Idoport Pty Limited v Natonal Australia Bank

THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION - COMMERCIAL LIST

50113/98 - IDOPORT PTY LIMITED and Anor v NATIONAL AUSTRALIA BANK LIMITED and Ors

JUDGMENT The Notice of Motion before the Court

1 There is before the Court a notice of motion brought by the plaintiffs and filed on 22 December 1999 in which the plaintiffs seek orders that upon the plaintiffs, by their counsel, giving to the Court certain specified undertakings, access to certain documents [referred to for convenience as "the critical documents"], discovered by the defendants be granted to the plaintiffs. The subject undertakings, insofar as they relate to the terms upon which the plaintiffs may make the critical documents available to third parties without the prior written consent of the defendants, are in issue. Specifically the question goes to the extent and nature of the undertakings which the plaintiffs are to secure from experts, prior to making such documents available to those experts for the purposes of assisting the plaintiffs in their conduct of the proceedings.

2 The plaintiffs are content that contents of the critical documents should only be divulged to experts: (a) whose names appear on a list in a sealed envelope to be delivered to my associate;

(b) who have signed a confidentiality undertaking that each will:

(i) not take further copies of, or disseminate the information in the copies with which they are provided, to other officers, or employees or agents of the plaintiffs, other than those whose name appears on any list delivered to my associate;

(ii) not use the documents for any purpose other than for the purpose of these proceedings;

(iii) return any copies of such documents to the defendants at the conclusion of the proceedings.

3 The defendants seek a different form of relevant undertakings to be given to the court by experts to whom the so-called "critical documents" may be shown. That regime would require such experts to undertake that they will not for specified periods, advise, consult to, or accept or continue employment with named entities to the extent that such advice, consultation or employment is directly or indirectly concerned with particular matters. Hence paragraph 4(c) of the final form of short minutes of order sought to be propounded by the defendants, is in the following terms: "The court notes the undertakings of the plaintiffs only to provide copies of the documents … or to divulge the contents to any potential or retained expert adviser or expert witness who has signed a confidentiality undertaking addressed to each of the court and each of the defendants which has been delivered to [my associate] in which he or she undertakes: (a) … (b) … (c) not advise, consult to ,or accept or continue employment with the entities listed in Schedule A to these orders as follows: (1) if given access to the FX Auto Dealing project documents listed in Schedule B, for 6 or 12 months from the signing of the undertaking (as set out in Schedule B) in relation to the entities numbered 1-12 in Schedule A to the extent that such advice, consultation or employment was directly or indirectly concerned with any proposed automated foreign exchange dealing system or any enhancement to an existing automated foreign exchange dealing system; (2) if given access to the Maple Leaf documents, 2 years from the signing of the undertaking in relation to the entities referred to at 13 in Schedule A to the extent that such advice, consultation or employment was directly or indirectly concerned with any strategy for utilising emerging technology (such as the Internet) to distribute financial products and services; (3) if given access to the Gateway/All in One documents listed in Schedule B, 2 years from the signing of the undertaking in relation to the entities referred to at 14 in Schedule A to the extent that such advice, consultation or employment was directly or indirectly concerned with the manner in which any cash account operated, any mechanism by which a nil entry fee option operates or daily pricing of units in connection with managed funds; (d) return any copies of such documents to the defendants at the conclusion of these proceedings." [These undertakings are hereafter called the "non-compete" undertakings] [The Bank's final version of the proposed Short Minutes of Order including the Schedules are appended to this Judgment]

4 The defendants submit that the issue to which the subject "critical documents" go is: "whether or not three particular Bank projects are of similar or equivalent functionality to the Ausmaq Service within the meaning of the Consulting Agreement". 5 The plaintiffs submit that the documents are also relevant to damages. 6 The proceedings are presently fixed for hearing to commence in June of this year following an extended interlocutory application heard in late July and early August 1999 and the subject of a reserved judgment handed down on 19 August 1999. For present purposes the interlocutory judgment serves to sketch out the principal issues pleaded and serves to set out the significance of the proceedings to both sets of parties.

7 It is common ground that up to this point in time the plaintiffs' expert evidence in chief which has been directed to establishing the proposition that relevant Bank projects are of similar or equivalent functionality to the Ausmaq Service, has relied only upon the evidence of Mr Maconochie and Professor Aitken.

8 A further expert to be called by the plaintiffs is Mr Joslin who resides in the United Kingdom. He has given evidence only about the features and operation of the Mutual Fund industry in the United Kingdom and Europe and in relation to life and pension type [life and unit linked] products in those countries. 9 The defendants have no objection to the "critical documents" being disclosed to Mr Maconochie or to Professor Aitken or to Mr Joslin and no form of undertakings other than those proposed by the plaintiffs are sought from those persons. 10 It is appropriate to note that the plaintiffs do not propose to approach the entities identified in the list schedule A under FX Dealing Project [No.'s 1-12] regarded as rivals or as trade rivals [transcript page 30]. And in relation to the Maple Leaf operation, the plaintiffs as I understand their position [see transcript 4 February 2000 at page 30] would be prepared to give undertakings not to approach the commercial trading and savings Banks now to be found in the defendants' new version of paragraph 13 referring in turn to the new Annexure A1 [and identified originally in paragraph 13 of the Short Minutes propounded by the defendants on 4 February].

11 The issue which has risen in relation to the so-called "critical documents" relates to three of the four Bank projects. As generally explained by Mr Smith SC in his overview at transcript pp 5 and 6 [4 February 2000], these are: (a) the "Foreign Exchange Dealing Project" which relates to an automated foreign exchange dealing system which the Bank has developed;

(b) a Master Fund which the Bank currently operates called the "All In One" which operates in Australia;

(c) a disparate group of projects referred to within the Bank as "the Maple Leaf Projects". Two stages of the projects are presently relevant. The first is the design stage and the second is the implementation phase. The implementation phase, referred to as "Project First Choice", comprises some 10 projects involving the Bank's present review of various aspects of its operations, both in Australia and overseas, with a view to using emerging technology such as the Internet, to develop various aspects of its banking business internationally. The projects relate to various ways and means by which aspects of the banking business can be so advanced.

12 A fourth project which on the plaintiffs case is said to be of similar or equivalent functionality to the Ausmaq Service is "Margin Lending". There is no current issue going to that project in relation to the so-called "critical documents". Hence order 1(d) in the short minutes annexed to the plaintiffs' Notice of Motion of 22 December 1997 is to be made by consent.

13 The documents in issue conveniently referred to as "the critical documents" are as follows: (i) as to the Foreign Exchange Dealing Project -- two folders [Exhibits PF1 and PF2]; (ii) as to the All In One Master Fund -- two folders [Exhibits PW1 and PW2]; (iii) as to the Maple Leaf Project First Choice -- 11 folders [Exhibit MJL1 Volumes 1-11].

14 The Bank makes plain that as at least two of its projects [the second stage of the Foreign Exchange Automated Dealing Project and the Implementation Stage of the First Choice Project] are ongoing projects, the Bank's continuing obligation to discover may well lead to further documents coming into existence and to the Bank seeking to also categorise certain of such documents as "critical documents".

The plaintiffs' evidence in chief 15 The plaintiffs read in chief two affidavits of Mr Stuart Hetherington who is the plaintiffs' solicitor. These were the affidavits of 21 December 1999 and 14 January 2000. The first affidavit simply annexed the revised Judgment of Rolfe J of 9 July 1999 and correspondence passing between the respective solicitors stating their positions in relation to the so called critical documents. 16 In Mr Hetherington's second affidavit he gave evidence on information and belief from Mr Maconochie to the following effect: (a) that Mr Maconochie has inspected the defendants' discovered documents in relation to the FX Auto Dealing project and product, the Margin Lending Project and product, the Gateway/National All In One Investment Service and the Maple Leaf/Operation First Choice; (b) that as a result of his examination of those documents, Mr Maconochie considers that copies of a number of them will need to be supplied to expert witnesses, already involved in these proceedings and others; (c) that in view of the confidentiality regime which is imposed in the proceedings, Mr Maconochie does not wish to be disadvantaged as against the defendants "in having to disclose to the defendants or their legal advisers, the identities of the experts that he wishes to retain in order to advise (and if thought appropriate provide written statements in reply), except by way of sealed envelope to the Court in the same way as the defendants have been required to do in relation to confidential documents of the plaintiffs. 17 Mr Hetherington further gives evidence in this affidavit on information and belief from Professor Aitken, that Professor Aitken has read Mr Lovell's affidavit of 22 December 1999 and is of the opinion that there will be substantial material in the defendants' discovery that he will have to read if the plaintiffs wish him to express further opinions on the matter. 18 Mr Hetherington further deposes that in view of the hearing date now fixed, the plaintiffs wish to retain experts to comment on the subject documentation as soon as possible.

19 The Bank read affidavits each made on 25 January 2000, the first made by Mr Peter Field, the second made by Ms Prudence Willsford and the third made by Mr Michael Liley.

20 Mr Field is the Project Director of the FX Dealing Project. This position involves defining and managing the implementation of the FX Dealing Project including ensuring that customer targets are met and that the Bank processes and procedures are satisfied.

21 Ms Willsford is Head of Investment Products of National Australia Financial Management Limited ["NAFM"] . In this capacity she is responsible for the design, marketing, maintenance and profitability of investment fund products offered by NAFM including the National All In One Investment Service ("All In One").

22 Mr Liley was until late January 2000, General Manager of Global Retail Financial Services and Channel Management of the Bank. In that position he was responsible for all of the National's branches globally and all channels of distribution, including call centres, branches, internet Banking, web sites, automatic teller machines as well as the Bank's global e-commerce activities.

23 Mr Smith in opening the defendants' case on the motion, conveniently summarised, although in general terms and only on an overview basis, the burden of what the evidence of those witnesses would establish. This summary was as follows: "In relation to the FX Automated Dealing Project, it appears from Mr Field's affidavit at paragraphs 23 to 26 that broadly speaking these documents comprise... either business cases, and by business cases I mean documents which are planning documents which record the internal deliberations of the Bank at a planning stage when they were setting about to set up the Foreign Exchange Automated Dealing System. Alternatively, specifications, design specifications reporting what the present system does and how it does it... In our respectful submission, one only has to characterise the documents in that way to appreciate that they are of critical significance to the Bank because the design specifications of how they operate a foreign exchange trading system obviously would be commercially sensitive to the Bank, obviously would be a product of great effort and expense on the part of the Bank, and would be protected.

All In One is on the evidence of Ms Willsford, a Master Fund which deals with investment funds which are not superannuation products. Ms Willsford's evidence is that there are three features of that Master Fund which is in current commercial operation which are unique to the Bank and they are, firstly, the procedures and the means by which daily pricing of investments in the fund are calculated and the manner in which that works. Her evidence is that the daily pricing feature of the fund is unique to the Bank in this country.

Secondly … that there is a nil entry fee option in this fund which is...unique.

Thirdly, there is as part of the Master Fund, a cash account which has particular features and her evidence is that that account is unique.

The documents which are subject of the claim comprise two documents. In the first case, what the claim relates to, the specification document for the Master Fund; that is to say, the specification to the computer software house that translated the prose requirements into code necessary to give the effect to those requirements. It's the prose specification where that specification deals with each of the three unique features.

The second document is the Bank's internal manual which is provided to those staff involved in this part of the Bank's operation which describes in detail the processes and the procedures to be followed in the operation of the Master Fund. Again we would submit that, for the same reasons I outlined in relation to the Foreign Exchange Dealing documents, specifications of the unique features and how those features are given effect to are critically of an commercially sensitive material to Banks, it not being in issue that the financial services Banking sector is a very competitive market...

The object of the project Maple Leaf was to examine ways and means of converting or transforming the Bank's operations from a regional retail Bank to a globally integrated financial services organisation....

In June of 1999 the implementation phase of the project Maple Leaf design phase commenced and the implementation phase was called Operation First Choice. The documents in question, both in relation to the design and implementation phase,... can be described in the following categories for ease of analysis . Firstly, documents defining or describing the initial scope and content of [sic] project. Secondly, the base cases developed for approval by the various committee's internal to the Bank including their internal business reasoning, their financial assessments and projections, matters of that kind. Thirdly, documents describing or defining the precise manner in which these various programs would be implemented, and fourthly documents that record the actual or projected costs and revenues of Operation First Choice.

Can I just try and descend from the general to the particular... one of the projects within the Maple Leaf umbrella was consideration of the extent to which the present ATM and EFTPOS facilities of the Bank could be amended, transformed, developed by way of offering other services....

Another aspect is ways and means of developing, giving consideration to using the internet for Banking. Now, it is clearly, we submit, commercially sensitive material for a Bank... [which is] giving consideration to matters of these kinds to be able to keep confidential to themselves their own internal assessments and deliberations and for competitors not to be able to get advantage of knowing what, for example, the Bank is doing or proposing or thinks about a particular feature or has costed a feature, or views the market, how the market might approach a particular development…." [transcript 4 February 2000, pages 22-23] The evidence given by Ms Willsford

24 In Ms Willsford's affidavit of 25 January 2000 she gave evidence that All In One is a master fund which deals with investment funds that are not superannuation funds. It competes against all non superannuation master funds operating in Australia for investment funds.

25 On her evidence, a master fund is an investment vehicle that enables people to channel money into one or more underlying investments, being wholesale funds or retail funds, operated by professional investment managers. Apparently the distinguishing feature of master fund is that there are 2 layers of trusts.

26 Ms Willsford then outlines in paragraphs 8 - 30: (a) The three distinct types of investment options which can be offered through a master fund.

(c) That All In One offers a range of over 40 investment options. (d) The entitlement of investors to choose either the Entry Fee Option or the Nil Entry Fee Option.

(e) The structure and operation of All In One and in particular how a custodian has been appointed to hold assets of the National Cash Management Trust and the National All In One Investment Trust, and to undertake transactions as directed by the Portfolio Manager.

(f) That the National All In One Investment Trust is a non-unitised trust vehicle used to hold the investor's investments.

(g) How the National Cash Management Trust works in terms of the establishment by an investor of a Cash Balance, the separate account which an investor may be offered in which to invest cash, known as the Cash Investment Facility.

(h) How and when the unit price of each investment fund is calculated.

27 Paragraphs 31 through to 47 of the affidavit are in the following terms: 31. All in One has 3 unique product features, which involve the application of confidential processes, namely the manner in which the cash account operates, the mechanism by which the nil entry fee option operates, and daily pricing of units. Cash Accounts 32. All in One incorporates 5 cash accounts, namely: (a) Cash (liquidity) account (entry-fee accounts); (b) Entry-fee-paid cash investment (entry-fee accounts); (c) Entry-fee-not-paid cash investments (entry-fee accounts); (d) Cash (liquidity) account (nil-entry-fee accounts); (e) Nil-entry-fee cash investment (nil-entry-fee accounts). 33. All in One enables investors to maintain a cash account that is not subject to entry fees. Entry fees are only payable (if at all) when the cash holding is used to purchase units in the All in One Investment Trusts. 34. The value to clients of the existence of cash accounts that do not incur entry fees is that it enables reporting to, and receipt by, investors of details of the performance of both cash investments and other investments in one consolidated statement. This enables the investor to more easily review and manage the performance of his or her investment portfolio and simplifies calculations of earnings for taxation purposes. Other master funds charge entry fees on all monies invested in the master fund which causes investors to treat cash investments separately to avoid being charged an entry fee on cash investments. With clients separating cash investments and other investments because of fee structures they lose the benefit of consolidated reporting. The investor will receive 2 statements, one for cash investments which are likely to be held in a common fund type account and another account statement for other investments from the master fund. 35. The processes involved in maintaining a no entry fee cash account are complex. They are described on pages 7 and 8 of the National All in One Investment Service Procedure Manual. The definition of the processes needed to ensure that cash balances do not incur entry fees until converted into investments in unit trusts, took a team of 8 people (at least half of whom were occupied on a full time basis) approximately 9 months to complete as a part of the overall design process. Fee options 36 The second unique and confidential process of All in One concerns fee options. All in One is the only master trust that allows an investor to select a nil entry fee option that progressively increases the amount of the investment that does not incur exit fees. Accordingly, during the first year of investment 7.5% of the investment will not incur an exit fee; during the second year 25% of the investment will not incur an investment fee; during the third year 50% does not incur an exit fee; during the fourth year of investment 75% does not incur an investment fee and after 4 years no exit fee is payable on a particular investment parcel. 37. The value of such a feature is that it enables investors who need to access part of their investment to do so without incurring fees after a defined period. For example, where an investor knows that a liability will fall due in two years time, money can be invested and the units redeemed potentially without incurring an exit fee. 38. In practice, it is difficult to develop business rules to accommodate such a fee option as investors may add to their investment funds, switch between investments, receive distributions or withdraw part of their funds either on an ad hoc basis or as part of a defined income stream. Matters such as these must be taken into account when determining how much of an investor's funds are subject to an exit fee in any particular year. 39. The work done on this product feature extended from April 1998 to December 1998 at which time the specifications were completed. The specifications were then incorporated into the computer program which underpins the registry procedures. Daily pricing 40. The third unique feature of All in One is that it is the only master fund that prices and transacts units on a daily basis. Other funds transact every third day or on a weekly basis. The advantage of pricing on a daily basis is that it gives an investor greater flexibility in managing their investments, particularly in respect of switching investments. If a master fund only transacts weekly then the process of switching may take up to a month or more. This is because a switch is transacted as a redemption (pricing cycle one) after which the master fund must wait for the proceeds (cycle two) prior to re-applying the funds to the new investment option (cycle three). 41. The development of the daily pricing and transacting function was a complex task as to operate it requires daily reconciliations of unit registers by both the portfolio manager and the fund managers. It also entailed significant negotiation with each of the underlying fund managers to ensure that their processes would be aligned with the master fund. It was first proposed in December 1997 and was not completed until the end of June 1999. Prejudice caused by use of the information 42. Information concerning the way in which these unique product features have been built into All in One would be useful to competitors as it would enable them to include such capabilities in their master trusts with minimal cost and development time. Given the value of the three product features referred to paragraphs 31 to 41, their addition to a master trust would enhance its ability to attract investors and to compete with All in One. 43. The three unique product features provide All in One with points of differentiation when promoting the master trust to both advisers and investors. All in One in its advertising has referred to these unique propositions. Annexed and marked "B" is an example of such an advertisement. The incorporation of such features in other master trusts at a time when All in One is establishing and growing its market share would be damaging to its marketing strategy. 44. Two documents set out the way in which All in One's cash accounts, nil entry fees and daily unit pricing are built into the master trust. The business rules are set out in the document entitled "Master Trust Requirement Specification" as follows: (a) pages 6-8, 19-20, 94-101 (Cash Account); (b) pages 79-93 (Fee options); (c) pages 11-14, 21-34, 39-40, 44-51, 56-62, 65-69, 70-74, 115-125 (Daily pricing). Exhibited and marked "PW1" is a copy of this document. 45. The computer processes required are set out in the National All in One Investment Service Procedure Manual. Exhibited and marked "PW2" is a copy of this document. 46. Any competitor that obtained access to the information in these two documents would be in a position to substantially build these features into a master fund. 47. Based upon my knowledge and experience of the cost and time involved in developing cash accounts, nil entry fees and daily unit pricing in the All in One master fund and my knowledge of the competing products I believe that these product features will not be generally available in competing master funds for a period of 2 years. 28 Under cross-examination in relation to the All In One Fee options and the claimed confidentiality in that regard, Ms Willsford accepted that the confidentiality to which she was referring was "the process by which the fee structure is actually administered". In short, what was sought to be protected included the software used for the administration of the fund as well as the business rules used to define the process of administration . Those business rules are to be found in the administration specification and also in the system specification [transcript pages 43, 44].

29 It was put to Ms Willsford that when in paragraph 35 she had referred to a team of a person's having taken approximately nine months to complete definition of the subject processes, and had used the word " complex" to describe the processes involved in maintaining a no entry fee cash account, that "it would be something that [she] would not expect any person to be able to remember in detail. Her answer was "No, no" [transcript page 44].

30 Ms Willsford accepted [transcript pages 44 - 45] that the specification of a two-year period to be found in paragraph 47 of her affidavit was derived by reference to the period of time that it had taken the Bank to develop the subject product features.

31 Ms Willsford also accepted [transcript page 45] that the All In One product had been fully described in a public prospectus since August 1999. Likewise she accepted that it was fair to say that the funds industry is regularly developing and bringing out new products.

32 Ms Willsford was also cross-examined on whether or not there is a process of reverse engineering which might be utilized in relation to a public description of a master fund so that a competitor could endeavour to work back and to design a fund with identical or very similar features. Her evidence was that reverse engineering could not be achieved as 'directly' as in relation to a physical object, as one of the processes of product management was to ensure that the client has under the Corporations Law, sufficient information on which to make an informed decision on which to invest in a product. "The business rules that are required in order to back that up are not normally part of your disclosure process, and so whilst the broader features are explained in the public documents, the methodology by which you achieve them is not" [transcript page 46]. The evidence given by Mr Liley

33 Mr Liley gave evidence to the following effect: - That Project Maple Leaf was the design phase of the project concerned with the transformation of the National from a branch based regional retail Bank to a globally integrated financial services organisation with greater reliance upon direct channels of distribution of its products and services through use of ATM's, Internet Banking and telephone banking, and an emphasis on migrating sales and service transactions from high cost to lower cost channels of distribution; - that the program formerly commenced in December 1998; - that the plan put forward in Project Maple Leaf was to implement a co-ordinated set of programs across all regions in which the National operates. Accordingly the program includes plans dealing with the other Banks owned or affiliated with the National, namely Bank of New Zealand, Michigan National Corporation in Michigan in the United States, and the National's four United Kingdom Banks. The plan consists of 10 programs, being six operating projects and four enabling programs, designed to be staged over multiple phases known as "episodes", with each episode lasting approximately six months and with defined objectives and methods of measuring achievements - in which he identified each of the 10 programs by name and purpose; - in which he described the principal documents created by the Bank which relate to Project Maple Leaf and Operation First Choice as falling into one or more of the following categories: (a) documents that define or describe the initial scope and concept of the project;

(b) the business cases developed for approval by the National and various of its service management committees;

(c) documents that define or describe the precise manner of implementing the programs that form part of Operation First Choice and the time frame for implementation;

(d) documents that set out the actual or projected costs and revenue of Operation First Choice. Exhibit MJL1 are the documents identified by Mr Liley as falling within these classes.

34 Paragraphs 19 to 26 of Mr Liley's affidavit were in the following terms: 19. The competitors of each of the Banks are the financial services companies in the particular geographic regions in which those Banks operate. 20. In this context it should be noted that all Banks have a variety of associations or networks with Banks in other regions which involve the sharing of information. These include formal networks to enable settlement of inter-Bank financial transactions, and less formal networks by which, for example, information concerning Banking procedures and processes are shared. Information of value to competitors 21. Changes to the manner in which financial services companies including Banks are regulated by government, the increasing globalisation of clients' businesses and rapid advances in technology have all combined to increase competition in the financial services market. 22. Given these circumstances many commercial trading Banks are reviewing the way in which they do business, and in particular, the means by which they distribute financial products and services. Accordingly detailed information concerning another Bank's strategy for utilising emerging technology (such as the internet) to distribute products and services would be of general use to any commercial trading Bank. 23. The information contained in the documents relating to Project Maple Leaf and Operation First Choice are however of more than general interest to competitors of Banks. 24. The information contained in the four classes of Maple Leaf and Operation First Choice documents as referred to in paragraph 18 above would assist a competitor in the following respects. First the analysis undertaken by the Banks as set out in the Project Maple Leaf and Operation First Choice documents would enable a competitor to better evaluate alternative distribution strategies and their potential cost. Secondly a competitor would be able to more quickly determine and implement new distribution strategies by drawing upon the ideas considered in the Project Maple Leaf and Operation First Choice documents. Thirdly a competitor would be able to identify both those parts of the strategies of the Banks that were successful and those parts that were not successful and thereby benefit from the implementation of the Banks' strategies without having to themselves incur the cost or risk of implementing such strategies. Fourthly the detail as to the timing and implementation of the Banks' strategies set out in the documents would enable a competitor to plan and implement a response to the initiatives and strategies employed by the Banks. 25. If the information contained in the Project Maple Leaf and Operation First Choice documents were available to competitors the Banks would be correspondingly prejudiced by the advantages obtained by competitors as set out in paragraph 24 above. 26. Based upon my knowledge and experience, and the period in which the strategies to be implemented in Operation First Choice are to be implemented, I believe that the information contained in the documents relating to Project Maple Leaf and Operation First Choice will remain generally of value to competitors for a period of time, being two years or more. [emphasis added]

35 Mr Liley under cross examination gave some detailed evidence as to the timing of the commencement of the design and consideration of project Maple Leaf. This cross-examination elicited that in October and November 1998, Mr Liley undertook a six week overseas trip together with technology representatives; that the Banks visited were in the United States, in Canada, in the United Kingdom and in Germany; that an interim design for Maple Leaf was then prepared; that advice was obtained from consultants; that there was a major strategy conference in about March 1999 and that the final submissions were addressed to the Bank's Group Leadership Team.

36 Mr Liley accepted that the Bank had used McKinsey and Company as its consultants from December 1998 onwards and still used McKinsey. He was taken to a memorandum proposal from McKinsey & Co to the Bank of 15 January 1999 entitled "Delivering Project Maple Leaf" including a note reading: "This report is solely for the use of The National personnel. No part of it may be circulated, quoted or reproduced for distribution outside The National without the prior written approval from McKinsey & Company."

37 Mr Liley was not aware but not certain as to whether any agreement was signed with McKinsey's in relation to the provision of their services to Maple Leaf after this document was received by the Bank. [transcript page 53]

38 In relation to paragraph 24 of his affidavit, Mr Liley was asked whether it was the case that he had made an assumption that the Bank was ahead of its rivals in the development of services of the kind there referred to. His answer was in the affirmative. In re-examination he gave the basis on which he made that assumption in terms of the way in which the Bank keeps a very close eye on its competitors, both in Australia and overseas: "A… All Banks are in one way or another trying to do similar things to Operation First Choice . The problem is most of them do it in an ad hoc fashion and don't get the sort of results that we are starting to get out of Operation First Choice. The very early stages indicate that we are far more successful than either the Banks we have studied overseas or what we'd believe to be the case with our local Australian competitors" [transcript page 56; emphasis added].

39 Under cross-examination Mr Liley gave evidence that when he had used the words "the financial service companies" in paragraph 19 of his affidavit, he had meant to refer not only to general trading Banks but to include essentially building societies and any entity which had a retail description network connected to financial services. The evidence given by Mr Field

40 Mr Field gave evidence that the process of manually providing a foreign exchange ("FX") product is labour intensive and costly. He also gave evidence as to the object of an automated FX system; the complexity of structured FX transactions and defining a number of terms used in relation to foreign exchange transactions.

41 Mr Field's evidence was that the Bank's FX Dealing System is a customised and automated FX system that facilitates an electronic method of automatically pricing, executing and confirming a deal between the Bank and its customers.

42 Mr Field gave evidence that the Banks FX Dealing System uses software developed by a technology company based in Ireland, namely Cognotec Services Limited ["Cognotec"]. His evidence was that the Bank is licensed under agreement with Cognotec to use the software.

43 Mr Field's evidence dealt with the periods of time in which the FX Dealing System had been developed. Phase 1 began in June 1998 - the cost of implementing phase 1 was approximately $4.7 million. Phase 2 began on 15 January 1999 to implement the FX Dealing System with the NAB Group of Banks globally.

44 Mr Field also dealt with the target market aimed at customers using FX products.

45 In paragraphs 19 - 32 of his affidavit Mr Field gave evidence as follows: 19. The primary competitors of the Bank in respect of an automated foreign exchange dealing system are those Banks engaged in wholesale trading and dealing in foreign exchange. 20. In Australia the primary competitors of the Bank in respect of a foreign exchange auto-dealing product are Commonwealth Banking Corporation, Westpac Banking Corporation, ANZ, Citicorp, Deutsche Bank, HSBC Bank Australia Limited, Standard Chartered Bank Australia Limited and Macquarie Bank and their respective subsidiaries. 21. In New Zealand the primary competitors of the Bank are the Commonwealth Banking Corporation, Westpac Banking Corporation and ANZ. 22. In respect of the United Kingdom the competitors included the major commercial trading Banks being Lloyds TSB Bank plc, Barclays plc, HSBC Holdings plc and National Westminster Bank plc. Information of assistance to competitors 23. The information contained in the documents relating to the FX Dealing System that would assist competitors falls into three categories, namely budgets and financial reports, business cases developed internally for approval by NAB management and specifications of enhancements to the NAB FX Dealing System. 24. Certain of these documents relate to Phase 1 of the Project namely: (a) Auto-Dealing Business Case (DEF: 147.0007A); (b) Auto-Dealing Business Case - Infrastructure Project (DEF: 145.0071); (c) HRR design Specifications (DEF: 179.0139); (d) System Enhancement: Value Today Cut Off Times (DEF: 147.0154); (e) FX Auto-Dealing Project: Phase 1 Process Changes (DEF: 148.0002); (f) Historic Rate Rolls: Functional Specification Version 1.7 (DEF: 179,0006); (g) Historic Rate Rolls: Functional Specification (DEF: 179.0149); (h) System Enhancement: Historical Rate Role: Business Specification (DEF: 147.0151). Exhibited and marked "PF1" is a copy of these documents. 25. Many of the competitors who have yet to launch an automated FX dealing system have announced their intention to launch an automated FX product in 2000. 26. The documents that comprise PF1 all relate to Phase 1 and if the information contained in these documents were available to competitors it would provide them with a number of benefits. First it would enable them to critically evaluate their own proposed system and ensure that it did not contain any errors identified in the NAB's documents. This would result in a saving of both time and money. Secondly the information in the documents would enable competitor to identify areas of competitive advantage or disadvantage and better refine its product prior to it being launched to make it more attractive to the market. Thirdly information in the documents would enable a competitor to determine whether its product was profitable by comparison to the NAB FX Dealing system, in terms of both pricing and cost. 27. From my knowledge of the timing of competitors' proposed releases and my experience as project director, and given the nature of the documents, I believe that the information contained in the documents comprising PF1 will remain confidential for a period of 6 months. 28. The remainder of the documents falling within the 3 categories set out above are: (a) FX Auto-Dealing Phase 2 Project: Global Implementation Business Case (DEF: 148,0069); (b) Internal Memo to Group Leadership Team (DEF. 147.0053); (c) FX Auto-Dealing Project: Benefits Realisation Plan - 20/8/1998 (DEF: 147.0174); (d) FX Auto-Dealing Project: Benefits Realisation Process - 11/9/1998 (DEF: 148.0001). 29. These documents include details of the strategy to be employed by the NAB for three years, the level of projected expenditure and the expected returns to be generated from the NAB FX Dealing project. 30. A competitor who obtained access to the information in these documents could use such information to develop a global strategy for automated FX dealing. Access to these documents would give a competitor information concerning the development of the product and enable the competitor to avoid any errors made by the NAB and thereby develop its own product more quickly, and more cheaply. A competitor could also use the information to develop defensive strategies to combat the NAB's marketing strategy. 31. The Bank would be prejudiced by competitors being able to use the information in these documents to target its customers (the Phase 2 Business Case identifies target markets) and their ability to use the information to engage in parasitic marketing - that is, marketing products related to foreign exchange, such as money market investment products. 32. From my knowledge of the timing of competitors' proposed releases and my experience as project director, and given the nature of the documents I believe that the information contained in the documents exhibited as "PF2" will remain of value to competitors for a period of 12 months.

46 Mr Field gave evidence as to the basis upon which he came to the conclusion expressed in paragraph 23 of his affidavit namely as to his view that information contained in the documents relating to the FX Dealing System that would assist competitors fell into the three named categories. His answer was as follows: "The most significant problem that the National faced in putting a product like this into the market was to get customers to sign on to the service and then be able to make some sort of profit. So, therefore, what was the most important work that we did at this stage in my opinion was to develop the budgets and financial analyses that would enable us to release a product which would be profitable and which would be competitive in the market against the other competitors who were trying to put [sic] such a product. Hence, those categories, the budgets and financial reports reported the amount we were going to spend on the product and therefore the amount we could sell the product for. The business cases talked about the approach we were going to use to sell the product and the specifications that are mentioned there were because of special specifications called historic rate rolls that were required for the Australian and New Zealand market".

47 Mr Field was asked to identify the basis on which he offered his opinion that access to the documents in the classes he had identified would in his view assist competitors. His answer was in the following terms : "First, they would be able to identify the way in which we went about, over some time and spending quite a lot of money, devising a marketing and sales strategy for this type of product. Secondly, they would be able to identify the cost structures that we had put together to be competitive in the market and, thirdly, they would be able to identify across a group of documents, some of the mistakes we made and start to devise sales strategies that would attack our weak points. " [Transcript page 58]

48 As to the amount of time involved and the amount of money spent in relation to the project and to which Mr Field had referred, he gave the following detail: "From the official start of the project in June 1998 we took until December 1998 to release the first level of service and then until October 1999 to release the next level of service. In that period of time in Australia we spent $4.7 million and internationally an additional approximately $2.5 million to date " [Transcript pages 58-59]

49 Mr Field was tested in cross-examination on paragraph 32 of his affidavit as to his claimed knowledge of the timing of competitors proposed releases. His evidence was that as part of a project which is responsible for actual sales and profits of the product, he kept informal records of all of the publications in business and finance pages in Australia, the United Kingdom and the United States. His evidence was that in addition, the National has a press clippings service internally also and that as part of the industry, there was gossip about what persons were doing or not doing. His evidence was that during the last three months in particular, that is to say during the period from 1 October 1999, most banks and financial institutions had been in a period of moratorium on products and services due to what he referred to as "the Year 2000 concerns". His evidence was that during that time a large number of banks and financial institutions have announced their intention to release foreign exchange services and instruments during the middle part of the year 2000" [transcript page 59; emphasis added]. Some of the banks and financial organisations which have announced such an intention included Citicorp, Commonwealth Bank of Australia, Hong Kong and Shanghai Banking Corporation, NatWest, Royal Bank of Scotland and First Union at North Carolina. The National has announced that it is going to have a new/upgraded product available in March.

50 Mr Field was tested on his understanding of the Commonwealth Banks new wave in their program. His evidence was that his understanding was that the Commonwealth Bank had a foreign exchange instrument which they had released sometime in the last four to six weeks and that they were adding term deposits and cash management products to that product in April. [Transcript page 60]

51 Mr Field was cross-examined on Cognotec which he accepted is a seller of software that happened to produce the software that the Bank felt was suitable for its needs. He accepted that the software which had been used in Australia was "a software program already in existence developed by Cognotec which would then add to it certain enhancements that the Bank felt was desirable". Mr Field accepted that as far as he was aware, anyone else could buy the basic Cognotec services program if they wished to do so from Cognotec. This included anyone else in Australia. Mr Field accepted that in development of the FX system which the Bank was presently using, it employed other outside consultants. One such consultant was a company called DMR Consulting. Another such consultant was Peter Field Management and Consulting-.

52 The company DMR, Mr Field accepted, was still providing services in relation to the FX system for a further five days .

53 In re-examination and against the event that the plaintiffs would submit that part of the foreign exchange software acquired from Cognotec depended upon standard "off the shelf" software, Mr Field was asked as to whether or not the software purchased from Cognotec underwent any process of enhancement and as to how extensive such enhancement was. His answer was: "There was extensive packaging at the client end of the system to ensure that -- there were security provisions to ensure that the date of transfer was secure between the client and the National's operating system to the extent that the software that is actually installed in the customer's office today is less than 50 per cent that which is supplied from Cognotec. Of the operating system which exists and does the actual pricing, we have had extensive additional function added to that which was about 500 days of work of programming and analytical work done by Cognotec on our specification. So it was quite a significant amount of enhancement that was added to the version which National Australia Bank now runs".

The plaintiffs' evidence in reply 54 The position which obtained on the hearing of the motion on 4 February was that the defendants sought on that day to rely on an alternative set of proposed undertakings to that which had previously been put to the plaintiffs. In consequence the evidence which the plaintiffs intended to rely upon in reply, being affidavits of Professor Aitken of 25 January 2000 and of Mr Joslin of 25 January 2000, had to an extent become outdated because they had sought to deal with the undertakings which the defendants had previously communicated to the plaintiffs as to be pressed. In those circumstances, when the matter was adjourned on 4 February this was for the purpose of the plaintiffs seeking to determine whether to supplement the evidence of Professor Aitken and Mr Joslin by further affidavits. In the result, further affidavits were made and these were read on the resumed hearing on Monday, 14 February 2000. 55 The late January affidavits of Professor Aitken and Mr Joslin commented upon the defendants then communicated requirement to have the subject experts to whom the critical documents would be shown, undertake: (c) Not [to] advise, consult to, or accept or continue employment with the entities listed in Schedule A to these orders as follows: (i) if given access to the FX Auto-Dealing project, for two years from the signing of the undertaking in relation to the entities numbered 1-12 in Schedule A; (ii) if given access to the Maple Leaf documents, two years from the signing of the undertaking in relation to the entities referred to at number 13 in Schedule A; (iii) if given access to the Gateway/All In One documents listed in Schedule B, two years from the signing of the undertaking in relation to the entities referred to at number 14 in Schedule A." 56 At the time of Professor Aitken and Mr Joslin's 25 January 2000 affidavits, Schedule A:-

• insofar as dealing with the FX Dealing Project, was in the same form as Schedule A as appearing in the defendants' final form of propounded undertakings;

• insofar as dealing with the Maple Leaf/Operation First Choice project, referred in paragraph 13 to "all commercial trading and savings banks", whereas the defendants' final form of proposed undertaking referred to, nominated commercial trading and savings banks which were then listed in annexure "A1", comprising in excess of 100 named banks, trust companies and financial institutions;

• insofar as dealing with the Gateway/All In One project, referred in paragraph 14 to " all entities offering or in process of developing a master fund ". In the defendants' final form of propounded undertaking, paragraph 14 now identified by reference to annexure "A2" to Schedule A, the entities described as " offering a non-superannuation master fund ". Schedule A2 sets out the named master funds - in all 16 such funds. 57 Professor Aitken in his affidavit of 25 January 2000 and in relation to the then proposed form of undertaking sought to be propounded by the defendants, deposed that he had been asked by the plaintiffs' solicitors to say whether if he was asked to give an expert opinion concerning the projects FX Auto-Dealing, Maple Leaf/Operation First Choice and Gateway/All In One, which necessitated his reading the statements which had been filed by the defendants' witnesses as well as the annexures thereto and documents discovered by the defendants, he would be prepared to give the undertakings. His response to the question was in the negative "because I considered that if I did so I would be depriving myself of any further consulting work in Australia for two years in each case". [Affidavit paragraph 4] [emphasis added] 58 Mr Joslin in his affidavit of 25 January 2000 likewise gave a negative response to the same essential question [save that the question was confined to his being asked to give an expert opinion concerning the FX Auto-Dealing Service], expressing his reasons in the following terms: "…because the nature of my consultancy and fund data business is such that I would reasonably expect to sell these services to a high proportion of the industry at any one time, including the organisations listed in 9-12 of Schedule A of annexure "A". Over the last 12 months two out of the four organisations listed in 9-12 of Schedule A to annexure "A" have been clients of mine ." [emphasis added] 59 Faced with an alternative set of proposed undertakings then propounded by the defendants by 10 February 2000 [which again is not in precisely the same form as that finally and on 14 February, propounded by the defendants, but is very close to the final form], Professor Aitken stated that he would not be prepared to sign an undertaking in the form then proposed and that the opinions which he had expressed in his earlier affidavit remained the same. He now gave the following reasons for his opinions: "5.1 My knowledge concerning the three projects described as Gateway/National All In One service, Maple Leaf/Operation First Choice and FX Auto-Dealing service is derived from my reading of the materials to which I referred in my statement dated 23 December 1998 and the affidavits of Damian Lovell sworn 22 December 1999 and 17 January 2000. 5.2 The undertaking required by annexure "A" would prevent me from advising the organisations referred to in Schedule A of the proposed short minutes. I already provide advice and consulting services to some of those entities, in relation to activities similar to the defendants' projects . 5.3 The Maple Leaf project, as described by Mr Lovell, concerns a wide variety of financial services and activities involving new technology. If I were to undertake not to advise or consult to persons engaged in similar projects, my professional activities would be very severely restricted . Accordingly, I would not give such an undertaking." [emphasis added] 60 Likewise, Mr Joslin in his affidavit of 8 February 2000 dealt with the set of undertakings then sought to be propounded by the defendants. 61 In Mr Joslin's latter affidavit he deposed that he would not be prepared to sign an undertaking in the form annexed to his affidavit and that the views which he had expressed in paragraph 3 of his earlier affidavit remained the same. 62 He gave the following reasons for giving those answers: "6.1 My principal concerns, if I were asked by the plaintiffs to give additional expert advice and evidence in these proceedings, and was required to give undertakings in accordance with paragraph 4 of annexure "A", would be in relation to what is described as the Maple Leaf and Gateway/All In One projects referred to in subparagraphs 4(c)(2) and (3). I do not give expert advice in foreign exchange matters. 6.2 My present knowledge of the Maple Leaf project is derived from paragraph 9 of Mr Lovell's affidavit of 22 December 1999, in which he describes this project as involving 'the concept of shifting the Bank's operating model from a traditional branch based regional Bank to a more integrated retailer of financial services with greater emphasis on direct channels of distribution such as telephone banking and internet banking'. 6.3 My present knowledge of the Gateway/All In One project also stems from Mr Lovell's affidavit in which he describes it as involving a 'master fund' which 'allows investors to invest in one or more underlying managed funds by investing in units in the master fund'. 6.4 Having read carefully the proposed undertakings in subparagraphs 4(c)(2), I am of the view that they would preclude me from providing my consulting services to all financial institutions in the United Kingdom for two years. For example, I have this week discussed supplying fund data to a major international Fund Manager who is seeking to develop a new distribution channel by way of a 'funds supermarket' . In the course of those discussions, I have also been asked to submit a proposal whereby my colleagues and I would develop on its behalf the underlying data base that would feed information into the website as well as assist them with the design and sequence of the various web pages. I consider that, if I signed the undertaking and was then given access to the defendants' Maple Leaf documents, I would be constrained by that undertaking from advising any fund manager in relation to such an assignment for two years. 6.5 I am not aware of any financial institution in the United Kingdom which is not giving consideration to utilising emerging technology (or which is not already using the internet) to distribute its products or services . 6.6 I would be prepared, if retained by the plaintiffs and asked to consider the Maple Leaf or Gateway/All In One documents, to sign a document in the form proposed by the plaintiffs. However, I would not be prepared to sign a document which would prohibit me from advising my usual clients for a period of two years. 6.7 The operation of the undertaking in relation to the Gateway/All In One project is restricted to Australia, and there is less likelihood of my UK clients seeking my advice in relation to such a project in Australia. However there are so many interlocking relationships between financial institutions worldwide that I consider it likely that I might inadvertently find myself advising a client who, without my knowledge, is involved in one way or another in such a project in Australia ." [emphasis added] 63 Mr Joslin further deposed that during his employment with Deloittes Touche Tohmatsu, he consulted to a large number of financial institutions. He referred in that respect to paragraph 1 of his statement of 19 April 1999 and to the curriculum vitae annexed to it. He deposed that in providing such services he was never asked or required to sign an undertaking such as that contained in annexure "A". He deposed that to the best of his knowledge, none of his colleagues was ever requested to do so, and never did sign such an undertaking, "notwithstanding the fact that we were often given access by such clients to large quantities of extremely confidential and sensitive material".

64 In the Bank's supplementary written submissions of 14 February 2000, the critical documents were summarised as falling within the following categories: FX dealing The business case studies undertaken by the Bank and the specification and design work of the FX System.

The All-In-One Master Fund The three unique features as recorded in the administration specification and the system specification namely: (a) daily pricing and the way in which that feature works; (b) the nil entry fee option; (c) the manner in which the cash account works. Project Maple Leaf (a) Documents defining or describing the initial scope and content of the project; (b) The business cases developed for approval by the Bank and its internal management committees; (c) Documents describing or defining the precise manner of implementing the programmes that constitute Operation First Choice and the timeframe for implementation of that programme; (d) Documents recording actual projected costs and revenue of Operation First Choice. [Submissions paragraphs 6 and 7] 65 The defendants' submissions first stress why precisely it is suggested that competitors of the National and of the other Banks owned or affiliated with the National, would be assisted by obtaining information contained in the critical documents. Most of these points are made by the defendant witnesses and have already been set out. They are, in general terms: As to Project Maple Leaf and Operation First Choice That competitors would be assisted to: (a) enable a better evaluation of alternative distribution strategies and their potential costs; (b) quickly determine distribution strategies; (c) assess successful and unsuccessful strategies without having to themselves incur the cost or risk of implementing such strategies; (d) plan and implement a response to the initiatives and strategies employed by the Bank Group.

As to Gateway/All In One That access to information concerning the way in which the unique product features have been built into All In One would be of assistance to competitors as it would enable them to include such capabilities in their master trusts at a minimal cost and development time. As to the FX Dealing System That, as many of the competitors of the Bank's FX Dealing System are yet to launch an automated FX Dealing System having announced their intention to do so, and to do so in the course of this year, competitors would be assisted in that access to the subject information: (a) would enable them to critically evaluate their own proposed system and to ensure that it did not contain errors identified in the critical documents leading to a saving in both time and money;

(b) would enable a competitor to identify areas of competitive advantage or disadvantage and better finance product prior to launch;

(c) would enable a competitor to determine whether its product was profitable by comparison to the Bank's FX Dealing System, in terms of a pricing and cost;

(d) could enable a competitor to develop a global strategy for automated FX Dealing;

(e) could enable a competitor to avoid any errors made by the Bank and thereupon to develop its own product more quickly and cheaply;

(f) could enable a competitor to develop defensive strategies to combat the Bank's marketing strategy.

[See the defendant's written submissions of 1 February 2000, paragraphs 14, 16, 24, 35, 36, 38] Findings sought by the defendants

66 Although again repeating their earlier submissions, the defendant's seek the following findings: All In One Master Fund That Ms Willsford's oral evidence establishes: (a) that the All In One fund is the market leader;

(b) that the nil entry fee feature and daily pricing contributed significantly to the Fund achieving that position;

(c) that the three unique features which Ms Willsford identified, confer a significant commercial advantage on the Bank;

(d) that the critical documents relating to the Fund constitute the intellectual property which underpin the three unique features identified by Ms Willsford;

(e) that access to the critical documents constituting that intellectual property would confer a significant advantage on competitors by enabling competitors to shorten the development and marketing time involved in developing a competing product;

(f) that a competitor who obtained access to this information could avoid having to spend "millions" to develop an identical product; and do so without having to spend two years in the development and building phase. Project Maple Leaf That Mr Liley's oral evidence establishes: (a) that the Bank's competitors both in Australia and overseas are trying to design and implement the projects involved in Operation First Choice;

(b) that the Bank has been more successful in its implementation of these projects than its Australian competitors have been;

(c) that the information in the critical documents is regarded by the Bank as confidential;

(d) that access to that information would confer the following advantages on the Bank's competitors:

(i) an ability to better evaluate alternative distribution strategies and their cost;

(ii) an ability to more quickly determine and implement new distribution strategies by drawing on the ideas contained in the critical documents;

(iii) an ability to identify from the documents, those parts of the Bank's strategies which were successful and those which would thereby benefit from those strategies without incurring costs and risk of implementing the strategies;

(iv) an ability to plan and implement a response to the Bank's plans. FX Dealing Project

That Mr Field's oral evidence establishes: (a) that access to the budget and financial analysis documentation comprised in the critical documents would confer significant commercial advantages on the Bank's competitors;

(b) that the development and implementation of the FX System took nearly 18 months, $7.2 million having been spent on the project;

(c) that a large number of the Bank's competitors were proposing to release competing foreign exchange services in mid 2000;

(d) that the FX System is based on software licensed from Cognotec but extensively modified. 67 I am content to determine the subject application by accepting that the above propositions [see paragraph 66] have been established by the evidence given by the Bank's witnesses. 68 The defendants next seek to emphasise the following three aspects said to arise in relation to the subject application:

(a) The fact that the non compete undertaking is sought in circumstances where the plaintiffs have, it is submitted, for no legitimate forensic reason, declined to accept the alternative regime offered by the Bank.

[That regime would, as the submissions elicited, require the plaintiffs to identify a proposed expert to the defendant's by way of furnishing his or her expertise and background; the Bank to undertake to the court not to comment upon the plaintiff's failure to call any person so identified to the Bank and to further undertake not to communicate with such person during the period of the proceedings and not to issue any subpoenas or notices to produce to such person or to the plaintiffs or to any other person seeking to procure by such process, any material or information as to what may have passed orally or in writing between the plaintiffs and such person. The regime would require, that following such identification of a proposed expert to the defendants, the defendants would be entitled to object to the critical documents being shown to such person. If such an objection came forward, this would have to be determined by the court [I interpolate that in the circumstance the regime would simply have moved down the track, in relation to such person, a repeat of the matters argued before the court on the motion]. In the event that the defendants did not have any objection to such nominated expert being shown the critical documents then, as with the current position as it obtains in relation to Professor Aitken and to Mr Joslin, such expert would be shown the critical documents subject only to the plaintiffs' regime as proposed in the plaintiffs' notice of motion. The defendants submission is that the plaintiffs' rejection, it is suggested, without justification, of this regime, in circumstances in which it is submitted that there was no prejudice in the plaintiffs agreeing to the regime, is a significant factor to take into account in determining what order should be made. (b) The fact that there is no dispute but that the documents sought to be made the subject of the non-compete undertakings are confidential to the Bank - this was clearly conceded by Mr Whittle SC during the application.

(c) The fact that on the defendants' submissions, the plaintiffs have not shown that the non-compete undertaking would cause them prejudice. The plaintiffs' submissions

69 The plaintiffs assert and I accept, that they need to have access to the critical documents permitted to their experts for the following purposes: (a) to receive advice from experts in preparing for cross-examination of the defendants witnesses; (b) to receive advice from experts in preparing their case in reply; (c) to receive advice from experts in preparing their case on damages.

70 Plainly the plaintiffs as parties have a right to access to the critical documents for general preparation of the whole of their case in chief and for general preparation in their attack upon the defendants case. So much is common ground -- the defendants have always, as I understand it, accepted the entitlement of the plaintiffs as parties and of course of their legal advisers [particular undertakings having been given to the court from time to time and in different terms, - but always in the context of the principle in Home Office v Harman [1983] 1 AC 280], to have access to the critical documents for these purposes. It is also to be recalled, as the 19 August 1999 interlocutory judgment made plain, that Mr Maconochie is proposed to be put forward as an expert by the plaintiffs.

71 The plaintiffs refer the court to the judgments of Rolfe J of 8 and 9 July 1999. Those judgments dealt with a contest as to which, if at all, access to several witness statements, including those of experts, relevant to the computation of the plaintiffs damages, should be given to the defendants. Ultimately at page 47 His Honour said: "I am not satisfied that the plaintiffs have established their claim for confidentiality as against [the Bank] its appropriate officers and the personal defendants. Nor am I satisfied that unless less restricted access, than that for which the plaintiffs contend, is granted to the statements, it will be possible for the legal advisers and experts retained on behalf of [the Bank] and the personal defendants... obtaining proper instructions. In my opinion, it would be inimical to the purpose of the exchange of witness statements to restrict access in the manner suggested by the plaintiffs. The suggestion that the legal representatives of the defendants should have to make known to those of the plaintiffs the areas, even in a general way, in respect of which instructions are being sought is, in my opinion, an impermissible infringement on the right of the defendants to conduct their case as they see fit. Even general information would alert the plaintiffs to areas on which the defendants were focusing, and provide a clue as to the course being followed."

72 In his reasons for judgment of 9 July 1999 Rolfe J. accepted the regime suggested by Mr Insall on behalf of the defendants. His Honour said in this regard "... the prospect of misuse of [the] information should be protected insofar as possible..." [at page 2] [emphasis added]

73 In the result, Rolfe J. made orders recognising as appropriate, undertakings of the defendants in a form which is generally sought to be replicated by the plaintiffs on the present motion. This regime obliged the defendants only to provide copies of relevant witness statements, or to divulge the contents thereof, to officers, servants or agents of relevant defendants: (a) whose names appear on a list delivered in a sealed envelope to His Honour's associate;

(b) who had signed a confidentiality undertaking that each would:

(i) not take further copies of, or disseminate the information in the copies with which they are provided, to other officers, or employees of the [relevant defendants], other than those whose names appear on any list delivered in a sealed envelope to His Honour's associate;

(ii) not to use the witness statements for any purpose other than for the purposes of the relevant proceedings;

(iii) to return any copies of such witness statements to the plaintiffs at the completion of the proceedings.

74 Mr Smith SC appearing for the defendants submitted that the circumstances before Rolfe J. could clearly be distinguished from the present circumstances as Rolfe J had critically proceeded upon the footing that the documents the subject of the application were not, on His Honour's findings, confidential.

75 Mr Whittle SC took issue with this contention pointing to the distinction which Rolfe J is said to have recognised in paragraph 72, when his Honour had said: "It is necessary to stress that in the present case Mr Garnsey submits that the proper inference to be drawn is that [the Bank] is acting as a competitor through Maple Leaf and Independence One, notwithstanding his further submissions that the plaintiffs are seeking to comply with the Consulting Agreement. The consequence of the latter submission is, of course, that [the Bank] and its officers become entitled to certain information conformably with the terms of that Agreement." [emphasis added]

76 Mr Whittle submitted that the holding was essentially that the subject information was not confidential vis-a-vis the Bank. This, it was submitted, flowed from what was submitted as having been his Honour's holding that the agreement between the parties while the Consulting Agreement remained on foot, entitled the Bank to the material. The submission was that the judgment then dealt with, what was in reality, a limited exception only, to confidentiality.

77 I do not see that this debate presently requires resolution. I do not see that the subject application presently before the court can or should turn on Rolfe J's reasoning on the different facts and circumstances being dealt with in his Honour's judgments. The present application falls to be considered on the evidence and applying the relevant principles in circumstances different to those earlier before Rolfe J. I do however readily grasp the pragmatic approach which his Honour saw fit to adopt in the final form of undertakings which his Honour accepted as appropriate. This attempt by his Honour to protect, insofar as possible, the prospect of misuse of information, seems to me to have been a common sense, practicable and reasonable endeavour to keep a level playing field, whilst recognising, as his Honour clearly did, the crucial significance of the right of litigants to access to evidentiary material sought to be deployed against them. Subject to the fuller exposition of the relevant principles set out below, I would certainly adopt as correct the following general statement of his Honour as to the principle: "The ability for those representing the defendants to exercise [the defendants' rights to answer the plaintiffs witness statements and to cross examine] depends on them and qualified experts obtaining full and proper instructions. Efficiency in the administration of the case demands that that occur with the minimum of delay and impediment. Prime facie, litigants are entitled to full access to evidentiary material sought to be deployed against them. In circumstances where that information is of a confidential, and hence commercially sensitive, nature the court can give directions, confining the extent to which and to whom may it be disseminated. However, in doing so the court must have regard not merely to the confidentiality or commercial sensitivity of the information, but also [to] the basic right [of] the party against whom it is tendered to have every reasonable opportunity to answer it fully." [Rolfe J Judgment 8 July 1999 at page 25] 78 The plaintiffs submit that the non-compete undertakings sought to be propounded by the defendants would impose an extraordinary requirement upon the plaintiffs and one which would severely inhibit and may well entirely prevent the plaintiffs from being in a position to retain appropriate experts. The plaintiffs submission is that such a requirement would be contrary to principle and would afford the defendants an undue advantage by severely inhibiting the plaintiffs capacity to prepare experts reports. The submission is that the extraordinary nature of the relief is such that the defendants cannot point to a single case in any jurisdiction where the orders which they seek have actually been made.

79 The plaintiffs seek to distinguish Mobil Oil v Guina Developments [1996] 2 VR 34 (referred to below) as having been radically different to the present case in that, so the plaintiffs submit: (a) the plaintiffs and the defendants are not trade rivals, and have a common interest in the AUSMAQ Service and in all similar and equivalent systems being successfully exploited to the greatest possible extent by the defendants and no one else;

(b) because of their common interest, the plaintiffs (as much as the defendants) have the strongest possible economic reasons to retain experts who the plaintiffs know and believe will not improperly deal with any confidential information which they may receive;

(c) an order permitting inspection would not place the documents in the hands of the defendants trade rivals;

80 The plaintiffs submit that the defendants are merely speculating that: (a) the plaintiffs expert witnesses might be retained to advise the named competitors of the defendants; (b) if they are so retained, the plaintiffs expert witnesses might then reveal information in the documents which they inspect to such competitors; (c) such information will be important and sensitive at the time it is revealed; (d) it will probably be revealed in such quantity and technical detail as to make it useful to those competitors; (e) those competitors will want to use it, will be able to use it, and will in fact use it to the detriment of the defendants.

81 The plaintiffs submit that the defendants attempt unsuccessfully to elevate the speculations to a high-level of probability and risk, in order to justify the imposition of non-competition undertakings.

82 The plaintiffs submit that any orders which the court makes which extend the normal restrictions on the use of discovered documents must reflect: (a) the level of confidentiality of the material contained in the discovered documents; (b) the risk of improper disclosure of that material; (c) the consequences of any improper disclosure; (d) the effect any extended restrictions may have on preparation by the inspecting party of its case.

83 The plaintiffs further submit as follows: "The documents which are the subject of the present application are by no means near the high end of any calculus of confidentiality. Ms Willsford's evidence is that the material she says is confidential would "enhance" the ability of a competitor to attract funds, and that this "would be damaging" to NAB's "marketing strategy": para. 43. She does not suggest that the material is of such a character that its disclosure would destroy this part of the NAB's business. Mr Liley's evidence is pitched at a similar level. At paragraphs 22-25 of his affidavit, he says that the confidential information to which he refers would be of "general use" and "of more than general interest to competitors" (para. 24). There would, he says, be corresponding prejudice to the NAB. Again, there is no suggestion of a high level of confidentiality. Mr Field's evidence at paragraphs 25-32 is to generally similar effect except that he limits any confidentiality to having an existence of, at most, 12 months.

Other matters show the level confidentiality the Defendants see in the information they seek to protect. They have employed consultants to advise them in relation to the FX Dealing and Maple Leaf Projects: Liley T.52.15; Field T.61.30. Those consultants include McKinseys, IBM, Booz Allen, Manhattan Consulting and DMR: T.54.10ff & T.61.30. McKinseys' consultants have been sourced from all over the world: Liley T.52.20.

However, they have not required these consultants to enter into contracts containing non-competition clauses: Liley T.53.25; Ex. A1/MF1-3 (Invitation to tender); Field T.61.30; Ex. A2/MF1-4 (DMR Contract). Only in the case of the DMR contract does one find a confidentiality clause: see Schedule B.

The Defendants are most concerned about the documents being shown to third parties: Willsford T.41.15. However, the undertakings offered by the Plaintiffs will prevent their experts from showing any documents to third parties.

Two experts who have already given evidence for the Plaintiffs are not prepared to give the undertakings sought by the Defendants; affidavits of Joslin and Aitken sworn on 10.2.00. The Court is entitled to infer from this evidence that it is probable that other experts would also refuse. The imposition of such undertakings would therefore place an unjustifiable restriction upon the Plaintiffs ability to obtain witnesses and to prepare its case: see Idoport v NAB (1999) NSWSC 686 para 83.

The normal obligations concerning discovery and the general law obligations concerning confidentiality prevent any improper use of the information in discovered documents, by the clients, lawyers, or witnesses, whether in relation to trade rivals or otherwise. The sealed list in Court offered by the Plaintiff goes further than is necessary, and is more than sufficient to safeguard against any improper use. JMG's case is that NAB'S e-commerce information etc belongs to and should be exploited by NMG. In short, NMG and JMG are not trade rivals of NAB." 84 The plaintiffs further submit that the content of the defendants' application, its extreme nature and novelty, the absence of any evidence of actual or threatened improper use, and the existing safeguards upon discovery and relating to confidentiality demonstrate the impropriety of the approach taken by the defendants and why it should fail. The Principles

85 The motions presently before the court acutely raise the fundamental tension between two important policy considerations to be balanced in the proper exercise of the administration of justice. The first is the concern of the court to promote and ensure open justice. In relation to the present issue, this concern is to permit discovery and inspection as a fundamental part of a court process designed to provide the parties with access to documents which are relevant to facts in issue prior to the hearing so as to enable them to properly prepare for the hearing.

86 The second policy consideration focuses upon the private right to keep one's documents to oneself. This consideration recognises the extent to which discovery and inspection constitute a serious and invasive incursion into the privacy of a party to proceedings: "Discovery constitutes a very serious invasion of the privacy and confidentiality of a litigant's affairs. It forms part of the English legal procedure because the public interest in securing that justice is done between parties is considered to outweigh the private and public interest in the maintenance of confidentiality. But the process should not be allowed to place upon the litigant any harsher or more oppressive burden than is strictly required for the purpose of securing that justice is done". [ Home Office v Harman [1983] 1 AC 280 at 308 per Lord Keith of Kinkel]

87 As Hayne JA [as his Honour then was] pointed out in Mobil Oil at 37-38, "It is because the 'compulsion [to disclose documents on discovery] is an invasion of a private right to keep one's documents to oneself and because 'the public interest in privacy and confidence demands that the compulsion should not be pressed further than the course of justice requires' that both of the litigant and the practitioner obtaining discovery are taken to undertake to the court that the documents so obtained on discovery will not be used for any purpose other than the action in which they are produced: Riddick v Thames Board Mills Ltd [1977] QB 881 at 896 per Lord Denning MR.

88 There is equally no doubt but that the prima facie right of a party to proceedings to have access to all documents properly discovered or produced before hearing may require appropriate qualification if, on balance, the interests of justice so require. The Court has a wide discretion in determining whether any, and if so, what appropriate qualification may be required, depending upon the circumstances before the court in each case.

89 The facts before the Victorian Court of Appeal in Mobil, concerned specific questions affecting trade rivals. Hayne JA's approach to the principles as which, with respect, I accept as entirely correct, included the following: "While it may readily be accepted that a party is ordinarily entitled to discovery and inspection of all discoverable documents in the possession or control of the opposite party (save those for which a valid claim for privilege from production is claimed) it is important to bear steadily in mind that discovery is but a tool to be used in the pursuit of justice and that the right to discovery and inspection is not without its limits. The first and most obvious limit is that a party does not have a right to inspect documents that are discovered if there is a valid claim to privilege from production (as for example on the grounds of legal professional privilege). Secondly, and because the law recognises that the assertion of compulsive power requiring production must be balanced against the needs of justice, a party inspecting the documents of the opposite party may not use them except for the purposes of the action in which discovery is made. Where it is said that the documents are confidential, it may be accepted that the fact that the documents are confidential will not ordinarily be a sufficient reason to deny inspection by the opposite party. In most cases, the fact that the documents may not be used except for the purposes of the litigation concerned will be sufficient protection to the party producing them. But where, as here, the party obtaining discovery is a trade rival of the person whose secrets it is proposed should be revealed by discovery and inspection, other considerations arise. Once the documents are inspected by the principals of the trade rival the information which is revealed is known to the trade rival and cannot be forgotten. Confidentiality is destroyed once and for all (at least so far as the particular trade rival is concerned). To say that the trade rival is bound not to use the documents except for the purposes of the action concerned is, in a case such as this, to impose upon that trade rival an obligation that is impossible of performance by him and impossible of enforcement by the party whose secrets have been revealed. How is the trade rival to forget what internal rate of return the competitor seeks to achieve on a new investment of the kind in question? How is the party whose hurdle rate has been revealed to know whether the rival has used the information in framing a tender? Thus, if the trade rival may inspect the documents concerned, the confidentiality of the information in them is at once destroyed. Is that necessary for the attainment of justice in the particular case?"

90 In Telstra Corporation v Australis Media Holdings [unreported Supreme Court of New South Wales, 6 December 1996] McLelland CJ in Eq. having cited the last paragraph from the above excerpt in Mobil Oil, went on to say: "This applies not only to any officers or employees of the respective plaintiffs but also to any solicitor or counsel who may have ongoing responsibilities in advising the plaintiffs or their commercial associates on matters other than the prosecution of the proceedings for which the confidential information in question may have relevance. For reasons of this kind in some classes of cases it may sometimes be appropriate to confine the disclosure of particular documents to nominated individuals associated with the parties to which disclosure is to be made who have given undertakings to the Court and to the disclosing party, not only restricting the use to which information in the documents may be put, but restricting the future activities of those individuals in representing or advising, or in participating in decision-making for, those parties, at least for some specified period of time. Such a procedure however, has its own disadvantages discussed in the cases including the quarantining of the individual to whom the poisoned chalice passes, from providing their services in particular areas and depriving the parties of the benefit of those services, and also creating a situation where agents of a principal are in that capacity put in possession of information, from access to which the principal is excluded". 91 Again it seems to me that McLelland CJ has correctly set out the relevant principles in this passage. The court's decision 92 To my mind, the circumstances here proved are sufficiently close to the trade rival situation generally examined by Hayne JA in Mobil Oil to require the court to consider very closely indeed whether in carrying out the necessarily delicate balancing exercise, the present is a case in which it is indeed appropriate to limit in some fashion the otherwise unfettered [save by the Harman undertaking], entitlement of a party to make discovered documents available to experts whom the plaintiffs may be considering retaining for assistance in relation to the proceedings. I do not overlook the strength of the plaintiffs submissions that both sets of parties have a common interest in the AUSMAQ Service and in all similar and equivalent systems being successfully exploited to the greatest possible extent by the defendants and no one else. This is, of course, a factor to be weighed in balance, in the proper exercise of the discretion. The more significant focus is however squarely upon the possible activities of experts who may be approached by the plaintiffs at a time, and in circumstances where, the very nature of the expertise of such persons is calculated to make it likely that their professional services will be being utilised in a wide variety of financial services and activities involving new technology. Almost by definition, there is a reasonable likelihood that the experts whom the plaintiffs may seek to retain, may be asked to provide advice and consulting services to other entities either in relation to activities similar to the defendants subject projects, or in relation to activities which may be directly or indirectly similar to all or parts of such projects. And as Hayne JA pointed out in Mobil Oil, there are very clear difficulties in obliging a person to do what is in fact physically impossible; namely, to rid his or her mind of information which he or she has gained.

93 The Bank has not, as I understood the evidence and the submissions, sought to gainsay the plaintiffs proposition that the Bank has not required outside consultants retained to advise the Bank in relation to the FX Dealing and Maple Leaf projects, to enter into contracts containing non-compete clauses. Confidentiality clauses such as that to be found in the contract between the Bank and DMR Consulting Group (Australia) Pty Ltd [Exhibit A2 - Schedule B], are dimensionally different to non-compete clauses. I would, in the absence of evidence to the contrary, infer that the Bank is likely to have similar confidentiality provisions in other of its agreements with outside consultants retained to advise the Bank in relation to these projects. The Bank did not put any submissions to the contrary. To my mind the fact that the Bank appears, at least on the evidence before the court, to have been content not to require non-compete provisions in its contractual relationships with outside consultants, provides at least some support, for the proposition that confidentiality clauses have been seen and are seen by the Bank as providing sufficient protection to it in the circumstances . 94 Then there is the fact that the Bank, notwithstanding its claimed anxiety at the possibility of the confidential information coming into the possession of of one of its competitors, through the medium, witting or unwitting, of one of the plaintiffs experts, is content to permit the critical documents to be inspected by Mr Joslin and by Professor Aitken, without seeking the non-compete undertakings from those persons. This provides further context against which to adjudicate the Bank's concerns. It must be recalled that the Bank's decision not to seek the non-compete undertakings from these persons is a decision reached in a context in which: · Professor Aitken had deposed that were he to undertake not to advise or consult to persons engaged in similar projects, his professional activities would be very severely restricted; · Mr Joslin had deposed that he had in early February, discussed supplying fund data to a major international fund manager who is seeking to develop a new distribution channel by way of a "fund's supermarket". Also that in the course of those discussions he was asked to submit a proposal whereby his colleagues and he would develop on its behalf the underlying data base that would feed information into the website as well assist them with the design and sequence of the various web pages. 95 An important consideration is the apparently accepted fact - [see for example paragraph 6.7 of Mr Joslin's affidavit of 8 February 2000], that there are so many interlocking relationships between financial institutions worldwide, that it is virtually impossible for an expert to be certain that he or she would not inadvertently find himself or herself advising a client who, without his or her knowledge, would be involved in one way or another in a project which, in one way or another, may be or may be perceived to be, in competition with one of the Bank's subject projects. Mr Joslin is not aware of any financial institution in the United Kingdom which is not giving consideration to utilising the emerging technology (or which is not already using the Internet), to distribute its products or services. Professor Aitken in paragraph 5.2 of his affidavit of 10 February 2000 deposed that the undertaking then sought to be extracted from him would prevent him from advising organisations referred to in schedule "A"[see the annexure to his affidavit of 10 February 2000], some of which are entities to which Professor Aitken already provides advice and consulting services in relation to activities similar to the defendants' projects. 96 Professor Aitken has not been cross-examined on his evidence given in paragraph 5.3 of his affidavit of 10 February 2000 to the effect that the Maple Leaf project, as described by Mr Lovell, "concerns a wide variety of financial services and activities involving new technology". A very significant consideration in determining the subject motion is the effect of the ambit of the non-compete undertakings and the extent of the potential restriction upon professional activities of experts retained by the plaintiffs (from whom the defendants' proposed undertaking would have to be sought), understood in the context of the wide variety of financial services and activities to which the undertakings apply. The court may infer that as neither Professor Aitken nor Mr Joslin was prepared to offer to give undertakings to the court in generally similar terms to those the subject of the defendants' final set of proposed undertakings, it is likely that the plaintiffs would have real difficulty in being able to find other experts in the field who would be prepared to subject themselves to the non-compete undertakings. And of course all of this is taking place only months before the final hearing commences and during a period where time is of the essence in terms of both parties general preparation, and of more particular relevance to the present motion, in terms of the plaintiffs entitlement to approach experts to comment and express views on the now discovered critical documents and on documents now the subject of general discovery. 97 Notwithstanding the obviously scrupulous care with which the Bank has sought to frame the proposed undertakings: (a) the nature of the expertise likely to be sought by the plaintiffs; (b) the interlocking and interrelated nature of the banks and institutions likely to retain in one way or another many such experts to give advice in relation to a wide variety of financial services and activities; (c) the difficulties likely to be encountered by an expert from whom the undertakings may be sought, in not being in a position to know whether or not a client seeking his or her advice on a project seemingly unrelated to the Bank's subject projects, may in fact have an association with one of the Bank's relevant competitors [see in particular, the use in the proposed undertaking of the word "indirectly" - "… to the extent that such advice, consultation or employment was directly or indirectly concerned with …"]; (d) the fact that the projects, and in particular the Maple Leaf project, concern a wide variety of financial services and activities involving new technology, strongly suggest that there is a degree of real artificiality in the defendants' assertion that there remains a wide geographic area [including most of the United States] from which the plaintiffs can draw and being likely to contain experts who may be expected to be prepared to give the subject non-compete undertakings. 98 The defendants contend that the orders proposed by them in relation to the Maple Leaf documents would not prevent the plaintiffs from retaining experts in the subject field who operate in the United States, except the Sate of Michigan. To my mind the defendants' submission is based upon the assumptions:

(a) that experts in the subject field operate in narrow geographic areas;

(b) that such experts confine their advice to clients who themselves operate in narrow geographic areas;

(c) that banks are without relevant interlocking relationships with other banks and financial institutions who operate across many geographic areas;

(d) that experts without Michigan connections in the subject field would be prepared to give the non-compete undertakings. 99 Dealing first with assumption (d), on the evidence, such as it is, I do not accept that such assumption is made out. Both Mr Joslin and Professor Aitken expressed particular concern at having their professional activities restricted by giving undertakings of the type from time to time dealt with in their affidavits. What was stressed was that banking and financial institutions generally are now considering utilising the emerging technology to distribute their products or services. Also that Project Maple Leaf involves the concept of shifting the bank's operating model from a traditional branch based regional bank to an integrated retailer of financial services with greater emphasis on direct channels of distribution such as telephone banking and Internet banking. To my mind the court would not infer without specific evidence to this effect that experts in United States without Michigan connections would be prepared to give the proposed non-compete undertakings. 100 Nor would I accept that the factual assertions which underpin assumptions (a), (b) and (c) are made out on, or could be inferred from, the evidence. To the contrary, such evidence as was adduced tends to suggest that these assumptions are not soundly based. 101 I note that to my mind the defendants who seek to propound their draft form of non-compete undertakings bore the essential onus of calling evidence to establish and of persuading the court that the above assumptions could be made. 102 Finally in relation to the Maple Leaf non-compete undertaking, there also appears to be a real degree of artificiality in the defendants' endeavour to only prevent the plaintiffs retaining as an expert, a person who may himself or herself be giving or propose to give advice to a Michigan based bank which is competing with an NAB subsidiary in Michigan. This suggests that Michigan based banks do not have affiliates or relationships outside Michigan - a fact which was not established by the evidence and which, if correct, would seem surprising. 103 As to each of the Bank's subject projects, the proposed non-compete undertakings are likely it seems to me to have the result that local experts with the requisite high level of expertise are unlikely to be available to the plaintiffs. Yet such experts would presumably be important on at least the damages issues related to the Australasian region. They would also be likely to be important on the "functional equivalence" issues. The whole of the non-compete undertaking regime seems to me on the evidence and as a matter of common sense, to be very likely to inhibit the plaintiffs to a real extent from being in a position to retain such experts as they may perceive able to assist in their preparation and presentation of their case and importantly also, seems likely to inhibit the plaintiffs from having ready and immediate daily access to local experts. Yet the obvious prima facie entitlement of a litigant [subject of course when questions of confidentiality arise, to the important balancing exercise earlier referred to], is to be free to prepare his or her case in the manner he or she believes best. It is certainly an unusual circumstance to have his or her preferred choice of experts fenced in by complex conditions laid down by the opposing party. This is not to say that in an appropriate case such conditions may not be imposed. But in my view, subject to the undertakings to be ordered which are referred to below, this is not such a case. 104 Whilst the Bank has certainly made good the propositions outlined in detail in paragraph 66 above and in particular has made good its contentions as to the prejudice it will suffer in the event that its confidential information set out in the critical documents become available to one or more competitors, I am not satisfied that the interests of justice require that the undertakings sought by the Bank be given to the Court. The significance of the case to both parties is obvious from the interlocutory judgment delivered last year. I do not see as necessary to repeat matters set out in that judgment. The respective claims are of such moment to the respective parties that the court must be extremely careful that it not, unless clearly necessary [as to which see the above statement as to the principles to be applied], hamper or impede either party from exercising their undoubted forensic entitlement to properly prepare their case and to do so without alerting the other party in any way. As Justice Young recognised in Hassle v Commissioner of Patents (1987) 9 IPR 565 at 568: "… it is a rather unusual requirement to put upon a litigant that he discloses his witnesses or the course which the preparation of its case is taking". "… it is well recognised that the 'right' to keep witnesses' names confidential is a weighty matter and it is particularly weighty when it is coupled with the right to keep confidential the way in which a person's litigation is proceeding: see eg Lyell v Kennedy (1884) 27 Ch D 1".. 105 One of the matters upon which the Bank placed special emphasis was its anxiety lest the plaintiffs may circulate the critical documents to any number of experts worldwide, leading to an exponential increase in the suggested risk that the information may be imparted to a competitor. To my mind this concern may be addressed at least to an extent by the form of undertakings which I propose to require in the orders to be made. 106 In my view the balancing exercise referred to above, requires in the present case that the orders generally proposed by the plaintiffs be made subject only to the following matters:

(a) the plaintiffs are to be restricted, at least in the first instance, from disclosing the critical documents to any more than four proposed additional experts [that is to say, additional to Professor Aitken, Mr Maconochie and Mr Joslin]; [Whilst it should not be assumed that an application by the plaintiffs made on a future date to increase the number of additional experts to whom the critical documents may be shown will be successful, it seems appropriate that leave should be reserved to the plaintiffs to make such application as and when the plaintiffs may believe necessary. Such an application will be dealt with on its merits at the time but in circumstances in which is to be plain that the court will closely monitor the situation. Any such application may well have to be dealt with by another Judge.]

(b) again, subject to further consideration on appropriate application should this become necessary, to my mind the number of copies of the critical documents proposed to be shown to experts should be the subject of specific order. Every page of the 15 folders should be paginated and no expert to whom the set of critical documents are to be disclosed, may photocopy any section of those folders without being given appropriate leave in identified circumstances.

[Here again it occurs to me that any application for such leave may well have to be dealt with by another judge. I recognise the difficulties of expecting an expert to report and to carry on preparatory work prior to reporting without being able to photocopy sections of the critical documents. To a real extent the types of difficulty which may be encountered by the experts in coping with this limb of the constraints are practical matters which will only be able to be treated with as and when they arise.]

107 The parties are to bring in Short Minutes of Order to include the undertakings referred to in paragraph 10. At the same time submissions as to costs will be taken.

I certify that paragraphs 1 - 107 and Appendix 1 are a true copy of the reasons for judgment herein of The Hon. Justice Einstein

  Gwen Wilkins
  Associate

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