Opportunities & Challenges

Justice Mansfield 24 May 2008

Evidence in cases under the Trade Practices Act 1974

Competition Law Conference 2008
Shangri-la Hotel, Sydney

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My early experience of Part IV cases under the Trade Practices Act 1974 (Cth) included Trade Practices Commission v Nicholas Enterprises Pty Ltd (No 2) (1979) 26 ALR 609; 40 FLR 83, a judgment delivered by Fisher J on 7 September 1979. That case, sometimes called the "Packaged Beer Price Fixing Case", concerned an allegation of an unlawful agreement about prices in contravention of s 45 of the Act. A number of the proprietors of retail hotels in South Australia (bottle shops were much less significant in those days) were alleged to have got together at a meeting and agreed on a certain date to cease their very competitive pricing of packaged beer. For some months in Adelaide there had been a vigorous price competition in the packaged beer market in South Australia. There was no contest about the market. The only issue is whether there had been an agreement in restraint of trade. The Commission’s case put simply was that the relevant hoteliers (who controlled a significant number of the hotels around Adelaide and who had been competing vigorously to sell packaged beer to the public) got together at a meeting and agreed that, on the following Monday, they would cut out discounting of packaged beer. There was, as it happened, uniform conduct on the following Monday by which all of those discount outlets ceased discounting packaged beer. In practical terms, therefore, the issue was whether there had been a meeting and, if so, whether those present had reached the unlawful agreement to act in the way that an observer of the market might have inferred had occurred. The meeting was alleged to have taken place in a private room of one of the hotels in question.

The star witness for the Commission was the representative of a brewer who, according to the opening, had been present at the meeting, had identified those present and had described the occasion of the agreement in a little detail. Such was the relative sophistication of case preparation at that time that the star witness had merely provided a statement which had been typed up by the Commission, of one to two pages. He had not apparently been asked to sign it. It had been assumed that he would attend and give evidence in accordance with his statement. It had not been given to the respondents’ solicitors.

The trial started. The respective hoteliers were all sitting in the rear rows of the Court along with an array of counsel, including myself. When the opening commenced, the star witness was waiting outside. It is entirely coincidental, I am sure, but just when the star witness was called in to give evidence a number of counsel turned back to the rear of the Court only to notice their clients also filtering back into the Court. They had obviously taken a few moments during the opening to stretch their legs.

Then the star witness’ examination started. After the usual introductory material, there was a question about a meeting at the (nameless) hotel with a group of publicans. He had many meetings with publicans. He was directed to a meeting at which a number of publicans were present and took place on or about the date alleged. But he did not remember any particular meeting.

The examiner got a little panicky. He went through the names of each of the publicans of the several hotels and asked if they were known to the witness and, of course, he said yes. Counsel then asked whether he had attended a meeting at which they were all present. But again the witness was not sure. And so it went on.

Those at the bar table speculated that the star witness, the brewer, might have come to understand somehow that the various publicans who represented substantial sales of liquor and packaged beer in South Australia might choose not to stock the product of that particular brewer if the foreshadowed evidence was given.

It is, of course, a matter of history that, despite the absence of direct evidence of the meeting, Fisher J was able to infer the existence of the alleged agreement.

The purpose of the story is simply to point out how dramatically different are the preparation and presentation of evidence in Pt IV cases now compared to those early days. You would all have had the experience of volumes of documents being exchanged before trial, commonly including extensive transcripts of examinations under s 155 of the Act, and of the provision of lengthy signed statements or affidavits of proposed witnesses, and of the style of presentation of evidence in chief by the adoption of the witness’ statement or affidavit followed only by short further evidence in chief. You would also have had the experience of detailed, and complex, expert opinion evidence being exchanged, often from several experts in the same discipline, and then tested at length during the hearing.

It is a trite observation to say that litigation under Part IV of the Trade Practices Act is often, if not now invariably, very expensive and prolonged. With the rise of digital technologies in the last decade, the challenges faced by courts in accommodating and synthesising evidence, including expert economic evidence, are amplifying. The volume and complexity of evidence poses challenges for the court, as well as for the parties, to absorb and understand it in the context of the whole case. Those matters are a good reason to address the nature, and means of presentation, of evidence in Pt IV cases.

There are additional reasons to consider this topic. In the arena of competition law, the courts are increasingly "vulnerable to the demands of well-resourced and determined litigants".[2] The drain on public resources caused by protracted trade practices litigation can be profound and runs contrary to the principles of effective case management, which emphasise the "just, quick and cheap"[3] resolution of disputes. The imbalance of resources between litigants in some cases, whether a substantial corporation against a smaller one, or the Australian Competition and Consumer Commission against a small corporation, presents its own difficulties in ensuring a fair trial with a just result. Indeed, concerns about the costs of such litigation are expressed from time to time by the ACCC itself, and by some larger corporations as well.

The Court and its judges, in response to such issues, for some time have adopted a more active case management role.

The Chief Justice recently released a Notice to Practitioners and Litigants on Case Management and the Individual Docket System.[4] It states, inter alia:

2. Purposes

2.1 The overarching purposes of individual case management within the docket system is the just resolution of disputes as quickly, inexpensively and efficiently as possible.

2.2 These purposes inform what the Court does in its management of proceedings.

2.3 The Court requires that the parties and their representatives give effect to these purposes in their conduct of proceedings.

3. Principles

3.1 In giving effect to the overarching purposes, the Court, the profession and the parties will necessarily have regard to what the interests of justice, either generally or in the particular case, require.

3.2 To that end, the Court may be expected to have regard to the desirability of:

(a) identifying and narrowing the issues in dispute as early as possible;

(b) ascertaining the degree of difficulty or complexity of the issues really in dispute;

(c) setting a trial date early;

(d) minimising unnecessary interlocutory steps by permitting only interlocutory steps that are directed to identifying, narrowing or resolving the issues really in dispute between the parties;

(e) exploring options for assisted dispute resolution as early as practicable.

3.3 The parties and their representatives have an obligation to cooperate with, and assist, the Court in fulfilling the overarching purposes and, in particular, in identifying the real issues in dispute as early as possible and dealing with those issues in the most efficient way possible. (Emphasis in original.)

This paper argues that judges must assume greater authority as case managers through more extensive use of the powers available to them under Order 10 of the Federal Court Rules, as well as making use of s 135 of the Evidence Act 1995 (Cth), in order to effectively enforce these principles. In particular, Order 10 rule 1(2) states, inter alia:

(2) Without prejudice to the generality of subrule (1) or (1A) the Court may:

(d) order that no more than a specified number of expert witnesses may be called;

(h) order that the parties attend before a Registrar for a conference with a view to satisfying the Registrar that all reasonable steps to achieve a negotiated outcome of the proceedings have been taken, or otherwise clarifying the real issues in dispute so that appropriate directions may be made for the disposition of the matter, or otherwise to shorten the time taken in preparation for and at the trial;
(i) in a case in which the Court considers it appropriate, direct the parties to attend a case management conference with a Judge or Registrar to consider the most economic and efficient means of bringing the proceedings to trial and of conducting the trial, at which conference the Judge or Registrar may give further directions; …

But the pathway to those ends is not always direct. Justice Ronald Sackville noted in a recent paper on mega-litigation:[5]

All these powers and more are available. Yet the reality is that the exercise of these powers in the context of mega-litigation depends to a great extent on the co-operation of the parties. In the adversary system, particularly as administered by courts subject to the constraints imposed by Chapter III of the Constitution, the overriding limitation is that the judge must not compromise his or her role as an independent and impartial judicial officer. If that limitation is transgressed, however well-intentioned the judicial intervention, the trial may miscarry.

It follows that if the parties to mega-litigation are not prepared to co-operate – with each other and the court – a judge may find it extremely difficult, over the active opposition of the parties, to make orders that might be likely to curtail the scope of the litigation and make the trial shorter. Orders, for example, limiting the nature and scope of evidence that a party can adduce in support of its case (other than by applying the rules of evidence) could place the integrity of the trial at serious risk.

Hence, the responsibility for successful and useful case management lies also with counsel and solicitors for the parties, and to a degree with the clients.

This paper is intended to consider whether there are ways that the process of evidence preparation and presentation in Pt IV cases might be improved. It is clearly in the interests of justice that such cases should be managed and resolved as fairly and efficiently (both in terms of time and cost) as possible. Necessarily, the paper simply dips into some particular topics. It also reflects my particular experiences and opinions. It should not be taken to represent the views of any of the other judges of the Court.

It is important not to lose sight of the fundamental proposition that the Court’s role is to administer justice. As Dawson, Gaudron and McHugh JJ pointed out in Queensland v JL Holdings Pty Ltd (1997) 189 CLR 146 at 155, "[j]ustice is the paramount consideration". In other words, courts should be astute to ensure that expediency is not permitted to usurp justice.

My starting point is to look at problems identified by others in the conduct of cases, particularly long cases, under the Trade Practices Act.

Long cases

The issues to which I have referred emerge more acutely in long cases.

Professor Maureen Brunt observed that a "trade practices trial lends itself to the accretion of a frightening quantum of irrelevant naked facts."[6]

In Trade Practices Commission v Australia Meat Holdings Pty Ltd (1988) 83 ALR 299 at 315-316; [1988] ATPR 40-876, Wilcox J lamented the unnecessary protraction of the hearing to 23 days:

[T]he major cause of the expansion of hearing time was the amount of evidence which the applicant and AMH, particularly AMH, adduced upon the issue of market definition. I am sure that the parties intended this material to be helpful to the court and I salute the industry of the many people involved in its collection and analysis. However, although none of the evidence is irrelevant, much of it has proved to be of little assistance. It is for me a matter of concern that the curial determination of the limits of a market — about which question I assume commercial people frequently make almost intuitive judgments — should be seen as requiring the time, effort and expense involved in this case. My concern is intensified by the circumstance that, almost by definition, proceedings to prevent a breach of s 50, or to reverse the effects of an antecedent breach, will always involve a measure of urgency. I suppose that the very flexibility of the concepts of market and of dominance necessarily casts a wide evidentiary net; but, in this type of litigation, there is a particular need for rigorous consideration of the probative value of potential items of evidence.

In particular I deprecate the course, taken by AMH, of supplying to economists proofs of the evidence to be given by other witnesses and then eliciting from those economists opinions as to the proper conclusion upon the definition of the market. Economists are able to assist the court in relation to economic principles. But, once the relevant principles are expounded, their application to the facts of the case is a matter for the court. The proper definition of a market is entirely a matter of fact, the determination of which ought not to be made more protracted and expensive by the adduction of unnecessary expert evidence.

In Arnotts Ltd v Trade Practices Commission (1990) 24 FCR 313 at 318; 97 ALR 555, the Full Court of the Federal Court complained of the trial occupying 110 hearing days:

[n]either the court nor the litigants should … be burdened with the consequences of a mountain of seemingly unnecessary evidence. We have no doubt that, with even reasonable attention on both sides to the relevance and utility of the questions being asked and the documents being tendered, the trial could have been completed in much less time than it actually took and, consequentially, with much less cost to the parties.

There appears to be an assumption abroad today about commercial litigation: that, when big issues are at stake, there must inevitably be a long and complicated hearing. This assumption must be discarded. No matter how much is at stake, in dollar terms, there is no justification for irrelevant or unuseful evidence. Moreover, it is in the interests of the parties to analyse properly the cases which they wish to make and to restrict themselves to helpful material; and not only because of savings in costs. The devotion of excessive attention to peripheral matters, rather than the main issues, causes the parties to lose sight of the real issues and to devote insufficient attention to them. The result may be to leave the court with insufficient or unsatisfactory material upon principal factual issues. The essence of counsel’s function is the identification of, and concentration upon, the critical issues in the case.

Mason CJ and Wilson J in Queensland Wire Industries Pty Ltd v Broken Hill Pty Co Ltd (1989) 167 CLR 177 at 191 characterised the behaviour regulated by Pt IV of the Trade Practices Act as "deliberate and ruthless":

Competition by its very nature is deliberate and ruthless. Competitors jockey for sales, the more effective competitors injuring the less effective by taking sales away. Competitors almost always try to "injure" each other in this way. This competition has never been a tort … and these injuries are the inevitable consequence of the competition s 46 is designed to foster.

Protracted battles in the business world often move to the terrain of the courtroom. General von Clausewitz famously stated, "[w]ar is the continuation of politics by other means."[7] One could extend the analogy to restrictive trade practices cases – litigation is the continuation of trade and commerce by other means. If the deliberate and ruthless tactics of competition in the business world are brought to the courtroom, what collateral damage is suffered by the court and civil society in general?

A recent example of the continuation of a bitter commercial dispute into the courtroom is Seven Network Ltd v News Ltd [2007] FCA 1062 (the C7 Case). Justice Sackville described the case as "mega-litigation", by which his Honour meant:

civil litigation, usually involving multiple and separately represented parties, that consumes many months of court time and generates vast quantities of documentation in paper or electronic form. An invariable characteristic of mega-litigation is that it imposes a very large burden, not only on the parties, but on the court system and, through that system, the community.[8]

In the Summary preceding the decision in the C7 Case, Sackville J outlined succinctly the extravagant expenditure of the parties in bringing the case to trial:

[4] The trial lasted for 120 hearing days and took place in an electronic courtroom. Electronic trials have many advantages, but reducing the amount of documentation produced or relied on by the parties is not one of them. The outcome of the processes of discovery and production of documents in this case was an electronic database containing 85,653 documents, comprising 589,392 pages. Ultimately, 12,849 "documents", comprising 115,586 pages, were admitted into evidence. The Exhibit List would have been very much longer had I not rejected the tender of substantial categories of documents that the parties, particularly Seven, wished to have in evidence.

[5] Quite apart from the evidence, the volume of written submissions filed by the parties was truly astonishing. Seven produced 1,556 pages of written Closing Submissions in Chief and 812 pages of Reply Submissions (not counting confidential portions of certain chapters and one electronic attachment containing spreadsheets which apparently runs for 8,900 or so pages). The Respondents managed to generate some 2,594 pages of written Closing Submissions between them. The parties’ Closing Submissions were supplemented by yet further outlines, notes and summaries.

[6] In addition, the pleadings amounted to 1,028 pages. The statements of lay witnesses that were admitted into evidence run to 1,613 pages. The expert reports in evidence totalled 2,041 pages of text, plus many hundred pages of appendices, calculations and the like. The transcript of the trial is 9,530 pages in length.

[8] It is not surprising that a case that generates this volume of material also generates very large costs. What is surprising is the sheer amount of money that has been devoted to a single case. My estimate is that the parties have spent in the order of $200 million on legal costs in connection with these proceedings.

[10] It is difficult to understand how the costs incurred by the parties can be said to be proportionate to what is truly at stake, measured in financial terms. In my view, the expenditure of $200 million (and counting) on a single piece of litigation is not only extraordinarily wasteful, but borders on the scandalous.

In the judgment itself at [25], his Honour noted:

I made a tentative suggestion, which Seven took up, that some of the experts might give concurrent evidence as a means of saving hearing time and encouraging a narrowing of the issues. However, the proposal was strenuously resisted by the Respondents and ultimately was not implemented. The parties’ resolute determination to put their respective cases at great length is reflected in the volume of their written submissions. That determination has also been reflected in the unwillingness of some parties to make concessions unless a point is self-evidently hopeless or there is a perceived forensic advantage to making the concession.

Justice Sackville, in a recent paper on mega-litigation, commented on his reluctance to limit the number of experts to give evidence despite his better judgment:[9]

In the C7 Case, reports from five experts were tendered on market definition questions: two by Seven; two by the News respondents and one by the PBL respondents. In retrospect, in my view, the issues requiring consideration would have been sufficiently exposed had Seven been content to rely on reports from one expert and if the respondents collectively had also limited themselves to tendering the report of a single expert. Indeed, on one view, Seven’s case suffered from having two experts on market definition whose views did not altogether coincide.

As the judgment in the C7 Case records, it became clear that a significant proportion of the costs incurred in compiling expert reports, and in arranging for their authors to give oral evidence, was wasted. Even so, in the face of assurances from senior counsel that multiple reports were justified by the unusual character of the proceedings and the complexity of the market definition issues, I did not feel able to direct that only two experts in total should prepare reports and give evidence. Knowing what I now know, I think that view was mistaken. But at the time the judgment had to be made, the information deficit suggested that I should err on the side of allowing the parties to pursue their own course. (Footnotes omitted.)

His Honour argued that trial judges must be armed with adequate strategies and tactics in order to manage mega-litigation more effectively:[10]

[T]he courts will have to adopt even more rigorous and interventionist pre-trial case management strategies. They will also have to demonstrate a greater willingness to exercise stringent control over the parties and their legal representatives in the conduct of the trial itself.

One obstacle in the path of these changes is the traditional constraints on the exercise of judicial power, especially by Chapter III courts. In particular a judge is held to stringent standards by reason of his or her role as an impartial and independent adjudicator.

The traditional constraints on the exercise of judicial power are well illustrated by the majority decision of the New South Wales Court of Appeal in Australian National Industries Ltd v Spedley Securities Ltd (in liq) [(1992) 26 NSWLR 411]. There a judge managing complex company litigation made findings in interlocutory proceedings in which he criticised the credit and commercial conduct of certain parties. This was held to be sufficient to disqualify the judge from further conduct of the proceedings notwithstanding the judge’s view that the disqualification would involve a scandalous waste of judicial resources.

[T]raditional adversary procedures, even within a case management system, must be modified if commercial proceedings are to be resolved more swiftly and cheaply.

This proposition must be accepted if the courts are to be able to control mega-litigation more effectively. Judges must be given explicit statutory powers to curtail the scope, duration and expense of mega-litigation exercisable even over the express opposition of the parties. The guiding principle should be the need to ensure that the projected costs of the litigation are proportionate to the relief sought and that an undue burden is not placed on the court or the judicial system. The powers should include:

  • making orders limiting the number and length of expert reports on any issue;
  • refusing permission for potential witnesses to give evidence if, in the opinion of the judge, there are reasonable grounds to think that the probative value of the proffered evidence will be outweighed by the danger that the evidence might cause or result in an undue waste of time;[11]
  • making orders restricting the categories of discoverable documents and imposing limits on the total cost of discovery (to ensure that the costs are proportionate to what is at stake in the proceedings and that, in any event, the costs are not unreasonable);
  • referring specific issues arising in the proceedings to arbitration subject to such directions as the court considers appropriate, including time limits for making a determination;[12]
  • specifying the maximum length of the trial and allocating the available time among the parties;
  • imposing time limits on the presentation of lay evidence (including cross-examination of the opponents’ witnesses);
  • imposing page limits on written submissions or similar material and limiting the hearing time (if any) allocated to each party to make oral submissions;
  • giving directions as to the template which the parties must follow in making submissions and which is to constitute the framework for the judgment;
  • providing summary reasons only when giving judgment on any contested interlocutory issue; and
  • specifying the time it is reasonable to expect the trial judge to devote to the preparation of a final judgment, having regard to the issues genuinely in dispute, the other commitments of the judge and the caseload and resources of the court. (Footnotes and emphasis in original.)

Justice Sackville continued:[13]

The trial judge needs additional statutory protection if effective management of mega-litigation is to become a reality. Effective management, especially at the pre-trial stage, may well require the judge to express or imply views about the apparent strength or cogency of proposed evidence or legal contentions. To express such views frankly might come close to the borders of pre-judgment, if the orthodox principles governing apprehended bias are applied. Effective control of mega-litigation therefore necessitates the judge being granted greater leeway in forming and expressing views at a relatively early stage in the proceedings than might be appropriate if the orthodox principles are to be applied in uniformly stringent manners.

Such modifications could facilitate innovations that may startle some who are imbued with the virtues of the traditional adversary system, yet can be justified in the interests of achieving considerable savings in time and costs and improving the chances of the litigation being effectively managed. For example, in a case involving expert evidence there may be advantages to the judge being entitled to consult with an independent expert, both during and after the trial, without having to disclose the substance of discussions to the parties or giving them an opportunity to comment. The ability to consult in this manner would shorten the trial, make the judge’s task more manageable and result in quicker judgments. The departure from traditional standards of procedural fairness can be justified not only by the advantages gained in the more effective conduct of mega-litigation, but by the safeguards inherent in the obligation of the judge to give reasons for his or her final decision.

… the trial judge should be required to have regard to – and indeed give primacy to – the principle of proportionality. In the context of mega-litigation, this principle mandates that the costs incurred by the parties and the public resources devoted to resolving the litigation must be proportionate to the subject matter of the dispute. Moreover, the principle of proportionality requires the court, in making directions for the conduct of the litigation, to take into account its duty to hear and determine all disputes quickly, cheaply and fairly. The duty to act fairly must of course remain, but it should be applied by trial and appellate courts paying due regard to the principle of proportionality.

Independence and impartiality must remain at the core of the exercise of judicial power. But the content of these concepts must adapt to the new forensic reality. (Emphasis in original.)

Economics and law

Law and economics are both disciplines belonging to the social sciences. As such, they employ similar modes of thought. Both rely on deductive reasoning – the application of theoretical principles to a set of facts – to adjudicate on matters of human behaviour. Perhaps this similarity explains, at least in part, the difficulty with which the law accepts economic evidence – lawyers and judges can feel their role to be usurped by economists since they present information by way of discursive theoretical constructs rather than via testimony of discrete, identifiable facts.

Nevertheless, the Trade Practices Act specifically incorporates economic concepts into Australian law. In Boral Besser Masonry Ltd v ACCC (2003) 215 CLR 374 at [247], McHugh J said:

The terms of the Act have economic content and their application to the facts of a case combines legal and economic analysis. Their effect can only be understood if economic theory and writings are considered. (Footnote omitted.)

The expert testimony of economists is required to define and apply these concepts in the courtroom. Expert economic evidence is required both to assist in the application of the economic objectives of the Act as they arise in a matter, and also in the interpretation of specific terms possessing a specialised usage and meaning. But it goes further than that, because it involves drawing and supporting conclusions about complex facts (eg the nature of the relevant market, the extent of the impact upon a particular matter of certain conduct). Such evidence is received under s 79 of the Evidence Act 1995 (Cth). Its "argumentative" quality is well recognised. In Australian Competition and Consumer Commission v Liquorland (Australia) Pty Ltd [2005] FCA 630 at [21], Allsop J quoted John Maynard Keynes as follows:

The Theory of Economics does not furnish a body of settled conclusions immediately applicable to policy. It is a method rather than a doctrine, an apparatus of the mind, a technique of thinking, which helps its possessor draw correct conclusions.[14]

Consequently, economic evidence can take the form of argumentative opinion evidence rather than merely factual evidence. In Australian Competition and Consumer Commission v Liquorland (Australia) Pty Ltd (2006) ATPR 42-123; [2006] FCA 826 at [842], Allsop J noted that "often the point of the expert opinion is to give a form or construct to the facts". He continued:

It may appear to be an argument put by the witness. So it is. The discourse is not connected with the ascertainment of an identifiable truth in which task the Court is to be helped by the views of the expert in a specialised field. It is not, for example, the process of ascertaining the nature of a chemical reaction or the existence of conditions suitable for combustion. The view or argument as to the proper way to analyse facts in the world from the perspective of a social science is essentially argumentative. That does not mean intellectual rigour, honesty and a willingness to engage in discourse are not required. But it does mean that it may be an empty or meaningless statement to say that an expert should be criticised in this field for "putting an argument" as opposed to "giving an opinion". 

Expert opinion evidence

Section 56 of the Act provides that only evidence which is relevant to the proceeding is admissible as evidence, "thus imposing a threshold test of relevance on all expert evidence".[15]

Orders 34-34B of the Federal Court Rules outline the procedures relating to the use of experts in court proceedings. In particular, O 34A provides judges with a range of means for taking expert evidence, primarily to enhance the quality of content and limit the volume of such evidence in proceedings, including concurrent examination of expert witnesses – colloquially known as "hot-tubbing".

The Federal Court’s Practice Direction on Guidelines for Expert Witnesses in Proceedings in the Federal Court[16] states, inter alia:

1. General Duty to the Court

1.1 An expert witness has an overriding duty to assist the Court on matters relevant to the expert’s area of expertise.

1.2 An expert witness is not an advocate for a party even when giving testimony that is necessarily evaluative rather than inferential.

1.3 An expert witness’s paramount duty is to the Court and not to the person retaining the expert.

2.The Form of the Expert Evidence

2.2 All assumptions of fact made by the expert should be clearly and fully stated.

2.5 The expert should give the reasons for each opinion.

2.7 There should be included in or attached to the report; (i) a statement of the questions or issues that the expert was asked to address; (ii) the factual premises upon which the report proceeds; and (iii) the documents and other materials that the expert has been instructed to consider.

3. Experts’ Conference

3.1 If experts retained by the parties meet at the direction of the Court, it would be improper for an expert to be given, or to accept, instructions not to reach agreement. If, at a meeting directed by the Court, the experts cannot reach agreement about matters of expert opinion, they should specify their reasons for being unable to do so. (Footnotes omitted.)

There exists a tension between Guideline 1 and O 10 r 1(2)(j) of the Federal Court Rules which allows experts to submit opinion by way of submission rather than as evidence. Order 10 r 1(2) provides:

Without prejudice to the generality of subrule (1) or (1A) the Court may:

(j) in proceedings in which a party seeks to rely on the opinion of a person involving a subject in which the person has specialist qualifications, direct that all or part of such opinion be received by way of submission in such manner and form as the Court may think fit, whether or not the opinion would be admissible as evidence.

In Sampi v State of Western Australia [2005] FCA 777 at [792]-[793], French J made the following observation:

[792] Aspects of the reports offered what might properly be called argumentative or taxonomical conclusions or inferences relevant to the claimed determination of native title. To call them such is not necessarily to denigrate them. The judgment of the Court in determining the application is in part evaluative. The Federal Court Rules recognise that there are aspects of so called expert testimony which are argumentative and can be treated as submission. … [Order 10 r 1(2)(j)] was developed in part to respond to concerns about the way in which rules of evidence might lead to the exclusion of helpful economic testimony in competition law cases. Economic experts typically offer opinions about questions such as market definition relevant to the application of particular provisions of the Trade Practices Act 1974 (Cth). Such opinion is by way of characterisation of primary evidence and is essentially argumentative in character albeit the characterisation is informed by relevant expertise. An anthropologist, as in the present case, may offer an opinion on whether a particular group of people constitute a distinct or discrete society of persons. The nature of the taxonomical exercise is conceptually similar to that undertaken by the economist.

[793] There is potentially some tension between the recognition that expert testimony may have the character of submission and the Practice Direction relating to expert witnesses which contemplates acceptance by the expert of a duty to the court in providing opinion evidence and which rejects the proposition that the expert is simply a ‘hired gun’ for the party who calls him or her. That tension and associated difficulty in the way of accepting expert testimony as evidence can arise where the opinion offered becomes advocacy for a particular outcome.

The Explanatory Memorandum to the Guidelines was amended on 11 April 2007 to acknowledge the competing aims of Guideline 1 and O 10 r 1(2)(j) of the Federal Court Rules:

Some expert evidence is necessarily evaluative in character and, to an extent, argumentative. Some evidence by economists about the definition of the relevant market in competition law cases and evidence by anthropologists about the identification of a traditional society for the purposes of native title applications may be of such a character. The Court has a discretion to treat essentially argumentative evidence as submission, see Order 10 paragraph 1(2)(j).

Justice John Middleton in a recent paper on "Expert Economic Evidence"[17] stated that Order 10 r 1(2)(j) was introduced in 1994:

to counter a restrictive approach to the admissibility of expert evidence that was seen to result from the decision of the Full Federal Court in Arnotts Ltd v Trade Practices Commission (1990) 97 ALR 555. There the Full Court held that an expert’s evidence in question was simply an expression of his opinions about the factual correctness of the assertions in the pleadings and that this was not admissible. The Court held that an economist may legitimately give his opinion about a question to be decided by the Court, but he or she must clearly identify and articulate the facts upon which the opinion is based. This position was seen to limit the evidence that could be admitted, particularly where economic experts present their opinion more as an argument than as evidence. This is a common characteristic of expert economic evidence given the nature of the field of specialisation, and it was in large part for this form of expert opinion that the rule was introduced.

Justice Robert French delivered a paper on "The Role of the Court in Competition Law" in which he said of the rule:[18]

A well constructed economic argument can be as beneficial to the court as a well constructed legal submission. If economists have an ability to put argument directly to the court as part of the trial process rather than filtering it second-hand through counsel, their role in the adjudication process is enhanced rather than downgraded. As Professor Brunt has observed of the rule:

It could also enable the economist-expert to assist the court in whatever capacity might prove useful to resolution of the issues. The rule would appear to give scope for a written submission at any stage in the proceedings, including the pre-trial stage and thus to widen the opportunity for economists to contribute to clarification of the issues and the assessment of the relevance of evidence.[19]

Notwithstanding the flexibility offered by the rule it is of course important to maintain the distinction between argument and evidence. Where argument depends for its validity upon the finding of primary facts it will play no part in the course consideration if those primary facts cannot be found on the evidence. (Footnote in original.)

The acknowledgment of the substantial role of expert economic evidence in cases under the Trade Practices Act has evolved with parallel emphasis upon the need for such expert evidence to be in an appropriate form for the judge to understand and make use of it.

In Australian Competition and Consumer Commission v Liquorland (Australia) Pty Ltd [2005] FCA 630 at [26]-[32], Allsop J highlighted the need for expert evidence to clearly distinguish facts, assumptions, opinions and reasoning processes. His Honour stated:

[26] There is a plain requirement, either out of fairness in terms of how evidence is deployed or as a requirement of admissibility, for there to be clarity in the presentation of the expert witness’ views. It must be plain, to avoid unnecessary cost, confusion and prejudice, to identify what are assumptions and what are not, that is, what is assumed as fact and what facts the expert can give primary evidence of. In many cases, an expert, who is both expert and familiar with the discipline involved, can say from personal knowledge what are some of the underlying facts.

[27] Then there is the clear identification of principle within the discipline. There appears to be no real debate in this case about that.

[28] Then there is a question of the reasoning process. That can be difficult to distinguish from the assumption and the opinion, but it is important that the taxonomy that I am identifying is understood as including reasoning towards a conclusion.

[29] With that fairly straightforward taxonomy in mind, one then comes to the role of the economist in a case such as this. Because it is a social science and because in one sense and in part it truly is a way of approaching matters and a way of thinking about matters, there is a role, it seems to me, for the economist to assist the court by expressing, in his or her own words, what the human underlying facts reveal to him or her as an economist and what it reflects to him or her about underlying economic theory and its application.

[30] For instance, if here there were tendered a mass of industry data about consumer behaviour, about catchment areas for shops and about activities of shopkeepers, and learned senior counsel closed his case and addressed me on that question, I could well understand and expect one submission from the respondent to be that there was a startling and illuminating absence of evidence in this case - the lack of assistance that I was given from an economist putting together, sorting and ordering, within the confines of economic theory, the human behaviour reflected by that raw data. It might be said that a Jones v Dunkel inference or conclusion could be drawn if the ACCC could not find an economist to assist me with the interpretation, from an economic standpoint, of that raw data. That, I think, throws up the problem in some of these admissibility objections and, if I may say so respectfully without intending the slightest personal criticism, the problem in some respects of the form of the evidence. There does appear to me to be a leap from time to time from the body of assumptions that I am asked to make from other material into an opinion.

[31] It may only be a matter of form, but there is an important question of presentation and understanding involved in the distinction between saying, after a body of assumptions, "Accordingly, in my opinion", something, and saying, "If the material revealed by what has gone in the assumptions is correct, that conforms with conclusions that can be drawn from basic or complex economic theory in the following way."

[32] That then identifies, with some precision, what is happening in terms of this evidence; that is, that the economist may, through his or her skill and background and expertise, be able to identify critical aspects of the underlying material as important to economic theory and consumer behaviour and economic behaviour, illustrating or illuminating the application of simple, or perhaps complex, economic theory. From that, conclusions can be drawn, through a reasoning process, which may be very short, as to what this economist thinks is the appropriate way to order, prioritise, synthesise and explain that underlying material.

In HG v The Queen (1999) 197 CLR 414 at [39], Chief Justice Gleeson stressed the importance of the form of expert evidence to its admissibility:

An expert whose opinion is sought to be tendered should differentiate between the assumed facts upon which the opinion is based, and the opinion in question. Argument in this Court proceeded upon the basis that it was possible to identify from [the expert’s] written report some facts which he either observed or accepted, and which could be distinguished from his expressions of expert opinion. Even so, the provisions of s 79 will often have the practical effect of emphasising the need for attention to requirements of form. By directing attention to whether an opinion is wholly or substantially based on specialised knowledge based on training, study or experience, the section requires that the opinion is presented in a form which makes it possible to answer that question. (Footnote omitted.)

His Honour continued at [44]:

[I]n trials before judges alone, as well as in trials by jury, it is important that the opinions of expert witnesses be confined, in accordance with s 79, to opinions which are wholly or substantially based on their specialised knowledge. Experts who venture "opinions" (sometimes merely their own inference of fact), outside their field of specialised knowledge may invest those opinions with a spurious appearance of authority, and legitimate processes of fact-finding may be subverted.

In Ocean Marine Mutual Insurance Association (Europe) OV v Jetopay Pty Ltd (2000) 120 FCR 146; [2000] FCA 1463 at [23], the Full Court of the Federal Court noted:

The further requirement [in s 79] that an opinion be based on specialised knowledge would normally be satisfied by the person who expresses the opinion demonstrating the reasoning process by which the opinion was reached. Thus, a report in which an opinion is recorded should expose the reasoning of its author in a way that would demonstrate that the opinion is based on particular specialised knowledge. Similarly, opinion evidence given orally should be shown, by exposure of the reasoning process, to be based on relevant specialised knowledge. (Emphasis in original.)

In Seven Network Ltd v News Ltd (No 14) [2006] FCA 500, Justice Sackville cited both HG v The Queen and Ocean Marine Mutual v Jetopay in deciding to reject the valuation report of an expert economic analyst sought to be relied on by the Seven Network. Justice Sackville concluded that the expert had not complied with the requirements of s 79 of the Evidence Act as he had failed to provide the reasoning process by which he formed his opinion, and had also failed to demonstrate that he had "any substantial expertise or relevant experience in the Australian television industry, whether as an analyst, valuer or adviser".[20]

In Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 159 FCR 397; [2007] FCAFC 70 at [106]-[109], the Full Court of the Federal Court stated:

[106] A Court should not act upon opinions, unless the prerequisites of s 79 are satisfied. It must be established, on the balance of probabilities, that the witness who gives an opinion has specialised knowledge, that the specialised knowledge is based on the witness’ training, study or experience and that the opinion is wholly or substantially based on that specialised knowledge. Accordingly, there must be evidence explaining both how the opinion stated is said to rest on the specialised knowledge of the witness and how the specialised knowledge is based, wholly or substantially, on the witness’ training, study or experience.

[107] The evidence in chief of a witness giving opinion evidence must explain how the field of specialised knowledge possessed by the witness, by reason of training, study or experience, and on which the opinion is wholly or substantially based, applies to the facts established or assumed, so as to produce the opinion about which evidence is to be given. If those matters are not made explicit in chief, it would normally not be possible for the Court to make a judgment as to whether the prerequisites of s 79 have been satisfied and whether the evidence is in fact admissible.

[108] Further, unless a witness states in his or her evidence in chief the grounds and reasoning that have led to the opinion, the opinion is valueless. Before the Court can assess the value of an opinion, it must know the facts on which it is based. If the opinion is based on irrelevant facts or facts that are clearly not going to be proved, the opinion is likely to be valueless. It should not be for a cross-examiner to endeavour to elicit the facts or assumptions upon which an opinion is expressed, and it would be unfair to leave such matters to the cross-examiner. Except in a straightforward, uncomplicated case, where the facts are admitted or otherwise readily identified, opinion evidence would normally be rejected under s 135 if the facts or assumptions upon which the opinion is based are not expressly stated.

[109] It is for the Court to judge the reliability of, and the weight to be given to, particular evidence. Opinion evidence, like any other evidence, must be comprehensible and reach conclusions that are rationally based. The process of inference or reasoning that leads to conclusions ought to be stated or revealed in a way that enables the conclusions to be tested and a judgment to be made about their reliability and the weight that should be given to them. If not, the opinion evidence would normally be rejected under s 135.

The role and powers of the courts: some suggestions

So, they are the challenges and the reasons why the challenges should be addressed. What of the opportunities?

The courts and judges are no longer merely passive adjudicators of the identification of issues by the parties, or of the resolution of those issues upon whatever arguably relevant evidence is adduced by the parties at trial. The public interest, and the interests of litigants, has resulted in the courts and judges assuming the so-called case management role in the conduct of litigation. It is not inapt to describe that role as an inquisitorial one at certain stages of the proceeding, albeit an inquisitorial role limited (almost invariably) by the material the parties adduce or wish to adduce.

And there are tools available to support that role in identifying and limiting the issues in dispute to those really in dispute, in controlling the form of evidence to be presented and the flow of the hearing, and in controlling also the extent of the evidence to be presented.

The tools available to the docket judge and the trial judge in any proceeding to monitor and, as necessary, regulate the nature and form of evidence (in addition, of course, to the control imposed by s 56 of the Evidence Act 1995 (Cth)) are contained at least in:

  • Orders 34-34B of the Federal Court Rules;
  • Order 10 r 1(2)(h),(i) and (j) of the Federal Court Rules;
  • the Practice Direction on Guidelines for Expert Witnesses in Proceedings in the Federal Court; and
  • s 135 of the Evidence Act 1995 (Cth).

I start with O 34-34B of the Rules. This is not to be another discussion of the merits or disadvantages of the "hot-tubbing" of experts under O 34A of the Rules, ie the concurrent examination of expert witnesses. But that procedure is one significant judicial step in the management of expert evidence in Part IV cases. So I should refer a little to its nature and usefulness. You would also be aware that the technique has been used with experts of other disciplines (particularly accountants) in other cases. It is a procedure not confined to economic experts.

Order 34A r 3(2) allows for the concurrent examination of expert witnesses at trial. This is a process of hearing expert evidence first developed in the Australian Competition Tribunal and subsequently adopted by the Federal Court. In essence, concurrent evidence involves the collaboration of experts to identify the key issues in dispute at a pre-hearing stage followed by the concurrent examination of experts at trial, ensuring all parties have an opportunity to respond to the opinions and concerns raised by the experts.

In Re Queensland Independent Wholesalers Ltd (1995) 132 ALR 225 at 232; [1995] ATPR 41-438, the Trade Practices Tribunal, comprising Justice Lockhart, Professor Maureen Brunt and Dr Barry Aldrich, succinctly explained the "hot-tub" process:

  • At the conclusion of all the evidence (other than the evidence of the experts) and before the commencement of addresses, each expert was sworn immediately after the other and in turn gave an oral exposition of his or her expert opinion with respect to the relevant issues arising from the evidence.

  • Each expert then in turn expressed his or her opinion about the opinions expressed by the other experts.

  • Counsel then cross-examined the experts, being at liberty to cross-examine on the basis (a) that questions could be put to each expert in the customary fashion (ie one after the other, completing the cross-examination of one before proceeding to the next), or (b) that questions could be put to all or any of the experts, one after the other, in respect of a particular subject, then proceeding to the next subject. Re-examination was conducted on the same basis.

Merkel J also described and endorsed the procedure in Robert Hicks Pty Ltd (t/a Auto Fashions Australia) v Melway Publishing Pty Ltd (1998) 42 IPR 627 at 645-646; [1999] ATPR 41-668. Justice Lockhart has said that "hot-tubbing" defines "more precisely the true issues of fact, law and expertise".[21]

In Managing Justice: A Review of the Federal Civil Justice System (Report No 89, 2000) at [6.116], the Australian Law Reform Commission explained the process as follows:

In this "hot-tub" panel approach:

  • experts submit written statements to the tribunal, which they may freely modify or supplement orally at the hearing, after having heard all of the other evidence
  • all of the experts are sworn in at the same time and each in turn provides an oral exposition of their expert opinion on the issues arising from the evidence
  • each expert then expresses his or her view about the opinions expressed by the other experts
  • counsel cross-examine the experts one after the other and are at liberty to put questions to all or any of the experts in respect of a particular issue. Re-examination is conducted on the same basis. (Footnotes omitted.)

The "hot tub" approach was employed by Heerey J in Australian Competition and Consumer Commission v Boral Ltd (1999) 166 ALR 410; [1999] FCA 1318. At [110], his Honour commented on the "very sensible cooperation between the parties and their accounting experts" which permitted certain uncontentious findings of fact. In BHP Billiton Iron Ore Pty Ltd v National Competition Council [2007] ATPR 42-141; [2006] FCA 1764, Justice Middleton used the "hot tub" method and approved of it as a way to deal with the economic evidence.

Henry Ergas, an academic in economics, identified some limitations with "hot tubs":

[E]conomists are not trained in, or at all familiar with, the forensic analysis involved in cross-examination, and rarely approach hot tubs in a structured and systematic way. Additionally, the language in which economists assess each other’s work is no less technical than that which underpins the analysis they undertake, and inevitably involves many terms of art, and references to the literature, which non-economists will find difficult to understand, much less assess. Moreover, hot tubs are especially at risk of being dominated by those participants who are most confident or assertive – traits that bear little relation to the merits of analyses being presented. Finally, time constraints often mean that the discussion remains relatively superficial, further limiting its value.

… [M]atters would be improved were the legal profession in Australia more familiar with contemporary economics.[22]

Ergas’ comments underline the unavoidable tension between lawyers and economists – lawyers complain that economists do not fully understand the law and its processes, and economists argue that lawyers do not understand the nature of economic reasoning.

Justice Garry Downes, who has been heavily involved with the use of concurrent evidence at the Administrative Appeals Tribunal, strongly endorses the "hot-tub" method:[23]

In [Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9 at 20], Sir Owen Dixon relied upon the adage "one story is true until another is told". I think we would do well to bear that in mind when dealing with expert evidence as we do when dealing with other evidence. Concurrent evidence recognises that the adage is as true of expert knowledge as of anything else; the use of single experts does not.

The benefits of a successfully conducted concurrent examination of expert witnesses are self-evident.

But those benefits require considerable discipline of expression by the experts concerned, and very often a great deal of preparatory reading by the judge so as to be able to understand (or to endeavour to understand) the premises from which the respective witnesses are starting (including all the factual assumptions they have made) and the processes of reasoning flowing from those premises. That is a massive task where there are sometimes voluminous expert opinions (often more than one from each party) which – although in form complying, or apparently complying, with the Guidelines – are not structured to facilitate ease of comparison.

That is where I think the case management conference, available under O 10 r 1(2)(i) of the Federal Court Rules (cited above), may play a greater part. It may be used to manage the development of the form of the expert reports so that they are more readily related to each other and so that the areas of dispute are more readily apparent. The "hot-tub" would then occur in an environment where the topic of debate between the experts is much clearer.

It may seem at first blush a long stretch, if not an impossible one, to expect that of economic experts. It may seem like an unwarranted interference upon the process of opinion-forming and opinion-expression by the economic experts. It may seem like an inappropriate descent of the judge or the Court from the adjudicative role.

But, for another expert discipline, that of anthropology, it is a technique which has been used and accepted by the parties. It has been shown to save cost and time. And it has the anecdotal support of some experts in that discipline.

There is one area of litigation in the Federal Court which, even more than that under Pt IV of the Trade Practices Act, is complex, prolonged and expensive. It is claims for the determination of native title under the Native Title Act 1993 (Cth). The principal expert evidence in such cases is anthropological. The work required for the preparation of an anthropological report commonly takes many months, often after years of studying the particular community which is the native title claim group. And, almost invariably, there is conflicting expert anthropological evidence from the State and sometimes from the other respondent interests such as mining companies or pastoralists.

Problems with particular anthropological reports were discussed by Sackville J in Jango v Northern Territory (No 2) [2004] FCA 1004 at [8]-[11]:

[8] … However, it is apparent that each of the reports, in particular the Yulara Anthropology Report, has been prepared with scant regard for the requirements of the Evidence Act 1995 (Cth) …

[9] This is not a new phenomenon. In Harrington-Smith v Western Australia (No 7) [2003] FCA 893, Lindgren J complained that many of the experts’ reports tendered in that case had made little or no attempt to address in a systematic way the requirements for the admissibility of expert opinion. In response to his Honour’s complaint, counsel protested that compliance with the requirements of the Evidence Act would require lawyers to become involved in the writing of expert reports and would also require the experts to depart from the way they were accustomed to write. Lindgren J dealt with this protest in the following way (at [19]):

Lawyers should be involved in the writing of reports by experts: not, of course, in relation to the substance of the reports (in particular, in arriving at the opinions to be expressed); but in relation to their form, in order to ensure that the legal tests of admissibility are addressed. In the same vein, it is not the law that admissibility is attracted by nothing more than the writing of a report in accordance with the conventions of an expert’s particular field of scholarship. So long as the Court, in hearing and determining applications such as the present one, is bound by the rules of evidence, as the Parliament has stipulated in subs 82(1) of the Native Title Act 1993 (Cth), the requirements of s 79 (and s 56 as to relevance) of the Evidence Act are determinative in relation to the admissibility of expert opinion evidence. (Emphasis in original.)

[10] Lindgren J’s observations, with which I record my strong agreement, are consistent with comments made in the joint judgment of Gleeson CJ, Gaudron, Gummow and Hayne JJ in Commonwealth v Yarmirr (2001) 208 CLR 1. Their Honours noted (at 62 [84]) that an anthropological report had been received in evidence in that case without proof and without objection:

despite it being a document which was in part intended as evidence of historical and other facts, in part intended as evidence of expert opinions the authors held on certain subjects, and in part a document advocating the claimants’ case.

Their Honours said that although the mixing of the disparate elements, without any evident delineation between them, had not ultimately led to insuperable difficulties in the case, it was a "practice which has obvious difficulties and dangers".

[11] Like some of the reports discussed by Lindgren J in Harrington-Smith (No 7), the Yulara Anthropology Report often does not clearly expose the reasoning leading to the opinions arrived at by the authors. Nor does it distinguish between the facts upon which opinions are presumably based and the opinions themselves. Indeed, it is often difficult to discern whether the authors are advancing factual propositions, assuming the existence of particular facts, or expressing their own opinions. Certainly the basis on which the authors have reached particular conclusions is often either unstated or unclear.

As with economists, anthropologists’ opinions are, of their nature, argumentative in favour of a particular interest going to the heart of the proceeding.

The Court has, at least in some States and the Northern Territory (where there are over 200 extant claims), used the case management conference procedure in a creative and positive way. It requires the expert anthropologists, when they have formed their initial views and have prepared a draft report, to confer at a case management conference conducted by a Registrar. There are rules. The draft report is required to be disclosed to the other parties. The processes and discussions at the conference are not recorded (except to the extent of agreement). They are not available for cross-examination. The experts are not supported at the conference by legal advisers for the party proposing to call them. The purpose of the conference is to identify, and if possible to limit, the extent of disagreement between the experts and to ensure that their reports are structured in a way which is readily comprehended and the issues between them are identified. In effect, the kind of difficulties which Sackville J referred to in Jango are sought to be avoided.

One particular example will suffice. In Gumana v Northern Territory (2005) 141 FCR 457; [2005] FCA 50 Selway J gave reasons for concluding (inter alia) that the applicants in that case were entitled to certain native title rights and interests. It concerned an area of land in north east Arnhem Land, bordering the Gulf of Carpentaria. As his Honour died before making formal orders, those orders were subsequently made by another judge: Gumana v Northern Territory (No 2) [2005] FCA 1425. (An appeal to the Full Court was successful on a particular issue as to whether rights granted under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) extended to the low water mark: Gumana v Northern Territory (2007) 158 FCR 349; [2007] FCAFC 23. Special leave to appeal to the High Court was granted on that issue, and judgment on the appeal has been reserved.)

At Selway J’s direction, the procedure referred to above took place. The conference of experts took place before pleadings were finalised. It was facilitated by a list of propositions prepared by counsel for the parties addressing sequentially the series of findings required for the applicants to succeed. The experts, during and then after the conference, substantially narrowed the grounds of their dispute (as apparent from their draft reports). Subsequently, and not surprisingly, the parties reduced the areas of dispute very substantially. They then were able to address the areas of factual dispute more quickly, as the required evidence they proposed to adduce was much reduced in length. From an anticipated eight week hearing of lay evidence it was reduced to several days of lay evidence only. After the applicant’s evidence from the indigenous witnesses was given at the hearing, the anthropologist for the Northern Territory, who had disagreed about the existence of certain claimed native title rights and interests, acknowledged that more of those rights existed than he had previously been prepared to do so; initially he had thought that there was not sufficient evidence to support them. The remaining areas of dispute became very confined and the evidence and submissions much more focussed.

Without disclosing the content of that and other such conferences, Registrars have reported that the atmosphere between experts at the conferences has generally been collaborative, and that the experts have said they felt somewhat empowered by the responsibility of participating in that way. Such a conference is also a vehicle which emphasises to the experts that, as the Guidelines say, their overriding duty is to assist the Court.

That is a procedure which might be considered in appropriate Pt IV cases. Of course, the assumption is that the parties would not then seek to cast the net more widely in search of another expert who does not share the views of those who have been selected in the first place for their professionalism and expertise; but, if such an expert were found, that expert may also be required to participate in a subsequent case management conference in the same manner.

That leads me to a further suggestion for the use of case management conferences in litigation under Pt IV of the Act. Pleadings are often extensive and complex. That is sometimes necessarily so, given the detailed terms of certain provisions. A case management conference at an appropriately early stage of the proceeding, whether a suit by the ACCC or by a private litigant, may better serve to refine and then define the issues between the parties. An applicant, when proceedings are instituted, knows well what is to be alleged and generally has a pretty good idea about how the allegations are to be proved. The respondent, served with a lengthy statement of claim, must be given a proper opportunity to consider the allegations. But after that time, the respondent should also be in a position to respond in a meaningful way. I have in mind that a case management conference would provide a vehicle for a record of "findings" – that is, uncontested facts – to be made or progressively developed in a logical and sequential manner, at least so far as there is common ground. In less complex cases, that should not be too hard. The respondent may wish to insert other facts in the sequence, and the applicant should also be required to respond by disputing or acknowledging those facts. There would be a progressive build up of the agreed factual context for the resolution of the dispute.

At that conference, which might well be adjourned from time to time, the parties could also be expected to agree upon the contentious facts and to develop a template for the sequence in which the contentious facts should be addressed. They may develop a common chronology. They may develop a common book of documents. There may be other time and cost saving steps taken. It is worth consideration, at least where there are two (or more) parties who are desirous of having their real dispute addressed as efficiently and promptly as possible. I see no reason why such a conference would not generally be conducted by the docket or trial judge.

Moreover, the case management conference could be adjourned to a time during the trial, if there is to be a lengthy trial. Note that O 10 r 1(2)(i) concerns both the most economic and efficient means of bringing the proceedings to trial and of conducting the trial. And it contemplates that a judge may conduct the conference. The experience of Sackville J in the C7 Case justifies such a step. Where there are directions (preferably consensual) about the templates for submissions, for example, or there is an understanding about the number of witnesses on a particular topic, those matters might be revisited from time to time to ensure that the templates are being adhered to and, if necessary, revised, or to ensure that all the facts in dispute remain in dispute, or that the number of witnesses on a particular topic (such as the number of expert economists) remains appropriate.

I anticipate the accusation of disingenuousness in my comments about the potential use of the case management conference. It may be said: get in the real world; litigation, especially litigation involving Part IV of the Trade Practices Act, is complex and is generally hard fought between the ACCC and significant corporations, or between two significant corporations or entities. So it is. But it does not follow that, in every case, the parties want the litigious battle to be fought on all fronts. They may be prepared to refine the battleground. Sometimes they do, and more often (I suspect) with the assistance of competent counsel and solicitors who see it in their clients’ respective interests to get to the real issues as quickly and efficiently as possible. Sometimes, the role of the Court in requiring participation in a case management conference may facilitate such an approach by the parties when, for whatever reason, it has not been fully considered. Communication between the parties at such a conference may assist in reaching the conclusion that a widely fought battle will involve corporate resources, as well as legal resources and costs, which are not warranted, and that the areas of dispute may be refined. It is more likely to do so than the joining of issues remotely, that is, through the exchange of correspondence and pleadings, especially when correspondence is not uncommonly used as a strategic, or potentially strategic, weapon.

I have not touched upon all the things which may be addressed at a case management conference. Clearly, there is the potential for overlap in dealing with some matters (eg the terms of any discovery orders) at a case management conference or at a directions hearing. A case management conference, in some circumstances, may be more effective if the client, or some other appropriately authorised officer, is required to attend and is available to give instructions. It may be a less formal occasion than a directions hearing. There may be a variety of options as to how the conference is to be conducted. There may be other circumstances which make the case management conference successful in refining issues or otherwise shortening the evidence. All of that reinforces my view that, in an appropriate case, the option should be explored.

I must emphasise that none of the above comments are intended to indicate that a case management conference is a form of mediation. That is a different matter. The case management conference is not to induce settlement of the dispute between the parties (that is a matter for the parties, whether or not assisted by mediation). It is to ensure that the dispute between the parties is properly defined and is addressed at the hearing by relevant evidence as efficiently and fairly as possible.

That leads me to s 135 of the Evidence Act. It provides:

The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might:

(a) be unfairly prejudicial to a party; or

(b) be misleading or confusing; or

(c) cause or result in undue waste of time.

The relevant placitum is (c): the probative value of evidence being substantially outweighed by the danger that the evidence might cause or result in undue waste of time. It is a provision which has been used relatively infrequently, at least so far as it has been disclosed in reported cases.

Provided evidence is relevant, it is to be received unless its probative value is substantially outweighed by the danger or consequence referred to in placitum (c). The term "probative value" is defined in the Dictionary as follows:

Probative value of evidence means the extent to which the evidence could rationally affect the assessment of the probability of the existence of a fact in issue.

It is an unremarkable definition for present purposes.

This is not the occasion for a general exploration of s 135(c). It is sufficient to note that its application requires the Court to consider the nature of the proposed evidence:

  • to assess the time it would take to be given and tested: Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 159 FCR 397; [2007] FCAFC 70;
  • to assess its probative value standing alone – it may be relevant to decide if the proposed evidence would directly assist in deciding matters in issue or if it might, on the contrary, add a layer of complexity to that process without being overly helpful in deciding the matters in issue: Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd (2000) 100 FCR 90; [2000] FCA 876 at [21];
  • to assess its probative value in the light of the whole evidence – if it is to be further evidence on the same topic as other evidence already given, its probative value may be less than if it were the only evidence on that topic: cf Re Morris; Ex parte Donnelly (1997) 77 FCR 303 at 306; 148 ALR 349;
  • to assess the nature and extent of the evidence which would or might be prompted by the admission of the proposed evidence – this factor arises from the expression "result in" used in placitum (c).

In the light of those matters, and there may be others, the Court must decide whether the admission of the proposed evidence would cause or result in undue waste of time.

In a Part IV case, the time may well come when s 135(c) is used to limit the number of expert witnesses (although one would generally expect such matters to be determined by a pre-trial case management conference), or to restrict the evidence of a particular proposed expert witness to certain topics, or – if the proposed expert’s report is in an unsatisfactory form – to preclude such evidence from being given. For example, if a case management conference resulted in a "flow chart" or template for expert opinion evidence so that each expert report could readily be compared with the other to identify differences, the probative value of a report which failed to comply with that format might be assessed as significantly outweighed by its causing an undue waste of time, because it would need to be understood and assimilated into a form which assisted in the resolution of the facts in issue. It might also be assessed as falling within placitum (c) if it might provoke inquiries into factual premises not previously identified and addressed in evidence, or if it might otherwise provoke inquiries into its reasoning in a way which should have been exposed earlier.

My point is, simply, that s 135(c) is a judicial management tool available for use – perhaps only at the instigation of an opposing party – to control the number of witnesses, and the structure and admissible content of the evidence of certain witnesses, including expert witnesses. Obviously, it would be a rare case when it might be used. But, I suspect with the greater wisdom of hindsight, its potential may have been considered by Sackville J in the C7 Case.


There is no way to reduce the complexity of many Part IV cases. They are complex of their nature because the provisions are complex, the concepts are complex, and often the stakes are high.

But that does not mean we should not make sure such cases are not conducted as efficiently as possible, consistent with doing justice between the parties. The Court must do that, but it must, in the interests of the community as well as the parties, endeavour to manage such cases so that they are heard as quickly and as economically as fairness will allow. It must do so largely with the cooperation of counsel and solicitors for the parties, and with the parties themselves. The responsibility is shared. But for the reasons given earlier, the few matters referred to above may enhance the ability of the Court and the legal profession to better serve the objective of doing justice between the parties as efficiently as possible.

[1] I gratefully acknowledge the extensive assistance of Charles Maltby, legal researcher in the Federal Court of Australia, in the research and preparation of this paper.

[2] Justice Ronald Sackville, "Mega-litigation: Towards a New Approach" (Paper delivered to the Supreme Court of New South Wales Annual Conference – 17-19 August 2007), at [3].

[3] See Civil Procedure Act 2005 (NSW), s 56(1). See also Justice James Spigelman, "Just, Quick and Cheap – A Standard for Civil Justice" (Speech, Opening of the Law Term Dinner, 31 January 2000), available at http://www.lawlink.nsw.gov.au/lawlink/supreme_court/ll_sc.nsf/pages/SCO_speech_spigelman_310100.

[4] Federal Court Notice to Practitioners and Litigants Issued by the Chief Justice: Case Management and the Individual Docket System (issued 5 May 2008).

[5] Justice Sackville, "Mega-litigation" (Supreme Court of New South Wales Annual Conference, 2007) at [24]-[25].

[6] M Brunt, "The Use of Economic Evidence in Antitrust Litigation: Australia" (1986) 14 ABLR 261 at 265.

[7] See Carl von Clausewitz, On War (Princeton University Press, 1984).

[8] Seven Network Ltd v News Ltd [2007] FCA 1062 at [1].

[9] Justice Sackville, "Mega-litigation" (Supreme Court of New South Wales Annual Conference, 2007) at [30]-[31].

[10] Justice Sackville, "Mega-litigation" at [41]-[43], [47]-[48].

[11] Cf Evidence Act 1995 (Cth), s 135.

[12] At present the Federal Court can refer matters to an arbitration only with the consent of the parties: Federal Court of Australia 1976 (Cth), s 53A(1A). Chapter III issues may arise if federal courts are empowered to compel the parties to arbitrate. The Supreme Court of New South Wales has power at any stage of the proceedings to refer the whole of the proceedings, or any question in the proceedings, to a referee appointed by the Court for inquiry and report: Uniform Civil Procedure Rules 2005 (NSW), r 20.14.

[13] Justice Sackville, "Mega-litigation" at [50], [52]-[53], [57].

[14] See also Allsop J in Australian Competition and Consumer Commission v Liquorland (Australia) Pty Ltd (2006) ATPR 42-123; [2006] FCA 826 at [838].

[15] Justice John Middleton, "Expert Economic Evidence" (Paper delivered to the 5th Annual University of South Australia Trade Practices Workshop, 19-20 October 2007) at [27].

[16] The latest version was issued on 5 May 2008.

[17] Justice John Middleton, "Expert Economic Evidence" at [11].

[18] Justice French, "The Role of the Court in Competition Law" (Paper delivered to the Workshop on Competition Law for Judges and Lawyers in Papua New Guinea, 26 February 2005), p 26.

[19] M Brunt, "The Australian Anti Trust Law After 20 Years – A Stocktake" (1994) 9 Review of Industrial Organisation 483 at 517.

[20] Seven Network Ltd v News Ltd (No 14) [2006] FCA 500 at [23].

[21] Lockhart J quoted in Judicial Commission of New South Wales and Australian Institute of Judicial Administration, Concurrent Evidence: New Methods with Experts (DVD, 2005).

[22] H Ergas, "Reflections on Expert Economic Evidence" (2007) 45 Law Society Journal 68 at 73.

[23] Justice Garry Downes, "Expert Evidence: The Value of Single or Court-Appointed Experts" (Paper delivered to the Australian Institute of Judicial Administration Expert Evidence Seminar, 11 November 2005), p 10.