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Sportsbet Pty Ltd v State of New South Wales (No 4) [2009] FCA 1509 (25 November 2009)

Last Updated: 17 December 2009

FEDERAL COURT OF AUSTRALIA


Sportsbet Pty Ltd v State of New South Wales (No 4) [2009] FCA 1509


SPORTSBET PTY LTD v STATE OF NEW SOUTH WALES, RACING NEW SOUTH WALES and HARNESS RACING NEW SOUTH WALES
NSD 1821 of 2008


PERRAM J
25 NOVEMBER 2009
SYDNEY


IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1821 of 2008

BETWEEN:
SPORTSBET PTY LTD
Applicant

AND:
STATE OF NEW SOUTH WALES
First Respondent

RACING NEW SOUTH WALES
Second Respondent

HARNESS RACING NEW SOUTH WALES
Third Respondent

JUDGE:
PERRAM J
DATE OF ORDER:
25 NOVEMBER 2009
WHERE MADE:
SYDNEY

THE COURT ORDERS THAT:


  1. The second and third respondents to provide discovery of the full text of board minutes and CEO’s reports already discovered in redacted form by 6.00pm, Thursday 26 November 2009;
  2. The motion is otherwise dismissed with costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.


IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1821 of 2008

BETWEEN:
SPORTSBET PTY LTD
Applicant

AND:
STATE OF NEW SOUTH WALES
First Respondent

RACING NEW SOUTH WALES
Second Respondent

HARNESS RACING NEW SOUTH WALES
Third Respondent

JUDGE:
PERRAM J
DATE:
25 NOVEMBER 2009
PLACE:
SYDNEY

REASONS FOR JUDGMENT


  1. By notice of motion filed on Friday 13 November 2009 the applicant (“Sportsbet”) seeks orders which would require the second and third respondents to discover further documents. At 3.30pm yesterday, that is Tuesday 24 November 2009, I dismissed that application with costs. These are my reasons for taking that course.
  2. It is first necessary, however, to say something of the context in which the application was made and heard. These proceedings are fixed for hearing on Monday 30 November 2009 immediately after the conclusion of the proceedings in Betfair v Racing New South Wales. Both that case and this case have in common an allegation that the imposition of a fee fixed by the New South Wales racing authorities by reference to turnover of a wagering operator is constitutionally unlawful by reason of its impact upon interstate trade. Betfair is a betting exchange operating from Tasmania; Sportsbet is a corporate bookmaker operating from the Northern Territory.
  3. Thus far the cases have travelled together in my docket with a couple of minor exceptions when they were listed separately for directions. The trial in the Betfair proceeding commenced before me last Wednesday 18 November 2009. However, both cases were originally fixed for a hearing commencing on Monday 16 November 2009. The order fixing both matters for hearing was made on 5 June this year. Both sets of proceedings have been attended by a degree of urgency. At present the racing authorities who are the respondents in both sets of proceedings and the first and second respondents in the Betfair proceedings, have been collecting the impugned fee from wagering operators under their protest. If either Betfair or Sportsbet succeed in their cases there is a prospect, but not a certainty, that that money, which is presently in excess of $44 million, will have to be refunded. To protect themselves against that eventuality the racing authorities are presently not distributing the fees which they have collected to the participants in the New South Wales racing industry.
  4. Accordingly, funding to that industry which is in large part dependent upon distribution of that fee is partially cut off or impeded. That state of affairs will continue whilstsoever the present proceedings and Betfair’s proceedings remain on foot in this Court or on foot in any appeal. The effect on third parties such as racing clubs and those who are employed by or in contractual relations with racing clubs is obvious. It follows, as I have previously accepted, that the present proceedings must be heard as expeditiously as possible.
  5. Because the Betfair trial is presently running it has been necessary to deal with the current application largely out of hours. During the course of the hearing of the present application I refused an application by Sportsbet to cross-examine the racing authorities’ solicitor, Mr Price, on the steps he took in pursuit of the process of discovery. Ultimately I also imposed time limits on the addresses of counsel. I took that rather unusual course because of the imperative need to resolve the present application before the length of the submissions determined, in a de facto way, the outcome of an adjournment application to be dealt with later by me today.
  6. I refused the application to cross-examine because of the concerns I held that the magnitude of the cross-examination which was contemplated might unacceptably lengthen the hearing and also because of my impression that the points which were sought to be made through the cross-examination of Mr Price could just as readily be made by way of submission from the bar table.
  7. The issues which arise on the application for further discovery are, so it seems to me, three:

(i) whether the categories of discovery now sought in the notice of motion are to be seen as being within the previous categories which have been ordered;

(ii) whether, if they are, there has been any failure by the racing authorities properly to comply with the obligations inherent in the original discovery orders; and

(iii) whether, if the documents now sought do not truly lie within the previous categories ordered whether there should nevertheless be an order for fresh discovery.

It is useful to deal with those issues in the order which I have just outlined.

First issue: whether the categories of discovery now sought are within the previous categories ordered.

  1. Sportsbet’s position is, as will become apparent, that the respondents have failed to comply with their pre-existing discovery obligations. The notice of motion filed seeks in consequence orders requiring discovery of 14 further categories. Assuming, in favour of Sportsbet, that there has been a failure to comply with the previous orders, nevertheless the orders now sought by it in its motion which purport to secure compliance with the former orders should not be made if, in truth, what they seek is fresh discovery. Putting the matter perhaps a little differently, it is necessary that the categories now sought on the notice of motion should be capable of being seen as being required by or implicit in the former categories.
  2. That makes it necessary to attend to the original categories, which the parties settled upon. They were as follows:
1.
All documentation, recording or referring to the formulation of the race fields legislation form 1 July 2004 including but not limited to:
  1. minutes of meetings of the board of Racing NSW (RNSW Board);
  2. papers, reports or analysis prepared for members of the RNSW Board or committees of the RNSW Board;
  3. Presentations and notes given to members of the RNSW Board or committees of the RNSW Board;
  4. Hand written notes taken by RNSW Board minutes by those attending;
  5. Documents created by Mr Peter V’Landy’s, CEO of Racing NSW;
  6. Correspondence between Racing NSW and;
    1. OLGR;
    2. Ministers Office;
    3. TAB Limited and/or Tabcorp Holdings Limited (TAB);
    4. Racing Clubs;
    5. HRNSW
which bear upon allegations raised in the pleadings by Sportsbet, namely:
(a) in respect of the exempt turnover threshold,
(b) arrangements between licensed bookmakers in NSW (s. 91 of the Amended Statement of Claim),
(c) the allegation that TAB Ltd is not required to pay the fee, or that the fee is “absorbed”
(d) the relevant sections of the Act, being sections 33 and 33A.
1 July 2004 to date
2.
All documentation, reporting or referring to the implementation of the race fields legislation and the setting of the 1.5% fee and conditions and the $5,000,000.00 threshold including but not limited to:
  1. minutes of meetings of the board of Racing NSW (RNSW Board);
  2. papers, reports or analysis prepared for members of the RNSW Board or committees of the RNSW Board;
  3. Presentations and notes given to members of the RNSW Board or committees of the RNSW Board;
  4. Hand written notes taken by RNSW Board minutes by those attending;
  5. Documents created by Mr Peter V’Landy’s, CEO of Racing NSW;
  6. Correspondence between Racing NSW and;
    1. OLGR;
    2. Ministers Office;
    3. TAB Limited and/or Tabcorp Holdings Limited (TAB);
    4. Racing Clubs;
    5. HRNSW.
It is agreed that the reference to ‘race fields legislation’ is confined to the relevant sections of the ACT (sections 33 and 33A), and Regulations (regulation 16)
3.
Racing Distribution Agreement entered into between NSW Totalisator Agency Board, NSW Racing Pty Ltd, Greyhound Racing Thoroughbred Racing Board.
11 December 1997
4.
First Amending Agreement to Racing Distribution Agreement.
13 June 2000
5.
Deed of Mutual Release (relates to Racing Distribution Agreement).
23 August 2001
6.
Second Amending Agreement (relates to Racing Distribution Agreement).
3 April 2003
7.
Deed of Accession, cooperation and amendment (relates to Racing Distribution Agreement).
December 2004
8.
Documents recording payments made by TAB under the agreements referred to in 3-7 above or the period 1 January 2006 to date.
10.
Departmental brief for Minister re. Victorian racefields legislation. Facsimile from CEO Racing NSW to Director General – Office of Liquor Gaming and Racing.
9 June 2005
11.
Letter by CEO Racing NSW to Minister proposing amendments to 24 June 2005 NSW racefields legislation.
24 June 2005
12.
Email by OLGR Manager, Racing Policy to Racing NSW, HRNSW and GRNSW re. establishment of working party to develop racefields regulations.
2 January 2007
13.
Racefields Regulations workshop.
26 February 2007
14.
Minutes of OLGR re. Racefields Regulations workshop on 26 February 2007
22 March 2007
15.
OLGR Working Papers re. annotated drafting instructions for PCO and notes following working party meeting on 2 May 2007
2 May 2007
16.
Letter by CEO Racing NSW to OLGR Director of Racing re. progress report on consultation with stakeholders.
8 May 2007
17.
Email by OLGR Manager, Racing policy to CEO’s Racing NSW, HRNSW and GRNSW with attachments:
  1. copy of annotated third draft of drafting instructions to PCO;
  2. notes following working party meeting of 2 May 2007.
19 June 2007
18.
Email by CEO Racing NSW to OLGR Director, Racing forwarding copy of Managements recommendations to Racing NSW Board.
28 June 2007
19.
Minutes of working party.
12 July 2007
20.
Email by OLGR Manager, Racing Policy to CEO’s Racing NSW, GRNSW and HRNSW with attachments:
  1. copy of annotated fourth draft of drafting instructions to PCO;
  2. notes following working party meeting on 2 May 2007;
  3. notes following working party meeting of 12 July 2007.
13 July 2007
21.
Email by OLGR Manager, Racing policy to CEO’s Racing NSW, HRNSW and GRNSW forwarding copy of annotated fifth draft of drafting instructions to PCO.
19 July 2007
22.
Email by CEO Racing NSW to OLGR Director, Racing re. proposed scheme for implementation of racefields regulations.
2 August 2007
23.
Letter by CEO Racing NSW to Minister re. Media reports about betting exchanges and racefields legislation.
30 October 2007
24.
Letter to Minister jointly signed by Chairman of Racing NSW, HRNSW and GRNSW re. outcomes of meeting on 5 November 2007 and promulgation of racefields regulations.
8 November 2007
25.
Email by CEO Racing NSW re. outcomes of meeting on 5 November 2007 and promulgation or racefields regulations.
9 November 2007
26.
Email by OLGR Manager, Racing Policy to CEO’s of Racing NSW, HRNSW and GRNSW re. request for Crown solicitor’s advice and arrangements for final working party meeting with attachments:
  1. Copy of letter to Crown solicitor dated 29 November 2007;
  2. copy of proposed draft instructions to PCO.
6 December 2007
27.
Email from OLGR Manager, Racing Policy to CEO’s of Racing NSW, HRNSW and GRNSW re. final working party meeting with summary of Crown Solicitor’s advice attached.
21 February 2008
28.
Minutes of workshop meeting held on 25 February 2008.
25 February 2008
29.
Email by CEO Racing NSW to OLGR re. Racing NSW oppress release concerning Betfair High Court decision.
27 March 2008
30.
Email by CEO Racing NSW to OLGR re. Racing NSW legal advice on Betfair High Court decision
28 March 2008
31.
Email by OLGR Manager, Racing Policy to CEO’s of Racing NSW, HRNSW and GRNSW seeking working party meeting with draft regulations by PCO attached.
9 May 2008
32.
Email by OLGR Manager, Racing Policy to CEO’s of Racing NSW, HRNSW and GRNSW confirming arrangements for working party meeting on 22 May 2008.
15 May 2008
33.
Email by OLGR Senior Policy Officer, Racing to CEO’s Racing NSW, HRNSW and GRNSW forwarding copy of PCO’s email response dated 20 May 2008.
21 May 2008
34.
Email by OLGR Manager, Racing Policy to CEO’s of Racing NSW, HRNSW and GRNSW with fifth draft of Racefields Regulations attached.
3 June 2008
35.
Email by OLGR Manager, Racing Policy to Racing NSW seeking comments on further PCO advice.
4 June 2008
36.
Email by Racing NSW to OLGR providing further comment on fifth draft of Racefields Regulations by PCO.
12 June 2008
37.
Email by OLGR Manager, Racing Policy to CEO’s Racing NSW, HRNSW and GRNSW and forwarding sixth draft racefields.
13 June 2008
38.
Email by Racing NSW to OLGR forwarding final comments on draft racefields regulations by PCO.
16 June 2008
39.
Email response by OLGR Manager Racing Policy to Racing NSW’s email dated 16 June 2008.
16 June 2008
40.
Email by OLGR Manager, Racing Policy to CEO Racing NSW seeking input to Minister’s Joint press release.
24 June 2008
41.
Email response by CEO Racing NSW to OLGR.
24 June 2008
42.
Email by CEO Racing NSW to OLGR providing copy of Tabcorp’s press release on Racefields Regulations.
27 June 2008
43.
“All documents recording communications between the Second Respondent and Boston Consulting Group which record or refer to race field’s legislation”.
48.
All documents relied upon by the Second Respondent to make the allegations in paragraph 25 of the Defence.
51.
“All documents recording:

(a) applications for approval pursuant to section 33A of the Act by off-course totalisators based in States and Territories other than NSW;
(b) communications between Racing NSW and off-course totalisators based in States and Territories other than New South Wales concerning applications by the wagering operators referred to in (a) above for approval pursuant to section 33A”
52.
All documents relied upon by the second respondent to make the allegations in paragraph 85.1 (b) of its defence.
53.
All documents relied upon by the second respondent to make the allegations in paragraph 85.1 (b) of its defence.
54.
All documents relied upon by the second respondent to make the allegations in paragraph 85.1 (b) (iii) A of its defence.


  1. It is necessary to deal with each of the proposed 14 categories in the Sportsbet notice of motion. The first is as follows:
(a) minutes of meetings of the Business and Strategy Committee established under the Racing Distribution Agreement for the period June 2005 to date;

  1. This category seeks all minutes of the Business and Strategy Committee from June 2005 to date. A number of original categories touched upon the position of the Strategy Committee. Category 1, for example, required production of that committee’s minutes but, significantly, only those which recorded or referred to the formulation of the Race Fields legislation and which bore upon the allegation made by Sportsbet about exempt turnover threshold, arrangements with bookies or the non-obligation of the TAB to pay the fee under the provisions of ss 33 and 33A of the Act.
  2. Category 2 in the original categories also touched upon the same minutes, but again only to the extent that they referred or related to the Race Fields legislation or the setting of the 1.5 % fee. The category now proposed, it seems to me, is not subject to either of those sets of limitations. It would, for example, require the production of minutes having no necessary connexion with the issues in these present proceedings at all. It follows that the first category sought in the notice of motion is not a facilitation of the agreed categories but, in fact, a fresh, somewhat broader category.
  3. The second category calls for the minutes of a committee known as the Product Committee for the period June 2005 to date. The Product Committee, like the Strategy Committee, is dealt with in the agreed categories in much the same way. For analogous reasons I conclude that the category sought is a fresh category and not the vindication of a previous category.
  4. The third category is as follows:
(c) any notes taken by Mr Peter V’Landys of any meetings he attended of the Business and Strategy Committees and Products Committees held under the auspices of the Racing Distribution Agreement;

  1. The agreed categories required through category 1 the production by the respondent of documents produced by Mr V’Landys referring or relating to the formulation of the Race Fields legislation from 1 July 2004, insofar as they bore upon the allegations I have previously set out above. They also required, through category 2, the production of such notes so far as they referred to the Race Fields legislation or the setting of the 1.5% fee. The present category, so it seems to me, is much broader and is not limited by any criteria linking it to the issues in the proceedings. Accordingly it is to be characterised as a fresh category rather than the vindication of the earlier categories.
  2. The fourth through to seventh categories are as follows:
(d) any notes of any telephone conversation or meeting between Mr VLandys and Mr Robert Nason of Tabcorp Holdings Limited between the period June 2005 to date concerning the introduction of the Race Field Legislation and the liability of Tabcorp Limited to pay the race fields fees;

(e) any notes of any telephone conversation or meeting between Mr Max Pool and Mr Robert Nason of Tabcorp Holdings Limited between the period June 2005 to date concerning the introduction of the Race Field Legislation and the liability of Tab Limited to pay the race fields fees;

(f) any notes of any telephone conversation or meeting between Mr Murphy of Racingcrop and Mr Robert Nason of Tabcorp Holdings Limited between the period June 2005 to date concerning the introduction of the Race Field Legislation and the liability of Tab Limited to pay the race fields fees;

(g) any notes of any telephone conversation or meeting between Mr Max Pool and Mr Murphy of Racingcorp between the period June 2005 to date concerning the introduction of the Race Field Legislation and the liability of Tab Limited to pay the race fields fees;

  1. These categories are capable of being seen as elucidations of former categories 1 and 2. To put it another way, they are not fresh categories but rather merely expansions or clarifications of the earlier categories.
  2. The eighth category is as follows:
(h) any documents in their power, custody or possession concerning Racingcorp and the liability of Tab Limited to pay fees to Racingcorp pursuant to the terms of the Racing Distribution Agreement between 1 September 2008 to date

It seems to me that that category does lie within former category 1 as well.

  1. The ninth category is as follows:
(i) any documents concerning any agreement reached or communication between Racing NSW, the Australian Jockey Club, the Sydney Turf Club and/or the New South Wales Bookmakers Co-operative Limited, in relation to:

  1. The money to be paid by Racing New South Wales and Harness Racing New South Wales respectively to the AJC and STC and any other racing clubs that is derived by the imposition of the 1.5% turnover approval fee;
  2. The abolition by the race clubs of fees and levies imposed by those clubs on New South Wales Bookmakers
  1. I am unable to identify any of the present categories that this might be seen as a fulfilment of. Accordingly, it is to be categorised as fresh discovery.
  2. The tenth category is as follows:
(j) Documents relating to RISA including the RISA Participation Agreement;

  1. RISA was explained in the evidence to be a company called Racing Information Services Australia Pty Limited. It was said that its purpose was to facilitate the sale by the racing authorities of Race Field information.
  2. There are apparently transaction agreements between RISA and Racing New South Wales which the latter sought to rescind on the basis of certain misrepresentations. That disagreement was eventually resolved on commercial terms. Sportsbet submitted that documents relating to RISA were relevant to the proceedings because RISA was “the holder of rights in relation to the information comprising Race Fields”. Assuming that to be so does not explain why discovery of this material should be seen as being required by the previous categories.
  3. As I previously noted, I do not perceive how the fact that RISA has rights in respect of the Race Field’s information should be pertinent to the previously agreed categories. It follows that I do not think that this category is to be seen as a species of further discovery but rather as a species of fresh discovery.
  4. The eleventh category was as follows:
(k) The correspondence identified in the letter dated 5 November 2009 from Fitzpatrick Legal to the solicitors for the Second and Third Respondents;

  1. The letter of 5 November 2009 was in evidence. I will not set it out. It suffices for present purposes only to observe that it does not appear to identify any “correspondence” referred to in this category. It does identify a great many documents and discovery references but one cannot formulate from a perusal of that letter what the correspondence which is referred to in this prayer of the motion is related to. It certainly does not identify documents with a level of sufficient particularity to form the basis for an order for discovery.
  2. The twelfth category was in the following terms:
(l) The full text of Board Minutes and CEO’s reports that have been discovered by the Second and Third respondents; and meetings (including Board meeting agendas, board papers and attachments) of the Second and Third Respondents for the period 1 October 2008 to date; and

  1. Sportsbet’s point is that masking for relevance is not a permissible course in this Court: Australian Competition & Consumer Commission v McMahon Services Pty Ltd (2004) FCA 353 at 12 per Selway J.
  2. There is a degree of uncertainty in this Court about the extent to which masking for relevance in discovery is or is not permissible. The debate is usefully collected in Egglishaw v Australian Crime Commission (No 2) [2009] FCA 12 at [12] – [26] by Besanko J. Putting the matter somewhat loosely, it would appear that masking for relevance is not permitted where specific discovery has been ordered but may be permissible where general discovery has been ordered; although this latter proposition may be controversial. Discovery in this case has not been general discovery but rather specific, so that it follows, as Sportsbet correctly submits, that the original categories do require the production of unmasked copies. It follows that the twelfth category is not to be seen as fresh discovery but rather as further discovery.
  3. The thirteenth category was as follows:
(m) Books and records of the Second and Third Respondents that demonstrate:

  1. the amount of money received from the race fields legislation from 1 September 2008 to date; and
  2. any rebate, refunds or money returned to wagering operators in the period 1 September 2008 to date.
  1. I do not see that any such document can be said to be one which relates or refers to either the formulation of the Race Fields legislation or its implementation, or the fixing of the 1.5% fee, or the $5 million threshold. Accordingly, it does not fall within categories 1 and 2. It does not appear to be caught by any of the other categories. Accordingly, it is to be characterised as a species of fresh rather than further discovery.
  2. The final category is as follows:
(n) Books and records of the Second and Third Respondents relating to any payment by any wagering operator who has a turnover in excess of $5 million in respect of the Third Respondent.

  1. For the same reason this does not appear to be caught by any of the categories. I conclude, therefore, that only categories 4 through to 7 and category 12 are capable of being seen as being within the original categories, with the balance properly to be characterised as being applications for fresh discovery.

Second issue: in relation to the category which are capable of being seen as being within the former categories, whether further discovery be ordered.

  1. At the forefront of Sportsbet’s submissions was the proposition that the respondent’s process of discovery had miscarried. There were two routes to this peak. The first was the ability of Sportsbet to point to a number of documents which it said patently should have been discovered. The second was said to be the evidence of the second and third respondents’ solicitor, Mr Price, which was said to prove that the respondents had approached the matter in a fundamentally flawed way. It is convenient to deal with these submissions in turn.
  2. Sportsbet contended that there were many documents showing that the discovery process must have gone awry. I have concluded that only proposed categories 4 to 7 and category 12 sought in the motion truly seek further discovery of categories already ordered. However, in case I should be wrong about that, I will proceed on the basis that each proposed category seeks further, rather than fresh, discovery, and test the adequacy of the discovery given as if all the categories were in play.

Category 1(a), Business and Strategy Minutes.

  1. Sportsbet complains that only one of these minutes has been discovered. This does not show that there has been non-compliance with the discovery orders. The agreed category was not that all such minutes be discovered but rather only that minutes having a particular quality should be discovered. The documents that Sportsbet complains were not discovered appear to me not to have been discoverable. The position of Sportsbet appeared to misunderstand the relationship between general discovery, where an assessment for relevance is called for, and particular discovery, where in principle it is not. With respect to those conducting the process this is an error in approach which appears to bedevil much of the present application for further discovery. The test on such an application is not to claim that the Business and Strategy Committee’s minutes might be relevant to an issue; rather it is to establish whether those minutes fall within an already extant category.

Category 1(b): Product Committee Minutes.

  1. These were not a category. They are not discoverable per se.

Categories 1(d) through to 1(g):

  1. I have already concluded that these categories can properly be seen as being within the agreed categories. Hence, even on my reasoning, the question of adequacy of discovery arises. However, Sportsbet’s argument misdescribes the categories. For example, in its final submissions it relied upon an aide-mémoire where category 1(d) was described as “Notes by Mr V’Landys.” It was then said that commonsense suggested that such documents must exist. So much may be accepted for commonsense probably does suggest that there are notes by Mr V’Landys in existence. But category 1(d) is not, in fact, “Notes by Mr V’Landys”. It is in fact:
Any notes of any telephone conversations or meetings between Mr V’Landys and Mr  Robert Nason of Tabcorp Holdings Proprietary Limited between the period June 2005 to date, concerning the introduction of Race Field legislation and the liability of TAB Limited to pay the Race Field’s fee.

  1. It is true that no such documents have been discovered. However, I regard commonsense as having little to say about the existence of such documents. It is entirely plausible that they do not exist. It is therefore unsound to summarise such a category as “Notes of Mr V’Landys” and then to pray in aid of commonsense to impeach their absence. Accordingly, I do not regard there as being any sufficient evidence that there has been a failure to comply with the respondent’s discovery obligations. The same process of reasoning applies to categories 1(e) through to 1(g) which is categories 5 to 7 to which I have previously referred.

Category 1(h): Racing Corp.

  1. It is said that the 2009 annual report for Racing New South Wales shows that Racing Corp was on the agenda for various meetings, yet the minutes of those meetings have not been discovered. However, the agreed categories did not call for the production of such documentation and hence I do not think that they can be said to be discoverable per se.
  2. It was then said that the Chief Executive Officer’s Report for Racing New South Wales for 19 November 2007 showed that Racing Corp had resolved to seek a meeting with the Minister to express concerns over the government’s failure to commence the Race Field legislation. It is said that Racing New South Wales has failed to discover those minutes of Racing Corp relating to such a meeting. Even assuming that Racing New South Wales has a copy of the minutes of the meeting of the board of Racing Corp such a document does not fall within categories 1 or 2 of the previous categories. It does not necessarily “record” or “refer” to the formulation of the Race Fields legislation nor does it necessarily record or refer to their implementation or to the setting of the 1.5% fee or the $5 million threshold. Sportsbet again overlooks the wording of the categories.

Category 1 (i):

  1. No such documents have been discovered. However, that absence is not to be explained on the basis that there has been a failure on the part of the respondents to discover them. To the contrary the most likely explanation for those documents not having been discovered is that they are not discoverable.

Category 1(g): the RISA agreement.

  1. No such documents have been discovered. However the documents sought in relation to this category are not within any of the agreed categories.

Category 1(h):

  1. I previously indicated in relation to this category that I am unable to ascribe to it a content which can be followed.

Category 1(l): The full text of minutes

  1. The minutes have been discovered in a redacted form. For reasons which I have already given, Sportsbet is entitled to have them in an unredacted form.

Categories 1(m) to (n):

  1. No such documents were discovered. However they were not discoverable. Apart therefore from category 1(l) no basis for doubting the respondent’s discovery has been identified.
  2. I turn then to the broad attack made upon the general approach of Mr Price to discovery. Paragraphs 8 and 9 of Mr Price’s affidavit of 17 November 2009 are as follows:
    1. Prior to giving discovery in these proceedings, Racing NSW and HRNSW provided discovery in the Betfair proceedings. In my opinion, the agreed categories in the Betfair proceedings were significantly broader than the agreed categories in these proceedings. Notwithstanding the broader scope of the Betfair discovery, Racing NSW and HRNSW decided to provide Sportsbet with the entirely of their discovery in the Betfair proceedings together with a small number of additional documents (not discovered in the Betfair proceedings but which fell within the agreed categories in these proceedings). The result of this approach, in my opinion, is that arguably the discovery provided to Sportsbet in these proceedings goes beyond the issues exposed by the pleadings in these proceedings.
    2. The approach taken by Racing NSW and HRNSW was done for costs reasons and to avoid making the searches and preparing the discovery separately for each set of proceedings.
  3. Sportsbet submitted that the second and third respondents had failed to comply with their obligation to make proper searches and that these paragraphs demonstrated that to be so. Mr Price gave further evidence in paragraph 16 of his affidavit of 19 November 2009 which was in the following terms:
16. I respond to these complaints as follows:

16.1 In respect of the complaint that no searches were conduct of the documents falling within the agreed categories in these proceedings, I make the following comments:

(a) I certified the verified lists of documents for Racing NSW and HRNSW in these proceedings and each of those lists were verified by officers of my clients (including Mr Sweney, the General Counsel of Racing NSW who is admitted as a solicitor), I note that in the submissions dealing with this complaint, no recognition is given to my certification or the verification of the lists of discovery;

(b) to the extent that the First Price affidavit (paragraph 8 to 11) is not clear on this topic, the searches that were undertaken by me or at my request or direction to identify documents of Racing NSW and HRNSW for the purpose discovery were undertaken with both proceedings in mind and it was necessary to review all documents for the purpose of determining what fell within the agreed categories in each proceeding. Because the categories were different , the preparation of discovery in these proceedings did involve an independent analysis by reference to the categories and certain additional searches;

(c) following my review of all the potentially discoverable documents in both proceedings, I formed the view (which I still hold) that Racing NSW and HRNSW were not obliged to discover all the documents in the Betfair proceedings in these proceedings but for the reasons set out in paragraph 9 of the First Price Affidavit, I decided that the appropriate course to provide the Betfair discovery to Sportsbet as the initial stage of discovery and to provide any further documents (which were not discoverable in Betfair but were discoverable in these proceedings) as a second stage of discovery. The additional documents were described in a covering letter serving the verified list (a copy of which is annexed to this affidavit and market TRP 6);

(d) In respect of the complaint (in paragraph 14 of the written submissions) that there is no evidence that the deponents to the verified lists (Mr Sweney and Mr Carney) have seen the agreed categories and have satisfied themselves that there are no other documents in their possession, custody or control, I make the following comments:

(i) I was satisfied that it was appropriate for me to certify the verified lists in the terms required;

(ii) As part of the discovery exercise, I provided the agreed categories to each of Mr Sweney and Mr Carney for the purpose of preparation of discovery. When I certified the verified lists I was satisfied that Mr Sweney and Mr Carney had reviewed the agreed categories;

(iii) The verified list of documents in these proceedings prepared for Sportsbet was verified by Mr Tyshing on 25 August 2009 and certified by Mr Ftizpatrick on that date (Mr Fitzpatrick also witnessed the verifying affidavit of Mr Tyshing). There is no reference in Mr Tyshing’s verifying affidavit or otherwise in the verified list of discovery for Sportsbet that Mr Tyshing saw the agreed categories before verifying the list. A copy of the list is annexed to this affidavit and marked TRP 7.

  1. In light of this evidence I reject entirely the submission that the respondent did not conduct the proper search for the Sportsbet discovered documents. I also reject the proposition that no proper verification has taken place.

Conclusions on further discovery

  1. With the exception of providing unmasked copies of the minutes in category 1(l) I reject all of Sportsbet’s arguments which proceed on an erroneous understanding of the nature of the process in question.
  2. Sportsbet’s submissions before me proceeded more or less on the basis that it only needed to show that the materials might be relevant to an issue in the proceedings but that, so it seems to me, was quite wrong. The issue was always whether the materials sought were within the categories already agreed. Thus, by paying insufficient attention to the text of the categories, Sportsbet has been lured into alleging that the absence of certain documents from that which has been discovered shows the inadequacy of the discovery. However, that absence was consistent with the discovery process being properly carried out once attention was focussed on the categories which had been agreed.
  3. I have considered whether category 1(l) should be rejected on discretionary reasons. I have come to the view that it should not be. It is a relatively small task to provide unredacted copies of the minutes in question. To the extent that it may give rise to confidentiality issues that may be resolved by appropriate orders which can be done by consent or failing consent by determination.
  4. I turn then to the question of fresh discovery.
  5. It follows from the above analysis that categories (a) to (c), (h) to (k) and (m) to (n) are in truth applications for fresh discovery which Sportsbet applied for in the alternative. I reject the application. It is made far too late. To accede to it now might well cause the trial to abort which, for reasons given at the start of these reasons, is a less palatable option than would be even in an ordinary case.
  6. I order the second and third respondents to provide the full text of board minutes and the CEO’s reports that have already been discovered in redacted form in these proceedings by 6.00 pm tomorrow, 26 November 2009, in an unredacted form. The motion is otherwise dismissed with costs.
  7. It follows from what I have just said that I have varied the orders made yesterday by providing for production of the unredacted minutes. This does not cause me to vary my previous costs order, for the degree of victory involved in the obtaining of the unredacted minutes is small.
I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.

Associate:


Dated: 16 December 2009


Counsel for the Applicant:
Mr T. North SC and Mr A. Tokeley


Solicitor for the Applicant:
Fitzpatrick Legal


Counsel for the First Applicant:
Mr J. Kirk and Ms A. Mitchelmore


Solicitor for the First Applicant:
Attorney-General of New South Wales


Counsel for the Second and Third Applicants:
Mr S. Kerr SC and Mr J. Emmett

Date of Hearing:
24 November 2009


Date of Judgment:
25 November 2009

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