Consideration
11 Each of the parties is represented by experienced counsel and solicitors. Each is extremely well resourced. The corporate parties apparently run highly successful businesses. When there is delay the whole quality of justice deteriorates: cf Reg v Lawrance [1982] AC 510 at 517B per Lord Hailsham of St Marylebone LC. The circumstances that have given rise to the present application, however, cannot be laid at the door of Optiver, as I explained in Optiver (No 3) [2012] FCA 641. The revelation that Mr Bhandari's passphrase is missing has thrown up yet another difficulty in the parties' paths to decrypt the emails. Arrangements have been made between the parties today for passphrases that Mr Bhandari thinks he used around the time to be provided to Optiver. That will enable its expert to run forensic tests using variations of those passphrases to see whether any of the encrypted emails can be unlocked in combination with one of Mr Bhandari's private keys that has now been discovered.
12 The Court and the parties must seek to facilitate the just resolution of disputes, according to law, as quickly, inexpensively and efficiently as possible pursuant to the overarching purpose set out in s 37M of the Federal Court of Australia Act 1976 (Cth). Nonetheless, at the heart of the exercise of judicial power lies the consideration of the interests of justice. In an application such as the present, a balancing exercise has to be undertaken on imperfect materials and incomplete information. In Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175, Gummow, Hayne, Crennan, Kiefel and Bell JJ discussed considerations that were applicable to an analogue of s 37M with respect to an amendment application that had occasioned the vacation of a hearing date. Their Honours said (239 CLR at 212 [94]):
"Where a party had had a sufficient opportunity to plead his or her case, it may be necessary for the court to make a decision which may produce a sense of injustice in that party, for the sake of doing justice to the opponent and to other litigants."
13 They noted that a just resolution of the proceedings remained the paramount purpose of provisions such as s 37M. However, they had said that the concept of a just resolution had to be understood in light of the purposes and objectives of the applicable legislative purpose. Here, that is stated in s 37M and includes having regard to speed and efficiency, in the sense of a minimum of delay and expense, as being essential components of a just resolution. Their Honours pointed out that it could not be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings on payment of costs (see 239 CLR at 213 [98]). Critically their Honours said (239 CLR at 214-215 [102]):
"It is the extent of the delay and the costs associated with it, together with the prejudice which might reasonably be assumed to follow and that which is shown, which are to be weighed against the grant of permission to a party to alter its case. Much may depend upon the point the litigation has reached relative to a trial when the application to amend is made. There may be cases where it may properly be concluded that a party has had sufficient opportunity to plead their case and that it is too late for a further amendment, having regard to the other party and other litigants awaiting trial dates. Rule 21 makes it plain that the extent and the effect of delay and costs are to be regarded as important considerations in the exercise of the court's discretion." (emphasis added)
14 It will not be contrary to the decision in Aon 239 CLR 175 or anything in Pt VB of the Federal Court of Australia Act for a judge to give significant weight to the consideration of the achievement of justice in the particular case: Cement Australia Pty Limited v Australian Competition and Consumer Commission (2010) 187 FCR 261 at 274-275 [45] per Keane CJ, Gilmour and Logan JJ. Their Honours pointed out that nothing in the High Court's reasons suggested that the latter consideration was not relevant to the exercise of discretion to permit or refuse an amendment. Rather, they held that the principle in Aon 239 CLR 175 was that the consideration of the achievement of justice in the particular case must not be allowed to trump other relevant considerations, including those such as are referred to in ss 37M and 37N. They made the point that Aon was not a "one size fits all" case and that, at the end of the day, the Court must weigh all the relevant factors, and that these may vary depending on the facts of the case.
15 When I ordered that these proceedings be referred to a referee I was mindful that they had been fixed for nearly a year to be heard and determined in an eight week agreed timeframe commencing on 4 June 2012. I found that the proceedings were likely to take significantly longer than that timeframe and the parties were not able to guarantee that it would finish within it. I had regard, among other reasons, to the facts that there would be a somewhat indeterminate length to the hearing, the serious allegations of, in substance, fraudulent conduct which Optiver made against the Tibra parties, the highly complex and detailed expert evidence, and the undesirability of splitting the hearing of the trial once that hearing had commenced. Since both parties wanted the proceedings heard sooner rather than later, I took the course of ordering that the proceedings be referred to the Honourable Kevin Lindgren QC as a referee.
16 The situation has now developed that documents that were apparently relevant and had been discovered, but were unreadable, have now become readable. As I found in my reasons of 14 June, the Tibra parties had undertaken their discovery on the basis of a misconception. Indeed, the further discovery I ordered has revealed that Mr Bhandari's private key for the PGP software was, in fact, located on the Tibra companies' computer system, but had not been found earlier. There is no affidavit evidence explaining any of the difficulties that have been encountered in relation to Mr Bhandari's ability to access or otherwise use the PGP software since he made his affidavit of 12 June 2012.
17 Optiver says, through its counsel, that it needs to reassess the discovered material and to compare it against what is available as evidence likely to be deployed in the hearing as well as considering documents that have already been discovered and matters arising from them. It wishes to undertake further exploration of that material. Critical to its case is the fact that, as appears to be common ground, in the period ending on 4 September 2006, a significant amount of primary material held by each of the individual Tibra parties and the Tibra companies was wiped from, or no longer exists on their private computers on which the individual Tibra parties worked. The individual Tibra parties have given differing dates as to when each of them ceased to hold the documentary material on his laptop or personal computer. Mr Bhandari transferred all of his material onto the Tibra computer system. The parties, and in particular Optiver, have now the ability to consider, at least in part, some of the encrypted material that was previously inaccessible. This has potential significance to the overall conduct of the proceedings particularly having regard to the contents of the "Things to Do" timeline document.
18 These matters suggest that the orderly and proper preparation of the case for trial requires that Optiver have the opportunity to further assess and explore other evidentiary paths that have now been opened up by the new material that has come to light. This is a highly complicated case involving a vast amount of analytical material concerning computer software and the like. But, as Optiver argued, one of the significant features, not usually found in litigation, is that the party alleged to be copying or misusing confidential information does not now have a significant amount of material contemporaneous with the period prior to 4 September 2006 when much of that activity is alleged to have occurred.
19 In order to be able to cross-examine witnesses as to credit, it is often the case that contemporaneous documents enable a picture to be painted. That picture can be very different from a witness' honest recollection or, in other cases, an asserted recollection that is less transparent or well motivated. Through no fault of Optiver's, this new ability to access the encrypted material has come at a very late stage. I am not satisfied that it is likely that Optiver will be able to undertake or complete investigations that it, bona fide wishes to undertake and which, on the material before me, appear to be reasonable for it now to undertake.
20 There is no evidence of what Mr Bhandari has now done to check for and seek to use one or both of his private keys and establish, through his own recollection or experimentation, whether any passphrase that he thinks might be applicable would open the encrypted material. It may be that at the end of the day, no one will be able to do so with all the best will and effort in the world. Nonetheless, the various accounts given by the individual Tibra parties as to the apparent lack of significance of the "Things to Do" timeline or any similar plan raises the need, I think, for Optiver to be given the opportunity to test that material forensically by pursuing a reasonable course of investigation in the orderly preparation of its case for hearing. I think the inevitable consequence of the view that I have formed must be that the hearing cannot be forced on in accordance with the previous orders or sensibly commence on 5 July 2012.
21 The individual Tibra parties' credibility is a central issue relevant to the outcome of the proceedings. They deny that they are guilty of the very serious matters that Optiver alleges against them. The inability of Optiver to have available contemporaneous documents to which the individual Tibra parties were themselves party, until the opening of the encrypted documents would have been a matter of some significance in Optiver's ability to test its opponents' evidence before any tribunal of fact. Obviously, I have no view one way or the other as to which side in this debate will ultimately succeed or has a stronger case. My concern is to ensure that, as the events have now unfolded, justice is done to both sides. In doing so, I recognise that vacating the hearing date will inevitably cause prejudice to the Tibra parties, some of which may be irremediable.
22 At the moment, I do not think that it is possible to assess whether one or other side should be responsible for the costs of the vacation of the hearing date because, as the Tibra parties argued, to some degree, there must be a degree of speculation and whether the opportunity afforded Optiver by this course will yield any substantive benefit. Optiver has asked for it and the state of the evidence suggests to me that it is entitled to have such an opportunity to explore and investigate what flows from this material. The very high level forensic arguments deployed by each of the parties before me as to the strengths and weaknesses of the other's case may or may not hit home at the end of the proceedings. It will be easier, then, to judge whether this adjournment was or was not justified in all of the circumstances. It would not be desirable, in effect, to tie the referee up on an indefinite basis to a reference that may or may not be ready to proceed at a later stage when the opportunity I propose to give to Optiver to pursue its enquiries further is completed. It is not yet feasible to know when a hearing date should be set. Accordingly, I should also vacate the order for reference.
23 Optiver accepts that it may later be appropriate to make a further order for reference, as indeed Tibra urges. One consideration in relation to that is that a referee may be even more readily available to hear an open ended, in terms of length, trial of the issues that must be heard pursuant to the orders for a separate hearing than a judge, depending on when the parties assess the case is ready to be fixed for hearing. I will order that orders 1, 2 and 3 made on 28 May 2012 be vacated.
I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.