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[2003] FCA 907
Federal Court of Australia
2003-08-29
Gyles J
Original judgment source is linked above.
REASONS FOR JUDGMENT 1 The principal proceeding is by Australian Competition and Consumer Commission ("ACCC") against Qantas Airways Limited ("Qantas") for contravention of s 46 of the Trade Practices Act 1974 (Cth) ("the Act"), and was commenced on 7 May 2002. After various preliminary skirmishes, a second amended statement of claim was filed on 13 February 2003, and a defence was filed on 14 March 2003. A substantial amount of ACCC's evidence has been filed. The first motion is by ACCC for discovery by Qantas of documents under twenty categories, a number of which have sub-categories. It is supported by evidence and by a very useful schedule which cross-references the categories of documents with the relevant pleading and with the evidence given on behalf of Qantas as to the time and resources required to discover particular categories of document. 2 Early in the development of the argument, attention was drawn to O 15 r 3 and r 15 of the Federal Court Rules, to certain authorities relating to those rules (Trade Practices Commission v CC (New South Wales) Pty Ltd (No 4) (1995) 58 FCR 426; Index Group of Companies Pty Ltd v Nolan (2002) FCA 608; and Gray v Associated Book Publishers (Australia) Pty Ltd(in liq)(2002) FCA 1045) and to Federal Court Practice Note 14. The latter, in particular, seems to have been lost sight of over recent years. Counsel for ACCC then took further instructions, and limited the categories of documents to be sought. 3 ACCC then sought leave to serve twenty-one interrogatories for the answer of Qantas, most of which included more than one question, pursuant to O 16 of the Federal Court Rules. This was opposed, and a further hearing ensued. The argument as to interrogatories substantially overlapped with and arose out of the argument relating to discovery. Whilst Practice Note 14 does not in terms relate to interrogatories, they have been regarded as a form of discovery, and that note at least gives guidance as to the approach to be taken to the exercise of discretion pursuant to O 16. 4 The practice of the Court over many years has been to actively manage cases, and the introduction of the docket system has emphasised that approach. Naturally, the degree of supervision varies from case to case. This case is of a size and complexity which demands relatively close management if it is to be brought on for hearing in a timely fashion and then completed in an efficient manner. This involves, amongst other things, the filing of evidence in advance of the hearing. The evidence of witnesses to be called by ACCC has now been filed, and Qantas should be well on the way towards producing its evidence. Experience has shown that this process will bring to the surface most of the documents which are relevant, and will deal with most issues which need to be addressed. In my opinion, the time to take stock of what orders for discovery or interrogatories should be made is generally after the respondent has filed its evidence. There are, however, good reasons to consider these applications now. In the first place, this is not an inter partes dispute arising out of a bilateral transaction, where each party has knowledge of relevant facts. ACCC needs to have access to information in the hands of Qantas. The fact that information has been obtained by ACCC pursuant to s 155 of the Act does not, of itself, necessarily deny the right to discovery or interrogatories although possession of the information which has been so obtained is relevant. In the second place, there is not a long period between the service of the evidence by Qantas and the commencement of the hearing. 5 I propose to approach the applications on the basis that I will order only that discovery or those interrogatories which I am reasonably satisfied would be required in any event, and where I can perceive a substantial likelihood of real benefit to the preparation and presentation of the case without undue duplication or unnecessary diversion of resources by Qantas. I bear in mind that I have indicated that I am prepared to revisit issues of discovery and interrogatories as preparation of the case unfolds. My decisions in relation to these applications will not be based upon any view as to ultimate relevance at the hearing one way or another. 6 This approach involves a balancing exercise which, because of the stage which the case is at, necessarily involves some fairly arbitrary judgments. I have now had the benefit of a substantial argument as to whether the proceeding should be struck out or summarily dismissed (Australian Competition & Consumer Commission v Qantas Airlines Ltd [2003] FCA 125) and two occasions of detailed argument as to discovery and interrogatories, including consideration of a body of affidavit material. Having explained the approach I have adopted, I do not propose to give lengthy reasons for the conclusions to which I have come. To do so is unnecessary and would unreasonably delay delivery of this judgment, taking account of my other commitments.
Category 2 7 I am satisfied that the first part of the category should be produced, on the understanding that what is called for are regular reports which were prepared as a matter of system for the information of senior management, and so are readily retrievable. I am not satisfied that there is sufficient apparent relevance in reports on Qantas' overall Australian domestic route profitability for any month to warrant the cost of production at this stage.
Category 3 8 There will be no order. I am not satisfied that a case has yet been made that the material to which ACCC already has access is inadequate to make any point which might turn out to be open to be made concerning the financial resources of Qantas.
Categories 10, 18 and 19 9 In my opinion, these categories have sufficient apparent relevance to justify discovery, provided that the documents are limited to those created by or for senior management of Qantas appropriately defined.
Category 14(a) 10 I am satisfied that the documents have sufficient apparent relevance to justify discovery.
Category 15 11 This order will be made. I am not satisfied that a case has been made that the documents already in the possession of ACCC within this category are not adequate for relevant purposes, particularly for the whole period called for. Any difficulty which exists concerning masking is to be dealt with between the parties and brought back only if necessary.
Interrogatory 1 12 I am not satisfied that information in this form has sufficient apparent relevance to justify the interrogatory. It is a very indirect way of approaching proof of either adequate aircraft capacity or excess aircraft capacity, which is best handled (if necessary) by appropriately framed notices to admit or interrogatories after the evidence on Qantas' behalf is produced.
Interrogatory 2 13 The topic has sufficient relationship with the pleading to justify the interrogatory.
Interrogatory 3 14 I have dealt with the substance of this in relation to discovery categories 2 and 3. There is no present need for these interrogatories. The time for other questions (if any) will be after discovery and receipt of the Qantas evidence.
Interrogatories 4, 5, 6 and 7 15 These interrogatories relate to topics said to be relevant to prove the existence of market power and are tied back to paragraphs of the amended statement of claim. It is arguable that information of that detail would be relevant on the issue of market power. Except at a very general level, information is not available from any other source. On the other hand, to answer these interrogatories properly would involve a massive exercise. In my opinion, that effort is disproportionate to the benefit to be obtained, and I do not propose to allow the interrogatories as sought, except as a last resort. In my view, the matter is best dealt with by Qantas making a properly framed set of admissions, the form and content of which could no doubt be the subject of discussion between the parties. Quantum and scale in relation to each topic may be of some importance, but the fine detail is unlikely to be of importance. If suitable admissions are not proffered, I will return to the question of discovery and interrogatories in due course. It should not be overlooked in relation to these matters, and others, that interrogatories and discovery can be ordered at any stage of the proceeding, including during or after the cross-examination of witnesses.
Interrogatory 8 16 I am satisfied that the topic is sufficiently relevant to justify the question, but I am not satisfied, at this stage at least, that 8.1 or 8.2 should be asked save for "If yes, state for which competitor airline and on each occasion the amount or quantum of costs assessed or assumed".
Interrogatory 9 17 This purports to be designed to prove an allegation of the negative. In my opinion, 9.1 is justified but nothing more at this stage.
Interrogatory 10 18 In my opinion, if relevant at all to the pleaded case, the relevance of any answer is not sufficient to justify the interrogatory.
Interrogatories 11, 12 and 13 19 These questions amount to detailed cross-examination on documents. It is submitted for Qantas that this is an impermissible form of interrogatory. Whether that is so or not, in my opinion these questions descend to a level of detail which is not necessary at this stage of the case, and may never become necessary.
Interrogatory 14 20 It is objected that this interrogatory involves directing a party to carry out a complex series of calculations upon a basis which is not self-explanatory. In my opinion, that is correct. If reports are in existence which were regularly, and as a matter of system, prepared stating the required information, a different issue would arise and this, perhaps, might be followed up between the parties.
Interrogatory 15 21 I would permit this question on the basis that the answer to 15.2 is limited to general principles and that the answer to neither 15.2 nor 15.3 should exceed half an A4 page.
Interrogatory 16 22 In my opinion, the question is far too broad, imprecise and open-ended, both as to the persons involved and the topics. The subject is best returned to after discovery, receipt of the answsers to other interrogatories and the Qantas evidence.
Interrogatory 17 23 I allow the question, but omitting from 17.2.2 "and, if so, by whom, when and in what manner?"
Interrogatory 18 24 I disallow this interrogatory, at least until after discovery.
Interrogatory 19 25 I would permit 19.1, 19.3 and 19.4, omitting 19.4.1. However, the reference to the belief and intention of Qantas in 19.3 and 19.4 respectively must relate to appropriately senior officers of Qantas.
Interrogatory 20 26 This will be allowed, omitting 20.1, again with 'Qantas' to be understood as appropriately senior officers of Qantas.
Interrogatory 21 27 This question is allowed, again with the qualification that 'Qantas' is to refer to appropriately senior officers of Qantas.
Costs 28 As ACCC has succeeded over blanket opposition by Qantas, costs of these motions will be applicant's costs in the proceeding. 29 ACCC is to bring in short minutes to give effect to these reasons. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.
Counsel for the Applicant: D Yates SC and P Renehan
Solicitor for the Applicant: Australian Government Solicitor
Counsel for the Respondent: AJ Bannon SC, R Wright SC and J Lockhart
Solicitor for the Respondent: Blake Dawson Waldron
Date of Hearing: 15, 16 July, 11 August 2003
Australian Competition and Consumer Commission
Qantas Airways Ltd
(1995) 58 FCR 426