FEDERAL COURT OF AUSTRALIA

Australian Mud Company Pty Ltd v Coretell Pty Ltd (No 5) [2013] FCA 663

THE COURT ORDERS THAT:

1.    The document titled “Amended Interlocutory application” provided to the Court by the first respondent via email on 12 December 2012 be accepted as filed.

2.    The applicants give discovery by 19 July 2013 of documents relied upon by the applicants in support of the allegations at paragraphs 4 and 13 of the applicants’ defence to first respondent’s statement of claimed loss and damage filed 13 July 2013, but the first respondent’s “Amended Interlocutory application” provided to the Court via email on 12 December 2012 and accepted as filed be otherwise dismissed.

3.    The first respondent provide the applicants’ solicitors with a copy of the first respondent’s complete general ledger in its native electronic format by 19 July 2013, but the applicants’ interlocutory application filed 20 November 2012 be otherwise dismissed.

4.    The general ledger described in order 3 not be disclosed to any person other than to:

(a)    the parties, solicitors or barristers acting for the parties in these proceedings and independent experts engaged by the parties;

(b)    who have signed a confidentiality undertaking in the form of the undertaking in Annexure A to the orders made on 20 July 2012, which must be provided to the respondents’ solicitors as soon as practicable after signing.

5.    The first respondent file and serve the expert report of Mr Greg Meredith by 2 August 2013.

6.    Upon signing a confidentiality undertaking in the form of the undertaking in Annexure A to the orders made on 20 July 2012, which must be provided to the applicants’ solicitors as soon as practicable after signing, Mr Nicky Kleyn be given access to the annexure described as “PTA-15” to the affidavit of Mr Paul Theodore Arns sworn on 14 December 2012.

7.    The first respondent file and serve its lay evidence by 16 August 2013.

8.    The applicants pay 25% of the first respondent’s costs of the first respondent’s “Amended Interlocutory application” provided to the Court via email on 12 December 2012 and accepted as filed to be taxed, if not agreed.

9.    The first respondent pay 25% of the applicants’ costs of the applicants’ interlocutory application filed 20 November 2012 to be taxed, if not agreed.

10.    A directions hearing be listed on 23 August 2013 at 9:45am (WST).

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

overview

1    On 20 December 2012, I heard competing interlocutory applications filed on behalf of the applicants and the first respondent. Both applications sought orders requiring the other party to provide specified discovery.

2    For the reasons which follow, I would order that:

    the applicants give discovery of documents relied upon by the applicants in support of the allegations at paragraphs 4 and 13 of the applicants’ defence to first respondent’s statement of claimed loss and damage filed 13 July 2013; and

    the first respondent provide the applicants with a copy of the first respondent’s complete general ledger in its native electronic format;

but otherwise dismiss both applications. I would also make orders requiring the first respondent to file its evidence by 2 August 2013. As each party was only partially successful on its interlocutory application, I would order that each party receive 25% of its costs of its interlocutory application.

background

3    By an amended application dated 28 July 2008, the applicants sought relief in relation to the alleged infringement of Australian Innovation Patent No. 2006100113, which refers to an invention named “Core Sample Orientation”. The invention is used for determining the down-hole orientation of core samples taken during drilling operations, typically in the mining industry.

4    By a further amended cross-claim dated 14 April 2010, the respondents sought relief in relation to allegations of unjustified threats and also revocation of the patent for invalidity.

5    By consent orders of French J made on 19 June 2008, it was ordered that the issue of liability in the proceeding be determined separately from and in advance of the issue of quantum of relief.

6    On 29 October 2010, I dismissed the applicants’ amended application and the respondents’ further amended cross-claim for revocation of the patent for invalidity. However, I held that the respondents were entitled to relief in relation to the further amended cross-claim for unjustified threats: Australian Mud Company Pty Ltd v Coretell Pty Ltd [2010] FCA 1169; (2010) 88 IPR 270. The applicants appealed against my decision dismissing their amended application and upholding the further amended cross-claim for unjustified threats, but on 15 September 2011 the Full Court of the Federal Court dismissed this appeal: Australian Mud Company Pty Ltd v Coretell Pty Ltd [2011] FCAFC 121; (2011) 93 IPR 188.

7    On 27 April 2012, I made orders directing the respondents to file and serve a statement of claim articulating their claim for damages for unjustified threats by 15 June 2012. On 15 June 2012, the first respondent filed a statement of claimed loss and damage (statement of claimed loss and damage), claiming $18,402,782 plus interest. Relevantly, the statement of claimed loss and damage provides:

3.    At the time of the commencement of the business referred to at paragraph 1, the Applicants or one or other of them were:-

    (a)    the sole exploiters of the core orientation tool referred to therein;

    (b)    successful in such exploitation; and

    (c)    able to make profits from such exploitation.

4.    Between approximately June 2005 and May 2006, the Second Respondent:-

(a)    developed and manufactured or caused to be developed and manufactured a core orientation tool for use by its customers or clients in determining the down-hole orientation of an extracted core sample in exploration drilling (the Camteq Tool); and

(b)    supplied demonstration units of the Camteq Tool to various parties for testing and evaluation in the field at various events.

…

13.    Consequent on the threats and demands, and in accordance with them, the First Respondent ceased the business activities referred to at paragraph 7 in about late November 2006, save for a hiring of core orientation tools to one customer from February to May 2007 in fulfilment of a commitment previously made.

8    On 13 July 2012, the applicants filed a defence to the statement of claimed loss and damage (defence). Relevantly, the defence provides:

3    As to paragraph 3 of the statement of claimed loss and damage, the applicants:

a.    admit that they were the sole exploiters of the Ace Core Tool as at 7 October 2004;

b.    admit that they were able to make profits from such exploitation; and

c.    otherwise deny the allegations in paragraph 3.

4    As to paragraph 4 of the statement of claimed loss and damage, the applicants admit the matters alleged and say further:

a.    the Camteq Tool as supplied and demonstrated for use, testing and evaluation between June 2005 was not fit for use in exploration drilling; and

b.    further or in the alternative, the Camteq Tool as supplied and demonstrated for use, testing and evaluation between June 2005 was not of merchantable quality.

…

13    The applicants deny paragraph 13 of the statement of claimed loss and damage and say further that, if (which is denied) the first respondent did not conduct the business activities referred to in paragraph 7 of the statement of claimed loss and damage at any time during the period fromlate November 2006 to February 2009 or at all, this was caused by or as a result of matters other than the threats referred to in paragraphs 11 to 13 above, including one or more of the following matters:

a.    the Camteq Tool was unreliable, inaccurate and unfit for use in exploration drilling;

b.    the Camteq Tool was not of merchantable quality;

c.    the first respondent had no existing customer base or orders for the Camteq Tool;

d.    the first respondent conducted a business operated solely by Mr Nicky Kleyn and his wife Mrs Aileen Kleyn, having no employees or sales staff, from their residential premises;

e.    the first respondent had no inventory to fulfil any orders or any significant manufacturing capacity; and

f.    the commencement or conduct of the present proceedings.

9    On 17 July 2012, I heard an interlocutory application filed on behalf of the first respondent. This interlocutory application related to confidentiality orders in respect of a document annexed to an affidavit of Paul Theodore Arns, the principal of the respondents’ solicitors. However, at the hearing I also considered issues regarding particulars of the statement of claimed loss and damage and discovery. In respect of this latter issue, the applicants sought an order that the respondents give discovery regarding the statement of claimed loss and damage in accordance with certain categories of document, rather than standard discovery. I was of the view, however, that standard discovery would achieve sufficient disclosure at the current stage of the proceeding and so made an order to that effect: Australian Mud Company Pty Ltd v Coretell Pty Ltd (No 3) [2012] FCA 778 at [18]-[21].

10    On 2 November 2012, I heard an interlocutory application filed on behalf of the first respondent. This interlocutory application related to the variation of costs orders I had made previously. However, at the hearing I also made the following order:

4.    The respondents to file and serve any affidavits in support of the first respondents’ claim for loss and damage and upon which they proposes to rely at trial by 19 December 2012.

11    On 16 November 2012, the first respondent filed an interlocutory application. This application was purportedly replaced by an “Amended Interlocutory application” emailed to the Court on 12 December 2012 (first respondent’s interlocutory application). While this document has not been filed with the Court, I am content to consider the orders sought on their merits and, if necessary, order that the first respondent’s interlocutory application be accepted as filed. In the first respondent’s interlocutory application, the following relief is sought:

1.    The Applicants give discovery of the documents in Annexure A way of non-standard discovery pursuant to r20.15 of the Federal Court Rules 2011.

2.    The discovery referred to in paragraph 1 may be given in an electronic format.

3.    The Applicants pay the Respondents’ costs of and incidental to this Application.

4.    Such further or other orders as the Court deems fit.

5.    Order 4 of the Orders of Barker J dated 2 November 2012 be vacated, or alternatively the time for compliance with that Order be extended until eight weeks after the Applicants provide discovery and inspection of the documents requested by order 1 of this Interlocutory Application.

12    Annexure A refers to four categories of documents:

    Category 1, which relates to documents relevant to the applicants’ sales of the applicants’ core orientation tool.

    Category 2, which relates to documents relevant to the applicants’ cost of sales of the applicants’ core orientation tool.

    Category 3, which relates to documents relied upon by the applicants in support of the denials at paragraph 3 of the defence.

    Category 4, which relates to documents relied upon by the applicants in support of the allegations at paragraphs 4 and 13 of the defence.

13    On 20 November 2012, the applicants filed an interlocutory application (applicants’ interlocutory application). In it, the following relief is sought:

1.    The respondents give discovery of the documents in Annexure A within 14 days of these orders, by way of non-standard discovery pursuant to r 20.15 of the Federal Court Rules 2011.

2.    Further or alternatively, the respondents give proper discovery pursuant to orders 4, 5 and 7 dated 20 July 2012 within 14 days of these orders.

3.    The respondents provide electronic copies of the following documents to the applicants’ solicitors within 48 hours of these orders:

(a)    the first respondents’ complete General Ledger in its native electronic format; and

(b)    the 2010 Financial Statements for Mincrest Holdings Pty Ltd.

4.    The respondents pay the applicants’ costs of and incidental to this application.

5.    Such further or other orders as the Court thinks fit.

14    Annexure A refers to ten categories of documents:

1    Documents recording or evidencing the alleged decision of the Second Respondent to cease its dealings in the Camteq Tool in May 2006 and the alleged cessation of those dealings, including without limitation, any communication of such a decision to its agents, existing or potential customers.

2    Documents recording or evidencing any consideration or discussion of whether or not to continue or resume the business activities of the First Respondent following the commencement of these proceedings in July 2007.

3    Documents recording, referring to or evidencing communications with customers or agents regarding the Camteq Tool or ORIshot Tool, including without limitation, any complaints from customers regarding operation or functioning of the tool in the period between January 2006 and June 2009.

4    Documents recording or evidencing any consideration or discussion of the threats or demands referred to statement of claimed loss or damage.

5    Documents recording, referring to or evidencing quantities of Camteq Tools in inventory and manufacturing capabilities of First Respondent as at February 2007.

6    Documents recording, referring to or evidencing any finance facilities available to the First Respondent as at February 2007.

7    Documents recording, referring to or evidencing lost sales or revenue by the First Respondent between 13 February 2007 and 2 July 2007.

8    Documents recording or evidencing the alleged decision by the First Respondent to cease its business activities in about late November 2006 and the alleged cessation of those business activities, including without limitation, any communication of such a decision to its agents, existing or potential customers.

9    Documents recording or evidencing the alleged decision by the First Respondent to resume its business activities in about in February 2009 and the alleged resumption of those business activities, including without limitation, any consideration of the reasons for such a decision and any communication of such a decision to its agents, existing or potential customers.

10    Documents recording, referring to or evidencing any testing, evaluation, repair or return of Camteq or ORIshot Tools, including without limitation any field testing or return of faulty tools during the period January 2006 and February 2009.

submissions on the FIRST RESPONDEnt’s interlocutory application

15    First respondent’s submissions: With respect to categories 3 and 4 of its proposed discovery, the first respondent submits that the applicants have made positive allegations and denials in their defence and so should discover documents in respect of these matters. In particular, the first respondent submits that the applicants must have had some material available to them to provide a proper basis for the allegations made in paragraphs 4 and 13 of the defence. Further, the first respondent contends that following the filing of documents in evidence in a related proceeding in the New South Wales Registry of the Federal Court, NSD2082/2011 (NSW proceeding), it has been confirmed that the applicants are in possession of documents of direct relevance to the matters pleaded at paragraphs 4 and 13 of the defence. At the hearing, counsel for the respondents submitted that the Court could make an order for discovery of documents which were produced in evidence in the NSW proceeding pursuant to R 20.21 (“Order for particular discovery”) of the Federal Court Rules 2011 (Cth) (Rules).

16    In response to a request for such documents, the applicants have refused to provide discovery, stating, via letter to the respondents’ solicitors, that “these matters are peculiarly within your client’s knowledge”. However, the first respondent submits that under R 20.14 of the Rules, there is no longer an exemption from discovery for documents reasonably believed to be in the possession of the opposing party.

17    With respect to categories 1 and 2 of its proposed non-standard discovery, the first respondent submits that its expert forensic accountant, Greg Meredith, has requested that certain documents be provided by the applicants so that Mr Meredith can complete his report as to the assessment of loss and damage resulting from the applicants’ unjustified threats. By affidavit affirmed on 13 December 2012, Mr Meredith provides reasons why he requires the documents in categories 1 and 2, which reasons include:

    Over the period during which the first respondent refrained from selling its core orientation tool, the applicants were the only parties selling a directly comparable product in the market. Therefore, it is only by access to the sales data of the applicants in respect of the core orientation tool that Mr Meredith will be able to obtain the necessary information about the demand and size of the market during the relevant period.

    The sales/hirings made by the applicants are relevant as a point of comparison for the growth profile exhibited by the first respondent’s sales and projected lost sales.

    Information about the differences (if any) between the two products and the existence of other competitors is necessary in order to confirm the comparability of the two products and whether there are any other competitors.

    The costs incurred by the applicants in respect of the manufacture and sale of its core orientation tool are relevant to assess the profit margin of the product so as to understand whether, in the event that the first respondent commenced competing for similar customers, the applicants would have been able to reduce their prices. It is also relevant to assist in understanding whether the unit sales forecast for the first respondent would have been achievable and if so, whether it would have been achievable at the sales price forecast and consequent profit margins.

18    In summary, Mr Meredith deposes that he does not anticipate the applicants’ financial information will be directly comparable to that of the first respondent, but that it would provide relevant and valuable information in assessing the reasonableness of the first respondent’s expected sales and cost of sales.

19    With respect to the extension of time sought for the first respondent to file and serve its evidence in support of its statement of claimed loss and damage, the first respondent relies upon an affidavit of Mr Arns sworn on 14 December 2012. Mr Arns deposes that an extension of time is required because:

    The applicants have refused to make discovery of the documents relevant to the issues in dispute between the parties.

    The applicants have refused to make discovery of the documents required by Mr Meredith.

    The applicants have refused to allow a waiver of confidentiality to enable some of the applicant’s confidential documents to be shown to the director of the first and second respondent, Mr Nicky Kleyn.

    Until Mr Meredith’s report is finalised, the evidence of the first respondent’s lay witnesses cannot be finalised as they may need to deal with issues raised by Mr Meredith.

20    Applicants’ submissions: The applicants contend that the denial in paragraph 3 of the defence is confined in nature and does not give rise to an obligation to discover all documents relied upon to support that position. Further, the applicants contend that their commercial success has no relevance to the statement of claimed loss and damage.

21    The applicants submit that the positive allegations in paragraphs 4 and 13 of the defence are matters uniquely within the knowledge of the respondents. Further, the applicants contend that there is no precedent for a responsive party to a claim for loss and damage to give discovery.

22    With respect to categories 1 and 2 of the first respondent’s proposed discovery, the applicants submit that, while this approach might be relevant to an enquiry for an account of profits, it is inappropriate in a damages claim. The applicants also note that:

    a prior, similar proposal by the first respondent was rejected by the Court on 17 July 2012;

    their expert does not believe that Mr Meredith requires documents in these categories;

    the cost and time of giving this discovery would be oppressive; and

    the first respondent has not established the threshold criteria for a non-standard discovery order under R 20.15 of the Rules.

23    Finally, the applicants submit that the foundation for Mr Meredith’s expert report should be the evidence of lay witnesses, and therefore both Mr Meredith’s report and any lay evidence should be filed and served immediately.

submissions on the applicants’ interlocutory application

24    Applicants’ submissions: With respect to their proposed order 1, the applicants submit that their proposed categories of non-standard discovery are relevant to the allegations in paragraph 19 of the statement of claimed loss and damage (which relates to the loss and damage suffered by the first respondent following the cessation of its business) and the vitiating factors in paragraphs 10-13 of the defence (paragraphs 10-12 allege that the unjustified threats ceased on 2 July 2007, that the second respondent ceased all dealings with the Camteq Tool prior to the date of demand, and that the second respondent makes no claim of loss and damage). Further, the applicants submit that the proposed categories are limited in scope and not oppressive.

25    In the alternative, the applicants contend that, having had regard to already discovered documents and evidence before the Court, it is likely that further documents exist in the respondents’ control in the proposed categories.

26    With respect to their proposed order 3(a), the applicants contend that electronic copies of the first respondent’s general ledgers are sought so as to permit the applicants’ expert to efficiently and accurately carry out any independent analysis of the first respondent’s calculation of its loss and damage that may be required. The applicants further contend that the first respondent’s concerns regarding the risk of inadvertent disclosure are without merit as there are appropriate undertakings in place.

27    With respect to their proposed order 3(b), the applicants note that the second respondent’s financial statements for the periods ending June 2007, June 2008, June 2009 and June 2011 have already been provided. Further, the applicants contend that the financial statements that have been provided suggest financial and operational independence between the first and second respondents.

28    First respondent’s submissions: The first respondent submits that it has already provided standard discovery by reference to the matters pleaded and in issue between the parties, and that the applicants have also had comprehensive discovery from the respondents in the related NSW proceeding.

29    Furthermore, the first respondent contends that there has been no change to the status of the proceeding since 20 July 2012 (when the Court refused to order discovery by categories) to warrant any change in the Court’s position.

30    The first respondent also contends that the applicants can not seek an order pursuant to R 20.21 of the Rules as there has been no evidence advanced of the existence of a particular document or category of documents that have not been discovered, but should have been.

31    With respect to the applicants’ proposed order 3(a), the first respondent submits that the applicants have already been offered hard copy general ledgers and that no additional information would be available from access to electronic copies. The first respondent also notes that on 20 July 2012, the Court ordered that it was appropriate that the confidential financial information of the first respondent be exchanged in hard copy form only: Australian Mud Company Pty Ltd v Coretell Pty Ltd (No 3) [2012] FCA 778 at [8]-[9]. Furthermore, the first respondent contends that, based on experience, confidential electronic documents would not be afforded the requisite protection by the applicants.

32    With respect to the applicants’ proposed order 3(b), the first respondent submits that as the second respondent makes no claim for loss and damage, the second respondent’s financial statement for the period ending June 2010 is not relevant to any matter in issue between the parties.

consideration

33    Rule 20.11 of the Rules states the basic principle that “[a] party must not apply for an order for discovery unless the making of the order sought will facilitate the just resolution of the proceeding as quickly, inexpensively and efficiently as possible”. This principle reflects the overarching purpose of civil practice and procedure of the Court stated in s 37M of the Federal Court of Australia Act 1976 (Cth): see generally Alanco Australia Pty Ltd v Higgins (No 2) [2011] FCA 1063 at [7]; Coca-Cola Company v Pepsico Inc [2011] FCA 1069 at [33]-[34]; Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 2) [2011] FCA 1396; (2011) 212 IR 313 at [21].

34    Rule 20.15 deals with non-standard and more extensive discovery. In particular, it enables a party to apply for discovery other than standard discovery, but obliges this party to identify any criteria mentioned in R 20.14(1) and (2) that should not apply; and any other criteria that should apply. This means, generally speaking, that a party may press a case as to why some documents that are not directly relevant should be discovered, perhaps on a “train of inquiry” test (the test derived from the decision of the English Court of Appeal in The Compagnie Financier et Commercial du Pacifique v The Peruvian Guano Company (1882) 52 LJQB 181): Dennis v Chambers Investment Planners Pty Ltd [2012] FCA 63; (2012) 201 FCR 321 (Dennis) at [31].

35    With respect to the first respondent’s proposed discovery by categories 1 and 2, I note that on 17 July 2012, I rejected a similar proposal for discovery by the first respondent. I see no reason why I should now come to a different conclusion. As counsel for the respondents put it at the hearing, the first respondent’s argument on this point does not go any higher than requiring discovery of these documents in order to provide “degrees of confidence” to Mr Meredith in compiling his expert report. This, in my view, is insufficient to support an order for discovery, particularly having regard to R 20.11. That is, I am not satisfied that discovery by categories 1 and 2 will have the effect of facilitating the just resolution of the proceeding as quickly, inexpensively and efficiently as possible: see generally Practice Note CM5 (“Discovery”). If the applicants choose to adduce expert evidence to contradict the evidence of Mr Meredith that will be their prerogative.

36    Given that I will not make an order for discovery by categories 1 and 2, in my view the first respondent should not be given the extension of time it seeks to file and serve its evidence. Therefore, I would order that Mr Meredith file and serve his expert report by 19 July 2013, and that the first respondent file and serve its lay evidence by 2 August 2013. However, in order to facilitate this latter order, I would also order that Mr Kleyn, after providing an appropriate confidentiality undertaking, be given access to the annexure described as “PTA-15” to the affidavit of Mr Arns sworn on 14 December 2012, in order to complete his evidence.

37    With respect to the applicants’ proposed order 1, I note that on 20 July 2012, I refused to make an order that the respondents provide non-standard discovery. Once again, I see no reason why I should now come to a different conclusion. The respondents have already provided standard discovery to the applicants and Mr Kleyn has sworn to the fact that proper discovery pursuant to R 20.14 of the Rules has been given. That is, that all documents “that are directly relevant to the issues raised by the pleadings or in the affidavits” have been discovered. Further, it is important to note that discovery is a continuing obligation: R 20.20(1) of the Rules. In my view, the categories of documents listed in Annexure A are already covered by the respondents’ obligation to provide standard discovery. Indeed, in an affidavit filed in support of its interlocutory application, the applicants concede as such. As such, an order for non-standard discovery is unnecessary.

38    The applicants’ proposed order 2 appears to be an application pursuant to R 20.21 of the Rules. In my view, the applicants have not established grounds as to why the Court should make an order under this rule. They have simply speculated that certain documents have not been provided. This, in my view, is an insufficient basis for the Court to make an order pursuant to R 20.21: Kautto v La Trobe Capital & Mortgage Corp Ltd [2011] WASC 157; Independent Cement & Lime Pty Ltd v Australian Cement Ltd (unreported, Federal Court of Australia, Gray J, 27 October 1988).

39    However, following the benefit of submissions and affidavit evidence from the applicants as to why their expert needs electronic copies of the first respondent’s general ledger, in my view it is appropriate that the first respondent provide electronic copies of its general ledgers to the applicants. An order to this effect may be made pursuant to R 20.21: Dennis at [37]. Allowing the applicants’ expert to efficiently and accurately carry out an independent analysis of the first respondent’s calculation of its loss and damage will, in my view, “facilitate the just resolution of the proceeding as quickly, inexpensively and efficiently as possible”: see also Dennis at [39]. Provided an appropriate confidentiality undertaking is in place, I see no grounds for not making this order.

40    With respect to the 2010 financial statement of the second respondent, I note the applicants’ submission that the second respondent’s financial statements for the periods ending June 2007, June 2008, June 2009 and June 2011 have already been provided to the applicants and, in their view (on the basis of expert advice they have received), there is a substantial degree of interdependence between the first and second respondents. However, I also note that the second respondent’s financial statements were not provided following discovery in this proceeding, but rather following discovery in the NSW proceeding. Further, the second respondent makes no claim for loss and damage in this proceeding. As such, in my view, it is not appropriate that I should make an order that the second respondent provide its 2010 financial statement to the applicants. I make no comment on whether such an order would be appropriate in the NSW proceeding.

41    Lastly, with respect to the first respondent’s proposed discovery by categories 3 and 4, I am inclined to agree with the applicants’ submission that the denial in paragraph 3 of the defence is confined in nature and does not give rise to an obligation to discover documents relied upon to support that position. However, in my view, it is appropriate that the applicants provide discovery pursuant to category 4. An order to this effect may be made pursuant to R 20.21: Dennis at [37]. The applicants have made positive allegations in paragraphs 4 and 13 of their defence, which allegations were made prior to discovery by the respondents and so could not have been made based upon the respondents’ discovered documents. Further, the first respondent contends that any relevant documents that are or have been in the control of the respondents have already been discovered; although, in any event, contrary to the applicants’ submission, there is no exemption from discovery for documents reasonably believed to be in the possession of the opposing party: compare O 15, r 2(4) of the Federal Court Rules 1979 (Cth). Therefore, I am satisfied that discovery of documents in category 4 will facilitate the efficient conduct of the proceedings: Dennis at [39].

conclusion and orders

42    For the reasons given, the Court orders that:

1.    The document titled “Amended Interlocutory application” provided to the Court by the respondents via email on 12 December 2012 be accepted as filed.

2.    The applicants give discovery by 19 July 2013 of documents relied upon by the applicants in support of the allegations at paragraphs 4 and 13 of the applicants’ defence to first respondent’s statement of claimed loss and damage filed 13 July 2013, but the first respondent’s “Amended Interlocutory application” provided to the Court via email on 12 December 2012 and accepted as filed be otherwise dismissed.

3.    The first respondent provide the applicants’ solicitors with a copy of the first respondent’s complete general ledger in its native electronic format by 19 July 2013, but the applicants’ interlocutory application filed 20 November 2012 be otherwise dismissed.

4.    The general ledger described in order 3 not be disclosed to any person other than to:

(a)    the parties, solicitors or barristers acting for the parties in these proceedings and independent experts engaged by the parties;

(b)    who have signed a confidentiality undertaking in the form of the undertaking in Annexure A to the orders made on 20 July 2012, which must be provided to the respondents’ solicitors as soon as practicable after signing.

5.    The first respondent file and serve the expert report of Mr Greg Meredith by 2 August 2013.

6.    Upon signing a confidentiality undertaking in the form of the undertaking in Annexure A to the orders made on 20 July 2012, which must be provided to the applicants’ solicitors as soon as practicable after signing, Mr Nicky Kleyn be given access to the annexure described as “PTA-15” to the affidavit of Mr Paul Theodore Arns sworn on 14 December 2012.

7.    The first respondent file and serve its lay evidence by 16 August 2013.

8.    The applicants pay 25% of the first respondent’s costs of the first respondent’s “Amended Interlocutory application” provided to the Court via email on 12 December 2012 and accepted as filed to be taxed, if not agreed.

9.    The first respondent pay 25% of the applicants’ costs of the applicants’ interlocutory application filed 20 November 2012 to be taxed, if not agreed.

10.    A directions hearing be listed on 23 August 2013 at 9:45am (WST).

Associate:

Dated:    4 July 2013