Idoport Pty Limited v National Australia Bank Limited and 8 Ors; Idoport Pty Ltd "JMG" and Market Holdings Pty Ltd v Donald Robert Argus [11]

[2000] NSWSC 945

CITATION:	IDOPORT PTY LIMITED & ANOR v NATIONAL AUSTRALIA BANK LIMITED AND 8 ORS; IDOPORT PTY LTD "JMG" & MARKET HOLDINGS PTY LTD v DONALD ROBERT ARGUS [11] [2000] NSWSC 945
FILE NUMBER(S):	SC 50113/98; 50026/99
HEARING DATE(S):	3/10/00, 4/10/00 & 5/10/00
JUDGMENT DATE:	5 October 2000
PARTIES :	IDOPORT PTY LIMITED (Plaintiff) MARKET HOLDINGS PTY LTD (Plaintiff) NATIONAL AUSTRALIA BANK LIMITED (Defendant) DONALD ROBERT ARGUS (Defendant)
JUDGMENT OF:	Einstein J

COUNSEL :	JJ Garnsey QC, RC Titterton & R Alkadamani (Plaintiffs) TF Bathurst QC, JR Sackar QC, H K Insall (Defendants)
SOLICITORS:	Withnell Hetherington (Plaintiffs) Freehill Hollingdale and Page (Defendants)
CATCHWORDS:	Practice and procedure - Avoidance of multiplicity of proceedings - Order that proceedings raising common questions of law and fact and arising out of same set of transactions be heard together - Case management.
LEGISLATION CITED:	Amendment 337 to Supreme Court Rules Evidence Act 1995 Judicature Act 1873 (UK) Judiciary Act 1903 Supreme Court Act 1873 Supreme Court Act 1970 s63 Supreme Court of Judicature (Consolidated) Act 1925 (UK)
CASES CITED:	Philip Morris Inc v Adam P. Brown Male Fashions (1980) 148 CLR 457 Trawl Industries v Effem Foods (1992) 36 FCR 406
DECISION:	The Defendants' Notice of Motion allowed, costs being reserved.

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

EINSTEIN J

Thursday 5 October 2000 ex tempore
Revised 10 October 2000

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

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

JUDGMENT on motion to hear proceedings No 3991 of 2000 together with proceedings No 50113 of 1998 and 50026 of 1999

The Notice of Motion

1    There is before the court a notice of motion filed on 3 October 2000 under cover of which the defendants and first cross-claimants [together referred to for convenience as ["the defendants"] seek an order that Equity Division proceedings No 3991 of 2000 ["the new proceedings"] be heard and determined with Equity Division Commercial List proceedings No 50113 of 1998 and 50026 of 1999 ["the existing proceedings"]. .

Background leading to the Motion

2    The existing proceedings need little introduction. Proceedings No 50113 of 1998 [referred to for convenience as "the main proceedings"] were commenced on 24 September 1998 when the first Summons and statement of claim were filed. Proceedings No 50026 of 1999 ["the Argus proceedings"] were commenced in March 1999 and it is common ground that they raise in large measure, identical issues to the issues raised in the main proceedings. 3    Following an extensive set of pre-trial procedures covering numerous sets of directions and interlocutory hearings including in mid 1999, a heavily contested application by the plaintiffs for interlocutory relief including the appointment of receivers and managers (in which the documentary tender alone extended to well in excess of 5,000 pages), the judgment essentially declined to award most of the interlocutory relief sought but made plain that:

(a) the plaintiffs had established at interlocutory level a serious case for trial in relation to many of their allegations
(b) bearing in mind the pressing significance and urgency attaching to the case and to the plaintiffs claims of an ongoing and radical undermining of its contractual rights, the court had come to the conclusion that the case was one appropriate to be fixed for final hearing in early May 2000.

4    Following the delivery of the interlocutory judgment in late August 1999, the parties continued under active case management by the court, to work their way through innumerable timetables and cross applications dealing with matters going to pleadings, discovery and witness statements. I venture to suggest that there would be few occasions when as much energy and time has been spent by parties to proceedings in this country in preparing for a final hearing. Presumably this is because of the significance to the parties of the issues, the plaintiffs asserting that the relief to which they are entitled, exceeds the market capitalisation of the National Australia Bank Limited [“NAB”]. 5    I do not see it as appropriate to repeat the record. The undoubted fact is that the existing proceedings, following a number of contested applications dealing with the precise date when the final hearing should commence, in fact ultimately commenced on 24 July 2000. The plaintiffs then proceeded to open their case for approximately seven weeks, the court adjourning for three weeks over the Olympic court declared short vacation. During that vacation Idoport on 19 September 2000 commenced the new proceedings.

The New Proceedings

6    The first four defendants to those proceedings are identical to the first four defendants to the existing proceedings. The fifth and sixth defendants to the new proceedings are new parties namely MLC Ltd ["MLC"] and National Online Training Ltd ["National Online"]. The seventh defendant to the new proceedings Mr Cicutto, had already been joined as sixth defendant to the existing proceedings. 7    I do not see it as appropriate to set out in this judgment exhaustive detail of all the allegations made in the statement of claim in the new proceedings. Importantly the document mirrors, although far more succinctly, many of the allegations made in the current statement of claim in the existing proceedings. I shall however endeavour to give an overview of the common issues thrown up by the existing and new proceedings. 8    Idoport in the statement of claim in the new proceedings alleges that the defendants to those proceedings procured and caused breaches of contract and fiduciary duty in relation to three projects ["the new projects"] which were established or acquired subsequent to the commencement of the existing proceedings. In referring to the new projects as three projects, it should be clear that following discussions which have taken place between the parties the plaintiffs have confirmed that the projects to be litigated in the new proceedings are those referred to as National Online Trading, the National BtoB e-commerce portal service, CFOWeb.com and insofar as the MLC services are concerned, not one but two services, one of which extends to cover, so the defendants have made plain, a number of products. The particular such services are identified on page 17 of the statement of claim in the new proceedings as MLC MasterKey which is a total investment solution which Mr Bathurst has indicated the defendants will assert covers a number of products and, secondly, the service identified as "Your Prosperity." Hence, whether one is dealing with precisely three or some larger number of projects being litigated in the new proceedings, the transcript of argument today will make plain that the parties are ad idem as to precisely what is to be in issue. 9    I pause to note that Mr Bathurst has made plain that the service Your Prosperity is not a product operated by a named defendant, but is as I understand it operated by a related company to MLC, namely, Your Prosperity Ltd which is, I understand, a subsidiary of MLC Holdings, MLC Holdings being itself a subsidiary now of NAB. 10    The claims made in respect of the new projects are arguably, subject only to one matter, in essence the same as those made in relation to the projects the subject of the existing proceedings, (“the first identified projects”) namely that:

(a) Ausmaq was an Operating Entity as defined in the Consulting Agreement dated 13 September 1996
(b) the project is a service with equivalent or similar functionality to the service of providing an automated securities trading system and related services
(c) by developing, operating and marketing the project, NAB and other named entities have used and threaten and intend and will continue to use the System IP Rights as defined in the Consulting Agreement and are Operating Entities as defined in the Consulting Agreement
(d) each of the entities referred to in (c) is proceeding to develop, implement and market the project to the exclusion of NMG and Ausmaq and refuses to account for and pay a performance bonus in respect of the project
(e) NMG has breached clause 7 of the Consulting Agreement in specified ways.

11    On the defendants submissions, the only material difference between the claims made in respect of the first identified projects and the new projects is that in the new proceedings, comparison is made with a service with equivalent or similar functionality to the service of providing an automated securities trading system as it is or should be or should have been enhanced or modified or added to. Although the defendants assert that this matter was not pleaded in the third further amended statement of claim in the existing proceedings, the plaintiffs assert that this matter was so pleaded or particularised. The reach of the existing pleadings is likely to require determination in coming weeks. In any event, it is common ground that this interpretation of the definition of Ausmaq Service in clause 1.1 of the Consulting Agreement was put by the plaintiffs as a matter which they seek to litigate, in the course of their opening. [MFI P70] 12    It is also common ground that a number of other allegations in the statement of claim in the new proceedings are identical or substantially identical to the allegations made in the third further amended statement of claim in the existing proceedings. Examples include the following:

(a) the allegations concerning the obligations imposed on NAB /NMG by the terms of the Consulting Agreement are substantially identical, including the allegations as to the implied terms in the Consulting Agreement

(b) the allegations concerning the fiduciary relationship of NMG and NAB to JMG. are substantially identical

(c) the allegations as to the alleged breaches of contract and fiduciary duty are substantially identical
(d) relief sought is substantially similar

13    A convenient summary setting out those paragraphs in the third further amended statement of claim which correspond to paragraphs in the statement of claim in the new proceedings in respect of the above described allegations is set out in the schedule annexed to this judgment and taken from annexure "A" to the affidavit of Mr D G Lovell Solicitor made on 29 September 2000. 14    Additionally the statement of claim in the new proceedings in certain sections repeats certain paragraphs of the third further amended statement of claim in the existing proceedings. Also the particulars to at least paragraph 50.4 of the statement of claim in the new proceedings, expressly "repeat" the facts and matters particularised in relation to a number of paragraphs of the third further amended statement of claim. 15    The statement of claim in the new proceedings in the particulars at least to paragraph 50.4, rely upon "the whole of the plaintiffs opening in and the particulars in certain documents which have been marked for identification in the plaintiffs opening and in paragraph 51.3 upon certain other documents which have been marked for identification in the plaintiffs’ opening and upon certain other documents which have been marked for identification in that opening.

Similarity of Evidence

16    In my view it is quite clear, and I do not know that this could possibly be controversial or was controverted by either of the senior counsel who addressed the court in relation to the motion, that given that the claims made in respect of the new projects are in the same terms as those made in respect of the first identified projects, it is extremely likely and probably certain that the type of evidence sought to be led with respect to the new projects will in very large measure be substantially the same. I further accept that it is likely that the parties will wish to seek to rely extensively upon evidence from the same experts who have given statements in respect of the new projects when filing evidence in relation to the new projects.

The genesis of the new proceedings

17    Limited attention has been given during address to the precise points in time and manner in which the plaintiffs first learned of the new projects and of the NAB acquisition or proposed acquisition of MLC and its associated financial services businesses. As I understand the position, it is common ground, however, that the plaintiffs could not be said to have acquired knowledge of the new projects or acquisition prior to this year and it seems that from early this year, Mr Maconochie was pressing for detailed information as to National Online Trading, that in August, the NAB announced that it was to become a provider to the global B2B e-commerce Portal Service CFOWeb.com and that the announcements by NAB of its agreement to acquire MLC businesses from Lend Lease Corporation Ltd and completion of that acquisition respectively took place in April and late June 2000. Those issues appear to have been accepted by both Senior Counsel who addressed on the application as not being determinative of the issues raised by the application. It is of course common ground that during the first half of this year, both parties were working apace to prepare for the hearing fixed to commence originally in June, but ultimately commencing on 24 July 2000. In particular, Mr Bathurst QC did not submit that there was any or any appreciable criticism sought to be levelled at the plaintiffs in relation to delay in having commenced the new proceedings. 18    Clearly during the course of the plaintiffs opening, Mr Garnsey QC made reference to possible evidence in relation to other services being developed by the NAB and to e-commerce services and the plaintiffs arguments on equivalent and similar functionality. On 31 August 2000 and on 4 September 2000 the court made enquiry of Mr Garnsey as to the ambit of the plaintiffs 'equivalent and similar functionality' case. Mr Garnsey indicated in response that while the scope of the plaintiffs case was at that stage limited to the first identified four Bank projects, the plaintiffs were considering their position in relation to additional, 'recently added' services

The need for the existing proceedings and the new proceedings to be heard together

19 The proposition that it is appropriate for the existing proceedings and the new proceedings to be heard together cannot be gainsaid. The two sets of proceedings clearly cry out to be heard together. Simply standing back and examining the scale of the existing proceedings makes the point. Those proceedings are estimated to take between one and two years. In my view based on the materials to which the court has been taken during the plaintiffs opening, there is a realistic and respectable prospect that the hearing may take two years. The pleadings in the existing proceedings are very extensive. The particulars furnished to those pleadings are very extensive. The number of documents forming part of the Ausmaq casebook and the Projects casebook are extensive - estimates given to the court of these numbers have from time to time varied but my general understanding is that there are in the order of close to 100,000 pages of such documents. The scale of the documents capable of being tendered or used during the course of the proceedings was referred to in the interlocutory judgment delivered on 14 April 2000 when the use of the Technology Court was ordered. The number of witnesses to be called in the existing proceedings is apparently in excess of 130. Statements filed and served by many witnesses extend to hundreds of pages or paragraphs and in some cases the same witnesses have made several statements. A number of overseas witnesses including experts are involved. The plaintiffs have briefed seven counsel including two Senior Counsel. The defendants have briefed five counsel including three Senior Counsel. Special arrangements have been made for outside court reporters to transcribe the proceedings. The Technology Court is, as I have said, made available to the parties. The court has provided extensive facilities to the parties including a number of computers. A specially trained Court officer capable of operating the electronic mode in which the proceedings have been set up, has been retained. An outside project manager has been retained. Steps have been taken to construct special shelving inside and outside the courtroom to accommodate, notwithstanding the electronic mode in which the case has been set up, the voluminous documentary material. 20 The common sense of the position which obtains suggests in the clearest possible terms that every attempt practicable be maintained to permit the new proceedings to be heard together with the existing proceedings, providing always, of course, that the dictates of natural justice be complied with. Those dictates essentially relevantly require that the respective parties have a proper opportunity to understand one another’s cases, have a proper opportunity to prepare for and represent their cases and are not materially prejudiced in that regard. But weighing how those dictates may be met becomes a question of detail and at base a simple question of appropriate case management. 21 Section 63 of the Supreme Court Act 1970 is in the following terms:

"The court shall grant, either absolutely or on terms, all such remedies as any party may appear to be entitled to in respect of any legal or equitable claim brought forward in the proceedings so that, as far as possible, all matters in controversy between the parties may be completely and finally determined, and all multiplicity of legal proceedings concerning any of those matters avoided"

22 Section 63 expresses a fundamental principle of the Supreme Court Act which is the avoidance of multiplicity of proceedings. The section has its derivation in section 43 of the Supreme Court of Judicature (Consolidation) Act 1925 (UK) which in turn derived from section 24 (7) of the Judicature Act 1873 (UK), whose provisions had been reproduced with or without amendment in subsequent enactments in the States of Australia as well as in section 32 of the Judiciary Act, Gibbs J in summarising this history in Philip Morris Inc v Adam P. Brown Male Fashions (1980) 148 CLR 457 at 489 said:

“The provision which has been considered in a number of authorities, has been said to mean ‘that whenever a subject of controversy arises in an action which can conveniently be determined between the parties to the action, the court should, if possible, determine it so as to prevent further and needless litigation’: In the Goods of Tharp (1878) 3 P.D. 76 at 81. In other words, it gave effect to a fundamental principle of the Judicature Act procedure, the avoidance of a multiplicity of proceedings. It has been said, and no doubt rightly, that having regard to the nature and purposes of the provision, it should be construed liberally …”

23    The gravamen of the entitlement of the defendants to have the existing and new sets of proceedings heard together is to avoid multiplicity of proceedings most particularly where there is such an enormous overlap of material issues. The notion that on another occasion in some years time, another judge at first instance could be faced with hearing the new proceedings, in circumstances where an enormous number of the relevant issues would be absolutely identical with issues determined in the existing proceedings (or so close to identical with those issues as to throw up almost the same issues), only has to be stated to be rejected. Although in any such scenario the parties may be expected to endeavour to argue matters of issue estoppel, as Mr Bathurst for the defendants has pointed out, there is substantial authority in this country in support of the proposition that related companies and subsidiaries are not privies for the purpose of satisfying the requirement of identity of parties between the parties in a concluded action and an action in which an estoppel, be it cause of action estoppel or issue estoppel, is sought to be raised [Cf Trawl Industries v Effem Foods (1992) 36 FCR 406 at 416 and following, per Gummow J; Full Federal Court 43 FCR 510]. 24 In any such scenario the witnesses who are likely to be recalled, having given evidence in the existing proceedings, are likely for a second time to be taken in detail over the evidence which they had given. The very possibility of any such scenario is likely to lead to the parties approaching the continued hearing of the existing proceedings with an eye to keeping open for themselves as often as possible, all options perceived as of possible assistance in relation to the new proceedings due to come on at some time following completion of these proceedings. Any such scenario would involve undoubted additional costs. Any such scenario would involve as a necessary consequence a real degree of commercial uncertainty. Very serious allegations are pressed against Mr Cicutto in both sets of proceedings. The court is clearly entitled to take into account the effect upon personal defendants of leaving proceedings embracing allegations of this order unresolved for an indeterminate time. 25 Whilst it may sound somewhat out of place in proceedings of the dimensions of these proceedings, to invoke the new amendment No 337 to the Supreme Court Rules which articulates the overriding objective of enabling the court to deal with cases justly ['the overriding purpose of [the] rules… is to facilitate the just, quick and cheap resolution of the real issues in such proceedings]. The fact is that in order for the court to deal with any case justly a number of considerations require to be taken into account. The interests of the parties represent one such consideration. The entitlement of the parties to natural justice represents a crucial such consideration. The cost to the parties of the proceedings represents an appropriate consideration. The state of the court’s lists requires to be taken into account. The particular position which has been reached in relation the preparation or conduct of proceedings at the point in time when an application is made to have new proceedings covering in the main, the same or closely similar issues, heard together, represents an appropriate consideration. 26 Part 31 rule 7 of the Supreme Court Rules provides that where several proceedings are pending in the same division then, if it appears to the court-

(a) that some question of law arises in both or all of them;
(b) that the rights to relief claimed therein are in respect of, or arise out of, the same transaction or series of transactions; or


(c) that for some other reason it is desirable to make an order under this rule,

the court may, on terms, order those proceedings to be consolidated or may order them to be tried at the same time or one immediately after another or may order them to be stayed until after the determination of any of them.

27    Clearly the demands of sub-rules (a) and (b) are met in the instant situation. It is likely that for reasons associated with the magnitude of the proceedings and the significance of the relief claimed and the interests of shareholders in the NAB and the state of the court list, the demands of sub-rule (c) are satisfied. 28    A particularly important consideration in relation to the subject application concerns, as it seems to me, the undoubted fact that by reason of the time which the hearing is likely to take, the court is able, using case management techniques, to accommodate to the extent that the dictates of natural justice require, any prejudice to either party by the making of the order that the two sets of pleadings be heard together. 29    The point may be made in a number of ways. For one thing, it is reasonably plain that no witness is likely to enter at the witness box this year. This is because the defendants intend for Mr Bathurst QC to open on certain sections of their cases in detail and for Mr Sackar QC to continue that opening on other sections of the defendants’ cases, these openings being currently estimated to take approximately six weeks. The regime which the parties have accepted as appropriate up to this point in time has quarantined a large number of important questions and applications going to pleadings and other matters for consideration following completion of the openings. One of the matters currently proposed to be treated with following the openings concerns objections to statements and there now being a very large number of such statements indeed, that exercise itself is likely to take a considerable time, although it is hoped that by treatment with sample sections of particular statements the otherwise time which might be occupied in the court going through each and every sentence in each and every statement to adjudicate upon admissibility, will not require to be taken. 30    This judgment is being handed down in early October. When one takes into account the proximity of the long vacation it becomes plain that there are some four months available before the case resumes next year during which time the parties, notwithstanding the ongoing hearing, will have an opportunity to comply with such directions as may have to be given now or in coming months in relation to the new proceedings dealing, for example, with detailed pleadings, discovery and preparation of evidence. In any event, both parties accept, as I understand it, that a number of witnesses may be called prior to the end of term in December should the remaining court time available permit of this course. 31    I do not see it as presently imperative that, otherwise than as debated from the Bar table today, the court lay down an exhaustive set of directions covering these matters. Further directions can be formulated in coming weeks and where there is no consensus the court will determine what are to be the appropriate directions. The point is that an order should now be made for the new proceedings to be heard at the same time as the existing proceedings in order to avoid problems likely to occur if that order can only be made on a later occasion and after evidence has begun to be adduced 32    Amongst the matters required to be taken into consideration when future directions may require to be given are questions related to the specific issues in the proceedings and the types of evidence to be mobilised by both sets of parties in the continued hearing. 33    An enormous amount of the material, both documentary and in terms of oral evidence or evidence by statement followed by oral evidence, is proposed to be adduced by both parties on matters which form the substratum of each party’s case. From time the time the parties have, in attempting to categorise the evidence to be called, referred to 'lay evidence' and 'expert evidence'. The lay evidence to be adduced involves both pre-contractual as well as post-contractual communications. Whilst in a number of cases witnesses to be called by both parties will be relevant, both to lay evidence as well as to expert evidence or related matters, it is also plainly to be the case that many witnesses to be called will not deal at all with the similar or equivalent functionality issue. 34    Insofar as the expert evidence to be mobilised relating to the new projects is concerned, that evidence may of course be anticipated to be in many areas connected to the approach taken by the parties in their expert evidence relating to the existing projects. Whilst it is put that there may be difficulties occasioned to the parties in the event that future directions may quarantine for many months the receipt into evidence or the examination of evidence going to the similar or equivalent functionality issues raised by the new projects or going to the additional issues thrown up by the new proceedings, a common sense approach to weighing those difficulties will require to be taken. Litigation, particularly in the Commercial List, does not present a perfect world. Ultimately cases which have been commenced require to be brought to conclusion. And where from time to time applications for a vacation of a hearing date are pursued, the court requires to weigh-in balance the respective interests of the parties against the justice of the situation. At this time in these proceedings in my judgment that weighing exercise comes down squarely in favour of the existing proceedings and the new proceedings being now ordered to be heard together and in favour of the court, as and when necessary, imposing by appropriate case management techniques, an appropriate regime to permit:

(a) the hearing which has now commenced to continue

(b) the difficulties expected to be occasioned by the need for the parties to work apace to complete the usual interlocutory steps necessary to permit the new proceedings to be fully litigated, to be accommodated wherever possible and however possible, subject to either there being no appreciable break in the hearing or alternatively subject to any break in the hearing required to be justified to the satisfaction of the court on an instance specific basis.

35    Amongst the other considerations put forward by the defendants in support of the joinder of the new and existing proceedings has been the suggested special consideration occasioned by:

(a) the very extensive publicity given to the existing proceedings

(b) the matter earlier mentioned, namely the obvious interest of shareholders in the NAB in having the present and the new proceedings completed as soon as practicable

36    It seems to me that the submission is one of substance. However, it is equally plain that in exercising the court's discretion, the interests of both parties require to be taken into account. Taking all these matters into account, in my judgment, the justice of the situation requires the making of the order that both sets of proceedings be heard together and I propose to make that order. 37    At the end of the day, it must be acknowledged that Mr Garnsey QC appears to have accepted as correct much of the above reasoning. On behalf of the plaintiffs his essential submission did not appear to be to challenge the propriety, the prudence or the necessity of the court at some stage making an order for the existing proceedings and the new proceedings to be heard together, but rather to submit that the appropriate time for the making of such an order was when the necessary interlocutory procedures required to bring the new proceedings up to speed, as it were, were seen to have been completed. To my mind, the problem with that submission is that the existing proceedings now being on foot and proceeding, it is vital that all parties be aware of all the parameters which concern the proceedings being heard. Now that the new proceedings have been commenced, the likely issues are clearly marked out in the statement of claim and it does not take very much imagination to identify the likely areas of issue. To my mind, to leave a decision on the defendants' motion for some months and possibly into early next year would be a mistake for the simple reason that when and if documents are tendered and evidence is taken it is imperative that such evidence be clearly seen to have been adduced against all parties to the litigation or against such parties to the litigation as particular material may be tendered against. As I have said, all manner of likely problems or possible problems may be raised if the present proceedings continue for a distance (and who knows precisely what distance) only then to be co-joined to the new proceedings.

38    Against the event that I may not have made the point with sufficient precision or clarity, the parties are to take it that into the future, the likely approach of the court to the hearing of the proceedings is very simply to require that the continued hearing proceed. As I have said, all applications as and when made for a hiatus in the continued hearing will be dealt with on their merits, but the parties ought not assume for a moment that such a hiatus will be countenanced absent the clearest grounds being shown for such a course.

39 The court has, of course, the widest of powers to regulate its own proceedings so as to promote matters relating to convenience and efficiency in the administration of justice, powers which include directions ordering the parties to use certain procedures or to take certain steps if the benefits derived from the use of those procedures or steps justifies the costs and will ensure that the hearing proceeds quickly and efficiently. Those powers justify the court in using appropriate case management techniques to ensure that a case proceeds efficiently. The court’s powers have been confirmed in the widest possible terms by section 26 of the Evidence Act 1995 which provides, inter alia, that the court may make such orders as it considers just in relation to the way in which witnesses are to be questioned; in relation to the production and use of documents and things in connection with the questioning of witnesses; and in relation to the order in which parties may question a witness. Section 11(1) of the Act expressly provides that the power of a court to control the conduct of a proceeding is not affected by the Act except so far as the Act provides otherwise expressly or by necessary intendment.

40    The position which is likely to obtain here will involve case management techniques being used as appropriate and subject to the directions to be given today, I propose to leave for further application and address a detailed examination of each and every step necessary to be taken to permit both parties to litigate the orders which arise in the new proceedings in an environment in which natural justice will have been afforded to both parties.

41    It is appropriate also to refer to the fact that in the course of address on the subject motion Mr Bathurst has outlined the structure where under the company, Your Prosperity Ltd is a subsidiary of MLC Holdings which is in turn a subsidiary of NAB. In those circumstances, Mr Garnsey has indicated that the plaintiffs to the new proceedings propose to seek leave to join the company Your Prosperity Ltd as a defendant and are presently giving consideration, in the light of Mr Bathurst's indication of the structure, to the question of whether or not MLC Holdings is to be joined. I did not understand Mr Bathurst to indicate that there would be any objection to a joinder of companies now subsidiaries, directly or indirectly, of NAB.

42    I order that Equity Division proceedings number 3991 of 2000 be transferred into and heard in the Commercial List and that those proceedings be heard and determined with Equity Division Commercial List proceedings number 50113 of 1998 and 50026 of 1999.

43    In relation to the directions aspects of the motion and argument which has taken place, I propose to indicate the directions which I intend to give in the new proceedings when short minutes of order in proper form are produced by the parties. The directions will generally be as follows:

(1) That the plaintiff serve on the defendants a revised order of the witnesses in proceedings number 50113 of 1998 by 13 October 2000;

(2) That the defendants file and serve a defence to the statement of claim by 13 October 2000;

(3) That the plaintiffs file and serve a reply by 20 October 2000.

(4) That the plaintiffs give general discovery by 6 November 2000;

(5) That the defendants serve upon the plaintiffs an unverified list of documents falling within the categories identified below on or before 17 November 2000 with a verified list of documents to be filed by 1 December 2000.

The categories to which I have referred are as follows:


(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 January 1996 to date 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 business and services referred to in paragraphs A1 and A2 of the plaintiffs' proposed short minutes of order;

(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 plaintiffs (or their 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:

(a) the functional specifications of each of the NAB services and the MLC services (including systems specification documents);

(b) any comparison of the functionality of any of the NAB services or the MLC services and the functionality of the AUSMAQ Service;

(c) all user, dealer, fund manager or product provider, customer and/or client standard form agreements, and manuals, information memoranda, and promotional or marketing material current before promotion.

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:

(a) detailed design of the system software;
(b) software code;
(c) documents forming part of the configuration control system for the system software and system documentation;
(d) information regarding the project management of the software development process (including software metrics or any similar material);
(e) information regarding the testing of, or correction of faults or omissions in, the system software;
(f) information regarding the integration of the system software with any other software;
(g) documentation of changes, including but not limited to potential, requested and actual changes, to the system software;
(h) 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.

[In paragraph 5 above:

“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 Services;

“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;

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


perform application detailed design; build and test application components;

prepare and execute application product test.
“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 (e.g. production, test, development).]

(6) Documents created in the Period 15 January 1996 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:


(a any project status reports;

(b) any business case proposals;

(c) e-mails sent by or to members of the project team working on the development of implementation of any of the NAB services and the AUSMAQ Service.


(7) That the plaintiffs file and serve statements in-chief on or before 29 December 2000;

(8) That the defendants file their statements on or before 15 February 2001;

(9) That the plaintiffs file and serve any statements in reply by 15 March 2001.

I certify that paragraphs 1 - 43
are a true copy of the reasons
for judgment herein of the
Hon. Justice Einstein
given on 5 October 2000 and
revised on 10 October 2000

___________________
Susan Piggott
Associate

10 October 2000

Last Modified: 06/13/2002