Australian Securities and Investments Commission v Flugge and Geary (Ruling No 9)

[2015] VSC 796

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
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

---

JUDGE:	ROBSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	23 November 2015
DATE OF RULING:	23 November 2015
CASE MAY BE CITED AS:	ASIC v Flugge & Geary (Ruling No 9)
MEDIUM NEUTRAL CITATION:	[2015] VSC 796

---

EVIDENCE — Application to re-open evidence-in-chief to tender further evidence under s 64(3) of the Evidence Act 2008 (Vic) — Objections raised as cross-examination had already concluded and it would be unfair to allow the plaintiff to re-open evidence-in-chief — Consideration given to whether the relevant evidence is otherwise before the court — Application refused.

---

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 applies to re-open the examination-in-chief of Mr Alistair John James Nicholas (Mr Nicholas), an employee of the Australian Trade Commission, otherwise known as Austrade, between February 1996 and October 2000, in order to tender a statutory declaration of Mr Nicholas’, sworn on 27 January 2006 and used in the Cole Royal Commission (the statutory declaration).  The present application arose out of questions asked of Mr Nicholas concerning his discussions with Mr Flugge, Mr McConville and Mr Snowball at the Australian Embassy about an issue raised by the UN with DFAT.

1. Mr Nicholas said in his evidence-in-chief in the present hearing that he recalled the issue raised as being whether AWB had entered into, what he called, a parallel contract with the IGB.  In his evidence-in-chief, Mr Nicholas did not make reference to an issue of whether irregular payments were being made by AWB to the IGB.

1. The outline of evidence given by ASIC to the defendants, indicated that Mr Nicholas would give evidence that a concern had been raised as to whether AWB was making irregular payments to the IGB.  Despite such notice being given, ASIC did not seek to tender the statutory declaration at the conclusion of Mr Nicholas’ evidence-in-chief.  In the present hearing, in giving his evidence, Mr Nicholas was clear that the only irregularity he could recall being raised was an allegation that AWB had entered into a parallel contract with the IGB.

1. During evidence-in-chief, the plaintiff had not led, or managed to obtain from the witness, evidence regarding the issue of irregular payments being made by AWB to IGB, as they may have hoped and did not seek to tender Mr Nicholas’ statutory declaration.  In cross-examination, Mr Dharmananda accepted the evidence given, and clarified whether there was any discussion about the payment of trucking fees.  Mr Nicholas’ response was that there was no discussion of trucking fees.[1]

   [1]Transcript of hearing, ASIC v Flugge & Geary, November 23, 2015, T2135, L16–17 Nicholas XXN (Mr Dharmananda).

1. In re-examination, Mr Moore again asked Mr Nicholas about the irregularity discussed.  Mr Nicholas said, for the third time that, as far as he could recollect, the ‘irregularity’ discussed was an allegation or a suggestion that AWB had entered into a parallel contract with the IGB concerning the supply of wheat.[2]  Mr Moore then sought to take Mr Nicholas to a cable Mr Nicholas had written,[3] that referred to irregular payments being discussed at the meeting, with the intention of having the witness correct his evidence to say that there was in fact a discussion about irregular payments or there was a complaint about irregular payments being made by AWB to the IGB.

   [2]Transcript of hearing, ASIC v Flugge & Geary, November 23, 2015, T2135-2136, Nicholas RXN (Mr Moore).

   [3]CB 2/921.

1. Objection was made on the ground that this was, in effect, seeking to cross-examine the witness.  I upheld the objection.  Mr Nicholas had given the answer three times, in evidence-in-chief, in cross-examination, and in re-examination, that his memory was that the discussion was limited to the suggested irregularity of AWB having a parallel contract for the supply of wheat with the IGB.

1. Upon my ruling that the question could not be asked, as it constituted cross-examination, Mr Moore sought to re-open the examination-in-chief to seek to tender the statutory declaration. The application is made under s 64(3) of the Evidence Act 2008 (Vic) (the Act), which provides:

If the person who made the representation has been or is to be called to give evidence, the hearsay rule does not apply to evidence of the representation that is given by—

(a)       that person; or

(b)a person who saw, heard or otherwise perceived the representation being made.

1. Subsection 4 of s 64 provides:

A document containing a representation to which subsection (3) applies must not be tendered before the conclusion of the examination-in-chief of the person who made the representation unless the court gives leave.

1. Mr Moore submitted that he may have been able to tender this evidence at the end of the examination-in-chief, but provided no explanation as to why he did not seek to do so at that stage.  Mr Dharmananda submitted that it would be unfair for Mr Moore to be able to lead further evidence-in-chief after Mr Nicholas has been cross-examined.  Mr Moore was unable to obtain the evidence in re-examination; Mr Nicholas maintained his evidence that all he could recall of the irregularity was the allegation of the parallel contract.

1. During his evidence-in-chief, Mr Nicholas did refer to the cable[4] written by Mr Nicholas, and referred to above, in which Mr Nicholas said at paragraph 2:

I met with Office of the Iraq Program (OIP) (Johnston, chief, contracts processing section) in New York last week.  Johnston advised that OIP had informally raised concerns about irregularities in AWB contracts with the Australian Mission to the UN in January.  However, Johnston said she had received an insufficient response to enable her to close the matter.  (Refer cables 0.UN8311 of 13 January and 0.CE987696 of 18 January.)

Johnston said there were continuing concerns by the mission of a third country that the AWB had agreed to the irregular payment terms required by the Grain Board of Iraqi (GBI).  She said it was conceivable that the AWB had entered into irregular terms ‘unknowingly’.

[4]CB 2/921.

1. In considering whether leave should be given to re-open the evidence-in-chief, it is relevant to take into account that there is evidence already before this hearing, that is in the cable referred to, on which the witness was not cross-examined or challenged.

1. In giving consideration to, and balancing the contending interests, I am not prepared to allow ASIC to re-open Ms Nicholas’ evidence-in-chief for three reasons:

(1)ASIC chose not to lead the statutory declaration when ASIC had failed to get the answer ASIC wanted in the evidence-in-chief;

(2)Mr Dharmananda, on behalf of Mr Flugge has now cross-examined Mr Nicholas; and

(3)the relevant evidence is otherwise before the hearing as it was contained in the cable sent by Mr Nicholas.

1. I reject the application.