FEDERAL COURT OF AUSTRALIA

Domino’s Pizza Enterprises Limited v Precision Tracking Pty Ltd (No 6) [2018] FCA 910

ORDERS

THE COURT ORDERS, BY CONSENT, THAT:

1.    By 28 June 2018, the respondents give the discovery referred to in paragraph 1 of the letter from Allens to DLA Piper dated 8 May 2018, namely, standard discovery of discoverable documents arising from a review of those documents previously provided by the respondents to their former solicitors, Corrs Chambers Westgarth.

2.    By 28 June 2018, the respondents provide, pursuant to paragraph 10.10 of the Central Practice Note: Court Framework and Case Management (CPN-1), a brief description of the steps taken to conduct a good faith proportionate search to locate discoverable documents pursuant to order 1 above and the orders of 12 April 2018, including what records have been searched for, what search criteria or terms have been used, and what databases have been searched.

THE COURT ORDERS THAT:

3.    The applicant is granted leave to amend to add paragraphs 26(d) and 26(e) to its proposed Further Amended Defence to the Statement of Cross-Claim.

4.    The applicant’s interlocutory application for leave to amend is otherwise refused.

5.    Within 28 days of the date of these orders, the respondents give discovery of documents in the following categories:

(i)    Documents evidencing the disclosure by one or more of the respondents, or with their authority or consent, to any person not a party to this proceeding of any GPS tracking or fleet management system which system incorporated the Proof of Concept Information, the Car Topper Concept, or the Precision Delivery System Confidential Information, except where such disclosure was subject to a written confidentiality agreement.

(ii)   Documents evidencing any agreement between one or more of the respondents and any Resellers in relation to any GPS tracking or fleet management system which system incorporated the Proof of Concept System Confidential Information, the Car Topper Concept, or the Precision Delivery System Confidential Information.

(iii)    Non-disclosure agreements or confidentiality agreements in relation to any GPS tracking or fleet management system that incorporated the Proof of Concept System or the Precision Delivery System, between one or more of the respondents and:

    a. PhonePost Pty Ltd;

    b. Toll Pty Ltd;

    c. Peter Ekstein;

    d. Southern Cross Group Services Pty Ltd;

    e. George Weston Foods Limited;

    f. Macquarie University; or

    g. Luxury Afloat Hawkesbury River & Brooklyn Pty Ltd.

6.    The applicant’s interlocutory application for discovery is otherwise refused.

7.    The applicant is to pay the respondents’ costs thrown away, if any, by reason of the amendments allowed by order 3 of these orders.

8.    Subject to order 9, each party bear its or his own costs of the interlocutory application filed on 30 May 2018.

9.    If any of the parties wishes to contend for a different costs order, they are to notify my associate and the other parties and thereafter directions will be made for the exchange of short written submissions and the determination of that issue on the papers.

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

REASONS FOR JUDGMENT

ROBERTSON J:

Introduction

1    These proceedings have an extensive interlocutory history. In Domino’s Pizza Enterprises Limited v Precision Tracking Pty Ltd (No 5) [2018] FCA 48 I referred to the following earlier interlocutory judgments for the relevant background: Domino’s Pizza Enterprises Ltd v Precision Tracking Pty Ltd [2016] FCA 853; Domino’s Pizza Enterprises Ltd v Precision Tracking Pty Ltd (No 2) [2017] FCA 211; Domino’s Pizza Enterprises Ltd v Precision Tracking Pty Ltd [2017] FCA 1063; and Domino’s Pizza Enterprises Ltd v Precision Tracking Pty Ltd (No 4) [2017] FCA 1264.

2    The three-week trial fixed to commence on 27 November 2017 was adjourned and I then made orders for the filing and serving of evidence in relation to a particular new claim, a breach of confidence case, which I permitted Domino’s then to raise in light of the discovery then belatedly being made on the part of Precision Tracking. For example, on 1 December 2017, I made orders for progression of the matter to further trial involving pleadings and discovery, the filing by March, April and May 2017 of lay evidence arising solely from the pleading amendments, and the filing of any expert affidavit evidence arising solely from the pleading amendments in May and June 2018.

3    Those dates were later extended, most recently by orders made on 15 June 2018, in the following form:

BY CONSENT, THE COURT ORDERS THAT:

1.    Orders 2 to 5 of 18 May 2018 are vacated.

2.    By Friday 13 July 2018, Domino's and Navman file and serve any lay affidavit evidence arising solely from the pleading amendments.

3.    By Friday 17 August 2018, the respondents file and serve any lay affidavit evidence in answer arising solely from the pleading amendments and Domino's and Navman file and serve any expert evidence in chief arising solely from the pleading amendments.

4.    By Friday 31 August 2018, Domino's and Navman file and serve any lay affidavit evidence in reply arising solely from the pleading amendments.

5.    By Friday 21 September 2018, the respondents file and serve any expert affidavit evidence in answer arising solely from the pleading amendments.

4    The adjourned trial is due to recommence on 22 October 2018. I note that on 9 February 2018 the first to fifth respondents (referred to as Precision Tracking in these reasons) changed their solicitors.

5    By its interlocutory application filed on 30 May 2018, the applicant (Domino’s) seeks leave to amend its pleadings and seeks orders that Precision Tracking give further discovery, by certain specified categories.

6    Navman did not participate in the hearing of the interlocutory application. It did, however, ask for the benefit of any discovery orders that were made.

Application to amend

7    The parties did not disagree as to the principles but did disagree as to their application. The principles have recently been summarised by Burley J in, University of Sydney v ObjectiVision Pty Ltd [2016] FCA 1199 as follows (omitting citations):

[62]    The onus is on the party seeking leave to amend to persuade the Court that such leave should be given.

[63]    The principles articulated by the High Court in Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 apply to matters in this Court… [R]elevant matters that the Court is to consider [are]:

(1) The nature and importance of the amendment to the party applying for it;

(2) The extent of the delay and the costs associated with the amendment;

(3) The prejudice that might be assumed to follow from the amendment, and that which is shown;

(4) The explanation for any delay in applying for that leave;

(5) The parties’ choices to date in the litigation and the consequences of those choices;

(6) The detriment to other litigants in the Court; and

(7) Potential loss of public confidence in the legal system which can arise where a court is seen to accede to applications made without adequate explanation or justification.

[64]    The weight to be given to the considerations identified in Aon, individually and in combination, and the outcome of the balancing process, may vary depending on the facts in the individual case.

I apply those principles.

8    The principal issue in relation to the application to amend is prejudice to Precision Tracking’s preparation for the resumed trial by reason of further evidence or further discovery.

9    The following proposed amendments remained in contention, Precision Tracking having consented to some of Domino’s proposed amendments:

(a)    to the fourth amended statement of claim – paragraphs 45A, 46, 51(v)(BA), 51(xi), 52(viii), 52(ix) and 54H(iv); and

(b)    to the further amended defence to the statement of cross-claim (Defence) – paragraphs 26, 83, 84 and 85.

10    The first grouping of amendments in relation to the proposed fourth amended statement of claim to be considered is paragraphs 45A and 46. Domino’s submitted that these amendments proposed to introduce an allegation that the inventions disclosed in the First and Second Innovation Patents were the result of a collaboration between Domino’s and Precision Tracking. This allegation went to Domino’s claim that it owned, or alternatively jointly owned, the First and Second Innovation Patents. Domino’s submitted that if this allegation was made out then the patent infringement case against Domino’s would fall away.

11    The second grouping of amendments to be considered is paragraphs 51(v)(BA), 51(xi), 52(viii), 52(ix) and 54H(iv). These were referred to by Domino’s as the reagitated amendments since in 2017 Domino’s had previously sought leave to include those allegations in its pleading but leave was refused: Domino's Pizza Enterprises Ltd v Precision Tracking Pty Ltd (No 4) [2017] FCA 1264.

12    The third grouping is the proposed amendment to paragraph 26 of the Defence. Domino’s submitted that these amendments, to paragraphs 26 (d)-(f), clarified Domino’s position on the construction of the confidentiality agreement between Domino’s and Precision Tracking dated March 2015 (Confidentiality Agreement). This was important as the Confidentiality Agreement was central to the claims of Precision Tracking for breach of confidence by which it sought injunctive and extensive pecuniary relief. Domino’s submitted that if its construction was correct then Precision Tracking’s reliance on the Confidentiality Agreement was fundamentally flawed.

13    The fourth and last grouping is the proposed amendment to paragraphs 83, 84 and 85 of the defence. Domino’s submitted that these arose substantially from the disclosures that it had received from third parties by way of subpoenas. In short, if the information was confidential then some or all of that information would necessarily be confidential to Domino’s by reason of the joint endeavour, if that were established. Therefore, Precision Tracking could not restrain Domino’s from using such information.

14    As to the first grouping, I accept the submission on behalf of Precision Tracking that if the amendment were allowed it would result in the need for further evidence from the witnesses of fact whose evidence has otherwise long been finalised. I am not persuaded that the timing of the application to amend is explained by the contents of the subpoenaed documents and it seems to me very likely that the factual basis of a plea of collaboration or joint ownership in relation to the intellectual property rights as proposed to be pleaded would have been known to Domino’s at or near the time of the events in question. By reason of the extent of the delay, the absence of persuasive justification for the delay and the prejudice constituted by the self-evident need for further evidence, at least on the part of Precision Tracking, if the amendments were allowed, I reject the application to amend in relation to the first grouping, that is, proposed paragraph 45A and the amendments to paragraph 46.

15    As to the second grouping, the reagitated amendments, there is no persuasive explanation for the delay of some six months since the trial was adjourned. This grouping is not said to arise specifically out of ongoing discovery or answers to subpoenas. It is true to say that when I rejected these amendments on 27 October 2017, in Domino’s Pizza Enterprises Limited v Precision Tracking Pty Ltd (No 4), the then three-week trial was then more imminent than it is now, being then set to commence on 27 November 2017. Nevertheless I would conclude, as I did in that judgment at [12], that the amendment would require further evidence, at least from the experts, as the US specification differs from the Australian. I accept Precision Tracking’s submissions in this respect. Also, as I then said at [14], I do not accept the submission that, in effect, Precision Tracking should be able to deal in the time available with any evidence it wants to adduce in relation to the additional US document. In my view due account should be taken of the timetable that has otherwise been fixed and the preparation necessary to be done in relation to the new breach of confidence case and the recommencement of the hearing of this complex litigation. For example, discovery by Precision Tracking is continuing. I reject the application to amend to include the second grouping, the reagitated amendments.

16    As to the third grouping, proposed paragraphs 26(d) and 26(e) go only to questions of the proper construction of the Confidentiality Agreement. I allow those amendments: even though they may not strictly be necessary, they serve to put Precision Tracking on notice of those contentions.

17    However, paragraph 26(f) is in a different category because it seeks to plead that if the Confidentiality Agreement imposes obligations in respect of information that is not confidential it is to that extent an unlawful restraint of trade. In my opinion, it is probable, and I find, that not only does this amendment raise substantial legal issues but it would involve new evidence, for example in relation to practical working and to reasonableness. I accept Precision Tracking’s submissions in this respect and do not accept Domino’s submission to the contrary. This matter could have been pleaded much earlier. By reason of the extent of the delay, the absence of persuasive justification for the delay and the prejudice constituted by the need for further evidence if the amendment was allowed, I reject the application to amend in relation to paragraph 26(f).

18    As to the fourth grouping, whether or not the information there referred to is confidential information of Domino’s is a matter that could have been pleaded much earlier and there is no persuasive justification for the delay. I also accept that further evidence on the proposed factual matters, at least on the part of Precision Tracking, would be likely to be necessary. Although some of the matters particularised in proposed paragraph 85(h) flow from documents recently produced, in my view that goes only to the extent of the alleged disclosures rather than to what is said to be the “permitted purpose” of the alleged disclosures. For these reasons, I am not persuaded by Domino’s that I should grant leave in this respect. I therefore reject the application to amend in relation to this fourth grouping, paragraphs 83, 84 and 85 of the Defence.

Discovery

19    By orders made on 7 February 2017, I ordered by consent that, by 27 March 2017, Precision Tracking give standard discovery of documents, to be produced in electronic searchable .pdf format, pursuant to r 20.14 of the Federal Court Rules 2011 (Cth).

20    Domino’s submitted that the documents requested in proposed order 2 of its interlocutory application and the amended attachment D were documents that ought be discovered by Precision Tracking in accordance with its obligations under that rule.

21    As originally claimed, by the present interlocutory application Domino’s sought discovery as follows:

2.    By 28 June 2018, the Respondents give discovery of documents in the categories attached to this application and marked “D”.

3.    By 28 June 2018, the Respondents give the discovery referred to in paragraph 1 of the letter from Allens to DLA Piper dated 8 May 2018, namely, standard discovery of discoverable documents arising from a review of those documents previously provided by the Respondents to their former solicitors, Corrs Chambers Westgarth.

4.    By 28 June 2018, the Respondents provide, pursuant to paragraph 10.10 of the Central Practice Note: Court Framework and Case Management (CPN-1), a brief description of the steps taken to conduct a good faith proportionate search to locate discoverable documents pursuant to order 2 above and the orders of 12 April 2018, including what records have been searched for, what search criteria or terms have been used, and what databases have been searched.

22    Paragraphs 3 and 4 were agreed. Attachment D was amended and, as amended, took the following form:

Attachment “D”: Categories for discovery by the Respondents (as amended)

1.     Documents that describe any GPS tracking or fleet management system (or any part thereof) that:

a.     incorporated any one or more of the elements of the Proof of Concept System and/or the Precision Delivery System; and

b.     was offered by one or more of the Respondents, or with their authority or consent, to any person not a party to this proceeding.

2.     Documents evidencing the disclosure by one or more of the Respondents, or with their authority or consent, to any person not a party to this proceeding of any GPS tracking or fleet management system (or part thereof) which system incorporated any of the Proof of Concept Information, the Car Topper Concept, or the Precision Delivery System Confidential Information, including but not limited to:

a.     documents evidencing the offer or sale of such a system to any person not a party to this proceeding;

b.     marketing or promotional material about such a system;

c.     documents evidencing any presentation given to any person not a party to this proceeding, including but not limited to Toll Pty Ltd, Telstra Corporation Ltd, and George Weston Foods Limited, such documents including but not limited to slides; speaking notes; materials distributed during the presentation; notes made during the presentation; and/or any recording of the presentation (or part thereof);

d.     marketing or promotional material provided to any resellers of any GPS tracking or fleet management system offered by the Respondents (Resellers), including but not limited to PhonePost Pty Ltd (trading as GoFinder); MacTrack Pty Ltd; and Uniguard Pty Ltd;

e.     documents evidencing, used in, or distributed at any presentation or stall by one or more of the Respondents at the event known as “CeBIT”, such documents including but not limited to marketing materials; slides; speaking notes; materials distributed during the presentation; notes made during any presentation; and/or any recording of the Respondents’ participation at the event; and

f.     documents exchanged between one or more of the Respondents and Luxury Afloat Hawkesbury River and Brooklyn Pty Ltd, Macquarie University, Southern Cross Group Services Pty Ltd, Yum! Restaurants Australia Pty Ltd, Jimmy Brings Australia Pty Ltd, Laing O’Rourke Australia Construction Pty Ltd, Kentucky Fried Chicken Pty Ltd, or Telstra Corporation Ltd,

except where such disclosure was subject to a written confidentiality agreement.

3.     Documents evidencing any agreement between one or more of the Respondents and any Resellers in relation to any GPS tracking or fleet management system (or any part thereof) which system incorporated any of the Proof of Concept System Confidential Information, the Car Topper Concept, or the Precision Delivery System Confidential Information.

4.     Non-disclosure agreements or confidentiality agreements referring to, or in relation to, any GPS tracking or fleet management system (or any part thereof) that incorporated any one or more of the elements of the Proof of Concept System and/or the Precision Delivery System, between one or more of the Respondents and:

a.     PhonePost Pty Ltd;

b.     Toll Pty Ltd;

c.     Peter Ekstein;

d.     Southern Cross Group Services Pty Ltd;

e.     George Weston Foods Limited;

f.     Macquarie University; or

g.     Luxury Afloat Hawkesbury River & Brooklyn Pty Ltd.

23    Rule 20.14 is in the following form:

20.14    Standard discovery

(1)    If the Court orders a party to give standard discovery, the party must give discovery of documents:

(a)    that are directly relevant to the issues raised by the pleadings or in the affidavits; and

(b)    of which, after a reasonable search, the party is aware; and

(c)    that are, or have been, in the party’s control.

(2)    For paragraph (1)(a), the documents must meet at least one of the following criteria:

(a)    the documents are those on which the party intends to rely;

(b)    the documents adversely affect the party’s own case;

(c)    the documents support another party’s case;

(d)    the documents adversely affect another party’s case.

(3)    For paragraph (1)(b), in making a reasonable search, a party may take into account the following:

(a)    the nature and complexity of the proceeding;

(b)    the number of documents involved;

(c)    the ease and cost of retrieving a document;

(d)    the significance of any document likely to be found;

(e)    any other relevant matter.

(4)    In this rule, a reference to an affidavit is a reference to:

(a)    an affidavit accompanying an originating application; and

(b)    an affidavit in response to the affidavit accompanying the originating application.

Note:    Control is defined in the Dictionary.

24    In relation to proposed category 2, Domino’s submitted that each of the categories of documents was relevant to an issue raised by the pleadings, particularly in relation to Precision Tracking’s claims of alleged breach of confidence. As to proposed categories 3 and 4, Domino’s sought discovery of these documents for the same reasons as for category 2. In addition, these requests arose as a result of issues identified by Domino’s following the discovery of further documents by Precision Tracking on 13 April 2018 and the production of documents produced under subpoena by third parties. Primarily, the requests related to the provision of documents and information to some specific third parties, including resellers of Precision Tracking’s GPS tracking system.

25    Precision Tracking submitted that proposed category 2 was excessively broad in scope because it captured documents relating to any part of a GPS tracking system. Such systems contained many elements. Because Precision and Delivery Command were in the business of providing such systems to their customers, it was clear that this would capture an extremely broad range of documents created in the course of Precision Tracking’s businesses, the majority of which would have little bearing on the outcome of this proceeding. Proposed categories 3 and 4 were also framed, not by reference to Domino’s allegedly confidential information, but to Precision Tracking’s confidential information. The proposed orders were excessively broad, for the same reasons as proposed category 2.

26    A threshold issue is whether it is appropriate for the Court in effect to advise the parties on what is or is not the content of standard discovery and to do so by reference to proposed categories. This is because the content of standard discovery, under the current Federal Court Rules, is no longer one which may be decided objectively, that is, by reference to the pleadings, but extends to issues of reasonable search, as defined.

27    Further, to the extent that the resolution of this part of Domino’s interlocutory application depends on reaching a concluded view on the fine detail of the extensive exchange of lengthy letters between the solicitors for the parties, I decline to do so.

28    In what follows, therefore, I limit myself to the issue of direct relevance and say nothing about whether or not Precision Tracking has, or will have, failed in its discovery obligations as currently contended.

29    I do not draw any inferences from the failure in 2017 of Precision Tracking to give the discovery it had agreed to give.

30    Having made these observations, my conclusions are as follows.

31    As to category 2, I direct that within 28 days from the date of these orders, Precision Tracking give discovery of:

Documents evidencing the disclosure by one or more of the respondents, or with their authority or consent, to any person not a party to this proceeding of any GPS tracking or fleet management system which system incorporated the Proof of Concept Information, the Car Topper Concept, or the Precision Delivery System Confidential Information, except where such disclosure was subject to a written confidentiality agreement.

32    In my opinion this category, as narrowed, is directly relevant within the meaning of r 20.14.

33    As to category 3, for the same reasons, I direct that within 28 days from the date of these orders, Precision Tracking give discovery of:

Documents evidencing any agreement between one or more of the respondents and any Resellers in relation to any GPS tracking or fleet management system which system incorporated the Proof of Concept System Confidential Information, the Car Topper Concept, or the Precision Delivery System Confidential Information.

34    Again, in my opinion, this category, as narrowed, is directly relevant within the meaning of r 20.14.

35    As to category 4, for the same reasons I direct that within 28 days from the date of these orders, Precision Tracking give discovery of:

Non-disclosure agreements or confidentiality agreements in relation to any GPS tracking or fleet management system that incorporated the Proof of Concept System or the Precision Delivery System, between one or more of the respondents and:

a.     PhonePost Pty Ltd;

b.     Toll Pty Ltd;

c.     Peter Ekstein;

d.     Southern Cross Group Services Pty Ltd;

e.     George Weston Foods Limited;

f.     Macquarie University; or

g.     Luxury Afloat Hawkesbury River & Brooklyn Pty Ltd.

36    Again, in my opinion, this category, as narrowed, is directly relevant within the meaning of r 20.14.

37    I am not persuaded, either on the evidence or as a matter that is self-evident, that giving discovery in these terms would impose an unwarranted burden on Precision Tracking.

38    Documents discovered pursuant to these orders by Precision Tracking to Domino’s are also to be discovered to Navman.

Conclusion and orders

39    I make orders accordingly. I will, if necessary, hear the parties in relation to costs. I indicate that my present provisional view is that, in light of the mixed success of the parties on Domino’s interlocutory application, there should be no order as to costs of the interlocutory application except that Domino’s should pay Precision Tracking’s costs, if any, thrown away by reason of the amendments to the pleadings which I have allowed.

Associate:

Dated:    19 June 2018

SCHEDULE OF PARTIES