account is as detailed as it can be.
The only real downside of preparing detailed evidence is that it requires more work from you. That may be important, especially where it means you are probably putting your client to unnecessary expense in preparing overly detailed evidence, especially if the client is unable to afford it.
But in my experience concerns about costs are rarely if ever the real reason for affidavits being replete with inadmissible assertions. Most of the time the explanation is the laziness of the lawyers or the witnesses. If there is one thing you take away from this post, it should be this: do not let your laziness lose your client's case.
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