Idoport Pty Limited v National Australia Bank Limited and 8 Ors; Idoport Pty Ltd "JMG" & Market Holdings Pty Ltd v Donald Robert Argus; Idoport Pty Ltd "JMG" v National Australia Bank Ltd [13]

[2000] NSWSC 1140

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; IDOPORT PTY LTD "JMG" v NATIONAL AUSTRALIA BANK LTD [13] [2000] NSWSC 1140 revised - 20/12/2000
FILE NUMBER(S):	SC 50113/98; 50026/99; 3991/00
HEARING DATE(S):	14/11/00 - 16/11/00, 20/11/00 - 23 /11/00, 27/11/00, 28/11/00
JUDGMENT DATE:	7 December 2000
PARTIES :	Idoport Pty Ltd (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) JR Sackar QC, JA Halley (Defendants)
SOLICITORS:	Withnell Hetherington (Plaintiffs) Freehill Hollingdale & Page (Defendants)
CATCHWORDS:	Practice and Procedure - Leave to permit the reading of statements filed out of time - regulatory evidence - evidence of technical requirements and timing
CASES CITED:	Shekleton-Barden v Hogan (McLelland J, 13 June 1985, unreported)
DECISION:	Statements permitted to be read on terms

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

EINSTEIN J

Thursday 7 December 2000

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 - Further Defendant’s Statements served September-October 2000 in so far as dealing with:
(a) regulatory materials
(b) technical requirements and timing

1    There is before the court an amended Notice of Motion filed by the plaintiffs on 16 November 2000. The motion seeks the following relief:

1. That the orders of Einstein J made 28 June 2000 be vacated and leave to the Defendants to file and serve the statements in Schedule 1 hereto filed on behalf of the Defendants be withdrawn and that the statements be removed from Court file.

2. Alternatively to order 1, as to such of the statements in Schedule 1 hereto filed on behalf of the Defendants as the Court may determine, that the orders of Einstein J made 28 June 2000 and 14 July 2000 be vacated and leave to the Defendants to file and serve those statements be withdrawn and that the statements be removed from Court file.

3. Alternatively to orders 1 and 2, that the Defendants be required to explain on affidavit why each of the statements in Schedule 1 was not filed and served in answer to the plaintiffs statements in chief, with reference to the contents of each statement.

4. Alternatively to orders 1, and 2, as to the statements in Schedule 1 hereto filed on behalf of the Defendants, that the Defendants pay the Plaintiffs' costs of and incidental to obtaining and filing witness statements in response to those statements, and the cross-examination of the plaintiffs' witnesses upon or in relation to those statements.

5. Alternatively to orders 1, 2 and 3, as to such of the statements in Schedule 1 hereto filed on behalf of the Defendants as the Court may determine, that the Defendants pay the Plaintiffs' costs of and incidental to obtaining and filing witness statements in response to those statements, and the cross-examination of the plaintiffs' witnesses upon or in relation to those statements.

6. Alternatively to order 1 and in addition to order 2 above, that should the Defendants succeed in whole or in part upon an issue as to causation or damages by reason wholly or partly of the evidence in such of the statements in Schedule 1 hereto as are not subject to order 2, that the Defendants pay the Plaintiffs' costs of and incidental to the proceedings in respect of that issue

7. Costs.

8. Alternatively to orders 1 and 2, as to the statements in Schedule 1 hereto filed on behalf of the Defendants, or as to such of the statements in Schedule 1 hereto filed on behalf of the defendants as the Court may determine, that the Defendants pay the Plaintiffs’ costs thrown away as a result of the filing of those statements and/or as a result of obtaining further statements in reply thereto.
9. Alternatively to orders 1 and 2, an order that, on or before such date as the Court may determine the Defendants amend their Defence and provide sufficient particulars so as to plead and particularise all matters necessary to enable the Defendants to allege that it is highly likely that under the law of the United States of America, if deployed in the United States, the proposed Ausmaq Service would have infringed claim 16 of US Patent 5,517,406 either directly, or under the Doctrine of Equivalents.

Background

2    The Defendants served the following statements in September and October 2000 purportedly pursuant to the orders of the Court of 19 May 2000, 28 June and 14 July 2000. The new witnesses are indicated in bold in the table below 3    Those statements have been filed and served purportedly pursuant to orders of the Court on 28 June 2000. [orders 9 and 10]. 4    On 28 June 2000 the Court made the following orders:

9. Direct that the Defendants file and serve by Friday 15 September 2000 any expert statements in response to each of the following expert statements relied upon by the Plaintiffs:
(a) Mr Joslin dated 9 June 2000
(b) Mr Mack dated 9 June 2000
(c) Professor Pruden dated 6 June 2000
(d) Ms Mackay dated 15 June 2000
10. Direct that the Defendants file and serve by Friday 22 September 2000 any expert statements in response to the expert statements of Professor Aitken dated 7 June 2000 and the proposed report from Mr Maconochie in reply on similar or equivalent functionality issues.

The dates in those orders (namely 15 and 22 September 2000) were subsequently extended to 28 September 2000.

5    Before the orders were made, the Court indicated that the Defendants should if possible confine the proposed additional statements to existing witnesses and to new matters requiring response (transcript of 28 June 2000 at lines 31 to 41). 6    As is apparent from the above list, the Defendants in fact filed and served no fewer than 21 statements. Of these, only 7 are from existing witnesses. 7    The plaintiffs in their written submissions have sought to classify the statements from new witnesses as follows:

Three statements concerning European Regulatory Barriers, with particular reference to Switzerland and Italy (Ball, Breitenstein, Cappelli).
One statement concerning the United Kingdom Regulatory Barriers, (Thompson).
Three statements concerning the United Kingdom Retail Deposit and Money Markets (Phythian-Adams) and the United Kingdom Life and Pensions Market (Wainwright) and United Kingdom/European Fund Managers (McMeehan-three statements). Of these, two statements (Phythian-Adams and Wainright) deal to some extent with legal and regulatory requirements.

Three statements concerning the United States Regulatory position and barriers (Alexander, Leto and Kramer).

One statement on United States Securities firms practice (Kash)

One statement on technical capability, from the point of view of the United States, as to scalability (Hodgkinson).

One statement concerning alleged infringement of a United States patent (McNamara).
One statement concerning technical development barriers for the United Kingdom and Europe (Thomas).

8    Objection was taken to the new witnesses’ statements on the following grounds: · as to certain statements, that they do not provide admissible expert evidence insofar as they do not merely give evidence of foreign law or regulatory practice as a fact (“content evidence”) but also express opinions as to the application of the foreign law to the facts, (“application evidence”) something which is said to be impermissible. The objections made on this basis are set out in Schedule 1 to the plaintiffs’ submissions marked for identification “A1” · that they are not in response to the plaintiffs' statements in reply within the orders of the Court. 9    For the purposes of determining which statements ought be rejected as falling outside the ambit of the Court’s directions, the plaintiffs divided the statements into further categories and advanced the following initial written submissions:

“1. New witness statements dealing with regulatory, technical and patent matters .

In general, these statements (by Alexander, Ball, Breitenstein, Capelli, Leto, Kramer, McNamara, Thomas and Hodgkinson) are not in response to the plaintiffs' statements in reply, and objection is made to them, on the grounds:
(a) that insofar as they purport to apply foreign law to the facts are plainly inadmissible, embarrassing and vexatious and should not be permitted to be read; and
(b) that they deal with matters which could and should have been raised in the witness' first statements (in the case of regulatory statements there is material in the plaintiffs' statements in chief and the defendants' first statements in answer to support an argument that the defendants deliberately chose not to raise regulatory matters in their statements in answer).
2 New witness statements purportedly dealing with the plaintiffs' statements in reply.
While these statements (by Phythian-Adams, McMeehan, Wainright and Kash, and to a lesser extent, small parts of Thomas and Hodgkinson) purport to be in response to the plaintiffs' statements in reply, objection is made to parts of them, in that they deal with matters which could and should have been raised in the witness' first statements.

3 The existing witness' new statements.

In general, these may be considered in response to the plaintiffs' statements in reply, but objection is made to them, in that they deal with matters which could and should have been raised in the witness' first statements.

Matters raised by the Plaintiffs' First Statements and Elected not to be Pursued


The following matters were clearly raised by the Plaintiffs' First Statements and could have been but were not answered by the Defendants in their statements in answer.

1 The nature of, requirements for and timing of regulatory approval for the AUSMAQ Service for Australia and New Zealand, the United Kingdom and Europe, and North America and Asia: see Maconochie Statement 14 July 1999 No 15 paras 8.2(ix) (p42), 8.3, 9.1, 9.2.3 (pp54-58), 9.6, Joslin Statement 19 April 1999 No 5 para 6.
2 The technical requirements and timing for development of the AUSMAQ Service for Australia and New Zealand, United Kingdom and Europe, and North America and Asia: see Maconochie Statements 20 Nov 1998 No 2, 30 April 1999 No 6, and Maconochie Statement 14 July 1999 No 15 paras 8.2(ix) (p42), 8.3, 9.1, 9.2.3 (pp54-58), 9.6, Joslin Statement 19 April 1999 No 5 para 6.
The Defendants elected not to answer these matters. This election was apparently deliberate:
1 See the assumptions put to the Defendants experts for the United Kingdom, Europe and North America, and Japan, Hong Kong and Taiwan, for the purpose of their statements in answer:
Lehane 15 March 2000 Vol 9 Tab 3 para 3.2.6
Erasmus 27 March 2000 Vol 6 Tab 7 para 1.3.7
Lehn 23 March 2000, Vol 10 Tab 1, para 6
27 June 2000 Vol 11 Tab 1, para 6
Monsowitz 8 March 2000 Vol 15 Tab 3 para 7(c).
Hanson 11 March 2000 Vol 7 Tab 12 Attachment B para 2 (f)
Aldcroft 5 July 2000 Vol 1 Tab 1 para 2.4(f)
Yamamoto 27 June 2000 Vol 20 Tab 9 para 2.3.6
2 The Defendants also chose to deal with technical requirements and timing for development of the AUSMAQ Service for Australia and New Zealand, United Kingdom and Europe, and North America and Asia by limiting the evidence to evidence concerning the AUSMAQ Service in Australia and New Zealand: see eg statements of Pozzobon 17 March 2000, Vol 17 Tab 1, Purcell Vol 17 Tab 3, and the many statements for the Defendants to which Martin replied in his statement 27 June 2000, No 30.
Further, the second round of statements in answer from the Defendants' existing witnesses raise matters which were raised by the Plaintiffs' original statements and could and should have been dealt with by the Defendants in their first round of statements in answer: this is evident from the text of the second round of statements in answer from the Defendants' existing witnesses. See
The Defendants have in the past been granted considerable indulgence in repeated extensions of time for the filing of evidence: see the tables in Schedules 2 and 3 . They should not be permitted to file the additional statements without at the least an explanation supported by evidence as to why each of the classes of the further statements were not previously obtained, and explaining the delay.”

[Plaintiffs’ submissions MFI A1 paragraphs 12-16]

The Plaintiffs’ Submissions

10    The plaintiffs cited a number of authorities in support of the proposition that the court has a discretion, as one of the usual sanctions for failure to comply with pre-trial directions concerning filing of affidavits or statements of witnesses, to refuse to permit the evidence in question to be adduced at the hearing. The authorities cited include Shekleton-Barden v Hogan (McLelland J, 13 June 1985, unreported) where directions had been given that affidavits were to be filed by a certain date, and, in breach of those directions, certain affidavits were filed out of time. His Honour said:

“This is not a case where it could be said that the plaintiff could be adequately compensated for any necessary delay in the hearing or conclusion of the proceedings by an order for costs or, indeed, by any other procedural order. Although one should not permit procedural rules and directions to operate so as to prevent substantial justice being done between the parties, it seems to me that to permit this evidence to be adduced would, on balance, give rise to a substantial degree of injustice to the plaintiff which could not, in the circumstances, be adequately remedied, and that, on balance, the requirements of justice as between the parties should lead to leave being refused to the reading of any of these nine affidavits, and leave is, therefore, refused.”

11    The plaintiffs then cite a number of authorities in support generally of the proposition that the court has an undoubted inherent power to control and supervise the conduct of proceedings so as to prevent unfairness; that in the exercise of this power the court may exclude statements filed out of time; that justice will not necessarily require that a party should have multiple opportunities to present its case; and that a court must accord justice to the particular litigant but must also maintain its responsible use of scarce public resources and consider in a general way, the impact which it’s orders have on other litigants and the public generally. 12    Particular emphasis was initially placed by the plaintiffs upon all of the following submissions:

(a) That a deliberate decision is said to have been taken by the defendants not to obtain expert evidence in answer going to regulatory and technical matters so that the defendants, it is said, ought to be bound by that election particularly in the absence of any satisfactory explanation as to why the additional statements going to these matters were not obtained within time.
(b) That the additional statements are said to raise matters going beyond what is fairly in reply or in response.
(c) That the additional statements are said to raise significant new areas of evidence the full extent of which, the time taken to determine which, and the additional time to be involved in the hearing is said to be considerable and to remain, to a certain extent, unknown.
(d) That the effect of the matters sought to be raised in issue by the additional statements, on the plaintiffs’ conduct of the case, may be expected to be considerable in terms of the disruption to and diversion of existing personnel with knowledge of the case who will, it is said, require to deal with these matters during the regular ongoing presentation by the plaintiffs of their case.
(e) That the plaintiffs ought be regarded as vitally affected by a continuation of the proliferation of further issues to be litigated. The burden of the submission is that the nature of the plaintiffs’ case being generally as outlined in the interlocutory judgment of August 2000, the fact that Mr Maconochie is to play a pivotal position in the preparation and presentation of the plaintiffs’ case is said to make plain that it is a case in which to allow the additional issues to be litigated, would cause non-compensable inconvenience and stress to be occasioned to the plaintiffs and to Mr Maconochie.

Regulatory Materials

13    Following the completion of the oral and written submissions addressed by the defendants in answer to the plaintiffs’ proposition that the defendants should for the reasons set out above, be shut out from relying upon the new defendants statements dealing with the regulatory matters, on 21 November 2000 the plaintiffs, as I understood Mr Garnsey QC, withdrew their objections to those statements being relied upon. The plaintiffs, although not waiving their claim that the statements insofar as containing regulatory materials went beyond what was fairly in reply, and without waiving their claims to costs, now accept that as a matter of case management, the court is in a position to accommodate the situation by giving the plaintiffs a three month period in which to provide statements in reply. [See transcript 4492, 4589-4590] It has to be said that this new stance by the plaintiffs followed a very detailed address by Mr Sackar QC in which to my mind he made good the proposition that the plaintiffs statements purporting to be in reply, in fact adopted, in some cases additional, and in some cases changed detail with respect to the regulatory processes in various countries. In the result the plaintiffs’ change in stance in relation to the motion seems clearly to have been motivated by the fact that the defendants detailed submissions showed quite clearly how, as a matter of common fairness, the plaintiffs could not possibly be entitled to both rely upon their new and in some cases changed approaches to the regulatory issue and at the same time permitted to prevent the defendants from responding to those issues.

Technical Requirements and Timing

14    The defendants seek to rely upon the expert witness reports of Dr Thomas dated 22 September 2000 and of Mr Hodgkinson dated 6 October 2000 which deal with limited systems and software development issues. These reports are said not to deal with technical matters generally but only with specific systems development issues raised by the plaintiffs in relation to their case on global commercialisation 15    The essential burden of the defendants submissions is that a very close examination of the statements relied upon by the plaintiffs in their first tranche of statements as compared to the statements relied upon by the plaintiffs in their second tranche of statements discloses a material departure by the plaintiffs from the way in which they either put or seek to support their case. 16    It is common ground that the defendants statements which deal with limited systems and software development issues, go into very great detail in terms of addressing the issue of systems development for the purposes of global commercialisation. The defendants submit that they are entitled to address this issue by reason of the departure by the plaintiffs in their second tranche of statements from their previous first tranche statements which are said to have been tethered to a particular assumption (the “Technical Imperatives Assumption") put to two of the plaintiffs’ expert witnesses. The defendants draw attention to an important additional assumption (the "System Development Assumption") supplied to the plaintiffs’ witness Mr Joslin as well as to three plaintiffs’ new witnesses, all of whom first put on statements as part of the second tranche. The defendants submission is that the plaintiffs are seeking to steal a march on the defendants by both relying upon evidence based upon the System Development Assumption and at the same time seeking to deny the defendants an entitlement to answer this evidence in the form of the statements of Dr Thomas and Mr Hodgkinson. 17    The issue raised for decision requires a very close examination indeed of the paths taken by both parties in their preparation of statements over an extended period. It is necessary to appreciate as explained in the judgment delivered today in the patent issue, that the plaintiffs initial tranche of statements were responded to by the defendants initial tranche of statements and that the plaintiffs then produced very extensive statements said to be in ‘reply’. The defendants have generally adopted the stance that the plaintiffs so called ‘reply’ statements in fact sought to mobilise considerable materials which should properly have been adduced by way of the plaintiffs statements in chief. Notwithstanding that attitude of the defendants, the defendants have elected to respond to so much of the plaintiffs second tranche statements as are said to have raised new material, the present issue being simply a subset of the defendants election to so respond. 18    I am satisfied from the defendants submissions that the Technical Imperatives Assumption raised a limited systems issue in the plaintiffs first tranche of statements. That assumption was supplied to two of the plaintiffs expert witnesses mainly Professor Pruden and Mr Skelton for the purposes of preparing their first reports. The assumption was in the following terms:

"… the technical imperatives set out in paragraphs 9.0 of the report by JMG entitled "Global Commercialisation of the Ausmaq Service" had been achieved by JMG by June 1998 and were at a state of operational readiness to support the description of the Ausmaq Service given in paragraph 4.1 above"

19    Paragraph 9.0 of that report sets out over approximately 12 pages, a very detailed statement of the posited development of a number of features of the Ausmaq System, including for example the inclusion of shares in the Ausmaq product listing and the development of the Ausmaq Message Interface (the AMI). The paragraph imports a number of assumptions as to the date by which the additional features would have been completed but for the suggested misconduct of NAB 20    I am satisfied that given the areas of expertise in which each of Professor Pruden and Mr Skelton profess to have specialised knowledge, the purpose of supplying the assumption appears to have been to inform those persons as experts, of what general functionality would have been available on the Ausmaq System by mid-1998. I am further satisfied that the purpose of supplying the assumption to those experts does not appear to have been to invite comments upon any systems development issues in the context of global commercialisation. It seems that neither of those experts treated with the systems area utilising the technical imperatives assumption. 21    It then appears that system scalability and testing were referred to in the statement of Mr Pozzobon filed for the defendants in the context of the findings of the NAB IT review undertaken in February 1998 22    Turning to the second tranche of the plaintiffs witnesses statements, I accept as correct the defendants submission that more specific issues relating to the manner in which the Ausmaq System is said by the plaintiffs to have been capable of being commercialised overseas, and hence its scalability to cope with business volumes in foreign markets, were raised by the plaintiffs, in part, through assumptions supplied to the plaintiffs new batch of expert witnesses retained for the purposes of preparation of their second tranche expert witness statements. 23    The Systems Development Assumption which was supplied to the plaintiffs witnesses Mr Joslin, Ms Mackay, Mr Heller and Mr Davies was in the following terms:

"Euromaq would, in systems terms, have effectively been an extension of the Ausmaq Service in Australia. Whilst local customisation would have been necessary, it would also have benefited from any enhancements to the shared core functionality. This would have included such enhancements as multi-currency capability, dealing in partial units and access via the Internet"

24    The Technical Imperatives Assumption was also supplied to Mr Joslin, apparently for the first time, for the purpose of preparing his second report but not for the purpose of preparation of his first report. It was also supplied to Ms Mackay, Mr Heller and Mr Davies. In relation to the damages issue in the United States markets, the assumption was also supplied to Mr Mack for his report of 5 June 2000. 25    I accept as correct the defendants submission that the plaintiffs experts in relation to the United Kingdom and Europe all appear to rely on the above described assumptions to state that the Euromaq system would have been ready to launch (at least in the United Kingdom) by mid 1998 and would have been capable of functioning in multiple markets. 26    The gravamen of the defendants submissions is that, read together, the Technical Imperatives Assumption and the Systems Development Assumption throw the issue of systems development for the purposes of global commercialisation into sharp focus. 27    The defendants claim, and I accept, that their entitlement to respond on these issues is further heightened by the additional opinions expressed by Mr Joslin in his second report. It is in that report that Mr Joslin seeks to express opinions in relation to systems development and global commercialisation based upon the above described assumptions, purportedly in response to the evidence given by Ms Lehane. 28    It seems that it was the statement of Ms Lehane of 15 March 2000 (appearing in volume 9) which alerted the plaintiffs to the all important question of precisely how the plaintiffs wish to posit the software being utilised off shore. On the one hand, so Ms Lehane suggests, the proposal could have been to customise existing systems for exploitation off shore. On the other hand, so Ms Lehane suggests, the proposal could have been to rebuild from 'scratch' or, to use Mr Sackar’s expression, to adopt a bespoke system tailored to the particular off shore target market. 29    In the result Ms Lehane in the first tranche of the defendants statements was apparently responding to the assumption of Mr Joslin that Euromaq would have been operationally ready and would have cleared all regulatory hurdles by mid 1998. Ms Lehane touched upon systems issues in a general manner only, stating that customisation of an existing system to meet local regulatory requirements would be one of many considerations for any foreign entrant to the United Kingdom and European markets. I do not read her statement as expressing the opinion, as stated by Mr Joslin, that it would be more cost effective to develop Euromaq "from scratch" rather than to customise the existing Ausmaq system. Rather there is substance, as it seems to me, in the defendants’ submission that Ms Lehane asserted that this would be one option for any entrant, in the context of the need to fulfil regulatory requirements. 30    It is important to note that Mr Joslin in his second report expresses a number of opinions and "understandings" in relation to systems issues in the context of global commercialisation. These include the following:

‘(a) EUROMAQ “was designed to run as an integrated global system” and central core functionality had been designed to be applicable to all major world markets.
(b) EUROMAQ’s potential would have been “completely destroyed” had a new system been built from scratch, or had an existing system been bought and modified.
(c) “It would not have made economic sense to build or acquire new systems for each new geographical market EUROMAQ wished to enter or new product it wished to list…”
(d) “the additional time taken” to either build or customise an existing system “would have meant that EUROMAQ would have lost its first mover advantage.”
(e) “On the assumption that EUROMAQ had successfully built or bought a PEP and ISA sub-system [these apparently being two United Kingdom financial products] to link into the core EUROMAQ system, I consider it would have had little difficulty in adhering to the client money regulations.”
(f) few customisations would have been required, given the nature of the EUROMAQ proposition, which would have imposed a “standard way of business’ upon all participants in the same way that this has been achieved by such internet players as Amazon, E-bay, and E*trade.
(g) the need to customise would also have been reduced by fact that EUROMAQ would have dealt with the product provider on a wholesale basis so that “many of the local features that related to the retail sale of the market would not have applied” and because EUROMAQ would have dealt with the product providers on an institutional basis”, so that the volume of information passing between them “would not have been particularly high and could, if necessary, be dealt with by more flexible manual interfaces.”
(h) the AUSMAQ system had been “designed to be a global system from inception” and “was designed to be scaleable (it would be able to process progressively larger volumes of business at little additional effort and finally it was planned to be a true multi-currency system”.

31    It seems that Mr Joslin who had never before dealt with any degree of specificity, then descended into considerable detail and specificity as to what the capabilities of the Ausmaq or Euromaq system would have been. 32    It also seems that these customisation issues were issues that neither Professor Pruden nor Mr Skelton had touched upon although they had been given the Technical Imperatives Assumption. 33    It is also the case that in the sixth statement of Mr Maconochie of 14 July 1999 [volume 15] Mr Maconochie in paragraph 9.2.2 (d) sought to express the opinion that by reason of particular expressions of interest in the Ausmaq service expressed by United Kingdom interests, "the functionality [of Euromaq] in systems and commercial terms, would likely have at least satisfied if not exceeded the minimum operational requirements of the users of the system". This is, I accept, hardly dealing with specifics in terms of precisely how the system was proposed to be exploited outside of Australia. 34    When one follows carefully the progression of statements as identified in the very useful chart prepared by the defendants and marked for identification D23, it seems to me difficult to see why the defendants should now be shut out from addressing by means of the evidence of Dr Thomas and Mr Hodgkinson, the Systems Development Assumption that the core software was sufficiently developed architecturally in the first instance to make off shore exploitation relatively simple and hence to make the so-called ‘window of opportunity’, relatively easy to attain. 35    It may well be that the defendants would be entitled to call the evidence of Dr Thomas and Mr Hodgkinson grounding their entitlement to do so upon the simple proposition that if the plaintiffs were entitled to supply their new experts with a new assumption, then the defendants must be entitled to respond to treat with both the viability or validity of that assumption. 36    It seems to me particularly important to note that the content of the evidence which the defendants seek to rely upon over the plaintiffs strenuous opposition, upon examination is shown to be a core issue in terms of the plaintiffs claims to damages in respect of the loss of opportunity to exploit the Ausmaq system overseas. This is not an area in which the proper approach to the plaintiffs initial statements, the defendants response to those initial statements and the plaintiffs second tranche of statements could or should be measured or examined with coffee spoons. It is exceptionally difficult, as it seems to me, for the plaintiffs who wish in their second tranche of statements to put new assumptions to experts, for whatever reasons, to then deny to the defendants an entitlement to treat and to treat carefully and properly with matters thrown up by those new assumptions. And in a real sense this is what the plaintiffs apparently seek to do at the same time as objecting to the number and volume of the defendants’ statements which seek very thoroughly to cover many aspects of the issue. The plaintiffs’ wish to assert, as I understand it, that albeit that the subject matter goes to the core of the plaintiffs’ extra Australia/New Zealand loss of opportunity case, the limited and arguably ambiguous manner in which the plaintiffs had treated with evidence on the subject, and the suggested equally limited manner in which the defendants had first responded, by definition and notwithstanding the terms of the plaintiffs second tranche statements treating with that subject matter, requires that the defendants be tied down so as not to be permitted to respond. I simply do not accept that this approach would be an appropriate exercise of the court’s discretion in the circumstances. 37    I further accept as correct, the defendants’ submission that it is difficult to characterise the opinions which Mr Joslin expresses as a "response" to the evidence given by Ms Lehane. It is clearly impermissible for Ms Lehane's opinion to be misconstrued and for Mr Joslin to then purport to respond to that misconstrued opinion. 38    The issue of scalability of the Ausmaq Service to handle the large business volumes projected by virtue of the huge revenues anticipated by the plaintiffs from the overseas markets is also of importance. This issue is raised also by the plaintiffs experts reliance upon the Systems Development Assumption. 39    Further the plaintiffs’ expert witness in its second tranche statements in relation to the Australian market, Mr McMullan, another new witness who had not given evidence earlier, seeks to give evidence that the Ausmaq System was capable of being "scaled up" to handle larger business volumes. 40    In the context of that approach the defendants submit and I accept that the following specific questions arise and are dealt with by Dr Thomas and by Mr Hodgkinson:

(a) Assuming that the core AUSMAQ system was to be deployed overseas effectively as an extension of the AUSMAQ service in Australia, what software development implications would this have?
(b) Whether it was reasonable for the plaintiffs to maintain that the enhancements set out in the Global Commercialisation document (and hence in the System Development Plan) could have been completed by mid 1998;
(c) Whether the estimates of time and effort for undertaking these enhancements as set out in the 1997 System Development Plan were reasonable, and what would generally be involved in planning for such enhancements;
(d) Whether the AUSMAQ Service had the capacity or could have been “scaled up” to meet the requirements of handling the business volumes implicit in the plaintiffs’ offshore revenue projections.
(e) Whether the plaintiffs’ reliance on “regression testing” in MFI P20 could reasonably have provided any useful information about the actual capacity and scalability of the AUSMAQ system.

41 In the result and again as a matter of common fairness, the plaintiffs could not possibly be entitled to both rely upon their new and in some cases changed approaches to the issues dealing with technical requirements and timing for development of the Ausmaq Service for Australia, New Zealand, the United Kingdom, Europe, North America and Asia and at the same time permitted to prevent the defendants from responding to those issues. 42 Ultimately the plaintiffs (outside of their stance on foreign law issues now determined and outside of their pressing their costs claims), save to the extent that the statements listed in Annexure "A" to the defendants notice of motion 24 dealt with technical or patent issues, did not oppose the making of order 1 as sought in that motion. As I understand the plaintiffs’ position with respect to order 3 as sought in that notice of motion it was that the notice of motion should be stood over until the further statements were available as the plaintiffs might well not oppose the making of that order. As to order 2 as sought in the motion I did not ultimately understand the plaintiffs to oppose the making of that order. 43 I have given close consideration to so much of the plaintiffs’ detailed written and oral submission on these matters as were ultimately pressed. 44 To my mind for reasons given in more detail in the judgment delivered today dealing with patent issues, these proceedings stand apart from most other proceedings for a number of reasons, the principal amongst these being the magnitude of the claims made by the plaintiffs, the significant amount of time set aside for the hearing, the commercial interests of the respective parties and the public interest in the outcome. 45 The very wide ambit of the plaintiffs’ claims, the gravity of the allegations made by the plaintiffs, the joinder of a number of individual defendants against whom extremely grave allegations are made and the number and complexity of issues which having been pleaded, are to be litigated, are all legitimate factors to be taken into account in adjudicating upon the motion. 46 The plaintiffs very particularly do not put forward as a relevant prejudice to the plaintiffs, the proposition that the plaintiffs financial resources are such as to make it difficult or impossible for the plaintiffs to meet the issues raised by the defendants new statements. They do however rely upon the approach they have taken as to resources, submitting that the Court may and should take into account that the plaintiffs have a team comprising one solicitor working full time on the case, one solicitor working half of his time on the case and five counsel. 47 The issues going to foreign law principle have been dealt with in the separate judgment [2000] NSWSC 1077 delivered on 23 November. 48 Leaving aside the patent case question which is dealt with in the separate judgment, the stage which the litigation has presently reached is such that the court is in a position, by appropriate costs orders and by the imposition of appropriate conditions, to permit the regulatory, technical and timing issues raised by the new statements to be read by the defendants and to permit the plaintiffs a practicable and reasonable opportunity to properly answer those materials. Hence as the plaintiffs do not submit that the new issues are not relevant to the proceedings, to my mind, subject to imposing appropriate conditions, the exercise by the court of its discretion should clearly be in favour of allowing the defendants to mobilise the new statements. 49 The appropriate conditions will deal with the period to be afforded to the plaintiffs to file responsive statements. An appropriate period will be identified and ordered when short minutes are brought in.

I certify that paragraphs 1 - 49
are a true copy of the reasons
for judgment herein of the
Hon. Justice Einstein
given on 7 December 2000

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Susan Piggott
Associate

7 December 2000

Last Modified: 06/13/2002