The University of Western Australia v Gray

REASONS FOR JUDGMENT ON INSPECTION OF DISCOVERED DOCUMENTS Introduction 1 The University of Western Australia (the University) sues Dr Bruce Gray, a former Professor in its Faculty of Medicine, by reason of his alleged exploitation and assignment of intellectual property rights relating to inventions said to have been developed while he was in the employment of the University. The University asserts that Dr Gray and a public company, Sirtex Medical Limited (Sirtex) which it also sues, hold rights and entitlements deriving from the inventions on trust for the University. The inventions are said to involve methods for the production of hollow microspheres for the delivery of ionising agents to cancerous sites in the human body (SIRT-Spheres), microspheres to deliver pharmaceutically active compounds to such sites (DOX-Spheres) and microspheres incorporating ferromagnetic particles which, by application of an external magnetic field, can provide localised hysteresis heating in cancerous tissue (Thermo-Spheres). 2 The proceedings are set down for trial commencing on 12 March 2007. The University seeks an order for inspection of documents which have been the subject of Dr Gray's discovery. The documents include records of patients allegedly treated with the disputed technology. The application is resisted, essentially on grounds relating to the necessity for such an order. It is said that the documents are voluminous and are mixed up with unsorted, irrelevant material which would require two weeks of fulltime work by Dr Gray to sort. This raises a question about the basis upon which Dr Gray's solicitors certified that the documents enumerated in the discovery list could be inspected at their offices by appointment. For the reasons that follow I am satisfied that inspection should be ordered and will allow 14 days for that to occur subject to directions to protect the privacy of patients named in the documents. The inspection question 3 On 7 July 2006 Dr Gray gave discovery of documents. His discovery list included an item numbered 1804 described as "Various miscellaneous patient files". The solicitors for the University wrote to Dr Gray's solicitors on 12 October 2006 following a meeting of a Discovery Committee comprising representatives of the parties which had been held on 21 September 2006. In their letter of 12 October 2006 the University's solicitors attached a list of documents from Dr Gray's discovery for which they had not received electronic images or for which the electronic images were incomplete or illegible. They required Dr Gray to provide complete and legible images for each document identified in the annexure as soon as possible. Among the documents listed as "Missing" was a document labelled "BNG.001.1804". It is not in dispute that this referred to the documents in item 1804 in Dr Gray's list. Under the heading "Further documents" which were said to have not been discovered or incompletely discovered, the University's solicitors listed: 'Clinical data for patients treated by the First Respondent with any of the inventions the subject of these proceedings (in particular those patients treated between 1986 and 1991).' The University required Dr Gray to discover those documents and to make them available for inspection. In a letter dated 12 October 2006, which evidently crossed the letter from the University's solicitors, the solicitors for Dr Gray said, inter alia: 'The range of documents from BNG.001.1775 up to and including BNG.001.1808 is comprised of previously reported files that have been described as bundles due to their nature and volume. These documents were made available to Mr (sic) at the time of his inspection of the client's documents. As advised to Mr Cox previously, these have not been scanned.' The documents referred to in that passage clearly included document 1804. 4 In a letter dated 14 November 2006 Dr Gray's solicitors wrote again to the University's solicitors and said, inter alia: '[A]ny clinical data for patients treated by the first respondent to which you refer at 3(g) of your letter is held at our client's offices at 24 Brodie Hall Drive, Bentley. We are instructed that the clinical data material is voluminous and mixed up with all sorts of hospital notes and various other irrelevant data. Our client has discovered patient data which is relevant to the matters in issue, which your solicitors have inspected. Our client does not concede any further material is relevant. Further, given the volume of material the request is oppressive. Please also explain why clinical data of patients is relevant.' This was evidently by way of response to the request for "Further documents" in the letter of 12 October 2006 from the University's solicitors. 5 On 23 November 2006 I directed that the Discovery Committee meet on the following day to endeavour to resolve issues raised by an application made by Dr Gray for further discovery and the University's outstanding issues in relation to discovery. Subsequently, and pursuant to directions, written submissions together with a minute of proposed orders and an affidavit of Marjorie Hodgson sworn 29 November 2006 were filed by the University in support of claims for further discovery from Dr Gray. The orders sought included an order for the production of: 'Any clinical data in the possession, custody or power of the first respondent in relation to any patient treated with an invention the subject of these proceedings at Royal Perth Hospital during the period 1986 to 1991.' The basis upon which the University sought the production of these documents was not expressed to be related to any prior discovery. I declined to make the order. 6 The decision refusing the University's application was given on 1 December 2006: The University of Western Australia v Gray (No 6) [2006] FCA 1656. I noted in the reasons that Dr Gray did not contend that the material sought was irrelevant. He argued rather that it was of "tangential" relevance. It was not in issue that he treated patients during the relevant period but no issue about that treatment was raised on the pleadings. He maintained through his solicitors that it would be oppressive to require that he sort out and produce from the large number of documents in existence those which fell within the class the subject of the proposed order. I found the case advanced by the University for access to those records to be less than convincing. The class sought by its minute overreached in seeking a range of clinical data relevant to patients treated with an invention the subject of the proceedings. It was not limited to data flowing from such treatment. The description of records by reference to records of treatment with an "invention" would require judgments about what was meant by "invention". I also expressed reluctance about having the clinical data of individuals put in play in the proceedings without good reason. 7 The University has now adverted to discovery item 1804 which it had not previously raised in Court and seeks inspection of those documents. They may fall within, although they are not necessarily congruent with, the class of documents for which the University in effect sought additional discovery in October 2006. The question therefore is whether, clinical records having been discovered, the University is entitled to inspect them. Statutory framework - rules of Court relating to discovery 8 Order 15 relevantly provides: '1 After a directions hearing under Order 10, any party may, with the leave of the Court and within any period fixed by the Court for this purpose, by notice for discovery, in accordance with Form 21, filed and served on any other party, require any other party to give discovery of documents. 2(1) A party required to give discovery must do so within the time specified in the notice of discovery (not being less than 14 days after service of the notice of discovery on the party), or within such time as the Court or a Judge directs. 2(2) Unless the Court or a Judge orders otherwise, a party must give discovery by serving: (a) a list of documents required to be disclosed; and (b) an affidavit verifying the list. 3 Without limiting rule 3 or 7, the documents required to be disclosed are any of the following documents of which the party giving discovery is, after a reasonable search, aware at the time discovery is given: (a) documents on which the party relies; and (b) documents that adversely affect the party's own case; and (c) documents that adversely affect another party's case; and (d) documents that support another party's case. … 6(1) A list of documents required by or under this Order shall, unless the Court otherwise orders, be in accordance with Form 22 and conform to the requirements of this rule. … 6(7) A list of documents shall appoint a time within 7 days after service of the list when, and a place where, the documents in the list may be inspected. … 10(1) Where a pleading or affidavit filed by a party refers to a document, any other party may, by notice to produce served on him require him to produce the document for inspection. (2) Where a notice to produce a document is served on a party under subrule (1), he shall, within 4 days after that service, serve on the party requiring production a notice: (a) appointing a time within 7 days after service of the notice under this subrule when, and a place where, the document may be inspected; (b) claiming that the document is privileged from production and sufficiently stating the grounds of the privilege; or (c) stating that the document is not in his possession, custody or power and stating to the best of his knowledge information and belief where the document is and in whose possession, custody or power it is. 11(1) Where: (a) it appears from a list of documents filed by a party under this Order that any document is in his possession, custody or power; … the Court may, subject to any question of privilege which may arise, order the party: (d) to produce the document for inspection by any other party at a time and place specified in the order; or (e) to file and serve on any other party a copy of the whole or any part of the document, with or without an affidavit verifying the copy made by a person who has examined the document and the copy. (2) An affidavit made pursuant to an order under paragraph (1)(e) shall, unless the Court otherwise orders, state whether there are in the document copied any and, if so, what erasures, interlineations or alterations. … 15 The Court shall not make an order under this Order for the filing or service of any list of documents or affidavit or other document or for the production of any document unless satisfied that the order is necessary at the time when the order is made.' Whether inspection should be ordered 9 Item 1804 in Dr Gray's discovery list appeared in Pt 1 of Schedule 1 of that list. Order 15 r 6(7) requires that a list of documents appoint a time within seven days after service of the list when, and a place where, the documents in the list may be inspected. At the end of the discovery list provided by Dr Gray there was a certificate signed by one of his solicitors which stated: 'I certify that according to my instructions, this list and the statements in it are correct. The documents enumerated in Part 1 of Schedule 1 may be inspected at Lavan Legal, Level 19, 1 William Street, Perth by appointment between the hours of 9.00am and 5.00pm.' 10 The certificate was signed by the same solicitor who swore an affidavit on 25 January 2007 in opposition to the University's request for an order that inspection of item 1804 be provided. In that affidavit she said: '4. In the first respondent's list of documents filed 7 July 2006, item 1804 in Schedule 1, part 1 (page 220) is described as "various miscellaneous patient files". 5. The applicant has sought inspection of the files contained in item 1804. I refer to "MFH6" and "MFH7" to the affidavit of Marjorie Frances Hodgson sworn 19 January 2007, which are copies of letters of Jackson McDonald and Lavan Legal in relation to the request for inspection. 6. I am informed by the first respondent and believe that the documents comprising those described in item 1804 are patient files containing clinical data, constituted by individuals' patient files from Royal Perth Hospital. As such they comprise patient records, nurse observation notes, administration documents and medical notes of patient treatment and conditions in respect of patients that the first respondent has treated. 7 I am informed by the first respondent and believe that: 7.1 the documents are located at 24 Brodie Hall Drive, Bentley in the State of Western Australia; 7.2 the documents are the contents of a stack of full boxes measuring approximately 1 ½ metres high by 2 metres wide by 1 metre deep; 7.3 the documents are mixed with a voluminous amount of documentary material recording clinical data, which is completely irrelevant to the proceedings; 7.4 the clinical data which is recorded on the files does not reveal matters such as the timing of the change of the micron size of the micro spheres used by the first respondent; 7.5 it would take the first respondent approximately 2 weeks of full time work to sort through the documents to extract the documents sought by the applicant; 7.6 the time and cost to effect the extraction of documents sought by the applicant would be excessive and disproportionate to the relevance of the documents to the proceedings. The task of recovering the clinical notes could not be undertaken by clerks or para-legals and would require the first respondent personally to come to Perth for that purpose. 8. The files described in item 1804 of which the applicant seeks inspection, contain the same files that the applicant sought inspection of pursuant to an application heard by His Honour in these proceedings on 1 December 2006.' 11 The statements made in the affidavit are at odds with the unqualified assurance given in the certificate to the discovery list. Moreover, they appear to replicate the statements made in the solicitor's letter of 14 November 2006 which was a response to the University's request for "Further documents" contained in its letter of 12 October 2006. It is apparent from the text of the affidavit that Dr Gray's solicitors have not seen the documents in item 1804 for themselves or advised, or been in a position to properly advise, on their relevance. Nor apparently are they in a position to specify or even estimate the number of such documents falling within item 1804. If, as suggested in the affidavit, the documents have not been sorted from irrelevant materials and if it would require two weeks of fulltime work to do that, it is difficult to see on what basis the assurance contained in the certificate appearing at the end of the list of documents was given. It is also difficult to see how, given the certificate, the solicitors could claim to have discharged their duty to their client or to the Court in respect of this discovery. 12 The discovery of documents and the certification of their availability for inspection are obligations to be taken seriously by the parties and by their advisors. While the discovery was complex and voluminous, and while it may be accepted that mistakes can occur, it does not appear that at the time the list was certified the necessary checks had been done to ensure the certificated assurance could be honoured. While on the subject of mistakes, it may be noted that in its earlier application for access to "Further documents" in December 2006, the University made no reference to the fact that clinical records, probably falling within the class for which it was, in effect, seeking additional discovery had already been discovered. 13 Order 15 r 15 requires that the Court not make an order under Order 15 for the production of any document "unless satisfied that the order is necessary at the time when the order is made". It is arguable that there is a free standing obligation under O 15 r 10, the existence of which is assumed by O 15 r 6(7), to produce for inspection documents set out in a discovery list. Writing in 1984 of the position under Rules of this Court and the State Supreme Courts relating to discovery and production, BC Cairns observed of O 15 r 10 and its equivalents: 'A party is obliged to produce for inspection all of the documents referred to in his pleadings or affidavit … In addition, it is almost too obvious to mention that this formulation includes the affidavit of documents.' Cairns BC, The Law of Discovery in Australia (Law Book Company, 1984) at p 66 14 The proposition advanced by Cairns was not always so obvious nor is it obvious today. In Bray's Principles and Practice of Discovery (Reeves and Turner, 1885) it was pointed out that cases under the old English equivalent of O 15 r 10 drew a clear distinction between an application for production of documents referred to in affidavits and pleadings and documents referred to in the affidavit of documents: at 242-243 citing Quilter v Heatly (1883) 23 Ch D 42; Roberts v Oppenheim (1884) 26 Ch D 724. 15 The English practice in relation to inspection under the former Rules of the Supreme Court was recently described in Matthews P and Malek HM, Disclosure (Sweet & Maxwell, London, 2001) (at [9.001]): 'Under the former rules … at the stage of disclosure, the burden was on the disclosing party to show why disclosure was not necessary, either for disposing fairly of the cause or matter, or for saving costs. In relation to inspection, the general rule involved the same test, but (in the High Court) it reversed the burden of proof, ie that no order for production, or for the supply of a copy, of any document is to be made unless the Court was satisfied that the order was necessary either for disposing fairly of the cause or matter or for saving costs. Thus the burden was on the inspecting party to show why he should have inspection or supply, and not on the disclosing party to show why he should not.' The learned authors went on to refer to the new Civil Procedure Rules (CPR) which came into effect in England in 1999. The position now is that a person to whom disclosure of a document has been given has, subject to exceptions, an automatic right to inspect it. This appears from CPR r 31.3. Even then (at [9.001]): '… the Court will only make an order for inspection after taking into account, and seeking to further, the overriding objective in CPR, Pt 1, which also applies at the stage of making an order for disclosure.' It is interesting to note that one of the objections to inspection under the Civil Procedure Rules relevant to the court's discretion is "disproportionality". This basis for objection is set out in CPR r 31.3(2) (at [5.16]): 'Where a party considers that it would be disproportionate to the issues in the case to permit inspection of the documents within a category or class of document disclosed under r 31.6(b): (a) he is not required to permit the inspection of documents within that category or class; but (b) he must state in his disclosure statement that inspection of those documents will not be permitted on the grounds [that] to do so would be disproportionate.' 16 The requirement of necessity in O 15 r 15 may well find its place in the understanding of what is "disproportionate" for the purposes of the Civil Procedure Rules. In Kimberley Mineral Holdings Pty Ltd (In Liq) v McEwan [1980] 1 NSWLR 210 the Court of Appeal of New South Wales considered the operation of Pt 23 r 10(1) of the Supreme Court Rules (NSW). That conferred upon the Supreme Court a discretion to order the production of documents set out in the list of documents filed by a party save for those privileged from production. In the joint judgment of Hope and Glass JJA their Honours said that (at 215): '… there are grounds of objection in relation to the production of documents for inspection which may properly be taken other than grounds based on privilege. Without suggesting that that is the only purpose for the use of the word "may" in r 10, it would, nonetheless seem to provide one basis for that use.' Moffitt P agreed with the joint judgment and emphasised the court's discretion to adapt its orders to the exigencies of the case particularly where large quantities of documents are concerned (213). 17 Davies J in Holmes v Deputy Federal Commissioner of Taxation [1988] 2 ATC 4010 referred to O 15 r 15 as a rule which (at 4018): '… emphasises the principle which was clearly stated in Kimberley Mineral Holdings Ltd (In Liq) v McEwan [1980] 1 NSWLR 210, that a court's powers with respect to discovery and inspection are discretionary and ought to be exercised to prevent abuse of its process.' 18 In Trade Practices Commission v CC (New South Wales) Pty Ltd (1995) 58 FCR 426 Lindgren J said that O 15 r 15 requires that the Court to be satisfied that an order of the kind referred to in that rule is, at the time when the order is made, necessary "in the interests of a fair trial". He cited Percy v General Motors-Holden's Pty Ltd [1975] 1 NSWLR 289 at 292. He also referred to Boyle v Downes [1979] 1 NSWLR 192 dealing with a similarly expressed constraint in the Supreme Court Rules 1970 (NSW) relating to interrogatories. The criterion adopted in the latter case was whether the order sought was "reasonably necessary for the disposing fairly of the cause or matter". Lindgren J said (at 437): 'The notion of the "interests of a fair trial" and of the "fair disposition of a case" encompasses, in my view, the opening up of a train of inquiry of the kind referred to above which is part of the proper function of discovery. ' His Honour was referring to discovery rather than the production of discovered documents. Nevertheless, O 15 r 15 applies the same criterion to orders for production of documents. It was so applied by Branson J in Gray v Associated Book Publishers (Aust) Pty Ltd [2002] FCA 1045 in which her Honour said (at [9]): '… it is clear that the power of the Court to order that a discovered document be produced for inspection by another party is a discretionary power (see O 15 r 11).' And added (at [9]): 'What is "necessary" within the meaning of O 15 r 15 is that which is reasonably necessary in the interests of a fair trial and of the fair disposition of the case…' She cited Lindgren J in Trade Practices Commission v CC (New South Wales) Pty Ltd. 19 In support of the order it seeks for the production of the documents in discovered item 1804 the University referred to Dr Gray's affidavit of 15 January 2006 in which he said he had treated his first patients with radionuclide bearing microsphere technology referred to in the substituted statement of claim as "SIRT 1". It referred also to a letter dated 14 October 1998 from Dr Gray on University letterhead requesting Royal Perth Hospital to transfer patient files in relation to patients treated with Yttrium 90 to the Centre for Applied Cancer Studies for safe keeping. According to the University there was no disclosure that this request was made on behalf of Sirtex. 20 A Phase III trial used to support an application to the Federal Drug Administration of the United States began at Royal Perth in 1991. The University said that it is to be inferred that the period between the first human treatment in 1986 and the commencement of the Phase III trial was spent developing SIRT 1. On that basis it submitted that the medical records were "plainly relevant" to the issue between the parties. 21 Sirtex has discovered original patient files for the period 1991 to 1996 which form part of the Phase III study. So, it is said, claims by counsel for Dr Gray at a directions hearing on 23 January 2007 that the documents held by Dr Gray comprise patient records in relation to that trial cannot be accepted. 22 The University's submissions referred to objections raised on behalf of Dr Gray in connection with its earlier application for further discovery of patient records. It contended: (a) The relevance of the documents is demonstrated by them having been discovered as documents falling within the categories of documents for discovery by Dr Gray, which were negotiated at length. By their letter dated 14 November 2006, Dr Gray's solicitors referred to having discovered relevant patient data. (b) The claim that the application is oppressive because it would require Dr Gray to sort through large volumes of irrelevant material should not be accepted because: (i) his solicitors have previously said that they have made document 1804 available for inspection but in fact did not do so; (ii) it must be inferred that, as part of the discovery process, the solicitors for Dr Gray had already excluded irrelevant material; (iii) the volume of documents said to comprise document 1804 is of a similar size to the volume of patient data already produced by Sirtex and inspected by the University's solicitors in Sydney. (c) Any concerns in relation to patient confidentiality could be dealt with by the provision of undertakings as to confidentiality. (d) To the extent that some irrelevant material may have been discovered by Dr Gray as part of the bundle comprising item 1804, its disclosure is not a basis for refusing to permit inspection of relevant material. The University's solicitors are prepared to travel to Bentley to carry out inspection of the documents at the site where they are presently located. 23 The reasons advanced on behalf of Dr Gray against production of the documents relate almost entirely to his failure to have those documents sorted and conveniently available for inspection. The relevance of at least some of them is not in dispute. The difficulties of identification and definition which attended the University's prior application for what amounted to further discovery do not apply in this case as the documents have been identified for the purposes of discovery albeit there may be difficulties in separating relevant from irrelevant material. I am persuaded, on the basis of the University's submissions, that it is necessary that they see the discovered documents, less irrelevant material, subject to appropriate directions to protect patient confidentiality. I propose therefore to order inspection. That inspection may be affected by the University's solicitors being given direct access to the documents at Bentley. I will allow 14 days for inspection to be provided so that Dr Gray and/or his advisors may separate out relevant from irrelevant material. Conclusion on the question of inspection 24 For the preceding reasons, I will make an order for the inspection of the documents in item 1804. Dr Gray will be required to pay the costs of the application for inspection. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French.

Solicitor for the Applicant: Jackson McDonald

Date of Hearing: 6 February 2007

Date of Judgment: 9 February 2007