Australian Coal Technology Pty Limited v Schenck Australia Pty Limited [2005] NSWSC 1023 | Case summary

JUDGMENT 1 In proceedings No. 50099/04 a notice of motion filed on 8 September 2005 by the plaintiff seeking an order that the defendant give verified discovery of the categories of documents listed in attachment A to the notice of motion was before the Court this morning being one of approximately 68 matters before the Court in today's Friday Commercial List and Technology and Construction List. 2 When the motion was called the Court was advised that the parties had to a considerable extent, but not completely, been in a position to reach an accommodation as to the discovery categories. 3 Before the proceedings came on today I had an opportunity to go through the court file and to endeavour to understand the issues to be litigated as pleaded. 4 During the morning after relatively brief submissions from the bar table as to the suggested problems with the remaining categories, I made clear what the Court's decision was. I indicated that the suggested oppression by reason of the reach of the discovery claimed could be addressed being essentially a question of costs and time. The matter was stood down for the purpose of counsel endeavouring to produce short minutes of order to record the decision. 5 I have a few moments ago made orders consistently with the document that counsel have propounded, which not only records the matters which had been agreed but also records: · the matters which I determined this morning; · a further limitation to category 24 which I determined when the sort minutes were brought in. 6 It is appropriate to make clear presently that the amended summons which runs for some 31 pages together with a 7 page schedule, upon close examination is seen to raise issues of extraordinary breadth. 7 The nature of the dispute is generally outlined in section A and the issues likely to arise are generally outlined in section B. The current defence to the amended summons is self-explanatory placing most material allegations in issue. The cross claim and defence extend the ambit of factual issues. 8 It is unnecessary to repeat the record. Suffice it to say that the pleaded issues raise wide ranging questions of fact; witness the plaintiff's claims: · to have agreed to supply the defendant with the technology to construct Coal Preparation Plants ["CPP's"]; · to have granted to the defendant the exclusive and non transferable right to market, manufacture and install such Plants in China; · that the defendant breached a contractual obligation to notify the plaintiff of opportunities which it had identified to sell such Plants in China; · that the defendant further breached a contractual obligation preventing it during the contract term from entering into negotiations, dealings or other business arrangements concerning the manufacture or supply of any Coal Preparation Plants in competition with the plants supplied by the plaintiff; · of contractual breaches by way of a failure by the defendant to pay royalties and to notify the plaintiff of all opportunities to sell CPP in China and by reason of the defendant's involvement in the manufacture and supply of Coal Preparation Plants in competition with the CPP's supplied by the plaintiff. 9 The breadth of the plaintiff's contentions, the number of projects relevant to the pleaded issues, the causes of action, the type of issues, the necessity for the plaintiff to make good its case through enumerable documents of the defendants, and the communications between the parties relating to the proposed categories of discovery, seemed and seem to me to justify the proper exercise of the Court's relevant discretion being [subject to the diary proviso] to allow the plaintiff's claimed categories still in dispute: cf Uniform Civil Procedure Rules 2005 Part 21 Rule 21.2 generally repeating the terms of Part 23 of the New South Wales Supreme Court Rules which fell for consideration in National Australian Bank Ltd v Idoport Pty Ltd [2000] NSWCA 8. Part 21 Rule 21.2 (3) is extremely wide in terms of the criteria by which a class of documents may be specified. 10 I take into account: · the overriding purpose rule set out in section 56 of the Civil Procedure Act 2005 ["the Act"], the object of case management set out in section 57 of that Act and in particular the directive that for the purpose of furthering the overriding purpose referred to in section 56.1: "proceedings in any court are to be managed having regard to objects including the just determination of the proceedings, the efficient disposal of the business of the Court, the efficient use of available judicial and administrative resources and the timely disposal of the proceedings at a cost affordable by the parties." · the provisions of section 58 of the Act, sub-section 1(a) requiring that "in deciding whether to make any order or direction for management of proceedings including any order of a procedure nature, the Court must seek to act in accordance with the dictates of justice". · section 58(2) which provides that for the purpose of determining what are the dictates of justice in a particular case, the Court must inter alia not only have regard to the provisions of section 56 and 57 but may also have regard to a number of nominate matters to the extent to which it considers them relevant. [Those matters include the degree of expedition with which the respective parties have approached the proceedings, the degree to which any lack of expedition in approaching proceedings has arisen from circumstances beyond the control of the respective parties and the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction.] 11 I have taken into account my view that the nature and scope of the issues to be litigated as thrown up by the current pleadings are so wide as to mean that although the defendant may be prejudiced in terms of parameters of costs and time [cf the affidavit of Mr Ammer of 4 October 2005], the efficient disposal of the business of the Court made it a proper exercise of the Court's discretion to presently avoid a bifurcated or circumscribed form of discovery and to require, as the Court has, a relatively broad approach to that which has to be discovered, the touchstone being the ascertainment of matters in issue 12 I have taken into account the communications described in the affidavit of Mr Timothy Webster made on 7 September 2005 and the conduct of the defendant described in that affidavit in terms of what I would describe as a most leisurely approach to the issue of the finalisation/determination of agreed categories extending over a number of months, following the giving of directions in late April 2005. 13 This case effectively involves litigation where documents not only situated locally but in very considerable volume situated overseas will be required to be deployed or discovered one way or another. 14 The equitable relief which is sought is wide. The restraining orders which are sought include orders restraining the defendant permanently from promoting, marketing, advertising or selling CPP, using the intellectual property, technology or confidential information of the plaintiff as those terms are defined in the contract. 15 The plaintiff contends that the defendant, in breach of the contract and in breach of equitable duty of confidence, has not returned to the plaintiff all confidential information and other documents provided by the plaintiff to the defendant but has used that confidential information and those documents to submit tenders for CPP. It contends that the defendant in breach of the contract has failed to cease marketing CPP after the termination of the contract, has engaged in conduct in breach of fiduciary duties and has engaged in misleading or deceptive conduct in contravention of section 52 of the Trade Practices Act. 16 Recognition of the fact that the defendant's conduct in and relating to opportunities to sell CPP in China is a principal issue has only to be mentioned to point up the difficulties likely to be involved in terms of the plaintiff's endeavours to obtain a full and complete discovery. The very difficulty of the exercise involving the above described international parameter itself speaks to the efficiency of once and for all closing down, as soon as practicable, the interlocutory discovery processes, where as the court file will makes plain, the proceedings commenced over a year ago. 17 For all of those reasons the orders which have now been made are aimed at ensuring an expeditious approach to the further conduct of the proceedings. Stay Order 18 The defendant has indicated that it seeks an order that the orders made this morning be stayed for the purpose of seeking leave to appeal from those orders insofar as they require discovery of documents within categories 6, 15, 16, 24 and 32. My conventional practice following delivery of a final judgment, as soon as I am informed that there is to be an application for leave to appeal, is to automatically make such a stay order, absent an aberrant circumstance., 19 In this instance even although the Court is dealing with an interlocutory set of directions concerning a case management issue, it seems to me appropriate to order that the discovery orders insofar as the proposed appeal is concerned should be stayed for a limited period.

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Australian Coal Technology Pty Limited v Schenck Australia Pty Limited

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