FEDERAL COURT OF AUSTRALIA Lynx Engineering Consultants Pty Ltd v The ANI Corporation Limited [2007] FCA 578 PRACTICE – non-party discovery – whether reasonable cause to believe of right to obtain relief – whether all reasonable inquiries made – context involving alleged infringements of copyright and trade practices – letter of request to non-party – discovery from respondents – affidavit from non-party raising prospect not liable Copyright Act 1968 (Cth) ss 31, 36, 38, 115, 119, 120 Trade Practices Act 1974 (Cth) ss 52, 53, 80, 80A, 82, 86(2)(d), 87, 163A Federal Court Rules O 15A r 6, O 15A r 7 Austal Ships Pty Ltd v Thurlow [2006] FCA 1219 Austrac Operations Pty Ltd (In Liquidation) v State of New South Wales [2003] ATPR 41-960 Australian Broadcasting Corporation v Seven Network Limited [2005] FCA 1851 C7 Pty Ltd v Foxtel Management Pty Ltd [2001] FCA 1864 CGU Insurance Ltd v Malaysia International Shipping Corporation Berhad (2001) 187 ALR 279 East Grace Corporation v Xing (No 2) [2005] FCA 1266 Hooper v Kirella Pty Ltd (1999) 96 FCR 1 Hoyts Multi-Plex Cinemas Pty Ltd v Fox Entertainment Precinct Pty Ltd [2003] FCA 1347 Legent Corporation v Fundi Software Services Pty Ltd (1992) (unreported, Federal Court, Lockhart J, No G134 of 1992, 13 July 1992) St George Bank Ltd v Rabo Australia Ltd (2004) 211 ALR 147 LYNX ENGINEERING CONSULTANTS PTY LTD (ACN 059 949 469) v THE ANI CORPORATION LIMITED TRADING AS ANI BRADKEN RAIL TRANSPORTATION GROUP (ACN 000 421 358), BRADKEN RESOURCES PTY LTD (ACN 098 300 988) AND BRADKEN LIMITED (ACN 108 693 009) WAD 219 OF 2006 NICHOLSON J 23 APRIL 2007 PERTH IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WAD 219 OF 2006 BETWEEN: LYNX ENGINEERING CONSULTANTS PTY LTD (ACN 059 949 469) Applicant AND: THE ANI CORPORATION LIMITED TRADING AS ANI BRADKEN RAIL TRANSPORTATION GROUP (ACN 000 421 358) First Respondent BRADKEN RESOURCES PTY LTD (ACN 098 300 988) Second Respondent BRADKEN LIMITED (ACN 108 693 009) Third Respondent JUDGE: NICHOLSON J DATE OF ORDER: 23 APRIL 2007 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The applicant's notice of motion dated 20 December 2006 be granted. 2. Costs reserved. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY WAD 219 OF 2006 BETWEEN: LYNX ENGINEERING CONSULTANTS PTY LTD (ACN 059 949 469) Applicant AND: THE ANI CORPORATION LIMITED TRADING AS ANI BRADKEN RAIL TRANSPORTATION GROUP (ACN 000 421 358) First Respondent BRADKEN RESOURCES PTY LTD (ACN 098 300 988) Second Respondent BRADKEN LIMITED (ACN 108 693 009) Third Respondent JUDGE: NICHOLSON J DATE: 23 APRIL 2007 PLACE: PERTH REASONS FOR JUDGMENT 1 The applicant brings a notice of motion for discovery in respect of non-parties pursuant to O 15A r 7 of the Federal Court Rules 1979 (Cth) (FCR). One of the non-parties - WP Williams and Associates Consulting Engineers Pty Ltd formerly trading as 'Williams Worley Rail' (WP) - has provided the discovery which was being sought. The motion remains extant in respect of the other non-party, WorleyParsons Services Pty Ltd trading as 'Williams Worley Rail' (WorleyParsons). The issues on the pleadings The application and claim 2 The applicant brings the proceeding in reliance on ss 31, 36, 38, 115, 119 and 120 of the Copyright Act 1968 (Cth) and ss 52, 53, 80, 80A, 82, 86(2)(d), 87 and 163A of the Trade Practices Act 1974 (Cth) in respect of alleged copyright infringement and misleading and deceptive conduct. Additionally, under the accrued jurisdiction of the Court, the application is brought in respect to breach of contract and duty of confidence. 3 It is claimed that from 1993 to April 1997 the applicant, through its research and development efforts (Lynx R&D) in relation to the design of a new or improved wagon body suitable for carrying of freight and bulk materials for use in the rail freight market in Australia, had devised a prototype design, together with the requisite technical specifications and manufacturing information. This related to the applicant's prototype wagon known as the 'Lynx 3CR12 Wagon Project'. 4 Further that on or about 10 April 1996 the applicant agreed with the first respondent in the 1996 Confidentiality Agreement to disclose the information concerning the wagon design to the first respondent's servant or agent. This is said to have been for the purpose (the approved purpose) of engaging in discussion to determine whether each of those parties would co-operate in an exclusive arrangement to participate jointly in a tender in respect of a wagon body and/or bogey design in response to BHP Iron Ore Ltd (BHP) Invitation to Tender T 6896 for the design, manufacture, supply and testing of 120 enhanced gondola ore cars (BHP Tender). The disclosure is pleaded as having taken place the next day solely for the approved purpose. At the same time the first respondent entered into a confidentiality agreement with United Construction Pty Ltd for the purpose, if the tender succeeded, of that company manufacturing the wagons, using the applicant's design and technology. The applicant claims not to have given permission beyond the approved purpose. The BHP tender, however, was not successful. 5 The claim continues by referring to an approach in early 1997 by the first respondent to the applicant for them to be jointly involved in submitting a tender to Hamersley Iron Ore Ltd (Hamersley) for the purpose of designing and manufacturing a bulk freight rail wagon (Hamersley Iron Tender). For that purpose they proposed entering into the 1997 Confidentiality Agreement. The subject research and development at this time was the Lynx 1996 Confidential Information with enhancements (Improved Lynx 3CR12 Design). 6 Around 21 April 1997, in anticipation of the conclusion of the 1997 Confidentiality Agreement, the applicant disclosed the Lynx 1997 Confidential Information in respect of the Improved Lynx 3CR12 Design to the first respondent for solely the approved purpose. The Hamersley Tender did not succeed. 7 In August 2000 the first respondent approached the applicant to participate jointly in a further tender to Hamersley. 8 Around that same date the applicant claims to have agreed with the first respondent in the 2000 Confidentiality Agreement to disclose further confidential information reflecting its ongoing enhancements of the Lynx R&D in the field of design of rail wagons for carrying of freight and bulk materials in the Australian rail freight market (Lynx 2000 Confidential Information, which was based on and derived from the Lynx 1996 and 1997 Confidential Information). Around 7 August 2000, the applicant disclosed the Lynx 1997 Confidential Information in respect of the Lynx Golynx design to the first respondent. 9 The claim proceeds by stating that in breach of its obligations under the 1996, 1997 and 2000 Confidentiality Agreements the first respondent has, without licence or authority, disclosed the Lynx Confidential Information contained therein for purposes other than the approved purpose, revealing the information to the second and third respondents which have unlawfully made profits for themselves by the manufacture and marketing of the Bradken 9100 rail wagon and otherwise exploited the confidential information by purporting to licence or authorise other parties to use the information. In the particularisation of breach it is pleaded that the applicant is unable to supply the identity of the persons to whom disclosure took place until after discovery, although certain additional information is also particularised. 10 The applicant claims that, as a consequence, the information has lost its value or that such value has been seriously diminished. 11 It is further said that the information was supplied to non-parties to the Confidentiality Agreements in breach of an obligation of confidence and an account of profits is sought. 12 There is also a copyright claim in respect of the Lynx Copyright Works, being documents recording some of the Lynx Confidential Information as provided to the first respondent pursuant to the 1997 and 2000 Confidentiality Agreements. A breach is claimed in respect of the Lynx Copyright Works as the result of their unauthorised reproduction, publication and sale by the first, second and third respondents. Such is said to have occurred in trade in a manner prejudicial to the commercial interests of the applicant. 13 Finally there are claims that the conduct of the respondents was at all times false and misleading and that they made false and misleading statements. The amended defence 14 The defence of the first respondent is essentially that by a deed dated 19 October 2001 it sold its business to the second respondent. 15 The relevant paragraphs of the amended defence of the second and third respondents, which include the paragraphs referred to from it in the applicant's notice of motion, read: '(d) say that the iron ore wagons referred to in the Statement of Claim were designed by a company in the Worley Group, trading as Williams Worley Rail (Worley); (e) say that they did not provide, and the First Respondent did not provide, or cause to be provided any of the information referred to as the Lynx Confidential Information to Worley or any of its officers or employees, and that neither Worley nor its officers and employees otherwise had access to or made any use of the Lynx Confidential Information; (f) say that the design for the iron ore wagon referred to in the Statement of Claim as the "Bradken 9100 Wagon" was developed by Worley after a detailed physical examination of a wagon owned by BHP Billiton Iron Ore Pty Ltd, and the infrastructure with which that wagon was required to interface; Particulars (A) In or about March 2003, at Port Hedland, Western Australia, Warren Williams of Worley and Doug Cummings of the Second Respondent conducted a detailed physical inspection of a wagon owned by BHP Billiton Iron Ord Pty Ltd (BHP); (B) In or about March 2003, at Port Hedland, Warren Williams of Worley and Doug Cummings of the Second Respondent conducted a detailed physical inspection of the following infrastructure: (1) three dumpers used by BHP to empty ore from wagons; (2) the maintenance shop where wagons were repaired and serviced, including the hoists and the pits; and (3) the layout of the Port Hedland site, including the crusher plants; (g) say that the design for the iron ore wagon referred to in the Statement of Claim as the "Rio Tinto Pilbara Iron Car" was developed by Worley after a detailed physical examination of existing wagons owned by Hamersley Iron Pty Ltd, and the infrastructure with which those wagons were required to interface; Particulars (A) in or about April 2000, at the Seven Mile facility of Hamersley Iron Ore Pty Ltd, Warren Williams of Worley and Allan Walshe of the First Respondent conducted a physical inspection of existing iron ore wagons owned by Hamersley Iron Pty Ltd; (B) In or about April 2000, at mine and port sites including the Seven Mile facility, Warren Williams of Worley and Allan Walshe of the First Respondent conducted a detailed physical inspection of the infrastructure of Hamerley [sic] Iron Pty Ltd, including dumpers used at the port site. (h) deny that any product designed or manufactured by or on behalf of the Second or Third Respondent was designed or manufactured using any of the information referred to as the Lynx Confidential Information; (i) deny that they have made any use at all of any of the information referred to in the Statement of Claim as the Lynx Confidential Information; …' The non-party discovery sought 16 Discovery is sought in respect of: '(i) the design and development ("Design") by WP, WorleyParsons and/or any other company within the group of companies known as the Worley Group trading as Williams Worley Rail ("Worley"), of each of the Bradken 9100 Wagon and the Rio Tinto Pilbara Iron Ore Car (collectively and severally referred to as the "Cars"), as referred to in sub-paragraphs 31(d), (f) and (g) respectively of the amended defence of the second and third respondents dated 17 October 2006 ("Defence"), including any and all tests undertaken in the development of each such Design; (ii) any and all communications between each and both of W.P. and WorleyParsons, and each or both of the second respondent and the third respondent to these proceedings and/or concerning the alleged Design of the Cars, as referred to in sub-paragraphs 31(d), (f) and (g) of the Defence; (iii) the design for the Bradken 9100 Wagon having been allegedly developed by either or both of W.P. and WorleyParsons after a detailed physical examination of a wagon owned by BHP Billiton Iron Ore Pty Ltd ("BHPB"), and the infrastructure with which that wagon was required to interface, as referred to in sub-paragraph 31(f) of the Defence; (iv) the events alleged by the second and third respondents in the within proceedings to have taken place in or about March 2003, at Port Hedland, Western Australia, whereby Warren Williams of either or both W.P. and WorleyParsons, and Doug Cummings of the second respondent, allegedly conducted a detailed physical inspection of a wagon owned by BHPB, as referred to in sub-paragraph (A) of the Particulars subjoined under sub-paragraph 31(f) of the Defence; (v) the design for the Rio Tinto Pilbara Iron Ore Car having been allegedly developed by either or both of W.P. and WorleyParsons after a detailed physical inspection of: (A) existing wagons owned by Hamersley Iron Ore Pty Ltd ("Hamersley"); and (B) the infrastructure with which those wagons were required to interface, as referred to in sub-paragraph 31(g) of the Defence; and (vi) the events alleged by the second and third respondents in the within proceedings to have taken place in or about April 2000, at the Seven Mile Facility of Hamersley, concerning Warren Williams of either or both of W.P. and WorleyParsons, and Allan Walshe of the second respondent, having: (A) conducted a physical inspection of existing iron ore wagons owned by Hamersley, as referred to in sub-paragraph (A) of the Particulars subjoined under sub-paragraph 31(g) of the Defence; and (b) conducted a detailed physical inspection at mine and port sites of the infrastructure of Hamersley, including dumpers used at the port site, as referred to in sub-paragraph (b) of the Particulars subjoined under sub-paragraph 31(g) of the Defence.' The requirements of the Rules 17 FCR O 15A r 7 reads: '7 Rule 6 shall, with any necessary modification, apply where the applicant is a party to a proceeding and there is reasonable cause to believe that the applicant has or may have the right to obtain against a person who is not a party relief which the applicant could properly have claimed in the proceeding had the person been a party.' FCR O 15A r 6 provides: '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).' Propositions from the authorities 18 The Full Court (Wilcox, Sackville and Katz JJ) in Hooper v Kirella Pty Ltd (1999) 96 FCR 1 stated the following on the requirements of FCR O 15A r 6: 'The power conferred by O 15A, r 6, if valid, is to be construed beneficially as befits remedial legislation: Paxus Services Ltd v People Bank Pty Ltd (1990) 99 ALR 728 (Burchett J), at 733. Within this framework, there are some features of the rule that are important for present purposes. First, unlike identity discovery under O 15A, r 3, information discovery under O 15A, r 6 is available only against the person in respect of whom there is reasonable cause to believe that the applicant has or may have the right to obtain relief in the Court. That person must be someone whose description has been ascertained. Secondly, it follows from the language of O 15A, r 6 that the rule can apply only beforesubstantive proceedings have been instituted. After proceedings have commenced, the rule ceases to apply: Ricegrowers Co-operative Ltd v ABC Containerline NV (1996) 138 ALR 480 (Tamberlin J), at 484. Thirdly, an applicant must satisfy each of the three conditions specified in pars (a), (b) and (c) of O 15A, r 6 in order to obtain an order for information discovery. Fourthly, O 15A, r 6(a) poses an objective test, namely whether there is reason to believe that the applicant has or may have the right to obtain relief from the prospective respondent: Minister for Health & Aged Care v Harrington Associates Ltd [1999] FCA 549 (Sackville J), at [28]. While it is not necessary for the applicant to demonstrate a prima facie case, it is not enough merely to assert that there is a case against the prospective respondent: CCA Beverages (Adelaide) Limited v Hansford (unreported, 15 November 1991, O'Loughlin J), at p 12. Fifthly, an order may be made in favour of an applicant who already has available evidence establishing a prima facie case for the granting of relief: Alphapharm Pty Ltd v Eli Lilly Australia Pty Ltd (unreported, 24 May 1996, Lindgren J), at p 33. But the applicant, after having made all reasonable inquiries, must not have sufficient information to enable a decision to be made whether to commence a proceeding in the Court to obtain relief against the prospective respondent (see par (b)). The absence of sufficient information is to be assessed objectively: Alphapharm, at p 31.' 19 A number of single judges have set out their understanding of the overall effect of these rules. The most recent is the statement of French J in East Grace Corporation v Xing (No 2) [2005] FCA 1266. An earlier statement was that of Hely J in St George Bank Ltd v Rabo Australia Ltd (2004) 211 ALR 147. French J in East Grace [2005] FCA 1266 at [38] cited the following statement of Emmett J in Austrac Operations Pty Ltd (In Liquidation) v State of New South Wales [2003] ATPR 41-960 at [10]: 'The words 'where there is reasonable cause to believe that the applicant has or may have the right to obtain relief' are not satisfied by mere assertion. The belief requires more than mere suspicion or conjecture. On the other hand, it is not necessary for an applicant to establish even a prima facie case. It is necessary, however, for the applicant to show objectively that there is reasonable cause for the relevant belief. It is not necessary to demonstrate whether or not the applicant has the belief.' However, as French J said in East Grace [2005] FCA 1266 at [37]: 'There is no bright line test here. One way of framing the question is whether a reasonable person, having regard to the material before the Court, could say: 'I believe that you may have a cause of action against this person but I would need further information before I could believe that you do.' The difficulty with even that formulation is that it may too readily accommodate speculation or mere suspicion. The test is confined to some degree by the propositions that while it does not require a prima facie case for relief to be demonstrated, mere assertion of a case against a prospective respondent is not enough – Hooper v Kirella Pty Ltd (1999) 96 FCR 1 at 11-12.' 20 The following propositions emerge from the authorities on what may constitute 'all reasonable inquiries': (a) in circumstances where a letter to the other side before litigation would have been an exercise in futility and a mere formality, the fact that no such letter was sent may not necessarily constitute a failure to make such inquiries: Legent Corporation v Fundi Software Services Pty Ltd (1992) (unreported, Federal Court, Lockhart J, No G134 of 1992, 13 July 1992) at 6. (b) the nature of the foreshadowed proceeding is a relevant factor to take into account in deciding whether all reasonable inquiries were made: Legent (1992) (unreported, Federal Court, Lockhart J, No G134 of 1992, 13 July 1992) at 7. Where the action is for breach of confidence and infringement of copyright, a letter before action may not have obtained information of the kind and width for which the processes of discovery make provision. (c) such a proceeding may create circumstances of urgency when there is a potentially serious breach of an obligation of confidentiality and unauthorised reproduction of a sensitive internal report: Austal Ships Pty Ltd v Thurlow [2006] FCA 1219 at [40] per French J. (d) the provision does not contemplate an order where some reasonable inquiries have been made but rather where all reasonable inquiries have been made. It appears to contemplate a reasonable exhaustion of alternative sources of information and, in any particular case, involves a pragmatic balancing of considerations: CGU Insurance Ltd v Malaysia International Shipping Corporation Berhad (2001) 187 ALR 279 at [25] per Tamberlin J. (e) the power of the Court arises after the applicant has made all reasonable inquiries and finds that there is insufficient information to enable a decision to be made: CGU 187 ALR at [25] per Tamberlin J. It is essential to assign meaning and effect to the requirement to make 'all reasonable inquiries'…that is a precondition to the power: CGU 187 ALR at [34] per Tamberlin J. (f) nevertheless: 'what is reasonable is so notoriously dependent on context that it is difficult to make any helpful comments about what is required without taking context into account. One can venture to say that both the extent and nature of the inquiries should be considered including the likelihood that the inquiries would yield a result. The rule does not require applicants to make inquiries that are predictably fruitless.' Per Stone J in Australian Broadcasting Corporation v Seven Network Limited [2005] FCA 1851 at [13] considering the reference to 'reasonable inquiries' in O 15A r 3 where the word 'all' does not appear. Her Honour at [12] commented that she did not think the qualification of 'all' before reasonable inquires created a different standard for FCR O 15A r 6. (g) where most of the relevant information is in the hands of the non-party, the focus may not be primarily upon inquiries of the potential respondent, but rather upon external inquiries as to relevant facts: C7 Pty Ltd v Foxtel Management Pty Ltd [2001] FCA 1864 at [44] per Gyles J. (h) institution of proceedings for non-party discovery within a few days of notice of the request to the non-party will not necessarily make the non-party discovery unreasonable: Hoyts Multi-Plex Cinemas Pty Ltd v Fox Entertainment Precinct Pty Ltd [2003] FCA 1347 per Branson J. Evidence 21 The applicant relies on two affidavits of Mr Mazur, director of the applicant and a structural engineer with 27 years of experience in structural design, analysis and testing, in the laboratory and the field, also on two affidavits of Ms Trichilo and Mr Karp of the applicant's solicitors. 22 WorleyParsons relies on an affidavit of Mr Wong, its General Manager of Operations of the Infrastructure Division and Mr Sash of its solicitors. The issue of reasonable cause to believe In relation to the application of FCR O 15A r 6(a), the applicant says there is an inference to be drawn from the presently available documentary materials that there may have been disclosures by the first respondent to the second and/or third respondents of the Lynx Confidential Information and the Lynx Confidential Documents (forming a part of the Copyright Works). It is said the influence of this is reflected in the second respondent's Bradken 9100 Wagon and the Rio Tinto Pilbara Iron Car. The applicant contends that each of these bulk carriers incorporate features which are attended by significant design and performance advantages being the same or substantially identical to features evidenced in the wagons made to the applicant's design. 23 It is argued this is supported by the amended defence in which it is conceded by the second and third respondents that these wagons were developed by WorleyParsons after a detailed physical examination of existing wagons owned by BHP and Hamersley respectively as well as the infrastructure with which the wagon was required to interface. 24 The applicant directs attention to documents exhibited to the affidavits of Ms Trichilo. These are principally email exchanges involving reference to components of the Lynx Confidential Information. Particular reliance is placed by the applicant on the email dated 11 March 2003 for Doug Cummings ofWorleyParsons to Patrick Torok of the second respondent, being item 25 of the second and third respondent's discovery, placed in evidence by the second affidavit of Ms Trichilo. That referred to a schedule of preliminary engineering based on previous projects. 25 Other materials from the second and third respondents' list of discovery said by the applicant in their submissions to be relevant to enabling the inference to be drawn that WorleyParsons is, prima facie, involved in matters of relevance to the applicant's claim against the existing respondents are: '(a) second and third respondents' discovery item 153 at pages 59-60 of MGT-15, where express reference is made to the Lynx car and BHP drawings, and involving Williams-Worley Rail and Warren Williams; (b) item 165 at pages 62-63 of MGT-15, and note item 3 at p.62 for express reference to the Golynx car appears very lightweight compared to other car designs that appear to meet AAR end loads and Rrepos. Can you confirm that the Golynx car structure meets the specification that we are working to? (c) item 180 at pages 64-65 of MGT-15 for email of 11/3/03 from Doug Cummings to Warren Williams, concerning the new Golynx design; (d) item 205 at pages 66-67 of MGT-15 for copy of memo from Doug Cummings to Warren Williams, and, in particular, the first two paragraphs which make express reference to the Lynx wagon body and Lynx body design, as well as referring to the patent on the Lynx body design. The patent application for Lynx is a relevant matter in dispute concerning the second respondent; and (e) item 246 at pages 131-132 of MGT-15, where the title block on lower right-hand corner refers to Lynx Engineering Consultants Pty Ltd – Golynx ore car general arrangement.' [Footnotes not included] It is clear that the request for discovery to WP has not yielded what the applicant seeks by way of discovery from a non-party in the Worley group. 26 Mr Wong deposes in his affidavit for the respondents that 'a copy of a contract document' was forwarded on 20 March 2003 to WorleyParsons in respect of the BHP Contract, namely the specification and the tender document. He also deposed that at p 54 of the BHP contract document there is a copy of the Lynx ore car drawing. 27 As a consequence Mr Wong deposes he believes that the copies of the Lynx drawings were either contained in the specification referred to in the BHP contract or provided to WorleyParsons by BHP directly or via the second respondent. Likewise in relation to what he described as the 'sidewall drawings'. 28 As to the evidence of Mr Wong, the applicant submits that it raises more questions than it answers. It fails to give discovery while plainly making it apparent that WorleyParsons is likely to hold documents of relevance. 29 WorleyParsons submits that the effect of the evidence is to show that the applicant has no 'reasonable cause to believe' that the applicant has or may have the right to obtain relief against it. This is because it is said the evidence discloses that the Lynx drawings received by WorleyParsons were supplied to it by BHP and were not received by it as confidential information from the second respondent. WorleyParsons submits that there is nothing in the affidavit of Mr Mazur or Ms Trichilo to give colour to the possibility of liability against it. It is said there is nothing to support any reasonable basis for believing that confidential information passed from the second respondent to WorleyParsons in breach of confidentiality obligations owed to the applicant. It is contended that the emails upon which the applicant relies do not meet the standard. Rather the applicant is seen to be proceeding only on a suspicion. 30 Mr Wong also deposed that the documents contained in annexure 15 to the affidavit of Ms Trichilo form only a small proportion of the documents he would expect the second respondent to have in its possession, custody or control relevant to the design and construction of the BHP ore cars. Also that the manufacturing and construction drawing has not been provided to WorleyParsons. 31 He continued by stating that he would expect the second respondent to have in its possession BHP specification documents; BHP tender documents; progress reports; change requests; meeting and site notes; and all final design drawings. 32 I consider that the filing of the amended defence enables the applicant to establish 'a reasonable cause to believe' that it might have a right to obtain relief from WorleyParsons. The claims made by WorleyParsons, in relation to BHP and the second respondent may yet be made out However, the applicant is not bound to accept the claims of WorleyParsons as the only credible explanation of the circumstances to which it has made reference in its submissions and the affidavit of Mr Wong. The circumstances specified in the amended defence and the list of discovery provided by the second and third respondents, unexplained, do provide a basis for a reasonable cause to believe there might be a right of recovery. Just as the applicant cannot establish its reasonable cause to believe by mere assertion, so the mere assertion by the non-party cannot necessarily bring the reasonable belief to an end. It is to better test that belief that the applicant seeks the non-party discovery. The non-party has given one explanation of the circumstances; it is to enable the applicant to consider that position that the discovery is now sought. Until that occurs and speaks for itself there is reasonable cause for the applicant to believe from the circumstances before it that it may have the right to obtain relief until proven otherwise. Whether all reasonable inquiries made WorleyParsons contends the applicant has failed to establish that it has made 'all reasonable inquiries' as required by FCR O 15A r 6(b). It is submitted the applicant has failed to make 'all' such inquiries. Rather the applicant has leapt to a conclusion without satisfying the precondition in this paragraph. 33 It is argued that the only evidence the applicant brings of making an inquiry is an inquiry of WorleyParsons. Further, that the applicant has not brought to the Court an affidavit of the effect of the discovery given by WP. It cannot therefore be established in what position of knowledge the applicant is presently placed. Additionally the evidence of Mr Wong is that the second and third respondents have many other documents and there is no evidence of discovery in relation to them: cf CGU 187 ALR at 288 at [33]. His affidavit is suggestive that BHP is also another apparent source of productive inquiry. 34 In relation to both the application of r 6(a) and (b), WorleyParsons submits that the applicant has not attempted to satisfy the jurisdictional preconditions to the exercise of the discretion under FCR O 15A rr 6 and 7 so that the application is incompetent. 35 The applicant relies on the evidence of Mr Mazur to substantiate the making of all reasonable inquiries. That shows that a letter of inquiry on 29 November 2006 from the applicant's solicitors to WorleyParsons. This was responded to by a letter from WorleyParsons dated 5 December 2006 refusing discovery and denying the appropriateness of it because it was a 'fishing' expedition. On 6 December 2006 the applicant's solicitors wrote denying the 'fishing' character of the inquiry and stating, that failing compliance, application would be made to the Court. On 12 December 2006 the applicant's solicitors made a request for discovery to WP. From the supplementary affidavit of Alan Karp there is evidence of the response to that dated 19 December 2006 providing discovery. 36 The applicant submits that the test for the application of the requirements of FCR O 15A r 6(a) and (b) is not as high as the respondents would have and that the applicant is not precluded from 'fishing'. 37 It is important that the nature of the foreshadowed proceedings is that they allege breach of confidence and infringement of copyright. It is in that context that the reasonableness of the inquiries and in which the requirement to make 'all' inquiries is to be judged. Essentially there was only the one inquiry, being that directed from the applicant to WorleyParsons. As the authorities show, there is the possibility of futility in such an inquiry, given the character of the foreshadowed litigation. 38 The possible sources of inquiry which WorleyParsons submits are required to be investigated by the applicant before any application of an order for non-party discovery in its favour are in respect of the second and third respondents. However, discovery against the second and third respondents has taken place. The fact that Mr Wong considers there is more held by those parties for discovery cannot govern the position that inquiry has been made of them. 39 In this particular context I cannot see why the letter of inquiry from the applicant's solicitors to WorleyParsons does not satisfy the requirement of all reasonable inquiries being made. That is consistent with the nature of the issues, involving confidential information and copyright, and with authority. Whether not sufficient information to decide on commencement of proceedings 40 I do not consider that the applicant has yet obtained sufficient information to enable it to decide whether to commence proceedings. The affidavit of Mr Wong raises the prima facie position that there may not be a foundation to bring proceedings against WorleyParsons. However, until discovery, the applicant will not be in a position to determine whether that is or is not the course it should pursue. Conclusion 41 For these reasons I consider the applicant's notice of motion should be granted. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholson. Associate: Dated: 23 April 2007 Counsel for the Applicant: RJL McCormack Solicitor for the Applicant: Karp Steedman Ross-Adjie Counsel for the Non-Party Respondent to the Motion: P Cahill Solicitor for the Non-Party Respondent to the Motion: Jackson McDonald Date of Hearing: 10 April 2007 Date of Judgment: 23 April 2007