Sykes, Peter & Ors v Reserve Bank of Australia [1995] FCA 1144

IN THE FEDERAL COURT OF AUSTRALIA) ) NEW SOUTH WALES DISTRICT REGISTRY) No. NG 941 of 1994 ) GENERAL DIVISION ) BETWEEN: PETER SYKES First Applicant BEVERLY MAY SYKES Second Applicant POLYBANK PTY LIMITED Third Applicant AND: RESERVE BANK OF AUSTRALIA Respondent 5 DECEMBER 1995 REASONS FOR JUDGMENT LOCKHART J. The Court is hearing two motions: one filed by the applicants and one by the respondent. They are being heard together by consent, and raise three issues. The first issue concerns discovery and inspection of documents. The applicants wish to have an order for discovery and inspection of all documents relevant to the problems experienced with polymer notes, both during their production for overseas countries, and during their use there. The respondent does not oppose that order provided - and this emerges from paragraph one of its notice of motion - it is at liberty to mask the identity or names of the foreign countries for which polymer notes were manufactured by it on the documents of which discovery is given. The applicants, at this stage, do not oppose that course, provided the counsel and solicitors for the applicants do have access to the unmasked documents, on the basis that the identities of the countries concerned are not disclosed without further order of the Court. In my view, because of the sensitive nature of the revelation of the identity of manufacturers of currency, and so of the countries employing the manufacturers, it would be premature to allow the applicants access, even on a confidential basis, to the identity of those countries at this stage, but the point may arise where it becomes proper that that be done. The second issue is whether paragraph nine of the respondent's defence should be struck out. Paragraph nine of the defence in substance asserts that the respondent had at all material times a public duty or statutory obligation to inform the public generally of the proposed introduction of a new series of notes and of the time when they were expected to be issued for the reasons given in the paragraph. In essence, the respondent says that it acted in accord with that public duty, and therefore it could not be said to have engaged in either misleading or negligent conduct. The threshold which must be crossed by a moving party to strike out a paragraph in a defence is a high one. The Court really must be satisfied before it accedes to such a course that the defence in question is manifestly unarguable. The principles are well established. They arise, particularly, from Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91 and General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125. I am not persuaded that that threshold has been crossed by the applicants in this case, and I do not propose to strike out paragraph 9 of the respondent's defence. How strong it is is a question which will be determined at the trial; and I have no idea of the answer at this stage. The third issue concerns the motion by the respondent to amend its defence in order to deny that the representations relied on by the applicants, at least in regard to Part V of the Trade Practices Act, were made in trade or commerce. Counsel for the respondent says that no further evidence will be needed to raise the point; it will be solely a question of law based on the evidence as it presently stands, or on the many documents produced on discovery. On the other hand, it is true, as has been contended on behalf of the applicants, that they have, at the moment, the benefit of an admission to the contrary effect from the pleadings, and they say that no good cause has been shown to permit the respondent to depart from that admission. Also, Mr Lee, who appears for the applicants, says that it may be that further discovery will be necessary if this issue is to be raised in the proceeding. In my view, to determine properly all the issues in this case, it is right that the respondent be entitled to amend its defence to raise this question. If it means that there will be further discovery, then so be it. Accordingly, I make the following orders: 1. That the respondent give discovery and inspection within 14 days of all documents relevant to the problems experienced with polymer notes both during their production for overseas countries and during their use therein, provided that the respondent is at liberty to mask on the documents of which it gives discovery the name or names of the foreign country or countries for which the polymer notes were manufactured. 2. That liberty to apply be reserved to the applicants to renew their motion for access to the name or names of the foreign country or countries concerned. 3. The Court declines to strike out paragraph 9 of the respondent's defence. 4. That the respondent be at liberty within 14 days after today to amend its defence to deny that the relevant representations referred to in the amended statement of claim were made in trade or commerce for the purposes of the Trade Practices Act 1974. 5. That any party be at liberty to apply to the Court on two days notice for any further discovery and inspection of documents that may be required arising from the amended defence. 6. That the costs of the two motions be costs in the proceeding. I certify that this and the preceding four (4) pages are a true copy of the reasons for judgment herein of the Honourable Justice Lockhart. Associate Dated: 5 December 1995