FEDERAL COURT OF AUSTRALIA

Nichia Corporation v Arrow Electronics Australia Pty Ltd (No 3) [2016] FCA 466

ORDERS

THE COURT:

1.    Directs that the evidence of Stefan Richter in this proceeding be given by video link.

2.    Refuses the respondent’s application that the evidence of Christoph Schroeder in this proceeding be given by video link and, to that extent, dismisses the respondent’s interlocutory application dated 28 April 2016.

3.    Makes the rulings on evidence set out at [52] of the reasons for judgment published today as Nichia Corporation v Arrow Electronics Australia Pty Ltd (No 3) [2016] FCA 466 in respect of the evidence intended to be adduced at the trial of this proceeding to commence on 9 May 2016.

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

REASONS FOR JUDGMENT

YATES J:

1    The applicant, Nichia Corporation, sues the respondent, Arrow Electronics Australia Pty Ltd, for infringement of claim 3 of Patent No. 720234 (the patent). The respondent has cross-claimed, seeking revocation of claims 1 and 3 of the patent on various grounds, including that the claims are not novel. I have previously found that the priority date of the claims is, relevantly, 29 July 1996: Nichia Corporation v Arrow Electronics Australia Pty Ltd [2015] FCA 699.

2    Based on this priority date, the respondent alleges that claims 1 and 3 are not novel in light of the following prior art information, considered separately:

    An enclosure (elsewhere referred to as a data sheet) in a letter from Hans-Dieter Wustlich to Marcus Menden dated 22 September 1995 and posted in Germany (Document 1).

    A two page flyer entitled “White News (COB Technologie) 02/1995” distributed by Wustlich Mikro-Elektronik GmbH (Wustlich) and Wustlich Opto-Elektronik GmbH in Germany in around 1995 (Document 2).

3    The trial of the proceeding will commence on 9 May 2016. Originally, the trial was listed to commence on 7 March 2016. On 4 December 2015, this listing was vacated on the application of both parties and the new trial date was appointed. The trial is estimated to take seven days.

4    There are two matters to be considered and determined at the present time. The first concerns the admissibility of certain evidence which the respondent and the applicant respectively propose to adduce. The second concerns whether leave should be granted to the respondent to adduce certain oral evidence by video link.

Admissibility

Introduction

5    The respondent’s case with respect to Document 1 is that it was sent on 22 September 1995 as an enclosure in a letter dated 22 September 1995 (the Menden letter), from Mr Wustlich to Mr Menden (Representation 1A). The letter and Document 1 were received on 25 September 1995, and signed by Mr Menden (Representation 1B). The letter and Document 1 were collected by Mr Wustlich on 28 September 1995 (Representation 1C). Mr Wustlich was the author of the letter.

6    The respondent’s case with respect to Document 2 is that it was sent on 28 September 1995 as an enclosure in a letter dated 28 September 1995 (the Schroeder letter) from Wustlich to Christoph Schroeder at Brose GmbH (the proper name of the company is apparently Carl Brose GmbH) (Representation 2A). The letter and Document 2 were received on 2 October 1995 and signed by Mr Schroeder (Representation 2B). Mr Wustlich was the author of the letter.

7    The respondent proposes to prove the asserted facts in Representations 1A to 1C, by an affidavit made by Stefan Richter on 21 December 2015. Dr Richter is an attorney at law who was admitted to practice in Germany. He is an Associate in the firm called Hoyng Rokh Monegier. Dr Richter’s firm acts for Everlight Electronics Co Ltd (Everlight) in patent proceedings in Germany (including in the Federal Patent Court (the FPC)) involving the applicant. The respondent is Everlight’s distributor in Australia of certain light emitting diodes which are the subject of this proceeding. The respondent also proposes to rely on a statement made by Mr Wustlich, purportedly given by him under oath before a notary in Germany (the Wustlich declaration). There are two such statements referred to in paragraphs 34 to 36 of Dr Richter’s affidavit. However, as I understand it, the respondent only relies on the statement identified as Annexure SR17 (statement SR17).

8    The respondent proposes to prove the asserted facts in Representations 2A and 2B by Dr Richter’s affidavit and by an affidavit made by Mr Schroeder on 11 December 2015.

9    For the purposes of dealing with the applicant’s objections, the parties accept that Mr Wustlich (who is dead) and Mr Menden (who refuses to give evidence) is each a person who has made a previous representation and who is “not available to give evidence about an asserted fact”, for the purposes of s 63 of the Evidence Act 1995 (Cth) (the Evidence Act).

10    The respondent tendered the following evidence on the voir dire, which is identified in MFI 1 as:

    Copy of letter from Mr Wustlich to Mr Schroeder (German) relied on by Arrow (Exhibits 1.11 and 1.12 in FPC Proceeding).

    Copy of letter from Mr Wustlich to Mr Schroeder (English) relied on by Arrow.

    Richter affidavit, excluding annexures.

    Schroeder affidavit (English).

    Schroeder testimony in German proceedings (English).

    Copy of letter from Mr Wustlich to Mr Menden (German) relied on by Arrow (4 pages) (Exhibit 1.5 in FPC Proceeding).

    Copy of letter from Mr Wustlich to Mr Menden (English) relied on by Arrow (4 pages).

    Copy of letter from Mr Wustlich to Mr Menden (German), relied upon by Arrow, as annexed to Wustlich Declaration 2 (5 pages).

    Copy of letter from Mr Wustlich to Mr Menden (English), relied upon by Arrow, as annexed to Wustlich Declaration 2 (5 pages).

    Menden testimony in German proceedings (English).

    Wustlich testimony in German proceedings (English).

    Wustlich Declaration 1 in German proceedings (English), including annexures.

    Wustlich Declaration 2 in German proceedings (English), including annexures.

11    The applicant tendered the following evidence on the voir dire, which is identified in MFI 1 as:

    Kramer affidavit, excluding annexures.

    English translation of notice of opposition filed with European Patent Office on 22 May 2001.

    English translation of letter from Becker and Muller, Patent Attorneys to the European Patent Office dated 29 January 2003.

Objections to the Richter affidavit: hearsay

12    The applicant objects to paragraphs 23 to 26 of Dr Richter’s affidavit and the tender of the documents referred to therein as the February minutes and the May minutes. The applicant submits that these paragraphs and the minutes offend the hearsay rule in s 59(1) of the Evidence Act.

13    The minutes are summaries of evidence given by Mr Wustlich and Mr Schroeder on 13 February 2014 (the February minutes) and by Mr Menden on 8 May 2014 (the May minutes) before the FPC. Dr Richter’s evidence (to which no objection is taken) is that witnesses giving oral evidence before the FPC are subject to an obligation to provide truthful testimony. Giving false, unsworn testimony is a criminal offence under the German Criminal Code, as is perjury (giving false sworn evidence). Dr Richter says that unsworn testimony is usually given in proceedings before the FPC unless a party makes a request for evidence to be given on oath or the FPC decides, on its own motion, to require evidence to be given on oath. In the FPC proceeding to which the minutes relate, neither party made such a request. Further, the FPC did not require the evidence to be given on oath. Accordingly, the witnesses gave their evidence in unsworn form.

14    In his affidavit, Dr Richter explains that there is no transcript of hearings before the FPC that is available to the parties. The presiding judge dictates “minutes” throughout the hearing. The minutes are supposed to give a short summary of the key procedural events at the hearing. The minutes include the testimony given by witnesses. This testimony is not dictated verbatim. Rather, the presiding judge summarises the evidence given by the witness who is then asked to confirm whether the summary produced in the minutes by the presiding judge accurately reflects the content of that witness’s statement.

15    Dr Richter says that he was present at the hearings on 13 February and 8 May 2014 and heard the evidence given by Mr Wustlich, Mr Schroeder and Mr Menden. He says that each witness was informed by the presiding judge that it was a punishable offence to give a false sworn or unsworn statement to the FPC.

16    The substance of the evidence to be given by Dr Richter in paragraphs 23 to 26 of his affidavit is that he received a copy of the February minutes and the May minutes, which are annexed (paragraph 23); the February minutes contain a summary of the oral evidence given by Mr Wustlich and Mr Schroeder (paragraph 24); and the May minutes contain a summary of the oral evidence given by Mr Menden (paragraph 25).

17    In paragraph 26, Dr Richter says:

While I no longer recall every aspect of the hearings on 13 February 2014 and 8 May 2014, the summaries referred to in paragraphs 24 and 25 are true and accurate, and, to the best of my recollection accord to the witnesses’ evidence as given during those hearings.

18    In my view, paragraphs 23 to 26 of Dr Richter’s affidavit are not admissible as evidence. They seek to adduce the February minutes and the May minutes for a hearsay purpose, namely to establish facts asserted by the witnesses before the FPC including Representations 1A to 1C and Representations 2A and 2B, assuming the asserted facts set out in the minutes are capable of constituting those representations. As a matter of analysis, the minutes constitute previous representations about earlier, previous representations (the facts asserted by the witnesses). They are second-hand hearsay. They cannot be tendered as an exception to the hearsay rule under Div 2 of Pt 3.2 of the Evidence Act. Further, each minute of each witness’s testimony is not a document that “contains the representation” for the purposes of s 63(2)(b) of the Evidence Act because the minute has not been written, made or otherwise produced by the witness or signed, initialled or marked by the witness: in this latter connection, see cl 6 of the Dictionary in the Evidence Act. Thus, the respondent cannot rely on s 63(2)(b) of the Evidence Act in any event.

19    In this latter connection, the respondent raises two related submissions. First, the respondent submits that the minutes fall within s 157 of the Evidence Act, which provides, amongst other things, that evidence of a public document that is a judgment, act or other process of a foreign court may be adduced by producing a document that purports to be a copy of the public document that is sealed by the foreign court. Here, the respondent says, the minutes are sealed by the FPC. Secondly, the respondent submits that cl 6 of the Dictionary in the Evidence Act does not impose a mandatory requirement and that the contrary conclusion reached by Heerey J in Caterpillar Inc v John Deere Ltd (No 2) (2000) 181 ALR 108; [2000] FCA 1903 at [22] is obiter and should not be followed. Whatever the status of Heerey J’s conclusion might be, I respectfully agree with it. In my view, cl 6 of the Dictionary can only be read sensibly as imposing a mandatory requirement. That requirement has not been fulfilled here. Further, s 157 does not assist the respondent. Assuming that the minutes fall within s 157 as a sealed copy of the public record of “the process” of a foreign court, the provision is concerned with the facilitation of the proof of facts that are otherwise relevant and admissible: Cvetkovic v The Queen [2010] NSWCCA 329 at [304]-[315]. The minutes are not admissible as evidence for the reasons I have given at [18] above.

20    The respondent seeks to support paragraph 26 of Dr Richter’s affidavit as evidence of a representation (that is, the testimony of each witness before the FPC) given by a person (Dr Richter) who saw, heard or otherwise perceived the representation being made: s 63(2)(a) of the Evidence Act.

21    In my view, this is not the proper characterisation of Dr Richter’s statement in paragraph 26 of the affidavit. In the form in which it is expressed, paragraph 26 cannot be divorced from the minutes to which it refers. It is not a statement of what Dr Richter saw, heard or otherwise perceived in respect of Representations 1A to 1C and Representations 2A and 2B. It is really no more than an attempted verification, in very general terms, of the representations that somebody else (the presiding judge) has made about what he (the presiding judge) saw, heard or otherwise perceived in the course of the witnesses giving their unsworn testimony. The vice of evidence given in the form of paragraph 26 of Dr Richter’s affidavit is its unreliability. It suggests an apparent recollection by Dr Richter of the making of a previous representation that may well have been prompted by or, indeed, is substantially based on, the inadmissible hearsay of another.

22    For these reasons, paragraphs 23 to 26 of Dr Richter’s affidavit, and the tender of the February minutes and the May minutes, should be rejected as evidence in this proceeding.

23    The applicant also seeks to argue that this material should be rejected under s 135(a) and (c) of the Evidence Act. In light of my ruling, it is not necessary to consider the discretionary rejection of this material as evidence.

24    The applicant also submits that paragraphs 27 to 36 of Dr Richter’s affidavit should be rejected under s 135(a) and (c) of the Evidence Act. I will deal with the admissibility of those paragraphs in the following paragraphs of these reasons.

Document 1 and the Menden letter

25    With respect to the proof of Representations 1A and 1B, the respondent seeks to tender Document 1 and the Menden letter. The respondent says that Document 1 and the Menden letter are admissible under s 63(2)(b) of the Evidence Act on the basis that the documents constitute representations that were signed by Mr Wustlich or, alternatively, are admissible under s 69 of the Evidence Act on the basis that they constitute a business record.

26    The applicant’s objection is based on s 135(a) and (c) of the Evidence Act. The applicant submits that it will be denied the opportunity to cross-examine Mr Wustlich (as the apparent author of the Menden letter) and Mr Menden (as the apparent recipient of the letter). The applicant says that this inability is particularly important because the documents have the potential to invalidate claims 1 and 3 of the patent. Indeed, the applicant accepts that Document 1, if published as alleged, on the date alleged, will anticipate claims 1 and 3 of the patent if it is also established that Mr Menden was free in law and equity to disclose or use this information. A similar concession is made concerning the alleged disclosure of Document 2.

27    The applicant also advances submissions concerning aspects of the authenticity of Document 1 and the Menden letter, which it says will be the subject of challenge in its own evidence. This evidence was briefly summarised in the course of the applicant’s oral submissions as well as in its written submissions. In this connection, the applicant submits that the respondent has not discharged its burden of proving that Document 1 and the Menden letter are what they purport to be and, particularly, that the dates, signatures and stamps on them are what they purport to be.

28    In my view, the applicant’s challenge to authenticity is not one that should be determined now. It should be considered and determined on all the evidence to be adduced.

29    I accept, however, that the inability to cross-examine Mr Wustlich and Mr Menden is a significant procedural impediment that can be taken into account in considering the discretionary exclusion of evidence, although this impediment is one that attends the admission of hearsay evidence generally.

30    In light of the evidence that the applicant proposes to call in respect of Document 1 and the Menden letter, I am not persuaded that the probative value of these documents is substantially outweighed by the danger that the evidence might be unfairly prejudicial to the applicant or might cause or result in undue waste of time.

31    I would not, therefore, reject Document 1 and the Menden letter on discretionary grounds, although the weight to be attached to them as probative of Representations 1A and 1B is, of course, another matter, which will fall to be assessed in light of all the evidence. Therefore, I would admit Document 1 and the Menden letter provided that an evidentiary basis is established at trial for finding that the documents are what they purport to be: National Australia Bank Ltd v Rusu (1999) 47 NSWLR 309; [1999] NSWSC 539 at [17] and [27]; Australian Securities and Investments Commission v Rich (2005) 216 ALR 320; [2005] NSWSC 417 at [116]-[121]; see also Australian Competition and Consumer Commission v Air New Zealand Ltd (No 1) (2012) 207 FCR 448; [2012] FCA 1355 at [89]-[107].

32    Further, on the same basis, I would admit paragraphs 30 and 33 of Dr Richter’s affidavit (dealing with Document 1 and the Menden letter) provisionally under s 57(1) of the Evidence Act, other than the last sentence of paragraph 33 which I would reject.

The Wustlich declaration: statement SR17

33    With respect to the proof of Representations 1A and 1C, the respondent seeks to tender the Wustlich declaration. The respondent says that the declaration is admissible under s 63(2)(b) of the Evidence Act as a document signed by Mr Wustlich. The applicant’s objection is based on s 135(a) and (c) of the Evidence Act. The applicant submits that the provenance of the declaration is uncertain. It also submits that the declaration is inaccurate and an incomplete record of Mr Wustlich’s evidence (presumably, Mr Wustlich’s evidence before the FPC). The applicant also points to the evidence it proposes to call to challenge the authenticity of statements made in the declaration.

34    As with Document 1 and the Menden letter, these aspects of the Wustlich declaration are matters that should be considered in light of all the evidence to be adduced.

35    The applicant, once again, points to an inability to cross-examine Mr Wustlich. For the reasons I have given with respect to the applicant’s objection to Document 1 and the Menden letter, I would not reject the Wustlich declaration on discretionary grounds, although an evidentiary basis will need to be established at trial to show that the document is what it purports to be. Assuming that to be done, I am not persuaded that the probative value of the Wustlich declaration is substantially outweighed by the danger that the evidence it gives might be unfairly prejudicial to the applicant or might cause or result in undue waste of time, at least in terms of its relevance to Representations 1A and 1C. However, the declaration contains other material, the relevance of which is not apparent to me. I would defer ruling finally on the Wustlich declaration pending the identification by the respondent of those parts of the declaration it proposes to tender. As presently advised, I am not persuaded that all statements made in the declaration are probative of the issues that arise for determination in this proceeding. For the avoidance of doubt, I do not understand the respondent to suggest that it will tender the other declaration (SR16) referred to in paragraph 35 of Dr Richter’s affidavit.

36    Subject to my final ruling on the Wustlich declaration, I would be prepared to admit paragraphs 34 to 36 of Dr Richter’s affidavit (dealing with that declaration) provisionally, under s 57(1) of the Evidence Act, other than in respect of the document referred to as SR16.

Document 2 and the Schroeder letter

37    With respect to the proof of Representations 2A and 2B, the respondent seeks to tender Document 2 and the Schroeder letter. The respondent says that Document 2 and the Schroeder letter are admissible under s 63(2)(b) of the Evidence Act on the basis that the documents constitute representations that were signed by Mr Wustlich or, alternatively, are admissible under s 69 of the Evidence Act on the basis that they constitute a business record.

38    The applicant’s objection is based on s 135(a) and (c) of the Evidence Act. Its submissions are to the same effect as those made with respect to Document 1 and the Menden letter. The applicant submits that the respondent cannot discharge its burden of proving that Document 2 and the Schroeder letter are what they purport to be and, particularly, that the dates, signatures and stamps on them are what they purport to be. As with Document 1 and the Menden letter, the challenge to the authenticity of Document 2 and the Schroeder letter is not one that should be determined now. Rather, it should be determined on all the evidence to be adduced.

39    I accept that the applicant’s inability to cross-examine Mr Wustlich is a significant procedural impediment. However, in light of the evidence that the applicant proposes to call in respect of Document 2 and the Schroeder letter, I am not persuaded that the probative value of these documents is substantially outweighed by the danger that the evidence might be unfairly prejudicial to the applicant or might cause or result in undue waste of time. The applicant also argues that it will be unfairly prejudiced “by Mr Schroeder’s insistence on giving evidence by video link”. Whether leave should be given to the respondent to adduce Mr Schroeder’s evidence by video link is matter that is considered in later paragraphs of these reasons. Suffice it to say for present purposes, Mr Schroeder cannot insist on giving evidence by video link.

40    I would not, therefore, reject Document 2 and the Schroeder letter on discretionary grounds. I would admit Document 2 and the Schroeder letter provided that an evidentiary basis is established at trial for finding that the documents are what they purport to be.

41     Further, on the same basis, I would admit paragraph 31 of Dr Richter’s affidavit (dealing with Document 2 and the Schroeder letter) provisionally under s 57(1) of the Evidence Act.

The Schroeder affidavit

42    With respect to the proof of Representation 2B, the respondent seeks to rely on Mr Schroeder’s affidavit. Paragraphs 3 to 7 of that affidavit suffer the same defect as paragraphs 23 to 26 of Dr Richter’s affidavit. In those paragraphs, Mr Schroeder purports to verify that his testimony, represented by the February minutes, is evidence that he gave to the FPC and is true and correct.

43    In my view, evidence in that form is not admissible, for the reasons I have expressed at [21] above. Although differing from the statement in paragraph 26 of Dr Richter’s affidavit (in that Mr Schroeder purports to verify a previous representation made by the presiding judge about previous representations made by Mr Schroeder himself), the vice remains that paragraphs 3 to 7 are based on someone else’s inadmissible hearsay.

44    I would reject this intended evidence on discretionary grounds in any event. If Mr Schroeder is to give evidence of the making of Representation 2B, his evidence should be given originally in this Court and not indirectly through a summary of testimony prepared according to the usages, procedures and rules of the foreign court in which the previous representation is said to have been made. Evidence on a critical and controversial issue of fact, given in the form of paragraphs 3 to 7 of Mr Schroeder’s affidavit, is of limited probative value, particularly when regard is had to the actual statements attributed to Mr Schroeder in the February minutes. I am satisfied that the probative value of that evidence would be substantially outweighed by the unfair prejudice that would be caused to the applicant in having to cross-examine Mr Schroeder on that evidence in that form.

45    I would, however, admit paragraph 32 of Dr Richter’s affidavit (dealing with the receipt of the Schroeder letter) provisionally under s 57(1) of the Evidence Act.

Remaining paragraphs of Dr Richter’s affidavit

46    The applicant submits that paragraphs 27, 28 and 29 of Dr Richter’s affidavit should be rejected under s 135(a) and (c). I do not understand the relevance of those paragraphs to any issue in this proceeding. I expressed that view in the course of the respondent’s oral submissions. I will defer ruling on the applicant’s objection until the respondent establishes a sufficient basis for the admission of those paragraphs, conditionally or otherwise.

Dr Kramer’s affidavit

47    The respondent objects to paragraph 20 of the affidavit of Michael Kramer made on 29 February 2016. He was, for a time, the co-managing director with Mr Wustlich of Wustlich and Wustlich Opto-Elektronik GmbH, at that time called Vossloh-Wustlich Opto GmbH & Co KG following an acquisition by Vossloh AG.

48    In paragraph 20 of his affidavit, Dr Kramer gives evidence of a conversation he had with Mr Wustlich in August 2002 in which, according to Dr Kramer, Mr Wustlich admitted to “making up” Document 1 and Document 2 to protect the company’s business interests.

49    The respondent’s objection to paragraph 20 of Dr Kramer’s affidavit is, with respect, difficult to understand. The respondent argues that if, in this paragraph, the asserted fact is that Document 1 and Document 2 are forgeries, then it cannot be supposed reasonably that this fact was intended to be asserted by Mr Wustlich in his conversation with Dr Kramer. The respondent’s argument appears to be that, for this reason, the applicant cannot rely on the exception in respect of hearsay provided by s 63(2)(a) of the Evidence Act. The respondent submits that if paragraph 20 is not excluded, it should be admitted provisionally, subject to a limitation under s 136 of the Evidence Act that it not be used for a hearsay purpose.

50    I understand the asserted fact to be precisely the statement attributed to Mr Wustlich, namely that he “made up” Document 1 and Document 2. I do not understand why the conversation set out in paragraph 20 cannot stand as evidence on the basis that it constitutes an exception to the hearsay rule under s 63(2)(a), given that Mr Wustlich is “not available to give evidence about [the] asserted fact”. The applicant also seeks to justify the reception of paragraph 20 on the basis of s 60(1) of the Evidence Act. In this connection, the applicant submits that paragraph 20 is admissible as evidence on the alternative basis that it is relevant for a purpose other than proof of an asserted fact, namely “as part of a challenge to the credibility of Messrs Wustlich, Menden and Schroeder”. I have significant reservations that this argument is sound, but it is not necessary for me to dwell on it.

51    For these reasons, I would not reject paragraph 20 of Dr Kramer’s affidavit as evidence. There is no warrant to limit its admissibility as the respondent contends.

Rulings

52    At the trial of this proceeding commencing on 9 May 2016:

    I will reject paragraphs 23 to 26 of Dr Richter’s affidavit, and the tender of the February minutes and the May minutes, as evidence in this proceeding.

    I will admit paragraphs 30 to 33 of Dr Richter’s affidavit provisionally under s 57(1) of the Evidence Act, other than the last sentence of paragraph 33 which I will reject.

    I will defer ruling on the applicant’s objection to paragraphs 27 to 29 of Dr Richter’s affidavit until the respondent establishes a sufficient basis for the admission of those paragraphs, conditionally or otherwise.

    I will admit Document 1 and the Menden letter as evidence in this proceeding, provided that an evidentiary basis is established at trial for finding that the documents are what they purport to be.

    I will admit Document 2 and the Schroeder letter as evidence in this proceeding provided that an evidentiary basis is established at trial for finding that the documents are what they purport to be.

    I would admit the Wustlich declaration as evidence in this proceeding insofar as it is relevant to Representations 1A and 1C. However, as the declaration contains other material, I will defer ruling finally on the admissibility of the declaration pending the identification by the respondent of those parts of the declaration it proposes to tender.

    Subject to the resolution of the matter referred to immediately above, I would be prepared to admit paragraphs 34 to 36 of Dr Richter’s affidavit provisionally, under s 57(1) of the Evidence Act, other than in respect of the document referred to as SR16.

    I will reject paragraphs 3 to 7 of Mr Schroeder’s affidavit as evidence in this proceeding.

    I will admit paragraph 20 of Dr Kramer’s affidavit as evidence in this proceeding.

Evidence by video link

Introduction

53    By an interlocutory application dated 28 April 2016, the respondent seeks orders pursuant to s 47A of the Federal Court of Australia Act 1976 (Cth) (the FCA Act) to the effect that Dr Richter’s evidence and Mr Schroeder’s evidence at the trial be given by video link. The applicant consents to such an order in respect of Dr Richter’s evidence. I am satisfied that it is appropriate that Dr Richter’s evidence be given by this mode. The applicant opposes such an order in respect of Mr Schroeder’s evidence.

The respondent’s evidence and submissions

54    The respondent advances its application in respect of Mr Schroeder in the following way. It says that Mr Schroeder resides in Germany and is independent of either party. His evidence is important, if not critical, on the issue of publication in respect of Document 2. On 13 April 2016, Mr Schroeder advised the respondent’s solicitors that he was unable to come to Australia to give evidence in person during the trial, as appointed. Mr Schroeder’s inability to attend is due to the fact that he will take up an appointment as “chief executive officer” with a company in Germany.

55    It is convenient at this point to make certain observations in respect of these aspects of the respondent’s application. The application is supported by an affidavit made on 29 April 2016 by the respondent’s solicitor, Ms O’Connell. This affidavit annexes certain email correspondence with Mr Schroeder on the question of his availability to give evidence in this proceeding.

56    The first email, from the respondent’s solicitors to Mr Schroeder, is dated 1 March 2016. It refers to Mr Schroeder’s “communications last year” with Dr Richter and thanks Mr Schroeder for his “assistance to date and agreeing to give evidence in this matter”. Ms O’Connell’s affidavit does not indicate when contact was first made with Mr Schroeder to request that he give evidence in this proceeding. The email certainly refers to communications of some kind with Mr Schroeder in 2015, but it is possible that earlier contact was made with him in this regard.

57    As I have noted, Dr Richter acts for Everlight in the patent proceedings in Germany. The content of Mr Schroeder’s evidence, as revealed by the February minutes, was known to Everlight, and I would assume available to the respondent as Everlight’s distributor in Australia, by no later than about 13 February 2014.

58    In this connection, the respondent filed its notice of cross-claim and statement of cross-claim alleging invalidity of claims 1 and 3 of the patent, including on the basis of the publication of Document 2 in Germany, on 29 August 2014. Thus, the significance of proving the publication of Document 2 to Mr Schroeder must have been apparent to the respondent by no later than 29 August 2014.

59    I would add that, throughout the course of directions hearings and case management hearings in this matter, the applicant has made clear that it does not accept that Document 2 is genuine. This, no doubt, would have reinforced, for the respondent, the importance of Mr Schroeder’s evidence on that question. In the context of a case such as the present, I cannot conceive that proof of the publication of Document 2 to Mr Schroeder has been anything other than, for the respondent, a critically important matter that would have been of concern to it.

60    Further, Mr Schroeder made his affidavit on 11 December 2015. As I have noted, on 4 December 2015 the listing of this matter for trial on 7 March 2016 was vacated at the request of the parties. However, on 18 December 2015, my Associate sent an email to the parties’ solicitors advising that, under special arrangements, the matter had been listed for hearing from 9 to 13 and 16 to 17 May 2016.

61    Thus, I do not view the email of 1 March 2016 as the starting point for considering the present application. The respondent has known of the importance of Mr Schroeder’s evidence for a significant period of time. It has also known that Mr Schroeder’s evidence would be disputed and challenged as to its reliability and perhaps for its truthfulness. The strong probability that Mr Schroeder would be cross-examined must have been appreciated by the respondent’s solicitors from an early stage in the proceeding. Further, since 18 December 2015, the respondent has known of the special listing of this matter for trial.

62    The 1 March 2016 email, continues:

As you may be aware, the matter is listed for hearing from 9 May 2016 to 17 May 2016. The applicant, Nichia Corporation, has not yet advised us as to which witnesses they will require for cross-examination. In the meantime, we would be grateful if you could confirm your availability during that period, and let us know before accepting any engagements that would make you unavailable during that period in the event that you are required for cross-examination.

Stefan Richter may have discussed with you the possibility that Nichia’s lawyers will wish to cross-examine you on your affidavit. If they do wish to cross-examine you, we would ask the Court to allow you to be cross-examined by video link from a location in Germany that is convenient to you. We cannot be sure, but anticipate that the cross-examination would only take one or two hours. If Nichia’s lawyers advise that they wish to cross-examine you, we will contact you to discuss further.

(Original emphasis.)

63    These passages indicate the likelihood that Mr Schroeder was previously aware of the trial dates. They also reveal the mistaken perception that an application for Mr Schroeder’s evidence to be given by video link would be treated by the Court as a somewhat routine matter that would be readily accommodated.

64    The evidence shows that Mr Schroeder responded to the email the next day. The response was simply an acknowledgement of the respondent’s solicitors’ email and a request that Mr Schroeder be told “how things will develop”.

65    The next email in evidence is from the respondent’s solicitors to Mr Schroeder on 12 April 2016. It states that the applicant’s solicitors had advised them that Mr Schroeder was required for cross-examination. The email continues:

While we are going to see if it is possible to have cross-examination conducted by video link to Germany, it is possible that the Court may refuse our application and require you to come to Australia. We will know more in the coming weeks.

66    At a later point, the email states:

Could you please let us know if you know of any reasons why you cannot come to Sydney, or if you have any concerns about travelling to Australia so that we may raise them with the judge in our request for your cross-examination to be made by video link.

67    Mr Schroeder responded by email the next day. Apart from other matters, he wrote:

I will have a problem to come to Australia, because it looks like that I will take on a new CEO position 2nd May.

68    Mr Schroeder ended his email by stating that he hoped to get clarification within the next week “I hope”.

69    Ms O’Connell’s affidavit annexes a letter which she says was received on 21 April 2016 from Mr Schroeder’s employer: Relevantly, the letter states:

[T]his is to confirm that on April 14th Mr. Christoph Schrder … has been appointed as general manager of the Komptech Umwelttechnik Deutschland GmbH, a 100% subsidiary of the Komptech GmbH, starting May, 16th.

In order to prepare for his new role Mr. Schröder is required to get to know the headquarter in Frohnleiten, Austria, as well as the subsidiary in Ljutomer, Slovenia, prior to his start on May, 16th. This training will start on May, 2nd and is essential for enabeling Mr. Schröder a good start in his new function.

70    Ms O’Connell states that she has been informed by Mr Schroeder that, as a result of his new employment, he travels from 2 May until 6 May 2016; that on 9 and 10 May 2016 he has designated “home office days” and is available for videoconferencing; and that he again departs for Belgium and the Netherlands on 11 May 2016 and does not return home until after 24 May 2016.

71    Ms O’Connell states that Mr Schroeder has informed her that the requirements of taking on a “new leadership role” in his company based in Europe will make it extremely difficult for him to travel to Australia in the next six to seven months.

72    Based on this evidence, the respondent submits as follows. The respondent says that Mr Schroeder’s evidence is critical to the issue of publication of Document 2 but that this is “a narrow factual enquiry”. Nevertheless, if decided in the respondent’s favour, this issue will be dispositive of the proceeding. The respondent submits that Mr Schroeder has substantive reasons for not coming to Australia in person. The respondent accepts that the applicant would wish to enjoy the forensic advantage of cross-examining Mr Schroeder in person. It says, however, that the applicant has already had the advantage of seeing Mr Schroeder giving evidence in person. (I pause immediately to note that I simply do not see the relevance of this last submission.) The respondent says that the Court would be satisfied as to the technical arrangements for the video link, which are also set out in Ms O’Connell’s affidavit. Finally, the respondent submits that it is in the best interests of the administration of justice, including as between the parties, that its application be granted.

73    The respondent referred to the general statements of principle in Australian Competition and Consumer Commission v Pirovic Enterprises Pty Ltd [2014] FCA 544 at [11] concerning the application of s 47A of the FCA Act and the giving of evidence by video link.

The applicant’s submissions

74    The applicant submits that if leave is granted for Mr Schroeder’s evidence to be given by video link, it will suffer substantial prejudice. The applicant agrees that Mr Schroeder’s evidence is critical, but expresses this agreement as supporting the prejudice it would suffer. It says that it will cross-examine Mr Schroeder on credit. This is because of the questionable authenticity of Document 2 and the Schroeder letter, including the correctness of the dates appearing on those documents. The applicant says, in this connection, that Mr Schroeder’s evidence will be “highly controversial” and that he recollection will be subject to “significant challenge”.

75    The applicant submits that Mr Schroeder’s affidavit is not in admissible form: see now, in that connection, my ruling on Mr Schroeder’s affidavit at [42]-[45] and [52] above. It submits that the absence of an affidavit or signed statement of the evidence he would give is an important consideration against the granting of the application: Stuke v ROST Capital Group Pty Ltd (2012) 207 FCR 86; [2012] FCA 1097 at [24]. The applicant also notes that Mr Schroeder requires a German interpreter and that, taken with the importance of his evidence, stands as another reason why evidence by video link would be “most unsatisfactory”: Mastipour v Secretary, Department of Immigration and Multicultural and Indigenous Affairs (2004) 140 FCR 137; [2004] FCA 1571 at [37]. Further, it will be necessary for a number of documents to be put to Mr Schroeder in cross-examination, which stands as a further reason why evidence by video link would be unsatisfactory: Winnebago Industries, Inc v Knott Investments Pty Ltd (No 3) [2014] FCA 1167 (Winnebago) at [9].

76    The applicant submits that a party is not entitled to assume that a witness can give evidence by video link, especially where the party concerned ought to have appreciated that the evidence in question is contentious: Winnebago at [10]. In this connection, the applicant criticises the email correspondence with Mr Schroeder to which I have referred at [56]-[68] above which, it argues, reveals such an assumption and effectively invited Mr Schroeder to come up with reasons why he could not come to Australia.

77    Further, the applicant points to the evidence of Mr Schroeder’s employment commitments which, it says, shows that Mr Schroeder would be available to give evidence in person in Australia on 9 and 10 May 2016 and that, in the period up to 16 May 2016, Mr Schroeder will simply be preparing for his new role. In any event, the applicant says, the employment commitments of a witness are not entitled to much weight.

78    The applicant referred to the general statements of principle in Campaign Master (UK) Ltd v Forty Two International Pty Ltd (No 3) (2009) 181 FCR 152; [2009] FCA 1306 at [77]-[78] concerning the application of s 47A of the FCA Act and the giving of evidence by video link.

Consideration and conclusion

79    Plainly, Mr Schroeder’s evidence is critical to the issue of the publication of Document 2. This fact must have been appreciated at all times by the respondent since at least 29 August 2014. The respondent must also have appreciated well before 18 December 2015, when the parties were informed of the current trial dates, that Mr Schroeder’s evidence would be highly contentious and that there was a strong probability that he would be cross-examined. Acting reasonably, the respondent should have taken steps at that time to inform Mr Schroeder of the trial dates and to secure, to its satisfaction, Mr Schroeder’s personal attendance at the trial. There is, in fact, a suggestion in the respondent’s solicitors’ email of 1 March 2016 that Mr Schroeder had been told, prior to that time, of the current trial dates. It does not appear, however, that steps were taken until 1 March 2016 to arrange for Mr Schroeder’s attendance. Even then, the 1 March 2016 email displays a somewhat insouciant approach to securing the attendance of such an important witness. Mr Schroeder was merely asked to confirm his availability during the trial period (which, incidentally, he did not do). Moreover, the terms of the email would have given Mr Schroeder every reason to think that it was unlikely that he would need to be present in person to give evidence and that his evidence could be given by video link. The next step taken by the respondent was some six weeks later on 12 April 2016, just four weeks before the commencement of the trial, when Mr Schroeder was told that the applicant’s lawyers “would like you to be available for the hearing in May for cross-examination”. It was the following day that Mr Schroeder informed the respondent’s solicitors of his “problem” concerning his new employment. The evidence does not state when Mr Schroeder became aware of this problem. However, I have no reason to think that it arose only on 13 April 2016. In any event, as between the parties, the fault for Mr Schroeder’s stated inability to be available in person to give evidence lies with the respondent, not the applicant.

80    I would add, in this connection, that the letter from Mr Schroeder’s employer does not state that it would not be possible for Mr Schroeder’s training commitments to be delayed or changed to accommodate him giving evidence in Australia or that it would not consent to such a course if asked. Indeed, there is no evidence that Mr Schroeder has even been asked to approach his employer to see whether his presence in Australia to give evidence can be accommodated in some appropriate way. The approach seems to have been to find an explanation for Mr Schroeder to give his evidence by video link rather than to find ways to get him to Australia to give his evidence in person. The evidence that Mr Schroeder has designated “home office days”, particularly on the first two days of the trial, shows that he is not required to be physically present at his work on every day of the trial period. There is no evidence that it would not have been possible, for example, for Mr Schroeder to travel to Australia on the immediately preceding weekend so that he could give his evidence on Monday, 9 May 2016 and then return to Germany, or that some other similar arrangement could not be made.

81    The respondent has been given fair warning that the reliability of Mr Schroeder’s evidence is squarely in issue and that he will be challenged in this respect. Further, Mr Schroeder’s cross-examination will involve his attention being directed to documents and the markings on them. I have also been informed that Mr Schroeder proposes to give evidence through an interpreter, although he has communicated both orally and in writing with the respondent’s Australian legal representatives in English, without the intervention of an interpreter. These matters, taken with the importance of his evidence, convince me that it would most unsatisfactory for Mr Schroeder’s evidence to be given by video link. I accept that the applicant would suffer substantial prejudice if it was required to cross-examine Mr Schroeder in this way. This prejudice should not be visited on the applicant.

82    For these reasons, the respondent’s application for Mr Schroeder’s evidence to be given by video link is refused.

Associate:

Dated:    5 May 2016