Schutz DSL (Australia) Pty Ltd v VIP Plastic Packaging Pty Ltd

IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 136 of 2009

JUDGE: MCKERRACHER J DATE: 11 OCTOBER 2011 PLACE: PERTH

INTRODUCTION 1 These reasons address discovery motions advanced by each of the 'Schutz' applicants and the 'VIP' respondents. The background to the dispute and abbreviations adopted are as in Schutz DSL (Australia) Pty Ltd v VIP Plastic Packaging Pty Ltd (No 10) [2011] FCA 1107 (Schutz No 10). These reasons deal with discovery disputes.

VIP'S MOTION FOR DISCOVERY 2 VIP seeks orders that: (a) Schutz re-serve their electronic discovery in compliance with the discovery protocol agreed on 11 March 2010; (b) Schutz provide further discovery in accordance with proposed categories; and (c) Schutz give further and better discovery in certain 'existing categories'.

Electronic discovery 3 An electronic discovery protocol was agreed between the parties in March 2010 in accordance with Federal Court Practice Note CM 6 Electronic Technology in Litigation (Discovery Protocol). Pursuant to cl 11.2 of the Default Document Management Protocol, discovery must be re-served where errors are found in more than 25% of the exchanged documents. On 12 May 2011, VIP's solicitors gave notice under that clause that more than 25% of Schutz' electronic discovery contained errors. The need to re-serve electronic discovery in compliance with the Discovery Protocol had been accepted by Schutz' solicitors but at the time of the hearing of this motion had not been produced. Schutz now accepts that they should re-serve their electronic discovery. Consent orders to that effect have been made.

Further discovery in various categories 4 In May 2011, orders that the parties exchange any proposed categories for further discovery and that the parties respond to any proposed categories for further discovery were made. The discovery categories sought were in addition to the agreed categories August 2010 (original categories). VIP provided categories to Schutz. Schutz rejected all those categories. VIP has reduced the categories it seeks and now presses the following categories. Further revision of the categories sought by VIP are considered in these reasons.

Category 1 5 By category 1, VIP seeks all documents recording, referring or relating to the development of the pallet container disclosed in the Patent, including without limitation all documents recording, evidencing or referring to any trial, working or experimentation of the pallet container and all documents constituting or referring to any prior publically available material (including prior art products) that were referred to in the development of the pallet container. In essence, while the original categories 48 and 49 contained particular limitations as to date, versions and the like, this category seeks the whole of the research and development documents not just a subsection. 6 VIP argues that they are plainly relevant, in particular, to the question of inventive step. 7 VIP makes the point that the Patent is for a particular type of cage that has a type of welding which is said to 'relieve stresses'. VIP wants to explore the extent to which it might have been within common general knowledge that there were problems with these cages. VIP want to ascertain whether customers complained to Schutz about the problems with the cages which, VIP suggest, would say that the problem was an 'obvious one'. 8 In Wellcome Foundation Ltd v VR Laboratories (Aust) Pty Ltd (1981) 148 CLR 262, the High Court affirmed a decision of the Full Federal Court (Wellcome Foundation Ltd v VR Laboratories (Aust) Pty Ltd (1980) 142 FLR 266) on this topic. Wellcome had sued in the Supreme Court of New South Wales for infringement of a patent in relation to 'improvements in or relating to injectable therapeutic compositions'. VR denied infringement and counterclaimed for a declaration of invalidity of the patent on various grounds including that the invention was obvious and did not involve an inventive step, having regard to what was known or used in Australia on or before the priority date of the claim. To support that defence and counterclaim, VR sought further and better discovery of the following classes of documents: (a) documents relating to research and development and experimental work on a claimed invention both before and after the priority date of the subject of the subject letters patent; (b) documents relating to the provisional application for the patent and documents relating to the application for the complete patent, as the case may be, both in the United Kingdom and in Australia and elsewhere insofar as they contained matters relevant to (a) and, in any event, all such documents for the United Kingdom and Australia; and (c) documents relating to infringement, revocation or opposition proceedings in any country of the world where a corresponding patent has issued or been applied for insofar as they contained admissions by or on behalf of Wellcome and relevant to (a). 9 At first instance, the primary judge made an order for further and better discovery in terms of para (a) and para (b) but deleted from the description of the documents in para (b) the words 'and elsewhere' and the words 'and in any event all such documents for United Kingdom and Australia'. Discovery was refused in relation to the documents described in (c). Wellcome appealed to the Full Federal Court (Bowen CJ, Franki and Deane JJ). The appeal was dismissed by Aickin J in the High Court, with whom Gibbs ACJ, Stephen, Mason and Wilson JJ concurred, affirming the decision under appeal saying (at 287-288): In the result therefore I have concluded that evidence of research and experiments (if any) of a patentee leading up to his claimed invention is generally admissible though not always likely to be helpful. The fact that in a particular case there may not have been any research or experiment involved in the making of an invention does not require the conclusion that evidence relating to research and experiments, where they took place, will not be admissible. So far as discovery of documents is concerned the test is wider than the test of admissibility as the statement of Windeyer J. in Temmler's Case, which I have quoted above, demonstrates. It may be that in many cases documents recording such research and experiment could properly be said to relate solely to the inventor's own case but that ground for refusing discovery is no longer available in New South Wales, having been abolished in 1976 by the insertion of r. 6a in Pt 23 of the Supreme Court Rules 1970 (N.S.W.). The cases to which I have referred appear to show that some discovery in respect of the work done by a patentee in arriving at his invention has been given as a matter of course and that the disputes have been as to the extent of discovery. Since evidence of such work may in some cases be relevant to the issue of obviousness it must follow that discovery should generally be given, even if only on the basis that the documents discovered may suggest a line of enquiry worth investigation. 10 In the last passage cited above, his Honour makes the point that 'some' discovery of this character would be appropriate. His Honour then ultimately makes the point that this would be so even if only the documents may suggest a line of inquiry worth investigation. This reasoning was consistent with the Peruvian Guano test (Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Company (1882) 52 LJQB 181). That position has significantly changed. The Rules of this Court, consistent with those changes, reflect a significantly less broad ranging ambit of discovery. 11 While the nature of the discovery pursued by VIP may be relevant, it does not follow that the extensive range of discovery which might once have been permitted will now be appropriate. The observations of the High Court in Wellcome do not constitute an erosion of the Court's general discretion to be applied in permitting discovery, especially in more modern times when electronic reproduction has massively magnified the burden compared with the benefit. 12 The following observation applies to the approach I adopt for most of the categories of discovery sought by Schutz and VIP. I consider that most of the categories are so broad as to be oppressive on their face. 13 The discretion as to the necessity for and the extent of the discovery will turn on the particular case. In my view, a stand must be taken against insistence of production of every last note of possible tangential relevance. A number of authorities have recognised that discovery can be an intrusive and oppressive tool, particularly in the hands of a business or trade rival: see Austal Ships Pty Ltd v Incat Australia Pty Ltd [2009] FCA 368 (at [129], [133]-[135], [137]-[139] and [150]): 129 It must be recalled that discovery is an invasive procedure by which production of a party's documents or other non-public records may be compelled. That compulsion is one of the reasons that the extent to which discovery must be given is limited. … 133 One of the fundamental questions arising in the extent of discovery which is sought by this application is whether or not it constitutes a fishing expedition. In Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd (1955) 72 WN(NSW) 250 at 254, Owen J described 'fishing' as arising when: ... a person who has no evidence that fish of a particular kind are in a pool desires to be at liberty to drag it for the purpose of finding out whether there are any there or not. 134 Similarly, if the attempt to gain information is speculative in nature it will be 'fishing': Melbourne Home of Ford Pty Ltd v Trade Practices Commission (1979) 36 FLR 450; WA Pines Pty Ltd v Bannerman (1980) 41 FLR 175. The question is whether the applicant has shown a good case, proof of which is likely to be aided by discovery. 135 In Trade Practices Commission v CC (New South Wales) Pty Limited (1995) 58 FCR 426, Lindgren J dealt with the balance between a fishing expedition and giving discovery by a party who has the only knowledge on which the claim is based. In that case, the applicant had already supplied reasonably detailed particulars and had the benefit of transcripts from compulsory examinations. His Honour said at 439: 4. Apparently the Commission does not know what was said at either the Meeting or at the alleged prior meetings. I do not think, however, that this means that it does not know whether it has a case. The pleading and the particulars supplied are reasonably detailed. Moreover, there is some evidence in the transcripts of the evidence given by individuals to the Commission of the existence of a case of the kind pleaded. In my view, the Commission's application is not a "fishing expedition". 5. The respondents submit that the Commission should be directed to "supply particulars by putting on its affidavit evidence" before the discovery issue is decided. I do not agree. A well accepted situation which the court often exercises its discretion by ordering discovery before particulars are supplied is that in which the party which seeks particulars and resists discovery is alone in possession of the relevant documents: Millar v Harper (1888) 38 Ch D 110 at 112; Egg & Egg Pulp Marketing Board v K H Korp Tocumal Trading Co Pty Ltd [1963] VR 378; L Grollo & Co Pty Ltd v Nu-Statt Decorating Pty Ltd (1978) 34 FLR 81 at 90-91; Halsbury's Laws of England (4th ed, 1975), Vol 13, par 28; BC Cairns, Australian Civil Procedure (3rd ed, 1992), p 348. In my view, I should exercise my discretion accordingly in the present case. (emphasis added) … 137 It is well established that generally a discovery affidavit is conclusive on the question of whether a party has or has had in its possession, custody or control of any relevant documents other than those discovered: Betts Group Pty Ltd v Paul's Retail Pty Ltd [2007] FCA 1983 at [15]; Mulley v Manifold (1959) 103 CLR 341. 138 Under O 15 r 8, however, there is a procedure under which particular discovery may be sought where a party is dissatisfied with the extent of the discovery made by the opposing party. The Court may exercise its discretion under O 15 r 8 where it is clear that there has been a defect in compliance with an earlier order for discovery if it appears, for example, that a party has excluded documents under a misconception of the case as Austal argues is the position here: Mulley 103 CLR 341 at 343. 139 However, in Slick v Westpac Banking Corporation (No 2) [2006] FCA 1712 at [43], particular discovery was refused on the basis that 'the theoretical possibility that something might turn up [was] well and truly outweighed by the cost and burden to Westpac' (see also Betts [2007] FCA 1983). … 150 As observed by Tamberlin J in KGL Health Pty Ltd v Mechtler [2008] FCA 273 at [9], if classes of documents are sought, they should be framed so as not to be too wide and need to be stated with sufficient specificity. 14 Schutz contends that they have already discovered everything necessary in category 1 as they fall within the original categories 48 and 49 in which discovery has already been given. Given that the records are 15 years old, the Court should infer that any records not discovered by Schutz are records that were once in their possession, custody and power and have subsequently been lost or destroyed. Schutz complains that the category is not limited in time and is so broad as to be oppressive. The scope of category 1 would require Schutz to conduct searches for, translate from German to English (at great expense and causing significant delay) and discovery of potentially thousands of documents in a very wide category. 15 I consider that this category is too broad. I do not propose ordering discovery in terms of category 1 but I would review the position if the category of documents were substantially narrowed.

Category 2 and category 3 16 By category 2, VIP seeks the following documents relating to the sale, supply or servicing of Schutz IBCs in Australia between July 1991 and 29 October 1997: (a) a list of resellers, suppliers and users and the earliest example of requests from and correspondence with each reseller, supplier and user; (b) communications with users, resellers or suppliers regarding performance of the outer cage or inner container of the Schutz IBC; (c) summary or aggregate financial reports of sales and/or supply of the Schutz IBC by reseller, supplier or user, year and volume. 17 By category 3, VIP seeks catalogues, photographs, brochures and other promotional material relating to the promotion of the Schutz IBCs at international trade fairs between July 1991 and 29 October 1997. 18 In these categories VIP seeks a set of documents relevant to the issue of inventive step including the common general knowledge as it pertained to the Schutz IBCs as at the priority date. The earliest claimed priority date was March 1995. The start date of July 1991 was selected in the discovery request to capture documents relating to the state of knowledge as at that date without extending for an unnecessarily long period into the past. The latest potential priority date is 29 October 1997. 19 In relation to category 2 and category 3, once again, the categories appear to be very wide. I accept that some discovery in category 2 and category 3 is relevant. However, my impression is that these categories of discovery are also too broad. I note the submission by Schutz, that Schutz would be required to search through historical business records for any reference in or to correspondence with resellers, suppliers or customers in Australia (potentially thousands of documents) concerning the performance, characteristics and function of Schutz manufactured IBCs. They would similarly have to search for every record of Schutz' promotion of Schutz manufactured IBCs at international trade fairs for a six year period almost 15 years ago, which Schutz contends is no more or less probative of the timing of Schutz' sale or service of IBCs in Australia than the documents already available. 20 I consider this category is too broad and adopt the same approach as taken in relation to category 1.

Category 4 and category 5 21 These categories are not pressed.

Category 6 and category 7 22 In category 6, VIP seeks all versions of all specifications of each design type of composite IBC (of approximately 1000 L capacity) manufactured by Schutz or their licensees at any time since March 1991, including without limitation specifications detailing dimensions and construction materials. 23 By category 7, VIP now seeks the following documents identified below for each type of IBC identified in category 6 above: (a) each Certificate of Approval issued by BAM, defined as meaning Bundesanstalt fur Materialforschung und prufung, (including one copy of each revision); (b) technical drawings submitted in support of each Certificate of Approval (and in the case of revisions, the revised drawings only); (c) performance proofs for each Certificate of Approval (including each revision); and (d) correspondence with BAM, describing the nature of and reasons for any revision. 24 Although Schutz raises the objection of oppression in relation to these categories, it appears that relevance is not in dispute. 25 Category 6 is similar in terms to original category 20 in respect of which Schutz provided discovery by a summary document. VIP accepts that Schutz is certified by BAM to manufacture 21 different design types of 'MX1000 IBCs' but VIP contends that the documents are relevant to: (a) testing the pleaded case of Schutz that VIP would be unable to comply with its regulatory approval because of the variety of Schutz' MX1000 specifications and approvals; and (b) common general knowledge. 26 VIP complains that the summary document produced by Schutz under original category 20 is insufficient because it provides only current specifications. The admission by VIP as to Schutz' BAM approvals does not detract from the discoverability of the documents based on the disputed issues in the pleading. As with other categories, VIP complains that there is no evidence as to oppression and that any confidentiality and translation issues may be addressed by way of the existing regimes agreed between the parties. 27 In an appropriate circumstance, oppression will be self-evident. Where the burden of providing all the discovery sought outweighs any likely benefit, being compelled to do so would go outside the regime provided for under the Rules. 28 Schutz argues that the categories which have been framed are too wide and the Court should consider the burden placed on the party from whom discovery is sought and weigh that against the likely benefit that would be enjoyed by the party seeking discovery: Betts Group Pty Ltd v Paul's Retail Pty Ltd [2007] FCA 1983 and Austal Ships. 29 In giving discovery in the new category 6 and category 7, Schutz would be required to conduct searches for documents, translate from German to English and give discovery of several thousand highly commercially sensitive documents in their possession, some of which are 20 years old. All of the documents would be produced subject to the confidentiality regime in place between the parties. The majority of the documents would need to be translated at great expense and considerable delay. Given the summary form of discovery previously given and acknowledged by VIP, Schutz says that these discovery categories should be disallowed. 30 I agree with Schutz' arguments on this topic. The parties should negotiate on a sensible basis in relation to these categories. I do not foreclose the possibility of further discovery but, as with category 1 (and others), the categories need to be more refined. No discovery will be ordered at present.

Category 8 and category 9 31 In relation to these categories, they are no longer pressed for VIP.

Category 10 32 VIP seeks discovery of representative samples of contracts of sale between Schutz and its customers in relation to the Schutz IBCs and the IBC inner containers from 1991 until the present date. 33 The contracts are relevant, VIP says, to matters presently in issue as are the terms of contract with those customers, in particular, as regards to the presence or absence of an implied licence in respect of cross-bottling. It is said to be further relevant to VIP's proposed defence based upon s 144 PA. Schutz opposes giving discovery on the basis that it is not relevant to any issue in the pleading. 34 In my view, the discovery is capable of being relevant to the amended pleadings. I have residual concern, however, that discovery of this nature may be oppressive. There should be further refinement of the sample so that the burden on Schutz in searching for the possible discovery is not entirely disproportionate to the benefit which VIP might obtain from accessing that material. The parties should agree upon a refined category. No discovery will be ordered at present.

Further discovery in agreed categories 35 VIP seeks 'proper' discovery in ten of the original categories. Schutz contends that discovery having been given by Mr Johnston on behalf of Schutz DSL, and Dr Jürgenhübbe, on behalf of the second and third applicants, such discovery is conclusive as to the adequacy of the discovery to be given in the absence of clear evidence that there is a deficiency in the discovery. 36 Although 'proper' or further discovery is sought in ten of the original categories, VIP focuses on two issues. The first is the 'unexplained failure' by Schutz to discover any documents at all as to its use of the ECODRUM trademark or sales of 'ECODRUM Products' referred to in original categories 62, 69, 70 and 71. VIP argues that this is surprising in circumstances where: (a) Schutz has alleged that it has made worldwide use of the ECODRUM trademark and the term 'ECODRUM Products' is defined in Schutz' own pleading, and Schutz has alleged that VIP wrongfully obtained the mark from Schutz; (b) VIP's evidence in chief confirms that Schutz has used the mark in Australia; and (c) Schutz further agreed to provide a summary document in respect of sales of 1 April 2011 but has failed to do so. 37 The second issue raised by VIP is that Schutz has failed to discover its communications involving Mr Kenneth Price in original categories 34 and 35. Mr Price has purported to give 'independent' expert evidence for Schutz in these proceedings. It has emerged, VIP says, that Mr Price has recently disclosed that, in fact, he has been involved in providing Schutz with advice in relation to cross-bottling and making submissions on behalf of Schutz to regulatory authorities in respect of cross-bottling for a number of years. On that basis, it is submitted that it would be reasonable to assume that Schutz would be in possession of documents in respect of this activity. 38 In my view, the points made by VIP on the limited categories of documents of which they have expressly raised particular submissions are to be accepted. Further, there appear to be no further specific submissions in reply by Schutz to these points. No discovery will be ordered at present. But I would expect discovery to be given in these categories and expect the parties to consent.

SCHUTZ' REQUEST FOR FURTHER DISCOVERY 39 Schutz also revised its categories in which further discovery was sought. By category 1 of the further discovery sought by Schutz, Schutz seeks discovery of all documents comprising or recording the sale, supply and/or distribution in the course of trade of cross-bottled IBCs by VIP, their agents, related bodies corporate and/or licensees since January 2008. 40 By category 2, Schutz seeks all documents comprising or recording any sale, supply and/or distribution in the course of trade of 'Reconditioned Cross-Bottled IBCs' by VIP, their agents, related bodies corporate and/or licensees since January 2008 not otherwise falling within category 1. 'Reconditioned Cross-Bottled IBCs' was defined by Schutz to mean cross-bottled IBCs comprising Schutz cages with inner containers manufactured by any other 'person' and bearing an UN certification markings for DG transport. Schutz makes the point that the definition of 'Reconditioned Cross-Bottled IBCs' expressly excludes the VIP cross-bottled IBCs but does include any cross-bottled IBC comprising a Schutz manufactured cage that is reconditioned by VIP. 41 The documents discoverable in categories 1 and 2 are said, by Schutz, to be relevant to the pleas that by the promotion, sale and supply in Australia by VIP of various types of cross-bottled IBCs, VIP have made representations to classes of consumers and people involved in the transport of goods in IBCs as to the quality, certification and origin of those cross-bottled IBCs. VIP concedes that they have sold and suppled cross-bottled IBCs in Australia but deny that their conduct gives rise to the representations pleaded. VIP denies that any representations, if made, were made to the classes of persons pleaded by Schutz. For that to be determined, examination of the documents is said to be necessary for the purpose of the former O 15 r 3 FCR as the documents in those categories will show: The market in which VIP trade cross-bottled IBCs; Customers to whom they have sold or supplied VIP cross-bottled IBCs and 'Reconditioned Cross-Bottled IBCs'; Circumstances surrounding the promotion and sale by VIP of cross-bottled IBCs; Circumstances and instances of the making by VIP of the representations as alleged by Schutz; Circumstances and instances of VIP's exploitation of the Patent as pleaded by Schutz; and Circumstances and instances of VIP's sale and supply of products bearing the applicants' SCHUTZ trademark as Schutz pleads. 42 Schutz argues that without access to the documents in these two categories, they would have to prove their claims in an 'evidentiary vacuum' without reference to the factual realities of VIP's conduct that would be disclosed by those documents. 43 As against that, Schutz contends that the discovery would not be oppressive because VIP has already maintained that they keep records of their sales of VIP cross-bottled IBCs. Also, VIP has only been selling VIP cross-bottled IBCs and 'Reconditioned Cross-Bottled IBCs' since in or around January 2008 so that the search period, it is said, is not excessively onerous. Commercial confidentiality would be covered by the usual undertaking in this proceeding. 44 VIP, however, submits that the category is 'self-evidently broad', capturing every document evidencing the supply of cross-bottled IBCs by VIP and 'Reconditioned Cross-Bottled IBCs'. Seeking, for example, sales records, purchase orders, invoices and customer records, it is argued, is oppressive. 45 In my view, discovery of documents such as sales records, purchase orders and invoices is clearly unnecessary and oppressive. I accept that discovery of some of these documents may be relevant but the discovery sought is far too broad in the case of each category. I would not be prepared to order discovery as sought. 46 Categories 3, 4 and 5 are now the subject of consent. It is unnecessary to make further orders. 47 Categories 6, 7, 8 and 9 are addressed together by Schutz. Category 6 seeks discovery of all documents recording the sale, supply or distribution in the course of trade by Southcorp, its agents, related bodies corporate and/or licensees of polyethylene drum containers by or under the name ECODRUM since 12 October 1999. Category 7 seeks discovery of all documents recording the sale, supply or distribution in the course of trade by VIP, their agents, related bodies corporate and/or licensees of polyethylene drum containers by or under the name ECODRUM since 12 October 1999. Category 8 seeks discovery of all documents recording the customers who have purchased or received supply from VIP, their agents, related bodies corporate and/or licensees of polyethylene drum containers by or under the name ECODRUM since 12 October 1999. Category 9 seeks discovery of all documents recording any consideration, assessment, analysis or opinion by VIP, their agents, related bodies corporate and/or licensees of the market, purpose and/or customers and/or prospective customers of polyethylene drum containers sold, supplied and/or distributed in the course of trade by VIP, their agents, related bodies corporate and/or licensees under or by the name ECODRUM prior to March 2010. 48 Relevance cannot be disputed in my view. Schutz claims cancellation of the ECODRUM trademark from the Register of Trademarks and for relief under the Trade Practices Act 1974 (Cth). The plea for cancellation of the ECODRUM trademark is based on the claims by Schutz that VIP's predecessor, Southcorp, registered the ECODRUM trademark in bad faith on or about 12 October 1999 having been in negotiations with Schutz to distribute its products in Australia prior to that date. VIP denies that claim. The documents appear to be relevant to the Trade Practices Act claim but, in any event, Schutz says that the documents in categories 6-9 relate to VIP's cross-claim against Schutz for relief in respect of alleged infringement of the ECODRUM trademark. 49 However, once again, this discovery is far too broad in my view. It will include every sales record, purchase order, invoice and customer record. It is inconceivable that all such documents could be necessary. It is difficult to see that sales by Southcorp and VIP of ECODRUM products after 12 October 1999 have anything to do with the 'bad faith claim' as at that date. This is particularly so in circumstances where extensive categories (original categories 27-40) have already been ordered in respect of that issue. Schutz should consider a very substantially more confined request on this topic. I would not order discovery of the categories 6-9 as presently drawn.

REDACTION/CONFIDENTIALITY 50 I propose dealing with this matter in substantially briefer form than the submissions and affidavits which have given rise to this part of the dispute alone. As a general comment, I consider that it is desirable that all parties take a slightly more constructive approach to the interlocutory disputes in this litigation. If that course does not commend itself to the parties (and I note that there are more interlocutory disputes to look forward to), the better course may be for the Court to make orders compelling mediation so that the resources of the parties and the Court are more efficiently focussed. 51 In providing its discovery, Schutz redacted material which, it says, was not relevant to the issues in dispute in the proceeding. 52 VIP has not used any redaction and no provision for redaction was made in the orders pertaining to discovery. 53 VIP seeks orders compelling Schutz to provide discovery without redaction in accordance with its obligations under the Rules. 54 Apart from pointing to the fact that Schutz has taken this course in breach of the Rules and without approval of the Court, VIP also points to the fact that the process of determining what was relevant and what was not relevant for redaction purposes was taken by a relatively junior solicitor and that VIP cannot be confident, therefore, that all relevant material has been disclosed. 55 Schutz, for its part at least on the face of the matter, seems to accept that the process it adopted, without leave of the Court, was inappropriate. It now seeks the Court's approval for the redaction process which it has undertaken. This approval necessarily, insofar as that discovery which has already been given relates, must be retroactive or provided nunc pro tunc. 56 Although VIP is quite correct in relation to most of its arguments, I consider that Schutz should succeed on its motion for reasons that follow. 57 The first reason is that VIP has been unable to point to any apparent specific prejudice. Were it to do so and, if it does so in the future, I would be more readily persuaded to its arguments that specific material be discovered on an un-redacted basis. However, the complaint appears to be more of a general nature and as redaction is quite a common procedure in commercial litigation especially between trade rivals (providing proper approvals have been obtained). I do not consider that it is sensible to put Schutz to the further expense of providing the material on an un-redacted basis. I stress that if VIP can point to specific potential prejudice in a specific instance, I would take a far more sympathetic view to their submission. 58 On the issue as to the level of seniority of the solicitor taking the decision as to what material should be redacted on the grounds of irrelevance, my view is that this is not a strong basis for complaint. Discovery is already, in a matter such as this, an expensive and intrusive process. The Courts strive to minimise that expense and to order discovery only in circumstances where it is likely to be necessary to satisfy the objectives under the Rules and thereby to do justice. To expect that a partner in a law firm, for example, would conduct the entire discovery process (including redaction) would strain the objectives of keeping the cost of discovery to a manageable level. I do not mean to suggest that discovery is not an important process. Clearly, it is. But it does not follow that one would ordinarily expect each aspect of discovery would be carried out by the most senior of personnel in a law firm. 59 I do consider, however, that it is appropriate that Schutz should pay the costs of VIP in relation to this motion because it is quite clearly the default by Schutz in compliance with the Rules which has give rise to the dispute.

CONCLUSION 60 Therefore the following orders are made: 1. The applicants/cross-respondents do re-serve their electronic discovery upon the respondents/cross-claimants within 14 days, if this has not already occurred. 2. The motions for further discovery by all parties be dismissed, each party bearing its own costs. Redaction 3. The orders made on 14 December 2010 be varied as follows: (a) the following paragraph be inserted after paragraph 4: 4A. Where any party claims that a document produced by it in these proceedings contains confidential information irrelevant to the agreed categories for discovery (Claimant), the Claimant may produce a redacted copy of the document, masking the irrelevant information from inspection by any other party or their representatives. (b) paragraph 5 be varied to read: 5. If a party disputes a claim for confidentiality in respect of a particular document or a claim for irrelevance in respect of masked portions of a particular document (Disputed Document) it can request from the Claimant written reasons supporting its claim for confidentiality and/or irrelevance of the Disputed Document (the Request), such reasons to be provided by the Claimant within 14 days of the Request. (c) paragraph 6 be varied so as to read: 6. If the Claimant fails to provide a written reason within 14 days of the Request to support its confidentiality claim for the Disputed Document and/or its irrelevance claim for the masked portions of the Disputed Document, or the disputing party maintains its challenge to the confidentiality of the Disputed Document and/or irrelevance of the masked portions of the Disputed Document, notwithstanding such reasons, the disputing party may serve a notice disputing the claim in respect of the Disputed Document (Notice of Dispute) on the Claimant. Any Notice of Dispute is to be served within 28 days of the Request. (d) the following paragraph be inserted after paragraph 6: 6A. The Claimant in respect of a claim for irrelevance of the masked portions of any Disputed Document must produce an unmasked copy of the Disputed Document 14 days after receipt of a Notice of Dispute in respect of the Disputed Document if no application is made to the Court in respect of the Disputed Document within 14 days. 4. The applicants/cross-respondents do pay the costs of the respondents/cross-claimants' motion in relation to the redaction of documents to be taxed if not agreed. 5. There be liberty to apply on short notice. I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.