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Where am I now? Lawlink > Law Reform Commission > Publications > Report on Evidence
Report 17 (1973) - Evidence (Business Records)
Report on Evidence
To the Honourable K. M. McCaw, Q.C., M.L.A.,
Attorney-General for New South Wales.
INTRODUCTION
1. You have made a reference to this Commission-
“To review the law of evidence in both civil and criminal cases.”
2. This report deals only with that part of the hearsay rule which governs the admissibility in legal proceedings of statements in business records.
3. We began work on this topic because considerable use is made of computers by government and business for keeping and producing records. Yet, in civil proceedings, statements in documents produced by computers cannot be admitted in evidence if objected to. And, in criminal proceedings, the provisions of the Evidence Act, 1898, do not work satisfactorily in relation to such documents.
4. Special provision is made in the English Civil Evidence Act 1968 for statements in documents produced by computers. Similar provision is made in the Victorian Evidence Act 19581 and in the Evidence Ordinance 1971 of the Australian Capital Territory. 2 We thought initially that we might recommend the adoption of a like provision in this State, but, we are now satisfied that this is not the best course to follow. It would have the effect of making a document admissible if it was produced by a computer, but inadmissible if it was produced by other reliable means. 3 There is, we think, no justification for that result. We were led, therefore, to consider the admissibility of statements in business records, whether the records are kept or produced by computers or by other reliable means.
5. In the result, we recommend that the Evidence Act, 1898, be amended to provide a statutory exception to the rule against hearsay evidence: an exception which will facilitate the admission in legal proceedings of reliable statements in business records, however kept or produced, as evidence of the matters recorded. For this purpose we recommend legislation along the lines of the bill in Appendix A to this report. Notes on the bill are contained in Appendix B. A summary of the effect of the bill appears in paragraphs 27-37.
WORKING PAPER
6. In August, 1972, we publis,hed,a working paper on the law of evidence relating to business records which contained our then proposals in the form of a draf t Bill. 3A A This was circulated to the Judges of the Supreme Court and to the Chairman of the District Court Judges, the Chairman of the Bench of Stipendiary Magistrates, the New South Wales Bar Association, the Law Society of New South Wales, to the interested government departments, to the persons and bodies mentioned in Appendix G and to other law reform bodies.
7. We received valuable comment on the working paper. A committee of Judges of the Supreme Court made a number of comments to which we have had, regard. The New South Wales Bar Association formed a committee to study the proposals. The Council of the Association did not formally come to a vote on the proposals but we have had the benefit of reading the report to this Committee and of the comments of the Council of the association on this report. The Institute of Directors of Australia, afterexamination of the working paper by the Legislation Committee of its New South Wales Branch, expressed its approval for the general approach of the working paper and support for the principles embodied in the draft Bill. The Institute of Chartered Accountants in Australia, New South Wales Branch, formed a subcommittee to review and report on the working paper. This branch of the Institute expressed its oeneral support for the draft Bill. However, it suggested that parts of the working paper could wrongly create an impression that computers were wholly reliable. We did not intend to give such an impression. We make some comments on the reliability of records made or kept by computers in paragraphs 38-46. Other interested persons and bodies have expressed general agreement with our proposals. These include the Chairman of the Bench of Stipendiary Magistrates, the Australian Bankers Association, the Government Insurance Office and the Registrar General. The report to the Council of the New South Wales Bar Association raised several objections of principle to our proposals. No one else raised any substantial objection to the proposals in the working paper.
8. As a result of comments received, and of our own further reconsideration, the draft Bill in Appendix A differs from the draft Bill in the working paper in a number of respects. The principles on which admissibility of statements in business records as evidence is based remain the same except that admissibility in criminal proceedings has been restricted, and a number of additional safeguards of the interests of persons,against whom evidence may be tendered under the proposed exception have been introduced. other changes have been made in the interests of clearer and simpler drafting. The changes made meet all the comments made on our proposals except those in the report of the Committee of the Bar Association discussed in paragraphs 49, 521-55 and 79-82 of Appendix B.
BUSINESS RECORDS
9. The use of computers for keeping,and producing records is not widely understood. So far as we know there is no simple published account of such use available. In Appendix D to this Report we describe the operation of computers and their use for such purposes. The description is appropriate to I.B.M. equipment. Some modification may be necessary in the case of equipment from other manufacturers of which, there is a very great variety. Appendix D reproduces, with some alterations, Part 2 of the working paper to which we refer in paragraph 6.
10. In this report and.in the proposed bill in Appendix A we use the term “business” with an enlarged meaning. It includes government activities and the pursuit or conduct of any profession, occupation, calling, trade or undertaking whether engaged in or carried on for profit or not, and whether within New South Wales or not. The purpose of using the term “business” with an enlarged meaning is to include within the application of the legislation we recommend the records of activities which, although not businesses in the ordinary sense of the word, can be expected to have a similar standard of reliability. Thus, the, records of a hospital not carried on for profit, a doctor in private practice, a municipal council, and a charitable body would come within the legislation.
11. The following are examples of documents forming part of the records of a business, statements in which might be admissible under the draft Bill in legal proceedings as evidence of the matters stated: books of account; accounting records of all kinds; employment records; production, job and work records of all kinds; stock records; despatch, delivery or receipt of goods records; postage books; surveyors’ field books; transport drivers’ logs; hospital records; medical records of a doctor in private practice; interoffice memoranda; office diaries; files of correspondence.
12. In this Report we use the expressions “statement in a business record” and “statement in a document”. In the draft bill “,statement” is defined 4 as including “any representation of fact whether made in words or otherwise”. It is inthis sense that we use the word “statement” in this Report.
13. The following are examples of statements in the sense mentioned above which might be found in business records: an entry in a cash book “to rent $25”; an entry in a job card “repair lighting circuit, 4 hours, 30-in cable, 2 socket power point”; an entry in a postage book “W. R. Smith, 7 Close Avenue, Ryde-$1.20 express”; a table of motor vehicle traffic flow at a particular location in the records of the Main Roads Department; a graph showing daily production forining part of factory records. It will be apparent that some statements will be self-explanatory. Others will be in an abbreviated or in a graphical, statistical or accounting form, the meaning of which will not be apparent to a court except in the light of other evidence.
THE RULE AGAINST HEARSAY
14. A statement by a person in a document tendered by a party to a legal proceeding as evidence of a fact asserted in the statement is hearsay evidence. It is hearsay because the court is asked to find that the fact existed on the ground that a person, who is not a witness, at some time in the past, said in a document that it did. The statement is not admissible as evidence unless it comes within one of the exceptions to the general rule which excludes the admission of hearsay evidence in legal proceedings.
15. As a consequence of the rule against hearsay, an entry in the ledger of :a shop that a customer’s account is unpaid, or an entry in a hospital record made by a nurse that a patient spent a restless night or had a temperature of 102° or by a doctor that the patient had appendicitis, or an entry in a bank manager’s diary that Mr X called on a certain date to,ask for overdraft accommodation is not evidence in legal proceedings of the facts asserted in the entry unless the circumstances come within one of the exceptions to the rule, no matter how clearly it appears to the court that the entry is reliable.
16. It is important to note the relationship between the rule against hearsay and the basic rule of admissibility of evidence in legal proceedings. This basic rule of admissibility is that -all evidence is admissible which is sufficiently relevant to an issue before the court and that all evidence that is irrelevant, or insufficiently relevant, should be excluded. In this context, the word “relevant” means that “any two facts to which it is applied are so related to each other that according to the common course of events one either taken by itself or in connection with other facts proves or renders probable the past, present or future existence or non-existence of the other”. 5 Thus a statement in a business record which,asserts the existence of a fact which is in dispute in legal proceedings is relevant evidence. But if the statement is objected to, it must be excluded as evidence on the ground that it is hearsay unless it comes within one of the exceptions, to the hearsay rule. The rule against hearsay must be regarded, therefore, as a qualification of the basic rule of admissibility. It is concerned to exclude from the body of evidence on which a court must reach its decision a particular type of relevant evidence, that is hearsay evidence. We now turn to discuss the reasons given for the rule and the rationale of the exceptions to it.
17. The reasons given for the rule against hearsay are based on the idea that hearsay evidence is a substitute for the oral testimony of the person whose personal knowledge is embodied in the hearsay statement. Those, which are generally advanced are as follows. Tle reliability of a hearsay statement cannot be tested by cross-examination of the person who perceived the facts asserted in the statement. The court is deprived of the opportunity of assessing the demeanour of that person while giving evidence. This is unfair to, the party confronted with the evidence and to the court. The statement is not made oa an .oath administered in court. If the trial is with a jury, the jury may prove mcapable, of properly evaluating the worth of the statement as evidence. Further, a hearsay statement is not the “best evidence” in the sense that oral testimony given in court by the person who perceived the facts asserted is intrinsically more valuable than,a written statement recording what he perceived even if made at or near the time that the f acts occurred.
18. We comment on the last three of these objections. It may be doubted that it is the religious -sanction of the oath which induces most witnesses to tell the truth. We think that, in general, witnesses tell the truth from a recognition of a duty to do so and a sense of honesty and because of a fear that if they do not, an untruth may be exposed by conflict with other evidence or by cross-examination. Fear of prosecution for perjury is a deterrent to serious deliberate lying. Those who make, or supply information for, statements in business records have some corresponding motives for telling the truth. They have a duty to their employer to do so and, in general, no motive to misrepresent or conce,al the truth. They fear the adverse consequences of inaccurate reporting being discovered by their superiors. They know that lying may result in dismissal.
19. We doubt that modem juries, properly instructed, find special difficulty in evaluating the worth of hearsay evidence. In private and business life most important decisions are based, at least partly, on hearsay information. Juries are as well equipped by experience to assess hearsay evidence as they are to assess direct evidence given by oral testimony. And, of course, all the common law exceptions and the statutory exceptions, including section 14CB of the Evidence Act (enacted in 1966. to provide for the admissibility of statements in business records in criminal proceedings), proceed upon the basis that juries are able to assess hearsay evidence. As far as we are aware, New South Wales is, the only jurisdiction of the many which have adopted the provisions of the English Evidence Act 1938, as is done by Part IIA of the Evidence Act (enacted in 1954), to have restricted its operation to proceedings without a jury. This restriction is now generally thought to be unjustified. 6 We see no reason to. restrict our proposals to proceedings without a jury.
20. We do not think that it can validly be said that oral evidence of facts given in court is intrinsically “better” than a written statement of the facts made out of court. If the statement was made as a contemporary record, it will generally prove to be more reliable than oral testimony given when recollection has faded, and particularly wherethe witness has refreshed his memory from the statement, as is normally done, before giving his evidence. On the other hand, oral evidence would generally be regarded as preferable to a statement made long after the event for the purpose of the proceedings.
21. We now turn to the considerations which provide the rationale for the, present exceptions, to the rule against hearsay. The exceptions are provided partly by the general law and partly by statute. There may be said to be two such considerations: a necessity forthe admission of the hearsay evidence in question; and,a circumstantial probability of us trustworthiness. 7 This in some circumstances, the common law provides, that by way of exception to the rule against hearsay a statement made by a person may be admitted in evidence where the person who made the statement has died. The circumstances in which this exception applies are limited to rigid categories which provide some assurance that it is unlikely that the person would have lied for example, that he made the statement in the course of duty or that the statement was against his own interest. 8 In the case of public documents both common law and statutory exceptions recognize a necessity which arises from the impossibility or practical difficulty of procuring better evidence. The character of the documents as public documents provides the circumstantial probability of trustworthiness. 9 In the case of each of the exceptions to the rule against hearsay, the disadvantages of hearsay evidence are outweighed by the absence of any other evidence or the practical difficulties of obtaining other or better evidence and the reliable nature of the evidence which is admissible.
THE NEED FOR A BUSINESS RECORDS EXCEPTION
22. There are, in our view, three reasons why a new statutory exception to the rule against hearsay evidence of the kind we propose is necessary. In the course of stating these reasons we summarize the effect of the existing exceptions, both common law and statutory, on the admissibility as evidence of statements in business records. The present law is more fully set,out in Appendix E to this Report.
23. The first of these reasons is thatthepresent exceptions applicable to civil proceedings do not adequately provide for the admissibility of a statement in a business record where the person who made the statement is dead or otherwise for good reason unavailable as a witness. In civil proceedings with a jury only the common law exceptions for the written statement of a deceased person made in the course of duty or against interest are available. The great bulk of statements in business records, whether or not produced by a computer, are not in a form to which these exceptions apply because they are not made or signed or initialled by the deceased person. 10 In civil proceedings without a jury the common law exceptions are, for practical purposes superseded by section 14B of Part IIA of the Evidence Act. While this section makes admissible statements made not only by deceased persons but also by persons who for other reasons stated in the section are not available as a witness, it contains requirements,as to form 11 which correspond to those of the common law exceptions and which make the great bulk of statements in business records inadmissible under it.
24. The second reason is that the present exceptions in the case of civil proceedings do not adequately coverthe situation where, the trouble and expense of identifying and calling as witnesses the persons concerned with the statement, or proving that their evidence is not available, is not justified by the likely value of their testimony. This situation often occurs. In the case of proceedings with a jury there is no exception which meets it at all. In the case of proceedings without a jury section 14B (2) (a) of the Evidence Act applies. This enables a court to admit a statement “if having regard to all the circumstances of the, case it is satisfied that undue delay or expense would otherwise be caused . . . notwithstanding that the maker of the statement is available but is not called as a witness”. However, because of the requirements,as to form, to which we have :already referred, the great bulk of business records, whether or not produced by the use of a computer, are not admissible under section 14B. Further, we consider that it is not satisfactory in the practical conduct of civil litigation for the admission of evidence to be dependent upon the exercise of a discretion such as that provided by the section. Our reasons for this opinion are stated in paragraphs 54-55.
25. The third reason concerns section 14CB of Part 11B 12 of the Evidence Act. This provides an exception for criminal proceedings under which statements in business records are admissible if the person who supplied the information recorded in the statement is dead or for some other specified reason not available as a witness or cannot be expected to have any recollection of the matters in question. However, this exception is too narrow,and has a number of practical disadvantages. Our reasons for saying this are stated in paragraphs 20-24 of Appendix E.
RECOMMENDATION
26. We recommend that,a statutory exception to the hearsay rule be enacted to the effect of the proposed new Part IIB of the Evidence Act which the draft Bill in Appendix A would substitute for the present Part IIB. 13 We summarize the proposed new Part IIB in paragraphs 27-36. We also recommend that some related amendments be made to the Act to the eff ect of sections 3 and 4 of the draft Bill which we summarize in paragraph 37.
Proposed New Part IIB
Application
27. The proposed new Part IIB applies to all legal proceedings both civil and criminal but there are some special requirements for criminal,proceedings. The term business is given the extended meaning referred to in paragraph 12. 14
Admissibility of Statements in Business Records
28. Where a fact or expert opinion is relevant in the proceedings, a statement, in any form, of the fact or opinion is,admissible as evidence of the fact or opinion if the statement is in a record of the business and was made in the course of or for the purpose of the business and either-
(1) was made by a person engaged in the business who had personal knowledge of the fact or was an expert qualified to express the opinion; or
(2) contains information which reproduces or is derived from information in one or more statements each made by persons engaged in the business who had personal knowledge of the facts or who were qualified to express any expert opinion involved or from information supplied by recording or measuring machines (s. 14CB).
29. In civil proceedings such a statement is admissible without it being necessary to call any person concerned with the statement as a witness or to show that any such person is not available to, be called. For the reasons given in paragraphs 51-53 it is safe to assume that in the overwhelming majority of civil proceedings business records will not be tendered as evidence unless it is necessary to do so.
30. In criminal proceedings, however, such a statement is admissible only if-
(1) each of the persons who, supplied the information is called as a witness; or
(2) no opposing party requires him to, be called; or
(3) he is not available or cannot be expected to have any recollection of the matters in question; or
(4) it appears to the court that undue delay or expense would be caused by requiring him to be called.
These grounds are specified in greater detail in section 14CD (2). The reasons for recommending these provisions in criminal proceedings are stated in paragraphs 56-60.
31. Where, a statement is admitted in evidence it merely becomes part of the material to be considered by the court in reaching its decision. The proposed Part does not make the statement prima facie evidence which the court must accept as true unless there, is evidence to the contrary. The court is to give such weilyht to. the statement as seems appropriate in,all the circumstances. The court may come to the conclusion that it is so unpersuasive as to be of no weight at all. On the other hand, it may come to the conclusionthat it is reliable because, for example, it fits, in with other evidence or that the circumstances, in which it was made make it likely to be reliable.
Absence of Business Record
32. Where in the course of a business a system has been followed to make and keep a record of all events of a particular kind, the absence of a record of such an event is evidence that it did not happen (s. 14CE). This provision serves the same kind of practical necessity as is referred to in paragraph 24. Evidence admissible under this provision has the value described in paragraph 31.
Computer Records
33. The proposed new Part IIB applies to records made or kept by the, use of a computer. See the wide definition of “document” in section 14CA (1) and the provisions as to proof in section 14CK (1) (c) and (2). A statement in such a record, or evidence of the absence of such a record is admissible in exactly the same way as similar evidence relating to records made or kept by other means.
Machine Information
34. Statements in business records which reproduce or are derived from information produced by automatic counting, measuring, identifying or recording machines are admissible as evidence in the same, way as if the information had been supplied by persons (s. 14CB (6) (b.) (ii)
Safeguards
35. The interests of parties against whom evidence may be tendered under the proposed new Part IIB are protected in the following ways-
(1) Before a statement in a business record is admitted as evidence, or evidence is given of the absence of a record of the happening of an event, evidence must be given which establishes that the statutory requirements for admissibility have been satisfied (paras 28-30 and 32 above). This evidence is subject to cross-examimation. 15 This enables the party against whomthe statement, or evidence of the absence of a record, is tendered to contest its admissibility, reliability or completeness. It may also enable him to elicit that a person connected with the business who might be expected to be called is available as a witness. Cross-examination may, moreover, lead the court to reject or exclude the statement on a ground mentioned, in subparagraphs (2) or (3) below.
(2) Evidence tendered under the proposed new Part IIB may be rejected or excluded if its weight is too slight to, justify the court acting on it, or if its, utility is outweighed by a probability that it would unduly prolong the hearing, or be unfair, or, if there is a jury, mislead the jury (s. 14CM).
(3) A statement or evidence of the:absence of a record may be rejected or excluded unless related records which the court thinks should also be in evidence are tendered (ss. 14cc (2) and 14CE (2)).
(4) Evidence affecting the credibility of the person who supplied the information contained in a statement is admissible to the same extent as if he had been called as a witness (s. 14CH).
(5) The court is required to take into,account on the question of the weight of a statement or of evidence of the absence of a record all matters from which any inference, as to the accuracy or otherwise of the evidence can reasonably be drawn (ss. 14CF and 14CG).
(6) Where a statement is proved by means such as the production of a copy, or the production of a document produced from magnetic tape by the use of a computer, the court may reject or exclude the evidence unless the original document or the tape is produced to the court or to the parties for examination or testing (s. 14CK (3)). If the statement is in a sound recording or cinematic film, the court may exclude or reject the statement unless a record of the statement is produced to the court in the form of say a transcript or of still prints (s. 14CK (4)).
(7) Where the proceedings are with a jury and it appears to the court that if the jury were to have the document containing the statement with them during their deliberations they might give the statement undue weight, the judge may direct that the document be withheld from the jury during their deliberations (s. 14CN).
(8) For the purpose of any rule requiring the evidence of a person to be corroborated a statement in a business record is not to be treated as corroborating the evidence of a person who supplied information contained in the statement (s. 14CO).
(9) The power of a court in criminal proceedings to reject evidence which, if admitted, would operate unfairly against a defendant is expressly saved (s. 14CP).
(10) Rules or regulations may be made as to-
(a) giving notice of intention to tender a statement in a business record;
(b) giving notice of intention to give evidence of the absence of a business record;
(c) production of relevant documents for inspection (including those in the possession of a person who is not a party to the proceedings).
36. Nothing in the proposed Part IIB prejudices the admissibility of business records as evidence on a ground not provided by the Part. See section 3 (b) (ii) of the proposed Bill. 16
37. The draft Bill in Appendix A also provides for section 14B of Part IIAof the Evidence Act referred to in paragraph 23 to be amended so as to apply to civil proceedings, with a jury as well as to those without a jury. Section 14B would also be amended so as to provide a discretionary power in the case of proceedings with a jury to reject a statement which would be, unfair or might mislead the jury and to withhold a statement from the jury during their deliberations if it is likely that they might give undue weight to it. The draft Bill also provides for definition of “bankers’ books” in section 3 of the Evidence Act to be,amended so as to include modem forms of accounting records such as loose leaf cards and computer print out sheets. We state our reasons for the amendments mentioned in this paragraph in Appendix B, paragraphs 1-7.
ACCURACY OF COMPUTERS
38. Before returning to our general reasons for recommending the proposed new Part IIB we comment on the accuracy with which records are made or kept by the use of computers. The factors relevant to accuracy are considered in more detail in Appendix D, paragraphs 44-56.
39. There is no doubt that business records can be made and kept by a computer to a degree of accuracy which cannot, as a practical matter, be attained by a corresponding clerical system. Commonly they are so made,and kept. But errors in such records do occur. The cause of error is rarely a malfunctioning of the computer equipment. Where error in such records does occur the source of it, in almost every case, is human error. It is relevant to consider the sorts of human error which may be involved. As we explain, in paragraphs 45 and 46, the conditions of admissibility which we recommend should ensure that the occurrence, or any likelihood of such error is the subject of evidence given either in chief or under cross-examination.
40. First, the program inadvertently may not provide for all the circumstances which may arise because the person who compiled the program, or who analysed the system which was to be recorded, made a mistake. As a result the computer may print out information which is quite wrong. Generally, the information win be obviously wrong but sometimes the error will be apparent only on comparison with other documents or with known facts. Errors of this kind are normally corrected within a reasonable time after the computer system is commenced. Occasionally a failure to provide for an unusual combination of circumstances may be undetected for years.
41. Secondly, it occasionally happens that, to save money, a program deliberately does not provide for all the circumstances which may arise. Those conducting the business may rely on any error being discovered either by their own employees or by those, with whom they are dealing. Sometimes to save money, the, program deliberately does not include editing or checking procedures which, if used, should detect errors of various kinds.
42. Thirdly, human errors do occur in the transferring of information into the computer from the source documents. Errors in the transfer of information are inevitable in any business system, whether or not a computer is used. Methods commonly used for transferring information into a computer provide verifying procedures which keep errors to a small fraction of one per cent. There is, however, currently a tendency in some computer applications to adopt new methods which are quicker and cheaper but do not provide verifying procedures or an adequate opportunity to check that the information has been transferred to the computer correctly.
43. Fourthly, the accuracy of information put out by a computer depends on how frequently the information already recorded by it is brought up to date by subsequent information being put into it. How frequently such records are “updated” depends upon the nature of the computer equipment used, the use to which the records are put in the business and the expense involved. Perhaps the greatest justified source of complaint in respect of records produced by computers is that they have not been brought up to date.
44. Finally, no matter how adequately a computer is programmed, how extensive are the editing and checking procedures and how accurately information is transferred into a computer, the records kept and produced by the computer will be wrong if the information supplied to the computer is wrong. It is because of this that we recommend that a statement in a computer record be subject to the same condition of admissibility as a statement in a record kept by other means that is that the information in the statement must originate from a person, with personal knowledge, engaged in the business in question.
45. As is mentioned in paragraph 35 (1), before a statement in a business record is admitted as evidence or evidence is given of the absence of a record of the happening of an event, evidence must be given wluch establishes that the statutory requirements for admissibility have been satisfied. In the case of records made or kept by the use of a computer, the person or persons who give such evidence should have knowledge of the occurrence of errors or the kind mentioned and of the matters relevant to any likelihood of such errors occurring. He should, for instance, know what method was used to transfer information to the computer and what procedure was followed to check that it has been correctly transferred; whether the information transferred originated from the personal knowledge of a person engaged in the business; what procedure was followed to update the records; by what steps and subject to what checks the information put out by the computer was derived from the information put in; and whether the computer has malfunctioned during any relevant time.
46. Accordingly, a party against whom such a statement, or evidence of the absence of a record, in a record made or kept by the use of a computer is tendered under the proposed Part would have an opportunity of testing by cross-examination all the matters relevant to the admissibility and reliability of the statement or evidence. 17
FURTHER REASONS FOR PROPOSED NEW PART IIB
General
47. We now add to our reasons for proposing the new Part IIB. The legislation we recommend is designed to apply to all legal proceedings where the rules of evidence apply. Such legislation must for instance be appropriate to proceedings in the Supreme Court, a Court of Petty Sessions or in a private commercial arbitration. Equally it must be appropriate to all conceivable factual situations. The course which we have followed is to provide for the admissibility of business records as evidence in a way which we think will do the greatest good in the greatest number of instances in which a need for the use of business records as evidence is likely to arise. We have provided for exceptional cases by the safeguards mentioned above. Throughout we have borne in mind that the legislation we recommend must be appropriate to the adversary system of litigation which is a basic element of our judicial system.
48. Statements in business records of the kind we recommend should be admissible are likely to be inherently reliable. They originate in the personal knowledge of a person engaged in the business or in an expression of his expert opinion which, in the course of the business, he recorded or passed on to others in the business to record. The purpose of such statements is to provide a reliable record for future use. There is, therefore, in general, a strong incentive for accuracy.
49. The keeping of records in any large organization ordinarily involves the participation of a large number of people in supplying information and in recording and processing it. It is often difficult to identify the people involved in any particular transaction and sometimes difficult to prove, according to the rules of evidence, that they cannot be identified. The persons who have supplied information are generally likely to be unable to add anything to the information recorded and will often have little real recollection of the matters in question.
50. These considerations apply with particular force to records kept or produced by computers. Ordinarily, only a large number of transactions justifies the use of computers. Identification of the persons who supplied any particular item of information is made more difficult by the usual practice in computer applications of keeping the source documents in random order. 17A
51. We think that experience indicates that in the great majority of cases in which a party would wish to rely upon a statement in a business record as evidence of the matter stated, some or all of the following circumstances would be present:
(1) The statement would be reliable evidence of the matters dealt with by it; it might in fact be the best evidence.
(2) The fact or expert opinion which it is sought to prove would not be the subject of bona fide dispute.
(3) The statement would be unlikely to be the only evidence of any fundamental fact in issue in the proceedings.
(4) The persons who made the statement or supplied,the information from which it was made would either have no recollection of the matters recorded or would not be able to give any further or better evidence than that provided by the statement.
(5) It would be difficult to identify the persons who made the statement or supplied the information for it or to prove that such persons cannot be identified.
(6) If such persons can be identified, they would be numerous or engaged in important work ;and it would be a hardship to bring them to court, both to the party calling them and to the business in which they are engaged.
Many instances in which some or all of the above circumstances would exist can readily be envisaged in relation to most of the records mentioned in paragraph 11.
52. We think that what we say in paragraph 51 is supported by the general course of litigation. Each party to litigation is anxious to win the case and ordinarily calls the most persuasive, evidence available. We think that experience indicates that in nearly all cases in which a fact can be proved either by the testimony of a witness who is available and by a statement in a business record and the fact is of any importance in the proceedings, the witness will be called if it is practicable to do so. He will be called either because oral testimony will carry the most conviction in the mind of the tribunal of fact, or to avoid damaging comment on the failure to call a relevant witness, or to avoid. any risk that the statement may be rejected or excluded pursuant to the safeguard mentioned in paragraph 35 (2).
Civil Proceedings
53. It follows from the considerations mentioned in paragraphs 51 and 52 that the exception we recommend should be appropriate to the great majority of civil proceedings. What of the exceptional cases? Sometimes, of course, a party might for tactical reasons not call an available, witness but seek to tender in evidence and rely on a statement in a business record. In order to prove that the statement was admissible it would under the legislation we propose be necessary to lead evidence to prove that the conditions of admissibility have been fulfilled. 18 In the light of that evidence, and of cross-examination, it is highly unlikely that such a manoeuvre would not become evident to the court with a resulting adverse effect on the case of the party concerned which would more than balance any benefit sought to be achieved. However, there may be circumstances of this or some other kind in which it would. be unfair to admit a statement. Accordingly, we recommend that a court have power, in the exercise of a discretion to reject a statement otherwise admissible. This safeguard should we think make a party hesitate not to call available oral evidence but rely solely on a business record when such oral evidence would be or might be thought to be, likely to assist the court.
54. We now mention an alternative approach which might be made to, provide in civil proceedings for the necessity mentioned in paragraph 24 to admit a statement in a business record where the inconvenience and expense of identifying or calling as witnesses the persons who, supplied the information in the statement is not likely to be justified by the value of their testimony. An example of this approach is provided by section 14B (2) (a) of the Evidence Act 19 which enables the court to, dispense with calling the maker of a statement notwithstanding that he is available to be called as a witness if to do so would cause undue delay or expense. It might be said that we should follow a similar course and recommend an exception for civil proceedings expressed to be conditional upon it being established that there is a practical necessity in a particular case to admit the evidence. No one has suggested to us that we should follow such a course. However, we think that we should give our reasons for not following it.
55. To follow such a course would have the result that in the great majority of cases in which a party would wish to rely on the proposed exception, admissibility would be discretionary. The party would not know whether the evidence would be admitted until it was tendered. In the Supreme Court and the District Court this discretion might be exercised on the motion for directions, but a preliminary decision is not available in other courts. In any event, very frequently, the necessity for tendering a statement in a business record might not arise or be recognized until after directions are given or during the progress of the trial. Again, the hearing of many proceedings such as equity and commercial matters is expedited,and generally it is not practical to seek or make preliminary,orders as to the admission of evidence. Finally, it will very often not be satisfactory to the court to be asked to exercise a discretion as to admission of evidence before a proceeding is taking its final shape at the trial. We think that, as far as possible, parties should know where they stand on the question of admissibility before the trial. In our view this object is best achieved by providing that reliable business records be admissible, but that the court have power, in the exercise of a discretion, to exclude such evidence if to admit it would be unfair to another party or if, where there is a jury, it might mislead the jury. A party should nearly always know whether the tender by him of a statement in a business record is likely to be unfair to another party or to mislead a jury.
Criminal Proceedings
56. In our working paper we expressed the view that the considerations we have mentioned in paragraphs 51 and 52 applied with at least equal force to criminal proceedings. In short, we said that as each element of a crime has to be proved beyond reasonable doubt it is highly unlikely that any prosecutor would rely solely on a business record when oral evidence was available because to do so would expose the case for the prosecution to damaging comment and invite an acquittal. No one has suggested to us that this view was wrong.
57. However, on reconsideration, we have come to think that while practical considerations , and the safeguards mentioned in paragraph 35, should ensure that statements in business records are properly used as evidence in civil proceedings, there are aspects of criminal proceedings which indicate that the use of such evidence in these proceedings should be conditional upon the court being satisfied that it is justified. These aspects. are the standard of proof beyond reasonable doubt required, the basically oral nature of proceedings, the absence of interlocutory procedures, the difficulty of granting adjournments in trials with a jury, the fact that some prosecutions are conducted privately and the substantial number of prosecutions in Petty Sessions in which the accused is not represented. For these reasons, we make the recommendation summarized in paragraph 30.
58. We comment on our recommendation in paragraph 30 (4), namely, that a statement in,a business record should be admissible if it appears to the court that undue delay or expense would be caused by requiring the person who supplied the information in the statement to be called as a witness (s.14CD (2) (vi)).
59. The present section 14CB does not make a statement in a business record admissible in a criminal proceeding on such a ground. In recommending that such a statement should be admissible on this ground, we adopt in respect of all business records, whether or not made or kept by the use of a computer, section 55 (7) of the Victorian Evidence Act 1958. This was inserted by the Evidence (Documents) Act 1971. This provision and section 55 (2), to which it refers, are in terms which apply to all business records. But there is no need to rely on it in the case of a statement in a document produced by a computer because under section 55B, such a statement is admissible irrespective of whether the person who supplied the information is called as a witness. Under our recommendation, however, the circumstances in which a statement is admissible do not depend in any respect on whether it is in a document produced by a computer.
60. We think that in criminal proceedings important practical advantages would be secured by providing that a statement in a business record be admissible on this ground. Delay or expense would be undue, within the meaning of this ground, if not justified by a likelihood that the oral testimony of the person who supplied the information in the statement would add something of significance. These advantages are, preventing the hearing being rolonged and issues being obscured by unnecessary oral evidence, and preventing unnecessary expense and inconvenience to the parties and to the business concerned. Such a provision would be of particular value in cases where it is necessary to tender voluminous or complex records, for example, of an accounting nature. 20 It is unlikely that the prosecution would rely on such a provision if to do so would expose it to damaging comment. An accused may well be assisted by such a provision, for instance where an entry in accounting records or in a hospital record first assumes importance to his case during the trial.
CONCLUDING COMMENTS
61. The exception to the rule against hearsay which we recommend is not by any means novel. In substance, our recommendation for civil proceedings is to, the effect of statutory business records exceptions which have been in force in the Federal judicial system of the United States 21 and in a majority of the States 22 for many years. These exceptions also apply to criminal proceedings but, for reasons mentioned in paragraph 57, we recommend some restrictions on admissibility in such proceedings. The United States exceptions have worked well in a country having a common law legal system and an economic organization very close to our own. We have avoided using the language of these exceptions in the proposed new Part IIB. Although each of them is expressed in attractively simple terms, they cannot be understood without reference to a mass of case law, in which many of the decisions are in conflict, and which is not readily available in Australia. The draft Bill expresses, in general, the effect of the American exceptions as interpreted by the consensus of court decisions. We reproduce in Appendix H the business records exception in the Rules of Evidence recently adopted for the Federal judicial system in the United States as the most recent example of such a statutory exception. As we mention in paragraphs 9 and 10 in Appendix F one of these exceptions has been adopted in Tasmania and a variant of it in South Australia for both civil and criminal proceedings. 23
62. We now say something as to what would be the relationship between Part IIB of the Evidence Act, if it were amended along the lines we recommend, and other exceptions to the rule against hearsay evidence. The proposed new Part IIB would provide for the admissibility of a statement in a business record as evidence where the information in question originates from a person engaged in the business. Where the information in such, a statement does not originate from such a person, the statement is admissible only if it comes within some other exception, as for instance, in a civil case, within Part IIA of the Act.
63. Finally, we comment on the length of the proposed new Part IIB. It is longer and more detailed than might be expected for an amendment of this kind. There are two main reasons for this. The first is that although this Report is concerned only with business records, we envisage that some of the provisions of the proposed Part IIB may later be applied to all evidence 24 and others to all hearsay evidence. 25 The second reason is that it is important that the law of evidence anticipate, as far as possible, all questions which may arise in the day to day business of the courts. Some of the provisions of the proposed new Part IIB are intended to prevent questions arising for decision which have arisen under similar legislation. 26
C. L. D. MEARES, Chairman.
T. W. WADDELL, Commissioner.
11th July, 1973.
FOOTNOTES
1 S. 55B, inserted by the Evidence (Documents) Act 1971.
2 Part VII, ss. 39-45.
3 See the examples in Appendix F, para. 6.
3A See 47 A.L.J.I where the working paper is summarized.
4 By s.14CA (1) of the proposed new Part IIB of the Evidence Act.
5 See Cross, p. 16. The quotation taken from Cross is from Stephen: Digest of Evidence, 12th ed. it is unnecessary for present purpose to debate whether the word “relevant” should be given some other meaning. See Seminars on Evidence, ed. H. H. Glass, Q.C., p. 53.
6 See also paras 4-5 of Appendix B.
7 V Wigmore, paras.1420-22.
8 See Appendix E, paras 3 and 4.
9 See Cross, pp.540-1.
10 See Appendix E, paras 3 and 4.
11 S. 14B (4)-see Appendix C.
12 See Appendix C.
13 See Appendix C.
14 See the definition in s. 13CA (1) of the proposed new Part IIB. Hereafter we refer to sections of this Part unless we indicate otherwise.
15 See Appendix B, para. 36.
16 Thus the principle discussed in Potts V. Miller (1940) 64 C.L.R. 282 is unaffected. As to this principle see Appendix E, para. 7.
17 We regard the provision of such an opportunity for cross-examination as important. It is for this reason that we do not follow the provisions in the Victorian and South Australian legislation mentioned in paragraphs 5 and 12 of Appendix F which enable admissibility to be proved by a certificate.
17A See Appendix D, para. 58.
18 See para. 35 (1) and Appendix B, para. 36.
19 Another example is s. 55 of the Victorian Evidence Act 1958.
20 See, for example, R. v. Seifert (1956) 73 W.N. (N.S.W.) 358 where the admissibility of such records under the general law for limited purposes was upheld by the Court of Criminal Appeal. The Court followed Potts v. Miller which is discussed in Appendix E, para. 7. However, the correctness of the former decision was doubted by Owen, J., in Commissioner for Motor Transport v. Collier Moat Limited (1960) 60 S.R. (N.S.W.) 238 at 243. For a further example of such records see R. v. H. G. Palmer (1969) 90 W.N. (Pt 1) (N.S.W.) 188.
21 Federal Business Records Act of 1936. See 28 United States Code Annotated, para. 1732.
22 Principally the Uniform Business Records as Evidence Act promulgated in 1936 by the Commissioners on Uniform State Law and since adopted by thirty or more States. See 9A Uniform Laws Annotated, p. 504.
23 Statutory exceptions based on the American exceptions have also been adopted for the Federal judicial system in Canada (Canada Evidence Act, s. 30) and by some of the Provinces (e.g., Ontario Evidence Act, s. 36).
24 E.g., ss. 14CI, 14CL, 14CM, 14CN.
25 E.g., ss. 14CH, 14CO.
26 E.g., ss. 14CA (2), 14CB (2), 14CB (3) (d).
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