Federal Court of Australia

Southernwood v Brambles Limited (No 2) [2022] FCA 973

ORDERS

THE COURT ORDERS THAT:

1.    The Interlocutory Application dated 28 July 2022 is dismissed.

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

REASONS FOR JUDGMENT

MURPHY J

1    By interlocutory application dated 28 July 2022, the respondent in this proceeding, Brambles Limited, sought an order pursuant to s 47A(1) of the Federal Court of Australia Act 1976 (Cth) (the Act) that the Court permit the lay witness testimony of Daniel Martin and Laura Nador, who are both residents of the USA, be given via video link. The application was made very late and heard two business days before the commencement of the pending five week trial.

2    In relation to Mr Martin, the application was centrally based on the contention that he is an important witness; he is no longer an employee of Brambles; and that his work commitments as Chief Executive Officer of Xpress Global Systems during the trial period, particularly his role and responsibilities in relation to an important transaction that is on foot, mean that he cannot travel to Australia to give evidence in person and he should be permitted to give evidence via video link. Brambles submitted that it had made all reasonable efforts to persuade Mr Martin to travel to Australia to give evidence in person, but he had refused to do so, and he could not be compelled. I accepted the evidence that Mr Martin had so refused. Brambles argued that in the circumstances, the choice for the Court was not between hearing Mr Martin’s evidence in court or via video link, but between hearing evidence from him via video link or not hearing his evidence at all.

3    In relation to Ms Nador, who remains a senior employee with Brambles, the application was centrally based on the contention that she is an important witness; that her work commitments with Brambles during the trial period are real “impediments” to her travelling to Australia to give evidence in person; that she is “unable and unwilling” to do so; and that she should be permitted to give evidence via video link. There was no evidence that Ms Nador had actually refused to travel to Australia to give evidence.

4    The applicants, Holly Southernwood, and William Kidd and Mary Collum as trustees for the Magness-Bennett Superannuation Fund, opposed the application.

5    For the reasons I explain, I dismissed the application. At the conclusion of the hearing I indicated that I would not provide written reasons unless either party requested that I do so. Brambles sought written reasons and by email to chambers the following day asked when they would be provided. To meet Brambles’ desire to have written reasons without delay I prepared them over that weekend.

6    Then, surprisingly, on the first day of trial Brambles informed the Court that Mr Martin’s and Ms Nador’s position had changed. Both would now travel to Australia to give evidence in person. I cannot know, but it appears that their unwillingness to give evidence in person was, in reality, based on inconvenience rather than inability.

The evidence

7    Neither Mr Martin nor Ms Nador gave direct evidence as to why they were unable or unwilling to travel to Australia to give evidence in the trial in person. Brambles relied on the following two affidavits:

(a)    one of Alice Pailthorpe, a solicitor in the employ of Allens, the solicitors for Brambles in the proceeding, affirmed 28 July 2022, on the basis of information from Mr Martin and Ms Nador and belief; and

(b)    another of Alex Tolliday, a partner of Allens, affirmed 3 August 2022, in which he provided more information in relation to Mr Martin, on the basis of information from Mr Martin and belief. On Brambles’ application, I ordered that paragraph 9 of the affidavit be treated as confidential.

The FACTUAL BACKGROUND

8    The substantive proceeding is a securities class action which is large, complex and strenuously contested. It was listed for trial for five weeks, commencing on 8 August 2022; the trial date having been set by orders made on 20 August 2021.

9    Pursuant to orders of the Court, both sides were required to adduce their evidence in chief by way of affidavit. Brambles notified the applicant that at trial it intended to rely on the evidence of nine lay witnesses as well as two expert witnesses, and provided the applicant with affidavits and expert reports from those witnesses. The applicants notified Brambles, that they required each of those witnesses to attend for cross-examination.

10    Of the nine lay witnesses, all of whom are present or former Brambles’ executives, six live overseas and three live in Australia. Of the six overseas-based lay witnesses, four intend to travel to Australia to give evidence in person at the trial, two from the United Kingdom, one from Spain, and one from the USA. Brambles submitted however that the work commitments of the two other overseas-based lay witnesses, Mr Martin and Ms Nador, mean they face substantial impediments in travelling from the USA to Australia to give evidence in person at the trial, and that both are “unable and unwilling” (to use the expression in Brambles’s submissions) to do so. Mr Tolliday deposed that Mr Martin’s work commitments are such that he has refused to give evidence in person at the trial. Both witnesses have made themselves available to give evidence from the USA by video link during the Court’s ordinary sitting times in Melbourne and Brambles seeks an order that they be permitted to do so.

The importance of Mr Martin’s and Ms Nador’s evidence

11    Mr Martin lives in Chattanooga, Tennessee. Ms Nador lives in Atlanta, Georgia. For the trial, Brambles has filed:

(a)    two witness affidavits of Mr Martin, affirmed on 18 November 2021 and 7 June 2022; and

(b)    one witness affidavit of Ms Nador affirmed on 21 October 2021.

12    It is common ground that the evidence of both witnesses is of significant importance to the matters in dispute in the proceeding. In part that is because the applicants’ case includes the allegation that Brambles’ budget and forecast for revenue or “sales” growth in the relevant period, included projections for new business or “wins” which did not have a reasonable basis, and the evidence of both witnesses contests that allegation. For example, at paragraph 29E(b) of the Amended Consolidated Statement of Claim (ACSOC) the applicants take issue with the reasonableness of $52.6 million of “Unidentified Wins” through new business which was forecasted to be achieved by US Pooled (a pooled pallets business within CHEP North America, a division of Brambles) in FY2017. Both Ms Nador and Mr Martin were senior executives of CHEP North America in the relevant period.

Mr Martin

13    Under the heading “Importance of Martin’s evidence to the Respondent’s defence” Ms Pailthorpe deposed that:

(a)    Mr Martin was the Senior Vice President, Sales and Customer Operations for CHEP North America (which included US Pooled) in the relevant period;

(c)    the evidence in Mr Martin’s two affidavits concerns the process and outcome of the sales components of the US Pooled and CHEP North America budgets and forecasts, and includes evidence as to the reasonableness of the “Unidentified Wins” forecast; and

(d)    the applicants’ allegations that Brambles’ budgeting and forecasting of sales did not have a reasonable basis will be met by, inter alia, Mr Martin’s evidence.

In submissions, senior counsel for Brambles described Mr Martin’s evidence as “very important”.

14    The applicants made similar submissions. They contended that Mr Martin’s evidence is of significant importance because one of the four key assumptions on which the US Pooled budget was based included the revenue item “new customer wins”. They said that over two thirds of that assumption comprised “unidentified new wins” which Mr Martin’s affidavit describes as “the total amount of business we expected we could win through the work of the “Hunters” or [Business Development Manager] teams, but which was not yet allocated to a specific customer or potential customer. In effect, it was a target for sales growth”, and that Mr Martin had oversight of the team tasked with achieving the “unidentified new wins” target. They argued that this key assumption was not reasonable.

15    They submitted that Mr Martin’s evidence is “plainly critical” to the objective reasonableness of Brambles’ making of and adhering to that key assumption, and described his evidence as “central to the matters in dispute” and “likely to be ‘hotly contested’”. In their proposed trial plan they estimated that he would be required for cross-examination for one and a half days. Counsel for the applicants said that the intended cross-examination of Mr Martin would go to his credit, in the sense of attacking the reliability of his evidence.

16    I was persuaded that Mr Martin’s evidence would be the subject of considerable contest, and is of significant importance in the proceeding.

Ms Nador

17    Under the heading “Importance of Nador’s evidence to the Respondent’s defence” Ms Pailthorpe deposed that:

(a)    Ms Nador was the Senior Vice President and General Manager of US Pooled in the relevant period;

(b)    the applicants’ case includes numerous allegations regarding the reasonableness of the budget and forecasts for US Pooled for the relevant period; and

(c)    Ms Nador’s affidavit concerns the performance of US Pooled during the relevant period.

18    The applicants submitted that what they said about the significance of Mr Martin’s evidence is equally true of Ms Nador’s evidence, while acknowledging that Ms Nador’s evidence might not be as central as that of Mr Martin. In their proposed trial plan they estimated that Ms Nador would be required for cross-examination for half a day.

19    I was persuaded that Ms Nador’s evidence would be the subject of considerable contest, and is of significant importance in the proceeding.

The asserted inability and unwillingness of Mr Martin and Ms Nador to travel to Australia

Mr Martin

20    Ms Pailthorpe said that she was informed by Mr Martin and believes that:

(a)    Mr Martin is no longer employed by Brambles, having ceased employment with the company in 2019;

(b)    since April 2021 he has been the Chief Executive Officer of Xpress, a flooring product transportation, supply chain and logistics business based in Chattanooga, Tennessee in the USA. Xpress operates an integrated network of around 41 distribution centres across the contiguous USA;

(c)    as CEO, Mr Martin has overall responsibility for Xpress’ operational and business planning and delivery of its full-service flooring supply chain services;

(d)    he is proficient in Microsoft Teams and other audio-visual platforms and is able to provide his testimony in the trial by video link during the Court’s ordinary sitting times in Melbourne, which equates to 8:15 pm to 2:30 am in Chattanooga, Tennessee; and

(e)    he would “encounter difficulties” travelling from Chattanooga, USA to give evidence at the trial in person at any time during the pending five week trial (Trial Period), and that the “impediments” to his attendance to give evidence in person include that:

(i)    as CEO, throughout the Trial Period he will be involved in a confidential transaction (the Transaction) which is at an early stage and which may accelerate at any time. He is required to attend Xpress’ offices in Chattanooga full-time during the Trial Period to oversee the Transaction and attend meetings with third parties, advisers and legal advisers of Xpress;

(ii)    in addition, when the employees of Xpress learn of the Transaction, which may be during the Trial Period, it is important that Mr Martin be on-site to support its employees and he is not presently able to confirm when that might occur;

(iii)    while Xpress undergoes the Transaction, Mr Martin is also required to fulfil his regular role and responsibilities as CEO;

(iv)    if required to travel to Australia to give evidence, while in transit he would be unable to or severely restricted from carrying out his role and responsibilities as CEO of Xpress while it is undergoing the Transaction;

(v)    in the period that Mr Martin would be required to provide his testimony in Australia in person, his capacity to perform his role and responsibilities to Xpress as CEO would be adversely affected by the differences in time zones between Melbourne and Chattanooga, his inability to communicate face-to-face with other Xpress personnel and his inability to consider and respond to events in Xpress’ head office with the benefit of his support staff and Xpress’ facilities; and

(vi)    in light of those impediments, Mr Martin is unwilling to travel to Australia in the Trial Period to provide his testimony in person.

21    Mr Tolliday’s affidavit provides more detail about the nature and timelines of the Transaction and the asserted effect on Mr Martin’s ability and willingness to travel to Australia to give evidence in person during the Trial Period, again on the basis of information and belief. Brambles sought an order that paragraph 9 of Mr Tolliday’s affidavit be treated as confidential on the basis that the information about the Transaction there set out is commercially sensitive and not known in the market in which Xpress operates; is not known among Xpress employees other than a very small number of executives; is not otherwise public information; and the success of the Transaction may be imperilled or otherwise put at risk if confidentiality is not retained until such time as those matters are completed. I was persuaded that it was appropriate to make a confidentiality order in the terms sought. While I have taken the information in paragraph 9 of Mr Tolliday’s affidavit into account, I will not set it out. Brambles is directed to notify the Court at the conclusion of the trial as to whether it contends the information continues to be confidential.

22    Mr Tolliday said that:

(a)    that approximately two weeks after a case management hearing in this proceeding on 21 June 2022, he was informed by Mr Martin and believes that the Transaction had entered an accelerated stage, which would require a greater amount of Mr Martin’s time and attention than originally anticipated and that this could interfere with his ability to give evidence for Brambles in person or via video link;

(b)    over the course of July 2022, he and other Allens solicitors attempted to contact Mr Martin to seek further information regarding the nature of the Transaction; to identify Mr Martin’s obligations to Xpress and obstacles to providing his testimony at the trial via video link; and to understand whether Brambles’ proposed trial plan would need to be further varied to accommodate Mr Martin’s commitments to Xpress. They were not however able to contact Mr Martin until the last week of July 2022. On that occasion, Mr Tolliday said that he was informed by Mr Martin and believes that Mr Martin had been unable to respond to the inquiries due to the intensity of his involvement in the Transaction and his obligations to Xpress.

(c)    he was informed by Mr Martin and believes that:

(i)     if Mr Martin were to travel to Australia to give evidence it would jeopardise the Transaction because he would not be able to dedicate his full attention to managing the Transaction, and he would not be able to perform his obligations to Xpress as CEO to the extent that is required of him;

(ii)    Mr Martin continued to be fully engaged in managing the Transaction as CEO of Xpress, seven days a week, and will remain so until at least October 2022; and

(iii)    in the circumstances, Mr Martin refuses to travel to Australia to give evidence in person in the Trial Period but he is willing and able to give evidence via video link during ordinary court hours.

Ms Nador

23    Ms Pailthorpe said that she was informed by Ms Nador and believes that:

(a)    Ms Nador is the President of CHEP North America and a member of Brambles’ Executive Leadership Team;

(b)    she is proficient in Microsoft Teams and other audio-visual platforms and is able to provide her testimony in the trial by video link during the Court’s ordinary sitting times in Melbourne, which equates to 8:15 pm to 2:30 am EDT in Atlanta, Georgia;

(c)    that the “impediments” to Ms Nador’s attendance to give evidence at the trial in person include that:

(i)    as President, Ms Nador is responsible for CHEP North America’s overall management and performance as well as leading the development of strategies relating to supply solutions in the North American pallets market. Her day-to-day responsibilities relevantly include managing and developing the Executive Leadership Team for CHEP North America;

(ii)    the CHEP North America Executive Leadership Team Strategy Intensive is scheduled to take place in Canada from 1 to 5 August 2022, and as President Ms Nador’s role is to lead the Intensive and she is required to attend and participate in person;

(iii)    in the week commencing 15 August 2022 being the week of Brambles’ FY22 market announcements, Ms Nador is scheduled to be in Atlanta all week. In this period, Ms Nador will be heavily involved in preparations for Brambles’ Group results communications, in addition to her usual role and responsibilities as President of CHEP North America. She also has family commitments in that week which make travelling to Australia difficult;

(iv)    in the week commencing 22 August 2022, Ms Nador will be intensely preparing for the CHEP North America Connect Live Conference which is scheduled to commence the week of 29 August 2022 in Orlando, USA, as well as preparing for and attending a Board review, in addition to her usual role and responsibilities as President of CHEP North America. The Connect Live Conference is a CHEP North America strategy and development conference. This will be the first time the conference has been held in person in three and a half years (due to the COVID-19 pandemic) and will involve 250 to 300 delegates from across the whole of the CHEP North America business. As the President, Ms Nador is required to attend and lead the conference where she will also be the main presenter;

(v)    if Ms Nador was required to travel to Australia between 15 and 26 August 2022, while in transit she would be unable to, or severely restricted from, preparing for or attending to the commitments in that period;

(vi)    in the period that Ms Nador would be required to provide her testimony in person, her capacity to perform her role and responsibilities as President of CHEP North America would be adversely affected by the differences in time zones between Melbourne and Atlanta which would impede her ability to respond to matters promptly as they arise, and by her inability to communicate face-to-face with other CHEP North America personnel to respond to matters as they arise; and

(vii)    in light of these impediments, Ms Nador is unwilling to travel to Australia in the Trial Period to provide her testimony in person.

24    Brambles’ submissions described Ms Nador as “unable and unwilling” to travel to Australia to give evidence in person.

Delay

25    The application to hear Mr Martin’s and Ms Nador’s evidence by video link was made very late; and was heard just three business days before the commencement of a five week trial. To explain the delay, Mr Tolliday noted that the prospect of the application was first raised at a case management hearing on 21 June 2022 when Brambles submitted that there were a handful of witnesses, four at that stage, whom Brambles were contemplating seeking the Court’s indulgence to give evidence by video link.

26    Mr Tolliday deposed that, at the time of a case management hearing, Brambles was “at an early stage of discussions” with four of its overseas-based lay witnesses regarding their “capacity and willingness” to travel to Australia to provide their testimony in person during the Trial Period. Mr Tolliday said that following the case management hearing he sought instructions from each of those witnesses regarding their capacity and willingness to travel to Australia to give evidence in person. He said that upon receipt of their instructions he considered their basis for indicating that they lacked the capacity or were unwilling to travel to Australia to provide their testimony, and then undertook steps to resolve or work around those matters, including by varying the draft trial timetable to accommodate their different availabilities. He said that he succeeded in “persuading” two of Brambles’ overseas-based lay witnesses to travel to Australia to give evidence in person at the trial, but apparently not Mr Martin and Ms Nador.

Relevant principles

27    Pursuant to s 47A(1) of the Act the Court has power to permit testimony to be given by video link. Subject to s 47C(1), the exercise of the power is in the Court’s discretion. Section 47C(1) precludes the exercise of the power conferred by s 47A(1) unless the Court is satisfied as to the existence of certain technical requirements in relation to a video link are met.

28    In Kirby v Centro Properties Limited [2012] FCA 60; 288 ALR 601 at [3]-[11] Gordon J reviewed the authorities up to that point. Her Honour noted (at [4]-[5]) that the courts had adopted two broad approaches in exercising the discretion to permit testimony by video link:

[4]    The first is that given the advanced state of video link technology and also because of the convenience of the procedure and the savings in time and cost, a substantial case needs to be made out to warrant the Court declining to make an order for evidence to be taken by video link: see Reinsurance Australia Corp Ltd v HIH Casualty & General Insurance (in liq) [2002] FCA 1549 at [10]-[11]; Versace v Monte [2001] FCA 1454 at [16] and Tetra Pak Marketing Pty Ltd v Musashi Pty Ltd [2000] FCA 1261 at [25].

[5]    The other approach has been described as more cautious, and requires good reason to be shown before leave to give evidence by video link is granted: Australian Competition & Consumer Commission v World Netsafe Pty Ltd [2002] FCA 526 at [7]; Sunstate Airlines (Qld) Pty Ltd v First Chicago Australian Securities Ltd (unreported, NSWSC, Giles CJ, 11 March 1997) at 6; Australian Medical Imaging Pty Ltd v Marconi Medical Systems Australia Pty Ltd (2001) 53 NSWLR 1 at [27].

(Emphasis in original.)

29    At [8] Gordon J cited, with apparent approval, Buchanan J’s remarks in Campaign Master (UK) Ltd v Forty Two International Pty Ltd (No 3) [2009] FCA 1306; 181 FCR 152 at [77]-[78]. Buchanan J said the following:

… I think there is a significant difference in emphasis in the two lines of authority. One, essentially pragmatic, matter which arises from the differences of view to which I have drawn attention is where the practical onus of persuasion lies. Despite the undoubted efficiencies available in an appropriate case, the trend of authority seems to me to emphasise the need for a persuasive case to be made out to use a video link to take evidence, particularly to impose it on an unwilling cross-examining party, rather than the reverse.

I share the concerns expressed by Spender J in World Netscape [sic] and by Stone J in Dorajay about the limitation on the effectiveness of video link arrangements as a means of taking oral evidence. I am particularly troubled by the prospect (or possibility) that the cross-examination of an important witness might be rendered less effective by the limitations of video link technology or the absence of the witness from the courtroom. Although the days are gone when witnesses are expected to feel any sense of intimidation as an aid to telling the truth, there is no doubt in my mind that the requirement to give evidence on oath or affirmation in the (generally) solemn atmosphere of a courtroom in the presence of a judge, and to answer questions in cross-examination in the presence also of cross-examining counsel, has at least three potential benefits. It enhances the prospect that the witness will remain conscious of the nature and solemnity of the occasion and of his or her obligations. It affords the cross-examiner some reassurance that the gravity and immediacy of the moment, and of the supervising presence of the judge, are not lost on the witness and the cross-examination is not thereby rendered any less effective, to the possible prejudice of the cross-examining party. It provides the Court with a more satisfactory environment in which to assess the nature, quality and reliability of responses by a witness, both to questions and to the overall situation presented by the necessity to give evidence in court. To my mind there remains, even in the modern context, a certain “chemistry” in oral interchanges in a courtroom, whether between a judge and counsel (or other representative) or between cross-examiner and witness. I would not wish too lightly to deprive a cross-examiner of that traditional forensic element in the exchange although, as the cases universally make clear, the Court must now, if asked to do so, balance the interests of a cross-examining party against claimed inconvenience both in individual cases and with respect to individual witnesses. Notwithstanding the increased availability and use of video link technology, in my view, a case must be made out for the use of video link evidence if it is opposed by an affected party. …

30    Those remarks have been cited with approval by judges of this Court on numerous occasions. For example:

(a)    in Blackrock Asset Management Australia Services Limited v Waked (No 2) [2011] FCA 479 at [46], Perram J referred to Buchanan J’s remarks as “powerful considerations” and also said:

A trial is, in fact, a public event in which witnesses are confronted by their cross-examiners and in which they give evidence in front of the very people who are involved in the case. The giving of evidence by video link is unsatisfactory in a number of ways. That is not to say that in some cases it is not appropriate.

(b)    in Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 627; 231 FCR 531 at [16] Besanko J said that the matters identified in Campaign Master and Blackrock Asset were “powerful considerations”.

31    It is also worth going back to the earlier remarks endorsed by Buchanan J (at [78]). First, in Australian Competition and Consumer Commission v World Netsafe Pty Ltd [2002] FCA 526; 119 FCR 303 at [7]-[8] where Spender J said:

Notwithstanding observations in those cases that there is essentially no real difference between evidence by video-link and viva voce evidence, I disagree, and I think it right to recognise that there are deficiencies when evidence is taken by video-link when compared with evidence given viva voce.

32    Spender J agreed with the observations of Giles J in Sunstate Airlines (Qld) Pty Ltd v First Chicago Australia Securities Ltd, unrep, SCNSW, 11 March 1997 at 4 who said:

The ordinary procedure is [that a witness gives oral evidence before a judge in a courtroom] and there are sound reasons for following it unless cause to the contrary be shown. The conduct of proceedings in open court, available to public scrutiny, is of great importance. Cross-examination may be more difficult when video evidence is taken because documents have to be transmitted or produced in an unfamiliar manner, because of delay in voice transmission, or for other reasons, and the effectiveness of cross-examination as a weapon in the fight for truth should not be unduly hindered. And in many cases the Court is assisted in fact by observance of what is misleadingly called the demeanour of the witnesses, upon which the taking of video evidence may impact. All that said, particularly where the evidence is relatively uncontroversial, the cross-examination is not likely to be lengthy, or no real issue of credit is involved, the taking of video evidence can be beneficial to the administration of justice and consistent with justice between the parties. It may permit the Court to receive the evidence of a witness that would otherwise not have been available, it may permit the evidence to be received without causing undue inconvenience to witnesses …

(Emphasis in original.)

33    Spender J agreed with the remarks of Palmer J in Australian Medical Imaging Pty Ltd v Marconi Medical Systems Australia Pty Ltd [2001] NSWSC 651; 53 NSWLR 1 at [27], where his Honour followed the approach suggested by Giles J in Sunstate and said:

...where the matter in contest involves major issues of credit or where documentary material of some volume and complexity is likely to be deployed in Court, it is still desirable, in my opinion, to have the witness in Court for examination, unless good reasons are shown to the contrary.

34    Spender J’s remarks in World Netsafe were referred to with approval by the Full Court in Odhiambo v Minister for Immigration and Multicultural Affairs [2002] FCAFC 194; 122 FCR 29 at [97] (Black CJ, Wilcox and Moore JJ).

35    Second, the observations of Stone J in Dorajay Pty Ltd v Aristocrat Leisure Ltd [2007] FCA 1502 at [6]-[8] where her Honour considered “the difficulties that attend the taking of evidence by video link and the cross-examination on that evidence.” Her Honour accepted that such difficulties were perhaps less than in the past but said (at [7]-[8]);

In my experience, however, those difficulties are considerable and markedly interfere with the giving of the evidence and, particularly, with cross-examination.  They include technical problems such as difficulties with hearing, in presenting documents to the witness, in maintaining transmission over an extended period of time and those arising from time differences.  More importantly, even if those difficulties can be overcome or minimised, there are the problems in maintaining a line of cross-examination and the difficulty of assessing a witness where evidence is given by video link.  As a matter of justice to both parties these problems are critical.  It is perhaps more workable where one is dealing with an expert witness who is generally well-prepared, has written a detailed report and has an expertise and familiarity with the subject that may not be the case with a lay witness.  I accept that Mr Rowan may have some of those qualities.  He is clearly very experienced in his field and his detailed affidavit suggests that he would be well-prepared.

Nevertheless, issues of credit or something very close to credit will undoubtedly arise in dealing with the asserted contradictions in the evidence to which I have referred.  I am not satisfied that justice would be served by allowing this evidence to be given by video link and requiring the cross-examination to be carried out through that same medium.  

36    More recently, in Palmer v McGowan (No 2) [2022] FCA 32; 398 ALR 524 at [43], [45]-[47], Lee J expressed similar views. His Honour said:

[43]    Not only does receiving the evidence of the witnesses in person maintain fluidity between the witness, counsel and the judge, but there is much to be said about a witness coming into the usually unfamiliar confines of a courtroom, swearing an oath or taking an affirmation in a witness box to tell the truth, and proceeding to give evidence on oath or affirmation in the physical presence of counsel and the judge. There is a solemnity about the giving of evidence, and the formalities reinforce it.

…

[45]     In relation to many witnesses, including highly intelligent professionals, I have come to appreciate a somewhat different dynamic between the witness and the cross-examiner than is present at an orthodox hearing. Speaking generally, the witness feels an additional degree of comfort in being physically remote from the courtroom and being in their own surroundings. Incidentally, a tell-tale indication of this more “relaxed” environment is often seen by witnesses being far more casually attired than would be the case if they came into Court. This might be termed the “leisure wear” effect. Further, as much as courts seeks to reproduce the solemnity of a traditional hearing while operating online, at least in my experience, there a distinct difference in atmosphere. It is jejune to assume that exchanges (which may include confrontational exchanges) between two persons in close physical proximity to one another, is the same as exchanges that occur in the less intimate world of a video link.

[46]     Related to this point, is that increasingly I have felt a nagging disquiet that I may perhaps be missing something in assessing the evidence of a witness by reference to the tone of voice or non-verbal signals. As time has gone on, it is has become more evident to me that in an audio-visual feed, minor differences in emphasis or tone can be more difficult to appreciate and assess.

[47]    It has, of course, become common for scepticism to be expressed about the advantage that trial judges enjoy in seeing a witness give evidence. But despite these well-founded criticisms and the fact that by video a judge can observe the manner of giving evidence remotely, based on my experience in recent times, I consider I have a better prospect of understanding the subtleties and nuances of the sort of evidence to be given in the present case, if it is given in person. Credit is likely to be a factor in resolving at least some issues in this case. It is unnecessary to be more specific for present purposes, but I cannot discount the possibility that in this case (and these assessments are always case-specific) the close and careful assessment of the evidence-in-chief may be relevant in properly fixing any award of damages to either claimant based on consolation for hurt, and evidence given in cross-examination may be an important factor which assists me in justly determining this controversy.

37    Against this, Brambles submitted that following the emergence of the COVID-19 pandemic and the widespread adoption of ‘virtual’ hearings by courts around Australia, courts have adopted a more pragmatic approach with respect to the exercise of the discretion to hear evidence by video link. It submitted that since 2020, it has been held that:

(a)    the courts’ experience in facilitating and observing cross-examination of important witnesses by video link is more widespread than it was prior to the pandemic, and it has generally been viewed favourably in this Court and other courts, citing Australian Securities and Investments Commission v Wilson (No 2) [2021] FCA 808; 153 ACSR 649 at [34] per Jackson J. His Honour cited Universal Music Publishing Pty Ltd v Palmer [2020] FCA 1472 at [32] (Katzmann J); Long Forest Estate Pty Ltd v Singh [2020] VSC 604 at [23]; Auken Animal Husbandry Pty Ltd v 3RD Solution Investment Pty Ltd [2020] FCA 1153; 147 ACSR 521 at [49]-[50] (Stewart J); and Sanson v Sanson [2021] NSWSC 417 at [31] (Henry J), and said (at [44]) that “the Court has more experience with taking contentious evidence by video link and more confidence in its efficacy”.

(b)    the perception of a witness’s facial expressions, reactions, bodily movements and gestures may be enhanced by audio-visual technology compared to evidence given in Court, citing Capic v Forward Motor Company of Australia Ltd (Adjournment) [2020] FCA 486 at [19]. There, Perram J said that his impression of evidence given on the various audio-visual platforms had been that the judge was looking at the witness from about one metre away such that his or her perception of the witness’s facial expression is much greater than it is in court. But his Honour also said:

What is different—and significant—is that the video-link technology tends to reduce the chemistry which may develop between counsel and the witness. This is allied with the general sense that there has been a reduction in formality in the proceedings. This is certainly so and is undesirable. To those problems may be added the difficulties that can arise when dealing with objections.

(c)    difficulties with document management in a virtual courtroom can be overstated, citing Capic at [20]. In this passage Perram J did not accept that document management was much more difficult in a virtual courtroom. His Honour found that the problem of witness in cross-examination bundles is readily soluble with a service such as Dropbox which, while not ideal, did not result in an unfair or unjust trial. However, and importantly, his Honour also said that he could not speak for other judges. As might be expected, some judges are more IT savvy than others and some may find real difficulty in assessing the reliability of a witness while also retrieving documents from Dropbox or some other system. But that problem does not arise in the present case as the documents will be called up to the Judge’s screen by Epiq, the e-trial document operator; and

(d)    well-prepared cross-examination can be as, or just about as, effective in a virtual setting, citing Auken at [49]-[50], where Stewart J also said that his impression has been that counsel, even those who were initially sceptical, had shared that experience.

38    There are also the remarks of Bromwich J in Tetley v Goldmate Group Pty Ltd [2020] FCA 913 at [16], where his Honour said:

Because it influenced my thinking in deciding this application, I also consulted with a number of my judicial colleagues, several of whom are presently conducting protracted online hearings which also involve questions of credit and cross-examination. Their experience was that there was no great diminution in the conduct of an online hearing compared to a hearing in court, with some of the obvious disadvantages being offset by some real advantages including a clearer view of the witness in the course of giving evidence-in-chief and in cross-examination online.

39    I have no difficulty in accepting that in many cases it will be suitable for evidence to be received via video link, and it is plain that during the height of the COVID-19 pandemic courts were more inclined to grant such applications. It is unsurprising that such applications were more readily granted when one considers the context in which that occurred - the strictest mandatory public health measures ever imposed in Australia, with Australia’s international and state borders being closed and travel and in-person gatherings being banned or severely restricted. During the height of the pandemic, judges of this and other courts took a more pragmatic approach to the exercise of the discretion, faced as they were with the undesirable alternative of numerous adjournments, extensive backlogs that might arise from such adjournments, and uncertainty as to the duration of the required adjournment.

40    I do not seek to downplay the significance of the various judicial observations expressing satisfaction, even enthusiasm, in relation to the efficacy of cross-examination via video link, including where issues of credit are involved, but in my opinion they should be understood in the context in which they were made. To an extent that can be seen in Wilson (No 2) where, in an earlier application, Jackson J refused the application to hear a USA-based witness’s evidence by video link because he considered there was a real risk that Mr Wilson would not have a fair and proper opportunity to test the evidence of the witness if that evidence was not given in person: see Wilson (No 2) at [2](4). Later, Jackson J allowed a renewed application in the context that the continuing pandemic and the indefinite closure of Australia’s borders meant that the witness could not come to Australia and if his evidence was not heard via video link the trial would need to be adjourned indefinitely.

41    Further, as Lee J noted in Palmer (at [44]), “a number of the particularly favourable judicial references to remote hearings in complex cases were made in 2020, at an early stage of the ‘unforeseen mass-pilot of remote hearings’” brought about through the pandemic. His Honour said that the “accumulated experience” of judges and “subsequent reflection” had caused his views and the views of some other judges to change over time.

42    I discussed with some judicial colleagues issues such as the efficacy of cross-examination via video link, the risk of unfairness to the cross-examining party, the advantage for the cross-examined witness or party, and the possibility of increased difficulty for the judge in assessing the reliability of testimony in such circumstances. While I will say that I am not alone in the concerns I express in these reasons, I do not consider it appropriate to represent their views. Even where their views are similar to mine there nevertheless remain some nuanced differences. It is best that other judges speak for themselves if and when the occasion arises. It must also be kept in mind that the views of other judges are of little relevance. As Brambles seemed to accept, different judges may have different experiences and views as to whether they may be hindered in assessing the reliability of testimony given through cross-examination via video link. It is my task to assess the reliability of Mr Martin’s and Ms Nador’s evidence, and to decide whether effective cross-examination of them may be hindered, not the task of other judges in other circumstances.

43    The courts have taken into account a variety of factors in exercising the discretion under s 47A(1), including the employment commitments of an overseas witness; whether the credibility of the witness is in issue; whether the witness’s evidence will be “centrally important” to the case; and whether the use of video link may frustrate or delay the management of documents in cross-examination: see Kirby at [10] and the cases there cited. Each of those can be said to be relevant in the present application.

44    But those factors are neither exhaustive nor prescriptive and the discretion under s 47A(1) is a broad one in which the determining consideration is the interests of justice in the particular facts and circumstances of the case. It involves a balancing exercise as to what will best serve the administration of justice, doing so consistently with maintaining justice between the parties: Kirby at [11]. It must also be guided by the overarching purpose in s 37M, namely, the facilitation of the just resolution of disputes according to the law and as quickly, inexpensively and efficiently as possible: Palmer at [40]. This approach to the discretion is consistent with the remarks of Flick J in Corrigan v Commvault Systems (Australia) Pty Ltd [2011] FCA 107; 192 FCR 71 at [12], with which Besanko J agreed in Fair Work Building Industry Inspectorate at [16]. Those decisions show:

(a)    it is for the party seeking a favourable exercise of the discretion to establish the reason for its exercise having regard to the specific facts and circumstances and the overriding consideration of ensuring that justice is done as between the parties to the proceeding; and

(b)    there is no presumption nor prima facie case as to the way in which the discretion is to be exercised in the absence of countervailing considerations.

Consideration

45    I commence by noting that the video link arrangements proposed by Brambles meet the technical requirements under s 47C of the Act and any other appropriate technical requirements, and the discretion under s 47A(1) is therefore available for exercise. 

46    Brambles’ arguments in relation to Mr Martin had some force, but I saw little force in the application in respect to Ms Nador. As I have said, I concluded that the application to hear the evidence of both Mr Martin and Ms Nador via video link should be refused.

47    First, oral evidence at a trial is generally to be given directly to, and in the presence of the Court; and the opposing party is entitled to insist upon the physical presence of a witness for cross-examination. I did not understand this to be contested. Brambles accepted that it is preferable for testimony to be given in court, principally for the Court to have the best opportunity to accurately and fairly assess the reliability of the witness’s evidence. Brambles seemed to accept that hearing evidence via video link is sub-optimal and that, depending on the judge, the Court may be hindered in assessing the reliability of Mr Martin’s and Ms Nador’s evidence.

48    It was for Brambles to establish that an order to permit Mr Martin’s and Ms Nador’s evidence to be taken via video link will facilitate the just resolution of the dispute according to the law and as quickly, inexpensively and efficiently as possible. It was required to show reasons for the exercise of the discretion in its favour having regard to the specific facts and circumstances of the case and the overriding consideration of ensuring that justice is done as between the parties to the proceeding. In respect to Mr Martin, Brambles’ arguments were not without force but they were outweighed by the other considerations.

49    Second, Mr Martin’s and Ms Nador’s evidence is significant to the dispute in the proceeding. Their evidence is contentious, and cross-examination is likely to be lengthy, involve consideration of numerous documents and include issues of credit or something akin to credit.

50    For the cross-examining party, cross-examination via video link in large, complex cases involving numerous documents, including on issues of credit, is less effective in my view than cross-examination in court. In my opinion, there is almost an inevitable disadvantage for the cross-examining party in such circumstances.

51    The converse is also true because, in such circumstances, giving evidence via video link confers an advantage on the party calling the witness. It permits the witness to give evidence from the comfort of his or her own home or office, freed from the solemnity of the occasion which being in court carries with it. In my opinion, there can be a world of difference for a witness between being cross-examined over a video link and being cross-examined in the (usually) unfamiliar confines of a courtroom, in the physical presence of the judge and other parties, in close physical proximity to a cross-examiner asking difficult and sometimes confrontational questions. In Campaign Master Buchanan J said (at [78]) that “the days are gone when witnesses are expected to feel any sense of intimidation as an aid to telling the truth.” That may be so, but one of the cross-examiner’s usual tools is to attempt to make the witness uncomfortable or to unsettle the witness, as an aid to getting to the truth as the cross-examining party sees it. In my view, in a case like the present, to allow Mr Martin and Ms Nador to give evidence via video link would advantage Brambles, and disadvantage the applicants.

52    Third, I should not be hindered in assessing the reliability of Mr Martin’s and Ms Nador’s evidence. I cannot know whether that will eventuate; but I am concerned that in a case such as this, which is likely to involve lengthy cross-examination on contentious evidence and issues of credit, I may be if their evidence is given via video link. I consider I will be better placed to pick up the nuances of their evidence and assess its reliability if their evidence is given in person. I agree with Lee J’s remarks in Palmer at [47].

53    Fourth, Brambles argued that allowing Mr Martin’s and Ms Nador’s evidence to be given via video link is likely to promote the overarching purpose under s 37M. It contended that, in circumstances where Mr Martin and Ms Nador face significant impediments in travelling to Australia due to the pre-existing work obligations, an order permitting them to give evidence via video link would promote the overarching purpose for three reasons:

(a)    first, that the order sought will minimise the risk of any adjournment and therefore delay of the trial which might eventuate if Mr Martin and Ms Nador are not permitted to provide their evidence by video link, and must travel to Australia to give evidence in person at some other time;

(b)    second, that an order to allow their evidence to be heard via video link is unlikely to result in material inefficiencies in the conduct of the hearing as they are willing to provide their testimony in accordance with the Court’s ordinary sitting times in Melbourne, and the Court has made orders for an “e-trial” which will facilitate Mr Martin’s and Ms Nador’s access to relevant documents with relative ease and third party assistance and with the presence of an independent solicitor; and

(c)    third, the order sought will nullify the prejudice Brambles will suffer if it is unable to rely on Mr Martin’s and Ms Nador’s evidence in the proceeding.

54    I can see little substance in the first of those contentions. Brambles did not at any point contend that if the application to take Mr Martin’s and Ms Nador’s evidence via video link was not granted then the trial should be adjourned. I accept the second of those contentions, but it is not a weighty consideration.

55    Insofar as Mr Martin’s evidence is concerned I also accept Brambles’ third contention. Although it did not ultimately prove to be the case, in dismissing the application I was persuaded that if Mr Martin was not permitted to give evidence via video link during the Trial Period he would not give evidence at all. I accepted that Brambles’ defence of the proceeding was likely to be prejudiced as a result and that the prejudice could be significant. I treated this consideration as a powerful one.

56    In relation to Ms Nador, because she continues to be employed by Brambles I did not accept that she was in a position to refuse to travel to Australia to give evidence if Brambles directed it. Whether Brambles did so is a matter for it. If it did direct Ms Nador’s attendance at the trial, the prejudice it would suffer is the time and expense of her travelling to and staying in Australia, and the detriment to its business in the USA by reason of her being away. There is no persuasive evidence as to any such detriment but I am prepared to accept that there may be some. There may be some prejudice to Ms Nador as her work in the USA will be affected if she is required to travel to Australia, and she will have the inconvenience, reduced efficiency and lost time of travelling to Australia and having to undertake work while in transit and on a plane. I do not, however, see these as weighty considerations.

57    Fifth, it is also relevant that the prejudice that Brambles may suffer results from steps that it, or Allens, failed to take. It certainly does not arise from anything the applicants have done. I do not see this as a particularly weighty consideration, but it is relevant.

58    Mr Martin ceased employment with Brambles in 2019 and the 20 August 2021 orders listed the proceeding for trial to commence on 8 August 2022, with an estimate of six weeks. Brambles (or Allens) knew that Mr Martin was no longer a Brambles employee at the point that he was requested to make an affidavit in the proceeding. I do not know precisely when that was but he affirmed his first affidavit on 18 November 2021, approaching nine months before the trial. The trial date was already set at the time Mr Martin made his affidavit and Allens must have known that he could not be compelled to travel to Australia to give evidence. There was no evidence that Mr Martin ever agreed to travel to Australia to give his evidence, nor was there any evidence that Brambles ever contemplated making an application to have his evidence taken overseas pursuant to the procedures in r 29.11 of the Federal Court Rules 2011.

59    Mr Tolliday’s affidavit tends to show Allens did not take steps to be satisfied as to the capacity and willingness of its overseas-based witnesses to travel to Australia to give evidence in person at the trial until much too late. He said that at the time of the 21 June 2022 case management hearing Brambles was “at an early stage of discussions” with four of its overseas-based lay witnesses “regarding their capacity and willingness” to travel to Australia to provide their testimony in person. It appears that it was not until after the case management hearing that “instructions” were sought from those witnesses regarding their capacity and willingness to travel to Australia to give evidence in person, and then steps were taken to resolve or work around the difficulties that were proposed, including by varying the draft trial plan to accommodate different witness availabilities. The case management hearing was about seven weeks before the commencement of the trial and the arrangements for the witnesses to travel to Australia to give evidence should have been put in place and ‘locked in’ much earlier, so as to avoid their diaries becoming filled with other work commitments.

60    In relation to Mr Martin it might be argued that the Transaction (and the difficulties it was said to create for his availability) did not arise until, say, late June 2022 and therefore Allens could not have known about his potential unavailability until then. But the evidence in that regard is not clear. Mr Tolliday said only that approximately two weeks after the 21 June 2022 case management hearing he was informed by Mr Martin that “the Transaction had entered an accelerated stage, which would require a greater amount of his time and attention than originally anticipated, and that this could interfere with his ability to give evidence for [Brambles] in person or via AVL.” The evidence does not make clear how long the Transaction was on foot before that, just that it had accelerated.

61    In relation to Ms Nador, the evidence rises no higher than to state that Ms Pailthorpe was informed by Ms Nador and believes that Ms Nador’s work commitments constitute “impediments” to her travelling to Australia to give evidence in person in the trial, and that she is therefore “unable and unwilling” to do so. There are several shortcomings in the evidence in this regard.

62    The trial date has been set since 20 August 2021. One of the work commitments upon which Ms Nador relies as an impediment to her giving evidence in person is the CHEP North America Connect Live Conference, which Ms Nador was said to be preparing for (together with preparing for and attending a Board review) in the week commencing 22 August 2022, and which she was said to be required to attend in the week commencing 29 August 2022. I doubt that this was a fixed commitment prior to the trial date being set. It is unlikely that the conference was finally scheduled at the time that Allens first requested Ms Nador to prepare her affidavit. It is also appropriate to infer that, as President of CHEP North America, Ms Nador had some influence as to when the conference was scheduled.

63    But whether or not Ms Nador had any say in the scheduling of the conference, it is a conference which Brambles chose to schedule at the same time as the trial in circumstances where Brambles intended to call Ms Nador as an important witness. It should have been possible to schedule the conference so that there was a window of time within which Ms Nador could travel to Australia, give evidence and return to the USA. It would not need to be a substantial time window.

64    Nor is it clear on the evidence why Ms Nador’s preparation for the conference (which commences over a week after she is scheduled to give evidence in Brambles’ proposed trial plan) cannot be effectively undertaken if she is required to travel to Australia to give evidence. There is nothing to show that the preparation, or some of it, could not be undertaken from a wifi-enabled business class seat in an aeroplane, in an airline business lounge, or in a hotel in Australia while waiting to give evidence.

65    Brambles seeks to rely on Ms Nador’s evidence and, if it wishes to do so, it can take steps to ensure that she does not have to undertake work commitments that interfere with her ability to give evidence on Brambles’ behalf in the proceeding.

66    Sixth, because my diary could accommodate this without slowing the resolution of the case, I flagged that I was open to hearing Mr Martin’s and Ms Nador’s evidence in October 2022, outside the Trial Period. This reduced the significance of the evidence about their unavailability in the Trial Period. The applicants did not oppose this course.

67    Finally, it is perhaps worth noting the similarities between the facts in this case and the facts in Dorajay, where Stone J refused the application to hear a witness’s evidence by video link for reasons that included “the difficulties that attend the taking of evidence by video link and the cross-examination on that evidence” which her Honour found to be “considerable” and which “markedly interfere with the giving of the evidence and, particularly, with cross-examination” (at [6]-[7]). That case was also a large and complex securities class action. As in this case, the relevant witness was a former senior officer of the respondent who was by then working as a senior officer of another company; the witness’s evidence went to the reliability of the respondent’s profit forecasts and it was accepted to be significant to the dispute in the proceeding; the witness lived in the USA and was unwilling to travel to Australia to give evidence in person because of asserted heavy work commitments, but was prepared to give evidence by video link; the witness could not be compelled to travel to Australia to give evidence and the choice was therefore between hearing the witness’s evidence via video link or not hearing it at all; and the evidence as to reasons for the witness’s inability or unwillingness to travel to Australia to give evidence was not given directly by the witness, instead being given by lawyers on the basis of information and belief.

Conclusion

68    Weighing the various considerations in the balance, I concluded that it was in the interests of justice to refuse the application for Mr Martin’s and Ms Nador’s evidence to be heard by video link. Their subsequent change in position fortifies my view as to the appropriateness of that conclusion.

69    The question of costs was not raised by the parties but I am aware of no reason why costs should not follow the event. If either party wishes to submit that some other costs order is appropriate that party should file short submissions within seven days, otherwise I shall order that Brambles pay the costs of and incidental to the application.

Associate:    

Dated:        19 August 2022