Trade Practices Commission v CC (New South Wales) Pty Ltd & Ors (No 4) [1995] FCA 556

CATCHWORDS

PRACTICE & PROCEDURE - Discovery - privilege against self-exposure to a civil penalty - whether available to corporate respondents in opposition to Commission's motion for discovery in proceedings for penalties under s 76 of Trade Practices Act 1974 (Cth) - whether discovery "necessary" - whether possibility of Commission's giving notices under s 155 of that Act made discovery by respondents not "necessary" - meaning of "necessary" in Order 15 r 15 of Federal Court Rules - whether discovery should be ordered as an exercise of discretion - whether "fishing expedition" - meaning of "fishing expedition" - whether discovery by respondents should precede filing of Commission's affidavit evidence.

TRADE PRACTICES - Enforcement and Remedies - proceedings to recover civil penalties under s 76 of Trade Practices Act 1974 (Cth) - whether privilege against self-exposure to a penalty available to corporate respondents in opposition to Commission's motion for discovery - whether discovery "necessary" - whether possibility of Commission's giving notices under s 155 of that Act made discovery by respondents not "necessary" - meaning of "necessary" in Order 15 r 15 of Federal Court Rules - whether discovery should be ordered as an exercise of discretion - whether "fishing expedition" - meaning of "fishing expedition" - whether discovery by respondents should precede filing of Commission's affidavit evidence.

Trade Practices Act 1974 (Cth) ss 76, 155.

Federal Court Rules, Order 15, r 15.

Trade Practices Commission v Abbco Iceworks Pty Ltd (1994) 52 FCR 96 (FCA/FC).

Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co (1882) 11 QBD 55 (CA).

Mulley v Manifold (1959) 103 CLR 341 (Menzies J).

Commonwealth of Australia v Northern Land Council (1993) 176 CLR 604.

Percy v General Motors-Holden's Pty Ltd [1975] 1 NSWLR 289 (NSW/Rath J).

Boyle v Downs [1979] 1 NSWLR 192, (NSW/Cross J).

W. A. Pines Pty Ltd v Bannerman (1980) 41 FLR 175 (FCA/FC).

Trade Practices Commission v The IMB Group Pty Ltd (1994) ATPR 41-348, (FCA/Drummond J).

TRADE PRACTICES COMMISSION v CC (NEW SOUTH WALES) PTY LIMITED & ORS (No 4)

No NG 574 of 1994

LINDGREN J

SYDNEY

2 AUGUST 1995

IN THE FEDERAL COURT OF AUSTRALIA)

NEW SOUTH WALES DISTRICT REGISTRY) No NG 574 of 1994

GENERAL DIVISION )

BETWEEN:

TRADE PRACTICES COMMISSION

Applicant

AND:

CC (NEW SOUTH WALES) PTY LIMITED formerly known as

CONCRETE CONSTRUCTIONS (NSW) PTY LIMITED

First Respondent

PETER WOOLLARD

Second Respondent

HOLLAND STOLTE PTY LIMITED

Third Respondent

GRAHAM RONALD DUFF

Fourth Respondent

MULTIPLEX CONSTRUCTIONS PTY LIMITED

Fifth Respondent

GEOFFREY THOMAS PALMER

Sixth Respondent

LEIGHTON CONTRACTORS PTY LIMITED

Seventh Respondent

LEONARD DIXON

Eighth Respondent

THE AUSTRALIAN FEDERATION OF CONSTRUCTION CONTRACTORS

Ninth Respondent

RUSSELL NORMAN RICHMOND

Tenth Respondent

CORAM: LINDGREN J

PLACE: SYDNEY

DATE: 2 AUGUST 1995

MINUTE OF ORDERS

THE COURT:

1. ORDERS THAT the applicant's motion brought by notice of motion filed on 24 February 1995 be stood over to 9.30 am on 10 August 1995.

2. ORDERS THAT the motion of the seventh respondent brought by notice of motion filed on 29 March 1995 and the motion of the eighth respondent brought by notice of motion filed on 29 March 1995 also be stood over to 9.30 am on 10 August 1995.

3. ORDERS THAT by 4.00 pm on 9 August 1995 the applicant and the first, fifth and seventh respondents supply to the Associate to Lindgren J, form of agreed short minutes of orders to give effect to Reasons for Judgment of Lindgren J published on 2 August 1995 (including an order or orders providing for costs), and that if agreement shall not be reached by that time upon the form of the short minutes of orders, each of the applicant of the one part and the first, fifth and seventh respondents of the other part supply to the Associate to Lindgren J by that time the forms of short minutes of orders (including an order or orders providing for costs) for which they will respectively contend.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA)

NEW SOUTH WALES DISTRICT REGISTRY) No NG 574 of 1994

GENERAL DIVISION )

BETWEEN:

TRADE PRACTICES COMMISSION

Applicant

AND:

CC (NEW SOUTH WALES) PTY LIMITED formerly known as

CONCRETE CONSTRUCTIONS (NSW) PTY LIMITED

First Respondent

PETER WOOLLARD

Second Respondent

HOLLAND STOLTE PTY LIMITED

Third Respondent

GRAHAM RONALD DUFF

Fourth Respondent

MULTIPLEX CONSTRUCTIONS PTY LIMITED

Fifth Respondent

GEOFFREY THOMAS PALMER

Sixth Respondent

LEIGHTON CONTRACTORS PTY LIMITED

Seventh Respondent

LEONARD DIXON

Eighth Respondent

THE AUSTRALIAN FEDERATION OF CONSTRUCTION CONTRACTORS

Ninth Respondent

RUSSELL NORMAN RICHMOND

Tenth Respondent

CORAM: LINDGREN J

PLACE: SYDNEY

DATE: 2 AUGUST 1995

REASONS FOR JUDGMENT (No 4)

NATURE OF PROCEEDINGS

The applicant ("the Commission") moves for an order that the first, fifth and seventh respondents (all the corporate respondents other than the third and the ninth) give discovery. The motion was brought by notice of motion filed on 24 February 1995.

There are also before the Court two other motions on notice. They are motions by the seventh respondent ("Leightons") and the eighth respondent ("Mr Dixon"), in each case for an order for the filing and service by the Commission within a specified time of all the evidence on which it will rely, or in the alternative, for an order that it provide further and better particulars of its amended statement of claim. It was agreed that the appropriate course was for me to hear and determine the Commission's motion first, because the outcome would be relevant to my decision on Leightons' and Mr Dixon's motions.

BACKGROUND

The proceedings arise out of what the Commission alleges to have been collusive tendering by major construction companies for a project known as the Commonwealth Offices - Haymarket ("the Haymarket Project"). It alleges that this involved contraventions of the Trade Practices Act 1974 (Cth) ("the Act").

The Commission's application was filed on 30 August 1994 seeking one set of remedies against the corporate respondents, that is to say, the first, third, fifth, seventh and ninth respondents, and another set of remedies against the individual respondents, that is to say, the second, fourth, sixth, eighth and tenth respondents. Each set of remedies comprised imposition of pecuniary penalties, declaratory and injunctive relief. With the application was filed a statement of claim. The amended statement of claim was filed on 17 November 1994.

According to the pleading each individual respondent was at all material times employed by the corporate respondent named in the title to the proceedings immediately preceding his name. Accordingly, and so the pleading described them, Mr Woollard was employed by Concretes, Mr Duff was employed by Hollands, Mr Palmer was employed by Multiplex, Mr Dixon was employed by Leightons and Mr Richmond was employed by the AFCC. (I use the same abbreviations in these reasons.) It is pleaded that all acts alleged in the amended statement of claim were performed by the individual respondents in their capacities as employees of their respective corporate employers.

The AFCC has never appeared in the proceedings. On 28 September 1994 Hill J made an order staying the proceedings so far as they related to Mr Woollard. Mr Richmond, Hollands and Mr Duff have withdrawn their defences and penalties have been imposed on them (each joined with the Commission in making a submission as to a level of penalty appropriate to be imposed). Accordingly, although Hollands was one of the respondents to the Commission's motion for discovery it did not appear on the hearing and the Commission no longer seeks discovery from it. The other respondents to the motion, Concretes (first respondent), Multiplex (fifth respondent) and Leightons (seventh respondent), contested the motion.

FACTS AS PLEADED AND ISSUES ON THE PLEADINGS

The following is an account of the facts as alleged by the Commission in the amended statement of claim.

At all material times Concretes, Hollands, Multiplex and Leightons ("the Tenderers") carried on business as building and construction contractors in New South Wales and were members of the AFCC. On or about 11 August 1988, Australian Construction Services ("ACS"), part of the Commonwealth Department of Administrative Services, for and on behalf of the Commonwealth, invited the Tenderers to submit tenders for the Haymarket Project.

Central to the Commission's case is a meeting held in September or October 1988 ("the Meeting"), the intention of Mr John Cunningham ("Mr Cunningham") of the AFCC and the Tenderers in agreeing to attend the Meeting, and the making of two agreements at the Meeting. Because of their importance to the issues raised by the Commission's motion, I find it useful to set out paragraphs 15-24 of the amended statement of claim relating to these matters. Those paragraphs are as follows:

"15.In or about September or October 1988 John Cunningham ('Cunningham') Director of Special Projects with the AFCC, for and on behalf of the AFCC, contacted the tenderers and notified them of his intention to conduct a meeting of tenderers in relation to the Haymarket project prior to the closing date for tenders. Cunningham invited an officer from each of the tenderers to attend such a meeting ('the meeting') prior to the closing of tenders and each of the tenderers accepted the invitation.

PARTICULARS

Cunningham contacted each of the tenderers by telephone.

16.It was the intention of Cunningham and of each of the tenderers respectively in setting up and agreeing to attend the meeting that each tenderer would be able to take into account, and would take into account in preparation of its tender, any matters agreed at the meeting (which Cunningham and each of the tenderers expected would include arrangements or understandings on the subjects of special fees ('Special Fee') and unsuccessful tenderers fees).

17.Prior to the meeting Richmond instructed Cunningham to propose to the tenderers that the successful tenderer should pay to the AFCC a Special Fee of $1,000,000.

18.In or about September or October 1988 the meeting took place at the premises of the AFCC at 655 Pacific Highway (cnr Christie Street) St Leonards in the State of New South Wales.

19.The meeting was attended by:

(a) Cunningham of the AFCC;

(b) Woollard of Concretes;

(c) Duff of Hollands;

(d) Palmer of Multiplex; and

(e) Dixon of Leightons.

20.At the meeting Cunningham proposed that the successful tenderer for the Haymarket project should pay an agreed amount called a Special Fee ('Special Fee') to the AFCC.

21.At or arising out of the meeting each of the tenderers, and the AFCC made or arrived at an arrangement and understanding between themselves to the effect that;

(a) each tenderer would, if its tender for the Haymarket project was accepted, pay from the proceeds of the job a Special Fee to the AFCC in the sum of $1,000,000;

(b) each tenderer would take into account in the preparation of its tender, the commitment to pay the Special Fee if successful.

(c) none of the tenderers or the AFCC would disclose to ACS the terms of the arrangement or understanding, or that a meeting of all tenderers had taken place.

PARTICULARS

(i) the arrangement or understanding was partly express and partly implied;

(ii) insofar as it was express it was oral:

(iii)as to the oral part it was constituted by the conversation at the meeting;

(iv) insofar it was implied it arose from the attendance at the meeting of Cunningham, and the representatives of the tenderers and the acceptance of the proposals put at the meeting;

(v) as to subparagraph 21(b) and (c) it was implied in order to give business efficacy to the arrangement or understanding; and

(vi) the Applicant will also rely on the inferences to be drawn from the facts set
out in paragraphs 27-30 [it is not necessary to refer to the allegations made in paras 27-30].

22.After the agreement or understanding referred to in paragraph 21 had been reached Cunningham was asked to leave the room, and did so. The meeting resumed with Woollard of Concretes,Duff of Hollands, Palmer of Multiplex and Dixon of Leightons in attendance.

23.At the meeting it was then proposed that the successful tenderer should pay to each of the unsuccessful tenderers an unsuccessful tenderers fee ('UTF') in the sum of $750,000.

24.There arose from the meeting an arrangement or understanding between the tenderers to the effect that:

(a) each tenderer would, if its tender for the Haymarket project was accepted, pay from the proceeds of the job a UTF to each of the unsuccessful tenderers in the sum of $750,000;

(b) each tenderer would take into account in the preparation of its tender, the commitment to pay the UTF if successful; and

(c) none of the tenderers or the AFCC would disclose to ACS the terms of the arrangement or understanding or that a meeting of all tenderers had taken place.

PARTICULARS

(i) The arrangement or understanding was partly express and partly implied;

(ii) insofar as it was express it was oral:

(iii)as to the oral part it was constituted by the conversation at the meeting;

(iv) insofar it was implied it arose from the attendance at the meeting of the representatives of the tenderers and the acceptance of the proposals put at the meeting;

(v) as to subparagraph 24(b) and (c) it was implied in order to give business efficacy to the arrangement or understanding; and

(vi) the Applicant will also rely on the inferences to be drawn from the facts set out in paragraphs 32-35 [it is not necessary to refer to the allegations made in paras 32-35]."

By their defences, Concretes, Multiplex and Leightons deny or do not admit the matters alleged in paras 15-24.

The Tenderers did take into account the arrangements or understandings reached at the Meeting in the preparation and submission of their tenders. ACS awarded the contract to Hollands. Mr Richmond caused or procured the AFCC, by its National Executive Committee, to ratify and levy the Special Fee on Hollands. In or about January or February 1989 Hollands paid $200,000 or $300,000 to the AFCC as part of the Special Fee, and subsequently over a period from 24 July 1989 to 1 February 1990, the AFCC sent a series of seven invoices of $100,000 each to Hollands which it also paid on account of the Special Fee. For their part, Concretes, Multiplex and Leightons each sent to Hollands a series of invoices which represented parts of their respective UTFs and totalled, in respect of each of those three unsuccessful Tenderers, $750,000. Hollands also paid the amounts of those invoices.

Each of the invoices sent by the AFCC and by Concretes, Multiplex and Leightons to Hollands purported to be claims for "consultancy services". But such services had not been provided and were never intended to be provided. In the result, Hollands paid the Special Fee of $1,000,000 to the AFCC and UTFs totalling $2,250,000 to Concretes, Multiplex and Leightons.

The amended statement of claim alleges that the pleaded conduct constituted various contraventions of the Act.

RELEVANT PROVISIONS OF THE ACT

It is important to note the relevant provisions of the Act at the relevant time as referred to in the amended statement of claim, namely ss 4D, 45 (2) (a), (b); 45A; 52; 53 (aa), (e); and 55A.

It is unnecessary for me to give an account of the ways in which it is pleaded that the respondents contravened the Act. They are numerous. It is pleaded not only that the corporate respondents "contravened" and "attempted to contravene" a provision of Part IV (cf paras 76 (1) (a) and (b) of the Act), but also that each of the Tenderers was "knowingly involved" in contraventions by the other Tenderers. It is pleaded that each of the individual respondents was "knowingly involved" in each of the contraventions by each of the AFCC and each of the Tenderers. The pleading recognises that all four Tenderers were parties to both the Special Fee agreement and the UTFs Agreement but that the AFCC was a party only to the Special Fee agreement.

The principal allegation is that the making and implementation of the two agreements constituted contraventions of paras 45 (2) (a) and (b) of the Act. Those provisions are as follows:

"45(2)A corporation shall not --

(a)make a contract or arrangement, or arrive at an understanding, if --

(i) the proposed contract, arrangement or understanding contains an exclusionary provision; or

(ii) a provision of the proposed contract, arrangement or understanding has the purpose, or would have or be likely to have the effect, of substantially lessening competition; or

(b)give effect to a provision of a contract, arrangement or understanding, whether the contract or arrangement was made, or the understanding was arrived at, before or after the commencement of this section, if that provision --

(i) is an exclusionary provision; or

(ii) has the purpose, or has or is likely to have the effect, of substantially lessening competition."

The notion of an "exclusionary provision" is "defined" in s 4D of the Act. It is also pleaded that the two agreements constituted "price fixing" in contravention of s 45A. Finally, contraventions of ss 52, 53 (aa), 53 (e) and/or 55A within Part V of the Act are alleged against the Tenderers.

It is alleged that the five individual respondents were directly or indirectly concerned in and party to their
employers' conduct and contravention of those provisions.

Section 76 provided that if the Court was satisfied that a person had contravened a provision of Part IV (in which ss 45 and 45A occurred) or was an accessory of certain kinds to such a contravention, it might order the person to pay to the Commonwealth such pecuniary penalty in respect of each act or omission by the person to which the section applied, as the Court determined

"to be appropriate having regard to all relevant matters including the nature and extent of the act or omission and of any loss or damage suffered as a result of the act or omission, the circumstances in which the act or omission took place and whether the person ha[d] previously been found by the Court in proceedings under this Part to have engaged in any similar conduct".

Section 76 further provided that the pecuniary penalty payable by a person being a body corporate was not to exceed $250,000 for each act or omission by the body corporate to which the section applied, and that the pecuniary penalty payable by any other person was not to exceed $50,000 for each act or omission by such other person to which the section applied. Section 78 provided that criminal proceedings should not lie against a contravener or accessory by reason only of the contravention of a provision of Part IV or accessorial conduct of the kinds referred to in s 76.

NOTICES UNDER SECTION 155 OF THE ACT

As will be seen, it was central to the respondents' submissions that the Commission had already obtained from them many documents pursuant to notices issued under s 155 of the Act. There were in evidence numerous notices to produce documents, and notices to attend to give evidence and produce documents, issued by the Commission under s 155 over the period April to August 1993. There were also in evidence transcripts of the examinations under para 155 (1) (c) of the Act of numerous witnesses including all of the individual respondents, Messrs Woollard, Duff, Palmer, Dixon and Richmond. They were given notices under para 155 (1) (c) to attend before the Commission to give evidence and to produce documents.

Each corporate respondent was given a notice under para 155 (1) (b) to produce documents. The documents for which production was called were described in a schedule to the notices. Attached to the notices was a relevant extract from s 155. At the relevant time, sub-s 155 (1) provided as follows:

"155.(1)Where the Commission, the Chairman or the Deputy Chairman has reason to believe that a person is capable of furnishing information, producing documents or giving evidence relating to a matter that constitutes, or may constitute, a contravention of this Act, ..., a member of the Commission may, by notice in writing served on that person, require that person --

(a) to furnish to the Commission, by writing signed by that person or, in the case of a body corporate, by a competent officer of the body corporate, within the time and in the manner specified in the notice, any such information;

(b) to produce to the Commission, or to a person specified in the notice acting on its behalf, in accordance with the notice, any such documents; or

(c) to appear before the Commission at a time and place specified in the notice to give any such evidence, either orally or in writing, and produce any such documents."

The description of documents in the schedule to the s 155 notices given to the corporate respondents was in the following form:

"DOCUMENTS TO BE PRODUCED

In respect of the Commonwealth Offices Haymarket project, all documents (including diaries, appointment books, notes or reports) in the company's possession, power or control wherein any reference is made to:

(i) the meeting of tenderers held at the AFCC offices in or about September or October 1988;

(ii) arrangements or understandings involving the payment of special fees to the AFCC and the payment of unsuccessful tender fees;

(iii) invoicing and payment of unsuccessful tender fees;

(iv) preparation and submission of the tender by [name of corporate respondent to which notice addressed] for the Commonwealth Offices Haymarket project."

There were in evidence copies of certain receipts issued by the Commission acknowledging that the documents referred to in them had been produced to the Commission. The documents produced were not themselves in evidence. Submissions were not addressed to the terms of the receipts. The brief descriptions of documents contained in the receipts are not informative as to the content of the documents themselves.

PARTIES' SUBMISSIONS

Outline of the Commission's submissions in chief

The submission of the Commission in chief is simply that following the decision of the Full Court of this Court in Trade Practices Commission v Abbco Iceworks Pty Ltd (1994) 52 FCR 96 ("Abbco") a corporation does not enjoy privilege against self-exposure to a penalty and that in the light of this there is no reason why discovery should not be ordered.

Outline of submissions of first, fifth and seventh respondents (Concretes, Multiplex and Leightons)

Concretes and Multiplex adopted the submissions made by Leightons and enlarged upon them. It is convenient to deal together with the submissions of all three, to whom I shall refer, for convenience, as "the respondents".

The respondents point out that Abbco was concerned with the question whether the privilege against self-exposure to a penalty avails against a notice to produce, not an application for discovery. They acknowledge, however, that the judgments contain references to discovery.

The respondents mount a submission based on Order 15 r 15 of the Federal Court Rules. This is to the effect that the Court may make an order for discovery only if it is satisfied that such an order is "necessary at the time when the order is made", and that such an order is not necessary here because the Commission has available to it the power of requiring production of documents given by s 155 of the Act and has in fact had the benefit of inspection of documents produced to it pursuant to such notices.

It is convenient to note at this stage Rules 1, 2, 5, 8 and 15 of Order 15 of the Federal Court Rules. They provide, relevantly, as follows:

"1 ..., any party may, unless the Court otherwise orders, by notice of discovery filed and served on any other party, require any other party to give discovery of documents.

2(1)A party required to give discovery shall do so within such time, not being less than 14 days after service of the notice of discovery on him, as may be specified in the notice of discovery.

(2)A party shall, ..., give discovery by filing and serving on the party giving the notice of discovery --

(a) a list ... of documents relating to any matter in question between him and the party giving the notice of discovery; and

(b) an affidavit verifying the list.

5 The Court may, at any stage of the proceeding, order any party to give discovery in accordance with rule 2.

8 Where, at any stage of the proceeding, it appears to the Court from evidence or from the nature or circumstances of the case or from any document filed in the proceeding that there are grounds for a belief that some document or class of document relating to any matter in question in the proceeding may be or may have been in the possession, custody or power of a party, the Court may order that party --

(a) to file any affidavit stating whether that document or any document of that class is or has been in his possession, custody or power and, if it has been but is not then in his possession, custody or power, when he parted with it and what has become of it; and

(b) to serve the affidavit on any other party.

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." (emphasis supplied)

A third submission of the respondents is that in the exercise of its discretion, the Court should not order discovery. In support, the respondents again refer to the fact that the Commission has already had access to many documents produced pursuant to the notices under s 155 of the Act. They also submit that discovery should be ordered only where the applicant for it has demonstrated that it has a case, and (so it was submitted), a consideration of the pleadings and of the supply of particulars by the Commission reveals that it does not yet know whether it has a case and that it is using the discovery process as a "fishing expedition".

Finally, the respondents submit that if I should not accept their primary submission that discovery should under no circumstances be ordered, I should at least defer ruling on the question whether it should be and should direct the Commission to file and serve its affidavit evidence in order that the ruling might be made when it is known whether the Commission has a case.

Outline of Commission's submissions in reply

The Commission took me to the detail of the judgments of Burchett J and Gummow J in Abbco in support of its submission that Abbco cannot be distinguished as one concerned with notices to produce and not with discovery.

In response to the respondents' submission based on Order 15 r 15, the Commission submits that the word "necessary" does not mean "necessary to success in the proceedings" but rather, and more liberally, "necessary in the interests of justice, in the administration of the judicial process".

In response to the respondents' submission on discretion, the Commission submits that discovery would give it substantially more than it has already got pursuant to its notices under s 155. It submits further that ordinarily discovery precedes the filing of affidavit evidence and indeed assists in defining the areas in which affidavit evidence will be necessary.

REASONING ON THE MOTION

Abbco

In Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477 the High Court held by majority that the privilege against self-incrimination is not available to corporations. As a matter of decision, Abbco is authority for the unavailability to corporations of the privilege against self-exposure to a civil penalty in respect of a notice to produce documents.

Although Abbco was concerned with notices to produce rather than with discovery, in my view the case is also strong authority for the proposition that the privilege against self-exposure to a civil penalty does not avail a corporation against the process of discovery.

In Abbco as in the present case, the Commission sought injunctive relief and the recovery of pecuniary penalties under s 76 of the Act. In that case, contraventions of ss 45 and 45A of that Act were alleged. In this case, contraventions of those sections and of 52, 53 (aa), (e) and 55A are alleged. Burchett J (with whose reasons Black CJ and Davies J agreed) referred to discovery at 118 et seq. Gummow J, who agreed in the result proposed by the majority but delivered independent reasons, referred to discovery at 134-135. The reasoning of their Honours does not distinguish between notices to produce and discovery, and is, in my view, inimical to the survival of the privilege in favour of a corporation against self-exposure to a civil penalty in the context of discovery.

Further, in Trade Practices Commission v The IMB Group Pty Ltd (1994) ATPR 41-348, Drummond J held that in the light of Abbco that privilege does not afford a reason why discovery should not be given by corporations. It will be clear from what I have already said that I think that his Honour was, with respect, correct. It would only be if I thought that he was clearly wrong, that I would not follow his Honour's judgment in that case: see Bradley v Armstrong (1981) 55 FLR 355 (FCA/FC) at 356 (Fox J), 361 (Connor J); Hamilton Island Enterprises Pty Ltd v Commissioner of Taxation [1982] 1 NSWLR 113 (NSW/Rogers J) at 119F; Re Rothercroft Pty Ltd (1986) 4 NSWLR 673 (NSW/Kearney J) at 679E; Deputy Commissioner of Taxation v Access Finance Corporation Pty Ltd (1987) 8 NSWLR 557 (NSW/CA) at 558C-D; Magman International Pty Ltd v Westpac Banking Corporation (1991) 32 FCR 1 (FCA/FC at 20 (Hill J); Australian Securities Commission v Marlborough Gold Mines Limited (1993) 177 CLR 485 at 492; Upperedge v Bailey (1994) 13 ACSR 541 (FCA/Jenkinson J) at 543; and on the position in the United Kingdom, see Jones v Secretary of State for Social Services [1972] AC 944 (HL) and Davis v Johnson [1978] 1 All ER 841 (CA).

Order 15 r 15 of the Federal Court Rules

Under Order 15 r 15 the applicant for an order for discovery bears the onus of satisfying the Court that the order is "necessary". What is the significance of the word "necessary" in the rule (the rule is in the same terms, mutatis mutandis, as Part 23 r 14 of the Rules of the Supreme Court of New South Wales)? The answer must depend upon the purpose properly served by the procedure of discovery of documents.

What must be discovered are "documents relating to any matter in question ... " in the proceedings; see Order 15 rr 2 (2) (a) and 8. The "matters in question" in the proceedings are the issues as revealed by the pleadings. It is well established that it is not necessary in order for a document to "relate" to such a matter that it be admissible in evidence in relation to that matter, and that it suffices that the document may lead to a train of inquiry which may advance the case of one party or damage that of his adversary: see, for example, Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co (1882) 11 QBD 55 (CA) at 60 (Baggallay LJ), 62-64 (Brett LJ); Mulley v Manifold (1959) 103 CLR 341 (Menzies J) at 345; Commonwealth of Australia v Northern Land Council (1993) 176 CLR 604 at 632 (Toohey J).

In my opinion, Order 15 r 15 requires that the Court 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": Percy v General Motors-Holden's Pty Ltd [1975] 1 NSWLR 289 (NSW/Rath J) at 292E,F. Similarly, in the judgment of Cross J in Boyle v Downs [1979] 1 NSWLR 192, in which his Honour had to construe a similarly expressed constraint in Part 24 sub-r 5 (2) of the New South Wales Supreme Court Rules relating to interrogatories, the following passage appears:

"Of course, in many cases the evidentiary difficulties of one party only, i.e. the moving party, may loom large as considerations; but the test is not solely a matter of how much more effectively the moving party can present his case but, I believe, whether, all in all, the order is reasonably necessary for the disposing fairly of the case; and where a plaintiff has evidentiary difficulties, considerations of those difficulties will probably be the most important, but not the only, considerations relevant to determining whether the order is so necessary. I feel that it is for the reason that the rule should take into account the interests of both parties that the rule in other places, e.g. England and South Australia, is framed to make the relevant test 'necessary for the disposing fairly of the cause or matter'. I am of the opinion that the word 'necessary' in r.5 (2) should be interpreted in a somewhat similar manner, namely, 'reasonably necessary for the disposing fairly of the cause or matter'. In considering the meaning of the word 'necessary' in Pt. 23, r.14 -- a rule relating to discovery and inspection similar to r.5 in Pt.24 relating to interrogatories -- Rath J. in Percy v General Motors-Holden's Pty Ltd. [[1975] 1 N.S.W.L.R. 289, at p.292.] interpreted it as 'necessary in the interests of a fair trial'. This definition is similar to the one I have suggested; for in Griebart v Morris [[1920] 1 K.B. 659, at p.666.], Scrutton L.J. interpreted 'necessary for disposing fairly of the cause or matter' (under the English rules relating to interrogatories) as 'necessary for the fair trial of the action'." (at 205C-E - emphasis supplied)

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.

In a case such as this, where one party and not the other is likely to have documents relating to a matter in question, it seems to me to be prima facie "necessary" in the sense referred to that discovery be ordered. But this general position is subject to the well established exception that discovery should not be ordered to enable a mere "fishing expedition" (see below).

In the present case, the s 155 notices addressed to the respondents required production of only documents "wherein any reference is made to" the Meeting, the Special Fee agreement and the UTFs agreement, the invoicing and payment of the Special Fee and the UTFs, and the recipient's preparation and submission of its tender. This description is narrower than that of documents in the possession, custody or power of
Concretes, Multiplex and/or Leightons "relating to any matter in question" in the proceedings. There may be documents in the possession, custody or power of the respondents fitting that broader description which do not contain "references to" the things mentioned.

A particular advantage of discovery is that the party required to give it must search for documents by reference to a judgment which that party is required to make and is in a position to make. This process is apt to bring to light documents the existence of which will often be beyond the other party's knowledge. The Commission is not in a position to know what documents are in the respondents' possession, custody or power.

Subject to what I say below in relation to discretion, I am satisfied that it is necessary in the interests of fair disposition of the proceedings that discovery be ordered.

Discretion

I have already rejected the respondents' submission that I am constrained not to order discovery because it is not "necessary" for the reasons that s 155 of the Act confers significant powers on the Commission, and that many documents have already been produced by the respondents to the Commission pursuant to notices given in exercise of those powers. Subject to what I say below, I am satisfied that discovery is "necessary" in the sense to which I have referred. It follows that I would not, as an exercise of discretion, refrain from ordering discovery on the ground that it is unnecessary by reason of the existence of such statutory powers and the giving of the notices pursuant to them and production of documents to the Commission in response.

It remains to consider the submission that discovery should not be ordered because the Commission seeks to use it as a "fishing expedition". It has often been said to be a ground on which discovery (and interrogatories) will not be ordered, that the purpose is to carry out a "fishing expedition": see, for example, Hennessy v Wright (No 2) (1890) 24 QBD 445n at 448n; Russell v Stubbs Ltd [1913] 2 KB 200n at 204n; Rofe v Kevorkian [1936] 2 All ER 1334 (CA) at 1337-1338 (Greer LJ); Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd (1952) 72 WN (NSW) 250 at 254 (Owen J); Latec Finance Pty Ltd v Jury [1960] NSWR 321 (NSW/Else-Mitchell J) at 323; Melbourne Home of Ford Pty Ltd v Trade Practices Commission (1979) 36 FLR 450 (FCA/FC) at 459-460 (Smithers J); W. A. Pines Pty Ltd Pty Ltd v Bannerman (1980) 41 FLR 175 (FCA/FC) at 181-2 (Brennan J), 190-191 (Lockhart J); Lloyd v Costigan (1983) 62 ALR 284 (FCA/FC) at 292; ASC v Dalleagles Pty Ltd, unreported, FCA/French J, 27 February 1992 at 14; and cf Bray, The Principles and Practice of Discovery (1885) at 13.

What does the reference to a "fishing expedition" mean? After all, ex hypothesi, the giving of discovery will often, if not always, reveal documents of which the other party was not previously aware (similarly, the administering of interrogatories will often, if not always, reveal information of which the other party was not previously aware). What is meant is that discovery must not be used for the purpose of ascertaining whether a case exists, as distinct from the purpose of compelling the production of documents where there is already some evidence that a case exists: see, for example, Commissioners for Railways v Small (1938) 38 SR (NSW) 564 (NSW/FC) at 575 (Jordan CJ); Associated Dominions Assurance Society Pty Ltd v John Fairfax & Sons Pty Ltd, supra; W. A. Pines Pty Ltd v Bannerman, supra; Barbarian Motor Cycle Club Inc v Koithan (1984) 35 SASR 481 (SA/FC) at 486 (King CJ); Nestle Australia Ltd v Commissioner of Taxation (1986) 10 FCR 78 (FCA/Wilcox J) at 82-83; Mobex Pty Ltd v Comptroller-General of Customs, unreported, FCA/Foster J, 18 May 1994, at 18. In W. A. Pines Pty Ltd v Bannerman, supra, at 181, Brennan J said that what is required is that "sufficient is shown to ground a suspicion that the party applying for discovery has a good case proof of which is likely to be aided by discovery." On the facts of particular cases, the application of the distinction between "fishing" and "non-fishing" may well be difficult.

The respondents made their submission that discovery would be a "fishing expedition by reference to two illustrations. The first relates to a request by Leightons and Mr Dixon for further and better particulars of para 16 of the Commission's pleading (see earlier). On 12 September 1994, the solicitor for Leightons and Mr Dixon requested particulars of the facts, matters, or circumstances on which the Commission relied to support the allegation that Leightons had the intention referred to in para 16 "in agreeing to attend" the Meeting. On 19 October 1994, the Australian Government Solicitor "AGS" replied that the intention was "to be inferred from the nature of the meeting, the participants, and the nature and result of similar prior meetings". On 28 November 1994 Leightons' solicitor replied requesting the same particulars in respect of each of the "similar prior meetings". On 21 December 1994 the AGS replied to the effect that the "similar prior meetings" were those in respect of 15 projects which it named. These included the "Metroplaza" project and the "Glebe Island Bridge" project. On 17 January 1995 Leightons' solicitor replied, contending that the AGS had not provided the particulars requested in his letter of 12 September 1994 in respect of any of the "similar prior meetings". On 20 February 1995 the AGS responded contending that the request was not one for further and better particulars of the pleading but was one for particulars of evidence intended to be led to support the allegation of intention, and so was not a proper request for particulars. On 1 March 1995 Leightons' solicitor requested the following particulars in respect of each of the "similar prior meetings":

"(a) On what date and at what place is it alleged that the meeting occurred?

(b) Is it alleged that Leighton Contractors Pty Limited was present?

(c) If "yes" to (b), by which natural person was Leighton Contractors Pty Limited represented?"

On 13 March 1995 the AGS replied as follows:

"(a) The Commission is not in a position to provide the particulars sought.

(b) Yes.

(c) The Commission does not know."

The second illustration relates to para 24 of the amended statement of claim. On 12 September 1994, the solicitor for Leightons and Mr Dixon requested particulars of the conversation referred to in particular (iii) of para 24 (noted earlier in these reasons) including advice as to whether it was alleged that Mr Dixon had said anything or that anything was said to him, and if so what and by whom. On 19 October 1994 the AGS replied advising that the Commission was unable to provide the particulars sought prior to discovery and interrogation. On 28 November 1994, Leightons' solicitor pressed the request. On 21 December 1994, the Commission advised that:

"The applicant cannot give the conversation. The applicant does not know precisely what Mr Dixon did."

On 17 January 1995, Leightons' solicitor sought identification of "the substance of the words alleged to have been said or the nature of the gestures said to have been used by [Mr Dixon] to indicate his acceptance on behalf of [Leightons]". On 20 February 1995, the AGS replied advising that the only evidence which the Commission was in a position to lead was that Mr Dixon indicated by word or gesture his acceptance on behalf of Leightons and that the Commission was not in a position to provide further particulars or to identify the words or gestures used. On 1 March 1995 the Leightons' solicitor asserted that the AGS had not supplied particulars to which Leightons was entitled.

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".

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 (CA) at 112; Egg & Egg Pulp Marketing Board v K H Korp Tocumal Trading Co Pty Ltd [1963] VR 378 (Vic/Adam J); L. Grollo & Co Pty Ltd v Nu-Statt Decorating Pty Ltd (1978) 34 FLR 81 (Smithers J) at 90-91; 13 Halsbury's Laws (4th) para 28; Cairns, Australian Civil Procedure (3rd ed, 1992) at 348. In my view, I should exercise my discretion accordingly in the present case.

CONCLUSION

There should be an order that each of the first, fifth and seventh respondents give discovery, but the order should be framed so as not to require that a respondent discover documents which it has already produced. As I understand it, all parties find it an acceptable course for me to publish these reasons and not to make orders at this stage but to list the proceedings for a date when short minutes of orders in a form to give effect to these Reasons can be handed up. I will follow that course.

I certify that this and the preceding 28 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lindgren.

Associate:

Dated: 2 August 1995

Heard: 4 May 1995

Place: Sydney

Decision: 2 August 1995

Appearances: Mr C A Sweeney QC with Mr P Clay of counsel instructed by the Australian Government Solicitor appeared for the applicant.

Mr G O'L Reynolds of counsel instructed by Corrs Chambers Westgarth solicitors appeared for the lst respondent, CC (New South Wales) Pty Ltd.

Mr S J Rushton of counsel instructed by Freehill Hollingdale & Page solicitors appeared for the 5th respondent, Multiplex Constructions Pty Ltd and the 6th respondent Geoffrey Thomas Palmer.

Mr J D Heydon QC with Mr C P Comans of counsel instructed by Robin Maxam solicitor appeared for the 7th respondent, Leighton Contractors Pty Ltd, as a respondent to the applicant's motion and as applicant on its own motion.

Mr I E Davidson of counsel instructed by Dunhill Madden Butler solicitors appeared for the 8th respondent, Leonard Dixon as applicant on his motion.

Top