Seven Network Limited v News Limited

submissions 7 Mr Sheahan initially put Seven Network's contention on three bases. 8 First, Mr Sheahan relied on s 79 of the Evidence Act, which allows opinion evidence to be given by a person with specialised knowledge based on that person's training, study or experience. Ultimately, Mr Sheahan did not pursue this contention. 9 Secondly, Mr Sheahan relied on s 78 of the Evidence Act, which provides as follows: 'The opinion rule does not apply to evidence of an opinion expressed by a person if: (a) the opinion is based on what the person saw, heard or otherwise perceived about a matter or event; and (b) evidence of the opinion is necessary to obtain an adequate account or understanding of the person's perception of the matter or event'. 10 In the course of argument, I expressed the view that it is difficult to see how s 78 of the Evidence Act could apply to the disputed material. This is so because any opinions that Mr Gammell formed about the advantages enjoyed by Seven Network in relation to pay television do not seem to have been based on what he saw, heard or perceived about particular matters or events. Rather, his opinions seemed to have involved the evaluation of a range of information bearing on Seven Network's position within the pay television industry. I therefore expressed some doubts as to whether s 78 of the Evidence Act was intended to apply to evidence in the nature of the disputed material. While Mr Sheahan did not formally abandon this contention, he did not press it. 11 Thirdly, Mr Sheahan relied on s 77 of the Evidence Act which provides that: 'The opinion rule does not apply to evidence of an opinion that is admitted because it is relevant for a purpose other than proof of the existence of a fact about the existence of which the opinion was expressed'. Mr Sheahan pointed out that it is common ground that Mr Gammell's evidence of the opinions he had formed can be admitted for a purpose other than proof of the existence of facts about which the opinions had been formed. It followed that the opinion rule does not apply, and that the evidence can be admitted for all purposes pursuant to s 77. Thus the evidence can be admitted as probative of the existence of the facts about which Mr Gammell had formed opinions. 12 As I understand their position, neither Telstra nor PBL dispute Seven Network's submission based on s 77 of the Evidence Act. They accept that the disputed material constitutes evidence of 'an opinion' held by Mr Gammell and that, subject to the operation of s 136 of the Evidence Act, s 77 has the effect that evidence of Mr Gammell's opinions can be admitted without qualification. They do not take any point as to whether Mr Gammell has 'expressed' the relevant opinions. 13 Telstra and PBL contend, however, that a direction should be made pursuant to s 136 of the Evidence Act because otherwise there would be a danger that Mr Gammell's evidence might be unfairly prejudicial to them. They argue that Seven Network, in effect, is attempting to have opinion evidence admitted without having to comply with the requirements that govern the admissibility of expert evidence: cf Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705, at [64], [85] per Heydon JA; Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 157, at [14], per Branson J. They say that they would be prejudiced because the statement contains no reasoning process to support the opinions of Mr Gammell which he says he formed in the course of advocating an 'integrated media' strategy. They further say that the statement does not identify such enquiries as Mr Gammell may have made or any information upon which he relied to form his opinions. Nor is it clear whether his assessment was based on any particular experience or expertise he might have had. They acknowledge that Mr Gammell can be cross-examined, but they point out that cross-examination would have to be undertaken without any of this material being exposed in advance. They would therefore be at a severe forensic disadvantage. 14 Mr Castle further argues that if the evidence is allowed in for all purposes, it will effectively reverse the onus of proof. This is so, so he contends, because Seven Network would be able to rely on Mr Gammell's reconstruction of his thought processes as the basis for establishing facts that otherwise would have to be proved by primary evidence. In effect, so he contends, the respondents will be forced to adduce evidence to rebut Mr Gammell's unsubstantiated assertions. 15 Mr Sheahan submits that there is no unfair prejudice in admitting the evidence without qualification. He accepts that there might be such prejudice if the respondents could not cross-examine Mr Gammell: cf Commonwealth of Australia v McLean (1996) 41 NSWLR 389, at 401-402, per Handley and Beazley JJA; Roach v Page (No 11) [2003] NSWSC 907, at [19], per Sperling J. But, he says, it is open to the respondents to cross-examine Mr Gammell. Moreover, they can do so having the advantage of inspecting the very large quantity of documents discovered by Seven Network. He submits that care must be taken not to render s 77 of the Evidence Act nugatory by making directions under s 136 too readily.

reasoning 16 The Court has power under s 136 of the Evidence Act to limit the use of evidence if there is a danger that a particular use of evidence might be unfairly prejudicial to a party. The Court does not have to be satisfied that a particular use of evidence will be unfairly prejudicial. The section speaks of a danger involved that such a use of evidence might be unfairly prejudicial: Guide Dog Owners' & Friends' Association Inc v Guide Dog Association of New South Wales and ACT (1998) 154 ALR 527, at 532, per Sackville J. The fact that the Court's power is enlivened does not mean that a direction must be made under s 136. The section confers a discretion on the Court which must be exercised judicially, having regard to the circumstances of the particular case. 17 The expression 'unfair prejudice' is used not only in s 136 of the Evidence Act but in other similar provisions: see ss 135, 137. The expression is not defined and, as Sperling J observed in Roach v Page (No 11), at [74], Parliament has placed no express restriction on the criteria for determining unfairness. Different views have, however, been expressed as to the meaning of the expression. 18 The Australian Law Reform Commission, whose report led to the passage of the Evidence Act, appears to have intended the expression to mean: 'the danger that the fact-finder may use the evidence to make a decision on an improper, perhaps emotional, basis ie on a basis logically unconnected with the issues in the case'. Law Reform Commission, Evidence (Report No 26 1985), par 644. 19 In Papakosmas v The Queen (1999) 196 CLR 297, McHugh J noted (at [93]), that some decisions had suggested that the term 'unfair prejudice' could have a broader meaning than that suggested by the ALRC and that the expression could cover procedural disadvantages which a party might suffer as the result of evidence being admitted under the provisions of the Evidence Act (citing Gordon (Bankrupt), Official Trustee in Bankruptcy v Pike (No 1) (FCA, unreported, 1 September 1995); Commonwealth v McLean (1996) 41 NSWLR 389). His Honour expressed no concluded view on the correctness of these decisions, but was inclined to think that insufficient attention had been given to the changes brought about by the Evidence Act. 20 The weight of authority, however, supports the view that a procedural disadvantage may mean that a particular use of evidence might be 'unfairly prejudicial to a party', depending upon the circumstances of the particular case. For example, a number of decisions have held that there may be unfair prejudice in admitting hearsay evidence under s 60 of the Evidence Act (which is framed in similar terms to s 77), where the truth of the representation cannot be tested by the party against whom it is tendered: see Roach v Page (No. 11) at [19] and the detailed discussion there of the authorities; Ringrow Pty Ltd v BP Australia Ltd [2003] FCA 933, at [27], per Hely J; Quick v Stoland Pty Ltd (1998) 87 FCR 371, at 377-378 per Branson J; at 382, per Finkelstein J. 21 In my opinion, considerable care should be exercised before s 136 of the Evidence Act is invoked to limit the use of evidence on the ground that its use might be unfairly prejudicial to a party in a procedural sense. I agree with Mr Sheahan that the policy apparently underlining provisions such as ss 60 and 77 of the Evidence Act should not be undercut by the making of orders under s 136 as a matter of course. This is particularly so where a judge, rather than a jury, is the trier of fact, since the danger of unfairness to a party might be expected to be mitigated by the judge attributing less weight to material that cannot adequately be tested in cross-examination. Even so, the circumstances may be such that the power conferred by s 136 will not only be enlivened but it will be appropriate for the Court to make a direction limiting the use of otherwise admissible evidence. 22 In the present case, Seven Network seeks to use Mr Gammell's evidence to prove the truth of a number of highly contentious propositions relating to its position in the pay television market. It appears that these propositions are, or may be, of considerable importance to the very large damages claim that Seven Network makes against the respondents. The evidence takes the form of an account by Mr Gammell of his reasoning process for advocating a particular strategy that was apparently formed in the years after 1995. 23 The opinions Mr Gammell expresses are couched in general language. He does not divulge the basis for those opinions. Nor does he identify the documents upon which he relied or the enquiries that he made before forming his opinions. There is nothing to indicate the extent to which he used his own expertise or experience to make his assessment. Indeed, it is not clear when he formed the opinions referred in the Statement. They might have been formed, so it appears, at any time after 1995. 24 It is true, as Mr Sheahan emphasised, that the respondents will be able to cross-examine Mr Gammell. This is therefore not a case where Mr Gammell's opinions cannot be subject to any scrutiny. But it is a very large and complex case in which tens of thousands of documents have been discovered. Special procedures have been devised to deal with the vast volume of documentation. To mount an effective challenge in cross-examination to Mr Gammell's opinions may well prove to be an extremely difficult task, given the form in which his opinions are expressed. It would presumably be necessary for the cross-examiner to ascertain the bases for Mr Gammell's opinions and then test whether they were well-founded. The obvious risk is that the bases for the opinions will only be exposed in the course of the cross-examination, potentially placing the cross-examiner at a serious forensic disadvantage. It may be very difficult, for example, to obtain instructions about documents or transactions referred to by Mr Gammell in the witness box. For these reasons, in my view, there is a danger that the use of Mr Gammell's evidence in the manner proposed by Seven Network might be unfairly prejudicial to the respondents. 25 I should make it clear that I am not suggesting that unless a party seeking to rely upon evidence of opinion complies with the requirements for adducing expert evidence, there will necessarily be unfair prejudice for the purposes of s 136 of the Evidence Act. Everything must depend upon the particular circumstances. In this very complex case, evidence has been given of unsupported opinions relating to important factual matters. Seven Network wishes to use this material in order to support its very large damages claim. For the reasons I have given, that proposed use creates a significant danger of unfair prejudice to the respondents. 26 I think that I should exercise the discretion conferred by s 136 of the Evidence Act to make an order limiting the use to which Mr Gammell's evidence of his opinions may be put. I take into account not only the unfair prejudice to the respondents, but the fact that the matters on which Mr Gammell formed opinions are quintessentially within the knowledge of Seven Network. It is possible that these matters are the subject of documentary evidence not yet tendered or that they are dealt with in statements or reports of witnesses who will called later in the proceedings. If this is not so, Seven Network will have an opportunity to seek leave to adduce further evidence. 27 In short, I think it would be unfair having regard to the nature and procedural background of this case to allow Seven Network to use the evidence of Mr Gammell's opinions in the manner it proposes. Accordingly I shall make the direction under s 136 of the Evidence Act sought by Telstra and PBL. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sackville.

Associate: Dated: 22 September 2005 Counsel for the Applicants: J Sheahan SC

Solicitors for the Applicants: Freehills

Counsel for the Third, Fifth and Sixth Respondents: T Castle

Solicitors for the Third, Fifth and Sixth Respondents: Mallesons Stephen Jacques

Counsel for the Seventh, Eighth and Twenty-First Respondents: T Meagher SC

Solicitors for the Seventh, Eighth and Twenty-First Respondents: Gilbert + Tobin

Date of Hearing: 21 September 2005

Date of Judgment: 22 September 2005