FEDERAL COURT OF AUSTRALIA

Caterpillar Inc v John Deere Limited (No 2) [2000] FCA 1903

EVIDENCE – depositions taken in United States proceedings – whether admissible pursuant to s 63 or s 64 of Evidence Act 1995 (Cth) – whether person is available to give evidence – whether all reasonable steps taken to secure attendance – letter inviting person to come to be cross-examined – no tender of expenses – no response to letter – no attempt to make personal contact – no attempt to invoke Foreign Evidence Act 1974 – whether calling person would cause undue expense – relevant factors

WORDS AND PHRASES – “all reasonable steps” “undue expense”

Evidence Act 1995 (Cth) ss 63, 64, Dictionary Pt 2, cl 4, cl 6

Foreign Evidence Act 1974 (Cth) s 7

Re Sherlock (1991) 102 ALR 156 at 158-9 mentioned

R v Walker (1993) 61 SASR 260 at 263 and 266 followed

Australian Competition and Consumer Commission v Rural Press Ltd (1999) 169 ALR 201 at pars 15-16 followed

CATERPILLAR INC V JOHN DEERE LIMITED (NO 2)

NO VG 739 OF 1997

HEEREY J

21 DECEMBER 2000

MELBOURNE

THE COURT ORDERS THAT:

1.         Rule that the evidence sought to be adduced pursuant to the respondents’ notice dated 29 September 2000 is not admissible under s 63 or s 64 of the Evidence Act 1995 (Cth).

2.         The respondents pay the applicant’s costs in relation to the notice and the hearing on 12 December 2000.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     The applicant Caterpillar Inc (“Caterpillar”) has brought this proceeding against the respondents John Deere Ltd and others (collectively “Deere”) alleging infringement of an Australian patent relating to tracked or belted tractors.  Deere denies infringement and has cross-claimed seeking revocation of the Caterpillar patent on various grounds of invalidity.  After extensive interlocutory proceedings the trial has been fixed for 14 May 2001 with an estimate of six weeks. 

2                     On 29 September 2000 pursuant to s 67(1) of the Evidence Act 1995 (Cth) (“the Act”) Deere filed and served a notice of intention (“the Notice”) to adduce evidence of a previous representation in reliance on s 63(2) or alternatively s 64(2) of the Act.  On 19 October Caterpillar gave notice of objection under s 68(1).

3                     The parties agree that this issue should be ruled on now.  Strictly speaking the notice of objection under s 68(1) only applies to a proposed reliance on s 64(2) (where the person is available) as distinct from s 63(2) (where the person is not available).  However, no point was taken as to this and argument proceeded on the basis that I should determine whether either s 63(2) or s 64(2) applied.  These provisions fit into the scheme of the Act as follows.

4                     Evidence that is relevant (as that concept is defined in s 55) is admissible unless otherwise provided by the Act:  s 56(1).  One of those exceptions is hearsay:  Pt 3.2.  Evidence of a previous representation made by a person is not admissible to prove the existence of a fact that the person intended to assert by the representation:  s 59(1).  Division 2 of Pt 3.2 provides certain  exceptions to the hearsay rule in the case of what is called “first-hand” hearsay, that is to say a previous representation made by a person who had personal knowledge of an asserted fact:  s 62(1).  “Previous representation” is defined in Pt 1 of the Dictionary at the end of the Act (made applicable by s 3) to mean a representation made otherwise than in the course of giving evidence in the proceeding in which evidence of the representation is sought to be adduced.  A representation includes an express or implied representation (whether oral or in writing):  Dictionary, Pt 1. 

5                     Sections 63 and 64 relevantly provide as follows:

“63.(1)    This section applies in a civil proceeding if a person who made a previous representation is not available to give evidence about an asserted fact.

       (2)     The hearsay rule does not apply to:

       (a)     evidence of the representation that is given by a person who saw, heard or otherwise perceived the representation being made; or

       (b)     a document so far as it contains the representation, or another representation to which it is reasonably necessary to refer in order to understand the representation.

64. (1)      This section applies in a civil proceeding if a person who made a previous representation is available to give evidence about an asserted fact.

       (2)     The hearsay rule does not apply to:

       (a)     evidence of the representation that is given by a person who saw, heard or otherwise perceived the representation being made; or

       (b)     a document so far as it contains the representation, or another representation to which it is reasonably necessary to refer in order to understand the representation;

if it would cause undue expense or undue delay, or would not be reasonably practicable, to call the person who made the representation to give evidence.”

6                     Also some provisions of Pt 2 of the Dictionary are relevant.  Clause 4 deals with unavailability of persons as follows:

“4. (1)     For the purposes of this Act, a person is taken not to be available to give evidence about a fact if:

       (a)     the person is dead; or

       (b)     the person is, for any reason other than the application of section 16 (Competence and compellability:  judges and jurors), not competent to give the evidence about the fact; or

       (c)     it would be unlawful for the person to give evidence about the fact; or

       (d)     a provision of this Act prohibits the evidence being given; or

       (e)     all reasonable steps have been taken, by the party seeking to prove the person is not available, to find the person or to secure his or her attendance, but without success; or

       (f)      all reasonable steps have been taken, by the party seeking to prove the person is not available, to compel the person to give the evidence, but without success.

       (2)     In all other cases the person is taken to be available to give evidence about the fact.”

7                     Clause 6 of Pt 2 of the Dictionary deals with representations contained in a document:

“6.  For the purposes of this Act, a representation contained in a document is taken to have been made by a person if:

       (a)     the document was written, made or otherwise produced by the person; or

  (b)     the representation was recognised by the person as his or her representation by signing, initialling or otherwise marking the document.”

8                     The Notice states that the respondents give notice under s 67 that they intend to adduce evidence of a previous representation and to argue that the hearsay rule does not apply to the evidence in reliance on s 63(2) or alternatively s 64(2).  Paragraph 2(a) of the Notice states:

“2.  (a)     The substance of evidence of each of the previous representations that is intended to be adduced is as follows:

         (i)   The representations by Charles E Grawey (‘Mr Grawey’) set out in Confidential Annexure ‘A’ hereto and in the transcripts of the depositions taken of Mr Grawey in the US proceedings referred to below, which are exhibited as part of the exhibit marked ‘CFJ-1-Confidential to the affidavit of Christopher Francis Jordan sworn 28 September 2000, a copy of which affidavit (together with its exhibits) is attached to this Notice.”

9                     Paragraph 2(b) of the Notice gives the date, time, place and circumstances at or in which the representations mentioned in par 2(a) were made, namely on six dates in May and June 1997 in either Chicago or Peoria, Illinois in the course of the deposition of Mr Grawey in the US District Court for the Northern District of Illinois, Eastern Division in proceeding No. 96C5355 (“the US proceedings”).  The Confidential Annexure “A” is headed “Substance of previous representations or summary of evidence taken from depositions of Charles E Grawey in US proceedings”.  There then follow 36 paragraphs each of which contains an asserted fact with a transcript reference, for example:

“2        Mr Grawey worked for Caterpillar from 1951 to 1991 (T4,T7).

 4.        The US patent corresponding to the patent in suit (“the corresponding US patent”) is addressed to persons skilled in the art of agricultural engineering tractor design and persons skilled in the arts of rubber compounding and rubber products (T106-7).”

10                  In the affidavit referred to in the Notice Mr Jordan deposes, inter alia, that on 17 July 2000 Deere’s solicitors wrote to Caterpillar’s solicitors asking whether Mr Grawey would be giving evidence at the trial.  Having received no reply to that letter the solicitors on 26 July wrote a letter to Mr Grawey addressed to him at 210 East Orchard Place, Peoria Illinois, being the address mentioned in his deposition transcripts.  The letter advised that the solicitors acted on behalf of Deere in relation to Australian patent infringement proceedings brought by Caterpillar, that Mr Grawey was named as one of the inventors of the patent and that the Australian proceedings, broadly speaking, corresponded to the US proceedings in which he was deposed.  The letter continued:

“The contents of your deposition in the US proceedings are relevant to the issues raised in the Australian proceedings.  Our clients wish to rely on parts of your US depositions in the Australian proceedings, as part of their case against Caterpillar.

The purpose of this letter is to ask you whether you would be prepared to come to Australia to give evidence in the trial.  It is likely the trial will commence in February or March 2001.  If you were willing to come to Australia to give evidence, it would be our submission that you be treated as a witness of Caterpillar and could therefore be cross-examined by our clients. 

We would appreciate your response to our letter as soon as possible.  You should note that we have previously enquired about your attendance to give evidence by writing to Caterpillar’s Australian solicitors; however, we have had no response from them.

We look forward to hearing from you.”

11                  The letter was delivered to the Peoria address by courier.  There is no direct evidence that Mr Grawey in fact received it.  No response was received to the letter or to a letter of 9 August enclosing a copy of the earlier letter and requesting a reply.

12                  In Deere’s cross-claim reference is made to the deposition evidence of Mr Grawey in the course of particulars given in relation to the allegations of lack of fair basing (par 3.1.2, particular (c)), failure to define the invention (par 3.1.3, particular (d)), failure to describe the best method known to the patentee (par 3.1.4, particular (a)) and inutility (par 3.2.4).

13                  On the present hearing Deere submitted a schedule entitled “Examples of Grawey Representations Supporting Deere’s Cross Claims”.  This document matches particular allegations in the cross-claim (including particulars) to passages from the transcript of Mr Grawey’s depositions.  In those passages Mr Grawey speaks about Caterpillar’s objectives, the problems it encountered and what it did to overcome those problems in the course of working on the alleged invention.

Section 63(2) – Is the person “not available”?

14                  In the course of argument Deere tendered an affidavit sworn by Keith Von Rockey, a Chicago lawyer who appeared as leading counsel for Deere in the US proceedings.  Mr Von Rockey deposes that he took the depositions of Mr Grawey, that he has read the transcript and believes it is a true and accurate record of Mr Grawey’s depositions.  Mr Grawey has not signed the transcript, but Mr Von Rockey says that under r 32(d)(4) of the US Federal Rules of Civil Procedure a deponent is taken to waive any right to complain of errors in transcripts unless a motion is issued promptly after a defect is detected.  No such motion has been issued by Mr Grawey. 

15                  However it is clear that the “person” for the purposes of ss 63 and 64 is Mr Grawey and not Mr Von Rockey.  So much is clear from the terms of the Notice itself.  In any case, the subject matter of the representations is the work Mr Grawey and other Caterpillar employees did in the course of discovering the alleged invention.  These are matters within the personal knowledge of Mr Grawey, he being a claimed inventor.  But Mr Von Rockey’s knowledge of these matters is not based on something he “saw, heard or otherwise perceived, other than a previous representation made by another person about the fact” (s 62(2)).  Thus, if the relevant representation was Mr Von Rockey’s evidence as to what Mr Grawey said in the US proceedings such a representation would not be within Div 2 of Pt 3.1 at all.  It would not be “first-hand” hearsay.

16                  Another preliminary matter to be noted is that the applicable paragraph of s 63(2) is (b), not (a).  It is clear that the Notice refers to representations in a document namely “the transcripts of the depositions taken to Mr Grawey in the US proceedings”.  The written outline of argument of counsel for Deere on the present hearing sought “a ruling admitting into evidence certain statements previously made by Charles E Grawey ...  These statements are contained in transcripts of depositions taken on oath by Mr Grawey in the United States of America in 1997”.

17                  It was common ground that the only potentially applicable parts of cl 4(1) of the Dictionary were (e) and (f).  Assuming for the purposes of argument that Deere’s solicitors have “found” Mr Grawey in the sense that he is still living or working at the address mentioned, they have not in my opinion taken all reasonable steps to secure his attendance at the trial.  It appears from the evidence that Mr Grawey worked for forty years for Caterpillar, reaching a senior position in the company, and then retired to carry on a consultancy practice for which a very substantial part of his custom comes from Caterpillar.  He is being asked in the letter of 26 July 2000 to come to Australia, presumably at his own expense, for the purpose of being cross-examined by a company hostile to Caterpillar in a case in which that company is attacking the validity of a patent for an invention of which Mr Grawey is an inventor.  It is hardly surprising that Mr Grawey did not respond to this unappealing invitation.  (Also, were he to take legal advice it would be pointed out to him that Australian law does not permit a party to insert a witness  into the opposing party’s case and then cross-examine the witness.)

18                  It is not to the point, as senior counsel for Deere argued, that Mr Grawey could have raised with Deere the question of his expenses.  It was not for Mr Grawey to enter into negotiations.  The onus was on Deere to show they have taken all reasonable steps to secure his attendance.  At the very least one would expect Deere (one of the respondents is the US company itself) to establish personal contact with Mr Grawey. 

19                  The reasonableness of the steps taken by Deere in the present case can be assessed by comparison with a hypothetical example.  Let it be assumed that Deere wished to secure the attendance of some other important American witness, but without any pre-conceptions as to whether or not the witness might be co-operative.  It could be expected that Deere would write to the witness asking if he or she would be prepared to come to Australia to give evidence and offering to meet all expenses and compensate for the interruption of his or her business, including payment of professional fees if appropriate.  If no response were received, especially where the address was three years old, it might also be expected that Deere US would try to make personal contact with the witness, ascertain whether the witness had changed address or whether there were any impediments such as health or previous commitments, and, if so, try to work out mutually satisfactory arrangements.  None of this was done in the present case.

20                  Nor has Deere taken all reasonable steps to compel Mr Grawey’s attendance within the meaning of cl 4(1)(f).  No attempt has been made to take advantage of s 7 of the Foreign Evidence Act 1974 (Cth).  Deere’s argument on the cl 4(1)(f) issue merely asserted that because Mr Grawey was a US resident he was beyond the process of the Federal Court and could not be compelled to give evidence in the present proceeding:  Re Sherlock (1991) 102 ALR 156 at 158-9.  However cl 4(1)(f) necessarily assumes that steps can be taken to compel the person’s attendance; if such steps have been taken but without success then unavailability within the meaning of cl 4(1) is made out.  If the person in question is in a country in respect of which Foreign Evidence Act procedures cannot be used, it would be a strange application of cl 4(1) if a party who had not taken all reasonable steps for the purposes of cl 4(1)(e) could then argue that (f) applied because no compulsive procedures were available at all.

21                  Moreover, and as a separate ground for holding s 63 inapplicable, the relevant representations were not, for the purposes of s 63(2)(b), contained in a document within the meaning of cl 6 of Pt 2 of the Dictionary.  The depositions were not written, made or otherwise produced by Mr Grawey.  They were made by the court reporter:  R v Walker (1993) 61 SASR 260 at 263 per Cox J and 266 per Duggan J; Australian Competition and Consumer Commission v Rural Press Ltd (1999) 169 ALR 201 at pars 15-16.  The depositions were not signed, initialled or otherwise marked by Mr Grawey.

22                  Compliance with cl 6 is mandatory, notwithstanding that cl 6, in contrast to cl 5, says “if” and not “if, and only if”.  Clause 6 is concerned with the connection between a person, the maker of a representation, and a document.  If it were not necessary for the person to have written or made or signed or initialled the document, cl 6 would seem to be pointless.

23                  The US rules referred to by Mr Von Rockey cannot remedy the failure to comply with the requirements of the Act.  In any case, the natural reading of the rules is that they are directed to proceedings in the US federal courts and only operate to deem a waiver by the witness of any right to complain of errors in the transcript in proceedings in those courts. 

Section 64(2) – Expense, delay or practicability

24                  Deere having failed to show Mr Grawey is not available, he is taken to be available:  Dictionary Pt 2, cl 4(2).  To bring itself within s 64(2) Deere has to show that calling Mr Grawey would cause undue expense (undue delay was not relied on) or that it would not be reasonably practicable to call him. 

25                  In assessing whether expense is “undue”, relevant matters would include

(i)         the actual cost of securing the attendance of the witness;

(ii)        a comparison of that cost with the value of what is at stake in the litigation; and

(iii)       an assessment of the importance of the evidence the witness might give.

26                  In the present case, Deere did not provide any details as to (i) or (ii).  However major patent litigation in Australia more often than not involves witnesses from the Northern Hemisphere, especially where, as in the present case, there has been parallel litigation in other jurisdictions.  The commitment of the parties in the present case, as evidenced by the level of representation and the resources devoted to interlocutory contests, suggests that the intellectual property rights being contested in this litigation have very substantial value.  I think that if either side considered an overseas witness might be helpful, cost would not stand in the way.  As to Mr Grawey himself, the fact that his evidence in the US proceedings is relied on in the particulars in the cross-claim suggests that his evidence is by no means formal or peripheral.  His evidence seems important.  The expense of bringing him from the United States would not be disproportionate in the context of the present case.  It would not be “undue expense”.  No other reason was advanced why it would not be “reasonably practicable” to call him. 

Conclusion

27                  I am not satisfied therefore that Deere has not brought itself within either s 63 or 64.  I should add that in my opinion no question of an admission arises.  I agree with senior counsel for Deere that if his client had bought itself within s 63 or 64 it would not have to establish that Mr Grawey’s representations were admissible as admissions.  Admissions are an independent exception to the hearsay rule, contained in Pt 3.4 of the Act.  Deere (correctly in my view) did not submit that Mr Grawey’s evidence was binding on Caterpillar as an admission.  He had ceased to be an employee of Caterpillar at the time his deposition was taken and in any case he seems to have given evidence as an individual because he was compelled to attend by Deere. 

Orders

28                  The procedural basis of the present hearing was not clearly articulated.  No notice of motion was issued.  I treated the hearing as an adjourned summons for directions.  However it is clear enough that no discretion is involved.  Either s 63 or s 64 apply or they do not.  Essentially what the parties sought was an evidentiary ruling which, for understandable practical reasons, they needed prior to trial.  Accordingly I think the appropriate order is a ruling that the evidence sought to be adduced pursuant to the Notice is not admissible under s 63 or s 64 of the Act.  There will be an order that Deere pay Caterpillar’s costs in relation to the Notice and the hearing on 12 December 2000.

Associate:

Dated:              21 December 2000