Federal Court of Australia Camm Cattle Company Pty Ltd v Acumen Finance Pty Ltd [2021] FCA 1225 File number(s): QUD 321 of 2020 Judgment of: DOWNES J Date of judgment: 11 October 2021 Catchwords: PRACTICE AND PROCEDURE – determination of objection to tender of affidavit at trial where deponent will not be available for cross-examination – where deponent is mentally unable to attend the trial – whether affidavit is admissible hearsay pursuant to s 63(2) Evidence Act 1995 (Cth) – where no notice was given pursuant to s 67(1) Evidence Act 1995 (Cth) – where party was aware that deponent would not be available for cross-examination and the reasons – requirements of s 67(1) Evidence Act 1995 (Cth) dispensed with pursuant to r 1.34 Federal Court Rules 2011 (Cth) – direction given pursuant to s 67(4) Evidence Act 1995 (Cth). Legislation: Federal Court Rules 2011 (Cth) rr 1.34, 30.29 Evidence Act 1995 (Cth) ss 4, 59, 63, 67, 192 Cases cited: Tarrant v Statewide Secured Investments Pty Ltd (2012) 128 ALD 290; [2012] FCA 582 Division: General Division Registry: Queensland National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Number of paragraphs: 54 Date of hearing: 8 October 2021 Counsel for the Applicants: Mr P Somers Solicitor for the Applicants: Bennett & Philp Lawyers Counsel for the Respondent: Ms M Bateman Solicitor for the Respondent: Davis Lawyers Table of Corrections 22 October 2021 In the second sentence of paragraph 2, "filed 19 October 2021" has been replaced with "filed 19 October 2020". ORDERS QUD 321 of 2020 BETWEEN: CAMM CATTLE COMPANY PTY LTD ACN 068 203 001 First Applicant PETER CAMM Second Applicant CAMM FINANCE PTY LTD ACN 616 728 520 Third Applicant AND: ACUMEN FINANCE PTY LTD ACN 617 819 217 Respondent order made by: DOWNES J DATE OF ORDER: 11 October 2021 THE COURT ORDERS THAT: 1. Pursuant to r 1.34 Federal Court Rules 2011 (Cth), the requirements of s 67(1) Evidence Act 1995 (Cth) (Evidence Act) are dispensed with in relation to the affidavit of Mr Gardiner sworn 7 July 2020 and filed 19 October 2020 ('Gardiner affidavit'). 2. Section 63(2) Evidence Act applies in relation to the Gardiner affidavit notwithstanding that notice has not been given in accordance with s 67(1) Evidence Act. 3. The applicants have leave to tender the Gardiner affidavit at the trial of these proceedings commencing on 20 October 2021 and are not required to produce Mr Gardiner for cross-examination at the trial. 4. The parties shall file any further and better particulars of their pleadings by 5.00 pm (AEST) 13 October 2021, being further and better particulars that they have exchanged prior to the date of this order. 5. Costs in the cause. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT DOWNES J Relevant background 1 This proceeding was commenced on 19 October 2020. The proceedings concern whether an agreement was entered between the first and second applicants, and the respondent, on 12 March 2020 (alleged agreement). 2 One issue in this case is whether the alleged agreement was entered by the first and second applicants by their authorised agent (Mr Gardiner). An affidavit of Mr Gardiner was filed on 19 October 2020 (Gardiner affidavit). According to that affidavit, Mr Gardiner is a commercial broker who operates his own business. 3 At a case management hearing held on 26 August 2021, the matter was set down for trial commencing on 20 October 2021 for three days. 4 Shortly after that hearing, the applicants' solicitors were informed that Mr Gardiner had had a mental breakdown, that he had attempted to take his own life and that his wife was in the process of trying to have him admitted to a mental health facility. This is referred to in the affidavit of Mr Slasberg filed on 31 August 2021. 5 At a case management hearing on 2 September 2021, the respondent was ordered to advise the Court and the applicants' solicitors by 30 September 2021 if it objected to the affidavit of Mr Gardiner being read in the trial. The matter was also listed for a hearing on 8 October 2021 at which the Court would rule on any objection to the admissibility of the Gardiner affidavit. 6 No advice as to any objection was received by the Court or the applicants. Paragraph 2.6 of the respondent's outline of submissions (exhibit 1) stated that an objection was notified to the Court and the applicants on 2 October 2021, which was a Saturday. However, there is no evidence of any notification on that date. 7 The first notice which the Court had of any objection was the receipt by my chambers of (unfiled) written submissions at 3.57pm (AEST) on 7 October 2021 (exhibit 1), being the day before the hearing. By paragraph 3 of the applicants' outline of submissions, it was stated that the respondent had not advised the applicants of the objection "despite the order of 2 September 2021". However, nothing turns on this as the applicants were able to deal with the objection at the hearing on 8 October 2021. The ruling on the objection is addressed below. 8 A second issue arose at the hearing on 8 October 2021 relating to the respondent's failure to comply with a previous order of the Court in relation to the production of certain recordings. 9 On 2 September 2021, the respondent was ordered to produce to the applicants' solicitors by 30 September 2021 all of the audio recordings in its possession or control of conversations between representatives of the applicants and the respondent. 10 No audio recordings were produced by 30 September 2021. 11 This was not the first time that the respondent had been ordered to produce the recordings, and had failed to comply. A similar order was made by Derrington J on 16 July 2021, which was required to be complied with by 30 July 2021. On 26 August 2021, I extended the time for compliance with this order to 16 September 2021. 12 The alleged difficulty in providing the recordings to the applicants is said to be by reason of the "Sydney lockdown". 13 However, the affidavit evidence filed by the respondent of Mr Nathan Daly, who is the sole director of the respondent, contains a transcription of the recordings. For example, the affidavit of Mr Daly filed 18 January 2021 contains transcriptions of recordings of telephone conversations at paragraphs 45, 55 and 56. The affidavit of Mr Daly filed 22 January 2021 contains transcriptions of recordings of telephone conversations at paragraphs 43, 54 and 55. 14 It follows that, as at January 2021, the respondent had access to the recordings. 15 The applicants' solicitors first requested a copy of these recordings on 19 January 2021. While it is correct that a stay-at-home order was issued for Greater Sydney and certain other locations in New South Wales in June 2021, this does not explain the failure to provide the recordings to the applicants between January and June 2021. Further, the respondent's solicitor, Mr Davis, submitted that Mr Daly has been "outside Byron Bay", that he has been in quarantine and that he is in New Zealand at present. 16 During the hearing on 8 October 2021, counsel for the applicants proposed that a form of guillotine order be made against the respondent by reason of the ongoing failure to produce the recordings. Also during the same hearing, Mr Davis sent two of the recordings to the applicants' solicitors. No explanation was provided as to why they were not provided before this and their provision appears to have been prompted by the oral application for a guillotine order. 17 As the trial is due to commence in less than two weeks, I requested, and the respondent agreed that it would provide, an affidavit: (a) identifying the location of the recordings that were used by the respondent to prepare its affidavit evidence; (b) explaining why the orders of 2 September 2021 were not complied with in relation to the recordings; (c) identifying when the recordings would be able to be provided to the applicants (other than the recordings which were provided during the hearing on 8 October 2021). 18 Mr Davis submitted that the affidavit would be provided on 8 October 2021. For this reason, no direction was made about the affidavit nor was any order made in connection with the recordings. However, no affidavit was provided on 8 October 2021. I will hear the parties at the case management hearing on 11 October 2021 about the orders which should be made about the recordings, if any. Ruling on objection 19 The respondent objects to the tender of the Gardiner affidavit at the trial unless Mr Gardiner is made available for cross-examination. 20 The essence of the objection is that the respondent wishes to cross-examine Mr Gardiner on "matters in dispute" in the proceedings and that, having given reasonable notice of its intention to cross-examine Mr Gardiner, "it is an incident of the Court's duty to provide a fair trial that, in general, that wish is respected". 21 As observed above, the hearing proceeded on the basis that notice had been given to cross-examine Mr Gardiner and no submission was made by the applicants that any such notice was not given or was not reasonable. 22 The decision in Tarrant v Statewide Secured Investments Pty Ltd (2012) 128 ALD 290; [2012] FCA 582 is relied upon by the respondent. However, that case recognised that courts have a discretion to admit affidavit evidence where the deponent is not available for cross-examination, even over objection. In that case, Katzmann J stated at [34] – [35]: At common law there was no "right" to cross-examine a witness: ... As Young J put it in GPI Leisure at 22, the only right was the right to a fair trial. But s 27 of the Evidence Act 1995 (Cth) provides that a party may question any witness, except as provided by the Act. That suggests that the parliament's intention was to legislate for such a right: compare Moore v Wilson [2006] FCA 79 at [76] where Mansfield J queried whether the common law position had been removed by s 27. The right, of course, is not unfettered. But if a party wishes to cross-examine a witness on matters in dispute in the proceeding and gives reasonable notice of its intention to do so, it is an incident of the court's duty to provide a fair trial that, in general, that wish be respected. The right to cross-examine a witness has been described as "a fundamental element of litigation when conducted on affidavits or witness statements, not lightly to be set aside", all the more so when the witness is a party: … There is old authority that evidence given by a party affecting another party is not admissible against that other party unless there is a right to cross-examine: … Nevertheless, courts have a discretion to admit affidavit evidence where the deponent is not available for cross-examination, even over objection. That discretion is incorporated into r 15.29A of the Federal Magistrates Court Rules 2001 (Cth) (the FMCR). But no application was made in this case for the discretion to be exercised. … (citations omitted, emphasis added) 23 The respondent accepted that the Federal Court has a discretion to admit the Gardiner affidavit into evidence where the witness is not available for cross-examination: see paragraph 3.5 of exhibit 1. 24 The respondent also raised the issue of whether the Gardiner affidavit contains inadmissible hearsay in circumstances where the maker of the statements in the affidavit would not be called as a witness at the trial. 25 The hearsay rule is contained in s 59(1) Evidence Act 1995 (Cth) (Evidence Act) which provides that: 59 The hearsay rule – exclusion of hearsay evidence (1) Evidence of a previous representation made by a person is not admissible to prove the existence of a fact that it can reasonably be supposed that the person intended to assert by the representation. … 26 Section 63 Evidence Act provides that: 63 Exception: civil proceedings if maker not available (1) This section applies in a civil proceeding if a person who made a previous representation is not available to give evidence about an asserted fact. (2) The hearsay rule does not apply to: (a) evidence of the representation that is given by a person who saw, heard or otherwise perceived the representation being made, or (b) a document so far as it contains the representation, or another representation to which it is reasonably necessary to refer in order to understand the representation. 27 In Pt 2, s 4 of the Dictionary of the Evidence Act, it is provided that: 4 Unavailability of persons (1) For the purposes of this Act, a person is taken not to be available to give evidence about a fact if: … (c) the person is mentally or physically unable to give the evidence and it is not reasonably practicable to overcome that inability; … 28 There was no dispute at the hearing on 8 October 2021 that Mr Gardiner is not mentally able to give evidence at the trial commencing on 20 October 2021. Further, no objection was taken to the expert medical evidence which was adduced by the applicants as follows: 1. Mr Gardiner is currently suffering from a recent suicide attempt following polysubstance overdose in August 2021. He also has depression, anxiety, post traumatic stress disorder, Cluster b traits and chronic neck pain following neck surgery. 2. Currently due to Mr Gardiner's psychiatric conditions he is not fit to attend trial. His mental health is not currently stable enough to be able to be cross examined in court. His mood is labile with poor focus and attention. He is quite withdrawn and is difficult to engage. Given his recent overdose last month I am concerned that a trial appearance could trigger a deterioration in his mental health. 3. Due to the above, I do not feel that Mr Gardiner would be fit enough to attend trial by October 20th 2021 for the reasons already stated. His recovery following the overdose will take more than a few weeks and he will need input from his treating psychiatrist/psychologist to ensure he was fit to attend trial which could be at least [in] a few months time. 29 Further evidence reveals that Mr Gardiner will not commence seeing a psychiatrist until February 2022, and that he is now on fulltime disability support: 3. Mrs Gardiner informs me, and I verily believe, that Mr Gardiner is due to commence seeing psychiatrist, Dr Paul Trott at the Cairns Private Hospital, in February 2022. He is not able to get in to see Dr Trott sooner than that due to the waitlist at that clinic. 4. Mrs Gardiner has also informed me that Mr Gardiner has been approved for the National Disability Insurance Scheme ("NDIS") and is now on fulltime disability support payments and is unable to work at all. 30 I infer from this evidence that it is not reasonably practicable to overcome Mr Gardiner's inability to give evidence at the trial commencing on 20 October 2021. I also infer from this medical evidence that the date by which Mr Gardiner could be fit to attend trial is indeterminate, as he will not first see a psychiatrist until February 2022 and presumably any psychiatric treatment will only commence then. 31 For these reasons, s 63(2) Evidence Act is satisfied and the hearsay rule does not apply to the Gardiner affidavit. 32 The respondent appears to accept this but complains that the required notice under s 67(1) Evidence Act had not been provided. This has the consequence, it is submitted, that the applicants must obtain a direction under s 67(4) Evidence Act by reason of that failure which in turn requires consideration of the matters identified in s 192(2) Evidence Act. 33 Section 67 Evidence Act provides as follows: 67 Notice to be given (1) Sections 63(2), 64(2) and 65(2), (3) and (8) do not apply to evidence adduced by a party unless that party has given reasonable notice in writing to each other party of the party's intention to adduce the evidence. (2) Notices given under subsection (1) are to be given in accordance with any regulations or rules of court made for the purposes of this section. (3) The notice must state: (a) the particular provisions of this Division on which the party intends to rely in arguing that the hearsay rule does not apply to the evidence, and (b) if section 64 (2) is such a provision – the grounds, specified in that provision, on which the party intends to rely. (4) Despite subsection (1), if notice has not been given, the court may, on the application of a party, direct that one or more of those subsections is to apply despite the party's failure to give notice. (5) The direction: (a) is subject to such conditions (if any) as the court thinks fit, and (b) in particular, may provide that, in relation to specified evidence, the subsection or subsections concerned apply with such modifications as the court specifies. 34 Rule 30.29 Federal Court Rules 2011 (Cth) (Federal Court Rules) provides as follows: 30.29 Notice of intention to adduce evidence of previous representation A notice of intention to adduce evidence of a previous representation, under section 67 of the Evidence Act 1995: (a) must be in accordance with Form 62; and (b) may have attached to it an affidavit that sets out evidence of the previous representation. Note: The Court may dispense with compliance with the Rules—see rule 1.34 35 Form 62 contains the following sections which are relevant to the facts of this case: (a) a section which requires the identification of the evidence of the representations which will be the subject of the evidence. That is contained in the Gardiner affidavit which has been served on the respondent; (b) a section which contains the facts relied upon to allege that the person is not available to testify. That information is contained in the affidavit evidence of Mr Slasberg, the applicants' solicitor, which includes the medical evidence referred to above. Those affidavits have also been served on the respondent. 36 In the circumstances described in the previous paragraph (namely that the respondent has been provided with the information which would have been contained in Form 62, had one been provided), and as the respondent has been on notice since the case management hearing of 2 September 2021 (at the latest) that the applicants intended to seek to rely on the Gardiner affidavit at the trial, without making him available for cross-examination, I will dispense with the requirement for the applicant to comply with s 67(1) Evidence Act in relation to the Gardiner affidavit pursuant to r 1.34 Federal Court Rules. This dispensation is given as there is no utility in requiring the applicants to provide the same information to the respondent as has been provided already. 37 Further, a direction will be made pursuant to s 67(4) Evidence Act that s 63(2) Evidence Act applies notwithstanding that notice was not given in accordance with s 67(1) Evidence Act. 38 This direction is made for the reasons set out below. In making this direction, it will be apparent that the matters identified in s 192(2) Evidence Act have been addressed. 39 First, the respondent has been provided with the information which would have been contained in Form 62, had one been provided by the applicants, and the respondent has been on notice since 2 September 2021 that the applicants intended to seek to rely on the Gardiner affidavit at the trial without calling him as a witness. 40 Second, Mr Gardiner is not mentally able to give evidence at the trial commencing on 20 October 2021 and it is not reasonably practicable to overcome that inability. 41 Third, the date by which Mr Gardiner could be able to be cross-examined at a trial is uncertain, and, having regard to the nature of Mr Gardiner's medical conditions, there is at least a reasonable prospect that he will never be in a position to be cross-examined at a trial. This means that vacating the trial dates for the purposes of allocating trial dates next year or later could be a pointless exercise. At the least, the parties and the Court would need to await the outcome of Mr Gardiner's psychiatric treatment, which does not commence until February 2022 and which could take several months or longer. 42 Fourth, the primary fact in issue on the pleadings to which the evidence of Mr Gardiner relates is whether he was an agent and, if so, the extent of his agency. 43 Pursuant to orders of this court, the respondent filed a statement of claim on 9 March 2021. Mr Gardiner is referred to once in that pleading, at subparagraph 5(c) as follows: In the alternative, the First Applicant and the Second First (sic) Applicant via an their (sic) authorised agent, on behalf of the First Applicant and the Second Applicant, completed the Acumen Finance Lending Application on the https://www.acumenfinance.com.au website and accepted the Terms and Conditions of the Agreement by clicking 'Accept' and in doing so, the Agreement was entered. 44 The applicants deny that they authorised or appointed any agent to do the things pleaded in subparagraph 5(c) of the statement of claim: see 3(b) of the defence filed 22 April 2021. 45 It is relevant to note that paragraphs 12 to 15 of the Gardiner affidavit, which will be relied upon by the applicants at trial, contains evidence that Mr Gardiner did the things pleaded in subparagraph 5(c) of the statement of claim. This means that the Gardiner affidavit assists the respondent to prove part of its case. 46 Fifth, the Gardiner affidavit is only 28 paragraphs long. Notwithstanding the facts in issue as they arise on the pleadings, it was submitted that Mr Gardiner would be cross-examined about a number of "material" matters and that his evidence was of "great importance". 47 However, a review of the Gardiner affidavit shows that some of it appears to be general background, other paragraphs appear to be irrelevant to any fact in issue (such as whether a particular advertisement "popped up" in a newsletter on about 12 March 2020), one paragraph about a teleconference on 13 March 2020 lacks detail (and that teleconference appears to have been recorded by the respondent in any event) and many of the paragraphs exhibit or refer to documents, which speak for themselves. 48 Pursuant to orders made as part of pre-trial directions, the respondent filed an outline of submissions on 27 August 2021. Mr Gardiner is only referred to in that outline twice, in paragraphs 3.1 and 3.3, and paragraph 10 of the Gardiner affidavit is cited in footnote 8. That is, the respondent appears to wish to rely on the Gardiner affidavit to some extent. However, Mr Gardiner otherwise does not feature prominently in the respondent's case. 49 For these reasons, while it is correct that aspects of the Gardiner affidavit are relevant and material to the respondent's case, and that he might have given further relevant evidence under cross-examination, it is an overstatement to characterise his evidence as being of "great importance" to the respondent's case. 50 As to the issue of fairness, it is inevitable that permitting the Gardiner affidavit to be tendered without the deponent being cross-examined on it will involve some unfairness for the respondent. 51 However, when one has regard to the pleadings, the Gardiner affidavit itself and the trial submissions filed by the respondent on 27 August 2021, as well as the oral and written submissions of the respondent's counsel at the hearing on 8 October 2021, I consider that permitting the Gardiner affidavit to be tendered at trial without cross-examination is not so unfair to the respondent that it should not be allowed to occur. This is especially as Mr Gardiner's absence from the trial is more likely to do more harm to the applicants' case than the respondent's case, as it is likely that less weight will be ascribed to the Gardiner affidavit in these circumstances. 52 Sixth, Mr Gardiner's absence from the trial will shorten the trial which is due to commence on 20 October 2021. However, that fact is not significant as more time than is required to hear the matter was allocated in any event. It is a neutral factor. 53 Seventh, the resolution of the proceeding will turn in part on the recollections of witnesses as to events, including conversations (at least in relation to those which were not recorded), which occurred in and around March 2020, being over 18 months ago. A trial should be held sooner rather than later for this reason. 54 For the reasons set out above, the applicants can tender the Gardiner affidavit at the trial which is due to commence on 20 October 2021, without Mr Gardiner being required to attend the trial for the purposes of cross-examination. However, this ruling does not affect the respondent's ability to take objections to the admissibility of any part of that affidavit on a basis other than that Mr Gardiner is not available for cross-examination. I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Downes. Associate: Dated: 11 October 2021