Martin v Hillier

Introduction 1 The applicant in this matter, Ms Victoria Martin (applicant) seeks leave to appeal from an interlocutory decision of the primary judge on 25 June 2021, and the written reasons published on 29 June 2021, where the primary judge made orders for discovery of electronic financial records of a business controlled by the applicant called Nordburger Operations Pty Ltd. 2 The applicant now seeks leave to appeal from the orders of the primary judge on the grounds stated in the draft notice of appeal: affidavit of Stephen Williams filed 12 July 2021; exhibit SBW2. 3 On 12 July 2021, Besanko J granted a stay of the order for production. 4 The background facts relevant to this proceeding are set out in detail in the primary judge's reasons for judgment: Hillier v Martin (No 4) [2021] FCA 710 (Reasons) at [4], [5], [11] and [12] - [20]. 5 The principles relevant to an application for leave to appeal were not in dispute between the parties. 6 The application of the following principles are in issue in this proceeding. 7 First, whether in the circumstances, the decision of the primary judge was attended by sufficient doubt to warrant it being reconsidered by the Full Court of the Federal Court of Australia (Full Court). 8 Second, whether substantial injustice would result if leave were refused, supposing the decision of the primary judge to be wrong. 9 The two tests are interrelated as was explained by the Full Court in Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at p 399, where the Full Court stated: [T]he sufficiency of the doubt in respect of the decision and the question of substantial injustice should not be isolated in separate compartments. They bear upon each other, so that the degree of doubt which is sufficient in one case may be different from that required in another. Ultimately, a discretion must be exercised on what may be a fine balancing of considerations. 10 It was also not in dispute between the parties that the usual restraint in matters of practice and procedure should be shown, and that, to the extent the order for production was an exercise of discretion, the principles in House v The King (1936) 55 CLR 499 at [505] apply: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at [177].

Consideration 11 I am not satisfied that the decision of the primary judge is attended by sufficient doubt to warrant it being reconsidered by the Full Court. I am of this view for the reasons that follow. 12 First, I do not accept the applicant's submission that the primary judge held that the Xero programme and the files stored within it in their entirety were a single document within the meaning of r 20.14(1) and Schedule 1 of the Federal Court Rules 2011 (Cth) (Rules). The primary judge's Reasons make plain that the relevant discoverable document was the collection of financial data on the database and not the Xero software which enabled the underlying database to be accessed. 13 The applicant made the submission that regard should be had to the primary judge's use of the word "document" in the singular (in reference to the Xero programme) at certain points in the judgment. The applicant submits that this evinces that the primary judge found that the Xero programme should be viewed as a single document. The applicant submitted that the primary judge erred in making an order that the financial data on the Xero database should be discoverable as a single document in its entirety rather than as multiple documents, some of which may not be subject to discovery. The applicant submitted that this finding creates an issue with respect to production of the database for discovery as it places the onus of identifying which parts of the database are directly relevant on the applicant in this proceeding, rather than the onus being on the respondent to identify this. I reject this argument. The primary judge made a clear finding that the database was directly relevant, and the onus must be placed on the applicant to show that there is a proper basis for this not to be produced in full. 14 Second, the reasons given by the primary judge at [27] to [48] explain why the financial data and information contained on the database (which was accessed by the Xero software) was directly relevant to Mr Hillier's (respondent) claim that he is entitled to a share of the profits of the alleged joint venture which he conducted with the applicant. The primary judge at [27] to [48] of the Reasons considered the relevance of the information on the database by reference to the matters pleaded in the proceeding and concluded that that information was directly relevant and therefore discoverable by the applicant. The primary judge's Reasons at [48] make plain that the Xero database is directly relevant to this proceeding. The primary judge concluded that, to the extent that the files stored on the database do contain any information that is not directly relevant, this does not denude it of its quality as a discoverable document. I agree with the primary judge's assessment. The reasoning of the primary judge does not disclose any error nor is the decision of the primary judge attended by sufficient doubt to warrant it being reconsidered by a Full Court. I am also satisfied that the proposed seven grounds of appeal outlined in the draft notice of appeal do not identify any basis upon which the discovery orders made by the primary judge could be challenged and, as a consequence, the proposed grounds of appeal do not identify any error in the primary judge's reasoning which is attended by sufficient doubt to warrant further consideration by a Full Court. 15 Third, I am not satisfied that the failure to grant leave would result in a substantial injustice to the applicant. That is so because there was no evidence advanced by the applicant in respect to substantial injustice. The primary judge considered this issue at [52] to [62] of the Reasons where the primary judge observed: (1) The applicant did not assert production was onerous in terms of time or expense. (2) The respondent had ceased to operate the business which competed with the applicant so that disclosure of the database would not advantage the respondent. (3) The applicant had not demonstrated any material potential disadvantage given that Hillier was not a stranger to the business and therefore the documents were not truly commercially confidential as between the applicant and the respondent. (4) On the case advanced by the applicant, it was difficult to identify any part of the Xero database that was not directly relevant. (5) The resolution of the overall controversy by reference to the Xero database outweighed any potential for commercial disadvantage to the applicant in the circumstances where the respondent had ceased to operate the business. (6) It was appropriate having regard to ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth) in weighing the competing contentions and considerations in relation to discovery of the Xero database. (7) Discovery of the Xero database was necessary in order for the respondent to properly brief experts and to avoid false assumptions in respect to the financial data. (8) The respondent was aware of his obligations to the applicant with respect to the rule in Harman v Secretary of State for the Home Department [1983] 1 AC 280 (Harman undertaking), and there was no reason to think that he would not abide by that Harman undertaking. Disposition 16 For the reasons given above, the application for leave to appeal will be dismissed with costs. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Anderson.

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