Westgem Investments Pty Ltd in Its Own Right as trustee for Hossean Pourzand and Jenny Maria Pourzand ATF the Helen Trust v Commonwealth Bank of Australia Ltd [No 4] - [2018] WASC 130

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   WESTGEM INVESTMENTS PTY LTD IN ITS OWN RIGHT AS TRUSTEE FOR HOSSEAN POURZAND AND JENNY MARIA POURZAND ATF THE HELEN TRUST -v- COMMONWEALTH BANK OF AUSTRALIA LTD [No 4] [2018] WASC 130
CORAM:   TOTTLE J
HEARD:   24 APRIL 2018
DELIVERED          :   26 APRIL 2018
FILE NO/S:   CIV 2722 of 2012
BETWEEN:   WESTGEM INVESTMENTS PTY LTD IN ITS OWN RIGHT AS TRUSTEE FOR HOSSEAN POURZAND AND JENNY MARIA POURZAND ATF THE HELEN TRUST
First Plaintiff

HOSSEAN POURZAND IN ITS OWN RIGHT TRUSTEE FOR THE HELEN TRUST & THE SHERIN TRUST & THE POURZAND TRUST
First Named Second Plaintiff

JENNY MARIA POURZAND IN ITS OWN RIGHT TRUSTEE FOR THE HELEN TRUST & THE SHERIN TRUST & THE POURZAND TRUST
Second Named Second Plaintiff

PAKWEST PTY LTD (RECEIVERS AND MANAGERS APPOINTED) IN ITS OWN RIGHT TRUSTEE FOR NEWPORT SECURITIES PTY LTD & TRUSTEE FOR VARIOUS OTHER COMPANIES
Third Plaintiff

NEWPORT SECURITIES PTY LTD (RECEIVERS AND MANAGERS APPOINTED) ATF THE PAKWEST TRUST THE NEWPORT FAMILY TRUST & THE LUKE SARACENI FAMILY TRUST
Fourth Plaintiff

OAKCURE PTY LTD OWN CAPACITY AND TRUSTEE FOR THE PARRY TRUST
Fifth Plaintiff

SEAPORT PTY LTD (RECEIVERS AND MANAGERS APPOINTED) IN ITS OWN RIGHT TRUSTEE FOR THE SEAPORT TRUST
Sixth Plaintiff

LUKE SARACENI
Seventh Plaintiff

MAYPORT NOMINEES PTY LTD (RECEIVERS AND MANAGERS APPOINTED) IN ITS OWN RIGHT TRUSTEE FOR THE MAYPORT UNIT TRUST
Eighth Plaintiff

QUEEN STREET PROPERTIES PTY LTD IN ITS OWN RIGHT TRUSTEE FOR THE QUEEN STREET PROPERTIES
Ninth Plaintiff

GRAND EDITION PTY LTD (RECEIVERS AND MANAGERS APPOINTED) IN ITS OWN RIGHT TRUSTEE FOR THE FARAH INVESTMENT TRUST NO 4
Tenth Plaintiff

LMS HOLDINGS PTY LTD ATF THE SARACENI FAMILY TRUST
Eleventh Plaintiff

TOKYO CITY PTY LTD ATF THE TOKYO CITY TRUST
Twelfth Plaintiff

MAREE SARACENI PTY LTD ATF THE TOKYO CITY TRUST AND THE LUKE SARACENI FAMILY TRUST
Thirteenth Plaintiff

MAREE ANN SARACENI
Fourteenth Plaintiff

SINGLE HOLDINGS WA PTY LTD ATF THE TUART INVESTMENTS UNIT TRUST
Fifteenth Plaintiff

SARACEN PROJECT MANAGEMENT PTY LTD ATF THE SARACEN PROJECT MANAGEMENT TRUST
Sixteenth Plaintiff

CARDUP INDUSTRIAL LAND HOLDINGS PTY LTD IN ITS OWN RIGHT TRUSTEE FOR THE CARDUP INDUSTRIAL LAND TRUST AND THE CARDUP INDUSTRIAL LAND TRUST NO 2
Seventeenth Plaintiff

GOLDCUP NOMINEES PTY LTD ATF THE PAKWEST TRUST
Eighteenth Plaintiff

GOLDEN WEST PROPERTIES PTY LTD ATF THE POURZAND FAMILY TRUST THE OZRA TRUST THE GOLD HOUSE TRUST AND JENNY'S TRUST
Nineteenth Plaintiff

AND

COMMONWEALTH BANK OF AUSTRALIA LTD
First Defendant

WESTPAC ADMINISTRATION 2 LTD
Second Defendant

WESTPAC ADMINISTRATION 3 LTD
Third Defendant

Catchwords:

Practice and Procedure - Evidence - Application to cross-examine in person - Whether evidence of witness should be taken audio visually - Relevant considerations - Where issues of credit relevant - Where case involves large number of documents

Legislation:

Evidence Act 1906 (WA)
Rules of the Supreme Court 1971 (WA)

Result:

Application successful

Category: B

Representation:

Counsel:

First Plaintiff	:	Mr R Newlinds SC, Mr W Edwards & Mr R May
First Named Second Plaintiff	:	Mr R Newlinds SC, Mr W Edwards & Mr R May
Second Named Second Plaintiff	:	Mr R Newlinds SC, Mr W Edwards & Mr R May
Third Plaintiff	:	Mr R Newlinds SC, Mr W Edwards & Mr R May
Fourth Plaintiff	:	Mr R Newlinds SC, Mr W Edwards & Mr R May
Fifth Plaintiff	:	Mr R Newlinds SC, Mr W Edwards & Mr R May
Sixth Plaintiff	:	Mr R Newlinds SC, Mr W Edwards & Mr R May
Seventh Plaintiff	:	Mr R Newlinds SC, Mr W Edwards & Mr R May
Eighth Plaintiff	:	Mr R Newlinds SC, Mr W Edwards & Mr R May
Ninth Plaintiff	:	Mr R Newlinds SC, Mr W Edwards & Mr R May
Tenth Plaintiff	:	Mr R Newlinds SC, Mr W Edwards & Mr R May
Eleventh Plaintiff	:	Mr R Newlinds SC, Mr W Edwards & Mr R May
Twelfth Plaintiff	:	Mr R Newlinds SC, Mr W Edwards & Mr R May
Thirteenth Plaintiff	:	Mr R Newlinds SC, Mr W Edwards & Mr R May
Fourteenth Plaintiff	:	Mr R Newlinds SC, Mr W Edwards & Mr R May
Fifteenth Plaintiff	:	Mr R Newlinds SC, Mr W Edwards & Mr R May
Sixteenth Plaintiff	:	Mr R Newlinds SC, Mr W Edwards & Mr R May
Seventeenth Plaintiff	:	Mr R Newlinds SC, Mr W Edwards & Mr R May
Eighteenth Plaintiff	:	Mr R Newlinds SC, Mr W Edwards & Mr R May
Nineteenth Plaintiff	:	Mr R Newlinds SC, Mr W Edwards & Mr R May
First Defendant	:	Mr J A Thomson SC & Ms S E Russell
Second Defendant	:	Mr J A Thomson SC & Ms S E Russell
Third Defendant	:	Mr J A Thomson SC & Ms S E Russell

Solicitors:

First Plaintiff	:	Jackson McDonald
First Named Second Plaintiff	:	Jackson McDonald
Second Named Second Plaintiff	:	Jackson McDonald
Third Plaintiff	:	Jackson McDonald
Fourth Plaintiff	:	Jackson McDonald
Fifth Plaintiff	:	Jackson McDonald
Sixth Plaintiff	:	Jackson McDonald
Seventh Plaintiff	:	Jackson McDonald
Eighth Plaintiff	:	Jackson McDonald
Ninth Plaintiff	:	Jackson McDonald
Tenth Plaintiff	:	Jackson McDonald
Eleventh Plaintiff	:	Jackson McDonald
Twelfth Plaintiff	:	Jackson McDonald
Thirteenth Plaintiff	:	Jackson McDonald
Fourteenth Plaintiff	:	Jackson McDonald
Fifteenth Plaintiff	:	Jackson McDonald
Sixteenth Plaintiff	:	Jackson McDonald
Seventeenth Plaintiff	:	Jackson McDonald
Eighteenth Plaintiff	:	Jackson McDonald
Nineteenth Plaintiff	:	Jackson McDonald
First Defendant	:	King & Wood Mallesons
Second Defendant	:	King & Wood Mallesons
Third Defendant	:	King & Wood Mallesons

Case(s) referred to in decision(s):

Australian Securities and Investments Commission v Rich [2004] NSWSC 467
B v Dentists Disciplinary Tribunal [1994] 1 NZLR 95
Henderson v SBS Realisations Ltd (Unreported, CA(UK), 1992)

TOTTLE J:

In this action one of the defendants' witnesses, Mr Larry Mahaffy, who lives in Melbourne, is unable to attend court to give evidence in person due to ill health.
The issue with which these reasons is concerned is whether a direction under s 121 of the Evidence Act 1906 (WA) should be made that Mr Mahaffy's evidence be taken by audio visual link or whether the court should make an order under s 110 of the Evidence Act that his evidence be taken in Melbourne. The defendants favour the first procedure and the plaintiffs the second.
The defendants have filed and served two witness statements made by Mr Mahaffy. The first comprises 54 pages and the second comprises 115 pages. Mr Mahaffy is a former senior manager of one of the defendant banks and his statements contain evidence about his involvement in a series of events that are of central importance in this case.
The plaintiffs accept that Mr Mahaffy is unable to attend court to give evidence in person.
The plaintiffs' application is supported by an affidavit sworn by Mr Darren Pratt, a partner in the firm of solicitors representing the plaintiffs. In his affidavit Mr Pratt explains the relevance of Mr Mahaffy's evidence and the reasons why Mr Mahaffy is unable to attend court in Perth. The trial is being conducted as an electronic trial and Mr Pratt deposes that the service provider does not anticipate any difficulty in providing the electronic trial services in Melbourne in the period over which it is anticipated that Mr Mahaffy may give evidence. Transcript services will also be available. Mr Pratt deposes that he has made inquiries about possible hearing venues and that he has identified potentially suitable venues. Mr Pratt deposes that two of the defendants' counsel in this case, Mr Jopling QC and Mr Gisonda, are from Melbourne and that the defendants' solicitors have offices in Melbourne.
The plaintiffs propose that they will pay the expenses that will be incurred if Mr Mahaffy is examined in Melbourne, though they say that ultimately the costs of both the application and the examination should be in the cause.
Subject to Mr Mahaffy's health, it is presently contemplated that he will be available to give evidence commencing on 22 May 2018.
Section 110(1) of the Evidence Act confers the power on the court to make an order of the kind sought by the plaintiffs 'where it appears in the interests of justice to do so'. In considering whether it is in the interests of justice to make an order, the matters the court shall have regard to include the following:
(a)whether the person is willing or able to come to Western Australia to give evidence in the proceeding;
(b) whether the person will be able to give evidence material to any issue to be tried in the proceeding; and
(c) whether having regard to the interests of the parties to the proceeding, justice will be better served by granting or refusing the order.
The power conferred by s 110 of the Evidence Act is regulated by O 38A of the Rules of the Supreme Court 1971 (WA).
The plaintiffs' senior counsel supported the application with submissions to the following effect:
(a)Mr Mahaffy's statements are long and the cross-examination is anticipated to take between one and two days, though there is a possibility that due to his ill health Mr Mahaffy may not be able to sit full hours, in which case the cross-examination may take longer.
(b)Mr Mahaffy's evidence concerns serious issues and may involve cross-examination as to his credit. In oral reply submissions the plaintiffs' senior counsel identified the topics as to which cross‑examination as to credit might be directed.
(c)Although taking evidence by video link is common, it is not the usual position and, but for Mr Mahaffy's ill health, he would be required to attend court in person.
(d)The plaintiffs' senior counsel will be disadvantaged in conducting his cross‑examination of Mr Mahaffy, and the court will be disadvantaged in assessing Mr Mahaffy's evidence, if the evidence is taken by video link.
(e)This is very substantial commercial litigation and the cost and inconvenience of taking the evidence from Mr Mahaffy in person should be assessed in that context.
The defendants' senior counsel did not submit that the application could not be resolved in the plaintiffs' favour but in the course of his submissions drew attention to a number of matters that he submitted weighed against exercising the court's discretion in favour of the plaintiffs. They were as follows:
(a)The cost of taking evidence in Melbourne, and the inconvenience it will entail, will not be insignificant and must be weighed against the forensic disadvantage that may be suffered by the plaintiffs.
(b)The plaintiffs have not identified the topics on which Mr Mahaffy is to be cross‑examined with sufficient particularity to enable a proper assessment of the forensic disadvantage they will suffer if they are unable to cross examine Mr Mahaffy in person.
(c)Although the accepted wisdom is that face to face cross‑examination is the best means of testing the reliability of a witness's evidence, developments in video conferencing facilities over the last 10 years have overcome many of the difficulties that existed in earlier times.
(d)Mr Mahaffy's availability depends on his health and there is a degree of uncertainty about whether he will be available on the days that it is proposed his evidence be taken. Thus there is a risk that the cost and inconvenience of implementing the arrangements to examine Mr Mahaffy will be suffered but the examination itself may be frustrated by supervening ill health on Mr Mahaffy's part.
In Australian Securities and Investments Commission v Rich Austin J surveyed the differing judicial attitudes and approaches towards the taking of evidence by audio visual link and the considerations that are relevant to the exercise of the court's discretion to allow evidence to be so adduced.[i] Austin J's survey of the cases revealed that there was no uniform approach to the use of audio visual links for the taking of evidence. In the case before him, his Honour identified a number of factors that weighed against using audio visual technology to take evidence. These factors included that the evidence in question was 'centrally important', that there were credit issues involved, the cross‑examination was likely to be lengthy and that reference would be made to a large number of documents which might give rise to logistical difficulties. Austin J's observations were made 14 years ago and in the intervening years the quality of audio video links has improved, as has the technology for managing documents. Nevertheless, with the possible exception of the logistical difficulties in managing documents to which Austin J referred, in my view the considerations identified by his Honour remain relevant.
I am satisfied that Mr Mahaffy is unable to come to Western Australia to give evidence. I am also satisfied that Mr Mahaffy is able to give evidence material to the issues in the case.
The critical question is whether having regard to the interests of the parties, justice will be better served by granting or refusing the order.
In approaching that question I have had regard to the following:
(a) The quality of audio visual technology available to the court has improved significantly over recent years. On the basis of my recent experiences, there is no longer any noticeable delay between transmission and the receipt of questions and answers. Sound and picture quality is usually excellent. With proper preparation the taking of evidence that involves references to documents can be managed adequately. Audio visual links are used frequently in the criminal jurisdiction of the court.
(b)When cross‑examination of a witness is relatively short and there are either no credit issues, or such issues are limited, taking evidence by an audio visual link is unlikely to compromise to a material extent either the ability of counsel to cross‑examine or the ability of the court to make an assessment of the witness. In such circumstances, taking evidence by audio visual link is 'very much the same as hearing evidence in court'.[ii]
(c) The most effective method of taking and testing evidence remains, however, for the witness, counsel and judge to be physically present together in the same place. Although it is not the only reason for the general rule that witnesses must attend court in person to give their evidence orally and in public, it is one of the reasons for this rule.
(d)Mr Mahaffy is a witness who will be giving evidence about events and issues central to the case.
(e)The plaintiffs' senior counsel has foreshadowed a cross‑examination that may take one to two days, perhaps longer. Given the large number of documents referred to by Mr Mahaffy in his witness statements and that the events described in the witness statements took place some eight years or so ago it is reasonable to assume that the cross‑examination will involve frequent references to documents. It is impossible to say to what extent credit will be in issue but it is safer to approach this application on the basis that it will involve significant credit issues.
(f)In the above circumstances cross-examining counsel is potentially disadvantaged if the evidence is taken by audio visual link. The potential disadvantage lies in the loss of immediacy that exists when cross-examiner and witness are present in the same place. However good the technology, counsel cannot observe a witness as closely when evidence is taken by audio video link. The potential for disruption to the course and pace of cross‑examination by misunderstanding questions or answers is greater when counsel and the witness are not in the same place. Even though the documents will be displayed on computer screens and the process of bringing up the images of the documents would be managed from the court room if there were an audio visual link, there is greater scope for misunderstandings between counsel and witness about documents if evidence is taken by audio visual link than if all participants are physically present in the same place.
(g) That, in the first instance at least, the plaintiffs are prepared to bear the costs associated with taking evidence from Mr Mahaffy in person may be viewed as a measure of the extent to which the plaintiffs' senior counsel considers he may be disadvantaged if Mr Mahaffy's evidence were to be taken by audio visual link.
(h)Although for the purposes of making an assessment of a witness's credibility it is preferable for the witness to be physically present, I have reservations that if that were the only concern at play in this case it would be sufficient to persuade me to accede to the plaintiffs' application but in this case the importance of being present in person is reinforced by the fact that I consider that I will be able to make a more informed assessment of how Mr Mahaffy is coping with the process of cross‑examination in the light of his ill health and his need for breaks in his evidence if we are in the same room.
(i)The circumstances giving rise to this application involve no fault on either side but it is the defendants which seek a departure from the usual rule that a witness should attend court to give evidence in person.
(j)Although the present trial is not concerned with quantum the amounts in issue in this litigation are very substantial and the costs associated with examining Mr Mahaffy in Melbourne cannot be said to be in any sense disproportionate.
(k)The prejudice to the defendants is attenuated by the fact that they are represented by a team of solicitors from a national firm led by one partner based in Sydney and one in Perth and two of the defendants' counsel are based in Melbourne.
Having regard to the factors identified above I consider that justice will be better served by making an order that Mr Mahaffy be examined in Melbourne. Such an order will only be made if the firm of solicitors acting for the plaintiffs provide a personal undertaking to the Attorney General of Western Australia in form 29 of the Second Schedule of the Rules of the Supreme Court amended to reflect the circumstances of this case. If the plaintiffs' solicitors are not able to provide a personal undertaking to the Attorney General the plaintiffs will be required to make a payment into court as security for the costs of the examination. In that event, I will request the Chief Justice to appoint a Judge or Registrar to determine the appropriate sum to be paid into court as security.
I will hear the parties as to the precise form of orders to be made in the light of these reasons and as to the directions that are required for the purposes of undertaking the examination.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
JB
ASSOCIATE TO THE HONOURABLE JUSTICE TOTTLE
26 APRIL 2018

[i] Australian Securities and Investments Commission v Rich [2004] NSWSC 467.

[ii] B v Dentists Disciplinary Tribunal [1994] 1 NZLR 95 (Williams J) citing Henderson v SBS Realisations Ltd (Unreported, CA(UK), 1992) (Lord Donaldson MR)