ACN 117 641 004 Pty Ltd (in liq) v S&P Global, Inc

[2022] FCA 1289

FEDERAL COURT OF AUSTRALIA

ACN 117 641 004 Pty Ltd (in liq) v S&P Global, Inc [2022] FCA 1289  

File numbers:

NSD 881 of 2020

NSD 73 of 2021

Judgment of:

LEE J

Date of judgment:

18 October 2022

Date of publication of reasons:

31 October 2022

Catchwords:

EVIDENCE – admissibility of affidavit evidence – paramount importance of oral evidence in fraud cases

Legislation:

Evidence Act 1995 (Cth), s 191

Cases cited:

Queensland v Masson [2020] HCA 28; (2020) 94 ALJR 785
Transport Workers’ Union of Australia v Qantas Airways Limited [2021] FCA 873; (2021) 308 IR 244

Division:

General Division

Registry:

New South Wales

National Practice Area:

Commercial and Corporations

Sub-area:

Commercial Contracts, Banking, Finance and Insurance

Number of paragraphs:

8

Date of hearing:

17–18 October 2022

Counsel for the Applicants in NSD 881 of 2020:

Mr C Withers SC with Mr J Entwistle and Ms K Dyon

Solicitor for the Applicants in NSD 881 of 2020:

Banton Group

Counsel for the Plaintiffs in NSD 73 of 2021:

Mr R Dick SC with Mr G Donnellan

Solicitor for the Plaintiffs in NSD 73 of 2021:

Webb Henderson

Counsel for the Respondents in NSD 881 of 2020 and Defendants in NSD 73 of 2021:

Mr J Williams SC with Mr I Ahmed

Solicitor for the Respondents in NSD 881 of 2020 and Defendants in NSD 73 of 2021:

Ashurst Australia

ORDERS

NSD 881 of 2020

BETWEEN:

A.C.N. 117 641 004 PTY LTD (IN LIQUIDATION)

First Applicant

CITY OF COCKBURN A.B.N 27 471 341 209

Second Applicant

AND:

S&P GLOBAL, INC.

First Respondent

STANDARD & POOR’S INTERNATIONAL, LLC

Second Respondent

NSD 73 of 2021

BETWEEN:

YAF MASTER (WK-155253)

First Plaintiff

BASIS PAC-RIM OPPORTUNITY FUND (MASTER) (IN VOLUNTARY LIQUIDATION) (WK-155158)

Second Plaintiff

AND:

S&P GLOBAL, INC.

First Defendant

STANDARD & POOR’S INTERNATIONAL, LLC

Second Defendant

ORDER MADE BY:	LEE J
DATE OF ORDER:	18 OCTOBER 2022

BY CONSENT, THE COURT ORDERS THAT:

1.The initial word in paragraph 193 of the amended statement of claim in proceedings NSD 881 of 2020 (Class Action) be struck out.

THE COURT ORDERS THAT:

2.Pursuant to s 37P(2) of the Federal Court of Australia Act 1976 (Cth), by 2 December 2022 counsel briefed by each party in both the Class Action and in proceedings NSD 73 of 2021 (Basis Proceedings) are to confer in person, attempt to agree on, and produce to the Associate to Justice Lee the following documents:

(a)an agreed list of proposed questions requiring answers by way of admissible opinion evidence in each proceeding or, in the event the parties are unable to reach agreement as to the proposed list of questions, each party is to provide a copy of their proposed list of questions; and

(b)a list of the assumptions each party wishes to be taken into account in providing admissible opinion evidence in response to the questions.

3.By 5pm on 9 December 2022, the parties exchange submissions as to the mode by which the Court should resolve any disputed expert questions.

4.The submissions filed by the parties in accordance with these Orders are to be in Times Roman 12 point-type, are to refer to any authorised report and medium neutral citation of any cases referred to or cited (or in the absence of an authorised report, any unauthorised report and the medium neutral citation), and are not to include footnotes.

5.The proceedings be adjourned for a case management hearing at 9:30am on 13 December 2022, for any orders to be made concerning the matter generally, including the orders to be made concerning the filing of expert evidence, or as to matters to be referred to a referee for inquiry and report.

6.At the initial trial of the Class Action, and at the hearing of the Basis Proceedings, and subject to further order, the evidence-in-chief of lay witnesses be adduced viva voce.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT
(Delivered ex tempore, revised from the transcript)

LEE J:

1. In this matter, I have conducted a case management hearing lasting almost one and a half days. To those unfamiliar with complex class actions, that first sentence might seem somewhat odd, but it has involved dealing with a slew of interlocutory disputes.

2. The primary purpose of the case management hearing was to work out, among other things, the optimal way for the Court to receive what is likely to be Byzantine opinion evidence.

3. It goes without saying that this is a case of some complexity. The fundamental issue is one of fraud. The respondents have filed a series of very lengthy affidavits, which raise real questions of admissibility. Indeed, I have been asked to make an advance ruling in relation to large parts of that material. I have decided that it would be inappropriate for me to form a definitive view about admissibility questions, including whether certain representations (which might be regarded as lay opinion evidence), should be ruled inadmissible.

4. At this time, my knowledge of the underlying facts is not sufficiently advanced for me to make such rulings safely. Further, a great deal of the affidavit material constitutes what appears to be contextual observations relating to business records. It may be that some of this material is admissible and important, but it may well be that it is of marginal or no utility. It is simply too early for me to form a final view about these matters.

5. But the affidavits are very long and have evidently been carefully crafted. As I said in Transport Workers’ Union of Australia v Qantas Airways Limited [2021] FCA 873; (2021) 308 IR 244 (at 253–254 [24]–[29]), it would be jejune for me to form the view that the affidavits have not been workshopped and settled by lawyers after taking the witnesses through various documents. That said, nothing I have said should be seen as suggesting that the solicitors or barristers involved in this process have done anything other than try to obtain the evidence conscientiously and consistently with their professional obligations. However, as observed by Nettle and Gordon JJ in Queensland v Masson [2020] HCA 28; (2020) 94 ALJR 785 (at 810 [112]), the reality is that it is the oral evidence of the witnesses, and the trial judge’s assessment of it, that are of “paramount importance”.

6. These comments have particular resonance in a case concerning fraud. The parties are represented by highly experienced counsel and solicitors who, thus far, have worked cooperatively to produce a draft Statement of Agreed Facts document which in due course will be tendered pursuant to s 191 of the Evidence Act 1995 (Cth). That process of agreeing on facts will continue. There is undoubtedly a large amount of background material referred to in the affidavits which is uncontroversial. Agreement should be reached in relation to these matters and the Statement of Agreed Facts amended accordingly.

7. It may be that some of these matters cannot, for one reason or another, be included in the Statement of Agreed Facts. If, however, such material is not likely to be challenged during the course of cross-examination, then I will reserve the ability of the respondents to read those parts of the relevant affidavits.

8. What is good for the goose is good for the gander. The same position should obtain in relation to the witnesses to be called on behalf of the applicants, including evidence given as to reliance, causation and damages. Again, there may be aspects of that evidence which may be the subject of agreement, but, given the nature of this fraud case, I will be best assisted in ascertaining the truth by receiving oral evidence.

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Lee.

Associate:

Dated:       31 October 2022