Other matters — the drawing of inferences
The judicial task often requires the drawing of inferences from material before the court. There are two rules of practice and procedural fairness that commonly arise for consideration in litigation. These are:
the rule in Browne v Dunn (1893) 6 R 67
the rule in Jones v Dunkel (1959) 101 CLR 298 at 320.
[4-1900] The rule in Browne v Dunn
Under this rule of practice, if a witness gives evidence that is inconsistent with what the opposing party wants to lead in evidence, the opposing party should raise the contention with that witness during cross-examination. In general terms, the rule prevents a party from putting forward a case without first giving opposing witnesses the opportunity of responding to it.
The rule is essentially one of professional practice based on the notion of procedural fairness. It will be satisfied, however, where the opposing party (and his witnesses) plainly know (eg, through notice having been given) the nature of the opposition case to be met: Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation  1 NSWLR 1 at 16.
The rule in Browne v Dunn has been recently emphasised by the NSW Court of Appeal in State of NSW v Hunt (2014) 86 NSWLR 226. The trial judge, in an action for malicious arrest, assault and battery, and misfeasance in public office, found for the plaintiff. The defendant was vicariously liable for the conduct of its employee, a police officer. The officer, according to the trial judge, had completely fabricated his evidence in a number of material particulars. However, this had not been put to the officer when he gave his evidence. The Court of Appeal emphasised, at , that two conditions needed to be satisfied before such a finding could be made: first, reasons must be given for concluding that the truth has not been told; secondly, the witness (or party) must have been given an opportunity to answer the criticism. See also Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361 at .
The Court of Appeal’s decision in SAMM Property Holdings Pty Ltd v Shaye Properties Pty Ltd  NSWCA 132 is a timely reminder that the parties to litigation cannot by agreement (even though the court may have acquiesced) authorise a course which denies elementary procedural fairness to a witness.
The precise issue in the proceedings concerned the events at a property auction. The dispute related to whether the purchase price included GST. The “decisive evidence” according to the primary judge was the evidence of the auctioneer. Counsel for the unsuccessful appellant failed to cross-examine the auctioneer, relying on an agreement between the parties that rendered it unnecessary for this course to be taken. The Court of Appeal were by no means satisfied as to the content of this asserted agreement. However, it was satisfied that there had been an obligation placed on counsel to put to the witness “the nature of the case upon which it was proposed to rely”. The court emphasised that the rule in Browne v Dunn was not only concerned with procedural fairness. In addition, it facilitated the court’s ability to assess reliability and credibility of the witness.
In Oneflare Pty Ltd v Chernih  NSWCA 195 the primary judge had rejected the truthfulness of the evidence given by the appellant’s directors, and held for the respondent. The appellants argued that they had been denied procedural fairness. The Court of Appeal rejected this submission, emphasising that the crux of the rule in Browne v Dunn is that the witness must have been given “full notice beforehand that it is intended to impeach the credibility of the story he is telling”. In the instant case, the affidavit evidence exchanged before the hearing, the parties’ opening statements and the cross-examination of each of the directors made plain that the truthfulness of their evidence was under challenge.
In Lardis v Lakis  NSWCA 113 the central issue was whether a transfer of property was a voidable alienation of property with intent to defraud creditors. The primary judge held it was, thus rejecting the evidence of the appellant’s solicitor as to the date when instructions had been received to effect the transfer. The primary judge said: “taking the most generous view of [the solicitor’s] evidence, I am satisfied he was mistaken about the times when he said … he received instructions”. Counsel for the respondent had cross-examined the solicitor at trial but had not specifically suggested his evidence was a fabrication. Rather it was suggested that he had been mistaken on the timing issue. This led to a submission on appeal that the primary judge had erred by making an adverse credibility finding absent cross-examination directed to the credibility of witnesses evidence. Meagher JA (with whom Macfarlan JA agreed) held that the rule in Browne v Dunn had not been infringed. Without trespassing into the realm of credibility, there was ample evidence justifying the primary judge’s rejection of the solicitor’s evidence. White JA agreed that there was ample evidence to justify finding that the solicitor was mistaken. He thought, however, that “further findings that cast doubt on the [solicitor’s] veracity … were not open … having regard to the limited scope of cross-examination”. This conclusion did not affect the fate of the appeal.
The Evidence Act s 46 overlaps with the rule. It permits a witness to be recalled where there has been a failure to cross-examine on a contested matter: see, MWJ v The Queen (2005) 222 ALR 436.
[4-1910] The rule in Jones v Dunkel
This rule operates where there is an unexplained failure by a party to give evidence, to call witneses or to tender documents or other evidence. In appropriate circumstances, this may lead to an inference that the uncalled evidence would not have assisted the party. However, the rule is complex and unless the appropriate circumstances are present, the court will not be bound to draw the adverse inference. Moreover, where the inference is drawn, the rule cannot be used to fill gaps in the evidence or to connect conjecture into suspicion. See J D Heydon AC, Cross on Evidence, 10th edn, 2014, LexisNexis, Sydney at .
The rule has application to criminal proceedings but is very restricted in operation.
In Mamo v Surace (2014) 86 NSWLR 275, the NSW Court of Appeal considered once again the scope of duty of care imposed on the driver of a motor vehicle. In the instant case, the passenger in a car was injured when the vehicle collided with a cow owned by the defendant. The animal had wandered onto the road at night. The defendant was not called at the hearing, raising the argument on appeal that a Jones v Dunkel inference should have been raised, namely that his evidence would not have assisted his case. The Court of Appeal firmly rejected this argument. The defendant’s statement had been in evidence and was substantially consistent with the plaintiff’s evidence. There was, in fact, no other evidence that called for an answer on the defendant’s part. There had been sufficient evidence at trial to enable the court below to determine the primary issue. The appeal was dismissed.
By contrast, a decision where the Jones v Dunkel inference assumed significance is the Court of Appeal decision in RHG Mortgage Ltd v Ianni  NSWCA 56. At trial, the Iannis’s essential case had been that they were misled by their son Joseph when they entered into a loan agreement and mortgage with the appellant. Their case was that he had told them their liability would not exceed $100,000. The advance, which was not for their benefit, was for an amount in the excess of $900,000. The critical point in the appeal was that neither party had called Joseph Ianni to give evidence. The trial judge regarded this as essentially neutral in the circumstances and failed to draw an adverse inference.
The court reiterated that the circumstances for drawing a Jones v Dunkel inference are found where an uncalled witness is a person presumably able to put the true complexion on the facts relied on by a party as the ground for any inference favourable to that party. The three conditions to be applied are: first, whether the uncalled witness would be expected to be called by one party rather than the other; secondly, whether his or her evidence would elucidate the matter; thirdly, whether his or her absence is unexplained.
The court held that, even though the respondent’s case was that the Iannis had been misled by Joseph, the better view was that Joseph was the obvious witness who could have corroborated their evidence. He was a person who could reasonably be expected they would call. There was no satisfactory evidence as to his absence as a witness. A retrial was ordered.
In Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389, the NSW Court of Appeal extended by analogy the Jones v Dunkel rule to the situation where a party fails to ask questions of a witness in chief. In particular, Handley JA suggested that a court should not draw inferences favourable to a party where questions were not asked in chief.
In Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361, the High Court gave a limited degree of approval to Handley JA’s proposition. See also Nominal Defendant v Rooskov  NSWCA 43 which emphasised that the rule does not require that an inference be drawn. It is simply available where the appropriate circumstances exist.
Evidence Act s 46
J D Heydon AC, Cross on Evidence, 10th edn, 2014, LexisNexis, Sydney