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Quanta Software International Pty Ltd v Computer Management Services [2000] FCA 969 (21 July 2000)

Last Updated: 21 July 2000

FEDERAL COURT OF AUSTRALIA

Quanta Software International Pty Ltd v Computer Management Services Pty Ltd [2000] FCA 969

PRACTICE AND PROCEDURE - preliminary discovery - applicant distributor of software - respondent licensee of applicant - whether reasonable cause to believe applicant may have right to obtain relief in the Court for infringement of copyright - whether applicant made all reasonable inquiries by making requests of the respondent.

Evidence Act 1995 (Cth), Dictionary.

Copyright Act 1968 (Cth), ss 115, 119, 131C.

Federal Court Rules, O 15A r 6; O 1 r 4.

Hooper v Kirella Pty Ltd [1999] FCA 1584; (1999) 96 FCR 1, cited.

W R Pateman Pty Ltd v Walker Corp Pty Ltd [1990] ATPR 41-106, cited.

London Economics (Aust) Pty Ltd v Frontier Economics Pty Ltd [1999] FCA 932, cited.

Alphapharm Pty Ltd v Eli Lilly Australia Pty Ltd (unreported, 24 May 1996, Lindgren J), cited.

Paxus Services Ltd v People Bank Pty Ltd (1990) 99 ALR 728, cited.

QUANTA SOFTWARE INTERNATIONAL PTY LTD v COMPUTER MANAGEMENT SERVICES PTY LTD

N 516 of 2000

SACKVILLE J

21 JULY 2000

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 516 OF 2000

BETWEEN:	QUANTA SOFTWARE INTERNATIONAL PTY LIMITED APPLICANT
AND:	COMPUTER MANAGEMENT SERVICES PTY LIMITED RESPONDENT
JUDGE:	SACKVILLE J
DATE OF ORDER:	21 JULY 2000
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The respondent give verified discovery by 2 August 2000 of such of the following documents as are within its custody, possession or power:

(a) all contracts relating to

(i) UNISON software; or

(ii) any other software distributed by the respondent which incorporates EUNICE modules or portions of EUNICE modules,

entered into during the period of three years preceding the date of these orders; and

(b) all source codes in the possession of the respondent relating to

(i) UNISON software; or

(ii) any other software distributed by the respondent which incorporates EUNICE modules or portions of EUNICE modules.

"Document" has the meaning it bears in FCR O 15A r 6.

2. Subject to par 3, inspection of the documents referred to in par 1 shall take place within fourteen days of the date verified discovery is given by the respondent.

3. Inspection by the applicant of the documents referred to in par 1 shall be given subject to the following conditions:

(a) no more than two (2) copies of such documents or things shall be made without further order of the Court;

(b) access to the originals or copies of such documents will be confined to the following persons: Simon Allison and Andrew Clements of the applicant; the applicant's legal representative, Terence Lee; and the applicant's appointed expert, Graeme Harrison;

(c) access will be granted to each person named in sub-par (b) only upon each such person giving an undertaking in writing addressed to the respondent's solicitors, or giving an undertaking to the Court, in the following terms:

(i) No further copies shall be taken of the copy documents or things provided, except with the written agreement of the respondent's solicitors or further order of the Court.

(ii) The contents of the documents and things shall be kept confidential and not disclosed to any other person other than a person named in sub-par (b) without leave of the Court.

(iii) The information provided shall be used solely for the purposes of

(A) forming an opinion as to whether the respondent infringed the applicant's asserted copyright in EUNICE software; and/or

(B) instituting and conducting proceedings against the respondent in respect of infringement of the applicant's asserted copyright in EUNICE software.

(iv) Subject to any further order of the Court, all copies of documents and/or copies taken of the contents of such documents shall be delivered to the respondent's solicitors at the conclusion of any proceedings initiated by the applicant against the Respondent following this discovery, or within thirty (30) days of inspection should there be no such proceedings initiated by the Applicant within that time.

4. Liberty to apply on 72 hours notice.

5. The respondent pay fifty per cent of the applicant's costs of the application, as agreed or taxed.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 516 OF 2000

BETWEEN:

QUANTA SOFTWARE INTERNATIONAL PTY LIMITED

APPLICANT

AND:

COMPUTER MANAGEMENT SERVICES PTY LIMITED

RESPONDENT

JUDGE:	SACKVILLE J
DATE:	21 JULY 2000
PLACE:	SYDNEY

REASONS FOR JUDGMENT

The Proceedings

1 This is an application pursuant to Federal Court Rules ("FCR") O 15A r 6 seeking verified discovery of certain documents. The applicant distributes EUNICE, a computer program which comprises a suite of integrated modules designed for importers and distributors. The software covers the areas of sales and marketing, inventory management, financial management, and general management. The applicant says that UNISON, a computer program distributed by the respondent, is used for similar purposes. There is evidence that UNISON software may have incorporated parts of the source code for EUNICE, either directly in its own code or as distinct modules.

2 The categories of documents sought by the applicant are identified in a schedule to the application. They are as follows:

"1. All correspondence relating to the sale of EUNICE software, UNISON software and any other software distributed by the Respondent and sold in conjunction in any way with Eunice software, for a period of 6 years immediately preceding 3 May 2000.
2. All contracts relating to the sale of EUNICE software, UNISON software and any other software distributed by the Respondent and sold in conjunction in any way with Eunice software, for a period of 6 years immediately preceding 3 May 2000.
3. All books of account relating to the sale of EUNICE software, UNISON software and any software distributed by the Respondent and sold in conjunction in any way with Eunice software, for a period of 6 years immediately preceding 3 May 2000.
4. All source codes in the possession of the Respondent in relation to EUNICE software, UNISON software and any software distributed by the Respondent and sold in conjunction in any way with Eunice software."

3 Mr Lee, who appeared on behalf of the applicant, conceded in argument that the four categories of documents identified in the schedule to the application had probably been stated too broadly. At the conclusion of the argument Mr Lee put forward an alternative form of order. After some refinement (and with some editorial changes) the alternative order took the following form:

"1. All contracts relating to
(a) UNISON software; or
(b) any other software distributed by the respondent which incorporates EUNICE modules or portions of EUNICE modules,
entered into during the period of six years preceding the date of these orders.
2. All source codes in the possession of the respondent relating to
(a) UNISON software; or
(b) any other software distributed by the respondent which incorporates EUNICE modules or portions of EUNICE modules."

4 Mr Lee accepted that, if the Court were minded to make orders for preliminary discovery, a confidentiality regime should be put in place. He proposed a particular regime. Mr Gelbart, who appeared for the respondent, argued that, if any orders were to be made, the documents should be made available only for inspection by an independent expert. Failing that, he did not dispute that the proposed confidentiality regime (subject to one agreed modification) was adequate to protect the respondent's interests.

The Rules

5 FCR Order 15A r 6 provides as follows:

"(6) 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)."

6 The word "document" is defined to include any record of any information which is a document within the definition contained in the Dictionary to the Evidence Act 1995 (Cth) and any other material, data or information stored or recorded by mechanical or electronic means: FCR, O 1 r 4. It follows that the Court has power pursuant to O 15A r 6 to order that a person make discovery of an electronic record of information, or indeed anything from which sounds, images or writings can be reproduced with or without the aid of anything else: see par (c) of the definition of "document" in Part 1 of the Dictionary to the Evidence Act.

The Evidence

7 The applicant filed two affidavits in advance of the hearing. Both were sworn by Mr Allison, the applicant's Company Secretary. These affidavits were duly read. Mr Allison was not cross-examined on them.

8 The respondent filed no evidence in advance of the hearing. At the hearing itself, however, Mr Gelbart sought leave to file and read an affidavit by Mr Morton, an officer of the respondent. The main point of Mr Morton's affidavit was to authenticate a letter dated 18 July 1996 which, according to Mr Gelbart, constituted a licence by the applicant to the respondent to use the EUNICE software as part of the respondent's software.

9 Mr Lee initially objected to Mr Morton's affidavit being read on the ground that it had been filed late and required an answer. Ultimately Mr Lee withdrew his objection. He did so on the basis that he would be permitted to read a further affidavit from Mr Allison explaining the context in which the letter had been written and to tender additional correspondence. In the result, the affidavits of Mr Morton and Mr Allison were both filed in Court and read. The additional correspondence was admitted into evidence. Neither Mr Morton nor Mr Allison was cross-examined on the affidavits filed in Court.

The Course of Events

10 By an "Exclusive Perpetual Software License Agreement" dated 2 February 1991, between Quanta Holdings Ltd, a New Zealand company, and the applicant, the latter was granted an exclusive perpetual licence to use, copy, publish, translate and sub-licence rights to the EUNICE software system, with respect to all countries other than New Zealand.

11 By a Dealer Agreement dated 12 November 1992, the applicant appointed the respondent a non-exclusive "Dealer of Licensed Programs" upon the terms and conditions specified therein (cl 2). The term "Licensed Program" was defined to mean:

"The computer software specified in Schedule 1 together with such other computer software as are from time to time made available or supplied by [the applicant] to the [respondent] pursuant to the terms of this Agreement but excluding such computer software as may be notified by [the applicant] to the [respondent] from time to time" (cl 1.2.2).

Clause 8.1 of the Dealer Agreement provided as follows:

"Development Code purchased by [the respondent] must only be used for Development Purposes".

"Development Code" was defined to mean

"the source computer programs from which the licensed programs are derived".

"Development Purposes" was defined to mean

"modify, enhance or add to the functionality of a licensed program already supplied to an end user".

The Dealer Agreement could be terminated on written notice by the applicant, effective immediately in the event of the respondent breaching the agreement and failing to remedy the breach within fourteen days after written notice thereof (cl 13.4(i)).

12 By letter dated 6 June 1994, the applicant terminated the Dealer Agreement. The letter asserted that the respondent was still holding itself out as a dealer in the applicant's software and had unlawfully entered into sub-licence arrangements with third parties.

13 For reasons that are not explained in the evidence, the applicant apparently continued to deal with the respondent. This came about through a course of dealings between Mr Friis on behalf of the applicant and Mr Cross on behalf of the respondent. The applicant appears to accept that the effect of this course of dealings was to have reinstated the Dealer Agreement between the parties.

14 In the first half of 1996 a dispute arose between the applicant and the respondent. The applicant had carried out a major upgrade to its EUNICE software. It refused, however, to supply the upgraded version to the respondent because the latter (so the applicant claimed) had failed to keep its account up to date. On 18 July 1996, Mr Allison prepared a letter for Mr Cross to sign. The letter was as follows:

"As per your meeting with Mr Friis on the 17^th July 1996 Quanta will provide you with the updated source code provided you agree to confine its use to the development of your CMS Eunice, and that the source code is not used to offer or give support to any Quanta customers."

This was the letter which the respondent claimed granted a licence to it to use the EUNICE modules in conjunction with its own systems.

15 The evidence is sketchy as to developments between 1996 and 2000, although it appears that in 1998 the parties negotiated with a view to amending the Dealer Agreement. A draft amending agreement was prepared, but was never executed.

16 On 20 March 2000, Mr Friis died. On 11 April 2000, in circumstances not addressed in the evidence, Mr Cross, on behalf of the respondent, forwarded a letter to the applicant. The letter noted that a number of users of EUNICE software had "upgraded" to UNISON. The letter also contains this paragraph, on which the applicant placed considerable reliance:

"We have since then delivered seven Unison sites. Unison has some portions of some of the modules, which come from Eunice. It would be difficult to specify the Eunice components."

17 On 3 May 2000, the applicant's solicitors wrote to the respondents. The solicitors asserted that the Dealer Agreement was "presently subsisting...in relation to distribution of [the applicant's] EUNICE software". The letter stated that the applicant believed that the respondent had been in breach of copyright and otherwise had acted unlawfully in breach of the Dealer Agreement by distributing EUNICE software as a component of its UNISON software. The solicitors noted that, if this belief were correct, the applicant would be entitled to initiate proceedings against the respondent in the Federal Court. The letter stated that the applicant did not have sufficient information to enable it to make a decision whether to commence proceedings or not. The respondent was requested to make available for inspection within seven days four categories of documents. In substance, these categories corresponded to those identified in the schedule to the application.

18 On 9 May 2000, the respondent's solicitors requested further time in which to reply. On 12 May 2000 the respondents' solicitors queried the authority of the applicant's solicitors to act in the matter. The respondent's solicitors replied on 15 May 2000 and requested a reply to the letter of 3 May 2000 by the close of business on 18 May 2000. No response was received by that deadline and on 19 May 2000 the present proceedings were instituted.

19 On 19 May 2000, after the application had been filed but before it had been served, the respondent's solicitors made what described by Mr Gelbart in argument as an open offer. The relevant portions of the offer are the following:

"Our client subject to the execution of an acceptable Confidentiality Agreement which provided for the appointment of a independent party to undertake inspection would make available
(a) All contracts for the sale of Unison software
(b) Invoices and statements relating to sale of Unison
(c) Source code of Unison.
...
We would suggest that the terms of reference should include the determination by the independent party of the proportions of the modules in each of the programs that have their derivation in either Eunis [sic] or Unison and the amount, if any, payable in respect of the Eunis [sic] component of their software programs."

Applicant's Submissions

20 The applicant submits that it has satisfied the requirements of FCR O 15A r 6. Its contentions, in summary, are as follows:

* O 15A r 6(a) is satisfied because there is reasonable cause to believe that the applicant has or may have a right to obtain relief in this Court from the respondent. The cause of action is said to be one for infringement of copyright which the applicant, as the exclusive licensee of the EUNICE software, is entitled to bring in the Court: Copyright Act 1968 (Cth) ("Copyright Act"), ss 115, 119, 131C. The applicant supports its contentions by reference to the respondent's admission, in its facsimile letter of 11 April 2000, that it had used some portions of modules derived from the EUNICE software. The applicant also relies on the terms of the open offer as constituting an admission.

* O 15A r 6(b) is satisfied because the applicant has made all reasonable inquiries, but still has insufficient information to enable a decision to be made whether to commence a proceeding in the Court to obtain the relief. The applicant accepts that it made inquiries only of the respondent, but submits that these inquiries were reasonable in the circumstances. The applicant further submits that the correspondence from the respondent leaves it unclear whether the respondent has sold EUNICE software "intermingled" with the UNISON software or whether the respondent has sold the EUNICE modules separately. In the former case the applicant (so it is argued) would have a claim for infringement of copyright in respect of which the Court would or might have jurisdiction. If the latter, the claim would be for breach of contract for non-payment of licence fees in respect of which this Court would not have jurisdiction. The applicant says that without access to the contracts between the respondent and its end users, and without access to the EUNICE source code, it cannot assess whether the respondent has infringed copyright so as to allow proceedings to be taken under the Copyright Act. Moreover, the applicant lacks the information which would enable it to particularise any claim against the respondent. Specifically, it has no information concerning the end users who entered into contracts with the respondent to acquire UNISON or EUNICE, in whatever form or combination. Nor is the applicant able to particularise its loss or specify the quantum of any claim it might have.

* O 15A r 6(c) is satisfied because the respondent has in its possession source codes and other documents that would assist the applicant to make the decision whether or not to commence proceedings in the Court.

Respondent's Submissions

21 In its written submissions, the respondent conceded that the applicant had satisfied the requirements of O 15A r 6(a) and (c). In his oral submissions on behalf of the respondent, Mr Gelbart resiled from the concession in relation to r 6(a). He submitted that the applicant, in the letter of 18 July 1996, had licensed the respondent to use modules derived from EUNICE software in its UNISON software. For this reason, the applicant had failed to establish that there was reasonable cause to believe that it has or may have the right to obtain relief in the Court from the respondent.

22 The respondent further submitted that the applicant had not satisfied the requirements of par r 6(b). It had failed to show that it had made "all reasonable inquiries". Specifically, the applicant should have examined its own correspondence with the respondent in order to negate the possibility that a licence had been granted to the respondent beyond the scope of that granted by the Dealership Agreement. The respondent also argued that the applicant's requests for access to documents had allowed an unreasonably short time for a response.

23 Finally, the respondent's written submissions contended that the applicant had sought only documents related to the quantum of any claim for damages or compensation it might have against the respondent. According to Mr Gelbart's submissions, the quantum of any claim is not relevant in determining whether an applicant has sufficient information to decide whether or not to commence a proceeding in the Court.

Reasoning

Order 15A r 6(a)

24 It is well established that O 15A r 6(a) poses an objective test. The test is whether there is reasonable cause to believe that the applicant has or may have the right to obtain relief from the prospective respondent. The applicant does not have to make out a prima facie case to satisfy par (a), although it is not enough for an applicant merely to assert that there is a case against the prospective respondent: Hooper v Kirella Pty Ltd [1999] FCA 1584; (1999) 96 FCR 1 (FC), at 11-12 [39]; W R Pateman Pty Ltd v Walker Corp Pty Ltd [1990] ATPR 41-016, at 51,299, per Wilcox J.

25 Although the respondent resiled from its concession that the applicant had satisfied r 6(a), Mr Gelbart accepted that, if the letter of 18 July 1996 were put to one side, the applicant had indeed shown that there was reason to believe that it may have an action for infringement of copyright against the respondent. So much followed from the admission in the letter of 11 April 2000. That letter, it will be recalled, acknowledged that the respondent had used portions of EUNICE modules, although the precise nature and extent of the use were left unclear.

26 In my opinion, the agreement evidenced by the letter of 18 July 1996 does not detract from the conclusion that the applicant has satisfied the requirements of O 15A r 6(a). The agreement did not expressly authorise the respondent to use the source code as part of the EUNICE software. On the contrary, the language is consistent with Mr Allison's explanation that the agreement was intended to resolve a dispute arising from the applicant's refusal to supply updated source codes until the respondent paid amounts said to be due under the Dealer Agreement. There is nothing in the language used in the letter that suggests that the applicant was granting the respondent a licence outside the terms of the Dealer Agreement, such a licence, which would entitle the respondent to incorporate EUNICE modules into its own software.

27 I do not mean to suggest that the respondent will ultimately be unable to establish that it received a licence to incorporate portions of the EUNICE software into the UNISON software or to act in some other way outside the scope of the Dealer Agreement. At a hearing on the substantive issues, the respondent may be able to show that the letter should be construed as confirming a licence in the terms it propounds. It is not necessary to consider that question here. It is enough to conclude that, on the evidence before me, the agreement of 18 July 1996 does not necessarily negate any claim the applicant may have against the respondent for infringement of copyright in respect of the EUNICE modules.

Order 15A r 6(b)

28 In my view, the applicant has made all reasonable inquiries to obtain sufficient information to enable it to make a decision whether to commence a proceeding in the Court. The applicant lacked information as to the manner in which the respondent had used the EUNICE modules and, in particular, whether they had been incorporated into the respondent's UNISON software (or, indeed, into other software). If the respondent had simply sold the EUNICE modules separately, a question might arise as to whether the applicant could maintain an action for infringement of copyright, as distinct from a claim in contract based on the terms of the Dealer Agreement.

29 The applicant requested the respondent to provide documents, including source codes, which would enable the former to determine whether its copyright had been infringed and, if so, by what means. The request was made in terms which may have been over-inclusive. Nonetheless, it was the respondent which had the relevant information and it is difficult to see who else might have been asked to provide it. The applicant's own files would not have revealed what use the respondent had made of the EUNICE modules outside the terms of the Dealer Agreement: cf London Economics (Aust) Pty Ltd v Frontier Economics Pty Ltd [1999] FCA 932, at [29] (Finkelstein J).

30 In my view, the fact that the applicant did not adduce evidence that it had systematically examined its own files is not a barrier to concluding that it had made all reasonable inquiries. The information required by the applicant was the nature and, perhaps, extent of the respondent's use of the EUNICE modules in connection with the sale and distribution of UNISON or other software. That information was not available in the applicant's files. It presumably is and always has been available in the respondent's files.

31 Nor do I think that the applicant could reasonably be expected to have examined its own files to determine whether a licence had been granted to the respondent to incorporate EUNICE modules in its UNISON software, or otherwise make use of the modules outside the terms of the Dealer Agreement. If such a licence had been granted, it was reasonable for the applicant to expect that the respondent would point out that fact very promptly. Moreover, Mr Allison gave unchallenged evidence that he understood the letter of 18 July 1996 merely to clarify the operation of the Dealer Agreement in relation to the respondent's access to updated source codes. There is no evidence that Mr Allison believed or had reason to believe that a licence had been granted by the applicant to the respondent authorising the latter to incorporate EUNICE modules into its own software.

32 The respondent contended, in the alternative, that the applicant had not satisfied O 15A r 6(b) because the only information sought by it related to the quantum of any claim. It is true that many of the documents within the four categories identified by the applicant in its letter of 3 May 2000 would be likely to relate only to quantum. But the applicant's request was not confined to such documents. It was seeking documents that would enable it to determine whether the respondent had infringed copyright and, if so, in what manner. Documents within this category included the applicant's source codes used by the respondent or sold by it in conjunction with UNISON or other software and the contracts entered into between the respondent and its customers.

33 In any event, I would not accept the proposition that documents relating only to quantum are necessarily irrelevant in determining whether an applicant has satisfied O 15A r 6(b). As Lindgren J observed in Alphapharm Pty Ltd v Eli Lilly Australia Pty Ltd (unreported, 24 May 1996), at 24, r 6(b) invokes a notion of "reasonable sufficiency". The question posed by the sub-rule is not whether an applicant has sufficient information to enable it to decide if a cause of action is available against the prospective respondent. The question is whether the applicant has sufficient information to enable a decision to be made whether to commence a proceeding in the Court to obtain relief from an ascertained person. The extent to which copyright has been infringed, for example, may be highly material to a decision to commence a proceeding in respect of infringement of copyright. A trivial claim may not be worth pursuing and might prove to be a waste of the time and resources not only of the applicant but of the Court.

34 None of this is intended to imply that FCR O 15A r 6 can be used as a matter of course to obtain preliminary discovery of documents relevant to the quantum of a particular claim. Each case must depend on its own circumstances. There may be cases, however, in which an applicant, after making the reasonable inquiries, has insufficient information relating to quantum to enable it to make a decision whether to commence a proceeding in the Court. In such instances the requirements of O 15A r 6(b) may well be satisfied.

Discretionary Considerations

35 The respondent argued that it had been given insufficient time to respond to the request made by the applicant. As events transpired, sixteen days elapsed between the initial request (3 May 2000) and the commencement of proceedings (19 May 2000). I think that this was sufficient time for the respondent to formulate a considered response to the request. Even if the period allowed by the applicant were unreasonably short, I would not necessarily regard that as a ground for withholding relief to which the applicant was otherwise entitled, although the failure to allow sufficient time might have been relevant to costs.

36 As I have indicated, the applicant in effect conceded its application was framed too broadly. Mr Lee did not argue in support of pars 1 and 3 of the categories of documents identified in the schedule to the application. I think that orders should be limited to the narrower categories specified in the alternative orders reproduced earlier in this judgment, subject to one qualification. It does not seem to me to be necessary or appropriate for the applicant to have access to contracts between the respondent and its customers going back six years. Three years is an adequate period to allow the applicant to ascertain whether the respondent's contracts with its users contemplate infringement of copyright and, if so, whether this occurred on a substantial scale.

37 In my opinion, contrary to the respondent's submissions, the evidence does not support a form of order which would provide that any documents produced by the respondent should be inspected only by an independent expert. That course was adopted by Burchett J in Paxus Services Ltd v People Bank Pty Ltd (1990) 99 ALR 728, at 734, but his Honour did so in consequence of an agreement between the parties. Here the respondent adduced no evidence as to the confidential nature of its records. While I am prepared to infer from the fact that it produces and distributes software that it is entitled to some protection, I do not think that a stringent order of the kind proposed by Mr Gelbart is appropriate.

38 Finally, the respondent argued that it should be required only to make discovery of printed versions of the source codes, and not the electronic versions. In the absence of evidence supporting such a limitation, I am not prepared to restrict the order for discovery in this manner.

Costs

39 The respondent argued that the applicant should pay the respondent's costs of furnishing discovery in accordance with the orders of the Court. Such an order is sometimes made (see W R Pateman Pty Ltd v Walker Corporation Pty Ltd, at 51,300). In my opinion, however, there is nothing in the present circumstances that warrants such an order. There is no evidence, for example, that compliance with the orders will be especially costly or inconvenient. Moreover, the applicant has established that it is entitled to inspect the documents, having satisfied the requirements of FCR, O 15A r 6 and overcome any objections on discretionary grounds.

40 The respondent submitted that the applicant should pay its costs of the proceedings because of the terms of the open offer made by it on 19 May 2000. The submission, as I understood it, was founded on the proposition that the letter should be treated as a Calderbank offer. This submission fails because the open offer required access to be limited to an independent expert. That limitation, as I have explained, cannot be justified.

41 On the other hand, I do not think the applicant should receive all its costs. Its initial claim was too broad and it only refined its claim at the hearing. Had the more limited claim been adopted earlier, the parties may well have been able to reach some accommodation. The appropriate costs order is that the respondent pay fifty percent of the applicant's costs of the application.

Orders

42 I propose to make the following orders: