NOT FOR DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA                               )

NEW SOUTH WALES DISTRICT REGISTRY                              )

GENERAL DIVISION                                                                    )             No. NG 111 of 1997

                      BETWEEN:          GMB RESEARCH & DEVELOPMENT

                                                     PTY LIMITED

                                                     (A.C.N. 002 879 254)

                                                                                                                                        Applicant

                      AND:                     THE COMMONWEALTH OF AUSTRALIA

                                                                                                                                     Respondent

CORAM:     Lehane J

PLACE:        Sydney

DATE:          26 February 1997

                                     EXTEMPORE REASONS FOR JUDGMENT

LEHANE J:  The application before me is one for an order for preliminary discovery under order 15A, rule 6.

The parties are in agreement that an order should be made that the respondent file and serve on the applicant a list of documents falling within certain particular categories, and that the respondent also should provide to the applicant a list of names, positions or designations of certain persons responsible for the making of decisions in relation to the tender process within which these decisions are concerned.  But there remain three matters in issue.  One is as to whether the list should be verified.   The second is as to the time not later than which the lists are to be provided.  The third relates to costs.

I have heard substantial and helpful argument on all three issues.  The easiest of them with which to start is the issue as to the time by which lists are to be provided.  The applicant asks that the order require provision of the lists not later than 5 pm on 3 March 1997.  The respondent says that the appropriate time is 5 pm on 7 March 1997.

It is clear that there is some urgency in this matter from the point of view of the applicant.  The applicant needs to know, and needs to know soon, whether it is in a position to commence proceedings which have as their purpose the applicant's reinstatement in a tender process from which at present it faces the prospect of being excluded.  On the other hand, the current phase of the tender evaluation process will come to an end on 28 February - that is to say two days from now - and the lists will, in any event, be provided after that date.

The tender process as a whole is to be completed at the end of June this year, at least unless, for one reason or another, that timetable is extended, and Mr Bennett QC, who appeared today for the respondent, put to me that it would be difficult for the respondent to be certain of complying with the requirements of an order for the provision of the agreed lists by 5 pm on 3 March.  There is no particular evidence as to that difficulty.  It is merely said, and it is easy enough to see that this is likely to be correct, that at least some cutting and pasting will need to be done.  Additionally, there is a degree of geographical separation between the respondent and its counsel which I suppose, even in these days, remains of some significance, particularly for the process of checking that the list compiled complies fully with the order.

At all events, although plainly this matter ought to be dealt with as a matter of urgency, I cannot see that any particular prejudice is likely to flow from allowing an extra four days at this stage in the proceedings, and I am prepared to accede to the respondent's submission that the appropriate time for the provision of the lists is 5 pm on 7 March.

The next question is whether the list of documents ought to be verified.  In a sense, it is tempting to think that this is a question which does not matter a great deal.  I say that because, as I suggested during the course of argument, the same obligations in relation to discovery, both of the party obliged to give discovery and its advisers, must apply whether lists of documents are verified or not.

Mr Bennett put to me that it did not appear from the judgments in the two cases to which I have been referred - Concrete Construction Group Pty Ltd v Commonwealth of Australia 22 April 1996 unreported FCA (Sheppard J) and Hughes Aircraft Systems International v Civil Aviation Authority 28 June 1995 unreported FCA (Davies J) - that verified discovery was ordered.  The difficulty with that, I think, is that in each case the making of orders was postponed and the printed judgments do not in fact reveal whether verified discovery was ordered or not.  No doubt the actual orders made, assuming actual orders were made, would reveal that, but those orders are not before me.  Mr Bennett also submitted that, given the identity of the respondents it was inappropriate to order verified discovery even if, in cases involving other respondents, verification might be appropriate.

Undoubtedly, the general rule from which, equally undoubtedly, exceptions are not infrequently made is that discovery takes place by way of verified lists of documents.

That is clearly contemplated in O 15 of the Federal Court Rules.  It is not referred to in O 15A r 6, but I think it is not unreasonable to suppose that the shorthand reference in the rule to discovery may be taken to import that similar principles ought to apply in relation to preliminary discovery under that rule to those which apply explicitly under O 15.

Mr Gageler, who appeared for the applicant, pointed to the general rule, and pointed also to exchanges that had occurred in an earlier hearing before Sheppard J, which he said indicated that a need that great care, which could be indicated by a requirement of verification, be applied in compiling the lists.

I am not to be taken as acceding to any suggestion that those providing lists of documents on behalf of the Commonwealth are in any sense unlikely to take their duties other than seriously.  Nor am I inclined to give a great deal of weight to what happened, particularly at an early stage of the proceedings when there had been little opportunity to consider the material fully, before Sheppard J.  And I should add, lest there be any misunderstanding, that there can be no suggestion that his Honour was deliberately misled or, in my view, that his Honour or the applicant was misled at all in any way that is of any particular significance.

Be all that as it may, my conclusion on this aspect of the matter is that verification is the general rule.  The applicant seeks verification.  I am unable to see that it imposes any particular difficulty or disadvantage upon the respondent, and in the absence of any particular reason why verification should not be required, I am disposed to order that the list to be provided under the proposed order number 1 is to be verified.

That brings me to the question of costs.  I have had the advantage of substantial argument in relation to the question of costs, as to whether, if preliminary discovery had not been agreed to, albeit without admissions, the applicant would have obtained an order;  more particularly, whether the applicant would have fulfilled the conditions in O 15A r 6, particularly the condition in paragraph (a):

            That there is reasonable cause to believe that the applicant has or may have the right to obtain relief in the Court from [the Commonwealth].

Mr Bennett submitted that there was not a "skerrick of evidence" of any relevant breach of duty on the part of the Commonwealth applicant.  Mr Gageler drew my attention to various matters in the documents in evidence, the Government's request for proposals and the applicant's proposal, which, he said, provided the footing at least for an inference that there is reasonable cause to believe that the applicant may have a right to obtain relief from the Commonwealth on the footing either of breach of a preliminary contract or of an infringement of s 52 of the Trade Practices Act.

Having had the benefit of those arguments, I am inclined to think that the applicant probably does, perhaps not with a great deal of room to spare, surmount this hurdle.  On the other hand, it seems to me that there is considerable force in the substance of an argument put to me by Mr Bennett that the matter of costs is one as to which the court will be able to make a considerably more informed decision at a later stage.

It must, after all, be borne in mind that this is a quintessentially interlocutory proceeding and that costs, in any event, will not be taxed or recovered until a substantially later stage is reached.  Accordingly, I think the appropriate order in relation to costs is simply that they be reserved.

The consequence is that - and I shall give counsel the opportunity to speak to this in case I misapprehend some aspect of it - I should make order 1 as set out in the draft order handed up this morning, but on the footing that in the opening paragraph the date is to be 7 March 1997;  that in the third line the documents described are to be documents held within the Office of Government Information and Technology;  that paragraph (c) will read:

            All documents or parts of documents setting out the adopted evaluation process to be followed up to the end of the initial assessment phase;

and that paragraph (d) as it was typed is omitted altogether.  I should then make order 2 as set out in the draft order, again changing the date to 7 March, adding in the second line after "documents" the words "or parts of documents", and deleting at the end of the
paragraph the word "Sydney" and substituting "Canberra, and provide copies to the applicant".  Then there should be an order 3 which would read:

            The respondent, by no later than 5 pm on 7 March 1997, provide to the applicant a list of the names and positions or designations of persons who were the ultimate decision-makers in relation to the elimination of the applicant.

Then I should make a fourth order in the form of order 3 as typed in the draft order and a fifth order that the costs of these proceedings be reserved.  The final order is simply that the parties have liberty to apply on three days' notice.

                                                     I certify that this and the preceding 6 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lehane.

                                                     Associate: 

                                                     Dated:  26 February 1997

Heard:                                          26 February 1997

Place:                                            Sydney

Decision:                                       26 February 1997

Appearances:Mr S J Gageler of counsel instructed by Barnetts appeared for the applicant.

                                                     Mr D M J Bennett QC and Ms C A Needham of counsel instructed by Australian Government Solicitor appeared for the respondent.