REASONS FOR JUDGMENT
1 In the course of a directions hearing on 8 February 2005 the applicant sought a direction that the first respondent give the applicant inspection forthwith of 'full copies of all its discovered documents save those over which it claims legal, professional or some other form of privilege on oath'. The direction was sought pursuant to the applicant's motion in which a direction to that effect was sought in the alternative. The premise on which the motion was brought is that the first respondent had failed to comply with the Court's order made on 13 December 2004.
2 The order in relation to which the direction is sought is order 1 made on 13 December 2004. It was there ordered that 'the first respondent give discovery on oath of the documents referred to in the Schedule annexed hereto (save items 2 and 8 thereof) within 7 days of this order'. The annexed Schedule listed 13 categories of documents.
3 The first respondent disclosed a significant number of the documents in question. However, portions, sometimes large portions, were blanked out ('redacted'). No claim or no specific claim for privilege was made in respect of those blanked out portions.
4 On 5 January 2005 the first respondent provided to the applicant discoverable documents, portions of which had previously been masked, with further portions revealed. There had, in the meantime, been no amendment to the pleadings.
5 When the applicant reviewed the unmarked portions of the documents it became apparent that the portions previously marked had always been relevant and discoverable. This raised concerns by the applicant about many other documents with portions still blanked out.
6 By facsimile dated 11 January 2005 the applicant informed the first respondent that it considered that the first respondent was obliged to discover the entirety of documents contained in its list of discoverable documents and requested production of the same. No response was received from the solicitors for the first respondent. On 17 January 2005 the request was renewed. Again, no response was forthcoming. However, on 25 January 2005 the first respondent provided inspection of further documents with portions blanked out.
7 The applicant contends that once part of a document must be discovered, the whole of the document should be produced for inspection unless part of it is privileged or unless the Court has ordered that such part not be produced: Gray v Associated Book Publishers (Australia) Pty Ltd [2002] FCA 1045 at [14] - [17] per Branson J; Australian Competition and Consumer Commission v McMahon Services Pty Ltd [2004] FCA 353 at [10]. Additionally, it is said that Federal Court Rules ('FCR') make it quite clear that what must be discovered and produced, save for any question of privilege, is the whole of the document if any part of it is discoverable. Reference is made to the statement in McMahon at [12] that the fact that part of the document is relevant may well mean that all of it is relevant if only to provide the context for that part which is directly relevant.
8 The applicant accepts that while the Court retains a discretion to make orders modifying the general rule having regard to the circumstances of the particular case (Westfield Management Ltd v Brisbane Airport Corporation Limited [2004] FCA 611 at [22]) the Court should not depart from the general rule here. It is said there is no reason to withhold inspection of portions of any redacted documents in this case because there is no evidence of any such reason; the first respondent has revealed previously masked portions of a number of documents; therefore it cannot be safely assumed that all relevant portions have now been revealed.
9 For the first respondent it is contended that regard should be had to the provisions of O 15 r 11(e) of FCR which expressly provides for an order for production of only part of a document. The effect of FCR O 15 r 15 is that the Court should not make an order under O 15 r 11 for the production of any document unless satisfied that the order is necessary at the time when the order is made. What is 'necessary' is that which is reasonably necessary in the interests of a fair trial and of the fair disposition of the case: Trade Practices Commission v CC (New South Wales) Pty Ltd (1995) 58 FCR 426 at 436 - 437; Gray at [9]. The respondent accepts that there is no right to withhold documents from inspection on the grounds of confidentiality or irrelevance alone: Gray at [13] - [14]. However, the first respondent says that the considerations of confidentiality and irrelevance are both relevant to the exercise of the discretion to order or withhold production: Index Group of Companies Pty Ltd v Nolan [2002] FCA 608 at [6] - [8]; Gray at [17] - [18].
10 Here it is asserted that the redacted parts of documents discovered are irrelevant to any matter in issue and commercially sensitive. Therefore, it is said, it is a proper exercise of the discretion to decline to make an order for inspection or, if necessary, to direct that the first respondent be relieved from any obligation to produce for inspection those parts of the documents which have been masked: Westfield at [22] - [24].
11 The categories of documents in which masking has occurred are (1) board minutes of the first respondent's group; (2) Barton 'family letters', being reports to shareholders; (3) reports by the Barton group; and (4) financial statements. It is said these are all documents of the parent company of the first respondent.
12 In relation to the assertion by the first respondent that the masked portions are commercially sensitive, the applicant says that this is not brought to the Court by way of affidavit. As to the assertion of irrelevance, the applicant relies on Gray and McMahon in support of the view that the whole document should be produced. The applicant adds a further contention, namely, that its concerns were raised on 11 January 2005 and that if there is to be an order for non-production then an application for such an order needs to be made promptly by way of motion and not simply by way of resistance to the applicant's motion seeking the direction presently in issue.
13 I do not accept that the occasion for the application and consideration of FCR O 15 implied into it a requirement that it should be made promptly in relation to (in this case) masked production. The time of application is a discretionary consideration which falls for consideration in the light of all the circumstances. FCR O 15 r 15 provides that the Court is to be satisfied that the order is necessary at the time when the order for the filing or service of a list of documents is made. However, it is apparent that the need for certain portions to be the subject for an order of non-production by the Court may not always arise until response comes to be given to the order for discovery. As was said in Sony Music Entertainment (Australia) Limited v University of Tasmania (2003) 129 FCR 472 at [57] by Tamberlin J in relation to FCR O 15A, the Court must have regard to the fact that at the time pre-trial discovery is ordered no issues may have been formulated against which relevance of documents can be measured. The same may be said of discovery after initiation of proceedings because at the time of the order the respondent party may simply not have been able to assess relevance where there is a large volume of documents. I therefore do not regard the reference in FCR O 15 r 15 to the time when the order is made as restricting the Court to only acting in reliance on it only on the initial occasion discovery is ordered.
14 There is the further question whether the first respondent should have brought a motion. I note that in par [16] of Gray Branson J, having regard to the course of argument on the applicant's notice of motion, considered it appropriate then to give consideration to the claim of the respondents that the masking undertaken by them is appropriate in the circumstances and ought to be authorised by the Court. I propose to follow the same approach here.
15 It is apparent from the statement of principle in Gray and McMahon that if the Court orders that part not be produced then there is no scope for application of the rule that production of part of the document requires the whole of the document to be discovered.
16 A critical consideration seem to me to be those raised by O 15 r 15, namely, the considerations of what is reasonably necessary in the interests of a fair trial and fair disposition of the case in the particular circumstances of this proceeding. The position is that the first respondent asserts irrelevance and commercial sensitivity in relation to the masked portions. If it is correct that the portions are irrelevant then there is a good case for non-production of them being ordered even at this time. Taking into account the circumstances and timing of the passage of documents between the parties, I do not consider that the late raising of the non-production issue precludes the exercise of a discretion in these particular circumstances.
17 Therefore, I would accept that prima facie, the first respondent has good reason for maintaining the masking. Accordingly I would order that the portions that are masked in the discovered documents be excluded from production for inspection by the applicant, subject to what follows.
18 The qualification is that the applicant may wish the Court to test the assertions of irrelevance or commercial sensitivity. While I would decline to make the direction now sought by the applicant, I preserve liberty to the applicant to apply to the Court for the Court to inspect the masked portions in relation to either the assertions of irrelevance or commercial sensitivity.
19 Therefore I propose not to make an order in terms of par 1.3(b) of the applicant's minute of orders of 8 February 2005; to order that order 1 of 13 December 2004 be varied to provide that 'the first respondent give discovery on oath of the documents referred to in the Schedule annexed hereto (save items 2 and 8 thereof and save such portions as are masked by it as relating to evidence claimed to be irrelevant or commercially sensitive) within 7 days of this order'; and to further order that the applicant have liberty to apply to the Court to test the assertions of irrelevance and commercial sensitivity by inspection of the masked portions in accordance with agreed directions if they consider that desirable.
I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice RD Nicholson.