FEDERAL COURT OF AUSTRALIA

Seven Network Limited v News Limited (No 13)

1.      The notice to produce dated 28 March 2006, served by the applicants on the Telstra respondents, be set aside.

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

REASONS FOR JUDGMENT

1                     On the seventy-first day of the trial, the applicants served a notice to produce on the Telstra respondents, seeking production of:

‘Unmasked copies of all discovered documents which are masked, wholly or in part, for relevance.’

Telstra has now applied to set aside the notice to produce on the ground that it seeks the production of documents of no apparent relevance to the issues in the proceedings.

2                     On 23 October 2003, I made orders establishing an elaborate protocol for discovery of documents by the many parties to the proceedings.  The orders provide for the exchange of electronic indexes and images of discovered documents.  The orders clearly contemplate that the parties may ‘redact’ those portions of ‘partially relevant’ documents that are irrelevant to any issue in the proceedings.

3                     In practice, the parties have provided electronic copies of documents which effectively black out or omit those portions considered to contain irrelevant material.  I was informed from the bar table that Telstra has masked 697 documents as partially irrelevant, while the applicants have masked 1,879 documents for the same reason.

4                     Mr Sheahan SC, on behalf of the applicants, recognises that masking for irrelevance is specifically contemplated by the discovery orders.  He also recognises that, while an unqualified order for discovery may require a party to produce unmasked copies of all partially relevant documents unless the Court grants relief from the requirement, it was appropriate for Telstra in the present case to mask the truly irrelevant portions of discovered documents: cf Gray v Associated Book Publishers (Aust) Pty Ltd [2002] FCA 1045, at [9], [14]-[15], per Branson J; Australian Competition and Consumer Commission v McMahon Services Pty Ltd [2004] FCA 353, at [12]-[13], per Selway J; Rio Tinto Ltd v Commissioner of Taxation [2005] FCA 1335, at [16] ff, per Sundberg J, and authorities cited there.

5                     Mr Sheahan says, however, that Telstra has frequently masked not only irrelevant material, but material that is directly relevant to issues in the proceedings.  He submits that the only way the applicants can be protected against the risk that they have been denied access to relevant material is by an order requiring Telstra to make available the entirety of all documents masked for relevance.  He points out that the ‘unmasking’ should not be a complicated process, having regard to the fact that production of documents has been effected electronically.  Mr Sheahan also points out that any issue of confidentiality can be addressed by limiting access to the unmasked documents, at least initially, to the legal representatives.

6                     In support of the applicants’ contentions, Mr Sheahan gives fifteen examples of documents which he says have been either inappropriately masked by Telstra or in respect of which there are grounds for suspicion that relevant material has been inappropriately masked.  Several of these examples concern documents that have been masked as irrelevant, but the masked portions of which have subsequently been annexed to statements of witnesses called by Telstra.  In several other instances, Telstra has provided unmasked copies of documents to the applicants following complaints by them.  In the remaining cases, Mr Sheahan argues that the documents themselves provide on their face a basis for suspicion that the masked material might indeed be relevant to the issues in the proceedings, or that it might at least be helpful in establishing the context for relevant information disclosed by Telstra.

7                     In assessing the significance of the applicants’ complaints, it must be remembered that this is an exceedingly large and very complex case.  Scores of thousands of documents have been discovered.  The task of masking documents for relevance, as the orders to which I have referred contemplate, cannot be easy.  Exercising a judgment as to whether or not material is relevant to the issues in the proceedings is not a purely mechanical matter.  It is inevitable, with maximum goodwill and diligence, that errors will be made.  Since I assume that the applicants would have brought to my attention virtually all the cases of inappropriate, or possibly inappropriate, masking of which they are aware, I would regard the fifteen examples they identify as demonstrating a relatively low error rate on the part of Telstra.  Certainly I would not be prepared to conclude that there has been any deliberate attempt by Telstra to mask material that is known to be relevant.

8                     In my view, the remedy sought by the applicants is disproportionate to any problem that they may have identified.  It appears that any complaint made in the past about apparently inappropriate masking has been addressed by Telstra.  If particular documents on their face give rise to a suspicion that segments may have been inappropriately masked, I would be prepared to entertain an application seeking an unmasked version of the document.  Indeed, as I commented to Mr Sheahan in argument, if it seems that the masked portion of a document might be helpful in providing context for unmasked material, there may well be grounds for treating such an application sympathetically.  But to require Telstra to unmask all material masked for relevance would undo the protocol that the parties have chosen to adopt and to which they have adhered throughout the proceedings, including the first seventy days of hearing.

9                     I should add that the applicants have known of a number of the matters about which they complain for a considerable period of time.  No application was made for access to the masked material prior to the commencement of the hearing or indeed before the witnesses called by Telstra had substantially completed their evidence.  To require Telstra to unmask all documents masked for relevance creates a real danger of disruption to the trial, as the applicants consider the significance of the unmasked material and perhaps seek to put fresh material to witnesses who have already given evidence. (I do not imply by this concern that any such material would necessarily be relevant to the issues in the proceedings.)

10                  In my view, the notice to produce issued by the applicants to the Telstra respondents should be set aside.  If the applicants wish to apply to gain access to the masked portions of particular documents, I shall consider their application.

Associate:

Dated:              3 April 2006