Case: Reading Entertainment Australia Pty Ltd v Birch Carroll &amp; Coyle Ltd [2002] FCAFC 109
Outcome: followed
The first three grounds really revolve around the same point. Documents relating purely to credit are not discoverable. In a different context McHugh J, in a dissenting judgment, has criticised any bright line distinction the evidence as to credit and evidence as to the issues: Palmer v The Queen [1998] HCA 2 ; (1988) 193 CLR 1 at [51] et seq. However the Full Court of the Federal Court in Reading Entertainment Australia Pty Ltd v Birch Carroll &amp; Coyle Ltd [2002] FCAFC 109 has reaffirmed the distinction in the context of discovery. Beaumont J at [70] adopted the statement in Butterworths , Practice &amp; Procedure of the Federal Court at [40.760] "Documents which relate only to credit do not relate to a matter in question within the meaning of the traditional formulation." His Honour continued: "This may be seen as an example of the general principle, still valid, that the Court must always be satisfied that any order for discovery (including, as here, a specific order) must be 'reasonably' necessary for the fair disposing of the case." 107 Tamberlin J at [116] in agreeing with Beaumont J "strongly endorsed" the need for exercise of restraint in discovery. The judgment in Reading is binding on me. 108 In the present case, everyone knows that critical witnesses for the ACCC have been granted immunity. That fact can be, and no doubt will be, used by the respondents as a legitimate basis for an attack on credibility the witnesses. The effectiveness of such an attack cannot be predicted. However, documents which do no more than evidence that fact are relevant only to credit and are not discoverable. 109 On 8 January 2007 the respondents filed an amended defence to the ACCC's second further amended statement of claim. It included some new sub paragraphs to par 222. These were not introduced pursuant to leave. This is not a criticism, since the respondents had to plead to the ACCC's amended statement of claim. However the question of leave needs to be considered now. The new sub-paragraphs are as follows: (aa) that in or about late January or February 1998 the Amcor Group formed the belief that it has a higher cost structure than Visy Board in its corrugated fibreboard packaging division and was significantly uncompetitive with the corrugated fibreboard packaging business conducted by Visy Board. Particulars The Amcor Group's belief arose by reason of the fact that a former employee of Visy Board, John Alan Morriss (" Morriss "), provided the Amcor Group with, and the Amcor Group received, confidential information of Visy Board concerning Visy Board's CFP business, including a copy Visy Board's Managing Director's Report for the CFP Division dated June 1995 (" the 1995 Report "). The 1995 Report covered Visy Board's sales and included a detailed analysis of all major costs areas by month, year to date performance against budget, and the previous year. It included statistics on volumes, credit notes, employee numbers and conversion cost per unit of volume and per employee. Morriss provided extracts of the 1995 Report and other Visy Board confidential information relating to Visy Board's costs and sales figures in respect of the CFP business to Peter Brown of the Amcor Group . (ab) that in or about November 1999, Morriss obtained a copy of the Visy Board Managing Director's Report CFP Division for October 1999 (" 1999 Report"), showed Brown, then the Managing Director of Amcor Australasia, the summary of the key financial data contained in the 1999 Report, and discussed the data with Brown. Particulars The 1999 Report covered an analysis of volumes, employee numbers, costs and production statistics and profitability of each Visy Board Manufacturing plant for Visy Board's CFP business. (ac) that during the period of his employment with the Amcor Group (approximately January 1998 until January 2000), Morriss disclosed to Amcor Group personnel, including Brown and Hodgson, confidential information of Visy Board concerning customers, volumes of CFP products sold, and Visy Board's costs of producing CFP products. (ad) that the Visy Board confidential information referred to in the particulars to paragraph 222(aa) and in paragraphs 222(ab) and (ac) above (" the Visy Confidential Information ") was used by the Amcor Group: (i) to evaluate the relative efficiency of the Amcor Group's processes and costs in comparison with the corresponding processes and costs of Visy Board; (ii) in the development of the Amcor Group's business strategies and plans to compete with Visy Board's CFP business, including as the basis of capital expenditure requests to the Board of Amcor Limited; and (iii) to target Visy Board's customers. Particulars (A) Morriss provided information in the 1995 Report to members of the Executive Management Team of Amcor's CFP business including Brown, Peter Reichler, David Ley, Tony Myles, Max Fitzgibbons, John Crawford, Hodgson and Laidlaw at an Amcor strategy meeting in March 1998 at which the relative CFP cost structures of Visy and Amcor were discussed. Jones, then the Managing Director of Amcor Limited, visited during the meeting and was briefed on strategy developments, including the significance of the information in the 1995 Report. (B) Brown and Morriss from time to time during the Period of Service attended the Amcor Group's Camberwell offices to discuss issues about the CFP business with Jones. During these meetings, Morriss, Brown and Jones discussed the competitive position of the Amcor Group's CFP business and discussed information derived from the 1995 Report. (C) Information derived from the 1995 Report was used by Morriss at Board meetings of Amcor Limited that occurred in 1998 during the course of which Morriss made presentations to the Board of Amcor Limited in the context of making capital expenditure requests to upgrade facilities at the Amcor Group's corrugated factory at Brooklyn. (D) The Visy Confidential Information, or parts of it, were cited in presentations made to Jones, as Managing Director of Amcor Limited, to verify submissions as to the true competitive position of the Amcor Group and Visy Board, and in presentations made to Jones in support of additional injections of capital to fund a restructure of the corrugated fibreboard packaging division of the Amcor Group. These presentations were made by Brown, Morriss and others in or about the first half of 1988 and later by Hodgson to Brown and Jones at the Amcor Group's Rocklea offices in or about mid to late 1998. The presentation by Hodgson was made to support his request for a new corrugator and supporting infrastructure modernisation in order for the Amcor Group to compete more effectively with Visy Board's CFP business. (E) The Amcor Group restructured its CFP business to reduce costs and pursued increased market share by a "breadth" strategy, including bundling CFP products with other primary packaging which Visy Board did not offer at the time. This was agreed at the March 1998 strategy planning meeting referred to in sub-paragraph (a) above and ultimately approved by the Board on Amcor Limited and implemented. (ae) that despite incurring and continuing to incur significant expenditure aimed at regaining competitiveness in its CFP business, in or about late 1999 or early 2000 senior management of the Amcor Group, including Jones, Brown, and Hodgson, devised an alternative strategy, (described by the Amcor Group as "price recovery"), namely attempt to pursue collusive arrangements with Visy Board concerning prices and competition in respect of the supply of CFP; (af) that the Amcor Group's attempts to pursue the collusive arrangements referred to in paragraph 222(ae) were unsuccessful." 110 Sub-pars (aa) to (ad) raise allegations far removed from the numerous serious issues of fact and law already present in this case. They have the potential of raising countless side issues as to the rights and wrongs of the conduct of Mr Morriss and the effect of that conduct on Amcor. Such evidence would be likely to be excluded as resulting in an undue waste of time: Evidence Act 1995 (Cth) s 135 (c). 111 Such pars (ae) and (af) stand on a different footing. The respondents put them as an alternative. In the end the respondents did not object to the provision of further particulars. 112 There will be orders as follows: 1. The first to fifth respondents' motions dated 5 December 2006 and 1 February 2007 are dismissed with costs. 2. Subparagraphs 222 (aa) to (ad) of par 22 of the first to fifth respondents' amended defence filed 8 January 2007 are struck out. 3. The first to fifth respondents file and serve further and better particulars of the allegations in par 222 (ae) and (af) of their amended defence by 27 April 2007 4. The first to fifth respondents pay the applicant's costs of the motion dated 21 February 2007. I certify that the preceding one hundred and twelve (112) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. Associate: Dated: 29 March 2007 Counsel for the Applicant: P J Jopling QC, CM Caleo SC, J Moore and P Wallis Solicitor for the Applicant: Australian Government Solicitor Counsel for the first to fifth Respondents: J L Sher QC, J Beach QC, P D Crutchfield, M H O'Bryan and D Crennan Solicitors for the first to fifth Respondents: Arnold Bloch Leibler Dates of Hearing: 28 February, 1, 13 and 15 March 2007 Date of Judgment: 29 March 2007 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2007/444.html