Smith v Commonwealth of Australia

JUDGE: Lee J DATE OF ORDER: 24 December 2019

1. Orders 3, 4 and 5 sought by the applicants at the interlocutory hearing on 29 November 2019 are refused.
2. The parties are directed to send forthwith a copy of these reasons to counsel assisting the referees in all the references ordered in these proceedings. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

BETWEEN: KIRSTY BARTLETT First Applicant ANTHONY GRAIG BARTLETT Second Applicant

AND: COMMONWEALTH OF AUSTRALIA Respondent

JUDGE: LEE J DATE OF ORDER: 24 december 2019

1. Orders 3, 4 and 5 sought by the applicants at the interlocutory hearing on 29 November 2019 are refused.
2. The parties are directed to send forthwith a copy of these reasons to counsel assisting the referees in all the references ordered in these proceedings. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

A INTRODUCTION 1 In Kadam v MiiResorts Group 1 Pty Ltd (No 4) [2017] FCA 1139; (2017) 252 FCR 298 at 301 [5], I observed that: It is now over seven years since the commencement of the overarching purpose provisions [contained in Pt VB of the Federal Court of Australia Act 1976 (Cth)] and over a quarter of a century since Gleeson CJ, the then Chief Justice of New South Wales, said in Super Pty Ltd v SJP Formwork (Aust) Pty Ltd (1992) 29 NSWLR 549 at 558: The proposition that all litigants are entitled to have a judge … decide all issues of fact and law that arise in any litigation, is unsustainable. 2 Despite recent attempts (for example, in Kadam and more recently in CPB Contractors Pty Ltd v Celsus Pty Ltd (formerly known as SA Health Partnership Nominees Pty Ltd) (No 2) [2018] FCA 2112; (2018) 364 ALR 129) to explain: (a) the importance of referees; (b) how references are conducted in this Court; and (c) their importance in facilitating the overarching purpose in large scale litigation, it is apparent that there is an imperfect understanding in some sections of the profession as to when references are appropriate, how an inquiry by a referee is conducted, and the principles that inform how and when a report is adopted by the Court. 3 In these related Part IVA class actions of sweeping dimensions, replete with technical issues, the parties have displayed a high degree of cooperation and a detailed understanding as to how references can be used to assist in resolving issues in a way that places manageable demands upon the time and resources of both the Court and the parties. Notwithstanding this, issues have arisen which require attention to be given to some foundational aspects of the conduct of references. 4 At a case management hearing, the applicants have sought orders to the effect that Court approved communications be sent to the Counsel Assisting a land valuation referee and a toxicology referee. These communications are directed to "clarifying the role of the referee". It is asserted that the Commonwealth, in a statement of facts and contentions, suggested (at the very least implicitly) that the role of the referee is adjudicative, rather than inquisitorial. This is because a submission was made to one of the referees that he should "prefer" the evidence of the Commonwealth's experts to that of experts retained by the applicants for reasons which were then explicated. Further it is said that the Commonwealth's statement of contentions makes a number of legal submissions which are said to be inappropriate given that the subject matter expert (who had been appointed the referee) is not a lawyer and should not be opining about legal matters. 5 I declined to make the orders sought by the applicants and noted to the parties I will provide short reasons for doing so.

B The role of the referee 6 In very broad terms, these proceedings are three class actions commenced to claim compensation for damages to property as a result of contamination to groundwater, surface water, soil and biota by per- and poly-fluoroalkyl substances (PFAS) from the use of Aqueous Film Forming Foam (AFFF) by the Commonwealth at three Royal Australian Air Force bases. 7 This brief summary is enough to give a flavour of the complex scientific and technical issues that arise. I have made orders that a number of referees, in various disciplines, each conduct an inquiry and prepare a report stating, with reasons, their opinion about identified questions. Orders were made that the references are to be conducted in accordance with the "General Procedures on Reference" set out in Schedule 3 to Orders made on 2 October 2019. Those General Procedures were as follows: 1. Orders 2 to 14 below provide general directions for the purposes of facilitating references ordered by the Court in the PFAS Class Actions (collectively, the References) and are subject to any more specific orders made by the Court in relation to any of the References (whether in these orders or hereafter). 2. Each referee appointed by the Court (collectively, the Referees) individually is to consider and implement such manner of conducting each of the References as will, without undue formality or delay, enable a just, efficient, timely and cost-effective resolution of each of the References to allow completion of their report. 3. Without limiting the generality of order 2, in order to facilitate each Referee implementing the just, efficient, timely and cost-effective resolution of the relevant reference, each Referee is to make such directions as the Referee considers appropriate as to the conduct of the Reference. 4. Without limiting the generality of orders 2 and 3, each Referee may, to the extent that he considers appropriate: a. make enquiries by telephone or in writing; b. have direct communication, without intervention of lawyers, with any expert retained on behalf of a party and/or any person who the Referee believes may have information relevant to the Reference; c. make any direction the Referee considers appropriate in relation to the making of submissions by any party, including that any submissions be provided wholly in writing and be limited in length and topic; d. make directions for the attendance of any person, and/or the production of documents, be compelled by subpoena. 5. To assist the Referees in the preparation of their reports, to the extent the Court considers it appropriate or necessary to do so a barrister may be appointed as counsel assisting (Counsel Assisting) any Referee and the costs of such barrister, capped at such sum as the Court specifies (subject to further order), shall be costs in the References and dealt with in the same way as the fees of the Referees. 6. Without limiting the generality of orders 2, 3, and 4, to the extent it is necessary for a Referee to make any findings of fact in order to express an opinion, any material other than expert opinion before the Referee shall, unless the Referee otherwise directs, be by way of: a. any statement of agreed facts; b. a compendium of facts and documents provided to the Referee by a party in accordance with any directions made by the Referee; and/or c. a written statement signed by the maker of the statement provided to the Referee by a party in accordance with any directions made by the Referee (but only in the event the Referee considers it necessary or appropriate to receive any statement relevant to any contested fact). 7. Each party must, before the time fixed by the Referee conducting the reference, give a brief statement of the findings of fact and law contended by the party in accordance with FCR 28.65(7) to Counsel Assisting (or in their absence, directly to the Referee[)] [and] provide a copy to any other party to the inquiry. 8. Subject to order 7 above, the parties are to participate in the References without the involvement of legal representatives (except to the extent any Referee wishes to obtain the assistance of any lawyer) and the laws of evidence will not apply in relation to the References. 9. Each Referee, in their reports: a. shall, to the extent it was necessary for the Referee to make any findings of fact in order to express his or her opinion, make a statement of the facts found by the Referee from which, following any adoption, the Court may draw such inferences as it thinks fit; and/or b. may submit any question arising on the Reference relevant to that Referee for the decision of the Court and provide alternative opinions which depend upon how the Court determines any questions submitted to the Court. 10. Subject to further direction by the Referee, the parties are to deliver to each Counsel Assisting (or in their absence, directly to the Referee) forthwith one copy of these orders, together with a copy of FCR 28 and a copy of the pleadings and expert evidence relevant to the reference. 11. Any amendments to the questions the subject of the References, whether by agreement or on a contested basis, are to be the subject of an order made by the Court. 12. If for any reason a Referee is unable to comply with the order for delivery of their report to the Court by the date in this order, the Referee is to notify the Associate to Justice Lee (as soon as practicable after that reason becomes apparent) with a brief statement of the reasons for such inability and providing an indication of the further time … which is required to deliver the report to the Court. 13. Each Referee and Counsel Assisting have leave to contact the Associate to Justice Lee to obtain directions with respect to any matter arising in relation to the reference. 14. Without affecting the powers of the Court as to costs, the parties are to be jointly and severally liable to each Referee for the fees payable to him. 8 I should pause to explain one aspect of the General Procedures. In complex references, it has been the recent experience of the Court that junior barristers appointed by the Court to act as Counsel Assisting perform a valuable role. They assist the referee (who often has limited experience in communicating scientific knowledge or recondite concepts to a general non-expert audience), to express conclusions in a comprehensible way free of jargon and abstruseness. Additionally, they assist the referee in ensuring the procedural aspects of the references do not miscarry and assist the non-lawyer to ensure the focus is the precise task required by the orders of the Court. Experienced counsel have been appointed in this case. 9 In light of the detailed General Procedures, and the participation in the inquiry process of Counsel Assisting, I do not consider the referees need to be "reminded" about the nature of their role and I am confident they are well aware they can have regard to any material they consider to be relevant in the conduct of their inquiry. As noted above, under Order 4 of the General Procedures, the referees may make such inquiries as they consider appropriate and, as it happens, I am told the referees have already availed themselves of various procedures provided for by the General Procedures in gathering relevant material. 10 In this case the parties have provided the referees with statements of contentions (see Federal Court Rules 2011 (Cth) r 28.65(7)) in order to apprise the referees of the matters the parties wish the referees to consider in the discharge of their role. 11 The referee is always under the control of the Judge in participating in the special mode of trial constituted by the reference and the Court reserves for itself a discretionary power to decide the nature of the inquiry. This is the whole purpose of the General Procedures and reserving liberty to the referee to seek clarification as to the procedure to be adopted if something unusual occurs. But having made orders for reference and mandated some aspects of the procedure to be adopted, the Court should extend some degree of deference to a referee in the conduct of the inquiry. In a way, this is consistent with the notion the Court will generally exercise a degree of deference to a referee, particularly in respect of factual findings in an area where the referee has particular expertise. Any deference in these matters does not detract from the Court's ultimate control of the procedure. Ultimately, conduct of references in federal jurisdiction are licit because the referee's task lacks an essential aspect of judicial power: the reference does not quell a controversy between the parties by making binding or conclusive determinations of rights and liabilities because the Court retains the discretionary power to decide whether it is appropriate to adopt the referee's findings: see CPB Contractors at 143-144 [55], 143-144 [59]-[61].

C a further issue: additional material 12 On 22 November 2019, the Commonwealth served a report from Mr Jeremy Thorpe (not to be confused with the former leader of the Liberal Party of some notoriety) and provided it to the land valuation referee. Those acting for Mr Bartlett had no prior notice of Mr Thorpe's report and had not had a chance to respond to Mr Thorpe's report in the statement of contentions provided to the land valuation referee. This is in circumstances where the Commonwealth's evidence has critiqued the expert evidence of the applicant and Mr Bartlett wishes to supplement the statement of contentions in respect of the matters contained in Mr Thorpe's report. 13 I have been asked to make a direction concerning the filing of an amended statement of contentions. Again, I do not think I should make such an order but rather leave the issue of obtaining further information to the good sense of the referee. 14 In making submissions in advance of the case management hearing, it was submitted by the Commonwealth that in the event referees gather additional material on contentious matters through their own inquiries, procedural fairness "will require that the parties have an opportunity to comment on that material". The authority for this proposition was said to be a decision of Rogers CJ in Comm D being Telecomputing PCS Pty Ltd v Bridge Wholesale Acceptance Corporation (Aust) Ltd (1991) 24 NSWLR 513 at 523, 524-525. For the benefit of the referee, I should record my view that this submission expresses the relevant proposition at too high a level of generality. 15 Obviously enough, there is no fixed content to the duty to afford procedural fairness. It is trite that the fairness of a procedure depends upon the nature of the matters in issue, and what would be a reasonable opportunity to be afforded to parties depends entirely upon the bespoke circumstances of the case. As Mason J stated in Kioa v West (1985) 159 CLR 550 at 585, "the expression 'procedural fairness' … conveys the notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of a particular case". More recently, in Re Minister for Immigration and Multicultural and Indigenous Affairs; ex parte Lam [2003] HCA 6; (2003) 214 CLR 1 Gleeson CJ at 13-14 [37] noted that "fairness is not an abstract concept" and the concern of the law is to avoid practical injustice. 16 Procedural fairness traditionally involves two requirements: the fair hearing rule and the rule against bias. It is only the former that is relevant here. The hearing rule requires the decision-maker to afford a person a reasonable opportunity to be heard before making a decision affecting their interests. There is no doubt referees are required to afford procedural fairness to parties. Telecomputing is authority for the unremarkable proposition that there is no better guide to what procedural fairness requires in a given case than "the test of fairness". Fairness usually demands that each party be afforded a proper opportunity of putting before the referee contentions; and an opportunity to comment on information gathered on contentious matters; and that a referee should not form a concluded view nor close his or her mind to the contentions of the parties before all material is gathered. 17 In another case decided by Roger CJ Comm D being Beveridge v Dontan Pty Ltd (1991) 23 NSWLR 13, the Chief Judge (who more than any other judge, revived and moulded the use of referees in commercial litigation), made clear that what procedural fairness demands in the hearing of a reference is to be answered bearing in mind the nature of the issues posed, the expertise of the referee, the submissions made by the parties and any other relevant matters: at 21G, 24F. Put another way, fixing upon a fair procedure in a given case is a bespoke task dependent upon all the circumstances. 18 Whether or not a referee is required to provide material to a party gathered by the referee in order for them to have an opportunity to make specific comment will depend upon a range of factors. A referee may well think it is appropriate further contentions be obtained when expert material is provided following provision of a statement of contentions by a party advancing a contrary view to that belatedly expressed by the expert (as is the case, it appears, with Mr Thorpe). 19 Speaking entirely in the abstract, however, whether this course is necessary may depend upon a number of factors including whether or not the referee ascribed any cogency to the additional material or whether or not it was thought by the referee that the matters already advanced in the contentions sufficiently dealt with the content of the "new" material. It would be unwise to suggest a hard and fast rule given the flexible content of the duty. 20 Accordingly, I decline to make the orders proposed by the applicants. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lee.

SCHEDULE OF PARTIES NSD 1908 of 2016 Fourth Applicant: ANN CLOUT Fifth Applicant: LINDSAY CLOUT Sixth Applicant: JOHN ARTHUR HEWITT Eighth Applicant: MARSHALLS TRANSPORT PTY LTD Ninth Applicant: NICHOLAS MARSHALL Tenth Applicant: MELISSA MARSHALL