Southernwood v Brambles Limited (No 2)

Link copied
Case Copied 43 min read

FEDERAL COURT OF AUSTRALIA

Southernwood v Brambles Limited (No 2) [2022] FCA 973

File number(s): VID 972 of 2018
Judgment of: MURPHY J
Date of judgment: 5 August 2022
Date of publication of reasons 19 August 2022
Catchwords: PRACTICE AND PROCEDURE – application for evidence of lay two witnesses to be heard via video link from United States – where the witnesses are unable or unwilling to travel to Australia to give evidence in person – where the evidence of both witnesses is significant to the matters in dispute – where the application was made a short time before trial – the relevant principles to the exercise of discretion to permit evidence by video link – discussion of difficulties that can be associated with cross-examination via video link, including as to credit, in large and complex proceedings – application dismissed
Legislation:

Federal Court of Australia Act 1976 (Cth) ss 37M, 47A, 47C

Federal Court Rules 2011 r 29.11
Cases cited:

Auken Animal Husbandry Pty Ltd v 3RD Solution Investment Pty Ltd [2020] FCA 1153; 147 ACSR 521

Australian Competition and Consumer Commission v World Netsafe Pty Ltd [2002] FCA 526;  119 FCR 303

Australian Medical Imaging Pty Ltd v Marconi Medical Systems Australia Pty Ltd [2001] NSWSC 651; 53 NSWLR 1

Australian Securities and Investments Commission v Wilson (No 2) [2021] FCA 808; 153 ACSR 649

Blackrock Asset Management Australia Services Limited v Waked (No 2) [2011] FCA 479

Campaign Master (UK) Ltd v Forty Two International Pty Ltd (No 3) [2009] FCA 1306; 181 FCR 152

Capic v Forward Motor Company of Australia Ltd (Adjournment) [2020] FCA 486

Corrigan v Commvault Systems (Australia) Pty Ltd [2011] FCA 107; 192 FCR 71

Dorajay Pty Ltd v Aristocrat Leisure Ltd [2007] FCA 1502

Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 627; 231 FCR 531

Kirby v Centro Properties Limited [2012] FCA 60; 288 ALR 601

Long Forest Estate Pty Ltd v Singh [2020] VSC 604

Odhiambo v Minister for Immigration and Multicultural Affairs [2002] FCAFC 194; 122 FCR 29

Palmer v McGowan (No 2) [2022] FCA 32; 398 ALR 524

Sanson v Sanson [2021] NSWSC 417

Sunstate Airlines (Qld) Pty Ltd v First Chicago Australia Securities Ltd, unrep, SCNSW, 11 March 1997

Tetley v Goldmate Group Pty Ltd [2020] FCA 913

Universal Music Publishing Pty Ltd v Palmer [2020] FCA 1472
Division: General Division
Registry: Victoria
National Practice Area: Consumer and Corporations
Sub-area: Regulator and Consumer Protection
Number of paragraphs: 69
Date of hearing: 3 August 2022
Counsel for the Applicants: Mr W A D Edwards and Mr T Rawlinson
Solicitor for the Applicants: Maurice Blackburn Lawyers and Slater & Gordon Lawyers
Counsel for the Respondent: Mr M Borsky QC and Ms S Brenker
Solicitor for the Respondent: Allens

ORDERS

VID 972 of 2018
BETWEEN:

HOLLY SOUTHERNWOOD

First Applicant

WILLIAM VINCENT KIDD AND MARY AGNES AS TRUSTEES FOR THE MAGNESS-BENNETT…

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Southernwood v Brambles Limited (No 2) and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2022] FCA 973
Decision Date

CaseChat Overview and Summary

Southernwood v Brambles Limited (No 2) involved an application by Brambles Limited to have the evidence of two witnesses, Mr Martin and Ms Nador, heard via video link from the United States. The witnesses were unable or unwilling to travel to Australia to give evidence in person. Both witnesses were significant to the matters in dispute in the securities class action. The application was made a short time before the trial. The court had to determine whether it was in the interests of justice to permit the witnesses to give evidence via video link.

The court considered the legal principles that guide the exercise of discretion under section 47A(1) of the Federal Court of Australia Act, which includes ensuring that justice is done between the parties and facilitating the just resolution of disputes according to the law. The court also considered the difficulties associated with cross-examination via video link, including the assessment of witness credibility. The court concluded that while Brambles’ arguments in relation to Mr Martin had some force, it saw little force in the application in respect of Ms Nador. The application was ultimately dismissed, as it was in the interests of justice for the witnesses to give evidence in person. The court noted the similarity to Dorajay, where the application to hear a witness’s evidence by video link was also refused due to the difficulties associated with video link evidence.

The court's decision was based on the importance of oral evidence being given directly to the court, and the entitlement of the opposing party to insist upon the physical presence of a witness for cross-examination. While Brambles had argued that video link evidence was preferable due to the witnesses' work commitments, the court concluded that the other considerations outweighed Brambles' arguments. The court emphasised that it was for Brambles to establish that an order to permit video link evidence would facilitate the just resolution of the dispute according to the law and as quickly, inexpensively and efficiently as possible.

The final orders of the court were that the interlocutory application dated 28 July 2022 was dismissed. The court noted that the question of costs was not raised by the parties, but if either party wished to submit that some other costs order was appropriate, they should file short submissions within seven days. Otherwise, the court would order that Brambles pay the costs of and incidental to the application.

Orders

Orders of the court

1. The Interlocutory Application dated 28 July 2022 is dismissed.

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

Background

Background to the litigation

Neither Mr Martin nor Ms Nador gave direct evidence as to why they were unable or unwilling to travel to Australia to give evidence in the trial in person. Brambles relied on the following two affidavits:(a)one of Alice Pailthorpe, a solicitor in the employ of Allens, the solicitors for Brambles in the proceeding, affirmed 28 July 2022, on the basis of information from Mr Martin and Ms Nador and belief; and(b)another of Alex Tolliday, a partner of Allens, affirmed 3 August 2022, in which he provided more information in relation to Mr Martin, on the basis of information from Mr Martin and belief. On Brambles’ application, I ordered that paragraph 9 of the affidavit be treated as confidential.THE FACTUAL BACKGROUND The substantive proceeding is a securities class action which is large, complex and strenuously contested. It was listed for trial for five weeks, commencing on 8 August 2022; the trial date having been set by orders made on 20 August 2021. Pursuant to orders of the Court, both sides were required to adduce their evidence in chief by way of affidavit. Brambles notified the applicant that at trial it intended to rely on the evidence of nine lay witnesses as well as two expert witnesses, and provided the applicant with affidavits and expert reports from those witnesses. The applicants notified Brambles, that they required each of those witnesses to attend for cross-examination. Of the nine lay witnesses, all of whom are present or former Brambles’ executives, six live overseas and three live in Australia. Of the six overseas-based lay witnesses, four intend to travel to Australia to give evidence in person at the trial, two from the United Kingdom, one from Spain, and one from the USA. Brambles submitted however that the work commitments of the two other overseas-based lay witnesses, Mr Martin and Ms Nador, mean they face substantial impediments in travelling from the USA to Australia to give evidence in person at the trial, and that both are “unable and unwilling” (to use the expression in Brambles’s submissions) to do so. Mr Tolliday deposed that Mr Martin’s work commitments are such that he has refused to give evidence in person at the trial. Both witnesses have made themselves available to give evidence from the USA by video link during the Court’s ordinary sitting times in Melbourne and Brambles seeks an order that they be permitted to do so. The importance of Mr Martin’s and Ms Nador’s evidence Mr Martin lives in Chattanooga, Tennessee. Ms Nador lives in Atlanta, Georgia. For the trial, Brambles has filed:(a)two witness affidavits of Mr Martin, affirmed on 18 November 2021 and 7 June 2022; and (b)one witness affidavit of Ms Nador affirmed on 21 October 2021. It is common ground that the evidence of both witnesses is of significant importance to the matters in dispute in the proceeding. In part that is because the applicants’ case includes the allegation that Brambles’ budget and forecast for revenue or “sales” growth in the relevant period, included projections for new business or “wins” which did not have a reasonable basis, and the evidence of both witnesses contests that allegation. For example, at paragraph 29E(b) of the Amended Consolidated Statement of Claim (ACSOC) the applicants take issue with the reasonableness of $52.6 million of “Unidentified Wins” through new business which was forecasted to be achieved by US Pooled (a pooled pallets business within CHEP North America, a division of Brambles) in FY2017. Both Ms Nador and Mr Martin were senior executives of CHEP North America in the relevant period.Mr Martin

Evidence

Evidence Before The Court

Of the nine lay witnesses, all of whom are present or former Brambles’ executives, six live overseas and three live in Australia. Of the six overseas-based lay witnesses, four intend to travel to Australia to give evidence in person at the trial, two from the United Kingdom, one from Spain, and one from the USA. Brambles submitted however that the work commitments of the two other overseas-based lay witnesses, Mr Martin and Ms Nador, mean they face substantial impediments in travelling from the USA to Australia to give evidence in person at the trial, and that both are “unable and unwilling” (to use the expression in Brambles’s submissions) to do so. Mr Tolliday deposed that Mr Martin’s work commitments are such that he has refused to give evidence in person at the trial. Both witnesses have made themselves available to give evidence from the USA by video link during the Court’s ordinary sitting times in Melbourne and Brambles seeks an order that they be permitted to do so. The importance of Mr Martin’s and Ms Nador’s evidence Mr Martin lives in Chattanooga, Tennessee. Ms Nador lives in Atlanta, Georgia. For the trial, Brambles has filed:(a)two witness affidavits of Mr Martin, affirmed on 18 November 2021 and 7 June 2022; and (b)one witness affidavit of Ms Nador affirmed on 21 October 2021. It is common ground that the evidence of both witnesses is of significant importance to the matters in dispute in the proceeding. In part that is because the applicants’ case includes the allegation that Brambles’ budget and forecast for revenue or “sales” growth in the relevant period, included projections for new business or “wins” which did not have a reasonable basis, and the evidence of both witnesses contests that allegation. For example, at paragraph 29E(b) of the Amended Consolidated Statement of Claim (ACSOC) the applicants take issue with the reasonableness of $52.6 million of “Unidentified Wins” through new business which was forecasted to be achieved by US Pooled (a pooled pallets business within CHEP North America, a division of Brambles) in FY2017. Both Ms Nador and Mr Martin were senior executives of CHEP North America in the relevant period.Mr Martin Under the heading “Importance of Martin’s evidence to the Respondent’s defence” Ms Pailthorpe deposed that: (a)Mr Martin was the Senior Vice President, Sales and Customer Operations for CHEP North America (which included US Pooled) in the relevant period; (b)the evidence in Mr Martin’s two affidavits concerns the process and outcome of the sales components of the US Pooled and CHEP North America budgets and forecasts, and includes evidence as to the reasonableness of the “Unidentified Wins” forecast; and(c)the applicants’ allegations that Brambles’ budgeting and forecasting of sales did not have a reasonable basis will be met by, inter alia, Mr Martin’s evidence.In submissions, senior counsel for Brambles described Mr Martin’s evidence as “very important”.

Decision

Reasons for decision

Finally, it is perhaps worth noting the similarities between the facts in this case and the facts in Dorajay, where Stone J refused the application to hear a witness’s evidence by video link for reasons that included “the difficulties that attend the taking of evidence by video link and the cross-examination on that evidence” which her Honour found to be “considerable” and which “markedly interfere with the giving of the evidence and, particularly, with cross-examination” (at [6]-[7]). That case was also a large and complex securities class action. As in this case, the relevant witness was a former senior officer of the respondent who was by then working as a senior officer of another company; the witness’s evidence went to the reliability of the respondent’s profit forecasts and it was accepted to be significant to the dispute in the proceeding; the witness lived in the USA and was unwilling to travel to Australia to give evidence in person because of asserted heavy work commitments, but was prepared to give evidence by video link; the witness could not be compelled to travel to Australia to give evidence and the choice was therefore between hearing the witness’s evidence via video link or not hearing it at all; and the evidence as to reasons for the witness’s inability or unwillingness to travel to Australia to give evidence was not given directly by the witness, instead being given by lawyers on the basis of information and belief. CONCLUSION Weighing the various considerations in the balance, I concluded that it was in the interests of justice to refuse the application for Mr Martin’s and Ms Nador’s evidence to be heard by video link. Their subsequent change in position fortifies my view as to the appropriateness of that conclusion. The question of costs was not raised by the parties but I am aware of no reason why costs should not follow the event. If either party wishes to submit that some other costs order is appropriate that party should file short submissions within seven days, otherwise I shall order that Brambles pay the costs of and incidental to the application.

Ratio Decidendi

Legal Principle Established

But those factors are neither exhaustive nor prescriptive and the discretion under s 47A(1) is a broad one in which the determining consideration is the interests of justice in the particular facts and circumstances of the case. It involves a balancing exercise as to what will best serve the administration of justice, doing so consistently with maintaining justice between the parties: Kirby at [11]. It must also be guided by the overarching purpose in s 37M, namely, the facilitation of the just resolution of disputes according to the law and as quickly, inexpensively and efficiently as possible: Palmer at [40]. This approach to the discretion is consistent with the remarks of Flick J in Corrigan v Commvault Systems (Australia) Pty Ltd [2011] FCA 107; 192 FCR 71 at [12], with which Besanko J agreed in Fair Work Building Industry Inspectorate at [16]. Those decisions show: (a)it is for the party seeking a favourable exercise of the discretion to establish the reason for its exercise having regard to the specific facts and circumstances and the overriding consideration of ensuring that justice is done as between the parties to the proceeding; and (b)there is no presumption nor prima facie case as to the way in which the discretion is to be exercised in the absence of countervailing considerations. CONSIDERATION I commence by noting that the video link arrangements proposed by Brambles meet the technical requirements under s 47C of the Act and any other appropriate technical requirements, and the discretion under s 47A(1) is therefore available for exercise. Brambles’ arguments in relation to Mr Martin had some force, but I saw little force in the application in respect to Ms Nador. As I have said, I concluded that the application to hear the evidence of both Mr Martin and Ms Nador via video link should be refused. First, oral evidence at a trial is generally to be given directly to, and in the presence of the Court; and the opposing party is entitled to insist upon the physical presence of a witness for cross-examination. I did not understand this to be contested. Brambles accepted that it is preferable for testimony to be given in court, principally for the Court to have the best opportunity to accurately and fairly assess the reliability of the witness’s evidence. Brambles seemed to accept that hearing evidence via video link is sub-optimal and that, depending on the judge, the Court may be hindered in assessing the reliability of Mr Martin’s and Ms Nador’s evidence. It was for Brambles to establish that an order to permit Mr Martin’s and Ms Nador’s evidence to be taken via video link will facilitate the just resolution of the dispute according to the law and as quickly, inexpensively and efficiently as possible. It was required to show reasons for the exercise of the discretion in its favour having regard to the specific facts and circumstances of the case and the overriding consideration of ensuring that justice is done as between the parties to the proceeding. In respect to Mr Martin, Brambles’ arguments were not without force but they were outweighed by the other considerations.