Australian Securities and Investments Commission v GetSwift Limited

B THE COVID-19 outbreak and the court's response 5 On 31 March 2020, the Chief Justice published a Special Measures Information Note: Special Measures in Response to COVID-19 (SMIN-1) (Information Note). The Information Note set out the arrangements for the continued operation of the Federal Court during the COVID-19 outbreak in Australia. It noted (at [1.2]) that: Due to the COVID-19 pandemic, where appropriate and necessary, the Federal Court is modifying its practices in order to minimise in person attendance on Court premises, with the Court's priority being the health and safety of the community, and in particular, parties, practitioners, judges and staff, and the families of all of these groups. 6 The Information Note went on to observe that cooperation of all Court users was required in this regard, and in respect of longer listings said the following: 10. LONGER LISTINGS AND EVENTS, OVER HALF A DAY 10.1 Longer listings and events that would ordinarily require in person attendance for half a day or more will undergo a triage and prioritisation process. Legal practitioners and parties should work cooperatively with the Court, and with each other, to identify how and when longer listings and events may be able to proceed. 10.2 The Court has already been able to accommodate some longer listings and events, including contested hearings, through the use of remote access and file sharing technology, including Microsoft Teams. 10.3 Issues requiring consideration include reliability of the proposed technology, document security, availability and timing of transcripts, and the ability to live stream hearings so as to facilitate open and accessible courts. 7 The singular circumstances presented by the current health crisis, and the arrangements provided for in the Information Note, reflect the Court's remedial response as an arm of government in continuing to exercise the judicial power of the Commonwealth in circumstances where life cannot go on as usual. Just because one cannot have a hearing conducted in accordance with traditional practices and procedures, does not mean that the Court's judicial function cannot be performed effectively where it is necessary to do so. As Voltaire observed, one must ensure the perfect does not become the enemy of the good. 8 The Information Note sets out what the Court of Appeal of Western Australia recently observed of similar arrangements put in place by the Supreme Court of Western Australia in JKC Australia LNG Pty Ltd v CH2M Hill Companies Ltd [2020] WASCA 38 (at [8]) as "a necessary but proportionate alteration to the normal practice and procedure of the court consistent with the due administration of justice." 9 The Court must continue to do its job, but fundamental to the discharge of that role is ensuring that cases are determined justly. It is in this context that the current adjournment application is made. The application, if I may say so, was one which was fully justified, and raises matters to which it is necessary to give close attention. No litigant, particularly a litigant involved in serious proceedings, should apprehend that they will be materially prejudiced by reason of the mode by which a trial will be conducted. If this case was to proceed to a hearing on the scheduled dates, there would need to be significant changes to the way in which I would ordinarily conduct a trial, and the way in which the parties would participate in that trial. 10 This is an application entirely about balancing considerations which point in different directions. It is not entirely, however, a matter in which I am left without any lodestar as to how it should be determined. The application to adjourn the hearing date involves the application of the civil practice and procedure power and, as 37M(3) of the Federal Court of Australia Act 1976 (Cth) provides, such a power "must be exercised or carried out, in the way that best promotes the overarching purpose". The overarching purpose of the civil practice and procedure provisions, of course, is to facilitate the just resolution of disputes, that is, according to law, and as quickly, inexpensively and efficiently as possible: s 37M(1).

c reasons why THE adjournment is sought 11 No evidence was adduced by the defendants on the adjournment application, but evidence in the present circumstances seemed hardly necessary. Section 144 of the Evidence Act 1995 (Cth) allows me to have regard to the current circumstances called in aid by those seeking the adjournment. The reasons can be placed, with some degree of overlap, into the following 12 categories. 12 First, Mr Hunter and Mr McDonald are currently located in New York, which was described by Senior Counsel for GetSwift as the "epicentre" of the current pandemic. It would be impossible for them to travel to Australia in order to participate in the proceedings, without potentially endangering their health, and in any event, under the current quarantine arrangements, without requiring them to then spend a period of time in self-solation and quarantine. 13 Secondly, the ASIC Proceeding involves ASIC calling 41 witnesses, 31 of which are proposed to be the subject of cross examination. 14 Thirdly, litigation of the type with which we are concerned is conducted by a team of counsel and instructing solicitors. In this regard it is not dissimilar to the litigation recently aborted in the Supreme Court of New South Wales involving the collapse of Dick Smith, which, I am informed by counsel, experienced some difficulty in progressing because of logistical difficulties encountered by solicitors for some of the parties. 15 Fourthly, there are a range of technical issues that arise through use of the Microsoft Teams technology that has been adapted and is proposed to be used. Without being exhaustive, these range from the possibility of drop-outs, there being some difficulty in one or other counsel being heard and in the display of documents to witnesses for the purposes of cross examination (including some forensic disadvantages which may arise in that regard), and related matters. 16 Fifthly, the Court would be deprived of seeing witnesses in person, with the disadvantage referred to in a number of authorities that this may involve in the assessment of demeanour in circumstances where credit is likely to be in issue in respect of at least some witnesses. 17 Sixthly, there is the difficulty of senior counsel taking instructions from their instructing solicitors and collaborating with junior counsel for the purposes of conducting the case, including during the process of cross examination. 18 Seventhly, the current health situation could properly described as "fluid" and there may be a number of contingencies that arise which may not be able to be accurately foreseen, including a party, witness or member of a legal team falling ill, or another unanticipated event which may cause the trial to be aborted, with costs being incurred unnecessarily. 19 Eighthly, in the event that witnesses such as Mr McDonald and Mr Hunter were to give evidence from the United States, then they would suffer the disadvantage of giving evidence in the middle of the night, or the Court and counsel would be inconvenienced by taking that evidence outside of court hours. 20 Ninthly, related to the difficulties that would be occasioned in court, there would be out of court problems including those relating to preparation which, to at least a large extent, ordinarily would be conducted as part of a close collaborative exercise. 21 Tenthly, the counterfactual in the event that the hearings were to be adjourned, would be a fixture probably in late 2021 in early 2022, depending upon a number of matters, the most important of which, is the current relevantly high demands of my docket in having to deal with a significant number of large matters next year; such a delay, the defendants submitted, would cause no real prejudice in the circumstances of this case, or at the very least the prejudice was not so significant as to outweigh the factors favouring an adjournment. 22 Eleventhly, connected to the last point, useful work could be done in the interim, including in preparation of documents such as agreed bundles for tender, submissions and documents assisting in the narrowing of the issues between the parties. 23 Twelfthly, and significantly, the bespoke circumstances of the ASIC Proceeding being a civil penalty proceeding is highly significant when one comes to assessing whether it would be just to conduct the litigation in the present circumstances.

D principled approach 24 In the next section I intend to address the 12 issues raised by the defendants, and at the conclusion will weigh these matters consistently with my obligation to facilitate the overarching purpose. Before doing so, I should make a few preliminary observations. 25 First, if I was presently satisfied that the arrangements that could be put in place to hear this matter would mean the trial was "second-rate" or substandard, then I would not proceed. Central to my analysis is the accumulating experience of the Court in the use of the Microsoft Teams technology to hear cases. Currently, a native title case is proceeding before Justice Jagot using that technology, which I am informed involves some 33 witnesses giving oral evidence. For my own part, I have now conducted a number of interlocutory hearings, and a complex defamation trial involving extensive cross examination and reference to documents. The hearings were successful (at least from my perspective). Indeed, as someone who was quite sceptical about how the trial could be conducted in the present circumstances, I was pleasantly surprised. Speaking generally (and this case does have particular aspects to which I will make more reference below), the process of receiving both evidence, including evidence adduced in cross examination, and submissions, although sub-optimal, was not impaired to such an extent that I considered that there was anything second-rate about the experiences that I have had with the Microsoft Teams technology. 26 Secondly, the critical considerations referred to in the Information Note, being the health and safety of the community, the parties, practitioners, judges and staff and the families of all of these groups are to be borne steadily in mind. There is no doubt there are significant challenges involved by everyone engaged in the process, where litigation is being conducted other than through being able to interact freely, but these are the unique circumstances in which we find ourselves, and one must do the best that one can. 27 With these observations in mind I then turn to the specific matters raised by the defendants, and my evaluation of them.

e consideration 28 First, I simply would not proceed with the hearing unless I was satisfied that Mr Hunter and Mr McDonald could give evidence remotely from New York. In the current circumstances it would be wholly unrealistic to expect them to travel to Australia for the purposes of the hearing, and to the extent that they give evidence or otherwise participate, it would need to be remotely. 29 Secondly, I am conscious of the large number of ASIC witnesses proposed to be called and the demands on the defendants to cross examine a large number of witnesses. Having said that, the evidence given by a number of these witnesses will be relatively confined, and the evidence in chief to be adduced by ASIC has been filed and served by affidavit. No doubt if instructions need to be obtained in relation to the evidence given by these witnesses, there is ample opportunity for such instructions to be given. No doubt there will be real disadvantages in junior counsel being unable to tug senior counsel to remind him or her of some question or document that senior counsel may have forgotten, but there are other ways (as I have already observed) for such communications to be made in real-time, and in any event I am confident, through some patience and forbearance, that appropriate accommodations can be made, including for there to be short adjournments prior to the conclusion of cross examination of any witness if required. 30 Thirdly, I am acutely conscious of how large litigation is prepared in teams. Working collaboratively with other highly skilled legal practitioners is one of the joys of being involved in large-scale litigation. It would no doubt be both more productive and more enjoyable for such preparation to occur with all of the team being together. But, it is possible through modern technology for teams to work together, albeit perhaps less efficiently, remotely. As for the experience of other cases, each case turns on its own facts. I am sensible to the fact that unanticipated problems may become evident during the process of preparation, or there may be some deus ex machina event which means that the current decision will need to be revisited. But having satisfied myself it is possible for a trial to be conducted fairly, then my present intention and focus is to try to make such a trial work. 31 Fourthly, again I appreciate that there may be technical issues, but there are two relevant responses: (a) the parties will need to work together and with the Court closely over the next few months to ensure that the technology used by the parties is of a sufficient quality to minimise any such difficulties; and (b) if unexpected difficulties arise, then the parties have the assurance of knowing that the Court will seek to show some latitude and forbearance in having those problems work themselves out. 32 Fifthly, in Webb v GetSwift Limited (No 5) I referred (at [18]-[19]) to the following: As Leggatt J said in Gestmin SGPS SA v Credit Suisse (UK) Limited [2013] EWHC 3560 (Comm) at [15]-[23], there are a number of difficulties with oral evidence based on recollection of events given the unreliability of human memory. Moreover, considerable interference with memory is also introduced in civil litigation by the procedure of preparing for trial. As his Lordship noted, a witness is asked to make a statement, often when considerable time has already elapsed since the relevant events. The statement is usually drafted by a solicitor who is inevitably conscious of the significance for the case of what the witness does or does not say. The statement is often made after the memory of the witness has been "refreshed" by reading documents. The documents considered can often include argumentative material as well as documents that the witness did not see at the time and which came into existence after the events which the witness is being asked to recall. It may go through several iterations before it is finished. As Lord Buckmaster famously said, the truth "may sometimes leak out from an affidavit, like water from the bottom of a well". This may be overly cynical, but the surest guide for deciding the case will be as identified by Leggatt J at [22]: … the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on the witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This is not to say that I discount the fact that Mr Hunter and Mr MacDonald (at least) may be significant witnesses; indeed, their subjective understanding of facts may be of real importance in determining matters in the ASIC proceeding. The point is, however, that any evaluation of the difficulties that may arise with oral testimony must take account of the likelihood that the best assistance the Court is likely to receive is to be found in the contemporaneous documentary record. 33 To the extent that demeanour does play an important role in assessing the evidence of witnesses, then my experience, particularly in the recent trial that I conducted, is that there is no diminution in being able to assess the difficulty witnesses were experiencing in answering questions, or their hesitations and idiosyncratic reactions when being confronted with questions or documents. Indeed, I would go further and say that at least in some respects, it was somewhat easier to observe a witness closely through the use of the technology than from a sometimes partly obscured and (in the Court in which I am currently sitting) distant witness box. 34 Sixthly, there is undoubted difficulty in taking instructions during the course of evidence, but again, as noted above, this is something which, although not ideal, does not create insuperable difficulties with the use of some imagination. 35 Seventhly, I recognise that this is a fluid situation and that events might occur that make it impossible to continue. Of course, the converse is also true, things might get easier. In any event, a party to the proceedings should feel no hesitation revisiting the question of adjournment if matters arise which have not been canvassed during the course of this adjournment application, or where some real prejudice of the type currently anticipated does emerge, which means that the case does start to go off the rails, or a party perceives that there is some real unfairness being occasioned. Needless to say, if I am satisfied that if the procedure adopted is causing an unfairness to a party, or parties, then that is the point that it does become a second-rate hearing and ought to be stopped. Starting the case and then adjourning it will involve an element of double-handling, which would involve increased costs, but in my view these are outweighed by the countervailing considerations in favour of keeping the current dates. 36 Eighthly, I would be un-attracted to witnesses, particularly witnesses who are facing serious allegations, being required to give evidence late at night. Having said that, senior counsel appearing on behalf of ASIC has indicated a willingness to cross examine at a time convenient to the witnesses, and all of us must make accommodations to account for the difficulty in which those witnesses find themselves. Accordingly, I would be prepared to sit outside of court hours to ensure that those witnesses (if indeed they do give evidence) have their evidence taken at some convenient time. 37 Ninthly, I have already dealt with the difficulty in preparation above. Again I am conscious that the current situation is not ideal in preparing for a hearing involving serious allegations. But again, one must do the best one can. 38 Tenthly, I am much less sanguine as the defendants about the counterfactual of there being a lengthy delay in the hearing. Indeed, it creates real difficulties. Those difficulties transcend the interests of these parties, and involve broader considerations. The work of the Court needs to go on. To adjourn this matter will mean that I need to find another time in an already busy calendar which will displace the opportunity of hearing other cases which have, at the very least, equal priority. It is not easy for me to, as it were, slip in other matters at this late stage. An adjournment will disrupt the listing of other matters. This would involve those litigants suffering prejudice. It is not only about the rights of these parties to have their day in court, but also the rights of other parties to have their day in court. Although no reliance was placed on it by counsel for the applicant in the Class Action, it is also appropriate for me to have regard to the position of group members. Although far from determinative of the application, I have a protective and supervisory role in relation to group members: given the ASIC Proceeding needs to be determined initially, any adjournment of the ASIC Proceeding will have a "knock on" effect, and the current determination of group member claims has already been considerably delayed by a number of procedural fights in the Class Action. Further, the ASIC Proceeding being a regulatory proceeding is one which, by its nature, should be determined promptly. Orders are sought which may affect the ability of persons to be involved in the management of corporations. Serious issues are raised by the ASIC Proceeding, which in the ordinary course should be determined as quickly as the business of the Court and fairness allows. 39 Eleventhly, although work can be done in the interim, the substantive work will be at the hearing, which in my view would be very substantially delayed if the current dates are lost. 40 Twelfthly, I have already dealt above with the fact that I am acutely conscious of the seriousness of the ASIC Proceeding. I have anxiously taken into account the fact that a party might feel aggrieved about an outcome which they have subjectively considered may have been less than ideal. Even if I am satisfied that justice will be able to be done by the case proceeding, it is important that it is perceived to be done by those involved in it. But, to quote the Court of Appeal of Western Australia in JKC Australia LNG Pty Ltd v CH2M Hill Companies Ltd (at [14]), I am "unable to perceive any real risk of practical injustice" of at least such a dimension as to mean that the case ought not proceed.

f conclusion 41 The other further matter to which I should make reference is the demand and necessity of "open justice". I am satisfied appropriate arrangements can be put in place to ensure the ASIC Proceeding (and the Class Action) is fully accessible and can be observed by the public; and orders will be made facilitating such access. 42 It follows that it is consistent in facilitating the just resolution of the disputes in the ASIC Proceeding as quickly, inexpensively and efficiently as possible, to refuse the adjournment application. This outcome also serves to facilitate the same ends in the Class Action. 43 Accordingly, I order that the application for an adjournment be dismissed. There should be no costs consequent upon the dismissal of the application. It was properly made and, if I may say so, was a relatively close run thing. I certify that the preceding forty-three (43) numbered paragraph are a true copy of the Reasons for Judgment herein of the Honourable Justice Lee.

Associate: Dated: 9 April 2020 SCHEDULE OF PARTIES VID 146 of 2019 Defendants Fourth Defendant: BRETT RONALD EAGLE