Bar Association of Queensland Conference
3 – 5 march 2006

Some Aspects of Tendency and Propensity Evidence 
	in a Federal Setting	

1.	The English language is remarkable in many respects and, in part, because it contains a number of aphorisms deeply rooted in long‑standing human experience.  There really is no point, in terms of the prudential discharge of duties and especially duties of care, of “closing the stable door after the horse has bolted” and if, in a given set of circumstances, a person has revealed facets of their character, conduct or an attitude of mind, another person conscious of that experience might well proceed, in similar circumstances in their dealings with such a person, on the footing “once bitten, twice shy” notwithstanding the inherently prejudicial nature such an approach visits upon the individual; or, as Pope Gregory VII (Hildebrand) said of the Venetian Doge, “I have seen the colour of his true face and now I see it all the time”.  

2.	The question for us is how has the exercise of legislative power at the Federal level and the exercise of judicial power dealt with reliance upon and the value to be ascribed to evidence of an individual’s tendency or propensity to act in a particular way or to hold a certain state of mind.  

3.	Logically, that analysis begins by recognising that s.56 of the Commonwealth Evidence Act 1995 provides that, except as otherwise provided by the Act, evidence that is relevant is admissible and evidence that is not relevant is inadmissible.  

4.	Relevant evidence in a proceeding is evidence that, if it were accepted, could rationally affect (directly or indirectly - by reason of inferences which might be drawn from secondary facts) the assessment of the probability of the existence of a fact in issue:  s.55, Evidence Act; a notion that “can fairly be equated with the common law concept”:  Papakosmas v The Queen (1999) 196 CLR 297, per Gaudron and Kirby JJ at page 312, para. [47]; although, as Sackville J observed (with whom Whitlam and Mansfield JJ agreed) in Jacara Pty Ltd & Ors v Perpetual Trustees WA Ltd (2000) 180 ALR 569 at para. [47], the Australian Law Reform Commission (ALRC) in its Interim Evidence Report, No. 26, noted the “minimal logical connection between the evidence and the fact in issue” required by s.55.  

5.	Although a trite observation, it is nevertheless important to remember that evidence relevant to a matter in question is not rendered admissible by the exercise of a discretion.  A party is entitled to place before the Tribunal of fact as part of its case on the controversy, evidence relevant to a question in issue unless otherwise excluded.  

6.	Section 97 of the Evidence Act addresses the admissibility of evidence relevant to an issue in the proceeding but tendered in order to prove a person had a tendency to act in a particular way or to have a particular state of mind thereby making it more likely than not that such a person did something or acted for a reason or purpose concerning the immediately material issue raised on the pleadings.  

7.	However, it is not enough that such evidence is relevant.  

8.	Section 97 is in these terms:

“97.	The Tendency Rule

(1)	Evidence of the character, reputation or conduct of a person, or a tendency that a person has or had, is not admissible to prove that a person has or had a tendency (whether because of the person’s character or otherwise) to act in a particular way, or to have a particular state of mind, if:

	(a)	the party adducing the evidence has not given reasonable notice in writing to each other party of the party’s intention to adduce the evidence; or

(b)	the Court thinks that the evidence would not, either by itself or having regard to other evidence adduced or to be adduced by the party seeking to adduce the evidence, have significant probative value.”

9.	Section 97 does require the Court to form a particular view not just of the relevance of the evidence but also the extent of the probative value of the evidence.  

10.	The inquiry as to admissibility is focused upon the following approach.  First, define precisely the issue raised on the pleadings.  Secondly, assess the tendency evidence to determine whether the evidence is relevant to the issue thus defined and determine whether the integers present in the tendency evidence reveals something about the integers to be determined in the question in issue in the proceeding.  The degree of correspondence between the features present in the tendency evidence and those features of the matter in issue raised on the pleading will determine, largely, the final question of whether the court forms a view that the tendency evidence sought to be adduced would not have “significant probative value” in the assessment of the probability of the existence of the fact in issue.  

11.	If the evidence establishes a tendency towards something, what exactly is the content of that tendency and does that tendency have any correspondence with the fact in issue.  For example, in seeking to adduce evidence that a person has made misleading representations to lessees inducing them to take up a lease in a shopping centre development, as evidence probative of particular misleading representations pleaded by an applicant, it is not sufficient that the evidence demonstrates a propensity towards mere misleading statements but rather statements demonstrating real correspondence with the content of the statements pleaded:  see Jacara v Perpetual Trustees (supra).  

12.	In examining the essential character of evidence of a person’s tendency to engage in certain conduct or adopt a certain state of mind, there is no sound distinction between characterising evidence as “tendency evidence” which must satisfy the test of admissibility within the formulation of s.97 on the one hand and as “circumstantial evidence” directly probative of a fact that need not satisfy s.97, on the other.  Evidence of previous conduct or a previous state of mind is itself circumstantial and once tendered as probative evidence that a person had a tendency to think or act in a particular way so as to enable conclusions to be drawn on the balance of probabilities that such a person thought or acted that way on the immediately material occasions, s.97 will apply to that evidence.  Jacara v Perpetual Trustees at paras. [56] and [57]; Hock v The Queen (1988) 165 CLR 292; D F Lyons Pty Ltd v Commonwealth Bank 100 ALR 468 at 474.  

13.	In applying s.97, the evidence of tendency or propensity is to be excluded if the Court thinks the evidence would not have significant probative value either of itself or by reason of an assessment of the evidence having regard to other evidence.  The weight and therefore the probative value that might be attributed to the tendency evidence might well be influenced by other evidence.  The “probative value” of evidence means the extent to which the evidence could rationally affect the assessment of the probability of the existence of a fact in issue; Dictionary, Part 1, Evidence Act, which reflects the relevance test of s.55.  To be admissible under s.97, the extent of the probative value must be significant.  

14.	Because s.97 rests admissibility on whether the evidence could rationally affect the assessment of the probability of the existence of the relevant fact to a significant extent, an applied understanding needs to be reached as to the notion of “significant”.  In Zaknic Pty Ltd v Svelte Corp Pty Ltd (1995) 61 FCR 191 at 175 – 176, Lehane J observed that the evidence must be capable of rationally affecting the assessment of the probability “to a significant extent; that is, more is required than mere statutory relevance” which probably means “clearly and strongly probative” of the fact in issue but, as Lindgren J observed in Australian Competition and Consumer Commission v CC (NSW) Pty Ltd 165 ALR 468 at para. [91], “something less than substantial probative value”.  See also the discussion of the authorities by his Honour at paras. [92] to [95] in ACCC v CC.  

15.	Accordingly, it is necessary to try and plot a point on the continuum from relevance (or statutory relevance to use the term adopted by Lehane J), something more than statutory relevance to something less than substantial probative value.  

16.	In Australian Securities and Investments Commission v Vines [2003] NSWSC 1237, a proposition was put to Austin J concerning the notion of what “significant” and “substantial” might mean based upon analogous references to considerations in decisions of the Federal Court of the concept of a “substantial lessening of competition” for the purposes of the Trade Practices Act 1974.  The effect of the submission, rejected by his Honour, was that since a substantial lessening of competition is understood consistent with the authorities to involve an effect which is “more than trivial”, the threshold for determining whether something (in this case tendency evidence) might have a significant affect, is necessarily quite low.  Leaving aside the distinction between conduct which has an effect upon an event or state of affairs (for example, competition in a market) and the statutory test that tendency evidence must have a significant probative affect upon the question in issue, almost any effect upon the processes of competition (processes of rivalry) in a market (rather than the transactional competition of a particular competitor) is likely to be substantial.  Explanations of the terms substantial or significant in the context of particular legislation does not necessarily translate in any meaningful way to other legislative instruments.  

17.	The question is what degree of cogency must be established before the Court forms the view that absent that degree of cogency, the evidence would not have significant probative value.  

18.	In making that assessment, the application of the test has been influenced by the thinking and jurisprudence reflected in a number of the significant decisions of the High Court in criminal proceedings.  In particular, the formulation adopted by the High Court in Hock v The Queen (supra) and Pfennig v The Queen (1995) 182 CLR 461 have been influential although, in the civil context, not decisive of the question of whether particular evidence of tendency has “significant probative value”.  In Hock v The Queen (supra), Mason CJ, Wilson and Gaudron JJ recognised at pages 294 and 295 that the criterion of admissibility is the strength of the probative force of the evidence and “that strength lies in the fact that the evidence reveals ‘striking similarities’, ‘unusual features’, ‘underlying unity’, ‘system’ or ‘pattern’ such that it raises, as a matter of common sense and experience, the objective improbability of some event having occurred other than as alleged by the prosecution”; although these features are not essential conditions of admissibility in every case:  Pfennig v The Queen (supra).  

19.	See also Markby v The Queen (1978) 140 CLR 108, Gibbs ACJ at pages 116-117 (Stephen, Jacobs and Aickin JJ agreeing):

“The first principle, which is fundamental, is that the evidence of similar facts is not admissible if it shows only that the accused had a propensity or disposition to commit crime, or crime of a particular kind, or that he was the sort of person likely to commit the crime charged.  The second principle, which is a corollary of the first, is that the evidence is admissible if it is relevant in some other way, that is, if it tends to show that he is guilty of the crime charged for some reason other than that he has committed crimes in the past or has a criminal disposition.” 

Such evidence must have “a strong degree of probative force”, Lord Wilberforce, Director of Public Prosecutions v Boardman (1975) AC 421 at 444; or capable of admission only if “so very relevant that to exclude it would be an affront to common sense”, Lord Cross, Director of Public Prosecutions v Boardman at 456.  Assistance in determining that question is gained by determining whether there is a “striking similarity” between the similar facts and the facts in issue:  Director of Public Prosecutions v Boardman at 439, 452 and 462.  In Perry v The Queen (1982) 150 CLR 580 and Sutton v The Queen (1984) 152 CLR 528, Gibbs CJ and Brennan J in those respective cases observed that the foundation for the exclusion of propensity evidence is not so much an assessment of relevance as caution about whether the evidence “is likely to be unfairly prejudicial to the accused” and “the inherent tendency of the evidence of other offences unfairly to prejudice an accused person”.  

20.	In the context of assessments as to whether evidence of particular tendency towards certain conduct, disposition or attitude of mind might safely go to the jury in a criminal prosecution having regard to the potential for prejudice, the High Court has recognised that the evidence must possess such probative value or cogency that if accepted, it bears no reasonable explanation other than the inculpation of the accused in the offence charged.  

21.	The following observations of their Honours, Mason CJ, Deane and Dawson JJ in Pfennig v The Queen (supra) at pages 482 and 483 as a statement of the common law principles guiding the reception of tendency evidence in a criminal trial also provide guidance, for the purposes of civil proceedings, in assessing the degree of correspondence between the features present in the tendency evidence and those features of the facts in issue raised on the pleading sought to be established by adducing the tendency evidence:

“Because propensity evidence is a special class of circumstantial evidence, its probative force is to be gauged in the light of its character as such.  But because it has a prejudicial capacity of a high order, the trial judge must apply the same test as a jury must apply in dealing with circumstantial evidence and ask whether there is a rational view of the evidence that is consistent with the innocence of the accused.  Here, ’rational’ must be taken to mean ‘reasonable’ and the trial judge must ask himself or herself the question in the context of the prosecution case; that is to say, he or she must regard the evidence as a step in the proof of that case.

Only if there is no such view can one safely conclude that the probative force of the evidence outweighs its prejudicial effect.

There has been a tendency to treat evidence of similar facts, past criminal conduct and propensity as if they each raise the same considerations in terms of admission into evidence.  The difficulty is that their probative value varies not only as between themselves but also in relation to the circumstances of the particular cases.  

Thus, evidence of mere propensity, like evidence of a general criminal disposition having no identifiable hallmark, lacks cogency yet is prejudicial.  On the other hand, evidence of a particular distinctive propensity demonstrated by acts constituting particular manifestations or exemplifications of it will have greater cogency so long as it has some specific connection with or in relation to the issues for decision in the subject case.  

That evidence, will be admissible only if its probative value exceeds its prejudicial effect.  But that statement, it seems to us, is of little assistance unless it is understood that the evidence sought to be admitted is circumstantial and as such raises the objective improbability of some event having occurred other than that asserted by the prosecution; in other words, that there is no reasonable view of the evidence consistent with the innocence of the accused.

… [T]he purpose of the propensity evidence is to establish a step in the proof of the prosecution case.  Accordingly, the admissibility of the evidence depends upon the improbability of its having some innocent explanation in the sense discussed.

Acceptance of the statement of principles stated above means that striking similarity, underlying unity and other like descriptions of similar facts are not essential to the admission of such evidence though usually the evidence will lack the requisite probative force if the evidence does not possess such characteristics.”

22.	In reaching this formulation, their Honours were concerned to put the principles “on a clear and coherent theoretical foundation” at page 481, and recognise that in criminal trials “the basis for admission of similar fact evidence lies in its possessing a particular probative value or cogency such that, if accepted, it bears no reasonable explanation other than the inculpation of the accused in the offence charged”:  also at page 481.

23.	In recognising the clear, coherent and theoretical foundation at common law for the admission of propensity evidence in a criminal proceeding, a question arises as to whether that approach is consistent with the requirements adopted by s.101 of the Evidence Act.  Courts of the Australian Capital Territory and the Federal Court have taken the position that this formulation is not to be applied when construing the application of s.101:  W v The Queen (2001) 115 FCR 41 [53], [60].  In New South Wales, the Court of Criminal Appeal has taken a different position but Chief Justice Spigelman in R v Ellis (2003) 58 NSWLR 700 at [70], [74], [83] took the position, for the Court, that the common law test derived from Hock v The Queen and Pfennig v The Queen is not the applicable test for the purposes of s.101.  Section 101 is not simply to be construed consistent with the pre-existing common law.  It is a statutory formulation in its own right and is not consistent with the protective stringency for safe admission reflected in the common law test established by the High Court.  In the recent report of the Australian Law Reform Commission delivered in December 2005, the ALRC has made a recommendation that no change be made to s.101 of the Evidence Act (and its equivalent in New South Wales) on the basis that “the appropriate course to follow is that suggested by the Director of the Criminal Law Review Division of the New South Wales Attorney‑General’s Department that the section be applied in its current form in the light of R v Ellis and be monitored”:  see Chapter 11, ALRC Report 102, December 2005 at 11.93, page 391.  

24.	There is, of course, no substitute for the express language of the provision itself.  Section 97 of the Evidence Act makes it clear that evidence of a tendency that a person has or had to act in a particular way or have a particular state of mind is not admissible if the Court thinks that the evidence would not have significant probative value (either by itself or having regard to the other evidence adduced or to be adduced by the party seeking to adduce the tendency evidence).  In criminal proceedings, s.101 of the Evidence Act contains the further safeguard that tendency evidence or coincidence evidence about a defendant cannot be used against the defendant unless the probative value of the evidence substantially outweighs any prejudicial affect it may have upon the defendant.  The evidence must reflect both significant probative value and its value must “substantially outweigh its prejudicial effect”.  A question then arises as to the proper construction, and the criminal cases of those provisions of the Evidence Act against the background of the statement of principles of common law.  

25.	This notion of unfair prejudice of the accused before the jury has less persuasive application in civil trials as a principled formulation for rendering propensity evidence inadmissible.  In civil trials, the theoretical foundation for the treatment of propensity evidence might well be different.  In Duff v The Queen (1979) 39 FLR 315 at 348, a decision of the Full Federal Court, Brennan, McGregor and Lockhart JJ in a joint judgment identified the principles and made reference to the decision of Street CJ in Kitto v Gilbert identifying the ground of remoteness or want of reasonable connection between the principal and evidentiary facts as the basis for exclusion.  Their Honours said:

“Evidence of similar facts is admissible to prove a fact in issue when the connection between the alleged similar fact and the fact in issue is so close or immediate that in the common experience of mankind the fact in issue is likely to have occurred if the similar fact occurred.  

An allegation of a mere similarity between the way in which a person performs a particular task on one occasion and the way in which he is alleged to have performed it on another does not, at least in the generality of cases, show the kind and degree of connection between the occasions which is essential to the admissible of evidence of the former occasion as a similar fact to prove the way in which the task was performed on the latter occasion.  

In the generality of cases, similar fact evidence is not admissible for the reasons given by Street CJ in Kitto v Gilbert (1926) 26 SR (NSW) 441 at 447-448:  

	‘The rule of law in such cases is stated accurately in Halsbury’s Laws of England, Vol 13, p450, and is that ‘facts similar to, but not part of, the same transaction as the main fact are not, in generally, admissible to prove the occurrence of the main fact’.  The rule, I think, is sometimes rested upon the ground of remoteness or want of reasonable connection between the principal and evidential facts in such cases, sometimes upon the inconvenience that would result if a different rule prevailed, and sometimes upon the tendency that there would be to confuse juries by raising collateral issues; but, on whatever ground it may be rested, it is a well established rule.’ ”

26.	In reliance upon these principles, von Doussa J in Sheldon v Sun Alliance Australia Limited (1988) 50 SASR 236 concluded:  “Whilst the likelihood that a jury might be unduly swayed by propensity evidence to the unfair prejudice of the accused provides a cogent explanation for the principles applied in criminal cases, in my view the ground of remoteness or want of reasonable connection between the principal and the evidential facts justifies the application of the same principles where it is sought to have propensity evidence admitted in a civil trial”.  

27.	In the Full Court in Sheldon v Sun Alliance Australia Limited (1989) 53 SASR 97, Bollen J with Prior J agreeing, concluded that the criterion of admissibility of propensity evidence is the strength of its probative force (reflecting the expressions of opinion in Hock v The Queen and Markby v The Queen) and the requisite strength is that the evidence raises as a matter of common sense and experience the objective improbability of the event having occurred other than as alleged by the party tendering the evidence.  Further, in civil cases for the purposes of the common law, evidence of propensity or “similar facts” is admissible if that evidence is “logically probative”, that is, if the evidence is logically relevant in determining the matter which is in issue.  See Bollen J at page 145, “[Propensity evidence] is circumstantial evidence.  It should be admitted where it is logically probative of a fact in issue.  The safeguards required in criminal proceedings are not required in civil proceedings.”  Bollen J further observed that the scrutiny with which the evidence must be tested, however, is precise.  At page 144, his Honour observed:

“I do not think that evidence can be admitted simply of past behaviour which is said to show that a person was more likely than not to have perpetrated an act in issue.  It is the whole concatenation of events making up the past acts on the one hand and the concatenation of events making up the act in issue which count.  Not just behaviour simplicita.”

28.	Sheldon’s case is a useful illustration of the principles reflected in the common law approach.  In that case, Mr and Mrs Sheldon and their children particularly their son, Philip, migrated to South Australia and in 1980 purchased a house.  Before the settlement of the property purchased by Mrs Sheldon, when it was vacant, a fire occurred and restoration of the house was necessary.  Mr Sheldon had secured a cover note on the property to protect the beneficial interest of his wife as purchaser, issued by the defendant.  In 1985, a further fire occurred causing substantial damage and a claim was made by Mrs Sheldon for indemnity under a policy issued by the defendant.  The insurer refused indemnity on the ground of material non-disclosure of prior fire events and on the further ground that Mr and Mrs Sheldon and their son Philip had engaged in a conspiracy to set the fire and make a claim upon the insurer.  The insurer sought to adduce evidence of previous fires and, in particular, five fires which occurred at a property at 72 Honour Oak Road, London whilst owned by Mr Sheldon.  Four of those fires occurred within a few months after the property was acquired in 1962 and the fifth fire occurred in November 1972 when the house and contents received extensive damage.  Shortly afterwards, the property was sold by Mr Sheldon.  Moreover, Mr Sheldon in partnership with his brother, operated a business in factory premises in Bermondsey, England and those premises were significantly damaged by fire in 1963.  The evidence also suggested a further fire in Dublin in 1962 in factory premises owned by Mr Sheldon and his brother.  All of these events were said by the insurer to be probative of the matter in issue, namely, whether indemnity was properly declined by reason of a conspiracy to destroy the property in Adelaide by fire and fraudulently claim indemnity.  The specific question was whether the evidence established a propensity on the part of Mrs Sheldon as a party to a conspiracy rather than conduct on the part of Mr Sheldon.  His Honour admitted evidence of the circumstances of the 1972 fire because the concatenation of facts making up the events surrounding the 1972 fire corresponded closely with the facts in issue in the proceeding.  By way of illustration, the similarities were these:

•	The house had been vacated by the family.  The pets had been removed.  On the occasion of the 1972 fire, family members had been moved out of the house as they had in 1985.
•	The fire was deliberately lit.  
•	A large conflagration had been set, in 1972 liberal quantities of accelerant had been spread widely around the kitchen and the lounge room.  In 1985, four fires had been set (although only three ignited).
•	In each fire, accelerants, apparently on hand in the house, were used – white spirit in 1972 and the contents of dektex tins and the mineral turpentine in 1985.
•	The contents of the house were disturbed; cupboards and wardrobes were opened, drawers were tipped out and possessions disturbed.  This gave the appearance of ransacking and suggested a thief, although the purpose may have been to assist the ignition and widespread damage.
•	The house was supposedly locked yet there were no signs of forced entry.
•	The absence of forced entry strongly suggested the person who lit the fire had a key to the house.  
•	Mr and Mrs Sheldon were staying away from the house at the time of each fire.  Philip Sheldon was the first person to arrive at the scene after the fire in each case.  
•	Similar explanations were given after the event by Philip Sheldon for each of the fires. 
•	No items of value were stolen.
•	No culprit was found.
•	Insurance was claimed in both cases.
•	On each occasion attempts were made to disguise the potential gain from the proceeds of insurance.  

29.	Accordingly, the correspondence between the features evident in the similar fact evidence and those features in issue in the proceeding was so significant that there was, in the view of von Doussa J, reasonable connection between the principal and evidential facts to justify admission of the evidence and in the view of the Full Court, the similar fact evidence was logically relevant in determining the matter in issue.  Having admitted the evidence of the 1972 fire, the trial judge accepted that evidence of the 1980 fire ought properly be admitted on the ground that it too, having regard to the 1972 facts, was reasonably connected with the 1985 events.  His Honour refused admission of the fire in 1963.  For the Full Court’s part, it would have admitted the evidence of the 1963 fire as well because those facts logically increased the probability of the fact in issue occurring.  

30.	In the civil context, there is also a relationship between the significance of the probative value of the evidence and its prejudicial affect when the cogency of the evidence is assessed.  The ultimate statutory test is whether the prohibition arises because the Court has formed the view that the evidence would not have significant probative value.  Although, clearly enough, in civil cases, it is not necessary for the party seeking to adduce the evidence to establish the stringency for safe admission reflected in Hock v The Queen and Pfennig v The Queen, nevertheless, the trial judge must be satisfied that the evidence is clearly a step in the proof of the party’s case, that the evidence is not evidence of mere propensity to conduct or thought but is evidence of a particular distinctive propensity demonstrated by acts, conduct or a state of mind having some specific connection with the issues for decision in the case and that the significant probative value (affect) of the evidence is not substantially outweighed by the danger that the evidence might be unfairly prejudicial to a party.  

31.	In that regard, s.135 of the Evidence Act is in these terms:

“135	General discretion to exclude evidence

	The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might:

(a)	be unfairly prejudicial to a party; or

(b)	be misleading or confusing; or

(c)	cause or result in undue waste of time.”

32.	Although the particular relevance of authorities is to demonstrate the principles, grounded upon a proper assessment of the ratio of each case, to be applied in any given case, there is some utility, in this area, in making reference to some authorities both as to principle and as illustrations of the application of the principles.  In Zaknic v Svelte, the applicant claimed compensation against a respondent for losses arising out of the repudiation by that party of a lease.  The lessee’s obligations were the subject of a guarantee by the fourth respondent.  That respondent denied that he ever knowingly signed a document guaranteeing the payment of rent and outgoings under a lease and denied any liability said to arise under the document.  The guarantee was in evidence and signed on the final page.  Each preceding page was initialled and a signature appeared on the second last page purporting to be that of the fourth respondent (alleged guarantor).  The denials of the fourth respondent were supported by evidence given by a handwriting expert.  The document was said to be a forgery.  To support the assessment of the probability of the document being a forgery, the fourth respondent sought to adduce evidence to show that persons in whose interests it was to propound the supposed guarantee had engaged in various disreputable acts including backdating of documents and transactions, the production for fraudulent purposes of false documents and the placing on documents of unauthorised and false signatures.  

33.	The evidence comprised an affidavit by a deponent who swore to the forgery by one of the relevant persons of a signature on a loan application document and to words spoken to the deponent by that person which amounted to an admission of the forgery.  The affidavit deposed to a conversation with another person associated with propounding the guarantee of uttering a forged loan application and a conversation amounting to an admission of that allegation.  The affidavit also deposed to the deponent seeing one of the relevant individuals forge the signature of that person’s wife on a finance application.  There was also an affidavit by the wife of one of the relevant individuals with an interest in propounding the guarantee in which she deposed to the practice of her husband applying signatures to documents with no regard to the accuracy or content of the documents.  That affidavit exhibited a transcript of proceedings before the Family Court.  

34.	Further, there was an affidavit exhibiting a copy of a transcript of a recording made by the National Crime Authority of a conversation between three people two of whom were the individuals the subject of the earlier affidavits in which those individuals made admissions as to their participation in a plan to backdate certain documents and transactions and falsify documents.  

35.	In relation to that evidence, his Honour had to decide whether the evidence could rationally affect an assessment of the probability of forgery of the guarantee.  The evidence of the transcript of the Family Court proceedings did not have sufficient correspondence with the question of whether the particular individuals had demonstrated a propensity to falsely apply a person’s name to documents but the evidence of statements contained in the National Crime Authority transcript and the evidence contained in the affidavits demonstrating conduct on the part of the two relevant individuals was relevant “in the statutory sense”.  

36.	His Honour, Lehane J, thought it was important that there was evidence in the form of a report from a handwriting expert in the proceeding going to the allegation of forgery.  In other words, the fourth respondent was not seeking to establish the allegation of forgery simply upon the basis of evidence of a tendency on the part of those with an interest in propounding the guarantee, to engage in conduct of a kind or character which spoke to the allegation of forgery on the pleading.  His Honour thought the need to establish evidence of the contention before receiving tendency evidence, arose out of the decision in Pfennig v The Queen.  In that case, the question was not whether evidence of a tendency on the part of Pfennig to engage in particular conduct might be admitted on the question of whether Pfennig had taken the life of the young boy but whether the evidence might be admitted on the ground that it bore no reasonable explanation other than the abduction by Pfennig of the young boy.  Once the evidence was admitted on that question on the ground that it bore no reasonable explanation other than the inculpation of the accused in that conduct, the jury would undoubtedly conclude that having abducted the boy, Pfennig took the life of the boy.  

37.	In the civil context, the question remains whether there is a sufficient correspondence between the issue properly identified in the pleading to be determined and the distinctive features of propensity demonstrated by the acts, conduct or state of mind having the specific connection with the issue properly defined.  It seems to me that the point of the Pfennig illustration in the judgment of Lehane J is to demonstrate that there must be a specific correspondence between the issue of fact to be determined and the content of the propensity evidence.  In the result, Lehane J took the view that although some of the evidence was found to be relevant to the issue on the pleading, the evidence was not clearly and strongly probative of the relevant fact.  

38.	In other words, by itself the tendency evidence was not of significant probative value and having regard to the other evidence said to be probative of forgery, that evidence did not go far enough to lend sufficient weight to the tendency evidence so as to enable the judge to conclude that the tendency evidence together with the foundation evidence was clearly and strongly probative of forgery of the guarantee and therefore of significant probative value.  His Honour described the failure to pass the threshold in terms that the tendency evidence “did not fill the gaps” resulting from the foundation evidence.  Lehane J also concluded that had he found that the relevant evidence also had significant probative value, he would nevertheless had excluded the evidence in reliance upon s.135 of the Evidence Act on the ground that its probative value was substantially outweighed by the danger that the evidence might be unfairly prejudicial.  

39.	There are a number of formulations of the statutory test including that adopted by Lehane J, the notion of “a strong degree of probative force … a real nexus, judged according to experience and common sense between the evidence and the fact in issue”:  Boyce v Cafred Pty Ltd (1984) 4 FCR 367 at 370, and descriptions such as the evidence must be “of consequence”, “important” and have “a real degree of probative force”.  Ultimately, the degree of cogency must be contextual having regard first to the nature and circumstances of the case being advanced by the party seeking to adduce the evidence and secondly, the degree of correspondence between the issues for decision in the case and the “distinctive propensity” (Pfennig v The Queen) demonstrated by acts, conduct or a state of mind, in the evidence, balanced against the statutory test of whether the probative value of the evidence is substantially outweighed by the danger of unfair prejudice or that the evidence might be misleading or confusing.  It seems to me that the notion of evidence being misleading or confusing means misleading or confusing as to the assessment of the probability of the existence of the fact in issue.  

40.	Because propensity evidence is a “special class of circumstantial evidence” (Pfennig v The Queen), the following remarks of Sir Owen Dixon in Martin v Osborne (1936) 55 CLR 367 at 375 concerning the admissibility of circumstantial evidence continue to be of significant guidance and influence:

“If an issue is to be proved by circumstantial evidence, facts subsidiary to or connected with the main fact must be established from which the conclusion follows as a rational inference.

In the inculpation of an accused person the evidentiary circumstances must bear no other reasonable explanation.  

This means that, according to the common course of human affairs, the degree of probability that the occurrence of the facts proved would be accompanied by the occurrence of the fact to be proved is so high that the contrary cannot reasonably be supposed.  The circumstances which may be taken into account in this process of reasoning include all facts and matters which form constituent parts or ingredients of the transaction itself or explain or make intelligible the course of conduct pursued.  

The moral tendencies of persons, their proneness or proneness’s to acts or omissions of a particular description, their reputations and their associations are in general not matters which it is lawful to take into account, and evidence disclosing them, if not otherwise relevant, is rigidly excluded.  

But the class of acts and occurrences that may be considered includes circumstances whose relation to the fact in issue consists in the probability or increased probability, judged rationally upon common experience, that they would not be found unless the fact to be proved also existed.  

But it is at least true, I think, that the acts of a party are admissible against him whenever they form a component in a combination of circumstances which is unlikely to occur without the fact in issue also occurring.  The repetition of acts or occurrences is often the very thing which makes it probable that they are accompanied by some further fact.  The frequency with which a set of circumstances recurs or the regularity with which a course of conduct is pursued may exclude, as unreasonable, any other explanation or hypothesis than the truth of the fact to be proved.”

41.	In reliance upon these principles, Ellicott J in Gates v City Mutual Life Assurance Society Ltd (1982) 43 ALR 313 admitted evidence of representations made to persons concerning the scope of disability cover as probative of alleged misleading representations made by the respondent’s agent to the applicant, on the basis that the evidence increased the probability of whether the representations in issue in the controversy were made.  Similarly, in Mr Figgins Pty Ltd v Centrepoint Freeholds Pty Ltd (1981) 36 ALR 23, Northop J admitted evidence of representations made to eight tenants in the particular shopping centre development as probative of the alleged misleading representations made to the applicant on the ground that there was a probability or increased probability, judged rationally upon common experience that similar representations had been made to the applicant.  Reliance was placed upon Martin v Osborne.  

42.	Both these decisions reflect a common law approach to the admissibility of the evidence which do not rely upon s.97 of the Evidence Act.  The requirement remains that the evidence is inadmissible if the Court concludes that the evidence would not have significant probative value.  It seems to me that it would be difficult for a Court to conclude that the evidence would not have significant probative value if there existed real correspondence between the concatenation of features in the tendency evidence and the concatenation of features in the facts in issue.  Moreover, if the evidence increased the probability judged rationally upon common experience that the facts in the evidence tendered would not be found unless the fact to be proved also existed, a sufficient correspondence would exist between the primary fact and the evidential fact to warrant admission.  The degree of cogency of the evidence ought to be tested against the background of whether the trial judge is satisfied that the evidence is clearly a step in the proof of the party’s case, the evidence is not evidence of mere propensity to conduct or thought but is evidence of a particular distinctive propensity demonstrated by acts, conduct or a state of mind having some specific connection with the issues for decision in the case.  The trial judge must then determine whether the significant probative affect of the evidence is substantially outweighed by the danger that the evidence might be unfairly prejudicial to a party.  

43.	In the class of case where what is sought to be established is a reason or purpose on the part of a party in engaging in particular conduct, it should be remembered that such a reason or purpose lies entirely within the mind of the relevant decision-maker.  The state of mind of that person can only be established or proven (absent documents decisive the question emerging on disclosure and absent the operation of any statutory presumption) as a conclusion based upon inferences drawn from evidence (secondary facts) of conduct or expressions of attitude concerning matters relevant to the ultimate facts.  Such inferences might be drawn out of many examples of conduct or expressions of attitude and in that sense be collectively of significant probative value so as to make the Court reluctant to affirmatively conclude that the tendency evidence “would not have significant probative value” for the purposes of s.97 of the Evidence Act.  

44.	In Jacara v Perpetual Trustees, Sackville J, on behalf of the Full Court of the Federal Court, made these observations:

“I doubt that it is useful to attempt any more precise reformulation of the terms of section 97(1) of the Evidence Act.  The statutory language provides the standard that is to be applied and judicial statements as to the construction of the legislation cannot supplant that language:  Ogden Industries Pty Ltd v Lucas [1970] AC 113 at 127; (1968) 118 CLR 32 (PC), quoted in Brennan v Comcare (1994) 50 FCR 555.  Moreover, the statutory language incorporates a test which, although it will normally be applied before facts have been found, involves ‘a degree and value judgment’ having regard both to the evidence to be adduced and other evidence adduced or to be adduced s.97(1)(b); Fleming v Hutchinson (1991) 66 ALJR 211”:  at para. [74].

45.	At para. [76], Sackville J made these further observations:

“The probative value of the evidence as tendency evidence must depend upon the circumstances of the case.  The factors to take into account will usually include the cogency of the evidence relating to the conduct of the relevant person, the strength of the inference that can be drawn from that evidence as to tendency … and the extent to which that tendency increases the likelihood that the fact in issue occurred.”

46.	In making an assessment of whether the evidence reveals facts similar to the fact in issue (thus making the evidence relevant), Gummow J has drawn attention to the importance of identifying the materiality of the similar features as commonality of features may not necessarily reveal a feature relevant to the question immediately in controversy:  D F Lyons Pty Ltd v Commonwealth Bank (1991) 28 FCR 597.  

47.	Section 98 of the Evidence Act is in these terms:

“98	The coincidence rule

	(1)	Evidence that two or more related events occurred is not admissible to prove that, because of the improbability of the events occurring coincidentally, a person did a particular act or had a particular state of mind if:

(a)	the party adducing the evidence has not given reasonable notice in writing to each other party of the party’s intention to adduce the evidence; or

(b)	the court thinks that the evidence would not, either by itself or having regard to other evidence adduced or to be adduced by the party seeking to adduce the evidence, have significant probative value.

(2)	For the purposes of subsection (1), 2 or more events are taken to be related events if and only if:

(a)	they are substantially and relevant similar; and

(b)	the circumstances in which they occurred are substantially similar.

(3)	Paragraph 1(a) does not apply if:

(a)	the evidence is adduced in accordance with any directions made by the court under section 100; or

(b)	the evidence is adduced to explain or contradict coincidence evidence adduced by another party.”

48.	There are a number of immediate difficulties with s.98.  Unlike s.97, the ALRC in report 102 of December 2005 has recommended changes to the section.  Some of the difficulties surround the operation of subsection (2).  Two events are taken to be related, if and only if, they are both substantially and relevantly similar and, in addition, the circumstances in which they occur are substantially similar.  If two events satisfy those requirements it is difficult to see a basis upon which the occurrence of those two events would not have significant probative value.  Subsection (2) prescribes circumstances in which the two events are taken to be related but it may be that events are related in such a way that the relationship between the events is relevant and has significant probative value although the circumstances required by subsection (2) to give rise to the deeming effect are not satisfied.  

49.	The section has received considerable criticism:  ALRC Discussion Paper 69 with a result that the proposed change is reflected in Recommendation 11-1 which is in these terms:

“Recommendation 11-1.  Section 98(1) of the uniform Evidence Acts should be amended to provide that:  evidence that 2 or more events occurred is not admissible to prove that a person did a particular act or had a particular state of mind on the basis that, having regard to any similarities in the events and any similarities in the circumstances surrounding them, it is improbable that the events occurred coincidentally unless the party adducing the evidence gives reasonable notice in writing to each other party of the party’s intention to adduce the evidence; and the court thinks that the evidence, either by itself or having regard to other evidence adduced or to be adduced by the party seeking to adduce the evidence, has significant probative value.”

Justice Andrew Greenwood
Federal Court of Australia
Saturday, 4 March 2006