Idoport Pty Ltd v National Australia Bank [3]

[1999] NSWSC 1026

CITATION:	Idoport Pty Ltd v National Australia Bank [3] [1999] NSWSC 1026
CURRENT JURISDICTION:	Equity Division, Commercial List
FILE NUMBER(S):	50113/98
HEARING DATE(S):	28 September 1999, 25 October 1999
JUDGMENT DATE:	28 October 1999
PARTIES :	Idoport Pty Ltd & anor (Plaintiffs) National Australia Bank Limited & ors (Defendants)
JUDGMENT OF:	Einstein J

COUNSEL :	M. Dicker (Plaintiffs) J. Sackar QC, H.K. Insall (Defendants)
SOLICITORS:	Withnell Hetherington (Plaintiffs) Freehill Hollingdale & Page (Defendants)
CATCHWORDS:	Practice - Discovery - Further discovery - Discovery not to be used as indirect interrogation - Matters in issue - Relevance - Whether documents generally relating to the significance to the defendants of E-commerce for the provision of financial services, go to facts in issue - Evidence - Ambit of evidence permissible on claim to expand categories of discoverable documents.
CASES CITED:	Commonwealth v Northern Land Council (1991) 103 ALR 267 Lakatoi Universal Pty Ltd & Ors v Walker & Ors, (Unreported, Supreme Court of New South Wales, 31 July 1998, Rolfe J) Mulley v Manifold (1959) 103 CLR 341 National Employers Mutual General Association Ltd v Waind and Hill [1978] 1 NSWLR 372 Spencer Motors Pty Ltd v LNC Industries Ltd [1982] 2 NSWLR 921
DECISION:	Order that:; Order that the defendants give discovery of the following documents by the following dates:; (1) High level documents created in the period from 6 November 1996 internally with any one or more of the defendants referring to or commenting upon or considering the importance to any one or more of the defendants of E-commerce for the provision of financial services.; (2) High level documents created in the period from 7 November 1996 recording, referring to or relating to analyses or evaluations or consideration of the benefit to any one or more of the defendants of E-commerce for the provision of financial services.; (3) In paragraphs 1 and 2 of this order ‘high level documents’ means:; All documents which were sent to:; (a) Any one or more of the individual defendants; and/or; (b) The board of directors of one of more of the corporate defendants; and/or; (c) Any person or committee or subcommittee reporting to any of the individual defendants or the boards of any one of the corporate defendants, and/or; (d) Any one or more persons in the Group Leadership Team (as described on page 13 of the National Australia Bank Limited 1998 Annual Report [being exhibit A1 as marked on the interlocutory discovery application heard on 28 September 1999].; (4) Discovery of documents sent to the persons and entities referred to in sub-paragraphs (a) and (b) of paragraph 3 is to take place by 29 February 2000.; (5) Discovery of documents sent to the persons and entities referred to in sub-paragraphs (c) and (d) of paragraph 3 is to take place by 31 March 2000.; (6) The proceedings are stood over for further directions on the first day of term next year, prior to which date the defendants’ solicitors are to file and serve an affidavit dealing with the defendants’ progress in complying with these directions. The affidavit is to detail the precise steps taken in endeavouring to comply with these directions.

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

EINSTEIN J

SYDNEY 28 October 1999

50113/98 Idoport Pty Limited & Market Holdings Pty Limited v National Australia Bank Limited & ors.

JUDGMENT 1    HIS HONOUR: There is before the court a further amended notice of motion filed on 25 October 1999 by the plaintiffs seeking the following orders:

“(1) Pursuant to Part 23 rule 3 of the Rules, that the Defendants give discovery to the Plaintiffs of the documents described in Schedule A to this Notice of Motion by the dates referred to in paragraphs 3.2 and 3.3 of the directions made by the court on 28 May 1999 . . .;

(2) That the parties provide continuing discovery (by the service of further Lists of Documents) in relation to discovery categories (including that referred to in paragraph 1 of this Notice of Motion) every two months from the filing of initial Lists of Documents;

(2A) In the alternative to (1), that the Defendants give discovery of the documents described in Schedule B to this Notice of Motion by the dates referred to in the directions made by the court on 27 August 1999.”

2 Schedule A to the amended notice of motion is in the form annexed to this judgment. 3 Schedule B to the notice of motion is in the form annexed to this judgment. 4 The present discovery regime requires continuing discovery on a three monthly basis. This is satisfactory and practicable. 5 To my mind there is no substance in the application seeking order (2) in the notice of motion and so much of the application is dismissed. 6 To my mind there is no substance in so much of the application as seeks an order that the defendants give discovery of the documents referred to in paragraph 4.1.4 of either schedule to the motion being effectively a mode of interrogation and to that extent the notice of motion is dismissed. Applications to administer interrogatories cannot be achieved by this indirect route. 7 The essential contest for determination is as to the matters dealt with in paragraphs (1) and (2A) of the amended notice of motion. 8 Part 23 Rule 3 of the Supreme Court Rules provides inter alia as follows:

“(1) The Court may, on the application of a party or of its own motion, order that any party (party B) give discovery to any other party (party A) or parties (each of which is included in the expression ‘party A’) of:

(a) documents within a class or classes specified in the order;

(b) one or more samples (selected in such manner as the Court may specify) of documents within such a class.
(2) A class of documents shall not be specified in more general terms than the Court considers to be justified in the circumstances.
(3) Subject to subrule (2), a class of documents may be specified:

(a) by relevance to one or more facts in issue;

(b) by description of the nature of the documents and the period within which they were brought into existence;

(c) in such other manner as the Court considers appropriate in the circumstances.”

9 Part 23 Rule 1 in giving relevant definitions provides, inter alia, as follows:

“A document or matter is taken to be relevant to a fact in issue if it could, or contains material which could, rationally affect the assessment of the probability of the existence of that fact (otherwise than by relating solely to the credibility of a witness), regardless of whether the document or matter would be admissible in evidence.”

10    The proceedings are presently fixed for hearing to commence in May 2000 following an extended interlocutory application heard between 26 July 1999 and 5 August 1999 and the subject of a reserved judgment handed down on 19 August 1999. For present purposes the reserved interlocutory judgment serves to sketch out the principal issues pleaded although bearing in mind the focus of the subject application it will be necessary to refer again to the pleadings. 11    During argument on the notice of motion the plaintiffs’ counsel, Mr Dicker, took the court closely to a number of relevant paragraphs in the Third Further Amended Statement of Claim. That statement of claim presently runs for 73 pages and it is clearly inappropriate to repeat it in any detail. 12    I accept as correct Mr Dicker’s submission that, although dealing particularly with the relevant provisions of the Federal Court Rules, the following passage is apt to describe the position as it obtains in relation to proceedings in the Supreme Court. That is to say:

“A document relates to a matter in question between the parties if it is reasonable to suppose that the document contains information which may - not which must - either directly or indirectly enable the party requiring [the production of the document] either to advance his own case or to damage the case of his adversary.” -
Commonwealth v Northern Land Council (1991) 103 ALR 267 at 290, per Black CJ, Gummow and French JJ.

Part 23 Rules 3(b) and (c) of the Supreme Court rules of course permit the Court, depending upon the circumstances, to require discovery by reference to a wider field of reference. The primary approach must, however, be to ascertain the matters in issue. The exercise of the Court’s discretion to be exercised under the rules involves a balancing of the respective interests of the parties having regard to the issues examined in context.

13    Both parties took the court to the well known passage from the judgment of Menzies J in Mulley v Manifold (1959) 103 CLR 341 at 345:

“I now turn to the pleadings to determine what are the matters at issue between the parties, because discovery is a procedure directed towards obtaining a proper examination and determination of these issues - not towards assisting a party upon a fishing expedition. Only a document which relates in some way to a matter in issue is discoverable … “

14    Mr Insall of counsel who appeared for the defendants on the initial hearing of the then notice of motion in form as filed on 28 September 1999, submitted that the appropriate exercise in which the court is engaged on the hearing of the motion is to identify a category of document in no more general terms than is appropriate but which category must relate to an issue disclosed or thrown up by the pleadings. Mr Insall’s submission was that “there is no issue on the present pleadings which requires the discovery by the Bank generally of documents relating to E-commerce” - transcript 32. 15    What then are the issues raised by the pleadings sought to be relied upon by the plaintiff and said within the above principles to throw up a requirement for discovery by the defendants of the documents sought to be discovered as set out in paragraphs (1) or alternative (2A) of the further amended notice of motion? 16    The plaintiffs assert, and I accept, that the AUSMAQ Service in the sense of ascertaining precisely what that service comprises and what has been at material times its precise functionality, is at the centre of the pleaded issues. There are of course a number of other important issues. The plaintiffs intend to assert that the AUSMAQ Service is an E-commerce service. The plaintiff’s submission is that the subject documents sought to be included in the defendants’ discovery are relevant to the following issues:

(a) The identity of the AUSMAQ Service;

(b) The issue of functionality, namely whether the subject bank services referred to in the pleadings and summarised in the interlocutory judgment are services with ‘equivalent or similar functionality’ to the AUSMAQ Service; [see the definition of AUSMAQ Service referred to in paragraph 3 of the Interlocutory Judgment]

(c) Damages - the plaintiffs’ claim including loss of opportunity damages should the AUSMAQ Service be held to be a version of E-commerce .

17    The plaintiffs submit that if one of the bank documents now sought to be made the subject of the further order for discovery recognises that E-commerce is a crucial service in the modern banking environment, then the plaintiffs are entitled to rely upon such document in support of the plaintiffs’ case that the AUSMAQ Service ought to have been, but was not, promoted, developed and exploited pursuant to the bank’s alleged contractual obligations to so promote, develop and exploit that service. [See paragraph 18.1 of the Third Further Amended Statement of Claim for the allegation as to the implied term]. On the plaintiffs’ submissions these are all matters which go to quantum of the plaintiffs’ claims to damages. 18    The plaintiffs seek discovery of these documents in an attempt to prove as part of their case that the prospects of success in the marketing and exploitation of the AUSMAQ system were clearly perceived to be such by the bank as to warrant it entering into the various agreements with the plaintiffs; that the defendants and in particular the Bank in fact recognised and recognises that E-commerce banking was and is likely to be the major direction of future banking or to provide a substantial base for the revenue of banks including the National Australia Bank and as I have indicated, for the purpose of proving that material in the possession of the defendants relating to E-commerce which it is submitted includes the AUSMAQ system, will be shown to be relevant to the perceived value and importance of the AUSMAQ system as part of E-commerce to the Bank. The submission is that such documents may be admissible as admissions of the Bank relating to the importance of E-commerce and hence the AUSMAQ system. The submission is that such documents will also be relevant to the question of loss of a chance. The submission is that if the Bank itself formed the view that E-commerce and the AUSMAQ system were important, then the court is able to logically draw an inference both from that fact and from the Bank’s position as the main, or one of the main financial institutions in Australia, that other financial institutions including leading international financial institutions would similarly have regarded and presently regard the AUSMAQ System as a valuable, attractive and a worthwhile system to be party to or worthy of consideration in respect of purchase or otherwise use. 19    The plaintiff’s submission is further that matters relating to E-commerce and the defendants’ comments and perceptions in relation to E-commerce are clearly relevant to issues of breach including motive and damages and by potentially revealing admissions in documents. 20    The defendants, on the other hand, contend that the plaintiffs have not in their Third Further Amended Statement of Claim pleaded any cause of action in relation to “E-commerce” and that there are no issues thrown up by the present pleadings which require the bank to discover generally documents relating to E-commerce. 21    The defendants submit that there is no necessary nexus between E-commerce and the AUSMAQ system. The defendants seek to summarise the plaintiffs’ argument as a four stage argument as follows:

‘(1) That the AUSMAQ system is an E-commerce system;
(2) That the prospects of success of the AUSMAQ System led the first defendant to enter into various agreements with the plaintiffs;
(3) That E-commerce banking is likely to be the major direction of future banking;
(4) That documents on the perceived value and importance of the AUSMAQ system as part of E-commerce to the Bank are highly relevant and may be admissible as admissions of the Bank relating to the importance of E-commerce and hence the AUSMAQ System.’

22    Mr Sackar QC, who appeared for the defendants on 25 October, submitted as follows:

(i) To make the proceedings intelligible one has to look at the [AUSMAQ] Service and how it was defined and how it was understood by the parties to be read.
(ii) That the Service might be a species of E-commerce could not of itself make discoverable the kind of documents which are described so generally in Schedule B.
(iii) What is not pleaded is that every E-commerce initiative taken after the date of the Consultancy Agreement is and should be regarded as an AUSMAQ service for the purposes of the payment of moneys pursuant to that Agreement. In short, the plaintiffs have not pleaded that Mr Maconachie or any company associated with him was the sole inspiration, or in terms of causation, the only relevant inspiration, for E-commerce initiatives or innovations within the Bank.

23    On the defendants’ written submissions of 8 June 1999 furnished well in advance of the date which was finally fixed for the hearing of motion, the following criticisms of each of these stages in the plaintiffs’ suggested argument were put.

As to stage 1 - the submission was that this matter had not been pleaded and was that the plaintiffs had not as at 8 June led any evidence on the motion to support the allegation.
As to stage 2 - the submission was that the plaintiffs had as at 8 June led no evidence on the motion to support the allegation.
As to stage 3 - the submission was that this allegation had not been pleaded by the plaintiffs, clearly related to issues outside the proceedings and was not supported by any evidence.
As to stage 4 - the submission was that the plaintiffs had failed to demonstrate the nexus between the AUSMAQ System and E-commerce and that there is no necessary nexus between E-commerce and the AUSMAQ System.

24    The plaintiffs in submission took the court particularly to so much of the Third Further Amended Statement of Claim as included:

(a) Paragraph 8.3 The particulars of which are in the following terms:

“The AUSMAQ IP included confidential information, trade secrets and know-how, copyright in computer software programmes, trade marks, copyright and other licences and licensing rights comprised or used in the AUSMAQ service or in the development or commercialisation of the AUSMAQ service and the AUSMAQ IP.”


(b) So much of paragraph 10.1 as includes the last four lines of particular (a) referring inter alia to the ‘NAB Group E-commerce Council’.

(c) The paragraphs dealing with the Consulting Agreement.

(d) Paragraphs 15.3 and 15.4

(e) The paragraphs dealing with the implied terms in the Consulting Agreement

(f) The paragraphs dealing with the alleged fiduciary relationship of NMG and NAB to JMG.

(g) Paragraph 29.

(h) The allegation in paragraph 30 that the Gateway Service is and will be a service within the definition of the AUSMAQ Service (as defined in the Consulting Agreement) being a service with equivalent or similar functionality to that described in subparagraphs 30.1 - 30.3.

(i) The paragraphs which plead allegations in the same terms in relation to the other relevant Bank services.

(j) Paragraph 49A and in particular particulars 1 to 4 to that paragraph describing Independence One, inter alia as follows:

“. . . an integrated financial services platform offering international business people unmatched customer value through access to financial services at any place and time through the convenience and tools of the internet, personal digital assistance and modern communications devices ‘and’ as designed to deliver its functionality through the integration of the internet and existing communication devices [and which would] represent a significant advance in the ability of the NAB Group to respond to the competitive threat posed by the on-line financial services.”


(k) Paragraphs 49B.1 .2 and .3 describing inter alia the Independence One Service.

(l) Paragraph 49H and in particular the particulars in paragraphs 1, 2 and 3 on pages 37 and 38 of the amended statement of claim. Here again descriptions of Project Maple Leaf/Operation First Choice are set out. Particular I commences:

“Project Maple Leaf/Operation First Choice is a project to create a fundamental shift in the NAB’s operating model, from a traditional branch based regional retail bank to the paradigm of a highly customer focussed information driven globally integrated financial services operation [and then continues with the reference to the use of technology including the convenience and tools of the internet, personal digital assistants and modern communications devices].”
[emphasis added]

Particular (3) of paragraph 49H refers to “E-commerce generally” in the following terms:

“The Direct Bank Service involves an integrated financial services platform offering customer value to customers generally through access to financial services at any place and time through the convenience and tools of the internet, personal digital assistants and modern communications devices, and E-commerce generally.”


Reference is also made to E-commerce in particular (5) to paragraph 59H.

(m) Paragraph 55.1(c) and (d) and 56.1 (c) and (d).

(n) Paragraph 55.6 (c) and (d).

25    To my mind the absence of an express pleading to the effect that the AUSMAQ System is an E-commerce system is far from fatal to the plaintiffs’ present application for the extended discovery. The primary question is and remains whether the subject discovery seeks production of documents relevant to facts in issue. 26    To my mind, the plaintiffs’ submissions outlined in paragraphs 16, 17, 18 and 19 are of substance. I am satisfied from the argument and the pleadings that the documents sought ‘could or contain material which could, rationally affect the assessment of the probability of facts [in issue]’. It is reasonable to suppose that documents relating to E-commerce sought to be the subject of the more extended discovery, contain information which may, not which must, either directly or indirectly enable the plaintiffs to advance their cases or to damage the case of the defendants. It is reasonable to suppose that the documents sought relate to the substance of the dispute thrown up by material allegations pleaded. 27    I do not accept the submission that the plaintiffs are shown to be attempting to here embark on a fishing expedition. A clear attempt has been made in paragraph 4.1.3 of Schedule B to the further amended motion to limit the meaning of high level documents to documents prepared for the purposes of proposal, summary, submissions or report to the identified categories of persons. I accept that this represents an attempt to cut down dramatically the width of the wording which appeared in Schedule A being the only schedule to the motion in its form as originally filed. 28    The question requires to be approached using common sense, applying a sense of perspective and by finding a workable and practicable solution. 29    Plainly enough the defendants are obliged to discover documents only if it is reasonable to suppose that the documents contain information which may, not which must, either directly or indirectly enable the plaintiffs to advance their own case or to damage the defendants’ case. Only high level documents going to the defendants’ strategic examination of the importance of E-commerce to the defendants and to the defendants’ strategic plans which could or may, on an expansive approach to the definition of ‘AUSMAQ Service’ and to the words ‘service with the equivalent or similar functionality’ [to the AUSMAQ Service] advance the plaintiffs’ case or damage the defendants’ case, require to be discovered. 30    I do not see it as appropriate to have a definition of ‘E-commerce’ in the order for discovery. That the term may be capable of referring to any electronic means of providing transactional and financial banking services or indeed of conducting commerce is not to the point. What is to the point is that the proceedings throw up for determination, assertions by the plaintiffs and a denial by the defendants:

(a) As to the ambit of the subject definition of ‘equivalent or similar functionality’ [to the AUSMAQ Service];
(b) As to whether the defendants, and in particular the Bank, has developed services falling within that definition;

(c) As to the recognition by the defendants and in particular by the Bank of the significance of E-commerce banking generally in terms of the direction of future banking.

31    I do not regard the presently agreed categories of documents [see in particular paragraphs B.C.1, E.1 and E.3 on pages 78, 81 and 82 of Exhibit A2] as sufficient to satisfy the plaintiffs’ entitlement. 32    A careful examination of those closely defined categories reveals that they do not cover the expanded description of documents now pursued. 33    Category B.C.1 treats with documents relating to the functionality of ‘the NAB Services’ or to the functionality of the AUSMAQ Service, including:

- the functional specifications of the NAB Services and the AUSMAQ Service;
- any comparison of the functionality of the NAB Services and the AUSMAQ Service;
- documents recording, referring to or relating to the benefits and advantages including future benefits and advantages of acquiring the AUSMAQ Service and the AUSMAQ IP rights.

34    Category E.1 is squarely aimed at documents recording, referring to or relating to the AUSMAQ or EUROMAQ Services on the three defined parameters (see sub-paragraphs (a), (b) and (c). 35    Category E3 is again squarely aimed at documents recording, referring to or relating to :

- analyses and evaluations of benefits and the like of the AUSMAQ or EUROMAQ Services;
- proposals, offers and the like by persons interested in purchasing the AUSMAQ or EUROMAQ Services, and internal considerations by corporate defendants of such proposals and offers;
- profits (potential, possible or future) or applications of the four NAB Services;
- analyses or evaluations or consideration why the defendants should or should not make the AUSMAQ Service or the EUROMAQ Service available to any person, whether in Australia or overseas.

36    As Rolfe JA said, albeit in a slightly different context:

‘In determining the question of relevance the Court must bear in mind that the parties are entitled to build up an evidentiary mosaic. Generally that cannot be done in complicated commercial litigation by the tender of one piece of evidence or the assertion that only limited material is relevant to the issues involved. . . . the Court should not be astute to find irrelevance at an early stage of the proceedings . . .
[ Lakatoi Universal Pty Ltd & Ors v Walker & Ors, Unreported, Supreme Court of New South Wales, 31 July 1998 at 18]

37    I am further satisfied that the proposed expanded discovery categories are such as are ‘reasonably likely to add, in the end, in some way or other, to the relevant evidence in the case’. [Cf, (again dealing in a slightly different field of discourse,) the judgment of Waddell J in Spencer Motors Pty Ltd v LMC Industries Ltd [1982] 2 NSWLR 921 at 297, seeking to summarize views expressed by Moffitt P in National Employers Mutual General Association Ltd v Waind and Hill [1978] 1 NSWLR 372 at 383, 384]. I particularly have in mind the wording extracted in paragraph 23(l) of the Judgment which makes it clear that the plaintiffs seek to make a case to the effect that the defendants are seeking to fundamentally shift the Bank’s operating model from a traditional branch based regional retail bank to ‘the paradigm of a highly customer focussed information driven globally integrated financial services operation [using technology including the internet, personal digital assistants and modern communication devices . . . and E-commerce generally]. These are broad concepts indeed and involve, as the case sought to be made, an examination of an alleged radical move from one type of operation to another. 38 To my mind there is however substance in Mr Insall’s submission that it may be oppressive to include the words ‘for the purposes of proposal, summary, submission or report in the definition of ‘high level documents’. Those words require a degree of interrogation of those who prepared the documents which may be oppressive in terms of what may be reasonably required by the plaintiffs. 39 In the course of the argument which took place on 25 October 1999, the defendants by leave read an affidavit of Mr Gregory D. J. Richards made on 22 October 1999 which provides details of the individual defendants, of the boards of directors of the corporate defendants and of the persons, committees and sub-committees reporting to individual defendants or to the boards of the corporate defendants. The affidavit descends into considerable detail in terms of the documents believed to have been generated in connection with NAB board meetings, NMG and AUSMAQ board meetings and meetings of the board of directors of National Australia Financial Management Limited. In like fashion the affidavit descends to considerable detail in relation to the reporting by individuals and entities within the defendants over particular periods of time. The affidavit also provides evidence that there is no one part of the National Australia Bank that deals exclusively with E-commerce issues and that a substantial volume of documentation has been sent to the Board of the Bank or persons supporting the Board of the Bank on the subject of E-commerce for the provision of financial services. The affidavit deals with the volume of documents said to be relevant to the subject ‘E-commerce for the provision of financial services’. Mr Richards deposes that he is of the opinion, on the basis of his instructions, that: · There is no one source within the Bank from which documents falling within the terms of paragraphs 4.1.1 and 4.1.2 of Schedule B to the motion would originate. · There is no one place within the Bank where copies of such documents would be filed. · It would take a very substantial amount of time to carry out the enquiries necessary to identify such documents. 40    Mr Richards also deposes that it is impossible at this stage to estimate the work required to be performed to provide discovery in the terms required by paragraphs 4.1.1 and 4.1.2 of Schedule B. He deposes that further substantial enquiries would need to be made in this regard. He deposes that it would be necessary to interview not less than 50 persons. He estimates on current information that it would take a number of months to complete this aspect of the discovery. 41    During argument, I indicated to Mr Sackar that it would be of assistance for the Court to be given some indication by the defendants as to the time presently believed to be necessary if the categories of extended discovery were to be ordered. On taking instructions, Mr Sackar, whilst making plain that it was not possible to be at all precise about the matter, referred to the possibility for example that the time required would be four months before the documents could be identified. He pointed out, of course, that this may be an underestimate or an overestimate. 42    There is then, so Mr Sackar put, a question as to whether the hearing dates now in place could be retained if, for example, after four months, the documents were able to be produced to the plaintiffs, and if the plaintiffs then required to digest the content of the documents so as for example to include that material in their opening address. 43    Outside this question of the difficulties of fixing an exact timetable if the categories of extended discovery are to be ordered, Mr Sackar on instructions approached the matter on what he put was a ‘fall back’ position. This included the tender of a confidential document which became Exhibit ‘250.1’ and was the subject of a confidentiality order. That exhibit is but one of the documents which are in fact presently in train to be discovered under the present discovery regime. It is inappropriate to open up that confidentiality by now referring to particular sections of the subject exhibit. The broad proposition which Mr Sackar advanced, was that this document was an example of documents which would presently be produced under the existing discovery regime by the defendants. Mr Sackar’s proposition was that what the plaintiffs were seeking are documents which refer to or comment upon or consider the importance of E-commerce and/or the benefit of E-commerce to one or more of the defendants in relation to the provision of financial services. It was then submitted that, as I understood the submission, documents already in train to be discovered under the existing discovery regime, would identify the importance and benefit of electronic commerce to the Bank. 44    I am not persuaded that Exhibit 250.1 or documents similar to this exhibit presently to be discovered removes the burden of the plaintiffs’ claim to the expanded categories of discovery. 45    On the question of the suggested oppression in terms of the expanded categories of discovery, it is necessary only to refer back to the interlocutory judgment which identifies the issues and the significance to both parties of those issues. Discovery being one of the interlocutory procedures will no doubt be included in the ambit of costs orders at the end of the proceedings. I do not accept the defendants’ submission that the plaintiffs are not entitled on their case as pleaded to discovery in terms of the extended categories of documents. 46    To my mind, the appropriate way forward is to distinguish between discovery in terms of the categories referred to in sub-paragraphs (a) and (b) of Schedule B to the amended motion. Those documents will be the subject of an order for production in four months, namely by the end of February 2000. On the other hand, the documents the subject of sub-paragraphs (c) and (d) of the definition of ‘high level documents’ in Schedule B of the amended motion will be discoverable by the end of March 2000, giving the defendants five months within which to produce those documents. Additionally, the proceedings will be listed for directions in relation to these categories of discovery on the first day of the new term in early February 2000, prior to which date the defendants are to file and serve an affidavit, identifying precisely what steps have by then been taken to satisfy the extended discovery categories order. That form of affidavit should assist the Court in being able to further tailor appropriate ancillary directions if necessary. 47    In my view, the plaintiffs are entitled to the following order:

Order that the defendants give discovery of the following documents by the following dates:
(1) High level documents created in the period from 6 November 1996 internally with any one or more of the defendants referring to or commenting upon or considering the importance to any one or more of the defendants of E-commerce for the provision of financial services.
(2) High level documents created in the period from 7 November 1996 recording, referring to or relating to analyses or evaluations or consideration of the benefit to any one or more of the defendants of E-commerce for the provision of financial services.

(3) In paragraphs 1 and 2 of this order ‘high level documents’ means:

All documents which were sent to:
(a) Any one or more of the individual defendants; and/or
(b) The board of directors of one of more of the corporate defendants; and/or

(c) Any person or committee or subcommittee reporting to any of the individual defendants or the boards of any one of the corporate defendants, and/or

(d) Any one or more persons in the Group Leadership Team (as described on page 13 of the National Australia Bank Limited 1998 Annual Report [being exhibit A1 as marked on the interlocutory discovery application heard on 28 September 1999].
(4) Discovery of documents sent to the persons and entities referred to in sub-paragraphs (a) and (b) of paragraph 3 is to take place by 29 February 2000.
(5) Discovery of documents sent to the persons and entities referred to in sub-paragraphs (c) and (d) of paragraph 3 is to take place by 31 March 2000.
(6) The proceedings are stood over for further directions on the first day of term next year, prior to which date the defendants’ solicitors are to file and serve an affidavit dealing with the defendants’ progress in complying with these directions. The affidavit is to detail the precise steps taken in endeavouring to comply with these directions.

Rulings as to Evidence

48    On the hearing of the motion, the plaintiffs sought to read a number of sections of Mr Maconochie’s third, fourth and fifth statements. The sections are identified on pages 14 to 16 of the transcript. The Court’s ruling on admissibility of those paragraphs was reserved to be handed down as part of the Judgment. 49    Also on the hearing of the motion, the plaintiffs sought to tender a number of National Bank documents which were marked for identification ‘A3’. Again the ruling in relation to that tender was reserved to be handed down as part of the Judgment. 50    In Mulley v Manifold, Menzies J pointed out that there are circumstances in which insufficiency in discovery may appear from any source which constitutes an admission of the existence of a discoverable document. Hence, if a party can show from the record or from an admission that incomplete discovery has been given, the Court may order a further and better affidavit of discovery to be filed. 51    As I understood the way in which both parties approached the motion here, the question was put as one of principle, namely as put by Menzies J in Mulley v Manifold at 344:

‘. . . the only important question ie. . . whether certain documents, of which some do exist, and some may or may not exist, do, or if they were to exist, would, relate to any matter in question in the actions. This is clearly something that must be determined from the pleadings, not from an argumentative affidavit.’

52    To my mind, in the way in which the motion before the Court was argued, the plaintiffs are not entitled to read those sections of Mr Maconochie’s statements already referred to or to tender the documents in the material marked for identification ‘A3’. Those affidavits and the materials marked for identification ‘A3’, are therefore not admitted into evidence or taken into account on the hearing of the motion.

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Last Modified: 06/13/2002