FEDERAL COURT OF AUSTRALIA

Sportsbet Pty Limited v Racing New South Wales (No 13)
[2009] FCA 1582

SPORTSBET PTY LIMITED v RACING NEW SOUTH WALES and HARNESS RACING NEW SOUTH WALES

NSD 1821 of 2008

RARES J

26 NOVEMBER 2009

SYDNEY

THE COURT ORDERS THAT:

1.                  The applicant's notice of motion filed today is dismissed.

2.                  The applicant pay the respondents' costs of the motion.

THE COURT NOTES:

1.         The undertaking of the solicitor for the applicant by his senior counsel the filing fees will be paid at the registry.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

REASONS FOR JUDGMENT

1                                             This is an application for leave to appeal three decisions of Perram J, given yesterday.  In essence his Honour declined to order further discovery, or fresh discovery, depending on which characterisation one makes of Sportsbet Pty Limited’s application before his Honour.  Sportsbet argues that his Honour erred in his assessment of the evidence given in respect of the discovery by the respondents Racing New South Wales and Harness Racing New South Wales and that as a consequence his Honour erred in rejecting sequential applications for adjournment of the hearing of these proceedings which is due to commence next Monday.  This application has been brought on with considerable expedition and much industry by all of the legal representatives of the various parties.

2                                             I indicated at the commencement of dealing with the proceedings this afternoon that I would make an assessment in the course of today whether or not I considered the proceedings raised sufficient issues to warrant me referring them to a court of three judges so that it could proceed as a leave application before them and, if necessary, the appeal could be heard at the same time.  I also said then that in the event I came to a contrary view, I would be able to deal with the matter today.  All parties have prepared brief but commendably focussed submissions on the errors which his Honour was said to have made. 

The contentious approach to discovery

3                                             The discovery issues arise in the context of Sportsbet’s application challenging the adequacy of Racing and Harness Racing’s discovery.  The solicitor for those respondents, Timothy Price, swore, relevantly, two critical affidavits that were before his Honour.  In the first of those two affidavits sworn on 17 November 2009 Mr Price described his client’s approach to discovery in paras 8 to 10 inclusive.  In essence he said that each of Racing and Harness Racing had provided discovery in related but distinct proceedings that are currently being heard by the primary judge and are in the course of final submissions between Betfair and the same respondents including the State of New South Wales.  Mr Price deposed there that in his opinion the agreed categories of discovery in the Betfair proceedings were significantly broader than those agreed in the Sportsbet proceedings.  He said that notwithstanding that broader scope, his clients had decided to provide Sportsbet with the entirety of their discovery in the Betfair proceedings together with a small number of additional documents not discovered in those other proceedings but which fell within the agreed categories in the current proceedings.  He said the result of that approach was that arguably discovery provided to Sportsbet in these proceedings went beyond the issues exposed by the pleadings.  He then said:

“9.        The approach taken by [Racing] and [Harness Racing] was done for costs reasons and to avoid making the searches and preparing the discovery separately for each set of proceedings.

10.       In my assessment, the scope of the searches undertaken for the preparation of the Betfair discovery identified all of the documents within [Racing] and [Harness Racing] possession which were relevant to these issues.”

The basis of Sportsbet’s Contention

4                                             Sportsbet argues that Mr Price’s approach to discovery, that had been taken by his clients, was fundamentally misconceived.  It contended that, first, the discovery did not focus as it ought on ascertaining what documents were relevantly discoverable within FCR O 15 having regard to the agreed categories in these proceedings and the substantively wider allegations here.  In particular, as I understand it, Sportsbet alleges in these proceedings that, unlike the Betfair proceedings, the practical effect of the legislation it challenges as creating a contravention of the freedom of interstate trade and commerce in s 92 of the Constitution was an effect actually intended so as to bring about the proscribed interference with that freedom.  The application before the primary judge in respect of Mr Price’s affidavit involved Sportsbet’s contention that a considerable number of documents falling within the existing categories had not been discovered.  It was contended that such documents could be inferred to exist by including reference to documents that had been obtained on subpoena or discovery.  Sportsbet relied on the description Mr Price had given in his 17 November affidavit to contend that, in effect, Racing and Harness Racing had not really attended to giving discovery individually in these proceedings but had simply replicated what had been done in the Betfair proceedings and in that way had prejudiced, in a substantive fashion, the proper revelation of documents that may be material for the purposes of the proper determination and just disposition of these proceedings.

Mr Price swears another affidavit

5                                             After Sportsbet served submissions which sought to make good its attack on the approach to discovery that it perceived Mr Price’s affidavit to have revealed, he swore a further affidavit on 19 November which substantially added to his evidence and explained in far more detail what he said had occurred.  In essence, he denied that no searches had been conducted with the specific purpose of ascertaining whether documents answered the descriptions in the agreed categories for the Sportsbet proceedings.

6                                             Mr Price said that he had certified the verified list of documents which each of Racing and Harness Racing had made by its general counsel verifying those lists.  He explained that the searches that he undertook or were undertaken at his request or direction to identify the documents of those two bodies for the purposes of discovery were undertaken with both proceedings in mind and that, for that reason, all documents were reviewed in order to determine whether they fell within the agreed categories in each proceeding.  He said that because the categories were different, the preparation of discovery in the current proceedings involved an independent analysis by reference to categories and certain additional searches.

7                                             He said that he reviewed the documents and formed views as to what needed to be, what did not need to be discovered, and course he would take with respect to the provision of discovery of all of the documents in the Betfair proceedings as an initial stage for discovery in these proceedings.  He said that at the end of his processes for discovery he was satisfied it was appropriate to certify the list of documents of Racing and Harness Racing in the terms required by the Rules.  Mr Price said that, as part of the discovery exercise, he provided the list of agreed categories to each of the general counsel and a Mr Carney.  After he had satisfied himself that each of those gentlemen had reviewed the agreed categories they and he certified the verified lists.

The Primary Judge’s Reasons

8                                             The primary judge noted that Sportsbet had submitted that Racing and Harness Racing had failed to comply with their obligation to make proper searches and that pars 8 and 9 of Mr Price’s affidavit of 17 November demonstrated this.  His Honour referred to Mr Price’s further evidence in par 16 of his affidavit of 19 November and said that in light of this new evidence, he rejected the submission that Racing and Harness Racing had not conducted a proper search for the documents properly discoverable in the Sportsbet proceedings.  He also rejected the proposition that no proper verification had been in place.

9                                             Indeed, the amended list of documents, of 23 November 2009 verified by Mr Sweeney, which was handed up during the course of today’s hearing, contained the usual certification and verification that all documents in the possession, custody and power of Racing that were required to be disclosed pursuant to the primary judge’s orders made on 17 July and 24 September this year, other than documents enumerated in schedules 1 and 2, had been disclosed. 

10                                          It is well known that, in the ordinary course, an affidavit verifying a list of documents such as that verifying the amended list was generally, but not always, conclusive.  The Court would look at the pleadings, the verified list, documents discovered in that list and any other source that constituted an admission that a discoverable document existed:  see Mulley v Manifold (1959) 103 CLR 341; Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Company  (1882) 11 QBD 55.  It is not necessary to determine the precise scope of the avenues to challenge the adequacy of the verified list of documents under the current provisions of O 15 of the Federal Court Rules.

11                                          His Honour was also taken by Sportsbet, in the course of its application, through a variety of particular instances of asserted failures to discover documents within the various categories.  He considered each of those in detail and overall, but not completely.  He concluded that most of these were not truly characterised as complaints of inadequacy of the current discovery, but amounted to requests for fresh discovery. 

12                                          However, I think it is fair to say that to the extent that his Honour permitted either further or fresh discovery to be provided to Sportsbet, the documents were in a relatively narrow compass. 

13                                          Having formed the view that he did, his Honour concluded that Sportsbet’s primary position, that the discovery process of Racing and Harness Racing had miscarried, was incorrect.  It was in that context that he then turned to consider the application for adjournment.  Of course, had the discovery been found to have proceeded on a substantive misconception, the task for undertaking proper discovery is likely to have caused his Honour to have come to a wholly different conclusion as to vacating the hearing fixed to commence on 30 November.

14                                          What his Honour, in fact, concluded was that the solicitors and counsel for Sportsbet faced substantial and significant burdens in preparing for the hearing next Monday, but that the burden, at that stage, was not so unfair or so significant that it was not capable of being borne so that a fair trial could take place.  On the material before his Honour yesterday he concluded that Sportsbet was not presently unable to commence the hearing on Monday, and accordingly he declined to adjourn the hearing.

15                                          His Honour then, in fairness to the parties, allowed a further application for adjournment to be made.  But he concluded that, notwithstanding that a deal of fresh documents either had been discovered or produced on subpoena in recent days, at that time, yesterday he was not prepared to grant an adjournment.  He concluded that the best time to ascertain if Sportsbet were in a position to proceed with the hearing would be when the case commenced.  He could then evaluate the position having regard to whether all of the steps that were contemplated or necessary to prepare it had been undertaken.

The basis of the application for leave to appeal

16                                          Sportsbet had not prepared a draft notice of appeal in the very short time between his Honour’s delivery of reasons and its preparation of the present application.  However, during a short adjournment that I took in order to deal with another matter in the duty list this afternoon, senior counsel for Sportsbet began to prepare grounds of appeal.  I do not consider that they were completely exhaustive, and I by no means seek to criticise them, given the speed with which the task was undertaken and the circumstances.

17                                          In essence, the grounds proposed are that the primary judge erred:

·                    in law in failing to consider the requirements of O 15 r 2(3) for a separate search to be carried out for documents falling within the agreed categories of discovery; 

·                    in his conclusions about whether the documents which Sportsbet were seeking were fresh or were, in truth, seeking proper discovery of the agreed categories;

·                    in concluding that Racing and Harness Racing in fact had given proper discovery.

18                                          I understood, and I think the parties did, that Sportsbet also sought to challenge his Honour’s refusal of the application for adjournment and the proceedings were argued on that basis before me. 

19                                          The question of whether or not proper discovery has been given can involve questions of principle on the one hand, and questions of practice and procedure on the other.  In order to be satisfied whether a case is ripe for the grant of leave to appeal the applicant for leave must demonstrate that, first, in all of the circumstances the decision is attended with sufficient doubt to warrant it being reconsidered by the Full Court and, secondly, whether substantial injustice would result if leave were refused supposing the decision to be wrong:  see Décor Corporation Pty Limited v Dart Industries Inc (1991) 33 FCR 397.  Generally, in seeking leave to appeal, it is necessary to demonstrate that some error of law or principle has been made in order to suggest that the decision is attended with sufficient doubt to warrant the grant of leave to appeal:  Bienstein v Bienstein (2003) 195 ALR 225 at 231 [29] McHugh, Kirby and Callinan JJ.  In addition, the courts have always been wary of laying down rigid and exhaustive criteria for the grant of leave to appeal.  However, in approaching the grant of leave to appeal, the celebrated judgment of Sir Frederick Jordan CJ in In Re the Will of F.B. Gilbert (deceased) (1946) 46 SR (NSW) 318 at 323 holds the field, as Gibbs CJ, Aickin, Wilson, and Brennan JJ said in Adam P. Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177 in approving Jordan CJ’s statement;  namely :

“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 In re the Will of F. B. Gilbert (dec.) ((1946) 46 SR (NSW) 318 at p 323):

" ... I am of 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."

See also, Brambles Holdings Ltd. v. Trade Practices Commission ((1979) 40 FLR 364, at p 365;  28 ALR 191 at p 193);  Dougherty v. Chandler ((1946) 46 SR (NSW) 370 at p 374). It is safe to say that the question of injustice flowing from the order appealed from will generally be a relevant and necessary consideration.”

20                                          The first substantial question which I must decide is whether his Honour can be said to have made an error in accepting Mr Price’s more fulsome explanation, in para 16, of his affidavit of 19 November with respect to his client’s actual approach to discovery.  Obviously, no question of demeanour arises in this regard, and I am in as good a position as his Honour for that purpose, since Mr Price was not, over Sportsbet’s opposition, cross-examined on his affidavits.  In that situation, I am unable to see that it is arguable that his Honour erred, in law or in fact, in accepting that the explanation identified the proper process of discovery.  Moreover, his Honour did have the benefit of the affidavit of discovery, to which I have also referred, that had been recently sworn. 

21                                          I note that Mr Price also identified, in par 8 of his earlier affidavit, that in approaching discovery, not only were the Betfair documents discovered in the Sportsbet proceedings, but there would be further documents, not discovered in those, which fell within the agreed categories.  That, in essence, linked the more fulsome explanation Mr Price gave to what he meant by, and how he approached, the ascertainment of the agreed categories. 

22                                          It is understandable that Sportsbet saw Mr Price’s first affidavit as potentially revealing an erroneous approach.  It was not happily expressed.  But having regard to the contents of his subsequent affidavit, I am unable to see that his Honour erred in principle or in law in accepting the subsequent affidavit as revealing a proper approach to the discovery process.  It seems to me that that underpins and reinforces his Honour’s conclusion that Sportsbet’s challenges to the adequacy of the documents produced on discovery, in the various categories in which his Honour rejected challenges as amounting to, in effect, seeking fresh or further or new discovery.  That conclusion appears to be also a correct appreciation by his Honour, or one, at least, that does not show any error of a kind which would warrant me to have sufficient doubt that his Honour was correct.

23                                          Once that position is reached, the remaining question is whether his Honour’s exercise of discretion in refusing an adjournment on the material then before him, was correct. His Honour stated that, when the trial is due to commence on Monday, a further assessment of the need for an adjournment of the trial may need to be made.  I am not seeking to suggest that his Honour must or will do that.  Again, my consideration of the matters put today does not satisfy me that sufficient doubt has been raised as to the correctness of his Honour’s decision not to adjourn the hearing. 

24                                          The question of whether or not a trial should be adjourned just a few days before the hearing, is one which involves the exercise of a significant discretionary judgment.  Because of the docket system of case management which is adopted in this Court, the docket judge is the trial judge.  He or she manages the proceedings from their inception to the trial, and does so in the context of a familiarity with the development of issues as they occur, and an acute awareness of the impact of particular procedural steps, and changes in approach and substance that occur in the course of the proceedings as they progress to trial.  This case has had, I think it is fair to say, very intensive case management by his Honour, conducted, in part, in parallel with the Betfair proceedings.

25                                          For my part, I am not able to see what error of principle or law his Honour made in assessing that he should not accede to the application for adjournment.  Again, this falls within the area of discretionary judgments of which Jordan CJ spoke and also within that area of discretion referred to in the judgment of Dixon, Evatt and McTiernan JJ in House v The King (1936) 55 CLR 499 at 504-505.  It is not a question as to whether or not a different judge may have come to a different conclusion.  What an applicant for leave to appeal against such a judgment must do, is demonstrate that the trial judge made an error of law or principle.

26                                          As I have said, had it been established that his Honour may have erred in his decision in respect of discovery, it would have been a fairly easy task to conclude that an adjournment would have followed.  But that is not the position as a result of the course of his case management of these proceedings, his Honour had before him far more of the history and significance of issues in the proceedings and developments in the way in which they were conducted, than I have been able to absorb in the short time I have been dealing with today’s application.  I am not able to discern that his Honour could be said to have made any error that should attract a grant of leave to appeal on the adjournment decision. 

27                                          It follows, that I am of opinion that the application for leave to appeal should be refused. 

Associate:                                                         Dated:  8 February 2010