Hodgson v Amcor Ltd
[2011] VSC 272
•2 June 2011
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
No. 9420 of 2004
| JAMES GEORGE HODGSON | Plaintiff |
| v | |
| AMCOR LTD (ACN 000 017 372) | Defendant |
No. 8181 of 2004
| AMCOR LTD AND ORS (ACN 000 017 372) | Plaintiffs |
| v | |
| TREVOR MARK BARNES AND ORS | Defendants |
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JUDGE: | VICKERY J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 2 June 2011 | |
DATE OF RULING: | 2 June 2011 | |
CASE MAY BE CITED AS: | HODGSON v AMCOR LTD; AMCOR LTD v BARNES (No. 3) | |
MEDIUM NEUTRAL CITATION: | [2011] VSC 272 | |
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EVIDENCE– Distinction between opinion evidence and factual evidence – Admissibility of expert evidence of facts – Expert with experience in computer forensic analysis assisted in data retrieval - Whether an expert opinion — Document in question (computer data) not available - ss.48(4), 76 and 79 Evidence Act2008;
PRACTICE AND PROCEDURE — Case management – Civil Procedure Act 2010 – Case management orders made pursuant to s 47(1) – Balance between case management requirements and the necessity to ensure a fair trial - Rule 44 Supreme Court (General Civil Procedure) Rules 2005 - Whether applicable to expert statement where facts stated but where no opinion expressed.
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff (9420 of 2004) | Mr C Gunst QC with Mr P Booth of counsel | A.J. Macken & Co |
| For the Defendant (9420 of 2004) | Mr WT Houghton QC with Dr SB McNicol and Mr G Fitzgerald of counsel | Corrs Chambers Westgarth |
| For the Plaintiffs (8181 of 2007) | Mr WT Houghton QC with Dr SB McNicol and Mr G Fitzgerald of counsel | Corrs Chambers Westgarth |
| The First Defendant (8181 of 2007) | Mr T Barnes appeared in person | |
| The Second–Fourth Defendants (8181 of 2007) | Mr P Riordan SC with | Mills Oakley |
| The Fifth Defendant (8181 of 2007) | Mr Sangster appeared in person | |
| The Sixth–Seventh Defendants (8181 of 2007) | Mr M Champion of counsel | Mr David Shaw |
HIS HONOUR:
Introduction
The Amcor parties, which include the defendant in proceeding No. 9420 of 2004 and the plaintiffs in proceeding No. 8181 of 2004 (“Amcor” or the “Amcor parties”), in the course of the trial seek to call and rely upon the evidence of Graham Robinson Conn.
Mr Conn is a principal at Deloitte Touche Tohmatsu, (“Deloitte”), working in Deloitte's forensic division. He has been employed by Deloitte for seven years as a specialist in computer forensics.
Prior to his involvement with Deloitte he was the senior manager in the Security Technology Services Division of Ernst & Young accountants, where he also specialised in computer forensics. He commenced employment with Ernst & Young in 2000.
Before joining Ernst & Young he was an officer of the Victoria Police Force, a position he occupied for a total of 17 years. He rose to the rank of Senior Detective in the Victorian Police Computer Crime Investigation Squad. In this role his duties included:
(a) forensic analysis of computer systems;
(b)conducting computer crime investigations involving fraudulent data entries, falsification of documents, network security breaches and criminal damage; and
(c) training other personnel in these procedures.
The essence of Mr Conn's evidence which he proposes to give arises from the execution of an Anton Pillar order granted by the Federal Court of Australia on 10 November 2004. That order permitted the Amcor parties to search the premises of Messrs Mihelic, Sangster, Bayley, Barnes, ACMG and Vickery.
Mr Conn proposes to give evidence that he arranged for members of the Deloitte forensic division to attend on 11 November 2004, at each site where the Anton Pillar orders were executed.
He went himself to Mr Sangster's home at Ashmore, Queensland for this purpose on 11 November 2004.
He proposes to give evidence that on that day, in his capacity as the primary person heading up the computer team engaged in this exercise, he was advised that the Deloitte’s forensic team who had gone to the house of Mr Barnes, encountered difficulties taking the image of the hard drive on a laptop which had been identified as belonging to Ms Tania Selever using a program called Encase. Mr Conn says that he was told that it was necessary to take the laptop from the premises and keep it overnight to finish running the Encase program to copy the hard drive.
Mr Conn further proposes to say how he set up a computer facility at the offices of his instructors to view the hard drive images using the Encase program. In particular he says that he explained to Mr Tom Reid, a solicitor of the firm Allens Arthur Robinson (“Allens”), how to utilise the software.
Mr Conn also seeks to explain how information derived from the use of the Encase program when viewing hard drive images can be, as shown on a computer screen.
He also seeks to explain the ‘slack space’ in a filing system within a computer hard drive - namely, disk space that exists between the end of a logical data file and the end of the physical cluster that the file exists in. He proposes to give evidence that residual information can exist in this slack space, when a smaller file is written to the physical space that had been previously occupied by a larger data file. This residual information existed prior to the creation of the newer file which in part overwrote it.
He proposes to give evidence that in July 2005 he was contacted by Amcor's lawyers, Allens. Mr Conn says that he was requested to assist in producing various data files obtained as a result of the execution of the Anton Pillar orders. He proposes to give evidence that he processed the data and facilitated the numbering of the processed data files. He says that he assisted Allens in preparing the lists by extracting electronic documents (including those deleted documents that could be recovered from the image files).
Mr Conn seeks to give evidence that after December 2005, following a further order from the Federal Court, he was instructed by Mr Reid of Allens to assist in the removal of categories of information from the hard drive images which had been obtained as a result of the 10 November 2004 Anton Pillar order.
Further, that he was instructed that, pursuant to the further order, original images of the various hard drives which Deloitte’s forensic division had made were to be destroyed. However, before the destruction of these images Amcor was permitted to copy certain of the files to another media and retain them. He says that Mr Reid of Allens provided him with lists of files to be kept, and a list of files to be removed and that he received lists of documents which were to be separated.
Mr Conn proposes to give evidence that the process of separating the documents was time consuming. However he completed the task and provided to Allens a hard drive containing the required data and two back ups. He also produced CDs which contained the documents that had been removed from the hard drive image for return. He also undertook a process to prevent access to the hard disk drives which contained the original images. When undertaking this process, he proposes to give evidence that the “slack space” was also overwritten and rendered unrecoverable.
Mr Conn's proposed evidence, however, needs to be considered in the context of Mr Reid's proposed evidence.
The Amcor parties also seek to call Mr Reid to give evidence as set out in his witness statement to the following effect:
(a) He was a solicitor employed by Allens.
(b)Allens were the former solicitors for the Amcor parties. They were the solicitors on the record for the Amcor parties at the time of the making of the Anton Piller orders by the Federal Court on 10 November 2004 and the execution of these orders on 11 November 2004;
(c)As a result of the execution of the Anton Piller orders, Allens received a number of boxes of hard copy documents, together with the forensic images of several computer hard drives.
(d)On 16 December 2005, Merkel J made an order in the Anton Piller proceeding that, amongst other things:
(i)Permitted the first applicant in the Anton Piller proceeding, Amcor Ltd, to use and disclose in the Hodson proceeding approximately 33,000 List 1 documents obtained in the Anton Piller proceeding; and
(ii)Required Amcor Ltd to return to AJ Macken & Co, the solicitors for the respondents, and Mr Vickery, in the Anton Piller proceeding, 172 returnable List 1 documents as defined in the order, after first being permitted to derive information from the returnable List 1 documents for the purpose of, amongst other things, making applications in the Hodson proceeding.
(e)Following the 16 December 2005 order, Mr Reid says that he attended the offices of Deloittes for the specific purpose of reviewing what he described as the Barnes letter information. This, he says, involved reviewing electronic documents from an image of a computer hard drive, which he says had been obtained from Mr Barnes' premises, pursuant to the Anton Piller order of 10 November 2004.
(f)He says that he made a detailed file note which copied the Barnes letter information as contained on that image of the computer hard drive, which he observed. He later incorporated his file note into another document which he created.
(g)He says that on 10 November 2006, he was informed by Mr Conn of Deloittes that, in the course of its work in assisting the Amcor parties comply with the order of 16 December 2005, by destroying certain of the documents obtained pursuant to the Anton Piller order, some of the electronic data on the image of the computer hard drive had been inadvertently deleted.
No doubt it will be sought to adduce evidence from Mr Reid to prove the content of the Barnes letter information. This is proposed to be done, not from the original documents, which on the evidence of Mr Conn and Mr Reid have been destroyed, but from a secondary source, namely from Mr Reid’s detailed file note which he says he copied from an image of the hard drive he viewed at Deloittes on 15 February 2006.
For this purpose, Amcor may well seek to rely upon s 48(4) of the Evidence Act 2008, for this purpose, s 48(4) provides:
(4)A party may adduce evidence of the contents of a document in question that is not available to the party, or the existence and contents of which are not in issue in the proceeding, by:
(a)tendering a document that is a copy of, or an extract from or summary of, the document in question; or
(b)adducing from a witness evidence of the contents of the document in question.
In order to invoke s 48(4), if that is what Amcor seeks to do, Amcor must prove, amongst other things, that the document or documents are not available to it.
The body of evidence sought to be adduced from Mr Conn and Mr Reid is directed in large part to proof of that fact.
Mr Hodgson objects to the evidence of Mr Conn. He does so on a number of grounds. These grounds were adopted by the other defendant parties.
The second to fourth defendants also object to Mr Conn's evidence. They do so principally on the basis that his evidence, when combined with that of Mr Reid, does not provide any basis, on admissible evidence, that what Mr Reid noted was contained on the hard drive which he observed on 15 February 2006 at Deloittes, came from data taken from Ms Selever's computer hard drive. They say further that at best, the evidence if admitted could only constitute an admission made by Mr Barnes and could not be used against the other parties to the proceeding as evidence against them.
In this ruling I propose to deal only with the submission made by counsel for Mr Hodgson, namely that on the grounds advanced, the whole of the evidence of Mr Conn in his witness statement should not be admitted into evidence. In the event that the witness statement survives these submissions, I will then deal with the parts of the witness statement which are objected to by the other parties, including the second and fourth Defendants. This should, of course be undertaken preferably pursuant to the Nicholson Schedule procedure.[1] However, I will hear further submissions on that matter.
[1]The procedure for taking objections and dealing with them electronically utilised in
I will now turn to the principal grounds upon which Mr Hodgson in his submissions made through his counsel presented.
Case Management Ground
By way of background:
(a)Mr Conn's witness statement was served without the leave of the Court and without consent on 29 April 2011. This was some 19 days before the commencement of the trial;
(b)Pursuant to orders made by the Court on 7 March 2011. The Amcor Parties were directed to file their witness statements by 18 February 2011. This date was the culmination of a number of extensions granted to Amcor to file its witness statements;
(c)Amcor filed and served its witness statements by 18 February 2011 in compliance with the order of the Court. These witness statements however did not include statements from either Mr Conn or Mr Reid.
Case management orders such as those made on 7 March 2011 were made pursuant to s 47(1) Civil Procedure Act 2010. However, case management orders designed to serve the interests of justice in the course of a trial, particularly a long and complex matter such as the present case are not immutable. The procedures set in place for the management of the trial must be capable of reasonable adaptation to ensure that the trial is in fact conducted in accordance with the interests of justice as the case proceeds to judgment.
Further, it is axiomatic that a just determination of a proceeding is the product of a trial, which must be conducted fairly and in accordance with the principles of natural justice and procedural fairness. Nothing in the Civil Procedure Act 2010 (Vic) detracts from these principles. Indeed they are supported by its terms. The overarching purpose of the Act defined in s 7(1) provides:
The overarching purpose of this Act and the rules of court in relation to civil proceedings is to facilitate the just, efficient, timely and cost effective resolution of the real issues in dispute. [Emphasis added]
Further, s 6 of the Civil Procedure Act provides that nothing contained in it is intended to override the Charter of Human Rights and Responsibilities Act2006. Section 24(1) of the Charter provides:
A person charged with a criminal offence or a party to a civil proceeding has the right to have the charge or proceeding decided by a competent, independent and impartial court or tribunal after a fair and public hearing.
Although s 6 of the Charter makes it plain that only natural persons have human rights and not corporations. The reference to the Charter in the Civil Procedure Act serves to underpin the importance of maintaining the right to a fair trial not only for individuals but also for corporations in the application of the powers provided.
Natural justice or procedural fairness in the curial sense includes the right of a party to present relevant evidence in support of its case both oral and documentary.
The provisions of the Civil Procedure Act therefore call for a balance to be applied between the case management requirements of achieving an efficient, timely and cost effective resolution of the real issues in dispute, and the requirements for a fair hearing to achieve a just outcome on the other.
In this case Mr Conn's witness statement was served on 29 April 2011, 19 days before the commencement of the trial. In the course of opening the case for Amcor senior counsel referred to the evidence proposed to be called through Mr Conn.
The trial is now at the end of the third week. The defendant parties have not been taken by surprise in relation to the evidence of Mr Conn, and do not advance any procedural prejudice resulting from having him called now.
In this case the balance between case management considerations and the dictates of a fair trial falls squarely in favour of permitting Mr Conn to be called by the Amcor parties.
Failure to Specify Underlying Facts and Assumptions
As to the need for underlying facts and assumptions to be spelt out in a witness statement provided by an expert, I readily accept that this is essential in any expression of opinion ventured by an expert in his or her evidence.
The underlying facts and assumptions upon which the expert has proceeded need to be set out. Reference is made to the statement of principle in Makita (Aust) Pty Ltd v Sprowles[2] particularly at [59-86] were Heydon JA (as he then was) summarised the position in thorough analysis. In particular Heydon JA said at [85]:
In short if evidence tendered as expert opinion, evidence is to be admissible it must be agreed or demonstrated that there is a field of specialised knowledge. There must be an identified aspect of that filed in which the witness demonstrates that by reason of specified training, study or experience the witness has become an expert, the opinion proffered must be wholly or substantially based on the witness's expert knowledge so far as the opinion is based on facts observed by the expert. They must be identified and admissibly proved by the expert and so far as the opinion is based on assumed or accepted facts, they must be identified and proved in some other way.
It must be established that the facts on which the opinion is based form a proper foundation for it, and the opinion of the expert requires demonstration or examination of scientific or other intellectual basis for the conclusions reached. That is the experts evidence must explain how the field of specialised knowledge in which the witness is expert by reason of training, study or experience and on which the opinion is wholly or substantially based applies to facts assumed or observed so as to produce the opinion propounded. If all these matters are not made explicit and it is not possible to be sure whether the opinion is based wholly or substantially on the expert's specialised knowledge, if the court cannot be sure of that the evidence is strictly speaking, not admissible and so far as it is admissible it is of diminished weight.
[2]55 NSWLR 705.
The requirement is further underlined by Order 44 Supreme Court (General Civil Procedure) Rules (the “Rules of Court”). In particular r.44.03(2)(d) requires that a report of an expert prepared in accordance with the rule must state, specify or provide:
(d) the facts, matters or assumptions on which the opinion is based
Whether the Evidence of Mr Conn is Opinion Evidence on Factual Evidence
In order to determine whether Order 44 of the Rules of Court has any application, it is necessary to determine whether or not the evidence proposed to be called from Mr Conn is opinion evidence or factual evidence.
The Evidence Act 2008 provides the opinion rule through two sections. Section 76 provides:
(1)Evidence of an opinion is not admissible to prove the existence of a fact about the existence of which the opinion was expressed.
Section 79(1) provides:
(1)If a person has specialised knowledge based on the person’s training, study or experience, the opinion rule does not apply to evidence of an opinion of that person that is wholly or substantially based on that knowledge.
Lindgren J observed in Allstate v ANZ:[3]
Opinion is not defined in the Act, in the context of the general law of evidence, opinion has been defined as an inference from observed and communicable data.
[3]136 ALR 627 at 629.
Thayer, writing in 1896, in his work, Evidence at the Common Law, noted:
In a sense, all testimony to matter of fact is opinion evidence, that is it is a conclusion formed from phenomena and mental expressions, yet that is not the way we talk in courts or in common life. Where shall the line be drawn? When does matter of fact first become matter of opinion?[4]
[4]Evidence at the Common Law, at 524.
The question was dealt with, by Cox J in The Queen v Perry[5], where his Honour noted that "simply because the relevant evidence is given by an expert does not mean that the evidence necessarily becomes opinion evidence". Cox J said in this regard:
It is not all kinds of evidence that only an expert witness can give that may properly be described as opinion evidence. A man may need to show a particular degree of knowledge or expertise to be qualified to give evidence on a specialist subject, but it does not necessarily follow that his evidence as to how a complex piece of equipment works, for instance, or what happens when a car skids is opinion evidence.
[5](1981) 26 SASR 119 at 124.
His Honour then quoted from Cross 2nd Edition 1979:
Following a long English tradition treating as opinion any inference from observed facts. A fact, however, is something that a witness has directly observed.[6]
[6] Cross 2nd Edition 1979 at 16.2.
The notion of an opinion as opposed to a statement of fact was also analysed in 1849 by G.C. Lewis, in his work, Influence of Authority in Matters of Opinion (quoted in Wigmore, also cited by Justice Cox in Perry at p.126) where the following is observed by the learned author:
The essential idea of opinion seems to be that it is a matter about which doubt can reasonably exist, as to which two persons can, without absurdity, think differently. The existence of an object before the eyes of two persons would not be a matter of opinion, nor would it be a matter of opinion that twice two are four. When testimony is divided or uncertain, the existence of a fact may become doubtful, and therefore a matter of opinion.
The distinction between fact and opinion may not be clear in many cases. However, a useful definition may be taken from the reasoning of Giles J in R. W. Miller & Co Pty Ltd v Krupp (Australia) Pty Ltd.[7] In this case, His Honour described the distinction in these terms: "Opinion evidence can be described as evidence of a conclusion, usually judgmental or debatable, reasoned from facts".
[7]34 NSWLR 129 at 130.
Whether Conn’s Evidence is Opinion Evidence
The question then becomes whether Mr Conn's evidence that he proposes to give is opinion evidence or evidence of fact.
In my view, the evidence proposed to be given by Mr Conn is not opinion evidence. It is evidence of fact. He describes the workings of a complex piece of equipment, namely a computer, in relation to what is stored on the slack space of its hard drive.
He also describes what he personally did and observed in relation to the information derived from the hard drives of the computers seized during the Anton Piller process.
Importantly, he does not arrive at or form any conclusions, nor does he make any judgments by a process of reasoning from the facts that he observed.
Consequences of this Finding
Accordingly the proposed, evidence not being of the nature of an opinion, is not required to comply with the requirements of Makita. Nor is it necessary to comply with r.44.03(2)(d) to state that matters, facts and assumptions on which the purported opinion is based simply because there is no opinion proposed to be expressed by Mr Conn.
Rule 44.03(1)(a) and (b) provides:
Unless otherwise ordered a party who intends at trial to adduce the evidence of a person as an expert shall:
(a)as soon as practicable after the engagement of the expert and before the expert makes a report under this rule, provide the expert with a copy of the code, and
(b)not later than 30 days before the day fixed for trial serve on each other party a report by the expert in accordance with Sub-paragraph (2) and deliver a copy for the use of the court.
However on close examination of the Rule, it applies only to the evidence of a person who is called as an expert and who is called to express an opinion. The rule has no application to an expert who is called to give evidence confined to giving evidence of facts, where no opinion is expressed. The provisions of the rule make this plain. Reference is made to r.44(2) paragraphs (d), (e), (i) and (j). The requirements of r.44(2) are mandatory, they cannot be complied with if no opinion is expressed.
Although in the appropriate case it maybe desirable to order that an Order 44 statement be provided in respect of an expert witness called to give evidence of facts only, this is not a mandatory requirement of the rule itself.
The submission made on behalf of Mr Hodgson that Mr Conn's evidence should not be received because of non compliance with r.44, must be rejected.
Relevance of Mr Conn’s Evidence
Admissible parts of Mr Conn's evidence may not on their own prove any fact relevant to the facts in issue in this case.
However, in combination with other admissible evidence yet to be called, Mr Conn's evidence may provide a link in the chain which establishes a relevant fact. For this reason I am not prepared to reject Mr Conn's evidence at this stage because it may, when linked together with other evidence yet to be called, provide relevant evidence within the meaning of s 55 of the Evidence Act2008.[8]
[8] Section 55 of the Evidence Act2008 provides:
Mr Conn's Reply Statement
The Amcor parties also propose to call Mr Conn to give evidence by way of reply. Again, his witness statement was served late, outside the time set by the orders made by the Court.
However, Mr Conn’s evidence in reply is in the nature of factual evidence as to his observations derived from his examination of a computer hard drive. He does not seek to give evidence in the nature of any opinion, nor does he make any judgment on the matters that he observed.
The evidence deals with a factual issue raised by the defendants in their pleadings. It is relevant to the chain of events which they plead led them to withdraw from the agreements in issue.
Conclusion
For these reasons and subject to further objections being made out in respect of Mr Conn's evidence, it is determined that his evidence as a whole in both witness statements is admissible and ought to be admitted. This is subject to the further objections being dealt with.
I will determine whether any evidence to be adduced from Mr Conn is admissible against which and any party in due course when all of the evidence in the trial has been called.
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(1)The evidence that is relevant in a proceeding is evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding.
(2) In particular, evidence is not taken to be irrelevant only because it relates only to:
(a) the credibility of a witness, or
(b) the admissibility of other evidence, or
(c) a failure to adduce evidence.
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