What do you know about the rule in 'Jones v Dunkel'?
Practitioners may be aware of the ‘rule in Jones v Dunkel’ and the way this can impact the decision to call witnesses at trial. Practitioners might not be aware, however, of the intricacies of the rule and the way it ought be applied. A recent decision of the Supreme Court provides a useful application of the rule and an explanation of its relevant principles.
The facts
The case of Primrose Meadows Pty Ltd v River View Pty Ltd[1] concerned a retail lease dispute. Primrose Meadows was landlord and River View the tenant. The tenant claimed it had exercised an option to renew the lease and sought orders for specific performance of such. The landlord claimed that the tenant had not properly exercised the renewal option and brought a counterclaim for unpaid rent.
The dispute was initially heard in VCAT. The Tribunal held that the tenant had validly exercised its option to renew the lease and ordered specific performance for the creation of the new lease. The Tribunal dismissed the landlord’s counterclaim.
The landlord sought leave to appeal the Tribunal’s decision to the Supreme Court on the basis of a number of errors of law. An issue at the VCAT hearing, and one of the questions of law to which the application for leave to appeal related, was the tenant’s failure to call one of the landlord’s directors, Mr Straussman, to give evidence. The tenant’s case regarding renewal of the lease had relied, in part, upon allegations of certain representations and conduct on Mr Straussman’s part. At the VCAT hearing, one of Mr Straussman’s co-directors gave evidence that Mr Straussman was at the time incarcerated for fraud-related offences.
The decision on appeal
The landlord argued on appeal that the Tribunal had failed to take into account the tenant’s failure to call Mr Straussman when assessing the overall weight of evidence supporting the tenant’s case and, for that reason, had erred in law. In doing so, the landlord submitted that the Tribunal should have:
drawn an inference that whatever evidence Mr Straussman could have given would not have assisted the tenant’s case; and
more readily drawn an inference against the tenant on issues about which Mr Straussman could have given evidence, and that his absence was unexplained.
It was in the making of these inferences — or, more particularly, the Tribunal’s failure to make these inferences — that the landlord invoked the rule in Jones v Dunkel.[2] Not to be confused with the rule in Browne v Dunn[3] (which relates to a party’s failure to challenge evidence) the rule in Jones v Dunkel provides that the unexplained failure by a party to adduce evidence, either through the calling of a witness or the tender of a document, can lead to an inference that such oral or documentary evidence would not have assisted that party’s case.
The Court’s comments regarding rule in Jones v Dunkel
Croft J gave the Court’s reasons and ultimately dismissed the landlord’s application for leave to appeal. In doing so, his Honour discussed the operation of the rule in Jones v Dunkel and provided some helpful pointers. There are at least seven points worth noting.
First, and in a way a summary of his Honour’s decision, Croft J noted at the outset that:
‘[B]roadly speaking … the rule in Jones v Dunkel does not provide a means for a party to fill in the facts of its case before the threshold of the operation of the rule is reached and nor is it a rule which operates to require a party to give cumulative evidence.’[4]
In support of that view, his Honour cited an earlier decision in Tenth Vandy Pty Ltd v Natwest Markets Australia Ltd.[5] There, the Court of Appeal quoted the decision of the primary judge in that matter in stating that:
‘[N]o inference can be drawn [pursuant to the rule in Jones v Dunkel] unless and until the party bearing the burden of proof of its case (the plaintiff) has by the evidence it relies upon established a case for the defendant to answer’.[6]
Put another way, a party cannot properly ask a court to draw a Jones v Dunkel inference against its opponent until the opponent ostensibly has discharged its burden of proof.
Second, his Honour addressed the fact that the decision the subject of appeal had been made in VCAT. The Tribunal is not bound by the rules of evidence. The question arose as to whether VCAT could be said to have erred in law in failing to apply an evidence-based rule. Noting the reasoning of the High Court in the decision in Jones v Dunkel itself, Croft J held that:
‘It does not … follow that the application of the rule … may not arise as a result of the Tribunal’s consideration of the probative value of evidence’.[7]
In other words, it might be that the Tribunal can apply the rule even though it is not bound to apply that or any other rule of evidence. Nevertheless, his Honour held that the application of the rule, even if VCAT were bound to apply it, would not have supported the landlord’s position in the present case.
Third, his Honour noted that in any event VCAT was not compelled to apply the rule in Jones v Dunkel, it being the case that a decision-maker — whether on the Bench or in the jury box — is never required to apply that rule and draw an inference; it is discretionary.
Fourth, while the landlord had argued on appeal that the tenant had failed to call a witness who could corroborate the tenant’s other evidence, Croft J noted that the rule does not require a party to call witnesses ‘to give merely cumulative evidence’ in support of the party’s case and that a failure to adduce such cumulative evidence should not give rise to an adverse inference.[8]
Fifth, and mindful of the requirement that the relevant witness have been in the ‘camp’ of the party that failed to call that witness, Croft J noted that ‘[t]he rule in Jones v Dunkel applies only where the missing witness would be expected to be called by one party rather than the other’.[9] In the reasons for its decision, the Tribunal held that Mr Straussman was in the landlord’s camp and not the tenant’s. This was on the basis the tenant had only dealt with Mr Straussman in his capacity as representative of the landlord and not pursuant to any relationship of confidence. It was also relevant that Mr Straussman was one of the landlord’s directors. His Honour saw no reason to interfere with the Tribunal’s findings; it could not be expected that Mr Straussman be called by the tenant rather than the landlord.
Sixth, Croft J noted that a Jones v Dunkel inference should only arise where a witness has not been called and there is no satisfactory explanation for that failure. A party need not give an irrefutable explanation. In the present case, the tenant had given a satisfactory explanation; a witness for the tenant gave evidence that he did not know Mr Straussman, in his own words, ‘from a bar of soap’. Moreover, his Honour noted a further justification for the tenant not calling Mr Straussman in circumstances where the tenant could not have expected his evidence to have been reliable given Mr Straussman’s alleged history of fraud.
Finally, his Honour held that even if VCAT had drawn a Jones v Dunkel inference against the tenant for failure to call Mr Straussman it ultimately would not have changed the Tribunal’s decision. The relevant fact to which Mr Straussman’s evidence could have pointed was his authority to negotiate terms of settlement with the tenant on behalf of the landlord, such matters going to the issue of renewal of the lease. The landlord had sought to argue that any terms of settlement with the tenant were void and, in the absence of a valid renewal of the lease, the landlord was entitled to unpaid rent for related reasons.
The Tribunal elsewhere found, however, that the tenant had validly renewed the lease. The landlord did not challenge this particular finding on appeal. In circumstances where this finding stood in the way of the landlord seeking unpaid rent, and where the landlord had not challenged this finding on appeal, the failure to call Mr Strausssman to give evidence on a different (albeit related) issue ultimately would not, in the Court’s view, have made a difference.
Comment
The decision in Primrose Meadows Pty Ltd v River View Pty Ltd illustrates the subtleties of the rule in Jones v Dunkel and contains at least seven matters of note as discussed above, namely:
A party cannot properly ask the decision-maker to draw a Jones v Dunkel inference unless the party complained of has established a case to answer.
It is unclear whether in tribunals which are not bound by the rules of evidence the decision-maker needs to at least consider the application of the rule in Jones v Dunkel.
A decision-maker is never required to apply the rule and draw an inference.
The rule does not require a party to call a witness to give evidence substantially already given by another witness in the proceeding.
The rule only applies to create an adverse inference against a party who otherwise would have been expected to have called the particular witness.
For the adverse inference to arise, the relevant failure to call the witness must have been without a satisfactory explanation. Put another way, the party need not comprehensively explain the failure to call a witness in order to avoid the adverse inference being drawn.
For the purposes of an appeal, it is important to consider whether the adverse inference would have changed the outcome of the case and whether it could truly assist the party seeking to appeal.
Postscript, 1 June 2023:
In Ling v Pang,[10] the New South Wales Court of Appeal considered the application of the Jones v Dunkel principles to a case where a party, alleging that their signature on loan documentation had been forged, failed to call as a witness the person alleged to have committed the forgery. That person capable of being a witness was also a party to the proceeding.
A question raised on appeal was whether the trial judge had erred in failing to draw an adverse inference against the party.
In upholding the judge’s decision not to draw any such adverse inference, the Court of Appeal noted the following.
First, in some cases no adverse inference may be drawn for a failure to call or produce (merely) collaborative or cumulative evidence. However, where there are only two witnesses to a particular event the situation can be different. In the case before the Court, there was evidence of a conversation in which only two people were involved (and to which no-one else was privy). The Court noted:
‘The content of the conversation was peculiarly in the knowledge of [the] two [persons], and that is a matter tending to support the drawing of the inference … If anyone was going to call [the witness] to corroborate that he had said what [the party] claimed, it was [that party]’.[11]
Second, and related to the first point, a party should not typically be expected to call a witness to corroborate an allegation of fraud being made against that witness. The Court noted:
‘It is not natural to expect one party in a case to call another unrelated party to testify as to matters touching upon the latter’s own possible fraud, where that very fraud is at issue in the case, and where the claim against the first party only arose for consideration if the other party had engaged in wrongdoing’.[12]
The Court held that the witness was not in the party’s ‘camp’, and thus a key criterion for drawing a Jones v Dunkel inference was not satisfied.
Third, and on the question of whether or not a witness is in a given party’s camp, although in some situations persons who have suffered a falling-out can still be said to be in one another’s camp — for example, in relation to evidence about matters occurring prior to a falling-out — ‘the evaluation of whether it is natural to expect the person to have been called by the party is fact specific’.[13] The Court went on to say:
‘Here, the facts that the missing witness was himself a party, who was accused of fraud in these proceedings by the appellants, are distinguishing features’.[14]
Fourth, even if an adverse inference is to be drawn in a given case it is important to reflect on whether or not the inference would materially affect the judicial reasoning in that case; as the Court held:
‘At most, here, a Jones v Dunkel inference would suggest that the evidence of a likely forger would not have supported [the party’s] case. That would be a statement of little assistance in resolving the factual dispute’.[15]
[1]: [2019] VSC 263.
[2]: (1959) 101 CLR 298.
[3]: (1893) 6 R 67.
[4]: Primrose Meadows Pty Ltd v River View Pty Ltd [2019] VSC 263, [19].
[5]: [2012] VSCA 103.
[6]: Ibid [155].
[7] Primrose Meadows Pty Ltd v River View Pty Ltd [2019] VSC 263, [21].
[8] Ibid [23].
[9]: Ibid [24], citing Payne v Parjer [1976] 1 NSWLR 191.
[10]: [2023] NSWCA 112.
[11]: Ibid [29].
[12]: Ibid [30].
[13]: Ibid [32].
[14]: Ibid.
[15]: Ibid [33].