Limits of the Discretion Conferred
32 The primary object and purpose of O 25B is to preserve evidence pending the final determination of a proceeding.
33 Order 25 is likewise confined to the making of interim orders. Order 25 r 2, in particular, is confined to the making of orders as to the "preservation of property". Those seeking orders pursuant to that rule do not need to satisfy the more onerous requirements imposed by O 25B: Authors Workshop v Bileru Pty Ltd (1989) 88 ALR 211 at 215 per Lockhart J.
34 It is considered that it is no part of the object or purpose of those provisions to facilitate the discovery processes otherwise authorised by the Rules or to facilitate the provision of further particulars. To construe those provisions as extending to such a purpose would erode both the importance attached by the common law to protecting the privacy of individuals and the constraints otherwise imposed by the Rules upon the discovery process.
35 As a matter of principle, the common law has long been "jealous of the prima facie immunity from seizure of papers and possessions": George v Rockett (1990) 170 CLR 104. Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ were there addressing s 679 of The Criminal Code (Qld) which authorised the issue of a search warrant and observed at 110-11:
A search warrant thus authorizes an invasion of premises without the consent of persons in lawful possession or occupation thereof. The validity of such a warrant is necessarily dependent upon the fulfilment of the conditions governing its issue. In prescribing conditions governing the issue of search warrants, the legislature has sought to balance the need for an effective criminal justice system against the need to protect the individual from arbitrary invasions of his privacy and property. Search warrants facilitate the gathering of evidence against, and the apprehension and conviction of, those who have broken the criminal law. In enacting s 679, the legislature has given primacy to the public interest in the effective administration of criminal justice over the private right of the individual to enjoy his privacy and property. The common law has long been jealous of the prima facie immunity from seizure of papers and possessions: see Holdsworth, A History of English Law, vol 10 (1938), pp 668-672. Except in the case of a warrant issued for the purpose of searching a place for stolen goods, the common law refused to countenance the issue of search warrants at all and refused to permit a constable or government official to enter private property without the permission of the occupier: Leach v Money [(1765) 19 State Tr 1001]; Entick v Carrington [(1765) 19 State Tr 1029]. Historically, the justification for these limitations on the power of entry and search was based on the rights of private property: Entick [(1765) 19 State Tr, at p 1066]. In modern times, the justification has shifted increasingly to the protection of privacy: see Feldman, The Law Relating to Entry, Search and Seizure (1986), pp 1-2.
State and Commonwealth statutes have made many exceptions to the common law position, and s 679 is a far-reaching one. Nevertheless, in construing and applying such statutes, it needs to be kept in mind that they authorize the invasion of interests which the common law has always valued highly and which, through the writ of trespass, it went to great lengths to protect. Against that background, the enactment of conditions which must be fulfilled before a search warrant can be lawfully issued and executed is to be seen as a reflection of the legislature's concern to give a measure of protection to these interests. To insist on strict compliance with the statutory conditions governing the issue of search warrants is simply to give effect to the purpose of the legislation. …
The importance of the rights protected by the common law has likewise been repeatedly recognised by all courts, including this Court: eg, Commissioner, Australian Federal Police v Oke [2007] FCAFC 94 at [36]-[37], 159 FCR 441 at 448 per Branson and Lindgren JJ (Besanko J agreeing at [47]); Hart v Commissioner of Australian Federal Police [2002] FCAFC 392 at [66], 124 FCR 384 at 400 per French, Sackville and Nicholson JJ. See also: Rugs-a-Million (WA) Pty Ltd v Walker [2007] WASCA 23 at [35]-[36] per Pullin JA (Wheeler and Buss JJA agreeing).
36 Order 25B of the Federal Court Rules is likewise a provision which gives primacy to the public interest in the administration of justice over the private interests of the individual. But it is a provision which should be strictly confined within the limits of the authority conferred and, once an order is executed, access to the materials and documents seized should be confined to the purpose for which that power was conferred. In the absence of consent, to permit access to seized materials for the purposes of facilitating discovery or the provision of particulars, as opposed to preserving the continued existence of evidence, it is considered would go beyond the authority conferred.
37 Although there may be no enforceable right to privacy presently recognised in Australian law (cf Australian Broadcasting Corp v Lenah Game Meats Pty Ltd [2001] HCA 63, 208 CLR 199), such compulsory powers of search and seizure as are conferred by both Commonwealth and State legislation should not be construed as authorising any greater intrusion into the private affairs of individuals than is unambiguously authorised.
38 In some circumstances there may be a "tension" between common law privileges and "the efficient exercise of statutory powers": Halliday v Nevill (1984) 155 CLR 1 at 20 per Brennan J; New South Wales v Corbett [2007] HCA 32 at [16]-[22], 230 CLR 606 at 610-12 per Kirby J. Not in the context of the exercise of statutory powers facilitating the investigation of criminal offences, but rather in the context of construing that which is permitted by O 25B of the Federal Court Rules, there is not considered to be any such "tension". The convenience of the position being advocated by the Applicants may well be understandable, but it is not a sufficient reason to depart from the importance accorded by the common law to an individual's right to preserve the privacy and confidentiality of his own documents. The interests in the administration of justice should not be understated or minimised; but those interests are adequately served by the preservation of the documents and materials properly seized.
39 No submission was advanced on behalf of the Applicants contrary to the importance attached by the common law to protecting the privacy of individuals. Their submission was that the primacy attached to the administration of justice extended to conferring authority to access the materials as an adjunct to the discovery process. This contention was said by the Applicants to have been resolved by Jacobson J in Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd [2006] FCA 1707. An order pursuant to O 25B in that proceeding had previously been made by Allsop J (as he then was). Consent orders were made on 7 September 2006 which provided for inspection by the Applicants and their solicitors.
40 One of the two issues before Jacobson J was "the proper construction of the orders of 7 September 2006". His Honour observed that those consent orders provided that a list of all documents seized which were claimed to be privileged or confidential was to be made available to the independent solicitor and the applicants' solicitors, and that the remaining material was then to be made available for inspection by the applicants and their solicitors. The orders also provided for the filing of affidavits setting out the nature and basis of any objection or claim for privilege or confidentiality. An issue previously mentioned by His Honour was whether the seizure of documents was to be confined to those documents "directly related to the precise cause of action then known to an applicant". His Honour referred to the order as made by Allsop J and continued:
[4] In his reasons, his Honour noted at [6] that an issue may be ventilated in due course as to the necessity for the search to be closely related to the accrued cause of action. However, his Honour thought that the better reading of O 25B was that the flexibility and amplitude of the order would be undermined if the search order was limited to the precise cause of action known.
[5] His Honour also observed at [7] that it is not the practice that the terms of orders for search and seizure are limited to material directly related to the precise cause of action then known to an applicant. He said that "[s]uch a course would tend to make the utility of this procedure doubtful".
His Honour thereafter continued the discussion of the principles to be applied and, in the passage relied upon by the Applicants, observed:
[26] The respondents submit that the purpose of the search orders made by Allsop J on 30 June 2006 was to preserve evidence contained on various hard drives or computers located at their premises. The respondents then submit that once the evidence is preserved access to the material falls to be determined in accordance with the usual principles, that is to say categories of discovered documents would then need to be determined and access would be given in the usual way.
[27] The respondents submit that the applicants cannot overreach their usual discovery entitlements to have access beyond relevant material contained on the imaged hard drives. They submit that simply by obtaining a search order from a court the applicants do not automatically obtain an entitlement to traverse the entirety of the material retrieved by the independent experts. In my view that is not the proper construction of the orders which were consented to on 7 September 2006. I have already given my reasons for that.
[28] Moreover, it seems to me that the approach proposed by the respondents is not consistent with the usual practice which applies to search orders. The terms of O 25B of the Federal Court Rules are to be considered in light of the practice which evolved in the years following the decision in Anton Piller KG v Manufacturing Process Ltd [1976] Ch 55.
[29] Prior to the advent of the computer era, the practice was for a physical search to be conducted at the premises. Questions of relevance were not an issue, although provision was always made for the protection of material claimed to be privileged or confidential. The computer imaging which now takes place seems to me to be the equivalent of what Mr Cobden SC for the applicants called the "flick through", which took place in the searched premises in the days when only hard copy documents and other physical materials were the subject of searches.
[30] I accept that the effect of the modern regime of computer imaging as applied in the present case is to grant an applicant a far more leisurely period in which to examine the seized materials than was previously available. This will be a particular concern where the seized materials are obtained from a trade competitor as has happened in the present case. This emphasises the draconian and exceptional nature of the remedy.
[31] However, in order to obtain a search order an applicant must satisfy the stringent conditions laid down in O 25B r 3. As I have already noted, Allsop J was satisfied that the necessary conditions were met. His Honour was also satisfied that the search should not be limited to the precise cause of action known to the applicants when the search order was obtained.
[32] It seems to me that all of that is reflected in the terms of the orders that were made on 7 September 2006 when the regime for access was adopted in the orders that I made on that date. I should add that the decision of Lindgren J in Microsoft Corp v Adelong Electronics Pty Ltd (1997) 37 IPR 283, at 291-292, though not directly in point, does suggest that a copyright owner will ordinarily be able to inspect all of the evidence in the possession of the alleged infringer without it being confined to the documents that relate to the cause of action then known to the copyright owner.
[33] In my view the approach proposed by the respondents is not consistent with the purpose for which a search order is issued. It is not for the respondents to put to the applicants the task of identifying categories of documents to which they seek access on discovery. That would be to reserve to the respondents, against whom a strong prima facie case of infringement is required for the issue of the search order, the ability to limit the documents which are inspected to those that are subject of the accrued cause of action. I do not think this has been part of the ordinary practice of the Court in relation to the execution and implementation of search orders, nor does it seem to me to be reflected in the provisions of practice note 24.
41 One of the issues clearly being addressed by Jacobson J in that passage was the proposition that O 25B permitted the seizure of documents going beyond the "precise cause of action" then before the Court. The orders as made on 7 September 2006 were to be so construed.
42 It is also equally clear that His Honour rejected a proposition that the respondents could confine the applicants to a search of the documents seized by reference to "categories of documents". To so confine the applicants would confer upon the respondents "the ability to limit the documents which are inspected to those that are subject of the accrued cause of action".
43 But that, it is respectfully considered, is all that His Honour decided. The decision does not stand as authority for the proposition that seized documents (in the absence of consent) may be inspected as an adjunct to the discovery process or to facilitate the provision of particulars. It is simply a decision as to what may be seized and, once seized, what may be looked for when inspecting those documents. Neither of the other decisions cited by the Respondents in this proceeding - Remath Investments No 6 Pty Ltd v Savi World Transport Pty Ltd & Fraser (Unreported, VSC, Byrne J, 12 November 1997) and Liberty Financial Pty Ltd v Scott [2004] VSC 414 - provide further assistance. No decision other than that of Jacobson J was able to be identified by any of the parties, or Citic Pacific, which provided any further guidance on the issues now to be decided.
44 In addition to considering that the course now being urged by the Applicants is inconsistent with principle and not endorsed by the decision of Jacobson J, it is further considered that that course (if accepted) would erode the constraints otherwise imposed by the Federal Court Rules in respect to discovery.
45 The regime for discovery is that set forth in O 15 and O 15A of the Federal Court Rules.
46 The traditional test for discovery, it will be recalled, was expressed in part in terms of whether a document would lead to a "train of enquiry" which could advance a party's case or damage that of his opponent: Mulley & Marney v Manifold (1959) 103 CLR 341. Menzies J there observed at 345:
I now turn to the pleadings to determine what are the matters at issue between the parties, because discovery is a procedure directed towards obtaining a proper examination and determination of these issues - not towards assisting a party upon a fishing expedition. Only a document which relates in some way to a matter in issue is discoverable, but it is sufficient if it would, or would lead to a train of enquiry which would, either advance a party's own case or damage that of his adversary.
See also: Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co (1882) 11 QBD 55.
47 The Federal Court Rules, however, were amended in 1999 with the intent of confining the ambit of documents to be discovered: Salim v Loh (No 2) [2005] FCA 1417. French J there summarised the position as follows:
[3] The 1999 amendments to the Rules, which introduced the new O 15 r 2, manifested '… a quite new and restrictive policy in relation to the discovery to be allowed' in the Federal Court - South Sydney District Rugby League Football Club Ltd v News Ltd [2000] FCA 519 per Finn J. The rule that the discovery obligation covered documents that did no more than relate in some way to a matter in issue or that might lead to a train of inquiry has been abolished. The categories required to be discovered under O 15 r 2(3) include documents that support or adversely affect another party's case or that adversely affect a party's own case. They do not extend to documents that might support or adversely affect a party's case. The search obligation is limited to 'reasonable search'.
Similarly, in Aveling v UBS Capital Markets Australia Holdings Ltd [2005] FCA 415 Lindgren J observed:
[10] The question arises: what are the principles which should guide the parties in identifying categories? They are the principles which guide the Court when ordering discovery. In ACCC v Advanced Medical Institute [[2005] FCA 366], I attempted to explain (at [19] - [21]) that rule amendments and Practice Note 14 (Discovery) of 1999 were intended to establish a régime under which discovery is more confined than it was under the former Peruvian Guano test (cf The Compagnie Financičre et Commerciale du Pacifique v The Peruvian Guano Co (1882) 11 QBD 55). Practice Note 14 para 3 states:
To prevent orders for discovery requiring production of more documents than are necessary for the fair conduct of the case, orders for discovery will ordinarily be limited to the documents required to be disclosed by Order 15 rule 2(3).
Consistent with the more confined extent of discovery which is required, the Federal Court Rules now confer an express power to limit discovery and to make orders "necessary to prevent unnecessary discovery": O 15 r 3(2).
48 Order 15A provides for "Preliminary Discovery". And again the rules contain limiting conditions: cf Airservices Australia v Transfield Pty Ltd [1999] FCA 886, 92 FCR 200. Finn J there made the following observations as to the features of both rr 3 and 6 of O 15A:
[5] I would emphasise at the outset the following features of these rules. First, while r 3 for obvious reasons allows discovery against a person whether or not that person is a possible respondent to the projected proceeding, the discovery available under r 6 is limited to discovery against the person who is the "prospective respondent". Secondly, as has been emphasised by judges of this Court, r 6 prescribes significant limiting conditions to be satisfied before an order can be made… An applicant who can satisfy them, is allowed "to fish" for the purpose of ascertaining whether he has a case against the prospective respondent… But preliminary discovery cannot itself be used to remedy deficiencies in the satisfaction of the conditions themselves. It does not mandate mere rummaging through another's affairs. Thirdly, while an applicant does not have to make out a prima facie case for the purpose of satisfying the r 6(a) condition that he or she has reasonable cause to believe he or she has a right to obtain relief… an applicant will not necessarily be denied preliminary discovery because he or she "already has available evidence establishing a prima facie case for the granting of relief"… Fourthly, an order for discovery under r 6 can properly be characterised as an interlocutory order… Fifthly, in Kirella Pty Ltd v Hooper (1999) 92 FCR 90; 161 ALR 447 Tamberlin J held that the provisions of O 15A do not infringe the constitutional requirement that for this Court to have jurisdiction in relation to a proceeding there must be a "matter". …
Leave to appeal was granted and the appeal dismissed: Hooper v Kirella Pty Ltd [1999] FCA 1584, 96 FCR 1.
49 The power conferred by O 25B is expressed to be "for the purpose of securing or preserving evidence". The purpose, not surprisingly, is not confined to securing only that material which may thereafter be discoverable. But, to enable a party to obtain an order pursuant to O 25B and thereafter permit that party to "rummage through" the materials seized, in order to make an assessment as to those documents which that party considers would be or should be discoverable, would defeat the perimeters within which discovery is to be made by a party, especially the more confined and restricted extent of discovery which this Court now permits. It would also endorse a course which courts have properly shunned, namely a course of improperly permitting the relief authorised by O 25B to become an "investigatory tool" (Microsoft Corp v Goodview Electronics Pty Ltd [1999] FCA 754 at [26], 46 IPR 159 at 164 per Branson J; Bugaj v Bates [2004] FCA 1260 at [13] per Stone J) or a preliminary step that later facilitates such an investigation.
50 The onerous nature of the requirements prescribed by O 25B r 3 before an order can be made is no reason to permit materials and documents seized pursuant to an order when made to be used for any purpose other than that identified in r 2, namely "the purpose of securing or preserving evidence". The onerous nature of the requirements imposed is but a recognition of the exceptional nature of an order made under O 25B. If those requirements have been satisfied, there is thereafter conferred upon those who seize the documents no licence to use them for the collateral purpose of assisting in the discovery to be provided by an opponent.
51 Order 25B does not permit the seizure of documents or other materials in order to isolate and preserve a pool from which the Applicants can conduct a self-determined regime of preliminary discovery.