FEDERAL COURT OF AUSTRALIA

Samsung Electronics Co. Limited v Apple Inc. [2013] FCAFC 138

THE COURT ORDERS THAT:

1.     The application for leave to appeal filed by Samsung Electronics Co. Limited on 11 November 2013 is dismissed.

2.     Samsung Electronics Co. Limited is to pay the costs of the said application.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    There is presently being litigated in this Court, and a number of other Courts world-wide, a protracted dispute between Apple Inc. (“Apple”) and Samsung Electronics Co. Limited (“Samsung”). The litigation has largely been allocated to the docket of Bennett J. Some parts of the litigation have been allocated to the docket of Yates J.

2    It is no understatement to acknowledge that the litigation is one of considerable complexity and has occupied – and will continue to occupy – much of the time of Justice Bennett. It is also probably no understatement to acknowledge that it is in all likelihood only her Honour who fully grasps the complexity of all that litigation.

3    What is presently before the Court is an application for leave to appeal from an interlocutory judgment of her Honour Justice Bennett given on 4 November 2013 on a matter of practice and procedure. Her Honour then refused Samsung leave to file two witness statements: Samsung Electronics Co. Limited v Apple Inc. [2013] FCA 1142. The proposed witness statements were statements of Mr Kwang Jun Kim served on 5 August 2013; and a statement of Mr Kenneth S Korea, served on 6 August 2013. Both statements were served nearly 12 months after the time which had been directed for the filing of such evidence. Her Honour also found that the evidence should be excluded under s 135 of the Evidence Act 1995 (Cth) (“Evidence Act”).

4    Samsung filed its application for leave to appeal on 11 November 2013. A draft notice of appeal has also been prepared.

5    The primary judge heard the application for leave to rely upon these two further witness statements approximately one month before the commencement date of the final stage of the proceedings. As described by the primary judge, the timetable for this part of the proceedings is complex and very tightly ordered ([2013] FCA 1142 at [4]). The setting of the timetable long preceded the application to rely upon the proposed statements. The hearing is due to resume on 26 November 2013.

6    What underlies Samsung’s application for leave to appeal is a contention that the primary judge made a number of fundamental errors of principle in failing to identify and consider – by reference to the current pleadings in the case – the facts in issue to which the proposed evidence relates. This is said to have resulted in her Honour failing to make an informed assessment of the probative value of the proposed evidence to the case advanced by Samsung. Accordingly, Samsung submits that her Honour failed to appreciate and take account of the prejudice likely to be suffered by Samsung if it is unable to rely on the statements. Samsung also contends that the primary judge ignored their reasons for delay in serving the proposed evidence and elevating what her Honour considered to be an absence of reasons into an “overarching test” for reception of the evidence. It also contends that the primary judge failed to consider Samsung’s evidence and submissions as to the absence of any real prejudice to Apple if the evidence was admitted.

7    The various attacks made by Samsung in the draft notice of appeal and its written submissions are expressed in unambiguous terms. The primary judge is said to have acted upon a wrong principle and a mistaken understanding of the facts and issues in the case in finding the evidence, which Samsung considers central to a factual issue in the hearing, to be of limited relevance and probative value.

8    Notwithstanding the attacks advanced, it is concluded that no error of principle is revealed in her Honour’s reasons. Nor is it considered that her Honour misunderstood the facts and issues, failed to take into account relevant considerations, or took into account irrelevant considerations in coming to the view that Samsung should be refused leave to rely upon the proposed evidence.

9    The reasons for so concluding may be briefly stated.

The proceeding to-date & the importance of the proposed further evidence

10    The proceeding before Bennett J was initially instituted by Samsung against Apple for infringement of three patents. These patents are known in the market as “standard essential patents”. The standard essential patents have been declared by Samsung to the European Telecommunications Standards Institute (“ETSI”) to be essential to the technical specification comprising the UMTS standard, informally known as the “3G standard”.

11    The three patents are also the subject of declarations made by Samsung to ETSI to grant a licence on fair, reasonable and non-discriminatory (i.e., “FRAND”) terms to anyone wanting to practise the patents. It is the precise content of these obligations which is now in dispute between the parties.

12    In addition to the claim by Samsung for infringement of its patent, Apple has filed a cross-claim alleging that Samsung has misused its market power in contravention of s 46(1) of the Competition and Consumer Act 2010 (Cth). At the heart of Apple’s case on s 46 is an allegation that Samsung has constructively refused to negotiate with Apple to grant a licence on FRAND terms of its portfolio of patents. To prove this Apple relies, essentially, on Samsung’s Electronic offer made by its letter to Apple dated 25 July 2011.

13    The proceeding before her Honour has been divided into the following broad phases, namely:

    infringement of the three patents;

    validity of the three patents;

    licensing issues relating to Samsung’s ETSI declarations; and

    competition law issues.

14    Leave to rely upon the further witness statements by Messrs Kim and Korea was sought by Samsung by way of an interlocutory application filed on 6 September 2013. It was this interlocutory application which was dismissed by her Honour on 4 November 2013.

15    In very summary form, the further evidence was said on behalf of Samsung to be relevant to one or other of the three principal issues to be resolved, namely:

    whether or not injunctive relief should be granted;

    whether or not there had been a breach by Samsung of what were said to be obligations imposed under the “ETSI IPR Policy” and the “FRAND Declarations” to negotiate a licence of Samsung’s patents upon terms that were “fair, reasonable and non-discriminatory”; and

    whether or not there had been an abuse of market power on the part of Samsung by constructively refusing to deal with Apple.

The effect of the interlocutory judgment, Samsung maintains, is that it is unable to file significant evidence going to one or other of these three issues.

16    Samsung maintains that if it is shut out from leading the further evidence, the hearing will proceed on a false basis. It is Samsung’s intention to tender the correspondence between Apple and Samsung concerning the negotiations between the parties that occurred after 25 July 2011 and to cross-examine Apple’s witnesses about these negotiations.

Leave to appeal – the principles to be applied

17    There is no question but that:

    leave is required to appeal from the interlocutory decision of her Honour (Federal Court of Australia Act 1976 (Cth) s 24(1A)); and

    the principles to be applied in considering whether her Honour erred in making her decision are those set forth in House v R (1936) 55 CLR 499 at 505. When considering an exercise of a discretion, Dixon, Evatt and McTiernan JJ there said that it was not sufficient for an appellate court to conclude that it would have “taken a different course”. Their Honours said that it “must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution, for his if it has the materials for doing so.”

So much was common ground.

18    The questions traditionally asked when considering whether leave to appeal should be granted have been repeatedly phrased in terms of:

(a)    whether in all the circumstances the judgment of the primary judge is attended by sufficient doubt to warrant it being reconsidered by the Full Court; and

(b)    whether substantial injustice would result if leave were refused supposing the decision to be wrong.

See: Decor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-9 per Sheppard, Burchett and Heerey JJ. The discretion conferred by s 24(1A), it was there said, was an “unfettered discretion” conferred in “unqualified terms”.

19    The very width of the discretion and the prudence in not seeking to confine the manner in which it is to be exercised is a necessary corollary of the myriad of interlocutory decisions which may be made – ranging from interlocutory decisions affecting the substantive rights of parties (and effectively being final orders) to matters of practice and procedure (including decisions to extend time, the granting or refusal of adjournments and the filing of evidence). The different character of interlocutory decisions which may be made and the different factual and forensic circumstances in play when such decisions are made nevertheless have occasioned a different emphasis from one judgment to another upon one particular factor or factors rather than others.

20    In the context of considering whether to grant or refuse leave to appeal from interlocutory decisions as to matters of practice and procedure, it has accordingly been long recognised that a “tight rein” should be exercised: National Mutual Holdings Pty Ltd v Sentry Corp (1988) 19 FCR 155 at 161. The Full Court there reaffirmed the principles governing the circumstances in which appellate courts would interfere in the exercise of the discretion of primary judges in respect to interlocutory orders. In so doing, the Full Court cited with approval the following observations of Gibbs CJ, Aickin, Wilson and Brennan JJ in Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177:

Nor is there any serious dispute between the parties that appellate courts exercise particular caution in reviewing decisions pertaining to practice and procedure. Counsel for Brown urged that specific cumulative bars operate to guide appellate courts in the discharge of that task. Not only must there be error of principle, but the decision appealed from must work a substantial injustice to one of the parties. The opposing view is that such criteria are to be expressed disjunctively ... For ourselves, we believe it to be unnecessary and indeed unwise to lay down rigid and exhaustive criteria. The circumstances of different cases are infinitely various. We would merely repeat, with approval, the oft-cited statement of Sir Frederick Jordan in Re the Will of F B Gilbert (dec) [(1946) 46 SR (NSW) 318 at 323]:

“... I am of the opinion that, ... there is a material difference between an exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal.”

And as Gummow J also observed in Bomanite Pty Ltd v Slatex Corp Aust Pty Ltd (1991) 32 FCR 379 at 387:

It is not a matter of saying that the discretion miscarried because the result strikes one as perhaps harsh or perhaps one might have exercised the discretion differently. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course.

It has further been recognised that greater scrutiny should be given to those interlocutory decisions which go to the ability of a party to advance its case for resolution: United States Tobacco Co v Minister for Consumer Affairs (1988) 20 FCR 520 at 532.

21    On occasions a Full Court will entertain an application for leave to appeal together with the appeal itself, particularly where the hearing of an application for leave and the appeal itself canvass much the same factual and legal territory. On some occasions, following such a course, leave may be either refused or leave may be granted and the appeal either allowed or dismissed. Whatever course is followed will largely depend upon the issues presented and the judgment of the individual Judges constituting the Full Court. No constraint should be placed upon the ability of a Full Court to proceed in such manner as it considers best serves the interests of justice. But no encouragement should be given to a course whereby the statutory requirement to first obtain leave can be subverted and relegated to an unnecessary distraction from a consideration of the arguments sought to be raised on appeal.

22    In the present proceeding, it was considered appropriate to consider the application for leave to appeal in advance of – and separate from – submissions in respect to the proposed notice of appeal.

The two further witness statements

23    Central to any assessment as to whether Samsung should be permitted to rely upon the two further witness statements was an assessment by her Honour as to what was sought to be proved by such evidence. The further evidence, Samsung submits, is “pivotal”.

24    In very summary form, Apple maintains that it was the common understanding of the parties – and in the preparation of the case for hearing – that any conduct after an offer made by Samsung in 25 July 2011 was not material. The two further statements set out what each witness recalls was said during negotiations between representatives of the parties, both before and after 25 July 2011, including what was said about proposals to license the portfolio of patents the subject of Apple’s allegations. But to permit these two further statements to be relied upon, Apple submits would be to depart from the manner in which the case had been prepared and would disrupt the hearing; to not permit the two statements to be filed, Samsung submits would be to preclude it from presenting its case as set forth unambiguously in “its pleadings”. Samsung seeks to allege that Apple has remained unwilling to negotiate the terms and conditions of a licence on an ongoing basis.

25    The further witness statement of Mr Kim, as her Honour correctly recounts ([2013] FCA 1142 at [101] to [103]), sets forth evidence as to:

    a meeting held on 5 October 2010;

    a meeting held on 4 November 2010; and

    “further correspondence with Apple” (being an e-mail forwarded on 8 November 2010 and an enclosed “pdf” form of a presentation on 4 November 2010).

The statement annexes a number of documents, including Samsung’s file notes of two meetings, correspondence between the parties and slides used during those meetings. The evidence as to the exchanges that took place at both meetings may well constitute evidence of negotiations, but, as noted by her Honour, there was no satisfactory explanation as to why such evidence was not filed by 15 August 2012 as directed. Nor was any explanation provided to this Court as to why Mr Kim’s witness statement could not have been filed in accordance with those directions.

26    The significance of the further evidence of Mr Kim, as explained to her Honour during the course of oral submissions, was that Mr Kim disputed an assertion that had been made “as to whether or not Samsung made a proposal about a cross-licence in the 4 November meeting.” Evidence as to presentations in the meeting on that date had previously been filed. But, as was submitted on behalf of Samsung to both her Honour and this Court, it was not until the oral submissions before her Honour on 25 October 2013 that Samsung was first put on notice that the content of part of that presentation and what was said during that meeting was “in dispute”. Whether that was so or not, there was no satisfactory explanation provided to her Honour as to why evidence in respect to, for example, the November 2010 meeting could not have been filed by 15 August 2012. And Senior Counsel on behalf of Samsung accepted in the hearing before this Court that the further evidence of Mr Kim could have been filed by the date directed.

27    The proposed witness statement of Mr Korea, comprising an account of a number of meetings and annexing 41 documents, fell into a different category. It was, unsurprisingly, separately addressed by her Honour ([2013] FCA 1142 at [105] to [108]) and culminated in her Honour’s identification of “particular problems” ([2013] FCA 1142 at [109] to [123]). During the course of oral submissions before her Honour, the significance of the proposed further evidence was identified as the evidence given in respect to a number of meetings, but in particular:

    meetings in December 2012; and

    a further meeting in January 2013.

During submissions to this Court, the significance of the further evidence was said to extend to:

    an earlier meeting on 16 September 2011.

Any departure between the submissions advanced to her Honour and this Court assumes no present relevance.

28    It is sufficient for present purposes to note the attention given by her Honour to this further evidence. One of the “particular problems” identified was the fact that the relevance of much of Mr Korea’s evidence was not self-evident. Her Honour thus recounted the fact that as far as she could tell “Australia was not mentioned in the evidence concerning negotiation” and ventured the view that “if this evidence were permitted, the question of its relevance to the precise issues in this proceeding, including to competition issues not apparently raised in other jurisdictions, would necessitate further lay and expert evidence” ([2013] FCA 1142 at [112]). The further view was expressed that, if the proposed evidence was meant to go to “an absence of bona fides in the negotiations … it is hard to see that it is of assistance, or necessary, to examine the numerous parameters discussed by the parties in the context of settlement of international litigation and ongoing commercial arrangements that import considerations well beyond the question of abuse of market power in Australia…” ([2013] FCA 1142 at [114]).

29    An issue to be resolved is the manner in which negotiations were undertaken in respect to a licence. Apple maintains that Samsung has breached its obligation and has not offered to Apple a licence on appropriate terms; Samsung denies that it has refused to grant Apple a licence on appropriate terms. Apple in its pleadings alleges refusals to negotiate on an ongoing basis. The importance to Samsung of adducing the evidence of Mr Korea, in particular, of events post 25 July 2011 can thus readily be appreciated.

30    It is against this background of the evidence sought to be adduced that the application for leave to appeal is to be approached.

The absence of error

31    Notwithstanding the care and detail of the reasoning process set forth by her Honour, Senior Counsel for Samsung seeks to bring the application for leave to appeal within the constraints set forth in House v R by reliance upon the following errors said to have been committed, set out in their written submissions as follows (without alteration):

(a)    not understanding or addressing the nature of the evidence and failing to consider its probative value and central relevance to key issues in the case;

(b)    confining the analysis of the issues to those to which Apple now seeks to confine its case, and not taking into account the issues raised by Samsung’s pleaded case;

(c)    failing to consider the serious prejudice and substantial injustice to Samsung if the evidence is excluded;

(d)    ignoring Samsung’s reasons for delay in serving the evidence, and elevating a perceived absence of such reasons into an overarching test for admission;

(e)    failing to consider Samsung’s evidence and submissions as to the absence of any real prejudice to Apple if the evidence were admitted;

(f)    confining consideration to matters pointing against the grant of leave and failing to take into account matters in favour of leave, and thus failing to carry out the required balancing exercise; and

(g)    confusing the application for leave with a foreshadowed application to amend the pleadings, and taking this irrelevant consideration into account.

Each of these arguments should be briefly addressed – albeit not necessarily in the above order.

32    In concluding that leave to rely upon the two further witness statements should be refused, her Honour committed no error of principle of the kinds advanced on behalf of Samsung. The criticisms expressed in both the proposed grounds of appeal and the written submissions missed their target. The reasons for so concluding may be expressed as follows.

33    First, the gravamen of the proposed evidence was to change and expand the nature of the case sought to be made by Samsung in respect to both the manner in which the negotiation as to licence terms had been pursued and the claim as to any abuse of market power.

34    It is true, as the primary judge recognised, that Apple relies in its case upon an alleged failure by Samsung to offer it a licence of the relevant technology upon fair and reasonable terms and that Apple’s pleading refers to continuing conduct on the part of Samsung ([2013] FCA 1142 at [36]). However, as her Honour’s reasons make clear ([2013] FCA 1142 at [37]), there is nothing in the pleading of either party (that is to say, including Samsung’s pleadings) to alert either party to the proposition that ongoing negotiations for the period after the end of 2011 were relevant to the case. Notwithstanding Samsung’s criticism of this statement by her Honour, the statement – properly understood - is unquestionably correct. There was nothing in the case as pleaded – and as particularised – to alert the parties that any such ongoing discussions were relevant; and there had been nothing which had been expressly conveyed from Samsung to Apple to alert Apple to the prospect that evidence of what had been said and done at any meeting after July 2011 would be relied upon.

35    Yet, as the primary judge’s reasons demonstrate ([2013] FCA 1142 at [110] to [114]), the evidence of one of the proposed witnesses (Mr Korea) was intended to introduce as a critical part of Samsung’s case numerous parameters discussed by the parties in the context of the settlement of international litigation and ongoing commercial arrangements that post-date the negotiations that are in issue in the pleadings. Her Honour further found that the proposed evidence seeks to import considerations beyond the subject matter of the Australian litigation. It would be difficult, as submitted on behalf of Apple in this Court, to “disentangle” from the international negotiations that which was of relevance to the Australian negotiations. Rather than her Honour not addressing the potential relevance of the proposed further evidence to the legal issues sought to be canvassed by Samsung, her Honour’s reasons – with respect – directly address that very issue.

36    Although it was submitted on behalf of Samsung that these reasons exposed a failure to appreciate the manner in which it sought to advance its case and (in particular) its reliance upon a “global market”, it is considered that no error is exposed. Her Honour’s reasons provide a complete answer to the proposition that the exclusion of the evidence of Mr Korea would cause proceedings on the central issues in the case to proceed on a false basis. This is because, as her Honour recognised, the evidence sought to be addressed went far beyond the licensing of the three “standard essential patents” in issue. The negotiations introduce other patents, other species of property and the question of disputes with at least one other entity which is not a party to the proceeding.

37    It is no answer to the difficulties raised by the breadth of the evidence to say that the market in issue in the present case is a “global market”. Her Honour correctly recognised that it was not apparent on the face of the proposed evidence that it related directly to the matters in issue. It therefore followed that the exclusion of the evidence will not shut Samsung out from adducing critical evidence. Her Honour was correct in finding that, at least so far as this body of evidence was concerned, it was of low probative value.

38    In any event, it is not at all clear that Samsung will be prejudiced by the exclusion of the two proposed further witness statements because it intends to tender the correspondence contained therein and cross-examine witnesses about this topic.

39    Second, as the High Court has made clear, there are limits to the opportunity that a court will afford to a litigant to agitate a case not previously raised, particularly if the litigation is well advanced. This principle applies not only to applications to amend pleadings but to all interlocutory rulings that bear upon the timely resolution of proceedings (see Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd [2013] HCA 46 at [51]). There is, as the High Court has recognised, no “right to amend”: Aon Risk Services Australia Limited v Australian National University [2009] HCA 27, 239 CLR 175. Gummow, Hayne, Crennan, Kiefel and Bell JJ there observed:

[112] A party has the right to bring proceedings. Parties have choices as to what claims are to be made and how they are to be framed. But limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced. That is why, in seeking the just resolution of the dispute, reference is made to parties having a sufficient opportunity to identify the issues they seek to agitate.

[113] In the past it has been left largely to the parties to prepare for trial and to seek the court’s assistance as required. Those times are long gone. The allocation of power, between litigants and the courts arises from tradition and from principle and policy. It is recognised by the courts that the resolution of disputes serves the public as a whole, not merely the parties to the proceedings.

On behalf of Samsung it is, of course, contended that the proposed further evidence goes to a case that has been long “pleaded”. But that was not the conclusion of the primary judge. When the general allegations of continuing conduct are read in the light of the absence of particulars, no error emerges from her Honour’s reasons. No doubt that is why Samsung proposed to further amend its pleadings. The application to lead additional evidence was merely a precursor to an application to amend.

40    Although the primary judge’s reasons do not expressly set out the number of the conversations deposed to by Mr Korea - or particulars of them - his proposed evidence includes a detailed account of conversations alleged to have taken place at 15 different meetings on 20 different days attended by 14 different individuals on behalf of Samsung and 12 different individuals on behalf of Apple. Given the advanced state of the preparation of the case for hearing, evidence was scarcely necessary to demonstrate that if his statement were to be admitted the hearing would be delayed with no real certainty as to when the case may be concluded.

41    Third, it is wrong to say that her Honour failed to consider the prejudice to Samsung if the evidence is excluded. Her Honour weighed the obvious prejudice to Apple against the probative value of the evidence sought to be adduced. She articulated and applied the correct principles and took into account any prejudice asserted by Samsung. This weighing process was predicated upon her Honour’s finding that the additional evidence was of very low probative value.

42    There is another broader aspect of Samsung’s complaint concerning the primary judge’s assessment of its claimed prejudice. It relates to Samsung’s concern, which is said to be based on a letter dated 5 November 2013 from Apple’s solicitors, that the effect of the primary judge’s decision precludes it not only from relying on the witness statements but also tendering the various business records annexed to those statements. The construction of Apple’s letter is not accepted. Moreover, and as Apple correctly submits, Samsung’s concerns are premature as the admissibility of the annexed material will be a matter for the primary judge at trial. That issue may arise if Samsung seeks to tender some or all of the material or rely on it in cross-examination as it apparently proposes to do. Nothing in this judgment should be taken as indicating a view one way or the other as to the admissibility of those annexed materials.

43    Importantly, her Honour’s judgment was a discretionary decision on a matter of practice and procedure involving a refusal to permit late evidence to be relied upon in circumstances which would have permitted Samsung to expand its case with considerable prejudice to Apple resulting in disruption to the proceedings. These matters also informed her Honour’s ruling in respect of s 135 of the Evidence Act. Had her Honour not considered the potential significance and relevance of the two proposed further witness statements, it would not have been necessary for her Honour to have separately considered s 135.

44    Fourth, it is wrong to contend that her Honour ignored Samsung’s reasons for delay and elevated the perceived absence of reasons into an “overarching test”. Her Honour correctly found that no real explanation was offered. She referred ([2013] FCA 1142 at [143]) to the fact that the High Court has stressed the importance of an explanation by the party seeking the exercise of the Court’s discretion. Her Honour took into account, as she was entitled to, that an important factor against the exercise of the discretion in Samsung’s favour was its failure to give any good reason for its inordinate delay. Her Honour did not treat the deficiency in Samsung’s explanation as determinative. Clearly enough, her Honour was not impressed with either the failure to file evidence by August 2012 or the failure to more fully explain the failure to do so. Senior Counsel for Samsung, again with the greatest of respect, does a disservice to the careful reasons for decision to submit that the reasons for delay were “ignored”. The conclusion which was in fact reached was that there was “no real explanation for the delay” ([2013] FCA 1142 at [74]) or, differently expressed, “no satisfactory explanation of the delay” ([2013] FCA 1142 at [155]). But the assumed “explanation” was also expressly identified: [2013] FCA 1142 at [74]. Put simply, such “explanation” was not considered to be persuasive. The proposed notice of appeal asserts (inter alia) that the delay in the filing of the further witness statements was explained “having regard to the evidence that there was a mutual understanding between the parties …”. This was a matter expressly addressed. It also does disservice to the careful reasons for decision to submit that the relevance of an absence of reasons was misconceived as an “overarching test for admission” or that “the perceived absence of an explanation of delay by Samsung was effectively treated as a disqualifying factor”. Albeit a matter of significance to her Honour’s decision, the absence of any “real explanation” remained a matter of relevance to the discretion to be exercised and remained but one of a number of considerations taken into account. The manner in which Samsung approached the necessity for it to comply with directions for the filing of evidence is, perhaps, only underlined by its written submission to this Court that “the original deadline for Samsung’s evidence of August 2012 is not particularly relevant”. It may be that in some cases an explanation, albeit an unsatisfactory one, will not be considered by a court to be a bar to the favourable exercise of a discretion: cf. Cement Australia Pty Ltd v Australian Competition and Consumer Commission [2010] FCAFC 101, 187 FCR 261. But here the absence of a satisfactory explanation was a factor that her Honour was entitled to take into account, particularly where her Honour weighed in the balance the probative value of the evidence sought to be admitted.

45    As the primary judge’s reasons state ([2013] FCA 1142 at [145]), her Honour weighed all matters relevant to the exercise of the discretion. The matters included the delay of almost 12 months by Samsung, which was, and still is largely unexplained. Evidence as to events that occurred in September and December 2012 and January 2013 could not, obviously enough, have been filed by August 2012. Reference relied upon by Senior Counsel for Samsung to statements made in (for example) assumptions to experts, are not sufficient notice. Such references provide no unequivocal notice to Apple that events post-July 2011 were to be relied upon by Samsung. This Court, it has long been recognised, deplores “any practice of quietly leaving footprints in correspondence or directions hearings to be uncovered some time later in an attempt to reveal that a matter was always in issue”: cf. White v Overland [2001] FCA 1333 at [4] per Allsop J (as his Honour then was). This concern is not confined to this Court: Nowlan v Marson Transport Pty Ltd (No 2) [2001] NSWCA 346 at [28] to [29], 53 NSWLR 116 at 128 per Heydon JA (Mason P and Young CJ in Eq agreeing). And there was no express statement made by those appearing for Samsung – in correspondence or elsewhere – prior to mid-2013 that evidence would be adduced and relied upon as to anything that was said and done and as to offers made at meetings post-July 2011. And no express statement was made that any such evidence would be sought to be adduced and relied upon by Samsung going to any of the three legal issues identified, namely: the appropriateness of injunctive relief; whether negotiations were conducted in good faith; and market power. Given the manner in which the case had been prepared for hearing, such express notice should have been provided by Samsung. The passage of time has eroded any such message as may have been left in the sand by Samsung.

46    Samsung’s separate contention that the primary judge erred by taking into account its proposed amendments is also without substance. Contrary to Samsung’s contention, the proposed amendments were not an irrelevant consideration. Her Honour made reference to the proposed amendments in [40] in the context of comparing them with Samsung’s existing pleadings. That simply served to highlight that Samsung was seeking to raise new issues, including Samsung’s conduct which occurred after the original conduct the subject of Apple’s complaints. The proposed amendments reinforced her Honour’s earlier observations regarding the disconnection between the proposed witness statements and the existing pleadings.

47    None of the asserted errors relied upon by Samsung warrants a grant of leave to appeal.

CONCLUSIONS

48    Any assessment of case-management principles necessarily involves an assessment of many potentially competing considerations. Included in that assessment is a growing recognition of the necessity to resolve civil litigation as “quickly, inexpensively and efficiently as possible” (Federal Court of Australia Act 1976 (Cth) s 37M) and a recognition of the fact that the “achievement of a just but timely and cost-effective resolution of a dispute has effects not only upon the parties to the dispute but upon the court and other litigants” (Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited [2013] HCA 46 at [51] per French CJ, Kiefel, Bell, Gageler and Keane JJ).

49    In the present case it is not considered that the primary judge focussed to any inappropriate extent upon prejudice to Apple should the further witness statements be admitted or failed to give appropriate attention to the prejudice to Samsung if the further statements were excluded. Different judges may well have reached different conclusions. But that is not the yardstick to be applied. When considering exercises of discretionary judgment as to the admission of evidence, the yardstick remains that of an error of principle of the kind identified in House v R. The cautions expressed in Re the Will of F B Gilbert (dec) (1946) 46 SR (NSW) 318 at 323 are not to be lightly placed to one side.

50    It is also of importance to recall that applications for leave to appeal should not be transformed without good reason into de facto appeals. An application for leave should thus not be conducted as though it is a preliminary hearing of the appeal itself: Food Channel Network Pty Ltd v Television Food Network GP [2009] FCA 1446 at [26]. The importance to Samsung of the present application for leave to appeal may readily be appreciated. Senior Counsel on behalf of Samsung quite properly repeatedly emphasised that the decision of her Honour “goes to the ability of a party … to put its case to the court…”: United States Tobacco Co v Minister for Consumer Affairs (1988) 20 FCR 520 at 532 . The yardstick, however, remains an application to the facts of the principles initially set forth in House v R.

51    It is concluded that the reasons for decision of the primary judge fail to disclose any error of principle of the kind described in House v R. Although a contrary conclusion may have been reached in respect to the more confined evidence of Mr Kim, confined to his account of the 4 November 2011 meeting, no error in the exercise of her Honour’s discretion emerges. The decision was one for her Honour and the fact remains that no satisfactory explanation was advanced to either her Honour or this Court as to why the evidence of that meeting could not have been filed prior to August 2012. The proposed further evidence of Mr Korea unquestionably expanded the factual issues presented for resolution. Rather than any error of principle being exposed in respect to either witness statement, the application for leave to appeal is but an attempt to re-canvass the same issues as were canvassed before the primary judge with a view to obtaining a different outcome. To encourage such applications is only to encourage the disruption to litigation of the kind condemned by F B Gilbert.

52    The application for leave to appeal should be dismissed with costs.

THE ORDERS OF THE COURT ARE:

1.    The application for leave to appeal filed by Samsung Electronics Co. Limited on 11 November 2013 is dismissed.

2.    Samsung Electronics Co. Limited is to pay the costs of the said application.

Associate:

Dated:    22 November 2013