FEDERAL COURT OF AUSTRALIA

Digital Cinema Network Pty Ltd v Omnilab Media Pty Limited [2013] FCA 1060

THE COURT ORDERS THAT:

1.    Leave to appeal is refused.

2.    The Applicant to pay the costs of the First and Second Respondents.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

introduction

1    The applicant, Digital Cinema Network Pty Ltd (“DCN”) seeks leave to appeal against two interlocutory decisions of the primary judge, namely:

(a)    the decision on 19 September 2013 to refuse to make an order pursuant to s 7(1)(c) of the Foreign Evidence Act 1994 (Cth) (“Foreign Evidence Act”) for the issue of a letter of request to the Royal Courts of Justice in London to take the evidence of Mr Nicholas Zylberstein at the hearing listed to commence on 28 October 2013; and

(b)    the decision on 9 October 2013 to refuse to permit the applicant to file an interlocutory application which sought such an order.

2    The proceeding is brought against the first and second respondents, Omnilab Media Pty Ltd and Omnilab Media Cinema Services Pty Ltd (collectively “the Omnilab Parties”) and the third respondent, Michael Geoffrey Smith. DCN alleges that Mr Smith engaged in conduct that was in breach of his general law and statutory duties as a director of DCN, that the Omnilab Parties were knowingly involved or assisted in those breaches, that the respondents each engaged in misleading and deceptive conduct, and that DCN suffered loss and damage as a result.

3    On 16 May 2011 liability was determined in favour of the applicants (Digital Cinema Network Pty Ltd v Omnilab Media Pty Limited (No 2) [2011] FCA 509) (“the liability judgment”). On 16 December 2011 the appeal against the liability judgment was dismissed (Omnilab Media Pty Ltd v Digital Cinema Network Pty Ltd [2011] FCAFC 166; 86 ACSR 674).

4    The proposed appeal relates to a refusal by the primary judge to make an order to issue a letter of request under the Foreign Evidence Act in relation to Mr Zylberstein, on the basis that the request was made too late in the preparation of the matter for hearing. The damages hearing is fixed for hearing on 28 October 2013 on an estimate of four weeks, and has been fixed for that date since March 2013.

5    DCN seeks leave to appeal be granted, and if leave is granted it seeks a stay of the trial pending the hearing of the appeal. Because the trial is shortly to commence it also seeks a stay if judgment on the application is reserved.

6    I heard this application yesterday afternoon and refused leave to appeal. I now provide my reasons.

Relevant Legal Principles

7    Section 24 (1A) of the Federal Court of Australia Act 1976 (Cth) provides:

An appeal shall not be brought from a judgment referred to in subsection (1) that is an interlocutory judgment unless the Court or a Judge gives leave to appeal.

8    Where, as here, the decision being appealed involves the exercise of a discretion, the Court will not interfere unless an error of the kind referred to in House v The King (1936) 55 CLR 499 (“House v King”) at 504-5 is shown to have been made. It is not enough that the appellate court consider that they would have taken a different course in the exercise of the discretion. It must be established that the primary judge:

(a)    acted upon a wrong principle;

(b)    allowed extraneous or irrelevant matters to guide him or her;

(c)    mistakes the facts; or

(d)    does not take into account some material consideration.

9    Where, as here, the decision appealed from concerns practice and procedure generally, not only must there be an error of principle, but the decision appealed from must result in a substantial injustice to one of the parties: Décor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 (“Décor Corp”) at 399-400 per Sheppard, Burchett and Heerey JJ; Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 (“Adam P Brown”) at 177 per Gibbs, CJ, Aickin, Wilson and Brennan JJ. Where the decision appealed from concerns the exercise of a discretion in the context of practice or procedure, appellate courts are even more reluctant to interfere: Brambles Holdings Ltd v Trade Practices Commission (1979) 28 ALR 191 at 193 per Bowen CJ.

10    A “tight rein” must be kept upon appellate interference with exercises of jurisdiction on matters of practice and procedure: Adam P Brown at 177; Bright v Femcare Ltd and Anor (2002) 195 ALR 574 (“Bright”) at [2] per Lindgren J; see also In re the Will of F. B. Gilbert (dec) (1946) 46 SR (NSW) 318 per Jordan CJ. This is particularly so in the context of the docket system where the decision may have an adverse effect upon the orderly administration of justice. The Court should be slow to attempt to second guess a docket judge charged with responsibility for the efficient management and determination of the cases within his or her docket: Cement Australia Pty Ltd and Ors v Australian Competition and Consumer Commission (2010) 187 FCR 261 at [69] per Keane CJ, Gilmour and Logan JJ.

11    An appellate court will usually only be justified in granting leave to appeal from an interlocutory decision concerning the exercise of discretion in the context of practice and procedure if:

(a)    there is sufficient doubt as to whether the primary judge’s decision was infected by one or more of the vitiating factors described in House v King; and

(b)    substantial injustice would result if, the decision being supposed to be wrong, leave to appeal were refused: Décor Corp at 399-400; Bright at [5].

the PROCEDURAL HISTORY

12    DCN’s dispute with the respondents arises in the context of the conversion of cinema equipment from analogue to digital. The conversion is expensive for cinema owners but results in great savings to film studios. In order to persuade cinema owners to purchase and install digital cinema equipment some major Hollywood film studios provide incentive payments named Virtual Print Fees (“VPF’s”) to cinema owners. The agreements to provide such payments (“VPF agreements”) are apparently entered into on a large scale rather than on an individual basis, through a central administrator known as a “digital integrator”. During the relevant period, DCN through its then director Mr Smith, was in negotiations with Hollywood studios, (including with The Walt Disney Company (“Disney”)) to become the digital integrator for independent studios in Australia and New Zealand.

13    In the liability judgment the primary judge found, in effect, that Mr Smith had diverted the negotiations about the VPF agreements from DCN to the Omnilab Parties in breach of his obligations to DCN, doing so with the Omnilab Parties’ knowing involvement.

14    Having succeeded on liability, DCN now seeks to prove its entitlement to damages. It argues that its damages include fees that it would have earned as a digital integrator under the VPF agreements and profits from other business opportunities it would have been able to leverage from its role as such. In defending the claim, the respondents argue amongst other things that the Hollywood studios would ultimately not have concluded VPF agreements with DCN. They argue that in order to become the digital integrator for independent cinemas in Australia and New Zealand, DCN needed to conclude VPF agreements with all six major Hollywood studios and it would not have done so. DCN says in response that it would have concluded VPF agreements with at least four Hollywood studios, and possibly six, which it says was sufficient.

15    DCN contends that as a matter of practice, the fact and status of negotiations with one studio was relevant to the negotiations with the other studios. In the damages trial it intends to ask the Court to infer that once three studios had executed VPF agreements with DCN others would likely follow. The attitude of the Hollywood studios to their negotiations with DCN, and whether they would have ultimately entered into VPF agreements with DCN, is therefore important.

16    DCN called three Hollywood executives at the liability trial, Mr Zylberstein from Disney, Mr Levin from 20th Century Fox (“Fox”), and Mr Aseme from Paramount Pictures International Limited (“Paramount”). None of the executives gave evidence voluntarily. On DCN’s application, their evidence was obtained through the issue of letters of request under the Foreign Evidence Act by the Federal Court to the United States District Court in California in respect of Mr Zylberstein and Mr Levin, and the Royal Courts of Justice in London, UK, in respect of Mr Aseme.

17    When the letters of request were issued in relation to the liability trial, the Royal Courts of Justice speedily made the relevant order. This appears from the fact that the Chief Justice of the Federal Court signed a letter of request dated 14 February 2011 in relation to Mr Aseme, and the Queens Bench Division of the High Court of Justice made an order on 18 February 2011 requiring his examination.

18    The quantum hearing was fixed for 15 April 2013. A similar process for obtaining the evidence of the three executives was proposed by the applicants for that hearing. The applicant sought orders issuing letters of request for examination of the three executives. On 28 February 2013, over the respondents’ objections, the primary judge ordered that letters of request be issued to the same foreign courts in relation to the same three executives, seeking that the executives be required to give evidence in the trial then listed to commence on 15 April 2013.

19    On 27 March 2013 the April hearing date was adjourned and the quantum trial was refixed for 28 October 2013.

20    DCN then sought orders for the issue of fresh letters of request under the Foreign Evidence Act for the revised hearing date. The request for these orders was made by way of an email of 2 May 2013 from DCN’s solicitors, Corrs Chambers Westgarth (“Corrs”) to the executive assistant to the primary judge. Ordinarily, the method by which this order was sought would be a matter of no interest, but DCN now argues that such an email is not an interlocutory application under the Federal Court Rules 2011 (“the Rules”). The email stated in part:

As you are aware, pursuant to her Honour’s orders dated 27 March 2013, the trial has now been adjourned until 28 October 2013. Accordingly, we understand that revised letters of request and revised orders will need to be issued to reflect the new hearing date.

Could you kindly confirm whether her Honour is able to make such orders in chambers and whether she requires any further information.

21    On 24 May 2013, again over the respondents’ objections, the primary judge ordered the issue of fresh letters of request to the USA and UK courts for the examination of the three executives. The primary judge held that there was little doubt that the three executives who were the subject of the application would be able to give evidence that was material to the damages hearing. Her Honour noted that the Omnilab Parties appeared to accept this in correspondence by describing the issue of whether the Hollywood studios would have entered into the VPF agreements as a “key issue” of “critical importance”: Digital Cinema Network Pty Ltd v Omnilab Media Pty Limited [2013] FCA 497 at [10].

22    Following the primary judge’s orders of 24 May 2013 a problem developed in relation to the evidence to be taken from Mr Zylberstein.

23    On 7 June 2013, pursuant to the orders of 24 May 2013, the Chief Justice of the Federal Court issued a letter of request to the Clerk of Court of the US District Court in respect of Mr Zylberstein.

24    On 13 June 2013 Corrs contacted DCN’s US attorney and instructed him to take the necessary procedural steps in California.

25    On 5 August 2013 the Federal Court received correspondence from the US District Court requesting “that the Applicant’s counsel file the necessary application and proposed order in that Court…”

26    On 12 and 16 August the primary judge’s executive assistant telephoned Corrs seeking that they provide the additional information requested by the United States District Court or at least address the issues revised in its correspondence. It was not until 19 August that a Corrs partner telephoned and advised her Honour’s assistant that he would follow up DCN’s US attorney. The Court heard nothing further at that time, or later.

27    On 3 September 2013 her Honour’s assistant again telephoned Corrs in relation to the request made by the US District Court in August. They again did not respond.

28    Lindsay Hogan (a junior employee solicitor with Corrs who commenced working on the case in mid-2013 and who conducted it subject to the supervision and control of a partner Matthew Muir) deposed in an affidavit of 14 October 2013 that he was on paternity leave on 12 and 16 August 2013. He deposes that the relevant telephone messages were received by two partners Matthew Muir and Ben Davidson. He deposes to being informed by Mr Davidson that by 16 August 2013 they were aware that the US District Court had on 15 August made orders requiring Mr Zylberstein and Mr Levin to give evidence. Although he says they intended no discourtesy to the primary judge, they did not advise her Honour’s assistant of this.

29    Notwithstanding that Mr Muir and Mr Davidson intended no discourtesy there can be no question that their approach was discourteous. No proper explanation was offered for the delay in responding to the telephone messages in August and in the failure to respond at all to the telephone message on 3 September. Notwithstanding its three attempts the Court was left in the position of not knowing what, if any, steps had been taken to properly respond to the US District Court.

30    On 29 August 2013 DCN’s US attorney informed Mr Hogan that he had ascertained by viewing Mr Zylberstein’s LinkedIn profile that it appeared that Mr Zylberstein was living in London. On 31 August 2013 he confirmed this information. The LinkedIn profile is a publicly available document and it shows that Mr Zylberstein resides in London and that he has done so since September 2011.

31    In the event, it was not difficult to contact Mr Zylberstein. On 2 September 2013 Mr Hogan easily made contact with Mr Zylberstein in London by telephone, asking him to give evidence voluntarily. Mr Zylberstein did not say he would do so and asked for the request to be made in writing.

32    It is significant too that in the voluminous affidavit material filed by the applicants there is nothing to indicate that DCN’s solicitors or its US attorney made any attempt to ascertain Mr Zylberstein’s place of residence before seeking the issue of letters of request in February or in May 2013 when seeking the revised letters for the adjourned hearing date.

33    As I have said, Mr Hogan did not commence working on the case until after the application in May 2013 in relation to Mr Zylberstein had already been made. In cross examination he conceded that the file did not reveal any enquiries had previously been made as to Mr Zylberstein’s place of residence and he was unable to indicate that any enquiries had been made.

34    Mr Muir was the partner with the long-term conduct of the file made an affidavit in the application dated 1 October 2013 and was present in court. He was given notice for cross-examination. In response counsel for DCN withdrew reliance on the affidavit and it was not read in the application. I was left with no explanation as to whether any proper attempt had been made to ascertain whether Mr Zylberstein lived in the USA prior to seeking in February and again in May 2013 that the Court issue letters of request to the US District Court. I infer that because Mr Zylberstein resided in the USA at the time he gave his evidence in the liability trial Corrs assumed that he continued to do so.

35    On 5 September 2013 a Disney lawyer confirmed that Mr Zylberstein did not live in the United States and that it would be futile to serve the order by the US District Court.

36    On 7 September 2013, Mr Hogan was advised by another Disney lawyer by letter that Mr Zylberstein maintained that he had only a weak recollection of the negotiations concerning VPF agreements in 2010 between Disney and DCN, and that he considered that he had no relevant information to offer regarding any loss and damage suffered by DCN. Mr Zylberstein stated through the Disney lawyer that he was not inclined to give evidence.

37    Given that Mr Zylberstein in fact resided in the United Kingdom, if DCN wanted his evidence in the pending trial, it was necessary for it to obtain an order for the issue of a letter of request to the Royal Courts of Justice in London seeking his examination. However, by this time the trial date was fast approaching.

38    On 11 September 2013 Mr Hogan emailed the primary judge’s assistant in the following terms:

We refer to Her Honour’s Orders dated 24 May 2013, which ordered that letters of request be sent to judicial authorities in the United States and United Kingdom in respect of obtaining evidence from Messrs Levin, Zylberstein and Aseme for this proceeding listed for trial on 28 October 2013 (refer attached).

Last week we were informed by our client’s US attorney that Mr Zylberstein now works and resides in the UK. Accordingly, we requested further Orders are issued and a revised letter of request sent to the Royal Courts of Justice in London.

We note that Mr Zylberstein’s professional address is [deliberately left blank].

Please kindly confirm whether Her Honour is able to make such orders in chambers and whether she requires any further information.

There is a controversy as to whether this email is to be seen as an interlocutory application under the Rules or “an informal email request”. I shall call it “the 11 September Application”.

39    On 19 September 2013 the primary judge advised Corrs, through email from her Honour’s assistant, that the orders sought would not be made as it was too late in the preparation for the trial.

40    Out of a concern that the 11 September Application may not have been an interlocutory application as contemplated by the Rules, Mr Hogan then prepared an interlocutory application (in accordance with Form 35) seeking the issue of the letter of request to the Royal Courts of Justice in London in relation to Mr Zylberstein, together with an affidavit in support. He sought to file this application on 2 October 2013 initially at the registry and then by email to her Honour’s chambers (“the 2 October Application”). On 9 October 2013 Corrs were informed by email that the primary judge refused to grant leave to file the interlocutory application.

41    On 10 October 2013 the applicants filed the application for leave to appeal. On 10 October 2013 the primary judge provided reasons for the refusal to issue a new letter of request in relation to Mr Zylberstein.

Consideration

42    In summary the applicant makes the following submissions, which I deal with below:

(a)    Mr Zylberstein’s evidence is critical to DCN’s case;

(b)    the 11 September Application was not an interlocutory application for the purposes of the Rules. The applicant therefore argues that the Court could not refuse to entertain the “formal” interlocutory application made on 2 October;

(c)    even if the 11 September Application was an interlocutory application the primary judge had no power to refuse to accept the “formal” interlocutory application for filing on 2 October;

(d)    DCN was denied natural justice; and

(e)    the primary judge’s discretion miscarried in that the primary judge’s decision was based in factual errors.

The importance of Mr Zylberstein’s evidence

43    It may be accepted that Mr Zylberstein’s evidence may well be material to the case. Had this not been so the primary judge would not have ordered the issue of the letters of request to the US District Court in the first place. However, I am not satisfied that the evidence is as critical or vital as DCN contends. By this I do not decide that Mr Zylberstein’s evidence could not prove valuable to DCN’s claim. I offer these remarks only as part of my assessment as to the extent of any injustice that may be suffered by DCN if leave to appeal is not granted (on the assumption that the decision to be appealed is wrong).

44    There are numerous indicators from which I infer that it is unlikely that Mr Zylberstein will be as valuable in DCN’s case as it argues. First, Mr Zylberstein has not provided a proof of evidence and appears to have not even advised Corrs what he is prepared to say. I infer that he has not cooperated with DCN or its solicitors which I see as a sign that his evidence will not assist. Similarly, through a Disney lawyer, he advised by letter of 6 September that he had only a weak recollection of the events and issues surrounding the negotiations with Mr Smith regarding the VPF agreements and did not consider that he had relevant evidence to give.

45    The gap between the evidence that DCN hopes that Mr Zylberstein will give and that which appears more likely is shown in the outlines of evidence filed in the proceeding. In the outline of his evidence filed by DCN dated 1 February 2013, DCN said that it expected that Mr Zylberstein would give the following evidence in the quantum trial:

Disney would have entered into a VPF agreement with DCN in or around September 2010 on terms substantially the same as those contained in the draft VPF agreements then being exchanged.

46    The cross examination of Mr Hogan revealed that this outline was not based on any proof of evidence or even advice provided by Mr Zylberstein. I infer that it is more a statement of what DCN hopes his evidence will be.

47    This is apparent too from an earlier outline of evidence served in December 2010 for the liability hearing. In this outline DCN said that it expected Mr Zylberstein would give the following evidence:

But for the events set out above, it is likely that the VPF agreements that DCN had been negotiating with Disney would have already been executed and operative.

48    In giving his evidence Mr Zylberstein amended this statement to the following and this evidence was unchallenged:

…Zylberstein made clear that the threshold issue for Disney in considering the party with which to enter into a VPF agreement is the number of screens/theatres that the party represents and that at a minimum DCN must demonstrate that it can deliver a minimum number of 400-500 screens for digital cinema conversion. DCN has offered no evidence that it represents this minimum number of screens.

But for the events set out above, and had DCN and Disney been able to resolve the outstanding material issues still being negotiated, and had DCN been able to give Disney comfort that a VPF deal with DCN would lead to digital cinema conversion of at least 400-500 screens, it is possible that DCN’s negotiations with Disney would have resulted in a VPF agreement between them.

This fell well short of the outline of evidence that DCN put forward.

49    Indeed, having heard evidence from the three Hollywood executives in the liability trial, Gordon J refused to grant an injunction to restrain the respondents from negotiating with the studios, stating:

…the evidence disclosed that [the applicant] was unable to perform the functions of a digital integrator to the satisfaction of the Studios – it could not provide the minimum number of screens and did not have the financial resources to prove the guarantees sought by the Studios…

Counsel for DCN argues that I should see this as a finding relevant to DCN’s capacity at the time of final submissions, rather than at the time of the negotiations. It is unnecessary for me to reach a final view on this question. I treat her Honour’s decision as one more indication that Mr Zylberstein’s evidence is not as critical or vital to DCN’s case as it contends. This is significant in my rejection of the application for leave.

Was the 11 September email an Interlocutory Application within the Rules

50    DCN sought and obtained the interlocutory orders of 24 May 2013 by way of an email on 2 May to the primary judge’s chambers. It also sought the interlocutory order in question by email of 11 September 2013 to her Honour’s chambers. Notwithstanding this, it now seeks to characterise its 11 September email as an “informal email request” rather than an interlocutory application for the purposes of the Rules.

51    I reject this contention. While r 17.01 provides that a party seeking an interlocutory order must file an application in accordance with Form 35, the Court may dispense with compliance with the Rules either before or after the occasion for compliance arises: r 1.34. The Court operates under a docket system and it is for the docket judge to determine the level of formality required in interlocutory applications, and in particular, whether an interlocutory application must comply with Form 35.

52    The primary judge had plainly determined that it was unnecessary for interlocutory applications to be made using Form 35, and the parties were aware of this. DCN had enjoyed the simplicity and efficiency of this approach when it obtained the 24 May 2013 orders through a short email rather than by use of an interlocutory application on Form 35 supported by an affidavit. I see no error in her Honour taking that approach.

Whether the primary judge should have accepted the 2 October Application for filing

53    On the basis that the 11 September Application was not an interlocutory application within the Rules, DCN argues that the primary judge could not refuse to entertain its 2 October Application. As I have said, I consider the 11 September Application was an interlocutory application. Its application having been refused, DCN was required to seek leave to appeal if it wanted to take the matter further.

54    DCN argues that it was nevertheless necessary for the Court to accept the 2 October Application for filing, even if then dismissing it because the Court was functus officio. I do not agree. The Court must remain in control of its interlocutory orders and a further application for interlocutory order which has already been refused, or an application to set aside, vary or discharge an interlocutory order, is usually required to be founded on a material change of circumstances since the original application was heard, or the discovery of new material which could not reasonably have been put before the Court on the hearing of the original application: Adam P Brown at 177-8. No material change in circumstances or evidence which has come to light since 19 September 2013 was referred to by DCN.

55    In any event this issue is ultimately unimportant because it is plain from her Honour’s reasons that she would have dismissed the application, and I have dismissed the application for leave to appeal on questions of substance rather than form.

Whether the primary judge made mistaken assumption about the facts and whether the applicant was denied natural justice

56    DCN contends that the exercise of discretion by the primary judge miscarried because her Honour took a mistaken view of the facts.

57    In a similar vein, DCN contends that it was denied natural justice because, in reliance upon a mistaken view of the facts, her Honour dismissed the application without giving DCN the opportunity to put on evidence and make submissions which would have shown the error: Lennox v Amcor Ltd t/as Amcor Cartonboard (No 2) [2009] FCA 962; Autodesk Inc and Anor v Dyason (No 2) (1993) 176 CLR 300 at 309 per Brennan J; Venus Adult Shops Pty Ltd and Ors v Fraserside Holdings Ltd and Anor (No 2) (2007) 239 ALR 724 at [6] per French and Kiefel JJ.

58    DCN’s contention that it was denied natural justice is based on the following arguments:

(a)    The primary judge did not:

i.    inform DCN that its alleged failure to prosecute its application in the United States; and

ii.    an alleged delay in making the application to the Federal Court;

may be relevant to her Honour’s decision on the application;

(b)    The primary judge did not provide an opportunity to the applicant to put on any evidence on those matters and consider that evidence; and

(c)    The primary judge did not provide an opportunity to make submissions in relation to those matters and consider those submissions.

59    It may be accepted that one of the possible deficiencies in an informal approach to bringing interlocutory applications is that it may give rise to a practice that the parties do not put the same quality of material forward in support of the application as they might have done had it been made more formally. This is though a matter for the parties. Even when an application is not made on Form 35 it remains incumbent on the party seeking the order to put forward the material on which it relies. While it would clearly have been preferable for DCN to have understood her Honour’s case management concerns and to have addressed them by evidence and submissions, I do not accept that her Honour was required to give notice to DCN of these concerns before determining the interlocutory application on the material it submitted.

60    It must be remembered that the question being dealt with was not one of high principle, but rather one of case management. The Court does not lightly seek the assistance of a foreign court and where it appeared there was delay and there had already been ample opportunity the primary judge was able to determine the application on the material put forward.

61    Further, in my view DCN overstates the facts which her Honour misapprehended.

62    In the reasons the primary judge observed at [8] that “[t]he questions raised by the United States District Court remain unanswered”, and at [17] that “the Applicant took none of the steps which were required of it to give effect to the order.” In response, DCN correctly notes that its US attorney had in fact responded to the US District Court and had by 15 August obtained an order in relation to Mr Zylberstein’s evidence.

63    It seems likely from these remarks that the primary judge considered that DCN had not pursued the application to the US District Court with appropriate vigour, and DCN puts this as central to her Honour’s purported error. First, it is difficult to ascribe the importance to this submission for which DCN contends. Any erroneous view her Honour reached was because Corrs had not responded to three telephone calls from her chambers. To the extent that her Honour suffered a misapprehension it was understandable if her Honour thought Corrs’ failure to respond was indicative of inaction. The Court is not required to repeatedly follow up requests to the parties.

64    Secondly, there was real delay. A four-week trial was fixed for hearing on 28 October 2013, and had been so fixed since March. At DCN’s request orders had been made in February and May 2013 that required letters to be issued to the US District Court seeking the examination of Mr Zylberstein. Then, just over a month before trial, the applicant’s solicitors advised the Court that Mr Zylberstein did not live in the USA. In fact he had not lived there for two years and the earlier applications had been a waste of the Court’s time (and as it turns out the time of the US District Court).

65    It would not have been difficult to ascertain that Mr Zylberstein was living in London. It could easily have been ascertained from social media such as LinkedIn (as it was) or it could have been discovered by the more traditional means of a telephone call to his place of work, Disney. When he was eventually telephoned Mr Zylberstein took the call.

66    However, and more importantly, I do not accept that any misapprehension about the inaction of Corrs or the US attorneys was the central basis of her Honour’s decision to reject the application. Her Honour decided that, given the pending trial, it was too late by 11 September for a fresh letter of request to be sent to the Royal Courts of Justice in relation to Mr Zylberstein. This is apparent from the following parts of her Honour’s reasons:

(a)    At [1] her Honour explained: “In short, the Applicant’s solicitors sought, far too late, to have a revised letter of request issued to the Royal Courts of Justice in London in relation to the taking of evidence from a Mr Nicholas Zylberstein for the purposes of a hearing which is listed to commence in this Court on 28 October 2013 on an estimate of 20 days.”

(b)    At [15] her Honour said: “The matter has been listed for trial in October since no later than March 2013…. The logistical arrangements necessary not only from within the Court, but also within the Royal Courts of Justice in relation to taking evidence from an additional witness (here, Mr Zylberstein) are not straightforward. The application proceeded on an assumption not made out: that the necessary logistical arrangements could be made in the time available. Whether that is so is by no means clear.”

(c)    At [17] her Honour said: “The application now made is made to late. The Applicant has had ample opportunity to prepare for the Damages Hearing…. It is not appropriate for this Court now to make a further request of the Royal Courts of Justice in London for the taking of additional evidence which the Applicant has already had ample opportunity to obtain.”

67    DCN strongly argued that the proposition that it was “too late” was a mistaken assumption by her Honour. Mr Hogan deposed that he had been informed by Mr Muir that on the previous occasion (in relation to Mr Aseme’s evidence in the liability trial) it only took five days from when the letter of request from the Federal Court was received by the UK court for it to make the appropriate order. In opening Counsel argued strongly that this showed the primary judge’s error, and that Mr Hogan’s evidence showed that it was nowhere near too late on 11 September for a fresh letter of request to be ordered.

68    Contrary to this argument, it became clear in cross examination of Mr Hogan that his affidavit only provided part of the story as it had recently taken much longer to obtain an order from the UK courts. I do not know why it took much longer on this later occasion. Mr Muir may have provided some insight but DCN made the forensic choice not to call him.

69    The documents adduced into evidence from Corrs’ file reveal that in relation to Mr Aseme’s evidence for the quantum trial, following the orders of 24 May 2013, the Chief Justice of this Court issued a letter of request to the Royal Courts of Justice in the United Kingdom on 6 June. On 3 July 2013 DCN’s UK solicitors informed Corrs that the letter of request had been reviewed by the Senior Master of the English High Court and that the Senior Master requested a draft order. On 11 July 2013 the UK solicitors provided Corrs with a draft order for their consideration. On 17 July 2013 Corrs advised the UK solicitors that the wording of the draft order was acceptable. On 18 July 2013 the draft order was submitted to the Senior Master of the English High Court by the UK solicitors. On 30 July 2013 the Senior Master of the English High Court made an order requiring Mr Aseme to give evidence. From start to finish the process had taken about 54 days.

70    I can see no clear error in the primary judge’s conclusion that by 11 September it was too late for another letter to be sent to the Royal Courts of Justice. Her Honour considered that it was not established that the necessary logistical arrangements could be made in the time available, and the evidence does not show that view to be erroneous. Her Honour considered that DCN had ample opportunity to obtain Mr Zylberstein’s evidence and had not taken it. There was a basis for this view as Mr Zylberstein’s country of residence was readily ascertainable on social media or by a telephone call.

Conclusion

71    The primary judge’s decision involved the exercise of a discretion in a matter of case management. A tight rein must be kept on appellate interference with such decisions. I refuse the application for leave to appeal and order DCN to pay the costs of the Omnilab Parties.

Associate:

Dated:    18 October 2013