FEDERAL COURT OF AUSTRALIA Australian Competition & Consumer Commission v World Netsafe [2002] FCA 526 AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v WORLD NETSAFE PTY LTD and ANOR No Q 297 of 1999 SPENDER J BRISBANE 24 APRIL 2002 IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY Q 297 OF 1999 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION APPLICANT AND: WORLD NETSAFE PTY LTD FIRST RESPONDENT TERENCE BUTLER SECOND RESPONDENT JUDGE: SPENDER J DATE OF ORDER: 24 APRIL 2002 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The evidence of Mr Mark Thomas McCluskey may be taken by video-link. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY Q 297 OF 1999 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION APPLICANT AND: WORLD NETSAFE PTY LTD FIRST RESPONDENT TERENCE BUTLER SECOND RESPONDENT JUDGE: SPENDER J DATE: 24 APRIL 2002 PLACE: BRISBANE REASONS FOR RULING ON EVIDENCE – NO. 2 1 The Australian Competition and Consumer Commission applies, pursuant to O 24 r 1A of the Federal Court Rules, for a direction that Mark McCluskey, who is a deponent of an affidavit on which the ACCC wishes to rely, be permitted to be cross-examined by video- link. Section 47(1A) of the Federal Court of Australia Act 1976 (Cth) provides: "The Court or a Judge may, for the purposes of any proceeding, direct or allow testimony to be given by video link, telephone or other appropriate means …" Section 47(4) provides: "... if a party to a cause desires in good faith that the maker of an affidavit ... proposed to be used in the cause be cross-examined with respect to the matters in the affidavit, the affidavit may not be used in the cause unless that person appears as a witness for such cross-examination or the Court, in its discretion, permits the affidavit to be used without the person so appearing." Order 24 r 1A of the Federal Court Rules provides that: "The Court may in its discretion take evidence from a witness by telephone or video link or other similar means in accordance with such procedures as the Court directs." 2 The material in this case shows that Mr McCluskey was made bankrupt on 6 June 1991 and again on 23 November 2001. The Trustee of his bankrupt estate is the source of information that Mr McCluskey left Australia in November 2001 without the consent of the Trustee and that, notwithstanding the Trustee's demand that Mr McCluskey return to Australia, Mr McCluskey refuses and has failed to provide a statement of his affairs. 3 Evidence from the solicitor for the ACCC, Rodney Michael Dann, indicates that, after a number of telephone conversations, Mr McCluskey told him that he would not be returning to Australia to attend and give evidence at this trial and inquired whether he could give evidence by video-link. Mr McCluskey said that he did not propose to come back to Australia "due to business commitments" and that it would be inconvenient to travel to Australia as it would interrupt his negotiations with the Malaysian Government in relation to Government contracts and tenders. 4 It appears that he is prepared to be cross-examined on his affidavit by means of video- link. The question of giving evidence by video-link has been the subject of a number of cases in this Court and elsewhere. A number of these authorities are referred to in Tetra Pak Marketing Pty Ltd v Musashi Pty Ltd [2000] FCA 1261, an unreported judgment of Katz J. His Honour referred to McDonald v Federal Commissioner of Taxation (2000) ATC 4271, where Finn J said at 4276: "As is now well known, the video-link facility is being utilised with greater regularity and acceptance in court proceedings - particularly of this Court - as judges have come to acknowledge the apprehended disadvantages from the use of video-links have not materialised as expected: see generally the discussions in B v Dentists Disciplinary Tribunal [1994] 1 NZLR 95 at 105ff and in Studniberg v J P Morgan Australia Ltd [1998] NSWIR Comm 483 [also reported in (1998) 84 IR 86]." His Honour continued: "Significantly, the facility has been used notwithstanding that a witness' evidence, for example, (a) was 'central' to the case, (b) was contentious, (c) would be expected to occupy three to four days and (d) was to be given in a serious criminal matter: see R v Kyu Hyuk Kim (1998) 104 A Crim R 233. Equally judges have accepted that in relation to trials that a video-link is, for practical purposes, much the same as hearing evidence in court: see Lord Donaldson MR's observations quoted in B's case, above, at 107; and that it does not pose a significant impediment to the assessment of a witness' demeanour: see B's case at 109; and also the observations of Young J in Bayer AG v Minister for Health [reported in (1988) 96 FLR 50 at 116] as quoted in Studniberg's case, above." 5 Katz J also quoted Lord Donaldson MR in Henderson v S.B.S. Realisations Ltd (English CA, 13 April 1992, unreported): "[I]fyou have a critical matter to be proved, it is most unsatisfactory that it should be done by documents. A video link is quite different. A video link is, for all practical purposes, very much the same as hearing evidence in court …" 6 Katz J also referred to his own judgment in Mewett v The Commonwealth [FCA: Katz J, 28 October 1998, unreported], the judgment of Einfeld J in Meehan v GPR Management Services Pty Ltd [FCA: Einfeld J, 31 May 1994, unreported], a ruling of Ryan J in ICI Australia Ltd v Commissioner of Taxation [FCA: Ryan J, 29 May 1992, unreported], and to Beaumont J's decision in Federal Commissioner of Taxation v Grbich (1993) 31 ALD 97. Reference should also be made to the subsequent decision of Tamberlin J in Versace v Monte [2001] FCA 1454. 7 Notwithstanding observations in those cases that there is essentially no real difference between evidence by video-link and viva voce evidence, I disagree, and I think it right to recognise that there are deficiencies when evidence is taken by video-link when compared with evidence given viva voce. I think the criticisms voiced by Giles J in Sunstate Airlines (Qld) Pty Ltd v First Chicago Australia Securities Ltd, unrep, SCNSW, 11 March 1997 at 4 are sound: "The ordinary procedure is [that a witness gives oral evidence before a judge in a courtroom] and there are sound reasons for following it unless cause to the contrary be shown. The conduct of proceedings in open court, available to public scrutiny, is of great importance. Cross-examination may be more difficult when video evidence is taken because documents have to be transmitted or produced in an unfamiliar manner, because of delay in voice transmission, or for other reasons, and the effectiveness of cross-examination as a weapon in the fight for truth should not be unduly hindered. And in many cases the Court is assisted in fact by observance of what is misleadingly called the demeanour of the witnesses, upon which the taking of video evidence may impact. All that said, particularly where the evidence is relatively uncontroversial, the cross-examination is not likely to be lengthy, or no real issue of credit is involved, the taking of video evidence can be beneficial to the administration of justice and consistent with justice between the parties. It may permit the Court to receive the evidence of a witness that would otherwise not have been available, it may permit the evidence to be received without causing undue inconvenience to witnesses …" 8 In Australian Medical Imaging Pty Ltd v Marconi Medical Systems Australia Pty Ltd [2001] NSWSC 651, Palmer J followed the approach suggested by Giles J noting at par 27: "... where the matter in contest involves major issues of credit or where documentary material of some volume and complexity is likely to be deployed in Court, it is still desirable, in my opinion, to have the witness in Court for examination, unless good reasons are shown to the contrary." 9 I agree with that observation. In this case, however, I think there are good reasons shown to the contrary. The fact of the matter is that Mr McCluskey cannot be compelled by the ACCC to appear in person, and unless his evidence can be tested by cross-examination by video-link the evidence would not be available at all. I do not accept that this is giving some sort of encouragement to Mr McCluskey in the achieving of his purposes in remaining outside the country. Those questions are, of course, relevant to any question of credit that may arise with respect to the weight to be given to his evidence. 10 In my opinion, the fact that the ACCC will not be able to rely on Mr McCluskey's evidence at all unless he is cross-examined by video-link is a good reason why cross-examination - with the deficiencies that I believe attend cross-examination by video-link - should be permitted by that method. In this particular case, it is submitted on behalf of Mr Butler that the evidence of McCluskey is contentious, but is not central to the ACCC's case. In that respect it is said it differs from the case of Kyu Hyuk Kim (1998) 104 A Crim R 233 decided by Coldrey J. 11 It seems to me that that consideration inclines more to the grant of cross-examination by video-link than if Mr McCluskey's evidence were crucial. 12 Conscious as I am that cross-examination by video-link is not as desirable as cross-examination in person, nonetheless in the exercise of the discretion conferred by O 24 r 1A of the Federal Court Rules, I direct that the evidence of Mr McCluskey be taken by video-link. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender. Associate: Dated: 29 April 2002 Counsel for the Applicant: Mr P.L. O'Shea SC, with Mr A.M. Pomerenke Solicitor for the Applicant: Corrs Chambers Westgarth Counsel for the Respondent: Mr M.M. Stewart SC, with Mr G.A. Wilkins Solicitor for the Respondent: Redmond van de Graff Date of Hearing: 24 April 2002 Date of Judgment: 24 April 2002