FEDERAL COURT OF AUSTRALIA

Axent Holdings Pty Ltd v Compusign Australia Pty Ltd (No 4) [2018] FCA 674

RULING (REVISED FROM TRANSCRIPT)

1    During the course of the trial in these proceedings, there was a ruling on 26 April 2018 that was not included in the daily transcript. This ruling was noted in the transcript of 26 April 2018 at page 192, line 10 merely as “JUDGMENT DELIVERED”.

2    Chambers staff subsequently made enquiries of the transcript provider to obtain a transcribed copy of the ruling. The ruling, which has been revised from transcript, is reproduced below.

RULING MADE ON 26 APRIL 2018

3    The respondents make an oral application under rule 17.01 of the Federal Court Rules to set aside paragraphs 2, 3 and 5 of the applicant’s notice to produce dated 19 April 2018. Rule 30.28 of those rules provides for the service of notices to produce and permits the party serving the notice to lead secondary evidence of the contents or nature of a document or thing where the document or thing is not produced in conformity with the notice. The respondents do not challenge paragraphs 1 and 4 of the applicant’s notice, but they do challenge paragraphs 2, 3 and 5 which read:

2.    All documents provided to or viewed by Barry Denis Jan in the course of preparing his affidavits filed in the proceeding that are not referred to in those affidavits.

3.    Any documents which records any oral instructions given to Barry Denis Jan in the course of preparing his affidavits filed in the proceeding.

5.    All emails and notes of communications passing between the solicitors for the respondents and the solicitors for VicRoads in connection with the patent.

4    The respondents contended that none of the documents referred to in these paragraphs were relevant. They also submitted that categories 2 and 3 had been the subject of a previous unsuccessful application made by the applicant on 20 October 2017. In respect of paragraph 5 the respondents further observed that, if unsuccessful in their present application, the documents sought in paragraph 5 would be the subject of a claim of privilege by the respondents. The respondents observed that paragraph 2 was seeking documents that were not referred to by Mr Jan in his affidavit and submitted that documents that were not the basis of his expressed opinions were not relevant.

5    The respondents observed that paragraph 3 was seeking any document that records any oral instructions given to Mr Jan in preparing his affidavit and submitted that to the extent that he was given oral instructions, then such instructions are recorded directly or by inference in his affidavit. The respondents submitted that if the oral instructions were not apparent in his affidavit, then he would not be acting on them in his affidavit, and they could not be relevant. As to the final paragraph, the respondents submitted that communications between the respondents’ instructor and the solicitors for VicRoads were not relevant to any ground in issue and noted that, in any event, if this paragraph were not set aside, then the documents would be the subject of a claim of privilege by the respondents.

6    The applicant contended that it was “entitled to test the veracity of the assertion that the respondents made in respect of Mr Jan’s evidence and opinions by seeing what other documents and instructions he was given and asking him whether they influenced his evidence”, and submitted that Mr Jan’s affidavit made it clear that he had been given documents in “a drip feed sort of fashion” by the respondents.

7    As to paragraph 5, the applicant submitted that the documents sought were relevant to “the ground in relation to VicRoads’ involvement and the respondent’s assertion that VicRoads is an inventor, absent VicRoads’ assertion that VicRoads is an inventor”, and that the issue of privilege would be for the Court to determine.

8    As to the applicant’s submissions on this paragraph, the respondent submitted in reply that the entitlement issue related to events in 2002 and that documentary communications between the respondents’ solicitors and the solicitors for VicRoads could have no bearing on the events in 2002 relevant to the entitlement ground. The respondents’ counsel referred me to Construction, Forestry, Mining and Energy Union v BHP Coal Proprietary Limited (No 3) [2012] FCA 61 where at [6] Collier J helpfully set out the principles relevant to setting aside a notice to produce. The applicant did not contend for any different statement of principles.

9    A lack of apparent relevance is a ground for setting aside a notice to produce. The party serving the notice to produce bears the onus of showing that the documents it seeks to have produced have apparent relevance to the issues in the proceedings, in the sense that the documents are reasonably likely to add, in the end, in some way or other to the relevant evidence in the case. See CFMEU v BHP Coal at [6] and the authorities there cited. A notice to produce cannot be used for the purpose of fishing. As to paragraph 5 of the notice to produce, I accept for the reasons advanced at the hearing by the respondents that the documents lack apparent relevance.

10    As to paragraphs 2 and 3 of the notice to produce, a careful reading of Mr Jan’s affidavits leads me to reject the respondents’ submissions that all documents that were the basis of his opinions are disclosed in these affidavits and that the substance of oral instructions may be inferred from those affidavits. To explain my rejection of the respondents’ submissions in this regard I would first refer to r 23.13. This sets out the formal requirements for an expert report which it seems that Mr Jan’s affidavits are intended to constitute. These requirements include that the report identify the questions that the expert was asked to address and set out separately each of the factual findings and assumptions on which the expert’s opinion is based. Rule 23.11 provides that a party may call on an expert to give evidence at trial only if that party has complied with r 23.13.

11    Of course, a failure to comply with r 23.13 does not of itself render the report inadmissible, and in this context admissibility is dependent principally on sections 79 and 56 of the Evidence Act 1995. Two things should therefore be borne in mind: first, the Court may dispense with the Federal Court Rules’ requirements under r 1.34, particularly if to do so would be in keeping with s 37M(3) of the Federal Court of Australia Act 1976. Secondly, the failure to comply with r 23.13 may mean that the Court is unable to satisfy itself that the evidence of the putative expert is wholly or substantially based on his or her specialised knowledge. In the latter event, the evidence will not be admissible.

12    A reading of Mr Jan’s affidavits indicates that not all the questions that Mr Jan was asked have been identified, nor have any factual findings or assumptions that may have been given to him and on which he proceeded been disclosed. These considerations lead me to reject the respondents’ submissions that all documents that were the basis of his opinions have been disclosed in Mr Jan’s affidavits and that the substance of oral instructions may be inferred from those affidavits. Instead, these considerations raise the possibility that documents or oral instructions were placed before Mr Jan that do bear on his opinion, including any letter of instruction or similar. Compare in this regard BrisConnections Finance Proprietary Limited (Receivers and Managers appointed) v Arup Proprietary Limited [2017] FCA 1268 at [71].

13    The nature of any oral instructions cannot be confidently inferred, as the respondents submitted. Accordingly, I would not set aside paragraphs 2 and 3 of the notice to produce. The problem that the applicant’s notice to produce has highlighted is that it is very possible that Mr Jan’s affidavit material does not comply with the requirements in r 23.13 since it would not appear to set out all the questions that he was to address and may also be said not to have identified separately the factual findings and assumptions on which his opinion is based. Whether this renders all or part of his affidavit inadmissible is a different question. In due course, I will hear the parties on whether Mr Jan’s affidavits constitute expert reports that ought to but have not complied with r 23.13 of the Federal Court Rules. If they are non-complying reports, I shall hear the parties on the consequences of that conclusion.

Associate:

Dated:    11 May 2018