Pre-trial oral examinations in the Australian context

Oral deposition-like processes in the Commonwealth

10.35 A few legislative provisions and court rules in Australia allow a court or a government agency to make orders for, or to compel a person to be subject to, oral examination. For example, the Family Law Rules (Cth) gives power to a court with jurisdiction under the Family Law Act 1975 (Cth) to request, at any stage in a case, the examination on oath of any person before a court or court officer, or to authorise a person to conduct an examination.^[63]

10.36 In particular, there are a number of existing powers affecting the Federal Court of Australia (Federal Court). However, the width of these powers is somewhat unclear.

The Federal Court of Australia Act

10.37 A broad provision is to be found in s 46 of the Federal Court of Australia Act 1976 (Cth), which empowers the Court to make orders and commissions for the examination of witnesses. The section relevantly provides:

The Court or a Judge may, for the purposes of any proceeding before it or him or her:

(a) order the examination of a person upon oath or affirmation before the Court, a Judge, an officer of the Court or other person, at any place within Australia; …

…

and the Court or a Judge may:

(c) by the same or a subsequent order, give any necessary directions concerning the time, place and manner of the examination; …^[64]

10.38 This provision—which has been part of the Act in largely the same form since the original enactment—does not appear to have been subject to specific judicial consideration.^[65] However, a few general observations may be made. The provision is in pt VI of the Act which relates to ‘General’ matters so it need not be confined to particular proceedings. While the section is headed ‘Orders and commissions for examination of witnesses’, the word ‘witness’ is not used in the text of the provision. As the heading is not to be taken as part of the Act,^[66] the concept of ‘witnesses’ should not be used to narrow the interpretation of the provision.

10.39 The real question is whether a discovery application could come within the ambit of the expression ‘for the purposes of any proceeding before [the Court or the Judge]’. Arguably, a discovery application could come within the ambit of the expression, given that the term

proceeding means a proceeding in a court, whether between parties or not, and includes an incidental proceeding in the course of, or in connexion with, a proceeding.^[67]

10.40 However, there is one authority characterising an application for preliminary discovery as ‘not itself a “proceeding”’,^[68] but rather ‘an antecedent step’.^[69] While that case was concerned with an application under O 15A r 3 of the Federal Court Rules—that is, for preliminary discovery to identify a respondent, rather than consideration of s 46 of the Federal Court of Australia Act—it is possible that the section could be interpreted narrowly so as not to apply to discovery that is obtained before a proceeding for substantive relief is commenced. However, as explained in Chapter 1 of this Report, in this Inquiry the ALRC is primarily concerned with the disclosure of documents for inspection by one party in proceedings for substantive relief conducted in a federal court. Order 15A r 3 was identified in that chapter as being one of the matters outside the Inquiry.

10.41 There are two other provisions in the Federal Court of Australia Act which should be mentioned. While neither specifically mentions pre-trial oral examinations, they are drafted in sufficiently broad terms that they leave room for possible argument that the Federal Court could make orders for oral discovery when the Court considers it necessary.

10.42 The first—s 33ZF—was mentioned by the ALRC in its 2000 report, Managing Justice: A Review of the Federal Civil Justice System (ALRC Report 89). The ALRC noted that:

the judge may order depositions to be taken if it is considered necessary in a particular case, pursuant to the general discretion in s 33ZF of the Federal Court Act to ‘make any order the Court thinks appropriate or necessary to ensure that justice is done in the proceeding’.^[70]

10.43 Section 33ZF appears in pt IVA of the Federal Court of Australia Act which concerns representative proceedings. Accordingly, the provision is confined to representative proceedings—that is, class actions.

10.44 The second provision—s 37M—is the ‘overarching purpose’ provision, that the overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible.^[71] Essentially, the Court is expected to interpret and apply the Federal Court of Australia Act, the Federal Court Rules, and any other Act—so far as they relate to civil proceedings—in the way that best promotes the overarching purpose.^[72]

Federal Court Rules

10.45 There are three rules of the Federal Court Rules that may be relevant to a consideration of pre-trial oral examinations in the discovery context—O 24 r 1;
O 33 r 13; and O 15 r 8.

10.46 These provisions are discussed in turn, in order of relevance.

10.47 Order 24 r 1(1)(a) provides:

The Court may, for the purpose of proceedings in the Court, make orders:

(a) for the examination of any person on oath or affirmation before a Judge or before such other person as the Court may appoint as examiner at any place whether in or out of Australia.

10.48 Currently this provision is entitled ‘Evidence taken in Australia or abroad or evidence taken under Part 2 of the Foreign Evidence Act 1994’ (the latter part of this heading relates to O 24 r 1(1)(b)). However, the original title was ‘Evidence by Deposition’.^[73]

10.49 The breadth of this provision—particularly the extent to which it could be used in the context of pre-trial oral examination—is unclear.

10.50 The ALRC heard in consultations that there is a view that the purpose of O 24 is to facilitate the taking of evidence in a trial. Some commentators have observed that O 24 r 1(1)(a) ‘is used … where a witness is in Australia, but is unable because of age, health or imminent departure from Australia to attend the trial’.^[74] For example, the Federal Court has relied on s 46 of the Federal Court of Australia Act and O 24 r 1(1)(a) of the Federal Court Rules to hear evidence relating to Aboriginal law so as to preserve that evidence for the hearing of an application for the determination of native title under the Native Title Act 1993 (Cth).^[75]

10.51 In Martin v Tasmania Development & Resources, Heerey J refused to make an order under O 24—as requested by the applicant’s counsel—for the pre-trial oral examination of potential witnesses where there had been no subpoena of the persons. His Honour stated that such an order would be ‘quite unprecedented’ in Australia and that:

O 24 is designed for circumstances where it is not practical or convenient for a witness to attend court and give evidence in the ordinary way. The making of an order such as is sought would have the practical effect of introducing an American-style oral deposition. This would be a fundamental change to the way litigation is conducted in this Court and indeed, all courts in Australia that I am aware of, and if such a change is to be made it should be made by statute.^[76]

10.52 A few years later, in September 2002, a Federal Court User Group Liaison Committee meeting in New South Wales (NSW) minuted:

There was discussion about whether there was merit in considering the US system of oral depositions, that is cross-examining witnesses away from the Court with objections able to be made but all questions having to be answered and with the whole process usually videotaped. US lawyers claim that this system often results in earlier settlements and limits what is an issue. Justice Branson suggested that the Federal Court Rules might currently provide enough flexibility to allow such a process to be ordered in an appropriate case if sought.^[77]

10.53 This comment provides very limited support for the proposition that O 24 r 1 may be interpreted to support the use of oral discovery. First, arguably it is an extra-curial comment and, secondly, Branson J did not specify an exact part of the Federal Court Rules.

10.54 In light of Heerey J’s strong curial statement it seems that O 24 r 1 cannot be used to order the appearance of persons for oral examination in relation to discovery as the judiciary may be of the view that O 24 r 1 does not have that purpose.

10.55 The second provision in the Federal Court Rules which is possibly relevant to this discussion is O 33 r 13(1)—headed ‘Evidence: general’ and the rule ‘Attendance and production’—which provides:

The Court may make orders for:

(a) the attendance of any person for the purpose of being examined; or

(b) the attendance of any person and production by him of any document or thing specified or described in the order.

10.56 Order 33 r 13(2) provides that an order under O 33 r 13(1)

may be made for attendance of any person before, and production by him to, the Court or any officer of the Court, examiner, or other person authorized to take evidence, on any trial, hearing or other occasion.^[78]

10.57 In its Final Report in Relation to Possible Innovations to Case Management, the Federal Court Liaison Committee of the Law Council of Australia (Law Council) noted the ‘very interesting recommendation’ that had been made by the Trade Practices Committee of the Business Law Section of the Law Council.^[79] It reported:

The Trade Practices Committee suggested that practitioners should make greater use of the power of the Court [under O 33 r 13] to make Orders for the attendan[ce] of any person for the purpose of being examined prior to trial.^[80]

10.58 That is, in the context of the report, the Trade Practices Committee appeared to consider that O 33 r 13 could be used to order oral discovery.

10.59 This provision in the Federal Court Rules does not appear to have been subject to much judicial consideration,^[81] and certainly not in the context of discovery.^[82] However, some commentators have observed that ‘[t]he object of the rule is to enable an order in the nature of a subpoena to be made at any stage of the proceedings’.^[83] The ALRC heard in consultations that usually this would be at a trial. Commentators have also noted that ‘[i]t does not permit an order in the nature of discovery against a non-party’.^[84] While neither subpoenas nor discovery from non-parties are the central focus of this Inquiry, it is unclear whether the provision could be used in the way the Trade Practices Committee advocated.

10.60 In its report, the Federal Court Liaison Committee noted that the Trade Practices Committee had ‘suggested an enhancement’ of the provision ‘[t]o put the matter beyond doubt’.^[85] The Federal Court Liaison Committee noted that the Trade Practices Committee’s submission

had suggested that Order 33 Rule 13 should be amended or supplemented to make it clear that such an examination can extend to cross examination and the rules attendant on examination in chief not be applied to such examinations.

The Committee made further suggestions that consideration be given to the Court amending Order 33 Rule [1]3 to add:

(a) ‘The Court may make orders contemplated by sub rule (1) at any time, including prior to trial or the hearing of an interlocutory application, and where the order is sought for the purpose of seeking discovery against a party or a non party.^[86]

10.61 In its final report, proposing that the Federal Court ‘be at liberty to permit oral depositions, limited by number, witness, length and subject matter’,^[87] the Federal Court Liaison Committee recommended that:

The Court introduce, on a trial basis, an entitlement for parties to examine on oath individual[s] employed by or on behalf of a party or witnesses proposed to be relied upon by that party.^[88]

10.62 Further, it recommended that:

The trial be undertaken either by amendment of Order 33 Rule 13 with the following variations or by adoption of rules analogous to Rule 30 of the United Stated Federal Rules of Civil Procedure.^[89]

10.63 The recommendation adopted paragraph (a)—extracted earlier—in full as one of the possible modifications of O 33 r 13. However, the Federal Court Liaison Committee’s proposal has not been implemented.

10.64 The final provisions in the Federal Court Rules that should be mentioned in this context are O 15 rr 8 and 9. Order 15 concerns discovery and the inspection of documents and r 8 concerns an order for particular discovery. This rule provides a separate right of discovery—a right to discovery to a particular document or class of document.^[90] If it appears that a party has a certain document, then the court can order the party to explain the situation by affidavit. Specifically, it provides that:

Where, at any stage of the proceeding, it appears to the Court from evidence or from the nature or circumstances of the case or from any document filed in the proceeding that there are grounds for a belief that some document or class of document relating to any matter in question in the proceeding may be or may have been in the possession, custody or power of a party, the Court may order that party:

(a) to file any affidavit stating whether that document or any document of that class is or has been in his possession, custody or power and, if it has been but is not this in his possession, custody or power, when he parted with it and what has become of it; and

(b) to serve the affidavit on any other party.^[91]

10.65 Order 15 r 9—headed ‘Deponent’—outlines, in sub-rule 1, who may depose an affidavit pursuant to an order under O 15 r 8 or an affidavit verifying a party’s list of documents.

10.66 There is an old general rule that an affidavit of discovery must be regarded as conclusive, unless it evidently misrepresents the facts.^[92] Further, the case law requires a high threshold of proof before the affidavit can be called into question.^[93] Because of this general respect for the contents of an affidavit of discovery, judges have been very reluctant to order the cross-examination of a deponent.^[94]

10.67 However, it is now generally accepted that an affidavit of discovery may be challenged,^[95] although only in limited circumstances.^[96] Where cross-examination has been allowed, the judges making the orders have routinely acknowledged that such a step was ‘unusual’^[97] or ‘exceptional’.^[98]

10.68 Generally an order for cross-examination will only be made if there are serious concerns of abuse of process or a view that there is no other way of preventing an injustice.^[99]

Corporations Act 2001 (Cth)

10.69 Under ss 596A and 596B of the Corporations Act 2001 (Cth), ‘eligible applicants’^[100] are able to request that a court issue a summons for the examination of a person concerning ‘examinable affairs’.^[101] While this is not a discovery process—rather, it enables liquidators and other administrators to access information which they would not otherwise have because they were appointed after the events into which they are inquiring— nevertheless the ALRC considers it useful to mention it as an example of another oral deposition-like process in the Commonwealth.

10.70 During the examination, the court may give directions concerning, among other things: matters to be inquired into; the procedure of the examination; the presence of any other persons at an examination; and access to the records of the examination.^[102] The court also has power to consider whether questions put to the summoned person are ‘appropriate’.^[103] Generally, the examination should be held in public, unless the court considers that there are special circumstances.^[104]

10.71 The purpose of such examination has been described as:

not in the nature of legal proceedings before a court; [the proceedings] are more in the nature of investigative procedures where the Court has a presence for the purpose, basically, of seeing fair play between the persons interrogating and the persons being interrogated.^[105]

Government agencies

10.72 A number of government agencies—largely regulatory and investigatory bodies—have powers to compel a person to appear for examination under oath in a setting other than in court at trial.^[106] For example:

• the Australian Securities and Investment Commission (ASIC), in investigating suspected breaches of the Corporations Act 2001 (Cth), can compel a person to appear before an ASIC member for examination on oath if ASIC ‘on reasonable grounds, suspects or believes that a person can give information relevant to a matter’;^[107]

• the Commissioner of Taxation can give notice compelling a person to give oral evidence on oath or affirmation, in connection with the administration of the Income Tax Assessment Act 1936 (Cth);^[108]

• the Commonwealth Ombudsman may, in the course of conducting an investigation, require a person to appear before him or her or an appointee for the purposes of answering relevant questions;^[109]

• the Australian Commission for Law Enforcement Integrity can summon a person to give evidence (including to produce documents or things) as part of a ‘hearing’ directed either to investigating a ‘corrupt issue’ or conducting a public inquiry;^[110] and

• the Australian Communications and Media Authority may require a person to appear before its delegate for examination on oath or affirmation in connection with an investigation it is conducting.^[111]

Oral deposition-like processes in the states and territories

10.73 All states and territories provide for oral examinations outside of trial in certain narrowly-defined circumstances. For example, every jurisdiction allows a party to be examined for the purpose of giving evidence that will be used at trial,^[112] although the use of such evidence may be contingent on the party’s consent or the deponent being deceased, infirm or otherwise unavailable during the trial.^[113] Most states and territories also allow for oral examination where a party’s answers to interrogatories are deemed insufficient.^[114]

10.74 Only Victoria and the Northern Territory, however, specifically provide for oral discovery.^[115] In these jurisdictions, oral depositions may be used in place of written interrogatories when the party being examined gives consent,^[116] or, in the Northern Territory, by court order.^[117]

10.75 Even though they are available, the VLRC observed that oral examinations are ‘rarely, if ever, conducted’, because the court does not often permit interrogatories and because the examinee’s permission is required.^[118] Although some states grant judges broad case management powers that could conceivably be interpreted to include the power to order oral depositions for the purposes of discovery,^[119] the ALRC is unaware of these powers being used in such a manner.

A case for depositions in Australia?

10.76 The possibility of adopting US-style deposition into the Australian civil justice system has been raised in reports by the Law Council, the VLRC, the litigation funder IMF,^[120] as well as by some academic commentators.^[121]

10.77 As discussed earlier, oral depositions were considered in the Federal Court Liaison Committee of the Law Council’s Final Report in Relation to Possible Innovations in Case Management. The Federal Court Liaison Committee proposed that ‘the Court be at liberty to permit oral depositions, limited by number, witness, length and subject matter’.^[122]

10.78 The Federal Court Liaison Committee commented that:

This proposal proved very controversial. A widespread reaction to it was adverse on the grounds that it would be likely to be productive of unnecessary expense and even that it would constitute a reversal of the current policy of discouraging interrogation. Most practitioners opposed the proposal with support coming primarily from those with practical experience of both US depositions and trial practice.^[123]

10.79 However, it also noted that:

based on the American experience, it would seem clear that, potentially, in addition to any function which oral depositions may perform in promoting settlement, they may have a valuable role in relation to discovery and the limitation on evidence and dealing with experts.^[124]

10.80 The report continued:

[In particular,] oral depositions offer an alternative to interminable document discovery … in relation to certain documents, issues can be quickly dealt with by some questions of a witness which would otherwise be difficult to track through a paper trail.^[125]

10.81 The Federal Court Liaison Committee concluded that:

Depositions would not be appropriate in many cases. Where cases are complex and the evidence of key witnesses may be significant, they may be, however, a very effective case management tool.^[126]

10.82 Accordingly, the Federal Court Liaison Committee recommended that:

the Court introduce, on a trial basis, an entitlement for the parties to examine on oath individuals employed by or on behalf of a party or witnesses proposed to be relied upon by that party.^[127]

10.83 As noted earlier, this proposal has not been implemented.

10.84 In its 2008 Civil Justice Review, the VLRC undertook detailed analyses of systems of oral depositions in Canada, the US and UK.^[128] The VLRC concluded that, subject to appropriate safeguards to curb potential abuse of the process and the escalation of costs, provisions ought to be made for pre-trial oral examinations.^[129] In particular, it recommended that pre-trial examinations only be permitted with leave of the court. This would give the court an opportunity to determine whether examination is necessary or desirable in a given case and, if so, allow the court to set the conditions for the examination to ensure that the process is not abused, control costs and protect vulnerable witnesses.^[130]

10.85 In many other respects, the model recommended bears similarities with the procedure set out in the US. The VLRC summarised the key features of its proposal in the following way:

• examinations would only be possible by consent, with leave of the court;

• parties would be expected to attempt to agree on the details of the examinations;

• the court would have the power to make directions limiting the number and duration of examinations;

• it should not be necessary to require examinations to be conducted before an independent third party in most instances, but in appropriate cases, examinations may be held before an examiner who is not a judicial officer (including an independent legal practitioner);

• there would be a process for identifying appropriate corporate deponents;^[131]

• examinees would be entitled to refuse to answer questions on the ground of legal professional privilege, and protected against disclosure or future use of self-incriminating information revealed in response to a question;

• objections to particular questions asked during the course of an examination would be noted on the record for determination by the court in the event that the answer is later sought to be introduced into evidence;

• the transcript of the examination would be able to be introduced into evidence at trial in a number of circumstances; and

• subject to certain limits, the costs of examinations should be recoverable as costs of the proceedings.^[132]

10.86 The VLRC’s recommendations for pre-trial oral examinations were not implemented in the Civil Procedure Act 2010 (Vic). Rather, s 57 of the Civil Procedure Act provides for cross-examination regarding discovery obligations:

Unless a court orders otherwise, any party to a civil proceeding may cross-examine or seek leave to conduct an oral examination of the deponent of an affidavit of documents prepared by or on behalf of any other party to that proceeding if there is a reasonable basis for the belief that the other party may be—

(a) misinterpreting the party’s discovery obligations; or

(b) failing to disclose discoverable documents.

10.87 The grounds for application for leave are similar to a broad construction of O 15 r 8 of the Federal Court Rules.

10.88 Legg has argued that the use of depositions in Australia would aid in promoting settlement or, if no settlement occurs, the narrowing of the issues in dispute:

The deposition is an opportunity for a party to test its view of the facts with opposing witnesses. Consequently, the opposing witness will be required to say which facts they agree with and why. In a complex case, those points of disagreement may be numerous but there will be many points of agreement which do not need to be dealt with before the court. The trial can therefore focus on the key issues and be conducted more efficiently.^[133]

10.89 The introduction of depositions, Legg notes, would result in ‘a major transformation of civil procedure in Australia’,^[134] as affidavit evidence would be substantially reduced or replaced by depositions. This has both practical and cultural implications for the profession:

Legal practitioners would need to move from drafting affidavits with only the witness present to the adversarial deposition. … The deposition requires practitioners to have a skill-set that is often split between solicitors (witness preparation) and barristers (witness examination) which will likely need to be reconciled … This may impact law school and professional qualification curricula.^[135]

Submissions and consultations

10.90 In the Consultation Paper, the ALRC proposed that a new pre-trial procedure should be introduced to enable parties to a civil proceeding in the Federal Court, with leave of the Court, to examine orally, on oath or affirmation, any person who has information relevant to the matters in dispute in the proceeding.^[136] The ALRC asked for stakeholder views on whether cost issues in proceedings before federal courts could be controlled by limiting pre-trial oral examinations to particular types of disputes.^[137] The ALRC also asked what mandatory considerations, if any, a court should take into account in granting leave for oral examination.^[138]

10.91 Of those submissions that addressed the ALRC’s proposal, the majority did not support it.^[139] Overall, only two submissions clearly supported the ALRC’s proposal^[140] and another advocated one like it.^[141] A number of submissions responded to these issues by querying the need for a new procedure at all.^[142] Some who held this view were not intrinsically opposed to the use of oral depositions but rather considered that the Federal Court was already empowered to order pre-trial oral examination for discovery.^[143] However, one stakeholder who queried the need for a new procedure was opposed to the use of oral depositions.^[144] Many views were expressed on possible disadvantages of using oral depositions,^[145] a common complaint being that they are costly.^[146] Those who supported the proposal advocated the need for appropriate safeguards such as the need for leave of the Federal Court.^[147] These issues are dealt with in turn.

The necessity of a new procedure?

10.92 The Law Society of Western Australia pointed to the fact that the Federal Court and many other courts are already empowered to authorise oral examination before trial and that there may be cases where the use of such depositions would be an effective case management tool:

The point is, however, that machinery already exists in order to facilitate that process in such cases and they are best administered on a case-by-case basis by the Judge who has an understanding of the particular case, as is currently the case.^[148]

10.93 Contributors from a group of large law firms made a similar point and argued that a broad view may be taken of O 24 r 1 of the Federal Court Rules. They submitted that while the power conferred by O 24 r 1(1)(a) historically has been used where a witness is ill or otherwise unable to attend trial, ‘it is clear that the power extends much further than this’.^[149] They suggested that ‘[t]he power conferred … is broad in scope and gives the Court flexibility to depose witnesses in a broad range of circumstances’.^[150]

10.94 The group explained:

Our primary submission is that the Court already has clear power to order the deposition of witnesses to obtain evidence about the identity of potentially discoverable documents. An order by the Court made under Order 24 rule 1 could reduce the costs of discovery in circumstances where parties have:

(a) no knowledge of the location of key categories of documents and/or the volume of documents to retrieve; and

(b) there is the potential for parties to have to review vast quantities of documents (including both hard and soft copy material).

Oral depositions could take place in order to refine potential discovery categories and obtain information from corporate employees about the location, type and potential relevance of documents.

A discovery deposition under Order 24 rule 1 could also be used when there is a dispute as to the adequacy of discovery.^[151]

10.95 Further, they considered that O 24 r 1 could ‘complement’ O 15 r 8 and ‘provide further certainty’ as it could:

prevent overuse [of O 15 r 8] in circumstances where a company officer has already given evidence about whether particular documents were in the possession of a specific party.^[152]

10.96 They concluded:

[O]n balance, it is our view that oral depositions under [O] 24 [r] 1 could, in appropriate cases and subject to control of the Court, play a narrow role in limiting the scope of the discovery process in the Court. The critical question is whether judges are prepared to use the power conferred.^[153]

10.97 By contrast, Allens Arthur Robinson argued that oral depositions—rather than a specific new procedure for them—were unnecessary because procedures already exist to facilitate the exchange of practical information about a party’s document management system:

Practical questions about a party’s document management system (for example, questions about the scope and location of document collections) can be informally addressed at a pre-discovery conference. Prima facie, there is no need for such questions to be answered on oath. If, for whatever reason, such a need arises in a particular case, the existing rules are adequate to meet that need.^[154]

10.98 Further, they submitted that the pleadings should define the issues in dispute so it would be unnecessary—moreover ‘inappropriate’—for oral depositions to seek to do so.^[155]

10.99 For the Department of Immigration and Citizenship, ‘it [was] not entirely clear what could be gained from pre-trial examination procedures that is not already possible through interrogatories and the submission of affidavits’.^[156]

Opposition to the use of oral depositions

10.100 Some reasons that were advanced opposing the use of oral depositions were that they:

• would increase costs;^[157]

• would cause further delay^[158] and more time to be expended;^[159]

• would increase the complexity of the proceedings,^[160] for example, by possibly leading to the discovery of more documents rather than less;^[161]

• may be abused for the purpose of ‘fishing expeditions’;^[162]

• may encourage ‘satellite’ litigation in relation to contested oral depositions;^[163] and

• could have a disproportionate impact upon the Federal Court.^[164]

10.101 For a group of law students:

[The] advantages [of oral depositions] do not compensate for the many disadvantages such as lengthy examinations induced by unprepared or self-motivated counsel, difficulties in convening parties and, particularly for complex technical matters, the infeasibility of extracting information from memory, or the need to orally examine many people within an organisation.^[165]

10.102 Concern was also expressed in some submissions about the lack of empirical evidence as to the effectiveness of oral depositions in the US:^[166]

The use of depositions does not appear to have assisted in the United States of America in the goal of reducing the need for discovery, as the American legal system is frequently criticised for its expensive discovery processes. For example, Brad Brian, a past chair of the American Bar Association, has said that pre-trial discovery is where most money is wasted in litigation in America (including depositions). The International Bar Association has criticised the American discovery system as one of the most expensive and wasteful private litigation systems in the world.^[167]

10.103 A group of large law firms submitted that

the [US] oral deposition process is prone to be used as a tool to justify requests for further categories of documents, rather than as a device to focus and limit the document production exercise.^[168]

10.104 However, for this group, the potential increase in costs was ‘the principal factor’ weighing against pre-trial oral examinations.^[169] The Civil Litigation Committee of the Law Society of New South Wales Young Lawyers (NSW Young Lawyers) argued that the introduction of such a measure could significantly increase the costs of litigation, because:

• it is an additional step in the litigation process;

• it forces clients to engage counsel at an earlier stage of the litigation process than might otherwise be the case;

• it forces costs to be incurred in preparing witnesses that would otherwise not be incurred until shortly before trial; and

• pre-trial oral examinations take longer than cross-examinations during a hearing because irrelevant questions can be asked.^[170]

Possible options to control costs

10.105 Only two submissions directly answered the ALRC’s question about whether cost issues in proceedings before federal courts could be controlled by limiting pre-trial oral examinations to particular types of dispute.^[171]

10.106 NSW Young Lawyers submitted that:

[P]re-trial oral examinations would only be appropriate where the quantum of damages being claimed is large enough to justify the additional cost being incurred by the oral examination. Pre-trial oral examinations could also be limited to expert witnesses where the witnesses could be ‘hot-tubbed’ in an effort to narrow the difference of opinion between each party’s expert witness.^[172]

10.107 By contrast, Legg argued that:

[I]t would be appropriate to allow for a deposition to be requested in any case that came before the court subject to the party requesting it being able to explain the necessity for its use i.e. it will save cost or produce information not available through other forms of discovery.^[173]

10.108 He also referred to an example that Justice Ray Finkelstein had originally identified as a type of dispute for which the Federal Court might be inclined to allow depositions, namely:

where the volume of documents discovered is large and the use of depositions to clarify the meaning of those documents is likely to reduce the number of documents to be placed before the court (or into evidence at trial), the number of witnesses to be called, or the subjects on which witnesses will need to be cross-examined.^[174]

Support for the use of oral depositions

10.109 A reasonable number of submissions recognised that there were likely to be advantages from the use of pre-trial oral examinations as an adjunct to the current Australian discovery process.^[175] For example, one submission stated, ‘[t]here are without doubt advantages to oral discovery, being that it may encourage an earlier settlement and it may allow for quicker and timelier follow-up questions’.^[176]

10.110 A group of large law firms submitted:

A discovery deposition process, within a wider discovery regime, could assist in some cases to narrow the issues or number of documents in dispute, by helping to resolve disputes over the existence or otherwise of specific categories of documents, obtaining an explanation of the scope of the envisaged discovery exercise, and obtaining evidence about the potential meaning and relevance of specific documents.

…

Drawing on the current use of depositions in Australia, when implemented with appropriate safeguards, and with the leave of the Court, oral depositions could assist parties and the Court to:

(a) resolve any dispute over the existence or otherwise of specific categories of documents;

(b) in complex cases involving large corporations (often with an overseas parent) obtain an explanation of the scope of the discovery exercise that is envisaged to ensure that a proportionate approach is achieved;

(c) obtain evidence about the potential meaning and relevance of specific documents (although in certain cases this might be reserved for trial); and

(d) in turn, narrow the issues and number of documents in dispute.^[177]

10.111 The Australian Government Solicitor also acknowledged that pre-trial oral examinations may assist the discovery process:

Depositions may allow a party who is considering seeking discovery to better assess what documents the other party has in its possession and whether it is relevant to a material issue in dispute. This could assist in reducing speculative discovery. One potential advantage of depositions is that answers are given on oath which may give a party seeking discovery the confidence to be more precise in targeting documents to be discovered without fear that potentially relevant documents or classes of documents might be missed.^[178]

10.112 This submission concluded that:

If discovery depositions are adopted we consider that they should be part of the overall ‘toolkit’ of case management techniques available to judges and, when utilised, closely controlled as to scope, time and costs. Consideration would need to be given to whether depositions might occur only with leave.^[179]

10.113 The two submissions most clearly in favour of the ALRC’s proposal thought that such a new procedure should be undertaken on a trial basis first.^[180] In addition, the Commercial Bar Association of Victoria was keen to stress the need for safeguards to prevent the abuse of the process,^[181] while for Legg ‘there needs to be clear guidance to parties in the court rules as to the procedures for the deposition’.^[182] Those in favour of the ALRC’s proposal stressed the need for the procedure to be discretionary, that is, by leave of the Federal Court.^[183]

Possible conditions for granting leave for pre-trial oral examination

10.114 A number of submissions provided a specific response to the ALRC’s question in the Consultation Paper about which, if any, mandatory conditions a court should take into account in granting leave for oral examination.^[184]

10.115 The group of large law firms focused on largely practical procedural issues:

The following factors could be considered by the docket judge before ordering a discovery deposition:

(a) the number of depositions which could be involved. This could be limited to a small maximum number per party (say two) with liberty to apply for further depositions if necessary;

(b) the potential length of the discovery deposition and thus the cost to the parties;

(c) the requirement for objections and/or arguments about admissibility issues; and

(d) whether the discovery deposition has a realistic prospect of assisting the parties to narrow the categories for discovery or the issues in dispute.^[185]

10.116 By contrast, NSW Young Lawyers focused on broader threshold issues:

[A] court should require the party seeking an oral examination to explain:

• how the party expects the oral examination to assist in narrowing the dispute and/or narrowing discovery required;

• that the witness being examined is closely connected to the proceedings;

• that the costs of the oral examination would be in proportion to the probative value of the evidence to be obtained through the oral examination; and

• that the oral examination will not unduly delay the proceedings.

The Committee also considers that if oral examinations were to be introduced in the federal courts then the number of witnesses who can be examined and the number of hours a witness can be examined should be limited.^[186]

10.117 Legg’s submission was broadly similar:

The court should consider the following matters in granting leave for an oral examination:

• whether the requesting party has described with reasonable particularity the matters for examination at the deposition and the person to be deposed;

• the cost of the deposition relative to the significance of the information sought through the deposition; and

• whether the information sought through the deposition cannot be obtained from another source more cheaply or efficiently.^[187]

An alternative to discovery or an additional discovery tool?

10.118 It should also be noted that a few submissions were keen to ensure or stress that what the ALRC was proposing was an additional discovery tool rather than an alternative to discovery.^[188] For example, the group of large law firms submitted that, ‘[a]n oral discovery deposition process could not and should not replace the current requirements imposed on parties to discover documents’:^[189]

[T]here is a very real distinction between the use of depositions as a further discovery device and replacing the modern case management approach which has seen greater reliance on affidavits and witness statements exchanged prior to trial for the purpose of evidence in chief. … [A]ny proposal to change the existing procedures for affidavit evidence in favour of the use of depositions would be a fundamental change, which would need to be the subject of careful and explicit consultation and consideration.^[190]

10.119 Perhaps due to a concern that what was being proposed was an alternative to existing discovery procedures, some submissions foresaw the proposed change as ‘a very substantial change to Australian court practice’,^[191] which would ‘have a significant impact on the legal culture in Australia’,^[192] and ‘would likely be met with doubt within the legal profession’.^[193] Following such comments, the Law Council further submitted that, before implementing such a recommendation, there should be detailed consultation with relevant stakeholders about the issue.^[194]

10.120 Both the Law Council and the Australian Government Solicitor thought there was a need for analysis of the American experience,^[195] the Law Council advancing the need for ‘empirical and qualitative data’. The Australian Government Solicitor also submitted that:

it would be desirable to undertake a detailed investigation of the likely advantages of depositions and whether these outweigh the potential for this sort of process to increase costs.^[196]

ALRC’s views

10.121 The ALRC is mindful that this chapter has discussed the use of pre-trial oral examinations in a broader context than just discovery. For example, the discussion of the use of pre-trial oral examinations in the US noted that that they are used in that jurisdiction with the aim of achieving a number of objectives—for example, assessing the credibility and suitability of a witness. Further, their use in that jurisdiction encompasses a number of aspects of civil procedure that are outside the scope of this Inquiry—for example, in assisting to obtain admissions prior to trial. The ALRC acknowledges that its original proposal was drafted in reasonably wide terms, which prompted some concern that what was proposed was a broad change to Australian legal practice. This broad discussion and the width of the ALRC’s proposal accounts for the concern expressed in some submissions that pre-trial oral examinations should not replace the current case-management approach in Australia. The ALRC acknowledges that any proposal to adopt oral depositions in the broad way that they are used in the US would be a significant change to Australian legal practice.

10.122 Pre-trial oral examinations may assist the discovery process by facilitating the discovery of evidence and the identity of documents, and by promoting settlement and the narrowing of issues in dispute. The ALRC has heard uniformly in consultations that narrowing the issues in dispute is essential to limiting the cost of litigation. The ALRC agrees with the VLRC that the primary object of oral examinations is not preparation for trial, but the narrowing of issues in dispute in order to facilitate settlement.

10.123 While pre-trial oral examinations may assist in reducing the cost of discovery—in that they may lead to increased efficiency which implies fewer costs or because they may assist in achieving earlier settlement—the ALRC acknowledges that the use of oral depositions has been criticised because they are costly. It is possible that complaints of excessive costs may arise from the abuse of oral depositions—for example, the Canadian evidence of lawyers who prolonged examinations in order to achieve their billing targets. It is also possible that some of these complaints are directed to the use of oral depositions in a context wider than discovery. The ALRC is not advocating the use of pre-trial oral examinations at large.

10.124 The ALRC is also not advocating the use of pre-trial oral examinations in all discovery matters. Rather, the ALRC considers that there may be a few, limited cases where the use of pre-trial oral examinations for discovery would not be cost prohibitive. The two submissions that addressed the costs question—that is, whether cost issues in proceedings before federal courts could be controlled by limiting pre-trial oral examinations to particular types of dispute—appear to take different views. However, both argue that the costs likely to be expended need to be justified—in the case of one submission, by the quantum of damages and, in the other submission, by an explanation that use of a pre-trial oral examination would actually save costs or would produce information not otherwise available through other forms of discovery.

10.125 The ALRC considers that there may be real value in the Federal Court being able to order oral examination in the discovery stage—albeit only in a few, limited cases. The ALRC considers that the Federal Court should be well equipped with a broad range of tools in its ‘toolkit’ of case management techniques,^[197] so as to manage all the various procedural stages of a particular case as the Court sees fit to facilitate the just resolution of the dispute according to law in the way it considers will be as quick, inexpensive and efficient as possible, consistent with the overarching purpose provision.^[198] The ALRC takes the view that there is sufficient evidence to support the use of pre-trial oral examination for discovery in specific cases.

10.126 The ALRC considers that such a procedure should only be conducted within the framework of the Federal Court—that is, the ALRC is not advocating that persons external to the Federal Court preside over pre-trial oral examinations about discovery. The use of such external persons would be a novel development in Australia. Such a move is unwarranted given that officers of the Federal Court have experience with oral examinations—including pre-trial oral examinations under ss 596A and 596B of the Corporations Act 2001 (Cth). Further, by keeping the process within the Federal Court, parties would not be put to the expense of paying for an external person to preside over the oral examination.

10.127 There is uncertainty as to whether the Federal Court has the power to order pre-trial oral examination in respect of discovery. For example, the text of s 46 of the Federal Court of Australia Act and the text of O 24 r 1 seem to provide the Federal Court with broad powers that could be used to order pre-trial oral examination to assist with the discovery phase. However, the only case of which the ALRC is aware that discusses O 24 r 1 in terms of oral discovery, interprets it narrowly.^[199] It is possible that the Federal Court may interpret the provision more broadly in light of the overarching purpose provision—however, it is uncertain.

10.128 In Chapter 2 of this Report, the ALRC explained that issues of uncertainty may lead to inconsistency in application of the rules of civil procedure and may hinder accessibility. The ALRC considers that the principle of certainty is a significant framing principle for law reform recommendations in this Inquiry. Therefore the ALRC considers that the Federal Court of Australia Act should be amended to provide expressly that the Court or a judge may order pre-trial oral examination about discovery. The ALRC is of the view that the Court or a judge should be empowered to direct a Registrar of the Court, rather than the judge, to conduct the pre-trial oral examination. The ALRC considers that the general power of delegation in the Federal Court of Australia Act and in the Federal Court Rules could be employed for this effect so there is no need to make a specific recommendation for legislative change in this respect.

10.129 The ALRC considers that a necessary safeguard for the use of pre-trial oral examinations about discovery is that they only be allowed with leave of the Federal Court. The ALRC envisages that such a procedure would be subject to the threshold outlined in proposed r 20.11 of the Federal Court Rules—namely, that ‘[a] party may apply for discovery only if it is necessary for the just determination of issues in the proceedings’.^[200] Further, the Court should set the limits and determine the parameters in which such pre-trial oral examinations take place. The Federal Court may find it useful to reflect on the views expressed in submissions on the possible mandatory considerations that the Court should take into account in granting leave for oral examination. Accordingly, the ALRC recommends that the Federal Court Rules should be amended to provide expressly the limited circumstances in which the Court or a judge may order pre-trial oral examination about discovery—for example, to discover evidence about the identity and location of potentially discoverable documents, to assess the reasonableness and proportionality of a discovery plan, and to resolve any disputes about discovery.^[201]