Kaplan v State of Victoria

1. The respondents' application to adjourn the trial after the conclusion of the evidence on 23 November 2022 is refused.
2. The trial will continue on 24 and 25 November and, subject to any further order, the respondents are to close their oral evidence case by the end of the hearing day on 25 November 2022.
3. Subject to any further order of the Court, the applicants are to conduct the cross-examination of each of Ms Sokrurm Dreschler, Mr Peter Mangold, Ms Kaye Sentry and Ms Karen Gibson in a way which ensures the estimates given by the applicants in the trial timetable for the cross-examination of those witnesses are adhered to.
4. The application to call Ms Kaye Sentry by remote access technology is allowed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

MORTIMER J: 1 The respondents apply for an adjournment of the trial after the end of the evidence on Wednesday, 23 November 2022. This application was first made in Court yesterday, 21 November 2022. It was foreshadowed by an email received at 6.35 pm on Sunday 20 November from the respondents' solicitors. In that email the respondents' solicitors informed the Court and the applicants that Mr Young KC for the respondents had tested positive to COVID-19 that afternoon. The purpose of the application for an adjournment was said to be so that Mr Young could lead the evidence of four of the respondents' witnesses in person. Those witnesses are Sokrurm Dreschler, Peter Mangold, Kay Sentry and Karen Gibson. 2 The respondents proposed, and the applicants accepted, that two witnesses will be called for the respondents on Wednesday, 23 November, as would the respondents' expert, Michael Whine. Junior counsel for the respondents will each take a witness on Wednesday, as I understand it. The Court is sitting late on Wednesday to accommodate the time differences for Mr Whine, who is in the UK and giving evidence by Microsoft Teams. 3 The respondents' application for an adjournment did not contemplate any extension of the hearing days necessary to deal with the four witnesses. Mr Jeffrie expressly accepted that two days would be "a reasonable amount of days to go through those four witnesses" (transcript at p 2544, ll 19-20). The respondents propose the Court find a convenient time between now and the end of February 2023, when the proceeding is listed for closing oral submissions for four days, to hear the evidence of those four witnesses. Counsel for the respondents submitted those two days could be found before Christmas, at a time in January or even on weekends. Counsel submitted another option was to move closing submissions to a later date and use the days listed for witness evidence. 4 The applicants opposed the adjournment application. 5 The applicable principles for the Court's consideration of an adjournment application are not in dispute. They are expressed by the Full Court in Luck v Chief Executive Officer of Centrelink [2015] FCAFC 75 at [42]. The respondents also relied on the decision of Edelman J, as his Honour then was, in Hart v Deputy Commissioner of Taxation [2016] FCA 250, where his Honour referred to the Full Court's decision in Luck and also to Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175. At [6], Edelman J noted that considering an adjournment application in the context of s 37M and s 37N of the Federal Court of Australia Act 1976 (Cth) means the Court must consider: important matters involving timeliness in the disposal of proceedings, and efficient use of the judicial and administrative resources available for the purposes of the Court. 6 At [7], Edelman J describes the factors set out in Aon. I have taken those factors into account where I consider they are applicable. The main ones that I consider applicable on this application are the explanation for the adjournment, the detriment to other parties in the proceeding and the parties' choices to date in the litigation as to the claims to be made and how they are to be framed. The detriment to other litigants in the Court is not so much of a factor in these circumstances. The application of these principles is always highly fact-dependent, and of course, the overall consideration for the Court is what is in the interest of the administration of justice. That is a multifaceted assessment. 7 The obvious proposition is that there are many factors to balance and weigh in deciding this adjournment application, and many of those factors pull in different directions. Mr Jeffrie submitted, and the applicants did not dispute, that the adjournment application assumed Mr Young would not be in a position to take any of the four witnesses on Thursday and Friday this week, even by Microsoft Teams. I proceed on that assumption. 8 Counsel for the applicants is correct to submit that s 37N of the FCA Act envisages and provides for a process in the conduct of litigation in this Court, which might be less than perfect, and which might be less than ideal in the real-life circumstances of many proceedings and litigants in those proceedings. Overall, of course, a trial process must be fair to both parties, but fairness is also a relative concept, depending on particular circumstances. Fairness is relative to other factors, such as the resources of the parties in the Court, the conduct of any trial to the point it has reached, and the Court's objective assessment of the asserted prejudice to the moving party on any adjournment application. 9 Mr Jeffrie made several submissions about the importance to the respondents of having Mr Young involved in all aspects of the proceeding, as the senior counsel responsible for the conduct of the respondents' defence, and as the counsel involved since the start of the proceeding. The Court does not seek to diminish those matters, and the importance of the role of senior counsel in a significant trial, but by the same token, what is under consideration here is two days of witness evidence after 28 days of trial so far, before closing submissions, and 4 out of a total of 25 lay witnesses for the respondents. While it might be accepted, as Mr Jeffrie put it, that Mr Young has been "the guiding mind" of the defence since the start, all of the matters nominated by Mr Jeffrie in submissions about Mr Young's involvement have been completed. There is no suggestion that Mr Young will not recover in a way which will enable his full participation on behalf of the respondents in closing submissions. 10 Overall, I consider the respondents have somewhat exaggerated the significance of Mr Young being absent for two days of witness evidence. The point this trial has reached is relevant to my assessment. We are in the seventh week of a trial that has had to be heard in tranches, with significant gaps between the tranches. The trial has well exceeded the parties' estimates. It has taken a number of twists and turns and, generally, the parties have sought co-operatively to deal with those twists and turns. However, at several points, the Court has had to insist, especially to the applicants, that their case must close and that the case must finish. The Court encountered some resistance to this on occasions. To some extent, this is no more than what the Court is now expecting of the respondents. 11 The principle of finality and certainty in litigation favours the respondents' evidence closing this week. There is always a risk when a trial is adjourned for a period in the middle of evidence, that parties will seek to alter or supplement their cases in a way that parties are not able to do when a trial runs continuously. That has been a feature of this trial to some extent. I have made this observation before. An important, but not the only, factor in my reasoning on this application is the need for finality. 12 There is a costs capping order in place. Counsel for the applicants is correct that orders of this kind are designed to avoid stifling litigation of matters which are arguable, and which have a public interest element. On the one hand, the State of Victoria is a very well-resourced litigant, capable of absorbing additional costs incurred during a trial. On the other hand, the applicants are five individuals, at least one of whom is still a minor, on my calculations, but all of whom are young men and most of whom are still studying. The costs capping orders, which were not opposed by the State, have expressly allocated capped amounts to each of the five applicants in terms of their liability for an adverse costs order. I infer these amounts were deliberately and carefully chosen; however, the orders also have the effect of capping the costs recoverable by the applicants if they succeed. On any view, the fact that there are costs capping orders is an important factor in ensuring that the trial is conducted as efficiently and effectively as possible. 13 Counsel for the applicants informed the court for the first time that all counsel and solicitors for the applicants are acting on a no-win / no-fee basis in the proceeding. Even if the applicants are wholly successful counsel confirmed the sum of $130,000 would have to be divided between solicitors and counsel, in the context of the size of this trial that is not a significant amount of remuneration for professional services. Mr Jeffrie observed in argument that the parties: would have gone through $130,000 before we got into this courtroom. 14 The resources available to the applicants are, I infer, unlikely to match those of the State of Victoria. I refer here to the affidavit of Ms Marian Morton sworn 18 November 2022, relied on in support of the application for Ms Sentry to give evidence by MS Teams, which demonstrates a number of witness conferences with counsel. The number and application of resources in that way is not to be criticised, but it illustrates the disparities at work in this proceeding. The State is capable of applying resources as and when it needs to, and does so knowing there is a costs capping order in place. That is not a position that the applicants are able to adopt. 15 Counsel for the respondents confirmed there was no submission that the costs capping order should be varied so that the respondents would pay the costs thrown away of the applicants by reason of the adjournment. Belatedly, he sought the hearing be stood down so he could seek instructions on whether the respondents would offer to pay the applicants' costs thrown away. I refused him leave to do that. It was, in my view, a belated attempt to repair the respondents' otherwise unattractive position, namely, that they had not done what would otherwise usually be expected, especially of a model litigant, and proactively offered to consent to a variation of the costs capping order so that the respondents pay the applicants' costs thrown away by reason of the adjournment. I emphasise, however, that even if the respondents had proactively made this offer, it would not have changed the conclusion I have ultimately reached. 16 When a trial is adjourned part-heard or a tranche finishes, there are significant legal resources needed to work the matter back up for the next tranche. This is quite a different situation from a trial that runs continuously, where all legal representatives remain concentrated on the evidence and arguments in a single matter. As I have sought to explain by reference to the costs capping order and the disparity of resources in this proceeding, the respondents' adjournment proposal is likely to increase the resources that would need to be expended on the applicants' side in a way which puts them at a significant resources disadvantage, especially since neither counsel nor solicitors are being remunerated in the usual way, contrary to the position of the legal representatives for the respondents, as Mr Jeffrie confirmed. 17 The respondents' adjournment application also puts the Court at a significant disadvantage. As fact-finder, the Judge must retain and marshal as comprehensive a working knowledge of the evidence as is possible. In a long trial, the ability to do this is compromised where there are gaps between tranches of the trial. The integrity of the Court's fact-finding processes, in particular its timely assessment of oral witness evidence in its proper context, is more at risk every time the trial is adjourned. For the sake of four witnesses, who are the last four witnesses, and where there is time available this week to hear their evidence, I consider that the risk to the integrity of the Court's fact-finding processes tends firmly against an adjournment. 18 Another factor is how this adjournment application affects the next stage of the trial. Closing oral submissions are listed for the end of February for four days. If the evidence finishes this week, the parties can turn their attention to written submissions and preparation for oral submissions with a complete evidentiary picture. The court book can be finalised, in itself no small task and one which will be resource and labour intensive. If the evidence does not close, significant uncertainty about the state of the evidence will remain, including about the documentary evidence. The court book cannot be finalised. The time contemplated by the court's existing orders for the parties to finalise the court book and prepare closing, and written and oral submissions cannot be efficiently used if the evidence has not closed. 19 How each party decides to put its case in this proceeding will be a careful forensic exercise; it will take time. The Court's present orders give the parties that time - almost two months. That time is necessary, in my opinion, for the proper presentation in a timely and efficient fashion of the parties' respective cases, and there is insufficient justification in the present circumstances for the objective of having the parties ready for closing submissions by the end of February to be compromised. 20 I did propose that the respondents might consider electing to rely on the outlines of evidence of these four witnesses as standing as their evidence-in-chief with or without supplementation. I suggested to counsel for the respondents that option might be capable of alleviating some of the asserted prejudice. I infer Mr Young was involved in the settling of those outlines, and they are very detailed. That invitation was rejected on behalf of the respondents, and I accept that was a matter for the respondents to consider and, if they saw fit, to reject that invitation by the Court. 21 An important factor in my consideration is that what is proposed to occur is that the respondents' two junior counsel must take evidence-in-chief of two extra witnesses each, not cross-examine. It is well understood, in my view, that in significant proceedings, such as this, forensic decisions made on the run in cross-examination might well be much more difficult for counsel to make. That should not be the case in a proceeding such as this with evidence-in-chief. 22 Capable junior counsel, such as those who are acting on behalf of the respondents, should be able to lead witnesses and manage objections, particularly in the circumstances I describe now. We are at the end of this trial. All counsel and instructors are highly familiar with the evidence, both witness evidence and documentary evidence. The important factual issues are now well-defined and well-known. 23 The issues arising from the documentary evidence are also well-defined and well-known. The examination-in-chief of each respondent witness takes a familiar course and has familiar themes. So does the cross-examination. The applicants' witness case is closed. I do not accept the level at which the respondents' submissions were pitched about how difficult the task is for these two days or what it is necessary to know about the evidence to manage these four witnesses. 24 I do not accept the level of prejudice asserted; I consider it is exaggerated. The evidence in this case has been for each witness somewhat repetitive, and, in my view, the issues are now well-rehearsed. In his opening, Mr Young described this as a document-heavy case from the respondents' perspective. 25 I accept the applicants' submissions that the timing for each witness on both sides in this proceeding has ebbed and flowed, and I consider that as an unremarkable occurrence in an oral evidence case with a large number of witnesses. Despite the submissions of both counsel on this application, I consider it is fruitless trying to cast blame for how long the trial has taken or who bears responsibility for particular forensic choices. I do not consider that is a factor on this application. 26 As I explained during argument, to some extent I do consider it may be reasonable for parties in the State of Victoria, after almost three years of the COVID-19 pandemic, to anticipate and plan for COVID risks. I raised with Mr Jeffrie the proposition that it was apparent that Mr Young was unwell last week, and he confessed as much in court. Mr Young said "I am a bit unwell" towards the end of Thursday, 17 November 2022 (transcript at p 2233, l 34). Over the last week and a half several solicitors have tested positive for COVID. I inquired whether it might be said there have not been sufficient risk-management processes in place by the respondents to manage COVID risks, in the circumstances of the State of Victoria being such a well-resourced litigant. It is possible, in my view, that such risks might have been managed differently and might have been managed earlier. I do not place a lot of weight on that factor, but I do place a small amount of weight on that issue. 27 I accept that these four witnesses are important, but on the spectrum of all the respondents' witnesses I do not accept that they have much greater or lesser significance than many of the other witnesses called to this point, including witnesses who have been taken by junior counsel for the respondents. Junior counsel Mr House took the former principal Ms Julie Podbury and informed the Court she was always to be his witness. Further, it should be said that the parties' views of who are the most significant witnesses may or may not align with the Court's views, and may or may not align with how the fact-finding plays out. Therefore, the prejudice in terms of the prejudice to the success or failure of the respondents' case is not necessarily only a matter for assertion by the respondents; it is a matter for objective assessment by the court. 28 Balancing all those factors, I consider that the adjournment application should be refused. The Court's refusal of the adjournment application means counsel on both sides will have to exercise considerable discipline to ensure the witness evidence concludes this week; that is an objective which underlines this ruling. I am satisfied by the progress of the evidence on Monday that that objective is reasonably and fairly achievable. I propose to make orders so that it is clear that such discipline must be exercised absent any exceptional circumstances which might justify seeking leave to depart from the estimates already given. 29 If counsel do not exercise sufficient discipline, the court will impose it. As Mr Jeffrie pointed out, the Court has on many occasions intervened to keep cross-examination within bounds of relevance and avoiding repetition and vagueness. The Court will continue to exercise that control over the evidence for the next three days. The witness evidence must be concluded this week. In my view, each party has had more than a reasonable and fulsome opportunity to put their case. 30 An order will also be made that the respondents' application for Ms Sentry to give evidence by Microsoft Teams be allowed. Essentially, I accept on the affidavit material that has been presented that that is the fairest and most reasonable way for Ms Sentry to give her evidence. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Mortimer.