Consideration
10 Although the second respondent's notice of motion for discovery does not specifically invoke the provisions concerning preliminary discovery, it is apparent from the submissions made that the second respondent's motion has been made under the 'preliminary discovery' provisions of the Federal Court Rules. The relevant Order, O15A Rule 6, specifies the circumstances in which an applicant can obtain preliminary discovery of documents from a person against whom the applicant has, or may have, the right to obtain relief in the Court:
Where:
(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 has been ascertained;
(b) after making all reasonable inquiries, the applicant has not sufficient information to enable a decision to be made whether to commence a proceeding in the Court to obtain that 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 possession of 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 in making 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).
11 One possible problem facing the second respondent is that the use of the phrase 'prospective respondent' in O15A Rule 6 contemplates that discovery under this rule can only be obtained prior to the institution of substantive proceedings. This point was made by Tamberlin J in Ricegrowers Co-operative Ltd v ABC Containerline NV (1996) 138 ALR 480 where (at 484) his Honour said "[a]fter proceedings have been commenced the rule ceases to apply. After commencement, of course, in the ordinary process of discovery, additional facts may come to light which would provide a basis for other relief and it would then be open to the plaintiffs to seek leave to amend the pleadings so as to claim such relief." (See also Hooper v Kirella Pty Ltd [1999] FCA 1584 at [37] per Wilcox, Sackville and Katz JJ). A similar sentiment was expressed by Burchett J in Survival and Industrial Equipment (Newcastle) Pty Ltd v Owners of the Vessel "Alley Cat" (1992) 36 FCR 129, where, in considering the operation of O15A Rule 3 (which concerns circumstances where an applicant has made reasonable inquiries but is unable to ascertain the description of a person sufficiently in order to commence proceedings against that person) his Honour stated (at 136):
Here the case is one in which the identity of the defendant was sufficiently known to enable a proceeding to be commenced. It is true that that is so only because the proceeding may be commenced against the owners of a vessel without identifying them. But the proceeding has been commenced and regularly commenced. In my opinion once that has occurred, the rule ceases to be applicable. (Emphasis added)
12 However contempt proceedings are atypical. Even though they should be brought in the proceedings out of which the contempt is said to have arisen: O 40 r 5, the application and charge alleging contempt is itself a separate proceeding. I noted some relevant cases in Grout v Gunnedah Shire Council (1995) 129 ALR 372 at 381:
The applicant referred to a number of cases concerning proceedings alleging contempt of Court, the first of which was Viner v Australian Building Construction Employees and Builders' Labourers' Federation (1981) 38 ALR 550 at 553. Northrop J had to consider whether the legislative predecessor of s347, s197A of the Conciliation and Arbitration Act 1904 ("C & A Act"), limited the Federal Court's power to award costs. His Honour concluded that an application made by notice of motion alleging contempt of Court in relation to proceedings for the deregistration of an organisation brought under the C & A Act, was a separate proceeding taken under s31 of the Federal Court Act and thus s197A had no application. That conclusion has been affirmed by a Full Court in Cooke v Goodhew (1989) 91 ALR 447 at 458 per Sheppard J, 464 per Wilcox J and 474 per Gray J: see also Gregory v Phillip Morris Ltd (1987) 74 ALR 300. However Northrop J's conclusion in Viner, supra, turned on the special nature of contempt proceedings which are criminal in character and have historically been treated as proceedings separate from the proceedings which gave rise to the contempt.
13 In my view, the second respondent is not disentitled from seeking preliminary discovery simply because its notice of motion has been filed in the appeal proceedings. For reasons which will become apparent shortly, it is unnecessary to determine whether the expression "right to obtain relief" comprehends an application alleging contempt and seeking a penalty.
14 The principles to be applied in determining whether preliminary discovery should be ordered were recently considered by a Full Court in Echo Tasmania Pty Ltd v Imperial Chemical Industries PLC [2008] FCAFC 58, which quoted (at [43]), with approval, the following summary from the judgment of Hely J in St George Bank Ltd v Rabo Australia Ltd (2004) 211 ALR 147, at [26]:
'(a) the Rule is to be beneficially construed, given the fullest scope that its language will reasonably allow, with the proper brake on any excesses lying in the discretion of the court, exercised in the particular circumstances of each case;
(b) each of the elements prescribed in sub-paragraphs (a), (b) and (c) of the rule must be established. Preliminary discovery cannot itself be used to remedy deficiencies in the satisfaction of the conditions themselves;
(c) the test for determining whether the applicant has "reasonable cause to believe", as required by sub-paragraph (a), is an objective one. Further, the words "or may have" cannot be ignored. The applicant does not have to make out a prima facie case;
(d) belief requires more than mere assertion and more than suspicion or conjecture. Belief is an inclination of the mind towards assenting to, rather than rejecting a proposition. Thus it is not sufficient to point to a mere possibility. The evidence must incline the mind towards the matter or fact in question. If there is no reasonable cause to believe that one of the necessary elements of a potential cause of action exists, that would dispose of the application insofar as it is based on that cause of action;
(e) whilst uncertainty as to only one element of a cause of action might be compatible with the "reasonable cause to believe" required by sub-paragraph (a), uncertainty as to a number of such elements may be sufficient to undermine the reasonableness of the cause to believe;
…
(h) it is no answer to an application under the rule to say that the proceeding is in the nature of a "fishing expedition". Indeed O 15A r 5 "expressly contemplates" what once might have been castigated as "fishing". As Burchett J commented in Paxus Services [Ltd v People Bank Pty Ltd (1990) 90 ALR 728, at 733], the rule is:
"… designed to enable an applicant, in a situation where his proof can rise no higher than the level the rule describes, to ascertain whether he has a case against the prospective respondent …"'. (Other citations omitted.)
15 It can be seen that whether a party has reasonable cause to believe that they have, or may have, a right to obtain relief is to be determined objectively. It does not require the applicant for discovery to establish a prima facie case. But this case is unusual. The litigation in contemplation does not involve the vindication of private rights. To the contrary. For reasons which follow, I believe I am able to assess whether the proceedings will succeed. I do so, not as an impermissible assessment of the strength of the applicant's case, but rather as an assessment of whether there is a case at all. It is necessary for me to do this in order to determine whether, objectively, the respondent has reasonable cause to believe it has or may have a right to obtain relief. I am satisfied that it does not because any contempt proceedings are doomed to fail. I have reached this conclusion after further consideration of the transcript of the appeal and notwithstanding the observations I made in my earlier judgment referred to at [5] above.
16 To explain this conclusion, it is necessary to set out some principles governing contempt proceedings and to analyse, in a little more detail, what was said by senior counsel for the appellant during the hearing on 29 October 2007. As noted earlier, contempt arising from an alleged breach of an undertaking will not be found unless the terms of the undertaking are clear and unambiguous. This issue was comparatively recently considered by a Full Court in Universal Music Australia Pty Ltd v Sharman Networks Ltd (2006) 150 FCR 110.
17 In Universal Music Australia the Court had to consider whether an order (said to have been breached in a way that involved a contempt) was so ambiguous that it was devoid of any legal meaning and incapable of giving rise to liability on a charge of contempt. The leading judgment was given by Branson J. Her Honour referred to the earlier Full Court judgment in Microsoft Corporation v Marks (No 1) (1996) 69 FCR 117. Branson J noted that Microsoft v Marks involved an appeal from a dismissal of a contempt proceeding instituted by Microsoft alleging a breach by Mr Marks of an order of the Court. Her Honour said of that judgment (at [26] - [29]):
… The leading judgment was that of Beaumont J, with whom Lehane J agreed, and Lindgren substantially agreed while making certain observations of his own.
… The critical passage from his Honour's reasons for judgment for present purposes is the following passage:
'Yet it must follow, in my opinion, that to this extent order 1(a) should be treated as equivocal and its meaning as ambiguous. That being so, and since the question whether Microsoft had, in fact, consented was put in issue in the contempt proceedings, it must further follow that any attempt by Microsoft to move for contempt for alleged breach of such an order must have failed.
In any event, this outcome probably follows from an application of the general observations made in Witham on the relevance of the criminal standard of proof; there is a doubt as to the meaning of order 1(a) in an important respect, and … that doubt is a reasonable one. …
The above passage from the reasons for judgment of Beaumont J gives rise to questions. First, it is not clear precisely what his Honour intended to convey by describing order 1(a) as 'equivocal' and 'ambiguous'. Secondly, it is not clear whether his Honour was (a) intending to lay down a principle of law or (b) acknowledging a problem of proof.
To describe a court order as 'equivocal' or 'ambiguous' is to assert (at least) one of two possible things; either that its intended meaning is unclear or that, although its intended meaning is clear, its application in particular circumstances is uncertain …
Her Honour went on to say (at [36]):
Having regard to the views expressed by the members of the High Court in [Australian Consolidated Press Ltd v Morgan(1965) 112 CLR 483], Beaumont J's description in Microsoft v Marks of order 1(a) as 'equivocal' and 'ambiguous' is, in my view, to be understood as a finding that on its proper construction, order 1(a) had an uncertain meaning such that proof that it had not been complied with would prove problematic. His Honour's reference to the question of whether Microsoft had consented having been put in issue by the alleged contemnor indicates that his Honour regarded order 1(a) as providing a possible foundation for a charge of contempt. If the order were not capable as a matter of law of founding a charge of contempt it would be immaterial whether the question of Microsoft's consent had been put in issue. I therefore conclude that relevantly the ratio decidendi of Microsoft v Marks is that an appeal from a dismissal of a charge of contempt will fail for want of proof if the order alleged to have been disobeyed is, on its proper construction, of uncertain application in the circumstances giving rise to the alleged disobedience.
18 What can be gleaned from this authority is that ambiguity or uncertainty in relation to either an order or undertaking can relate to the meaning, as a matter of construction, of the order or undertaking on the one hand, or the scope of its operation when properly construed, on the other. Her Honour appears to accept that an order or undertaking may be so uncertain, as a matter of construction, such that it is incapable of sustaining a finding of contempt, although that was not so of the order in that case.
19 In the present case, counsel for the appellant was asked, during the hearing of the appeal, a question about an undertaking his client had given Gyles J on 2 October 2007. The following is the undertaking given to Gyles J together with the orders his Honour made:
Upon the appellant by its counsel giving the usual undertaking as to damages and undertaking that, pending the hearing of the appeal, the appellant will take no further steps to advance the rezoning of Tralee based on the current Australian Noise Exposure Forecast (ANEF):