New South Wales Supreme Court CITATION : Idoport Pty Limited & Anor v National Australia Bank Limited & 8 Ors; Idoport Pty Limited & Anor v Donald Robert Argus; Idoport Pty Limited ("JMG") v National Australia Bank Limited [37] [2001] NSWSC 838 FILE NUMBER(S) : SC 50113/98; 50026/99; 3991/00 HEARING DATE(S) : 28/09/01, 2/10/01 JUDGMENT DATE : 5 October 2001 Idoport Pty Limited (Plaintiff) PARTIES : Market Holdings Pty Limited (Plaintiff) National Australia Bank Limited (Defendant) Donald Robert Argus (Defendant) JUDGMENT OF : Einstein J COUNSEL : Mr JJ Garnsey QC, Mr M Dicker, Mr R Titterton, Mr R Alkadamani (Plaintiffs) Mr T Bathurst QC, Mr R Smith SC, Mr H Insall SC, Mr J Halley (Defendants) SOLICITORS : Withnell Hetherington (Plaintiffs) Freehills (Defendants) CATCHWORDS : Practice and procedure - Just, quick and cheap overriding purpose rule - Case management procedures - Conduct of litigation not merely a matter for the parties but also one for the court - Public interest in the proper allocation of scarce resources as between courts - Extended litigation leading to one of three Commercial List Judges being unavailable to hear other cases for several years - Multiple experts - Procedure for Court appointed examiner to take cross-examination evidence from selected experts Civil Procedure Rules 1998 (UK) Evidence on Commission Act 1995 (NSW) LEGISLATION CITED : Foreign Evidence Act 1994 (Cth Supreme Court Act (NSW) 1970 Supreme Court Rules (NSW) 1970 Ahmedi v Ahmedi ( 1991) 23 NSWLR 288 Alanbert Pty Ltd v Bulevi Pty Ltd [2000] NSWSC 610 Bangkok Bank Ltd v Swatow Lace Co Ltd [1963] NSWR 488 Berdan v Greenwood (1880) 20 Ch D 764 Bomanite Pty Ltd v Slatex Corp Australia Pty Ltd (1991) 32 FCR 379 Cambridge Credit Corp Ltd v Hutcheson (No 3) (1983) 8 ACLR 526 Chambers v Jobling (1986) 7 NSWLR 1 Clune v Watson [1882] Tarl 75 Coch v Allcock & Co 21 QBD 178 Connelly v Director of Public Prosecutions [1964] AC 1254 David Holdings Pty Ltd v Attorney General of the Commonwealth [(1994) 49 FCR 211 Devis v Turnbull (1822) 6 Madd 232, 56 ER 1080 Ehrman v Ehrman [1896] 2 Ch 611 at 616 Elna Australia Pty Ltd v International Computers (Australia) Pty Ltd (1987) 14 FCR 461 Garcin v Amerindo Investment Advisors Ltd [1991] 4 All ER 655 Hardie Rubber Co Pty Ltd v The General Tyre and Rubber Co (1973) 129 CLR 521 Harding v Bourke (2000) 48 NSWLR 598 Harman v Secretary of State for the Home Department [1983] AC 280 Henderson v Primmer (1986) 68 ACTR 9 Idoport Pty Limited & Anor v National Australia Bank Limited & 8 Ors (1999) NSWSC 828 Idoport Pty Limited & Anor v National Australia Bank Limited & 8 Ors [2000) 49 NSWLR 51 CASES CITED : Idoport Pty Limited & Anor v National Australia Bank Limited & 8 Ors [2000] NSWSC 338 Idoport Pty Limited & Anor v National Australia Bank Limited & 8 Ors [2000] NSWSC 1215 Idoport Pty Limited & Anor v National Australia Bank Limited & 8 Ors [2000] NSWSC 1250), Idoport Pty Limited & Anor v National Australia Bank Limited & 8 Ors [2001] NSWSC 123 Idoport Pty Limited & Anor v National Australia Bank Limited & 8 Ors [2001] NSWSC 744 Joyce v Yeomans [1981] 1 WLR 549 Leda Holdings v Water Board (supra) Lord Belmore v. Anderson (1792) 2 Cox 288, 30 ER 134 Maynard v West Midlands Regional Health Authority [1984] 1 WLR 634 Milne v Benjafield & 3 Ors [2000] NSWSC 171 Moodalay v. Morton (1785) 1 Brown Ch Cas. 469, 28 ER 1245 Poschung v Jones 25/10/96, NSWSC, unreported, BC9606849 Sali v SPC Ltd (1993) 67 ALJR 841 Savcor Pty Ltd v State of New South Wales [2001] NSWSC 596 State of Queensland v JL Holdings (1997) 189 CLR 146 The McKay Machinery Co Ltd v Turner and Another (1900) 16 WN (NSW) 192 Thorpe v. Macauley (1820) 5 Madd 218, 56 ER 877 Walt Disney Productions v H John Edwards Publishing Co Pty Ltd (1952) 69 WN (NSW) 281 WEA Records Ltd v Visions Channel 4 Ltd [1983] 1 WLR 721 Williams v Mutual Life Association of Australasia (1904) 4 SR (NSW) 677 Willis v Trequair (1906) 3 CLR 912 Wilsher v Essex Area Health Authority (1980) AC 1074 Woolf v Masius Wynne-Williams & D'Arcy Macmanus (Australia) Pty Ltd [1975] ACLD DT 98 (NSW SC) at 98 DECISION : Court appointed examiner to take cross-examination evidence from experts to be identified following further submissions. THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION - COMMERCIAL LIST EINSTEIN J 5 October 2001 50113/98 IDOPORT PTY LIMITED & ANOR v NATIONAL AUSTRALIA BANK LIMITED & 8 ORS 50026/99 IDOPORT PTY LIMITED & ANOR v DONALD ROBERT ARGUS 3991/00 IDOPORT PTY LIMITED ("JMG") v NATIONAL AUSTRALIA BANK JUDGMENT – On the taking of evidence on commission The Proceedings 1 Three sets of proceedings are presently being heard together. Proceedings No 50113 of 1998, referred to generally as "the main proceedings", were commenced by Idoport and Market Holdings as plaintiffs by way of statement of claim filed on 24 September 1998. The final hearing of the main proceedings being heard together with proceedings No 50026 of 1999 ("the Argus proceedings") commenced on 24 July 2000. The Argus proceedings had commenced in early 1999. The convention has been as a matter of convenience to refer both to proceedings No 50113 of 1998 as well as No 50026 of 1999 as "the main proceedings". 2 The MLC proceedings were commenced by Idoport as sole plaintiff on 19 September 2000, an order being made on 5 October 2000 that the main proceedings and the MLC proceedings be heard together. 3 The plaintiffs claim damages from the defendants in excess of $50 billion. The general nature of the proceedings was outlined in an interlocutory judgment [(1999) NSWSC 828] delivered on 19 August 1999. Since that date there have been numerous contested motions and contested directions hearings. The pleadings have also moved on in terms of a number of further issues being raised and further particulars being furnished. More than 50 judgments have been delivered in relation to the proceedings; many of them delivered following the commencement of the final hearing. The general state of the matter as at mid-April 2000 was set out in a judgment dealing with a contested application relating to use of the Technology Court ([2000) 49 NSWLR 51). The most recent judgment on the defendants' applications for security for costs ([2001] NSWSC 744) delivered on 13 September 2001 gives further substantial detail updating the state of the matter as at that date. Case Management of the final hearing 4 This judgment is delivered in circumstances where the final hearing, for reasons generally outlined in the security for costs judgment, is now estimated to take at least until the end of term in 2003, and may well continue even after that date. This judgment is being delivered at the same time as a judgment dealing with a number of disparate issues concerning pleadings and other matters but importantly dealing with questions germane to the appropriate case management directions necessary to permit the final hearing to proceed. The appointment of an examiner is one of the case management proposals identified in that judgment, however because the question raises a number of discrete issues it seems appropriate to deal with this issue in a separate judgment. To a certain extent, both judgments deal with the background and context in which case management directions require to be given in an attempt to deal with this extraordinary litigation. 5 The administration of justice as between parties to civil litigation requires the Court to adjust many integers to accommodate the interests of justice as well as the public interest in so far as any particular set of proceedings is concerned. 6 The Court has already taken a number of significant steps in endeavouring to shorten the time for the hearing; for example: · by ordering the use of the Technology Court ([2000] NSWSC 338); · by handing down standard directions on admissibility to deal with the numerous objections to the voluminous statements of both parties ([2000] NSWSC 1250); · by time and time again, endeavouring to tie down the material issues and requiring that relevant issues be properly pleaded and particularised; and · by receiving cross-examining counsels' express undertaking to limit the extent of cross-examination by cross-examining succinctly and efficiently [subject naturally to discharging their professional obligations to properly present the cases of their clients]. · by ordering that the proceedings be referred to mediation, the mediation having been undertaken by Sir Anthony Mason in August of this year. 7 The judgment being delivered simultaneously to this one also seeks to identify further steps which will be taken to the same end. These will include requiring a further measure of accountability from cross-examiners in requiring the identification of topics for cross-examination and compliance with time limits. Other matters such as the application of the provisions of Practice Note 121 in respect of particular issues are also treated with in that judgment. 8 The situation which now obtains where the final hearing may take up to and indeed in excess of three and a half years, requires the Court to take a major new step by way of being proactive in relation to the ongoing case management of the final hearing in the current litigation which has now developed into no less than an extraordinary saga. Litigation particularly difficult for the curial process 9 In the course of previous published judgments I have had occasion to make the point that this litigation is in my view particularly difficult for the curial process. The essential difficulty which is encountered is readily revealed when one bears in mind that the proceedings concern claims by the plaintiffs which: (a) if successful, were (during the opening) said to exceed the capitalisation of the National Australia Bank; and (b) encapsulate a number of proceedings covering a plethora of factual and legal issues - and as to the damages claims, embrace a global investigation of e-commerce markets and technology. 10 Moreover the number of witnesses and witness statements filed by both parties in the proceedings can only be regarded as extraordinary. 11 The Court must administer justice in terms of any proceedings before it. The parties are entitled to present their respective cases and to test one anothers' cases in accordance with well-established procedures. Evidence relevant to the issues will generally be admitted. The capacity of the Court to test the substance of pleaded issues is limited and the ultimate judgment must take into account all of the evidence presented during the hearing and all of the submissions put by the parties to the Court. The Court must however, consider whether particular procedures are appropriate to be taken, in any particular set of proceedings. Court appointed examiner 12 Notwithstanding the seemingly inapt use of the words 'quick' and 'cheap' in the expression 'just, quick and cheap' in relation to these proceedings, the Court, under cover of the overriding purpose rule, [Supreme Court Rules (NSW) 1970, Part 1 Rule 3], may take whatever steps are practicable to case manage the proceedings so as to expedite the hearing and bring the proceedings to a conclusion. I have come to the clear conclusion that the proper case management of the proceedings requires that a very unusual step be taken in relation to the manner in which the court deals with the testing of certain of the evidence to be adduced from independent professional experts being called by both sides of the bar table. The step involves the Court appointing an examiner before whom cross-examination of these experts will be 'conducted' [as explained below, the evidence will be 'taken' before the examiner and will only become evidence in the proceedings when tendered]. Before turning to explain the reasons for the taking of this unusual step (which is not unprecedented – cf Leda Holdings Pty Ltd v Water Board 26/4/94, Supreme Court of NSW, unreported discussed below), it is convenient to examine with more precision the power to make the order and the general background context in which evidence on commission has historically been ordered. The Principles Historical basis for the power 13 Previously in NSW, a procedure existed whereby evidence could be taken on commission pursuant to a formal commission issued by the Court. Notwithstanding that the term "evidence on commission" is still commonly referred to in current legislation and case law (for example the Evidence on Commission Act 1995 (NSW)); the current legislation does not currently provide for the procedure which applied to this previous practice. The procedures currently in place cater for "evidence on examination" instead. 14 Gummow J in Elna Australia Pty Ltd v International Computers (Australia) Pty Ltd (1987) 14 FCR 461 at 466 provided a brief history of the Court's power to issue commissions and appoint examiners: "It appears that whilst statute was needed to empower the English common law courts to issue commissions and to appoint special examiners for the examination of witnesses outside the British dominions, Chancery (and the Court of Exchequer on its equity side) claimed and exercised an inherent power to issue such commissions and to appoint examiners, both in aid of suits in the exclusive jurisdiction and in aid of actions at law: Moodalay v. Morton (1785) 1 Brown Ch Cas. 469, 28 ER 1245; Lord Belmore v. Anderson (1792) 2 Cox 288, 30 ER 134; Thorpe v. Macauley (1820) 5 Madd 218, 56 ER 877; Devis v Turnbull (1822) 6 Madd 232, 56 ER 1080; Hume-Williams and Macklin "Evidence on Commission" 2nd Ed. Ch 1; Pomeroy "Equity Jurisprudence", 3d Ed 2' 213, 214. The commissions issued in equity appear to have been limited to examination upon written interrogatories, in accordance with the general Chancery procedure of not allowing witnesses viva voce except by special order. See Ballow "A Treatise of Equity" ed. Fonblanque, Vol II, Book VI, Chapter 1, 2'2; Maddock "Practice of the High Court of Chancery", Vol 2, pp.405-415. As the nineteenth century progressed, objections were made by various foreign governments to examination of witnesses on their territory by British appointed examiners, and the earlier procedures largely were replaced by the issue of letters of request to foreign courts either to take the evidence or to appoint some person to take it: Daniel's Chancery Practice, 7th Ed, Vol 1, pp. 549-552. Section 7V (1) of the Evidence Act 1905 …contains the modern representatives of these procedures, namely the issue of commissions, appointments of examiners and the issue of letters of request. Order 24, Rule 1, of the Rules of this Court, also does so… … One consequence of the Judicature system was to empower the Supreme Court of Judicature to provide for the taking of evidence abroad both on interrogatory and viva voce (Hume-Williams and Macklin, supra, pages 7-21)." The overriding purpose rule 15 Part 1 Rule 3 of the Rules provides: "(1) The overriding purpose of these rules, in their application to civil proceedings, is to facilitate the just, quick and cheap resolution of the real issues in such proceedings. (2) The Court must seek to give effect to the overriding purpose when it exercises any power given to it by the rules or when interpreting any rule." 16 The "overriding purpose" rule adopts a similar approach to the Civil Procedure Rules 1998 (UK) which declare, "an overriding objective of enabling the court to deal with the cases justly". Both sets of Rules impose an express obligation upon the Court to give effect to the "overriding purpose" or "overriding objective" stated. Despite differences in wording, the UK version has a special relevance in the Australian context to the extent that the Rules take a similar approach in relation to the mandatory obligation imposed on the Court. A discussion of the "overriding purpose" and its UK counterpart was considered in Idoport v National Australia Bank (2000) 49 NSWLR 51 at 54 and following. 17 The overriding purpose rule was also recognised in Milne v Benjafield & 3 Ors [2000] NSWSC 171 (in relation to the referral of certain matters to a referee); Alanbert Pty Ltd v Bulevi Pty Ltd [2000] NSWSC 610 (in relation to the parties agreeing on the quantum of entitlements between themselves) and Savcor Pty Ltd v State of New South Wales [2001] NSWSC 596 (in relation to a refusal to make an order for separate trials). The Rules are the servants of justice, not their masters 18 The overriding purpose rule complements other general powers conferred on the Court by the Rules, the Supreme Court Act 1970 (NSW) and the Court's inherent jurisdiction to control and supervise the conduct of its own proceedings. Hence the obvious significance of Part 26 Rule 1 and section 76A of the Supreme Court Act which provide respectively: Part 26 Rule 1 "The Court may, at any time and from time to time, give such directions and make such orders for the conduct of any proceedings as appears convenient (whether or not inconsistent with the rule) for the just, quick and cheap disposal of the proceedings." Section 76A "The Court may, from time to time, give such directions as the Court thinks fit (whether or not inconsistent with the rules) for the speedy determination of the real questions between the parties to civil proceedings." 19 This general power is further emphasised by Part 34 Rule 6(1) which states: "The Court may give directions as to the order of evidence and addresses and generally as to the conduct of the trial." 20 The overriding purpose rule also complements the general discretion conferred by Part 1 Rule 12 of the Rules which provides: "The Court may dispense with compliance with any of the requirements of the rules, either before or after the occasion for compliance arises." 21 The Court of Appeal in Harding v Bourke (2000) 48 NSWLR 598 held that it was within the Court's discretion to exercise the Part 1 Rule 12 power to extend a time limit imposed on a party by another Rule. Commenting on this power, Mason J stated at 603: "Such a dispensing power is commonly encountered in rules of court and it serves to remind that rules are the servants of justice, not their masters." See also Clune v Watson [1882] Tarl 75. 22 French J in Bomanite Pty Ltd v Slatex Corp Australia Pty Ltd (1991) 32 FCR 379 at 391 further stated: "The substantive goal of this Court is to do justice between parties according to law. That objective is not to be compromised by undue rigidity in the application of the procedural requirements which are its handmaidens." Order for examination of a witness 23 It is clear that the Supreme Court Rules permit orders to be made for the taking of evidence "otherwise than at the trial". Although Part 36 Rule 6(2) provides that evidence taken during an examination is not admissible if the Court is satisfied that the person is in the State and able to attend the hearing (which rule has the potential of prohibiting the course proposed in this judgment), it is clear enough that this prohibition may be overridden by an order made pursuant to the general discretion conferred by the powers provided by Part 26 Rule 1, section 76A and/or Part 1 Rule 12. Bespoke approach to the giving of directions and orders 24 In examining a number of the matters of detail concerning conduct of the examination and the approach taken in conventional cases where orders for the examination of witnesses are made, it is important to bear in mind that the appointment of the examiner being considered in this present judgment will include a number of particular bespoke directions and orders for the purpose of ensuring that the particular considerations of importance to these proceedings dictate the form of such directions and orders. 25 In these circumstances, whilst adjectival information as to: (1) the circumstances when conventional orders for the examination of a witness otherwise than at a trial have been made; and (2) as to the principles which underpin the making of such orders, is clearly relevant to the question of whether the Court in these proceedings should make such an order, it is important to note that no generalisation ought mandate any particular constraint upon the particular orders which may be appropriate in these proceedings. 26 It is convenient however, for obvious reasons, to nevertheless examine the practice, procedure and principles which generally underpin the conventional making of orders for the examination of a witness other than at a trial. I proceed to that examination. Part 27 of the Supreme Court Rules 27 Part 27 of the Rules deals with the Court's power to take evidence "otherwise than at the trial". Part 27 Rule 1A provides: "The Court may, for the purpose of proceedings in the Court, make orders for the examination of any person before a Judge or master or other officer of the Court or before such other person as the Court may appoint as examiner at any place - a) in the State or out of the State in Australia; or b) out of Australia." 28 Part 27 Rule 1A was clearly intended to apply to situations where, for some reason, the witness is unable to attend the hearing. However, the application of this Rule in the present circumstances (ie where the witnesses to be examined are able to attend the hearing and the discretion is to be exercised for the sole purpose of saving court time) can be justified in three ways. 29 First, the discretion conferred upon the Court under this Rule is wide and the ultimate "interests of justice" test depends entirely upon the specific circumstances of the case. For these reasons, the non-restrictive wording of Rule 1A presents no actual obstacle to the application of this power for purposes other than the taking of evidence where the witness is unavailable. 30 Secondly, Leda Holdings v Water Board (supra) provides direct authority for the application of this Rule in the present circumstances. In that case, six hearing days had been set down for a matter involving a dispute between expert valuers (amongst other things). In circumstances where the witnesses declined to swear affidavits, and where the credit of the witnesses was not likely to be in issue, Young J (now Young CJ in Eq.) directed that their evidence be taken on commission. Young J stated that he preferred to read the depositions from the Commission at a later stage so that a day of court time could be saved. 31 The plaintiff in Leda opposed this course arguing that as a general rule, it must be established that the attendance of the witness cannot be procured before an order to take evidence on commission can be made. The plaintiff referred the Court to the following extracts from the authorities: "…as soon as a plaintiff or defendant shows to the satisfaction of the Court that a witness is out of the jurisdiction of the Court, and that his evidence is material, and that the Court has no power to enforce his attendance, the Court or Judge is bound to exercise its discretion, unless the other side can establish to the satisfaction of the Court that the witness can and will attend." : Williams v Mutual Life Association of Australasia (1904) 4 SR (NSW) 677 at 680, as approved by Griffith CJ in Willis v Trequair (1906) 3 CLR 912 at 919 "I accept the submission that as a general rule the applicant for an order for the issue of a letter of request should establish that he cannot procure the attendance of the witnesses." : Hardie Rubber Co Pty Ltd v The General Tyre and Rubber Co (1973) 129 CLR 521 at 554 32 Rejecting this approach, Young J stated: "Those decisions were made many years ago and today there is a far greater freedom in referring out of the court questions to be dealt with by appropriate people, and indeed I could refer out the taking of evidence on this issue to a referee under the rules. It is a lesser thing to do to order that the evidence be taken before a Commissioner, but it seems to me that in future the Court will do this where people refuse to file affidavits and where it appears more likely than not that the credit of the witness will not be impugned. However, if it appears when the evidence is taken that there is a matter which requires the Judge to see the witness to form a view as to his or her ability to recollect, then there should be leave for the plaintiff to supplement cross examination before the Judge." 33 Finally, the discretion conferred to the Court by this Rule must be read in light of the general powers of the Court. The rule articulated in Part 36 Rule 2(1): "…the evidence of any witness on any issue at a trial shall be given orally before the Court" is subject to subrule (3) which reads: "Subrule (1) applies subject to - a) the Act; b) the rules; c) any direction of the Court; d) any agreement between the parties; and e) section 29(4) and section 31 of the Evidence Act." 34 It is clear that the effect of Part 27 Rule 1A cannot be read and understood in isolation and must be considered with the general powers of the Court (including Part 1 Rule 3, Part 26 Rule 1, Section 76A, Part 34 Rule 6(1) and part 1 Rule 12) clearly in mind. Exercise of the discretion 35 Rule 27 Rule 1A contains no express limitation as to the exercise of the power, thereby conferring a wide discretion upon the Court. However the ultimate test is described as whether it is in the interests of justice to make the order in the circumstances of the case. The Court in Coch v Allcock & Co (1888) 21 QBD 178 at 181 (as quoted in The McKay Machinery Co Ltd v Turner and Another (1899) 16 WN (NSW) 192 at 193) stated: "It is clear that, according to the established practice, it is a matter of judicial discretion, and the commission ought only be granted on reasonable grounds being shown for its issue. The matter being one of discretion, it is impossible to lay down any general rule as to when a commission will be granted. It must depend on the circumstances of the particular case. The Court must take care on the one hand that it is not granted when it would be oppressive, or unfair to the opposite party, and on the other hand that a party has reasonable facilities for making out his case, when from the circumstances there is a difficulty in the way of witnesses attending at the trial. All the circumstances of each particular case must be taken into consideration." 36 An inherent tension exists between the desirability for all witnesses to give evidence at the one trial at the one time; and the need for parties to be able to adduce all material evidence without being shut out by matters of convenience: Ritchie's Supreme Court Procedure NSW [27.1A.3]. In seeking to resolve this tension, a number of general propositions and considerations have been formulated by the courts which are useful in highlighting the different circumstances which may arise. It is important to note however that these generalities should not constrain the exercise of a wide discretion with the interests of justice as the primary consideration. 37 One consideration relevant to the Court's decision whether to exercise this discretion is whether evidence to be given by the witness is dependent at all on the credibility of that witness: Walt Disney Productions v H John Edwards Publishing Co Pty Ltd (1952) 69 WN (NSW) 281 at 282. In that case, the Court made a point of distinction between evidence of a formal nature and cases where for example: "…identity is in question, or where misrepresentation is alleged, or indeed from any other case where, in determining the issue, the credibility or accuracy of recollection of a witness is as it were of the essence of the matter." (at 282). See also Bangkok Bank Ltd v Swatow Lace Co Ltd [1963] NSWR 488 at 490 38 Berdan v Greenwood (1880) 20 Ch D 764n involved an appeal from an order for evidence to be given on commission overseas. The Court took a number of considerations into account including the materiality of the witness' evidence and the possibility of other witnesses being called to establish that same evidence. Evidence which is merely "for the purpose of bolstering up other evidence by incidental evidence" should not be permitted to be obtained on commission and the evidence must be "really necessary for the purposes of justice". It is not enough to say that the evidence may possibly be of some use on some collateral matter: Ehrman v Ehrman [1896] 2 Ch 611 at 616. 39 Considerations of materiality are not relevant where the witness is the very person with whom the contract sued upon is said to have been made. In these circumstances, evidence which is merely incidentally useful in corroborating other evidence may be permitted to be taken via examination: Woolf v Masius Wynne-Williams & D'Arcy Macmanus (Australia) Pty Ltd [1975] ACLD DT 98 (NSW SC) at 98. 40 Levine J in Poschung v Jones 25/10/96, NSWSC, unreported, BC9606849 at 12 summed up the factors to be considered in relation to the examination of a witness overseas in the following way: "The determination of whether or not it is in the interests of justice in a given case that an order can be made is thus facilitated by: the identification of the witnesses; the establishment on the probabilities that the evidence of each witness is material; an explanation of the circumstances in which a witness is unable to come to this country (the more so in relation to a party); the provision of evidence in relation to costs of not bringing witnesses here and the costs of alternatives including (but only in appropriate cases in my view) video link; if a Judge is sought to be the Examiner the reasons therefore should be clear; the location and nature of the facilities at the place where it is sought to have the witnesses examined should be evidenced and in an appropriate case what I will describe as the "internal" costs of bringing to that place witnesses that might be elsewhere in the foreign country." Conduct of the examination 41 Evidence taken during the examination (including documents produced, answers made to written interrogatories and audio-visual recordings) may be tendered as evidence in the main proceedings: Part 36 Rule 6(1). Such evidence is not admissible if the Court is satisfied that the person is in the State and able to attend the hearing or if the evidence would not have been admissible had it been given at the hearing: Part 36 Rule 6(2). The potential obstacle caused by this Rule in relation to the present application of Rule 1A has already been referred to in relation to the general powers of the Court. 42 The examiner appoints a time and place for the examination having regard to the circumstances as well the convenience of the person to be examined. The appointment should be made as soon as practicable after the making of the order. The examiner is to give notice of the appointment to the party who made the application, and that party is to give notice to each of the other parties at least 3 days prior to the time appointed: Part 27 Rule 4. 43 The order for examination is addressed to the examiner and does not compel the attendance of any witnesses. Where the examination is to occur in Australia, the witness may be served with a subpoena under Part 37 of the Rules. 44 Each party and their respective counsel and solicitors are permitted to attend the examination. The examination, cross-examination and re-examination processes are to be conducted in a like manner as at trial, and the proceedings are to be conducted in accordance with the procedure of the Court: Part 27 Rule 5. 45 The deposition of the witness before the examiner must be recorded and must contain "as nearly as may be the statement of the person examined": Part 27 Rule 8. The Court or examiner can give directions for the making of a recording of the examination by any audio-visual method: Part 27 Rule 8A. 46 Where the deposition is recorded in writing, the record must be read to or by the witness and signed by them. Where the deposition was recorded otherwise than in writing, a transcript of it must be prepared and certified. The record or transcript must be then authenticated by the examiner and sent to the registrar to be filed in the proceedings. The examiner must also send the exhibits to the registrar who will deal with them in a manner directed by the Court. Where the examiner is a Judge or master, he or she merely has to authenticate his or her signature on the record or transcript: Part 27 Rule 9. The role of the examiner 47 Any person may be appointed an examiner by the Court, and the choice of the appropriate person will depend upon a number of considerations such as the convenience of the witness and parties; the nature and materiality of the evidence; and the nature of any controversy that may exist in relation to the evidence: Ritchie's Supreme Court Procedure NSW, [27.1A.2]. 48 Where the evidence is particularly material to the resolution of the proceedings, it may be appropriate to appoint a Judge as the examiner. A Judge, master or other officer of the Court may not act as an examiner without the concurrence of the Chief Justice: Part 27 Rule 1C(1). There are a number of factors relating to the appointment of a Judge as examiner which were considered by Sir Robert Megarry VC in Practice Note (Chancery Deposition) 1981 1 WLR 1560 at 1561 (referred to by Miles CJ in Henderson v Primmer (1986) 68 ACTR 9): "In the event, no objections to any of the evidence were taken, and so for most of two days I simply sat and listened to the evidence, with nothing to decide and no useful function to discharge. In those circumstances I think that I should provide some guidance for future cases. First, I think that any litigant who wishes the examination of a witness under Order 39 to take place before a judge and not an examiner must make out a sufficient case for such an order to be made; and the burden is substantial. The time of judges ought not to be spent on doing what can perfectly well be done by an examiner, and in the great majority of cases an examiner will suffice. Only rarely will the greater authority of a judge be needed, as where the witness is known to be recalcitrant or unruly. Most certainly a judge is not to be had for the asking. Second, until the powers of a judge before whom an examination is to be conducted are defined by rules of court, it behoves those who seek such an examination to agree beforehand, or to attempt to agree, what those powers are to be. If the judge is to have no greater powers than an examiner, it will usually be very difficult to establish a sufficient case for having a judge rather than an examiner. Third, the extent of the powers that the judge is to have should be defined in the order for the examination, instead of being left for discussion when the examination is due to begin. Fourth, the order for examination should make it explicit that it is to be before a judge, and not leave it optional for the parties to have it before a judge or an examiner, as they choose. The master must exercise his judgment, and decide whether or not it is a proper case for a judge." 49 Unless the examiner is a Judge or a Master: a) The validity of objections taken to questions put to witnesses under examination are not be decided by the examiner. Instead, the examiner is to state his or her opinion, and the Court may decide the validity upon a motion by any party at a later stage: Part 27 Rule 7(1); and b) The examiner is to be provided with copies of documents in the proceedings that are necessary to inform him or her as to the questions relating to the examination. If the documents do not suffice in this way, the Court is to state these questions in the order for examination or in a later order: Part 27 Rule 3. 50 The examiner may put questions to the witness in relation to the meaning of any answer given by the witness or any matter arising in the course of the examination: Part Rule 5(4). 51 The examiner may make a special report to the Court in relation to the examination and having regard to the absence or conduct of any person from or at the examination: Part 27 Rule 10. Witnesses outside jurisdiction or unable to attend hearing 52 In relation to witnesses outside of the jurisdiction, the Rules are complemented by the Evidence on Commission Act 1995 (NSW) and the Foreign Evidence Act 1994 (Cth). Under these circumstances, the Court is to consider a number of matters in the exercise of its discretion including: the ability of the person to give evidence in the proceedings; the materiality of the proposed evidence and the interests of the parties: ss6(2), 20(2) Evidence on Commission Act, s7(2) Foreign Evidence Act. I note that s8(2) of the Evidence on Commission Act effectively mirrors Part 36 Rule 6(2) of the Supreme Court Rules earlier referred to. 53 Where evidence is to be taken by an examiner outside of the jurisdiction (overseas for example), the conduct of the examination process must adhere to the local laws in force. 54 An alternative to the taking of evidence through examination is the issue of letters of request to the courts of the foreign jurisdictions. The relevant statutory powers provide as follows: "In any proceeding before a superior court, the court may, if it appears in the interests of justice to do so, on the application of a party to the proceeding, make an order, relating to a person outside Australia: … (c) for issue of a letter of request to the judicial authorities of a foreign country to take the evidence of the person or cause it to be taken." : s6(1)(c) Evidence on Commission Act, s7(1)(c) Foreign Evidence Act. 55 The issue of letters imposes no obligation upon the foreign courts, but compliance with such requests has become a widely accepted practice. This option overcomes the problems frequently encountered when evidence is taken through examination; namely the inability to compel witnesses to attend the examination and problems encountered in relation to the taking of evidence on oath: Ritchie's Supreme Court Procedure NSW, [27.1A.6]. 56 With the advent of new technologies and communications, it is often possible to bypass these methods through use of video and telephone conferencing facilities and the like. See for example Garcin v Amerindo Investment Advisors Ltd [1991] 4 All ER 655. The reasons for appointing an examiner 57 As with most sets of proceedings which come before the courts, it is possible to categorise the evidence to be adduced in more than one way. One such categorisation often adopted for differing purposes relates to the dichotomy between presentation of the case on liability and the case on damages. When, late last year, the plaintiffs applied for an order under Part 31 Rule 2 of the Supreme Court Rules for the hearing of certain questions separately from other questions in the proceedings [generally an application that the cases on liability be first heard and determined], the judgment ([2000] NSWSC 1215) set out reasons why that application was unsuccessful. The reasons made plain that the intertwined nature of many aspects of the evidence to be adduced in relation to liability, causation and damages was such that any attempt to split the case in the way suggested would almost certainly cause great difficulty for the Court and the parties. The holding was that there was a clear possibility that the splitting of liability and damages would ultimately lead to the case aborting, and this for the reason that vital issues of credit were to be raised with respect to particular witnesses who would give evidence both as to liability as well as to damages. 58 The particular categorisation of relevance to the present judgment concerns the dichotomy between; · on the one hand, lay evidence (in the sense of evidence given by persons who had some form of involvement at a contemporaneous level with the Ausmaq Service or with the negotiations and dealings between Maconochie interests and the NAB interests anterior to and/or following the entry into the restructuring agreements); and · on the other hand, expert evidence (in the sense of evidence given by professional experts retained by both sides of the bar table to give evidence on matters the subject of their specialised knowledge, but importantly not being persons having had any form of involvement at a contemporaneous level with the Ausmaq Service or with the negotiations and dealings between Maconochie interests and the NAB interests anterior to and/or following the entry into the restructuring agreements – these experts by and large expressing opinions based upon assumptions which they are asked to make). 59 There are a very large number of persons proposed to be called by both parties who fall into this latter category ["category two"]. The plaintiffs and defendants have identified at least 17 and 28 witnesses respectively. Many of these category two witnesses have made multiple statements and they are commonly voluminous with folders of documents exhibited to the statements. They deal with innumerable minutiae thrown up by the enormous number of factual issues being litigated in the proceedings. One example concerning analysis of the system architecture suffices to show how the evolution of statements tend to throw up such issues. 60 The plaintiffs' damages cases involve the proposition that in the year 2003, the Ausmaq System, however configured, would have had the technical capacity to process 1.8 million transactions a day. Mr Hodgkinson filed a statement dealing with this issue on behalf of the defendants. Mr Martin, called by the plaintiffs, then replied to that statement. One of the criticisms advanced by Mr Hodgkinson at a general level, related to the capacity of the Progress database. The Ausmaq System used a Progress database with most of the application software having been written in Progress 4GL language, and some also written in C. 61 The evidence to be advanced by the defendants' experts is to the effect that Progress, whilst suitable for some applications, is not a heavy duty database and is not suitable for high-volume transactions of the kind which had been assumed in the plaintiffs' damages calculations. 62 Following the filing of Mr Hodgkinson's statement and Mr Martin's statement in reply, both Mr Coleman (Star project manager of Star Systems for a period in relation to the original development) as well as Mr Martin, put on statements dealing with the capacity of the Progress database to the general effect that Progress had now released version 9.1. Version 9.1 had been internally rated by Progress as capable of carrying out 622,000 transactions a minute, which worked out at 35 million transactions a day. In the result, the plaintiffs' proposition became that Ausmaq would have been in a position to move across to Progress 9.1 and hence would have been able to achieve 35 million transactions a day – well and truly being able to cope with processing the lesser figure of 1.8 million transactions per day [see generally statement of Mr Stephen Coleman of 13 March 2001 paragraph 6]. 63 This issue then gave rise to a question of the reliability of the benchmarking internal test adopted by Progress. Apparently, the database market involves huge amounts of money such that the sale of databases around the world constitutes a very significant undertaking involving billions of dollars. The database market involves companies such as IBM, Oracle, Cybase and others who were in the business of selling heavy duty databases. These companies and other industry groups are said to have, in the late 1980's, formed a group named the "Transaction Processing Council". This is a non-profit body said to have been set up to undertake objectively rated and certified performance assessments of databases. 64 Mr Raab is put forward as the head of the Transaction Processing Council. The defendants assert that he has looked at the Progress test and seeks to give evidence that the test used by Progress was a "debit/credit" test which was the first of the tests ever promulgated by the Transaction Processing Council but was rejected in the late 1980s. He seeks to give evidence that the Transaction Processing Council now uses three subsequently developed tests, the latest of which is called "TCP 3". The defendants seek to call Mr Raab to give evidence to the effect that Progress did not subject their product, Progress 9.1, to rating in accordance with the TPC current standards. 65 The net result of this one particular issue is that the internal testing procedures of the developers of Progress 9.1 are to be the subject of very close examination requiring, in turn, an examination of the several approaches to the performance assessments of sundry databases. 66 The purpose of going into this somewhat extended examination of a particular issue is not so much to highlight the issue, as to familiarise the reader with one of literally hundred and hundreds of minute issues raised by the technical questions being litigated and dealt with by professional experts with specialised knowledge in relation to the many areas of technical expertise treated with. In respect of every proposition being put by an expert called by the either party, a contradictor for that proposition is called by the opposing party. 67 This example is not given to suggest that a decision has been made that Mr Coleman would himself be an appropriate candidate to be cross-examined before an examiner. As with all other experts, the question of whether or not he is an appropriate candidate will have to await detailed submissions, the defendants already having advanced the proposition that Mr Coleman had been an employee for Star System (which apparently subsequently changed its name to GBST) and that Mr Coleman was the project manager said to have been responsible for the original Instaclear development. Subsequent enhancements (including the Instaclear New Zealand development for Ausmaq) were project managed by staff reporting directly to Mr Coleman. Overview of certain of the evidence to be adduced 68 A convenient general overview of the evidence sought to be adduced in relation to the damages case and more particularly of the areas of expertise sought to be relied upon by both parties as at 19 July 2001, was given by Mr Lovell in his affidavit of that date which was relied upon in relation to the Security for Costs argument. Paragraphs 51-63 were in the following terms: "51 Evidence in relation to the Damages Case can broadly be broken down into the following components: (a) valuation issues; (b) systems issues; (c) opportunities for the Ausmaq System in the Australian and New Zealand markets; (d) the United Kingdom and European financial services markets; (e) the United States financial services market; and (f) the Asia Pacific market. 52 The evidence relied upon by Market Holdings in relation to valuation is as follows: (a) Fourth Statement of Mr Maconochie dated 24 May 1999; (b) Fifth Statement of Mr Maconochie dated 9 June 1999; (c) Third Statement of Mr Hume dated 9 June 1999; (d) Statement of Mr John R Skelton dated 11 June 1999; (e) Statement of Professor Henry O Pruden dated June 1999; (f) Statement of Mr Thomas H Mack dated 5 June 2000; (g) Second Statement of Professor Henry O Pruden dated 6 June 2000; (h) Second Statement of Mr John R Skelton dated 20 July 2000. In his judgment dated 12 March 2001, his Honour Justice Einstein ruled that Mr Maconochie did not have the expertise to give valuation evidence (see [2001] NSWSC 123). On 16 July 2001 Mr Garnsey QC (at T10747) indicated that a new witness would "replace" Mr Skelton and also that the evidence of Mr Maconochie on valuation, which has been ruled inadmissible, would be replaced by evidence from a new witness. 53 The evidence relied upon by the defendants in relation to valuation is as follows: (a) Statement of Professor Kenneth Lehn dated 23 March 2000; (b) Supplementary Statement of Professor Kenneth Lehn dated 27 June 2000; (c) Statement of Professor Kenneth Lehn dated 19 September 2000; (d) Second Statement of Professor George Foster dated 26 September 2000. 54 The evidence relied upon by Market Holdings in relation to so-called systems issues is as follows: (a) Statement of Mr Martin in reply to Professor Thomas dated 8 February 2001; (b) Statement of Mr Martin in reply to Mr Hodgkinson dated 8 February 2001; (c) Statement of Professor Michael Aitken in reply to Mr Hodgkinson dated 1 March 2001; (d) Statement of Mr Stephen Coleman dated 12 March 2001; (e) Statement of Mr Martin dated 15 March 2001; (f) Statement of Mr Martin in reply to Professor Thomas dated 12 April 2001; (g) Statement of Mr Martin in reply to Mr Hodgkinson dated 12 April 2001; (h) Statement of Mr Martin in reply to Professor Thomas and Mr Hodgkinson dated 2 May 2001. Mr Martin's evidence in relation to so-called systems issues was the subject of oral supplementation on 14 to 17, 24, 28 and 29 May 2001. 55 The evidence relied upon by the defendants in relation to so-called systems issues is as follows: (a) Statement of Professor Martyn Thomas dated 22 September 2000; (b) Statement of Mr Robert Hodgkinson dated 6 October 2000; (c) Further Statement of Mr Martyn Thomas dated 3 July 2001; (d) Statement of Mr Jeff Yancey dated 17 July 2001. 56 The evidence relied upon by Market Holdings in relation to opportunities for the Ausmaq System in the Australian and New Zealand markets is as follows: (a) Second Statement of Mr Maconochie dated 20 November 1998; (b) Fourth Statement of Mr Maconochie dated 24 May 1999; (c) Statement No. 3 of Michael James Aitken in response to Gary Turner dated 5 July 2000; (d) Statement of Mr Hugh McMullan dated 11 July 2000; (e) Statement of Mr Maconochie dated 11 September 2000 in response to Mr Turner; (f) Statement of Mr McMullan dated 26 February 2001 in response to Mr Turner; (g) Statement of Mr Maconochie dated 10 March 2001 in response to Mr Turner. 57 The evidence relied upon by the defendants in relation to opportunities for the Ausmaq System in the Australian and New Zealand markets is as follows: (a) Statement of Mr Turner dated 13 March 2000; (b) Supplementary Statement of Mr Turner dated 26 May 2000; (c) Statement of Mr Turner dated 11 December 2000. 58 The evidence relied upon by Market Holdings in relation to the United Kingdom and European financial services markets is as follows: (a) Statement of Mr Ian Joslin dated 19 April 1999; (b) Fifth Statement of Mr Maconochie dated 9 June 1999; (c) Statement of Mr Joslin dated 9 June 2000; (d) Statement of Ms Diana Mackay dated 15 July 2000; (e) Statement of Mr Jonathan Heller dated 6 July 2000; (f) Statement of Mr Anthony Davies dated 10 July 2000; (g) Statement of Mr Heller dated 4 April 2001; (h) Statement of Mr Joslin dated 5 April 2001; (i) Statement of Ms Mackay dated 20 April 2001. (j) Statement of Mr Andrew White dated 9 July 2001. In his judgment dated 12 March 2001, his Honour Justice Einstein ruled that Mr Maconochie did not have the expertise to give evidence relating to the United Kingdom and Europe (see [2001] NSWSC 123). 59 The evidence relied upon by the defendants in relation to the United Kingdom and European financial services markets is as follows: (a) Statement of Ms Dymphna Lehane dated 16 March 2000; (b) Statement of Ms Maureen Erasmus dated 27 March 2000; (c) Statement of Ms Pamela Thompson dated 22 September 2000; (d) Statement of Mr Michael Wainwright dated 25 September 2000; (e) Statement of Ms Lehane dated 27 September 2000; (f) Statement of Mr Mark Phythian-Adams dated 27 September 2000; (g) Statement of Ms Erasmus dated 29 September 2000; (h) Statement of Ms Anne McMeehan dated 29 September 2000; (i) Statement of Mr Stefan Breitenstein dated 5 October 2000; (j) Statement of Mr James Ball dated 8 October 2000; (k) Statement of Mr Giorgio Capelli dated 12 October 2000. 60 The evidence relied upon by Market Holdings in relation to the United States financial services market is as follows: (a) Fifth Statement of Mr Maconochie dated 9 June 1999; (b) Statement of Professor Pruden dated June 1999; (c) Statement of Mr Skelton dated 16 June 1999; (d) Statement of Mr Mack dated 5 June 2000; (e) Statement of Professor Pruden dated 6 June 2000; (f) Statement of Mr Mack dated 25 June 2000. 61 The evidence relied upon by the defendants in relation to the United States financial services market is as follows: (a) Statement of Mr Stan Monsowitz dated 10 March 2000; (b) Statement of Dr Ward Hanson dated 11 March 2000; (c) Statement of Professor Foster dated 14 March 2000; (d) Statement of Mr Bruce Leto dated 18 September 2000; (e) Statement of Mr Monsowitz dated 21 September 2000; (f) Statement of Mr Howard Kramer dated 21 September 2000; (g) Statement of Professor Foster dated 26 September 2000; (h) Statement of Mr Cliff Alexander dated 5 October 2000; (i) Statement of Mr Lawrence Kash dated 9 October 2000. 62 The evidence relied upon by Market Holdings in relation to the Asia Pacific market is as follows: (a) Fifth Statement of Mr Maconochie dated 9 June 1999; (b) Statement of Mr Carl Peter Meerveld dated 16 February 2001 In his judgment dated 12 March 2001, his Honour Justice Einstein ruled that Mr Maconochie did not have the expertise to give evidence relating to the Asia Pacific market (see [2001] NSWSC 123). 63 The evidence relied upon by the defendants in relation to the Asia Pacific market is as follows: (a) Statement of Mr Shinji Yamamoto dated 27 June 2000; (b) Statement of Mr Stewart Aldcroft dated 5 July 2000." 69 In paragraphs 196 and 197 of his affidavit of 26 September 2001 Mr Lovell, in explaining the areas covered by the experts, sets out a chart in respect of only one geographical region, namely Europe. When one bears in mind that similar such charts can presumably be prepared for the United States and Asian regions, the magnitude of the expert evidence begins to become clear. The chart in relation to Europe was in the following terms: UK ONSHORE OFFSHORE AND CROSS-BORDER EUROPE RETAIL DEPOSITS RETAIL DEPOSITS MUTUAL FUNDS Plaintiffs: Defendants: Plaintiffs:Plaintiffs:Defendants: Joslin 2Joslin 1 Joslin 2 Erasmus 1 Joslin 2 Joslin 3 Lehane 1 Mackay 1 (Germany, Italy, Switzerland, France) Joslin 4 (covers NAB's strategic approach in UK across all products) Phythian-Adams Mackay 2Erasmus 1 Davies 2 Erasmus 2 Erasmus 2 Lehane 1 Lehane 2 MUTUAL FUNDS MUTUAL FUNDS LIFE AND PENSIONS Plaintiffs: Defendants: Plaintiffs:Defendants:Plaintiffs:Defendants: Joslin 1 Joslin 2 Mackay 1 Maconochie 5* Mackay 2 Maconochie 6* Erasmus 1 Joslin 1 Erasmus 1 Erasmus 2 Joslin 2 Erasmus 2 Lehane 1 Davies 1 Lehane 1 Lehane 2Joslin 1 Mackay 1 Lehane 2 Joslin 2 Mackay 2 McMeehan Heller 1 (includes a "cross border" life and pensions proposition) Joslin 3 Davies 1 Davies 2 Heller 2 (reply to Ball) Davies 2 (with cross-border material)Lehane 1 Erasmus 1 Erasmus 2 Ball (includes comments on Heller's cross border proposition) LIFE AND PENSIONS REGULATORY EQUITIES Plaintiffs: Defendants: Plaintiffs:Defendants:Plaintiffs:Defendants: Joslin 1 Mackay 1Lehane 1 Joslin 2 Erasmus 1 Erasmus 1 Davies 1 Erasmus 2 Ball (life and pensions context)Joslin 2 Joslin 3 Lehane 1 (principally Germany)Erasmus 1 White Lehane 2 Erasmus 2 Davies 2 Lehane 1 Lehane 2 EQUITIES REGULATORY Plaintiffs: Defendants: Plaintiffs:Defendants: Lehane 1 Joslin 2 Joslin 2 Lehane 2 MackayCappelli (Italian regulatory issues) Erasmus 1 Breitenstein (Swiss regulatory issues) Erasmus 2 REGULATORY Plaintiffs: Defendants: Maconochie *6 Joslin 1 Lehane 1 Joslin 2 Thompson (mutual funds and equities) Richards-Carpenter 1 and 2 Wainwright (life and pensions) Davies 2 Need for court time and related matters 70 There is no issue but that the evidence to be called in chief by both parties from their respective experts is being adduced by written statement. However, the fact is that on my assessment, the cross examination of the numerous experts will take somewhere up to a calendar year of court hearing time. That is a very extended time indeed. 71 It has become very clear to me during the course of the openings, reading sections of the experts' statements and hearing the cross-examination of Mr Martin on technical matters, that by and large, the technicality of the evidence is such that notwithstanding every effort, the Judge simply cannot absorb the necessary detail during the hearing day. It becomes absolutely essential for the judge to carry out his work before court hours, after court hours and over weekends, through use of the transcript and by slowly and carefully travelling through the numerous documents shown to the witness. Curiously, in many ways, the hearing time often becomes almost superfluous in the sense that the cross-examiner and the witness engage in a necessarily private tour of the minute detail to be found in complex technical documents. With a witness such as Mr Martin, who is a very relevant lay witness and is also put forward as having specialised knowledge qualifying him to express expert opinions, it is obviously necessary for me to hear this cross-examination because his credit and objectivity is very much in issue. The same will obtain when Mr Maconochie is called. 72 On the other hand, the vast majority of the professional expert witnesses to be called fall into category two as earlier described. Importantly, they are not persons having had any form of involvement at a contemporaneous level with the Ausmaq Service or with the negotiations and dealings between the Maconochie interests and the NAB interests anterior to and/or following the entry into the restructuring agreements. Whilst the reliability of their opinions will be very much in issue, the reality is that the prospect of their credit, in terms of their objectivity being attacked, is slender indeed. In this respect, it is important to bear in mind that although many of the category two experts are to give evidence based on their specialised knowledge on matters of industry practice (for example on regulatory requirements; on what the market for particular products/services was; on what the perception of the industry was; on what the state of technology was and how it was used in practice in relation to particular products or services) to suggest that such witnesses will be attacked in terms of their "credit" in the sense of giving false or materially coloured evidence, is simply incorrect. Certainly, the acceptability of their evidence in terms of reliability is likely to be in issue, but this is far removed from the concept of an attack on credit in the sense in which the Court is asked to reject the evidence as unreliable. 73 It is not necessary for a blanket decision to be made requiring all category two expert witnesses to be cross-examined before an examiner. There are category two witnesses and category two witnesses. The convenient course is to leave the selection of such witnesses as may be practicably examined before an examiner to abide the result of the Court taking submissions in that regard. That decision would be made on an instant specific basis taking into account any special considerations which relate to the particular witnesses in respect of which the question arises. 74 If the Court orders that particular category two expert witnesses be cross-examined before an examiner appointed for this purpose, it seems certain that considerable efficiencies will have been achieved. The orders can require that the cross examination be video-taped so that either side may from time to time during final address, or otherwise, seek leave to take me to sections of that videotaping. An application for that form of leave may or may not be successful. The purpose of the videotaping of the evidence and the indication that leave of this type may be sought, is to ensure that neither party may suggest prejudice in terms of having being prevented in absolute terms, from having the trial judge placed in a position to observe precisely how a category two witness, may have reacted in relation to cross-examination upon certain nominate topics. 75 There is no question but that the examiner would not have a discretion to deal with certain specific matters as may thought to be appropriate only for the trial judge. Such matters may for example include questions of claims to legal professional privilege; there may also be other matters, presently unforeseen. The parties would be protected by the Court reserving leave to them to make application to the trial judge when and if matters are raised which either party wishes to submit seem only appropriate for determination by the trial judge. 76 There are a number of possibilities in terms of the nuts and bolts of how this examination procedure would operate. One possibility is that cross examination of selected category two experts may take place in another courtroom simultaneously with the ongoing hearing in terms of the adducing of evidence before me as the trial judge. Another possibility is that cross-examination by the defendants of certain of the plaintiffs' category two witnesses before the examiner would have to await completion of the adducement of the evidence of all of the plaintiffs' lay witnesses before me as the trial judge. Another possibility is that cross-examination by the plaintiffs of certain of the defendants' category two witnesses may be permitted to commence even prior to completion of the plaintiffs' cases in chief. Another possibility is that the plaintiffs be required to cross-examine certain of the defendants' category two witnesses before the examiner simultaneously with the plaintiffs being required to cross-examine the defendant's lay witnesses before me. 77 The transcript of the cross-examination before the examiner will not become evidence in the proceedings until it is tendered before me. 78 The proposal does not extend to any suggestion that the examiner hear re-examination of such category two witnesses as would be cross-examined. Re-examination would take place before me as the trial judge. 79 Questions of the parties' resources may become relevant for obvious reasons. Up to this point in time, the Court has often been informed that the defendants generally have one team of counsel and solicitors attending to liability issues and another team attending to damages/expert witness issues. The four senior counsel and two junior counsel retained by the defendants regularly address on their disparate areas, Mr Bathurst QC, Mr Sackar QC and Mr Smith SC being the proposed cross-examining counsel. 80 During address on 28 September 2001, the plaintiffs made the point that they would presently have difficulties in adopting any such procedure due to the way in which they had been preparing for the litigation in terms of demarcation of areas to be treated with by different counsel and because up to now they have had only one solicitor in court. It seems clear to me however that given proper notice and a period in which the plaintiffs would have to adapt to the new environment, the examiner procedure will have to be forced upon the plaintiffs. 81 Even if a circumstance arose where one or other of the parties made plain that it was impossible for identified category two witnesses to be cross-examined whilst the hearing before me continued, it may very well be the case that in those circumstances I would be persuaded not to sit for particular periods. There is no doubt that a huge amount of continued chamber work will be required to be carried out by me in relation to the proceedings. There is every chance that any such release from my being required to sit for particular periods would permit me as one of the three Commercial List Judges, to take other cases in the Commercial List. Section 8 of the Evidence on Commission Act 1995 (NSW) 82 Section 8(1) of the Evidence on Commission Act 1995 only deals with evidence taken in an examination held as a result of an order made under section 6 (which deals with examinations which take place outside Australia) of that Act. None of the proposals referred to above contemplate the examiner taking evidence outside of Australia. Public interest parameter of case management 83 This brings me to the public interest parameter which of necessity is one of the legitimate factors to be taken into account in any exercise by any trial judge of any discretion in terms of case managing particular proceedings. 84 As was made clear by Dawson, Gaudron and McHugh JJ in State of Queensland v JL Holdings (1997) 189 CLR 146 at 154 case management is not an end in itself but is an important and useful way for ensuring the prompt and efficient disposal of litigation. Their Honours added that: "[case management) is an important and useful aide for ensuring the prompt and efficient disposal of litigation. But it ought always to be borne in mind, even in changing times, that the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that aim ." [emphasis added] 85 There is no necessary inconsistency in this approach taken by Dawson, Gaudron and McHugh JJ and the approach earlier taken by Toohey and Gaudron JJ in Sali v SPC Ltd (1993) 67 ALJR 841 at 849: "The contemporary approach to court administration has introduced another element into the equation or, more accurately, has put another consideration onto the scales. The view that the conduct of litigation is not merely a matter for the parties but is also one for the court and the need to avoid disruptions in the court's lists with consequent inconvenience to the court and prejudice to the interests of other litigants waiting to be heard of pressing concerns to which a court may have regard". [emphasis added] 86 JL Holdings was a case concerning an application for leave to amend the pleadings. The subject presently being considered in relation to appointment of an examiner is far removed from such an application. If, as in my view is the case, the appointment of an examiner to take particular cross-examination does not affect the attainment of justice but is merely a tool by which justice can be achieved by utilising a particular procedure which does not relevantly prejudice either party, then the course of appointment of an examiner will be perfectly consistent with the clear public interest in the proper application of scarce resources as between courts. The fact that the procedure may be unusual and may cause some inconvenience to the parties is taken into account but inconvenience is far removed from a denial of natural justice. 87 There is a very clear public interest in judges being available to hear contested litigation. Chief Justice Gleeson has recently had occasion extra curially to advance the proposition that there is a clear public interest in issues concerning the proper allocation of scarce resources as between courts at various levels and in various parts of the justice system in Australia: "It is not easy to state clearly all the purpose which litigation serves in a community…. if thought is given to some modern mega litigation, usually fought out between substantial corporations, it may be very difficult to assess what the parties are intending to achieve, or what public purpose is being served by a judge who devotes months to presiding over proceedings that are ultimately settled. Court time is not allocated evenly amongst litigants. Especially in commercial disputes, some litigants consume hugely disproportionate amounts of scarce judicial resources. Is this a problem to which courts ought to be responding? If so, what should they be seeking to achieve by their responses? Since the activities of courts have economic value, does it follow that, in so far as that includes a value to individual litigants, the benefits of their activities should be more equitably apportioned? And, if courts are seen as providing services to litigants, who should bear the cost of the provision of those services?" [Emphasis added] [" Valuing Courts " – Paper addressed to the Family Court Conference, Sydney 27 July 2001] 88 It seems patently clear that if: (i) the cross examination of identified category two witnesses can be carried out by an examiner without any real suggestion of relevant prejudice of significance to either party; and (ii) if this approach has a high likelihood of freeing up one of the three Commercial List Judges of the Supreme Court to hear other commercial cases, then the public interest should mandate that the procedure which I am suggesting be followed. The 'weighing' exercise 89 Essentially the Court is simply weighing in the balance on the one hand, the entitlement of the litigants in the present proceedings to have the proceedings heard and determined justly (in the sense that each party is entitled to present its case and to test the case of its opponent), and on the other hand, the public interest in avoiding, where possible and practicable, certain litigants from consuming hugely disproportionate amounts of scarce judicial resources, the principle being an effort to allocate court time evenly amongst litigants. 90 In carrying out the weighing exercise I take into account those authorities in support of the proposition that where expert witnesses are radically at issue about complex technical questions within their own field and are cross-examined at length about their conflicting theories, the trial judge has a distinct advantage in seeing and hearing them. 91 In Wilsher v Essex Area Health Authority (1980) AC 1074, Lord Bridge said (at 1091): "Where expert witnesses are radically at issue about complex technical questions within their own field and are examined and cross-examined about their conflicting theories, I believe that the judge's advantage in seeing them and hearing them is scarcely less important than when he has to resolve some conflict of primary factor between lay witnesses in purely mundane matters". [This passage from Wilsher was cited with approval by Clarke JA in Ahmedi v Ahmedi ( 1991) 23 NSWLR 288 at 299-300 and by von Doussa J in David Holdings Pty Ltd v Attorney General of the Commonwealth [(1994) 49 FCR 211 at 243.] 92 In Joyce v Yeomans [1981] 1 WLR 549 Brandon LJ observed at 556: "There are various aspects of such evidence in respect of which the trial judge can get the 'feeling' of a case in a way in which an appellate court reading the transcript, cannot. Sometimes expert witnesses display signs of partisanship in a witness box or lack of objectivity. This may or may not be obvious from the transcript, yet it may be quite plain to the trial judge. Sometimes an expert witness may refuse to make what a more wise witness would make, namely, proper concessions to the viewpoint of the other side. Here again this may or may not be apparent from the transcript, although plain to the trial judge. I mention only two aspects of the matter, but there are others". [Cf observations to similar effect in Maynard v West Midlands Regional Health Authority [1984] 1 WLR 634 at 637 by Lord Scarman, cited with approval by Mahoney JA in Chambers v Jobling (1986) 7 NSWLR 1 at 25-26. The above passage from Joyce was also cited with approval by von Doussa J in David Holdings ( supra at 243).] 93 Notwithstanding the force of these observations it seems to me that in these present proceedings there will be a number of expert witnesses in respect of whom the examination procedure will be both practicable and possible. Clearly, both parties will be given an opportunity to address in respect of the proposal for the examination procedure at each step and no doubt one or both parties may in respect of particular experts, advance the strong submission that the trial judge's advantage referred to in the above authorities should weigh heavily against the examiner procedure being implemented. However, as Mr Bathurst QC appeared to accept during argument, the defendants were already likely able to indicate some categories of expert witnesses [cost of income and regulatory witnesses – transcript page 13595] in respect of whom the examiner procedure would appear to be appropriate. 94 It cannot be the case that the authorities referred to above must in every set of proceedings mandate the trial judge hearing every expert. If this were the case the overriding purpose rule would be severely eroded in this state. There are proceedings and there are proceedings. There are experts and there are experts. The very nature of the discretion given to the Court by the overriding purpose rule is calculated to ensure that the Court, taking all relevant factors into account in terms of the administration of justice in particular proceedings, then exercises the relevant discretion seeking to facilitate the just, quick and cheap resolution of the real issues. Natural Justice 95 The hearing must of course take place before a judge who will assess the evidence at the end of the case in the light of the submissions addressed by the parties to the Court following completion of the taking of evidence. As with parties in any proceedings, the parties in the present proceedings (which are of course commercial proceedings against possibly the largest corporation in Australia and are proceedings in respect of which there is a public interest referable to the potentially marked effect of a very substantial verdict on the value of shares held in the National Australia Bank) must be afforded natural justice in each of the senses in which that fundamental principle is understood as demonstrated by the authorities. Holding 96 I have come to the clear view that the procedure which I have suggested is a procedure which is practicable and possible and which preserves the necessary balance in the above terms. 97 Any apprehension which the parties have as to the procedure may be accepted as a subjective concern at an unusual approach. But the Court would need far more than mere apprehension in order to be persuaded that the posited procedure is inappropriate. And I have not heard any submission which to my mind suggests that there is any real unfairness or prejudice to either party in such a procedure being adopted. 98 The task of the Court will be to assess the evidence of all category two witnesses in terms of reliability. The Court will have, in that regard, all of the evidence in chief which will be in writing. In some cases, where leave is given to deal with a particular matter the subject of objections as to admissibility, it is quite possible that the party calling the witness will be given leave to supplement the evidence of the witness in the witness box. That may not happen in the case of some witnesses. 99 The Court will in any event, be in a position to examine the videotapes of the cross-examination of category two witnesses who give evidence before the examiner, as and when appropriate, should it become necessary. As trial judge, I will deal with the re-examination. 100 In the event that any aspect of evidence taken before the examiner became the subject of a matter in respect of which the trial judge wished to address particular questions, the trial judge would be in a position to require that the witness be recalled for the purpose of those questions being answered. Many of the witnesses who fall into the category two experts area, are overseas witnesses. Some of those questions if any, may be able to be put to those witnesses by the trial judge on video link. 101 There is simply such a huge saving of time capable of being achieved by the proposal for cross-examination even of only some category two witnesses before an examiner, that to my mind the adoption of this course represents a practicable and efficient case management procedure for the taking of a particular category of evidence. The proposal serves the dual purposes of ensuring that the trial judge be freed to hear other cases and to carry out chamber work in relation to the ongoing proceedings, as and when practicable during what, save for an examiner presiding over the taking of certain cross-examination evidence, would arguably have taken up to a considerable section of the trial judge's time sitting in court. 102 One question which does arise, relates to the extent to which the cross-examination before an examiner could take place in the Technology Court or alternatively could take place in a court where the document management system may be availed by the parties. This is a question of detail and no doubt close discussion will require to take place between the technical advisers of each party, the court's IT section and the Project Manager. Up to this point in time the parties have approached the final hearing by using hard copy in very large measure but making use of the Technology Court facilities if and when appropriate. 103 Ultimately, all of these questions become matters of detail. Even if the cross-examination of some of the category two experts before an examiner could only take place using hard copy, I would still be of the very strong view that the examiner procedure should be adopted. It is one thing for a final hearing to take one year. It is another thing altogether for a final hearing to take three and half years. And when, as here, there is raised even a question as to the reliability of that three and half year estimate, it seems to me that it is necessary for the Court to become pro-active in the way that I have indicated. 104 This is not the first case where judges who have the control of the trial of an action have taken particular steps to ensure that time is not wasted and to procure the speedy and complete determination of the proceedings by ordering the adoption of procedures which will reduce the time and expense involved or otherwise lead to deficiencies of the type earlier referred to in this judgment. 105 Cambridge Credit Corp Ltd v Hutcheson (No 3) (1983) 8 ACLR 526 involved an appeal from the decision of the trial judge who had attempted to simplify the complex, and potentially lengthy set of proceedings before him. For these purposes, Rogers J isolated one of the alleged breaches of contract and made certain orders consequent upon his findings in relation to this one issue. More specifically, Rogers J attempted to determine one claim which could have made the other, more detailed and numerous disputes between the parties unnecessary to consider. 106 Both parties appealed against this decision; one of the grounds for appeal being (at 532): "…in general it now appears that the decision to proceed otherwise than in the conventional fashion was wrong." 107 In rejecting this approach and dismissing the appeal, Mahoney JA referred to WEA Records Ltd v Visions Channel 4 Ltd [1983] 1 WLR 721 at 727, Harman v Secretary of State for the Home Department [1983] AC 280 and Connelly v Director of Public Prosecutions [1964] AC 1254 and stated that the aim of the Court should be to achieve the speedy determination of the real questions between the parties. Where it is clear that the proceedings will raise numerous and complicated issues and that a trial conducted in the routine way will be lengthy and expensive, it was considered to be "desirable and necessary" that: "the trial judge consider whether procedures can be adopted which, consistently with the requirements of justice, will reduce the time and expense involved" (at 537). 108 Mahoney JA went on: "In the management of long and complex trial, it will often be necessary for a judge to make judgments as to how a case will or may develop. The fact that such a judgment may, in the event, be wrong or that what he has done may not prove fully effective should not, I think, prevent a judge exercising the powers available to him for these purposes. In exercising such powers he will, of course, have in mind that the parties are apt to know more of their cases than he does and he will no doubt give great weight to the views and the wishes that they express. But, in the exercise of the powers which are available to him, whether under the Act or the Rules or otherwise, the judge is, in my opinion, not limited to what one or both parties may desire: he may in this regard exercise such powers in the way which in his opinion is best directed to securing the speedy and complete determination of the proceedings before him . And, in my opinion, an appellate court should afford a judge a wide ambit of discretion in relation to the orders which in this regard he makes." [emphasis added] Short minutes of order 109 There are a substantial number of practical matters of detail which will require to be addressed by detailed orders and directions to be made. The convenient course is to require the parties to endeavour to reach agreement on these matters beginning with candidates for examination before an examiner and to list the matter for short minutes. Submissions may be addressed at that time to these many questions of detail. I certify that paragraphs 1 - 109 are a true copy of the reasons for judgment herein of the Hon. Justice Einstein given on 5 October 2001 ___________________ Susan Piggott Associate 5 October 2001 Last Modified: 06/13/2002 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.