Idoport Pty Limited v National Australia Bank Limited and 8 Ors.; Idoport Pty Limited and Market Holdings Pty Limited v Donald Robert Argus; Idoport Pty Limited "JMG" v National Australia Bank Limited and Ors. [40]

Case •

[2001] NSWSC 922

•

19 October 2001

No judgment structure available for this case.
CITATION: Idoport Pty Limited & Anor v National Australia Bank Limited & 8 Ors.; Idoport Pty Limited & Market Holdings Pty Limited v Donald Robert Argus; Idoport Pty Limited "JMG" v National Australia Bank Limited & Ors. [40] [2001] NSWSC 922
FILE NUMBER(S): SC 50113/98; 50026/99; 3991/00
HEARING DATE(S): 15/10/01
JUDGMENT DATE:
19 October 2001

PARTIES :
Idoport Pty Limited (Plaintiff)
Market Holdings Pty Limited (Plaintiff)
National Australia Bank Limited (Defendant)
Donald Robert Argus (Defendant)
JUDGMENT OF: Einstein J
COUNSEL : Mr JJ Garnsey QC, Mr M Dicker (Plaintiffs)
Mr H Insall SC, Mr J Halley (Defendants)
SOLICITORS: Withnell Hetherington (Plaintiffs)
Freehills (Defendants)
CATCHWORDS: Practice and procedure - Discovery - production of documents on notice to produce
CASES CITED: Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 945
DECISION: Short minutes of order to be brought in.


–

    THE SUPREME COURT
    OF NEW SOUTH WALES
    EQUITY DIVISION - COMMERCIAL LIST

    EINSTEIN J

    19 October 2001

    50113/98 IDOPORT PTY LIMITED & ANOR v NATIONAL AUSTRALIA BANK LIMITED & 8 ORS

    50026/99 IDOPORT PTY LIMITED & ANOR v DONALD ROBERT ARGUS

    3991/00 IDOPORT PTY LIMITED (“JMG”) v NATIONAL AUSTRALIA BANK

    JUDGMENT

1    There are before the Court a number of notices of motion. The plaintiffs by their motions broadly seek the production of documents in a number of categories either by discovery orders or by notices to produce the documents. The defendants by their motions, seek to set aside the plaintiffs notices to produce.


    General discretionary considerations

2    Before outlining the terms of the particular categories of documents which the plaintiffs seek to have produced to them and noting the specific submissions made by both parties in relation to those categories, it is convenient to note that both parties relied upon a number of discretionary considerations.


    Submissions of Mr Insall

3    Mr Insall submitted that the Court should take into account the fact that orders for discovery were made both in the main proceedings in 1999 and in the MLC proceedings in 2000, the evidence of Mr Lovell showing that the defendants have provided extensive documents pursuant to those orders for discovery.

4    The final hearing has in the meantime progressed through the cross-examination of a relatively small number of very early witnesses. It is common ground that a key witness, Mr Martin, is part way through a lengthy cross-examination.

5    A further application for discovery was pursued by the plaintiffs earlier this year and orders were made for further discovery.

6    In the last few weeks the Court has dealt with a complex of issues in relation to the future case management of the proceedings. The defendants had sought a 12 months adjournment of the proceedings, although withdrawing that application towards the end of oral submissions. Mr Insall's proposition was that the plaintiffs only days after the judgment was handed down in relation to those matters, had for the first time brought up by notices to produce, and now by an application for further discovery, a suggested need to have production of the documents the subject of this present judgment. The submission was that the Court would infer late notice of the applications the subject of this judgment as having been motivated by forensic reasons.

7    Mr Insall submitted that there was a limit to the number of occasions when the plaintiffs could seek to introduce more material to the proceedings by way of further categories of discovery or production of documents on notice to produce and hence to otherwise expand the proceedings, which limit had already been reached. The submission was that the reality of the matter was that for the defendants to deal with the case properly, with personnel who have proper familiarity with the issues, the time which had already been allotted by the Court to various tasks has already been used up and that it was simply not possible for the defendants to continue to deal with continued applications for “expansion of the case”.


    Submissions of Mr Garnsey

8 Mr Garnsey QC, leading counsel for the plaintiffs, also raised a number of discretionary considerations which he submitted should be taken into account [transcript 13833 et seq]. The first was that the MLC proceedings were joined with the main proceedings and directions given for them to proceed, in effect concurrently with the main proceedings, which directions were given over the plaintiffs’ objections. It is a fact that those orders were made after the plaintiffs had submitted that there could well be real difficulties with the evidence running together and the interlocutory steps and the trial running together. [cf Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 945]

9    The next submission was that the trial was presently ongoing so that case management orders to permit the final hearing to continue had been made on a number of occasions.

10    Mr Garnsey's further submission was that the plaintiffs, by applying for specific discovery or for the production of categories of document by way of notice to produce, were adopting a procedure which is calculated to cause least disruption to the progress of the trial.

11    Mr Garnsey further submitted that insofar as the plaintiffs in relation to the MLC proceedings were presently preparing their statements as to the similar or equivalence functionality issue, it was desirable for the plaintiffs to have the documents now sought and relevant to that issue.

12    Mr Garnsey further submitted that the plaintiffs originally, while offering general discovery themselves, had accepted and agreed to discovery by categories by the defendants. This had been a matter calculated to progress the trial. This regime should not however now be used as a vehicle by which to disadvantage the plaintiffs in the continuing conduct of the trial.


    Existing Discovery Orders

13    It is further convenient to note the terms of the existing discovery orders made in the MLC proceedings on 10 October 2001. Those orders obliged the plaintiffs to give general discovery by serving a verified list of documents by 6 November 2000.

14    Insofar as the defendants were concerned orders 6 and 7 were in the following terms:

        “6. That the defendants serve on the plaintiff an unverified list of documents falling within the following categories on or before 17 November 2000 with a verified list of documents to be filed by 1 December 2000:
            (a) final and draft due diligence reports and documents (relating to functional or technical capability) analysing, instructing or commenting upon such reports created in the Period by the defendants, or for the defendants by their servants or agents, in relation to the acquisition of or concerning the MLC MasterKey and /or Your Prosperity businesses and services;
            (b) documents created by the defendants (or their servants or agents) relating to the functionality of the services referred to in paragraphs 26 to 39 of the Statement of Claim (the “NAB Services”) and in paragraphs 40 to 49 of the Statement of Claim (the “MLC Services”), and documents created by the plaintiff (or its servants or agents) or the defendants (or their servants or agents) relating to the functionality or technical capability of the NAB Services or the MLC Services, including:

                (1) the functional specifications of each of the NAB Services and the MLC Services (including system specification documents)

                (2) any comparison of the functionality or any of the NAB Services or the MLC Services and the functionality of the Ausmaq Service; and
                (3) all user, dealer, fund manager or product provider, customer and/or client standard form agreements, and manuals, information memoranda, and current promotional and marketing material,
                    but excluding (in the first instance) documents containing only one or more of the following types of material in relation to one or more of the NAB Services, the MLC Services and/or the Ausmaq Service:
                (1) detailed design of the system software;
                (2) software code;
                (3) documents forming part of the configuration control system for the system software and system documentation;
                (4) information regarding the project management of the software development process (including software metrics or any similar material);
                (5) information regarding the testing of, or correction of faults or omissions in, the system software;
                (6) information regarding the integration of the system software with any other software;
                (7) documentation of changes, including but not limited to potential, requested and actual changes, to the system software;
                (8) information regarding the logistics of implementing any of the NAB Services or the MLC Services and/or the system software for the NAB Services and/or the MLC Services, the Ausmaq Services and/or the system software for the Ausmaq Service;
            (c) documents created in the Period relating to the formulation of a strategy for the creation and implementation of each of the NAB Services and of the MLC Services, including but not limited to:
            (1) any project status reports;
            (2) any business case proposals; and
                (3) emails sent by or to members of the project team working on the development or implementation of any of the NAB Services and the MLC Services;
        7. In paragraph 6(c) above:

            (a) “Period” means the period from 1 January 1996 to 5 October 2000;

            (b) “system software” means, in relation to each of the NAB Services or the MLC Services, the software used to implement that NAB Service or the MLC Service;

            (c) “functional specifications” means the nature of the NAB Services in terms of the way they operate and the means by which they fulfil their purpose;

            (d) “detailed design” means activity performed during the capability release build and test stage of the delivering phase of the software lifecycle, being:

                (1) perform application detailed design; build and test application components;

                (2) prepare and execute application product test;

            (e) “configuration control system” means a system used on a software project to list and store all copies of the programs together with their versions and status (eg production, test, development).”

    Plaintiffs’ motion dated 10 October 2001 for further discovery in proceedings No 3991 of 2000 ["the MLC proceedings"]

15    The plaintiffs seek an order for discovery in respect of documents in relation to the MLC proceedings.

16    The terms of the schedule to the notice of motion identifying the subject documents are as follows:

        “1(a) Final and draft due diligence reports and documents (relating to functional or technical capability) analysing, instructing or commenting upon such reports created in the period 1 July 1994 to 1 January 1996 by the defendants, or for the defendants by their servants or agents, in relation to the acquisition of or concerning the MLC MasterKey and/or Your Prosperity businesses and services.
        1(b) Documents created in the period 1 July 1994 to 1 January 1996 relating to the formulation of a strategy for the creation and implementation of each of the MLC Services, including but not limited to:
            (1) any project status reports;
            (2) any business case proposals; and
            (3) emails sent by or to members of the project team working on the development or implementation of any of the MLC Services.
        2. Any reports, recommendations, analysis or assessments of the AUSMAQ Service or the AUSMAQ System undertaken by representatives or employees of MLC Limited or any of its subsidiaries in the period 1 July 1994 to 1 January 1996.
        3. Any document provided by the fourth defendant to representatives or employees of MLC Limited or any of its subsidiaries in the period 1 July 1994 to 1 January 1996 describing the AUSMAQ Service or the benefits or advantages of the AUSMAQ Service or the AUSMAQ System.”

17    The plaintiffs rely upon the affidavit of Mr D’Emilio made on 10 October 2001 [p 128]. This affidavit in paragraphs 4 - 10 is in the following terms:

        “4. Paragraph 6 of the Short Minutes of Order dated 10 October 2000 sets out in three sub-paragraphs categories of documents in respect of which the Defendants were to provide discovery. Sub-paragraphs 6(a) and 6(c) of the Short Minutes of Order dated 10 October 2000 contain the word “Period” in relation to the documents required to be discovered. Sub-paragraph 6(b) does not contain the word “Period” in describing the documents which are to be discovered pursuant to that sub-paragraph.
        5 . Paragraph 7(a) of the Short Minutes of Order dated 10 October 2000 defines the word “Period”. The definition of “Period” in paragraph 7, as well as the other definitions in that paragraph appears to be in respect of paragraph 6(c) only, notwithstanding that the word “Period” is also used in sub-paragraph 6(a).
        6. The approach taken by the Defendants to the discovery of documents in categories 6(a) and 6(b) in so far as it relates to the period covered by each category of documents is not entirely clear to the Plaintiff. Annexed hereto and marked “B” is a letter from Withnell Hetherington to Freehills dated 5 October 2001 with the enclosed Notice to Produce dated 5 October 2001. The last paragraph of that letter sought clarification of the approach taken in the discovery of documents in this respect.
        7. I am informed by Mr Maconochie, a Director of Idoport Pty Limited, and verily believe that:
            a. from about the middle of 1994 through to the middle of 1996 Mr Maconochie and employees of the Fourth Defendant (“AUSMAQ Systems”) met with employees/representatives of MLC Limited or its subsidiaries;
            b. discussions about the business purposes and objectives of the AUSMAQ service occurred at the meetings referred to in paragraph 7 (a) above with the objective by Mr Maconochie and employees of the Fourth Defendant to list MLC investment products on the AUSMAQ Service; and
            c. Mr Maconochie and employees of the Fourth Defendant, AUSMAQ Systems, provided the employees/representatives of MLC Limited or its subsidiaries with documents relevant to the business purposes and objectives of the AUSMAQ service including information about proposed and actual fees structures, client agreements, fund manager agreements, dealer agreements, user agreements, client, dealer and fund manager guides and benefit statements, annual reports and general information about the Ausmaq Service and Ausmaq’s business.
        8. Paragraph 1(a) of the Schedule for discovery which is annexure “A” to the Plaintiff’s Motion is in identical terms to sub-paragraph 6(a) of the discovery orders made on 10 October 2000 as found in annexure “A” hereto except that documents are sought specifically for the period 1 July 1994 to 1 January 1996. It is presently unclear to the Plaintiff whether the discovery given by the Defendants in relation to paragraph 6(a) of the discovery orders made on 10 October 2000 has been on the basis that the meaning of the word “Period” in sub-paragraph 6(a) is as defined in paragraph 7(a). [I interpolate that during oral submissions the defendants accepted that this had been the basis adopted by them on discovery]
        9. In relation to paragraph 1(b) of the Schedule for discovery which is annexure “A” to the Plaintiff’s Motion, the Plaintiff seeks discovery in the same terms as sub-paragraph 6(c) of the discovery orders made on 10 October 2000 as found in annexure “A” hereto with the exceptions that it deletes references to NAB Services and the Plaintiff seeks documents dated and/or created in the period 1 July 1994 to 1 January 1996. Pursuant to the orders made on 10 October 2000, the documents in respect of which discovery was to be provided by the Defendants was 1 January 1996 to 5 October 2000 (see paragraph 7(a) of annexure “A” hereto).
        10. No further discovery is sought in the Plaintiff’s Motion in respect of the category of documents set out in sub-paragraph 6(b) of the discovery orders made on 10 October 2000 as found in annexure “A” hereto. Sub-paragraph 6(b) does not contain any limitation as to time in the description of the documents discoverable pursuant to that sub-paragraph.”

18    The defendants rely upon an affidavit made by Mr Lovell on 11 October 2001 and on exhibit DGL 1 to the affidavit which became MFI D210. The affidavit extends to cover a number of the matters presently before the Court in categories referred to below.

19    The defendants’ submissions in chief in relation to this issue are in the following terms:

        “Introduction
        1. In considering the Plaintiff’s Notice of Motion for further discovery in the MLC Proceedings dated 10 October 2001 (the “Plaintiff’s MLC Motion”) it is relevant for the Court to have regard to four matters:
            i. The discovery previously given in the MLC Proceedings.
            ii. The circumstances in which the application is brought.
            iii. The alleged relevance of the documents sought.
            iv. The effect of the orders now sought on the timetable set down by the Court on 5 October 2001.
        The discovery previously given
        2. Proceedings 3991 (the “MLC Proceedings”) were commenced by Idoport Pty Limited on 19 September 2001 (paragraph 3 of the affidavit of Damian Gordon Lovell sworn 11 October 2001 (the “Lovell Affidavit”)).
        3. Orders were made for discovery in the MLC Proceedings on 10 October 2000 (paragraph 11 of the Lovell Affidavit). These orders substantially mirrored the categories of discovery sought by the Plaintiff as set out in a facsimile from Mr Garnsey QC to Mr Bathurst QC of 4 October 2000 (paragraph 8 of the Lovell Affidavit). Significantly the “period” within which documents were sought by the Plaintiffs was “1 January 1996 to date”.

        4. Discovery was given, and inspection took place of the Defendants’ documents in the period mid November 2000 to mid March 2001 (see paragraphs 12 to 15 of the Lovell Affidavit).

        5. At no time prior to the service of the Notice to Produce of 5 October 2001 (almost a year to the day after the discovery orders were first made) did the Plaintiff seek further discovery from the Defendants.

        6. Categories 1(a) and 1(b), of the Plaintiff’s MLC Motion mirror categories 6(a) and 6(c) of the categories of discovery ordered by the Court. The Plaintiff has not sought to explain by affidavit evidence why it is that documents from an earlier time period are now sought, a year after discovery was ordered and many months since discovery was originally given in relation to categories 1(a) and 1(b) of the Plaintiff’s MLC Motion.

        7. The documents now sought in paragraphs 2 and 3 of the Plaintiff’s MLC Motion were within the knowledge of the Plaintiff’s officers as at 10 October 2000. Given this fact and that the categories of discovery were proposed by the Plaintiff it is also significant that no evidence has been filed by the Plaintiff to explain the delay in seeking discovery of such documents.
        The circumstances in which the application is brought
        8. The application for further discovery is brought in circumstances where:
            a. the Plaintiff had been in grave default of its obligation to file and serve its statements. The orders made by the Court on 10 October 2000 required that the Plaintiff’s evidence in chief be filed and served on or before 29 December 2000. In fact the Plaintiff served its first statement on 30 July 2001 and as of the date of these submissions has filed only two statements (see Lovell Affidavit, paragraph 7);
            b. the Plaintiff had agitated the issue of discovery in proceedings no. 50113 of 1998 in June 2001 and obtained further orders for discovery (see Lovell Affidavit, paragraphs 17 to 18) yet made no application at that time for further discovery in the MLC Proceedings;
            c. the Plaintiff opposed the application brought by the Defendants in late September 2001 for an adjournment of the proceedings, and in so doing proposed and agreed to a number of orders relating to the MLC Proceedings including as to discovery on damages issues (see Lovell Affidavit, paragraph 22) yet did not raise the need for any further discovery in the MLC Proceedings;
            d. the subject of the Plaintiff’s MLC Motion was first raised by the Plaintiff issuing a Notice to Produce served on 5 October 2001, after the determination of the adjournment application and the making of orders for the further conduct of the proceedings.
        9. The inferences open to be drawn, in the absence of any evidence from the Plaintiff as to the reason for delay, is that:
            a. the Plaintiff did not raise the issue at the time of the adjournment application and instead chose to proceed by issuing a Notice to Produce shortly after the Court had determined the Defendants’ motion because it was concerned that seeking such documents may have some impact on the timetable it was proposing, including the dates for the giving of discovery by the Defendants; and
            b. the issue of further discovery was not raised at an earlier time because the Plaintiff simply chose to ignore the orders made by the Court for the filing of its evidence and did not turn its mind to the issue.
        10. In these circumstances the Court, in the absence of cogent evidence as to the relevance of the documents sought in the Plaintiff’s MLC Motion and the reason for the delay, (as to which see below), should in its discretion, set its face against granting a Plaintiff who has been in flagrant breach of the Court’s timetable, the indulgence of obtaining further discovery in the course of a final hearing.
        The alleged relevance of the documents sought
        11. The only evidence relied upon by the Plaintiff is the affidavit of Mr Stephen D’Emilio sworn 10 October 2001. It does not:
            a. explain the delay in seeking further discovery;
            b. explain the alleged relevance of the documents sought in the Plaintiff’s MLC Motion to the issues in the MLC Proceedings;
            c. explain why, in respect of categories 1(a) and (b), documents for the period 1994-1996 are now sought;
            d. identify with any precision the documents falling within paragraphs 2 and 3 of the Plaintiff’s MLC Motion that are sought to be discovered.
        12. The Plaintiff’s argument appears to be that Ausmaq System in the period 1994-1995 had some contact with MLC employees or representatives, and provided to them certain documents (see affidavit of Mr D’Emilio at paragraph 7). This however has no relevance to the issues pleaded in the Plaintiff’s Further Amended Statement of Claim. There is no allegation that these (largely unspecified) documents were relied upon by any of the Defendants in any way (whether improperly or not) or that the alleged equivalence or similarly of the MLC services was in any way connected to the exchange of those documents or any information contained in them.
        13. In short, the documents are not relevant to any issue in the proceedings, and the discovery application ought to be dismissed with costs.
        Effect on existing discovery orders
        14. If, contrary to the above, the Court is disposed to order the Defendants to give discovery as sought on the Plaintiff’s MLC Motion, the Defendants would wish to be heard on the timing of the giving of such discovery and its possible effect on the existing discovery orders, in light of the matters set out in paragraphs 25 to 27 of the Lovell Affidavit.
        15. In particular, the Court ought not penalise the Defendants by forcing them to engage further resources to accommodate a late and unforeshadowed application during the course of a final hearing by a plaintiff that has not diligently prosecuted its claim.”

20    The plaintiffs’ submissions in relation to this issue are in the following terms:

        “2. In respect of the MLC proceedings the plaintiff claims that certain services or businesses conducted by MLC Limited or a subsidiary thereof are of equivalent or similar functionality to the AUSMAQ Service.
        3. On 10 October 2000 the Court made orders as to the discovery to be provided by the Defendants in the MLC proceedings: see paragraph 6 of annexure A to Mr D’Emilio’s affidavit. Those orders were directed to the discovery of documents in the context of the Plaintiff’s claims that certain services or businesses conducted by MLC Limited or a subsidiary thereof are of equivalent or similar functionality to the AUSMAQ Service.
        4. Subject to paragraph 5 below the first two paragraphs of the category of documents sought by the Plaintiff in the Notice of Motion for further discovery seeks discovery in respect of the same category or class of documents as has already been ordered by the Court and provided by the Defendants.
        5. The one matter of difference between the documents sought in the Notice of Motion for further discovery and the discovery already provided is the period of time in respect of which documents are to be discovered. (Mr D’Emilio’s affidavit is then referred to)
        6. The Plaintiff submits that categories in paragraphs 1(a) and 1(b) of the schedule to the Plaintiff’s Motion, being identical (except as to time) to sub-paragraphs 6(a) and 6(c) of the orders made on 10 October 2000 , are clearly relevant on their face for the same reasons that sub-paragraphs 6(a) and 6(c) of the orders made on 10 October 2000.

        7. The point of difference between paragraph 1(a) of the schedule to the Plaintiff’s Motion and sub-paragraphs 6(a) of the orders made on 10 October 2000 is that paragraph 1(a) of the Plaintiff’s Motion specifically seeks documents in respect of the period 1 July 1994 to 1 January 1996. As set out in Mr D’Emilio’s affidavit, the period covered by sub-paragraph 6(a) is not recorded in the orders made 10 October 2000 (although admittedly this may have been a simple error).

        8. The reason that documents for the period 1 July 1994 to 1 January 1996 should be discovered is established by paragraph 7 of Mr D’Emilio’s affidavit dated 10 October 2001. By reason of the facts set out in paragraph 7 of Mr D’Emilio’s affidavit, documents for the period 1 July 1994 to 1 January 1996 are as relevant and forensically important as documents for the period 1 January 1996 to 5 October 2000.

        9. The Plaintiff submits that the fact that discussions between AUSMAQ and MLC were held from mid-1994 in which the “the business purposes and objectives of the AUSMAQ service” were covered and numerous documents which describe the AUSMAQ service including how it is delivered and how it relates to other parties were provided (eg fund managers via the fund manager agreements, dealers via the dealer user agreements and clients via the client agreements) are important facts.

        10. These facts establish that the period 1 July 1994 to 1 January 1996 is relevant to the issue of whether the MLC MasterKey and YourProsperity businesses and services are of equivalent or similar functionality to the AUSMAQ service.

        11. In relation to paragraph 1(a) of the schedule to the Plaintiff’s Motion, and in the context of the above matters, documents in the period 1 July 1994 to 1 January 1996 and which relate “to functional or technical capability” in respect of the MasterKey and/or YourProsperity businesses and services is relevant to the issue of equivalent or similar functionality.

        12. The point of difference between paragraph 1(b) of the schedule to the Plaintiff’s Motion and sub-paragraphs 6(a) of the orders made on 10 October 2000 is that paragraph 1(b) of the Plaintiff’s Motion specifically seeks documents in respect of the period 1 July 1994 to 1 January 1996 whereas sub-paragraph 6(c) is limited to the period 1 January 1996 to 5 October 2000: see sub-paragraph 7(a).

        13. The Plaintiff submits that documents “relating to the formulation of a strategy for the creation and implementation of the ... MLC Services”, as sought in paragraph 1(b) of the schedule of the Plaintiff’s Motion, are clearly relevant to the issue of equivalent or similar functionality. The Plaintiff submits this must include the period 1 July 1994 to 1 January 1996 by reason of the exchange of information between AUSMAQ and MLC in that period relating to “the business purposes and objectives of the AUSMAQ service” and documents which describe the AUSMAQ service including how it is delivered and how it relates to other parties (eg fund managers via the fund manager agreements, dealers via the dealer user agreements and clients via the client agreement).
        14. In respect of both paragraphs 1(a) and 1(b) of the schedule to the Plaintiff’s Motion the categories of documents created in the period 1 July 1994 to 1 January 1996 are no less relevant than those same categories of documents during the period, for example, 1 January 1996 to 1 January 1998 in respect of which the discovery orders already apply.*
            (*It appears that the Defendants approach to discovery in respect of the word “Period” for sub-paragraph 6(a) is the same as for sub-paragraph 6(c): see para 8(b)(1) of Mr Lovell’s affidavit dated 9 October 2001 in support of Notice of Motion no. 48.)

        15. Consequently, in the context where the Court knows that between mid 1994 and mid 1996 there were discussions between AUSMAQ and MLC in which the “the business purposes and objectives of the AUSMAQ service” were covered and numerous documents were provided which describe the AUSMAQ service including how it is delivered and how it relates to other parties were provided (eg fund managers via the fund manager agreements, dealers via the dealer user agreements and clients via the client agreement) there is no reason to limit discovery to the period from 1 January 1996.

        16. In relation to paragraphs 9 and 13 above, the Plaintiff does not assert that its case as pleaded is that MLC wrongfully used information provided to it. On the other hand, in the context of the facts referred to in paragraph 7 of Mr D’Emilio’s affidavit, the documents sought in respect of the period 1 July 1994 to 1 January 1996 are:

            a. relevant to the history of the development of the MLC Services; and

            b. independently of (a), relevant to the business objectives, business purpose and value proposition of the MLC Services (which is relevant to any analysis of whether those services are of equivalent or similar functionality).

        16. Indeed, although the Plaintiff does not seek such an order, it is arguable that there should be no time period limit specified in respect of the discovery of documents in categories in sub-paragraphs 6(a) and 6(c) of the orders made on 10 October 2000. In this sense, all documents which are relevant to, inter alia, the business objectives, business purpose and value proposition of the MLC Services are relevant to an analysis of whether those services are of equivalent or similar functionality to the AUSMAQ Service. Consequently, in light of the facts set out in paragraph 7 of Mr D’Emilio’s affidavit, the Court should be satisfied that the relevant categories should cover the period 1 July 1994 to 1 January 1996 as sought in the Plaintiff’s Motion.

        17. The documents sought in paragraph 2 of the schedule to the Plaintiff’s Motion are clearly relevant to the functionality of the AUSMAQ Service and the MLC Services. Documents such as “reports, recommendations, analysis or assessments of the AUSMAQ Service or AUSMAQ System” which were undertaken by employees or representatives of MLC could be expected to contain information about the business purpose/objectives of the AUSMAQ Service or AUSMAQ System, the value proposition and/or benefits/advantages of the AUSMAQ Service or AUSMAQ System. Such documents could contain admissions as against the MLC defendants or the fourth defendant. For example, such documents could contain statements to the effect that MLC businesses are easily capable of performing the purpose or objectives of the AUSMAQ Service. This would be relevant to the issue of whether such services have equivalent or similar functionality to the AUSMAQ Service. In the context of a situation where meetings between AUSMAQ and MLC were held over the period mid-1994 to mid-1996 and documents were provided by AUSMAQ to MLC, any assessments or analysis “of the AUMSAQ Service or the AUSMAQ System” could well be highly relevant. The documents sought are in respect of a very confined period (1 July 1994 to 1 January 1996).
        18. The documents sought in paragraph 3 of the schedule to the Plaintiff’s Motion are clearly relevant to, inter alia, admissions made by the fourth defendant in the MLC proceedings (ie documents created by AUSMAQ “describing the AUSMAQ Service or the benefits or advantages of the AUSMAQ Service or AUSMAQ system” which were provided to MLC.”

21    The defendants’ submissions in reply in relation to this issue are that the plaintiff has not established that there are any documents falling within paragraph 1 (a) and 1 (b) or paragraph 2.

22    The defendants further submit that the application for discovery of documents in the period 1 July 1994 up to 1 January 1996 ignores the plaintiff's own pleadings in that paragraph 28.4 of the plaintiff's further amended reply to the second further amended points of claim alleges as follows:

        "The plaintiff denies that there existed in 1996, either to their knowledge or in fact, services of equivalent or similar functionality to the Ausmaq service within the meaning of the Restructuring Agreement". [emphasis added by the defendants].

    The submission is that the application should be denied on this ground alone.

23    The further submission in reply is that to the extent that the plaintiff now asserts that the documents sought "could" contain admissions, the application amounts to no more than a fishing expedition.


    Holding

24    In my view each of the submissions made by the plaintiff's in paragraphs 8, 9, 10, 13, 15, the 2nd sentence of the first paragraph 16, 17 and 18 are of substance. The content of paragraph 28.4 of the plaintiffs’ further amended reply to the second further amended points of claim is not determinative of the issue when section 55 of the Evidence Act is taken into account.

25    In my view it is appropriate to make orders in terms of paragraphs 1, 2 and 3 of the plaintiff's’ notice of motion of 10 October 2001.


    Star Systems Pty Ltd or GBST

26    The plaintiffs by Notice to Produce No 12/2001 seek production of documents of the first and fourth defendants in the main proceedings, (namely NAB and Australian Market Automated Quotation (Ausmaq) System Ltd) created in the period February 1994 to July 1999, dealing in substance with the competence of GBST (formerly Star Systems) and the quality of software that it has produced.

27    The particular documents sought are described as follows:

        “1. Any documents created in the period February 1994 to July 1999, other than those documents already discovered by any of the defendants, recording or referring to
            (a) the competence or capability of Star Systems Pty Ltd or GBST Pty Ltd in software development;

            (b) the actual or reputed expertise or professionalism of Star Systems Pty Ltd or GBST Pty Ltd in the development of software; and

            (c) the quality of the software of Star Systems Pty Ltd or GBST Pty Ltd.”

28    The defendants by notice of motion filed on 15 October 2001 seek an order setting aside this notice to produce.

29    The defendants rely upon paragraphs 100 and 130 of exhibit P14 and upon paragraphs 76 and 77 of exhibit P15, these being statements of Mr Martin read in the main proceedings.

30    The plaintiffs rely upon certain pages of the transcript of examination of Mr Martin in the main proceedings namely pages 9846-9851, 9854, 12907-12911 and 13324, where Mr Smith explained a line of cross-examination and proceeded to cross-examine – the issue being the competence and track record of the development team of which Star Systems was an important member.

31    The plaintiffs’ further tendered paragraphs 57, 57A and the table 1 pages 26 to 30 and the commentary running up to page 37 from Mr Martin's statement exhibit P20.


32   


33    The defendants’ submissions are in the following terms:

        “1. The Plaintiffs have filed a notice to produce dated 5 October 2001 and numbered 12/2001 seeking access to documents of the First and Fourth Defendants dealing in substance with the competence of GBST (formerly Star Systems) and the quality of software that it has produced (“the GBST Notice to Produce”).
        2. The Defendants seek to set aside the GBST Notice to Produce on the ground that it is oppressive, principally because it requires production of documents which could not rationally affect the assessment of the probability of the existence of a fact in issue in the proceedings.
        3. The GBST Notice to Produce is expressed in very broad terms, particular in view of the size of the First Defendant and the use of the term “or relating to” which arguably would extend the scope of the Notice to Produce to nearly any document in the possession, custody or control of the Bank or AUSMAQ:
        (a) written by GBST;
            (b) otherwise provided by GBST to the Bank or AUSMAQ; or
            (c) in which reference is made to any work undertaken by GBST
        4. Further, such documents, unless they were concerned with:
            (a) GBST’s development of the Instaclear system prior to the Bank’s acquisition of AUSMAQ;
            (b) work undertaken by GBST in connection with the work undertaken in relation to the New Zealand customisation in early 1997; or
            (c) the assessment undertaken by AUSMAQ or the Bank of any additional work that it may have been proposed that GBST undertake in relation to AUSMAQ.
            could not be relevant.
        5. It would not be possible to draw any probative inference as to GBST’s capability to undertake any AUSMAQ software development, without at least:
            (a) a detailed appreciation of the project or activity in respect of which the comment was made; and
            (b) an analysis of the extent to which that project or activity had any similarity to the nature of any work that GBST undertook or it was proposed it undertake in relation to the AUSMAQ System.
        6. By way of illustration, in the absence of the information described in paragraph 5 above, if bank office A wrote a note to the effect that GBST’s work on project X fell short of his or her expectations, such remark or observation would not have any probative value to the issue of GBST’s capability to undertake any AUSMAQ software development.”

34    Mr Halley who addressed on this matter on behalf of the defendants submitted that the question of the competence of Star Systems upon proper analysis was simply a potential subset of the principal issue going to the relevance of Star Systems, namely Mr Martin's identification of Star Systems as being part of the development team which on his evidence would have been instrumental in completing the development for commercialisation of the Ausmaq Service. Mr Halley referred inter alia to Mr Martin's evidence referring to the creation by Ausmaq of an effective team that could achieve sustained and acceptable productivity, which team comprised the key consultants who included Star Systems. Mr Martin had referred in his evidence to estimates based on the known characteristics and performance of typical Progress programmers who had been used at Ausmaq and to the typical performance of Star Systems consultants who had been used at Ausmaq. Hence Mr Halley’s submission was that the issue was whether the particular team identified by Mr Martin would have been able to achieve the type of productivity suggested by Mr Martin-the issue going to the critical nature of the relationship between members of that team, their ability to co-operate, their ability to work effectively, their ability to identify requirements and then write software to meet those requirements being an issue squarely addressed by the expert evidence from both parties.

35    Mr Halley made the point that in relation to notice to produce 12/2001, the first two lines were silent as to who was the author of the documents sought. Hence, if for example, the NAB had within its position custody or control an internal record of Star Systems dealing with Star Systems competence this would be covered. Likewise with any documents held by NAB, but obtained from a third party.

36    The next objection to the notice to produce related to its broad terms - for example the terms of the notice would pick up any specifications which may have been provided by Star Systems to NAB .

37    The third point made by Mr Halley was as to the relevance of any assessment of Star Systems undertaken by a third party or by the NAB outside of the context of the Ausmaq System. The submission was that a host of subset issues could be raised because one would have to analyse in great detail the requirements for any particular project in which Star Systems had been involved in order to be in a position, even remotely, to extrapolate from documents produced in relation to the competence of Star Systems as demonstrated in relation to that project over to the competence of Star Systems to carry out work which may have been necessary to be carried out in relation to Ausmaq and the development of software for Ausmaq.

38    The plaintiffs’ submissions are in the following terms:

        “1. This is the outline of submissions on behalf of the First Plaintiff, Idoport Pty Limited, in relation to the Notice to Produce dated 5 October 2001 addressed to the First and Fourth Defendants in relation to documents created in the period February 1994 to July 1999, other than those documents already discovered by any of the Defendants, relating to the competence or capability of Star Systems Pty Limited, its expertise or a professionalism and the quality of the software of Star Systems Pty Limited.
        2. The Court will recall that one of the entities mentioned in the 1996/1997 Business Plans of Idoport Pty Limited which were considered by the Board of Directors of NMG and Ausmaq Systems in December 1996 and January 1997 referred to the future involvement of Star Systems Pty Limited in the development of the Ausmaq System
        3. There has been extensive cross-examination by Mr Smith SC, senior counsel for the Defendants, of Mr Brian Martin in relation to issues concerning Star Systems Pty Limited in an attempt to show that Star Systems’ performance and work was not to the highest standard.
        4. It is submitted on behalf of Idoport that any documents in the period in the Notice to Produce relating to the Defendants’ perception of the competence, capability, expertise or professionalism of Star Systems or of the software prepared by Star Systems must be relevant to the issue of the ability of Star Systems to perform some or all of the development work. No doubt, senior counsel for the Defendants would only be cross-examining Mr Martin in relation to matters which the Defendants perceive to be relevant to the issues in dispute in the proceedings. In the submission of Idoport this is a powerful factor in support of the relevance of the documents referred to in the Notice to Produce.
        5. An issue which has been articulated by Mr Smith SC on behalf of the Defendants is the capacity to have development work completed in relation to the Ausmaq System to permit the commercialisation of the Ausmaq System in foreign markets by mid 1998. Relevant to this issue is the ability of the JMG consultants, the Defendants and Star Systems to cause such developments to occur, with or without the assistance of third parties, by that period. To the extent that the Defendants are in possession of documents which show that they regard or they record a high standard from Star Systems, this must be relevant to this issue.
        6. The Court will also recall from its consideration of admissibility in relation to Mr Martin’s 25 May 2001 enhancements report, that Star Systems prepared the software for the purposes of the NAB’s Margin Lending Service and indeed that NAB’s Margin Lending Service system was based on Star System’s SHARES software. It will be recalled that “a significant part of the Ausmaq system is [also] based on Star System’s SHARES software”: para 4, exhibit P2. Consequently, it cannot be said that there is no connection between NAB and Star Systems. [I interpolate to note that paragraphs 57 and 58 of Mr Martin's statementP20 do prove at least on the applications that Star Systems was the same software house in respect of preparation of the software for purposes of the NAB 's Margin Lending Service and for the Ausmaq System. Mr Martin' s evidence was that in the case of Ausmaq, the underlying SHARES system was supplied by Star Systems. In the case of Margin Lending, the underlying SHARES system was supplied by Star Systems. Much of the development of Ausmaq, especially the customisation of SHARES, and the subsequent modifications for New Zealand operations, was subcontracted to Star Systems. The proposed Margin Lending Service system was to be entirely subcontracted to Star Systems-P20 at page 31]
        7. For all of the above reasons, it is submitted that the Notice to Produce dated 5 October 2001 seeks documents which are relevant to the proceedings. In the alternative, it is submitted that documents from 1 July 1996 to July 1999 would clearly be relevant to the proceedings as this time period would commence with the month of the due diligence work undertaken by NAB in relation to the acquisition of Ausmaq.”

39    The general issue is of some real importance in the proceedings


    Holding

40    The respective submissions on this issue throw up a particular difficulty where Mr Smith SC is shown in his cross-examination of Mr Martin to have focused on suggestions that Star Systems by their history had demonstrated a lack of confidence in software development in relation to the work carried out on Instaclear and/or related to The Ausmaq Service.

41    On the other hand the terms of notice to produce 12/2001 are extremely wide.

42    In my view there is substance in the defendants’ written submissions, paragraphs 4 and 5. There is also substance in the plaintiffs’ written submissions paragraphs 4, 5 and 6.

43    The proper exercise of the Court’s discretion is to permit a further category of discovery requiring production of the documents as described in notice to produce 12/2001 relating to the period February 1994 up to July 1999, but with the qualification that the class is limited to documents concerned with:

        (a) GBST's development of the Instaclear system prior to the banks acquisition of Ausmaq
        (b) work undertaken by GBST in connection with the work undertaken in relation to New Zealand customisation in early 1997; or
        (c) the assessment undertaken by Ausmaq or the Bank of any additional work that may have been proposed that GBST undertake in relation to Ausmaq

    Services known as Masterkey, Your Prosperity, NOLT /and Project Endeavour

44    By notices to produce in both the main proceedings [No 11/2001] and the MLC proceedings [No 4/2001], Idoport seeks production of documents in the following terms:

        “1. Any document created from 1 May 2000 to date recording or referring to any proposal, analysis, evaluation, project or plan to introduce the services known as Masterkey, Your Prosperity and/or NOLT (by whatever name they are actually described) in the United Kingdom or any part thereof . [I interpolate that NOLT is a reference to “National Online Trading”]

        2. Any document created from 1 May 2000 to date recording or referring to any proposal, analysis, evaluation, project or plan known as Project Endeavour.

        3. Any document constituting or recording a plan or project known as Project Endeavour.

        4. Any document created from 1 May 2000 to date recording or referring to any proposal, analysis, evaluation, project or plan to introduce or commence or establish the MLC business including Masterkey and/or Your Prosperity services (by whatever name they are actually described) in or into the United Kingdom or any part thereof.
        In this Notice:-
        Document means any record of information and includes:
        (a) anything on which there is writing; or
            (b) anything on which there are marks, figures, symbols or perforations having a meaning for persons qualified to interpret them; or
            (c) anything from which sounds, images or writings can be reproduced with or without the aid of anything else; or
        (d) a map, plan, drawing or photograph; or
        (e) a computer disk and/or electronically stored information.”

45    The defendants seek to set aside notice to produce 4/2001 by their further notice of motion filed on 15 October 2001. The defendants’ notice of motion referred to earlier in this judgment in addition to dealing with notice to produce 12/2001, also sought an order setting aside notice to produce 11/2001.

46    The defendants rely on the affidavit made by Mr Lovell on 9 October 2001 and upon exhibit DGL1 to this affidavit. [marked for identification D211 on the applications]

47    Idoport relies upon the affidavit of Mr D’Emilio of 12 October 2001.

48    The defendants’ submissions are in the following terms:

        “2. There are 3 bases on which the Plaintiff’s Notices to Produce should be set aside, namely
            (a) the Notices to Produce do not go to any issue raised in the Plaintiff’s pleadings;
            (b) the Notices to Produce impermissibly seek to circumvent the discovery orders sought and made in the MLC Proceedings;
            (c) the current status of the proceedings.
        3. As to the first of these matters, it is submitted that the documents sought in the Notices to Produce do not relate to the issues in the proceedings. In relation to paragraphs 2 and 3 of the Notices to Produce, the Plaintiff has served no evidence as to the nature of “Project Endeavour” and the Plaintiff has not pleaded any issue in relation to this project. It merely relies upon an article from a newspaper which mentions the “endeavour platform” and thereby asserts an entitlement to documents. These two paragraphs of the Notices to Produce are a paradigm of a fishing expedition in the sense used by Jordan CJ in Commissioner for Railways v Small (1938) 38 SR 564 at 575.
            In relation to paragraphs 1 and 4, the Plaintiff has no cogent evidence as to the relevance of the material sought. The evidence of Mr Joslin, commenting on a third party report (a report of Credit Suisse First Boston, see paragraph 1.1 of Mr Joslin’s statement) is neither probative nor admissible evidence. Further, these paragraphs are extraordinarily wide in their scope. For instance, any proposal or analysis regardless of its status would be caught; and the term “MLC business” as used in paragraph 4 is vague and imprecise. There is no definition (or pleading) of the phrase “MLC business”.
        4. As to the second matter, to the extent that any such documents sought or falling within the terms of the Notices to Produce relate to the Plaintiff’s “equivalent or similar” pleading, those documents are discoverable; similarly to the extent that any such documents are truly relevant to damages issues then those documents will be discoverable, and discovery can be given of such documents in accordance with the timetable set by the Court on 5 October 2001, that is, by 26 April 2002. To force the Defendants to produce these documents by way of Notice to Produce at this time would be to circumvent the agreed orders.
        5. As to the third matter (the status of proceedings), the Plaintiff has had the benefit of very considerable discovery on issues of functionality (see the affidavit of Damian Gordon Lovell sworn 9 October 2001). The Court ought not to permit a Plaintiff who has been in substantial default of the timetable to now require the Defendants to produce documents sought very soon after a 2 day timetabling hearing and without proper explanation as to why the documents were not sought earlier and in circumstances where the Notice to Produce is drawn in wide and undefined terms.”

49    The plaintiffs submissions are in the following terms:

        “1. In the MLC proceedings Idoport Pty Limited asserts that certain services have equivalent or similar functionality to the Ausmaq Service. Any documents relating to the introduction of such services into the United Kingdom may well contain analyses or consideration of the functionality of those MLC services which may constitute admissions or be relevant to establishing that the functionality is similar or equivalent to the functionality of the Ausmaq Service.
        2. Such documents would also be relevant to damages being the earnings or potential earnings of such services in the United Kingdom.
        3. In relation to the main proceedings, it is the case of the Plaintiffs that the Ausmaq Service should have been developed and commercialised in the United Kingdom. The Plaintiffs have asserted that it was contemplated by the parties prior to contract that the Ausmaq Service would be commercialised in the United Kingdom. Further, it is asserted by the Plaintiffs that such commercialisation in the United Kingdom as well as in other places globally was contemplated in the Consulting Agreement.
        4. The statement of Mr Joslin dated 7 August 2001 proposed to be filed by the Plaintiffs shows how an analysis of the introduction of the MLC Services in the UK is relevant to, inter alia, identification of the target market, identification of the business purpose or business objective and identification of the roles and relative power of relevant market participants: see paragraphs 2.1, 3.2, 4.1, 4.3-4.5, 4.9, 5.1, 5.3, 5.7, 5.9, 6.5-6.9, 9.1-9.32 (especially 9.18, 91.9, 9.20, 9.22) and section 11. Each of these matters is directly relevant to determining, inter alia, the functionality of the MLC Services. This is a necessary step in determining whether the MLC Services are of equivalent or similar functionality to the Ausmaq Service.
        5. It is submitted that documents relating to the commercialisation of the MLC Services in the United Kingdom:
            (a) are relevant to the prospects and likely profitability of the Ausmaq Service as developed as it would be commercialised in the United Kingdom;
            (b) are relevant to the issue of what development and commercialisation was possible in relation to the Ausmaq Service for the purposes of commercialisation in the United Kingdom;
            (c) are relevant to the issue of the prospects and potential profitability of e-commerce services at relevant times in the United Kingdom;
            (d) are relevant to a comparison of the functionality of the MLC Services to the functionality of the Ausmaq Service.
        6. For these reasons it is submitted that such documents are relevant to facts in issue in the proceedings being the development and commercialisation of the Ausmaq Service and services similar or equivalent to the Ausmaq Service in the United Kingdom and thus should be produced.”
    Project Endeavour

50    During the hearing of the applications, both parties devoted a great deal of attention to the question of precisely what, on the evidence before the Court, "Project Endeavour" was. The defendants’ submission was that Project Endeavour was not a service which was pleaded in the MLC proceedings or in the main proceedings. The submission was that there is nothing in the evidence to indicate that Project Endeavour is in any way relevant to any issue in either set of proceedings. The submission was that this was a classic example of a fishing expedition which should be disallowed.

51    Mr Insall further submitted that documents relating to equivalent or similar functionality as an issue and/or to damages were, in any event, already covered by the existing discovery orders.


    Holding

    Paragraphs 2 and 3 of Notices to Produce 11/2001 and 4/2001

52    I have given careful consideration to the evidence before the Court in relation to Project Endeavour. The evidence was generally outlined by Mr Garnsey at transcript 13836 and following. It includes:

· The report by Credit Suisse First Boston Australia Equities Limited dated June 2001 ["the CSFB Report"] to be found at pages 34 and following of MFI D 211. [See in particular the first bullet point on p 34; the reference in the table of contents on p 35 to appendix 2: MLC in Australia-A platform for growth; the fourth paragraph on p 36 and the final paragraph on p 36; and the third last paragraph on p 45; Appendix 21 p 51]

· The 9 October 2001 report of an announcement by Mr Cicutto [to be found at p 35 of the annexures to the affidavit of Mr D’ Emilio of 12 October 2001] in which Mr Cicutto asserted that NAB was continuing to build the endeavour platform in the United Kingdom which would be launched towards the end of November and would be a great addition to the NAB 's armoury in the United Kingdom

· The detailed review of the CSFB report by Mr Joslin also appended to the affidavit of Mr D’Emilio at pages 15 and following

53    It seems to me quite clear that the Court has power to order production on notices to produce so far as is necessary, in the proper conduct of litigation, where the Court forms the view that the material falls within the legitimate field of enquiry raised by the issues in contest and is reasonably likely to add in the end in some way or other to the relevant evidence in the case. In my view the proper exercise of the Court's discretion is to allow paragraphs 2 and 3 of the notices to produce on the basis that whether or not the subject of documents are already covered by existing orders as to discovery, the high likelihood is that the documents sought would have a relevance to a number of issues in the proceedings, including damages, the defendants pleaded ‘obligation to commercialise’ case, matters relating to regulatory factual issues and the similar or equivalent issue. The defendants have in submissions in relation to Project Endeavour [including in relation to how they propose to regard such documents in terms of their understanding of their discovery obligations] elected to hold their cards to their chest in significant ways. The Court has a clear discretion to order the production of the documents by notice to produce and in my view the plaintiffs’ evidence on the applications (including the tender without objection of the evidence of Mr Cicutto's announcement) is sufficient to satisfy the Court that this matter cannot be classified as a baseless fishing expedition.

54    If it be the case that on the defendants analysis of existing discovery orders, the subject documents are discoverable by 26 April 2002 in terms of damages, the defendants have not seen fit to concede this fact and in any event prior production of such documents is convenient in terms of the ongoing case management of the proceedings, particularly bearing in mind the plaintiffs current obligations to complete preparation of equivalent or similar functionality statements.

55    Generally the plaintiffs’ written submissions earlier set out in relation to Project Endeavour appear to me to be of substance. To avoid any issues which may arise as to whether production of the subject documents should be ordered by way of further discovery in an environment in which there remains residual uncertainty about the precise ambit of Project Endeavour, the convenient course is simply to make the order by way of requiring production pursuant to paragraphs 2 and 3 of the notices to produce.


    Paragraph 1 of the notices to produce 11/2001 and 4/2001

56    At transcript 13869.20 Mr Insall submitted that if the plaintiffs were to modify this paragraph by tying it to issues of functionality and damages there would probably be little that the defendants could say in opposing production. It seems to me that if the plaintiffs produce an appropriate form of wording to accommodate the suggestion then the paragraph should be permitted by way of an additional category of discovery.


    Paragraph 4 of the notices to produce 11/2001 and 4/2001

57    It does not seem to me that the plaintiffs have made a case in support of the proposition that this paragraph should be allowed whether by way of notice to produce or additional category of discovery. The words "the MLC business" are far too wide and undefined to permit the paragraph in its present form as a basis for either production on notice to produce or production by way of further discovery. If paragraph 1 of the notices to produce is varied to accommodate Mr Insall’s indication earlier outlined, paragraph 4 save for the unacceptable reference to ‘the MLC business’, would become otiose.


    Discretionary considerations

58    In reaching the above decisions I have taken into consideration the respective submissions of the parties as to suggested discretionary considerations said to be of importance, earlier set out in this judgment. A particularly pervasive such consideration, as it seems to me, is the matter referred to in paragraph 8 of the judgment which relates to the position which obtained when the Court, over the plaintiffs, objections, ordered that the MLC proceedings be joined with the main proceedings. That judgment made plain that such case management accommodation would be given as may become necessary, in terms of what was likely to be a fairly difficult exercise in forcing in the new proceedings to be heard together with the main proceedings. There was never any doubt but that it was necessary and appropriate for both proceedings to be heard together, section 63 of the Supreme Court Act essentially mandating that approach. Although a number of factors have necessarily been taken into account in reaching the above decisions, this consideration harking back to when the plaintiffs were forced to have the MLC proceedings heard together with the main proceedings, has certainly played a real part in a number of aspects going to the plaintiffs measure of success achieved on some of their applications the subject of this judgment,

59    I have also taken into account the defendants submissions and evidence as to their approach to the 7 notices of motion before the Court for argument on 29 September 2001 and 2 October 2001 and in particular as to the timetable then fixed. I have also taken into account the defendants submissions and evidence as to their resources. I refer in particular to the affidavit evidence given by Mr Lovell in paragraphs 21 and following of his affidavit of 11 October 2001 made in the MLC proceedings, in paragraphs 11 and following of his affidavit of 9 October 2001 made in the main proceedings and in paragraphs 18 and following of his affidavit of 9 October 2001 made in the MLC proceedings. The addition of further resources of the defendants is simply a necessary concomitant of the necessity to ensure that documents, which are in the interests of justice required to be produced by reference to issues being litigated in the proceedings, are duly produced. Previous reference has been made to the defendants’ resources being mobilised in terms of the continued conduct of the proceedings. I am not satisfied that there is any evidence of the type or extent of oppression which would justify doing otherwise than making the orders which are proposed to be made as earlier indicated. As always timetable accommodations will be made as and where necessary and appropriate.

60    The whole of the matters dealt with in Mr Lovell’s above described affidavits, have been taken into consideration.


    Limiting further applications for additional discovery/further applications for production of documents on notice to produce

61    Clearly it is particularly important for the Court to pay very close attention indeed to any applications for additional discovery and to any applications for production of further documents on notice to produce. The matter remains dynamic but the approach will be to strictly monitor all applications for production of further documents. By reference to the experience in relation to the roll-out of statements by both parties in these proceedings, the number of issues and the scale of the proceedings suggests that if the parties were permitted without careful scrutiny, to continue to obtain additional discovery and/or production of further documents on notice to produce, a considerable expansion of the Court time required for the hearing may occur.

62    On the other hand there are two important considerations to be borne in mind at all times. The first is the pervasive consideration that the interests of justice must direct any exercise of the Court’s discretion including any exercise dealing with production of further documents or an expansion of discovery categories. The second is the simple fact that whereas the plaintiffs have accepted an obligation to give general discovery, the defendants have only been required to give discovery by category. In this way if the Court was to shut both parties out from ever again seeking to apply for any further discovery, this would simply have the result of disadvantaging only the plaintiffs.

63    The continued approach of the Court will be to carefully monitor further applications for production of documents by either route. The approach of the Court may be anticipated to be reasonably strict as there simply has to be a limit to the documents which may be required to be produced, in the interests of the proceedings achieving finality.


    Short Minutes of order

64    There are a number of matters raised by the above decisions which will require careful attention in terms of short minutes of order. In relation to some matters one or both parties may wish to address short submissions. The appropriate course is for the plaintiffs to be required to bring in short minutes of order and to permit those submissions to be addressed at that time.


    I certify that paragraphs 1 - 64
    are a true copy of the reasons
    for judgment herein of the
    Hon. Justice Einstein
    given on 19 October 2001

    ___________________
    Susan Piggott
    Associate
Last Modified: 06/13/2002
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