Gold Coast Marine Aquaculture Pty Ltd v HTC Trading Pty Ltd

THE APPLICATIONS 15 Pursuant to Rule 7.23 of the Federal Court Rules 2011 Gold Coast Marine seeks discovery of eight categories of documents from the importers, and one category from the Department. 16 Rule 7.23 states as follows: 7.23 Discovery from prospective respondent (1) A prospective applicant may apply to the Court for an order under subrule (2) if the prospective applicant: (a) reasonably believes that he or she may have the right to obtain relief in the Court from a prospective respondent whose description has been ascertained; and (b) after making reasonable inquiries, does not have sufficient information to decide whether to start a proceeding in the Court to obtain that relief; and (c) reasonably believes that: (i) the prospective respondent has or is likely to have or has had or is likely to have had in the prospective respondent's control documents directly relevant to the question whether the prospective applicant has a right to obtain the relief; and (ii) inspection of the documents by the prospective applicant would assist in making the decision. (2) If the Court is satisfied about matters mentioned in subrule (1), the Court may order the prospective respondent to give discovery to the prospective applicant of the documents of the kind mentioned in subparagraph (1)(c)(i).

Documents sought from the importers 17 Gold Coast Marine seeks discovery of the following categories of documents from the importers: (a) import permits or licences for uncooked prawns issued to the importers by the Department (or other equivalent state or commonwealth body) and in place during 2016 and/or immediately prior to 6 January 2017; (b) any approved arrangements, compliance agreements or similar arrangements in respect of imported uncooked prawns entered by the importers, or to which the importers were a party, which were in place during 2016 and immediately prior to 6 January 2017; (c) all documents between the importers, on the one hand, the Department and/or any other Government body, on the other hand, in respect to the importation and storage by the importers of Virus infected uncooked prawns in or around 2016; (d) supply agreements between the importers and each of their customers who were supplied imported uncooked prawns in the period 1 January 2016 to 6 January 2017; (e) any notices, declaration or similar revoking or suspending any importer permits or licences, approved arrangements, compliance agreements or similar arrangements issued to the importers in relation to the importation of uncooked prawns into Australia; (f) any notices, declarations or similar of penalties and/or convictions imposed on the importers and/or any of its directors, officers and/or employees with respect to the importation of uncooked prawns into Australia; (g) any witness statements, reports or other documents that formed part of investigation and/or regulatory action undertaken by the Department (or any other Government body) against the importers in respect to the importing and/or storing of Virus infected uncooked prawns; and/or (h) any and all documents relating to testing for the Virus, including the results, of uncooked prawns imported and/or stored by any of the importers in or around 2016, including any genetic, DNA or similar testing. 18 As noted above, orders were made by consent for the discovery of the above categories by the Second and Third Respondents, Oriental and Aqua Star.

Documents sought from the Department 19 Gold Coast Marine seeks one category of documents from the Department: …documents forming the "Operation Cattai" file or files compiled by the DAWR when undertaking the body of work known as "Operation Cattai" during 2016.

The requirements for preliminary discovery 20 Gold Coast Marine must satisfy the three elements of rule 7.23, namely: (a) A reasonable belief that it may have right to obtain relief from the prospective respondent (7.23(1)(a)); (b) after making reasonable inquiries, it does not have sufficient information to decide whether to start a proceeding (7.23(1)(b)); and (c) a belief that the prospective respondent has relevant documents that would assist (7.23(1)(c)). I shall address each of these elements in turn. 21 HTC adopted the Department's submissions, save in relation to a contention not applicable to HTC concerning s 644 of the Biosecurity Act to which I shall refer below. HTC raised some additional arguments which I shall also address below.

First limb: Reasonable belief in a right to relief - 7.23(1)(a) 22 Gold Coast Marine, HTC and the Department each relied upon Pfizer Ireland Pharmaceuticals v Samsung Bioepis AU Pty Ltd [2017] FCAFC 193; 257 FCR 62; 351 ALR 103; 128 IPR 205. In that case, Allsop CJ, with whom Perram and Nicholas JJ agreed, explained the scope and operation of Rule 7.23: 2. … the words of the rule are the framework of analysis for deciding applications under the rule. Secondly, these are summary applications not mini-trials. … 4. … Rule 7.23 is a beneficial provision, the purpose of which is to enable a person who believes he, she or it may have a right to seek relief to obtain information to make a responsible decision as to whether to commence proceedings… … 8. …There have been a large number of cases now (both at first instance and Full Court) dealing with and explaining the relevant rule. Those authorities should not be utilised to form a complex matrix of sub-rules for the operation and application of a tolerably straightforward provision. Whilst there was no submission that any of these cases was wrongly decided, there does appear to have been a tendency to create an overly abstracted conceptualisation of refined states of mind which, if the words of the rule are not kept in mind, can lead in application to a misstatement of the essence of the rule, focused as it is upon what may be the position. The foundation of the application in r 7.23(1)(a) is that an applicant (a person or a corporation) reasonably believes that he, she or it may have a right to relief. The belief therefore must be reasonable (expressed in the active voice that someone reasonably believes) and it is about something that may be the case, not is the case. It is unhelpful and likely to mislead to use different words such as "suspicion" or "speculation" to re-express the rule. For instance, it is unhelpful to discuss the theoretical difference between "reasonably believing that one may have a right to relief" and "suspecting that one does have a right to relief" or "suspecting that one may have a right to relief" or "speculating" in these respects. The use of such (different) words and phrases, with subtleties of differences of imprecise meaning, and not found within the rule itself is likely to lead to the proliferation of evidence and of argument, to confusion and to error. One must keep the words of the rule firmly in mind in examining the material that exists in order to come to an evaluation as to whether the relevant person reasonably believes that he or she may have a right to relief. That evaluation may well be one about which reasonable minds may differ. … 69. …one needs to remind oneself of the nature of the task demanded by r 7.23(1)(a) in circumstances such as this. The relevant question posed by the rule is whether the applicant reasonably believes that it may have the right to obtain relief. It is not whether one scientific view is more or less persuasive than another. In the field of science, expert views may differ about important scientific aspects that can be seen to bear upon a question. If the applicant has a belief that is founded on considerations or views reasonably open (even if contested as incorrect by others) that may well found a conclusion that the applicant has a relevant reasonable belief. On the other hand, if in the application it can be shown that the belief of the applicant appears to be based on considerations or views that are unreasonable, untenable, irrational or baseless, it would be difficult to conclude that the applicant has a reasonable belief. Much will depend on the evidence and the nature of the question in issue. The kind of interlocutory hearing anticipated for the operation of the rule will, however, generally be inapt for the making of final judgments on contested scientific evidence. This is all the more so when, as here, there was no cross-examination. … (emphasis added) 23 I am satisfied that Gold Coast Marine has established a reasonable belief that it may have a right to obtain relief from each of HTC and the Department. Gold Coast Marine has obtained: (a) the 2009 BA Report; (b) the 2017 Diggles Report and 2018 Diggles Submission; (c) the Senate Interim and Final Reports; (d) the IGB Report; and (e) the 2018 Kelly Affidavit. 24 The Department submits that the evidence and submissions relied upon by Gold Coast Marine do not reveal any consideration of the elements of any possible causes of action, but merely assert that it may have a right to obtain relief against the Department in respect of one or more of the following causes of action: breach of statutory duty, negligence, contraventions of the Australian Consumer Law, and intentional, unlawful interference with property and economic interests. The Department submits that absent any evidence of consideration of the elements of these possible causes of action, any belief that Gold Coast Marine may have a right to obtain relief from the Department is mere speculation. 25 I disagree. There is no dispute that Gold Coast Marine has suffered damage. Damage has been identified and, on the information currently available, the events that were likely to have caused that damage have been identified. However, Gold Coast Marine will need to identify who engaged in conduct that caused the outbreak and consequently the harm to its business, whether there were factual circumstances from which it may be found that the Department owed it a duty of care, the content and standard of that duty and any conduct, taking into account what was known to the Department, or should reasonably have been known, that may result in a finding that the Department breached the duty. The discovery sought from the Department and HTC respectively is relevant to ascertaining whether a claim might reasonably be made against either or both of them. 26 I am satisfied that the evidence currently available to Gold Coast Marine supports the contention that it has a reasonable belief that it may have a claim against the Department and/or HTC in negligence and/or other causes of action mentioned above. 27 It is unnecessary in a preliminary discovery application to break down each element of a cause of action in order to show that there is a reasonable belief that a prospective respondent may be liable. As Kirby J held in Graham Barclay Oysters Pty Ltd v Ryan [2002] HCA 54; 211 CLR 540; 77 ALJR 183; 194 ALR 337 at [230]: There are certain "standard questions" that dissect the composite notion of common law liability in negligence. Relevantly, those questions analyse the concept in terms of: (1) the duty of care; (2) the scope of the duty; (3) the breach; and (4) the causation of damage. Although these issues are commonly considered separately, it has been pointed out many times that "each element can be defined only in terms of the others" and, for example, that "the actual nature of the damage suffered is relevant to the existence and extent of any duty to avoid or prevent it". These words teach an important lesson. Excessive analysis and undue intellectual subdivision of what is basically a unitary concept can lead a decision-maker into over-sophisticated elaboration of a notion that is, at its heart, a reflection of practicality and common sense. Long ago and far away, Oliver Wendell Holmes Jr said, correctly, that "the general foundation of legal liability in blameworthiness, as determined by the existing average standards of the community, should always be kept in mind". Although that was said years before Lord Atkin wrote his speech in Donoghue v Stevenson, it is reflected in what his Lordship said there : "The liability for negligence … is no doubt based upon a general public sentiment of moral wrongdoing for which the offender must pay. But acts or omissions which any moral code would censure cannot in a practical world be treated so as to give a right to every person injured by them to demand relief. In this way rules of law arise which limit the range of complainants and the extent of their remedy." 28 The Department further submits that Gold Coast Marine cannot have a reasonable belief in a right to obtain relief from the Department where the causes of action against the Department will confront the statutory immunity in s 644 of the Biosecurity Act. That section provides as follows: (1) No civil proceeding lies against the Commonwealth or a protected person in relation to anything done, or omitted to be done, in good faith: (a) by a protected person in the performance or purported performance of a function, or the exercise or purported exercise of a power, conferred by this Act…" 29 Although s 644 may be raised by the Department in any proceedings commenced against it, the onus will be on the Department to raise s 644 as a defence, and establish the elements of that defence, including that the Department carried out its duties in good faith. At this preliminary stage, I am not able to conclude that s 644 of the Biosecurity Act will provide immunity to the Department if proceedings are commenced against it. 30 Further, I respectfully adopt what Allsop CJ said in Pfizer at [121]: In practice, to defeat a claim for preliminary discovery it will be necessary either to show that the subjectively held belief does not exist or, if it does, that there is no reasonable basis for thinking that there may be (not is) such a case. Showing that some aspect of the material on which the belief is based is contestable, or even arguably wrong, will rarely come close to making good such a contention. Many views may be held with which one disagrees, perhaps even strongly, but this does not make such a view one which is necessarily unreasonably held… 31 For the above reasons I am satisfied that Gold Coast Marine has established a reasonable belief that it may have a right to obtain relief from HTC and the Department.

Second limb: Reasonable inquiries and sufficient information to decide - r 7.23(1)(b) 32 Gold Coast Marine has access to publicly available information about the outbreak, including expert reports. Further, HTC submits it has already discovered a sample of some of the categories of documents sought by Gold Coast Marine. The Department and HTC submit that Gold Coast Marine has failed to satisfy r 7.23(1)(b) because it already has sufficient information to decide whether to commence proceedings. They submit that Gold Coast Marine has not identified the extent to which the currently available information is insufficient, or what further information is required to determine whether to commence a proceeding. 33 I do not agree that Gold Coast Marine has not sufficiently identified the information it requires. The solicitor acting for Gold Coast Marine, Mr Stuart Walter, deposed that, despite all inquiries and examination of materials currently available, he is unable to properly advise Gold Coast Marine as to the basis for any claim, including any risks and costs associated with bringing a claim against the prospective respondents. Mr Walter has identified specific information required, summarised in Gold Coast Marine's written submissions as follows: (a) In respect of each of the importers: (i) the terms of permit or any of approved arrangements it may have under the Biosecurity Act; (ii) the evidence relied on by the Department when it took action against the importer; (iii) the nature of the action taken against the importer, including the identification of the obligations said to have been breached; (iv) the details of the matters (if any) raised by the importer in defence to the action taken; (v) the outcome of that action; (vi) the nexus between, including its causal potency (both absolutely and relative to that of the others), any conduct (including omission) by the importer and the infection of the Logan Gold Coast Marine Farm with the Virus; and (vii) what matters might be raised by way of a defence to the claims that might be made against the importer. (b) In respect of the Department (including its officers and agents): (i) what was known (including the character of that knowledge) of: (1) the failures of the Monitoring and Inspection Regime to achieve the ALOP Standard; (2) the extent of those failures; (3) the causes of those failure and those responsible therefore; (ii) when the Department (including its officers and agents) acquired that knowledge; (iii) having acquired such knowledge, what steps the Department (including its officers and agents) considered taking, took or chose not to take that may have avoided Gold Coast Marine's damage and the reasons therefore; (iv) the nexus between, including its causal potency (both absolutely and relative to that of the others), any conduct (including omission) by the Department (including by its officers and agents) and the infection of the Logan Gold Coast Marine Farm with the Virus; and (v) what matters might be raised by way of a defence to the claims that might be made against the Department. 34 In my view, it is rational and reasonable for lawyers advising Gold Coast Marine to seek to obtain the above categories of information before advising Gold Coast Marine whether or not to bring a proceeding against HTC or the Department.

Third limb: Belief that Prospective Respondent has relevant documents that would assist - 7.23(1)(c) 35 In relation to the Department, Gold Coast Marine seeks the "Operation Cattai" file on the basis that it may contain information about what the Department knew about failures of the Monitoring and Inspection Regime to achieve the ALOP standard, the scale of those failures, when it first knew about each of the failures, what steps it took to address those failures and the reasons why steps were or were not taken. That information may reveal action or inaction by the Department's officers and agents that may fail to meet the requisite standard of care. Gold Coast Marine submits that the information sought will allow it to make a reasonable assessment of the risks and costs associated with bringing a claim against the Department, including for any vicarious liability. In my view, the subject matter of Operation Cattai, namely the Department's investigation of the Virus and the outbreak, is very likely to be relevant to whether a proceeding should be commenced. There is no dispute that the file exists and is in the possession of the Department. 36 In relation to a potential claim against HTC, Gold Coast Marine says that it does not know the nature of HTC's conduct which was investigated by the Department, although it knows that the Department took regulatory action against HTC. In my view the nature of the conduct and the impetus for any action taken against HTC in connection with the importation of prawns following the outbreak is likely to be relevant to informing a decision whether to commence a proceeding against HTC. 37 HTC submitted that the documents sought by Gold Coast Marine go only to one aspect of a prospective claim, namely whether it breached the conditions of its permit issued under the Biosecurity Act. Accepting for present purposes that HTC is correct in relation to the relevance of the documents, in my view that is not a sufficient reason to refuse preliminary discovery. Assuming the documents are relevant only to one element of a cause of action, it does not follow that the documents are inutile. They may nevertheless assist Gold Coast Marine to assess whether a proceeding should be commenced. 38 HTC further submits the application should be refused on the grounds that there is potential that information that may be discovered by one prospective respondent, for example the Department, could be used for a claim against a different prospective respondent. Counsel for HTC relied upon Glencore International AG v Selwyn Mines Limited (2005) 223 ALR 238; [2005] FCA 801 in which Lindgren J at [11] said: …the person against whom the concluding words empower the Court to make an order, is the person referred to in paras (a) and (c), and, by the expression 'that relief', implicitly, in para (b) as well. That is to say, the provision does not allow for third party discovery: discovery may be ordered only against the person from whom there is reasonable cause to believe that the applicant is or may be entitled to obtain relief. 39 I respectfully agree with the analysis of Lindgren J. However, the application by Gold Coast Marine is not directed to obtaining preliminary discovery from a person or entity for the purpose of considering whether to commence a claim against a different person or entity. Rather, the circumstances in which the potential claim arises, in particular the pathway of infection by the Virus, requires an investigation of potentially multiple concurrent events involving multiple persons or entities. In these circumstances, there is a risk of overlap in relation to information revealed by one person or entity being relevant to the conduct, and potentially the liability, of a different person; if for no other reason due to a process of elimination. But that potential does not preclude the making of an order for preliminary discovery. 40 If it should emerge that documents discovered by one prospective respondent are to be used for a claim against a different person, whether or not a prospective respondent for the purposes of the present application, it would be necessary for Gold Coast Marine to seek dispensation from the implied undertaking to use the documents only for the purpose of a proceeding against the person or entity compelled to provide discovery: Harman v Secretary of State for the Home Department [1983] 1 AC 280 and Hearne v Street (2008) 235 CLR 125. If this circumstance should arise, HTC will have the opportunity to make submissions in opposition to such dispensation, if so advised.

Scope of discovery by the Department 41 During the hearing the dispute concerning the scope of categories of documents sought from the Department was helpfully narrowed by agreement between Gold Coast Marine and the Department. The remaining question as to the scope of discovery by the Department was whether the whole of the Operation Cattai file should be discovered, or whether discovery should be limited to documents within the file that may be identified through the use of key word searches as potentially relevant to the "good faith" condition to the immunity under s 644 of the Biosecurity Act. The application of s 644 is an issue in dispute between Gold Coast Marine and the Department. It is beyond the scope of the present application to determine that dispute and it would be inappropriate to attempt to do so in a vacuum as to the facts concerning the conduct said to be subject to the immunity. In my view the scope of the discovery is governed by rule 7.23. There can be little doubt that the Operation Cattai file falls within the scope of the discovery allowed under that rule. Accordingly, the Department should give discovery of the whole Operation Cattai file as sought by Gold Coast Marine.

DISPOSITION 42 I direct that the parties provide a minute of orders for discovery in accordance with these reasons. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Anastassiou.

SCHEDULE OF PARTIES VID 1659 of 2018 Respondents Fourth Respondent: THE DEPARTMENT OF AGRICULTURE AND WATER RESOURCES