Re EI Du Pont De Nemours & Company v the Commissioner of Patents; Australian Paper Manufacturers Limited; Cadbury Schweppes Pty Limited; J Gadsden Australia Limited; Coca-Cola Operations Pty Limited; Southern Cross Beverages Pty Limited and Coca- [1987] FCA 26 (9 February 1987)

FEDERAL COURT OF AUSTRALIA

Re: E.I. DU PONT DE NEMOURS & COMPANY
And: THE COMMISSIONER OF PATENTS; AUSTRALIAN PAPER MANUFACTURERS LIMITED;
CADBURY SCHWEPPES PTY. LIMITED; J. GADSDEN AUSTRALIA LIMITED; COCA-COLA
OPERATIONS PTY. LIMITED; SOUTHERN CROSS BEVERAGES PTY. LIMITED and COCA-COLA
BOTTLERS (BRISBANE) LIMITED
No. G590 of 1986
Patent - Discovery - Practice

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Sheppard J.
Beaumont J.
Burchett J.

CATCHWORDS

Patent - Petition for extension of patent - whether discovery should be ordered.

Discovery - Application to set aside order for discovery - consent order - Part 81 Supreme Court Rules (N.S.W.) within power - Petitioner's obligation to produce documents.

Practice - Supreme Court Rules (N.S.W.) applicable to petition to extend patent - consent order - ability of court to alter interlocutory order made by consent - ability of appellate court to interfere with discretionary order on matter of practice and procedure.

Patents Act 1952 Part IX ss.90, 92, 93, 94.

Supreme Court Rules Part 81, rr.19, 20, 23, 28. Part 26, rr. 1, 2.

Hele-Shaw's Patents (1938) 55 RPC 120

Purcell v. F.C. Trigell Ltd. (1971) 1 Q.B. 358.

Chanel Ltd. v. F.W. Woolworth and Co. Ltd. (1981) 1 WLR 485.

In Re Duckham's Patent [1951] HCA 63; (1951) 82 CLR 603.

In Re Coldham; Ex parte Australian Building Construction Employees' and Builders Labourers' Federation (1986) 60 ALJR 245

Wilkshire and Coffey v. Commonwealth of Australia (1976) 9 ALR 325.

Harvey v. Phillips [1956] HCA 27; (1956) 95 CLR 235.

Adam P. Brown Male Fashions Proprietary Limited v. Philip Morris Incorporated [1981] HCA 39; (1981) 148 CLR 170.

Siebe Gorman & Co. Ltd. v. Pneupac Ltd. (1982) 1 WLR 185

Wentworth v. Attorney General for the State of New South Wales [1984] HCA 70; (1984) 154 CLR 518

Thwaite v. Thwaite (1982) Fam 1

Superstar Australia Pty. Ltd. v. Coonan & Denlay Pty. Ltd. (1981) 40 ALR 183.

House v. The King [1936] HCA 40; (1936) 55 CLR 499.

Minister for Aboriginal Affairs v. Peko-Wallsend Ltd. (1986) 66 ALR 299.

Norbis v. Norbis (1986) 60 ALJR 335.

In Re Pitman's Patent (1871) 4 LRPC 84.

In Re Robinson's Patent [1918] HCA 35; (1918) 25 CLR 116.

HEARING

SYDNEY
9:2:1987

Counsel for the Appellant: R.G. Gyles, Q.C. with R. Peters.

Solicitors for the Appellant: Philips Fox.

Counsel for the Third Respondent: Mrs. A.C. Bennett.

Solicitors for the Third Respondent: Corrs Pavey Whiting & Byrne.

Counsel for the Fourth Respondent: J.D. Heydon.

Solicitors for the Fourth Respondent: Priddle Gosling.

Counsel for the Fifth, Sixth and Seventh Respondents: R.B.S. Macfarlan, Q.C. with M. Ellicott.

Solicitors for the Fifth, Sixth and Seventh Respondents: Dawson Waldron.

ORDER

The appeal be allowed.

So much of the orders made by the Supreme Court on 8 December 1986 as directed the appellant to file its list of documents on or before 6 February 1987 and as gave consequential directions as to the identification of documents in groups or bundles be set aside.

The appellant file and serve a notice of motion for directions returnable before the duty Judge in the Equity Division of the Supreme Court on 16 February 1987.

The respondents (other than the first and second respondents) pay the appellant's costs of the appeal.

Note: Settlement and entry of orders is dealt with in
Order 36 of the Federal Court Rules.

DECISION

On 22 December 1986 we allowed an appeal in this matter. We said that we would publish reasons for our decision at a later time. What follows by way of preface to my reasons is trite; but, in the light of the arguments addressed to us by counsel for the respondents, it needs to be said with some emphasis. Courts are publicly funded institutions. Except for a nominal filing fee, they provide their facilities free of charge. The judges who preside over them have a duty, consistently with their primary duty to administer justice, to do their utmost to prevent waste of public time and money. The days when parties were left at leisure to pursue private litigation in the way that they thought best suited their purposes have long gone. Courts have an overriding obligation to see to it that those using their facilities are proceeding in a way best calculated to bring litigation to an end at the earliest possible moment so long as the primary goal of achieving justice is not lost sight of. Undoubtedly the setting aside of a consent judgment or order which is final in character may provide difficulties for an applicant; cf. P.W. Young, The Law of Consent at pp. 182-5. But interlocutory orders, particularly those dealing with the procedural steps to be taken by parties to prepare a case for trial, fall into a different category. No matter what agreements the parties have made in relation to these matters, the court always remains in overall control of the proceedings before it. Judges have power, until the hearing is concluded, to make, and to continue to make, such directions as seem to them best suited properly and adequately to manage and direct the cases in their lists. Obviously they will always pay due attention to what the parties themselves suggest and will usually accept consent time-tables for procedural steps at their face value. But if an investigation of a matter at a directions hearing reveals that existing directions, whether made by consent or not, are not adequate for, or are not suited to, the needs of the case, the court has a duty to substitute appropriate directions for the existing ones, if necessary, against the will of the parties themselves.

2. In complex cases it is usual for courts to hold extensive directions hearings with a view to finding out what the real issues are, what the extent of the evidence will be, what steps may usefully be taken to confine or compress evidence and how long the case will occupy the court's time. Holding directions hearings of this kind is not only of benefit to the parties themselves; it enables the court to administer its list in the best way. Undoubtedly this is a complex case and requires the sort of investigation to which I have referred.

3. Against the background of what I have said I can shortly dispose of a principal submission made by counsel for all participating respondents that the appeal should fail because the order which the learned primary Judge largely refused to disturb was a consent order. So it was; but it was an order of the procedural kind to which I have referred. The fact that the order was by consent was a material matter for both the primary Judge and this Court to take into account. But it did not have the conclusive effect for which counsel for the respondents contended. The submission in this respect was rejected by me for this reason.

4. At the other extreme of the argument was a submission by counsel for the appellant that the Supreme Court Rules, at least insofar as they provided for discovery in an application such as this, were invalid. In my opinion there was no substance in this submission. I agree with what has been said about that matter by Beaumont J. whose judgment I have had the advantage of reading. I refer also to the decision of this Court in G.D. Searle & Co. v. Drug Houses of Australia Pty Limited (1984) 53 ALR 637.

5. In my opinion the central question in this appeal was whether the discretion which his Honour exercised miscarried. An appellant seeking to disturb the exercise of a discretion by a primary Judge carries a heavy burden; particularly is that so when the discretion has been exercised in an interlocutory application relating to a matter of procedure. I nevertheless thought that counsel for the appellant had demonstrated that the discretion had miscarried. I was of that view because, having considered the whole of the circumstances of the case, it appeared to me that it was plainly wrong to require the appellant to give general discovery by 6 February 1987. With respect, I consider that his Honour's decision in this respect failed to pay proper regard to the material which was contained in the affidavit filed in support of the application for an extension of time. The relevant paragraphs of this affidavit are set out in the reasons for judgment prepared by Beaumont J. and I need not repeat them. In the absence of cross-examination of the deponent of the affidavit, the statements in those paragraphs should be accepted at their face value. It is not suggested in his Honour's judgment that he did not do so, but he did raise the question whether what was said in the affidavit necessarily led to the conclusion that the extension of time sought by the appellant was necessary.

6. It is well established that solicitors advising a party on the question of discovery carry a heavy obligation. This has been emphasized on a number of occasions. In Woods v. Martins Bank Limited (1959) 1 QB 55 Salmon J. (as he was) said (p. 60):-

"No doubt the defendants' solicitors explained to
their clients that they must disclose all relevant
documents which were or had been in their
possession. The solicitors' duty, however, does
not stop there. It cannot be too clearly
understood that solicitors owe a duty to the
court, as officers of the court, carefully to go
through the documents disclosed by their clients
to make sure, as far as possible, that no relevant
documents have been omitted from their clients'
affidavit. In this case I am regretfully driven
to the conclusion that this duty was not performed
by the defendants' solicitors".

7. Until the most recent edition - the 19th - Scrutton on Charter-Parties included a chapter or note on the practice of the Commercial Court. In the 17th edition (1964) reference was made to the practice of the Commercial Court in relation to lists of documents. It was said (p. 445) that these normally take the place of affidavits of documents. The then current authors continued:-

"The judges expect solicitors and counsel
practising before them to see that the lists of
documents, though not on oath, are complete, and
any case of non-disclosure of a material document
seriously prejudices the case of the party failing
to disclose it".

Reference should also be made to Cairns on the Law of Discovery in Australia (1984) where it is said, under the heading "Solicitor's duty" (p. 35) that to discharge his duty, the solicitor is required to study a list of documents and form his own opinion of its adequacy and whether any material has been left out. That is, he must make his own independent appraisal of the case and assess what the client is likely to have. An affidavit or list of documents should be delivered only if the solicitor is satisfied that it is complete. I respectfully agree with what the author has said.

8. The solicitor for the appellant in the present case is under the obligations to which reference has been made in the authorities and texts referred to. An attempt to relieve him of some of those obligations was made by the direction that the list would be treated as sufficient if it identified documents in groups or bundles, provided the description of each group or bundle gave a reasonable indication of the contents. That qualification did nothing, in my respectful opinion, to lighten the solicitor's load except insofar as it permitted him to refer to the documents in the list in a more general way than would otherwise have been the case. It relieved him not at all of his obligation to study each of the documents which his client thought might be relevant and make a decision, in the light of the issues in the case, whether the document was relevant to those issues and thus discoverable.

9. There is another side to the coin. Just as it is important for solicitors to make sure that there is full disclosure of documents on discovery, so it is their obligation also to ensure that documents which bear no relevance whatsoever to the issues in question are not produced. If they are, the task of those inspecting them becomes a very difficult one. It is understandable that a party obliged to discover may err on the side of caution and there can be no question but there will be cases where different minds will take different views about whether a document is relevant or not. In those cases it is no doubt wise to take the cautious approach of including the document in the list. But in the light of the number of documents which there must be in this case, a solicitor concerned to determine which documents should be produced and which not, must be careful to ensure that he does not take the easy course of listing everything available and leaving to others the problem of working out what is relevant. If he produces too much, his sin of commission will not be as great as his sin of omission where he fails to produce a relevant document, but nevertheless his inclusion of irrelevant material is not conducive to the proper administration of justice.

10. The evidence given by the solicitor establishes that he was shown a large room in a building occupied by the appellant which was used for storing documents. He went on to describe the contents of the room and also referred to the fact that there were other documents in a warehouse occupied by the appellant. He was told, and there is no reason to doubt the accuracy of his information, that it would take many weeks to sort through and prepare a list of the documents. The application came before his Honour on 8 December. There is a question of delay to which I shall refer later. But the fact was that on 8 December 1986 no steps to prepare a list of documents, general or otherwise, had been taken. The documents in question were in the United States in the room and warehouse to which reference has been made. His Honour's decision required that discovery be afforded within a period of two months. During part of that period there would be the usual difficulties occasioned by the Christmas-New Year holidays.

11. In my opinion, the material in the solicitor's affidavit should have caused all the parties and the learned primary Judge to pause and consider what the best course for the future prosecution of the case was. It is difficult to imagine how the respondents would have been assisted by receiving a list specifying in a general way innumerable bundles of documents. They, like the appellant's solicitor, would have been obliged in their own interests to inspect them all. They could not have run the risk of doing otherwise. No solution in a case of this kind is completely satisfactory. Arbitrary decisions have to be made and corners have to be cut. If this is not done cases will never come on for hearing. Affidavits were directed to be filed by 6 February 1987. The appellant is under an onerous duty to make full disclosure in its evidence. In the light of the material which was included in the solicitor's affidavit, it seems to me that what was clearly required was a change of direction so far as discovery was concerned. Although an initial delay would have been involved, the better course was to await the affidavits and a consideration of the documents annexed or referred to in them. The issues would then be clear. If discovery were still required, the appropriate course would be to consider an order requiring discovery, not generally, but in a limited or special form. I agree entirely with his Honour that it may not, in the end, be wise to leave the selection of documents entirely to the appellant and that the respondents may well require the protection of an order for discovery, limited though it may be, as some kind of check on the adequacy of the appellant's disclosure in its evidence. But I think that the solicitor's affidavit established quite clearly that the time for a consideration of that matter was premature. That is why, so it seemed to me, the wise course was to await the affidavits and then to hold a proper investigation of the issues and the evidence to be led in support of the cases of each of the parties for the purpose of seeing whether discovery was necessary and, if so, what the appropriate order for it was.

12. In reaching my conclusions I bore very much in mind, as I have earlier indicated, the fact that the appeal was against an interlocutory judgment relating to a matter of procedure. I have not interfered lightly with that order but, in view of the entirety of the material which was before the learned primary Judge, I am satisfied that the interference of this Court was warranted in the overall administration of justice. In reaching my conclusion I had regard to the delay of which the appellant has no doubt been guilty in the prosecution of its claim and the undesirability of an application of this kind being delayed unduly when others may wish to take advantage of the expiration of the letters patent. The original directions were made on 22 August 1986 and allowed almost four months within which the appellant might file its list of documents. The order made on 8 December last extended this period to 6 February 1987. In all a period little short of six months has been involved. Although the problem of the large number of documents was known by September 1986, the matter was not raised until some two months afterwards. This is a matter for which the appellant's advisers must take responsibility and upon which they are open to criticism. They should have brought the matter to the attention of the respondents shortly after the return of the solicitor from the United States. But matters of that kind go to the question of whether the case is being properly prosecuted. If it is not, an application to have it dismissed for want of prosecution may be made. No such application was before us. The case is thus an on-going one which requires proper investigation and appropriate directions to get it ready for hearing. What I have said in the early part of this judgment indicates that it is not only in the interests of the parties that that should be done; it is also in the public interest that the case be prosecuted efficiently. If it is not, its impact on the list will be greater and will inhibit the Court in its overall task of discharging its duty to the community.

13. For all the reasons I have given I reached the conclusion that the appeal should be allowed and that orders be made in the terms of those which were made on 22 December last.

This is an appeal, by leave granted, from a judgment of a Judge of the Supreme Court of New South Wales refusing to set aside an order made by that Court (in proceedings brought by the appellant for the extension of the term of a patent) that the appellant file and serve a list of documents.

2. There is no real dispute about the facts. By its petition filed in the Supreme Court on 16 June 1986, the appellant, a Delaware corporation, alleged that Letters Patent were granted to it for an invention entitled "Biaxially Oriented Article" for a term which, unless extended, expired on 16 December 1986; that the invention was of great utility for a number of reasons then advanced; that the invention was the result of considerable time, expense and inventive ingenuity; that patents claiming the invention had been granted in a number of foreign countries; that the appellant had granted licences throughout the world to use the invention; that the appellant had experienced serious delays and difficulties in the detailed development, study, testing and exploitation of articles the subject of the invention; that marketing of the articles in Australia by a licensee and a sub-licensee did not commence until 1979; that up to 1985 the appellant had earned the sum of approximately US$1,300,000.00 by way of royalties; that for a significant proportion of its life, the patent could not be adequately exploited for reasons beyond the control of the appellant; and that the appellant had received insufficient remuneration from the exploitation of the invention within Australia.

3. The petition was presented pursuant to Part IX of the Patents Act 1952. A patentee who considers that he has been inadequately remunerated by his patent may present a petition praying that his patent be extended for a further term (s.90(1)). A person interested may file a caveat against the extension (s.91) and that person shall be made a party respondent to the petition (s.92). The Commissioner of Patents is also entitled to appear and be heard (s.92). The Court shall, in considering its decision, have regard to (a) the nature and merits of the invention in relation to the public; (b) the profits made by the patentee as such; and (c) all the circumstances of the case (s.93). If the Court is of the opinion that the patentee has been inadequately remunerated, the Court may order the extension of the term of the patent or order the grant of a new patent (s.94(1)).

4. The conduct of the proceedings is dealt with by Part 81 of the Supreme Court Rules (Intellectual Property). The Rules relating to proceedings commenced by statement of claim shall, so far as they are capable of application, apply to a petition under s.90 and to proceedings commenced by such a petition (Pt.81 r.19(2)). In proceedings on a petition under s.90 of the Patents Act, the plaintiff shall, unless the Court otherwise orders, before filing a notice to set the proceedings down for trial, move for a hearing for directions under Part 26 (Pt.81 r.20). A petition under s.90 shall join any caveator and the Commissioner as defendants (Pt.81 r.23). Particulars of the caveator's defence shall include particulars of objections to the granting of the extension (Pt.81 r.28).

5. As has been noted, Pt.81 r.20 contemplates that, ordinarily, a plaintiff will move for directions under Part 26. Under that Part, the Court may at any time and from time to time, give such directions for the conduct of proceedings, as appears convenient (whether or not consistent with the rules) for the just, quick and cheap disposal of the proceedings (Pt.26 r.1). The Court may, at any time and from time to time, of its own motion, appoint a date for a hearing at which it may give the directions and orders mentioned in rule 1 (Pt.26 r.2). The purpose of this Part is to save costs by isolating the issues and avoiding formalities of proof of matters not really in dispute (see Ritchie's Supreme Court Practice Vol. 1 at p.2585).

6. After the filing of the petition, caveats were filed on behalf of the respondents other than the Commissioner of Patents. The appellant moved for directions on 22 August 1986. A draft timetable had previously been discussed between the representatives of the parties. By letter to the solicitors for one of the respondents dated 6 August 1986, the appellant's solicitors indicated that the appellant would not consent to the administration of interrogatories and proceeded -

"As to discovery and inspection, this can relate
(if at all) only to documents relevant to either
the Caveators' objections or the Affidavits
which the Petitioner may file. Accordingly, we
suggest that the matter be listed for further
directions, and to deal with any applications
for discovery, on a date after the Petitioner's
Affidavits have been filed, namely, in the week
commencing 8 December, 1986."

7. On 22 August 1986, a Judge gave the following directions in accordance with short minutes proffered by one of the parties:

"3. Direct that the Defendants other than the
first defendant file and serve Defences
with particulars required by Part 81 Rule
28 of the Rules on or before 30 September,
1986, with draft defences to be supplied on
or before 19 September, 1986.

4. Direct the Plaintiff to file and serve its
Affidavits in support and any reply on or
before 5 December, 1986.

5. Direct the Plaintiff to file and serve its
List of Documents on or before 19 December,
1986.

6. Direct that inspection take place on or
before 16 January 1987.

7. Stand proceedings over for mention to 6
February, 1987 before Registrar.

8. Liberty to restore on 3 days notice"

8. These orders were made by consent, at least in the sense of being made without objection or opposition from any party. The hearing was brief and there was, apparently, no exploration by the Court of the issues in the proceedings. There was no adjudication upon the questions whether discovery of any kind was appropriate and, if so, whether it should be general or special.

9. In September and October 1986, the respondents other than the Commissioner filed defences to the appellant's claim. The defences put in issue the substantive allegations in the petition. In October, the fifth, sixth and seventh respondents also filed cross-claims seeking orders for the revocation of the appellant's patent. (We were told that the appellant intended to apply to have these cross-claims struck out on the ground that they could not be brought in proceedings under s.90. It is not appropriate to deal with this contention here).

10. On 2 December 1986, the appellant's solicitors wrote to the respondents' solicitors informing them that the matter had been restored to the list on 8 December, first, to seek an extension of time until 6 March 1987 for the filing of its affidavits; and secondly, to seek an order vacating the orders for discovery and inspection or, alternatively, to seek to vary those orders "so as to apply only to a limited class of materials."

11. The appellant's application was heard by a Judge on 8
December. An affidavit by the appellant's solicitor was read to the effect that, because the evidence was "complex" and because most of the deponents of the affidavits proposed to be read by the appellant resided in the United States, preparation of the affidavits had not been concluded and an extension until 6 March 1987 was requested. The affidavit proceeded -

"4. Whilst preparing evidence in the United
States in September 1986, I was shown a
large room in a building occupied, inter
alia, by the Petitioner, which was used for
storing documents accrued over the years in
connection with the United States parent
patent application and other applications
throughout the world. There were many
floor-to-ceiling filing cabinets lining the
walls and further rows of cabinets placed
at regular intervals of about two feet
apart filled with thousands of documents
concerning the patented article and the
patent applications referred to above. I
was informed by Harry Cress, the
Petitioner's custodian of this material,
and verily believe that in addition to the
documents mentioned above there are a
substantial number of documents in a
warehouse occupied by the Petitioner. I am
also informed by the said Harry Cress and
verily believe that it would take many
weeks to sort through and prepare a list of
these documents.

5. In the evidence which is being prepared in
support of the Petition, the Petitioner
will include particulars of all prior art
of which it has knowledge. The Petitioner
will also recount the prosecution history
of the United States parent application and
any dependent or divisional applications
and cognate applications in other parts of
the world including Australia, and provide
particulars of remuneration received in
respect of the patented article.

6. It is respectfully requested that the Order
for Discovery made on 22nd August 1986 be
vacated."

12. The solicitor was not cross-examined on his affidavit. There was no other evidence tendered, formally at least. The learned Judge was informed from the bar table that the directions made on 22 August had been the result of negotiation and subsequent agreement between the parties. The letter dated 6 August, already mentioned, confirms this although it was not before his Honour.

13. In refusing the application, the learned Judge said:

"Miss Crennin , for the plaintiff, has drawn my
attention to the case of Hele-Shaw's Patents
(1938) 55 RPC 120. In that case Luxmoore J.
indicated that in an extension of patent matter
the obligation of discovery on the petitioner
involved a duty not only of disclosing all
material documents, but also a duty of not to
overload the case with documents that are not
material.

As I have said, all defendants, apart from the
first defendant, the Commissioner of Patents,
oppose the application...

So far as the order for discovery is concerned,
it has been put for the defendants that this
being a consent order, it cannot be set aside by
the Court except by consent, and I have been
referred to a number of cases in relation to
that matter, including Purcell v. Trigell (1971)
1 QB 358 and Chanel v. Woolworth (1981) 1 WLR
485, and to comments that appear on pp 182-183
of Young, The Law of Consent.

In any event, it has been put by the defendants
that these proceedings, unlike some extension
proceedings, are very much adversary proceedings
rather than proceedings in which only the
Commissioner of Patents is involved as a
defendant.

The defendants have indicated that they would
agree, at least in the first instance, to the
list of documents being by way of reference to
bundles or groups of documents rather than
individual documents, so long as the groups or
bundles are given a description that fairly
indicates their content.

In general terms I accept the submission of the
defendants...

...it does seem to me that in proceedings of
this nature, where they are very much adversary
proceedings, there is merit in having discovery
so that the defendants do not have to completely
rely on the selection of documents made by the
petitioner.

In my view also the matter could well be delayed
if such discovery by reference to groups or
bundles of documents was not ordered at this
stage but rather was left until after the
plaintiff's affidavits had been served and then
perhaps ordered at that time.

If the list of the type contemplated is produced
at the same time as the plaintiff's affidavits,
then the defendants and the Court will be in a
position to consider whether any further more
particular discovery is required when the matter
comes back to the Court. At the same time the
question of appropriate directions in relation
to inspection could be sought on the next
occasion rather than later.

Having come to that view, it is not necessary
for me to reach any conclusion on the matter of
the discharge or varying of a consent order."

His Honour then gave the following directions:

"I direct the petitioner to serve its affidavits
in support and its list of documents on or
before 6 February, 1987.

I direct that such list of documents may
identify documents in groups or bundles,
provided the description of each group or bundle
gives a reasonable indication of its contents.

I stand the proceedings over to 16 February,
1987 before the Duty Judge.

I reserve liberty to restore the matter to the
list on three days' notice.

I direct the petitioner to serve its replies to
the defences and its defence to the cross-claim
on or before 15 December, 1986.

I direct the fifth, sixth and seventh defendants
to serve any reply to the defence to the
cross-claim on or before 6 February, 1987."

14. In my opinion, in the application made on 8 December, the Supreme Court should have first, set aside the consent order for general discovery made on 22 August and secondly, given directions for discovery which were appropriate in the circumstances of the case.

15. It is apparent from the history of the matter that at no stage has the Supreme Court had an opportunity to inquire into the real issues in the proceedings. The question of discovery cannot, of course, be considered in the abstract. It is first necessary for the Court to isolate the real matters in dispute and then to seek an indication of the nature of the documentation available on those questions. Only then can proper consideration be given to how discovery - whether general or specific or not at all - ought to be made (see T.A. Blanco White, Patents for Inventions, 3rd ed. at p.341; Terrell on the Law of Patents, 13th ed. at p.403). As has been noted, the Supreme Court Rules contemplate that, in the present type of proceedings, a motion for directions should be taken out, no doubt as a vehicle to explore such matters. The motion for directions is an important step in the proceedings and should not be treated as a formality or as a mere timetable to be bargained between the parties (see In Re Duckham's Patent [1951] HCA 63; (1951) 82 CLR 603 per Dixon J. at p 605; Blanco White, op cit. at pp 340-1; Terrell, op cit. at pp 403-404). The sketchy outline of the position in the affidavit of the appellant's solicitor does not permit a view to be formed one way or the other as to what form, if any, discovery should take in this case. The appellant should file a fresh notice of motion supported by proper evidence, seeking directions as to the future conduct of the proceedings. Directions should be sought on the question of the appellant's discovery together with such other matters as are necessary to enable a proper determination of the petition.

16. The respondents (other than the first and second respondents who did not appear on the appeal), in opposing the appeal, sought to place much reliance upon the circumstance that the orders made on 22 August were made by consent or, at least, without opposition (see P.W. Young, The Law of Consent at pp.182-5; P.W. Young, Control of Litigation (1986) 2 Aust Bar Rev at pp.264-5). The fact that a party has agreed to give discovery is, of course, a material matter to be taken into account in the exercise of any discretion to set aside an order for discovery. But it could not be suggested that the fact of such consent or agreement, of itself, deprives the Court of its power to control its own procedure. On the contrary, the Court has an inherent power to control its own procedure (see In Re Coldham; Ex parte Australian Building Construction Employees' and Builders Labourers' Federation (1986) 60 ALJR 245 per Gibbs C.J., Wilson and Dawson JJ. at p 248; Wilkshire and Coffey v. Commonwealth of Australia (1976) 9 ALR 325) as well as the express power conferred by the Rules of the Court to set aside its own orders (see Pt.40 r.9). It is then a question of discretion whether, in the interests of justice, the consent order should be varied or discharged (see Wilkshire, supra, per Muirhead J. at p.329-330).

17. It is true that there are cases where the circumstance that a party has agreed to the making of an order is of crucial importance. This is so, for instance, where the order merely evidences a final compromise of a cause of action. In that situation, at least where the order is formally taken out (a matter of uncertainty here), it may not be possible for the consenting party to seek to set aside the order without first challenging the underlying contract of compromise (see Harvey v. Phillips [1956] HCA 27; (1956) 95 CLR 235). But in the present case, no question arises of the final disposition of a private controversy between parties. In the first place, it is significant that the proceedings were merely interlocutory and not final (see Adam P. Brown Male Fashions Proprietary Limited v. Philip Morris Incorporated [1981] HCA 39; (1981) 148 CLR 170 per Gibbs C.J., Aickin, Wilson and Brennan JJ. at p 178; Siebe Gorman & Co. Ltd. v. Pneupac Ltd. (1982) 1 WLR 185). To borrow the words of Gibbs C.J., Mason, Brennan, Deane and Dawson JJ. in Wentworth v. Attorney General for the State of New South Wales [1984] HCA 70; (1984) 154 CLR 518 at p 526 -

"The order in question in the present case was
not one by which the litigation was concluded;
it was merely an order regulating the procedure
to be followed in the future conduct of
proceedings."

18. Moreover, this is not only private litigation. The public interest is an important consideration in an application under s.90 (see C.J. Bannon, Australian Patent Law, at p.72) and this removes the case from the private domain for present purposes (see Thwaite v. Thwaite (1982) Fam 1 per Ormrod L.J. at pp 8-9).

19. Then the respondents opposing the appeal seek to rely upon the traditional reluctance of appellate courts to interfere with an order involving the exercise of a discretion made on a matter of practice and procedure (see, e.g., Superstar Australia Pty. Ltd. v. Coonan & Denlay Pty. Ltd. (1981) 40 ALR 183.)

20. The authorities establish that special circumstances must be shown to exist before a court of appeal will intervene in that situation (see Adam P. Brown, supra, at pp.176-7). In my opinion, such circumstances have been demonstrated in the present case. As has been said, the Supreme Court has not yet had an opportunity to seek to identify the real questions in issue in the proceedings. It is thus a case where, in truth, the judicial discretion at first instance has not been exercised at all. In that situation, the appellate court may interfere and may even exercise its own discretion in substitution if it has the material to do so (see House v. The King [1936] HCA 40; (1936) 55 CLR 499 at p 505; Minister for Aboriginal Affairs v. Peko-Wallsend Ltd. (1986) 66 ALR 299 per Mason J. at pp 314-5; Norbis v. Norbis (1986) 60 ALJR 335).

21. For the sake of completeness, mention should be made of a submission advanced on behalf of the appellant that Pt.81 of the Supreme Court Rules, to the extent that it purported to empower the Court to order discovery, was beyond power. As I followed the argument, it was contended that the existence of such a power was inconsistent with first, the requirement of the Patents Act that applications for extension of time proceed by way of petition and secondly, the requirement of the general law of candour and good faith of a petitioner (see In Re Pitman's Patent (1871) 4 LRPC 84 at p 86; In Re Robinson's Patent [1918] HCA 35; (1918) 25 CLR 116 at p 120).

22. In my view, Pt.81 is within power.

23. There are no inconsistencies of the kind suggested by the appellant. It may be accepted that the machinery of discovery in the present type of application may differ in some respects from the usual way in which discovery is conducted in an action at common law. As was pointed out by Luxmoore J. in Hele-Shaw, supra, at pp.121-2, this is because the issues are often presented in a different way from the tender of an issue at common law and the petitioner's obligation of candour and good faith will subsist in the absence of any joinder of issue. Yet it is still accurate to describe the petitioner's obligation to produce documents as "discovery".

24. The appellant relied on the circumstance that the early procedures in Chancery did not contemplate the making of an order for discovery in proceedings by way of petition (see Daniell's Chancery Practice, 5th ed. (1871) at pp.1451-1461). But the obligation to make discovery is not to be measured, in the late 20th century, by the procedural limitations which may have prevailed in the time of Daniell but by the practices which the courts have developed and extended up to the present day. Under the Rules of the Supreme Court, there is no doubt that an appropriate order for discovery may be made in a case of this kind (and see Bray, The Principles and Practice of Discovery (1885) at pp.572-3).

25. For these reasons, on 22 December last, I concurred in the making of orders that the appeal be allowed with costs; that so much of the orders made by the Supreme Court on 8 December as directed the appellant to file its list of documents on or before 6 February 1987 and as gave consequential directions as to the identification of documents in groups or bundles be set aside; and that the appellant file and serve a notice of motion for directions returnable before the duty Judge in the Equity Division of the Supreme Court on 16 February.

I agree with the reasons of Beaumont J. I also agree with the general remarks made by Sheppard J. and with his analysis of what was involved in the application the subject of this appeal. But I desire to add something for myself concerning the respondents' argument that there was no power to set aside or vary the order of 22 August because it had been made by consent.

2. At the outset, it should be noted that the order under appeal does in fact make provision for discovery otherwise than as was required by the previous order. This was necessary since the Court had to deal with the situation which confronted it. For the present case is illustrative of the well known fact that procedural directions, designed to shape in the best way the preparation of cases for hearing, frequently prove impossible of compliance, or at least are not complied with, and that courts are obliged to reformulate them upon later occasions. It would be curious and inconvenient if the mere making of a consent order were held to add to the malleable material, from which the Court over time endeavours to fashion the most appropriate form for the particular proceeding, an awkwardly immutable lump. It would be still more unfortunate if the mutual cooperation of legal advisers in the making of consent orders became the cause of such a distortion of the litigation; while at the same time intransigence became a virtue, by removing the constraint of consent so as to permit the hand of the Court to continue to mould a proceeding.

3. But I think it is a false analysis which would produce such consequences. It is true that a line of authority, typified by Purcell v. F.C. Trigell Ltd. (1971) 1 QB 358, supports the general proposition that a consent order must be given its full contractual effect, and that this is so even if it relates to an interlocutory step in an action. But in Purcell's case itself at 364 Lord Denning M.R. qualified this proposition. He said:

"The court has always a control over
interlocutory orders. It may, in its
discretion, vary or alter them even though
made originally by consent."

Winn L.J. at 365 made it clear that he took the same view when he stated:

"However, there is this to be said, that
apparently the court would prefer to keep
closer control over its interlocutory
proceedings than it would over its final
orders if satisfied that they had been agreed
to by fully advised and competent parties."

In Siebe Gorman & Co. Ltd. v. Pneupak Ltd. (1982) 1 WLR 185 at 190 Lord Denning M.R. reiterated that:

"(T)he court had a discretion to vary or alter
the terms of interlocutory orders - even
though made by consent."

He also distinguished between consent orders which evidence a real contract between the parties, and consent orders the true nature of which is that they are made by the Court without there being anything amounting to a real contract between the parties.

4. In my view, it would be a rare case where it would be proper to construe a consent to an order giving a procedural direction as amounting to a contract removing from the Court thereafter its ordinary control over such a direction. For obvious reasons, and as Winn L.J. pointed out, the Court prefers to retain such a control. When parties ask the Court to make by consent an order of that nature, it seems to me that the prima facie, and almost invariable, intention is that their agreement shall be subject to the ordinary powers which the Court would have if it proceeded, apart from consent, to make an order of the kind contemplated. It is on that basis the Court is asked to make the order, and it would not readily do so on any other basis, because "the public interest in the due administration of justice takes account of but is not limited to (the parties') wishes," as Mahoney J.A. put it in Sydney City Council v. Ke-Su Investments Pty. Ltd. (1985) 1 NSWLR 246 at 257. Cf. Cherwell District Council v. Thames Water Board (1975) 1 WLR 448. The parties have not agreed to sell a washing machine - they have invoked the jurisdiction of the Court, with all that that entails.

5. Not only would the respondents' contention be inconsistent with the basis on which innumerable interlocutory directions are given by consent regularly in the courts, but it would also in my opinion do violence to ordinary principles of construction of contracts, which do not allow expressions to be wrenched from their context. Here, the context is a procedural direction by a superior court at an early stage of a proceeding pregnant with unforeseeable problems. To interpret the words of consent as depriving the court of its discretionary power to regulate justly the processes of the litigation, rather than as asking it to take a first step in the exercise of that power, would be to ignore the context and to "constru(e) words in such a manner as shall destroy the intent" of the arrangement in which they are embedded - to quote from a great statement of Willes L.C.J. in Smith v. Packhurst (1740) 3 Atk 135 at 136; 26 ER 881 at 882. Willes L.C.J. added that to do so might "shew the ingenuity of counsel, but is very ill becoming a Judge."

6. It should not be thought that if, in some rare case, a consent to a direction by a court could properly be construed as intended to deprive the court of any control in the future over its procedure, the direction would in fact be immune from amendment. A contract to that effect might well be regarded as contrary to a policy of the law underlying the statements of Lord Denning M.R. and Winn L.J. quoted earlier in these reasons. As Young J. said in Hunter v. Commonwealth Trading Bank of Australia (12/6/85, unreported, but noted in 1985 ACLD 569), a decision directly in point in the present appeal and opposed to the respondents' argument:

"Nobody has any vested rights in the practice
and procedure of this court. ... (T)he matter
is really not one in the area of private
agreement at all, but in the area of control
that the court keeps over its own process."

He cited Wilkshire v. The Commonwealth (1976) 9 ALR 325 as well as the dissenting judgment of Fisher J. in Philip Morris Incorporated v. Adam P. Brown Male Fashions Pty. Ltd. (1980) 44 FLR 88, which was approved, on appeal, by the High Court - see Adam P. Brown Male Fashions Proprietary Limited v. Philip Morris Incorporated [1981] HCA 39; (1981) 148 CLR 170 at 179. Fisher J. said (at 44 FLR 112):

"Likewise even if it be said that the original
order was in substance though not in form
made by consent, it has to me all the
indications of an order remaining under the
control of the court, which was entitled on
proper application to vary, dissolve,
discharge or adjust the order to meet
changing circumstances."

7. In my opinion, the interlocutory order made in this case was of a kind the very nature of which requires, and more especially in the particular circumstances, that the consent to it should not be construed as a contract to oust the ordinary jurisdiction of the Court to vary or rescind the order. But in any case I would hold that the Court's control over its own procedures cannot be lost merely because such an order is made by consent.