Supreme Court of WA|2000-11-29|Before: Mr P

Eastland Technology Australia Pty Ltd & Ors v Whisson & Ors [2000] WASC 285 (29 November 2000)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : EASTLAND TECHNOLOGY AUSTRALIA PTY LTD & ORS -v- WHISSON & ORS [2000] WASC 285

BETWEEN : EASTLAND TECHNOLOGY AUSTRALIA PTY LTD (ACN 059 479 391)

INTERCONTINENTAL BUSINESS CORPORATION PTY LTD (ACN 009 194 503)

SILVERFERN NOMINEES PTY LTD (ACN 070 887 722) as Trustee for the PRESTIDGE FAMILY TRUST

Practice and procedure - Production of documents mentioned in affidavits after notice to produce - Whether disk must be produced after hard copy made available - Operation of O 26 r 8(2) of the Rules of the Supreme Court

First Applicant : Mr P I Jooste QC & Mr E J Picton-Warlow

Second Applicant : Mr P I Jooste QC & Mr E J Picton-Warlow

Third Applicant : Mr P I Jooste QC & Mr E J Picton-Warlow

Central News Co v Eastern News Telegraph Co (1884) 53 LJQB 236

Commissioner of Railways v Small (1938) 38 SR NSW 564

Dalecoast Pty Ltd v Monisse [1999] WASCA 103

Dubai Bank Ltd v Galadari (No 2) [1990] 1 WLR 731

Hall v Truman, Hanbury & Co (1885) 29 Ch D 307

Hennessy v Wright (No 2) (1888) 24 QBD 445

Hoad v Nationwide News Ltd (1998) 19 WAR 468

Hughes v Gales (1995) 14 WAR 434

Irvine v The State of Western Australia [1999] WASC 224

Knapp v Harvey [1911] 2 KB 725

Lyons v Kern Konstructions (Townsville) Pty Ltd [1983] FCA 33; (1983) 47 ALR 114

Mobil Oil Australia Ltd v Curtis, unreported; FCt SCt of WA; Library No 6885; 9 October 1987

Parnell v Walter (1890) 24 QBD 441

Purnell Bros Pty Ltd v Transport Engineers Pty Ltd (1984) 73 FLR 160

Quade v Commonwealth Bank of Australia [1991] FCA 26; (1990) 99 ALR 567

Quancorp Pty Ltd v MacDonald [1999] WASCA 101

Quilter v Heatly (1883) 23 Ch D 42

R v Baines [1909] 1 KB 258

Rafidain Bank v Agom Universal Sugar Trading Co Ltd [1987] 1 WLR 1606

Re Excel Finance Corp Ltd (Rec & Mgr appointed) (1993) 113 ALR 543

Re Strachan [1895] 1 Ch 439

Robinson v Budgett & Co (1884) WN 94

Russell-Davison v Prosin, unreported; SCt of WA; Library No 980277; 22 May 1998

Steamship Mutual Underwriting Association Ltd v Trollope & Colls (City) Ltd (1986) 33 BLR 81

Trade Practices Commission v Kimberley Homes Pty Ltd, unreported; Fed Ct of A; 19 July 1989

Trade Practices Commission v International Technology Holdings Pty Ltd (1995) 31 IPR 466

Waind v Hill [1978] 1 NSWLR 372

1 MASTER SANDERSON: This is the return of six interlocutory applications. These applications represent a further instalment of what has become a saga of interlocutory proceedings. Because of the nature of the various applications it is necessary as a starting point to provide a summary of the dispute between the parties. Because of the large number of affidavits that have been filed and the conflicting evidence of the deponents, providing a concise summary that does justice to all parties is difficult. What follows is intended to be no more than an overview of the action generally. It is not appropriate for me at this stage of the proceedings to reach any concluded view on the facts and I have not done so.

2 The first applicant (which I shall refer to as "Eastland") is the holder of certain patents for devices for the administration of drugs and fluids to patients by injection ("the Eastland Devices"). The second and third applicants are shareholders in Eastland. The first respondent is a former director of Eastland and it was he who developed the Eastland Devices. Eastland was established to develop and market the Eastland Devices. The second respondent is a design draftsman. The third respondent, Silverfern Nominees Pty Ltd ("Silverfern"), is a company controlled by the second respondent. Silverfern has provided design drafting services to Eastland from time to time. Dr Martin Mann-Loke Ng ("Ng") is a director of Eastland and of the third applicant. Mr Douglas Arthur Sims ("Sims") is a director of Eastland and the second applicant. Kemayan Oil Palm Berhard ("Kemayan") is a Malaysian company with whom Eastland entered into a joint venture for the purposes of exploiting the Eastland Devices. The joint venture vehicle is Kemayan Eastland Medical Sdn Bhd ("KEM"). There are a number of other companies and individuals who play a greater or lesser part in the narrative, but the individuals I have mentioned above are the important players.

3 Prior to March of 1993 the first respondent, a medical practitioner and consultant haematologist, had developed and patented the Eastland Devices. After discussions with Ng, Eastland was incorporated on 17 March 1993. Soon after the first respondent entered into a number of licence agreements with Eastland which permitted Eastland to develop and commercialise the Eastland Devices. The first respondent became a director of Eastland. It is the first respondent's position that prior to the formation of KEM, his role in Eastland was limited to occasionally advising with respect to the Eastland Devices and his responsibilities as a director. He was not directly concerned with the development and commercialisation of the Eastland Devices.

4 KEM was formed in or about September 1993. Subsequent to the formation of KEM the first respondent assigned ownership of the patents related to the Eastland Devices to Eastland. This assignment of course went further than the original licensing agreement. By then the Eastland Devices were known as Reversyringe. There were a number of other devices associated with the Eastland Devices but for present purposes these can be put to one side. Prior to January 1996 KEM undertook the development and production of the Eastland Devices in Malaysia. Thereafter the operation was moved to Perth. When the KEM operation was moved to Perth the second respondent was engaged to perform certain work for the joint venture. Essentially it was the task of the second respondent to provide detailed drawings for the manufacture of the Reversyringe products. It was not, according to the second respondent, his function to in any way further develop the Eastland Devices. In or about January 1998, Kemayan ceased to provide funding to KEM and the second respondent consequently declined to provide any further services to the joint venture. The second respondent says that although he indicated to KEM and Eastland that he would not undertake any further work on their behalf because accounts for his work remained unpaid, he did in fact provide some assistance to the joint venture throughout 1998 and in November or December 1999. The second respondent says that this work was performed on an ad hoc basis and that he was not paid for the work that he did undertake.

5 In or about September 1998 the first and second respondents developed a system which was designed to prevent needle-stick injuries by persons using syringes. The details of the inventions are not presently relevant. It is referred to by all parties as "the Di-Med Inventions" and that is the nomenclature that I will adopt. To further develop the Di-Med Inventions the first and second respondents formed a partnership which is called Di-Med. Between September 1998 and January 1999 the Di-Med Inventions were the subject of certain patent applications. These patent applications were lodged through Lord & Company, a firm of patent attorneys. In early November 1998 the first respondent says he told the board of Eastland of the Di-Med Inventions and disclosed patent applications had been lodged with respect to them.

6 Although this dispute crystallised and eventually escalated subsequent to November 1998, in reality the battle lines were drawn at that time. The respondents say that the Di-Med Inventions were a new, completely original concept which owed nothing to the Eastland Devices or the Reversyringe. The applicants, on the other hand, say that the Di-Med Inventions grew out of or were developments of the Eastland Devices and Reversyringe. Furthermore, they say that the first respondent as a director of Eastland owed the company fiduciary duties and that by applying for patents in the name of Di-Med and excluding Eastland, the first respondent was breaching those fiduciary duties. As against the second respondent the applicants say that he was relying on their intellectual property in the Eastland Devices and Reversyringe when he developed the Di-Med Inventions. The applicants claim that property in the Di-Med Inventions is theirs. They also accused the first and second respondents of fraud. Without going into detail in relation to this allegation, essentially it is said that the Di-Med Inventions are a direct development of the Eastland Devices, the first and second defendants knew as much when they applied for patents and they intended to deprive Eastland of its proper entitlements.

7 Returning to the narrative, in November 1998 the first respondent arranged a meeting with Dr Bill Ryan ("Dr Ryan") of Heytesbury Holdings ("Heytesbury"). The first respondent thought that Heytesbury might be prepared to fund the development of the Di-Med Inventions. Prior to this meeting the second respondent had produced what he refers to as "a computer PowerPoint presentation" demonstrating the Di-Med Invention (see affidavit of second respondent sworn 21 July 2000, par 90). It was common ground between the parties that the reference to "PowerPoint" is reference to a Microsoft computer programme which allows images to be projected onto a computer screen. For the purpose of the presentation the second respondent used a laptop computer. At the conclusion of the meeting the second respondent says that he left a copy of the PowerPoint presentation on computer disk with Dr Ryan. During the course of the meeting Dr Ryan indicated that Heytesbury was unlikely to invest in the development.

8 By January 1999 it was clear that Sims and perhaps other members of the Eastland board had decided that the Di-Med Inventions were directly derived from the Eastland technology. The tone of the correspondence which passed between the parties at this time makes that plain. I need not detail the negotiations that took place and the position of each of the parties. It is sufficient if I say that in late January 1999 the parties entered into a licence agreement which allowed for development and commercialisation of the Di-Med Inventions by Eastland.

9 In early February 1999 David Capes ("Capes"), from an American corporation known as Becton Dickinson, was in Perth. Becton Dickinson are a medical products firm which would be likely to show interest in syringe technology of the type represented by the Eastland Devices and the Di-Med Inventions. A meeting was arranged between various individuals, including Sims, the first and second respondents and Capes. The second respondent was asked to prepare PowerPoint presentations for this meeting covering both the Eastland Devices and the Di-Med Inventions. That he did. In delivering the PowerPoint presentation the second respondent used computer equipment which was not the property of Eastland. The second respondent explains the position as follows (affidavit of 21 July 2000, par 136):

"I unloaded my computer equipment and set it up in the office, as Eastland did not have any suitable equipment of their own for the presentation. While I was doing this the others continued their conversation with Mr Capes."

10 At the conclusion of the presentations Capes indicated Becton Dickinson might well be interested in the Di-Med Inventions. He did not indicate any particular enthusiasm for the Eastland Devices.

11 By 10 February 1999 it had become apparent that the applicants were not satisfied that the licence agreement had resolved their differences with the respondents. I need not detail the correspondence and meetings which occurred. However, by mid-March Eastland had commenced Supreme Court proceedings against the present respondents (CIV 1333 of 1999). Settlement negotiations followed and the parties signed a settlement agreement on 5 June 1999. Based upon this settlement the Supreme Court proceedings then on foot were discontinued. Regrettably that was not the end of the matter. The parties fell into dispute over the terms of the settlement agreement. For the purposes of these applications it is not necessary for me to detail the respective positions of the parties. What does seem clear is that both sides regard the settlement agreement as at an end. These proceedings were commenced on 3 December 1999. The applicants claim relief under s 232, s 1317HD, s 1317DB, s 1317HE, s 1324 and s 1323 of the Corporations Law.

12 Lest there by any misunderstanding I should repeat again that the facts that I have set out above are taken from the various affidavits filed by the parties. Nothing I have said should be taken to indicate I have accepted the evidence of one party in preference to another. I have attempted as best I can to sift through the affidavit material and outline the facts relevant to these applications. In the course of her reasons when dealing with earlier interlocutory applications, Wheeler J said (Eastland Technology Australia Pty Ltd v Whisson [2000] WASC 134 at par 24):

"I note also in this case that the parties have displayed an almost limitless capacity to misunderstand each other and to disagree even about very simple issues ...".

13 With respect, this seems to me to sum up the position accurately and succinctly. Eventually the disagreements between the parties, both major and minor, will need to be resolved. But that is a matter for trial and this application calls for no determination at all on the facts of the matter.

14 The first application dealt with was by the applicants to set aside the issue of certain subpoenas. In their written submissions the applicants indicated they did not intend to proceed with this application. Accordingly, during the course of the hearing I simply adjourned the application sine die and ordered that the costs of both parties, including the reserved costs, be costs in the cause. I need say nothing more about this matter.

15 The second application was by the applicant seeking to have the respondents produce certain documents. The application was brought under O 26 r 8(2) of the Rules of the Supreme Court. That rule is in the following terms:

"Any party to a cause or matter shall be entitled at any time to serve a notice on any other party in whose pleadings or affidavits reference is made to any document requiring him to produce that document for inspection by the party giving the notice."

16 On 10 August 2000 the applicants filed and served a notice under O 26 r 8(2). The list runs to 13 documents or group of documents. It emerged during the course of argument that what the applicants wanted was not just copies of the documents referred to in the notice to produce; they actually wanted a copy of the computer disk upon which or within which the information was stored.

17 I can best illustrate the nature of the application by referring to a particular example. Document 5 in the list of documents in the notice to produce is described as follows:

"The powerpoint and laptop computer referred to in paragraphs 90 and 97 of the affidavit of Dean Brian Prestidge sworn 21 July 2000".

18 In the context of the application it is important to know precisely what reference is made to various documents in the affidavits. For that reason I will quote par 90 and par 97 of the second respondent's affidavit of 21 July 2000:

"90. During October 1998, I produced a computer PowerPoint presentation to illustrate the new Di-Med invention. This was the first time I had used this medium for presenting a product. I was very pleased with how well it could convey the invention.

97. I then gave the PowerPoint presentation of the Di-Med Inventions. I had brought along a lap top computer for this purpose. The presentation shown was the only presentation we had prepared at that point in time."

19 Both of these two paragraphs are referring to the PowerPoint presentation for the Heytesbury meeting. The respondents have provided to the applicants a hard copy of what was shown at the presentation. That is to say, they have printed out the various graphic images which were prepared by the second respondent and shown during the course of the presentation to Heytesbury. The applicants say this is not enough. What they want is the actual computer file which was used to generate the PowerPoint presentation. It is not clear how and where this information is stored. It may be on a floppy disk and held by the second respondent in his office or elsewhere. It may be in the hard drive on the computer used to prepare the presentation, or on the hard drive of the laptop computer used during the course of the presentation. Obviously there may be more than one copy of the presentation. The copy on the computer used to prepare the presentation may vary slightly from the copy on the laptop used at the presentation. Either way, whether there is only one copy of the presentation or if there are a number, the applicants want the "document" produced.

20 Order 26 r 1A defines for the purpose of O 26 the terms "document" and "inspection". Dealing first with "document" it is said to mean:

(a) any disc, tape, sound-track or other device in which sounds or other means of transmitting data (not being visual images); and

(b) any film, negative, disc, tape or other device in which one or more visual images,

are embodied so as to be capable, with or without the aid of some other device, of being reproduced therefrom."

"in relation to a document which is not in writing or otherwise capable of being understood by visual means alone, includes the right to require the party making discovery to supply a copy of the document in a form in which it is in writing or otherwise capable of being understood by visual means alone."

22 The question for decision then is this: Does O 26 r 8(2) require a party who uses a computer to generate an image to supply a copy of the electronically stored information or is production of the visual image sufficient? The applicants say they are entitled to the electronic information. The respondents for their part say that as they have provided a copy of what is produced from the disk, they have done all that is required of them and they have facilitated inspection of the document.

23 Furthermore, the respondents say that the only reason why the applicants want the disk or the electronically stored information is to subject it to forensic analysis. This, they say, is to make improper use of documents produced under O 26 r 8(2): see Mantaray Pty Ltd v Brookfield Breeding Co Pty Ltd (1992) 1 Qd R 91. For the applicants' part they deny that they intend to conduct any tests of a forensic nature. They say simply that they want the electronic version of the material being a document referred to in an affidavit.

24 During the course of the hearing junior counsel for the applicant sought to provide a technical explanation of what the electronically stored information was and how it could be accessed by the applicants. Counsel for the respondents objected to the submissions on the basis they were no more than evidence from the Bar table as to how computers operated and what access to the information might show. With respect, I think counsel's objection was well taken. There is no evidence from either side as to what is contained in the electronic information or on the disk. It was the applicants' case that the absence of such evidence was of no consequence. They submitted that the words of the rule made it plain they were entitled to the disk or the electronic information and that is what they wanted. Further, they submitted that there was no evidence to the effect that they intended to subject any material of which inspection was provided to any forensic testing.

25 There is no doubt that the arguments are finely balanced. Reading the definitions of "inspection" and "documents" together in r 1A it is apparent that what the rule is designed to ensure is that no matter how information is stored, it is provided to a party in visual form. However, r 8(2) allows for the giving of notice requiring a party "to produce that document". The document referred to in par 90 and par 97 of the second respondent's affidavit is "a computer PowerPoint presentation". It is not a printed version of the presentation. The reference must be to that electronic information which allows a computer with the appropriate programme to produce certain images. The position, referring to the definition in r 1A, is perhaps clearer if the presentation is contained on a floppy disk. That disk and all the electronic information on it is a document for the purposes of the order. Although it is not entirely clear from the rule it would seem to me that if the material is on a hard disk then that part of the material on the hard disk is also a document for the purposes of the order and must be produced.

26 The laptop computer cannot, in any sense, be regarded as a document. In fact, as I understood the submissions made on behalf of the applicants, the only reason why reference was made to the laptop computer was because it was anticipated that the PowerPoint presentation was on the hard disk in the laptop. The applicants wanted access to the laptop so they could have access to the hard drive in the laptop to allow them to obtain the PowerPoint presentation. If the PowerPoint presentation is on the hard drive in a laptop computer (and it is by no means clear on the evidence that it is) then some arrangements will need to be made to provide the applicants with a copy of the PowerPoint presentation from the hard drive. It is just the PowerPoint presentation which is to be produced. It is not the hard drive as a whole.

27 During the course of his submissions counsel for the respondents submitted that a document need not to be produced if a party demonstrates that he or she does not know where that document is: See Christianos v Westpac Banking Corporation, unreported; SCt of WA; Library No 7974; 1 December 1989. Counsel for the applicants conceded this point. Counsel for the respondents made his submission in the context of dealing with evidence that suggested the PowerPoint presentation or at least not all copies of the PowerPoint presentation may any longer be in possession of the respondents. If that is the case then some affidavit material dealing with what has become of the PowerPoint presentation ought be filed. This is a matter which I will deal with when making orders on this application.

28 I will deal in turn with each of the documents referring to in the notice to produce. Document 1 refers to diary notes mentioned in par 175, par 181, par 216 and par 222 of the second respondent's affidavit sworn 21 July 2000. In each case a copy of these notes appears as an annexure to the affidavit. As I understand the applicants' position, they want the electronic entry - that is to say the section of the hard disk of the second respondent's computer, where this information is stored. This is a rather different proposition from requesting the PowerPoint presentation. When a diary entry is made it is entered into the computer for subsequent recall; it is therefore stored in electronic form. Both the PowerPoint presentation and the diary notes are bundles of information which can only be reproduced with the aid of a computer and the appropriate program. On that basis I think it is appropriate that a copy of the electronically stored material be provided to the applicants.

29 Documents 2, 3 and 4 refer to an internet patent search and various drawings and sketchings, these documents being mentioned in par 76, par 72 and par 71 of the second respondent's affidavit. The "drawings and sketches" referred to in par 71 and par 72 are, it would appear, hand drawn documents not stored electronically. If they still exist they should be produced. Paragraph 76 deals with patent searches conducted on the internet. The second respondent says that certain documents were "ordered". A copy of any document subsequently received should be provided. As I understand it, that has been done.

30 I have already dealt with document 5. Document 6 is a confidentiality agreement which was signed by Dr Ryan subsequent to the Heytesbury meeting. Reference is made to par 94. The document in question is a signed version of the confidentiality agreement. There is no question of any electronic storage of the document. Provided that they hold a copy the respondents should produce the signed document for inspection.

31 Document 7 is the PowerPoint presentation on computer disk and market information which was left with Dr Ryan subsequent to the Heytesbury meeting. There is nothing in the affidavit material to suggest that this material was recovered from Dr Ryan. That being the case and the documents not being in possession of the respondents, no order for production should be made.

32 Document 8 is the PowerPoint presentation on Reversyringe shown to Capes. For reasons which I have already given the disk holding this presentation or the section of the hard disk holding the presentation ought be provided to the applicants. Document 9 is a file note completed by the solicitors for the respondents. A copy of that note appears as annexure "DBP36" to the affidavit of the second respondent sworn 21 July 2000. The reference in par 184 of the second respondent's affidavit is to the file note produced by his solicitor. The reference is in the context of that paragraph to the hard copy and I see no basis for ordering production of any electronic version. It was not entirely clear from submissions made on behalf of the applicants whether they were seeking production of the whole of the file of the respondents' solicitors because reference to the file note amounted to an implied waiver of privilege with respect to the whole of the file. As no detailed submission was put on that issue it will be sufficient if I say that given the limited nature of the file note, I am satisfied that no unfairness would flow from the limited disclosure of privileged material such as to warrant the discovery of the solicitors' entire file: See Attorney General (NT) v Maurice [1986] HCA 80; (1986) 161 CLR 475.

33 Document 10 is two "word" documents which are mentioned in par 214 of the second respondent's affidavit of 21 July 2000. This paragraph reads as follows:

"On 16 March 1999, Dr Whisson sent me (by e-mail) two word documents and asked me to forward these to Mr Capes in Windows word format. I forwarded these to Mr Capes via email on the 16 March 1999. Annexed to this affidavit and marked 'DBP48' is a true copy of this email dated 16 March 1999."

34 Hard copies of the two documents in question have been provided by the respondents to the applicants. The question is whether, once again, the electronic version of these documents should be provided. For reasons which I have outlined in relation to the PowerPoint presentations, I am satisfied that the electronic versions should be provided.

35 Document 11 is a letter varying an agreement not to take notes at one of the settlement conferences which took place in this matter. The reference in par 229 of the second respondent's affidavit to this letter is oblique. The reference to the letter appears to do no more than provide background as to why certain actions were taken by persons present at the settlement conference. In my view, documents which are only mentioned in passing and which do not really form part of the case between the parties need not be produced under r 8(2). The purpose of that rule is to allow a party to inspect a document which is incorporated in the pleading or the affidavit by reference. That is not the case with respect to this letter agreement and I would not order that the document be produced.

36 The same can be said of Document 12. Reference is made in par 70 of the first respondent's affidavit of 21 July 2000 to assigning what are described as the "Eastland improvements" to Eastland. No reference is made to the assignment agreement. I understand that the documents have in fact been provided. Insofar as the request is directed at any electronic version of these documents, I would decline to make any order.

37 Finally, Document 13 is copies of faxes referred to in par 107 of the first respondent's affidavit of 21 July 2000. Paragraph 107 of that affidavit is in the following form:

"In the first month after the original invention there were frequent faxes and telephone conversations between Mr Prestidge and myself. During this time we began to write the first provisional patent application. As is usual, the application was very much provisional and the inventive processes were continuing. We also established the new invention was indeed novel so far as we could determine."

38 It is the case that the reference in this paragraph to "frequent faxes" is non-specific. However, taken in context, the paragraph is clearly intended to demonstrate that because the first and second respondents were dealing with what they claim is a new and original invention, they corresponded frequently. While the paragraph does not seek to draw on the contents of these documents I think that the reference to the faxes is designed to adduce evidence to support the respondents' position. In the circumstances these faxes ought be produced. It is to be noted that the reference is to facsimile transmissions rather than e-mails. I assume on that basis that if any of these documents exist they exist in hard copy. Once again there is no question of discovering documents in electronic form.

39 In relation to this application I will hear the parties as to the precise form of the orders and how inspection of the electronic material ought be provided.

40 By the third application the applicants seek an order for general discovery. The application is brought under O 26 r 7. Although the present proceedings are brought under the Corporations Law and were initiated by way of application, there is no doubt that the court has power to make a discovery order: See Bell Resources Ltd v Turnbridge Pty Ltd, unreported; SCt of WA; Library No 7180; 30 June 1988. The real question for determination on this application is whether an order for discovery ought be refused under r 7(3)(d).

41 The respondents opposed any general order for discovery. They made two points. First, it was said that given the plethora of affidavits that had been filed by the parties in this matter, any document which was relevant to the issues between the parties is now before the court. A general discovery order was therefore unnecessary. Secondly, it was said that given the large number of documents in existence a requirement that the respondents give discovery would be oppressive, as it would be expensive and time consuming while offering no real benefit to the applicants.

42 For their part the applicants contended that this was a case where full discovery by the respondents was essential. The applicants base their claim in part on allegations of fraud and breach of fiduciary duty. Dishonesty by the respondents is at the heart of these claims. In those circumstances the applicants say it is essential that the respondents declare on oath what documents they have which are related to any matter in issue between the parties. Essentially the applicants are suspicious of the respondents and concerned that documents which might damage the respondents' case exist but have not been produced.

43 There was little or nothing in the material before the Court to which counsel for the applicants could refer which indicated that there were in existence documents which were discoverable but which were not before the Court. Reference was made to a document which appears as an annexure to the affidavit of Errol John Harwood sworn 21 December 1999 (p 225). It is not entirely clear what this document is, but counsel interpreted it as a question and answer session that the first respondent conducted with himself. Counsel submitted that this is only part of a document and the rest may throw some light on the intentions and motives of the respondents. With respect, that seems to me not to emerge from a reading of the document in question. There is nothing in the written material which in any way suggests dishonesty on the part of the first respondent and which would in any way advance the applicants' case.

44 In my view, this is a matter where an order for general discovery would not advance the applicants' case at all. It is important to remember what is at issue between the parties. The applicants say that the Di-Med Inventions are a development of the Eastland Devices and that fraudulently and in breach of their fiduciary and/or contractual obligations the respondents have sought to make the Di-Med Inventions their own. The respondents say the Di-Med Inventions are completely novel and original and that they were entitled to patent the Di-Med Inventions in their own right. They denied that they have been dishonest or that they have breached any contractual or fiduciary duties. Put that way, the issues between the parties are relatively simple. The essential documents will be those which show the Eastland Devices and those which show the Di-Med Inventions. The court will have to determine whether or not the Di-Med Inventions are original or derivative. The questions relating to the fiduciary and contractual duties of the respondents are complex but they are not dependent upon documents. Furthermore, each of the parties has set out in exhaustive detail their positions and the documents which they say support those positions. I see little value in undertaking a lengthy and expensive discovery process in the circumstances of this case.

45 I would dismiss this application. I will hear the parties as to costs on this application.

46 The fourth application is the respondents' application to set aside a writ of subpoena duces tecum addressed to Lord & Company dated 22 September 2000. To understand why the subpoena was issued some further background facts are necessary.

47 On 4 April 2000 the applicants issued proceedings seeking an interlocutory injunction preventing the respondents from dealing with or disposing of the patents relating to the Di-Med Inventions. The application was eventually resolved by each of the respondents providing to the court an undertaking in the following terms:

"That I will not encumber, transfer, assign or otherwise dispose of the patent applications numbered PP7660, PP7989 or PCT/AU99/00827 or any patents which might issue as a result of these applications or any subsequent amendments thereof without giving to all other parties 14 days written notice unless the court otherwise orders."

48 The application for leave to issue the writs of subpoena was supported by an affidavit of Sims sworn 11 September 2000. In this affidavit Sims says (at par 3):

"I have received a copy of an account addressed to two of the Respondents from Lord & Company, Patent Attorneys, which said account refers to a number of invoices related to the 'pre-conversion sale' and 'Sale'."

49 It is apparent that Sims was concerned that the respondents had in some way been dealing with the patent applications contrary to the undertaking given to the court. Based upon the terms of the invoice rendered by Lord & Company to the respondents it must be said that there is some justification for the applicants' concern.

50 The respondents say the subpoena should be set aside for a number of reasons. First, it is said that the terms of the subpoena are too wide. It requires Lord & Company to produce virtually any document which they have in their possession related to any dealings with the respondents. In my view this submission is well-founded. There is no justification for the broad terms in which the subpoena is couched. The issue between the parties is whether or not the respondents have been dealing with the patents or patent applications in relation to the Di-Med Inventions contrary to the terms of their undertaking. The subpoena ought be limited to documents related to that question.

51 Secondly, the respondents say that the subpoena is not directed at the production of documents which are related to in any matter in issue in the proceedings. They say that the documents relate to proceedings which might be taken for contempt consequent upon breach of the undertaking. This submission is not without merit. It certainly cannot be said that the subpoena is directed to matters which are primarily in dispute between the parties. However, the undertaking given by the respondents is now a part of the matrix of facts which makes up the rather amorphous nature of this dispute. I think it can be said that the applicants have a legitimate interest in ensuring that the undertakings given by the respondents are honoured and that the undertakings have been given in the context of the action as a whole. On that basis I would be prepared to allow the subpoena to stand.

52 There were a number of other arguments put by the respondents. It was said that the subpoena was in effect an attempt to obtain discovery by another means. If the subpoena in its present form was allowed to stand I would agree with that submission. If it is amended to limit it as I have proposed, the respondents concerns fall away. It was further said that the subpoena was nothing more than fishing. Based upon the invoice from Lord & Company to the respondents which is in the applicants' possession, it seems to me their concerns are well-founded and the subpoena cannot be said to be fishing. Nor do I accept that, provided the subpoena is limited in its terms, the issue of the subpoena is an abuse of the process. As I have said, in the context of the dispute as a whole I think its issue is proper.

53 On the respondents' application I would order that the subpoena be amended to limit its terms to require production of only those documents related to the sale, encumbering or otherwise disposing of patents or patent applications relating to the Di-Med Inventions. I will hear the parties as to the precise form of the orders and as to costs.

54 The fifth application was by the applicants seeking an order that the respondents answer certain interrogatories. Although the application was couched in terms of requiring answers to the two interrogatories which have already been served on the respondents, by consent it proceeded on the basis that it was an application by the applicants for leave to issue interrogatories under O 27 r 1(1). At the commencement of the hearing counsel for the respondents indicated that leave with respect to the second of the two interrogatories was not opposed. Counsel did specifically reserve his clients' rights in relation to the answers to be given and this can be accommodated in the form of the order. However, interrogatory 1 remained in dispute between the parties.

"The Respondents are referred to paragraph 97 of the affidavit of Dean Brian Prestidge sworn 21 July 2000 and filed herein and are required to state:

(a) to who does the laptop computer refer to in that paragraph belong? and

(b) what is the address of the person or company referred to in the answer to (a) above?"

56 Paragraph 97 of the second respondents affidavit sworn 21 July 2000 deals with the PowerPoint presentation of the Di-Med Inventions made to Dr Ryan of Heytsebury. As I understand it, the interrogatory has been prompted by the respondents asserting in correspondence that the laptop computer was not theirs, or at least that it is no longer in their possession. The applicants for their part are anxious to inspect the laptop computer and hence they wish to know where it is.

57 It is immediately apparent that the interrogatory is improper. It is not directed at any matter in issue between the parties. While the parties are in dispute about almost everything else, there is no question of ownership of the laptop computer. The interrogatory is not directed at establishing the applicants' case or destroying the case of the respondents. That is the purpose of interrogatories: See Potter's Sulphide Ore Treatment Ltd v Sulphide Corp Ltd [1911] HCA 35; (1911) 13 CLR 101 at 112. The interrogatory in its present form is simply a request for information. I would not grant leave.

58 I will hear the parties as to the precise form of orders and as to costs in relation to this application.

59 The final application was an application by the respondents to vary case management orders made by Wheeler J on 23 June 2000. The parties agreed that no order on this application ought be made pending determination of the other applications. Accordingly I adjourned the application without making any order.

Eastland Technology Australia Pty Ltd & Ors v Whisson & Ors [2000] WASC 285

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (109 paragraphs)

Eastland Technology Australia Pty Ltd & Ors v Whisson & Ors [2000] WASC 285 (29 November 2000)

Parties

Cases Cited (11)