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Supreme Court of New South Wales |
Last Updated: 19 June 2002
NEW SOUTH WALES SUPREME COURT
CITATION: Idoport Pty Limited &
Anor v National Australia Bank Limited & 8 Ors; Idoport Pty Limited &
Anor v Donald
Robert Argus; Idoport Pty Limited ("JMG") v National Australia
Bank Limited [37] [2001] NSWSC 838
CURRENT JURISDICTION:
FILE NUMBER(S): 50113/98
50026/99
3991/00
HEARING
DATE{S): 28/09/01, 2/10/01
JUDGMENT DATE: 05/10/2001
PARTIES:
Idoport Pty Limited (Plaintiff)
Market Holdings Pty Limited
(Plaintiff)
National Australia Bank Limited (Defendant)
Donald Robert
Argus (Defendant)
JUDGMENT OF: Einstein J
LOWER COURT
JURISDICTION: Not Applicable
LOWER COURT FILE NUMBER(S): Not
Applicable
LOWER COURT JUDICIAL OFFICER: Not Applicable
COUNSEL:
Mr JJ Garnsey QC, Mr M Dicker, Mr R Titterton, Mr R Alkadamani
(Plaintiffs)
Mr T Bathurst QC, Mr R Smith SC, Mr H Insall SC, Mr J Halley
(Defendants)
SOLICITORS:
Withnell Hetherington
(Plaintiffs)
Freehills (Defendants)
CATCHWORDS:
Practice and
procedure
Just, quick and cheap overriding purpose rule
Case management
procedures
Conduct of litigation not merely a matter for the parties but
also one for the court
Public interest in the proper allocation of scarce
resources as between courts
Extended litigation leading to one of three
Commercial List Judges being unavailable to hear other cases for several years
Multiple experts
Procedure for Court appointed examiner to take
cross-examination evidence from selected experts
ACTS CITED:
Civil
Procedure Rules 1998 (UK)
Evidence on Commission Act 1995 (NSW)
Foreign
Evidence Act 1994 (Cth
Supreme Court Act (NSW) 1970
Supreme Court Rules
(NSW) 1970
DECISION:
Court appointed examiner to take
cross-examination evidence from experts to be identified following further
submissions.
JUDGMENT:
THE SUPREME COURT
OF NEW SOUTH
WALES
EQUITY DIVISION - COMMERCIAL LIST
EINSTEIN J
5 October
2001
50113/98 IDOPORT PTY LIMITED & ANOR v NATIONAL AUSTRALIA BANK
LIMITED & 8 ORS
50026/99 IDOPORT PTY LIMITED & ANOR v
DONALD ROBERT ARGUS
3991/00 IDOPORT PTY LIMITED
(“JMG”) v NATIONAL AUSTRALIA BANK
JUDGMENT –
On the taking of evidence on commission
The
Proceedings
1 Three sets of proceedings are
presently being heard together. Proceedings No 50113 of 1998, referred to
generally as "the main
proceedings", were commenced by Idoport and Market
Holdings as plaintiffs by way of statement of claim filed on 24 September 1998.
The final hearing of the main proceedings being heard together with proceedings
No 50026 of 1999 ("the Argus proceedings") commenced
on 24 July 2000. The Argus
proceedings had commenced in early 1999. The convention has been as a matter of
convenience to refer both
to proceedings No 50113 of 1998 as well as No 50026 of
1999 as "the main proceedings".
2 The MLC proceedings
were commenced by Idoport as sole plaintiff on 19 September 2000, an order being
made on 5 October 2000 that
the main proceedings and the MLC proceedings be
heard together.
3 The plaintiffs claim damages from the
defendants in excess of $50 billion. The general nature of the proceedings was
outlined
in an interlocutory judgment [(1999) NSWSC 828] delivered on 19 August
1999. Since that date there have been numerous contested motions
and contested
directions hearings. The pleadings have also moved on in terms of a number of
further issues being raised and further
particulars being furnished. More than
50 judgments have been delivered in relation to the proceedings; many of them
delivered following
the commencement of the final hearing. The general state of
the matter as at mid-April 2000 was set out in a judgment dealing with
a
contested application relating to use of the Technology Court ([2000) [2000] NSWSC 338; 49 NSWLR
51). The most recent judgment on the defendants’ applications for security
for costs ([2001] NSWSC 744) delivered on 13 September
2001 gives further
substantial detail updating the state of the matter as at that
date.
Case Management of the final
hearing
4 This judgment is delivered in
circumstances where the final hearing, for reasons generally outlined in the
security for costs
judgment, is now estimated to take at least until the end of
term in 2003, and may well continue even after that date. This judgment
is
being delivered at the same time as a judgment dealing with a number of
disparate issues concerning pleadings and other matters
but importantly dealing
with questions germane to the appropriate case management directions necessary
to permit the final hearing
to proceed. The appointment of an examiner is one of
the case management proposals identified in that judgment, however because the
question raises a number of discrete issues it seems appropriate to deal with
this issue in a separate judgment. To a certain extent,
both judgments deal
with the background and context in which case management directions require to
be given in an attempt to deal
with this extraordinary
litigation.
5 The administration of justice as between
parties to civil litigation requires the Court to adjust many integers to
accommodate
the interests of justice as well as the public interest in so far as
any particular set of proceedings is concerned.
6 The
Court has already taken a number of significant steps in endeavouring to shorten
the time for the hearing; for example:
· by ordering the use of the
Technology Court ([2000] NSWSC 338);
· by
handing down standard directions on admissibility to deal with the numerous
objections to the voluminous statements of both
parties ([2000] NSWSC
1250);
· by time and time again, endeavouring to tie down the
material issues and requiring that relevant issues be properly pleaded
and particularised; and
· by receiving cross-examining
counsels’ express undertaking to limit the extent of
cross-examination by cross-examining succinctly and efficiently [subject
naturally to discharging
their professional obligations to properly present the
cases of their clients].
· by ordering that the proceedings be
referred to mediation, the mediation having been undertaken by Sir Anthony Mason
in August
of this year.
7 The judgment being delivered
simultaneously to this one also seeks to identify further steps which will be
taken to the same
end. These will include requiring a further measure of
accountability from cross-examiners in requiring the identification of topics
for cross-examination and compliance with time limits. Other matters such as
the application of the provisions of Practice Note
121 in respect of particular
issues are also treated with in that judgment.
8 The
situation which now obtains where the final hearing may take up to and indeed
in excess of three and a half years, requires the Court to take a
major new step by way of being proactive in relation to the ongoing case
management
of the final hearing in the current litigation which has now
developed into no less than an extraordinary saga.
Litigation
particularly difficult for the curial process
9 In
the course of previous published judgments I have had occasion to make the point
that this litigation is in my view particularly
difficult for the curial
process. The essential difficulty which is encountered is readily revealed when
one bears in mind that the
proceedings concern claims by the plaintiffs which:
(a) if successful, were (during the opening) said to exceed the
capitalisation of the National Australia Bank; and
(b) encapsulate a
number of proceedings covering a plethora of factual and legal issues - and as
to the damages claims, embrace a
global investigation of e-commerce markets and
technology.
10 Moreover the number of witnesses
and witness statements filed by both parties in the proceedings can only be
regarded as extraordinary.
11 The Court must administer
justice in terms of any proceedings before it. The parties are entitled to
present their respective
cases and to test one anothers’ cases in
accordance with well-established procedures. Evidence relevant to the issues
will
generally be admitted. The capacity of the Court to test the substance of
pleaded issues is limited and the ultimate judgment must
take into account all
of the evidence presented during the hearing and all of the submissions put by
the parties to the Court. The
Court must however, consider whether particular
procedures are appropriate to be taken, in any particular set of
proceedings.
Court appointed
examiner
12 Notwithstanding the seemingly inapt use
of the words 'quick' and 'cheap' in the expression 'just, quick
and cheap' in relation to these proceedings, the Court, under cover of the
overriding purpose rule, [Supreme Court Rules (NSW) 1970, Part 1
Rule 3], may take whatever steps are practicable to case manage the
proceedings so as to expedite the hearing and bring the proceedings to a
conclusion. I have
come to the clear conclusion that the proper case management
of the proceedings requires that a very unusual step be taken in relation
to the
manner in which the court deals with the testing of certain of the evidence to
be adduced from independent professional experts
being called by both sides of
the bar table. The step involves the Court appointing an examiner before whom
cross-examination of
these experts will be ‘conducted’ [as explained
below, the evidence will be ‘taken’ before the examiner and
will
only become evidence in the proceedings when tendered]. Before turning to
explain the reasons for the taking of this unusual
step (which is not
unprecedented – cf Leda Holdings Pty Ltd v Water Board 26/4/94,
Supreme Court of NSW, unreported discussed below), it is convenient to examine
with more precision the power to make the
order and the general background
context in which evidence on commission has historically been
ordered.
The Principles
Historical basis for the
power
13 Previously in NSW, a procedure existed
whereby evidence could be taken on commission pursuant to a formal commission
issued
by the Court. Notwithstanding that the term “evidence on
commission” is still commonly referred to in current legislation
and case
law (for example the Evidence on Commission Act 1995 (NSW)); the current
legislation does not currently provide for the procedure which applied to this
previous practice. The procedures
currently in place cater for “evidence
on examination” instead.
14 Gummow J in Elna
Australia Pty Ltd v International Computers (Australia) Pty Ltd (1987) 14
FCR 461 at 466 provided a brief history of the Court’s power to issue
commissions and appoint examiners:
“It appears that whilst
statute was needed to empower the English common law courts to issue commissions
and to appoint special
examiners for the examination of witnesses outside the
British dominions, Chancery (and the Court of Exchequer on its equity side)
claimed and exercised an inherent power to issue such commissions and to appoint
examiners, both in aid of suits in the exclusive
jurisdiction and in aid of
actions at law: Moodalay v. Morton (1785) 1 Brown Ch Cas. 469[1785] EngR 160; , 28 ER 1245; Lord
Belmore v. Anderson (1792) 2 Cox 288, 30 ER 134; Thorpe v. Macauley [1820] EngR 568; (1820) 5
Madd 218, 56 ER 877; Devis v Turnbull [1822] EngR 221; (1822) 6 Madd 232, 56 ER 1080;
Hume-Williams and Macklin "Evidence on Commission" 2nd Ed. Ch 1; Pomeroy "Equity
Jurisprudence", 3d Ed 2' 213, 214. The commissions
issued in equity appear to
have been limited to examination upon written interrogatories, in accordance
with the general Chancery
procedure of not allowing witnesses viva voce except
by special order. See Ballow "A Treatise of Equity" ed. Fonblanque, Vol II,
Book VI, Chapter 1, 2'2; Maddock "Practice of the High Court of Chancery", Vol
2, pp.405-415.
As the nineteenth century progressed, objections
were made by various foreign governments to examination of witnesses on their
territory
by British appointed examiners, and the earlier procedures largely
were replaced by the issue of letters of request to foreign courts
either to
take the evidence or to appoint some person to take it: Daniel's Chancery
Practice, 7th Ed, Vol 1, pp. 549-552. Section 7V(1) of the Evidence
Act 1905...contains the modern representatives of these procedures, namely
the issue of commissions, appointments of examiners and the issue
of letters of
request. Order 24, Rule 1, of the Rules of this Court, also does
so...
...
One consequence of the Judicature system was to
empower the Supreme Court of Judicature to provide for the taking of evidence
abroad
both on interrogatory and viva voce (Hume-Williams and Macklin, supra,
pages 7-21).”
The overriding purpose
rule
15 Part 1 Rule 3 of the Rules
provides:
"(1) The overriding purpose of these rules, in their
application to civil proceedings, is to facilitate the just, quick and cheap
resolution of the real issues in such proceedings.
(2) The Court
must seek to give effect to the overriding purpose when it exercises any power
given to it by the rules or when interpreting
any
rule."
16 The "overriding purpose" rule adopts a
similar approach to the Civil Procedure Rules 1998 (UK) which declare,
"an overriding objective of enabling the court to deal with the cases
justly". Both sets of Rules impose an express obligation upon the Court to
give effect to the "overriding purpose" or "overriding objective"
stated.
Despite differences in wording, the UK version has a special relevance in the
Australian context to the extent that the
Rules take a similar approach in
relation to the mandatory obligation imposed on the Court. A discussion of the
"overriding purpose"
and its UK counterpart was considered in Idoport v
National Australia Bank [2000] NSWSC 338; (2000) 49 NSWLR 51 at 54 and
following.
17 The overriding purpose rule was also
recognised in Milne v Benjafield & 3 Ors [2000] NSWSC 171 (in
relation to the referral of certain matters to a referee); Alanbert Pty Ltd v
Bulevi Pty Ltd [2000] NSWSC 610 (in relation to the parties agreeing on the
quantum of entitlements between themselves) and Savcor Pty Ltd v State of New
South Wales [2001] NSWSC 596 (in relation to a refusal to make an order for
separate trials).
The Rules are the servants of justice, not their
masters
18 The overriding purpose rule complements
other general powers conferred on the Court by the Rules, the Supreme Court
Act 1970 (NSW) and the Court's inherent jurisdiction to control and
supervise the conduct of its own proceedings. Hence the obvious significance
of
Part 26 Rule 1 and section 76A of the Supreme Court Act which provide
respectively:
Part 26 Rule 1
"The Court may, at any time and
from time to time, give such directions and make such orders for the conduct of
any proceedings as
appears convenient (whether or not inconsistent with the
rule) for the just, quick and cheap disposal of the
proceedings."
Section 76A
"The Court may, from time to
time, give such directions as the Court thinks fit (whether or not inconsistent
with the rules) for the
speedy determination of the real questions between the
parties to civil proceedings."
19 This general
power is further emphasised by Part 34 Rule 6(1) which
states:
“The Court may give directions as to the order of
evidence and addresses and generally as to the conduct of the
trial.”
20 The overriding purpose rule also
complements the general discretion conferred by Part 1 Rule 12 of the Rules
which provides:
"The Court may dispense with compliance with any of
the requirements of the rules, either before or after the occasion for
compliance
arises."
21 The Court of Appeal in
Harding v Bourke [2000] NSWCA 60; (2000) 48 NSWLR 598 held that it was within the Court's
discretion to exercise the Part 1 Rule 12 power to extend a time limit imposed
on a party by another Rule. Commenting on this power, Mason J stated at
603:
"Such a dispensing power is commonly encountered in rules of
court and it serves to remind that rules are the servants of justice,
not their
masters."
See also Clune v Watson [1882] Tarl
75.
22 French J in Bomanite Pty Ltd v Slatex Corp
Australia Pty Ltd [1991] FCA 536; (1991) 32 FCR 379 at 391 further stated:
"The
substantive goal of this Court is to do justice between parties according to
law. That objective is not to be compromised by
undue rigidity in the
application of the procedural requirements which are its
handmaidens."
Order for examination of a
witness
23 It is clear that the Supreme Court
Rules permit orders to be made for the taking of evidence "otherwise than at
the trial". Although Part 36 Rule 6(2) provides that evidence
taken during an
examination is not admissible if the Court is satisfied that the person is in
the State and able to attend the hearing
(which rule has the potential of
prohibiting the course proposed in this judgment), it is clear enough that this
prohibition may
be overridden by an order made pursuant to the general
discretion conferred by the powers provided by Part 26 Rule 1, section 76A
and/or Part 1 Rule 12.
Bespoke approach to the giving of directions
and orders
24 In examining a number of the matters
of detail concerning conduct of the examination and the approach taken in
conventional
cases where orders for the examination of witnesses are made, it is
important to bear in mind that the appointment of the examiner
being considered
in this present judgment will include a number of particular bespoke
directions and orders for the purpose of ensuring that the particular
considerations of importance to these proceedings dictate the
form of such
directions and orders.
25 In these circumstances,
whilst adjectival information as to:
(1) the circumstances when
conventional orders for the examination of a witness otherwise than at a trial
have been made; and
(2) as to the principles which underpin the making
of such orders,
is clearly relevant to the question of whether the Court
in these proceedings should make such an order, it is important to note that
no
generalisation ought mandate any particular constraint upon the particular
orders which may be appropriate in these
proceedings.
26 It is convenient however, for obvious
reasons, to nevertheless examine the practice, procedure and principles which
generally
underpin the conventional making of orders for the examination of a
witness other than at a trial. I proceed to that examination.
Part 27
of the Supreme Court Rules
27 Part 27 of the
Rules deals with the Court's power to take evidence "otherwise than
at the trial". Part 27 Rule 1A provides:
"The Court may, for the
purpose of proceedings in the Court, make orders for the examination of any
person before a Judge or master
or other officer of the Court or before such
other person as the Court may appoint as examiner at any place -
a) in the State or out of the State in Australia;
or
b) out of Australia."
28 Part 27 Rule
1A was clearly intended to apply to situations where, for some reason, the
witness is unable to attend the hearing.
However, the application of this Rule
in the present circumstances (ie where the witnesses to be examined are able to
attend the
hearing and the discretion is to be exercised for the sole purpose of
saving court time) can be justified in three
ways.
29 First, the discretion conferred upon the Court
under this Rule is wide and the ultimate “interests of justice” test
depends entirely upon the specific circumstances of the case. For these
reasons, the non-restrictive wording of Rule 1A presents
no actual obstacle to
the application of this power for purposes other than the taking of evidence
where the witness is unavailable.
30 Secondly, Leda
Holdings v Water Board (supra) provides direct authority for the application
of this Rule in the present circumstances. In that case, six hearing days had
been set down for a matter involving a dispute between expert valuers (amongst
other things). In circumstances where the witnesses
declined to swear
affidavits, and where the credit of the witnesses was not likely to be in issue,
Young J (now Young CJ in Eq.)
directed that their evidence be taken on
commission. Young J stated that he preferred to read the depositions from the
Commission
at a later stage so that a day of court time could be saved.
31 The plaintiff in Leda opposed this course
arguing that as a general rule, it must be established that the attendance of
the witness cannot be procured
before an order to take evidence on commission
can be made. The plaintiff referred the Court to the following extracts from
the
authorities:
“...as soon as a plaintiff or defendant shows
to the satisfaction of the Court that a witness is out of the jurisdiction of
the Court, and that his evidence is material, and that the Court has no power to
enforce his attendance, the Court or Judge is bound
to exercise its discretion,
unless the other side can establish to the satisfaction of the Court that the
witness can and will attend.”: Williams v Mutual Life Association
of Australasia [1904] NSWStRp 117; (1904) 4 SR (NSW) 677 at 680, as approved by Griffith CJ in
Willis v Trequair [1906] HCA 32; (1906) 3 CLR 912 at 919
“I accept the
submission that as a general rule the applicant for an order for the issue of a
letter of request should establish
that he cannot procure the attendance of the
witnesses.”: Hardie Rubber Co Pty Ltd v The General Tyre and
Rubber Co [1973] HCA 66; (1973) 129 CLR 521 at 554
32 Rejecting
this approach, Young J stated:
“Those decisions were made many
years ago and today there is a far greater freedom in referring out of the court
questions to
be dealt with by appropriate people, and indeed I could refer out
the taking of evidence on this issue to a referee under the rules.
It is a
lesser thing to do to order that the evidence be taken before a Commissioner,
but it seems to me that in future the Court
will do this where people refuse to
file affidavits and where it appears more likely than not that the credit of the
witness will
not be impugned. However, if it appears when the evidence is taken
that there is a matter which requires the Judge to see the witness
to form a
view as to his or her ability to recollect, then there should be leave for the
plaintiff to supplement cross examination
before the
Judge.”
33 Finally, the discretion conferred
to the Court by this Rule must be read in light of the general powers of the
Court. The rule
articulated in Part 36 Rule 2(1):
“...the
evidence of any witness on any issue at a trial shall be given orally before the
Court”
is subject to subrule (3) which
reads:
“Subrule (1) applies subject to -
a) the
Act;
b) the rules;
c) any direction of the Court;
d) any agreement between the parties; and
e) section
29(4) and section 31 of the Evidence
Act.”
34 It is clear that the effect of Part
27 Rule 1A cannot be read and understood in isolation and must be considered
with the general
powers of the Court (including Part 1 Rule 3, Part 26 Rule 1,
Section 76A, Part 34 Rule 6(1) and part 1 Rule 12) clearly in mind.
Exercise of the discretion
35 Rule 27
Rule 1A contains no express limitation as to the exercise of the power, thereby
conferring a wide discretion upon the
Court. However the ultimate test is
described as whether it is in the interests of justice to make the order in the
circumstances
of the case. The Court in Coch v Allcock & Co (1888)
21 QBD 178 at 181 (as quoted in The McKay Machinery Co Ltd v Turner and
Another (1899) 16 WN (NSW) 192 at 193) stated:
"It is clear that,
according to the established practice, it is a matter of judicial discretion,
and the commission ought only be
granted on reasonable grounds being shown for
its issue. The matter being one of discretion, it is impossible to lay down any
general
rule as to when a commission will be granted. It must depend on the
circumstances of the particular case. The Court must take care
on the one hand
that it is not granted when it would be oppressive, or unfair to the opposite
party, and on the other hand that a
party has reasonable facilities for making
out his case, when from the circumstances there is a difficulty in the way of
witnesses
attending at the trial. All the circumstances of each particular case
must be taken into consideration."
36 An inherent
tension exists between the desirability for all witnesses to give evidence at
the one trial at the one time; and
the need for parties to be able to adduce all
material evidence without being shut out by matters of convenience:
Ritchie's Supreme Court Procedure NSW [27.1A.3]. In seeking to resolve
this tension, a number of general propositions and considerations have been
formulated by the courts
which are useful in highlighting the different
circumstances which may arise. It is important to note however that these
generalities
should not constrain the exercise of a wide discretion with the
interests of justice as the primary
consideration.
37 One consideration relevant to the
Court's decision whether to exercise this discretion is whether evidence to be
given by the
witness is dependent at all on the credibility of that witness:
Walt Disney Productions v H John Edwards Publishing Co Pty Ltd (1952) 69
WN (NSW) 281 at 282. In that case, the Court made a point of distinction
between evidence of a formal nature and cases where for
example:
"...identity is in question, or where misrepresentation is
alleged, or indeed from any other case where, in determining the issue,
the
credibility or accuracy of recollection of a witness is as it were of the
essence of the matter." (at 282).
See also Bangkok Bank Ltd v
Swatow Lace Co Ltd [1963] NSWR 488 at
490
38 Berdan v Greenwood (1880) 20 Ch D 764n
involved an appeal from an order for evidence to be given on commission
overseas. The Court took a number of considerations into
account including the
materiality of the witness' evidence and the possibility of other witnesses
being called to establish that
same evidence. Evidence which is merely "for
the purpose of bolstering up other evidence by incidental evidence" should
not be permitted to be obtained on commission and the evidence must be
"really necessary for the purposes of justice". It is not enough to say
that the evidence may possibly be of some use on some collateral matter:
Ehrman v Ehrman [1896] 2 Ch 611 at 616.
39 Considerations of materiality are not relevant
where the witness is the very person with whom the contract sued upon is said
to
have been made. In these circumstances, evidence which is merely incidentally
useful in corroborating other evidence may be permitted
to be taken via
examination: Woolf v Masius Wynne-Williams & D'Arcy Macmanus (Australia)
Pty Ltd [1975] ACLD DT 98 (NSW SC) at 98.
40 Levine
J in Poschung v Jones 25/10/96, NSWSC, unreported, BC9606849 at 12 summed
up the factors to be considered in relation to the examination of a witness
overseas
in the following way:
“The determination of whether or
not it is in the interests of justice in a given case that an order can be made
is thus facilitated
by: the identification of the witnesses; the establishment
on the probabilities that the evidence of each witness is material; an
explanation of the circumstances in which a witness is unable to come to this
country (the more so in relation to a party); the provision
of evidence in
relation to costs of not bringing witnesses here and the costs of alternatives
including (but only in appropriate
cases in my view) video link; if a Judge is
sought to be the Examiner the reasons therefore should be clear; the location
and nature
of the facilities at the place where it is sought to have the
witnesses examined should be evidenced and in an appropriate case what
I will
describe as the “internal” costs of bringing to that place witnesses
that might be elsewhere in the foreign country.”
Conduct of
the examination
41 Evidence taken during the
examination (including documents produced, answers made to written
interrogatories and audio-visual
recordings) may be tendered as evidence in the
main proceedings: Part 36 Rule 6(1). Such evidence is not admissible if
the Court is satisfied that the person is in the State and able to attend the
hearing or if the evidence would not
have been admissible had it been given at
the hearing: Part 36 Rule 6(2). The potential obstacle caused by this Rule in
relation
to the present application of Rule 1A has already been referred to in
relation to the general powers of the Court.
42 The
examiner appoints a time and place for the examination having regard to the
circumstances as well the convenience of the
person to be examined. The
appointment should be made as soon as practicable after the making of the order.
The examiner is to give
notice of the appointment to the party who made the
application, and that party is to give notice to each of the other parties at
least 3 days prior to the time appointed: Part 27 Rule
4.
43 The order for examination is addressed to the
examiner and does not compel the attendance of any witnesses. Where the
examination
is to occur in Australia, the witness may be served with a subpoena
under Part 37 of the Rules.
44 Each party and their
respective counsel and solicitors are permitted to attend the examination. The
examination, cross-examination
and re-examination processes are to be conducted
in a like manner as at trial, and the proceedings are to be conducted in
accordance
with the procedure of the Court: Part 27 Rule
5.
45 The deposition of the witness before the examiner
must be recorded and must contain "as nearly as may be the statement of the
person examined": Part 27 Rule 8. The Court or examiner can give directions
for the making of a recording of the examination by
any audio-visual method:
Part 27 Rule 8A.
46 Where the deposition is recorded in
writing, the record must be read to or by the witness and signed by them. Where
the deposition
was recorded otherwise than in writing, a transcript of it must
be prepared and certified. The record or transcript must be then
authenticated
by the examiner and sent to the registrar to be filed in the proceedings. The
examiner must also send the exhibits
to the registrar who will deal with them in
a manner directed by the Court. Where the examiner is a Judge or master, he or
she merely
has to authenticate his or her signature on the record or transcript:
Part 27 Rule 9.
The role of the
examiner
47 Any person may be appointed an examiner
by the Court, and the choice of the appropriate person will depend upon a number
of
considerations such as the convenience of the witness and parties; the nature
and materiality of the evidence; and the nature of
any controversy that may
exist in relation to the evidence: Ritchie's Supreme Court Procedure NSW,
[27.1A.2].
48 Where the evidence is particularly
material to the resolution of the proceedings, it may be appropriate to appoint
a Judge as
the examiner. A Judge, master or other officer of the Court may not
act as an examiner without the concurrence of the Chief Justice:
Part 27 Rule
1C(1). There are a number of factors relating to the appointment of a Judge as
examiner which were considered by
Sir Robert Megarry VC in Practice Note
(Chancery Deposition) 1981 1 WLR 1560 at 1561 (referred to by Miles CJ in
Henderson v Primmer (1986) 68 ACTR 9):
“In the event, no
objections to any of the evidence were taken, and so for most of two days I
simply sat and listened to the
evidence, with nothing to decide and no useful
function to discharge. In those circumstances I think that I should provide some
guidance
for future cases. First, I think that any litigant who wishes the
examination of a witness under Order 39 to take place before a
judge and not an
examiner must make out a sufficient case for such an order to be made; and the
burden is substantial. The time of
judges ought not to be spent on doing what
can perfectly well be done by an examiner, and in the great majority of cases an
examiner
will suffice. Only rarely will the greater authority of a judge be
needed, as where the witness is known to be recalcitrant or unruly.
Most
certainly a judge is not to be had for the asking.
Second, until
the powers of a judge before whom an examination is to be conducted are defined
by rules of court, it behoves those
who seek such an examination to agree
beforehand, or to attempt to agree, what those powers are to be. If the judge is
to have no
greater powers than an examiner, it will usually be very difficult to
establish a sufficient case for having a judge rather than
an examiner. Third,
the extent of the powers that the judge is to have should be defined in the
order for the examination, instead
of being left for discussion when the
examination is due to begin. Fourth, the order for examination should make it
explicit that
it is to be before a judge, and not leave it optional for the
parties to have it before a judge or an examiner, as they choose. The
master
must exercise his judgment, and decide whether or not it is a proper case for a
judge."
49 Unless the examiner is a Judge or a
Master:
a) The validity of objections taken to questions put to
witnesses under examination are not be decided by the examiner. Instead,
the
examiner is to state his or her opinion, and the Court may decide the validity
upon a motion by any party at a later stage:
Part 27 Rule 7(1); and
b)
The examiner is to be provided with copies of documents in the proceedings that
are necessary to inform him or her as to the questions
relating to the
examination. If the documents do not suffice in this way, the Court is to state
these questions in the order for
examination or in a later order: Part 27 Rule
3.
50 The examiner may put questions to the witness in
relation to the meaning of any answer given by the witness or any matter arising
in the course of the examination: Part Rule 5(4).
51 The examiner may make a special report to the Court
in relation to the examination and having regard to the absence or conduct
of
any person from or at the examination: Part 27 Rule 10.
Witnesses
outside jurisdiction or unable to attend
hearing
52 In relation to witnesses outside of the
jurisdiction, the Rules are complemented by the Evidence on Commission Act
1995 (NSW) and the Foreign Evidence Act 1994 (Cth). Under these
circumstances, the Court is to consider a number of matters in the exercise of
its discretion including: the
ability of the person to give evidence in the
proceedings; the materiality of the proposed evidence and the interests of the
parties:
ss6(2), 20(2) Evidence on Commission Act, s7(2) Foreign
Evidence Act. I note that s8(2) of the Evidence on Commission Act
effectively mirrors Part 36 Rule 6(2) of the Supreme Court Rules earlier
referred to.
53 Where evidence is to be taken
by an examiner outside of the jurisdiction (overseas for example), the conduct
of the examination
process must adhere to the local laws in force.
54 An alternative to the taking of evidence through
examination is the issue of letters of request to the courts of the foreign
jurisdictions. The relevant statutory powers provide as follows:
"In
any proceeding before a superior court, the court may, if it appears in the
interests of justice to do so, on the application
of a party to the proceeding,
make an order, relating to a person outside Australia:
...
(c) for issue of a letter of request to the judicial
authorities of a foreign country to take the evidence of the person or cause
it
to be taken." : s6(1)(c) Evidence on Commission Act, s7(1)(c) Foreign Evidence
Act.
55 The issue of letters imposes no obligation
upon the foreign courts, but compliance with such requests has become a widely
accepted
practice. This option overcomes the problems frequently encountered
when evidence is taken through examination; namely the inability
to compel
witnesses to attend the examination and problems encountered in relation to the
taking of evidence on oath: Ritchie's Supreme Court Procedure NSW,
[27.1A.6].
56 With the advent of new technologies
and communications, it is often possible to bypass these methods through use of
video and
telephone conferencing facilities and the like. See for example
Garcin v Amerindo Investment Advisors Ltd [1991] 4 All ER 655.
The reasons for appointing an
examiner
57 As with most sets of proceedings which
come before the courts, it is possible to categorise the evidence to be adduced
in more
than one way. One such categorisation often adopted for differing
purposes relates to the dichotomy between presentation of the
case on liability
and the case on damages. When, late last year, the plaintiffs applied for an
order under Part 31 Rule 2 of the Supreme Court Rules for the hearing of
certain questions separately from other questions in the proceedings [generally
an application that the cases
on liability be first heard and determined], the
judgment ([2000] NSWSC 1215) set out reasons why that application was
unsuccessful.
The reasons made plain that the intertwined nature of many aspects
of the evidence to be adduced in relation to liability, causation
and damages
was such that any attempt to split the case in the way suggested would almost
certainly cause great difficulty for the
Court and the parties. The holding was
that there was a clear possibility that the splitting of liability and damages
would ultimately
lead to the case aborting, and this for the reason that
vital issues of credit were to be raised with respect to particular
witnesses who would give evidence both as to liability as well as to
damages.
58 The particular categorisation of relevance
to the present judgment concerns the dichotomy between;
· on the one
hand, lay evidence (in the sense of evidence given by persons who had some form
of involvement at a contemporaneous
level with the Ausmaq Service or with the
negotiations and dealings between Maconochie interests and the NAB interests
anterior to
and/or following the entry into the restructuring agreements);
and
· on the other hand, expert evidence (in the sense of evidence
given by professional experts retained by both sides of the bar table to
give evidence on matters the subject of their specialised knowledge, but
importantly
not being persons having had any form of involvement at a
contemporaneous level with the Ausmaq Service or with the negotiations
and
dealings between Maconochie interests and the NAB interests anterior to and/or
following the entry into the restructuring agreements
– these experts by
and large expressing opinions based upon assumptions which they are asked to
make).
59 There are a very large number of persons
proposed to be called by both parties who fall into this latter category
[“category
two”]. The plaintiffs and defendants have identified at
least 17 and 28 witnesses respectively. Many of these category two
witnesses
have made multiple statements and they are commonly voluminous with folders of
documents exhibited to the statements.
They deal with innumerable minutiae
thrown up by the enormous number of factual issues being litigated in the
proceedings. One example
concerning analysis of the system architecture suffices
to show how the evolution of statements tend to throw up such issues.
60 The plaintiffs’ damages cases involve the
proposition that in the year 2003, the Ausmaq System, however configured, would
have had the technical capacity to process 1.8 million transactions a day. Mr
Hodgkinson filed a statement dealing with this issue
on behalf of the
defendants. Mr Martin, called by the plaintiffs, then replied to that statement.
One of the criticisms advanced
by Mr Hodgkinson at a general level, related to
the capacity of the Progress database. The Ausmaq System used a Progress
database with most of the application software having been written in
Progress
4GL language, and some also written in C.
61 The
evidence to be advanced by the defendants’ experts is to the effect that
Progress, whilst suitable for some applications,
is not a heavy duty database
and is not suitable for high-volume transactions of the kind which had been
assumed in the plaintiffs’
damages calculations.
62 Following the filing of Mr Hodgkinson’s
statement and Mr Martin’s statement in reply, both Mr Coleman (Star
project
manager of Star Systems for a period in relation to the original
development) as well as Mr Martin, put on statements dealing with
the capacity
of the Progress database to the general effect that Progress had now released
version 9.1. Version 9.1 had been internally
rated by Progress as capable of
carrying out 622,000 transactions a minute, which worked out at 35 million
transactions a day. In
the result, the plaintiffs’ proposition became
that Ausmaq would have been in a position to move across to Progress 9.1 and
hence would have been able to achieve 35 million transactions a day – well
and truly being able to cope with processing the
lesser figure of 1.8 million
transactions per day [see generally statement of Mr Stephen Coleman of 13 March
2001 paragraph 6].
63 This issue then gave rise to a
question of the reliability of the benchmarking internal test adopted by
Progress. Apparently,
the database market involves huge amounts of money such
that the sale of databases around the world constitutes a very significant
undertaking involving billions of dollars. The database market involves
companies such as IBM, Oracle, Cybase and others who were
in the business of
selling heavy duty databases. These companies and other industry groups are
said to have, in the late 1980’s,
formed a group named the
“Transaction Processing Council”. This is a non-profit body said to
have been set up to undertake
objectively rated and certified performance
assessments of databases.
64 Mr Raab is put forward as
the head of the Transaction Processing Council. The defendants assert that he
has looked at the Progress
test and seeks to give evidence that the test used by
Progress was a “debit/credit” test which was the first of the tests
ever promulgated by the Transaction Processing Council but was rejected in the
late 1980s. He seeks to give evidence that the Transaction
Processing Council
now uses three subsequently developed tests, the latest of which is called
“TCP 3”. The defendants
seek to call Mr Raab to give evidence to
the effect that Progress did not subject their product, Progress 9.1, to rating
in accordance
with the TPC current standards.
65 The
net result of this one particular issue is that the internal testing procedures
of the developers of Progress 9.1 are to
be the subject of very close
examination requiring, in turn, an examination of the several approaches to the
performance assessments
of sundry databases.
66 The
purpose of going into this somewhat extended examination of a particular issue
is not so much to highlight the issue, as
to familiarise the reader with one of
literally hundred and hundreds of minute issues raised by the technical
questions being litigated
and dealt with by professional experts with
specialised knowledge in relation to the many areas of technical expertise
treated with. In respect of every proposition
being put by an expert called by
the either party, a contradictor for that proposition is called by the opposing
party.
67 This example is not given to suggest that a
decision has been made that Mr Coleman would himself be an appropriate candidate
to be cross-examined before an examiner. As with all other experts, the
question of whether or not he is an appropriate candidate
will have to await
detailed submissions, the defendants already having advanced the proposition
that Mr Coleman had been an employee
for Star System (which apparently
subsequently changed its name to GBST) and that Mr Coleman was the project
manager said to have
been responsible for the original Instaclear development.
Subsequent enhancements (including the Instaclear New Zealand development
for
Ausmaq) were project managed by staff reporting directly to Mr
Coleman.
Overview of certain of the evidence to be
adduced
68 A convenient general overview of the
evidence sought to be adduced in relation to the damages case and more
particularly of
the areas of expertise sought to be relied upon by both parties
as at 19 July 2001, was given by Mr Lovell in his affidavit of that
date which
was relied upon in relation to the Security for Costs argument. Paragraphs
51-63 were in the following terms:
“51 Evidence in relation to
the Damages Case can broadly be broken down into the following
components:
(a) valuation issues;
(b)
systems issues;
(c) opportunities for the Ausmaq System in the
Australian and New Zealand markets;
(d) the United Kingdom and
European financial services markets;
(e) the United States
financial services market; and
(f) the Asia Pacific
market.
52 The evidence relied upon by Market Holdings in relation
to valuation is as follows:
(a) Fourth Statement of Mr Maconochie
dated 24 May 1999;
(b) Fifth Statement of Mr Maconochie dated 9
June 1999;
(c) Third Statement of Mr Hume dated 9 June
1999;
(d) Statement of Mr John R Skelton dated 11 June
1999;
(e) Statement of Professor Henry O Pruden dated June
1999;
(f) Statement of Mr Thomas H Mack dated 5 June
2000;
(g) Second Statement of Professor Henry O Pruden dated 6
June 2000;
(h) Second Statement of Mr John R Skelton dated 20
July 2000.
In his judgment dated 12 March 2001, his Honour Justice
Einstein ruled that Mr Maconochie did not have the expertise to give valuation
evidence (see [2001] NSWSC 123). On 16 July 2001 Mr Garnsey QC (at T10747)
indicated that a new witness would “replace” Mr Skelton and also
that the evidence
of Mr Maconochie on valuation, which has been ruled
inadmissible, would be replaced by evidence from a new
witness.
53 The evidence relied upon by the defendants in relation
to valuation is as follows:
(a) Statement of Professor Kenneth
Lehn dated 23 March 2000;
(b) Supplementary Statement of Professor
Kenneth Lehn dated 27 June 2000;
(c) Statement of Professor
Kenneth Lehn dated 19 September 2000;
(d) Second Statement of
Professor George Foster dated 26 September 2000.
54 The evidence
relied upon by Market Holdings in relation to so-called systems issues is as
follows:
(a) Statement of Mr Martin in reply to Professor Thomas
dated 8 February 2001;
(b) Statement of Mr Martin in reply to Mr
Hodgkinson dated 8 February 2001;
(c) Statement of Professor
Michael Aitken in reply to Mr Hodgkinson dated 1 March 2001;
(d)
Statement of Mr Stephen Coleman dated 12 March 2001;
(e) Statement
of Mr Martin dated 15 March 2001;
(f) Statement of Mr Martin in
reply to Professor Thomas dated 12 April 2001;
(g) Statement of Mr
Martin in reply to Mr Hodgkinson dated 12 April 2001;
(h) Statement of Mr Martin in reply to Professor Thomas and Mr
Hodgkinson dated 2 May 2001.
Mr Martin’s evidence in
relation to so-called systems issues was the subject of oral supplementation on
14 to 17, 24, 28 and
29 May 2001.
55 The evidence relied upon by
the defendants in relation to so-called systems issues is as
follows:
(a) Statement of Professor Martyn Thomas dated 22
September 2000;
(b) Statement of Mr Robert Hodgkinson
dated 6 October 2000;
(c) Further Statement of Mr Martyn
Thomas dated 3 July 2001;
(d) Statement of Mr Jeff Yancey
dated 17 July 2001.
56 The evidence relied upon by Market Holdings
in relation to opportunities for the Ausmaq System in the Australian and New
Zealand
markets is as follows:
(a) Second Statement of Mr
Maconochie dated 20 November 1998;
(b) Fourth Statement of Mr
Maconochie dated 24 May 1999;
(c) Statement No. 3 of Michael James
Aitken in response to Gary Turner dated 5 July 2000;
(d) Statement
of Mr Hugh McMullan dated 11 July 2000;
(e) Statement of Mr
Maconochie dated 11 September 2000 in response to Mr
Turner;
(f) Statement of Mr McMullan dated 26 February 2001 in
response to Mr Turner;
(g) Statement of Mr Maconochie dated 10
March 2001 in response to Mr Turner.
57 The evidence relied upon
by the defendants in relation to opportunities for the Ausmaq System in the
Australian and New Zealand
markets is as follows:
(a)
Statement of Mr Turner dated 13 March 2000;
(b)
Supplementary Statement of Mr Turner dated 26 May 2000;
(c)
Statement of Mr Turner dated 11 December 2000.
58 The evidence
relied upon by Market Holdings in relation to the United Kingdom and European
financial services markets is as follows:
(a) Statement of Mr Ian
Joslin dated 19 April 1999;
(b) Fifth Statement of Mr
Maconochie dated 9 June 1999;
(c) Statement of Mr Joslin
dated 9 June 2000;
(d) Statement of Ms Diana Mackay dated
15 July 2000;
(e) Statement of Mr Jonathan Heller dated 6
July 2000;
(f) Statement of Mr Anthony Davies dated 10
July 2000;
(g) Statement of Mr Heller dated 4 April
2001;
(h) Statement of Mr Joslin dated 5 April 2001;
(i) Statement of Ms Mackay dated 20 April
2001.
(j) Statement of Mr Andrew White dated 9 July
2001.
In his judgment dated 12 March 2001, his Honour Justice
Einstein ruled that Mr Maconochie did not have the expertise to give evidence
relating to the United Kingdom and Europe (see [2001] NSWSC 123).
59 The evidence relied upon by the defendants in relation to
the United Kingdom and European financial services markets is as
follows:
(a) Statement of Ms Dymphna Lehane dated 16 March
2000;
(b) Statement of Ms Maureen Erasmus dated 27 March
2000;
(c) Statement of Ms Pamela Thompson dated 22 September
2000;
(d) Statement of Mr Michael Wainwright dated 25 September
2000;
(e) Statement of Ms Lehane dated 27 September
2000;
(f) Statement of Mr Mark Phythian-Adams dated 27 September
2000;
(g) Statement of Ms Erasmus dated 29 September
2000;
(h) Statement of Ms Anne McMeehan dated 29 September
2000;
(i) Statement of Mr Stefan Breitenstein dated 5 October
2000;
(j) Statement of Mr James Ball dated 8 October
2000;
(k) Statement of Mr Giorgio Capelli dated 12 October
2000.
60 The evidence relied upon by Market Holdings in relation
to the United States financial services market is as
follows:
(a) Fifth Statement of Mr Maconochie dated 9 June
1999;
(b) Statement of Professor Pruden dated June
1999;
(c) Statement of Mr Skelton dated 16 June
1999;
(d) Statement of Mr Mack dated 5 June
2000;
(e) Statement of Professor Pruden dated 6 June 2000;
(f) Statement of Mr Mack dated 25 June 2000.
61 The
evidence relied upon by the defendants in relation to the United States
financial services market is as follows:
(a) Statement of Mr Stan
Monsowitz dated 10 March 2000;
(b) Statement of Dr Ward Hanson
dated 11 March 2000;
(c) Statement of Professor Foster dated 14
March 2000;
(d) Statement of Mr Bruce Leto dated 18 September
2000;
(e) Statement of Mr Monsowitz dated 21 September
2000;
(f) Statement of Mr Howard Kramer dated 21 September
2000;
(g) Statement of Professor Foster dated 26 September
2000;
(h) Statement of Mr Cliff Alexander dated 5 October
2000;
(i) Statement of Mr Lawrence Kash dated 9 October
2000.
62 The evidence relied upon by Market Holdings in relation
to the Asia Pacific market is as follows:
(a) Fifth Statement of
Mr Maconochie dated 9 June 1999;
(b) Statement of Mr Carl Peter
Meerveld dated 16 February 2001
In his judgment dated 12 March
2001, his Honour Justice Einstein ruled that Mr Maconochie did not have the
expertise to give evidence
relating to the Asia Pacific market (see [2001] NSWSC 123).
63 The evidence relied upon by the defendants in relation to
the Asia Pacific market is as follows:
(a) Statement of Mr Shinji
Yamamoto dated 27 June 2000;
(b) Statement of Mr Stewart Aldcroft
dated 5 July 2000.”
69 In paragraphs 196 and
197 of his affidavit of 26 September 2001 Mr Lovell, in explaining the areas
covered by the experts, sets
out a chart in respect of only one geographical
region, namely Europe. When one bears in mind that similar such charts can
presumably
be prepared for the United States and Asian regions, the magnitude of
the expert evidence begins to become clear. The chart in relation
to Europe was
in the following terms:
|
UK ONSHORE
|
OFFSHORE AND CROSS-BORDER |
EUROPE |
|
RETAIL DEPOSITS |
RETAIL DEPOSITS |
MUTUAL FUNDS |
|
Plaintiffs: |
Defendants: |
Plaintiffs:Plaintiffs:Defendants: |
|
Joslin 2 Joslin 3 Joslin 4 (covers NAB’s strategic approach in UK across all products) Davies 2 |
Erasmus 1 |
Joslin 2Joslin 1 |
|
MUTUAL FUNDS |
MUTUAL FUNDS |
LIFE AND PENSIONS |
|
Plaintiffs: |
Defendants: |
Plaintiffs:Defendants:Plaintiffs:Defendants: |
|
Maconochie 5* |
Erasmus 1 |
Joslin 1 |
|
LIFE AND PENSIONS |
REGULATORY |
EQUITIES |
|
Plaintiffs: |
Defendants: |
Plaintiffs:Defendants:Plaintiffs:Defendants: |
|
Joslin 1 |
Erasmus 1 |
Mackay 1Lehane 1 |
|
EQUITIES |
|
REGULATORY |
|
Plaintiffs: |
Defendants: |
Plaintiffs:Defendants: |
|
Joslin 2 |
Lehane 1 |
Joslin 2 |
|
REGULATORY |
|
|
|
Plaintiffs: |
Defendants: |
|
|
Maconochie *6 |
Lehane 1 |
|
Need for court time and related
matters
70 There is no issue but that the evidence
to be called in chief by both parties from their respective experts is being
adduced
by written statement. However, the fact is that on my assessment, the
cross examination of the numerous experts will take somewhere
up to a calendar
year of court hearing time. That is a very extended time
indeed.
71 It has become very clear to me during the
course of the openings, reading sections of the experts’ statements and
hearing
the cross-examination of Mr Martin on technical matters, that by and
large, the technicality of the evidence is such that notwithstanding
every
effort, the Judge simply cannot absorb the necessary detail during the hearing
day. It becomes absolutely essential for the
judge to carry out his work before
court hours, after court hours and over weekends, through use of the transcript
and by slowly
and carefully travelling through the numerous documents shown to
the witness. Curiously, in many ways, the hearing time often becomes
almost
superfluous in the sense that the cross-examiner and the witness engage in a
necessarily private tour of the minute detail
to be found in complex technical
documents. With a witness such as Mr Martin, who is a very relevant lay witness
and is also put
forward as having specialised knowledge qualifying him to
express expert opinions, it is obviously necessary for me to hear this
cross-examination because his credit and objectivity is very much in issue. The
same will obtain when Mr Maconochie is called.
72 On
the other hand, the vast majority of the professional expert witnesses to be
called fall into category two as earlier described.
Importantly, they are not
persons having had any form of involvement at a contemporaneous level
with the Ausmaq Service or with the negotiations and dealings between the
Maconochie
interests and the NAB interests anterior to and/or following the
entry into the restructuring agreements. Whilst the reliability
of their
opinions will be very much in issue, the reality is that the prospect of their
credit, in terms of their objectivity being
attacked, is slender indeed. In
this respect, it is important to bear in mind that although many of the category
two experts are
to give evidence based on their specialised knowledge on matters
of industry practice (for example on regulatory requirements; on
what the market
for particular products/services was; on what the perception of the industry
was; on what the state of technology
was and how it was used in practice in
relation to particular products or services) to suggest that such witnesses will
be attacked
in terms of their “credit” in the sense of giving
false or materially coloured evidence, is simply incorrect. Certainly, the
acceptability of their evidence
in terms of reliability is likely to be
in issue, but this is far removed from the concept of an attack on credit in the
sense in which the Court is asked
to reject the evidence as
unreliable.
73 It is not necessary for a blanket
decision to be made requiring all category two expert witnesses to be
cross-examined before
an examiner. There are category two witnesses and
category two witnesses. The convenient course is to leave the selection of such
witnesses as may be practicably examined before an examiner to abide the result
of the Court taking submissions in that regard.
That decision would be made on
an instant specific basis taking into account any special considerations which
relate to the particular
witnesses in respect of which the question
arises.
74 If the Court orders that particular category
two expert witnesses be cross-examined before an examiner appointed for this
purpose,
it seems certain that considerable efficiencies will have been
achieved. The orders can require that the cross examination be video-taped
so
that either side may from time to time during final address, or otherwise, seek
leave to take me to sections of that videotaping.
An application for that form
of leave may or may not be successful. The purpose of the videotaping of the
evidence and the indication
that leave of this type may be sought, is to ensure
that neither party may suggest prejudice in terms of having being prevented
in absolute terms, from having the trial judge placed in a position to
observe precisely how a category two witness, may have reacted in relation to
cross-examination upon certain nominate
topics.
75 There is no question but that the examiner
would not have a discretion to deal with certain specific matters as may thought
to be appropriate only for the trial judge. Such matters may for example
include questions of claims to legal professional privilege;
there may also be
other matters, presently unforeseen. The parties would be protected by the
Court reserving leave to them to make
application to the trial judge when and if
matters are raised which either party wishes to submit seem only appropriate for
determination
by the trial judge.
76 There are a number
of possibilities in terms of the nuts and bolts of how this examination
procedure would operate. One possibility
is that cross examination of selected
category two experts may take place in another courtroom simultaneously with the
ongoing hearing
in terms of the adducing of evidence before me as the trial
judge. Another possibility is that cross-examination by the defendants
of
certain of the plaintiffs’ category two witnesses before the examiner
would have to await completion of the adducement of
the evidence of all of the
plaintiffs’ lay witnesses before me as the trial judge. Another
possibility is that cross-examination
by the plaintiffs of certain of the
defendants’ category two witnesses may be permitted to commence even prior
to completion
of the plaintiffs’ cases in chief. Another possibility is
that the plaintiffs be required to cross-examine certain of the
defendants’ category two witnesses before the examiner simultaneously with
the plaintiffs being required to cross-examine the
defendant's lay witnesses
before me.
77 The transcript of the cross-examination
before the examiner will not become evidence in the proceedings until it is
tendered
before me.
78 The proposal does not extend to
any suggestion that the examiner hear re-examination of such category two
witnesses as would
be cross-examined. Re-examination would take place before me
as the trial judge.
79 Questions of the parties’
resources may become relevant for obvious reasons. Up to this point in time,
the Court has
often been informed that the defendants generally have one team of
counsel and solicitors attending to liability issues and another
team attending
to damages/expert witness issues. The four senior counsel and two junior
counsel retained by the defendants regularly
address on their disparate areas,
Mr Bathurst QC, Mr Sackar QC and Mr Smith SC being the proposed cross-examining
counsel.
80 During address on 28 September 2001, the
plaintiffs made the point that they would presently have difficulties in
adopting any
such procedure due to the way in which they had been preparing for
the litigation in terms of demarcation of areas to be treated
with by different
counsel and because up to now they have had only one solicitor in court. It
seems clear to me however that given
proper notice and a period in which the
plaintiffs would have to adapt to the new environment, the examiner procedure
will have to
be forced upon the plaintiffs.
81 Even if
a circumstance arose where one or other of the parties made plain that it was
impossible for identified category two
witnesses to be cross-examined whilst the
hearing before me continued, it may very well be the case that in those
circumstances I
would be persuaded not to sit for particular periods. There is
no doubt that a huge amount of continued chamber work will be required
to be
carried out by me in relation to the proceedings. There is every chance that
any such release from my being required to sit
for particular periods would
permit me as one of the three Commercial List Judges, to take other cases in the
Commercial List.
Section 8 of the Evidence on Commission Act 1995
(NSW)
82 Section 8(1) of the Evidence on
Commission Act 1995 only deals with evidence taken in an examination held as
a result of an order made under section 6 (which deals with examinations
which take place outside Australia) of that Act. None of the proposals referred
to above contemplate
the examiner taking evidence outside of
Australia.
Public interest parameter of case
management
83 This brings me to the public
interest parameter which of necessity is one of the legitimate factors to be
taken into account in any exercise by any trial judge of any
discretion in terms
of case managing particular proceedings.
84 As was made
clear by Dawson, Gaudron and McHugh JJ in State of Queensland v JL Holdings
[1997] HCA 1; (1997) 189 CLR 146 at 154 case management is not an end in itself but is an
important and useful way for ensuring the prompt and efficient disposal
of
litigation. Their Honours added that:
"[case management) is an
important and useful aide for ensuring the prompt and efficient disposal of
litigation. But it ought always
to be borne in mind, even in changing times,
that the ultimate aim of a court is the attainment of justice and no
principle of case management can be allowed to supplant that
aim."
[emphasis added]
85 There is no
necessary inconsistency in this approach taken by Dawson, Gaudron and McHugh JJ
and the approach earlier taken by
Toohey and Gaudron JJ in Sali v SPC Ltd
[1993] HCA 47; (1993) 67 ALJR 841 at 849:
“The contemporary approach
to court administration has introduced another element into the equation or,
more accurately, has
put another consideration onto the scales. The view
that the conduct of litigation is not merely a matter for the parties but is
also one for the court and the need to avoid disruptions in the court's
lists with consequent inconvenience to the court and prejudice to the interests
of other litigants waiting to be heard of pressing concerns to which a court may
have regard".
[emphasis added]
86 JL
Holdings was a case concerning an application for leave to amend the
pleadings. The subject presently being considered in relation to appointment
of
an examiner is far removed from such an application. If, as in my view is the
case, the appointment of an examiner to take particular
cross-examination does
not affect the attainment of justice but is merely a tool by which justice can
be achieved by utilising a
particular procedure which does not relevantly
prejudice either party, then the course of appointment of an examiner will
be perfectly consistent with the clear public interest in the proper application
of scarce resources as between courts. The fact that the procedure may be
unusual and may cause some inconvenience to the parties
is taken into account
but inconvenience is far removed from a denial of natural
justice.
87 There is a very clear public interest
in judges being available to hear contested litigation. Chief Justice Gleeson
has recently
had occasion extra curially to advance the proposition that there
is a clear public interest in issues concerning the proper allocation
of scarce
resources as between courts at various levels and in various parts of the
justice system in Australia:
“It is not easy to state clearly
all the purpose which litigation serves in a community.... if thought is given
to some modern
mega litigation, usually fought out between substantial
corporations, it may be very difficult to assess what the parties are intending
to achieve, or what public purpose is being served by a judge who devotes months
to presiding over proceedings that are ultimately
settled. Court time is not
allocated evenly amongst litigants. Especially in commercial disputes, some
litigants consume hugely disproportionate
amounts of scarce judicial resources.
Is this a problem to which courts ought to be responding? If so, what should
they be seeking to achieve by their responses? Since the activities of courts
have economic value, does it follow
that, in so far as that includes a value to
individual litigants, the benefits of their activities should be more equitably
apportioned?
And, if courts are seen as providing services to litigants, who
should bear the cost of the provision of those services?”
[Emphasis
added]
[“Valuing Courts” – Paper addressed to the
Family Court Conference, Sydney 27 July 2001]
88 It
seems patently clear that if:
(i) the cross examination of identified
category two witnesses can be carried out by an examiner without any real
suggestion of relevant prejudice of significance to either party; and
(ii) if this approach has a high likelihood of freeing up one of the
three Commercial List Judges of the Supreme Court to hear other
commercial
cases,
then the public interest should mandate that the procedure which I
am suggesting be followed.
The ‘weighing’
exercise
89 Essentially the Court is simply
weighing in the balance on the one hand, the entitlement of the litigants in the
present proceedings
to have the proceedings heard and determined justly (in the
sense that each party is entitled to present its case and to test the
case of
its opponent), and on the other hand, the public interest in avoiding, where
possible and practicable, certain litigants
from consuming hugely
disproportionate amounts of scarce judicial resources, the principle being an
effort to allocate court time
evenly amongst
litigants.
90 In carrying out the weighing exercise I
take into account those authorities in support of the proposition that where
expert
witnesses are radically at issue about complex technical questions within
their own field and are cross-examined at length about
their conflicting
theories, the trial judge has a distinct advantage in seeing and hearing them.
91 In Wilsher v Essex Area Health Authority
(1980) AC 1074, Lord Bridge said (at 1091):
“Where expert
witnesses are radically at issue about complex technical questions within their
own field and are examined and
cross-examined about their conflicting theories,
I believe that the judge’s advantage in seeing them and hearing them is
scarcely
less important than when he has to resolve some conflict of primary
factor between lay witnesses in purely mundane matters".
[This
passage from Wilsher was cited with approval by Clarke JA in Ahmedi v
Ahmedi ( 1991) 23 NSWLR 288 at 299-300 and by von Doussa J in David
Holdings Pty Ltd v Attorney General of the Commonwealth [(1994) 49 FCR 211
at 243.]
92 In Joyce v Yeomans [1981] 1 WLR 549
Brandon LJ observed at 556:
"There are various aspects of such
evidence in respect of which the trial judge can get the 'feeling' of a case in
a way in which
an appellate court reading the transcript, cannot. Sometimes
expert witnesses display signs of partisanship in a witness box or
lack of
objectivity. This may or may not be obvious from the transcript, yet it may be
quite plain to the trial judge. Sometimes
an expert witness may refuse to make
what a more wise witness would make, namely, proper concessions to the viewpoint
of the other
side. Here again this may or may not be apparent from the
transcript, although plain to the trial judge. I mention only two aspects
of
the matter, but there are others".
[Cf observations to similar effect
in Maynard v West Midlands Regional Health Authority [1984] 1 WLR 634 at
637 by Lord Scarman, cited with approval by Mahoney JA in Chambers v
Jobling (1986) 7 NSWLR 1 at 25-26. The above passage from Joyce was also
cited with approval by von Doussa J in David Holdings (supra at
243).]
93 Notwithstanding the force of these
observations it seems to me that in these present proceedings there will be a
number of expert
witnesses in respect of whom the examination procedure will be
both practicable and possible. Clearly, both parties will be given
an
opportunity to address in respect of the proposal for the examination procedure
at each step and no doubt one or both parties
may in respect of particular
experts, advance the strong submission that the trial judge’s advantage
referred to in the above
authorities should weigh heavily against the examiner
procedure being implemented. However, as Mr Bathurst QC appeared to accept
during argument, the defendants were already likely able to indicate some
categories of expert witnesses [cost of income and regulatory
witnesses –
transcript page 13595] in respect of whom the examiner procedure would appear to
be appropriate.
94 It cannot be the case that the
authorities referred to above must in every set of proceedings mandate
the trial judge hearing every expert. If this were the case the overriding
purpose rule would be severely eroded in this
state. There are proceedings and
there are proceedings. There are experts and there are experts. The very
nature of the discretion
given to the Court by the overriding purpose rule is
calculated to ensure that the Court, taking all relevant factors into
account in terms of the administration of justice in particular proceedings,
then exercises the relevant discretion
seeking to facilitate the just, quick and
cheap resolution of the real issues.
Natural
Justice
95 The hearing must of course take place
before a judge who will assess the evidence at the end of the case in the light
of the
submissions addressed by the parties to the Court following completion of
the taking of evidence. As with parties in any proceedings,
the parties in the
present proceedings (which are of course commercial proceedings against possibly
the largest corporation in Australia
and are proceedings in respect of which
there is a public interest referable to the potentially marked effect of a very
substantial
verdict on the value of shares held in the National Australia Bank)
must be afforded natural justice in each of the senses in which
that fundamental
principle is understood as demonstrated by the authorities.
Holding
96 I have come to the clear view that the
procedure which I have suggested is a procedure which is practicable and
possible and
which preserves the necessary balance in the above terms.
97 Any apprehension which the parties have as to the
procedure may be accepted as a subjective concern at an unusual approach.
But
the Court would need far more than mere apprehension in order to be persuaded
that the posited procedure is inappropriate.
And I have not heard any
submission which to my mind suggests that there is any real unfairness or
prejudice to either party in such
a procedure being adopted.
98 The task of the Court will be to assess the
evidence of all category two witnesses in terms of reliability. The Court will
have, in that regard, all of the evidence in chief which will be in writing. In
some cases, where leave is given to deal with a
particular matter the subject of
objections as to admissibility, it is quite possible that the party calling the
witness will be
given leave to supplement the evidence of the witness in the
witness box. That may not happen in the case of some witnesses.
99 The Court will in any event, be in a position to
examine the videotapes of the cross-examination of category two witnesses who
give evidence before the examiner, as and when appropriate, should it become
necessary. As trial judge, I will deal with the re-examination.
100 In the event that any aspect of evidence taken
before the examiner became the subject of a matter in respect of which the trial
judge wished to address particular questions, the trial judge would be in a
position to require that the witness be recalled for
the purpose of those
questions being answered. Many of the witnesses who fall into the category two
experts area, are overseas witnesses.
Some of those questions if any, may be
able to be put to those witnesses by the trial judge on video link.
101 There is simply such a huge saving of time capable
of being achieved by the proposal for cross-examination even of only some
category two witnesses before an examiner, that to my mind the adoption of this
course represents a practicable and efficient case
management procedure for the
taking of a particular category of evidence. The proposal serves the dual
purposes of ensuring that
the trial judge be freed to hear other cases and to
carry out chamber work in relation to the ongoing proceedings, as and when
practicable
during what, save for an examiner presiding over the taking of
certain cross-examination evidence, would arguably have taken up to
a
considerable section of the trial judge's time sitting in
court.
102 One question which does arise, relates to
the extent to which the cross-examination before an examiner could take place in
the Technology Court or alternatively could take place in a court where the
document management system may be availed by the parties.
This is a question of
detail and no doubt close discussion will require to take place between the
technical advisers of each party,
the court’s IT section and the Project
Manager. Up to this point in time the parties have approached the final hearing
by
using hard copy in very large measure but making use of the Technology Court
facilities if and when appropriate.
103 Ultimately,
all of these questions become matters of detail. Even if the cross-examination
of some of the category two experts
before an examiner could only take place
using hard copy, I would still be of the very strong view that the examiner
procedure should
be adopted. It is one thing for a final hearing to take one
year. It is another thing altogether for a final hearing to take three
and half
years. And when, as here, there is raised even a question as to the reliability
of that three and half year estimate, it
seems to me that it is necessary for
the Court to become pro-active in the way that I have indicated.
104 This is not the first case where judges who have
the control of the trial of an action have taken particular steps to ensure
that
time is not wasted and to procure the speedy and complete determination of the
proceedings by ordering the adoption of procedures
which will reduce the time
and expense involved or otherwise lead to deficiencies of the type earlier
referred to in this judgment.
105 Cambridge Credit
Corp Ltd v Hutcheson (No 3) (1983) 8 ACLR 526 involved an appeal from the
decision of the trial judge who had attempted to simplify the complex, and
potentially lengthy set of
proceedings before him. For these purposes, Rogers J
isolated one of the alleged breaches of contract and made certain orders
consequent
upon his findings in relation to this one issue. More specifically,
Rogers J attempted to determine one claim which could have made
the other, more
detailed and numerous disputes between the parties unnecessary to consider.
106 Both parties appealed against this decision; one
of the grounds for appeal being (at 532):
"...in general it now
appears that the decision to proceed otherwise than in the conventional fashion
was wrong."
107 In rejecting this approach and
dismissing the appeal, Mahoney JA referred to WEA Records Ltd v Visions
Channel 4 Ltd [1983] 1 WLR 721 at 727, Harman v Secretary of State for
the Home Department [1983] AC 280 and Connelly v Director of
Public Prosecutions [1964] AC 1254 and stated that the aim of the
Court should be to achieve the speedy determination of the real questions
between the parties. Where
it is clear that the proceedings will raise numerous
and complicated issues and that a trial conducted in the routine way will be
lengthy and expensive, it was considered to be "desirable and necessary" that:
"the trial judge consider whether procedures can be adopted which,
consistently with the requirements of justice, will reduce the
time and expense
involved" (at 537).
108 Mahoney JA went
on:
"In the management of long and complex trial, it will often be
necessary for a judge to make judgments as to how a case will or may
develop.
The fact that such a judgment may, in the event, be wrong or that what he has
done may not prove fully effective should
not, I think, prevent a judge
exercising the powers available to him for these purposes. In exercising such
powers he will, of course,
have in mind that the parties are apt to know more of
their cases than he does and he will no doubt give great weight to the views
and
the wishes that they express. But, in the exercise of the powers which are
available to him, whether under the Act or the Rules
or otherwise, the judge is,
in my opinion, not limited to what one or both parties may desire: he may in
this regard exercise such powers in the way which in his opinion is best
directed to securing the speedy and complete determination
of the proceedings
before him. And, in my opinion, an appellate court should afford a judge a
wide ambit of discretion in relation to the orders which in this
regard he
makes."
[emphasis added]
Short minutes of
order
109 There are a substantial number of
practical matters of detail which will require to be addressed by detailed
orders and directions
to be made. The convenient course is to require the
parties to endeavour to reach agreement on these matters beginning with
candidates
for examination before an examiner and to list the matter for short
minutes. Submissions may be addressed at that time to these
many questions of
detail.
I certify that paragraphs 1 - 109
are a true copy of
the reasons
for judgment herein of the
Hon. Justice
Einstein
given on 5 October
2001
___________________
Susan
Piggott
Associate
5 October 2001
LAST
UPDATED: 11/06/2002
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