FEDERAL COURT OF AUSTRALIA
Optus Networks Pty Ltd v Telstra Corporation Ltd (No 4) [2011] FCA 485
| IN THE FEDERAL COURT OF AUSTRALIA | |
| OPTUS NETWORKS PTY LIMITED (ACN 008 570 330) Applicant | |
| AND: | TELSTRA CORPORATION LIMITED (ACN 051 775 556) Respondent |
| DATE OF ORDER: | |
| WHERE MADE: |
THE COURT ORDERS THAT:
1. The applicant's motion by amended notice dated 19 October 2010 be dismissed.
2. The respondent prepare and serve on the applicant draft short minutes of order to give effect to these reasons on or before Friday, 27 May 2011.
3. The parties notify the Chambers of Edmonds J by Friday, 3 June 2011 as to whether agreement can be reached on the orders to be made to give effect to these reasons and, if so, furnish short minutes of these orders no later than 5:00 p.m. on that day.
4. Each party pay its costs of the applicant's motion.
5. The respondent's motion by notice dated 3 September 2011 be stood over generally.
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 Federal Law Search on the Court's website.
| NEW SOUTH WALES DISTRICT REGISTRY | |
| GENERAL DIVISION | NSD 1087 of 1997 |
| BETWEEN: | OPTUS NETWORKS PTY LIMITED (ACN 008 570 330) Applicant |
| AND: | TELSTRA CORPORATION LIMITED (ACN 051 775 556) Respondent |
| JUDGE: | EDMONDS J |
| DATE: | 18 MAY 2011 |
| PLACE: | SYDNEY |
REASONS FOR JUDGMENT
Introduction and Background
1 This is a dispute about the scope and categories of discovery each party should give the other; another dispute which has plagued and protracted the life of this proceeding for over 13 years. Many of the past disputes were before my time and were managed and disposed of by judges who are no longer with the Court; indeed, two of them have since died.
2 The current dispute exemplifies the reasons why the proceeding has had such a protracted life. First, the resolve of each party to make it as difficult as possible for the other to make out its case or to defend the case put against it; and second, the fact that both parties can afford to engage in such conduct by reason of their very deep pockets.
3 The discovery that is now sought from each party by the other, follows findings of the respondent's ('Telstra's') liability for breach of provisions of the Access Agreement to which the applicant ('Optus') and Telstra are parties ([2009] FCA 422 and [2009] FCA 728) and for breach of Telstra's duty of confidence to Optus ([2010] FCAFC 21). On 21 November 2007 I ordered that certain issues be reserved for separate and later determination pursuant to O 29 r 2 of the Federal Court Rules (Cth) ('Rules'). The discovery now sought concerns those reserved issues – Optus' entitlement to relief, the quantum of any pecuniary relief, including the extent of Telstra's use of confidential information by the preparation and distribution of market share reports to officers of Telstra for certain specific purposes.
4 Relevantly for present purposes, my reasons for judgment in [2009] FCA 422 ('reasons for judgment') contain the following observations and findings:
'[8] Where the telecommunications networks of two carriers are interconnected, and telecommunications traffic generated by customers of one carrier passes across the network operated by the other carrier, the latter carrier has access to certain information relating to that telecommunications traffic. This includes information regarding the quantity, source, destination, duration, time of occurrence or kind of the telecommunications traffic, as well as the value of the telecommunications traffic whether in terms of its aggregate billing value or individual customer billing details and value (collectively, 'traffic information').
[9] For a particular telephone call such traffic information could include:
(1) Quantity - the number or volume of calls made;
(2) source – the telephone number of the customer making the call and the geographic location from which the call was made;
(3) destination – the telephone number and the geographic location to which the call was made;
(4) duration – the length of the call in time;
(5) time of occurrence – the date and time at which the call took place;
(6) kind – such as whether the call was a long distance call or was made using different telecommunications services; and
(7) value – the amount to be billed for that call or for that part of the call carried by the carrier.
…
[11] In this proceeding Optus alleges that, at least since 1995 and until at least September 2003, Telstra has used Optus' traffic information for marketing, promotional and related purposes without the knowledge and consent of Optus by the preparation and use of weekly reports containing information as to Telstra's market share in the STD and IDD segments of the Australian telecommunications market (market share reports').
…
[126] In its answer to interrogatories, Telstra admitted to using the market share reports referred to in paras 12(b), 16(a), 22(a), 28(a), 30(a) and 33(a) of the Defence to the Third Consolidated Amended Statement of Claim filed 5 March 2007:
(i) for the purpose of marketing, including considering or developing strategy for marketing, products or services of Telstra to existing or prospective customers; and
(ii) for the purpose of promotion, including considering or developing strategy for promotion, of products or services of Telstra to existing or prospective customers; and
(iii) for the purpose of selling, including considering or developing strategy for selling, products or services of Telstra to existing or prospective customers.
[127] Insofar as these market share reports contained Confidential Information of Optus for the purposes of the Access Agreement or, even if they do not, insofar as they contained Communication Information of Optus for the purposes of the Access Agreement, which is subject to the confidentiality requirements of cl 15 of the Access Agreement by force of cl 10 of that agreement such uses of the market share reports, admitted by Telstra, are not permissible uses of such information under the Access Agreement. Nor, if it matters, is the disclosure of such information a permissible disclosure under the Access Agreement.
CONCLUSIONS
[128] For the foregoing reasons, I find that Telstra has used traffic information of Optus, or Communication Information of Optus for the purposes of the Access Agreement, both in the preparation of market share reports and in distributing those reports among Telstra personnel. I also find that such information is Confidential Information of Optus for the purposes of the Access Agreement, or is otherwise subject to the requirements of confidentiality in cl 15 of the Access Agreement, by force of cl 10 of that agreement. I also find that neither such use of such information nor its disclosure for such purposes is permitted by the Access Agreement.
[129] It follows, in my view, that Telstra has breached the relevant provisions of the Access Agreement and is liable to Optus for such breaches. In this part of the proceeding, I am not concerned with the extent of such breaches or other issues going to quantum.'
5 On 4 September 2009, following determination of the liability issues, I ordered that:
On all issues in the proceedings other than those reserved for later determination by order 2 made on 21 November 2007:
1. There be judgment for [Optus] in relation to its claim in contract in paragraph 76 of the Fifth Consolidated Amended Statement of Claim ('FCASOC') based on findings that:
(a) [Telstra] used information which is traffic information (as defined in [8] of the reasons for judgment dated 30 April 2009) of [Optus] ('Traffic Information') which is also Confidential Information of [Optus] for the purposes of clause 1.1 of the Access Agreement between [Optus], [Telstra] and Optus Mobile Pty Limited dated 14 August 1992 ('Access Agreement') or Communication Information of [Optus] for the purposes of clause 1.1. of the Access Agreement otherwise subject to the requirements of confidentiality in clause 15 of the Access Agreement.
(b) [Telstra] breached clause 15.1 of the Access Agreement by:
(i) using Traffic Information from the NUMIS 100 system to prepare weekly STD and IDD market share reports ('Market Share Reports');
(ii) insofar as the Market Share Reports contain Traffic Information, being Confidential Information or Communication Information of [Optus] (each as defined in the Access Agreement), distributing the Market Share Reports among [Telstra's] personnel; and
(iii) insofar as the Market Share Reports contain Traffic Information, being Confidential Information or Communication Information of [Optus] (each as defined in the Access Agreement), using one or more of the Market Share Reports for the purpose of:
(A) marketing, including considering or developing strategy for marketing, products or services of [Telstra] to existing or prospective customers; or
(B) promotion, including considering or developing strategy for promotion, of products or services of [Telstra] to existing or prospective customers; or
(C) selling, including considering or developing strategy for selling, products or services of [Telstra] to existing or prospective customers.
2. [Optus'] claims in equity and under section 51AA of the Trade Practices Act 1974 (Cth) as pleaded in paragraphs 77, 78 and 79 of the FCASOC, be dismissed.'
6 On the same date, I made the following directions as to the further conduct of the proceeding:
'4. [Optus] serve on [Telstra] by 30 September 2009:
(a) a draft list of categories of documents for discovery by [Telstra] in respect of damages; and
(b) particulars of loss and damage.
5. [Telstra] indicate to [Optus] by 30 October 2009 its position on [Optus'] draft list of categories of documents for discovery and an estimate of the time [Telstra] requires to give any discovery.'
7 On 4 March 2010, following the allowance of an application for leave to appeal and an appeal to a Full Court of this Court, the Court ordered that in lieu of that part of para 2 of the orders I made on 4 September 2009 by which Optus' claim in equity was dismissed, there be judgment for Optus on its claim in [77] and [78] of the Fifth Consolidated Amended Statement of Claim (breach of duty of confidence).
Directions as to Discovery and the Ensuing Dispute
8 Pursuant to the directions I made on 4 September 2009 (see [6] above), by letter dated 2 October 2009, Optus' solicitors provided categories of documents for discovery by Telstra relating to loss and damage issues, including the extent of the use by Telstra of the market share reports, as well as particulars of loss and damage.
9 By letter dated 2 November 2009, Telstra's solicitors rejected Optus' proposed categories of documents for discovery by Telstra and complained that the particulars were inadequate.
10 There followed a lengthy exchange of correspondence between the respective solicitors in which the only thing that was achieved was that the parties agreed to disagree on anything and everything.
11 On 14 April 2010, I made directions including a direction in the following terms:
'[Optus] to serve on [Telstra] by 12 May 2010:
(a) any proposed categories of documents for discovery by [Telstra]; and
(b) any request for an affidavit of disclosure by [Telstra] (to the extent [Optus] is able to formulate such a request at this time without the benefit of discovery),
in relation to:
(i) the extent of the use of the Confidential Information/Traffic Information (as defined in the Third Further Amended Application and the Fifth Consolidated Amendment Statement of Claim and paragraph [8] of the reasons for judgment of Edmonds J dated 30 April 2009) by [Telstra]; and/or
(ii) information required to inform [Optus] of matters relevant to making an election between an account of profits and damages.'
12 By letter dated 24 May 2010, Optus' solicitors served categories of documents for discovery by Telstra as well as a request for an affidavit of disclosure by Telstra pursuant to orders I made on 14 April 2010. This request was said to be –
'…served in the interests of attempting to narrow the scope of discovery required in aid of [Optus'] election and on issues of quantum. [Optus] reserves the right to supplement its proposed categories for discovery in the event that any of the following matters are not to form part of any affidavit of the kind proposed.'
13 By letter dated 24 June 2010, Telstra's solicitors provided a response to Optus' proposed categories of documents and request for an affidavit of disclosure, including a lengthy schedule providing comments on each and every proposed category as well as information regarding the likely time and expense Telstra would incur in providing any such discovery.
14 By letter dated 15 July 2010, Optus' solicitors indicated that if Telstra did not consent to give discovery in accordance with the categories of documents attached to its letter of 24 May 2010 or to provide an affidavit of disclosure in the terms attached to that letter, they were likely to receive instructions to file and serve a notice of motion seeking orders to that effect.
15 Further correspondence ensued. By letter dated 30 July 2010, Telstra's solicitors proposed a timetable for Telstra to put its proposal for discovery by Telstra, on or before 13 August 2010, and for Optus to respond to Telstra's proposal by 18 August 2010.
16 Telstra's proposed discovery plan dated 13 August 2010 was served on Optus and Optus' response dated 18 August 2010 was served on Telstra. In its proposed discovery plan, Telstra suggested that Optus ought to be simultaneously required to provide discovery to Telstra on 'loss and damage'. In Optus' response, this was rejected as being premature.
17 By letter dated 2 September 2010, Optus' solicitors set out 'some of the deficiencies evident on a preliminary review of the categories in the 13 August 2010 draft discovery plan', and concluded:
'In light of the above, we repeat our client's request that your client consent to give discovery in accordance with the categories for discovery our client has proposed and which were attached to our letter of 24 May 2010. If your client has specific amendments it considers ought to be made to the form or wording of the categories proposed by our client, we invite you to indicate those amendments. We note that none have been indicated to date.
Our client will rely upon this and our previous letters on the issue of costs in relation to any notice of motion filed by our respective clients on the issue of discovery.'
18 Each party subsequently filed and served a notice of motion seeking orders for discovery by the other in accordance with categories of documents attached and, in the case of Optus' notice of motion, an affidavit of disclosure in the terms attached in a schedule to the motion.
Optus' Motion for Discovery by Telstra
Orders Sought
19 Optus' motion moves the Court for orders, set out in amended notice dated 19 October 2010 and, with leave, filed in Court that day:
'1. That [Telstra] give discovery in accordance with the categories of discovery attached and marked "A", by such date as may be determined by the Court.
2. That subject to Order 3, the discovery referred to in Order 1 be limited to:
(a) the discovery of documents other than documents stored on electronic back up tapes;
(b) the discovery of documents for the period from November 1992 to December 2000 (inclusive).
3. That the limitations identified in Order 2(b) do not apply to the discovery by [Telstra] of:
(a) a copy of each Market Share Report not previously discovered or produced by [Telstra] in these proceedings;
(b) the following material identified at paragraph 30 of the Affidavit of Patricia Anne Henry sworn on 27 September 2010 [Ex A]:
(i) the approximately 35 boxes of documents identified at paragraph 30(a);
(ii) the approximately 10-15 boxes of documents identified at paragraph 30(b);
(iii) the approximately 177 boxes of documents identified at paragraph 30(c); and
(iv) the approximately 56 CDs, floppy discs and zip disks identified at paragraph 30(d).
4. That the issue of whether [Telstra] is to be required to give discovery of documents:
(a) stored on electronic back up tapes; or
(b) in respect of other date periods;
be reserved for later determination.
5. That [Telstra] file and serve an affidavit (or affidavits) providing full details of the matters set out in the schedule attached and marked "B" and annexing copies of documents recording or evidencing those matters, by such date as may be determined by the Court.
6. That [Telstra] pay [Optus'] costs of and incidental to this Notice of Motion.
7. Such further or other orders as the Court thinks fit.
"A"
…
CATEGORIES FOR DISCOVERY BY [TELSTRA]
(A) CATEGORIES RELATING TO BOTH DAMAGES AND ACCOUNT OF PROFITS
Documents relating to distribution and receipt of Market Share Reports
1 All documents which record or evidence the distribution or receipt by any person of the Market Share Reports.
2 Without limiting 1 above, all documents which refer to, record or evidence:
(a) the identities of persons to whom the Market Share Reports were sent or forwarded, or who received or read the Market Share Reports; and
(b) the positions held by, and the responsibilities of, the persons referred to in paragraph 2(a).
Documents relating to use of the market share reports
3 All documents which record or evidence the use of the Market Share Reports.
4 Without limiting 3 above, all documents which refer to, record or evidence:
(a) the purpose for which any person received a copy of a Market Share Report or the information contained within one or more of them;
(b) any consideration of, decision regarding, or discussion of a marketing plan or strategy, sales campaign or promotion which referred to, or had regard to, any information contained within one or more of the Market Share Reports in the period November 1992 to September 2003;
(c) the marketing campaigns developed or run by [Telstra] or on [Telstra's] behalf involving any person who had access to the Market Share Reports during the period from November 1992 to September 2003;
(d) any discussion within [Telstra] about Optus' STD or IDD offers, or [Telstra's] offers, during November 1992 to September 2003 which referred to, or had regard to, any information contained within one or more of the Market Share Reports, including but not limited to any discussions within [Telstra] relating to [Telstra's] $3 offer;
(e) internal communications or correspondence referring to the Market Share Reports within [Telstra] during the period November 1992 to September 2003, including but not limited to any discussion, comment, and/or analysis of any Market Share Report or its contents;
(f) the uses to which the Market Share Reports were put, including, but not limited to:
(i) notes, minutes and agendas of meetings where the Market Share Reports were referred to, relied upon, or informed the content of the matters discussed;
(ii) documents prepared by the recipients of the Market Share Reports which refer to or rely upon the information contained in the Market Share Reports;
(iii) documents recording or evidencing any use or reference made by the recipients of Market Share Reports set out in Schedule 1 to these categories (or any personnel reporting to them).
5 Without limiting 3 above, all documents which refer to, record or evidence:
(a) the value of the Traffic Information or the Market Share Reports;
(b) the usefulness of the Traffic Information or the Market Share Reports, including, but not limited to, the role of Traffic Information in marketing, promotion, selling or in undertaking customer traffic analysis;
(c) the significance of using the Traffic Information or the Market Share Reports;
(d) internal correspondence about the importance of the Traffic Information or the Market Share Reports or its impact on market share;
(e) any consideration, including in any report, of any limitations on the information contained in the Market Share Reports, including without limitation any consideration of the impact or effect of any limitations on the reliability, accuracy or use of the Market Share Reports; or
(f) any expert opinion/s on the above.
6 Without limiting 3 above, all documents recording or evidencing any analysis of the Market Share Reports.
7 Without limiting 3 above, all strategic plans, business plans, product plans, business unit plans or papers, board papers, budgets, forecasts, pricing guidelines, strategies, responses or proposals, or other documents which include references to, or were prepared having regard to, the Market Share Reports.
8 Without limiting 3 above, all documents which refer to, record or evidence:
(a) any analysis of an STD or IDD marketing campaign run by [Optus] in the period from November 1992 to September 2003 referred to or contained within the Market Share Reports or undertaken by any person having access to the Market Share Reports;
(b) what STD and IDD marketing campaigns were run by [Telstra] in the period from November 1992 to September 2003;
(c) how the marketing plans were designed/prepared;
(d) the purpose of each campaign, the reason why it was developed, and its intended or expected outcome;
(e) the results of each campaign, or which analyse or report on the results for each campaign (including the impact on churn);
(f) STD and IDD marketing and campaign budgets and measurements against expected outcomes for the period from November 1992 to September 2003;
(g) sales and marketing reports relating to the above campaigns.
9 Without limiting 3 above, all documents which refer to, record or evidence the impact the use of the Market Share Reports had on [Telstra's] pricing, product, promotion, sales, marketing, strategic or other business decisions, including, but not limited to, any analysis of [Optus'] marketing campaigns or the impact of the use of the Traffic Information by [Telstra] on [Optus] and strategic plans or other documents relating to any business unit within [Telstra] which include references to the Market Share Reports.
Market share reports not previously discovered
10 A copy of each Market Share Report not previously discovered or produced by [Telstra] in these proceedings.
[Footnote:] [Optus] notes that the previous discovery of market share reports by [Telstra] was limited to the date range of January 1997 to February 2000.
Documents relating to the consequences of use
11 All documents referring to, recording or evidencing:
(a) [Telstra's] expectations, plans, proposals, budgets or forecasts with respect to STD and/or IDD market shares (including in terms of number of customers, minutes of use, duration of calls, or estimated revenue) in the period from January 1992 to December 2003;
(b) any discussion, analysis, or report on actual STD and/or IDD market share, market share loss, or market share gain, or the defence or maintenance of market share, or other changes or trends in those markets (including in terms of number of customers, minutes of use, duration of calls, or estimated revenue) in the period from January 1992 to December 2003; or
(c) any discussion, reference to, analysis, or report on the anticipated or actual impact of the entrance of [Optus], and/or [Optus'] continued participation, in the telecommunications market on [Telstra] or on market share in the STD and/or IDD markets (including in terms of number of customers, minutes of use, duration of calls, or estimated revenue), including any discussion, reference to, report or analysis of the impact of the entrant of a competitor on an existing monopolist or market shares in any overseas market in the period from January 1992 to December 2003.
12 Churn reports relating to STD/domestic long distance or IDD/international long distance customers in the period from November 1992 to September 2003.
13 All documents which refer to, record or evidence any analysis of customer churn with respect to the STD or IDD markets in the period from November 1992 to September 2003, including any analysis of:
(a) the impact of marketing campaigns ([Optus'] and/or [Telstra's] campaigns) on customer churn; or
(b) the reasons why customers were churning.
14 All documents which record information about the churn of customers to [Telstra] during November 1992 to September 2003, such as:
(a) the number of customers;
(b) the type of customers;
(c) the STD and IDD calls those customers made, including the volume of calls and call details (including where to, where from, how long, what time of day, call type) and customer/call usage patterns; or
(d) the length of time the customer stayed with [Telstra].
15 All documents which refer to, record or evidence any analysis of or reasons why [Telstra's] or [Optus'] STD or IDD marketing campaigns were or were not successful.
16 All documents recording or evidencing the total size (including in terms of number of customers, minutes of use, duration of calls, estimated total revenue) of the STD and/or IDD markets in the period from January 1992 to December 2003.
17 All documents which record or evidence to what extent [Telstra] was able to arrest, prevent or reduce market share loss to [Optus], or to maintain or increase its own market share, with respect to the STD and/or IDD markets in the period from November 1992 to September 2003.
18 All documents which record or evidence the number, identity and call patterns of customers which had been STD or IDD service customers of [Optus] who became STD or IDD service customers of [Telstra] (either by use of the override code, or by transfer or churn, or by some other means) consequent upon any marketing campaign, promotion, sales strategy or other activity developed having regard to the Market Share Reports or by any person having access to the Market Share Reports in the period from November 1992 to September 2003.
19 All documents which record or evidence in the period from November 1992 to September 2003 the following:
(a) what [Telstra] paid for market research relating to the STD and/or IDD markets and/or customers using services in those markets;
(b) what information and details that market research included (including whether it included Traffic Information);
(c) the timeliness of that market research; and
(d) any attempts by [Telstra] to obtain better or more extensive market research relating to the STD and/or IDD markets and/or customers using services in those markets and the likely costs of doing so.
(B) CATEGORIES RELATING TO ACCOUNT OF PROFITS ONLY
20 All documents recording or evidencing any assessment or analysis of the incremental benefits to [Telstra] as a result of any increase in STD or IDD customers or call volumes.
21 All documents recording or evidencing any assessment or analysis of the financial impact or market share consequences for [Telstra] as a result of STD and/or IDD customers returning to, or remaining with, [Telstra] which had been, or may have been, customers of [Optus] in the period from November 1992 to September 2003.
22 All documents recording or evidencing any assessment or analysis of the growth or reduction in the size of the STD and/or IDD market (in terms of minutes of use, call duration or number of customers) in the period from November 1992 to September 2003 as a consequence of:
(a) the entrance of [Optus] into the STD and IDD markets;
(b) any STD or IDD marketing campaign run by [Optus]; or
(c) any STD or IDD marketing campaign which [Telstra] undertook after having regard to any Market Share Report.
23 All documents which record or evidence the profit made by [Telstra] (including documents which record or evidence the revenue generated and the costs or expenses incurred by [Telstra]) from the customers which had been STD or IDD service customers of [Optus] who became STD or IDD service customers of [Telstra] (either by use of the override code, or by transfer or churn or by some other means) consequent upon any marketing campaign, promotion, sales strategy or other activity developed having regard to the Market Share Reports or by any person having access to the Market Share Reports in the period from November 1992 to September 2003.
24 All documents which record or evidence the stimulation or growth in [Telstra's] STD or IDD services markets (including in terms of minutes of use or call durations) consequent upon any marketing campaign, promotion, sales strategy or other activity developed having regard to the Market Share Reports or by any person having access to the Market Share Reports in the period from November 1992 to September 2003.
25 All documents which record or evidence the profit made by [Telstra] (including documents which record or evidence the revenue generated and the costs or expenses incurred by [Telstra]) as a result of the stimulation or growth in [Telstra's] STD or IDD services markets (including in terms of minutes of use or call durations) consequent upon any marketing campaign, promotion, sales strategy or other activity developed having regard to the Market Share Reports or by any person having access to the Market Share Reports in the period from November 1992 to September 2003.
26 All documents which record or evidence the total revenue derived by [Telstra] from customers pre-selected to [Optus] for STD or IDD services as a result of those customers using the override function to take up an STD or IDD service of [Telstra].
27 All documents which record or evidence any analysis of the financial benefits of increasing or maintaining market share and/or call volumes in the STD or IDD market and/or the financial detriment in decreasing market share and/or call volumes in the STD or IDD market.
Definitions:
For the purposes of these categories for discovery, the following terms have the following meanings:
"All documents" includes, without limitation, letters, facsimiles, emails, file notes, diaries, memoranda, notes of telephone conversations, minutes, board papers.
"Document" has the same meaning as provided for in the Evidence Act 1995, namely:
"any record of information, and includes:
(a) anything on which there is writing, or
(b) anything on which there are marks, figures, symbols or perforations having a meaning for persons qualified to interpret them, or
(c) anything from which sounds, images or writings can be reproduced with or without the aid of anything else, or
(d) a map, plan, drawing or photograph."
"Market Share Reports":
(a) means each (including any one or more) of the STD/domestic long distance and/or IDD/international long distance market share report/s produced by [Telstra] during the period from November 1992 (being the date [Optus] commenced providing domestic and international long distance services) to September 2003; and
b) includes a reference to the Traffic Information contained in any such report.
"Traffic Information" has the same meaning as in paragraphs [8] and [9] of the reasons for judgment of Edmonds J dated 30 April 2009.
Notes:
1. [Telstra] is not required to discover any document which has already been discovered or produced by it in these proceedings (including the Expert Committee proceedings).
SCHEDULE 1 - Known recipients of Market Share Reports
(A) Frank Blount (CEO);
(B) Steven Burton (Market Forecasting & Analysis Team);
(C) Doug Campbell (Group Managing Director);
(D) Peter Campbell (Market Forecasting & Analysis Team);
(E) Anne-Maree Donoghue (Product Analyst, STD/IDD);
(F) Noel Eldridge (Planning Manager - Long Distance Portfolio);
(G) Peter Frueh;
(H) Alison Grant;
(I) Max Jennings (General Manager - Marketing OnAir);
(J) Amanda Lacaze;
(K) Neil Lambert (National Marketing Manager);
(L) Stuart Lee (Managing Director, Long Distance Products and Marketing);
(M) Michael Montalto (Corporate Secretary);
(N) Gerald Moriarty (Group Managing Director);
(0) Harvey Parker (Group Managing Director);
(P) Ted Pretty (Group Managing Director);
(Q) Brett Riley;
(R) Paul Rizzo (Group Managing Director);
(S) Michael Rocca;
(T) Janet Sayer (National General Manager);
(U) Ian Shiers (General Manager);
(V) Peter Shore (Managing Director);
(W) Dick Simpson (Group Managing Director);
(X) John Stanhope (Executive General Manager);
(Y) Ziggy Switkowski (Group Managing Director);
(Z) Graeme Ward (Director/Group Director/Group Managing Director);
(AA) Gilbert Warwick (Director);
(BB) Gillian Welshe (Director);
(CC) Chris Wilkinson (National General Manager);
(AD) Lindsay Yelland (Managing Director/Group Managing Director); and
(AE) any other business unit within [Telstra].
"B"
…
AFFIDAVIT(S) OF DISCLOSURE BY [TELSTRA]
[Telstra] is to file and serve an affidavit (or affidavits) providing full details of the matters set out below and annexing copies documents recording or evidencing those matters:
1 Each instance of use by or on behalf of [Telstra] of Market Share Reports for any of the following purposes:
(a) marketing, including considering and developing strategy for marketing, products or services of [Telstra] to existing or prospective customers;
(b) promoting, including considering and developing strategy for promoting, products or services of [Telstra] to existing or prospective customers;
(c) selling, including considering and developing strategy for selling, products or services of [Telstra] to existing or prospective customers;
(d) assessing market trends in the Australian telecommunications market; and
(e) assessing the performance of [Telstra] or its business units in the Australian telecommunications market.
2 Any assessment or analysis conducted by or on behalf of [Telstra] in the course of its business of customers and/or market share retained by [Telstra], gained by [Telstra] or "won back" by [Telstra] from [Optus] wholly or partly as a result of or following any instance or instances of use of Market Share Reports referred to in paragraph 1 above.
3 The revenue received and costs incurred by [Telstra] or on its behalf in respect of:
(a) each instance of use of Market Share Reports referred to in paragraph 1 above; and
(b) each retention of, gain in or "winning back" of customers and/or market share referred to in paragraph 2 above.
4 Such overheads as [Telstra] would contend be taken into account in any calculation of its profits in respect of:
(a) each instance of use of Market Share Reports referred to in paragraph 1 above; and
(b) each retention of, gain in or "winning back" of customers and/or market share referred to in paragraph 2 above.
5 The approximate amount of profit [Telstra] contends it made as a result of:
(a) each instance of use of Market Share Reports referred to in paragraph 1 above; and
(b) each retention of, gain in or "winning back" of customers and/or market share referred to in paragraph 2 above,
including how that amount has been calculated and any assumptions underlying the calculation.
6 A yearly breakdown of the revenues, costs and overheads of [Telstra] relating to its STD and IDD services, or the STD and IDD markets, in the period from November 1992 to September 2003; including which revenues, costs and overheads were fixed and which were variable.
Definitions:
For the purposes of this request, the following terms have the following meanings:
"Market Share Reports":
(a) means each (including any one or more) of the STD/domestic long distance and/or IDD/international long distance market share report/s produced by [Telstra] during the period from November 1992 (being the date [Optus] commenced providing domestic and international long distance services) to September 2003; and
(b) includes a reference to the Traffic Information contained in any such report.
"Traffic Information" has the same meaning as in paragraphs [8] and [9] of the reasons for judgment of Edmonds J dated 30 April 2009.'
Telstra's Proposed Discovery Plan
20 As noted in [16] above, on or about 13 August 2010 Telstra served a proposed discovery plan on Optus. It dealt with a number of matters including discovery by Telstra, the criteria by reference to which it proposed to give discovery, as well as an account of the historical context in which that discovery was to take place. These are matters to which I shall return. The proposed discovery plan also dealt with an indication of how Telstra intended to go about the tasks of searching and identifying potentially relevant documents, the reporting back to Optus and the Court on the results of carrying out those tasks and its proposal for discovery by Optus. I propose to refer to certain passages from this document because, on the hearing of the respective motions, it formed the basis upon which Telstra resisted the discovery sought by Optus pursuant to its amended notice of motion. For present purposes, it is only necessary to refer to those passages dealing with discovery by Telstra, including the criteria by reference to which it proposed to give discovery:
'Summary of Telstra's discovery plan
4 In summary Telstra's discovery plan proposes that:
(a) Telstra's further discovery will go to the remaining issue of the extent of use of the IDD and STD market share reports for sales, marketing and promotional purposes during the periods 1993 – 1996 and 2000, and the alleged loss and damage and/or profits arising from the use of IDD and STD Market Share Reports for sales, marketing and promotional purposes during the period 1993 – 2000;
(b) the pool of documents from which Telstra will make discovery will be based on backup tapes to be restored from the years 1995 – 2000, supplemented by hard copy archived material for the years 1993 – 1995;
(c) Telstra will undertake and report back to Optus and the Court on the results of an initial scoping and search exercise of the available material based on the search terms set out in Annexure A ("Search Terms") and relevant senior personnel at Telstra set out in Annexure B ("Key Personnel") with a view to agreeing the pool of documents to be reviewed for discovery and likely time frames. This is a key step in the process. For the reasons given below, Telstra estimates that this initial scoping and search exercise will take up to 10 weeks to complete. Depending on the results of that initial review, it may be necessary for further agreement on the scope of restoration of backup tapes and refinement of the Search Terms and Key Personnel;
(d) all discovery be undertaken by Telstra by reference to the application of the categories of high level documents set out in annexure C ("Categories"), the Key Personnel and Search Terms. Having regard to the sources of data that potentially contain documents that are relevant to the remaining issues in these proceedings, it is simply not achievable within any reasonable time period for Telstra to undertake discovery based on the 27 or so unnecessarily broad categories proposed by Optus to date; and
(e) Optus provide discovery on the remaining issues of the alleged loss and damage from the use of IDD and STD market share reports for sales, marketing and promotional purposes during the period 1993 - 2000, and in responding to this discovery plan also provide its own proposal to Telstra and the Court by 18 August on how it will undertake that discovery and time frames.
5 Telstra puts forward this proposal assuming further discovery is to be ordered by the Court and on the basis that no subsequent discovery will be sought by Optus in the future in these proceedings.
Context of any further discovery
6 Any further discovery ordered by the Court must take into account the following significant facts:
(a) Telstra has already searched for, reviewed and discovered an extensive amount of documentation in the proceedings, including 7 rounds of discovery and under the notice to produce in 2008;
(b) the proceedings relate to a time period spanning from almost 17 years ago and as a result, nearly all relevant employees are no longer in Telstra's employ; and
(c) further discovery will be based on to be restored electronic data and archived hard copy records.
7 The previous discovery and production by Telstra included documents relating to the remaining issue of the extent of use: that is, what Telstra did with and what use was made of Optus confidential traffic information in the market share reports as pleaded. See for example, categories for discovery 1(c) and 1(d) of 30 September 1999 which required Telstra to give discovery of "all documents from 1 January 1997 to date supplied to and/or created by marketing and sales personnel as a result of access to Optus confidential information ..." and "…all documents from 1 January 1997 to date created, produced or generated by marketing and sales personnel as a result of being granted access to and/or being furnished with Optus confidential information", as well as paragraphs 1(g), 4(a), (e) of Optus' notice to produce.
8 In giving discovery of "use" and "extent of use" documents, Telstra has already made enquiries of in excess of 1400 current and past employees, most of those enquiries having been verified by affidavit of Vasilyki Eliades on 20 July 2000.
9 Having regard to the extent of those past enquiries, the review of documents according to Optus' prior categories and notice to produce and production of documents in response, it would be unreasonable and disproportionate to expect it to have to undertake at this stage of the proceedings another round of extensive document review and discovery on the issue of "use" and "extent of use" for the period previously covered, being 1997 to early to mid 2000, Telstra has admitted production of Market Share Reports up to November 2000. Further, there has been no evidence or findings against Telstra of the preparation of Market Share Reports after November 2000. The remaining issue is therefore limited to the extent of use of the market share reports in evidence before the Court on the liability hearing, being up to November 2000. In other words, what remains in issue is the extent of any use for the purpose of sales, marketing or promotion of the Traffic Information from the Market Share Reports proved at the liability hearing.
10 For these reasons, Telstra proposes that any further "extent of use" discovery be limited to the periods 1993 – 1996 and 2000.
11 Telstra accepts that discovery has not yet been given by either party in relation to damages, equitable compensation or an account of profits. It notes however that damages was an issue before the Expert Committee and Optus choose not to seek discovery on that issue at that stage. Telstra should not be prejudiced by any difficulties in its ability to produce material now when Optus had the opportunity to request relevant documents on those issues at that time.
12 Telstra also does not concede Optus' right to an account of profits, either as a matter of law or as a discretionary matter, for reasons including those put forward in Telstra's recent special leave application. However, Telstra's discovery plan proposes that it undertake discovery of documents relevant to damages and an account of profits given the orders made by the Full Court.
…
Discovery review – refined categories
37 Having identified the pool of potentially relevant documents and undertaken all restoration, retrieval and electronic imaging and de-duplication processes, Telstra proposes to discover documents by reference to the:
(a) Categories, which are primarily defined by document type, rather than broad categories;
(b) Key Personnel; and
(c) Search Terms.
38 Annexure C sets out the Categories proposed by Telstra. Only those documents that fall within the Categories and relate to the Key Personnel and Search Terms from the pool of potentially relevant documents will be discovered.
39 In accordance with usual protocols, Telstra proposes that parts of documents that are not relevant to the remaining issues in the proceedings will be masked. Privileged material in documents will also be masked.
…
ANNEXURE A - Search Terms
| Primary search term | Exclusionary search terms (ie contains primary search term but does not contain any of ...) | ||
| BUParis3 |
| ||
| Campaign AND C&C (Commercial and Consumer) or P&M (Products and Marketing) or RP&M (Retail Products and Marketing) or B&G (Business and Government) or IDD or STD or Long Distance |
| ||
| Churn |
| ||
| "Long distance" | TELEGRAPH, CABLE, EXCHANGE, EXCH, PROPAGATION, SCHOOL, SWITCHING, TRANSMISSION | ||
| IDD | 198* (a "wildcard" term that will capture all document with dates in the 1980s), QUALITY | ||
| International AND weekly, or monthly, or quarterly or annual or C&C (Commercial and Consumer) or P&M (Products and Marketing) or RP&M (Retail Products and Marketing) or B&G (Business and Government) | IMPERIAL, EMPIRE, TELEGRAPH, TELEGRAPHIC, TELEGRAM, CABLE, CONFERENCE, CODE, WIRELESS, RADIO, REGULATIONS, OTC, INTERCONNECTION, ASSISTANCE, EXPO, SYMPOSIUM, EMPLOYMENT, ROUTING, ENGINEERING, | ||
| "Market share" AND C&C (Commercial and Consumer) or P&M (Products and Marketing) or RP&M (Retail Products and Marketing) or B&G (Business and Government) or IDD or STD or |
| ||
| Marketing AND C&C (Commercial and Consumer) or P&M (Products and Marketing) or RP&M (Retail Products and Marketing) or B&G (Business and Government) or IDD or STD or |
| ||
| NUMIS | 66 | ||
| Optus | 198* (a "wildcard" term that will capture all document with dates in the 1980s), QUALITY, TRAINING, WHOLESALE, PAY TV, CONSTRUCTION, CABLING, TECHNICAL, BUILDINGS, INSTALLATION, EXCHANGE, EXCH, INTERCONNECT, SUBPOENA, ARBITRATION FASTWAY, ONRAMP, F/WAY, INVOICES, BILLING |
3 BUParis is a type of financial report
| "Post implementation" AND C&C (Commercial and Consumer) or P&M (Products and Marketing) or RP&M (Retail Products and Marketing) or B&G (Business and Government) or IDD or STD or Long Distance |
| ||
| "Pricing proposal" AND C&C (Commercial and Consumer) or P&M (Products and Marketing) or RP&M (Retail Products and Marketing) or B&G (Business and Government) or IDD or STD or Long Distance |
| ||
| Profit AND C&C (Commercial and Consumer) or P&M (Products and Marketing) or RP&M (Retail Products and Marketing) or B&G (Business and Government) or IDD or STD or Long Distance |
| ||
| Promotion AND weekly, or monthly, or quarterly or annual or C&C (Commercial and Consumer) or P&M (Products and Marketing) or RP&M (Retail Products and Marketing) or B&G | EMPLOYEE, EMPLOYMENT, APPOINTMENT, STAFF, PERSONNEL, TECHNICAL | ||
| Reports AND weekly or monthly or quarterly or annual or C&C (Commercial and Consumer) or P&M (Products and Marketing) or RP&M (Retail Products and Marketing) or B&G (Business and Government) or IDD or STD or Long Distance | CABLE, CABLING, SERVICE, EQUIPMENT, PROGRESS, TECHNICAL, WORKS, QUALITY, ASSURANCE, OUTAGE, INCIDENT, ENGINEERING, SERVICE, PERSONNEL, BUILDING, SITE, STAFFING, FAULT, HEALTH, OHS, MEDICAL, RESOURCES, CAPABILITY, CREDIT, MAINTENANCE, EEO, COMPLAINT, CONFERENCE | ||
| Research AND weekly, or monthly, or quarterly or annual or C&C (Commercial and Consumer) or P&M (Products and Marketing) or RP&M (Retail Products and Marketing) or B&G (Business and Government) or IDD or STD or Long Distance | TECHNICAL, CABLE, ENGINEERING, EQUIPMENT, MEDICAL, HEALTH, FAULT, LAB, LABORATORIES, FACILITY, FACILITIES, TAXATION, MINISTER | ||
| Revenue AND C&C (Commercial and Consumer) or P&M (Products and Marketing) or RP&M (Retail Products and Marketing) or B&G (Business and Government) or IDD or STD or | RENT, LEASE, BUILDINGS, ENGINEERING, TELECOM, STAFF | ||
| Sales AND C&C (Commercial and Consumer) or P&M (Products and Marketing) or RP&M (Retail Products and Marketing) or B&G (Business and Government) or IDD or STD or Long Distance | TELECOM, HUMAN, TAX, TAXATION, CONFERENCE, WIRELESS, MOBILE, INSURANCE, DEMONSTRATION, EXHIBITION, ASSISTANT, ASSET, ISDN | ||
| SLT | BANKING, SECURITY, BUILDINGS, "INCIDENT REPORT", "REGISTER ROLLS" | ||
| STD | EXCHANGE, "EXCHANGE FACILITIES", INSTALLATION, ANTENNA, "MAJOR BUILDINGS", "CCITT", "CCIR", FIELD, ENGINEERING | ||
| Strategy AND C&C (Commercial and Consumer) | CORPORATE, CAREER, CABLE, TECHNICAL, ENGINEERING, REDEPLOYMENT, TELECOM, PAY TV, SITES, DISABILITY, EEO, "WASTE MANAGEMENT", ACCOMMODATION, OHS | ||
| "Trading statement" AND C&C (Commercial and Consumer) or P&M (Products and Marketing) or RP&M (Retail Products and Marketing) or B&G (Business and Government) or IDD or STD or Long Distance |
| ||
| Traffic AND C&C (Commercial and Consumer) or P&M (Products and Marketing) or RP&M (Retail Products and Marketing) or B&G (Business and Government) or IDD or STD or Long Distance | OTC, TELECOM, CABLE, ENGINEERING, EXCHANGE, SIGNALS, VEHICLE, MOTOR, FLEET, ROADS, BUILDING, OFFICER, ROUTING | ||
| $2 |
| ||
| $3 |
| ||
| "$15 maximum call" |
| ||
| "$2 maximum charge for long distance calls" |
| ||
| "$20 call per hour" |
| ||
| "$20 maximum call" |
| ||
| "$20 off to the world" |
| ||
| "$20 per hour Off Peak" |
| ||
| "$20 per hour special" |
| ||
| "$25 maximum call" |
| ||
| "$3 offer" |
| ||
| "$3 special" |
| ||
| "$35 maximum call charge" |
| ||
| "$35 per hour special" |
| ||
| "$4.50 for 10 minutes" |
| ||
| "20 minutes is all you pay" |
| ||
| "20 Minutes Then Free" |
| ||
| "20% off for Optus Networks' pre-selected residential customers to all destinations" |
| ||
| "20% off to the world" |
| ||
| "30% off special" |
| ||
| "Autumn Moon" |
| ||
| "Call free after 20 minutes" |
| ||
| "Chinese New Year special" |
| ||
| "Every third minute free" |
| ||
| "Half price happy hour" |
| ||
| "No more than 10 cents" |
| ||
| "Pay first 10 minutes" |
| ||
| "Pay first 20 minutes then free" |
| ||
| "Pay for the first 15 minutes" |
| ||
| "Pay for the first 20 minutes then free to various countries" |
| ||
| "Pay for the first 20 minutes" |
| ||
| "Pay for the first 25 minutes" |
| ||
| "Saturday special" |
| ||
| "St Patrick" |
| ||
| "Super off-peak special" |
| ||
| "Weeknight $3 per call special" |
| ||
| "World Happy Hour" |
| ||
ANNEXURE B - Relevant Personnel
| Name | Position |
| Frank Blount | Chief Executive Officer until 28 February 1999 |
| Steven Burton | |
| Doug Campbell | Group Managing Director - Wholesale and International (1999 onwards) |
| Peter Campbell | Products and Marketing - Modelling, Forecasting and Performance |
| Anne-Maree Donohue | Commercial and Consumer - Marketing |
| Noel Eldridge | Manager, Planning and Analysis – Commercial and Consumer – Long Distance Portfolio (1994 to 1996) Planning Manager – Long Distance Portfolio (1996 to 1999) |
| Peter Frueh | Managing Director – Products and Marketing – Business Development |
| Alison Grant | Manager, Products and Solutions/Marketing, Small and Medium Enterprise |
| Amanda Lacaze | National General Manager - Commercial and Consumer Marketing |
| Neil Lambert | Acting National General Manager - Market Information - Products and Marketing |
| Stuart Lee | Various including managing Director Long Distance, RP&M 1996 – 1998 |
| Harvey Parker | Group Managing Director – Commercial and Consumer |
| Ted Pretty | Group Managing Director – Telstra Retail (2000 onwards) |
| Brett Riley | |
| Michael Rocca | Managing Director – Commercial and Consumer (1999) |
| Peter Shore | Group Managing Director – Commercial and Consumer (1998 onwards) |
| Ziggy Switkowski | Chief Executive Officer from 1 March 1999, Group Managing Director – Business and International (1998) |
| Gilbert Warwick | |
| Chris Wilkinson | Managing Director - Products and Marketing (2000) |
| Lindsay Yelland | Group Managing Director – Retain Products and Marketing (1996), Group Managing Director – Telstra Business Solutions (1999 onwards) |
ANNEXURE C – Categories
Notes and Definitions
Documents will only be discovered to the extent that the author/recipient was one of the Relevant Personnel.
Terms defined in Optus' Fifth Consolidated Amended Statement of Claim ("FCASC") have the same meaning when used in this document, except where otherwise indicated.
"Communications" includes letters, facsimiles, memoranda, notes, and emails (including attachments).
"High level documents" means reports, analyses, financial statements produced on a regular basis and does not include ad hoc communications.
"Market Share Reports" means each (including any one or more) of the STD and IDD market share report/s produced by the Respondent during the period from January 1993 to November 2000 as described in paragraphs 16, 17, 23, 29, 30 and 35 of the FCASC.
"Relevant Period" means 1 January 1993 to 30 November 2000 (inclusive).
"Relevant Personnel" means those persons listed in Annexure A.
"Traffic Information" means information of the kind identified in paragraph [8] of the judgment of Edmonds J delivered in these proceedings on 30 April 2009.
Evidence
21 Optus relied on three affidavits sworn by Mr Bruce Hambrett, the first on 20 September 2010 together with a two volume exhibit marked 'BH-1' (Ex 1); the second on 24 September 2010 (Ex 2); and the third on 12 October 2010 together with a one volume exhibit marked 'BH-2' (Ex 3).
22 Telstra relied on an affidavit sworn by Ms Patricia Anne Henry on 27 September 2010 together with a one volume exhibit marked 'PAH-1' (Ex A).
Overview of Dispute
23 One, indeed the main difficulty in resolving the present impasse between the parties is their respective positions. Telstra's starting point, as embodied in its solicitors' letter of 2 November 2009, was that Telstra did not accept that Optus should necessarily be entitled to any additional discovery in relation to the remaining issues in this proceeding, in circumstances where:
(1) Telstra has already given extensive discovery (seven rounds) based on categories drafted by Optus at a time well before I made orders to split the hearing;
(2) a significant volume of documents were produced by Telstra under Optus' notice to produce dated 10 June 2008 at the last hearing on issues that included the use of the Market Share Reports;
(3) evidence has been filed in the proceedings which clearly deals with the issue of the extent of use of the Market Share Reportss;
(4) the proceedings relate to events which took place up to 16 years ago and conduct which ceased in 2000; and
(5) there have been many, significant delays by Optus in prosecuting the proceedings since their commencement.
24 Even accepting the veracity and relevance of all these circumstances, and the veracity or relevance of a number, correctly in my view, is strongly disputed by Optus, such a starting point must be rejected out of hand. Telstra seems to now accept that further discovery is necessary, although not to the extent sought by Optus: see paras 9 – 11 of Telstra's proposed discovery plan in [20] above. Absent further discovery by Telstra of documents going to the issues reserved by the order I made on 21 November 2007 would render nugatory the findings made in the reasons for judgment (see [4] above), the consequential orders made on 4 September 2009 (see [5] above) and the orders made on 4 March 2010 (see [7] above).
25 On the other hand, I am equally of the view that those findings (and the admissions on which those findings are predicated) should control or inform the scope of the discovery to be given by Telstra (and Optus) in relation to the reserved issues, although the pleadings may also have a role to play.
26 So far as the findings (and the admissions on which they are predicated) are concerned, the Court found that insofar as the market share reports contained traffic information of Optus, being Confidential Information of Optus (for the purposes of the Access Agreement), or Communication Information of Optus (for the purpose of the Access Agreement) which is subject to the confidentiality requirements of cl 15 of the Access Agreement, by force of cl 10 of that agreement, it was Telstra's uses of such information in the preparation of market share reports and their distribution among Telstra personnel –
(i) for the purpose of marketing, including considering or developing strategy for marketing, products or services of Telstra to existing prospective customers; or
(ii) for the purpose of promoting, including considering or developing strategy for promotion, products or services of Telstra to existing or prospective customers; or
(iii) for the purpose of selling, including considering or developing strategy for selling, products or services of Telstra to existing or prospective customers
which were impermissible uses of such information under the Access Agreement, and that was what constituted both a breach of that agreement and an equitable duty of confidence by Telstra: see [126] – [129] of the reasons for judgment in [4] above and Order 1 made on 4 September 2009 in [5] above. In other words, it is the extent of Telstra's uses of such information in the preparation of market share reports and their distribution among Telstra personnel for any of the purposes in (i), (ii) or (iii) above, and not the extent of all of Telstra's uses of such information for any purpose, which inform the scope of the discovery to be given by Telstra.
27 So far as the pleadings are concerned, they may inform the scope of the discovery to be given by reference to indicia referred to therein subject to the usual limitations including, but not confined to, those found in O15 r 2 of the Rules and Practice Note CM5. In the present case, the time periods pleaded are undoubtedly relevant subject to prior discovery and production of documents in response to notices to produce, as well as evidentiary considerations going to the fair conduct of the case.
28 Having regard to what is said in [26] above, it is clear, in my view, that the categories of documents that Optus seeks Telstra discover go much too far. If only for that reason, I favour the form of the categories proposed by Telstra in Annexure C of its proposed discovery plan (see [20] above, but they too must be adjusted by the addition of at least one further category, namely, market share reports, and by changing temporal and other criteria which would otherwise fetter, unreasonably in my view, the scope of discovery that Telstra should give. I have to say that I find this task that the Court has been left with to be totally unsatisfactory; just as I have no doubt that my endeavour in seeking to resolve this unsatisfactory state of affairs will be viewed by each party as equally unsatisfactory. But if that is as it has to be, neither party can complain.
Categories of Discovery
29 Clearly, Telstra should not be required to discover any document which has already been discovered or produced by it in these proceedings (including the Expert Committee proceedings). Consistently with O 15 r 2(4) of the Rules, it would be reasonable for Telstra to believe that any such document is already in the possession, custody or control of Optus.
30 In addition to the eleven categories set out in Annexure C to Telstra's proposed discovery plan, a further category should be added, namely, all 'Market Share Reports' (as defined in Annexure C, subject to the change referred to at [31] below) prepared by Telstra during the period from January 1993 to September 2003 (when the NUMIS 100 computer system from which the Market Share Reports were prepared was apparently decommissioned), other than such of those reports previously discovered or produced in these proceedings (including the Expert Committee proceedings). Telstra resists the temporal scope of this additional category; first, on the basis that while it has admitted the preparation of such reports until November 2000, there is no evidence that they were prepared after that time and, secondly, on the basis that discovery of such reports for the period January 1997 to January 2000 has already been given. I am not satisfied that there should be a temporal 'carve-out' for either of those periods. The 'carve-out' for prior discovery will largely, if not wholly, accommodate Telstra's objection to discovery of this category for the second period. Telstra's resistance to the first period in this category is largely built on the allegation that, having regard to the state of the evidence, such discovery amounts to 'fishing'. On the other hand, the Market Share Reports are 'foundation' documents in this case. They lay at the heart of the findings on liability in the reasons for judgment; so much is exemplified at [114] and [115] of those reasons:
'[114] There can be no doubt that in preparing the market share reports Telstra used traffic information of Optus; certainly not every element of such information, but at least the aggregate quantity of Optus' traffic that travelled over Telstra's network; perhaps more. Telstra's argument that it only used the total aggregate traffic that travelled over its network and calculated Telstra's market shares in the various categories from its knowledge of Telstra's own traffic, and therefore did not use traffic information of Optus, is facile in the face of the indisputable fact that Telstra could not calculate the total aggregate of traffic that travelled over its network without bringing to account, and in that sense using, the aggregate of Optus' traffic that travelled over Telstra's network.
[115] Moreover, it is clear from at least December 1997, from which time carriers other than Optus were using Telstra's network, that Telstra used traffic information of Optus, not only in calculating the total aggregate of traffic that travelled over its network, but in identifying directly the quantity of Optus' traffic that travelled over its network independently of the traffic of other carriers that travelled over Telstra's network and that of Telstra itself. The STD and IDD Market Share Report for the week ending December 6, 1997 illustrates such use.'
Equally, they are likely to be 'foundation' documents to the issue of the extent of that liability; as evidence going to the extent of the impermissible uses of the relevant information for the relevant purposes. Moreover, the pleadings – see para 15 of the Fifth Consolidated Amended Statement of Claim – put the use of such information during the extended period in issue. This, coupled with the fact that the orders made on 4 September 2009, which reflect the findings of breach, do not incorporate any date limitations, leads me to the view that Telstra should be required to discover all Market Share Reports it prepared during the period from January 1993 to September 2003 other than reports previously discovered or produced.
31 The definition of 'Market Share Reports' as defined in Annexure C should be altered by the deletion of the words 'during the period from January 1993 to November 2000'.
32 The temporal periods referred to in Categories 1, 2 and 5 in Annexure C should not exclude the period January 1997 to January 2000. The period for each category should extend from 1 March 1993 to 30 November 2000 subject of course to prior discovery or production. This might be achieved by the substitution of the words 'during the Relevant Period' for the words 'during the periods … 30 November 2000' in each of Categories 1 and 2 and the substitution of the same words for the words 'in the period … 30 November 2000' in Category 5.
33 At this point in time, I am satisfied that the list of Relevant Personnel (Annexure B) is adequate for the purposes of Categories 1 and 2, as is the definition of 'High level documents' in Annexure C for the purposes of Categories 8, 9, 10 and 11.
34 I am also of the view that the categories of documents which Telstra should be obliged to discover in relation to the reserved issues should be left uncluttered by orders going to the sources from which that discovery is to be given and, in the case of searches of electronic records, the search terms to be used in the process. At the end of the day, those are matters that Telstra is in the best position to determine which are the most efficient in terms of time and cost. Telstra will, however, in pursuance of the orders I contemplate being made to give effect to these reasons, be obliged to disclose by affidavit all relevant details of the searches it has undertaken for hard copy documents and of the terms it has used in undertaking electronic searches so that only if the product of those searches or the searches themselves can be shown to be manifestly inadequate or deficient, should there be any consideration of further discovery.
35 In this latter regard, I repeat what I said, in effect, to counsel for Optus on the hearing of the respective motions that I am not prepared to make an order in the terms of that set out in [4] of Optus' amended notice of motion. This is not to say that any further discovery is foreclosed; it would depend on the outcome of the discovery to be presently given and the circumstances prevailing at the relevant time. For example, if discovery of Market Share Reports showed that these continued to be produced by Telstra after November 2000 for a substantial period until the NUMIS 100 was decommissioned in September 2003, an application for further discovery of other categories for that period may well be warranted and entertained.
Affidavit of Disclosure
36 As noted in [12] above, this was said to be 'served in the interests of attempting to narrow the scope of discovery required in aid of [Optus'] election and on issues of quantum'.
37 In its written outline of submissions, Optus submitted that:
(1) The provision of an affidavit of disclosure in terms of Schedule 'B' (see [19] above) is a conventional course in cases involving the infringement of intellectual property rights and misuse of confidential information. Reference was made to a number of authorities including: LED Builders Pty Ltd v Eagle Homes Pty Ltd (1996) 70 FCR 436 at 451; Dr Martens Australia Pty Ltd v BATA Shoe Company of Australia Pty Ltd (1997) 75 FCR 230 at 235 – 236; Polyaire Pty Ltd v K-Aire Pty Ltd (No 2) [2005] SASC 386 at [7], [20] and Polyaire Pty Ltd v K-Aire Pty Ltd (No 4) [2007] SASC 36; Dias Aluminium Products Pty Ltd v Ullrich Aluminium Pty Ltd (No 2) (2005) 225 ALR 569 at [14] per Crennan J; Barrett Property Group Pty Ltd v Carlisle Homes Pty Ltd (No 2) [2008] FCA 930; as well as the orders made by Heerey J in that matter on 28 April 2008; and orders made by Allsop J on 9 November 2007 in proceeding NSD 1089 of 2000 between Doric Productions Pty Ltd and Lockwood Security Products Pty Ltd; Nokia Corporation v Liu (2009) 179 FCR 422 at [39] read with [7].
(2) In circumstances such as the present, where the Court has found that Telstra has misused Optus' confidential information, the purpose of the affidavit is to assist Optus to quantify an account of profits. Reference was made to the observation of the Full Court ([2010] FCAFC 21) at [41]:
'Optus is entitled to make an informed election between damages for breach of clause 15 and an account of profits.'
(3) This observation was said to reflect the sentiment expressed by Lightman J in Island Records Ltd v Tring International Plc [1995] 3 All ER 444 at 447 as follows:
'[A] party should in general not be required to elect or be found to have elected between remedies unless and until he is able to make an informed choice. A right of election, if it is to be meaningful and not a mere gamble, must embrace the right to readily available information as to his likely entitlement in case of both the two alternative remedies. It is quite unreasonable to require the plaintiff to speculate totally in the dark as to whether or not the sum recoverable by way of damages will exceed that recoverable under an account of profits.'
(4) In addition to assisting Optus to make an election, the affidavit of disclosure reduces the scope of discovery, including in relation to any future discovery by means of the restoration of further back-up tapes. It may also limit the need for Telstra to disclose sensitive business records to a trade rival. Outcomes of this kind are consistent with the overriding purpose laid down by s 37M of the Federal Court of Australia Act 1976 (Cth).
(5) In response to Telstra's response that factors such as the effluxion of time and gaps in its records make the preparation of the affidavit oppressive, and will take 'a great deal of time and cost to prepare', should be rejected. As recognised by Besanko J in Polylaire (No. 2) at [21], the fact that an order for an affidavit of disclosure may be onerous, from the point of view of the party who has been found liable, does not provide a reason in such a case for not making the order.
38 In its written outline of submissions, Telstra submitted that:
(1) the test of whether an affidavit or affidavits of disclosure should be ordered is no different from that applicable to ordering discovery. The question is what is necessary for the fair conduct of the remainder of the proceedings, informed by the mandatory considerations of what is quick, inexpensive and efficient.
(2) While it accepts that Optus is not obliged to make an uninformed election between compensatory remedies and an account of profits, an informed election does not require discovery and affidavits at any cost; it does not require the unnecessary. Optus will be sufficiently informed as a result of Telstra's discovery.
(3) Mr Hambrett's evidence at para 32 of Ex 1 is the sum total of the evidence supporting Optus' application for affidavits of disclosure:
'The affidavit referred to in paragraph 4 of the notice of motion is designed to narrow the scope of discovery which would otherwise be required on issues of quantum and to inform the Applicant of relevant matters to an election between damages and an account of profits.'
With respect, that is not sufficient to discharge Optus' onus on its motion.
(4) Although it is said that the affidavit of disclosure is 'designed to narrow the scope of discovery which would otherwise be required', it is hard to see what more discovery Optus could want or what areas of discovery it has abandoned in favour of the affidavit of disclosure. It does not identify them. If anything, the affidavits of disclosure serve to exacerbate the problems of time, cost and inefficiency by demanding yet more discovery by a different name.
(5) Ms Henry's evidence at paras 75 to 78 of Ex A is that it may not be possible to comply with an order to provide such affidavits. Five reasons are given. They are compelling. In summary, Ms Henry's evidence is to this effect:
(a) To comply with an order to swear an affidavit or affidavits covering the matters which Optus seeks it would, in practice, first require Telstra to have undertaken a de facto discovery so it could identify if any Market Share Reports were used and, if so, how. Optus does not grapple with this issue at all in its submissions.
(b) the documents which are available may be an incomplete record of all relevant documents and transactions and few relevant employees remain with Telstra. There may therefore be an inadequate basis for deponents to swear to the matters on which Optus seeks Telstra to depose. Optus ignores this practicality.
(c) few relevant employees remain at Telstra from the period in question. Those who have left, even if they could be located, are under no obligation to assist Telstra and have no incentive to do so. Mr Hambrett complains that he faces a similar problem in relation to discovery sought by Telstra yet Optus refuses to acknowledge Telstra's difficulty. In any event, this could mean that Telstra is unable to obtain the information necessary to compile the affidavit or does not have the deponent necessary to swear it.
(d) the matters to which the affidavits relate commenced 17 years ago. It stands to reason that there is a strong likelihood that the memories of relevant employees (or former employees) would be impaired by the effluxion of time and they may be unable to swear an affidavit deposing to facts with any reasonable degree of confidence, completeness or accuracy. It would be unreasonable to require them to do so.
(e) the time and cost to prepare such affidavits would be disproportionate to the utility of the affidavits having regard to the limitations in the material available, the range of deponents available and the enormity of the discovery, or de facto discovery, which would first have to take place.
(6) Ms Henry states that the preparation of such affidavits would take a great deal of time and cost to prepare. It is, at this stage, understandably unquantifiable but she compares it with the process of answering interrogatories. That process took 8 – 12 weeks to complete. Ms Henry's opinion is that, given the limited nature of the interrogatories and the fact that they did not go to 'extent of use' or issues of relief, the time necessary to prepare affidavits of the kind sought by Optus would be very greatly in excess of that time and could be as long as or in excess of the time taken to give discovery.
(7) Notwithstanding that evidence, Optus, without any evidentiary support, says 'the costs of this exercise should not exceed $50,000'. That is inherently implausible and there is simply no evidence to support that estimate. It has earlier said that 'there is no dispute that the hearing on quantum is likely to be complicated, involving expert accounting and economic evidence' and 'plainly, that hearing and preparation for it will be lengthy and will involve significant cost'.
(8) At [41] of its submissions, Optus states 'broadly and in summary' the topics to be dealt with. This hides the vice of what it really seeks, which can only be judged by looking at each paragraph in Schedule B to its amended notice of motion. However, by way of response to its broad summary:
(a) Optus wants an affidavit(s) covering '[i]nstances of use of Market Share Reports for marketing, promotional, sale, market trend and performance purposes'. It seeks these very things by its discovery categories. Further, purposes beyond marketing, promotional and sales purposes are outside the ambit of the pleadings and judgment.
(b) Optus wants '[a]ssessment or analyses of customers or market share retained, gained or "won back" as a result of Telstra's use of Market Share Reports'. Again, it seeks these very things in its discovery categories. The problematic aspects of the 'as a result of' criterion are mentioned below.
(c) Optus wants '[r]evenue received and costs incurred in respect of the above matters'. These are also covered by the discovery categories.
(d) Optus wants '[r]elevant "overheads" for the purposes of calculation of Telstra's profit from use of Market Share Reports'. This assumes that it is possible for Telstra to know, before findings of fact are made, what revenues or profits were made as a result of use of Market Share Reports (if any). It is not a straightforward matter.
(e) Optus also wants '[t]he approximate amount of profit contended by Telstra to have been made as a result of its use of the Market Share Reports, including how that amount is calculated and the assumptions underlying the same'. This is fraught with difficulty for the reasons identified below.
(f) Optus also wants '[y]early breakdowns of revenue, cost and overheads of Telstra relating to STD and IDD services and markets throughout the relevant period'. This overlaps with the discovery which Optus seeks. In any event, Telstra has already offered discovery of objective documents in this class. Why it is necessary in addition to give an affidavit of disclosure when verified discovery will be given has not been explained.
(9) It is obvious that none of the above matters relieve Telstra of the burden of discovery. Quite the contrary, it increases the burden to give discovery by another name, including from sources (such as back-up tapes or documents other than Market Share Reports in the period 2000 to 2003) which Optus says it does not press, at least 'at this stage'. The terms of Optus' amended motion are otherwise.
(10) The difficulties of swearing affidavits of disclosure going to 'profits … made as a result of its use of Market Share Reports' are many. First, it requires Telstra to form an opinion as to whether customers churning to it, or customers of its own, made calls as a result of some use of a Market Share Report. That is a matter which must be decided by the Court, not Telstra.
(11) However, to that Optus says 'just tell us what profits you contend you made'. Telstra cannot do so without the benefit of discovery from Optus. Optus has refused to give discovery until after it makes an election between compensatory remedies and an account of profits. Further, it still requires Telstra to form an opinion on matters of causation. The authorities say that discovery on matters which require the formation of an opinion or the need to obtain an opinion is impermissible.
(12) To be clear, the point is that Optus does not seek discovery of documents or disclosure of matters which go to the existence of a fact about which the opinion relates, it seeks discovery of documents and disclosure on the premise of a matter which must ultimately be proved on opinion evidence which has not yet been led.
(13) A party should not be asked to answer an interrogatory (or, by extension, give discovery or an affidavit of disclosure) if it would require a party to express an opinion: Cahill v Queensland Housing Commission (No. 1) [1964] QWN 47; American Flange & Manufacturing Co Inc v Rheem (Aust) Pty Ltd (No. 2) [1965] NSWR 193; Rofe v Kevorkian [1936] 2 All ER 1334. A party should not be interrogated on a question which that party can only answer by consulting an expert and repeating that expert's opinion: Rofe v Kevorkian.
(14) Dawson J held in Chan v Minister for Immigration and Ethnic Affairs (1983) 49 ALR 593 that an interrogatory was unreasonable because it was not directed to the ascertainment of relevant facts but rather to material in the nature of an opinion.
(15) Interrogatories (and discovery categories and affidavits of disclosure) which require a party to work out its profits made in business may also be unreasonable. Jessel MR held in Parker v Wells (1881) 18 Ch D 477 at 484:
'The profits of a business are attributable partly to capital, partly to care and skill of the persons who carry on the business, and to ascertain what portion of the profits is attributable to a particular sum, leads ... to a very difficult enquiry, the result of which is never satisfactory.'
(16) Jessel MR also held in Parker v Wells at 484:
'The only use that could be made of detailed discovery sought would be to discredit the Defendant's evidence if he made any inaccurate statements, or failed to set out particulars. After this lapse of time such a failure would hardly discredit him, and to require a man to go through his books for a number of years for such a purpose as this would be oppressive.'
(17) What alleged profits or losses Optus may have sustained or Telstra may have earned as a result of any alleged use of Market Share Reports will clearly involve matters of opinion. Optus concedes that the next phase of proceedings will involve opinion evidence.
(18) Therefore, Optus cannot, by framing a discovery category or a requirement in its affidavit of disclosure which implicitly requires Telstra to express or obtain an opinion as to a particular matter, require discovery of other documents or compel Telstra to give evidence on oath by way of affidavit of disclosure which is premised on the existence and correctness of an opinion one way or another. See, for example, Optus Discovery categories 22, 23, 24 and 25 and affidavit of disclosure paragraphs 2, 3, 4 and 5.
(19) Were Telstra forced to provide affidavits of disclosure, the product would be of little utility to either party or the Court and would defeat its supposed purpose – either 'to narrow the scope of discovery which would otherwise be required' or to assist Optus to make its election between an account of profits and compensatory remedies.
(20) In essence, the affidavit is an impermissible attempt by Optus to gain an insight into Telstra's evidence before orders for evidence are made by the Court, before Telstra has had the benefit of discovery from Optus to assist it to prepare its evidence and is an attempt to discredit Telstra's witnesses by showing up inconsistencies which might emerge between or in evidence led at the hearing and any affidavits of disclosure.
(21) In summary, the affidavit of disclosure does not alleviate any discovery burden and the topics proposed by Optus are already covered by the discovery categories.
(22) There is no dispute that the Court, in an appropriate case, has the power to order an affidavit of disclosure. As stated above, there is no dispute that Optus is entitled to make an informed election between remedies. However, that is no licence to extend discovery in one form or other to the extreme. And the authorities relied on by Optus do not, on closer scrutiny, support its case.
(23) At [43] of its submissions (see [37(3)] above), Optus relies on Island Records. There, Lightman J referred to 'readily available information'. Information dating back 17 years stored away in archives which must be searched or on unrestored back-up tape or matters which require expert opinion cannot constitute 'readily available information'.
(24) This is not a simple case of IP infringement like the authorities which Optus relies upon. It is complex and imprecise. It is old and there are difficult questions of causation which are in issue and yet to be determined. The authorities relied upon by Optus (see [37(1)] above) illustrate the point.
(25) Eagle Homes was a straightforward case of copyright infringement. In that case the orders were made by consent. The calculation of profit was simple. All that was required was to count the number of homes built using the infringing plans and tally the revenues and expenses in a mechanical fashion. All questions but quantum had been decided. That is not the case here. In Eagle Homes, Lindgren J relied on Island Records. The relevant extract in Eagle Homes is at 448, where Lightman J says:
'[T]he Court may direct discovery, but if the information may be made available by some other satisfactory means (eg in an affidavit by the defendant or by way of audited accounts or reports) the Court may hold that the alternative may be adopted. ... There should be no over-lengthy or unnecessarily sophisticated exercise. The plaintiff is not entitled to know exactly the amount of damages or profits to which he is entitled, but only to such information as the Court considers to be a fair basis in the circumstances of the particular case for an election.' (Emphasis added.)
Clearly here, the affidavits here could not be prepared without an overly lengthy and sophisticated exercise.
(26) Dr Marten's provides no support at all for the making of orders for an affidavit of disclosure in this instance. That case dealt with whether or not the plaintiff should be forced to elect between remedies at an early stage when there had been not yet been a finding of liability.
(27) In Polyaire (No. 2), the orders for disclosure were made by consent. Again, this was a simple case of copyright infringement where the task was to count the number of items manufactured and sold using the plaintiff's designs and tally the revenues and expenses. Optus also relies on this authority for the proposition that the fact that an order for an affidavit for disclosure may be onerous does not provide a reason for not making the order. Leaving aside the fact that the matter is one of discretion, there is a difference between 'onerous' and 'oppressive'. Further, mere relevance of itself will not excuse an oppressive interrogatory and, therefore, will not excuse an oppressive discovery category or affidavit of disclosure: Plymouth Mutual Co-operative Society and Industrial Society Ltd v Traders' Publishing Association Ltd [1906] 1 KB 403 at 414. Polyaire (No. 4) advances matters no further.
(28) Dias Aluminium was a case where disclosure was ordered instead of discovery. That is certainly not what Optus seeks. Again, this was a simple case of copying a design and selling the manufactured copies.
(29) Barrett is of little utility. It says nothing about how the orders came about, whether by consent or whether they were defended. However, it is another instance of simple breach of copyright in plans for project homes. Significantly, no concurrent order for discovery was made. Likewise, Doric is of little utility. It appears to be a simple patent breach. The orders there say nothing of the underlying contest but it is clear that no concurrent order for discovery was made.
(30) Finally, in Nokia there was no appearance by the respondent in the Full Court and in the Court below the orders were made by consent.
(31) The underlying principle of the cases which Optus relies upon is this: the affidavit of disclosure route is intended, in simple cases, to provide a short-cut to election by sidestepping extensive discovery where the party giving the election can readily provide an estimate of its profit. The affidavit is usually volunteered by the respondent because it would relieve that party of an otherwise greater burden. That is why in most of the cases the affidavit has been ordered by consent. Optus seeks an extensive discovery. No submission can be made by it that it will have not have sufficient evidence on which to base an election after such a discovery.
(32) In summary, the affidavit of disclosure does not provide the parties or the Court with any benefit. It does not save time or reduce the burden of discovery. Optus' application for it should be rejected.
Analysis and Conclusion
39 In my view, there are a number of difficulties with the affidavit or affidavits of disclosure sought by Optus which are best exemplified by scrutinising each of the paragraphs in Schedule "B" to its amended notice of motion:
1. Paragraph 1: Sub-paragraphs (d) and (e) are outside the scope of both the pleadings and the judgment. There were no findings of any impermissible uses of relevant confidential information in the preparation of Market Share Reports and their distribution among Telstra personnel for the purpose of assessing market trends in the Australian telecommunications market or for the purpose of assessing the performance of Telstra or its business units in that market. But even if sub-paras (d) and (e) are removed, the principal vice of para 1 is that it calls for disclosure of information that will be provided by discovery of the categories of documents. Far from obviating the obligation for discovery of a particular category of documents or narrowing the overall obligation, it replicates that obligation, albeit in a different form. I am not prepared to order an affidavit or affidavits of disclosure on the topic or topics contained in para 1 even if sub-paras (d) and (e) are excluded.
2. Paragraph 2: The words 'as a result of' call for disclosure based on an opinion which, in the fullness of time, will be the subject of evidence and which, at the end of the day, is ultimately a matter for the Court. But even if these words are excluded, the vice remains the same as for para 1; it calls for the disclosure of documents that will be provided by discovery of the categories of documents. I am not prepared to order an affidavit or affidavits of disclosure on the topic or topics contained in para 2 even if the words 'as a result of' are excluded.
3. Paragraphs 3, 4 and 5: In my view, the disclosure required by these paragraphs is not only oppressive, but incapable of response short of Telstra undertaking an analysis of revenues and related costs which themselves are incapable of quantification by reason of the criteria upon which they are to be quantified, namely, 'each instance of use of Market Share Reports referred to in para 1' and 'each retention of, gain in or "winning back" of customers and/or market share [wholly or partly as a result of or following any instance or instances of use of market share reports]'. That comes out of para 3 and the disclosures required by paras 4 and 5 are predicated on what comes out of para 3. The task is nigh impossible and bears no correlation to a straight-forward case of copyright infringement where the revenues obtained and the expenses incurred in obtaining them from the use of the infringing material can be readily ascertained: Cf., Eagle Homes. I am not prepared to order an affidavit or affidavits of disclosure on the topics contained in paras 3, 4 and 5.
4. Paragraph 6: Again this paragraph suffers from the same vice as paras 1 and 2 in that it calls for disclosure of information that will be provided by discovery of the categories of documents. Again, I decline to order such disclosure on the ground that it merely replicates Telstra's discovery obligation.
40 In the circumstances, Optus' motion by amended notice dated 19 October 2010 must be dismissed. I will direct that Telstra bring in draft short minutes of order to give effect to these reasons and provide them to Optus for review. If they can be agreed, then I will make the orders in chambers. If not, I will hear the parties at a mutually convenient time and resolve the matters still in dispute. The draft short minutes should include the time or times within which categories of documents are to be discovered.
Telstra's Motion for Discovery by Optus
41 Telstra's motion moves the Court for orders, set out in notice dated 3 September 2010 and filed on 6 September 2010:
'1 That [Optus] give discovery on the remaining issues in the proceedings in accordance with the categories of discovery attached and marked [Annexure] "A", by such date as may be determined by the Court or agreed by the parties.
2 That [Optus] pay [Telstra's] costs of and incidental to this Notice of Motion.
3 Such further or other order as the court thinks fit.
ANNEXURE "A"
CATEGORIES FOR DISCOVERY BY [OPTUS]
| 1. High level documents which refer to or record the churn of customers of STD and/or IDD services during the Relevant Period, including the churn of customers: (a) from [Optus] to [Telstra]; or (b) from [Optus] to other providers of STD and/or IDD services. |
| 2 All documents which refer to or record any analysis of customer churn with respect to STD and/or IDD services during the Relevant Period, including any analysis of: (a) the marketing campaigns referred to in the Market Share Reports ([Optus'] and/or [Telstra's] campaigns) on customer churn; (b) any other marketing campaign undertaken by [Optus] on customer churn; (c) reasons or factors affecting why customers churn from or to [Optus] and/or a competitor of [Optus]; or (d) the reasons or factors affecting why customers stay with or do not chum from [Optus] and/or a competitor of [Optus]. |
| 3 All documents which refer to or record any analysis of the reasons or factors affecting why customers make STD and/or IDD calls (whether or not using [Optus'] STD and/or IDD services). |
| 4 High level documents which refer to or record aggregate data about the churn of customers to [Telstra] during the Relevant Period, including: (a) the number of customers; (b) the type of customers; (c) the STD and/or IDD calls those customers made, including the volume of calls and call details (including, where to, where from, how long, what time of day, call type) and customer/call usage patterns; (d) the proportion and/or volume of customers who churned away from [Optus] to [Telstra] or other providers of STD and/or IDD services and subsequently churned back to [Optus]; (e) the average length of time customers of [Optus] who used [Optus'] STD and/or IDD services remained customers of [Optus]; or (f) the length of time those customers referred to in (d) above remained away from [Optus]. |
| 5 High level documents which refer to or record any assessment or analysis of: (a) [Optus'] marketing campaigns and/or [Optus'] strategic decisions in the market for STD and/or IDD services; (b) [Telstra's] marketing campaigns and/or [Telstra's] strategic decisions in the market for STD and/or IDD services; or (c) the marketing campaigns of any other competitor of [Optus] and/or the strategic decisions in the market for STD and/or IDD services made by that competitor during the Relevant Period. |
| 6 All documents which refer to or record [Optus'] estimates or assessments of, or information in its possession in relation to; (a) the total market for STD and/or IDD services in terms of minutes, revenues and/or volumes, including by reference to destination or otherwise; (b) [Optus'] market share of STD and/or IDD services; (c) [Telstra's] market share of STD and/or IDD services; or (d) any other market share information for STD and/or IDD services during the Relevant Period. |
| 7 All documents which identify the source of the information relied upon by [Optus] to estimate or assess the market share information referred to in 5 above. |
| 8 High level documents which refer to or record: (a) [Optus'] expectations, plans, proposals, budgets or forecasts with respect to STD and/or IDD market shares; (b) any discussion, analysis, or report on STD and/or IDD market share, market share loss, or market share gain, or other changes or trends in those markets; or (c) the value or utility of market share information or Traffic Information during the Relevant Period. |
| 9 High level documents which refer to or record any assessment or analysis of the financial or market share consequences for [Optus] as a result of STD and/or IDD customers churning to, or remaining with, [Telstra] including where those customers had been, or may have been, customers of [Optus] during the Relevant Period. |
| 10 High level documents which refer to or record the loss of revenue or reduced profit or increased loss made by [Optus] from customers which had been STD and/or IDD service customers of [Optus] who became STD and/or IDD service customers of [Telstra] (either by use of the override code, or by transfer or churn, or by some other means) consequent upon any marketing campaign, promotion, sales strategy or other activity of [Telstra] during the Relevant Period. |
| 11 High level documents which refer to or record the revenues, costs and expenses, profits and or losses derived, incurred or earned by [Optus] during the Relevant Period on a weekly, monthly, quarterly or annual basis: (a) for STD and/or IDD services; (b) customer lines; (c) from customers pre-selected to [Optus] for STD and/or IDD services; or (d) from customers pre-selected to [Telstra] for STD and/or IDD services as a result of those customers using the override function to take up an STD and/or IDD service of [Optus]. |
| 12 All documents which refer to or record [Optus'] average per customer revenues, costs, expenses, profits and/or losses for STD and/or IDD services (including calls made at [Optus'] usual rates and at special or promotional rates) during the Relevant Period. |
| 13 All documents which refer to or record the Applicant's strategies, proposals or plans to increase its volume of customers, calls, call minutes or strategies to combat campaigns run by the Respondent in relation to STD and/or IDD services. |
| 14 All documents which refer to or record each marketing, promotional or sales campaigns (including information as to the rates, destinations, times applicable and conditions in relation to each) run by [Optus] during the Relevant Period which include STD and/or IDD services offered by [Optus] and any analysis of any such campaign. |
| 15 All documents which refer to or record any marketing, promotional or sales campaigns or sponsorships of [Optus] during the relevant period which do not refer to a particular telecommunication service offered by [Optus] (for example brand only advertising). |
| 16 All documents created or applicable to the Relevant Period which refer to or record [Optus'] pricing strategies for STD and/or IDD services. |
| 17 All documents which refer to or record [Optus'] marketing, sales or promotional budgets or expenditures during the Relevant Period. |
| 18 High level documents which refer to or record the effect or likely effect on Optus of other competitors entering a telecommunications services market which includes STD and/or IDD services. |
| 19 High level documents which refer to or record the value of a customer (whether in terms of revenue, profit or loss) and/or call usage patterns of a customer who has churned or is likely to churn to a competitor of [Optus] or who is price-sensitive in relation to STD and/or IDD services. |
| 20 All documents which refer to or record the effectiveness or impact of [Optus'] marketing campaigns. |
| 21 All documents which refer to or record [Optus'] expectations, plans, proposals, budgets or forecasts and/or any discussion, analysis or report in the Relevant Period with respect to (whether by call destination or otherwise): (a) number of STD and/or IDD customers; (b) number of STD and/or IDD calls made; (c) number of STD and/or IDD call minutes; (d) STD and/or IDD call holding time(s); (e) (a) to (d) above; (f) number of customer lines; (g) revenues, costs, expenses, profits or losses with respect to (f) above. |
| 22 All documents which refer to or record the number and identity of call patterns of customers which had been STD and/or IDD customers of [Optus] who became STD and/or IDD customers of [Telstra] (by any means or for any reason). |
| 23 All documents which refer to or record any assessment or analysis of the incremental benefits or detriments to [Optus] as a result of any increase or decrease of: (a) STD and/or IDD call volumes; (b) STD and/or IDD customers; or (c) customer lines. |
| 24 All documents which refer to or record the profit made by [Optus] (including documents which record or evidence the revenue generated and the costs and expenses incurred by [Telstra]) from the customers which had been STD and/or IDD service customers of [Optus] and who became STD and/or IDD customers of [Telstra] consequent upon marketing campaigns of [Telstra's] marketing campaigns as referred to in the Market Share Reports. |
| 25 All documents which record or evidence the stimulation or growth in [Optus'] STD and/or IDD services (including in terms of minutes of use or call durations) attributed to STD and/or IDD pricing structures adopted by [Optus], [Telstra] or another competitor of [Optus] in the Relevant Period. |
| 26 All documents which refer to or record the profit made by [Optus] (including documents which record or evidence the revenue generated and the costs or expenses incurred by [Optus]) as a result of the stimulation or growth in [Optus'] STD and/or IDD services (including in terms of minutes of use or call durations) attributed to STD and/or IDD pricing structure adopted by [Optus], [Telstra] or any other competitor of [Optus] in the Relevant Period. |
| 27 All documents which refer to or record any analysis of the financial benefits of increasing or maintaining market share and/or call volumes in the STD and/or IDD market and/or the financial detriment in decreasing market share and/or call volumes in the STD and/or IDD market. |
42 In my view, it is premature to require Optus to give discovery at this stage. Telstra submitted that discovery could begin because some categories would be discoverable irrespective of Optus' ultimate case for relief. That is undoubtedly so, but other categories now sought would inevitably fall away and their discovery would be futile. Optus should not be required to give discovery until such time as it is in a position to particularise its case for relief, in all its forms; only then will the Court be in a position to make an informed assessment of the scope of discovery that should be given and confirm or reject the articulation by each party of the categories of documents that should be discovered to give effect to that assessment.
43 In the circumstances I propose that Telstra's motion by notice dated 3 September 2010 be stood over generally. At this stage, there should be no order as to costs.
| I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edmonds. |
Associate:
