FEDERAL COURT OF AUSTRALIA PRACTICE AND PROCEDURE - discovery - application for respondents to make available ancillary equipment to enable viewing and analysis of source code of software - computer software and hardware supplied by the respondents to the applicant the subject of proceedings - where applicant's expert witness requires access to source code - whether an order for the supply of ancillary equipment within "the making of any observation of any property" - whether an order for the supply of ancillary equipment within "the trying of any experiment on or with any property" - consideration of implications of increasing sophistication of computer litigation - whether an order for the supply of ancillary equipment within the Court's powers under s 23 of the Federal Court of Australia Act Federal Court of Australia Act 1976 (Cth), s 23 Federal Court Rules, O 17 r 1 Vowell v Shire of Hastings [1970] VR 764 Parsons v Martin (1984) 5 FCR 235 S v S [1972] AC 24 THE ATHLETE'S FOOT AUSTRALIA PTY LIMITED - v - DIVERGENT TECHNOLOGIES PTY LIMITED and SHAUN ROSEN NG 908 of 1996 TAMBERLIN J SYDNEY 8 SEPTEMBER 1997 IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) NG 908 of 1996 ) GENERAL DIVISION ) BETWEEN: THE ATHLETE'S FOOT AUSTRALIA PTY LIMITED (ACN 001 777 582) Applicant AND: DIVERGENT TECHNOLOGIES PTY LIMITED (ACN 003 908 325) First Respondent SHAUN ROSEN Second Respondent JUDGE: TAMBERLIN J PLACE: SYDNEY DATED: 8 SEPTEMBER 1997 REASONS FOR JUDGMENT This application raises a question as to the principles which should guide the Court in deciding whether to order a respondent, not only to make discovery, but also, to make available ancillary equipment in the nature of "access control devices" to enable the applicant to view and investigate the source code or underlying structure of software currently installed on the applicant's computer hardware. The applicant relies on O 17 r 1 of the Federal Court Rules and also the inherent jurisdiction of the Court to make such an order. The applicant seeks damages for breach of contract and for breaches of the Trade Practices Act 1974 (Cth) on the basis that a computer system comprising hardware and software supplied was not capable of meeting the applicant's specified requirements for the system. These requirements included the maintenance of inventory levels, transmission of information between stores, and limitation of access to sensitive areas of the system which might cause a violation of data and program integrity. The first respondent, against whom the order is sought, contends that the Court has no such power, or, alternatively, that it should not exercise the power in the present case as a matter of discretion. The applicant indicates that it proposes to file and serve expert evidence in relation to the computer system. However, the expert says that he needs access to the software source code. That is to say, the computer language used in the creation of the computer software is in the form of a proprietary language developed by the software producer to create the logic needed for the software to perform. When distributed the software is not in a source code version. The source code is run through a specialist application called a "compiler" to create what is known as an object code. This contains the logic provided by the source code and may also contain components of other codes. It links to the operating system of a computer which is needed for the software to run. The software at issue in the present case is written in a computer language known as "Magic". The source code of this software is not contained in an easily readable language format. Rather, the activities are said to be configured using tables containing sequences of commands. These allow for the creation of forms and reports. The use of tables instead of a procedural language to create the software, enables the software developer to rapidly construct the software. The expert proposed to be retained by the applicant says that he needs to see the tables containing the sequences of commands which make up the software. To do this he needs access to the development environment in which the tables were produced. However, he is unable to do this as his company does not possess appropriate resources to secure access. To do so would require an access control device. It appears that the first respondent has, or has access to, such a device, but is unwilling to produce it to enable access by the expert retained by the applicant. The first respondent filed an affidavit by the second respondent, who is one of its directors. This claims that to require production of the appropriate means of access would be particularly onerous to it due to the cost involved and the disruption which would be caused to its business. In particular, senior personnel of the first respondent would necessarily, it is claimed, be diverted from critical projects with tight time-frames and worth millions of dollars. The Managing Director of the first respondent states that the source code is contained as a readable language format provided that there is available the means of access. He says such means of access is readily available to be purchased in the market and that the source code is in electronic format on the applicant's system. He says that the producer of the software "Magic" has in excess of 2,500 developers of the software and the applicant could purchase the development equipment and could acquire access from a number of sources. On the hearing of this application the respondents indicated that they would raise no objection to the applicant's expert having access to the source material provided, but it was not prepared to make available the equipment. While evidence before me as to the cost of acquiring the means of access was not very satisfactory, it does seem that it would cost over $10,000 to obtain the equipment necessary to access this software. There was no evidence as to whether any access device could be hired and if so as to the cost of such hire. Power of the Court Order 17 r 1 of the Federal Court Rules relates to the inspection of property for the purpose of proceedings before the Court. It provides: "1(1) The Court may, for the purpose of enabling the proper determination of any matter in question in any proceeding, make orders for - (a) the inspection of any property; (b) the taking of samples of any property; (c) the making of any observation of any property; (d) the trying of any experiment on or with any property; (e) the observation of any process; or (f) the copying of any document or the copying, transcribing or production of any material, data or information stored or recorded by mechanical or electronic means. (2) Any order under sub-rule (1) may authorize any person to enter any land or to do any other thing for the purpose of getting access to the property. (3) In this rule "property" includes any land and any document or other chattel, whether in the ownership, possession, custody or power of the party or not." The applicant relies on pars (c) and (d) relating to the observation of any property or the trying of any experiment on or with any property to support the application. The expression "document" is defined in O 1 r 4 to include any record of 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. In the Dictionary to the Evidence Act "document" is defined to mean "any record of information". There is no authority directly on point but the applicant has relied on several decisions which, it is submitted, would support in principle, the application now made. Counsel referred me to the judgment of Crockett J in the Supreme Court of Victoria in the matter of Vowell v Shire of Hastings [1970] VR 764. In that case the relevant court order empowered the Judge to make an order for the preservation or inspection of any property or thing being the subject of the cause or matter, or as to which any question might arise in the litigation. The rule authorised the making of observations and the carrying out of experiments necessary or expedient for the purpose of obtaining evidence. The question in that case was whether an order for the preservation and inspection of a tape recording should be made. The tape recorded the proceedings of a municipal council. Crockett J observed that it could not be contended that the tape was property or a thing which is the subject of the cause initiated by the writ. But nevertheless, it was a thing as to which a question might arise in the litigation. He expressed the view that the words of the rule deserved and should be a given liberal construction although obviously there must be some limitations on their application. He considered that the tape recording was the very best evidence that could be adduced in aid of the resolution in the cause. Therefore the Court made orders for the preservation and delivery of the tape. All that the applicant can derive from this decision, in my view, is the observation that the rule should be given a liberal interpretation. In support of its reliance on the inherent jurisdiction of this Court to make an order requiring production of the control device, the applicant referred to the decision of the Full Court in Parsons v Martin (1984) 5 FCR 235, where the Court at 241 pointed out that it was inappropriate to refer to the term "inherent jurisdiction" in relation to a statutory court which has powers conferred by the legislation which governs it either expressly or by implication. The jurisdiction of this Court is a matter of statute but the Court has, in addition, such powers as are incidental and necessary to the exercise of the jurisdiction or the powers conferred. The Federal Court also has power under s 23 of the Federal Court of Australia Act 1976 (Cth) to make orders of such kinds, including interlocutory orders, as the Court thinks appropriate in relation to matters in which it has jurisdiction to make orders. This is a power of the widest nature and is not to be narrowly construed by reference to vague implied constraints. The applicant also referred to the House of Lords decision in S v S [1972] AC 24 where their Lordships, on the trial of an issue as to legitimacy, held that it was in the interests of the child and of justice that the House should have before it the best evidence available. This included modern scientific evidence as provided by blood tests which might resolve the issue conclusively. Their Lordships considered that the interests of the child were best served if the truth was ascertained. The House of Lords upheld an order that blood tests should be undertaken on the husband, the wife, and the child. The primary judge had held that the Court had jurisdiction to order that the blood tests be taken. In the course of his speech, Lord McDermott referred to the "ancillary jurisdiction" of the High Court arising from its inherent jurisdiction to make interlocutory orders for the purpose of promoting a fair and satisfactory trial. His Lordship pointed out that the ancillary jurisdiction was of course subject to the limitations and modifications imposed by Parliament. He said at 46: "This ancillary jurisdiction is, of course, subject to the limitations and modifications imposed by Parliament and, in particular aspects, it has been codified and replaced by rules of court. But that is not to say it has vanished. The rule book naturally tends to lag behind new methods of proof and ascertainment, and the essential purpose of this ancillary jurisdiction means that it cannot be tied to what is old or outmoded. For example, the increasing number of claims which put in issue the bodily condition of a party have in recent years what is now a very common demand by defendants, namely, that the claimant shall submit to medical examination." (Emphasis added) The present case In the present case the evidence is that the software in dispute cannot be properly analysed by the applicant's expert unless access is given to the access control device in question. The applicant and his expert do not have such a device. The first respondent does have such a device but says that it should not be compelled to make it available, even on terms. The respondent contends that it is the applicant's responsibility to provide such a device, either by purchase, lease or other means, to enable the analysis to be made. Whilst not satisfactory as to specific costs, the evidence does indicate that it will be an expensive exercise to obtain the access control device and that the appropriate and convenient course is to order the first respondent to make it available on proper terms as to cost, supervision, confidentiality, timing and location. I do not think that the present application comes within O 17 r 1. The respondent has agreed that the property in question, namely the software, will be made available and that authorisation will be given on appropriate terms to enable analysis of that software. I do not consider that the scope of r 1(1)(c) extends to enable the imposition of a requirement that the means of observation of property be provided by the party against whom the order is made. Nor do I think that making available the access control device can be said to be the trying of an experiment on the software. In substance, it is the carrying out of an analysis and investigation as to the quality, logic and soundness of the software. Accordingly, I do not consider that the application can be founded on O 17 r 1. The problem posed in the present case is one which will no doubt become increasingly important with the growing sophistication of computer related litigation and the increased use of complex electronic and software programming. See for example, the recent interlocutory decision by Goldberg J in Admar Computers Pty Ltd v Ezy Systems Pty Ltd (unreported, 29 August 1997), which concerned a claim for infringement of copyright in relation to a program source code. In many cases the underlying technology may only be understood with the benefit of an explanation by its developer or creator or by the use of sophisticated analytic devices which may well cost substantial amounts. In many cases such equipment may only be in the possession or control of the party against whom the order is made and may be specifically constructed and therefore quite unique. The present case, of course, is not one where the device is unique and the question really turns on convenience and reasonableness in the conduct of litigation. In my view, it would be appropriate to give consideration to the amendment of O 17 r 1(1) to make provision for the making available equipment, devices or information necessary to analyse or understand any process for software, on appropriate terms. The observations of Lord McDermott, referred to above, as to court rules which lag behind increased sophistication in technology are important to bear in mind. Especially so when it is remembered that those observations were made over twenty-five years ago, and are of far greater force today give the exponential growth and sophistication of electronic technology. Notwithstanding my conclusion that O 17 does not apply in the present circumstances, I consider that the Court has power to make an order of the type sought. Section 23 of the Federal Court Act empowers the Court, where it has jurisdiction, to make such interlocutory orders as it thinks appropriate in relation to a matter over which it has jurisdiction. In the present case, I am persuaded that it is appropriate for such an order to be made on proper terms in relation to the matters to which I have referred to earlier. The Court clearly has jurisdiction in relation to the matter. The matter involves the soundness of the software which has been discovered. It seems to me unnecessary and unreasonable to put the applicant to the inconvenience and cost of obtaining, purely for the purpose of this litigation, an access control device of the type which the first respondent has in its possession. The evidence does not satisfy me that there would be any undue inconvenience, disruption or cost to the respondents if an order were made requiring it to make available the device on proper terms and conditions so as to enable the litigation to proceed in a timely and economically efficient manner. The making of such an order will tend to reduce costs by avoiding the necessity to acquire the device. The evidence, which might suggest some inconvenience or cost to the first respondent if the device were made available, is cast in the form of generalised assertion and is not sufficient to make out a case of disruption, unreasonable interference, inconvenience or loss. There is no reason to conclude that appropriate conditions cannot be imposed to protect the interest of the respondents. Although the proceedings are adversarial in character there is no practical reason why the parties should not co-operate in relation to the provision of a device which will enable a proper understanding of the circumstances so as to assist in the production of proper evidence to the Court, which may enable it to decide the dispute. Accordingly, my conclusion is that the Court has jurisdiction to make the order sought and I propose to do so on the basis that the order is conditional on the interests of the first respondent being protected by imposing suitable conditions. Therefore, I direct the applicant to bring in Short Minutes within fourteen (14) days. I order that the costs of this motion be costs in the application. I anticipate that the parties should be able to reach agreement on suitable conditions as to relevant matters associated with the production of the device. If they are unable to do so I will hear and determine any evidence and submissions on this aspect of the matter at an appropriate time. I certify that this and the preceding seven (7) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin Associate: Dated: 8 September 1997 Counsel for the Applicant: Mr T D Blackburn Solicitor for the Applicant: Gilbert & Tobin Counsel for the Respondents: Mr S T White Solicitor for the Respondents: Moray & Agnew Date of Hearing: 28 July 1997 Date of Judgment: 8 September 1997