Apache Northwest Pty Ltd v Newcrest Mining Ltd [2009] FCAFC 39 (31 March 2009)

Last Updated: 1 April 2009

FEDERAL COURT OF AUSTRALIA

Apache Northwest Pty Ltd v Newcrest Mining Ltd [2009] FCAFC 39

PRACTICE AND PROCEDURE – application for leave to appeal – principles to be applied – leave granted – appeal allowed

PRACTICE AND PROCEDURE – preliminary discovery – reasonable cause to believe – trade practices claim – no evidence of loss or damage


Federal Court of Australia Act 1976 (Cth) ss 24(1), 24(1A), 32
Federal Court Rules 1979 (Cth) O 15A r 6, r 11
Trade Practices Act 1974 (Cth) ss 52, 82, 86(1)


Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170
Australian Broadcasting Corp v Seven Network Ltd [2005] FCA 1851
Brilliant Digital Entertainment Pty Ltd v Universal Music Australia Pty Ltd [2004] FCAFC 270; (2004) 63 IPR 373
Burgundy Royale Investments Pty Ltd & Ors v Westpac Banking Corporation & Ors (1987) 18 FCR 212
C7 Pty Ltd v Foxtel Management Pty Ltd [2001] FCA 1864
Cappuccio v Australia & New Zealand Banking Group Ltd [1999] FCA 1188
Conrock Ltd v CSR Ltd [1990] FCA 312; (1990) 96 ALR 690
Cook v Pasminco Ltd [2000] FCA 677; (2000) 99 FCR 548
Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd [2007] FCA 1216; (2007) 164 FCR 450
Décor Corp Pty Ltd v Dart Industries Inc [1991] FCA 655; (1991) 33 FCR 397
Echo Tasmania Pty Ltd v Imperial Chemical Industries PLC [2008] FCAFC 58
Fencott v Muller [1983] HCA 12; (1983) 152 CLR 570
Glencore International AG v Selwyn Mines Ltd [2005] FCA 801; (2005) 223 ALR 238
Hooper v Kirella Pty Ltd [1999] FCA 1584; (1999) 96 FCR 1
Hornsby Shire Council v Valuer General of NSW [2008] NSWSC 1179
Hughes v Western Australian Cricket Association Inc [1986] ATPR 40-748
Imperial Chemical Industries plc v Echo Tasmania Pty Ltd [2007] FCA 1731
London Economics (Aust) Pty Ltd v Frontier Economics Pty Ltd [1999] FCA 932
Malouf v Malouf [1999] FCA 284; (1999) 86 FCR 134
Newcrest Mining Ltd v Apache Northwest Pty Ltd [2008] FCA 1527
Newcrest Mining Ltd v Apache Northwest Pty Ltd (No 2) [2008] FCA 1663
Optiver Australia Pty Ltd v Tibra Trading Pty Ltd [2008] FCAFC 133; (2008) 169 FCR 435
Pacific Dunlop Ltd v Australian Rubber Gloves Pty Ltd [1992] FCA 231; (1992) 23 IPR 456
Paxus Services Ltd v People Bank Pty Ltd [1990] FCA 500; (1990) 99 ALR 728
Re Wakim; Ex parte McNally [1999] HCA 27; (1999) 198 CLR 511
Schmidt v Won [1998] 3 VR 435
Seven Network Ltd v News Ltd [2005] FCAFC 125; (2005) 144 FCR 379
Smithkline Beecham plc v Alphapharm Pty Ltd [2001] FCA 27
St George Bank Ltd v Rabo Australia Ltd [2004] FCA 1360; (2004) 211 ALR 147
Thomson Australian Holdings Pty Ltd v Trade Practices Commission [1981] HCA 48; (1981) 148 CLR 150
United States Tobacco Co v Minister for Consumer Affairs (1988) 20 FCR 520
Village Building Co Ltd v Airservices Australia (No 2) [2008] FCA 1285
Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514





































APACHE NORTHWEST PTY LTD (ABN 58 009 140 854) v NEWCREST MINING LIMITED (ABN 20 005 683 625)
VID 887 of 2008

MOORE, GILMOUR AND FLICK JJ
31 MARCH 2009
SYDNEY (HEARD IN MELBOURNE)

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 887 of 2008

BETWEEN:

APACHE NORTHWEST PTY LTD (ABN 58 009 140 854) Applicant

AND:	NEWCREST MINING LIMITED (ABN 20 005 683 625) Respondent

JUDGES:	MOORE, GILMOUR AND FLICK JJ
DATE OF ORDER:	31 MARCH 2009
WHERE MADE:	SYDNEY (HEARD IN MELBOURNE)

THE COURT ORDERS THAT:

1. Leave to appeal be granted.

2. The appeal be allowed.

3. The order as made on 17 October 2008 for preliminary discovery pursuant to Order 15A r 6 of the Federal Court Rules be set aside.

4. The respondent pay the applicant’s costs of and incidental to the application for preliminary discovery.

5. The respondent pay the applicant’s costs of and incidental to the application for leave to appeal and the appeal.

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
VICTORIA DISTRICT REGISTRY	VID 887 of 2008

BETWEEN:

APACHE NORTHWEST PTY LTD (ABN 58 009 140 854) Applicant

AND:	NEWCREST MINING LIMITED (ABN 20 005 683 625) Respondent

JUDGE:	MOORE, GILMOUR AND FLICK JJ
DATE:	31 MARCH 2009
PLACE:	SYDNEY(HEARD IN MELBOURNE)

REASONS FOR JUDGMENT

MOORE AND GILMOUR JJ

1 We have had the benefit of reading the reasons of Flick J in a draft form. We gratefully adopt His Honour’s account of much of the background and his description of many of the relevant authorities. We would grant leave to appeal and allow the appeal. Our reasons for reaching this conclusion can be stated comparatively briefly.

2 A convenient starting point is the principles to be applied in determining whether or not to grant preliminary discovery under O 15A r 6(a) of the Federal Court Rules. It must be accepted that they are as discussed by Hely J in St George Bank Ltd v Rabo Australia Ltd [2004] FCA 1360; (2004) 211 ALR 147 at [26]. This flows from the views expressed by the Full Court, and in particular in the joint judgment of Black CJ and Sackville J, in Echo Tasmania Pty Ltd v Imperial Chemical Industries PLC [2008] FCAFC 58 at [43] that the principles had been correctly stated by Hely J. No suggestion was made that this judgment of the Full Court was wrongly decided. Accordingly it should be followed.

3 One of the principles is that to establish a "reasonable cause to believe" as required by O 15A r 6(a), something more than mere assertion and more than suspicion or conjecture is required. Belief is an inclination of mind towards assenting to, rather than rejecting, the proposition, and 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 the actual cause of action exists, that would dispose of the application in so far as it is based on a cause of action.

4 In the present case, two causes of action are relied upon. One is a contractual claim and the other is under the Trade Practices Act 1974 (Cth). Focusing for the present on the latter claim, it is a claim for damages under s 82 which has been described as a statutory cause of action: see, for example, the observations in the joint judgment in Wardley Australia Ltd v Western Australia [1992] HCA 55; (1992) 175 CLR 514 at 525. As Middleton J correctly said in Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd [2007] FCA 1216; (2007) 164 FCR 450 at [97] and [101], if the cause of action is based on alleged misleading or deceptive conduct arising from misrepresentations, there must be some evidence showing the loss or damage arising out of the alleged misleading statements to found an order for preliminary discovery. It is clear from the authorities that a prima facie case does not have to be established. But there must be some evidence concerning the loss.

5 The gist of the claim for damages under s 82 was that Apache made representations that full supplies of gas would be restored to its customers by mid-August 2008 and, on the strength of that, Newcrest cancelled some temporary arrangements for the supply of gas but it was later forced to make further alternative arrangements when full supply was not restored by that time. The primary judge made the following finding at [27]:

There is uncontradicted evidence that Newcrest suffered financial loss as a result of it having cancelled some of its gas supply contracts and then having to find alternative sources of energy.

Counsel for Newcrest did not seek to defend this conclusion by reference to the evidence in so far as it related to the events in August 2008. Indeed it is not supportable on the evidence. The only evidence was an assertion by Mr Brown in his affidavit, sworn 17 September 2008 at par [38(h)], supporting the application for preliminary discovery that in relation to losses flowing from the alleged misrepresentations, "Newcrest may suffer loss and damage as a consequence of its reliance on those representations". At best, this statement is conditional and speculative. Plainly, if there was any evidence of loss or damage having been suffered, it could have been furnished by Newcrest, even if only in the most cursory way. It was peculiarly within its knowledge whether the alleged misrepresentations resulted, even arguably, in loss. No evidence at all on this issue was furnished and it could not be said that the preliminary discovery sought might repair this deficiency.

6 Mr Brown deposed to the damages for breach of contract as being the additional cost incurred by Newcrest in obtaining replacement gas and procuring alternative fuel at par [39(e)]. The evidence of Mr Goddard, a solicitor acting for Newcrest, in his affidavit sworn on 26 September 2008, gave further generalised evidence as to the likely additional costs. We apprehend that evidence to be related to the case in contract and in any event appears to be related to correspondence from Apache to Newcrest dated 30 August 2008 concerning alleged losses directed to the reduction in supply from 1 October 2008. There is no evidence that the cost of the gas deposed to in par [11(c)] of the affidavit of Mr Goddard, dated 26 September 2008, (the gas resulting from the second interim supply arrangements) was greater than the cost of the gas deposed to in [11(a)] of that affidavit (the gas resulting from the initial interim supply arrangements).

7 In our opinion, Newcrest has failed to establish the existence of a reasonable cause to believe it has a cause of action under s 82. Different considerations arise in relation to the contractual claim but it is unnecessary to detail them. We say that because we would refuse preliminary discovery as a matter of discretion in circumstances such as the present where it is not established that there is a reasonable cause to believe the existence of a right to obtain relief in relation to the federal aspect of the claim which, if ultimately pursued, would engage the jurisdiction of the Federal Court.

8 The power of a judge of this Court to order preliminary discovery exists in aid of the exercise of the jurisdiction of the Court. If it is not apparent from the material filed in support of the application that the jurisdiction might be regularly invoked, then, in our opinion, no order should be made. That is not because we have concluded that the present application for preliminary discovery itself is colourable in the sense discussed in Burgundy Royale Investments Pty Ltd & Ors v Westpac Banking Corporation & Ors (1987) 18 FCR 212. We have not. An application can fail without being stigmatised in this way. It is, in our opinion, unnecessary to enter the debate of whether, as a matter of power, preliminary discovery could be ordered in the present circumstances as, for the reasons we have set out, no such order should be made in any event. However, we do not doubt that this Court has jurisdiction to hear and determine this application.

9 On the question of leave to appeal, the following observations of Black CJ and Stone J in Brilliant Digital Entertainment Pty Ltd v Universal Music Australia Pty Ltd [2004] FCAFC 270; (2004) 63 IPR 373 at [3] are apt to apply:

Clearly enough there are important differences to be borne in mind between steps taken in the management of a case towards trial and orders such as those challenged here [Anton Piller orders]. 

10 The primary judge made a finding of fact (at least concerning the existence of evidentiary material) which was not supported by the evidence before him. This led him, in our opinion, to overlook what we consider is a compelling discretionary consideration strongly militating against the making of an order for preliminary discovery. Leave to appeal should be granted and the appeal allowed. The order granting preliminary discovery should be set aside and Newcrest ordered to pay Apache’s costs of the application for preliminary discovery and of these proceedings.

I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Moore and Gilmour.

Associate:

Dated: 31 March 2009

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 887 of 2008

BETWEEN:

APACHE NORTHWEST PTY LTD (ABN 58 009 140 854) Appellant

AND:	NEWCREST MINING LIMITED (ABN 20 005 683 625) Respondent

JUDGES:	MOORE, GILMOUR AND FLICK JJ
DATE:	31 MARCH 2009
PLACE:	SYDNEY (HEARD IN MELBOURNE)

REASONS FOR JUDGMENT

FLICK J

11 On 3 June 2008 there was a catastrophic explosion on Varanus Island off the Western Australian coast. That explosion disrupted the supply of gas.

12 Included among those affected by the disruption of gas supplies was Newcrest Mining Limited ("Newcrest"), which operates a gold and copper mine in the Pilbara Region in the northwest of Western Australia. The mine is known as the Telfer Gold Mine and electrical power to the mine is provided by onsite generators fuelled by natural gas. The gas is supplied by Apache Northwest Pty Ltd ("Apache") and Santos (Bol) Pty Ltd ("Santos"). The gas supplied by Apache comes from a gas field known as the John Brookes gas field, located offshore in the Indian Ocean. That gas is processed on Varanus Island.

13 Following the explosion there was an exchange of correspondence between the parties seeking to determine when full gas supplies would be restored and the gas requirements in fact needed by Newcrest in the interim. Attempts were made by the gas suppliers to allocate such reduced gas supplies as were available between all customers.

14 Attempts to secure the provision of information were considered by Newcrest to be unsatisfactory. On 17 September 2008 an application was accordingly filed in the Melbourne District Registry of this Court seeking preliminary discovery pursuant to Order 15A of the Federal Court Rules 1979 (Cth). In support of that application a number of Affidavits were filed.

15 Orders for preliminary discovery were made on 17 October 2008: Newcrest Mining Ltd v Apache Northwest Pty Ltd [2008] FCA 1527. It is those Orders which are the subject of the present Application for Leave to Appeal. All submissions as were considered appropriate were advanced so that if leave were granted the appeal itself could also be resolved without further argument. An application made against Santos was discontinued.

16 Contrary to the conclusion reached by Moore and Gilmour JJ, it is considered that Leave to Appeal should be refused.

ORDER 15A RULE 6

17 Order 15A r 6 provides as follows:

Discovery from prospective respondent Where: (a) there is reasonable cause to believe that the applicant has or may have the right to obtain relief in the Court from a person whose description has been ascertained; (b) after making all reasonable inquiries, the applicant has not sufficient information to enable a decision to be made whether to commence a proceeding in the Court to obtain that relief; and (c) there is reasonable cause to believe that that person has or is likely to have or has had or is likely to have had possession of any document relating to the question whether the applicant has the right to obtain the relief and that inspection of the document by the applicant would assist in making the decision; the Court may order that that person shall make discovery to the applicant of any document of the kind described in paragraph (c).

18 The bases upon which Newcrest asserted that it believed that it had or may have a right to obtain relief were both breach of contract and a contravention of s 52 of the Trade Practices Act 1974 (Cth). After setting forth the contract claims which were being considered, the deponent to one of the Affidavits set forth as follows the trade practices claim which was under consideration:

(f) further, the Suppliers/Respondents have made representations to ... Newcrest in relation to the status of repairs to the facilities affecting the John Brookes gas field, the timetable for the restoration of production from the John Brookes gas field, and the allocation of gas to the Suppliers/Respondents’ customers; (g) in making those representations, the Suppliers/Respondents may have engaged in conduct that is misleading or deceptive or is likely to mislead or deceive, in contravention of s 52 of the Trade Practices Act 1974 (Cth) and/or s 10 of the Fair Trading Act 1987 (WA) ...

The deponent went on to state that Newcrest may suffer loss and damage. Another deponent identified the statements and representations made by Apache, upon which reliance was placed for the purposes of the preliminary discovery application, as being statements to the effect that:

(a) Apache’s estimated timetable was to restore gross production at a rate of 200 TJ/day of natural gas ... by 15 August 2008, ramping up to 350 TJ/day in December ...; (b) Apache expected limited production and deliveries of gas from the John Brookes field to begin in early August 2008, most likely on 5 or 6 August 2008; (c) Apache expected initial production volumes of 75-120 TJ/day, increasing to approximately 200 TJ/day by mid-August 2008; and (d) production and deliveries from the Harriet field would not begin until late in the year, with pre-incident production volumes expected by 15 December 2008.

19 Newcrest contended that the Respondents expressed opinions and made forecasts as to the restoration of gas supplies without having reasonable grounds to do so. Newcrest further contended that it did not have sufficient information to enable a decision to be made as to whether or not it should commence a proceeding.

20 The Orders for preliminary discovery as made on 17 October 2008 were stayed on 10 November 2008 pending the Application for Leave to Appeal now being made to this Court. Two principal issues were sought to be pursued on behalf of the Applicant, namely:

(i) the manner of application of O 15A r 6 of the Federal Court Rules to the facts; and

(ii) whether the trial judge erred in concluding that this Court has jurisdiction.

LEAVE TO APPEAL

21 The requirement for leave arises by reason of ss 24(1) and (1A) of the Federal Court of Australia Act 1976 (Cth). Those sub-sections provide as follows:

Appellate jurisdiction (1) Subject to this section and to any other Act, whether passed before or after the commencement of this Act (including an Act by virtue of which any judgments referred to in this section are made final and conclusive or not subject to appeal), the Court has jurisdiction to hear and determine: (a) appeals from judgments of the Court constituted by a single Judge; ... (1A) An appeal shall not be brought from a judgment referred to in subsection (1) that is an interlocutory judgment unless the Court or a Judge gives leave to appeal.

22 The decision of the trial judge is accepted by Apache as being interlocutory, although it is said that an order for preliminary discovery is "final" in effect because Apache "will lose irrevocably its right to prevent third parties examining its own documents which would constitute a substantial injustice if the pre-trial discovery order should not have been made". This, it may be noted, is the same submission as made in Echo Tasmania Pty Ltd v Imperial Chemical Industries PLC [2008] FCAFC 58 at [80]. Leave to appeal was there granted.

23 But a decision made pursuant to O 15A r 6 is unquestionably interlocutory: Malouf v Malouf [1999] FCA 284 at [36], [1999] FCA 284; 86 FCR 134 at 143 per Beaumont, Lee and Dowsett JJ; Echo Tasmania Pty Ltd v Imperial Chemical Industries PLC [2008] FCAFC 58 at [2] per Black CJ and Sackville J; London Economics (Aust) Pty Ltd v Frontier Economics Pty Ltd [1999] FCA 932 at [19] per Finkelstein J.

24 The discretion conferred by s 24(1A) to give leave to appeal from such an interlocutory decision, however, is a "wide discretion" and one "not constrained by rigid rules but (which) is ordinarily guided by well-recognised principles": Seven Network Ltd v News Ltd [2005] FCAFC 125 at [5], [2005] FCAFC 125; 144 FCR 379 at 380 per Branson J (Allsop and Edmonds JJ agreeing). Those principles require consideration of:

(i) whether in all the circumstances the judgment of the primary judge is attended by sufficient doubt to warrant it being reconsidered by a Full Court; and

(ii) whether substantial injustice would result if leave were refused supposing the decision were wrong.

See: Décor Corp Pty Ltd v Dart Industries Inc [1991] FCA 655; (1991) 33 FCR 397.

25 When exercising the discretion, a distinction is drawn between those cases where the decision of the trial judge is one which determines substantive rights and those where the question is one which goes to a matter of practice and procedure. Where the question posed is one of practice and procedure, the Court is loath to interfere: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170. The reason for this constraint was there explained by Gibbs CJ, Aickin, Wilson and Brennan JJ as follows (at 177):

Nor is there any serious dispute between the parties that appellate courts exercise particular caution in reviewing decisions pertaining to practice and procedure. Counsel for Brown urged that specific cumulative bars operate to guide appellate courts in the discharge of that task. Not only must there be error of principle, but the decision appealed from must work a substantial injustice to one of the parties. The opposing view is that such criteria are to be expressed disjunctively. ... For ourselves, we believe it to be unnecessary and indeed unwise to lay down rigid and exhaustive criteria. The circumstances of different cases are infinitely various. We would merely repeat, with approval, the oft-cited statement of Sir Frederick Jordan in In re the Will of F B Gilbert (dec.) [(1946) 46 SR (NSW) 318], at p. 323:

"... I am of opinion that, ... there is a material difference between and exercise of discretion on a point of practice or procedure and an exercise of discretion which determines substantive rights. In the former class of case, if a tight rein were not kept upon interference with the orders of Judges of first instance, the result would be disastrous to the proper administration of justice. The disposal of cases could be delayed interminably, and costs heaped up indefinitely, if a litigant with a long purse or a litigious disposition could, at will, in effect transfer all exercises of discretion in interlocutory applications from a Judge in Chambers to a Court of Appeal."

See also: United States Tobacco Co v Minister for Consumer Affairs (1988) 20 FCR 520 at 532.

PRELIMINARY DISCOVERY: PRACTICE AND PROCEDURE

26 The proper construction and manner of application of O 15A r 6 has been usefully summarised as follows by Hely J in St George Bank Ltd v Rabo Australia Ltd [2004] FCA 1360, 211 ALR 147 (references omitted).

Order 15A -- rule 6 -- Relevant principles ... [26] The following propositions emerge from the authorities in which the proper application of O 15A r 6 has been considered by judges of this Court: (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 ... (b) each of the elements prescribed in sub-paragraphs (a), (b) and (c) of the rule must be established ... Preliminary discovery cannot itself be used to remedy deficiencies in the satisfaction of the conditions themselves ... (c) the test for determining whether the applicant has ‘reasonable cause to believe’, as required by sub-paragraph (a), is an objective one ... Further, the words ‘or may have’ cannot be ignored. The applicant does not have to make out a prima facie case ... (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 ... (e) whilst uncertainty as to only one element of a cause of action might be compatible with the ‘reasonable cause to believe’ required by subparagraph (a), uncertainty as to a number of such elements may be sufficient to undermine the reasonableness of the cause to believe... (f) the question posed by sub-paragraph (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 ... 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 ... (g) whether an applicant has ‘sufficient information’ for the purposes of sub-paragraph (b) also requires an objective assessment to be made ... The sub-paragraph 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’ ... Indeed Order 15A r 6 ‘expressly contemplates’ what once might have been castigated as ‘fishing’ ... As Burchett J commented in Paxus Services [Ltd v People Bank Pty Ltd [1990] FCA 500; (1990) 99 ALR 728], the rule is (at 733):

... 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 ...

This summary has since repeatedly been applied (e.g. Village Building Co Ltd v Airservices Australia (No 2) [2008] FCA 1285 at [14]; Imperial Chemical Industries plc v Echo Tasmania Pty Ltd [2007] FCA 1731 at [18]) and has been endorsed by a Full Court of this Court: Echo Tasmania Pty Ltd v Imperial Chemical Industries PLC [2008] FCAFC 58 at [43].

27 The "beneficial" nature of the rule and its utility in empowering the Court in an appropriate case "to penetrate obscurities and uncertainties in the interests of justice" has been emphasised by Burchett J in Paxus Services Ltd v People Bank Pty Ltd [1990] FCA 500; (1990) 99 ALR 728 at 733 as follows:

It is no answer to the applicant's application under r 6 to say that the proceeding is in the nature of a fishing expedition ... Rule 6 is 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 -- that is, to "fish" in the old sense ... It would be unfortunate if a rule designed to amplify the court's power to penetrate obscurities and uncertainties in the interests of justice were to be weakened by restrictive and unnecessary glosses. I think the rule is of a beneficial kind within the meaning of the well known principle of interpretation, and should be given the fullest scope its language will reasonably allow. The proper brake on any excesses in its use is the discretion of the court, which is required to be exercised in the particular circumstances of each case. One guide for that discretion is provided by the reference in r 6(b) to "all reasonable inquiries"...

See also: Pacific Dunlop Ltd v Australian Rubber Gloves Pty Ltd [1992] FCA 231; (1992) 23 IPR 456 at 462 per Heerey J.

28 It is against this background that the Application for Leave to Appeal is now made.

29 That background includes not only the object and purpose of O 15A r 6. It also necessarily includes the interlocutory nature of the decision made and the fact that the decision of the learned trial judge ordering preliminary discovery and his Order as to costs were decisions made as to the practice and procedure of this Court. In making his Orders, His Honour expressly referred to and applied the decision in St George, supra. Subsequent to making those Orders, a confidentiality regime was agreed as between the parties to protect the commercial confidentiality of documents that may be discovered and restricting the future use of any such documents.

30 Subject only to the fact that it was thereafter under an obligation to comply with an Order of this Court as to the discovery of documents, Apache suffered no other prejudice. But it must be recognised that the jurisdiction to which it was exposed is truly an "extraordinary jurisdiction": C7 Pty Ltd v Foxtel Management Pty Ltd [2001] FCA 1864. Gyles J there observed:

[50] ... It needs to be borne in mind that this is an extraordinary jurisdiction. It provides for compulsory access to the private affairs of members of the community in order that somebody else can determine if they have a case against that party and the threshold set by O15A r 6(a) is not very high. There is much to be said for the view that a respondent in these circumstances is entitled to put the applicant to proof except in a clear case. ...

The safeguard that a third party has against its "private affairs" being intruded upon is the need for an applicant to satisfy this Court that the requirements of O 15A r 6 have been met. That which will have to be advanced before this Court in order to satisfy those requirements will obviously vary from case to case. Albeit forever conscious of the intrusion that an order will inevitably have upon a non-party, O 15A r 6 remains a rule which is to be "beneficially construed".

31 Although there remains a tension between these two propositions, there is no necessary inconsistency. As has been recognised by Hely J and others, although r 6 is to be "beneficially construed", the "proper brake on any excesses" rests in the discretion of the Court. A further "brake" upon possible excesses is the constraint that such discovery as is ordered must be that which "is necessary, but no more than that which is necessary, to overcome the insufficiency of information already possessed by the applicant after the making of all reasonable inquiries ...": Glencore International AG v Selwyn Mines Ltd [2005] FCA 801 at [13], [2005] FCA 801; 223 ALR 238 at 240 to 241 per Lindgren J.

32 As is demonstrated by the Full Court’s judgment in Echo Tasmania, supra, in an appropriate case leave to appeal may be granted.

33 The difficulties confronting a trial judge called upon to make an order for preliminary discovery are in many ways only compounded by the fact that a substantive proceeding has not been commenced and by the fact that the state of the evidence is less than complete. If the requirements of r 6 have been met, "fishing" is permitted. Indeed, it is the very deficiency in the material available to an applicant that is the occasion for the application being made. Judgments must necessarily be made in such circumstances as to each of the requirements imposed by r 6 and, if satisfied, the discretion must thereafter be exercised.

34 It is not considered that the decision of the learned trial judge in the present proceeding is attendant with sufficient doubt to warrant it being reconsidered by a Full Court.

35 Nor is there considered to be any "substantial injustice" occasioned by the making of the Orders as against Apache. Any order made under O 15A r 6 necessarily is an intrusion into the "private affairs" of those against whom the order is made. But the making of an order for preliminary discovery would not, without more, normally constitute "substantial injustice". Even if the making of a lawful order could be construed as working an "injustice", any "injustice" to Apache has been adequately addressed by the confidentiality regime which has been agreed and the restrictions thereby placed upon the use of documents discovered.

36 The caution expressed in Adam P Brown and by Sir Frederick Jordan in In re the Will of F B Gilbert has often been repeated. It is especially to be heeded in the present context of seeking leave to appeal from an order as to preliminary discovery.

37 A review of the reasons of the trial judge discloses no error of principle. His Honour correctly stated the principles and applied those principles to the facts before him. Although it may be assumed that any claim for relief in the present case (if made out) may well sound in substantial damages, the principles to be applied remain constant to all applications to review interlocutory decisions -- especially those decisions as to practice and procedure. The "long purse" of the present Applicant for leave may well have been sufficient to fund its initial resistance to the intrusion into its private affairs; but a "tight rein" must thereafter be kept upon attempts to interfere with the interlocutory orders of the trial judge.

38 The Application for Leave to Appeal has impermissibly delayed, at the very outset of potential litigation, the discovery of documents which have been properly ordered by the trial judge.

39 In the absence of any discernible error of principle, and in the absence of any substantial injustice to Apache, the Application for Leave to Appeal should be dismissed on that basis alone.

RULE 6: SOME COMPETING CONTENTIONS

40 Detailed argument, however, was addressed to the trial judge as to the application of O 15A r 6 to the facts; detailed and indeed different arguments have also been advanced on the present Application for Leave to Appeal.

41 Separate entirely from any approach that this Court may adopt in respect to interlocutory decisions going to the practice and procedure of the Court, it is considered that none of the relevant conclusions of the trial judge as were sought to be impugned by Apache were attendant with sufficient doubt to warrant a grant of leave to appeal.

42 Out of deference to the arguments advanced, some of these competing contentions should briefly be addressed.

43 It was common ground as between Apache and Newcrest that "mere assertion" on behalf of an applicant for preliminary discovery is not sufficient; an applicant seeking preliminary discovery must present some evidence which "inclines the mind" toward each of the elements of a cause of action relied upon.

44 For the purposes of both considering whether the trade practices claim as sought to be advanced was "colourable" and also for the purposes of applying O 15A r 6(a), the trial judge referred to the documents relied upon by Newcrest, being a late June 2008 press release, a 30 July 2008 letter from Apache and a 2 August 2008 letter from Santos and continued:

[20] It is said that those documents contain representations that, by mid-August, the respondents would be supplying Newcrest with its full gas entitlement under the contract. Newcrest says that, acting on these representations, it cancelled some temporary arrangements and then was forced to make further alternative arrangements when, in mid-August, full supply had not been restored. This led to Newcrest incurring substantial losses.

The conclusion of the trial judge was as follows:

[24] ... These passages are open to the construction that full supplies would be restored to Apache’s customers by mid August. ...

45 In support of its Application for Leave to Appeal, it was contended on behalf of Apache (inter alia) that:

(i) there was no evidence to support the conclusion that a representation had been made that, by mid-August, Newcrest would be supplied its full gas entitlement;

(ii) there was no evidence that such a representation was false or misleading; and

(iii) there was no evidence as to loss or damage.

46 Particular emphasis was placed on behalf of Apache, not surprisingly, upon both the first and last contentions. It is the essence of a claim under s 52 of the Trade Practices Act to establish the "conduct" sought to be relied upon and to establish "loss or damage".

47 The first contention on behalf of Apache was expressed with varying degrees of conviction. The contention varied from there being "no evidence", to a contention that the documents relied upon were not susceptible of containing the representation as formulated by the trial judge, to a contention that there was "some evidence". However expressed, it is to be rejected.

48 The documents identified by Newcrest, it is considered, are susceptible of containing a representation that by mid-August 2008 Newcrest would have its full allocation of gas restored. The press release (for example) contained the following statement:

The East Spar J.V. facilities are located the greatest distance from the rupture and sustained less damage. Export pipelines and associated valves, two compressors, instrumentation and control facilities are being repaired to meet the timetable of restoring production by mid-August.

Whether such evidence as is ultimately advanced at any final hearing by Newcrest will be sufficient to make out a case under s 52 of the Trade Practices Act is, of course, not the question presently to be resolved. Of present concern is whether the evidence that was before the trial judge was sufficient for him to be satisfied that Newcrest was advancing more than a "mere assertion" -- but rather evidence -- of a representation sufficient for it to have reasonably formed the opinion that it may have a right to obtain relief.

49 A submission on behalf of Apache that there was "no evidence" to support the conclusion of the trial judge was an impermissible overstatement. Moreover, it represents the very reason why a "tight rein" should be exercised in respect to applications for leave to appeal from interlocutory decisions as to practice and procedure. The conclusion of the trial judge as to the making of the representation is not a conclusion open to sufficient doubt to warrant leave to appeal being granted on that basis.

50 In his application of O 15A r 6 to the facts, the trial judge also considered whether loss or damage had been suffered. His conclusion was as follows:

[27] There is uncontradicted evidence that Newcrest suffered financial loss as a result of its having cancelled some of its gas supply contracts and then having to find alternative sources of energy.

It was accepted on behalf of Newcrest that this conclusion may be an "overstatement" of the effect of the evidence. But even if it is accepted that this conclusion is an "overstatement", it is respectfully considered that such a concession is not to be the occasion for this Court to trespass beyond its limited role when entertaining an application for leave to appeal.

51 The more substantial attack upon this conclusion advanced by Apache was that the trial judge had before him two potential causes of action -- one arising by reason of "conduct", being an alleged misleading representation, the other arising for breach of contract. Apache accepted that there may have been some evidence as to damages suffered for breach of contract. This evidence may have been found in the following statement of Mr Goddard, a solicitor for Newcrest, in his Affidavit.

[11] I am informed by [the Corporate Counsel of Newcrest] and believe that: (a) Newcrest had made interim gas supply arrangements after the ceasing of supply of gas by Apache and Santos in June 2008; (b) subsequent to receiving the communications from Apache referred to in the preceding paragraph, Newcrest terminated part of its interim gas supply arrangements with North West Shelf; and (c) as a result of the forecast step-down in Newcrest’s allocation from 1 October 2008, Newcrest will need to obtain replacement gas and diesel fuel to meet the Telfer mine’s energy requirements, at prices which represent many multiples of the price for which Newcrest had contracted to buy gas from the Respondents/Suppliers pursuant to the Gas Supply Agreement, and will thereby incur very substantial additional costs.

But it was said on behalf of Apache that there was no evidence of "loss or damage" for breach of s 52. The formulation of the manner in which any "financial loss" may be recovered for breach of s 52 (it was contended) may have been correctly expressed by the trial judge -- but there was no evidence to support the conclusion. The evidence of Mr Goddard, so it was said, was only evidence of damages for breach of contract. The only evidence of "loss or damage" for the purposes of s 82 of the Trade Practices Act, or so it was contended by Apache, was to be found in the following statement in Mr Brown’s Affidavit sworn 17 September 2008:

[39] The basis upon which Newcrest believes it has or may have the right to obtain relief from the Court against the Suppliers/Respondents is that: ... (h) Newcrest may suffer loss and damage as a consequence of its reliance on those representations, thereby entitling Newcrest to damages pursuant to s 82 of the Trade Practices Act 1974 (Cth) and/or s 79 of the Fair Trading Act 1987 (WA).

But this evidence, it was ultimately contended, was to be dismissed as "mere assertion".

52 It is not considered that the evidence can be so clinically analysed or confined. The requirements imposed by O 15A r 6 must obviously be satisfied. But the requirement of present concern, it should be recalled, is that there be "reasonable cause to believe that the applicant has or may have the right to obtain relief ...". Newcrest was asserting that it had suffered financially as a result of the disruption of its gas supply. Indeed, given the apparent extent and duration of the disruption to gas supplies, such an assertion was hardly surprising. If there was a reasonable basis upon which a conclusion could be reached that a representation had been made, and for a conclusion that the representation was "misleading", a further conclusion that Newcrest may well have thereby suffered "loss or damage" may have required very little support. It was sufficient for the purposes of O 15A r 6 for Newcrest to satisfy the Court that it "may have" the right to obtain relief, including a reasonable cause to believe that it "may have" suffered "loss or damage".

53 In a context where it is accepted for present purposes by Apache that there was some evidence as to damage suffered (albeit for breach of contract) and where the factual context is such that there had been significant disruption to gas supplies, it is not considered that a statement that Newcrest "may suffer loss and damage" can be dismissed as "mere assertion". Moreover, if gas supplies were not restored by mid-August 2008 (as was the representation relied upon), Mr Goddard was saying that Newcrest would have to "obtain replacement gas and diesel fuel ... at prices which represent many multiples of the price for which Newcrest had contracted to buy gas...". It is not considered that such evidence is to be quarantined to the claim being advanced in contract and not also employed to provide some evidence upon which "loss and damage" may also have been suffered for the purposes of s 52. His evidence, together with the evidence of Mr Brown, constituted a sufficient basis upon which the trial judge could reach the conclusion he in fact reached. In a different context, a statement that an applicant for preliminary discovery "may suffer loss and damage" may not rise above a "mere assertion"; but such a statement in the present proceeding must necessarily be considered as but part of the evidence available to the learned trial judge.

54 Although much of the information which may be sought pursuant to O 15A r 6 is within the control of the entity against which such an order is sought, information relevant to "loss or damage" may well be expected to be within the control of the person seeking the order. It may thus be expected that such evidence as is placed before the Court when an order is sought may be more fulsome in respect to "loss or damage" than other elements necessary to make out a cause of action. Be that as it may, such evidence as was presently before the trial judge as to the very real potential that Newcrest suffered financially as a result of the disruption to its gas supplies was sufficient in his opinion to satisfy the requirements of O 15A r 6.

55 The conclusion of the trial judge is not considered to be attendant with "sufficient doubt" to warrant leave to appeal being granted. Whether another Judge of this Court may have reached a conclusion different to that reached by the learned trial Judge is not the approach to be adopted upon an application for leave to appeal. And, even if it were appropriate for this Court, when entertaining an application for leave to appeal, to revisit the evidence before the trial judge with a viewing to forming its own conclusion as to what that evidence established, it is separately considered that that evidence was sufficient to "incline the mind" to a conclusion that Newcrest "may have" suffered "loss or damage" as a consequence of the representation as to the restoration of gas supplies by mid-August 2008.

56 Again, the very repetition of submissions on the Application for Leave to Appeal as to whether Newcrest had adduced sufficient evidence as to "loss or damage" is the very reason why a "tight rein" has to be exercised in relation to such applications. Applications for leave to appeal should not be allowed to descend into de facto appeals. Although the Application for Leave to Appeal and submissions in support of the appeal if leave were granted were conveniently and properly heard at one and the same time in the current proceeding, to accede to the submissions of Apache would be to extend to it a "free rein" rather than a "tight rein". Apache seeks an opportunity to take off on an uncontrolled gallop through the field of evidence; the task of this Court is to ensure that Apache is kept on the bit at a tightly controlled canter.

57 Separate from the contentions which placed reliance upon O 15A r 6(a), Apache also relied upon r 6(b) and the phrase "after making all reasonable inquiries". This was the second principal argument advanced. The contention of Apache was that Newcrest had not made "all reasonable inquiries". There was no evidence, so it was submitted, that Newcrest had made inquiries of Apache as to whether:

(a) any of the forecasts of future production levels made in its June 2008 press release or the letter dated 30 July 2008 had not been achieved as forecasted; (b) full supplies had not been restored to Apache’s customers by mid-August; or (c) Apache had a reasonable basis for the making of any of those forecasts.

58 The trial Judge rejected the contention that Newcrest had not made "all reasonable inquiries" by concluding as follows:

[35] Newcrest made a series of inquiries of Apache in an effort to obtain the information which it submits it needs in order to determine whether to commence proceedings in the Court. It directed a series of questions in writing to Apache. After some delay it received a guarded response. Most of the answers were lacking in detail. Some were only partially responsive to the question asked. One was non responsive. The questions and Apache's responses to them are set out above at [14] and [16]. In these circumstances I consider that Newcrest has made all reasonable inquiries to obtain the additional information which it needs. I am also satisfied that it is likely that Apache has in its possession documents disclosing the information sought by Newcrest in order that Newcrest may determine whether or not to commence a proceeding.

Again, the attack upon the approach of the trial Judge is rejected. Again the attack was that such inquiries as were made were directed to the contract claim and not the claim for relief under the Trade Practices Act.

59 With the benefit of hindsight, Newcrest may well have expressed such inquiries as were made differently. But the "series of questions" to which the trial Judge referred were identified by him as being contained within the letters from Newcrest to Apache dated 9 and 16 September 2008. The 16 September letter stated in part:

Newcrest believes that it has or may have the right to obtain relief against the Sellers in relation to the allocation or proposed allocation of gas by the Sellers to Newcrest, on the basis of breaches of the Gas Supply Agreement and/or representations made by the Sellers to Newcrest in contravention of s 52 of the Trade Practices Act 1974 (Cth). However, Newcrest does not have sufficient information to enable it to make a decision as to whether or not to commence court proceedings against the Sellers. So that Newcrest may consider its position, I request that you produce documents in the possession of the Sellers falling within the following categories by no later than 3.00 pm (in Melbourne) on Wednesday, 17 September 2008: (a) the allocation or proposed allocation of gas by the Sellers to its customers, including Newcrest, during the period between 3 June and 15 December 2008 (both dates inclusive), as shall be processed through the East Spar Joint Venture processing facility on Varanus Island; (b) the processing capacity or forecast processing capacity of the East Spar Joint Venture processing facility on Varanus Island during the period between 3 June and 15 December 2008 (both dates inclusive); (c) the firm commitments of the Sellers with other customers for the sale and purchase of gas from the John Brookes gas field (including but not limited to agreements for the supply of gas to those customers), for delivery at any time between 3 June and 15 December 2008 (both dates inclusive); (d) the proposed step-down in allocation of gas by the Sellers to Newcrest from 1 October 2008; and (e) the proposed step-up in allocation of gas by the Sellers to Newcrest from 15 December 2008. Newcrest is conscious of the commercially sensitive nature of the documents requested in this letter. As such, Newcrest would be prepared to accept a reasonable confidentiality regime to the extent necessary to preserve the confidentiality of information contained in relevant documents.

60 The trial Judge concluded that "reasonable inquiries" had been made. There is no reason to question either the approach or the conclusion of the trial Judge in this respect. It is not attendant with sufficient doubt to warrant the granting of leave.

61 A final observation should be made as to the need for an applicant seeking preliminary discovery to address each of the elements of the cause of action in respect to which he believes he has a right to obtain relief. As was observed by Hely J in St George, supra, at [25]: "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". The phrase as used in O 15A r 6(a), "there is reasonable cause to believe", does not require an applicant for preliminary discovery to establish every element of the cause of action sought to be relied upon -- but it does require a consideration as to whether there are reasonable grounds to believe that each of those elements exist: Optiver Australia Pty Ltd v Tibra Trading Pty Ltd [2008] FCAFC 133, 169 FCR 435. Heerey, Gyles and Middleton JJ there observed (references omitted):

[48] It was not incumbent upon Optiver to establish every element of the relevant causes of action, but a reasonable cause to believe that it "has or may have" the right to relief alleged. Of course, this is not to say that it is not necessary to examine the various elements of the potential cause of action that is sought to be relied upon to determine whether there is a reasonable cause to believe that each of the necessary elements exist ... Nor can an application for preliminary discovery be sustained without evidence that must incline the mind towards the matter of fact in question ...

There was no disagreement as between Newcrest and Apache as to the need for an applicant for preliminary discovery to have a "reasonable cause to believe" as to each of the elements of the cause of action sought to be relied upon.

62 That which was the subject of competing emphasis was the following observation of Hely J, namely (reference omitted):

[26] ... whilst uncertainty as to only one element of a cause of action might be compatible with the ‘reasonable cause to believe’ required by subparagraph (a), uncertainty as to a number of such elements may be sufficient to undermine the reasonableness of the cause to believe.

Inherent in the approach of Apache was either a contention that each of the elements of the trade practices claim had not been addressed or that, to the extent that each element was addressed, there was such "uncertainty" as to undermine the entire basis upon which that Application had been advanced.

63 Although it must be accepted that an applicant seeking preliminary discovery must both:

(i) establish each of the elements prescribed in O 15A r 6(a), (b) and (c); and

(ii) adduce evidence that "inclines the mind" to each of the elements of an identified cause of action,

there is respectfully considered to be a danger in too readily applying the "propositions" summarised by Hely J in St George rather than the words used in O 15A r 6 itself. Certainly, His Honour would have been the first to agree that it is the terms of r 6 which must be applied. The propositions of His Honour remain a very valuable guide as to those considerations which should be addressed and the manner in which those considerations should be applied when making an order for preliminary discovery. The greater the uncertainty there may be in respect to one or other of the elements of the cause of action being advanced, the greater may be the judicial reluctance to accept that an applicant has a "reasonable cause to believe"; the greater the certainty as to one or other of the principal elements of a cause of action, the less reason there may be to question the reasonableness of an applicant’s belief that he "may have" a cause of action. The rule remains a rule to be "beneficially construed". To adopt a too inflexible approach to the rule may be to deny the utility of preliminary discovery in those circumstances where it is most needed.

64 There may be some cases in which (for example) a case is sought to be advanced in reliance upon s 52 in which it is the making of a "representation" that may be in doubt and may require particular attention. Other elements of a cause of action under s 52 may emerge as perhaps more self-evident. In other cases, it may be "reliance" or "loss or damage" which may be in doubt and which may require particular attention. Applications under O 15A r 6 may present a myriad of varying circumstances. The language of r 6(a) -- "reasonable cause to believe" -- must be applied sensibly and in a pragmatic, but judicial, manner. "Reasonable cause to believe" may be satisfied in some cases with little or scant evidence as to (for example) "loss or damage", as those elements may not present themselves as reason to question the reasonableness of the belief being advanced. Each case must be separately considered on its own merits. The utility of the "propositions" as formulated by Hely J should not be diminished by an unjustified insistence upon other than scant or little evidence as to those elements of a cause of action which will in all probability not be put in issue at any final hearing. Applications for preliminary discovery should not be approached with some predisposition towards saying that a "reasonable cause to believe" can only be made out if there is some constant content or quality of evidence as to each of the elements of a cause of action, even if some are not really in dispute or likely to be in dispute.

65 In the Supreme Court of New South Wales, His Honour Justice Adams has similarly observed in Hornsby Shire Council v Valuer General of NSW [2008] NSWSC 1179:

[47] In my view it is important to approach the question of preliminary discovery in a practical and realistic way lest such applications, designed to facilitate the efficient conduct of litigation and permit a possibly wronged party to ascertain sufficient facts to decide whether it will undertake the increasingly expensive and inconvenient path of suing, become bedevilled with complicated hypotheses, nice distinctions and technical points. To use the language of Hely J in St George Bank Ltd v Rabo Australia [2004] FCA 1360 at 153, "The rule is to be beneficially construed, given the fullest scope that its language will reasonably allow, with a proper brake on any excesses lying in the discretion of the Court, exercised in the particular circumstances of each case".

66 The trial Judge in the present proceeding concluded that a "reasonable cause to believe" had been made out. There is no reason to question His Honour’s conclusion.

JURISDICTION

67 The trial Judge was also satisfied as to the jurisdiction of the Court which was being invoked. He relevantly concluded:

[23] Having examined the documentary evidence which is before the Court I am led to reject Apache's objections that Newcrest's federal claim is colourable and bound to fail.

This conclusion of His Honour is also considered not to be attendant with sufficient doubt to warrant the granting of leave to appeal.

68 This Court "has such original jurisdiction as is vested in it by laws made by the Parliament": Federal Court of Australia Act s 19(1). It is s 77(i) of the Constitution which confers legislative authority upon the Commonwealth Parliament to "make laws defining the jurisdiction" of this Court. Jurisdiction is relevantly conferred on this Court by s 86(1) of the 1974 Act "in any matter arising under this Act in respect of which a civil proceeding has ... been instituted under this Part". The claim sought to be advanced in the present proceeding by Newcrest was a "matter" for the purposes of both the Constitution and s 86(1) of the 1974 Act.

69 With limited exceptions, the Federal Court of Australia Act does not of itself confer jurisdiction on this Court: Thomson Australian Holdings Pty Ltd v Trade Practices Commission [1981] HCA 48; (1981) 148 CLR 150. The two exceptions are ss 24 and 32. Section 32(1) provides that "(t)o the extent that the Constitution permits, jurisdiction is conferred on the Court in respect of matters not otherwise within its jurisdiction that are associated with matters in which the jurisdiction of the Court is invoked". See: Hooper v Kirella Pty Ltd [1999] FCA 1584 at [64], [1999] FCA 1584; 96 FCR 1 at 18 per Wilcox, Sackville and Katz JJ.

70 The manner in which these provisions have been construed and applied, particularly in trade practices litigation, has by now been well canvassed.

71 It is thus now accepted that a "colourable" claim for relief under the Trade Practices Act does not properly invoke this Court’s jurisdiction. A federal claim which has been "fabricated" in order to invoke this Court’s jurisdiction in respect to non-federal claims, such as those in contract or tort, does not properly invoke this Court’s jurisdiction. And federal claims are "not genuine and are colourable and fabricated if they are obviously doomed to fail": Cook v Pasminco Ltd [2000] FCA 677 at [14], [2000] FCA 677; 99 FCR 548 at 550.

72 But where the jurisdiction of this Court has been properly invoked, its jurisdiction extends not only to the resolution of the claim for loss or damage under s 82 of the 1974 Act for a contravention of s 52; the jurisdiction also extends to the resolution of those other claims falling within the "accrued jurisdiction" of the Court. A claim falls within the "accrued jurisdiction" if it forms part of the one "matter" or "single justiciable controversy": Re Wakim; Ex parte McNally [1999] HCA 27, 198 CLR 511. Gummow and Hayne JJ there observed (references omitted):

[135] It must now be regarded as established that the jurisdiction of a federal court having jurisdiction in a matter arising under a law made by the Parliament is not "restricted to the determination of the federal claim or cause of action in the proceeding, but extend[s] beyond that to the litigious or justiciable controversy between parties of which the federal claim or cause of action forms part" ...

And in Fencott v Muller [1983] HCA 12; (1983) 152 CLR 570, Mason, Murphy, Brennan and Deane JJ observed (at 608):

What is and what is not part of the one controversy depends on what the parties have done, the relationships between or among them and the laws which attach rights or liabilities to their conduct and relationships. The scope of a controversy which constitutes a matter is not ascertained merely by reference to the proceedings which a party may institute, but may be illuminated by the conduct of those proceedings and especially by the pleadings in which the issues in controversy are defined and the claims for relief are set out. But in the end, it is a matter of impression and of practical judgment whether a non-federal claim and a federal claim joined in a proceeding are within the scope of one controversy and thus within the ambit of a matter.

A further requirement relevant to a consideration of that which falls within the "accrued jurisdiction" of the Court is that federal jurisdiction is only attracted to the entirety of the "matter" if the federal claim is a "substantial part" of the controversy: Fencott v Muller, supra. Their Honours there further observed (at 609 to 610):

However, federal judicial power is attracted to the whole of a controversy only if the federal claim is a substantial aspect of that controversy. A federal claim which is a trivial or insubstantial aspect of the controversy must, of course, itself be resolved in federal jurisdiction, but it would be neither appropriate nor convenient in such a case to translate to federal jurisdiction the determination of the substantial aspects of the controversy from the jurisdiction to which they are subject in order to determine the trivial or insubstantial federal aspect. Again, impression and practical judgment must determine whether it is appropriate and convenient that the whole controversy be determined by the exercise of federal judicial power.

73 Before this Court, arguments denying jurisdiction were again advanced on behalf of Apache. Although not all of the arguments now advanced were advanced before the trial Judge, the three relevant contentions advanced on behalf of Apache were that:

(i) the application for preliminary discovery pursuant to O 15A r 6 was not itself capable of constituting a "matter";

(ii) the claim for relief for loss or damage pursuant to s 82 of the Trade Practices Act, for a contravention of s 52 of that Act, was a "colourable claim"; and

(iii) the Trade Practice Act claim was a "trivial or insubstantial" aspect of the breach of contract claim.

There are at least three reasons for refusing leave to appeal based upon this part of the attack upon the reasons of the trial Judge.

74 First, concurrence is expressed with the conclusion of the learned trial Judge that the claims relied upon by Newcrest were not "colourable".

75 Second, although this Court must always ensure that its jurisdiction has properly been invoked, there is no "obvious error" in the decision of the trial Judge. In Fencott v Muller, supra, Mason, Murphy, Brennan and Deane JJ further observed (at 610):

Regardless of whether the form of objection to the jurisdiction of a court relates to the jurisdiction conferred upon it or the jurisdiction from which it is excluded by a law enacted pursuant to s.77(ii), the question -- hopefully amenable to summary disposition -- is whether the claim under the relevant federal law is a substantial part of a controversy the whole of which would be appropriately and conveniently determined by the court vested with jurisdiction in matters arising under that law. That is not to say that a judicial decision as to whether a particular question or issue falls for determination by the exercise of federal jurisdiction is not capable of review. But the occasions for such review should be few indeed and restricted to cases where there has been obvious error in holding either that the federal aspect of the matter is substantial or that it is trivial or that the overall area of dispute is susceptible of clear division into component controversies or that it is not.

These observations have particular application when a challenge to jurisdiction is made at that point of time when no statement of claim has been filed.

76 The Court unquestionably has jurisdiction to make an order pursuant to O 15A r 6 in respect to a potential claim under the Trade Practices Act: Hooper v Kirella Pty Ltd [1999] FCA 1584, 96 FCR 1. Left unresolved is a contention that O 15A r 6 enables an application to be made confined to the preliminary discovery of documents relevant only to a non-federal claim -- provided that the Court otherwise has jurisdiction. In this scenario, an applicant may have sufficient information to enable a decision to be made to commence a proceeding in respect to which this Court has jurisdiction, such as a trade practices claim. Whether in such a case an application may be made under O 15A r 6 for the preliminary discovery of documents confined to (for example) a claim in contract, is the question left unresolved.

77 Whatever be the scenario presented, it remains incumbent upon the Court to satisfy itself as to the jurisdiction being invoked. Based most probably upon affidavit evidence alone that sets forth the federal matter, and being denied the benefit of a statement of claim, it may be difficult for a Judge at first instance to form anything other than a preliminary view. It may be even more difficult for a Judge at first instance to form anything other than a preliminary view as to whether any non-federal claim also forms part of the common sub-stratum of facts so as to form part of the one "matter". It is only in the clearest of cases that a decision of a trial Judge as to jurisdiction should be revisited on an application for leave to appeal.

78 The present Application for Leave to Appeal is certainly not an example of such a case.

79 There is a further reason of present relevance to the refusal of leave to appeal. Although it may be noted that:

(i) the Draft Amended Draft Notice of Appeal does contain a proposed Ground of Appeal alleging that:

... the Court should have found that it had no accrued jurisdiction to make orders for discovery by Apache under O.15A r.6 in respect of the Clause 7.3 Contract Claim as the TPA Claim is a trivial or insubstantial aspect of the justiciable controversy between Newcrest and Apache as raised by Newcrest’s application.

and

(ii) the written submissions filed in this Court by Apache contain a submission that "the TPA Claim is severable from and/or a trivial or insubstantial aspect of the controversy constituted by the breach of clause 7.3 ... ";

it may further be noted that:

(iii) the written submissions as filed by Newcrest contend that "(t)he separation of the TPA and contract claims was not put by Apache to the primary judge"; and

(iv) the written submissions in reply as filed by Apache do not put in issue the Newcrest submission as to the manner in which the claim was "put by Apache" to the trial Judge -- those submissions only put in issue the submission that there is a common sub-stratum of facts.

Consistent with the submission of Newcrest, it would not appear from the reasons of the trial Judge that any submission was advanced at the initial hearing that there was any "separation" of the trade practices and the contract claims or that the trade practices claim was a trivial or insubstantial aspect of the controversy and that this Court’s jurisdiction therefore did not accrue. In such circumstances, it is indeed difficult to conclude that an interlocutory decision of a trial Judge is attendant with sufficient doubt warranting the grant of leave to appeal by reason of the trial Judge not resolving a submission which was never advanced.

80 For the purposes of resolving the application under O 15A r 6, it is thus also considered that the conclusion of the trial Judge that the Court had jurisdiction is not attendant with sufficient doubt to warrant the grant of leave to appeal. If Newcrest decides to further pursue its claims for relief in this Court, it would remain open to Apache (or such other respondents as may be parties to the proceeding) to file any such further motion as they may be advised challenging jurisdiction. At that point of time the Court would have the not inconsiderable benefit -- a benefit denied the trial Judge -- of a statement of claim clearly setting forth the federal matter upon which reliance is placed to invoke jurisdiction.

COSTS AND EXPENSES

81 Following the making of the Order for preliminary discovery, the trial Judge separately addressed the question of who should pay the costs of that application. His Honour ordered that Newcrest was entitled to its costs: Newcrest Mining Ltd v Apache Northwest Pty Ltd (No 2) [2008] FCA 1663.

82 The Draft Amended Draft Notice of Appeal seeks, inter alia, an order that the Order as to costs be varied such that Newcrest is to pay the reasonable costs of Apache in making discovery. The case for Apache was that it did not seek to challenge the Order that it was to pay the costs of the application for preliminary discovery. To the extent that it had resisted the application being made, and had lost, it was accepted -- albeit reluctantly -- that the Order as to costs was one which was within the discretion of the trial Judge. The order sought on appeal was confined to an order that Apache’s costs of providing preliminary discovery should be paid by Newcrest. Apache, it was said, was in the position of a third party. Just as a third party may be entitled to its "costs and expenses" of providing documents pursuant to a subpoena, so too should Apache be entitled to its "costs and expenses" of providing the preliminary discovery that was ordered.

83 In making the Order as to costs the learned trial Judge applied what he described as the "conventional approach to costs orders in this area" as explained by Burchett J in Cappuccio v Australia & New Zealand Banking Group Ltd [1999] FCA 1188 at [3] to [4].

84 The power of the Court to make an order as to costs and expenses is that conferred by s 43(1) of the Federal Court of Australia Act. The power to make an order for costs and expenses is further and more specifically addressed by O 15A r 11, which provides as follows:

Costs (1) The Court may make an order for the costs and expenses of the applicant, a party to the proceeding or a person against whom an order is made or sought, including the following: (a) the costs of making and serving a list of documents; (b) the costs of producing a document for inspection in accordance with rule 10; (c) the costs of complying with an order made under Division 2 of Order 15; (d) if the order made or sought was similar to a subpoena -- expenses or compensation that would have been allowable under Order 27, rule 11 if the order was for a subpoena. (2) The Court may make an order under this Order on condition that the applicant give security for the costs and expenses of the person against whom the order is made.

This Rule supplements such power as is otherwise conferred by s 43; the Rule cannot be construed as confining the ambit of the discretion thereby conferred.

85 In the ex tempore judgment of Burchett J in Cappuccio, His Honour concluded:

[3] However, I have a discretion as to just what I should do in respect of costs, and it seems to me that the costs order which would be appropriate in a case like this depends very much on the consequences of the discovery obtained. If the applicant for preliminary discovery uncovers enough to enable that applicant to bring proceedings which are successful, there may be much to be said for the proposition that the costs of the preliminary discovery should form part of the costs of the action. On the other hand, if the applicant proceeds, brings an action, fails, and is ordered to pay the costs of that action, there seems every reason why, generally speaking, the costs of the preliminary discovery should be included in the costs payable to the respondent. [4] There may, of course, be cases where there are special reasons to vary the normal rule that costs follow the event. In this particular case, having listened to the arguments of both sides, each of whom seeks a costs order, I have come to the conclusion that the appropriate order, in the event that a case is brought for substantive relief, is that the costs of this application be at the discretion of the tribunal which hears the substantive application. In all the circumstances, I order that, if a substantive application is brought by the applicants against the respondent bank within six weeks from today's date, the costs be dealt with in the way I have indicated.

Documents had there been produced by the respondent bank without an order of the Court. The order as to costs ultimately made was that, if an application was not commenced within six weeks, the applicants for preliminary discovery were to pay the costs of the bank. A similar order was made by Finkelstein J in Smithkline Beecham plc v Alphapharm Pty Ltd [2001] FCA 271 at [32].

86 In Victoria, Ormiston JA has referred to different "customary orders": Schmidt v Won [1998] 3 VR 435 at 459. The order customary in that jurisdiction, apparently, is that a respondent is to be treated like a non-party in a proceeding when responding to a subpoena, the applicant paying the respondent’s reasonable costs of making discovery.

87 In other cases in this Court a variety of forms of orders have been made, in some cases after apparently some argument, and in other cases without any apparent argument. In Conrock Ltd v CSR Ltd [1990] FCA 312; (1990) 96 ALR 690 at 695, Pincus J exercised the discretion conferred by O 15A r 11 and indicated that he did not consider that the companies against which preliminary discovery was sought "should perform the work of retrieving the material for nothing". In London Economics (Aust) Pty Ltd v Frontier Economics Pty Ltd [1999] FCA 932, Finkelstein J made an order that some of the respondents making discovery be paid their costs. So, too, in Australian Broadcasting Corp v Seven Network Ltd [2005] FCA 1851, Stone J made an Order that a respondent be paid its reasonable costs of complying with orders for discovery. An Order to the same effect made in Imperial Chemical Industries plc v Echo Tasmania Pty Ltd [2007] FCA 1731 was not the subject of appeal: Echo Tasmania Pty Ltd v Imperial Chemical Industries PLC [2008] FCAFC 58.

88 Any application for leave to appeal against an order made for the payment of costs in an interlocutory application must inevitably confront considerable difficulties. An order for costs in any proceeding is an exercise of a discretionary judgment made by a trial Judge.

89 Subject to this reservation, it is nevertheless considered that any error in principle that the trial Judge may have committed was confined to the extent that he concluded that there was a "conventional approach" to the making of an order for costs. The observations of Burchett J in Cappuccio were generally expressed. But any order for costs must necessarily be dictated by the facts and circumstances of any proceeding. In the absence of reason to the contrary, it may well be an appropriate exercise of discretion to make an order in the manner outlined by Burchett J. But the discretion conferred by s 43 is said to be an unfettered discretion, subject only to the constraint that it be exercised judicially: Hughes v Western Australian Cricket Association Inc [1986] ATPR 40-748 at 48,136 per Toohey J.

90 Although in a different context it has been said (for example) that ordinarily "costs follow the event", it may be doubted whether there is as yet a "conventional approach" as to how the discretion as to costs and expenses is to be exercised in preliminary discovery applications. Certainly Burchett J in Cappuccio did not express his observations as reflecting any such "conventional approach".

91 Although reservation is expressed as to whether or not there is as yet any "conventional approach" with respect to costs and expenses incurred in providing preliminary discovery, it is not considered that the Order as to costs as made by the trial Judge otherwise disclosed any error which exposed Apache to substantial injustice.

92 There is no reason to interfere with the Order made by the trial Judge as to costs.

CONCLUSION

93 The opportunity has been taken to read in draft the reasons for decision of Justices Moore and Gilmour. Regrettably, concurrence cannot be expressed with their conclusions. Contrary to the conclusions reached by their Honours, it is considered that the Application for Leave to Appeal should be dismissed.

I certify that the preceding eighty-three (83) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick.

Associate:

Dated: 31 March 2009

Counsel for the Applicant:	Mr A C Archibald QC with Mr G P Harris
Solicitor for the Applicant:	Mallesons Stephen Jaques
Counsel for the Respondent:	Mr J B R Beach QC with Mr C M Archibald
Solicitor for the Respondent:	Blake Dawson

Date of Hearing:	21 November 2008
Date of Judgment:	31 March 2009