Australian Securities and Investments Commission v Flugge and Geary (Ruling No 2)

[2015] VSC 792

IN THE SUPREME COURT OF VICTORIA AT MELBOURNE Not Restricted

COMMERCIAL COURT
CORPORATIONS’ LIST

S CI 2007 10077

IN THE MATTER OF AWB LIMITED (ACN 081 890 459)

BETWEEN:

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION	Plaintiff
v
TREVOR JAMES FLUGGE	Defendant

- AND -

S CI 2007 10081

IN THE MATTER OF AWB LIMITED (ACN 081 890 459)

BETWEEN:

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION	Plaintiff
v
PETER ANTHONY GEARY	Defendant

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JUDGE:	ROBSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	29 October 2015
DATE OF RULING:	29 October 2015
CASE MAY BE CITED AS:	ASIC v Flugge & Geary (Ruling No 2)
MEDIUM NEUTRAL CITATION:	[2015] VSC 792

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EVIDENCE – s 38 Evidence Act 2008 (Vic) (the Act) – Unfavourable witness – Whether leave should be given to question witness as though the party were cross-examining the witness – Whether witness appears to be making a genuine effort to give evidence - Whether the witness has made a prior inconsistent statement – Consideration of matters Court may take into account in exercising discretion – s 192 of the Act – Consideration of nature of the proceeding –Leave not granted.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr N J O’Bryan AM SC with Mr J P Moore QC, Mr C H Truong and Ms C E Klemis	Australian Securities and Investments Commission
For the Defendant in S CI 2007 10077	Mr S K Dharmananda SC, with Mr R F R Pintos-Lopez	Corrs Chambers Westgarth
For the Defendant in S CI 2007 10081	Mr I D Hill QC with Mr A Tragardh	Galbally Rolfe

HIS HONOUR:

1. ASIC seeks leave under s 38 of the Evidence Act 2008 (Vic) (the Act) to question its own witness, Mr Officer, as though ASIC were cross-examining the witness.

1. Section 38 of the Act provides as follows:

Unfavourable witnesses

(1)A party who called a witness may, with the leave of the court, question the witness, as though the party were cross-examining the witness, about—

(a)evidence given by the witness that is unfavourable to the party; or

(b)a matter of which the witness may reasonably be supposed to have knowledge and about which it appears to the court the witness is not, in examination in chief, making a genuine attempt to give evidence; or

(c)whether the witness has, at any time, made a prior inconsistent statement.

(2)Questioning a witness under this section is taken to be cross-examination for the purposes of this Act (other than section 39).

(3)The party questioning the witness under this section may, with the leave of the court, question the witness about matters relevant only to the witness's credibility.

Note

The rules about admissibility of evidence relevant only to credibility are set out in Part 3.7.

(4)Questioning under this section is to take place before the other parties cross-examine the witness, unless the court otherwise directs.

(5)If the court so directs, the order in which the parties question the witness is to be as the court directs.

(6)Without limiting the matters that the court may take into account in determining whether to give leave or a direction under this section, it is to take into account—

(a)whether the party gave notice at the earliest opportunity of the party's intention to seek leave; and

Note

Paragraph (a) differs from the Commonwealth Act and New South Wales Act.

(b)the matters on which, and the extent to which, the witness has been, or is likely to be, questioned by another party.

(7)A party is subject to the same liability to be cross-examined under this section as any other witness if—

(a)a proceeding is being conducted in the name of the party by or on behalf of an insurer or other person; and

(b)the party is a witness in the proceeding.

1. ASIC sought leave under s 38(1)(b) and or s 38(1)(c) of the Act to cross-examine Mr Officer, after Mr Officer said during examination in chief that he could recall one discussion with Mr Flugge about the Iraqis’ imposition of trucking fees. ASIC alleges that Mr Officer’s statutory declaration from the Cole Inquiry contains inconsistent statements regarding his discussions with Mr Flugge on the imposition of the trucking fee.

1. Section 192 of the Act is also relevant to this application as it sets out matters the court may take into account in deciding whether to grant leave:

Leave, permission or direction may be given on terms

(1)If, because of this Act, a court may give any leave, permission or direction, the leave, permission or direction may be given on such terms as the court thinks fit.

(2)Without limiting the matters that the court may take into account in deciding whether to give the leave, permission or direction, it is to take into account—

(a)the extent to which to do so would be likely to add unduly to, or to shorten, the length of the hearing; and

(b)the extent to which to do so would be unfair to a party or to a witness; and

(c)the importance of the evidence in relation to which the leave, permission or direction is sought; and

(d)      the nature of the proceeding; and

(e)the power (if any) of the court to adjourn the hearing or to make another order or to give a direction in relation to the evidence.

1. This is a difficult issue, primarily because the evidence being led relates to what happened in 1999, some 16 years ago.  I have heard Mr Officer give evidence.  In my view, he is making a genuine attempt to give his evidence.  In fact, I had to caution Mr Officer when he tried to assist the court by giving evidence about events from documents he had read, even though he had no current recollection of the events.  I think it is most unfortunate he was not advised and warned not to read documents before giving his evidence.   

1. On the other hand, he has been very careful not to give evidence of events when he has no recollection of the event. I think it is plain that some memory of precise conversations must be lost after 16 years. Under s 38 it is relevant for me to take into account that Mr Officer is making a genuine attempt to give evidence of his recollections.

1. In these circumstances, Mr O’Bryan, senior counsel for ASIC, seeks to cross-examine Mr Officer on an inconsistent statement.  I was not informed as to why Mr O’Bryan wishes to cross-examine Mr Officer, although I asked in argument whether Mr O’Bryan wishes me to find this witness is not telling the truth or, alternatively, that Mr O’Bryan wants, through cross-examination, to encourage the witness’ memory and to expand upon it.   

1. In those circumstances, it leaves the court in a difficult position.  I think it would be unfortunate if I was asked to find that this witness has not been telling the truth when my impression so far is he has been seeking to do so. 

1. I think at the end of the day I have to look at the nature of these proceedings.  These are proceedings which were brought by ASIC on the death knell of the limitation period — I think it was a few days before the limitation period expired — relating to events which have now taken place 16 years ago.  I think that it is important that the evidence I receive in this case be firsthand evidence of what people recollect rather than speculation and inference.  I think this case warrants, that the evidence be given first hand from recollection when the defendants are facing accusations about what happened 16 years. 

1. It is said that I have a discretion under s 38(1)(c). It is alleged that the statutory declaration made by Mr Officer many years ago, on its face, is inconsistent with what the witness has said in the witness box. It is said to be inconsistent to the extent that the statutory declaration refers to more than one occasion when he spoke to Mr Flugge on the imposition of the trucking fee, whereas Mr Officer’s recollection in the witness box is that it was only one occasion that he spoke to Mr Flugge. I do not think it is necessarily inconsistent merely because there is a difference, between his recollection now and what is in the statutory declaration made many years ago.

1. In any event, the statutory declaration was made some seven years after the event.  The circumstances in which it was made are extremely unusual.  It was made after the witness had been given, at the direction of the Royal Commissioner, documents relating to the events, and after he had read the evidence of other witnesses.  To me, it is not the most satisfactory basis upon which the statutory declaration should have been drawn. 

1. So bearing in mind the discretion that I have under s 192, the matters I have addressed above, the nature of the proceedings and that in my view the defendants are entitled to have evidence against them based upon actual recollection rather than speculation, inferences or recollections from documents, I refuse the application.