FEDERAL COURT OF AUSTRALIA Australian Competition and Consumer Commission v Lux Pty Limited [2003] FCA 949 EVIDENCE – exclusion or limitation of use – joint report of experts admitted – respondents' expert subsequently unavailable – substituted expert for respondents – whether evidence of applicant's expert referable to joint report should be limited – whether unfairly prejudicial or misleading or confusing - rulings Evidence Act 1995 (Cth) ss 135, 136 Gordon (Bankrupt), Official Trustee in Bankruptcy v Pike (unreported, Beaumont J, 1 September 1995) applied Papakosmas v R (1999) 196 CLR 297 applied R v BD (1997) 94 A Crim R 131 applied The Commonwealth v McLean (1996) 41 NSWLR 389 applied AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v LUX PTY LIMITED and DENNIS PODGER W124 of 2000 RD NICHOLSON J 9 SEPTEMBER 2003 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W124 OF 2000 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION APPLICANT AND: LUX PTY LIMITED (ACN 054 882 852) FIRST RESPONDENT DENNIS PODGER SECOND RESPONDENT JUDGE: RD NICHOLSON J DATE OF ORDER: 9 SEPTEMBER 2003 WHERE MADE: PERTH THE COURT ORDERS THAT: The Applicant's objections to evidence made in written submissions filed 10 June 2003 be resolved in accordance with the rulings in the attached reasons for decision. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY W124 OF 2000 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION APPLICANT AND: LUX PTY LIMITED (ACN 054 882 852) FIRST RESPONDENT DENNIS PODGER SECOND RESPONDENT JUDGE: RD NICHOLSON J DATE: 9 SEPTEMBER 2003 PLACE: PERTH REASONS FOR JUDGMENT Background 1 The background of this matter may be relevantly summarised as follows: (a) On 4 September 2001, the Court extended the time set by a previous order (made on 7 December 2000) for the parties' respective experts to participate in a joint conference to produce a joint report for the use and benefit of the Court and in an attempt to narrow the points of difference between them. (b) Prior to the conference, the parties' experts, Ms Nada Murphy for the Applicant and Mr Alex Wolowski for the Respondents, exchanged their respective reports. (c) On 10 September 2001, the parties' experts participated in a joint conference of experts and produced a joint expert report. (d) On 22 April 2002, the Applicant opened its case and in doing so raised as a preliminary point the issue of the relevance and admissibility of a number of contracts and related documents prior to the Lux's contract at issue in this application. After hearing from the parties on the issue, it was determined that due to a number of reasons, including the joint experts report, the prior contracts were relevant to the evidentiary matrix of Mrs Standing's contractual performance. (e) Throughout the trial until 9 April 2003, the Applicant claims to have conducted its case on the basis that the Respondents would call Mr Wolowski to give evidence in support of the matters raised in his report and the joint expert report. This position is said to have affected the manner in which the Applicant chose to lead evidence from its own witnesses and cross examine the witnesses called by the Respondents. Further, it is said it affected the objections that the Applicant decided to make and decided not to make. (f) On 9 April 2003, the Respondents advised the Court that, due to illness, they would not call their expert witness, Mr Wolowski, to give evidence in the trial of this action. At that time, the trial was adjourned to allow the Applicant to take instructions on how it wished to deal with the development. Shortly afterwards, the trial resumed and the Applicant indicated that it did not intend to seek a mistrial of the action but that it did wish to be heard on the excision of evidence. (g) On 10 April 2003, after hearing from the parties, the Court ordered that the use of the evidence in the joint report be limited to the expression of opinion therein by Ms Murphy and that no reliance be placed on the exhibit in respect of any opinion of Mr Wolowski. (h) On 29 May 2003, in accordance with the previous direction of the Court, the parties filed a Minute of Consent Orders by which they had agreed a procedure to allow the Court to determine whether evidence already before the Court in this action should be excluded or limited in any way by reason of s 136 of the Evidence Act 1995 (Cth) ("the Act") or some general discretion vested in the Court. 2 The Applicant now seeks the exclusion or limitation of certain evidence. Attendance by Respondents' first nominated expert 3 For the Respondents it is submitted that as the hearing of this proceeding is listed to resume on 20 October 2003, it may be that Mr Wolowski is fit to attend the Court to give evidence at that time. That course is no longer open to the Respondents. The grant of leave to the Respondents to file and serve an expert report of Associate Professor Hayes was made on the basis of the statement made on behalf of the Respondents that, if such leave were granted, the Respondents would only call Professor Hayes. Conflict with ruling of 10 April 2003 4 I do not consider the present application is contrary to the ruling of 10 April 2003. Rather it is an additional application to further limit the use of the evidence referred to in ruling or some of it. Whether s 136 supports 'complete limitation' of usage 5 The submissions for the Applicant seek to have the Court rely on and exercise its discretion in s 136 of the Act as well as discretions said to arise at common law. Section 136 reads: '136. The court may limit the use to be made of evidence if there is a danger that a particular use of the evidence might: (a) be unfairly prejudicial to a party; or (b) be misleading or confusing.' It is to be read with s 135 which reads: '135. The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might: (a) be unfairly prejudicial to a party; or (b) be misleading or confusing; or (c) cause or result in undue waste of time.' For the applicant it is submitted that s 136, when read having regard to its combined purpose with s 135, can be applied to limit the use of previously admitted evidence. Further, it is said it may completely limit (that is, exclude from usage) such evidence. It is said in support that where a party has been denied the opportunity to object to the admissibility of evidence pursuant to s 135 due to the circumstances existing at the time the evidence was admitted but later those circumstances change, the purpose of ss 135 and 136 would be frustrated if the objecting party was denied the ability to 'completely exclude' the previously admitted evidence. It is contended that in such circumstances s 136 should be given its broadest application. 6 It is necessary to apply s 136 in its terms. If unfair prejudice is established or it is shown evidence may be misleading or confusing, then the evidence may be limited to those portions which do not include the evidence having those characteristics. It is not a case of 'complete limitation' or 'complete elimination' unless the application of the criteria of the section gives rise to the appropriateness of limiting the evidence in a way which avoids the usage of such evidence. Whether s 136 can be used later than time evidence admitted 7 I do not consider that the discretion in the section is foreclosed from use after admission of the evidence to which s 136 is sought to be applied in the light of later developments in a trial. Such an exercise of the discretion would necessarily have to take into account in relation to the concepts of unfair prejudice and 'misleading or confusing' all the circumstances of usage of the evidence both before and after the later development said to have given rise to the need to apply s 136. Whether it is appropriate to exercise the discretion after admission of evidence depends entirely on the circumstances of the trial as they have developed. Criteria of limitation 8 In Papakosmas v The Queen (1999) 196 CLR 297, Gleeson CJ and Hayne J (at 308), with whom Gaudron and Kirby JJ (at 311) agreed in respect of this issue and McHugh J (at 325-328) held that the decision of the NSW Criminal Court of Appeal in R v BD (1997) 94 A Crim R 131 in relation to the interpretation of and application of s 136 was correct. In R v BD, Hunt CJ held at 139: 'The prejudice to which each of the sections [ss 135, 136 and 137] refers is not that the evidence merely tends to establish the Crown case; it means prejudice which is unfair because there is a real risk that the evidence will be misused by the jury in some unfair way.' (original emphasis) 9 The Applicant seeks to rely upon the decisions of Gordon (Bankrupt), Official Trustee in Bankruptcy v Pike (unreported, Beaumont J, 1 September 1995) and The Commonwealth v McLean (1996) 41 NSWLR 389, to support the proposition that evidence will be unfairly prejudicial where a party is denied the opportunity to cross-examine the source of the evidence. 10 The unfair prejudice contended for on behalf of the Applicant is as follows. It is said that if it had been known that the Respondents' would be unable to rely on Mr Wolowski's evidence, the Applicant's case would have objected to the tender of Mr Wolowski's report dated 18 June 2001, the joint report of Mr Murphy and Mr Wolowski and Mr Wolowski's views expressed at the joint conference and references to them. The unfair prejudice is said to be the loss of opportunity to object to admission and the denial of opportunity to cross examine Mr Wolowski. The loss of opportunity to object to admission is a past fact. It is the denial of opportunity to cross examine which must now weigh in the assessment of unfair prejudice. That is in the context of the ruling of 10 April 2003 limiting the use of the joint report to the expression of opinion of Mr Murphy. 11 There is no basis for introducing as a criterion in s 136 the test propounded for in s 135. Equally there is no basis for a limitation to give the evidence 'no weight'. Weight is determined at closing. Application of s 136 12 Each particular piece of evidence the subject of the application is now considered in relation to the criteria in s 136 and I rule as follows: Transcript Reference Ruling (a) T919/15-34; T920/5-25 Unfairly prejudicial as source of opinion put to witness not available for cross examination (b) T919/36-41; T920/10-12 No basis for limitation (c) T920/40-; T921/1-15 No basis for further limitation as joint report already admitted and usage limited to expression of Ms Murphy's opinion therein (d) T921/40; T922/1-5, 20-40; T923/1-16, 35-36 Limited to Mr Murphy's opinion in joint report so that limited to all evidence in these passages excluding only as unfairly prejudice or confusing: * T921/40: "and Mr Wolowski"; * T922/26-27: "Mr Wolowski believes that"; * T923/4-5: both lines; * T923/10: "with Mr Wolowski"; * T923/35-36: as marked (e) T926/8-11 No basis for limitation as expression only of view of Ms Murphy in joint report (f) T926/21-23 Same as T926/8-11 (g) T927/19-24 Same as T926/8-11 (h) T927/25-30 Evidence limited so as to exclude these lines as unfairly prejudicial or confusing (i) T927/35-42 Same as T926/8-11 (j) T927/42-43; T928/1 and 9 Evidence limited so as to exclude these lines as marked as unfairly prejudicial or confusing (k) T928/2-3 Same as T926/8-11 (l) T934/19 Words not unfairly prejudicial or misleading or confusing and necessary in context (m) T934/40-41 Same as T934/19 (n) T936/23 Same as T934/19 (o) T964/44-45; T965/1-10 No basis for the application of s 136 (p) T965/12-45; T966/1-10 Same as T964/44-45; T965/1-10 (q) T966/12-30 Same as T964/44-45; T965/1-10 (r) T966/32-45; T967/1-10 Same as T964/44-45; T965/1-10 (s) T967/15 Same as T964/44-45; T965/1-10 as limited in its terms to Ms Murphy's understanding (t) T986/10-26 Same as T964/44-45; T965/1-10 (u) T992/24-32 Same as T964/44-45; T965/1-10 (v) T993/17-45; T994/1-15 Limited only by exclusion of: * T993/34: "I assumed that Mr Wolowski would be doing the same"; * T994/9-15: as unfairly prejudicial or confusing I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice RD Nicholson J. Associate: Dated: 9 September 2003 Counsel for the Applicant: Ms N Johnson QC (until 15 July 2003), Mr JA Chaney SC (from 15 July 2003) & Mr SM Temby Solicitor for the Applicant: Philips Fox Counsel for the Respondent: Mr T North SC Solicitor for the Respondent: Mills & Oakley Lawyers Date of Last Written Submission: 8 August 2003 Date of Judgment: 9 September 2003