Plaintiff v First Defendant

1 The plaintiff ('AGHA') is seeking an order for preliminary discovery in accordance with r 32.05 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) ('Rules'), in order to determine whether it may have a cause of action against the first or second defendants.

2 AGHA is an association with over 2,200 members, all of which are participants in the gift and homewares industry. It organises an annual gift and homewares trade fair in Melbourne, at which its members exhibit their goods. The second defendant ('Reeds') organises a wide range of events, including exhibitions and conferences. Together, AGHA and Reeds have held a combined annual gift and homewares fair in Melbourne in early-August of each year since 1977.

3 Since the Melbourne Convention and Exhibition Centre ('the MCEC') opened in 1996, AGHA and Reeds have arranged with the first defendant ('the Trust') to hold the annual gift fair at the MCEC. Since this time, the available space at the MCEC has been apportioned between AGHA and Reeds, with AGHA being allocated 40 per cent of the available space, and Reeds being allocated 60 per cent of the available space.

4 Through the course of recent discussions and correspondence, AGHA have revealed some grounds to believe that Reeds and the Trust have entered into an agreement, arrangement or understanding, or are otherwise acting in concert ('the alleged conduct'). AGHA believes that Reeds and the Trust have engaged in the alleged conduct in order to exclude AGHA from being allocated any of the available space at the MCEC at future gift fairs. As such, AGHA is seeking an order for preliminary discovery from Reeds and the Trust (together 'the defendants'), in order to determine whether it may have a cause of action against them. The relevant causes of action that it may have against the defendants are:

(b) Contravention of various provisions of the Competition and Consumer Act 2010 (Cth), including s 47(4) (exclusive dealing), s 45(2)(a)(ii), s 45D (secondary boycott) and 45DA; and

(c) Misleading or deceptive conduct in contravention of s 18 of the Australian Consumer Law.[1]

5 In its originating motion, the plaintiff seeks - pursuant to r 32.05 of the Rules - orders for discovery of the following documents:

(a) All correspondence, emails or other documents (including file notes) evidencing communications between any representative of the Trust and any representative of Reeds in relation to the annual gift fair to be held in or after 2015;

(b) All correspondence, emails or other documents (including file notes) evidencing communications between any representative of the Trust and any representative of Reeds in relation to the hire by the Trust to Reeds of exhibition space at the MCEC;

(c) All internal documents of Reeds and the Trust (including reports and file notes) in relation to the annual gift fair to be held in or after 2015;

(d) All internal documents of Reeds and the Trust (including reports and file notes) in relation to the hire by the Trust to Reeds of exhibition space in the MCEC in or after 2015; and

(e) All documents evidencing or relating to any policy applicable to the hire of exhibition space at the MCEC.

6 In making this application, AGHA relied, amongst others, on an affidavit of its solicitor, Maria Nemeth, sworn on 20 May 2014. In that affidavit, Ms Nemeth deposed that she is informed by a member of AGHA who wishes to have 'their' name remain confidential ('the informant') and believes that:

(a) The informant has been a regular exhibitor in the gift fair at the Melbourne Showgrounds venue (where exhibitors who cannot obtain space at the MCEC obtain exhibition space);

(b) The informant has been very keen to exhibit at the MCEC, and has made this known to both AGHA and Reeds; and

(c) In late-March 2014, the informant received a telephone call from a representative of Reeds who told the informant that Reeds would probably be able to offer an exhibition stand at the gift fair in the MCEC in 2015, and would guarantee a place there in 2016 ('the telephone call').

7 On the date of the hearing, the plaintiff produced a further affidavit of Ms Nemeth dated 22 May 2014. Exhibited to that affidavit is an email from a representative of Reeds ('the email'), which Ms Nemeth is informed and believes was sent to the informant. The email asserts that Reeds is able to 'guarantee' the informant a place at the gift fair at the MCEC in 2016. The email is addressed to the informant.

8 AGHA submitted that this email, together with other evidence the subject of the affidavits filed, gives rise to a reasonable cause to believe that Reeds and the Trust have engaged in the alleged conduct, as this would allow Reeds to be able to 'guarantee' a position in the gift fair at the MCEC in 2016. On this basis, AGHA argues that it should be granted an order for preliminary discovery in order to determine whether it may have a cause of action against Reeds or the Trust, or both.

9 Significantly for this Ruling, AGHA also seeks an order preventing the disclosure of the identity of the informant, contending that the informant's business and prospects of exhibiting at the MCEC in the future will be compromised if Reeds learn of their involvement in these proceedings.

10 Both defendants contest any orders preventing the disclosure of the identity of the informant. They contend that such an order is governed by the provisions of the Open Courts Act 2013 (Vic) ('OCA'), and that there is no basis for such an order under those provisions.

11 The defendants also contend that the telephone call and the email are inadmissible, as they are hearsay evidence. Indeed, they are both hearsay upon hearsay, as Ms Nemeth is relying on a representation by the informant that the telephone call and the email were received by her. AGHA relies on both s 75 of the Evidence Act 2008 (Vic) ('Evidence Act') and r 43.03 of the Rules as providing an exception to the hearsay rule. However, to this the defendants respond that these provisions require disclosure of the source of hearsay evidence. As such, they argue that the evidence cannot be admissible under these provisions unless the identity of the informant is disclosed.

12 Given the importance of the above issues - determining, as they do, the basis on which the hearing of this application will proceed - I have adjourned the hearing of the plaintiff's summons dated 17 April 2014 pending determination of these preliminary matters.

13 In relation to the issue of the application of the OCA, I find that the orders sought by the plaintiff are not governed by the OCA.

14 In relation to the admissibility of the affidavits of 20 and 22 May 2014, that is the evidence of the telephone call and of the email, I find as follows:

(a) That paragraph 5 of Ms Nemeth's affidavit of 20 May 2014 is not admissible in this case without the identity of the informant being revealed;

(b) The admissibility of Ms Nemeth's affidavit of 22 May 2014 turns on whether the plaintiff can persuade the Court that a confidentiality order in respect of the informant should be made or, if not, the plaintiff decides to submit the affidavit without such an order so that the identity of the source of the email is revealed. In either case, the evidence in the email will fall within the exception to the rule against hearsay contained in both s 75 of the Evidence Act and r 43.03 of the Rules; and

(c) Assuming that the affidavit of 22 May 2014 is admitted as set out in paragraph (b), the evidence of the email is relevant and admissible for a non-hearsay purpose, which falls outside the scope of s 59 of the Evidence Act. On the basis of s 60 of the Evidence Act, the email is thus relevant and admissible for both the hearsay and non-hearsay purposes.

15 The proposed defendants contend that AGHA's application for the informant's identity to remain confidential to the Court and to the proposed defendants' legal counsel is governed by the OCA. They argue that such an order would be either a suppression order or a closed court order under that Act, and therefore that the order can only be granted if the relevant provisions are complied with.

16 The plaintiff, on the other hand, submits that the orders it seeks maintaining the confidentiality of the informant are not governed by the OCA. AGHA relies on s 7 of that Act as providing authority for their contention that the OCA was not intended to govern orders of this kind. The plaintiff argues that a confidentiality order can, and in this case should, be made on the grounds set out in Mobil Oil Australia Pty Ltd v Guina Developments Pty Ltd ('Mobil Oil').[2] In that case, it was held that there are circumstances in which confidential documents should not be made available to the other party to litigation through the process of discovery. The circumstances that will justify that course include where the implied undertaking (not to use the document other than for the purpose of the subject litigation) may not afford adequate protection. That can happen where the parties are rivals in trade and the information which the document contains is commercially sensitive, in the sense that the party to whom the document would be disclosed could use the information to its advantage and to the disadvantage of the party who seeks to keep it secret. In such a case, to require the party getting inspection not to use the information other than for the purpose of the proceeding concerned is to impose an obligation that is impossible of performance by the party, and impossible of enforcement by the party whose secrets have been revealed.[3]

17 For the reasons set out below, I accept the plaintiff's contention that the confidentiality orders sought in this case (in accordance with the principles set out in Mobil Oil) are not governed by the OCA. I am not yet, however, in a position to decide whether in this case I should make that order.

18 The relevant definitions are contained in s 3 of the OCA. A 'closed court order' is defined to be an order under Part 5, and a 'suppression order' is defined to mean:

(c) An order made under ss 25 or 26 (which are not relevant here); or

(d) An order made by the Supreme Court in the exercise of its inherent, jurisdiction that prohibits or restricts the publication or other disclosure of information in connection with any proceeding.

A 'proceeding suppression order' is an order under s 17 of the OCA.[4]

19 Section 30(1) of the OCA relates to the Court's power to make a closed court order. It provides that a court may order that the whole or any part of a proceeding be heard in closed court, or that only specified persons or classes of persons may be present during the whole or any part of a proceeding. Section 30(2) then goes on to set out the grounds on which such an order may be made.

20 Section 17 of the OCA sets out the Court's power to make a proceeding suppression order. It provides:

A court or tribunal on one or more of the grounds specified in section 18 may make a proceeding suppression order to prohibit or restrict the disclosure by publication or otherwise of -

(a) a report of the whole or any part of a proceeding;

21 Section 7 is particularly relevant to the current issue. It provides:

(a) the making of an order or decision by a court or tribunal that requires the disclosure of information in the course of, or in relation to, a proceeding;

(b) any rule of law restricting the permitted use and disclosure of information referred to in paragraph (a);

(c) the making of an order or decision by a court or tribunal regarding the admission into evidence of information;

(d) the making of an order or decision by a court or tribunal that -

(i) conceals the identity of a person by restricting the way the person is referred to in open court;

(ii) restricts the way an event or thing may be referred to in open court;

(iii) prohibits or restricts access to a court or tribunal file.

22 Counsel for the defendants referred to a number of authorities in which the fundamental importance of the open courts principle was emphasised.[5] However, these decisions did not concern the OCA. More recently, the OCA and, particularly, orders of the kind sought by the plaintiff, have been considered by the Supreme Court of Victoria in ABC-1 v Ring ('ABC')[6] and RN v The Commonwealth ('RN').[7]

23 In ABC, Bell J held that a pseudonym order did not fall within the definition of a 'suppression order' contained in s 3 of the OCA, saying that:

[a]n order permitting a proposed civil proceeding to be issued in the name of the plaintiffs identified by pseudonyms and requiring them to be identified in court documents only by those pseudonyms is not a 'suppression order' as defined in s 3. It does not come within any of the components of that definition. Such an order does not prohibit or restrict the publication or disclosure of information in connection with a proceeding.[8]

24 His Honour considered that this conclusion was supported by s 7(d) of the OCA, stating that this section suggests that the OCA 'was not intended to apply in situations like the present.'[9] In substance, his Honour held that the OCA was not intended to apply to orders having 'the effect of concealing the identity of proposed parties by restricting the way they may be referred to in court documents.'

25 In RN, Dixon J made similar findings, extending the exception to cover orders that particular documents on the court file that identified the plaintiff in that case be placed in a sealed envelope only to be opened on the order of a judge. In particular, Dixon J ordered that the identity of the plaintiff was to remain confidential to the plaintiff and his advisers. On the applicability of the OCA, his Honour said:

The Open Courts Act recognises that a pseudonym order differs from other restrictions on open justice, such as suppression orders and closed court orders ... The order that I propose to make will not constitute a proceeding suppression order. There will be no effect on the public nature of the proceedings and the ability of the media to fully report on proceedings will only be restricted on the issue of the identity of the plaintiff. The order will not directly restrain conduct by publication ...[10]

26 Although the cases of ABC and RN were decided in circumstances that were substantially different from those involved in this case, I consider that those decisions are nonetheless highly persuasive in deciding whether the OCA applies in this matter. However, this is not to say that those cases will be useful when determining whether the orders sought in this case should be granted.

27 The decisions of Dixon and Bell JJ make it clear that it is the practical effect of the order that is important when considering whether the provisions of the OCA will apply. In those cases, it was considered that the orders sought by the plaintiffs were more akin to orders 'restricting the way the person is referred to in open court' or restricting 'access to a court file', rather than 'restricting or prohibiting the publication or disclosure of information in connection with a proceeding'. By analogy with the different types of orders that are explicitly recognised as either within or outside the scope of the OCA, both Dixon and Bell JJ held that the orders sought in those proceedings fell within the latter category.

28 In the context of the current application, Counsel for the defendants argued, in the alternative, that the orders sought by the plaintiff amounted to closed court orders on the basis that the defendants would effectively be precluded from entering the hearing room if the informant were giving evidence. I do not consider that to be the case. Rather, in the circumstances, the informant's identity can readily be protected by orders of the kind granted in RN; that is, referring to the informant by use of a pseudonym both in court documents and in open court, and restricting access to any documents on the court file that would enable identification of the informant. To the extent that documents revealing the identity of the informant must be made available to the defendants in this matter, I do not see any reason why this cannot be done in a redacted form.

29 On the basis of the above discussion, I do not consider that the orders sought by the plaintiff in relation to the confidentiality of the informant's identity are governed by the OCA.

30 However, this says nothing of whether I am minded to make such orders. Thus far, the parties' submissions have focused primarily on the applicability of the OCA and, in regard to the defendants, on the issue of whether the OCA allows for such orders to be made in this case. Given my findings above, I will invite the parties to make further submissions and adduce further evidence on whether the orders sought should be granted in this case, in accordance with the principles set out in Mobil Oil and similar authorities.

31 There was little submitted as to the admissibility of the telephone call that was not also submitted in relation to the email, the latter being the substantial focus of the debate.

32 The representation contained in both the telephone call and the email is a second-hand representation. That is, in order to adduce each of them through her affidavits, Ms Nemeth is relying on a representation by the informant that the representation contained in the telephone call and the email was made to her. Both the informant's representation and the representation to the informant must be admissible in accordance with the rules of evidence in order for the latter representation to be relied on by the plaintiff.

33 Counsel for the defendants have argued that neither the representation that was made to the informant nor the informant's representation to Ms Nemeth are admissible as evidence in these proceedings, as this is prohibited by the rule against hearsay evidence.

34 In my view, it is clear that the informant's representations to Ms Nemeth are caught by the rule against hearsay evidence, and so I consider below whether the representations are nonetheless admissible under the exception to the rule against hearsay evidence in interlocutory proceedings.

35 I consider, however, that assuming the informant's representations to Ms Nemeth are admissible in this interlocutory hearing, that the telephone call and the email would not fall within the rule against hearsay evidence, as they are admissible for a purpose other than a hearsay purpose. I will explain this matter first.

Is the evidence being adduced for a hearsay purpose?

36 The rule against the admission of hearsay evidence is contained in s 59 of the Evidence Act, which states that '[e]vidence of a previous representation made by a person is not admissible to prove the existence of a fact that it can reasonably be supposed that the person intended to assert by the representation'.[11] On the basis of this section, it can clearly be seen that a party's purpose in seeking to adduce the evidence is relevant to the question of whether a representation will be considered to be hearsay evidence.

37 The rule against hearsay as formulated in s 59 of the Evidence Act reflects the common law position that had persisted until the enactment of the uniform evidence legislation, which drew a distinction between evidence of prior representations that were adduced to prove that the representation was made, and evidence of a prior representation that was adduced to prove the existence of a fact about which the representation was made. Thus, in Subramaniam v Public Prosecutor,[12] the Privy Council held that:

Evidence of a statement made to a witness by a person who is not himself called as a witness may or may not be hearsay. It is hearsay and inadmissible when the object of the evidence is to establish the truth of what is contained in the statement. It is not hearsay and is admissible when it is proposed to establish by the evidence, not the truth of the statement, but the fact that it was made.[13]

38 Like the current statutory provision, the common law rule emphasised the purpose of the party seeking to adduce the hearsay evidence in any determination of the admissibility of that evidence. For example, in Walton v The Queen,[14] Mason CJ described the rule against hearsay evidence in the following terms:

The hearsay rule applies only to out-of-court statements tendered for the purpose of directly proving that the facts are as asserted in the statement. Generally speaking, evidence of out-of-court statements relied on for another purpose is not excluded by the rule. Thus, evidence of a relevant out-of-court statement is admissible evidence of the maker's knowledge or state of mind when he made the statement in a case where such knowledge or state of mind is a fact in issue or a fact relevant to a fact in issue ...[15]

39 Given this emphasis on the purpose for adducing the evidence, it is useful to look at what the plaintiff is seeking to prove in the substantive application before the Court. In this way it can be determined what relevance the evidence has to the plaintiff's case, and therefore what purpose(s) it may serve in these proceedings.

(a) there is reasonable cause to believe that the applicant has or may have the right to obtain relief in the Court from a person whose description the applicant has ascertained;

(b) after making all reasonable inquiries, the applicant has not sufficient information to enable the applicant to decide whether to commence a proceeding in the Court to obtain relief; and

(c) there is reasonable cause to believe that that person has or is likely to have or has had or is likely to have had in that person's possession any document relating to the question whether the applicant has the right to obtain the relief and that inspection of the document by the applicant would assist the applicant to make the decision -

the Court may order that that person shall make discovery to the applicant of any document of the kind described in paragraph (c).

41 Each of the requirements described in paragraphs (a) to (c) of r 32.05 must be made out by the plaintiff in order to establish the basis for an order for preliminary discovery. That is, the following four questions must be answered in the plaintiff's favour in order for the application to be granted:

(a) Does AGHA have reasonable cause to believe that it may have a right to relief in the Court from the first and second defendants?

(b) Has the plaintiff made all reasonable enquiries?

(c) Does the plaintiff have sufficient information to enable it to decide whether to commence proceedings?

(d) Is it reasonable for the plaintiff to believe that the first and/or second defendants have or have had or are likely to have had possession of the documents sought?

42 The authorities establish the following principles as relevant to the first question:

(a) The plaintiff is not required to show it that has a prima facie case that it has a right to relief;[16]

(b) It is not necessary to show precisely what cause of action the plaintiff may have; such a requirement would defeat the object of the rule;[17]

(c) Rather, it need only be shown that the facts are such that it may reasonably be believed that the plaintiff may have a right to obtain relief;[18] and

(d) The test for determining whether the plaintiff has 'reasonable cause to believe' is an objective test.[19]

43 The second and third questions are governed by the following principles:

(a) The requirement is primarily concerned with whether, as an objective fact, the plaintiff has sufficient information to determine whether to commence proceedings;[20]

(b) It is for the court to determine whether the plaintiff has sufficient information available to it; the plaintiff's own assertion that it does not is neither determinative nor strictly necessary;[21]

(c) Accordingly, an application cannot succeed if the plaintiff has sufficient information (objectively assessed) but is unable to determine whether to commence proceedings due to subjective factors, for example, an overly cautious nature;[22]

(d) Courts have, however, approved litigants taking a conservative or prudent approach by applying for preliminary discovery under the rule;[23] and

(e) If there is evidence that an applicant has in fact decided to commence proceedings, the application must fail.[24]

44 For the purpose of the fourth question, 'possession' means 'possession, custody or power'.[25] It is not necessary to say anything further about this question as it concerns express requirements the satisfaction of which turn on the particular facts.

45 The next step is to ask in what way the evidence in the two affidavits is relevant to the present application. If the use to which it is to be put is a hearsay purpose, then it may not be admissible as evidence in these proceedings unless the requirements for the admission of hearsay statements in interlocutory hearings are satisfied. If, on the other hand, they can be used for a purpose that is not a hearsay purpose, then they may be admissible regardless of whether those requirements are satisfied. Additionally, if the evidence is relevant for a purpose other than a hearsay purpose, it will also be admissible for any purpose that contravenes s 59.[26]

(a) The evidence of the telephone call, that is the fact of the statement being made by a representative of Reeds to the informant (referred to in paragraph 6(c) above); and

(b) Correspondingly, the fact that the email was received by the informant;

are relevant for both a hearsay purpose and a non-hearsay purpose.

47 This is because the plaintiff is attempting to demonstrate that there are reasonable grounds for its belief that it may have a cause of action against the defendants. The fact that the statements were made is a fact upon which that belief can be founded, together with other facts. That is, the fact in issue is whether reasonable grounds exist for the plaintiff to believe that it may have a cause of action against the defendants. The fact that Reeds made such representations are relevant to that fact in issue. Thus, the substance of the telephone call and the email may be relevant for the non-hearsay purpose of proving the fact that such a statement was made.

48 My view as to this is, however, expressed as preliminary because the parties did not address me on the distinction between the admissibility of the telephone call or the email for the fact that they were made. The focus of the submissions concerned the hearsay introduction of them through Ms Nemeth.

49 Both the evidence of the telephone call and the email may be relevant, however, for the hearsay purpose of proving the truth of the representations that were made in them to the informant. That is, it may be used as evidence that Reeds can actually guarantee a position at MCEC in 2016. Again, the fact that the representation is true would be a fact relevant to the fact in issue - that is, whether the plaintiff has reasonable grounds for believing that it may have a cause of action against the defendants.

50 It is necessary to note, however, that neither of these facts, on their own, would necessarily be sufficient to ground a reasonable cause to believe that the plaintiff may have a cause of action against the defendants. That is, neither the fact that the representations were made nor the fact that they were true will necessarily be sufficient to render the plaintiff's belief 'reasonable'. As alluded to during the hearing, the defendants may be able to explain away either or both of these facts, or adduce evidence disproving the truth of the representations.

51 In contrast to the telephone call and the email, the representations made by the informant about each of those matters to Ms Nemeth cannot be relevant for any purpose other than a hearsay purpose. The plaintiff is relying on the truth of the representation in order to adduce the evidence of the telephone call and email through Ms Nemeth, so as to maintain the confidentiality of the informant. If the substance of the telephone call or the email were to be adduced in another way - for example, by an affidavit sworn by the informant - it would not be a second-hand representation and would be admissible in accordance with the above analysis. However, given that Ms Nemeth is asserting the truth of the representations that have been made by the informant, those representations fall within the scope of s 59 of the Evidence Act.

52 I consider on a preliminary basis (for the reasons I have given above) that, in the circumstances, the evidence of the telephone call and the email are capable of being relevant to prove two distinct facts: first, the fact that the representations were made by a person who was apparently speaking on behalf of Reeds; secondly, that Reeds is actually capable of 'guaranteeing' a potential exhibitor a position in the MCEC in 2016. Admission of either evidence for the purpose of proving the first fact does not fall within the rule against hearsay evidence contained in s 59. Thus, in accordance with s 60 of the Evidence Act, if the representation by the informant to Ms Nemeth that the informant received the telephone call and the email is admissible, then the evidence may be relevant and admissible for both the hearsay and non-hearsay purposes.

53 This result is brought about specifically by the nature of the circumstances in this particular case, and the matters in respect of which the Court must be satisfied in order to grant an application under r 32.05 of the Rules. The plaintiff's belief that it may have a cause of action against the defendants is based on its belief that the Trust have agreed to grant Reeds exclusive access (or at least more space than has previously been provided) to the MCEC in 2016. The representations contained in the telephone call and in the email, are consistent with that belief (although it may also be consistent with other scenarios). Thus, the plaintiff may rely on the fact that the statement was made, not to ask the Court to infer that the statement is true, but as a ground (whether reasonable or otherwise) for its belief that it may have a cause of action against the defendants.

54 This preliminary conclusion is sufficient to lead to the admissibility of the evidence of the telephone call and the email, assuming Ms Nemeth's evidence of the representation by the informant is admissible. That is, if Ms Nemeth's affidavits are admitted, the evidence of the telephone call and the email are admissible to prove that the representations contained in them were made, thereby increasing the reasonableness of the plaintiff's belief that it may have a cause of action against the defendants. Being admissible for this purpose, the plaintiff can then ask that the Court take both pieces of evidence as evidence of the truth of the relevant representation pursuant to s 60 of the Evidence Act.

55 However, as noted above, the representation made by the informant to Ms Nemeth is relevant only for a hearsay purpose and is thus inadmissible in accordance with s 59 of the Evidence Act, unless one of the exceptions are applicable in the circumstances.

Is the evidence admissible under s 75 or the Rules?

56 The plaintiff relied on s 75 of the Evidence Act as providing an exception to the rule against hearsay in this case. Section 75 provides:

In an interlocutory proceeding, the hearsay rule does not apply to evidence if the party who adduces it also adduces evidence of its source.

57 Section 75 reflects a common law exception that has existed for some time. The rationale for the exception has been described as follows:

The purpose of s.75 of the Evidence Act is to facilitate the conduct of interlocutory proceedings in circumstances where it is often difficult, at short notice, to adduce evidence in direct and admissible form. For that reason, evidence on information and belief is accepted.[27]

58 The plaintiff also relied on r 43.03 of the Rules. That rule provides:

(1) Except where otherwise provided by or under these Rules, an affidavit shall be confined to facts which the deponent is able to state of the deponent's own knowledge.

(2) On an interlocutory application an affidavit may contain a statement of fact based on information and belief if the grounds are set out.

59 By virtue of s 9 (particularly s 9(2)(c)) of the Evidence Act, s 75 does not affect the operation of the Rules.[28]

60 In order for evidence to be admissible in accordance with s 75, the proceedings in which the party is seeking to adduce the evidence must be 'interlocutory proceedings'. In this case, it was common ground that the plaintiff's application under r 32.05 is an interlocutory application for the purposes of s 75. This concession was, in my view, properly made.

61 The question whether an application for preliminary discovery is interlocutory in nature has been considered in a number of matters, both in Victoria and elsewhere. Both FAI Home Security Pty Ltd v Price[29] and Liu v The Age Company[30] contain an extensive discussion of the authorities in this respect. In Victoria, the relevant authority is that of the Full Court of the Supreme Court of Victoria in The Herald and Weekly Times Ltd v The Guide Dog Owners' and Friends' Association.[31]

62 In order for the evidence to be admissible in an interlocutory proceeding under s 75 of the Evidence Act, or under r 43.03 of the Rules, the plaintiff must also adduce evidence of the 'source' of the representation or 'grounds' of the information and belief. This was the cause of some contention at the hearing of the application. The defendants contended that the informant's representations cannot be adduced under s 75 of the Evidence Act in circumstances where the informant's identity is kept confidential. It was argued that the actual identity of the source must be revealed in order for the evidence to be admissible under the relevant provisions. On the other hand, the plaintiff contended that identification of the source was relevant to the weight - rather than the admissibility - of the evidence.

63 Before the enactment of the uniform evidence legislation, the rule allowing a party to adduce hearsay evidence in interlocutory proceedings only if the 'grounds' or the 'source' of the information and belief is also adduced had been well-established pursuant to the Rules of Court.[32] The authorities differ, however, in relation to the issue of what will be sufficient disclosure of the source of hearsay evidence.

64 The authorities appear to establish the following general propositions:

(a) Setting out the grounds as required by r 43.03(2) requires that the source of the information be identified: Hartwell Trent (Aust) Pty Ltd v Tefal Société Anonyme;[33]

(b) If the grounds are not set out, the Court may refuse to allow the affidavit to be admitted into evidence: Re JL Young Manufacturing Co;[34] Seward v Quigley;[35] Manson v Ponninghaus;[36] Hartwell Trent (Aust) Pty Ltd v Tefal Société Anonyme,[37] above;

(c) The discretion to admit an affidavit that does not set out the grounds for the information and belief, turns on the application of the irregularity Rules, Rules 2.01, 2.04 and 43.08: Atherton v Jackson's Corio Meat Packing (1965) Pty Ltd;[38]

(d) In some circumstances it has been held that the failure to state grounds for the information and belief goes to the weight to be given to the affidavit and not its admissibility: Re Mary Gleeson (dec'd);[39] Knight v Bell;[40] Hardie Rubber Co Pty Ltd v General Tyre & Rubber Co;[41]

(e) In some circumstances it has been held that it is sufficient to set out the grounds without identifying the source by name, such as where:

(i) an applicant for leave to commence a proceeding for damages for bodily injury caused by medical negligence pursuant to s 23A of the Limitation of Actions Act 1958, had a legitimate strategic interest in not naming an expert medical doctor, whose evidence was relied on in the application, at that stage of the proceeding: McNeill v Royal Victoria Eye & Ear Hospital;[42]

(ii) in relation to a provision of the Proceeds of Crime Act 1991 (ACT), which provided that "[an] affidavit made by a police officer for the purposes of this section that states that the officer believes a particular matter shall set out the grounds on which the officer holds that belief", the Full Court of the Federal Court held that there is no legal requirement that the sources of the information and belief should be disclosed. However, at the hearing of the DPP's application, a person entitled to resist the application may inquire of the police officer as to that source and, subject to any claim for non-disclosure of the response to any person in the public interest, the source will be named.[43]

65 A key authority in support of the contention that the failure to state grounds for the information and belief goes to the weight to be given to the affidavit and not its admissibility is the High Court case of Hardie Rubber Company Pty Limited v The General Tire & Rubber Company ('Hardie Rubber'),[44] which involved a claim in relation to the infringement of a patent. During an interlocutory application relating to the examination of overseas witnesses, one of the solicitors for the party making the interlocutory application (Mr Dowling) filed an affidavit relying on information and belief. The sources of his information and belief were described variously as 'officers' and 'United States counsel' of the respondent. Mr Dowling also relied on information from an unnamed officer of an unnamed company, who wished to remain anonymous because of its business dealings with the company whose officers were the overseas witnesses concerned.

66 In dealing with the application at first instance, Gibbs J made the following statement:

It is true that [Mr Dowling's] evidence is hearsay - indeed it is hearsay upon hearsay - but affidavit evidence on information and belief is admissible on interlocutory proceedings provided that the sources and grounds of that information and belief are stated: O. 39 r. 3 (3). Mr Dowling did state the sources of his information although in some cases he described and did not name his informants.[45]

67 On appeal to the Full Court of the High Court, objection was made to the reliance that Gibbs J placed on Mr Dowling's affidavits on the basis that they were inadmissible as hearsay evidence. This argument was rejected by the Full Court:

I am of opinion that a further submission that a great deal of the hearsay evidence upon which the respondent relied was not admissible in accordance with O. 39, r. 3 of the Rules of this Court or at all should not be accepted. Some of the evidence would have had greater weight if the "sources and grounds" of the deponent's information and belief had been stated more specifically but, in my opinion, the defects in the form of the evidence did not render it inadmissible.[46]

68 In Deputy Commissioner of Taxation v Ahern (No 2) ('Ahern'),[47] Thomas J, sitting in the Full Court of the Supreme Court of Queensland, reviewed the authorities applicable to the then equivalent Queensland Rules of Court, and, after quoting the passage above of Walsh J in Hardie Rubber, said:

This introduces a question of degree, and it is impossible to lay down any rule which will determine what is a sufficient disclosure of sources and grounds to overcome the hurdle of admissibility and enter the area where weight is assessed. However I find nothing in Walsh J's remarks which gives a general discretion to a court to admit evidence which would otherwise be inadmissible.[48]

In circumstances of great urgency a court may accept a general statement of sources as sufficient compliance with the rule, although this will more readily happen in the case of an interim rather than an interlocutory injunction. The question as to what is a sufficient disclosure of sources must be decided according to the exigencies of each particular case, and the court's discretion is not to be fettered.[49]

70 This latter statement by Thomas J was cited with approval by the NSW Court of Appeal in New South Wales Crime Commission v Vu,[50] when considering compliance with s 75 of the Evidence Act.

71 Thus, as a general rule, to be admissible under the Rules, where affidavit evidence is given on information and belief, the grounds that must be given include the identification of the person or persons who supplied the information, that is the 'source' of that information.

72 Notwithstanding that general rule, the Court has a discretion to admit an affidavit that adduces evidence on information and belief where the grounds are not, or are not fully, set out. The factors which will influence the exercise of that discretion are likely to include:

(a) The kind and gravity of the matter in relation to which the affidavit evidence is directed;

(d) The time the deponent has had to identify the source;

(e) The extent to which the identity of the source is necessary for the Court to assess the weight that needs to be given to the evidence; and

(f) Factors arising from the governing legislation or other law.

Section 75 Evidence Act

73 It is said in Cross on Evidence[51] that 'source' where used in s 75 of the Evidence Act requires identification of a person, not merely an institution: Registrar of Aboriginal Corporations v Murnkurni Women's Aboriginal Corporation.[52]

74 In Levis v McDonald,[53] Lindgren J expressed the view that the source which is referred to in s 75 is the maker of the hearsay statement relied upon. In his view, the lack of identification of the source of the original statement cannot be overcome by interposing a further person whose identity is revealed.

75 In the case of Wily v Terra Cresta Business Solutions Pty Ltd,[54] Palmer J of the Supreme Court of NSW held that hearsay evidence did not fall within the exception contained in s 75 of the uniform evidence legislation - even though the source of the evidence was described as 'our client' - stating as follows:

the requirement of [s 75] that the source of the information be revealed goes some way to assisting the Court in assessing the reliability of that evidence. Without any indication of the source of the evidence proffered on information and belief, the Court is unable to assess its weight nor can the opponent test the evidence or make any sensible submission as to its weight.

In the present case, as I have said, the endeavours on the part of the liquidator to keep secret the identity of the litigation funder - if there is a funder - has caused me great concern. I do not think that the requirement of s.75 is fulfilled by identifying "the source" of evidence on information and belief by the sole description "our client".[55]

76 Those remarks were cited with approval in New South Crime Commission v Vu[56] by Spigelman CJ (Allsop P (as he then was) and Hodgson JA agreeing)[57]. Spigelman CJ observed that nothing in s 75 suggests that it is necessary to provide evidence of the ultimate source of the information contained in the hearsay statement. However, his Honour implicitly endorsed (at [46]) the proposition that the task of assessing the weight of the evidence in question requires identification of a person reasonably likely to have knowledge of the relevant fact. He then went on to say:

There is authority for the proposition that, where hearsay evidence is admissible, it is not necessary to name an informant with respect to every source of information. (See Hardie Rubber Co Pty Ltd v General Tyre & Rubber Co [1973] HCA 66; (1971) 129 CLR 521 at 536; Proctor Gamble Australia Pty Ltd v Medical Research Pty Ltd [2001] NSWSC 183 at [54]- [56].)[58]

77 It seems, therefore, that the NSW Court of Appeal has approached the interpretation of s 75 in the same way as the earlier authorities have approached the interpretation of the Rules.

78 In Liu v The Age Company[59] McCallum J referred to these authorities and noted that in the context of the matter before her that -

I note that it would have been open to the defendants to seek to adduce the evidence in admissible form by tendering the relevant correspondence with the sources, masking the names of the sources and any other identifying information.

79 These authorities point to the result that, as a general rule, where affidavit evidence is given on information and belief, the 'source' (or at least the primary source) of that information includes the identification of the person or persons who supplied the information. Under both the Rules and s 75 of the Evidence Act, in circumstances of urgency the Court may accept a general statement of sources as sufficient compliance. The question as to what is a sufficient disclosure of sources must be decided according to the exigencies of each particular case.

80 In the case of the affidavit of 20 May 2014, I am of the view that the failure to identify the source of the information does disqualify paragraph 5 of that affidavit from admission into evidence. There is no urgency in the making of the application and no reason, other than the desire to keep the identity of the informant confidential, for the evidence to be admitted without the source being disclosed. Moreover, the later affidavit (of 22 May 2014) attaching the email referring to substantially similar evidence as the telephone call rather points to an acceptance that the earlier affidavit does not sufficiently disclose the source or give the grounds of the information and belief.

81 In relation to the affidavit of 22 May 2014 (sought to be the subject of the confidentiality order), the requirements of s 75 of the Evidence Act and the Rules will be complied with because the plaintiff proposes to adduce evidence of the source, albeit with the requested restriction; that restriction is that the Court make a confidentiality order restricting access to information disclosing the informant's identity to only the Court and the defendants' legal representatives.

82 I consider that this is a matter in which the Court has both the power, and the discretion, to determine whether the 'exigencies of the case' allow for disclosure of the source of the evidence to be made only to the Court and the defendants' legal advisors: Ahern.[60] The requirements of the provisions (s 75 and r 43.03) will, if such an order is made, be met as the identity of the source of the hearsay will have been disclosed.

83 If I am wrong in these conclusions in relation to s 75, I nonetheless consider that I have such a discretion in accordance with r 2.04 and r 43.08 to dispense with strict compliance with r 43.03 in relation to the affidavit of 22 May 2014, providing I am satisfied that a confidentiality order is appropriate to be made.

84 I am unable to determine at this point, however, whether in the circumstances of this case it is appropriate to order the informant's identity be kept from the defendants without hearing full argument, given - as I have found above - that the OCA does not apply to such an order.

85 In relation to the issue of the application of the OCA, I find that the orders sought by the plaintiff are not governed by the OCA.

86 In relation to the admissibility of the affidavits of 20 and 22 May 2014, particularly the evidence of the telephone call and of the email, I find as follows:

(a) That paragraph 5 of Ms Nemeth's affidavit of 20 May 2014 is not admissible in this case without the identity of the informant being revealed;

(b) The admissibility of Ms Nemeth's affidavit of 22 May 2014 turns on whether the plaintiff can persuade the Court that a confidentiality order in respect of the informant should be made or, if not, the plaintiff decides to submit the affidavit without such an order so that the identity of the source of the email is revealed. In either case, the evidence in the email will fall within the exception to the rule against hearsay contained in both s 75 of the Evidence Act and r 43.03 of the Rules; and

(c) Assuming that the affidavit of 22 May 2014 is admitted as set out in paragraph (b), the evidence of the email is relevant and admissible for a non-hearsay purpose, which falls outside the scope of s 59 of the Evidence Act. On the basis of s 60 of the Evidence Act, the email is thus relevant and admissible for both the hearsay and non-hearsay purposes.

87 I will list the matter for hearing on the issue of whether the confidentiality orders and orders for preliminary discovery sought by the plaintiff should be granted.

[1] Schedule 2 of the Competition and Consumer Act 2010 (Cth).

[2] [1996] VicRp 54; [1996] 2 VR 34. See also Church of Scientology of California v Dept of Health and Social Security [1979] 3 All ER 97; [1979] 1 WLR 723; Kimberley Mineral Holdings Ltd (in liq) v McEwan [1980] 1 NSWLR 210 at 215-16; Ex parte Fielder Gillespie Ltd [1984] 2 Qd R 339; Magellan Petroleum Australia Ltd v Sagasco Amadeus Pty Ltd (1993) 25 IPR 455 (QSC); Roads Corporation v Love (No 4) [2005] VSC 393; ICAP Australia Pty Ltd v BGC Partners (Aust) Pty Ltd [2007] FCA 467; Conor Medsystems Inc v The University of British Columbia (No 4) [2007] FCA 324; Australian Mud Co Pty Ltd v Coretell Pty Ltd (No 3) [2012] FCA 778; Williams, Civil Procedure Victoria, paragraph 29.01.80.

[3] Ibid 38 (Hayne JA, with whom Winneke P and Phillips JA agreed).

[4] Open Courts Act 2013 (Vic) s 3 (definition of 'proceeding suppression order').

[5] See, eg, News Digital Media Pty Ltd v Mokbel [2010] VSCA 51; (2010) 30 VR 248 (Warren CJ, Buchanan JA and Byrne AJA); Assistant Commissioner Condon v Pompano Pty Ltd [2013] HCA 7; (2013) 87 ALJR 458, 477-8 [67]-[72] (French CJ); David Syme & Co Ltd v General Motors-Holden's Ltd [1984] 2 NSWLR 294 (Street CJ, Hutley AP and Samuels JA).

[6] [2014] VSC 5.

[7] [2014] VSC 289.

[8] ABC-1 v Ring [2014] VSC 5, [15].

[10] RN v The Commonwealth [2014] VSC 289 [13].

[12] [1956] 1 WLR 965.

[14] [1989] HCA 9; (1989) 166 CLR 283.

[16] Plzen v Wharf Management at [17(e)].

[17] Schmidt v Won, 465; Beston Parks at [53]; United Energy at [32].

[18] Schmidt v Won, 465; Beston Parks at [53] .

[19] Plzen v Wharf Management at [17(c)].

[23] AFL v SOL at [59]-[61]; United Energy at [103].

[26] Evidence Act s 60.

[27] Wily v Terra Cresta Business Solutions Pty Ltd [2006] NSWSC 949.

[28] Cross on Evidence (internet edition) paragraph 35595; see Director of Public Prosecutions (ACT) v Le (1998) 86 FCR 33; 156 ALR 110 at 122.

[29] [1999] VSC 274 (Byrne J).

[30] [2010] NSWSC 1176 (McCallum J).

[31] [1990] VicRp 40; [1990] VR 451, 455 (O'Bryan J), 461 (Marks J). Murphy J agreed generally with the decisions of both O'Bryan J and Marks J.

[32] In some other jurisdictions the corresponding rule requires the source or the source and the grounds of the information: See Order 40 Rule 3(2) of the Australian Capital Territory Supreme Court Rules.

[33] [1968] VicRp 1; [1968] VR 3, 13.

[34] [1900] 2 Ch 753.

[35] (1901) 18 WN (NSW) 35.

[36] [1911] VicLawRp 49; [1911] VLR 239.

[37] [1968] VicRp 1; [1968] VR 3, 13.

[38] [1967] VicRp 110; [1967] VR 850, 853 per Smith J.

[39] [1887] VicLawRp 107; (1887) 13 VLR 565, 566 & 568 per Webb J.

[40] [1887] VicLawRp 121; (1887) 13 VLR 639, 644 & 647 per Webb J.

[41] [1973] HCA 66; (1973) 129 CLR 521, 558-9 per Walsh J, McTiernan, Stephen and Mason JJ agreeing.

[42] Unreported, Victorian Supreme Court, Hedigan J, No 13784/91, 16 March 1992, BC9200723.

[43] Director of Public Prosecutions (ACT) v Le (1998) 86 FCR 33; 156 ALR 110, 122.

[44] [1973] HCA 66; (1973) 129 CLR 521.

[46] Ibid 558-9 (Walsh J, with whom McTiernan ACJ, Stephen and Mason JJ agreed).

[47] (1988) 2 Qd.R. 158, Ryan and de Jersey JJ agreeing.

[50] [2009] NSWCA 349, [48].

[52] (1995) 137 ALR 404, 413 (FCA). See also De Bortoli Wines Pty Ltd v HIH Insurance Ltd, (2011) 200 FCR 253; 281 ALR 454; [2011] FCA 645; [40]-[41].

[53] (1997) 75 FCR 36, 43; 155 ALR 300, 306.

[54] [2006] NSWSC 949.

[56] [2009] NSWCA 349, [45].

[57] Ibid, [55] and [59] respectively.

[59] [2010] NSWSC 117, [45].

[60] (1988) 2 Qd.R. 158, 167 per Thomas J, Ryan and de Jersey JJ agreeing.