Case: Alphapharm Pty Limited v Eli Lilly Australia Pty Limited [1996] FCA 391
Outcome: applied
In his reasons for judgment in Alphapharm Pty Limited v Eli Lilly Australia Pty Limited [1996] FCA 391 ('Alphapharm'), Lindgren J made certain observations concerning Order 15A rule 6 at [41] as follows: '1. Paragraphs 6 (a) and 6 (c) pose an objective test, the opening words "there is" in each paragraph signifying "there exists"; but the "insufficiency test" of para 6 (b) has both subjective and objective aspects. 2. Although I need not explore the subjective aspect fully, it seems clear that if the evidence went so far as to show that a particular applicant was already able to decide to commence a proceeding by, for example, showing that the applicant had in fact decided to do so, para 6 (b) would not be satisfied even though the information available satisfied the objective aspect of the insufficiency test referred to below. 3. The fact that a particular applicant genuinely feels unable, because of a lack of information, to decide to commence a proceeding does not, without more, satisfy para 6 (b); the objective aspect of the paragraph requires it to be shown as an objective fact that the applicant lacks "sufficient information to enable a decision to be made whether to commence a proceeding". 4. In my view, the objective aspect of para 6 (b) invokes a notion of "reasonable sufficiency", the question raised being whether it is reasonable that the applicant for an order be required to take its decision without having the information to become available from inspection of the document or documents of which discovery is sought. 5. If the insufficiency test is satisfied, a second question will arise, namely, whether the Court's discretion should be exercised in favour of the making of an order. 6. The questions posed by rule 6 and referred to above are to be answered in the context of an adversary system of forensic contest in which a proposed respondent is ordinarily entitled to withhold its evidence, certainly prior to the commencement of proceedings. 7. The questions are also to be answered in the light of the nature of the "cause of action" contemplated and the range of information potentially available in respect of a cause of action of that kind. 8. ... in my opinion rule 6 is not necessarily rendered unavailable by the fact that the applicant already has available evidence establishing a prima facie case for the granting of relief. This is made clear by the reference in para (a) to the existence of "reasonable cause to believe that the applicant has ... the right to obtain relief ..." (emphasis supplied). It would impose an artificial constraint on rule 6, not supported by its terms or purpose, to exclude, a priori , all cases in which the insufficiency of the information possessed by the applicant to enable a decision to be made whether to litigate is due to a matter of "defence" which would defeat the prima facie case. 9. Rule 6 does not provide a means by which an applicant will be enabled to have available to it every document which would assist it in deciding whether to litigate. If that were the intention, paras (a) and (c) would stand alone and the additional condition set out in para (b) would not be necessary. 10. Paragraph 6 (b) contemplates that after making all reasonable inquiries, the applicant has come up against a problem, namely, that it is lacking a piece of information or pieces of information reasonably necessary to enable it to decide whether to commence a proceeding.' 58 In St George Bank Ltd v Rabo Australia Ltd (2004) 211 ALR 147 Hely J stated a series of propositions which his Honour considered had emerged from the authorities in relation to the proper application of Order 15A rule 6 at [26] as follows: '(a) the rule is to be beneficially construed, given the fullest scope that its language will reasonably allow, with the proper brake on any excesses lying in the discretion of the court, exercised in the particular circumstances of each case: Paxus Services Ltd v People Bank Pty Ltd (1990) 99 ALR 728 at 733; 20 IPR 79 at 85; Minister for Health and Aged Care v Harrington Associates Ltd [1999] FCA 549 ; BC9902167 at [27]; (b) each of the elements prescribed in subparas (a), (b) and (c) of the rule must be established: Hooper v Kirella Pty Ltd [1999] FCA 1584 ; (1999) 96 FCR 1 at 11 [38] ; 167 ALR 385 at 367; [1999] FCA 1584 ; 47 IPR 21 at 30. Preliminary discovery cannot itself be used to remedy deficiencies in the satisfaction of the conditions themselves: Airservices Australia v Transfield Pty Ltd [1999] FCA 886 ; (1999) 92 FCR 200 at 202 3 [5]; [1999] FCA 886 ; 164 ALR 330 at 332; (c) the test for determining whether the applicant has "reasonable cause to believe", as required by subpara (a), is an objective one: Hooper at FCR 11 12 [39]; ALR 367; IPR 30; Malouf v Malouf [1999] FCA 710 ; BC9902833 at [16]; Quanta Software International Pty Ltd v Computer Management Services Pty Ltd (2000) 175 ALR 536 at 541-2 [24]; 49 IPR 25 at 31; Alphapharm Pty Ltd v Eli Lilly Australia Pty Ltd [1996] FCA 391 ; BC9602085 at 23. Further, the words "or may have" cannot be ignored. The applicant does not have to make out a prima facie case: Quanta Software at ALR 541-2 [24]; IPR 31; Paxus Services at ALR 733; IPR 85; (d) belief requires more than mere assertion and more than suspicion or conjecture. Belief is an inclination of the mind towards assenting to, rather than rejecting a proposition. Thus it is not sufficient to point to a mere possibility. The evidence must incline the mind towards the matter or fact in question. If there is no reasonable cause to believe that one of the necessary elements of a potential cause of action exists, that would dispose of the application insofar as it is based on that cause of action: John Holland Services Pty Ltd v Terranora Group Management Pty Ltd [2004] FCA 679 ; BC200403021 at [13], [14], [17] and [73]; (e) while uncertainty as to only one element of a cause of action might be compatible with the "reasonable cause to believe" required by subpara (a), uncertainty as to a number of such elements may be sufficient to undermine the reasonableness of the cause to believe: Glowatzky v Insultech Group Pty Ltd (1997) 39 IPR 215 ; (f) the question posed by subpara (b) of the rule is not whether the applicant has sufficient information to decide if a cause of action is available against the prospective respondent. The question is whether the applicant has sufficient information to make a decision whether to commence proceedings in the court: Quanta Software at ALR 543 [33]-[34]; IPR 32-3, Alphapharm at 24 6. Accordingly, an applicant for preliminary discovery may be entitled to discovery in order to determine what defences are available to the respondent and the possible strength of those defences, or to determine the extent of the respondent's breach and the likely quantum of any damages award: CGU Insurance Ltd v Malaysia International Shipping Corp Berhad (2001) 187 ALR at 285 [21]; Quanta Software at ALR 543 [33]-[34]; IPR 32-3, Alphapharm at 24 6, Airservices Australia at FCR 202 3 [5]; ALR 332 (g) whether an applicant has "sufficient information" for the purposes of subpara (b) also requires an objective assessment to be made: Minister for Health at [44]; Alphapharm at 23 4, Hooper at FCR 12 [40]; ALR 367; IPR 31. The subparagraph contemplates that the applicant is lacking a piece (or pieces) of information reasonably necessary to decide whether to commence proceedings; (h) it is no answer to an application under the rule to say that the proceeding is in the nature of a "fishing expedition": Paxus Services at ALR 733; IPR 85. Indeed O 15A r 6 "expressly contemplates" what once might have been castigated as "fishing": Bailey v Beagle Management Pty Ltd [2001] FCA 60 ; (2001) 105 FCR 136 at 143 [27] ; [2001] FCA 60 ; 182 ALR 264 at 270-1; 20 IPR 79 at 85. As Burchett J commented in Paxus Services , the rule is (at ALR 733; IPR 85): ... designed to enable an applicant, in a situation where his proof can rise no higher than the level the rule describes, to ascertain whether he has a case against the prospective respondent ...' 77 Order 15A rule 6 is directed to aiding an applicant who is having real difficulty, and reasonably so, in deciding whether to litigate because of a lack of key information, whether relating to its own case or to that of the proposed respondent, which is in the possession of the respondent. It requires evidence demonstrating that the applicant for relief is on the horns of a dilemma: whether to sue or not to sue (per Lindgren J in Alphapharm at [45]). 78 Telstra claims that there is reasonable cause to believe that it may have, or already has, the right to obtain judicial review of the relevant administrative action involved in the allocation of an additional $358 million to the Infrastructure Programme, for which the Minister is responsible, without affording all applicants for the base funding of up to $600 million an opportunity to submit proposals as to how a grant to them of $958 million could have been spent to secure the desired outcome and meet the original benchmarks and more. 79 It wishes to mount an argument that it was denied procedural fairness. 125 Given Telstra's predisposition, as evidenced by the memorandum, to in effect 'sue regardless' it seems that the subjective aspect of the rule 6(b) requirement could not be satisfied in this case. The evidence does not, in my opinion, demonstrate that, to use Lindgren J's expression 'Telstra is on the horns of a dilemma: whether to sue or not'. 126 This brings me to the question of discretion. No question of delay arises. It was reasonable for Telstra to await Clayton Utz's response of 26 July 2007 to its Group General Counsel, Legal Services' letter of 19 July 2007 before making its Order 15A rule 6 application, which, in its original form, was filed on 3 August 2007. 127 However, I consider that the evidence of Telstra's 'sue regardless' disposition in respect of the award of $958 million of funding to OPEL Networks Pty Ltd is a matter properly taken into account in considering the proper exercise of the Court's discretion, as is the further observation contained in the internal draft memorandum, namely: 'If we are successful in getting documents this way, there will be limits on how they are used (eg only for litigation purposes, not in the media), but the hearing itself will be public and would presumably of itself be of media interest.'