FEDERAL COURT OF AUSTRALIA Meaden v Bell Potter Securities Limited (No 5) [2014] FCA 978 Citation: Meaden v Bell Potter Securities Limited (No 5) [2014] FCA 978 Parties: JILLIAN ANNETTA MEADEN, DAVID DARVILL, ELRYG NOMINEES PTY LTD (ATF THE ELRYG NOMINEES SUPERANNUATION FUND), SHULVO INVESTMENTS PTY LTD (IN LIQUIDATION), ROOSEYCORP PTY LTD ACN 125 400 080 (ATF NORLEX SUPER FUND), TECHNICAL INVESTING PTY LTD ACN 111 646 032 (ATF TECHNICAL INVESTING ABSOLUTE RETURN FUND), KAS DEVELOPMENTS PTY LTD ACN 065 305 204, NEIL MOUNT AND GEOFFREY JONES (ATF NEIL MOUNT SUPERANNUATION FUND ACCOUNT), MDS TILING PTY LTD ACN 096 842 152, PETER GEOFFREY TURNER AND ZENA TURNER (ATF THE P&Z SUPER FUND), CHRISTINE HILDEBRAND, CHRISTOPHER HO, IATRIX ENTERPRISES PTY LTD ACN 113 233 159, TPC PTY LTD ACN 000 823 414 (ATF THE ADAM FREIER FAMILY TRUST), PETER COPE PTY LTD ACN 123 888 586 (ATF COPE FAMILY SUPERANNUATION FUND), HAMMOND ROYCE CORPORATION PTY LTD ACN 005 562 050 (ATF LEN DAVID SUPER FUND), HAYSON BLOODSTOCK PTY LTD ACN 108 655 367, HAYSON SUPER INVESTMENTS PTY LTD ACN 108 655 376, JADWIGA MAJ, CHRISTOPHER PERDIS, PETER HALL (ATF SANDRA & PETER HALL TRUST), VICPAR HOLDINGS PTY LTD ACN 113 077 419 (ATF VICPAR TRUST) (IN LIQUIDATION), DAVID AZAR, BRETT JOHNSON, WOODVEST PTY LTD ACN 001 659 892 (ATF WOODVEST PTY SUPERANNUATION FUND ACCOUNT), TIM STAR, CRANPORT PTY LTD ACN 003 854 000, SOLOMONS & SHAW PTY LTD ACN 089 034 060, MARIANNE DOWNS, ANDREW RANDALL, SIMON MCLACHLAN, JOYBECK PTY LTD ACN 050 236 863 (ATF BLACK FAMILY TRUST), BRETT TYACK, JTW TRADING PTY LTD ACN 105 305 333, DRCW TRADING PTY LTD ACN 105 303 777, LAURAINE WORTHINGTON, APPLIKOTE PTY LIMITED ACN 010 446 269, ROGAN YATES, HOMEBOY PTY LTD ACN 123 378 512, JUSTINE ASHTON, TRANSWORLD CHEMICAL (AUST) PTY LTD ACN 005 625 981, CHRISTOPHER SPURRIER, DOUG AND LYNETTE ELLEN PADDON (ATF PADDON FAMILY SUPER FUND), SIEGFRIED LINK, VERONIQUE GUICHON and MELAIM PTY LTD ACN 005 880 290 (ATF DOUGLASS FAMILY TRUST) v BELL POTTER SECURITIES LIMITED (ACN 006 390 772) File number: NSD 1310 of 2010 Judge: EDMONDS J Date of judgment: 12 September 2014 Catchwords: PRACTICE AND PROCEDURE – application for further discovery of specific documents and categories of documents pursuant to Rule 20.21 of the Federal Court Rules 2011; in the alternative Rule 20.15; in the alternative proper discovery pursuant to earlier order of the Court; opposition to such orders supported by evidence that nothing further to be discovered; application for further and better particulars of a matter, not being a primary fact, the existence of which depends on the evidence, argument and judgment of the Court Legislation: Federal Court Rules 2011 rr 20.15, 20.21 Cases cited: Construction, Forestry, Mining & Energy Union v Rio Tinto Coal Australia Pty Ltd [2014] FCA 462 cited Date of hearing: 26 August 2014 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 34 Counsel for the Applicant: Ms L Nichols Solicitor for the Applicant: Slater & Gordon Lawyers Counsel for the Respondent: Mr JAC Potts Solicitor for the Respondent: Speed & Stracey Lawyers IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1310 of 2010 BETWEEN: JILLIAN ANNETTA MEADEN First Applicant DAVID DARVILL Second Applicant ELRYG NOMINEES PTY LTD (ATF THE ELRYG NOMINEES SUPERANNUATION FUND) Third Applicant SHULVO INVESTMENTS PTY LTD (IN LIQUIDATION) Fifth Applicant ROOSEYCORP PTY LTD ACN 125 400 080 (ATF NORLEX SUPER FUND) Sixth Applicant TECHNICAL INVESTING PTY LTD ACN 111 646 032 (ATF TECHNICAL INVESTING ABSOLUTE RETURN FUND) Seventh Applicant KAS DEVELOPMENTS PTY LTD ACN 065 305 204 Eighth Applicant NEIL MOUNT AND GEOFFREY JONES (ATF NEIL MOUNT SUPERANNUATION FUND ACCOUNT) Ninth Applicant MDS TILING PTY LTD ACN 096 842 152 Tenth Applicant PETER GEOFFREY TURNER AND ZENA TURNER (ATF THE P&Z SUPER FUND) Eleventh Applicant CHRISTINE HILDEBRAND Twelfth Applicant CHRISTOPHER HO Thirteenth Applicant IATRIX ENTERPRISES PTY LTD ACN 113 233 159 Fourteenth Applicant TPC PTY LTD ACN 000 823 414 (ATF THE ADAM FREIER FAMILY TRUST) Fifteenth Applicant PETER COPE PTY LTD ACN 123 888 586 (ATF COPE FAMILY SUPERANNUATION FUND) Sixteenth Applicant HAMMOND ROYCE CORPORATION PTY LTD ACN 005 562 050 (ATF LEN DAVID SUPER FUND) Seventeenth Applicant HAYSON BLOODSTOCK PTY LTD ACN 108 655 367 Eighteenth Applicant HAYSON SUPER INVESTMENTS PTY LTD ACN 108 655 376 Nineteenth Applicant JADWIGA MAJ Twenty-Second Applicant CHRISTOPHER PERDIS Twenty-Fourth Applicant PETER HALL (ATF SANDRA & PETER HALL TRUST) Twenty-Fifth Applicant VICPAR HOLDINGS PTY LTD ACN 113 077 419 (ATF VICPAR TRUST) (IN LIQUIDATION) Twenty-Seventh Applicant DAVID AZAR Thirty-Second Applicant BRETT JOHNSON Thirty-Third Applicant WOODVEST PTY LTD ACN 001 659 892 (ATF WOODVEST PTY SUPERANNUATION FUND ACCOUNT) Thirty-Fourth Applicant TIM STAR Thirty-Fifth Applicant CRANPORT PTY LTD ACN 003 854 000 Thirty-Eighth Applicant SOLOMONS & SHAW PTY LTD ACN 089 034 060 Thirty-Ninth Applicant MARIANNE DOWNS Forty-First Applicant ANDREW RANDALL Forty-Third Applicant SIMON MCLACHLAN Forty-Fifth Applicant JOYBECK PTY LTD ACN 050 236 863 (ATF BLACK FAMILY TRUST) Forty-Sixth Applicant BRETT TYACK Forty-Seventh Applicant JTW TRADING PTY LTD ACN 105 305 333 Forty-Eighth Applicant DRCW TRADING PTY LTD ACN 105 303 777 Forty-Ninth Applicant LAURAINE WORTHINGTON Fiftieth Applicant APPLIKOTE PTY LIMITED ACN 010 446 269 Fifty-First Applicant ROGAN YATES Fifty-Fifth Applicant HOMEBOY PTY LTD ACN 123 378 512 Fifty-Sixth Applicant JUSTINE ASHTON Sixty-First Applicant TRANSWORLD CHEMICAL (AUST) PTY LTD ACN 005 625 981 Sixty-Second Applicant CHRISTOPHER SPURRIER Sixty-Third Applicant DOUG AND LYNETTE ELLEN PADDON (ATF PADDON FAMILY SUPER FUND) Sixty-Fifth Applicant SIEGFRIED LINK Sixty-Sixth Applicant VERONIQUE GUICHON Sixty-Ninth Applicant MELAIM PTY LTD ACN 005 880 290 (ATF DOUGLASS FAMILY TRUST) Seventieth Applicant AND: BELL POTTER SECURITIES LIMITED (ACN 006 390 772) Respondent JUDGE: EDMONDS J DATE OF ORDER: 12 SEPTEMBER 2014 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The time by which the applicants are to serve their expert evidence be extended to 4:00 p.m. on Friday, 19 September 2014. 2. Otherwise the interlocutory application filed 8 August 2014 be dismissed. 3. The costs of the interlocutory application be costs in the cause. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 1310 of 2010 BETWEEN: JILLIAN ANNETTA MEADEN First Applicant DAVID DARVILL Second Applicant ELRYG NOMINEES PTY LTD (ATF THE ELRYG NOMINEES SUPERANNUATION FUND) Third Applicant SHULVO INVESTMENTS PTY LTD (IN LIQUIDATION) Fifth Applicant ROOSEYCORP PTY LTD ACN 125 400 080 (ATF NORLEX SUPER FUND) Sixth Applicant TECHNICAL INVESTING PTY LTD ACN 111 646 032 (ATF TECHNICAL INVESTING ABSOLUTE RETURN FUND) Seventh Applicant KAS DEVELOPMENTS PTY LTD ACN 065 305 204 Eighth Applicant NEIL MOUNT AND GEOFFREY JONES (ATF NEIL MOUNT SUPERANNUATION FUND ACCOUNT) Ninth Applicant MDS TILING PTY LTD ACN 096 842 152 Tenth Applicant PETER GEOFFREY TURNER AND ZENA TURNER (ATF THE P&Z SUPER FUND) Eleventh Applicant CHRISTINE HILDEBRAND Twelfth Applicant CHRISTOPHER HO Thirteenth Applicant IATRIX ENTERPRISES PTY LTD ACN 113 233 159 Fourteenth Applicant TPC PTY LTD ACN 000 823 414 (ATF THE ADAM FREIER FAMILY TRUST) Fifteenth Applicant PETER COPE PTY LTD ACN 123 888 586 (ATF COPE FAMILY SUPERANNUATION FUND) Sixteenth Applicant HAMMOND ROYCE CORPORATION PTY LTD ACN 005 562 050 (ATF LEN DAVID SUPER FUND) Seventeenth Applicant HAYSON BLOODSTOCK PTY LTD ACN 108 655 367 Eighteenth Applicant HAYSON SUPER INVESTMENTS PTY LTD ACN 108 655 376 Nineteenth Applicant JADWIGA MAJ Twenty-Second Applicant CHRISTOPHER PERDIS Twenty-Fourth Applicant PETER HALL (ATF SANDRA & PETER HALL TRUST) Twenty-Fifth Applicant VICPAR HOLDINGS PTY LTD ACN 113 077 419 (ATF VICPAR TRUST) (IN LIQUIDATION) Twenty-Seventh Applicant DAVID AZAR Thirty-Second Applicant BRETT JOHNSON Thirty-Third Applicant WOODVEST PTY LTD ACN 001 659 892 (ATF WOODVEST PTY SUPERANNUATION FUND ACCOUNT) Thirty-Fourth Applicant TIM STAR Thirty-Fifth Applicant CRANPORT PTY LTD ACN 003 854 000 Thirty-Eighth Applicant SOLOMONS & SHAW PTY LTD ACN 089 034 060 Thirty-Ninth Applicant MARIANNE DOWNS Forty-First Applicant ANDREW RANDALL Forty-Third Applicant SIMON MCLACHLAN Forty-Fifth Applicant JOYBECK PTY LTD ACN 050 236 863 (ATF BLACK FAMILY TRUST) Forty-Sixth Applicant BRETT TYACK Forty-Seventh Applicant JTW TRADING PTY LTD ACN 105 305 333 Forty-Eighth Applicant DRCW TRADING PTY LTD ACN 105 303 777 Forty-Ninth Applicant LAURAINE WORTHINGTON Fiftieth Applicant APPLIKOTE PTY LIMITED ACN 010 446 269 Fifty-First Applicant ROGAN YATES Fifty-Fifth Applicant HOMEBOY PTY LTD ACN 123 378 512 Fifty-Sixth Applicant JUSTINE ASHTON Sixty-First Applicant TRANSWORLD CHEMICAL (AUST) PTY LTD ACN 005 625 981 Sixty-Second Applicant CHRISTOPHER SPURRIER Sixty-Third Applicant DOUG AND LYNETTE ELLEN PADDON (ATF PADDON FAMILY SUPER FUND) Sixty-Fifth Applicant SIEGFRIED LINK Sixty-Sixth Applicant VERONIQUE GUICHON Sixty-Ninth Applicant MELAIM PTY LTD ACN 005 880 290 (ATF DOUGLASS FAMILY TRUST) Seventieth Applicant AND: BELL POTTER SECURITIES LIMITED (ACN 006 390 772) Respondent JUDGE: EDMONDS J DATE: 12 SEPTEMBER 2014 PLACE: SYDNEY REASONS FOR JUDGMENT Introduction 1 On 24 April this year, I made a number of interlocutory orders in this proceeding, including the following: 1. … 4. The proceedings be listed for hearing for thirteen weeks commencing 2 March 2015. 5. The respondent file and serve its defence to the third further amended statement of claim by 6 June 2014. 6. The respondent provide initial discovery in relation to "valuation methodology" issues by 6 June 2014. 7. The applicants provide verified standard discovery in accordance with FCR rule 20.14, and the respondent provide the balance of its standard discovery (and verify its discovery) in accordance with rule 20.14, by 1 August 2014. 8. The applicants file and serve their expert evidence by 15 August 2014 ... 2 On 18 August 2014, by consent I made orders to the following effect: (1) The time in order 8 of the orders made on 24 April 2014 was extended to 2 September 2014. (2) The respondent was to file and serve its lay evidence by 25 November 2014. (On 26 August 2014 I clarified that this timetable also applied to the respondent's expert evidence.) (3) The applicants were to file and serve any evidence in reply by 19 December 2014. Interlocutory Application 3 On 8 August 2014, the applicants filed an interlocutory application, seeking the following orders: 1. Pursuant to rule 20.21, the respondent: (a) On a date two weeks from the date of this order, file an affidavit stating: i. Whether the documents described in the Schedule A to this Application, or any document within those categories, is or has been in the respondent's control; and ii. If any such document or category of documents has been but is no longer in the respondent's control, when it was last in the respondent's control and what became of it or them; and (b) On a date two weeks from the date of this order, provide to the applicant electronic copies of all documents identified in the respondent's affidavit as being in the respondent's control. 2. In the alternative to paragraph (1) pursuant to rule 20.15, the respondent, on a date two weeks from the date of this order: (a) give discovery of the documents described in Schedule A to this Application; and (b) Provide to the applicant electronic copies of all documents identified in the respondent's supplementary affidavit. 3. Further or alternatively to paragraphs (1) and (2), on a date two weeks from the date of this order, the respondent give proper discovery pursuant to order 6 of the orders of the Honourable Justice Edmonds made 24 April 2014. 4. Paragraph 8 of the orders made by the Honourable Justice Edmonds on 24 April 2014 be extended to a date two weeks from the date identified in paragraphs (1) to (3). 5. On a date two weeks from the date of this order, the respondent provide further and better particulars to paragraph 31(c)(iv) of its defence to the Third Further Amended Statement of Claim. 6. The respondent pay the applicants' costs of this application, such costs to be payable forthwith. 4 Schedule A to the interlocutory application contains a description of some 34 categories of documents, although each of categories 32 – 34 inclusive only refer to one document. 5 The first three orders sought are sought in the alternative, and arise out of the respondent's initial discovery in relation to "valuation methodology" issues pursuant to order 6 made on 24 April 2014 and the balance of the respondent's standard discovery in accordance with r 20.14 of the Federal Court Rules 2011 ("the Rules") pursuant to order 7 made that date. 6 Order 4 seeks an extension of time for the applicants to file and serve their expert evidence beyond that to which it was already extended on 18 August 2014, viz., 2 September 2014. 7 Order 5 seeks further and better particulars to para 31(c)(iv) of the respondent's defence to the Third Further Amended Statement of Claim. 8 An affidavit of Mr Andrew Paull ("Mr Paull") affirmed 8 August 2014 was filed by the applicants in support, and read on the hearing, of the interlocutory application. Mr Paull is a solicitor employed by the incorporated legal practice acting on behalf of the applicants, subject to the supervision of his Practice Group Leader, Mr Ben Phi. 9 The interlocutory application was opposed by the respondent and in doing so it relied on an affidavit of Mr Benjamin Mark Giles ("Mr Giles") sworn and filed 18 August 2014 and read on the hearing of the application. Consideration and Analysis Alternative Orders Sought: 1 to 3 - Discovery 10 There was no dispute, at least no real dispute, that documents in the 34 categories of documents listed in Schedule A to the interlocutory application if they exist or previously existed, would be relevant to the issues in dispute. 11 Rule 20.21 reads: Order for particular discovery (1) If a party (the first party) claims that a document or category of documents may be or may have been in another party's control (the second party), the first party may apply to the Court for an order that the second party file an affidavit stating: (a) whether the document or any document of that category is or has been in the second party's control; and (b) If the document or category of documents has been but is no longer in the second party's control—when it was last in the second party's control and what became of it. (2) The first party seeking an order under subrule (1) must identify the document or category of documents as precisely as possible. 12 In Construction, Forestry, Mining & Energy Union v Rio Tinto Coal Australia Pty Ltd [2014] FCA 462, Flick J articulated the principles to be applied when considering an application under Rule 20.21. Those principles, summarised from [92]–[99], are: (1) Rule 20.21 should be applied in a manner to obviate the hardship of the rule that the affidavit of discovery is conclusive. The common law rule is described at [98] of the judgment. The affidavit of discovery was considered conclusive, save where an insufficiency was demonstrated from the pleadings, the affidavit of documents itself or the documents referred to therein, or from any other source constituting an admission of the existence of a discoverable document. (2) Rule 20.21 is not a substitute for general discovery, but rather a rule for discovery of particular documents. The application should be made following either an order for standard or non-standard discovery. (3) Despite the absence of any express requirement in Rule 20.21 that the moving party point to particular evidence establishing the existence of undiscovered documents, the Court is unlikely to make an order for particular discovery where the claim for particular discovery is not founded on any appearance that such documents exist. (4) A deficiency in discovery may emerge from an analysis of the pleadings, from the documents produced on discovery, from the evidence or from the nature or circumstances of an individual case. (5) The Court should be satisfied that particular discovery will facilitate the efficient conduct of the proceedings. 13 Rule 20.15 reads: Non-standard and more extensive discovery (1) A party seeking an order for discovery (other than standard discovery) must identify the following: (a) any criteria mentioned in rules 20.14(1) and (2) that should not apply; (b) any other criteria that should apply; (c) whether the party seeks the use of categories of documents in the list of documents; (d) whether discovery should be given in an electronic format; (e) whether discovery should be given in accordance with a discovery plan. 14 The applicants submitted that the respondent will not need to conduct an "unreasonable", or more extensive, search for these documents, because partial discovery has been made of some of the documents meeting each of the 34 categories in Schedule A – what is sought is a better quality of search. 15 The respondent was due to make discovery of the valuation methodology documents on 6 July 2014 (see order 6 made on 24 April 2014). Discovery of the valuation methodology documents was ultimately made in two tranches: (1) On 13 June 2014, the respondent served the second list containing 307 documents. (2) On 2 July 2014, the respondent served the third list containing 77 documents. 16 In his affidavit, Mr Paull deposed that he had reviewed the documents discovered by the respondent in the second and third lists (para 41) and on the basis of that review, "believe that the respondent has failed to discover the following categories of valuation methodology documents, which may be or may have been in the respondent's possession" (para 42): (1) Documents evidencing the basis for calculating the value of PGL shares reported in the Bell Potter Publications between 20 October 2006 and 5 December 2007 (Categories 1(a) to 26(a) of Schedule A). (2) Documents evidencing the basis for calculating the financial tables reported in the Bell Potter Publications on the page numbers identified in Schedule A, between 20 October 2006 and 5 December 2007 (Categories 1(b) to 8(b), 10(b), 11(b), 14(b), 16(b), 19(b) to 21(b), 24(b) and 26(b) of Schedule A). (3) The source materials relied on by Bell Potter as inputs to the valuation models referred to in sub-para (a) above, where applicable (Categories 1(c) to 8(c), 9(b), 10(c), 11(c), 12(b), 13(b), 14(c), 15(b), 16(c), 17(b), 18(b), 19(c) to 21(c), 22(b), 23(b), 24(c), 25(b) and 26(c) of Schedule A). (4) Any documents evidencing the "new, conservative methodology" adopted by Bell Potter for the purpose of the "Eleventh Update" dated 5 December 2007, and referred to in that document and discovered document numbers 276 and 290 (Category 27 of Schedule A). (5) Emails to and from Martin Pretty, Chris Gibson, Amy Mahony and Peter Quinton located in the electronic archive of the respondent, and dated between October 2006 and 5 December 2007 (Categories 28–31 of Schedule A). (6) The attachments to emails sent from Linda Ong to Nicholas Atkinson and Richard Michaels on the dates and times identified in Schedule A (Categories 32–34 of Schedule A). 17 In their written submissions, the applicants dealt with each of these classes of documents as summarised in [18]–[24] inclusive below. 18 As to the valuation models, in reliance on Part 3.1 of Mr Paull's affidavit (paras 43–54), they submitted: (1) It may be reasonably inferred that the respondent used valuation models embodied in spreadsheets because the respondent has produced 19 spreadsheets that appear to be valuation models for PGL shares. However: (a) Fourteen out of 19 spreadsheets contain valuations that do not correspond with the valuations in any of the published reports. (b) Of the 26 reports, only two (18 July 2007 and 5 December 2007) appear to have corresponding spreadsheets (199/201 for July, and 292/383 for December). (c) One spreadsheet (333) contains a valuation ($14.20) that corresponds with reports published between August and November 2007, but the spreadsheet is dated December 2006. It is not clear whether or how a calculation prepared in December 2006 was used to value PGL shares some nine months later. (d) Two spreadsheets dated 17 and 18 July (199/201) contain a valuation ($14.64) that correspond to those in five reports published in May and June 2007. It is not clear whether or how a calculation prepared in July 2007 could have been used in May or June 2007. (2) Without discovery of the documents now sought, the applicants' evidence about the methodology and assumptions actually used must proceed by inference from the incomplete material that has been produced. 19 As to the "Backpage" financial tables, in reliance on Part 3.2 of Mr Paull's affidavit (paras 55–63), they submitted: (1) On the penultimate page of each PGL-specific Company Update (not the generalised "Microscope" reports and other general reports) was a table containing financial data that appears to include assumptions used by Bell Potter in its valuations of PGL shares. (2) Taking the penultimate page of the 5 December 2007 Update as an example, the financial data included estimates of future income, cash flow, and balance sheet (on the left hand side), and then "Valuation Data", "Probability Ratios", "Equity and Leverage" and two DCF Valuations (with and without risk-adjustment). (3) The data and assumptions in this page offer a possible explanation of the valuation model used by the respondent to value PGL shares. Two spreadsheets (383/292) contain a worksheet from which the penultimate page of the 5 December 2007 Update appears to have been generated. As with the valuation models, the respondent's discovery in this area is scarce. (4) Of the 26 published reports relied on by the applicants, only two (18 July 2007 and 5 December 2007) have corresponding "Backpage" worksheets amongst the spreadsheets discovered by the respondent. (5) Not all of the 19 spreadsheets discovered by the respondent have "Backpage" worksheets, and eight of the 19 spreadsheets that contain "Backpage" worksheets do not correspond with any of the respondent's published reports (as set out in para 62 of Mr Paull's affidavit). 20 As to the primary source documents, in reliance on Part 3.3 of Mr Paull's affidavit (paras 64–72), they submitted: (1) In one set of the spreadsheets discovered (383/292) that correspond to a published valuation (5 December 2007), the respondent has identified the source of certain assumptions that fed into the valuation model. (2) For example, looking at AP-17 of Mr Paull's affidavit, under the heading "Market date" is "number of cases forecast for year 1". Next to that, identified as the "source" is "PGL AGM 2007 – Slide 11". (3) To the extent that these documents are in the respondent's control, they should be discovered because they will allow the experts (and ultimately, the Court) to see if the assumptions derived from these sources have been properly made. (4) Of the spreadsheets discovered to date: (e) Only two (383/292), corresponding to one report (5 December 2007) identify source material. None of that source material has been discovered. (f) Another two (199/201) correspondent to a report (18 July 2007) but does not identify source material. 21 As to change in methodology documents, in reliance on Part 3.4 of Mr Paull's affidavit (paras 73–78), they submitted: (1) The respondent expressly refers to a change in valuation methodology in the Company Update published on 5 December 2007. That change in methodology is also referred to in emails discovered by the respondent and included at AP-18 and AP-19 of Mr Paull's affidavit. (2) The respondent has discovered one valuation model (383/292) that appears to have been used for the 5 December 2007 report. It can be inferred that this model contains the "new, conservative" model. (3) However, the respondent has not discovered any documents that set out how the "new, conservative" valuation model differed from the old valuation model. While the respondent has only discovered a valuation model that appears to have been used in July 2007 (199/201), the best the applicants can do is to compare the 199/201 July spreadsheets with the 383/292 December spreadsheets and assume (reasoning by inference) that any changes between July and December represent the deliberate shift in models referred to by the respondent. 22 As to the emails, in reliance on Part 3.5 of Mr Paull's affidavit (paras 79–84), they submitted that the email archives of the respondent's staff who authored its published reports would hold relevant material, and that the searches of those archives have been limited. 23 As to the "chains" of emails with missing attachments, in reliance on Part 3.6 of Mr Paull's affidavit (para 85), they submitted that: (1) Document 35 in the second list is an email from Nicholas Atkinson to Linda Ong containing comments about a report valuing PGL shares. The email follows an email from Linda Ong to Nicholas Atkinson dated 17 October 2006 which attaches a 14 page PDF document that appears, from the words of the emails, to contain a valuation of PGL shares (this was probably a draft version of the Initiating Coverage, given it was a PDF). No valuation model has been discovered that corresponds to the October 2006 (that is, the Initiating Coverage) Report, nor any draft of that report. (2) Document 36 in the second list is a response to Nicholas Atkinson's suggested changes to the email in Document 35 and attaches an updated report (per the subject header). (3) Document 81 in the second list is an email exchange between Richard Michaels and Linda Ong, where Ms Ong provides Mr Michaels, at his request, her valuation model for PGL. The email exchange is dated 24 January 2007. No valuation model has been discovered that corresponds to the 19 January 2007 Company Update, which is closest in date to this email. 24 It was submitted that these earlier emails existed at some time and are evidently relevant. The earlier emails were sent from the respondent's employee email accounts and were self-evidently in the respondent's possession at some point. 25 As noted in [9] above, the respondent opposed the alternative orders for discovery sought by the applicants in paras 1–3 of the interlocutory application in reliance on the affidavit of Mr Giles, in particular, paras 16–19 where Mr Giles deposes: 16. Carol Simpson is employed as Bell's "Head of Compliance". Her responsibilities include collation and provision of documents in response to subpoenas, discovery obligations and requests from regulatory authorities. Kate Gleeson is employed by Bell as "Compliance Manager" and assists Ms Simpson. 17. I refer to rows 1 to 27 of the table in schedule A to the applicants' interlocutory application filed on 8 August 2014, which describe in summary valuation models and source materials in support of each of Bells' reports concerning Progen. I am informed by Ms Simpson and verily believe that, other than documents already discovered, to Ms Simpson's knowledge there are no documents which are now, or have previously been, in Bell's possession or control which fall within the descriptions in rows 1 to 27. 18. I refer to rows 28 to 31 of the table in schedule A to the applicants' interlocutory application filed on 8 August 2014, which describe in summary emails of four Bell employees in relation to Progen valuation methodology. I am informed by Ms Simpson and Ms Gleeson and verily believe that, other than documents already discovered, to Ms Simpson's and Ms Gleeson's knowledge there are no documents which are now, or have previously been, in Bell's possession or control which fall within the descriptions in rows 28 to 31. 19. I refer to rows 32 to 34 of the table in schedule A to the applicants' interlocutory application filed on 8 August 2014, which describe attachments to particular emails. I am informed by Ms Simpson and Ms Gleeson and verily believe that there are no documents which are now in Bell's possession or control which fall within the descriptions in rows 32 to 34, and they do not know when those specific documents were last in Bell's possession or control. 26 Mr Giles was not required for cross-examination. There was no challenge to the veracity of what he deposed to at paras 17–19 of his affidavit nor was it contended that there would be any utility in having Ms Simpson or Ms Gleeson depose to like affect. 27 Apart from Mr Paull's belief as expressed in the chapeau to para 42 of his affidavit; the view formed by Mr Paull as expressed in para 45 of his affidavit; the inference he drew in the same paragraph; the appearance to Mr Paull of the likelihood mentioned in paras 79 and 84 of his affidavit, there is no evidence establishing the existence of undiscovered documents or that, if it be different, a deficiency in discovery has occurred on the part of the respondent. Certainly nothing emerges from the pleadings or the documents discovered. The respondent has not yet put on its evidence and something may emerge from that. However, at the present time, any predication is purely speculative. 28 The orders sought in paras 1–3 of the interlocutory application must be refused. Order Sought: 4 – Filing Expert Evidence 29 If the applicants have not filed and served all their expert evidence due on 2 September 2014 (see order 1 made by consent on 18 August 2014) they must do so by 19 September 2014. No further expert evidence filed after that date will be allowed to be read. Order Sought: 5 – Particulars 30 In their Third Further Amended Statement of Claim, the applicants plead: 31. By reason of the matters alleged in paragraph 30, Bell Potter's conduct in making the valuation representations was misleading or deceptive, contrary to s.1041H of the Corporations Act and s.12DA of the ASIC Act. 31 In its Defence, the respondent pleads: 31. In response to paragraph 31 of the third further amended statement of claim, Bell: (a) refers to and repeats its response to paragraph 30 above; (b) otherwise denies the allegations; and (c) further says, in relation to each alleged contravention of s1041H of the Corporations Act 2001, that: (i) pursuant to s1041(4) of the Corporations Act 2001 these proceedings are eligible proceedings for the purposes of s1317S of the Corporations Act 2001; and (ii) in the event that Bell engaged in the conduct giving rise to the alleged contravention of s1041H of the Corporations Act 2001 (which is denied), then, (iii) Bell acted honestly in relation to that contravention; and (iv) having regard to all the circumstances of the contraventions, including all the matters set out in this defence, Bell ought fairly be excused for each contravention and be relieved wholly, or alternatively partly, from any liability for such contravention. Particulars Including but not limited to: 1. reliance by Bell on information, including releases to the ASX, published or provided by PGL, and other research, in the preparation of the reports: 2. use by Bell of proper, appropriate and sound valuation techniques; 3. inherent speculative nature of an investment in a biotechnology company whose main product was subject to US FDA approval; and 4. further particulars will be provided after discovery. 32 While not specified in the interlocutory application as such, it becomes clear from the submissions that the applicants made on the hearing that the further and better particulars being sought concerned para 2 of the particulars provided in the Defence, namely, the "proper, appropriate and sound valuation techniques" used by the respondent in valuing the PGL shares. 33 In their written outline of submissions, the applicants submitted: [The respondent], having made that positive allegation, must be in possession of the material by which it can be particularised. Requiring [the respondent] to particularise the allegation now will facilitate the just and efficient disposition of the proceeding. It will have the result that the most relevant facts are laid out for both the [a]pplicants' and [r]espondents' [sic] experts to consider. It will significantly reduce the prospect that time and costs will be wasted by the [a]pplicant's [sic] experts proceeding on material that is incomplete, with risk that further opinions will need to be sought once [the respondent] is required to particularise its defence. 34 With respect, the respondent has particularised its Defence: see [31] above. The further and better particulars sought are not articulated at all, let alone with any specificity and, in my view, whether or not the respondent used "proper, appropriate and sound valuation techniques" in valuing the PGL shares is a matter for lay and expert evidence, argument and judgment of the Court; not for particulars, which must be confined to matters of primary fact. This order must also be refused. I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edmonds. Associate: Dated: 12 September 2014