By Dan Star
Practice and procedure
Discovery – lengthy trial – whether to permit cross-examination of deponents of affidavits relating to discovery
In INPEX Operations Australia Pty Ltd v AkzoNobel NV (No 3) [2024] FCA 1221 (22 October 2024), the Court heard an application relating to whether INPEX should be permitted to cross‑examine deponents of affidavits relating to discovery.
The context was “mega litigation” and concerned the supply and use of a protective coating product on piping and equipment used in a gas field onshore project in Darwin. The coating degraded, and the cost of rectification was said to be in the billions of dollars. Which party should bear that cost is in issue. The applicants allege the respondents made misleading or deceptive representations to the effect that coating product was capable of providing a protective barrier against the external environment of the kind existing at Bladin Point, Darwin, when applied to steelwork, and was suitable for use on the project.
The application for cross-examination regarding discovery was brought during the closing stages of a long and complex trial on liability. There remained some discrete matters to be addressed, including potential further oral closing submissions, evidence from a further witness and written closing submissions.
This litigation involved events over about a decade, but in particular between 2011 and 2017. The Court accepted that problems with document identification and retention are bound to arise in proceedings of this scale, and some mistakes are inevitable (at [19]). The application was prompted by the production of nearly 3000 documents by a respondent (ANIP) during the 11‑week period of the liability trial and the contents of the relevant affidavits filed by ANIP. The application also relied on what were said to be inadequate or ambiguous explanations as to why repositories of certain documents apparently no longer exist (at [24]).
Banks-Smith J observed about the deponents who INPEX sought to cross-examine (at [50]): “None of the affidavits sworn by the deponents are of the nature of the familiar standard discovery affidavits that attach and verify lists of documents said to have been in the possession, custody or control of a party. Rather, they are affidavits that respond to bespoke requests for further documents or seek to provide explanations as to an absence of documents or late production . . . [T]his distinction is important. It reveals the need to approach with caution the application of a long line of authorities that suggest that cross-examination on discovery affidavits is not ordinarily permitted. It is important to have regard to broader statements of principle in relation to cross‑examination of the deponents of affidavits on interlocutory applications.”
With this in mind, the Court addressed the authorities relating to cross-examining a deponent relating to discovery (at [51]–[62]). Banks-Smith J stated (at [63]): “. . . it is apparent from the authorities that it is open to the Court to permit the deponents of affidavits to be cross-examined in special circumstances. These include where there are reasonable grounds for being fairly certain that there are other relevant documents, where there is concern about the legitimacy of the discovery process, or where the only process by which the deficiencies can be exposed or to ensure that injustice is not done is by cross-examination.” The Court preferred the view that, in the context of this application, pursuant to s27 of the Evidence Act 1995 (Cth), INPEX did not require leave to cross-examine deponents of the affidavits (at [65]).
The Court held that there were special circumstances that would justify a grant of leave (if it were required) and that persuade the Court to permit cross-examination in any event (at [66]). Banks-Smith J concluded (at [76]):
“The central point of this application, to adopt what was said in Mango Boulevard, is to ensure that all the pleaded issues between the parties are tried fairly. And to adopt what was said in Olympic Airways, an injustice might be done if documents of relevance to the proceeding do exist but are not discovered. The Court will be assisted in guarding against the risk of such injustice by permitting cross-examination. A party cannot be permitted to gain a forensic advantage by failing to give proper disclosure, nor by giving ambiguous, incomplete or artificially-confined explanations for any such failure or the absence or destruction of documents without the capacity for the explanations to be tested. Cross‑examination is the manner by which such explanations might be tested.”
However, the Court also noted that cross-examination relating to an interlocutory process (such as discovery) is more strictly controlled than during a trial and, where permitted, tends to be limited to the issues of the application. Thus, permitting cross‑examination would not provide an opportunity for free-range cross-examination on any matter in issue (at [88]).
Banks-Smith J observed that the decision to permit cross-examination was not premised on any view or assumption as to any inappropriate conduct by the deponents of the affidavits and stated he had not formed such views or made any such assumptions (at [117]).
Practice and procedure
Suppression and non-publication orders over pleadings – whether disclosure of pleadings might imperil mediation
In Saw v Seven Network (Operations) Ltd [2024] FCA 1210 (18 October 2024), Ms Saw issued proceedings for relief for contraventions of the Fair Work Act 2009 (Cth) arising from her employment by Seven. Seven filed an application for suppression and non-publication orders to prevent Ms Saw’s statement of claim and amended statement of claim until the mediation between it and Ms Saw took place or until its defence was filed.
A suppression or non-publication order can only be made if the requirements of s37AG(1) of the Federal Court of Australia Act 1976 (Cth) (FCA Act) are satisfied. Seven relied upon s37AG(1)(a) – that is, that suppression and non-publication orders are necessary to prevent prejudice to the proper administration of justice.
Perram J observed (at [8]): “The resources of the Court are finite. Every case which is not settled must be heard and determined. Consequently, the Court encourages parties to settle their litigation and it is in the interests of the administration of justice that they do so. Where proceedings have been settled, it has been accepted by many judges of this Court that non-publication and suppression orders may be made over documents on the Court file so that parties can be assured that settled proceedings remain confidential.”
Perram J further stated that the same policy considerations that support the making of such an order after the settlement of a proceeding would, in an appropriate case, justify the making of such an order before a mediation, at least where the mediation is imminent and one party believes keeping the matter confidential will increase the chances of settlement (at [9]).
The Court was cognisant that the proceedings had attracted attention in the media, and it was likely that if the pleadings are made public then their contents will be widely reported. That this may be embarrassing to Seven (and potentially the third parties) was irrelevant to the power to make a suppression or non-publication order, as it was well-established that mere embarrassment was not sufficient to justify the making of such an order (at [13], with reference to authorities).
However, Perram J concluded (at [14]): “Seven puts its case on the basis that the chances of settlement will be enhanced if Ms Saw’s allegations are not aired publicly before the mediation. Ms Saw submits that this is not so and that the prospects of settlement will not be materially affected by any such press coverage. Ms Saw’s submission is unrealistic. The continued maintenance of confidentiality is something which may be of value to Seven at any mediation and hence also to Ms Saw. To be crude about it, keeping the details of Ms Saw’s allegations out of the news is something Ms Saw can offer to Seven in their settlement negotiations. Once the allegations are public . . . that bargaining chip will be off the table. Thus, I accept that there is a risk – which I would rate as significant – that the publication of the pleadings will deleteriously affect the prospects of the mediation succeeding.”
The Court held that effect would be prejudicial to the proper administration of justice within the meaning of s 37AG(1)(a) of the FCA Act. In reaching that conclusion, the Court took into account that a primary objective of the administration of justice is to safeguard the public interest in open justice.
Perram J made observations on the words “open justice” in s37AE of the FCA Act, stating (at [17]): “At common law, the principle of open justice does not require that access be granted to a document on the court file where the document has not been used in open court: John Fairfax Publications Pty Ltd v Ryde Local Court [2005] NSWCA 101;62 NSWLR 512 at 526 [65] per Spigelman CJ (Mason P agreeing at 533 [100] and Beazley JA agreeing at 533 [101]). Thus, if the reference to open justice in s37AE is to the common law principle of open justice, then the principle has no application in this case because the pleadings in question have not been used in open court (other than for the purposes of this application).”
Perram J explained why he respectfully disagreed with certain statements of Rangiah J in Ryan v Transurban Limited [2024] FCA 994 regarding the expression “the public interest in open justice” in s37AEand its relationship with r2.32(2) of the Federal Court Rules 2011 (Cth) (at [18]–[21]).
Practice and procedure
Security for costs of appeal – stay application
In Lehrmann v Network Ten Pty Limited [2024] FCA 1226 (23 October 2024), before the Court were two interlocutory applications: (1) The respondents sought an order that the appellant provide security for the respondents’ costs of the appeal proceeding. (2) The appellant sought to stay the costs order made by the primary judge requiring he pay $2 million to the first respondent.
Abraham J refused the respondents’ application for security of costs and granted the appellant’s application for a stay on the primary judge’s cost order until the appeal in this proceeding is determined.
The well-established principles relevant to security for costs were summarised at [16]–[26]. The principles relevant to a stay order pending an appeal were summarised at [27]–[32].
Practice and procedure
Judicial notice
In Mastercard Asia/Pacific Pte Ltd v Australian Competition and Consumer Commission [2024] FCA 1237 (17 October 2024), the Court dismissed the application for leave to appeal brought by the Mastercard parties against orders made by the primary judge that, pursuant to s192A of the Evidence Act 1995 (Cth) (Evidence Act), judicial notice be taken of particular statistical information contained in Reserve Bank of Australia publications to which s85A of the Reserve Bank Act 1959 (Cth) applied (at [4]). The judgment includes observations on the concept of “judicial notice”, which developed in the common law and is now the subject of statutory codification by s144 of the Evidence Act.
