Idoport Pty Limited and Anor v National Australia Bank Limited and 8 Ors; Idoport Pty Ltd and Market Holdings Pty Ltd v Donald Robert Argus; Idoport Pty Limited "JMG" v National Australia Bank Limited [31] [2001] NSWSC 660 (7 August 2001)

Last Updated: 19 June 2002

NEW SOUTH WALES SUPREME COURT

CITATION: Idoport Pty Limited & Anor v National Australia Bank Limited & 8 Ors; Idoport Pty Ltd & Market Holdings Pty Ltd v Donald Robert Argus; Idoport Pty Limited "JMG" v National Australia Bank Limited [31] [2001] NSWSC 660 revised - 30/08/2001



CURRENT JURISDICTION:

FILE NUMBER(S): 50113/98
50026/99
3991/00

HEARING DATE{S): 31/07/01

JUDGMENT DATE: 07/08/2001

PARTIES:
Idoport Pty Limited (Plaintiff)
Market Holdings Pty Limited (Plaintiff)
National Australia Bank Limited (Defendant)
Donald Robert Argus (Defendant)

JUDGMENT OF: Einstein J

LOWER COURT JURISDICTION: Not Applicable

LOWER COURT FILE NUMBER(S): Not Applicable

LOWER COURT JUDICIAL OFFICER: Not Applicable

COUNSEL:
Mr M Dicker (Plaintiff)
Mr H Insall (Defendant)

SOLICITORS:
Withnell Hetherington (Plaintiff)
Freehills (Defendant)


CATCHWORDS:
Practice and Procedure
Additional Discovery

ACTS CITED:


DECISION:
Short minutes to be brought in providing for additional discovery as sought by Idoport Pty Limited by Notice of Motion filed 15 June 2001 subject to exclusion of sub-paragraph xvii of annexure.


JUDGMENT:

INDEX

JUDGMENT - on plaintiffs’ notice to produce 1
The Notice of Motion 1
History of Orders for Discovery 3
Overview of submissions 6
Relevance to facts in issue in the proceedings 8
The limitations built into the drafting of the notice to produce and the categories of discovery 8
The specified persons 10
Dealing with the motions 15

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

EINSTEIN J

7 August 2001

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

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

3991/00 IDOPORT PTY LIMITED (“JMG”) v NATIONAL AUSTRALIA BANK LIMITED

JUDGMENT - on plaintiffs’ notice to produce
The Notice of Motion
1 There are before the court two related notices of motion. The motions deal with an attempt by the plaintiffs to obtain access to documents of the defendants either by the route of a notice to produce or by orders for discovery.

2 By notice to produce dated 31 May 2001 the plaintiffs sought production of a large number of documents. A copy of the notice to produce is annexed to this judgment.

3 The defendants object to production and by notice of motion filed on the 6th June 2001 seek an order setting aside the notice to produce and seek costs on an indemnity basis. That notice of motion is supported by affidavits made by Mr Lovell sworn 14 August 2000 and 7 June 2001. Mr Lovell deposes that in order to be able to comply with the notice to produce, it would be necessary to review all of the documents obtained from each of the 28 persons referred to in the notice and to determine whether each document was sent from, to or between, any or all of those persons; whether those documents refer to any of the 21 matters listed in the notice to produce; whether such documents have been produced on discovery and whether or not they relate to an issue in the proceedings. [Affidavit 7 June 2001 paragraph 4]

4 Mr Lovell deposes that from his knowledge of the defendants’ discovery and of the amount of documents reviewed in the process of giving discovery, this would be a very substantial task particularly in the context of:

· the scope of the notice to produce,

· the need for the defendants to continue to prepare for the cross-examination of the plaintiffs witnesses,

· the work required to be done as a result of the amendments to the plaintiffs’ statement of claim.
[Affidavit 7 June 2001 paragraph 5]

5 Mr Lovell has deposed that from his knowledge of the discovery categories, the defendants’ discovery and of the documents reviewed, it is his belief that there would be a great deal of duplication between the documents falling within the notice to produce and the documents discovered by the defendants. He has also deposed that from his knowledge of the defendants’ discovery and the documents reviewed, there is likely to be, in respect of category xvii, a large number of documents that will need to be reviewed to determine whether a claim for legal professional privilege should be made, including, for instance, draft statements and correspondence relating to the draft statements. [Affidavit 7 June 2001 paragraph 7]

6 The second notice of motion is filed for Idoport Pty Ltd on 15 June 2001. It seeks orders pursuant to part 23.3 (1), that the defendants file and serve a list of documents of discovery falling within the categories of documents referred to in annexure "A" to the notice of motion within 21 days. That annexure is identical to the schedule to the notice to produce of 31 May 2001.

7 Submissions have been addressed to the Court in writing and from the bar table.

History of Orders for Discovery

8 The matters the subject of submissions have dealt very closely with the history of the proceedings in respect of orders dealing with discovery by the parties. The orders of 28 May 99 were consensual and provided for the plaintiffs to give general discovery and for the defendants to give discovery in accordance with agreed categories of documents. In due course that regime was followed. On the evidence on one occasion the defendants, by Freehill's letter dated 14 August 2000, unilaterally extended the categories of documents to be the subject of the defendants discovery. The letter advised:

"We attach a list of the classes of documents we propose to discover which fall outside the current categories of discovery and confirm that all documents falling within the categories attached will be discovered.
These categories are now relevant given the matters raised in the plaintiffs: opening and in statements filed on behalf of the plaintiffs, including the statement of Mr Brian Martin of 27 June 2000, so-called dealers statements filed on behalf of the plaintiffs and the statement in reply of Mr Maconochie, in particular the first statement in reply on post contractual issues (No 3) dated 30 June 2000"
9 The enclosed document entitled "Additional Categories Documents to be Discovered by the Defendants (to the extent that discovery has not previously been given in existing categories)” then indicated the following as the additional categories:

“1. Hard copy documents relating to the relationship between Ausmaq Limited and Australian Market Automated (Ausmaq) System Limited (“Ausmaq System”) and Market Holdings Pty Limited on the one hand and AIDC in the period to 6 November 1996.

2. Hard copy documents recording or relating to any dealing between Ausmaq System and fund managers or dealer groups in relation to the Ausmaq Service in the period to 31 December 1998.

3. Hard copies of Ausmaq System Dealer Support and Training Weekly reports for the period 1 January 1996 to 31 December 1998.

4. Hard copies of Ausmaq System Operations and Activity Reports for the period 1 January 1996 to 31 December 1998 (to ensure that one complete set has been discovered).

5. Hard copies of monthly Ausmaq Trading Reports for the period 1 January 1996 to 31 December 1998 (to ensure that one complete set has been discovered).

6. Hard copies of Ausmaq Live Produce Lists for the period 1 January 1996 to 31 December 1998 (to ensure that one complete set has been discovered).

7. Hard copies of all System Change Requests relating to the Ausmaq Service, regardless of when written and whether or not they are current (to ensure that one complete set has been discovered).”

10 It is common ground that the original agreed categories for discovery were formulated following a sequence of correspondence between the parties. The close wording of the original agreed categories suggests a very careful consideration by each of the parties in relation to the ambit of the defendants’ discovery by category.

11 By letter dated 13 May 1999 the defendants’ solicitors wrote to the plaintiffs’ solicitors stating:

"As agreed in our conference, notices to produce our not to be used to circumvent the agreed categories and thereby to enlarge the scope of discovery. We put you on notice that if you seek to enlarge the categories of documents by use of notices to produce, we will object"
12 In the course of his submissions before the court on the current motions Mr Dicker indicated that the plaintiffs had not, and as I understand him, ever agreed with the proposition that was put in the defendants solicitors letter as set out in the previous paragraph to this judgment [transcript 11665]. Hence Mr Dicker submitted that there was no agreement on an important matter which lay behind the making of the orders, so that the issue might well arise for determination in the future. It has now arisen.

13 In late September 1999 and in late October 1999 the court dealt with a further amended notice of motion filed by the plaintiffs on 25 October 1999 seeking that the defendants be ordered to give further discovery. The judgment in relation to that motion was delivered on 28 October 1999 ([1999] NSWSC 1026).

14 Amongst the claims for discovery which the plaintiffs pursued on that occasion was a claim to an order that the defendants give discovery of the documents referred to in paragraph 4.1.4 of either of the two schedules to the motion. Those paragraphs which were in the same terms read as follows:

"Files and documents of the 46 persons named in the letters of [the plaintiffs’ solicitors] to [the defendants’ solicitors] dated 25 March and 4 May 1999 and within the categories agreed and/or ordered for the defendants discovery"
15 The judgment of 28 October 1999 held that there was no substance in so much of the application as sought this order and held that the application was effectively an impermissible mode of interrogation. Applications to administer interrogatories could not be achieved by this indirect route.

Overview of submissions

16 Mr Insall who argued the motions for the defendants submitted that the current claim by the plaintiffs (whether viewed as requiring production of documents on notice to produce or as a claim put in the alternative for further discovery), bears an uncanny resemblance to the application which was unsuccessful before the court on 28 October 1999. The defendants make the point that the defendants having sought leave to appeal from that judgment on a non-related aspect, the plaintiffs did not seek leave to appeal in respect of the ruling on paragraph 4.1.4 of the schedules to the motion by filing a notice of contention.

17 Mr Insall therefore submits that the plaintiffs having acceded to the discovery regime which has been followed, have not shown any case in support of the proposition that the regime has failed to pick up or deal with new issues in the sense that the identified discovery categories could now be said to be sufficiently outdated to require the defendants discovery obligations to the reviewed afresh. The burden of the defendants submissions was that absent a fairly compelling and obvious substantive reason, the court should oblige the parties to honour the arrangements and agreements as to discovery set in place with care and followed with care. The submission was that no such compelling or obvious substantive reason had been shown by the plaintiffs.

18 A summary of the defendant submissions was that the plaintiffs application to obtain the documents by the notice to produce route or by the discovery route should be dismissed as seeking to re-agitate matters of principle the subject of the judgment of 28 October 1999; the plaintiffs have not demonstrated the need for the further discovery sought; the plaintiffs have not discharged the evidentiary onus for seeking further discovery; the categories of discovery sought are otherwise deficient; the plaintiffs application is contrary to the parties prior agreement and the plaintiffs application is oppressive in its scope.

19 The approach of the plaintiffs on the motions was generally to submit that in light of the way in which the hearing had progressed it could now be seen that the agreed categories for the defendants discovery were capable of more than one interpretation; that for this and other reasons the defendants discovery albeit voluminous, may very well have omitted relevant documents; that the proceedings had moved on in many ways since the date when over two years ago the agreed categories regime was ordered; that the defendants had conceded that there was no difficulty in terms of the defendants resources in being able to the deal with an order for production of the further documents sought, whether by discovery or by notice to produce; and that there was an essential unfairness which reposed in the simple fact that whilst the plaintiffs were obliged to give general discovery, the defendants were obliged only to give discovery by category.

20 To the extent that the defendants have submitted that the plaintiffs are seeking by a backdoor route to challenge the defendants discovery and have not been able to approach any such challenge directly because there is no evidence to suggest that the defendants discovery is incomplete, the plaintiffs submit that whilst such a point may have had substance had the defendants given general discovery, the point falls away when one realises that at a practical level it is clear that there are obviously grave hurdles in the path of the plaintiffs in seeking to challenge the defendants discovery because, by definition, the plaintiffs do not know exactly what interpretation the defendants have given to the discovery categories and do not and cannot know what are the documents which may not have been discovered. The plaintiffs refer in this regard to instances which they submit suggest that discovery has apparently been limited by the defendants through an apparent narrow reading of the existing discovery categories [plaintiffs submissions MFIP 218 at paragraphs 25-27]. I accept however that the plaintiffs would be necessarily in an extraordinarily difficult position in being able to give concrete examples of an approach to the proper construction of the discovery categories which must necessarily be private to the defendants.

21 The plaintiffs further rely upon the defendants unilateral addition of the further categories of discovery already mentioned and submit that there is a clear unfairness where the defendants may for forensic reasons at their whim, pick and choose new categories for discovery, acting altogether outside of any attempt at achieving a consensual expansion of the existing categories of discovery.

Relevance to facts in issue in the proceedings
22 In my view, relevance to the facts in issue in the proceedings is established in respect of the documents sought by both the notice to produce and the discovery categories ["the documents sought"]. I note in this regard that in relation to the notice to produce, Note (4) expressly states that no document need be produced if it is not relevant to a fact in issue within Part 23 rule 1 (d) of the Rules. A similar note (3) appears in the Schedule to the plaintiffs’ notice of motion in respect to the documents sought to be discovered by the defendants.

The limitations built into the drafting of the notice to produce and the categories of discovery
23 Both the notice to produce and the categories of discovery have clearly been a carefully drafted and contain a number inherent limitations. As conveniently summarised in the plaintiffs’ written submissions, these are:

“(a) limitation as to time: the Schedules to both the notice to produce and the discovery categories are limited to any e-mail, voice-mail recording, letter, file note, memorandum, note or meeting note dated or created in the period 1 July 1996 to date. Accordingly, unlike, for example, the IBS notice to produce recently determined by the Court, the Plaintiffs have limited the obligation to produce documents to documents from 1 July 1996 to date being the central period of time in issue in these proceedings. The Plaintiffs have not cast the scope of the documents sought to documents outside the central time in issue;
(b) express statement of the names of senders or recipients of documents: the Schedules only seek documents from, to or between any one or more of 28 stated persons or any combination of them. Further, the Schedules are limited only to documents, which on their face state that one, or more of the 28 persons listed was a sender or recipient of such documents. This provides a clear and objective reference point for the Defendants to search for the documents requested. It also means that the Defendants do not have to make inquiries as to whether documents were sent to any one of the 28 named persons or not as the documents must on their face state that one or more of the 28 persons was either a sender or recipient of the documents. Accordingly, the Schedules could not be regarded as interrogatories;
(c) limitation as to subject matter: first, the document must satisfy the date requirement in order for it to be produced or discovered; secondly, it must be sent from, to or between any one or more of the 28 stated persons; thirdly, it must fall within the description of the document set out in the first two lines of the Schedule; fourthly, and only if it gets over those initial hurdles, the document need only be produced or discovered if it refers to any one or more of the matters referred to in (i) to (xxi). This provides a clear objective basis for the reviewer to identify whether the document must be produced or discovered. Then and only then must the document be produced or discovered if it is relevant to a fact in issue. I note also the limitation in the notice to produce that no document need be produced if it has already been discovered by the Defendants or any one of them in the proceedings. The above restrictions provide a very close limitation on the documents which must be produced or discovered. They also provide concrete assistance to the reviewer.”

24 In my view these limitations provide significant protection to the defendants and a significant limitation as to what is to be produced or discovered.

The specified persons
25 The notice to produce and the discovery categories referred to 28 specified persons. A description of these persons and of their general connection with these proceedings is set out in annexure Q to the affidavit of Mr Hetherington made for the plaintiffs on 14 June 2001. That schedule read as follows:

“(a) Mr Glenn L L Barnes – Fifth Defendant in the proceedings; has signed statements in the proceedings dated 27 and 29 March 2000 which have been filed for the Defendants.
(b) Mr Francis Cicutto – Sixth Defendant in the proceedings; Managing Director and Chief Executive Officer of the First Defendant, National Australia Bank Limited; has signed statement dated 26 March 2000 which has been filed for the Defendants in the proceedings.
(c) Mr David Krasnostein – Seventh Defendant; Group Legal Counsel for the National Australia Bank, has filed statements for the Defendants in the proceedings.
(d) Mr Kevin Courtney – Eight Defendant; has filed statements for the Defendants in the proceedings.
(e) Mr Russell A McKimm – Ninth Defendant; has filed statements for the Defendants in the proceedings.
(f) Mr Donald Argus – formerly Managing Director and Chief Executive Officer of the First Defendant, National Australia Bank Limited, Defendant in proceedings no. 50026 of 1999.
(g) Mr Simon Moore – employee of the First Defendant; one of the persons who with Mr McKinnon met with Mr Maconochie in the pre-contractual period; has filed statements for the Defendants in the proceedings.
(h) Mr Richard McKimm – employee of the First Defendant; with Mr Moore met with Mr Maconochie in the pre-contractual period; has filed statements for the Defendants in the proceedings.
(i) Mr Trevor Matthews – met with Mr Christopher Campbell pre-contractually; was involved in the pre-contractual events; has filed statements for the Defendants in the proceedings;
(j) Ms Elizabeth Lomas – Managing Director of NAFM since 11 October 1999; has filed statements on behalf of the Defendants in the proceedings;
(k) Mr John Spence – former Managing Director of NAFM from April 1996 to December 1996; General Manager of Premium Financial Services division of NAB; has filed a statement for the Defendants in these proceedings;
(m) Mr Clifford Breeze – former Chairman of Directors of NMG and Ausmaq Systems; former senior employee of the First Defendant; has filed statements for the Defendants in these proceedings;
(n) Mr Peter Crutchley – former Chief Operating Officer of Ausmaq Systems; has filed a statement for the Defendants in these proceedings;
(o) Mr Roger Meikle – former Chief Operating Officer of Ausmaq Systems; has not filed a statement for either party in the proceedings;
(p) Mr Graham Nelson – a JMG Consultant under the Consulting Agreement; has not filed a statement for any party in the proceedings;
(q) Mr Peter Flavel – from October 1998 was employed as General Manager of Global Premium and Private Financial Services division of NAB from December 1996 to October 1998 was General Manager of NAFM; has filed a statement for the Defendants in these proceedings;
[I interpolate to note that Mr Flavel was in fact the managing director of NAFM – MFI P216 page 7]
(r) Mr Roland Matrenza – Group General Manager, Group Strategic Development of NAB (see pages 1, 2 and 4 of MFI P7A); has not filed a statement in these proceedings;
(s) Mr Mark Rayner – Chairman of Directors of the First Defendant (see annexure “G” which is a copy of an extract form the 2001 annual report of the First Defendant);
(t) Mr Ross Pinney – spokesman for the Defendants in these proceedings (see annexure “H” which are NAB press releases referring to Mr Pinney);
(u) Ms Tanya Cox – Chief Financial Officer of NMG, Ausmaq Systems and Ausmaq NZ. Also head of Corporate Services of Ausmaq Systems; has filed a statement for the Defendants in these proceedings;
(v) Mr G Purcell – joint author of the February 1998 IT Review; Head of IT at Ausmaq Systems; has filed statements for the Defendants in these proceedings;
(w) Mr V Berne – Head of Premium Financial Planning for NAB; has filed a statement for the Defendants in these proceedings;
(x) Mr G Einsiedel – from April 1997 to April 1998 was Head of Strategy and Finance (affiliate companies) of NAB; was involved in June 1998 Strategy Review of Ausmaq; has filed a statement for the Defendant in these proceedings;
(y) Mr R Memory – employee of NAB; was involved in review of Ausmaq in pre-contractual period; has filed a statement for the Defendant in these proceedings;
(z) Mr D Pozzobon – author with Mr Purcell of IT Strategy Review; has filed a statement for the Defendants in these proceedings;
(aa) Mr J Salamito – from April 1997 to May 1999 was Head of Group Re-Engineering (Europe) and Group Manager (Product Specialist & Implementation) of the First Defendant; involved in the June 1998 Ausmaq Strategy Review; has filed a statement for the Defendants in these proceedings;
(bb) Mr T Wakeling – Deputy Chief Executive Officer of County Investment Management Limited from October 1997; was involved in the June 1998 Ausmaq Strategy Review; has filed a statement for the Defendants in these proceedings;
(cc) Mr J Begg – Manager, Strategic Analysis, Group Strategic Development of NAB from November 1996 to May 1999; has filed a statement for the Defendants in these proceedings.”
[I interpolate to note that Messrs. Lomas, Spence, Cox, Purcell and Wakeling are no longer employees of corporate defendants – MFI P216 page7]

26 The persons listed in (a) to (h) are all parties to the proceedings either as defendants or as cross defendants to the second cross-claim. Mr Argus is a defendant to the separate proceedings relating to him. In relation to the persons in categories (i) to (cc), all of the persons except Mr Meikle, Mr Nelson, Mr Matrenza, Mr Rayner and Mr Pinney have filed statements for the defendants in the proceedings. Accordingly I accept that it is highly likely that they would have been the sender or recipient of documents relevant to issues in dispute in the proceedings:

27 In relation to Mr Meikle, he was the Chief Operating Officer of Ausmaq Systems after Mr Crutchley and, from the Court’s review of documents in the trial so far, it is arguably clear that he had a central role in the issues in dispute in the proceedings. Mr Nelson was a JMG consultant but was then apparently retained by Ausmaq Systems. He similarly has been involved in issues in the proceedings both in relation to the pre- and post-contractual periods. Mr Roland Matrenza at all relevant times was the Group General Manager, Group Strategic Development, of NAB. He was the senior officer to Mr McKinnon and Mr Moore who were in the Group Strategic Development department of NAB. Because of that connection with Mr McKinnon and Mr Moore and his seniority there is a real likelihood that he has documents which are relevant to issues in dispute in the proceedings.

28 Mr Rayner is the Chairman of Directors of NAB. See Mr Hetherington’s affidavit pages 65 and 70. It is assumed that he would have been consulted in relation to issues which arose concerning these proceedings and would be likely to have sent or received documents relevant to the proceedings. He was also a director of the NAB at the time the Ausmaq acquisition was approved: see MFI P7C at page 322. Mr Ross Pinney has been the spokesman for the Defendants in relation to these proceedings. See pages 71-74 of Mr Hetherington’s affidavit which are NAB press releases referring to Mr Pinney speaking on behalf of NAB in relation to these proceedings. It is highly likely that there would be documents in which Mr Pinney is the sender or recipient which are relevant to issues in dispute in these proceedings.”

29 Accordingly as it seems to me there is substance in the plaintiffs’ submissions that all of the persons referred to in annexure Q to Mr Hetherington's affidavit have a close connection to the issues in dispute in the proceedings.

30 I further accept as of substance the plaintiffs’ submissions that in relation to Messrs Rayner and Pinney, it is likely that they would have documents which are relevant to the views, which the defendants may have, as to the proper construction of the Consulting Agreement or the liability of the defendants in those proceedings.

31 I accept that the plaintiffs have been careful in preparing the description of documents sought in an attempt only to concentrate on those persons who are in the relevant period from 1 July 1996 to date, of central importance to the issues in dispute in the proceedings.

Dealing with the motions
32 I do not see that the reasoning in paragraph 6 of the judgment of 28 October 1999 puts the plaintiffs out of court in terms of the approach now sought to be taken by the plaintiffs. The court has a general discretion to revisit discovery from time to time and here again matters have moved on considerably in the 20 months since the judgment was delivered. The earlier judgment was interlocutory. The previous approach was by reference to an attempt to require the defendants by producing "files and documents of the 46 [named] persons” to seek to identify what those files and documents were. It goes without saying that the files of a particular person may include all manner of documents emanating from others and perhaps received by the person in whose files the document is found without an explanation as to from whom the document was received. The schedule is limited to documents which on their face show that the communication was sent or received by one or more of the named persons.

33 In his affidavit of 14 August 2000, Mr Lovell goes into considerable detail in terms of explaining the approach of the defendants to the very voluminous discovery which the defendants have given. It is unnecessary to repeat paragraphs 24 and following save to note the apparent care and attention to proper method which the defendants and their solicitors have obviously taken in terms of the task of complying with the onerous discovery obligations imposed upon parties and their legal advisers. Whilst there is not any evidence before the court as to the precise way in which the defendants have, no doubt both to enable the orderly presentation of their cases as well as for forensic purposes, attended to keeping some paper/electronic form of record of the discovered documents, it is permissible it seems to me to proceed upon the basis, bearing in mind the nature of the proceedings and the volume of the discovery, that special care is likely to have been taken in that regard. Generally in this regard I note that in the letter from the defendants’ solicitors to the plaintiffs’ solicitors dated 1 May 2001 it was suggested on behalf of the plaintiffs that it was assumed that when the defendants reviewed the defendants documents for the purposes of discovery, all relevant documents were reviewed and properly categorised and numbered. In the responsive letter of 4 June 2001 this was not disputed.

34 In paragraph 52 of the same affidavit Mr Lovell deposes that:

"Since the time of the formulation of the [defendants] categories, the plaintiffs have filed in excess of 50 statements.... Accordingly the defendants in preparing for the defence of the claim now find that the categories of discovery are inadequate to meet the way the plaintiffs’ case is now put in the opening, and to its evidence. Accordingly, by letter dated 14 August 2000 [referring to the letter earlier recited in this judgment], the defendants proposed for the categories of discovery and set out the timing of discovery under these categories..."

35 The plaintiffs make the legitimate point that from time to time the court has permitted the use of notices to produce and has required the production of documents where the parties have been able to persuade the court of the relevance of those documents to issues. A good example of this is to be seen in the judgment of 13 June 2001 [NSWSC 487] dealing with the notice to produce issued by the defendants to Investors Buying Service Pty Ltd. That judgment closely examines the relevant issues and the relevance of the document sought by the notice to produce to those issues. As a general matter the court has not approached the question by reference to whether the discovery route would have been more appropriate than the route of notice to produce - the substantial question being whether the documents should be required to be produced. The 13 June judgment makes the point that whilst the pleadings are of course the central focus when it comes to assessing relevance, it is also from time to time necessary for the statements to be examined carefully when relevance to plead it issues is being assessed.

36 Mr Dicker submits that a material point of distinction in terms of a comparison between the agreed categories of documents the subject of the original order and the identification of the documents now sought to be produced or discovered by the defendants is that the agreed categories of documents previously ordered were essentially by reference to a description of documents which related to categories of documents with subject matter, rather than documents involving individuals. To my mind this is a fair statement of a real distinction between the two approaches. The approach taken by the plaintiffs in terms of seeking the production of documents or the relevant discovery sent by the named persons in respect of the identified categories does seem to fit reasonably neatly into the discovery approach of the defendants outlined in paragraph 2 (d) of the defendant submissions which read as follows:

"(d) The defendants and their solicitors in undertaking their discovery obligations adopted the approach of identifying relevant persons and entities and requested and reviewed hard copy and electronic documents from more than 100 persons..."

37 It seems to me there is substance in the plaintiffs’ submission that the sender/recipient criterion as a basis of document selection does not add a layer of complexity but to the contrary adds a readily identifiable criterion which should without undue difficulty allow the defendants to exclude documents once the hurdle has been passed of identifying documents not already discovered.

38 A further matter at upon which Mr Dicker relied was that the pleadings as at the occasion when the agreed discovery regime was ordered have, for one reason or another including the granting of leave to amend from time to time, changed considerably since that time. It is common ground that the defendants’ amended form of defence to the amended statement of claim is to be served in the next few weeks. Additionally the rollout of voluminous statements by both parties has certainly continued apace over the period between the date of the making of the orders for the agreed discovery regime and the present time. It is common ground that to say that voluminous statements have been served by the parties upon one another on any manner of issues during that bracket of time would be an understatement. And it is common ground that both parties have been on a learning curve in terms of having to appreciate aspects and nuances in respect of how they put their respective cases from statements served by one another. In proceedings of the complexity of the subject proceedings it is difficult to give examples of this but clearly the fact that there has been such a learning curve was expressly adverted to by Mr Lovell in his reference in paragraph 53 of his affidavit of 14 August 2000, to "the way the plaintiffs case is now put in the opening and through its evidence". I accept that the plaintiffs put the manner in precisely the same way in terms of the defendants opening and rollout of evidence.

39 One of the reasons why the plaintiffs opening was as extended as it turned out to be concerns the court's insistence that the plaintiffs statement of claim be tied down so that uncertainties and ambiguities be clarified before the roll-out of evidence. The defendants played a considerable part in the same exercise when the defendants opened their cases also over an extended period of time. Likewise the Court sought to tie the defendants down to identifying the substantive issues where the statement of defence often contained bare denials. The net result was that during the plaintiffs opening and indeed thereafter and during the defendants opening and during the plaintiffs reply, many documents were marked identification being so-called aides to the court by way of explanation of how the plaintiffs in particular put their cases. Some of those documents responded directly to questions put to the plaintiffs by Mr Bathurst QC. Some of those documents responded directly to questions put to the plaintiffs by the court. Ultimately many of the matters specified in the documents marked for identification were formulated by way of amendments to the pleadings. The subsequent exercise in which the amendments to the pleadings were considered involved literally weeks of close examination of particular causes of action and an extended examination of the particulars which had been furnished and were later Consolidated and review and even later complimented. In the result it is fair to say that a narrowing in terms of the understanding of the court of the precise issues took place over an extended period of time resulting in the final form of statement of claim the subject of the court’s very recent order.

40 Against that background it seems to me that in the exercise of the court's discretion it is permissible for the court now to require the defendants to revisit their discovery.

41 As the plaintiffs have submitted the lodestar is the proper administration of justice. The knowledge of senior officers and employees of the defendants is clearly a central issue in terms of the plaintiffs’ case in the proceedings. The work, which would have to be carried out by the defendants in terms of giving the further discovery, must be considered in light of the defendants massive resources devoted to these proceedings. Those resources were referred to in paragraph 30 on pages 37-38 of the court’s judgment of 20 June 2001.

42 I note also that the current version of the plaintiffs’ notice to produce is a narrowed version of the notice to produce first served by the plaintiffs dated 25 May 2001. The narrowing by the plaintiffs’ of the notice to produce followed the defendants’ criticisms in correspondence of the width of the notice to produce. The plaintiffs further invited the defendants to suggest a further narrowing of the notice to produce to cover for the concerns but that invitation was apparently not taken up.

43 In my view the notice to produce served on 31 May is considerably narrower than that served on 25 May. It further seems to me that the plaintiffs’ submission of substance is that the notice to produce served on the later occasion has successfully avoided any argument that the notice amounts to an interrogatory by ensuring that the documents must on their face refer to one or more of the relevant persons as a recipient or sender.

44 The defendants referred to the date when the plaintiff’s application was pursued. Having case managed the proceedings up to this point in time I have been in a position to monitor the requirements of the litigation placed upon both parties. In my view a fair summary of the position is that both parties have had the most enormous burden in endeavouring to deal with one another’s rollout of statements. Focusing for relevant purposes upon the plaintiffs side of the record, I have not been able to discern any period of time during 2000 or 2001 when the plaintiffs have not been under immense pressure in terms of having to cope with sundry aspects of the litigation including aspects going to pleadings, statements, discovery, dealing with the sundry interlocutory applications, preparing to call witnesses and calling those witnesses. The volume of the materials mobilised by both parties itself has to be seen to be believed and in terms of the necessary work required to be carried out by either party, there is no doubt need very often, to travel through innumerable documents in order to work out whether or not to take a particular approach. I do not see in the litigation which is unlikely to be concluded before 2003, the question of the timing of this application for further discovery can be measured in coffee spoons. I accept as of substance the plaintiffs’ submission that as they approach preparation to cross-examine which cross-examination is unlikely to commence before the middle of 2002, the pressing need for the production of these documents becomes more apparent.

45 At the end of the day the question is one of the court's discretion in the circumstances. There are many cases in which the discovery regime first ordered will not be departed from for the simple reason that the efficiency of litigation requires consistency of approach. This is a case in which the defendants, at least to the extent to which I have specifically referred, have seen fit for whatever reasons to extend the discovery categories when this has seemed to either suit their cases or be clearly necessary to deal with matters which they presumably saw as obviously being areas of important discovery which could simply not be omitted. No criticism has been advanced by the plaintiffs to this approach taken by the defendants. But now, bearing in mind the whole of the above described history, the complex nature of the issues raised by the pleadings, the amount of time which has expired since the making of the orders for the ‘discovery by category’ by the defendants, the plaintiffs legitimate interest in understanding how the defendants have construed the agreed discovery by category terminology and very importantly the significance of the individuals identified in the plaintiffs list as well as the safeguards where no documents already discovered require to be discovered again, where privileged documents are excepted and where documents not relevant to facts in issue are excepted, it seems to me that the legitimate interests of the plaintiffs require the court to in the interests of justice to accede to the plaintiffs’ application but only upon the basis that the defendants be given ample time to comply with the need for further discovery. In my view the appropriate procedure ought be to require production by discovery. To my mind the defendants should be permitted to furnish that discovery by the end of the year.

46 I do not however accept that it is appropriate to include subparagraph xvii . The width of this paragraph mandates its deletion.

I certify that paragraphs 1 - 46
are a true copy of the reasons
for judgment herein of the
Hon. Justice Einstein
given on 7 August 2001


___________________
Susan Piggott
Associate
7 August 2001











LAST UPDATED: 11/06/2002