Eveready Australia Pty Ltd v Gillette Australia Pty Ltd

Background 11 Eveready served a notice in relation to the proposed survey on 11 June 1999, which referred to Practice Note 11 and invited comments on the questionnaire prior to the directions hearing on 18 June. Some criticism has been levelled as to the adequacy of the notice, but I am satisfied that in substance that it is sufficient to enliven the operation of the Practice Note. 12 Gillette, on 17 June, informed Eveready that it needed more time to consider an appropriate response. At the directions hearing on 18 June, Mr McGuinness for Eveready informed the Court that a survey had been served on Gillette. Mr Price for Gillette informed the Court that it was likely that the survey would be opposed. Lindgren J then directed that the time for additional evidence from Eveready should be fixed for 23 July. His Honour was informed that the survey would be undertaken the week following the directions hearing of 18 June. Subsequently, outside the court room, there was evidence of a brief conversation between Mr Price and Mr McGuinness in which it is said that Mr McGuinness stated that he expected and accepted that Gillette would oppose the use of survey evidence, and that it could be objected to at the hearing. Mr Price referred to the cost which might be wasted and Mr McGuinness is said to have stated that Eveready would proceed with the survey evidence because of the remarks of Dowsett J that the survey evidence may assist Eveready. There was a challenge to this evidence but I accept that a conversation to the general effect deposed to took place in the terms set out in Malleson's memorandum of 18 June. 13 The conversation, however, was followed by a letter from Mr McGuinness of 21 June seeking comments about the survey. On 22 June Mallesons responded stating only that Eveready would oppose the survey evidence. No specific grounds, criticisms, or comments were given by Eveready in relation to the survey. It was not until the affidavit of Mr Gordon on 10 September 1999 that any specific suggestions, criticisms, or evaluation were made of the survey. 14 When the matter came before Lindgren J on 26 July 1999 further directions were given but there was no discussion concerning the details of the survey evidence. Mr Price referred to the fact that unsworn survey evidence had been received but no criticisms were mentioned. 15 On 2 August Mr McGuinness wrote to Mallesons claiming that because the requirements of the Practice Note had not been satisfied any evidence relating to the form and methodology would be opposed. Gillette's position as notified by Mallesons at that point was that it was open to it at the trial to lead evidence regarding the weight and admissibility of the survey evidence. Sealed copies of the survey evidence were sent to Mallesons on 17 August.

Survey evidence 16 The principles relating to the use of survey evidence were discussed by the Full Court in Arnotts Ltd v Trade Practices Commission (1990) 24 FCR 313 and by McClelland J in Ritz Hotel Ltd v Charles of the Ritz Ltd (1988) 15 NSWLR 158. In the former case (at 363-364) the Court concluded that: "… Australian law should follow the American lead in acknowledging that market survey evidence may play a useful role in cases such as the present. In so doing, we do not mean to suggest that survey evidence will always, or even usually, be decisive. It will be merely one element in the overall picture, its importance varying from one case to another … it is also important to follow the American insistence upon proof of the proper conduct and form of the survey. We speak, of course, of the survey tendered at a final hearing. …" 17 See also Gas Corporation v Phasetwo Nominees Pty Limited (1998) ATPR 41-644 per R D Nicholson J.

Submissions and consideration 18 Eveready first submits that there has been non-compliance with Practice Note 11 by Gillette. Gillette disputes this. Although Gillette submits that notice of objection to the questionnaire was given as early as June 1999, in my opinion, there was no attempt to comply with the Practice Note on the part of Gillette. The generalised indication of opposition expressed in correspondence and at direction hearings does not satisfy the requirements of the Practice Note. It was not until the notification was given in September 1999 that details of the claimed inadequacy were conveyed to Eveready. The course taken by Gillette in ignoring the requirements of the Practice Note is an important matter to be taken into account on costs. 19 Secondly, Eveready claims that if the Practice Note had been followed then the survey could have been recast to satisfy some if not all of the alleged defects. Two consequences were said to follow from this. First, it is said that if the criticisms were accepted by the Court at the final hearing and the objections upheld, the expense of the survey would be thrown away in a situation where it would probably have been capable of remedy. The present limited evidence before me, however, does not satisfy me that Eveready would necessarily have accepted the criticisms and modified the questionnaire or methodology as suggested. Second, Eveready says that it may now have to incur additional costs of a fresh survey which may meet the requirements of the applicants. Again, the evidence does not show that this would be done rather than persist with the existing survey. If it can be shown after exposure of all relevant facts and circumstances at the hearing that the costs have been thrown away as a result of non-compliance with the Practice Note, an appropriate costs order can be made. In addition, if any real prejudice can be demonstrated other than costs, the trial judge can make the necessary orders on a more informed basis than is possible on the sparse material presently before me. 20 The third submission of Eveready is that the exclusion of the evidence of Mr Gordon is warranted by the principles of case management as expressed in, for example, Bomanite Pty Ltd v Slatex Corp Aust Pty Ltd (1991) 32 FCR 379 and Lenijamar Pty Ltd v AGC (Advances) Ltd (1990) 27 FCR 388. There is considerable force in this argument, especially in the present environment where the community expects the court to operate in an expeditious and efficient manner and to take account of the public interest in the orderly administration of the litigation process. However, the circumstances in each case must be closely examined in order to ensure that procedural injustice will not be done by application of case management procedures: see State of Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146. The facts in that case were somewhat special but the majority opinion pointed out that justice was the paramount consideration and no principle of case management can be allowed to supplant that aim. The amendment in that case was refused by the trial judge on the basis of case management principles and this decision was upheld by a majority of the Full Court. The Full Court decision was reversed by the High Court. 21 In the present case the expert evidence as to methodology and form of the survey is relevant evidence as it bears directly on the weight and the admissibility of the survey into evidence. The survey evidence in the circumstances is important. The applicant seeks to exclude such expert evidence before the hearing has commenced. This evidence, on its face, could be of assistance to the Court in the exercise of its judgment as to the weight to be attached to the survey. A preliminary foreclosure of such evidence calls for cogent evidence which is lacking in the applicant's case on this motion. 22 The Practice Note does not suggest that the consequence of non-compliance will be the exclusion of relevant material. As noted earlier there are several alternatives open to the Court to adjust the interests of the parties with a view to minimising prejudice. These include orders as to costs or the award of costs, together with a discretion to grant an adjournment or re-adjustment of the hearing process on terms imposed by the Court in order to meet any problems arising from non-compliance. In addition, there is nothing to prevent the applicant preparing an affidavit in response to the affidavit of Mr Gordon criticising the survey before the hearing is scheduled to commence in several week's time. 23 The purpose of Practice Note 11 is to minimise costs and hearing time by obtaining an early determination as to the admissibility and form of survey evidence. It is difficult to understand why it was ignored in this case. The Practice Note points out that the admissibility of surveys is a matter for the trial judge to determine but it also foreshadows the risk of the survey being rejected or given little weight in the event of non-compliance. The pre-trial exclusion of the expert evidence is a matter of difficulty in circumstances where the Court has not had the benefit of seeing witnesses and hearing cross-examination. 24 Based on the above circumstances and considerations, I consider that the application in Eveready's motion is premature and should be dismissed, and the costs of the application should be reserved for determination by the trial judge when the hearing has been completed. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin.

Associate: Dated: 7 October 1999 Counsel for the Applicant: S P Whelan QC A J Ryan

Solicitor for the Respondent: Mallesons Stephen Jaques