Discussion
26 There have been a number of decisions of the Court that have considered whether, in circumstances having some features of the present case, the Court has power to make an order for oral discovery involving a person being examined. There are no published reasons for decision where such an order has been made, but there are several cases where the possibility of such an order has been identified.
27 Before going to the cases, I want to identify more clearly what is proposed. It is, of course, axiomatic that the Court may make an order for the taking of evidence prior to the hearing. Such a course is authorised by r 29.11 of the Federal Court Rules 2011 (Cth) and s 46 of the Federal Court of Australia Act. Under that process, the witness may be subpoenaed to give evidence before an examiner (r 29.22(1)), and may be examined, cross-examined, and re-examined, in the same manner as a trial: r 29.16(4). This procedure may be seen as the statutory equivalent of the old equitable bill to preserve and perpetuate testimony: see, West v Lord Sackville [1903] 2 Ch 378 at 388 (Vaughan Williams LJ). The power under s 46 of the Act is wider than that under the Rules, because an order for examination of a witness may be made for the purposes of any "proceeding", which includes incidental proceedings such as discovery: see the definition of "proceeding" in s 4, and the notes under the definition and under s 46.
28 The process of deposing witnesses in civil proceedings in the United States prior to trial has broader purposes, namely the dual purposes of obtaining admissible testimony, and discovery: see, Radio Corporation of America v Rauland Corporation [1956] 1 QB 618 at 643-644 (Devlin J); Rio Tinto Zinc Corporation v Westinghouse Electric Corporation [1978] AC 547 at 634-635 (Lord Diplock). In the past, such a process has not been considered to be part of Australian or English law, as Heerey J observed more than 20 years ago in Martin v Tasmania Development Resources [1999] FCA 71.
29 What is proposed in the present case is not the taking of evidence for use at trial, but oral discovery. Pre-trial discovery is a different process with a different purpose from the taking of evidence on commission. There is no provision in the Federal Court Rules 2011 (Cth) allowing for oral discovery from a party, still less a stranger to the proceeding: cf, Supreme Court (General Civil Procedure) Rules 2015 (Vic), O 31, which provides for discovery by oral examination of a party with the party's consent.
30 The Court's power in s 23 of the Federal Court of Australia Act is a broad power that may be exercised in an appropriate case: Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia [No 3] [1998] HCA 30; 195 CLR 1 at [28] and [35] (Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ). Section 23 confers such powers as are necessary or incidental to the exercise of jurisdiction of the Court: Jackson v Sterling Industries Ltd [1987] HCA 23; 162 CLR 612 at 632 (Brennan and Toohey JJ). Orders may therefore be fashioned in an appropriate case so as to further the purpose for which the power in s 23 was conferred. That purpose is informed by s 37M of the Act, which provides for the overarching purpose in civil proceedings of facilitating the just resolution of disputes according to law, and as quickly, inexpensively, and efficiently as possible. Examples of orders made in exercise of power under s 23 of the Act include orders framed so as to prevent an abuse or frustration of the Court's processes, as with the Mareva orders that were the subject of consideration in Jackson v Sterling Industries Ltd and Cardile v LED Builders Pty Ltd [1999] HCA 18; 198 CLR 380. Orders may be made in the exercise of power under s 23 against persons who are not parties to the proceeding, as Cardile v LED Builders Pty Ltd illustrates. Another illustration, more closely aligned to the present circumstances, is Commonwealth Director of Public Prosecutions v Citigroup Global Markets Australia Pty Ltd (No 4 - examination orders) [2021] FCA 1237, where Wigney J ordered that a Crown witness, who had been examined at a committal hearing, appear for further examination before this Court, which was an example of the type of orders referred to by Hunt J in R v Basha (1989) 39 A Crim R 337 at 339. In the case before Wigney J, because the witness had given evidence at the committal the express powers in s 23CQ(1) of the Federal Court of Australia Act to require the witness to attend for examination were not engaged, but Wigney J held that the power existed under s 23 to require further examination for the purpose of preventing an unfair trial.
31 The idea that in civil proceedings this Court might make orders in the nature of oral discovery by requiring witnesses to attend for examination has been referred to in recent years on a number of occasions. In Jones v Treasury Wine Estates Ltd [2016] FCAFC 59; 241 FCR 111 at [29], Gilmour, Foster and Beach JJ alluded to this Court theoretically having the power under ss 23, 33ZF, and 37(2) and (3) of the Federal Court of Australia Act to order oral discovery of the type undertaken in the United States. Their Honours expressed doubt whether s 46 of the Act, despite its apparent width, could be used as a source of power to order oral discovery. Moreover, their Honours doubted that a power to order oral discovery would be exercised other than in a most exceptional case.
32 In Australian Securities and Investments Commission v Australia and New Zealand Banking Group Ltd [2019] FCA 1284; 139 ACSR 52 (ASIC v ANZ), Allsop CJ at [9] referred in passing to oral discovery from senior officers of the Bank with personal knowledge of relevant events as one means of prosecuting that proceeding in a cost-effective manner. In Crown Resorts Ltd v Zantran Pty Ltd [2020] FCAFC 1; 276 FCR 477 Lee J, with whose reasons Allsop CJ and White J expressed general agreement, identified at [82] a deposition procedure as one mechanism by which there might be compulsory disclosure by employees of the appellant who were bound by contractual obligations of confidence. Lee J considered that the making of such an order was supported by the broadly-expressed powers in s 33ZF or 37P(2) of the Federal Court of Australia Act, which apply to group proceedings. In Commissioner of Taxation v Israel Discount Bank Limited [2020] FCAFC 71 at [16], Perram, Gleeson and Lee JJ cited Crown Resorts Ltd v Zantran Pty Ltd and ASIC v ANZ and alluded to the possibility of pre-trial oral discovery directed to a third party.
33 In Davaria Pty Limited v 7-Eleven Stores Pty Ltd (No 8) [2021] FCA 295 (Davaria), which was a group proceeding, Middleton J addressed a submission that the Court lacked power to make an order for oral discovery directed to third parties to the proceeding under the Court's general powers in ss 23, 33ZF and 37P(2)-(3) of the Act. Middleton J also considered whether s 46 of the Federal Court of Australia Act was an available source of power, but did not decide that point. After referring to the authorities his Honour held at [104] that he had no doubt that there was power to make the oral discovery order sought in that case if it was appropriate to do so. While his Honour referred specifically to s 33ZF(1) of the Act as a source of power, I consider that his Honour's reasoning applies equally to s 23 as a source of power. However, Middleton J went on to reason that in the circumstances presented in Davaria, it was not appropriate to make the orders sought. Amongst other things, his Honour held at [117(g)] that the proposed examinations would increase the burden on the parties at the interlocutory stage and would lead to a lack of efficiency in the case management of the proceedings.
34 On the present application, there was no submission that the decision of Middleton J in Davaria should not be followed, and counsel for the respondents accepted that the Court had power to make the orders sought by the applicant. For these reasons, I conclude that the Court has power to make the orders sought by the applicant. Further, the recent decisions of this Court to which I have referred above indicate that the Court might entertain making an order for oral discovery directed to a third party in an appropriate case. I respectfully apply the approach of Middleton J in Davaria at [107] who reasoned that it was not necessary for there to be some exceptional characteristics before the Court would make an order for oral discovery. What is relevant is the individual judge's assessment of whether it is fair and just to do so in a particular case.
35 That brings me to consider orders made by Besanko J on 13 November 2020 in a proceeding involving an alleged patent infringement, Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia (NSD 200 of 2019). His Honour made orders that a witness, who had confidentiality obligations to the applicant, be deposed before his Honour. The orders made by Besanko J included the following -
1 Pursuant to sections 23, 37P(2) and (3) of the Federal Court of Australia Act 1976 (Cth) (the Act) Mr Peter Crowhurst be deposed on oath or affirmation by counsel for the First Respondent before Justice Besanko on 25 November 2020 at 10.30 am (AEDT) (Oral Examination).
2 The First Respondent be granted leave to, and must, issue to Mr Crowhurst a subpoena to attend to give evidence for the purposes of Order 1 above, returnable on the date specified in Order 1 above.
3 At the Oral Examination, there be no cross-examination.
4 The evidence at the Oral Examination be recorded in a transcript in accordance with the usual processes of the Federal Court of Australia.
5 Objections to evidence be permitted to be made by the Applicant and recorded on the transcript, and determined by the Court as it deems fit.
6 The transcript of the Oral Examination may be tendered at the hearing in this proceeding in March 2021, subject to:
(a) Mr Crowhurst being available for cross-examination if required by the Applicant;
(b) any rulings as to objections made by Justice Besanko; and
(c) appropriate confidentiality orders being made over information contained in the transcript.
…
36 Besanko J referred to the making of the above orders in reasons that were subsequently published in relation to a separate application by the respondent to amend its defence and cross-claim: Vehicle Monitoring Systems Pty Ltd v SARB Management Group Pty Ltd (No 6) [2020] FCA 1866. At [47] of those reasons, Besanko J referred to the fact that while the witness could be subpoenaed to attend to give evidence at the trial, this had the potential to disrupt the trial because the parties would not have advance notice of what he was going to say as would be the case with other witnesses who had sworn affidavits. I observe that although Besanko J ordered that the witness be deposed, the substance of the orders contemplated that the answers given at the oral examination could be tendered at the trial, thereby making the process closer to one where evidence was taken on commission than a process of oral discovery.