Kyocera Mita Australia Pty Limited v Mitronics Corporation Pty Limited

REASONS FOR JUDGMENT 1 This is an application for leave to appeal from a judgment of 15 February 2005 given by Stone J in disposing of the applicant's notice of motion filed on 28 January 2005. The motion related to discovery given by the first respondent in lists of documents dated respectively 9 August 2004 and 24 December 2004, which were filed and served pursuant to orders made by Stone J on 22 July 2004 and 1 December 2004. Her Honour refused to make orders that the first respondent (1) give discovery in respect of all the so-called Mita Products 'supplied by, serviced by, leased by, rented by or sold by' it after 22 October 1996 and not just those identified in the schedules to its cross-claim, (2) discover its so-called electronic database, and (3) identify specifically each document referred to in Part 2 of Schedule 1 of its list dated 9 August 2004. Stone J's reasons for declining to make such orders were published on 15 March 2005: Kyocera Mita Australia Pty Ltd v Mitronics Corporation Pty Ltd [2005] FCA 242. 2 The applicant has supported its application for leave to appeal with a draft notice of appeal. It accepts that the requirements for leave are stated in Decor Corporation Pty Ltd v Dart Industries Inc. (1991) 33 FCR 297. The Full Court there referred to the 'tight rein' to be kept on appeals from interlocutory decisions on points of practice. This case is a quintessential example of the need for that restraint. Its management has been the subject of quite exquisite detail in the attention given by the docket judge over the past year or so since it was transferred from the Victoria District Registry. Moreover, the matter has been the subject of spirited debate at several directions hearings and on the hearing of earlier motions. 3 At the outset it is necessary to say something about the discovery regime in this Court. Counsel for the applicant referred to what was said about the requirements of Order 15 of the Federal Court Rules in Commonwealth v Northern Land Council (1991) 30 FCA 1 at 23-24. That statement has been overtaken by the amendments which came into force in 1999 and the promulgation of the Practice Note No. 14 at that time. The new regime is one that envisages orders for discovery being moulded quite specifically to the needs of the case, it being borne steadily in mind that the point of any procedural or practice order made by a Court is to do justice between the parties by aiding the fair disposition of the proceeding. The significance of the so-called Peruvian Guano test has been considerably cut down: Australian Competition and Consumer Commission v Advanced Medical Institute Pty Ltd [2005] FCA 366 per Lindgren J at [17]-[23]. 4 Not unnaturally, faced with the difficulty of securing leave in a case such as this involving a practice decision, the applicant's counsel has striven to identify an error in the way in which her Honour dealt with the motion. This has led to a submission that her Honour failed to appreciate that an order for general discovery had earlier been made in the proceeding. This is a sterile argument. On one view the orders made by her Honour herself in July and December last year in relation to the filing and serving of lists of documents, unconfined as they were by any reference to categories, could arguably be said to be orders for general discovery. However her Honour was dealing here with a very specific motion taking issue with the discovery actually given. In no way did her Honour misconceive the nature of the decision she had to make. The applicant's motion was made pursuant to her directions given on 1 December 2004 which contemplated that any complaints about discovery would be dealt with by just such a motion. 5 The next broad basis of attack (and I say that without any reflection upon counsel for the applicant) is to attempt to identify some other factual error made by her Honour. It is submitted that her Honour has made findings of fact unsupported by evidence. However, properly understood and read fairly, I do not consider that her Honour has in the slightest fashion misconceived the evidentiary situation. Where orders sought in relation to discovery have been withheld because of something said from the bar table, the basis for such a course is stated clearly enough. 6 A transcript of the hearing of the motion has been received in evidence on the present application. The transcript reveals, unsurprisingly and as is common in practice matters, that the motion was addressed by the parties and dealt with by her Honour with as much expedition as possible. This involves a degree of shorthand in the way in which matters are referred to. There was in fact no formal reading of affidavits, and there was a very limited tender of documents in relation to one aspect of the applicant's motion which was resolved against it. But, again, speaking both broadly and specifically where, for example, her Honour has used an expression such as 'short on evidence', I do not think it can be shown that her Honour was operating under any misconception as to what was the material before her or what was the nature of the decision that she had to make in specifically moulding an order that would assist in the fair progress of the matter in her docket. 7 That brings me to the three matters that are the subject of complaint. It is convenient really to deal with them in the same order as her Honour does. The first is the privileged documents which her Honour dealt with at [10]-[13] of her reasons. In respect of that topic, counsel for the applicant has drawn my attention to various judgments where a degree of specificity has been required to support a claim for privilege pursuant to rules or orders. In particular, there are broad statements relating to the proper description of documents in Kadlunga Proprietors v Electricity Trust of South Australia (1985) 39 SASR 410. It is not necessary to express a view about the general applicability of some of the statements there made by White J in order to say with confidence that such discussion could hardly indicate any error in her Honour's approach in the present case. As counsel for the first respondent have correctly indicated, here there is no true sense of deficiency in terms of the statement made in the list of documents. It may be from time to time that a degree of specificity or individuation is required. It may then be ordered. Cape Wools SA v KPMG Corporate Finance (Vic) Pty Ltd [2002] VSC 571, to which counsel for the applicant referred in argument, was such a case. Indeed, that kind of order is quite common where a claim for privilege is put in issue and is the subject of contest. At some stage that point might be reached in this vigorously fought case. But no greater specificity was considered to be required by her Honour at this stage in the light of the material before her. Even if an appellate court were to take a different view, it would not for that reason substitute its own decision. 8 Next her Honour dealt (at [14]-[18]) with the need to give discovery in respect of the other Mita Products. As to this, counsel for the applicant submitted that there was, in fact, no evidence before her Honour that the number of machines that would be the subject of such discovery was actually 5000. That may be so, but at the very least there was material from which her Honour could conclude that the exercise involved in giving discovery in respect of machines other than those dealt with in the schedules to the cross-claim would be very extensive. That material was contained in the affidavits filed in support of the applicant's motion. 9 Moreover, as a matter of principle, I respectfully agree with her Honour that the pleading issues raised in relation to the terms touching on merchantable quality and fitness for purpose do not require as a matter of fairness that such material be discovered. It was submitted that discovery in respect of the further machines was necessary in order to establish a baseline for determining what was the normal performance of each model. However, her Honour was indisputably correct in taking the view that it was not inevitable that evidence of that type would be adduced to show a breach of those terms. Later on, of course, such discovery may be required. Indeed, if evidence is to be relied on by one party or the other which requires production of such material, there will be a variety of forensic devices available by which that can be procured. 10 This brings me, finally, to the third issue resolved by her Honour, the so-called electronic database. That matter arose really before her Honour as a side-wind. In fact, what had been sought in the applicant's notice of motion was in the nature of an order for particular discovery as to whether such a base existed. However, very properly no time was wasted at the hearing and senior counsel for the first respondent indicated then that such a base did exist. He explained the provenance of two documents relied upon by his opponent. There may be interesting and nice questions about what fairness will require in relation to how the first respondent seeks to prove its case on the cross-claim. But, again, whatever might be said about the lack of evidence touching on the extent of an electronic database and what would be required in giving production in relation to it, her Honour did not misunderstand the point and dealt with it in a way that did not indicate any error of principle. In particular, her Honour stated (at [22]) that she was 'not persuaded that it would be appropriate to order discovery of the electronic database at this point'. (Emphasis added.) In saying that, it is apparent that her Honour was giving very careful consideration to the terms of the orders that needed to be moulded at that stage to give discovery which will permit the fair preparation of the case disclosed in the parties' pleadings. 11 The applicant has not shown that the decision of her Honour is attended with sufficient doubt to warrant it being reconsidered. Counsel for the applicant framed some submissions by reference to what were said to be significant consequences suffered by his client, were leave to appeal not granted, supposing the decision to be wrong. At this stage of the proceeding the refusal to order the discovery sought does not have the consequence that the applicant will be denied access to documents necessary to prosecute its claims and defend the cross-claim. The application for leave to appeal will be refused with costs. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Whitlam.