B CONSIDERATION
7 It is worth commencing by having regard to the issue in this case to which this proposed evidence is said to have relevance. I will not rehearse the background to the case or the facts in issue, which I have previously done in an earlier interlocutory judgment: Parkin v Boral Limited (Loss of Privilege Issue) [2024] FCA 1039 (at [9]-[17]).
8 Broadly, the evidence goes to the issue of "materiality", which is the fourth requirement provided for in s 674(2)(c)(ii) of the Corporations Act 2001 (Cth). As I explained at some length in Australia and New Zealand Banking Group Ltd v Australian Securities and Investments Commission [2024] FCAFC 128; (2024) 305 FCR 383 (at 392-394 [41]-[53]), for the purposes of s 674, s 677 relevantly provides that a reasonable person will be taken to expect information to have a "material effect" on the price or value of securities if that information "would, or would be likely to, influence persons who commonly invest in securities in deciding whether to acquire or dispose of" the securities. As I then went on to say (at 394 [52]), in assessing materiality, expert evidence will not always be useful.
9 At least in my experience of dealing with materiality questions in cases of this sort, I have found expert evidence on materiality as being of very limited significance. It often amounts to voluminous and expensive material which over-intellectualises something which is supposed to be a matter of judgment assessed by reference to the realities of the business world and on an ex ante basis. Put another way, it is an evaluative assessment informed by commercial common sense. Despite this, applicants and litigation funders, for reasons not always readily apparent to me, think it is a good idea to spend vast amounts of money on experts to put such materials before the court and, perhaps understandably, in those circumstances, respondents feel they have no choice but to reply.
10 All points made by Mr Kane have some underlying merit, but, at the end of the day, the bulk of the prejudice identified can be ameliorated by appropriate rulings and, in the end, the issue is one of weight.
11 The first and third points can be taken together. Associate Professor Jackson's opinions are replete with references to the representations made by others in articles and assertions as to his opinion that such representations are cogent. This is, obviously, evidence of limited utility. The authors of the literature relied upon are not witnesses and, subject to a request being made to call the maker of the representation pursuant to s 167 of the EA, those persons are not being called to give evidence. I recently dealt with the admissibility of scientific articles and studies placed before a court in McNickle v Huntsman Chemical Company Australia Pty Ltd (Initial Trial) [2024] FCA 807. Relevantly, I said the following (at [58]-[62]):
[58] There is one qualification to what I have said about admissibility. I referred earlier to the scientific articles and studies placed before the Court. There is a lot of law about how a court is to deal with representations of opinion made in such material. As Heydon J explained in Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 243 CLR 588 (at 615 [69], 631-632 [110]), there has long existed a qualification to the proof of assumption rule (under a common law exception to the hearsay rule), that experts may give evidence of hearsay matters which go to demonstrate their expertise - what is said in the writings of others in the relevant area of expertise they have read as a basis for their opinion, or what has been said to them in discussions they have had with colleagues and taken into account.
[59] In short, experts are generally entitled to rely upon publications and material produced by others in the area in which they have expertise as a basis for their opinions and may give evidence of fact which is based on them. As is explained in Wigmore on Evidence (Little, Brown and Company, 3rd ed) Vol 2 (at 784-785):
The data of every science are enormous in scope and variety. No one professional man can know from personal observation more than a minute fraction of the data which he must every day treat as working truths. Hence a reliance on the reported data of fellow-scientists, learned by perusing their reports in books and journals. The law must and does accept this kind of knowledge from scientific men. On the one hand, a mere layman, who comes to court and alleges a fact which he has learned only by reading a medical or a mathematical book, cannot be heard. But, on the other hand, to reject a professional physician or mathematician because the fact or some facts to which he testifies are known to him only upon the authority of others would be to ignore the accepted methods of professional work and to insist on finical and impossible standards. Yet it is not easy to express in usable form that element of professional competency which distinguishes the latter case from the former. In general, the considerations which define the latter are (a) a professional experience, giving the witness a knowledge of the trustworthy authorities and the proper source of information, (b) an extent of personal observation on the general subject, enabling him to estimate the general plausibility, or probability of soundness, of the views expressed, and (c) the impossibility of obtaining information on the particular technical detail except through reported data in part or entirely.
[60] In Karpik v Carnival plc (The Ruby Princess) (Evidential Ruling) [2022] FCA 1318 , Stewart J addressed this topic and, after referring to the above extract, noted (at [5]) that "[i]t can thus be seen that expert reliance on such learned publications is not excluded by the rule against hearsay (s 59) or the opinion rule (s 76)". His Honour was dealing with a case, like here, where the expert reports were replete with references to scientific articles. Having noted the need for caution in making an order under s 136 EA limiting the use of such materials, such a limitation order was not made generally but was made in relation to an article which was: (1) not referred to in any of the expert reports; (2) only referred to in cross-examination; and (3) "deal[t] with an area of expertise not possessed by any of the many expert witnesses in the case" and therefore "there is no other evidence against which to compare, or weigh, the opinions and conclusions expressed in the article", leaving the Court "in an invidious position with regard to trying to assess the weight to give to those opinions and conclusions" (at [24]).
[61] His Honour explained that "[f]or that reason, taken together with the absence of any opportunity for the respondents the test or challenge those opinions and conclusions, I am satisfied that to not limit the use to which the article can be put under s 136 would be unfairly prejudicial to the respondents" (at [24]).
[62] To their great credit, the parties to this case (well advised by experienced solicitors and junior counsel), took a sensible and constructive approach to all issues as to admissibility. One aspect of their agreement related to the reception and use of the scientific articles. Taking a slightly different approach to Ruby Princess, I had proposed to the parties a limitation that would restrict reception of material to those articles and studies in the experts' relevant area of expertise that were read and were said to form a basis for otherwise admissible opinion evidence or were used in cross-examination, accompanied by a general limitation under s 136 EA that the evidence was to be used for the purposes of providing a basis for, or understanding, the expert opinions adduced by the witnesses called.
12 In Huntsman, an order was made under s 190(1)(c) of the EA dispensing with the laws of evidence to give effect to a pragmatic resolution that had been agreed in that case. In this case, I proposed to restrict the reception of the material in the articles and studies referred to in Associate Professor Jackson's evidence (which were otherwise said to form a basis for admissible opinion evidence, or which were used in cross-examination) through imposing a general limitation under s 136 of the EA that the evidence was only to be used for the purposes of providing a basis for, or understanding, the expert opinions. It seems to me it would be appropriate to make a limitation of this type not only in respect of Associate Professor Jackson, but also, subject to hearing any further argument, in relation to any other learned or scientific articles relied upon by any other of the witnesses. In short, those articles are, to an extent, useful in understanding the opinions expressed by the witnesses and not for a broader purpose.
13 The second issue raised by Mr Kane concerning Associate Professor Jackson's excursion into explaining American law can also similarly be dealt with in a pragmatic way. In effect, what Associate Professor Jackson is doing is pointing to American empirical research which he regards as relevant, and giving a survey of the commonalities between the Australian continuous disclosure regime and a similar regime existing in the United States.
14 It is trite that proof of foreign law is a question of fact. If it is said that there is a bona fide dispute as to his summary of the applicable law (in an attempt to undermine his assumption that the empirical evidence can have any present relevance) then no doubt that can be explored in cross-examination or by the respondent adducing any opinion evidence as to foreign law if so advised.
15 I expect, given my peripheral understanding of the American position regarding continuous disclosure, that the summary provided by Associate Professor Jackson is broadly accurate and anodyne (but I will keep an open mind given I may have overlooked some inaccuracy in what has been summarised).
16 Fourthly, when it comes to discretionary exclusion, given the already voluminous material in this case, I do not think there is going to be any real incremental undue waste of time or oppression caused, although I do not think that the evidence has substantive probative value for reasons I have explained (at least as I presently understand it). The savings associated with the exclusion do not seem to me to be sufficiently worthwhile so as to require rejection of the material. Obviously enough, in exercising this discretion, I have had regard more generally to the factors specified in s 192 of the EA.