Inala Plaza Discount Smokes Pty Ltd v Maembe Pty Ltd
[1996] FCA 494
•18 JUNE 1996
CATCHWORDS
PRACTICE AND PROCEDURE - Application for non-party discovery - relevance of documents sought - no question of principle.
Federal Court Rules O 15A
INALA PLAZA DISCOUNT SMOKES PTY LTD v MAEMBE PTY LTD
No QG 67 of 1994
Cooper J
Brisbane
18 June 1996
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
No QG 67 of 1994
BETWEEN:
INALA PLAZA DISCOUNT SMOKES PTY LTD
Applicant
AND:
MAEMBE PTY LTD
Respondent
JUDGE MAKING ORDER: Cooper J
WHERE MADE: Brisbane
DATE OF ORDER: 18 June 1996
MINUTES OF ORDER
THE COURT ORDERS THAT:
(a) Franklins Limited prepare, file and serve within twenty-one days of today an affidavit of documents in respect of the categories of documents contained in paragraphs 1(ii), (iii), (iv) and (vi) of the notice of motion filed 29 May 1996.
(b)Subject to all proper objections, Franklins Limited produce for inspection the documents referred to in that affidavit within fourteen days thereafter.
(a) Maembe Pty Ltd pay to Franklins Limited all reasonable costs incurred by Franklins Limited in preparing the affidavit of documents and of making the documents available for inspection and the reasonable costs of photocopying, if any.
(b)The amount to be paid by Maembe Pty Ltd to be agreed by the parties or in default of agreement, to be fixed by the taxing officer of the court.
(c)Such costs be paid to Franklins Limited within twenty-eight days of the delivery of the material or within such period as may be agreed by the parties or ordered by the taxing officer.
(d)Maembe Pty Ltd pay Franklins Limited's costs of and incidental to the notice of motion on a solicitor and own client basis, to be taxed if not agreed.
(e)The costs referred to in paragraphs (a) and (d) above be Maembe Pty Ltd's costs in the principal proceeding.
(a) Maembe Pty Ltd pay Woolworths (Qld) Pty Limited's legal costs of and incidental to the notice of motion on a solicitor and own client basis, to be taxed if not agreed.
(b)Maembe Pty Ltd pay Woolworths (Qld) Pty Limited its reasonable costs of the investigation and preparation of the material contained in the affidavit of Anthony James Ritchie at the rate specified in paragraphs 2(e)(i) and (ii) of Mr Ritchie's affidavit to be determined by the taxing officer of the court, if not agreed.
(c)The costs referred to in paragraphs (a) and (b) above be Maembe Pty Ltd's costs in the principal proceedings.
Maembe Pty Ltd's costs of and incidental to the notice of motion and today's appearance be its costs in the principal proceedings.
There be liberty to Franklins Limited to apply on three clear days notice for such orders as to confidentiality as it may be advised.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
No QG 67 of 1994
BETWEEN:
INALA PLAZA DISCOUNT SMOKES PTY LTD
Applicant
AND:
MAEMBE PTY LTD
Respondent
CORAM: Cooper J
PLACE: Brisbane
DATE: 18 June 1996
REASONS FOR JUDGMENT
This is an application by the respondent Maembe Pty Ltd ("Maembe") by notice of motion filed 29 May 1996 in proceedings instituted against it by Inala Plaza Discount Smokes Pty Ltd. The application is for third party discovery pursuant to O 15A of the Federal Court Rules.
In the principal proceedings the applicant claims that the respondent represented to it that by taking a tenancy at the Inala Plaza Shopping Centre it would be, subject to the trading of Franklins Limited ("Franklins"), granted a monopoly of cigarette sales or discount cigarette sales at the shopping centre. It is alleged that in breach of that representation a lease was granted to a newsagency in terms which allowed it to engage in the sale of discount cigarettes.
A report of an expert engaged by the applicant has been prepared and made available as part of the trial management and preparation process. In it, certain assumptions are made as to the distribution of the market share of the newsagency in the event that the newsagent was not a competitor in the market for discount cigarettes at the Inala shopping centre. The respondent, the applicant on the notice of motion, disputes the basis of that report and wishes to obtain information as to the trading of Franklins, another tenant in the Inala shopping centre and Woolworths (Qld) Pty Limited ("Woolworths"), the operator of a Cash and Carry store on an adjacent site.
Maembe seeks from Franklins and Woolworths documents which fall within five categories set out in the notice of motion. Woolworths has filed an affidavit of its solicitor, Mr Ritchie, indicating whether or not documents of the type specified in the categories exist, or if they do not now exist, when they ceased to exist. The position is that the documents sought, if they did exist at some stage and were "Inala specific" (to use a somewhat inelegant phrase) have been destroyed in the normal course of the operations of Woolworths. To the extent that some documents exist which, by description, fall within category 2(i) of the notice of motion, those documents relate to the operations of Woolworths on a State-wide basis and are not "Inala specific".
The major issue is whether or not discovery ought to be ordered in relation to rebates received from cigarette companies by Woolworths for the period August 1991 to March 1995. Objection has been taken that such information is not relevant and is, in any event, commercially sensitive material which would prejudice Woolworths' relations with its suppliers if it were released.
As I read the affidavit of Mr Ritchie the information is not "Inala specific" but rather relates generally to the rebates that were available to Woolworths during that particular time. In the absence of the other material, namely the sales figures and the prices charged at Woolworths' Inala store, it seems to me that the availability and amount of rebates to Woolworths generally is not sufficiently relevant to justify an order for discovery, particularly in relation to a third party. Therefore, insofar as Woolworths is concerned, the documents sought either do not exist or are not sufficiently relevant. The notice of motion will be dismissed as against Woolworths.
The position with respect to Franklins is somewhat different. Franklins has filed no material which addresses the issue as to whether in fact documents of the type specified in the categories exist. Rather, Franklins argues that the categories as described have not been shown to be relevant to the principal proceedings.
The object of obtaining the material is, it is said by the applicant, to attempt to show where sales attracted by the newsagency during the relevant period would have gone if the newsagency had not sold cigarettes. To that extent, it is submitted that it is necessary to know not only what the sales of cigarettes by Franklins were and the prices it charged but also to know the profitability and profit margins of and rebates available to Franklins in order to ascertain how it may have conducted itself in the market for cigarette sales at Inala Plaza Shopping Centre during the period from August 1991 to 31 March 1995.
It seems to me that the first category of relevant documents are those documents relating to the actual sale of cigarettes by Franklins through it's Inala store for the period August 1991 to 31 March 1995. That information would flow from the documents described in paragraph 1(ii) and paragraph 1(iii) of the notice of motion. Such information would establish the historic level of trading by Franklins and actual market share as between the three parties competing in the shopping centre itself, putting to one side for the moment the operations of Woolworths.
Next it is said that because I ought to assume that the cigarette market is price sensitive, price information is necessary in order to determine whether or not, in the absence of the newsagency, the prices being charged would have had some direct effect upon where the sales made by the newsagency would have gone. That information seems to be covered indirectly by paragraph 1(iv) of the notice of motion and one could conceive readily of a reconstruction using the actual price lists available and comparing the position of the applicant in the principal proceedings and Franklins to draw inferences as to how the market would have behaved in the absence of cigarette sales from the newsagency.
The question of the cost of the cigarettes to Franklins during the period is a matter which I am not satisfied is sufficiently directly or indirectly relevant to the question of market conduct such as to require Franklins to make discovery of those documents. If I were so satisfied, then it would only have been limited to the cost of sale of cigarettes at the Inala Plaza Shopping Centre. Accordingly I will not order discovery in relation to the documents specified in paragraphs 1(i) and 1(v) of the notice of motion.
Whether or not Franklins conducted its business in such a way as to make management decisions by reference to the conduct of the newsagency or the applicant may be relevant to the question of what attitude Franklins may have taken on cigarette marketing in relation to the Inala store if there was no competition for cigarette sales from the newsagency. However, that information or those management reports, if they exist, ought to be subject to confidentiality orders. At this stage, because Franklins have not put in any affidavit identifying what material is available, I think the best outcome is to give liberty to apply for a specific confidentiality order in the event that the need for such an order arises.
THE COURT ORDERS THAT:
(a) Franklins Limited prepare, file and serve within twenty-one days of today an affidavit of documents in respect of the categories of documents contained in paragraphs 1(ii), (iii), (iv) and (vi) of the notice of motion filed 29 May 1996.
(b)Subject to all proper objections, Franklins Limited produce for inspection the documents referred to in that affidavit within fourteen days thereafter.
(a) Maembe Pty Ltd pay to Franklins Limited all reasonable costs incurred by Franklins Limited in preparing the affidavit of documents and of making the documents available for inspection and the reasonable costs of photocopying, if any.
(b)The amount to be paid by Maembe Pty Ltd to be agreed by the parties or in default of agreement, to be fixed by the taxing officer of the court.
(c)Such costs be paid to Franklins Limited within twenty-eight days of the delivery of the material or within such period as may be agreed by the parties or ordered by the taxing officer.
(d)Maembe Pty Ltd pay Franklins Limited's costs of and incidental to the notice of motion on a solicitor and own client basis, to be taxed if not agreed.
(e)The costs referred to in paragraphs (a) and (d) above be Maembe Pty Ltd's costs in the principal proceeding.
(a) Maembe Pty Ltd pay Woolworths (Qld) Pty Limited's legal costs of and incidental to the notice of motion on a solicitor and own client basis, to be taxed if not agreed.
(b)Maembe Pty Ltd pay Woolworths (Qld) Pty Limited its reasonable costs of the investigation and preparation of the material contained in the affidavit of Anthony James Ritchie at the rate specified in paragraphs 2(e)(i) and (ii) of Mr Ritchie's affidavit to be determined by the taxing officer of the court, if not agreed.
(c)the costs referred to in paragraphs (a) and (b) above be Maembe Pty Ltd's costs in the principal proceedings.
Maembe Pty Ltd's costs of and incidental to the notice of motion and today's appearance be its costs in the principal proceedings.
There be liberty to Franklins Limited to apply on three clear days notice for such orders as to confidentiality as it may be advised.
I certify that this and the preceding five (5) pages are a true copy of the reasons for judgment herein of his Honour Justice Cooper.
Date: 18 June 1996
Associate
Counsel for Maembe Pty Ltd: R Derrington
Solicitors for Maembe Pty Ltd: Clayton Utz
Counsel for Woolworths (Qld) Pty
Limited:JK Bond
Solicitors for Woolworths (Qld)
Pty Limited: Feez Ruthning
Counsel for Franklins Limited: R Rackemann
Solicitors for Franklins Limited: Connor O'Meara McConaghy
Date of Hearing: 18 June 1996
Place of Hearing: Brisbane
Date of Judgment: 18 June 1996
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