Reading Entertainment Australia Pty Ltd v Birch Carroll and Coyle Ltd - [2001] FCA 1752

FEDERAL COURT OF AUSTRALIA
Reading Entertainment Australia Pty Ltd v Birch Carroll & Coyle Ltd [2001] FCA 1752
PRACTICE AND PROCEDURE – discovery – complex commercial issues arising in relation to causes of action for exclusive dealing against certain parties and knowing concern in relation thereto against remaining parties – discovery categories in dispute formulated by applicant – scope of documents in such categories potentially massive – similar fact documents sought in relation to geographical areas beyond the area of the market the subject of alleged misuse of power –formula for “high level” documents disputed on grounds of oppressive scope thereof – whether within framework of pleadings – cost and expense of discovery.
Trade Practices Act 1974 (Cth) ss 45, 46(1), 46(7), 47 and 75B
Federal Court Rules O 15 r 2(3), O 15 r 2(5), O 15 r 3(1), O 15 r 3(2)
BT Australia Pty Ltd v State of New South Wales (Sackville J, 20 May 1996, unreported) followed
Dowling v Dalgety Australia Ltd (1992) 34 FCR 109 referred to
Eastman Kodak Co v Image Technical Services Inc (1992) 504 US 451 referred to
F Hoffman-La Roche AG v Chiron Corporation and Another (2000) 47 IPR 516 followed
Melway Publishing Pty Ltd v Robert Hicks Pty Ltd (2001) 75 ALJR 600 referred to
South Sydney District Rugby League Football Club v News Ltd [2000] FCA 519 followed
The Lubrizol Corporation Inc v Imperial Chemical Industries plc [2000] FCA 1464 followed
Trade Practices Commission v CC (NSW) Pty Ltd (1995) 58 FCR 426 cited
Heydon, Trade Practices Law, para 5.410.29
JS Lockhart, ‘Handling Trade Practices Cases’ (1994) 17 University of New South Wales Law Journal 298
Federal Court Practice Note No. 14 published on 3 December 1999
READING ENTERTAINMENT AUSTRALIA PTY LIMITED v BIRCH CARROLL & COYLE LIMITED & OTHERS
NG 326 of 1997
CONTI J
11 DECEMBER 2001
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NG 326 OF 1997

BETWEEN:

READING ENTERTAINMENT AUSTRALIA PTY LTD
APPLICANT

AND:

BIRCH CARROLL & COYLE LIMITED
FIRST RESPONDENT

VILLAGE ROADSHOW EXHIBITION PTY LTD
SECOND RESPONDENT

PACIFIC CINEMAS (GARDEN CITY) PTY LTD
THIRD RESPONDENT

AMP LIFE LIMITED (ACN 079 300 379)
FOURTH RESPONDENT

AMP HENDERSON GLOBAL INVESTORS LIMITED
(ACN 001 777 591)
FIFTH RESPONDENT

VILLAGE ROADSHOW LIMITED (ACN 010 672 054)
SIXTH RESPONDENT

PACIFIC CINEMAS (LOGANHOLME) PTY LTD
(ACN 010 854 298)
SEVENTH RESPONDENT

JUDGE:

CONTI

DATE OF ORDER:

11 DECEMBER 2001

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.Interlocutory applications for discovery dismissed.

2.Liberty to apply on seven days’ notice.

3.Costs reserved.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NG 326 OF 1997

BETWEEN:

READING ENTERTAINMENT AUSTRALIA PTY LTD
APPLICANT

AND:

BIRCH CARROLL & COYLE LIMITED
FIRST RESPONDENT

VILLAGE ROADSHOW EXHIBITION PTY LTD
SECOND RESPONDENT

PACIFIC CINEMAS (GARDEN CITY) PTY LTD
THIRD RESPONDENT

AMP LIFE LIMITED (ACN 079 300 379)
FOURTH RESPONDENT

AMP HENDERSON GLOBAL INVESTORS LIMITED
(ACN 001 777 591)
FIFTH RESPONDENT

VILLAGE ROADSHOW LIMITED (ACN 010 672 054)
SIXTH RESPONDENT

PACIFIC CINEMAS (LOGANHOLME) PTY LTD
(ACN 010 854 298)
SEVENTH RESPONDENT

JUDGE:

CONTI

DATE:

11 DECEMBER 2001

PLACE:

SYDNEY

REASONS FOR JUDGMENT
The parties to the proceedings

The abovenamed Applicant (“Reading”) has applied in these proceedings for relief by way of declarations, injunctions and damages, pursuant to causes of action for contravention of ss 45, 46, 47 and 52 of the Trade Practices Act 1974 (Cth) (“the Act”), and for breach of contract and for economic tortious claims. The First, Second, Third, Sixth and Seventh Respondents, referred to in the fourth amended statement of claim (“S/C”) respectively as “BCC”, “Exhibition”, “Pacific Garden City”, Village and Pacific Loganholme, were represented by the same counsel in the present interlocutory proceedings, and the Fourth and Fifth Respondents, referred to in the S/C respectively as “AMP” and “Henderson”, were separately represented by counsel. BCC is said to be a subsidiary within the Greater Union theatre group of companies. Exhibition and Village may be described for present purposes as part of the Village Roadshow group of companies, and are hereafter together referred to as “Village”. Pacific Garden City and Pacific Loganholme may be described for present purposes as part of the Pacific group of companies, and are hereafter together referred to as “Pacific”. AMP and Henderson are hereafter together referred to as “AMP”, a description which includes Perpetual Trustee Company Limited in its capacity as a former trustee of an AMP trust estate, whereof Henderson recently became the trustee in its place. At least most of the matters complained of took place when Perpetual Trustee Company Limited was in office.
The commercial setting of the disputes
There is claimed to be a substantial market for the supply of cinema services to members of the public in South Brisbane and its environs in the State of Queensland (“South Brisbane”), which area is geographically defined by the Brisbane River in the north, the Pacific Ocean coastline in the east, Beaudesert Road in the west and the Logan River in the south, and such services comprising the provision to members of the public of cinema screens whereby they are able to view cinema film releases on payment of a fee.
Reading pleads by the S/C that at all material times, BCC and/or Village and/or Pacific have held a substantial degree of power in the South Brisbane market in relation to the provision to members of the public of cinema screens for entertainment, to the extent of not less than 70% of such market. The particulars supplied by Reading as to the circumstances giving rise to such market power are as follows:
(a)the Australian cinema industry has been at all material times, and still is, highly concentrated into a virtual duopoly involving the Hoyts group on the one hand and the Village and Greater Union groups on the other, which between them derive 70% of box office receipts from 50% of screens throughout Australia;
(b)Greater Union owns about 33% of Village Roadshow Corporation Ltd, which in turn owns about 48% of the ordinary shares of Village;
(c)BCC is a wholly owned subsidiary of Amalgamated Holdings Ltd, which company through Greater Union controls 11% of the market Australia wide for the supply of cinema screens, and 18% of cinema box office receipts;
(d)Exhibition is a wholly owned subsidiary of Village Cinemas Australia Pty Ltd, which in turn is a wholly owned subsidiary of Village, which latter company controls 10% of cinema screens Australia wide and 11% of cinema box office receipts Australia wide;
(e)Village and Greater Union enjoy a longstanding commercial association for some regional areas in Australia, and in particular some CBD locations, pursuant to which association they develop and/or operate cinemas jointly. In such locations they do not operate cinemas in competition with each other. From 1986 such association has included Village, Amalgamated Holdings Ltd and Warner Brothers, each owning a one third share in a joint venture which developed “multiplex” cinemas throughout Australia. Village and Greater Union have an association with the Hoyts group of cinemas in major venues nationally;
(f)BCC and Village Cinemas Australia Pty Ltd own Roadshow Distributors Pty Ltd, which company owns Roadshow Film Distributors Pty Ltd, the latter in turn controlling not less than 52% of the supply of first run cinema film releases Australia wide;
(g)Pacific Loganholme is part of a group of companies controlled by Mr Terry Jackman, he having been at all material times a director of Pacific Loganholme, the sole director of Classicist Pty Ltd, Lord Excellency Pty Ltd and Pacific Garden City, and a director of Pacific Cinemas (Brown Plans) Pty Ltd (which latter company is owned by Terry Jackman and Classicist); in addition he is said to be a director of Village. Pacific Loganholme and/or its related companies and/or Jackman and Village have had a longstanding commercial association through ventures such as “Movie World” on the Gold Coast;
(h)Warner Brothers Group, which is a major supplier of so-called “first run” films throughout Australia, owns a substantial percentage of the issued capital of Village;
(i)outside of central business district markets, the Hoyts group, and the Village and Greater Union groups, maintain a territorial separation of their operations nationally including in Queensland, and this has had the consequence that the Hoyts Group has not competed and could be relied upon by other exhibitors not to compete, in the South Brisbane market;
(j)BCC and Village and their related companies have had strategic alliances with their suppliers and other providers of entertainment services, and they have been vertically and horizontally integrated with businesses and companies associated or involved with the operation or promotion of cinema services; and
(k)there have been at all material times limited sites in the South Brisbane market which are capable of being expanded or redeveloped for the supply of cinema services, and BCC Village and Pacific Loganholme control the sites of that description at Capalaba, Carindale, Browns Plains and Loganholme.
Reading further pleads that at all such material times, there have been high barriers of entry to or expansion within the market for the supply of cinema services in South Brisbane, by reason of the following matters:
(a)as at 1997 the only remaining viable site for the construction of a cinema complex in South Brisbane was at the AMP Centre hereinafter referred to;
(b)the supply of cinema services has required a new entrant to incur significant capital expenditure of a sunk nature;
(c)access to the supply of first run films is an essential ingredient in competing in the cinema services market;
(d)a first release cinema film is expensive to acquire, and is only available from a limited number of sources, the most significant of which is Roadshow Film Distributors Pty Ltd, which is in turn owned by Roadshow Distributors Pty Ltd, and which has been at all material times the distributor in Australia for Warner Brothers and Disney; and
(e)the cost of owning and operating cinemas is very high and is a fixed cost.
The cause of action for contravention of s 45 of the Act
The claims the subject of this cause of action pleaded by the S/C are based upon s 45(2)(a)(ii) of the Act. The formation of an anti-competitive arrangement in contravention thereof, said to have been made from about September 1996 to November 1997 between BCC Village and Pacific, was to the effect that they would bid together, and not in competition, for the right to enter into an agreement with AMP for the operation of a cinema complex in the AMP shopping centre located at Upper Mount Gravatt in South Brisbane known as The Garden City Shopping Centre (“the Centre”), and would so conduct themselves on the basis that they and/or their related bodies would not acquire and operate further cinema screens in South Brisbane, and would not increase the number of cinema screens in South Brisbane, in particular within a 15 kilometre radius of the Centre, for a period of ten years. Amongst the documentary material said to constitute such anti-competitive arrangement included the AMP Board approval document dated 29 July 1997, and a lease entered into on or about 25 November 1997 from AMP in favour of BCC Exhibition and Pacific of a multiplex cinema in or adjacent to the Centre.
Reading asserts that the provisions of the foregoing anti-competitive arrangement had the purpose or likely effect of preventing the entry of Reading into the South Brisbane market for cinema services, and of preventing, restricting or limiting BCC and/or Village and/or Exhibition and/or Pacific Garden City and/or Pacific Loganholme in their supply of cinema services within South Brisbane for a period of ten years, and further asserts that such likely effect would extend to not reducing prices in order to compete with the lower prices that Reading would have charged, and not renovating or expanding the other cinemas operated in the South Brisbane market in order to compete with the facilities which Reading had proposed to AMP.
Reading further asserts that had BCC Exhibition and Pacific Garden City not entered into the Lease from AMP on the basis of such anti-competitive arrangement, AMP would not have entered into the same, and AMP would have instead honoured the agreement to lease which it had earlier made in favour of Reading of the cinema site adjacent to the Centre.
The cause of action for contravention of s 46 of the Act
It is this cause of action which has given rise to at least most of the discovery controversies the subject of these interlocutory proceedings. It is first pleaded by Reading that in the case of BCC Village and Pacific Loganholme commencing in or about September 1996 and continuing to 1997, and in the case of Exhibition and Pacific Garden City commencing respectively from February and September 1997, in furtherance of their substantial degree of market power for the supply of cinema services in South Brisbane, quantified directly and indirectly as set forth in [3] above, such Respondents informed AMP that if AMP granted the lease to them in respect of the Centre in lieu of Reading, they and/or their respective related bodies corporate would not acquire and operate further cinema screens in South Brisbane for a period of ten years, nor would increase the number of cinema screens in South Brisbane, and in particular within a 15 kilometre radius of the Centre, for a period of ten years. Furthermore BCC, Village, Pacific Loganholme, Exhibition and Pacific Garden City are said by Reading to possess significant financial resources, such that they could expend substantial funds to acquire further existing cinema screens in South Brisbane, and moreover such Respondents and AMP knew that as at 1997, the only remaining site in South Brisbane for the construction of a new cinema complex was at the Centre.
It is further alleged by Reading in the S/C that AMP knew the following material facts and circumstances:
(i)any acquisition and operation of further cinema screens owned by BCC, Village, Pacific, Loganholme, Exhibition and Pacific Garden City in South Brisbane could significantly impact adversely on the proposed cinema screen at the Centre by reducing the number of customers of the cinemas, and consequently the number of visitors to the Centre;
(ii)any reduction in the number of customers of the cinemas and visitors to the shopping centre would adversely affect their commercial return from the Centre, because the proposed lease terms, set out in the “Expression of Interest Outline” of 19 December 1991, provided for part of the rent payable in respect of the cinema complex to be calculated on the basis of gross sales of the cinemas, and because of the higher level of rent chargeable by a shopping centre owner where visitation is high; and
(iii)BCC, Village, Pacific Loganholme, Exhibition and Pacific Garden City possessed the means to put into effect the acquisition or operation of further cinema screens in South Brisbane.
As a consequence of the foregoing matters, AMP leased that part of the Centre as was required for such cinema complex to BCC, Exhibition and Pacific Garden City, to the exclusion of Reading, and thereby became knowingly concerned in the infringements by the other Respondents of s 46 of the Act.
Thus it is pleaded by Reading that BCC, Pacific Loganholme, Exhibition and Pacific Garden City took advantage of their power in the market for the supply of cinema services in South Brisbane for the purpose of preventing the entry of Reading into that market, [and] deterring or preventing Reading from engaging in competitive conduct in that market, in contravention of s 46 of the Act. The particulars pleaded in relation to such concluding allegations are lengthy, but in the circumstances it is appropriate to restate the same below:
(i)in order to prevent or limit competition or potential competition from Reading, Village, BCC, and Hoyts Group and Greater Union strenuously opposed the entry of Reading into the Australian cinema industry from 1994, notwithstanding that none of such parties had ever objected to or appealed against the grant of development approval of applications made by any of them to develop either a cinema complex or a retail development; the following circumstances were alleged in that regard:
(A)in 1995 BCC initially showed no interest in a proposed cinema development at the Pacific Fair shopping centre owned by AMP at Broadbeach in Queensland. However, after Reading expressed an interest in the development, BCC entered into an agreement, arrangement or understanding with AMP to develop cinemas at Pacific Fair on the basis that BCC’s Mermaid Beach cinema complex located nearby the Pacific Fair shopping centre would close down, or in the alternative would not show “first run” movies.
(B)In 1996 Village appealed to the Administrative Appeals Tribunal against the grant in January 1996 of a planning permit to Reading for the development of a 25 screen complex at Burwood East in Victoria;
(C)In 1996 and 1997 BCC opposed, in the Queensland Planning and Environment Court, Reading’s proposal to develop a “state-of-the-art” cinema complex at Jindalee in Brisbane;
(D)In late 1996 Roadshow Film Distributors Pty Limited refused to supply in Townsville certain “first-run” films to related companies of Reading; and
(E)In 1996 Greater Union opposed in the Land and Environment Court Reading’s proposal to develop a cinema complex at Liverpool in New South Wales;
(ii)in about April 1995 BCC made an offer to AMP to develop cinemas at the Centre which offer was considered unacceptable by AMP;
(iii)thereafter BCC did not pursue its offer to develop cinemas at the Centre until about September 1996, by which time AMP had granted a lease to Reading or was negotiating for the grant of a lease to Reading, and at which time BCC Village and/or Pacific Loganholme commenced negotiations with AMP for the operation of a cinema complex at the Centre;
(iv)BCC, Village, Pacific Loganholme, Exhibition and Pacific Garden City became aware that Reading was negotiating or had negotiated a lease with AMP in respect of the construction and operation of cinema screens at the Centre;
(v)BCC, Village, Pacific Loganholme, Exhibition and Pacific Garden City determined that they would not permit a competitor to obtain a foothold in South Brisbane for the supply of cinema services;
(vi)BCC, Village, Pacific Loganholme, Exhibition and Pacific Garden City determined that they would not allow Reading to weaken their control of the market for the supply of cinema services in South Brisbane;
(vii)BCC, Village, Pacific Loganholme, Exhibition and Pacific Garden City determined that given the importance of the Centre, they could not permit a competitor to obtain a lease in respect thereof, and they resolved to acquire the lease from AMP in circumstances where it was outside their usual investment parameters;
(viii)BCC, Village, Pacific Loganholme, Exhibition and Pacific Garden City knew that as at 1997, the only remaining viable site for the construction of a cinema complex in South Brisbane was at the Cinema.
The remaining causes of action
The third cause of action of Reading is to the effect that AMP contravened s 47(8)(b)(ii) of the Act, for the reason that AMP granted the lease complained of to BCC, Exhibition and Pacific Garden City on the condition that such lessees did not, or did only to a limited extent, supply cinema services within South Brisbane, and that such condition had the purpose or likely effect of substantially lessening competition for the supply of cinema services in South Brisbane. Reliance is placed by Reading upon a document provided by AMP entitled “Expression of Interest Outline” dated 19 December 1996.

The fourth cause of action of Reading is brought against AMP for damages for repudiation of an agreement for lease said to have been made partly orally, partly in writing and partly by conduct or as a result of a course of dealings between those parties, the conduct including instructions furnished by Reading to architects, structural engineers and quantity surveyors to commence work upon the cinema proposal made by AMP to Reading, and the submission by AMP to a draft lease to Reading.
The fifth cause of action is for economic torts on the part of BCC Village and Pacific Loganholme, by way of procuring or inducing AMP to wrongfully terminate the abovementioned agreement for lease made between AMP and Reading, or alternatively to terminate the negotiations for such agreement for lease.
The sixth cause of action is brought against AMP for false and misleading conduct taking the form of repeated representations made to Reading, in or about November 1995, as follows:
(a) that Reading had no need to worry about being used as a ‘stalking horse’;
(b) that negotiations would proceed between AMP and Reading on an exclusive basis;
(c)that AMP was willing to deal with ‘new players’ in the Australian market, even in the face of hostility from established operators. AMP’s dealings with Toys R Us was cited to Reading as such an example;
(d)that Board approval for a lease to Reading in relation to the Centre was in reality only a formality;
(e)that such Board approval was only necessary insofar as AMP proposed to fund part or all of the “Lessor’s Works” as defined in the draft lease;
(f)that it was impossible for the Board of AMP to overrule management on a matter of this type; and
(f)that there would be no issue taken at AMP Board level in relation to Reading’s recent entry in Australia, and the absence of any other Reading theatre operations in Australia.
Such representations were said to have been made orally and in writing, and are contained in or can be inferred from documents emanating from, and/or conduct of, AMP. Furthermore the same are said to have been made by AMP to Reading in circumstances where Reading had made it known to AMP from the outset of negotiations:
(a)that Reading had no open cinemas in Australia, and that its activities in Australia were developmental in nature;
(b)that given Reading’s experience with Lend Lease at Erina in the State of New South Wales, and the fact that AMP was proceeding with BCC at Pacific Fair, and despite having indicated to Reading in October 1995 that no other cinema group was interested in the Centre, Reading needed assurances that it was not being used as a ‘stalking horse’ for a deal with the already established cinema operators in Australia; and
(c)that Reading was not prepared to proceed with the negotiations for the site within the Centre for the purpose of constructing its cinema proposal, unless the negotiations were conducted on an exclusive basis.
There has been prepared for me on behalf of Exhibition and Village a diagram depicting in graphic form the corporate holdings, direct and indirect, in the operating company for the Mount Gravatt cinema complex located in the Centre. I have attached the same to these reasons for judgment, in order to facilitate an understanding of the complexity of the corporate relationship between the Respondents other than AMP.
Discovery controversies generally
It is against the context of the issues arising from the matters pleaded and particularised in the S/C, and the defences of the respective Respondents filed in response thereto, that substantial discovery controversies have arisen between the parties. Reading has adopted the convenient course of compiling categories of documents which it required to be discovered, first by BCC and Exhibition (and since presumably by Village as well), secondly by Pacific Garden City (and since presumably by Pacific Loganholme as well), and thirdly by AMP. Such categories have undergone a degree of modification over a period of some time, mainly as a result of discussions between the legal representatives of Reading on the one hand, and the Respondents other than AMP on the other. Whilst the scope of the categories remaining in dispute has been the subject of commendable efforts to compromise, both prior to commencement of the present interlocutory proceedings, and also in the intervals between the hearings before me in the afternoons of 21 and 31 August and 7 September 2001, the stage has been finally reached however where no further compromise is in prospect. Those interrogatories remaining in dispute arise mainly in relation to the causes of action for breach of the Trade Practices Act, and s 46 thereof in particular, on the part of the Respondents other than AMP, and in relation to AMP’s alleged knowing concern in such breaches within s 75B of the Act.
In relation to each of the documentary categories required by Reading to be discovered, a legend of meanings had been provided in its original submissions made prior to its presentation to the Court of the fourth amended statement of claim (ie the “S/C” above referred to), which legend is reproduced below for the purposes of affording an appreciation of the extent of the outstanding categories of documents still the subject of controversy:
““Documents” includes but is not limited to, all correspondence, facsimiles, emails, electronic transmissions, minutes, memoranda, file notes, surveys, reports, business plans, diaries, annual reports, financial statements and studies.
“Mt Gravatt” means the location of the Garden City Shopping Centre, corner of Logan Road and Kessells Road, Upper Mt Gravatt.
“the Period” means the period from 1994 to 1997 inclusive.
“The Second Period” means the period from 1994 to the present inclusive.
“South Brisbane market” means the market for the supply of cinema services to the public in the south Brisbane area bounded by the Brisbane River in the north, the coast in the east, Beaudesert Road in the west and the Logan River in the south.
Otherwise, terms referred to below have the same definition as those defined in the Third Amended Statement of Claim.”
It will be observed that the foregoing definition of “documents” is very wide and comprehensive. The reference to “the Period” represents the four years 1994 to 1997 both inclusive, but the reference to “the Second Period” is not the subject of use in the remaining interrogatories in dispute.
The outstanding categories of documents required by Reading to be discovered by BCC, Exhibition, Pacific Garden City, Village and Pacific Loganholme, listed under their respective headings in the Reading Request for Discovery List, were as follows, taking into account deletions or amendments which Reading agreed to make in relation to some of such categories prior to the close of the hearing:
“MARKET SHARES
11.Documents recording or referring to the territorial division of cinemas in Australia by the Hoyts Group of companies on the one hand and/or by [BCC], Exhibition and/or the Greater Union Group of companies on the other, or to any discussion or communication, of any of the [BCC], [Exhibition] and/or the Greater Union Group of Companies with the Hoyts Group of Companies or any representative of the Hoyts Group of companies relating thereto being documents created by or in possession of the employees officers or directors at or above the level of general manager of the operations of any company within the relevant Respondent’s Group.
12.Documents recording, or referring to any competitive advantage of, agreements, arrangements or understandings between [BCC] and [Exhibition] or between any company in the Greater Union group or any company in the Village Roadshow group for the establishment or operation of cinemas in Australia or any region of Australia from 1980 to the present including with any other parties.
BARRIERS TO ENTRY OR EXPENSION/ANTI-COMPETITIVE PURPOSE
15.In respect of the provision of cinema services in Australia documents recording or referring to:
(a)the value and/or benefits of strategic alliances of [BCC] and/or [Exhibition] or related companies with their suppliers and other providers of entertainment services; and
(b)the value and/or benefits of vertical or horizontal integration of [BCC] and/or [Exhibition] or related companies or their related companies with businesses, companies, persons or entities associated or involved with the operation or promotion of cinema services
being documents created by or in possession of the employees or directors at or above the level of general manager of the operations of any company within the relevant Respondent’s Group but excluding management reports and day to day correspondence and financial information relating to the operation of particular strategic alliances or particular associated businesses, companies, persons or entities respectively.
17.Documents recording or referring to [BCC’s] and [Exhibition’s], or their related companies’, assessment in the Period of the difficulties experienced or likely or possibly to be experienced by the Applicant or other exhibitors in establishing cinemas in Australia being documents created by or in the possession of the employees officers, or directors at or above the level of general manager of the operations of any company with the relevant respondents’ group but excluding management reports and day to day correspondence and financial information relating to the operation of particular cinema sites.
19.Documents recording or referring to the response, proposed response and/or possible response or reaction of [BCC] and/or [Exhibition] to the entry of the Applicant into or its activities within the Australian cinema industry and/or the South Brisbane market from 1994 to 1997, being documents created by or in possession of the employees, officers or directors at or above the level of general manager of the operations of any company within the relevant Respondent’s Group.
20.[BCC’s and/or Exhibition’s] or related companies’ business plans in respect of the cinema and film aspects of their businesses for implementation within Australia for the Period.
21.Documents recording or relating to the response by the Greater Union Group of companies and/or [Exhibition] to [Reading’s] proposal for a cinema complex at East Burwood in Victoria, including but not limited to any records of discussion or communication with the Victorian Government pertaining to the formulation and/or promulgation of a planning policy that became known as the ‘Centres Policy’ (pursuant to which the development of ‘stand-alone’ cinema developments were to be discouraged and/or prohibited) being documents created by or in possession of the employees, officers or directors within the relevant Respondent’s group whose duties included such response.
22.Documents recording or relating to the response by the Greater Union Group of companies and/or the [Exhibition] to [Reading’s] proposal for a cinema development at Geelong in Victoria, including but not limited to any records of communications with the owner of the relevant shopping centre concerning the Applicant or concerning the likelihood of the supply of films to such a cinema being documents created by or in possession of the employees, officers or directors at or above the level of general manager of the operations of any company within the relevant Respondent’s Group.
23.Documents recording or relating to the response by the Greater Union Group of companies and/or [Exhibition] to [Reading’s] proposal for a cinema complex at Liverpool in New South Wales, including but not limited to any records of discussion or communication with the New South Wales Government in relation to the formulation and promulgation of a planning policy equivalent to the Victorian Centres Policy being documents created by or in possession of the employees, officers or directors at or above the level of general manager of the operations of any company within the relevant Respondent’s Group.
24.Documents recording or relating to the response by [BCC] and/or [Exhibition] to [Reading’s] proposal in 1996 for a cinema complex in Jindalee in Brisbane being documents created by or in possession of the employees, officers or directors at or above the level of general manager of the operations of any company within the relevant Respondent’s Group.
25.Documents relating to the supply of films to [Reading], but not limited to the supply of films for [Reading’s] Townsville cinema development in Queensland being documents created by or in possession of the employees, officers or directors at or above the level of general manager of the operations of any company within the relevant Respondent’s Group.
26.Documents recording or referring to proposals by [Reading] or [BCC] to [AMP] for the development of a cinema complex at Pacific Fair Shopping Centre in Queensland being documents created by or in possession of the employees, officers or directors at or above the level of general manager of the operations of any company within the relevant Respondent’s Group.”
It will be observed that all of the above categories 11, 15, 17, 19 and 21 to 26 purport to define the executive level within the respective Respondents, consistently with the approach taken in s 46 litigation for instance of B T Australasia Pty Ltd v State of New South Wales (Sackville J, 20 May 1996, unreported), at and above which documentary discovery is in principle required. It will be further observed that categories 19 and 21 to 26 above purport to relate to events and circumstances outside of South Brisbane concerning all Respondents, and that category 11 relates additionally to the Hoyts Group of companies (which are not Respondents to the proceedings, but have been referred to in the particulars contained in paragraphs (a), (e) and (i) of [3] above, and in paragraph (i) of [11] above). I have assumed, in the light of the amendments made by the S/C to its precursor the third amended statement of claim, that all references above to [Exhibition] should extend to and include the new Sixth Respondent Village, and that in so far as the foregoing categories originally referred to [Pacific Garden City], the same should also extend to and include Pacific Loganholme.
Applicable discovery principles
The general principles concerning the Court’s powers in relation to discovery were enunciated by Burchett J in F Hoffman-La Roche AG v Chiron Corporation (2000) 47 IPR 516 at 517 in the following terms:
“The starting point is that the court has wide and flexible powers in respect of the making of orders for discovery…. The framework within which discovery may be ordered is fixed by the pleadings…. They determine the issues, and from the issues may be identified the categories of documents the court should consider when deciding what orders to make in respect of discovery.”
The caveats entered in relation to such traditional statements of principle have predominantly related to so-called “fishing”. Thus in Nestle Australia Ltd v Commissioner of Taxation (1986) 10 FCR 78 at 82, Wilcox J observed as follows:
“[t]here is a general principle against allowing discovery for the purpose of ‘fishing’, that is so as to allow a party who can demonstrate nothing to support an allegation, access to the documents of the opposing party in the hope of discovering some such support.”
Subsequently in Trade Practices Commission v CC (NSW) Pty Ltd (1995) 58 FCR 426 at 438 per Lindgren J, his Honour said as follows:
“What does the reference to a ‘fishing expedition’ mean? After all, ex hypothesi, the giving of discovery will often, if not always, reveal documents of which the other party was not previously aware (similarly, the administering of interrogatories will often, if not always, reveal information of which the other party was not previously aware). What is meant is that discovery must not be used for the purpose of ascertaining whether a case exists, as distinct from the purpose of compelling the production of documents where there is already some evidence that a case exists… In W A Pines Pty Ltd v Bannerman at 181, Brennan J said that what is required is that ‘sufficient is shown to ground a suspicion that the party applying for discovery has a good case proof of which is likely to be aided by discovery’. On the facts of particular cases, the application of the distinction between ‘fishing’ and ‘non-fishing’ may well be difficult.”
From 3 December 1999, Rule 2 of Division 1 of Order 15 of the Federal Court Rules became effective. In South Sydney District Rugby League Football Club v News Ltd [2000] FCA 519, Finn J observed in relation thereto at [10] that “In 1999 amendments were made to the Rules manifesting a quite new and restrictive policy in relation to the discovery to be allowed in this Court. I refer in particular to the limitation imposed in O 15 r 2(3)”, and his Honour further observed at [12] that discovery must be confined to existing matters in question, and not matters which could possibly be put in question in the future. The full text of Rule 2(3) is as follows:
“2(3)Without limiting rule 3 or rule 7, the documents required to be disclosed are any of the following documents of which the party giving discovery is, after a reasonable search, aware at the time discovery is given:
(a)documents on which the party relies; and
(b)documents that adversely affect the party’s own case; and
(c)documents that adversely affect another party’s case; and
(d)documents that support another party’s case; and
(e)documents that the party is required by a relevant practice direction to disclose.”
The abovementioned Rule 3 stipulates as follows:
“3(1)The Court may, before or after any party has been required under rule 1 to give discovery order that discovery under rule 2 by any party shall not be required or shall be limited to such documents or classes of documents, or to such of the matters in question in the proceeding, as may be specified in the order.
3(2)The Court shall, on application, make such orders under subrule(1) as are necessary to prevent unnecessary discovery.”
The abovementioned Rule 7 relates to privilege, and need not be reproduced in the context of the issues arising in these proceedings.
Rule 2(5) arises however for consideration, and is in the following terms:
“2(5)In making a reasonable search for subrule (3), a party may take into account:
(a)the nature and complexity of the proceedings; and
(b)the number of documents involved; and
(c)the ease and cost of retrieving a document; and
(d)the significance of any document likely to be found; and
(e)any other relevant matter.”
In The Lubrizol Corporation Inc v Imperial Chemical Industries plc [2000] FCA 1464, Branson J observed in relation to the above extracted Rules 2(3) and 2(5) at [6] as follows:
“The policy… is that discovery should only be ordered to the extent that is necessary for the attainment of the ends of justice… When this Court makes an order for discovery, subject to the power of the Court in any particular case to override the provisions of the Federal Court Rules, the resulting obligation on a party is less onerous than that which traditionally flowed from an order for discovery.”
Her Honour subsequently referred at [33] of her judgment to “… balancing the desirability of discovery being given of all documents that may be useful against the undesirability of compelling parties to incur unnecessary expense”.
I would for completeness refer also to Practice Note No. 14 published on 3 December 1999, being the same day as Rule 2 was introduced as above, which provides for flexibility in the Court’s supervision of the discovery process, and which is in the following terms:
“1.Practitioners should expect that, with a view to eliminating or reducing the burden of discovery, the Court:
(a)will not order general discovery as a matter of course, even where a consent direction to that effect is submitted;
(b)will mould any order for discovery to suit the facts of a particular case; and
(c)will expect the questions set out below to be answered:
(i)is discovery necessary at all, and if so for what purposes?
(ii)can these purposes be achieved:
·    by a less expensive means than discovery?
·    by discovery only in relation to particular issues?
·    by discovery (at least in the first instance – see (iii)) only of defined categories of documents?
(iii)particularly in cases where there are many documents, should discovery be given in stages, eg initially on a limited basis, with liberty to apply later for particular discovery or discovery on a broader basis?
(iv)Should discovery be given in a list of documents by general description rather than by identification of individual documents?
2.In determining whether to order discovery, the Court will have regard to the issues in the case and the order in which they are likely to be resolved, the resources and circumstances of the parties, the likely cost of discovery and its likely benefit.
3.To prevent orders for discovery requiring production of more documents than are necessary for the fair conduct of the case, orders for discovery will ordinarily be limited to the documents required to be disclosed by Order 15 rule 2(3).”
Reading’s contentions in relation to first, second, third, sixth and seventh respondents (“the Cinema Respondents”)

Reading has described “[t]he key point remaining at issue in the discovery process” as being “the extent to which high level documents in categories 11, 12, 15, 17, 19 and 21-26 are properly pressed in relation to matters at issue in the proceedings and raised by the pleadings and the evidence”. Such “high level” qualification would not however appear to have been applied by Reading to categories 12 and 20, and in any event, Reading’s description of the remaining issues understates the extent of controversy on all outstanding categories set out in [19] above, apart from the controversy as to what should constitute “high level documents”. Reading has emphasised that it will submit to “an appropriate requirement for commercial sensitivity”, and that it will in due course provide a mutually agreed text for an order to such effect. The Cinema Respondents have stated that subject to any resolution of their other objections as to the scope of categories 11, 15, 17, 19 and 21-26, they would agree to a “high level” formula to the effect of “documents created by or in the files of employees, officers or directors at Board, Executive Committee or Senior exhibition management…”. Reading has rejoined that it could not be satisfied that such would be an appropriate formula, in the absence of a detailed knowledge of the applicable management structures which it is yet to receive.
Reading’s central contention in relation to the abovementioned categories 11, 12, 15, 17, 19 and 21-26, or at least the majority thereof, is that the Cinema Respondents’ purposes falling within s 46 of the Act have been continuing purposes, formed at least by about 1994 when Reading announced its entry into the Australian market, and since continuing until the events of 1996/7 in relation to the cinema site at the Centre located at Mt Gravatt in South Brisbane, of excluding and preventing Reading from entry into the Australian market generally, and further that “… the events at Mt Gravatt were simply part of their overall purpose in opposing the entry of Reading into, and its competitive conduct within Australia”. The evidence adduced by the affidavits of Reading’s witnesses in relation to such alleged conduct of Village and Greater Union elsewhere in Australia, being evidence of circumstances where neither Village nor Greater Union, nor additionally the Hoyts Group (which are not Respondents), had ever objected to or appealed against local government approval of applications respectively made by each other to develop either a cinema complex or a retail development, was said to be in particular as follows:
“(a)in 1995 BCC initially showed no interest in the proposed cinema development at the Pacific Fair shopping centre owned by AMP at Broadbeach in Queensland. However, after Reading expressed an interest in the development, BCC then entered into an agreement with AMP to develop cinemas at the Pacific Fair on the basis that BCC’s Mermaid Beach cinema complex located (at ?) would not show “first run” movies.
(b)in 1996 Village appealed to the Administrative Affairs Tribunal against the grant in January 1996 of a planning permit to the applicant in respect of a proposal by the applicant to develop a 25 screen complex at Burwood East in Victoria.
(c)in 1996 and 1997 BCC opposed in the Queensland Planning & Environment Court, the applicant’s proposal to develop a state of the art cinema complex at Jindalee in Brisbane.
(d)in late 1996 in Townsville, Roadshow Film Distributors Pty Ltd refused to supply certain first run films to related companies of the applicant.
(e)in 1996 Greater Union opposed in the Land & Environment Court the applicant’s proposal to develop a cinema complex at Liverpool in NSW.”
All such instances are said to be “part of the track record of the respondents in relation to the competitive conduct of Reading”.
Reading submits accordingly that such previous instances of conduct of the Cinema Respondents in Australia relating to cinema or potential cinema locations outside of South Brisbane, that is to say, conduct in the nature of territorial divisions (category 11), and of arrangements between the Cinema Respondents inter se (categories 12 and 15), and otherwise of opposition to Reading’s market entry into Australia, is likely to be reflected in documents in the Cinema Respondents’ control, which are therefore duly discoverable in principle. Reading further submits that whilst the present proceedings relate to the exercise of market power on the part of the Cinema Respondents in the South Brisbane market, an equally significant element of s 46 (as well as of ss 45 and 47), is the purpose of undertaking generally in Australia anti-competitive conduct of that kind. Put another way, Reading submits that since the Cinema Respondents operate nationally in Australia, if their purpose in other geographic territories in Australia is to lessen competition from Reading, and to prevent its entry into other markets in Australia, then evidence thereof is logically relevant in determining whether they had the same purposes forbidden by ss 45 and 46 of the Act in relation to South Brisbane. In particular, Reading points to the circumstances of its experiences in relation to the districts of East Burwood, Geelong, Liverpool, Jindalee, Townsville and Pacific Fair Shopping Centre, as identified in paragraphs A to E set out in [11] above, which are the subject of categories 21 to 26 respectively set out in [19] above, as being “directly probative of a continuing purpose of the Respondents’ conduct” complained of in relation to South Brisbane. Reading refers in that regard to s 46(7) of the Act, which it asserts to “provide a very wide net for inferring the existence of a prohibited purpose from the conduct of the respondents or any other person or from relevant circumstances”, and which reads as follows:
“Without in any way limiting the manner in which the purpose of a person may be established for the purposes of any other provision of this Act, a corporation may be taken to have taken advantage of its power for a purpose referred to in sub-section (1), notwithstanding that, after all the evidence has been considered, the existence of that purpose is ascertainable only by inference from the conduct of the corporation or of any other person or from other relevant circumstances.”
Reading relies upon the following dictum in Dowling v Dalgety Australia Ltd (1992) 34 FCR 109 at 143, where Lockhart J said as follows:
“The determination of purpose for the purposes of s 46 is to be ascertained subjectively, in the sense of ascertaining the intent of the corporation in engaging in the relevant conduct.”
being dictum which has since been adopted in subsequent authorities of this Court. Reading pointed out that the s 46 notion of “taking advantage” means “using”, and does not necessarily require conduct which is predatory or morally blameworthy (see Melway Publishing Pty Ltd v Robert Hicks Pty Ltd (2001) 75 ALJR 600 at 606 [26]), and further that once a relevant purpose is established, a finding as to taking advantage is said by Reading to be often “virtually inevitable”. Reading has further submitted that in relation to commercial dealings, it is directly relevant to a determination of the purpose of parties in one transaction or trading situation to examine the purpose of those parties in relation to their conduct in responding to the activities of the same competitor involved in other situations, and in relation to the recent period of time involved in so responding to that competitor.
Thus Reading’s case at the final hearing is said to be that during the relatively short period since it announced its entry into the Australian cinema industry in 1994, the intention of the established duopoly of Hoyts Group on the one hand, and the Village/Greater Union combination on the other, was to strenuously oppose that entry, and that such intention was clearly evidenced in a number of identified and specific cases where Reading attempted to establish cinemas in competition with such commercial rivals, and that they continued in their opposition to Reading’s attempts to enter the South Brisbane market. Thus, so Reading’s submissions continued, for the Court to exclude an examination of the immediate history of intended opposition to the market entry of Reading into the Australian industry generally, over a relatively short period of time, would deprive the Court of the best evidence of subjective motivation. I would interpolate to emphasise that the Hoyts Group is not of course a respondent to the present proceedings, despite the references thereto in the S/C identified in [3] and [11] above.
Reading has adopted the citation by the High Court in Melway at 606 [29] of what was observed by Scalia J of the United States Supreme Court in Eastman Kodak Co v Image Technical Services Inc (1992) 504 US 451 at 488 in the following terms:
“Where a defendant maintains substantial market power, his activities are examined through a special lens: Behaviour that might otherwise not be of concern to the antitrust laws – or that might even be viewed as precompetitive – can take on exclusionary connotations when practised by a monopolist.”
Upon that further footing, Reading has contended that the Cinema Respondents are here seeking unjustifiably to confine the “focus of the lens” to a single transaction, that is to say, AMP’s leasing of the Centre to the film exhibition Respondents referred to in [10] above, and Reading has asserted reliance further upon the following passage in Heydon, Trade Practices Law at para 5.410.29:
“The fact that the element of purpose is now crucial means that much conduct, apparently neutral or even beneficial, will be made unlawful if inspired by an intent to monopolise. To lower prices, to give benefits to customers, to expand capacity, to advertise extensively, to merge with inefficient rivals – these acts are the essence of competition. They will become unlawful if done with a certain intention. Often that intention can be inferred from a long succession of particular events. It may be necessary to consider many acts together in order to reach a conclusion as to intent. Each looked at alone may seem innocuous, entirely justified by the particular necessity of the time; each may seem to have advantages and to confer benefits on those with whom the defendant deals; or each may seem no more than necessary to protect some property right such as a patent.”
Specifically as to the numbered categories described in [19] above, Reading has additionally submitted or acknowledged (as the case may be) during the course of the interlocutory proceedings inter alia as follows:
(i)as to category 11, the Hoyts group is particularised as a major participant in the exhibition industry in Australia (S/C para 9(a)), and as having strenuously opposed the entry of Reading into the Australian market, which is claimed to have involved historically territorial separations; moreover, given that there is an issue as to the extent to which Hoyts is likely to be a competitor in the South Brisbane market, then relevant thereto is the competitive state of affairs that has existed between the two major exhibitor groups in the Australian industry, and the alleged territorial basis on which the industry has operated;
(ii)as to category 12, the arrangements and practices within the Australian cinema industry for the establishment of cinemas, including those relating to the South Brisbane market, involve a central issue in the proceedings, there being alleged by Reading to have existed longstanding arrangements and practices in that regard; moreover the discovery category here sought is said to concern documents relating to such arrangements and practices; in any event, Reading would agree to delete from this category management reports and day to day correspondence relating to the operation of particular cinema sites;
(iii)as to category 15, it would confine the same to so-called higher level documents, but as stated in [28] above, the parties are not yet in agreement as to what that general description should embrace;
(iv)as to category 19, Reading’s case is that the conduct of the Cinema Respondents directed to preventing or deterring Reading from entry to the Australian cinema industry began upon the announcement of Reading’s proposed entry to Australia in 1994;
(v)as to category 20, it would agree to exclude from the scope of discovery film production;
(vi)generally as to the categories in dispute, “whether or not purposive conduct has elsewhere occurred in circumstances where all of the necessary ingredients of a Trade Practices Act violation are made out, it is nevertheless probative of purpose in the market situation where the Applicant asserts all those elements can be demonstrated”.
The Cinema Respondents’ responses to Reading’s contentions
As has already been indicated, in relation to all categories set out in [19] above except 12 and 20, there is a discrete issue as to what should constitute so-called “high level” documents, being an issue which will be separately addressed at the conclusion of this segment of my reasons for judgment. As foreshadowed above, it is appropriate that I first record the principal submissions otherwise made on behalf of the Cinema Respondents. It may be said that generally speaking, the Cinema Respondents joined issue upon Reading’s contentions which I have sought to summarise above. Village undertook the task of adducing affidavit evidence, and presenting detailed written submissions in two successive stages, whilst Greater Union adopted the approach merely of entire concurrence in and support for such submissions.
As to category 11, Village submitted that since collusion between the Cinema Respondents and Hoyts is not alleged, and no communication between the Cinema Respondents and Hoyts recording or referring to any territorial division of cinemas has been pleaded or particularised, the scope of discovery here sought by Reading constitutes a “fishing” exercise; Village further submitted in any event that discovery should be here confined to circumstances affecting the South Brisbane locality.
Specifically as to category 12, Village initially asserted that what was here required by Reading would involve them in the review of “an enormous volume of archived material”, extending over a lengthy period of time in relation to geographical areas beyond South Brisbane; such a review, so Village further asserted, would require a difficult, costly and time-consuming undertaking on the part of persons within the Village organisation having knowledge of its commercial operations and competitive environment over the requisite period of time. In support of the submission, an affidavit was tendered by Mr Leggo, the Group Company Secretary of Village who had occupied such office since 1992, and who professed a general knowledge of the scope of commercial arrangements potentially involved in the task of research required by such discovery requests. He asserted the existence potentially of a very large number of documents within category 12, the review of which would be “an inordinately lengthy and time consuming exercise”, and that such documentation would comprise frequent, and more often than daily, correspondence, as well as formal contractual documentation. He further asserted that the documentary research and review necessarily involved would need to be undertaken by a suitably trained person (or persons) with knowledge of the business and of the competitive environment. During the course of the present discovery proceedings over the three afternoon hearings, Reading stated that it would delete from its discovery requirements “management reports and day to day correspondence relating to the operation of particular cinema sites”, and as already indicated, would limit the time period of the scope of documentation to the four yearly periods from 1994 to 1997 (both inclusive); however Reading has not otherwise modified its requirement for material of the nature specified, notwithstanding that the sites were not confined in scope to South Brisbane; it is on this latter geographical controversy that the parties remain in issue in relation to category 12, leaving aside of course the issue as to “high level” documents.
As to category 15, similar problems were asserted by Mr Leggo to here arise as those relating to category 12, for the reason that the breadth of the request required the examination of literally a mass of documentation held by Village relating to its Australian cinema operations, given that all cinema business conducted by the various entities within the Village group in Australia would be likely to have, or to have had, so-called “strategic alliances” with providers of entertainment services, or would be "vertically or horizontally” integrated with businesses, companies, persons or entities associated or involved with the operation or promotion of cinema services, whatever those expressions might precisely mean in legal terms; moreover the scope of category 12 was said to be all the more diverse by virtue of the width of involvement of the Village group in entertainment businesses, in addition to film exhibition involving film production and distribution, and in commercial radio, theme parks and new media (the latter relating to the development of emerging technology opportunities such as video on demand). In any event, Village complained that the terms “strategic alliances” and “vertical and horizontal integration”, though widely used in commerce, are insufficiently clear for controlling the discovery process, where precision is so critical, especially in the search for a large number of potential historical documents spanning a period of years.
As to category 17, similar logistical (and administrative) difficulties were said on behalf of Village to arise here in terms of the number and location of documents, particularly having regard to the vaguaries of the expressions “difficulties experienced or likely or possibly to be experienced… in establishing cinemas in Australia”. In any event, the Cinema Respondents contended that Reading continued to be the party best placed to inform the Court of the difficulties to be encountered in the Australian market in terms of barriers to entry; in that regard, Sackville J observed in B T Australasia at 13 that “It is material, in my opinion, to take account of … circumstances… where the party seeking discovery can reasonably ascertain the information from other sources available to it”.
Significantly as to category 25, evidence was further tendered on behalf of Village by its Group Manager-Corporate Services (Mr Driscoll), as to the following matters:
(i)that the structure of Village’s administration is one of various divisions, each related to particular areas of its business, including its exhibition division, which is responsible for the operation and establishment of cinemas, and its film distribution, film production, radio, theme parks and resorts divisions;
(ii)that in relation to the years 1994 to 1997, there were some 30 people who fell into the categories of directors, employees or officers, and who were members of the board or the executive committee, or formed part of the senior exhibition management of Village;
(iii)that if the files and records of employees, directors or officers at or above the level of general manager operations of each company or division within the group were to be included in the scope of discovery, in addition to the main exhibition division, the files and records maintained by or for at least a further 60 individuals would need to be reviewed, that being a very substantial and expensive exercise;
(iv)Village has established thirteen cinemas in Australia, the same being located within the States of New South Wales, Victoria, Queensland and Western Australia;
(v)Village distributes about 50 to 55 films each year, and there exists communications and documents relating to each film individually; and
(vi)in the aggregate, tens of thousands of documents would fall within category 25 alone relating to the years 1994 to 1997.
Thus without substantial modification on the part of Reading, this category is asserted by Village to be unacceptably oppressive.

As to the group of categories 19 and 21 to 26 generally, Village contended that to the extent the same purport to relate to cinema locations and activities of Village outside of South Brisbane, then quite apart from issues as to oppression by virtue of the scope thereof, the same do not relate to an issue arising in the proceedings, such issues being concerned with the circumstances of the AMP lease of the Mt Gravatt cinema to the Cinema Respondents, and not with cinemas or cinema locations outside of South Brisbane.
Further again as to categories 11, 15, 17, 19 and 21 to 26, each of which contains the formula which Reading has nominated as “high level” documents, being the formula foreshadowed in [28] above, Village rejects the viability of such categories, and proposes in lieu the following formula, to the extent that any such categories are otherwise to be allowed:
“documents created by or in the files of any director, officer or employee above the level of general manager operations of any company within the Village Group.”
Greater Union did not provide any affidavit testimony, but relied on Village’s submissions and evidence as indicative of the reality of the scope of the categories formulated by Reading in terms of oppressive research and retrieval, thereby attracting the need for the Court’s consideration of the application of Rules 2(5) and 3 set out in [24-25] above, in the light of the policy spoken of in The Lubrizol as set out in [26] above.
Conclusions upon the discovery issues arising between Reading on the one hand and the Cinema Respondents on the other
The principal attack brought by the Cinema Respondents against the viability of the categories of interrogatories in dispute, which are set out in [19] above, is based upon the discovery principle of “fishing”, some authoritative statements as to the meaning whereof I have extracted in [22] above. As explained in [23-27] above, it is that symbolic description of procedural misuse to which the recent Federal Court discovery rules and practice note were introduced on 3 December 1999. Reading has sought to circumvent the complaints of the Cinema Respondents as to procedural “fishing” on Reading’s part by focusing upon the element of “purpose” contained in s 46 of the Act, in the manner and to the extent broadly explained in [29-33] above. At the risk of my proffering an unduly abbreviated description of the means adopted by Reading for justifying the expansive scope of the categories reproduced in [19] above, in terms which presently reflect a degree of modification from what had been earlier submitted by Reading, the categories in dispute framed by Reading are directed to documents brought into existence by the Cinema Respondents which Reading considers will serve to demonstrate purposive conduct on their part undertaken in Australia generally, and in certain parts of Australia specifically, which conduct serves to demonstrate the existence of the elements of a s 46 purpose of the Cinema Respondents undertaken in the South Brisbane market.
The conceptual obstacle to Reading’s approach outlined above is that s 46 is relevantly directed to a purpose of damaging a competitor in either the market in which the offender has a substantial degree of power, or in some other market, whereas the issue presented to the Court in the s 46 cause of action is whether the Cinema Respondents have abused their power in the South Brisbane market for the purpose of preventing Reading’s entry into or engagement in that market. As was emphasised in F Hoffman-La Roche in the passage extracted in [21] above, “The framework within which discovery may be ordered is fixed by the pleadings… They determine the issues….”. The relevant issue here addressed is alleged conduct within the South Brisbane market in contravention of s 46. Even if, as Reading contends, that evidence of purpose per se in relation to one place is evidence of that purpose relevantly in relation to another place, which in a s 46 context is I think insufficient in principle, it does not follow that discovery may be sought relevantly in relation to the former purpose. The circumstance therefore that the Cinema Respondents may have a substantial degree of market power in a relevant market or markets outside of South Brisbane, and have abused such power in such external market or markets, is not an element in Reading’s s 46 cause of action as presently framed. I should add that I do not think that the provisions of sub-section (7) of s 46 assist Reading’s submissions based upon “purpose”, which do not use purpose in any sense disconnected from the market in which a corporation has a substantial degree of power.
It follows in my opinion that Reading’s discovery categories 21 to 26, directed as they are to Reading’s proposed cinema establishments at East Burwood, Geelong, Liverpool, Jindalee and Townsville, and at the Pacific Fair Shopping Centre in Queensland, cannot be sustained in principle as matters susceptible to orders for discovery. I should add, however, in conformity with discussion which occurred in the context of oral submissions, that it does not follow from the ruling which I have just made in relation to specific localities within Australia that there would not be discoverable documents referrable to Reading’s intention to develop and operate cinema complexes generally and unspecifically in the Commonwealth of Australia, since such documents would inherently relate, or at least tend to relate, inter alia to the subject area of South Brisbane. Put another way, to the extent to which documents of such generality of description, by virtue of the terms thereof, touch and concern South Brisbane as part of Australia as a whole, the same would be discoverable in principle by the Cinema Respondents, upon the basis that the greater necessarily and inherently embraces the less. In the event of any questions of relevance, in the sense which I have described, arising, it may become necessary for me to make rulings in relation thereto. Beyond making that general observation in principle, it is inappropriate for me to be more definitive at this point in time, other than for Reading to bear in mind, in its pursuit of discovery upon the issue of purpose, the following further dicta of the majority of the High Court in Melway at 607 [31]:
“… there are cases in which it is dangerous to proceed too quickly from the finding about purpose to a conclusion about taking advantage.”
The next major discovery issue arising for resolution concerns the so-called “high level documents” presently the subject of categories 11, 15, 17, 19 and 21 to 26. Notwithstanding my foregoing ruling in relation to the scope of discovery of categories 21 to 26, it is appropriate that I address the “high level documents” issue to the extent of all interrogatories involving the same. In so doing, I bear in mind the width of the definition of documents proffered by Reading in its category list (see again [19] above). As I have already observed, Reading has already demonstrated a fair degree of compromise on its part in relation to what it has already been offered, but particularly in the light of the affidavit testimonies of the Village officers Messrs Leggo and Driscoll, which I have summarised in [39-40] above, there remains substantial problems of a practical nature in terms of the time and expense involved in addressing this issue. Thus Village has submitted that the provisions of at least Rule 2(5)(c) are attracted (see [25] above). Whilst no evidence was provided by any Greater Union officer to similar effect, I have inferred, from what has been submitted on behalf of Greater Union in final address, that similar logistical burdens would necessarily be faced by Greater Union, which I would readily infer to be the case. At least for the time being, I think that the “high level” issue should be confined to the regime proposed by the Cinema Respondents, to the extent that the categories to which the same applies are to be allowed in principle, namely the regime of “documents created by or in the files of employees, officers or directors at Board, Executive Committee or Senior Exhibition Management”, but I emphasise “for the time being”, bearing in mind also the concern expressed by Reading in the last sentence of [28] above, a concern which nevertheless needs to be balanced by the consideration that “In cases under the [Trade Practices] Act, especially Part IV, discovery can get out of hand and become extremely burdensome in terms of time and cost, unless properly controlled”, but that nevertheless “Discovery in complex cases is almost invariably not a once and for all process, but an ongoing one”: see Justice J S Lockhart, ‘Handling Trade Practices Cases’ (1994) 17 University of New South Wales Law Journal 298 at 301-2.
It is now appropriate to address certain of the categories individually. As to category 11, which also involves the “high level” documentary issue, the S/C makes reference to the Hoyts Group, in relation to its conduct in Australia of opposing Reading’s entry into the Australian market, in the context of the s 46 cause of action (see [11(i)] above and also [34(i)] above). However category 11 is directed to the “territorial division of cinemas in Australia by the Hoyts Group of companies on the one hand and/or by [BCC], [Exhibition] and/or the Greater Union Group of companies on the other…”. Putting aside the apparent absence of confinement of category 11 to a specified period of time, but in the light of any opinions expressed in [47-48] above concerning circumstances beyond South Brisbane, I consider that category 11 relates to matters beyond the s 46 issues arising in the proceedings, and should be disallowed, upon the basis at least of “fishing”. I would therefore disallow category 11.
On my understanding, category 12 is now to be confined in point of time to the four years 1994 to 1997 (both inclusive), and moreover Reading is prepared to delete therefrom management reports and day to day correspondence relating to the operation of particular cinema sites, but the same still contains no limitation in terms of “high level” documentary status, and uses the unspecific expressions “competitive advantage”, and “operation”, in addition to “establishment”. The submissions of the Cinema Respondents in relation to category 12, set out in [39] above, are I think too compelling to allow this interrogatory, at least in its present, albeit already modified, form. However I would be prepared to reconsider my ruling on category 12, if the same would be so framed as to be qualified by reference to the “high level” criteria put forward generally by the Cinema Respondents, and further if the same would be confined to Australia as a whole, and thus exclusive of any specific localities other than of course South Brisbane; and further if reference to “operation” was deleted. I would therefore disallow category 12, in the absence of the foregoing problems being resolved.
Category 15 does not in my opinion, at least in its present terms, relate to an issue in the proceedings, or at least sufficiently and unambiguously so, and must be disallowed. To interrogate as to the value and/or the benefits of so-called “strategic alliances” of [BCC] and/or [Exhibition], or their related companies, with their suppliers and other providers of entertainment, and to the value and/or benefits of so-called “vertical or horizontal integration” of [BCC] and/or [Exhibition] or their related companies with businesses, companies, persons or entitles associated or involved with the operation or promotion of cinema services, is not just to be characterised as fishing, but oppressively so, because of the width of the judgments which would have to be made in responding, and in any event in the absence of any reasonable period of time having been specified. I would therefore disallow discovery based on category 15.
As to category 17, the potentially oppressive nature of this wide ranging discovery request has been alleviated to some extent by its temporal limitation to the period of four years from 1994 to 1997 (both inclusive), and the exception made in relation to the operation of particular cinema sites, but the same is still oppressive, irrespective of confinement of the documents requested within the “high level” limits postulated by the Cinema Respondents, as Mr Leggo’s affidavit has demonstrated. The generality of the expression “assessment… of the difficulties experienced or likely or possibly to be experienced by [Reading] or other exhibitors” is inherently vague and unspecific in the extreme, such as to be oppressive in character. Moreover Reading must surely be the party best placed to specify the difficulties to be encountered in the Australian market as to barriers to entry, or is at least well placed so to do. As Sackville J observed in BT Australasia at 13, “It is material, in my opinion, to take account of… circumstances… where the party seeking discovery can reasonably ascertain the information from other sources available to it”. I would therefore disallow discovery based on category 17, in the absence of the foregoing problems being resolved.
As to category 19, subject to the qualification as to “high level” documents referred to in [49] above, I would have been of the opinion that the same was allowable in favour of Reading, had such category been confined in scope to documents relating to the operation of the Australian cinema industry within the South Brisbane market, and had been otherwise confined to documents recording or referring to the response or proposed response of the relevant respondents to Reading’s entry into that market. I have therefore disallowed discovery based on category 19, but in its present form I must disallow category 19. Reading may choose to take advantage of the liberty to apply which I have granted upon the footing indicated above.
As to categories 21 to 26, the same should be disallowed for the reasons indicated in [47-48] above, irrespective of the need for qualification in any event relating to “high level” documents. I would add that I am unable to understand how communications by any of the Respondents with State Governments concerning town planning controls and approvals could be conceivably more than an exercise in fishing.
In the result, I have disallowed discovery in relation to the categories presently in issue in the proceedings involving the Cinema Respondents. Reading shall have liberty to apply in relation to such discovery categories to such extent as would not be inconsistent with the reasons for the rulings I have made, and which Reading may seek to pursue. If Reading is to take advantage of the liberty to apply, it is important for Reading to pay close attention to the discovery principles introduced on 3 December 1999 by the new Rules and Practice Note which I have earlier extracted. I propose to reserve questions as to the costs of the present applications, since I am unclear as to the extent to which the Cinema Respondents have conceded issues as to other discovery categories which are not the subject of these reasons for judgment, following upon the making of the present applications for further and better discovery. Reading’s written submissions suggest that a substantial number of interrogatories were so conceded.
Discovery issues arising between Reading and AMP and my resolution thereof
The categories in issue between Reading and AMP arise in the context of Reading’s joinder of AMP to the proceedings against the Cinema Respondents pursuant to s 75B of the Act (see again [10] above). AMP has conceded entitlement to discovery in respect of eight categories, leaving the following numbered 3, 4, 5, 7 and 9 in dispute. The text of the same are set out below:
“3.Documents recording or referring to any discussion or communication with the Hoyts Group of companies or any representative thereof relating to the location of cinemas in the South Brisbane market in the Period.
4.Documents disclosing the terms and conditions upon which the First and/or Second and/or Third Respondents obtained access to the supply of first run films from distributors.
5.Documents recording the assessments of the importance, if any, to exhibitions of the supply of first run films in the provision of cinema services.
6.Documents recording or referring to the Fourth and/or Fifth Respondents knowledge of the difficulties experienced by the Applicant or other exhibitors in establishing cinemas in Australia.
7.Documents recording or referring, in relation to the provision of cinema services in Australia, the extent of the First, Second and/or Third Respondents’:
…
(g)alliances or strategic relationships with their suppliers or other providers of entertainment services;
…
9.Documents recording or referring to proposals by the Applicant or the First Respondent to the Fourth or Fifth Respondents for the development of a cinema complex at Pacific Fair Shopping Centre in Queensland in the Period.”
As in the case of the documentary categories the subject of Reading’s discovery requests addressed to the Cinema Respondents, the same adopt the identical comprehensive definition of “documents” (see [18] above). Moreover “the Period” referred to in both categories 3 and 9 is the same as that required of certain of the discovery categories proposed to the Cinema Respondents, namely 1994 to 1997 (both inclusive).
As to category 3, the convenient course is to reproduce the written submissions of AMP:
“6.The statement of claim does not plead any allegation that there exists or existed any form of agreement, arrangement or understanding between Hoyts, GU and Village regarding territorial separation. As we understand it, the applicant goes no further than alleging (in its particulars) that territorial separation exists as a matter of fact, and from this state of affairs it draws the conclusion that Hoyts would not enter the South Brisbane market in competition with GU/Village.
7.The fact or otherwise that territorial separation exists is capable of being proved by looking at where cinemas are physically located. Assuming it to be the state of affairs, it is then a simple question for the Court to determine whether one can draw an inference as the applicant has done, that Hoyts would not compete in the South Brisbane market.
8.Absent the allegation of an agreement, arrangement or understanding, there is no basis for embarking upon an inquiry as to Hoyts’ actions or motivations in relation to the South Brisbane market. No evidence relevant to this has been put forward by the applicant. The applicant’s evidence in relation to the allegation of territorial separation does no more than assert that it exists. The applicant does point to paragraph 16 of the affidavit of James Cotter, presumably as evidence of Hoyts’ involvement in some unpleaded arrangement with the respondents. This paragraph contains an entirely hearsay recital of a conversation between two third persons.
9.It is simply apparent from the correspondence between the parties that the applicant believes there to exist an arrangement between Hoyts on the one hand and GU and Village on the other in relation to territorial separation. The applicant has not been prepared to plead this allegation and has no evidence to support it. This discovery request is designed to find out whether there is any such evidence. It falls squarely within the definition of fishing….”
The reference made to Hoyts in the Particulars set out in the S/C, to which AMP refers, is that which I have recounted in [11(i)] above. The documents propounded by category 3 do not relate to an issue in the proceeding, essentially for the reasons advanced by AMP, and in particular, do not relate to what is pleaded by Reading as to AMP becoming knowingly concerned in the infringements by the Cinema Respondents of s 46 of the Act (see again [8-10] above). I would therefore disallow category 3.

As to categories 4, 5 and 7, AMP has submitted that the same are directed solely to the general issue of definition of the barriers to entry into the South Brisbane market for the purposes of the alleged infringement of s 46 by the Cinema Respondents, in relation to which AMP is said to have been knowingly concerned, and that it has not pleaded that AMP had substantial market power in relation to the Australian cinema industry, or that it took advantage of that power, or that it had a proscribed purpose. AMP’s alleged “knowing concern” is particularised as constituted by the following conduct on its part:
“(a)Issuance by AMP of the expression of interest outline referred to in the particulars given in respect of paragraph 11(b)(i)(C) above;
(b)The AMP Board Approval;
(c)The entering into of the Lease by AMP and Perpetual pursuant to the said Board Approval.”
I have difficulty in comprehending how such conduct on the part of AMP, without more, can fulfil the description of its alleged knowing concern in that conduct of the Cinema Respondents said to constitute infringement of s 46, but in any event, the documents the subject of categories 4, 5 and 7 have no apparent bearing upon any such alleged conduct on the part of AMP. I would therefore disallow categories 4, 5 and 7.
As to category 9, AMP repeats the substance of its responses to categories 4, 5 and 7, which I consider to be sound in relation to this category as well. I would refuse an order for discovery in relation to the same. I should add that in relation to categories 4, 5, 7 and 9 generally, AMP has invited Reading to subpoena the documents the subject thereof if it still wishes to access the same, and thus become obliged to bear AMP’s costs of its search for and production of the same. In the circumstances I consider such stance on the AMP’s part to be a reasonable one to adopt, which has the consequence that if that course was to be undertaken, Reading would not be susceptible to an allegation of abuse of process, as to which see again Finn J in South Sydney District Rugby League Football Club Ltd at [2] of his judgment.
In the result, I have also disallowed discovery in relation to the categories presently in issue in the proceedings involving AMP. I will take the same course as to costs as that adopted in relation to the Cinema Respondents in [54] above.
Generally
The preparation of these reasons for judgment has been complicated by reason of the dialogue that very properly took place between the parties subsequent to the commencement of the subject interlocutory proceedings, and thereafter over the course of more than the five weeks which spanned the three afternoon hearings that occurred. It is possible that I have not taken account of some concession, compromise or change in position that might have occurred over that period of time, bearing in mind the number of such instances to which I have already made reference. Accordingly, there should be liberty to apply generally, in case there is something further required to be the subject of adjudication.

I certify that the preceding six-two (62) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti.
Associate:
Dated: 11 December 2001

Counsel for the Applicant: Mr P Biscoe QC and Mr K Odgers

Solicitor for the Applicant: Maurice Blackburn Cashman

Counsel for the First, Second, Third, Sixth and Seventh Respondents: Mr J Lockhart

Solicitor for the First, Third and Seventh Respondents: Lane & Lane

Solicitor for the Second and Sixth Respondents Freehills

Counsel for the Fourth and Fifth Respondents Mr F Kunc

Solicitor for the Fourth and Fifth Respondents Gadens Lawyers

Date of Hearing: 7 September, 21 August and 31 August 2001

Date of Judgment: 11 December 2001

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 326 OF 1997

BETWEEN:	READING ENTERTAINMENT AUSTRALIA PTY LTD APPLICANT
AND:	BIRCH CARROLL & COYLE LIMITED FIRST RESPONDENT VILLAGE ROADSHOW EXHIBITION PTY LTD SECOND RESPONDENT PACIFIC CINEMAS (GARDEN CITY) PTY LTD THIRD RESPONDENT AMP LIFE LIMITED (ACN 079 300 379) FOURTH RESPONDENT AMP HENDERSON GLOBAL INVESTORS LIMITED (ACN 001 777 591) FIFTH RESPONDENT VILLAGE ROADSHOW LIMITED (ACN 010 672 054) SIXTH RESPONDENT PACIFIC CINEMAS (LOGANHOLME) PTY LTD (ACN 010 854 298) SEVENTH RESPONDENT
JUDGE:	CONTI
DATE OF ORDER:	11 DECEMBER 2001
WHERE MADE:	SYDNEY

JUDGE:	CONTI
DATE:	11 DECEMBER 2001
PLACE:	SYDNEY

Counsel for the Applicant:	Mr P Biscoe QC and Mr K Odgers
Solicitor for the Applicant:	Maurice Blackburn Cashman
Counsel for the First, Second, Third, Sixth and Seventh Respondents:	Mr J Lockhart
Solicitor for the First, Third and Seventh Respondents:	Lane & Lane
Solicitor for the Second and Sixth Respondents	Freehills
Counsel for the Fourth and Fifth Respondents	Mr F Kunc
Solicitor for the Fourth and Fifth Respondents	Gadens Lawyers
Date of Hearing:	7 September, 21 August and 31 August 2001
Date of Judgment:	11 December 2001