FEDERAL COURT OF AUSTRALIA Moyette Pty Limited v Foundation Healthcare Limited [2003] FCA 116 PRACTICE AND PROCEDURE application for one of the respondent's principal witnesses to be cross-examined by video link – witness provided no evidence of business inconvenience or ill health or other incapacity – cross-examination likely to continue for at least one hearing day – disadvantage of cross-examination by video link – application dismissed. Trade Practices Act 1994 (Cth) Australian Medical Imaging Pty Ltd v Mareoni Medical Systems Australia Pty Ltd (2001) 53 NSWLR 1 followed Australian Competition and Consumer Commission v World Netsafe Pty Ltd [2002] FCA 526 followed Sheldon & Hammond Pty Ltd v Metrokane Inc [2002] FCA 1561 cited MOYETTE PTY LIMITED AND DR IAN DAVIES v FOUNDATION HEALTHCARE LIMITED AND KENNETH DEREC JONES N 1140 OF 2001 CONTI J 27 FEBRUARY 2003 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 1140 OF 2001 BETWEEN: MOYETTE PTY LIMITED (ACN 006 021 012) FIRST APPLICANT DR IAN DAVIES SECOND APPLICANT AND: FOUNDATION HEALTHCARE LIMITED (ACN 002 601 501) FIRST RESPONDENT KENNETH DEREK JONES SECOND RESPONDENT JUDGE: CONTI J DATE OF ORDER: 27 FEBRUARY 2003 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Application dismissed. 2. Respondents to pay the Applicants' costs of this application. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 1140 OF 2001 BETWEEN: MOYETTE PTY LIMITED (ACN 006 021 012) FIRST APPLICANT DR IAN DAVIES SECOND APPLICANT AND: FOUNDATION HEALTHCARE LIMITED (ACN 002 601 501) FIRST RESPONDENT KENNETH DEREK JONES SECOND RESPONDENT JUDGE: CONTI J DATE: 27 FEBRUARY 2003 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an application brought on behalf of the respondents for an order that the evidence of Graham Meehan ("Mr Meehan") be taken by video link from London. Mr Meehan has provided to the respondents two affidavits in the proceedings, sworn respectively on 24 and 28 November 2002. 2 This application is strenuously opposed by the applicants. The hearing is due to commence on 17 March 2003. 3 The proceedings were commenced by application and statement of claim filed on 30 July 2001. The causes of action are for breach of contract and contravention of ss 51A and 52 of the Trade Practices Act 1994 (Cth). The proceedings are scheduled for hearing throughout the week commencing Monday 17 March 2003. 4 There have been three statements of claim filed in the proceedings as follows: (i) statement of claim filed 30 July 2001; (ii) amended statement of claim filed 27 September 2001; and (iii) further amended statement of claim filed 25 November 2002. In each statement of claim, it has been pleaded by the applicants in relation to Mr Meehan the following complex matrix of facts: (i) That Healthcare procured the termination of the services of Mr Meehan and of any entity which he controlled, thereby depriving the first applicant of the opportunity to maximise the earnings of the Edgecliff Medical Centre; (ii) That Healthcare by a subsidiary company purported to enter into a deed of release with various parties, including the applicants, relating to its liability to pay the first applicant a certain "adjustment price", that deed of release having been executed by Mr Meehan without relevant authority; (iii) That Mr Meehan made certain misleading and deceptive representations on behalf of Healthcare and the second respondent during the course of several conversations from May 2000 to December 2000. 5 By the further amended statement of claim, an additional allegation is made on an alternative basis involving the absence of authority of Mr Meehan to bind the applicants, and on a further alternative basis involving the substitution of Healthcare for Mr Meehan in relation to a certain services agreement or management agreement. 6 The applicants tendered two letters respectively dated 7 November 2000 and 13 November 2000 purportedly written by Mr Meehan on behalf of Foundation Medical Centres (NSW) Pty Ltd apparently a company related to Healthcare, being letters said to be of significance to the proceedings. Reference is also made to the conduct of Mr Meehan in several affidavits filed by the applicants. The allegations pleaded by the applicants involving Mr Meehan, as well as much of what appears in his two affidavits identified in [1] above, are said by the applicants to be in substantial issue in the proceedings, and are foreshadowed to be at the heart of an intended lengthy cross-examination of Mr Meehan. 7 A short affidavit has been made by the solicitor for the respondents in support of the present application as follows: "On 21 February 2003 I telephoned Mr Meehan at his home in England concerning his plans to travel to Australia. He informed me that: (a) he has no fixed plans as to when he will next be in Australia, but he does need to come to Australia soon to deal with his business interests in both Perth and Sydney; (b) he will make his plans on short notice, possibly only one or two days before he leaves; (c) he may be in Australia in early March but, if so, he would only be in Sydney for a short time and it would likely be inconvenient for him to stay until 19 or 20 March 2003, which are the dates I estimated to him would be the most likely dates upon which he would be required to give his evidence, as he has end of financial year activities to attend to in England for his businesses there; and (d) whilst he does not rule out entirely the possibility of being able to be in Sydney in the week of 17 March 2003 if he has other pressing business activities to attend to in Sydney, he presently expects that he will be in England all that week." 8 Evidence produced by the applicants suggests that Mr Meehan is indeed involved in business activities in Sydney. He is a director of 191 Cleveland Street Pty Ltd. This company is the proprietor of realty located at Redfern near Sydney. Mr Meehan also carries on certain businesses operating from Level 8, 95-99 York Street Sydney. 9 The applicants oppose the taking of testimony from Mr Meehan by way of video link, and hence will object to his affidavits being read in the proceedings without Mr Meehan being available for cross-examination in person. Counsel for the applicants estimated that the length of Mr Meehan's cross-examination would be no less than one day. Counsel also asserted that Mr Meehan is the acknowledged principal participant in the discussions leading to the signing of the two documentary agreements which I have identified in [6] above. 10 As has been recently illustrated in Australian Medical Imaging Pty Ltd v Mareoni Medical Systems Australia Pty Ltd (2001) 53 NSWLR 1 (Palmer J), the trend of authority indicates that evidence by video link should only be allowed upon application supported by evidence showing good reasons for the witness not to attend in person, and whether good reasons exist will depend on a balancing exercise as to whether the convenience of the witness in not attending in person is outweighed by considerations of fairness to the opposite party in the manner in which the trial will be conducted. The balancing exercise referred to will often weigh against the taking of evidence by video link in circumstances such as the present, "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" (at par 27). 11 In Australian Competition and Consumer Commission v World Netsafe Pty Ltd [2002] FCA 526 at [7] and [10], Spender J said as follows: "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 adopted the view of Spender J in Sheldon & Hammond Pty Ltd v Metrokane Inc [2002] FCA 1561 at [10]. 12 In the present case, it is readily apparent that the resolution of issues central to the causes of action, as well as to issues of credit, are potentially crucial to the viability of the testimony of Mr Meehan. By way of illustration, Mr Meehan in his affidavit of 24 November 2002 disputes engaging in several material conversations with Dr Davies who is one of the applicants' principal witnesses. For example in pars 13-17 in the above referred to affidavit, Mr Meehan asserted that various critical conversations giving rise to the essential building blocks of the applicants' case did not occur. The veracity of these assertions will need to be tested by the applicants and consequently issues such as truthfulness, bias or motive to be untruthful, and powers of perception and memory are live. In my view, there are major issues of credit that both parties will no doubt seek to explore. In addition given that it is proposed that Mr Meehan be cross-examined for approximately one day, and, I would infer, upon a large amount of complex documentary evidence, it would be prima facie unsatisfactory for his testimony to be taken by video link. My experience with the taking of evidence by that process coincides with that of Spender J cited above. 13 The evidence propounded by Healthcare's solicitor Mr Friedlander in support of the present application falls short in any event of that which in my opinion would be necessary to off set the disadvantage to the applicants involved in Mr Meehan's testimony being given by video link. Mr Meehan's response to being cross-examined on his affidavits disclose no health or other physical problem, nor any crucial or personal business commitment, which in either case should reasonably prevail over his attendance in Sydney, an attendance which he has said he might yet undertake in any event. Indeed Mr Meehan has not even sworn his own affidavit in support of the application. 14 In the result, this application is dismissed with costs. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. Associate: Dated: 27 February 2003 Counsel for the Applicant: Mr R Kaye Solicitor for the Applicant: Joseph G Capogreco & Associates Solicitor for the Respondent: Mr A Friedlander of Landerer & Co Date of Hearing: 24 February 2003 Date of Judgment: 27 February 2003