Australian Medical Imaging Pty Ltd v Marconi Medical Systems Australia Pty Ltd

1 A point has been raised in this case which is of some significance. In essence it is this: has the practice of the Court in relation to the conduct of trials developed to the point that in a case involving overseas witnesses, some good reason should be shown for not taking their evidence by video link. 2 There are decisions of this Court which suggest that the proper approach is that the evidence of every witness, even an overseas witness, should be given in person unless good cause be shown to the contrary. 3 There is a developing line of authority in the Federal Court and in other Courts of the common law world which suggests that the stage has been reached that, almost as a matter of course, the evidence of overseas witnesses should be taken by video link and that some good reason has to be shown to the contrary in order that overseas witnesses be compelled to attend in person. 4 I turn to the facts of this case. The plaintiff commenced proceedings on 18 April 2000 in the District Court. The plaintiff's claim was for payments said to be due by the defendant to the plaintiff under an agreement for sale of certain assets. The defendant company is apparently a subsidiary of a large multinational company and it seems that the head office of that company is in the United States. 5 In due course the defendant filed a defence and cross claim in the District Court proceedings. The issues raised by the defence and cross claim included the construction of the sale agreement, an alleged estoppel founded upon a common assumption, and a claim for rectification of the sale agreement. Further, by the cross claim, the defendant claimed that a substantial over-payment had been made to the plaintiff and sought recovery of that sum. 6 In very general terms and rough figures, the plaintiff in these proceedings claims from the defendant a sum of approximately $400,000 and the defendant cross claims somewhere in the vicinity of $250,000 from the plaintiff. 7 On 13 June 2001 the District Court fixed the matter for hearing on 16 July 2001. In July an application was made to transfer these proceedings into this Court. When the matter came into this Court, it was given a date for trial commencing on 1 August before a Master. The estimated time for the trial is three days. 8 The defendant has, despite a number of previous delays in the filing of its evidence, now filed a number of affidavits upon which it intends to rely in these proceedings. Four of the deponents are resident overseas. It is probably fair to say that the principal deponents of the affidavits to be relied upon by the defendant are a Mr Miller and a Mr Lang. Both of those witnesses are called to give evidence about conversations alleged to have taken place between the plaintiff and the defendant resulting in the sale agreement. Their evidence goes to the defences founded upon estoppel and the claim for rectification of the contract. 9 Evidence of subsidiary importance is to be given by Ms Cody, a lawyer formerly in the employment of a parent company of the defendant, and Mr Klein, an accountant or financial officer employed by another related company of the defendant. Ms Cody is a resident of the United States. Mr Klein is a resident of Israel. 10 The defendant has filed an application to have the evidence of Mr Miller, Mr Lang, Ms Cody and Mr Klein taken by video link. That application is resisted by the plaintiff. 11 The defendant says that it will be a matter of serious inconvenience to Mr Miller if he is compelled to come to Australia to give his evidence. It appears that Mr Miller is a senior executive of a related company of the defendant. Mr Miller says that it is important for him to attend a certain conference in the United States which is to take place commencing on 31 July this year. He says that he has to give a talk at that conference and, quite apart from giving that talk, it is important for him as an executive of the defendant's group of companies to be present during that conference to meet other members of the industry and to liaise with them. He says, in other words, that there are important business reasons connected with his attendance at the conference which make it highly inconvenient that he should be compelled to give his evidence in Australia. 12 As to Ms Cody, it is said, and not disputed, that she is no longer an employee of a related company of the defendant. Ms Cody, being a witness over whom the defendant no longer has control, has now indicated that due to the demands of her present employment she is not willing to come to Australia to give evidence in the case. She is, she says, willing to give evidence via video link. 13 There is no evidence put forward by the defendant indicating why either Mr Lang or Mr Klein is unable to come to Australia to give evidence in the case, or indicating why it would be inconvenient for them to come to do so. 14 Mr Speakman, who appears for the defendant, submits that the practice and procedure of this Court have now developed to the point where it is recognised that the taking of evidence by video link produces no unfairness to an opposite party even if extensive cross examination is required of a witness and even if it is necessary in the course of that witness' evidence to cross examine upon documents. He says, in effect, that although the technology for video link evidence is not perfect it is certainly workable and has been recognised by a number of authorities over the years as a satisfactory means of conducting a trial. 15 Mr Speakman says that there are good reasons shown why it is inconvenient for Ms Cody and Mr Miller to attend in person to give evidence at the trial and that the discretion which undoubtedly exists as to whether or not a direction should be made for evidence by video link should be exercised in their favour. As to Mr Lang and Mr Klein, Mr Speakman concedes that no reason is shown why they cannot conveniently come to Australia to give evidence but he says that, on the other hand, no reason is shown as to why their evidence should not be taken by video link. He relies on the decision of Katz J in Tetra Pak Marketing Pty Ltd v Musashi Pty Ltd [2000] FCA 1261. I will return to this decision shortly. 16 Mr Muddle, who appears for the plaintiff in opposition to the application, agrees that there is power in the Court to order that evidence in a trial be given by video link, and that whether such an order should be made is a matter entirely for the discretion of the Court. He says, however, that such an order should not be made unless good reasons are shown for making it and that those reasons should be compelling if they are to outweigh the difficulties which a cross examiner will face if required to conduct a cross examination by video link. He relies on the decision of Giles J in Sunstate Airlines (Qld) Pty Ltd v First Chicago Australia Securities Ltd (unrep. SCNSW, 11 March 1997). 17 Mr Muddle says that in the present case the credit of Mr Lang and Mr Miller will be much in issue. He says that the plaintiff's case is that the evidence of Mr Lang and Mr Miller, particularly as to conversations said to have taken place, is a total fabrication. He envisages substantial and intense cross examination of Mr Miller and Mr Lang on their credit. 18 He says further that Mr Lang will be cross examined upon a number of financial records and documents and that it will be inconvenient and perhaps confusing both to the Court and to the witness if cross examination on documents is to proceed by video link rather than in the Court itself. 19 Mr Muddle says that it has not been demonstrated that any expense will be saved by conducting the trial by video link rather than compelling the attendance of the witnesses. He points out that according to the applicant's own evidence the cost of a video link conference will amount to some USD750 per hour and that there are four witnesses sought to be examined by video link. The trial is estimated for three days. It is likely that the evidence of the four "video link witnesses" would consume two days of the trial. Whether or not there is any cost saving in these circumstances is very much in doubt, he says. 20 Mr Muddle says further that taking evidence by video link will considerably slow the conduct of the trial and that there will probably be delay in starting the case arising from technical difficulties. All of these considerations, he says, go to the Court exercising its discretion against making a video link evidence order. 21 Finally, Mr Muddle lays stress upon what he says has been a demonstrated failure on the part of the defendant to comply with directions to file its evidence in a timely manner. He says that this circumstance, coupled with the last minute application for video link evidence, demonstrates that the defendant is acting in bad faith in the whole conduct of its defence and that this should militate against the making of the order sought. 22 It is certainly the case, as recognised by a number of authorities to which I have been referred, that this Court has power to order the taking of evidence in a trial by video link: see e.g. Cigna Insurance Australia Ltd v. CSR Ltd (unrep. NSWSC 29 November 1995, Rolfe J); Supreme Court Act ss.76A, 82; SCR Pt 34 r 6(1) 23 The competing views in the authorities as to the taking of evidence by video link to which I have referred above can probably be best illustrated by referring to the decision of Giles J in Sunstate Airlines (Qld) Pty Ltd v First Chicago Australia Securities Ltd (supra), as contrasted with the decision of Katz J in Tetra Pak Marketing Pty Ltd v Musashi Pty Ltd (supra). In Sunstate Airlines Giles J says at p.4: "The ordinary procedure is [that a witness gives oral evidence before a judge in a courtroom] and there are sound reasons for following it unless cause to the contrary be shown. The conduct of proceedings in open court, available to public scrutiny, is of great importance. Cross-examination may be more difficult when video evidence is taken because documents have to be transmitted or produced in an unfamiliar manner, because of delay in voice transmission, or for other reasons, and the effectiveness of cross-examination as a weapon in the fight for truth should not be unduly hindered. And in many cases the Court is assisted in fact finding by observance of what is misleadingly called the demeanour of the witnesses, upon which the taking of video evidence may impact. All that said, particularly where the evidence is relatively uncontroversial, the cross-examination is not likely to be lengthy, or no real issue of credit is involved, the taking of video evidence can be beneficial to the administration of justice and consistent with justice between the parties. It may permit the Court to receive the evidence of a witness which would otherwise not have been available, it may permit the evidence to be received without causing undue inconvenience to witnesses (which should be an important matter in the administration of justice), and it is now an accepted feature of litigation - so much so that for some years the Federal Court of Australia has had in place the video conference facilities proposed to be used in the present proceedings." 24 In Tetra Pak Marketing , Katz J says at para.25: "In light of the attitude taken in this Court in the five cases which I have mentioned above, as well as the attitude manifested in the Courts of New South Wales, Victoria, New Zealand and England … in the cases referred to by Finn J in McDonald , I find a strong current of authority in favour of permitting the relatively new video link technology to be used in the absence of some considerable impediment telling against its use in a particular case." 25 It will be seen that Giles J in Sunstate Airlines was of the view that cause had to be shown for departing from the "ordinary procedure" of requiring a witness to give his or her evidence in Court in person, whereas in Tetra Pak Marketing Katz J was of the view that the video link technology should be permitted in the absence of some considerable impediment telling against its use. 26 I am unable to adopt the view of Katz J in Tetra Pak Marketing . In my opinion, the considerations referred to by Giles J in Sunstate Airlines in support of the ordinary procedure of the Court in receiving evidence are still compelling, notwithstanding the advances in technology since the date of his Honour's judgment and notwithstanding the obviously increasing use of technology in Court proceedings since that time. 27 Clearly, in matters such as interlocutory applications, directions and the like where it is unlikely that substantial evidence will be required or substantial documentation will be in issue, it will often be highly convenient and cost-efficient to conduct the hearing by video link if witnesses, parties or counsel are not located in the same city. However, where the matter in contest involves major issues of credit or where documentary material of some volume and complexity is likely to be deployed in Court, it is still desirable, in my opinion, to have the witness in Court for examination, unless good reasons are shown to the contrary. 28 Good reasons to the contrary are no longer such as would, in times past, have justified the taking of overseas evidence on commission. It is not necessary to show that an overseas witness is unable to attend Court to give evidence because of ill health, impecuniosity or for other reasons making attendance impossible. It is always a balancing exercise as to whether the convenience of the witness in not coming to this country to give evidence is outweighed by considerations of fairness to the opposite party in the manner in which the trial will be conducted. 29 In my view, until the rules of Court are amended expressly to provide otherwise, it should be assumed that an overseas witness required for cross examination in a trial will attend the Court in person to give evidence and that evidence by video link will be allowed only upon application supported by evidence showing a good reason for the witness's non-attendance. 30 In the present case, no evidence at all has been adduced as to why Mr Lang and Mr Klein cannot conveniently come to give evidence at the trial. Cost considerations certainly cannot be advanced in support of the application. The defendant, as I have said, is part of a large and obviously wealthy multinational group. In my opinion, no reason whatsoever has been shown to justify the exemption of Mr Lang and Mr Klein from the ordinary requirement of the Court to attend and give evidence in person. 31 In the case of Mr Miller, there is evidence that he would suffer inconvenience. I am not persuaded that Mr Miller's reason for wishing to be excused from attending to give evidence in person is a totally fabricated one. That reason may not, in the eyes of lawyers of a past age, have warranted the taking of evidence on commission, but where the taking of evidence by video link is now so convenient and the adverse impact in terms of efficacy of cross examination so much reduced, I think that inconvenience of the type shown by Mr Miller is sufficient to weigh in his favour and to excuse him from personal attendance if he is able to give his evidence by video link. 32 The same considerations apply to Ms Cody. I bear principally in mind that she is no longer a witness over whom the defendant has control. Her reasons for not coming to Australia may, again, not have been such as to excuse her attendance in times past but, in my view, it has not been demonstrated that the reasons that she gives for not wishing to come to Australia are without substance. Accordingly, in my view, Ms Cody should be able to give her evidence by video link. 33 In consequence, the application for video link evidence will be allowed in respect of Mr Miller and Ms Cody, but will be refused in respect of Mr Lang and Mr Klein. 34 I make no order as to costs. 35 I will stand the matter over to the Registrar's list at 9.30am on Monday 30 July.

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