Morey, Phillip James v Transurban City Link Ltd
[1997] FCA 608
•11 JULY 1997
CATCHWORDS
TRADE PRACTICES - consumer protection - misleading and deceptive conduct - City Link prospectus - predictions as to traffic flows based on traffic report - report not reproduced in prospectus - whether prospectus misrepresented definition of light commercial vehicle used in report - subpoena seeking production of traffic report set aside by trial judge - call for production of traffic report at trial - no order for production made - whether more than one construction of prospectus open - whether misleading or deceptive in one of such constructions
APPEAL - new trial - evidence - document sought by subpoena and call for production - wrongful rejection of evidence at trial - whether interest of fair trial required production of certain evidence - whether proprietary rights to document in party's possession relevant
Evidence Act 1995 (Cth) s 36
Federal Court of Australia Act 1976 (Cth) s 28(1)(f)
Federal Court Rules O 10 r 1(2)(a)(i), O 15 r 3, O 27 r 9
Commissioner for Railways v Small (1938) 38 SR(NSW) 565
Grant v Downs (1976) 135 CLR 674
Balenzuela v De Gail (1959) 101 CLR 226
Bell Resources Ltd v BHP Ltd (1996) 2ATPR 40-702
Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82
Wollongong Corporation v Cowan (1955) 93 CLR 435 at 444
Commonwealth Bank v Quade (1991) 102 ALR 487
Siddons Pty Ltd v The Stanley Works Pty Ltd (1991) 29 FCR 14
Phillip James Morey v Transurban City Link Limited & Anr.
(No. VG 81 of 1997
Judge: Lockhart, Heerey and Sundberg JJ
Date: 11 July 1997
Place: Melbourne
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY No. VG 81 of 1997
GENERAL DIVISION
B E T W E E N:
PHILLIP JAMES MOREY
Appellant
- and -
TRANSURBAN CITY LINK LIMITED
-and-
CITY LINK MANAGEMENT LIMITED
Respondents
JUDGE: Lockhart, Heerey and Sundberg JJ
DATE: 11 July 1997
PLACE: Melbourne
MINUTES OF ORDER
The Court orders that:
The judgment be set aside.
There be a new trial of this proceeding limited to the question whether the following matters involve contraventions of s 52 of the Trade Practices Act namely:
(a)the use of the definition of Light Commercial Vehicles being 1.5 - 4.5 tonnes in the calculations of Traffic Flow and Revenue Forecasts in the Traffic Report used in the compilation of the prospectus;
(b)the status of the demographic (ie population and employment) statistics as used in the Traffic Report as being "published Government forecasts"
together with such relief, if any, as may be appropriate.
There be a speedy trial.
The respondents pay the appellant's costs of the appeal, including reserved costs.
The costs of the first trial be reserved for the judge hearing the new trial.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY No. VG 81 of 1997
GENERAL DIVISION
B E T W E E N:
PHILLIP JAMES MOREY
Appellant
- and -
TRANSURBAN CITY LINK LIMITED
-and-
CITY LINK MANAGEMENT LIMITED
Respondents
CORAM: Lockhart, Heerey and Sundberg JJ
DATE: 11 July 1997
PLACE: Melbourne
REASONS FOR JUDGMENT
THE COURT
The Melbourne City Link is a very large project involving the construction of roadways and tunnels in the inner suburbs of Melbourne. The total cost will be of the order of $1.8 billion. When the Link is completed, traffic using it will pay tolls. The contractual arrangements for the project are contained in a document dated 20 October 1995 called the Concession Deed, which is given statutory force by an Act of the Parliament of Victoria, the Melbourne City Link Act 1995 (Vic).
As part of the funding of the project, a public issue of securities to the value of $455 million was made in March 1996. The securities were offered by the first respondent Transurban City Link Limited. A prospectus dated 20 February 1996 was lodged with the Australian Securities Commission.
The appellant Mr Phillip James Morey is a member of the Public
Transport Users Association. That body advocates investment in public transport rather than freeways. It is opposed to the City Link project.
The appellant brought a proceeding claiming that certain statements in the prospectus contravened s 52 of the Trade Practices Act 1974 (Cth). At trial many complaints were dealt with, but the only live issues on this appeal relate to statements in the prospectus concerning estimates of future traffic flows and population.
The major source of income of the Link is to be toll revenue. Since toll pricing is controlled by the Concession Deed, and the costs of the project are fixed, the reliability of traffic estimates is obviously of critical importance to any assessment of the future profitability of the Link, and hence to any investment decision based on the prospectus. In the words of the prospectus itself (s 5.1):
The principal factor that will affect the actual level of returns to Investors is the volume of traffic using the Link.
The Prospectus
Section 5 of the prospectus is headed "Traffic Estimates and Projected Returns". Sections 5.1 and 5.2 include the following (emphasis added):
5.1Introduction
The principal factor that will affect the actual level of returns to Investors is the volume of traffic using the Link. To assist the directors in assessing the likely traffic volumes, a report was commissioned to estimate traffic volumes and revenue that
could be reasonably expected on the Link.
An expert team of traffic engineers comprising Acer Wargon Chapman (specialising in traffic planning and engineering), DJA/Maunsell (specialising in traffic modelling), and the Transport Research Centre (RMIT) (specialising in traffic data and specialist research including stated preference surveys), was assembled to provide this advice. These parties, (collectively "the Traffic Experts"), have extensive experience in traffic engineering and planning, including involvement in toll road and major transport projects.
The Traffic Experts prepared a traffic report which estimates the traffic volumes on the road segments which will make up the Link in the years 2001 and 2011 and provides a growth rate assumption for traffic volumes beyond 2011. In addition, the traffic report includes an estimate of traffic revenue based on the selected tolling strategy. The years of 2001 and 2011 were chosen as they correspond with the years the Victorian Government uses to produce its official demographic planning estimates.
RJ Nairn and Partners have undertaken a comprehensive audit and review of the work and results of the Traffic Experts. RJ Nairn are expert traffic planning engineers and their report is contained in Section 8.
5.2Traffic Forecasting Methodology
The traffic volume estimates were derived utilising the TRIPS traffic network model. TRIPS is a widely used computer simulation tool which is considered by the Traffic Experts to be appropriate for the Melbourne City Link Project. Calibrating the TRIPS traffic model so it reflected conditions on the Melbourne road network involved the import of data from the VITAL project, a study undertaken by the Transport Research Centre (RMIT) into travel patterns in Melbourne. In addition, further surveys were conducted to validate the travel time parameters used in the base road network model and the most recent actual traffic count dates available from VicRoads was also incorporated into the base road network model.
The estimating of future traffic volumes on the Link required assumptions to be made in relation to the form of the road network that would be in place for each of the two forecast years (2001 and 2011). The description of the road network as at 2001 and 2011 was labelled "Ground Zero". The road network model assumes the completion (at the scheduled time) of a number of major projects including the Western Ring Road and Eastern Ring Road also known as the Scoresby Freeway (notwithstanding that the Government has not given any commitment to this road development). On the basis of the assumed Ground Zero road network and utilising the published Government forecasts relating to the expected demographics of Melbourne over the next 15 years, untolled traffic volume estimates were developed. These estimates were derived from models which estimate the peak period, 24 hour and commercial vehicle volumes ...
Section 5.2 goes on to discuss some other aspects of the modelling such as "diversion factors" (ie the percentage of motorists unwilling to pay the toll) and the assessment of the
consequences of future changes to the public transport system.
Section 5.3 then states (emphasis added):
5.3Traffic Estimates
Utilising the methodology outlined above, average weekday traffic estimates by class of vehicle have been prepared for each of the proposed toll zones for years 2001 and 2011. These are the Base Case Traffic Estimates adopted by the directors in the preparation of the financial forecasts.
Estimated Average Weekly Volumes (000's) by Class of Vehicle for Year 2001
Toll Zone Locations
Toll
Zone
Cars LCVs HCVs
Total
North of Brunswick Road
Western Link Section 1
Western Link Section 2
Domain Section
SE Arterial (Punt Rd to Burnley
St)
SE Arterial (Burnley St to north-
west of Toorak Rd)Total
1
2
3
45
6
104 21 7
85 17 6
82 17 6
78 16 5
87 18 6
85 17 6
520 106 36
132
109
104
99110
108
662
Note:LCV - Light Commercial Vehicles (1.5-4.5 tonnes)
HCV - Heavy Commercial Vehicles (>4.5 tonnes)
Totals subject to rounding
Refer to Route Map in Section 3 for locations of toll zones.
A similar table appears for the year 2011.
Section 5.7 "Key Assumptions" includes the following (emphasis added):
Traffic Revenue
A key assumption in the generation of the projected returns is the estimate of traffic volume and revenue. For the purposes of the projected returns contained in this Section, the directors have adopted the traffic volume and revenue estimates provided by the Traffic Experts and referred to in ss 5.3 and 5.4.
Section 6 "Investment Risk" includes under the heading "6.2 Traffic Risk" the following:
Traffic volume risk is a key economic risk to which Investors will be exposed. Returns to Investors during the Operations Phase will be a function of the volume of traffic using the Link and the level of tolls. Investors have no direct mitigation against this risk and are relying on the traffic volume estimates prepared for the directors by the Traffic Experts and audited by RJ Nairn. An overview of the methodology employed by the Traffic Experts in developing the traffic volume projections is included in Section 5.2.
Investors will bear the risk of reductions in traffic volume and revenue brought about by various factors including:
×incorrect projections;
×economic conditions;
×changing travel patterns and habits
×new technologies; or
×increases in the price of petrol
The report of the Traffic Experts (hereafter referred to as "the Report") does not appear in the prospectus. What does appear is the audit report of R J Nairn and Partners dated 19 February 1996. This is in essence a review of the methodology and other aspects of the Report. Amongst other things the Nairn Report states:
The Traffic Experts estimated that the growth and distribution of road-based travel in 2001 and 2011 will largely reflect growth due to demographic changes (ie population and employment changes). This is a reasonable assumption, to provide reliable estimates of base travel in the two forecast years.
The Appellant's Case
The two substantive complaints raised on the appeal were as follows.
First, the estimated traffic volumes appearing in section 5.3 of the prospectus define a Light Commercial Vehicle (LCV) as a commercial vehicle of between 1.5 and 4.5 tonnes. This is the same definition that appears in the Concession Deed. In fact, it is said, the Report used a different definition, that of the
Australian Bureau of Statistics, which defines an LCV as a commercial vehicle up to 3 tonnes. This definition would include commercial vehicles such as utilities which are less than 1.5 tonnes. Thus, it is said the prospectus mis-states the nature and effect of the Report. The figures for LCVs coming from the Report use a less restrictive definition and hence are likely to be inflated as compared with figures which would be obtained if the prospectus and Concession Deed definition were used.
Secondly, the demographic statistics used in the Report were not, as the prospectus states, "published Government forecasts" or "official demographic planning estimates". The word "utilising" in the prospectus would, or at least could, convey the meaning that only forecasts answering this description were used. It is said that in fact this was not the case. A subsidiary aspect of this complaint is whether the term "demographic" includes employment, as well as population statistics.
Non-Production of the Report
As will by now be seen, the Report was central to the appellant's case. It was however not produced at the trial. This appeal has been mainly concerned with the circumstances of that non-production. The arguments which were raised on this issue need to be looked at in the light of the procedural history of the case.
Because of the time constraints of the public issue process, the matter was always attended with urgency. The appellant initially
sought an interlocutory injunction on the morning of 14 March 1996. On that day Cooper J declined to grant such an injunction but directed that a notification be given to the Australian Stock Exchange which stated in substance that there was a legal dispute as to the validity of aspects of the prospectus. On 18 March Ryan J made directions by consent as to procedural matters such as the filing of defences and affidavits. Those directions included the following:
Subject to any further or other order, pursuant to O 15 r 3 and O 10 r 1(2)(a)(i), discovery be dispensed with.
Order 15 r 3 of the Federal Court Rules provides that the Court may order that discovery not be required, or be limited to specified documents or classes of documents. Order 10 r 1(2)(a)(i) confers power to make orders with respect to discovery and inspection of documents.
At some stage prior to trial the appellant caused to be issued a subpoena to the respondents seeking a large number of documents, including the Report. That subpoena was set aside on the application of the respondents. The appellant makes no complaint as to this.
The trial commenced on 3 April 1996 and resumed on the following day when it was adjourned part-heard due to prior commitments of the judge. By that stage the appellant had closed his case and the respondent's case had commenced. The appellant was represented by Dr Jocelyn Scutt of counsel. On 24 April the
trial resumed. Mr Peter Vickery QC came into the case to lead Dr Scutt. The hearing concluded on the 26th after an adjournment for the Anzac Day holiday. On 22 May his Honour gave judgment dismissing the application.
When the hearing resumed on 24 April three subpoenas were before the Court. They had been issued and served the previous day and were directed to the respondents, to DJA Maunsell and to Acer Wargon Chapman (Vic) Pty Limited. Each subpoena sought, and sought only, production of the Report. Each of the persons served with a subpoena moved that it be set aside under O 27 r 9 which provides that the Court may, on motion by the person named in a subpoena, set aside the subpoena wholly or in part. In upholding the motions his Honour said, after referring to some formal matters:
In the present case the Court has refused to give discovery generally or on a limited basis. The matter has proceeded as a matter of some urgency by way of affidavit material. At the beginning of the hearing the applicant sought to have documents produced pursuant to subpoena and issued subpoenas directed to the respondent and other parties for the purposes of obtaining documents to be produced in Court. On the application of the persons so served, the Court set aside those subpoenas. Insofar as the respondent was concerned, it was set aside on the basis that it is inappropriate to have subpoenas of this kind to produce documents where discovery has not been ordered. Reference is made, particularly, to what was said by Jordan CJ in The Commissioner for Railways v Small, (1938) 38 NSWSR 565 at page 574 where his Honour said:
It is not legitimate to use a writ of subpoena duces tecum as a substitute for an application for discovery of documents or as alternative to an application of further and better particulars [sic, in the judgment in Small the words used are "application for further and better discovery"]. Discovery application should be made at the proper time and place. It would greatly impede the trial of actions at nisi prius (that is at trial) [sic, the words in parentheses do not appear in the judgment in Small], and impose an intolerable burden upon the presiding judge if he were required from time to time to suspend proceedings and wade himself through masses of documents for the purpose of endeavouring to determine whether any of them are relevant.
There is only one document involved in this case but the comment made by the Chief Justice is equally applicable here where, so far, an hour has been spent on the questions of subpoenas in the middle of a trial which is being heard as a matter of urgency and time constraints are imposed by the fact of the non-availability of the Court.
In this case, no discovery has been ordered, in fact, an application for discovery was rejected. On a previous occasion the Court ruled that a subpoena be set aside insofar as the respondent was concerned because it was inappropriate to obtain by subpoena what should have been obtained by discovery.
It has been argued in this case that discovery and subpoena are two different things because discovery requires a person, either a third party or a party to the proceedings, to search and decide what documents are relevant and come within the discovery principles whereas here, one document only is identified. But that, in my opinion, does not alter the general principle that a subpoena to produce documents should not be used as a substitute for discovery.
It is made clear that the purpose of the discovery is for cross examination. The applicant has closed his case. The respondent is in the course of presenting its evidence. Witnesses are to be cross examined on their affidavits. Apart from any question of whether the contents of this document are relevant or not to the issues before the Court, this is a case where, in my opinion, what is being sought against the respondent is impermissible.
The same document is being sought against the other persons. In my opinion, the conduct of the applicant in doing this amounts almost to an abuse of the process of the Court to get indirectly what it cannot get directly.
Dr Scutt then continued cross-examination of Mr D K Johnston of DJA/Maunsell. He was the author of Part II of the Report, a technical report on traffic modelling. The following exchange took place:
Q.And have you that report with you in Court today?
A.No I don't.
Q.That report is accessible to you? It is your report?
There was then an objection from senior counsel for the respondents in these terms:
I object, your Honour. I should make it clear that this is the report, of course, that my learned friends have tried to obtain on a number of occasions through coercive powers for the Court and have been unsuccessful. The report, of course, is the property of my client and I am instructed that unless the Court
orders it, it is not to be offered. So though this witness does not have the ability to provide a copy of that [sic]. If the Court orders my client to provide it. [sic]
His Honour asked whether any claim of privilege was attached. Counsel replied:
That is the next question, your Honour. We will seek various orders if we are directed to do it. Can I explain why, your Honour, just so to explain the position. If a coercive order of the Court enforces that production of a document upon us then certain protection arises in relation to the document. If it is used outside this courtroom or outside these proceedings for other purposes then your Honour will be aware of the various consequences that follow when your Honour uses that document. If I volunteer the document or this witness volunteers the document the same consequences may not follow. We are very concerned to make sure that protection is given. They have tried to have it brought to the Court. That attempt has failed, as a matter of law, that should be the end of the matter.
There then followed a discussion between his Honour and Dr Scutt as to the purpose for which the report was sought. Amongst other things, Dr Scutt said that the report "goes to a direct and central issue before this Court" and not merely to credit.
Finally Dr Scutt said:
Well, your Honour, I would call for the document, Acer Wargon Chapman, TRC and DJA Maunsell, Melbourne City Link Traffic and Revenue Forecast, Part II, Technical Report on Traffic Modelling, dated July 1995.
His Honour asked for what purpose and Dr Scutt replied:
In order to put to Mr Johnston the issue as to whether this light commercial vehicle category consisting of vehicles from light vans to rigid trucks less than 3 tonnes is in fact the definition that was used to estimate the number of light commercial vehicles that would be used in the tollway.
His Honour asked what that was directed to. Dr Scutt said:
It goes, your Honour, directly to a misrepresentation that - a representation that is false and misleading in the prospectus.
The representation in the prospectus that is false and misleading appears on page 42 of the prospectus where it said that light commercial vehicles, 1.5 to 4.5 tonnes is the definition used in calculating the figures in that table. In other words, what that represents is that the City Link definition of light commercial vehicles is what was used in calculating the figures in that table and what we say is that that is a falsely misleading representing or likely to mislead and deceive because in fact that is not the definition that was used. The definition that was used was one of vehicles from light vans to rigid trucks less than three tonnes, which is not the definition in the City Link Act, your Honour.
After further discussion with counsel, his Honour ruled as follows:
At this stage it is premature to decide this matter. You are entitled to cross-examine the witness on all aspects, including matters of credit in the course of that, you can ask him about the contents of the document, if it is in writing, he gives his evidence and you say that it is not the correct document. You can put it to him. He does not get the document in evidence as I understand the rule, it goes to credit and that is as far as it got at the moment. As I understand it, you want to put this paragraph to him, I see no reason why you cannot. But it does not entitle you to call for the production or tender of the whole of the document.
The reference to "the paragraph" was to a single page, purporting to be a copy of a page of the Report, which had come into the possession of appellant's solicitors.
In further cross-examination Mr Johnston said that the 1.5 - 4.5 tonne range definition of LCV was "the range we adopted which is consistent with the prospectus". He also said he had not recently checked the Report.
New Evidence
On the hearing of this appeal counsel for the appellant sought to tender as fresh evidence affidavits of Mr Paul Andrew Mees. The first of these was sworn on 27 May 1997. Mr Mees deposed
that he is the President of the Public Transport Users Association and was present in Court during the trial and the cross-examination of Mr Johnston and the legal argument about the subpoenas. The next day a prominent report appeared in the Age regarding the issues raised by the cross-examination and the refusal of the respondents to produce the Report. Mr Mees further deposed that approximately one month after the Age report appeared
a parcel was left anonymously at the office of the Public Transport Users Association. The parcel contained what appeared to be, and what I verily believe to be, a photocopy of the information memorandum issued early in 1996 in connection with the CPI Indexed Bonds issue which forms part of the financing of the Melbourne City Link Project. This document incorporates, as Appendix B, a document which appears to be, and which I verily believe to be, the Traffic Report named in the subpoenas.
The document was produced. It includes a document entitled "Melbourne City Link Traffic and Revenue Forecasts Part II Technical Report on Traffic Modelling by DJA Maunsell".
At p 17 of that document under the heading "3.4 Light Commercial Vehicles" it is stated:
The Light Commercial Vehicle category consists of vehicles from light vans to rigid trucks less than 3 tonnes.
Also on a later page it is stated:
The method available for forecasting the growth in trip ends is restricted by the availability of forecasts of the demographics of the zones in the city. Estimates of population and employment were produced for the Department of Planning by Ratio Pty Ltd (reference A) and summaries are contained in Tables 4.1.
Reception of this evidence was opposed by counsel for the respondents. However in the exceptional circumstances of this case we think it appropriate that it be received. The appellant placed considerable reliance upon this document in order to found its primary argument that there were two misrepresentations included in the prospectus which resulted in the contravention of s 52 of the Trade Practices Act, namely, those described earlier as two substantive complaints. Hence, the document is important to the appellant's case.
As the Report did not come into the possession of the appellant until after the conclusion of the trial it could not have been relied upon by the appellant at the trial.
Although reference was made to re-examination of Mr Johnston at the trial when he referred to a number of drafts being prepared, the respondents have not sought, either at trial or on this appeal, to adduce evidence that the Report, that is to say the report referred to in the prospectus, adopted a different definition of LCV to that in the document produced by Mr Mees. In any case, since this matter will return for a retrial primarily on the grounds that the attempts made by the appellant to secure production of the Report in the ordinary way were wrongly rejected, there will be no problems with orthodox methods of proof. The later affidavits of Mr Mees did not appear to us to raise matters relevant to the appeal and we declined to receive them.
Setting Aside the Subpoena
In our opinion the learned trial judge erred in setting aside the
subpoena. There was no objection in point of form. It was entirely specific in its description of the one document sought. That document was plainly relevant to the issues raised at the trial.
Although reference was made to the well-known authority Commissioner for Railways v Small (1938) 38 SR(NSW) 565, the circumstances of that case were entirely different. In that case the solicitors for the plaintiff in a wrongful death claim issued a subpoena which sought the production of a vast array of documents by the Commissioner. They are described in Jordan CJ's judgment (38 SR(NSW) at 575). They included "all documents, papers, reports and correspondence relating directly or indirectly to falls from electric trains" in New South Wales and all documents etc "relating directly or indirectly to complaints about the running and control of electric trains".
His Honour acknowledged that, unlike Small, the present case referred to only one document. But the principle in Small is in our opinion not "equally applicable" by reason of the fact that an hour had been spent on the question of subpoenas in the middle of the trial. If an hour was spent, it was because an unmeritorious argument was advanced in support of the motions to set aside. Moreover, it was not correct to say that discovery had been "rejected". The consent directions made by Ryan J are entirely understandable in the context of a case where urgency was paramount. But nevertheless those directions explicitly contemplated that, should the requirements of justice dictate,
some limited form of discovery might be necessary or appropriate. The order made in relation to discovery afforded no logical basis for denying a party a right to the remedy of subpoena, providing of course the documents sought by the subpoena were relevant. Indeed, the absence of discovery is all the more reason why a properly directed subpoena may be appropriate.
The reference by Jordan CJ in Small to discovery applications being made "at the proper time and place" must be understood in the context of that case. Despite discovery having been obtained six months previously, the plaintiff's subpoena was served only two working days before the trial (at 572). When the trial commenced, the judge allowed the subpoena to be called on immediately and, before the plaintiff's opening, an officer of the Railways Department was "irregularly examined on the floor of the Court, without being sworn, as to the whereabouts and nature of the documents" (at 576).
Moreover, the appellant's subpoena in the present case was in no sense "fishing", that is, in the words of Jordan CJ, "endeavouring, not to obtain evidence to support his case, but to discover whether he has a case at all" (at 575). Here the appellant had sought to raise, through the affidavit of Dr Moriarty, a circumstantial case that the Report used a different definition of LCV from that in the Concession Deed and prospectus. The Report itself was evidence, and obviously the best evidence, to support that case. The Report was specified "with reasonable particularity" (Small at 574); indeed it was the
only document sought.
In Grant v Downs (1976) 135 CLR 674 at 685 Stephen, Mason and Murphy JJ, in the context of a discussion of legal professional privilege, referred to the
... more general public interest, that which requires that in the interests of a fair trial litigation should be conducted on the footing that all relevant documentary evidence is available.
That principle, in our opinion, mandated at the very least the production of the Report. Once that was done, any submissions as to confidentiality or privilege could be properly considered.
It is difficult to see what is or could be confidential about projections of traffic flows, on the basis of which the public was being asked by the respondents to invest almost half a billion dollars. In argument before us, counsel for the respondents said that his clients were "keen to show to the market place the prospectus was not misleading and deceptive". The simplest and best way to have achieved this objective was to produce the Report itself. The cryptic allusions of counsel to the "consequences" which might follow if the Report were produced should not have stood in the way of its production.
Calling for the Report
Section 36 of the Evidence Act 1995 (Cth) provides:
(1)The court may order a person who:
(a) is present at the hearing of a proceeding; and
(b) is compellable to give evidence in the proceeding;
to give evidence and to produce documents or things even if a subpoena or other process requiring the person to attend for that
purpose has not been duly served on the person.(2) A person so ordered to give evidence or to produce documents or things is subject to the same penalties and liabilities as if the person had been duly served with such a subpoena or other process.
(3) A party who inspects a document or thing produced to the court because of subsection (1) need not use the document in evidence.
The call that was made by the appellant's counsel at trial should have led to an order being made under this section. Even assuming that the copy of the Report in Mr Johnston's office was the property of the respondents, ownership rights could not stand in the way of an order for production under s 36(1). The ownership of the Report by the respondents was not relevant to the question whether the Report should be produced. When a document or other thing is produced to the Court, no question of interference with ownership arises. The Court takes the object in question into its custody, not to exercise any rights of ownership, but to use it for the temporary purpose of resolving disputed questions of fact. That power is essential to the proper administration of justice and prevails over private property rights.
Questions of relevance, admissibility, privilege and confidentiality can of course be considered once the document or thing is produced to the Court. But nobody can be heard to say: "The Court cannot see this document because it is my property".
Moreover, it was plain that the cross-examiner was not seeking the Report merely as a document going to Mr Johnston's credit. Also, the fact that the call was made in the course of the
respondent's case was no reason for non-production. There had not been any no case submission. A plaintiff is entitled to elicit evidence, whether documentary or otherwise, in support of his or her case during the course of the defendant's case, just as the defendant can elicit favourable evidence in the course of the plaintiff's case.
Should there be a New Trial?
Although the notice of appeal sought judgment for the appellant, on the hearing of the appeal counsel for the appellant only asked for a new trial, limited to the issues raised on appeal: see Federal Court of Australia Act 1976 (Cth) s 28(1)(f).
While the setting aside of the subpoena under O 27 r 9 and the refusal to make an order for production under s 36(1) of the Evidence Act were discretionary orders, in substance they had the effect that relevant evidence was wrongly rejected. This is usually a ground for a new trial. In Balenzuela v De Gail (1959) 101 CLR 226 at 232 Dixon CJ said:
When material has been erroneously rejected at the instance of the party who succeeds, then to deny nevertheless to the unsuccessful party the remedy of a new trial the Court must have some sure ground for saying that the reception of the evidence would not have affected the result or that it ought not to have done so.
See also per Taylor J at 238 and Menzies J at 239. Windeyer J (at 242) pointed out that the consequences of an improper rejection of admissible evidence are, generally speaking, more serious than the converse case where evidence is improperly admitted. In the former case, as his Honour said (at 244)
... there has been an error of law; and the court must assume that it has, or may have, resulted in a miscarriage of justice, for a party has a right to have his case tried according to law.
Counsel for the respondents, in arguing against a new trial, contended that the issue of LCV definition had become irrelevant. All that mattered, he said, was the "bottom line", the experts' opinion as to traffic volumes. The conclusions in the Report were matters of expert opinion which had been adopted in the prospectus. It cannot be misleading and deceptive for a company to publish a prospectus or similar document which adopts the opinion of experts, so long as the company acts in good faith and any opinions or conclusions stated are in fact the opinions or conclusions of those experts. Reference was made to a number of authorities, including Bell Resources Ltd v BHP Ltd (1996) ATPR 40-702 and Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82.
However, in the present case the complaint is a different one. The appellant contends the prospectus does not merely adopt the Report. Rather, it mis-states the nature and effect of the Report. The prospectus quotes the Report as giving an opinion of traffic volumes based on a certain definition whereas in truth the Report uses a different definition. If that case is made out then there is, prima facie, misleading and deceptive conduct. The question as to what difference, if any, the use of a different definition would make to the "bottom line" (for example, whether the incorporation of a higher number of LCVs might be balanced by a lower number of heavy commercial vehicles)
are matters to be resolved on the evidence and would bear on the nature of the relief, if any, granted.
This is not a case of "fresh evidence" or non-disclosure of relevant evidence by misconduct of a party: Wollongong Corporation v Cowan (1955) 93 CLR 435 at 444, Commonwealth Bank v Quade (1991) 102 ALR 487. It is a case of wrongful rejection of relevant evidence at trial.
The question whether the prospectus made misleading and deceptive statements has not become moot merely because the public issue closed last year. The first of the years for which estimated traffic flows were made is still four years off. The appellant adduced some evidence that the prospectus was still a document referred to by those trading in City Link securities. Indeed, that is an inference which would in any event be open.
Questions of delay and expense cannot stand in the way of the right of the appellant to a trial on relevant evidence, still less when the party complaining of such delay and expense is directly responsible for the wrongful objection to the production of the relevant document in question.
The Government Forecast Issue
In the course of his judgment the learned trial judge said:
Counsel for the applicant, by implication, asserted that the word "utilising" should be construed to mean "using and using only" the published Government forecasts and that evidence given before the Court showed that the Traffic Experts "used" the Ratio Report
which, it was asserted, was not a published Government forecast. Further, it was asserted that the demographics of Melbourne should be construed as meaning "demographic changes (i.e. population and employment changes)" when the Traffic Experts used the word "demographic" as referring to population changes only.
This submission on behalf of the applicant must be rejected. Normally the word "utilise" connotes the making use of something. The Macquarie Dictionary gives the meaning "to put to use; turn to profitable account". An example is given "to utilise water power for driving machinery." An alternative spelling is given "utilize". The Shorter Oxford Dictionary does not contain the word "utilise" but defines "utilize" to mean "to make useful, turn to account." On no view can it be said that in its context that word in the Prospectus "utilising" is to be construed as meaning "using and using only". It follows, in my opinion, that even if the Ratio Report is not a published Government forecast, reference to that report and making use of that report by the Traffic Experts cannot make the statement in sub-section 5.2 of the Prospectus wrong.
In our respectful opinion, this passage of his Honour's judgment was in error. This was not a case in which the appellant sought relief under the Trade Practices Act because he had suffered loss and damage as a result of reliance on any statement by the respondents. Rather, his case was that the prospectus, in the respects referred to, was misleading or deceptive or likely to mislead or deceive members of the public who might wish to deal in City Link securities. This was not a case therefore where the appellant had to show that the words bore a particular meaning on which he relied in acting to his detriment. Rather it is a case where he had to show that the words were capable of a meaning which was likely to mislead or deceive. Language is often capable of bearing more than one meaning. If a statement is misleading and deceptive in one of the meanings that are reasonably open, that is sufficient for the purposes of s 52, Siddons Pty Ltd v The Stanley Works Pty Ltd (1991) 29 FCR 14 at 18-20.
In the present case, the true issue before the Court was whether the prospectus might reasonably be taken as bearing the meaning for which the appellant contended. If it did, it was not to the point that another meaning open was the one preferred by his Honour. There seems to be an arguable case that the meaning for which the appellant contends is open. We note particularly the words we have emphasised in the third paragraph of s 5.1, which may give colour to the words in s 5.2. However, it will be a matter for the judge on the retrial to decide whether the prospectus was capable of bearing the meaning for which the appellant contends, and, if so, whether it was in fact misleading or deceptive or likely to mislead or deceive when read in that sense.
Orders
The judgment will be set aside and there will be orders for a new trial, limited to the question whether the following matters involve contraventions of s 52 of the Trade Practices Act namely:
(a)the use of the definition of Light Commercial Vehicles being 1.5 - 4.5 tonnes in the calculations of Traffic Flow and Revenue Forecasts in the Traffic Report used in the compilation of the prospectus;
(b)the status of the demographic (ie population and employment) statistics used in the Traffic Report as being "published Government forecasts"
together with such relief, if any, as may be appropriate.
The matter may be reheard before the same judge or any other judge of this Court. It is directed that there be a speedy trial.
As to costs, the respondent should pay the appellant's costs of this appeal, including reserved costs. The costs of the first trial should be reserved for the judge hearing the new trial.
I certify that this and the preceding twenty two (22) pages are a true copy of the reasons for judgment of the Court
Dated:
Associate
Appearances
Counsel for the apellant: Mr Peter Vickery QC and Ms
Frances O'Brien
Solicitor for the appellant: Grando & Breheny
Counsel for the respondents: Mr J E Middleton QC with
Mr TWalker
Solicitors for the respondents: Baker & McKenzie
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