New South Wales Supreme Court CITATION : Idoport Pty Ltd & Anor v National Australia Bank Ltd & 8 Ors; Idoport Pty Ltd v Market Holdings Pty Ltd v Donald Robert Argus; Idoport Pty Ltd "JMG" v National Australia Bank Ltd [19] [2001] NSWSC 246 FILE NUMBER(S) : SC 50113/98; 50026/99; 3991/00 HEARING DATE(S) : 27/02/01, 28/02/01, 21/3/01, 22/3/01, 26/3/01, 28/3/01, 2/4/01, 3/4/01 JUDGMENT DATE : 10 April 2001 Idoport Pty Ltd (Plaintiff) PARTIES : Market Holdings Pty Ltd (Plaintiff) National Australia Bank Ltd (Defendant) Donald Robert Argus (Defendant) JUDGMENT OF : Einstein J COUNSEL : JJ Garnsey QC, R Alkadamani (Plaintiffs) JA Halley (Defendants) SOLICITORS : Withnell Hetherington (Plaintiffs) Freehills (Defendants) CATCHWORDS : Evidence Act (1995) - Evidence - Admissibility - Opinion evidence - Expert opinion - Section 79 - Specialised knowledge - Whether an opinion is wholly or substantially based on specialised knowledge based on training, study or experience LEGISLATION CITED : Evidence Act 1995 (NSW) CASES CITED : Idoport Pty Ltd v National Australia Bank Limited [2001] NSWSC 123 DECISION : Mr Martin held to have demonstrated by his training, study or experience that he has acquired specialised knowledge on which to base, whether wholly or substantially, his opinions: as to the degree of difficulty and effort necessary to customise Ausmaq from a systems/IT perspective to enable it to operate effectively in financial services markets in countries other than Australia and New Zealand (category D1.1); relating to design, specification, formulation and functionality of computer systems and software in relation to languages other than English and French (category D1.2); from an IT or systems perspective relating to the functionality of a Master Trust (category D3.1); relating to a comparison of the Ausmaq Service and a Master Trust related to his technical expertise at the level of business strategy and objectives (category D4.1); relating to the features of commercially available internet banking packages and the possibility of interfacing Ausmaq with these packages (category D5.1); from an IT or systems perspective in relation to a program designed to achieve a shift from a branch based retail banking service to a customer focused, globally integrated service including: ATM and EFTPOS services, Customer Response Centres including IVR and internet banking (category D6.1); as to a comparison between development times and required levels of design and programming skill for strict real-time process control systems and 4th Generation Programming Languages (category D9.1); in reply to Professor Thomas (paragraph 195); and as to how dividend reinvestment could be effected in the Ausmaq system. Leave reserved to the plaintiffs to supplement Mr Martin's evidence in relation to a number of matters relevant to questions of admissibility of certain opinions particularly going to whether the Ausmaq Service as it existed in the Ausmaq system at particular dates could have been enhanced, modified or added to, if necessary, so that the Bank Services had or would have had equivalent or similar functionality to the Ausmaq Service. INDEX Page Paragraph The Defendants' Template and forms of challenge……………….......................2 6 Opinions as to Customisation ("The offshore customisation issue")[Defendants category D1.1]......................3 11 Opinions on functionality comparisons……………………………....................9 21 Opinions on customisation &c. in relation to languages other than English and French [Defendants category D1.2]………...................9 22 Disparate objections…………………………………………………...................10 23 Relevant Training, Study or Experience………………………….......................10 24 Pont Data……………………………………………………………......................12 32 Telstra CSSC - the FINE project………………………………….. 23 70 General……………………………………………………………… 24 74 Returning to the defendants submissions – Off shore customisation-category D1.1…………………………… 28 75 Holding as to opinions on offshore customisation-category D1.1.. 30 76 Holding-Defendants category D1.2…………………………………....................35 88 Further examination of the functionality comparison issue………..................35 89 Specialised knowledge in relation to Master Fund-Defendants categories D3, D4……………………………………………………. 42 109 IT/Systems perspective…………………………………………….. 42 109 Market perspective…………………………………………………. 44 113 Specialised knowledge relating to Internet banking services -Defendants' category D5………………………………… 45 115 Opinions in relation to retail banking distribution channels D6… 47 121 Opinion relating to regulatory environment [D8/D8.1]………….. 49 127 Page Paragraph Opinion relation to strict real-time process control systems [D9/D9.1]……………………………………………………....................49 128 Opinion - Paragraph 195, Mr Martin's reply to Professor Thomas………………………………………………….. 49 129 Opinion - Defendants' category D11………………………………. 49 130 Opinions - Paragraphs 641, 646 of Martin's statement of 27 June 2000………………………………………….. 50 133 Breadth, Depth and Currency…………………………………….. 50 136 Schedule of Rulings - D91, D92, D93……………………………… 51 137 Further Submissions……………………………………………….. 51 138 APPENDICES Appendix "A" - Particular paragraphs of Mr Martin's statements of 10 July 2000 and 27 June 2000 [subject to rulings as to matters of form] reproduced as MFI D67. Appendix "B" - Mr Martin's statement of 21 February 2001 [subject to rulings as to form] Appendix "C" - Plaintiffs' Template MFI P107 Appendix "D" - Defendants' Template MFI D83 Appendix "E" - Court's rulings correlated to MFI D91 Appendix "F" - Court's rulings correlated to MFI D92 Appendix "G" - Court's rulings correlated to MFI D93 THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION - COMMERCIAL LIST EINSTEIN J 10 April 2001 50113/98 IDOPORT PTY LIMITED & ANOR v NATIONAL AUSTRALIA BANK LIMITED & 8 ORS 50026/99 IDOPORT PTY LIMITED & ANOR v DONALD ROBERT ARGUS 3991/00 IDOPORT PTY LIMITED ("JMG") v NATIONAL AUSTRALIA BANK JUDGMENT on challenge to expertise of Mr Martin 1 The plaintiffs seek to read in their respective cases, sixteen statements covering in excess of 1000 pages made by Mr Brian Martin. This judgment deals with the issue of challenges to the expertise of Mr Martin. 2 In Idoport Pty Ltd v National Australia Bank Limited [2001] NSWSC 123 (judgment delivered on 21 March 2001), the court dealt with the relevant principles applicable in relation to the admissibility of expert evidence sought to be adduced from Mr Maconochie pursuant to section 79 of the Evidence Act 1995. It is not necessary to revisit that examination of those principles. 3 With some differences of approach the parties have generally dealt with the question of the expertise of Mr Martin in a similar manner to the manner in which they approached that question as related to the expertise of Mr Maconochie. 4 The evidence identifying Mr Martin's claimed relevant training, study or experience admitted into evidence for the purpose of the decision is to be found in (a) Particular paragraphs of Mr Martin's statements of 10 July 2000 and 27 June 2000 [subject to rulings as to matters of form reproduced as MFI D67 appended to this judgment as Appendix "A" and to be regarded as part of the Judgment]. (b) Mr Martin's statement of 21 February 2001 [subject to rulings as to form]. The statement is reproduced as Appendix "B" as part of this judgment. (c) Mr Martin's statement of 3 April 2001. (d) His additional oral evidence. [see transcript p 6254 and following]. 5 As before both parties produced templates in an attempt to crystallise the issues. The plaintiffs template was marked for identification as MFI P107. The defendants template was marked for identification as MFI D83. The templates are respectively reproduced as Appendices "C" and "D" to this judgment. The Defendants' Template and forms of challenge 6 On this occasion the aim of the defendants template has not been to seek to capture each of the opinions which the witness has expressed and to allocate those to a particular category of specialised knowledge. The defendants in relation to Mr Martin, conceded that "on any view, he has very detailed technical knowledge in relation to certain matters" [transcript p 7065] and for that reason put forward a template which only dealt with those opinions sought to be expressed by Mr Martin in respect of which opinions the defendants assert that he had not demonstrated the requisite specialised knowledge based on his training, study or experience. 7 This assertion that Mr Martin lacked specialised knowledge represents the first form of challenge to sections of the statement. The defendants address in respect of this challenge took the court carefully through the defendants template and is also summarised in the defendants schedule MFI D84 (iv). 8 The second form of challenge was the assertion that, admitting for the purpose of the application that Mr Martin might have specialised knowledge, the defendants took objection to opinions on the basis that the opinions did not disclose the relevant factual basis upon which they were expressed or that there are was no sufficient reasoning process. In effect this form of challenge was a combination of what had been referred to as the C1 to C5 objections as dealt with in relation to the challenge to Mr Maconochie's expertise. The defendants address in respect of this form of challenge took the court through the matters referred to in the defendants schedule MFI D84 (ii). 9 The third form of challenge related to Mr Martin's attempts to express opinions in his replies to certain statements, principally the statements of Professor Thomas and Mr Hodgkinson - generally summarised in MFI D84 (iii). 10 Subsequent templates expanded the plaintiffs' attempts to press opinions as Section 79 opinions and in some instances led to agreement on particular issues. [See MFI P128, P129, P129A, D91, D92, D93] Opinions as to Customisation ("The offshore customisation issue")[Defendants category D1.1] 11 The defendants described as their "most significant" set of objections those taken by reference to category D1 on the defendants template The submission was that a clear line required to be drawn between on the one hand, such specialised knowledge as Mr Martin may be held to have acquired by his training, study or experience in relation to Australia and New Zealand and on the other hand, his suggested lack of such specialised knowledge in relation to other countries. It may be convenient to refer to this issue as "The offshore customisation issue" [regarding New Zealand as 'onshore' for this purpose]. In short the submission as I understood it was that Mr Martin had not been shown to have acquired specialised knowledge in relation to: "the development, operation, design, specification, formulation, functionality, writing and composition of software code for computer systems and software in the financial services industry, particularly in relation to financial products and e-commerce markets, trading and financial systems in countries other than Australia and New Zealand " [Defendants' template first column - D1] 12 The approach taken by the defendants in terms of submissions was at least initially to generally withhold any concession as to the identification of such specialised knowledge as Mr Martin had in fact been shown, by his training, study or experience, to have acquired. Some concessions appear to have later been forthcoming although it seems to me that they have remained in extremely limited terms. One might have thought in the circumstances that the Court could for example, infer from the above extract from the defendants' template reference to the first column on page 1 [D1], that the defendants were content to concede that Mr Martin had been found to have acquired specialised knowledge in relation to the development, operation, design, specification, formulation, functionality, writing and composition of software code for computer systems in the financial services industry, particularly in relation to financial products and e-commerce markets, trading and financial systems in Australia and New Zealand. That had been my understanding of Mr Halley's submissions as initially advanced. But as Mr Halley later confirmed during the plaintiffs' address on 26 March 2001, this was not a concession which the defendants were in fact prepared to make. At that time the sole concession appeared to be that recorded at transcript 7151. This is where the defendants indicated that they did not challenge the proposition that Mr Martin has acquired specialised knowledge of and relating to the development and operation of computer systems and software for and relating to: · Foreign exchange dealing services · Networks · Direct Debit Files · Magnetic stripe cards 13 The defendants' position appears to have moved again in final written submissions in reply of 2 April 2001 [MFI D95]. It appears from the written submissions that: (i) The defendants perceive a flaw in the plaintiffs submission that that Mr Martin had been found to have acquired specialised knowledge in relation to the development, operation, design for specification, formulation, functionality, writing and composition of software code for computer systems in the financial services industry, particularly in relation to financial products and e-commerce markets, trading and financial systems in Australia and New Zealand, in that the subject matter of the suggested specialised knowledge is said to be expressed at such a level of generality that it provides little assistance in determining whether Mr Martin has in fact sufficient specialised knowledge based on training, or experience to enable him to express particular opinions. (ii) The defendants' submissions do not proceed on the basis that Mr Martin lacks expertise and experience in interfacing computer systems [Submissions paragraph 5 ] Rather the defendants now accept that Mr Martin has shown experience in interfacing which equips him with specialised knowledge on the basis of which he is entitled to express opinions on issues which may arise in relation to the interfacing of computer systems. [Paragraph 13]. (iii) The defendants accept that Mr Martin has experience in information technology, particularly at the level of writing code [Submissions paragraph 10] (iv) The defendants accept that Mr Martin has shown certain experiential knowledge in relation to superannuation companies, life assurance companies, mutual fund companies and the banking industry in Australia and New Zealand [Submissions paragraph 10 reproduced below] (v) The defendants accept that Mr Martin does have certain customisation experience [Submissions paragraph 13] (vi) The defendants accept that Mr Martin has demonstrated familiarity with equities trading derived from his work at Market Advantage over a particular period and has also demonstrated familiarity with the Star Systems Shares software - the areas of demonstrated familiarity are accepted as having a relevance to his ability to express opinions about the National Automated Margin Lending Service (vii) The defendants accept that Mr Martin has specialised knowledge of the systems used to provide the Ausmaq Service which is principally of an experiential character. 14 In those circumstances it falls to the court to hand down its holdings in regard to the demonstrated specialised knowledge in relation to all areas remaining in contention. 15 The short proposition for which the defendants contend is that Mr Martin seeks to express opinions relating to the degree of difficulty and effort necessary to customise Ausmaq from a systems/IT perspective to enable it to operate effectively in financial services markets in countries otherwise than Australia and New Zealand. The submission is that in general terms Mr Martin seeks to give opinions that Ausmaq customisation in offshore markets would be a relatively straightforward process, whereas it is put that he has no training, study or experience sufficient to equip him with the specialised knowledge on which wholly or even substantially to be in a position to express such opinions. The submission at least initially was that Mr Martin is shown to fall dramatically short in his training, study or experience because he cannot show that he worked in customising and designing software or in development of design or in relevant interfacing with local participants in each of the markets in respect of which he seeks to express opinions to the effect that it would not be a particularly difficult task to customise Ausmaq to service such markets. 16 As later refined in final submissions the proposition was that Mr Martin lacked contemporaneous exposure to and familiarity with the information technology systems used by the stock market, stockbroking firms, superannuation companies, life assurance companies, mutual fund companies and the banking industry, in countries other than Australia and New Zealand, and lacked exposure to and familiarity with the investigation of the capabilities, these objectives and the features of the types of computer and information technology systems that are in use and popular in the offshore financial industry. [Written submissions paragraph 6] The submission was that in the absence of such knowledge, Mr Martin would not be aware of the particular products available in each market, the specific interfaces to systems operated by key participants, including regulator is in each offshore financial services industry that would need to be established, and other related system software issues. [Written submissions paragraph 7]. Hence the submission was that on no view could some form of unspecified and imprecise exposure to offshore technology systems in the course of Mr Martin writing price and volume charting displays, sometime in the period between 1986 and 1992, equip Mr Martin with sufficient expertise to enable him to comment on the degree of difficulty and effort necessary to customise Ausmaq from a system/IT perspective for foreign markets during the period between 1997 and the present date. [Written submissions paragraph 8]. I interpolate to note that these submissions drastically understate the real expanse and depth of Mr Martin's overall experience. 17 The defendants' proposition is that in order to satisfy the section 79 criteria and to be entitled to express opinions as to whether or not a customisation, (for example in the United Kingdom or in Italy or in Hong Kong) was going to be difficult or simple or something in-between, the witness would at least have to show that he or she had some material exposure to that market. To further buttress this submission, Mr Halley submitted as I understood him, that the court could and should take judicial notice of matters such as the speed with which software becomes outdated and changes, the fact that computers tend to have to be turned over every few years, the continuing differences in relevant speeds, the differences in facilities available in different countries, the differing approaches to use of the Internet and the many different interfaces which are available around the world. 18 The submission was that there would be no difficulty in a person who is shown to be an expert in software and who had in fact dealt with IT issues pertaining to offshore financial services markets being given particular assumptions as to what would be required in relation to a particular market and then expressing relevant opinions. The submission was that Mr Martin had not approached the matter in this way. 19 Mr Halley submitted as follows: "the customisation issue which the defendants seek to agitate is not that given unlimited resources and time one could not take Ausmaq out of Australia and put it into another market. Clearly, if one has enough time and one has enough resources, one can nearly do anything with software, but the issue is how long it would take and therefore the degree of difficulty and complexity is crucial… So the degree of difficulty in customisation is a central issue" [transcript p 7080]. 20 Some examples taken from Mr Martin's statements point up perhaps more clearly why these submissions are pressed by the defendants: (1) In paragraph 30 of Mr Martin's statement of 7 February 2001 he seeks to refer to a particular paragraph of Professor Thomas' statement. Mr Martin then seeks to give the following evidence: "As noted above, the modifications for New Zealand localisation were done in a manner which simplified future localisation to additional countries . While not solving every single issue, the next country added would gain from generic modifications and parameterisations already done in the New Zealand case . Further, the change to use a Windows GUI for the dealer service would simplify future country specific customisation of the most visible part of the system from the user's viewpoint…." [emphasis added] (2) In paragraph 187 of the same statement Mr Martin seeks to refer to the apparent fact that following the implementation of Release 1.1, including the New Zealand customisation, Ausmaq supported a mechanism for automatically selecting the appropriate national variant module to be dynamically called from the core system. This allowed for most national customisations to be smoothly integrated . [emphasis added] (3) In paragraph 191 of the same statement Mr Martin seeks to give evidence in response to a paragraph of Professor Thomas' statement. Mr Martin seeks to give the following evidence: "Ausmaq had already interfaced with depositees, security custodians, regulators, tax departments, printing bureaus, banking deposit/withdrawal processing, faxing systems, signature image storage/display systems, interactive voice response systems, third party software products in Australia by mid 1995, and in New Zealand by mid 1997. Extending this to more parties in more countries was not a novel or difficult concept". (4) In paragraph 196 of the same statement Mr Martin seeks to give evidence that unusual products can always be implemented as a new market style in the trading engine, without fundamentally affecting the broader system . [emphasis added] (5) In paragraph 98 of his statement of 8 February 2001 Mr Martin seeks to give evidence that: "… it is impossible to anticipate every possible idiosyncrasy for every foreign market. However, many of the variations for the potential foreign markets had been anticipated and provided for, and there was a general flexibility to accommodate future enhancements for further adaptations " [emphasis added] (6) In paragraph 45 of his statement in reply of 27 June 2000 Mr Martin seeks to give evidence that: "…as at November 1996 the Ausmaq system could facilitate trading in any type of security or product. The limitations on what could be bought or sold on the Ausmaq system were generally not technical limitations in the Ausmaq system. The limitations were not related to Ausmaq's programs, software, operating system or hardware. The limitations were legal and/or regulatory and commercial" Opinions on functionality comparisons 21 The second major issue which the defendants put as a matter of substance and addressed upon went to the extent to which Mr Martin purports to express opinions on functionality comparisons between Ausmaq and the Bank services. Here the defendants submitted that there was no material training, study or experience of Mr Martin shown to have equipped him with the necessary specialised knowledge on which wholly or even substantially to be in a position to express any such opinions Opinions on customisation &c. in relation to languages other than English and French [Defendants category D1.2] 22 The defendants further contend that Mr Martin is not competent to express expert opinions relating to design, specification, formulation and functionality of computer systems and software in relation to languages other than English and French. [D1.2 opinions] Disparate objections 23 Other disparate objections as pressed are dealt with below. Relevant Training, Study or Experience 24 The convenient course is to briefly refer to Mr Martin's training, study or experience. It is set out on an overview basis in his CV annexure "A" to his first statement. [reproduced as part of MFI D67] [the CV was allowed over objection] [Transcript page 6387] This overview is not intended to replace or to limit his evidence before the Court on the issue of his expertise. 25 The defendants further sought in MFI D87 to thumbnail sketch the evidence of Mr Martin's training, study and experience corresponding to the areas in which the defendants allege that he lacked training, study or experience sufficient to ground the requisite specialised knowledge for the purposes of section 79. The document is of some, although limited, assistance as it is far from comprehensive. 26 Mr Martin has a B.Sc in 1981 from the University of New South Wales with majors in computer science and in mathematics and some electrical engineering subjects. 27 In 1996 he commenced studying some post graduate subjects at Deakin University by correspondence. In a subject "EDI concepts, Standards and Technology" ('EDI' denoting 'Electronic Data Interchange') he was awarded a High Distinction. The subject covered the emerging use of EDI standards and the EDIFACT standard in the exchange of information between businesses. The subjects covered included messaging standards, security, integrity and encryption. 28 In my view his evidence clearly establishes extensive training, study and experience in relation to computer programming concerning financial operations and transactions including programming and consulting concerning superannuation, life assurance, general insurance, stock market information systems, foreign exchange settlement, real-time trading systems and news data bases. [It is convenient to produce an internal dictionary to identify certain of the areas of demonstrated training, study and experience. "E" numbers should suffice. Some overlap appears to be unavoidable as the areas often merge in to one another. The shorthand reference to this is area "E1"]. That training, study and experience also includes programming and consulting concerning natural language processing, heuristic classification algorithms, graphic drivers, communications protocols, terminal emulators, encryption, biophysics, text retrieval and electronics ["E2"]. 29 It is generally unnecessary to repeat the specifics of the very detailed outline of Mr Martin's training, study and experience in the development, operation, design specification, formulation, functionality, writing and composition of software code for computer systems and software in the financial services industry, particularly as obtaining in relation to financial products and e-commerce markets, trading and financial systems ["E3"]. That background is set out in the statements to which I have referred. At the same time the extent to which Mr Martin wrote or developed or was involved in the writing and development of the trading systems and other critical sections of the Ausmaq prototype and in relation to the various versions of Ausmaq is apparently common ground. He has very clearly demonstrated a detailed familiarity with information technology systems used in the Australian financial industry being familiar with the main information technology systems used by the stock market, stockbroking firms, superannuation companies, life assurance companies and the banking industry ["E4"]. He has regularly had at various times to investigate the capabilities, design objectives and features of the types of computer and information technology systems in use in the Australian financial industry. ["E5"] 30 His work over the years has included participation in the reorganisation of the structure of the Ausmaq hard disk and making sundry system modifications and performing modifications or writing programs or writing functional specifications related to the Ausmaq Service. He has also been involved in the detailed customisation of Ausmaq for the purpose of the New Zealand market roll out including development and testing. He was involved in the co-ordination of the re-integration of particular changes and additions made by outside contractors for the Ausmaq New Zealand project with the existing program modules at Ausmaq and merged those enhancements back into the master version of Ausmaq's system source. His evidence establishes that over the years he was heavily involved at almost every level with many of the projects which were important aspects of the systems development of Ausmaq. These included the Windows GUI project and the AMI project. He has also demonstrated study and experience relating to the configuration of the Ausmaq system trading engine. He has been integrally involved with and has specialised knowledge in relation to the configuration of the Ausmaq program insofar as it processes and effects a transaction. [The areas described in this paragraph will be referred to as "E6"]. 31 The fact that the Ausmaq system had a number of market styles within the configuration of the trading engine ["E7"] is a matter in respect of which he is shown by reason of his training, study and experience to be in a position to have acquired specialised knowledge and upon the basis of which, whether wholly or substantially, he is able to express opinions. This is an important matter because apparently the evidence is likely to be that at the time of contract only one of these market styles [market style 4] was in use in terms of the suggested other capacities of the Ausmaq system as at November 1996. The issue will be the subject of evidence on the hearing. The extent to which and manner by which the Ausmaq system could facilitate trading in other types of security or product are clearly matters well within the domain of his training, study or experience and in respect of which he is, by that training, study or experience, shown to have acquired specialised knowledge upon the basis, whether wholly or substantially, of which he is shown to be in a position to be able to express opinions. Pont Data 32 It is convenient to now set out a short summary of Mr Martin's evidence in relation to his employment between 1986 and 1992 with Pont Data . 33 Prior to about mid 1987, Pont Data traded in Australia as Bridge Data Australia or a similar name. Pont Data was known as a "quote vendor", selling security price quotes and related information (such as dividends, corporate actions, news items, charts, price histories). Pont Data obtained the information in raw form from various stock exchanges and then validated, stored, analysed, cross-referenced, consolidated, extrapolated from and summarised the information which was then offered on a commercial basis to customers. The service allowed customers to view the stored and processed information in a range of styles and formats. 34 During the period that Mr Martin worked at Pont Data, the company was in competition with other quote vendors such as AAP-Reuters and Bloombergs. During this time, the business extensively redeveloped their customer systems software, and expanded to have offices in 22 counties in which clients were supported. The clients and the Pont Data offices were connected by a private worldwide computer network served by 3 major processing centres (in Australia, UK and the USA). Each processing centre was interconnected with the other two, and each maintained redundant copies (similar to a back-up copy of the database) of the others' databases. The worldwide system supported fault recovery by allowing, for example, customers in Europe, who were normally serviced by the UK centre, to be temporarily serviced by either Australia or USA in the event of a problem at the UK centre. Mr Martin was therefore experienced in Information Technology systems with worldwide distributed architectures undertaking processing functions globally across a number of differing jurisdictions. ["E8"] 35 The Pont Data systems supported all types of securities, from all exchanges in those 22 countries. Mr Martin recalls that some of the countries supported included: Australia, New Zealand, Singapore, Hong Kong, Japan, UK, France, Germany, Switzerland, Italy, Finland, Sweden, USA and Canada. He recalls that negotiations were underway in Hungary, Argentina and Brazil. 36 In paragraphs 6-10 of Mr Martin's statement of 21 February 2001, he describes the Australian system by way of example: "In Australia for example, data feeds were processed from each of the 5 major Australian Stock Exchanges, prior to formation of the ASX. This included the exchanges of Sydney, Melbourne, Perth, Adelaide, and Brisbane. These prices would be displayed either separately or in a consolidated format. Also displayed were arbitrage opportunities. "Arbitrage" is the practice of buying a security and then (almost immediately) selling the same security on a different exchange, at a different price. Later when these 5 exchanges merged into the ASX in its current form, a single data feed direct from the ASX was processed. Data feeds were also processed from the Sydney Futures Exchange, in respect of both the day session and the overnight SYCOM session. Data feeds from exchanges often had multiple strands, or composite information. The data which was processed included automated feeds of price quotes, trades completed, volumes of trades, price highs and price lows, corporate actions (ie. capital reconstructions, rights issues, takeovers), dividends paid, company splits, bonus issues, price corrections. In addition to trading data, data feeds of text articles were processed, such as from AAP-Reuters and the Australian Financial Review. These news items were received, parsed, stored and indexed in a news database. Clients could then search the news database either by reference to a company or with a free text search to locate and display stories of interest to them." 37 The system made information available for display on ordinary equity shares, rights, options on shares, SPI contracts, foreign exchange rates, commodity prices, commodity futures, foreign exchange futures, treasury bonds, interest futures and index futures. The system also stored and displayed information on underlying measures such as a range of interest rates and market indexes (All Ordinaries, top 20, top 100, All Industrial, All Mining, and others for Australia, and correspondingly for overseas markets the Hang Seng index, the Straits Times index, the Nikkei index, the Dow Jones index, and so forth). 38 The system supported foreign exchange rates and included the full set of cross rates between each of about a dozen major currencies (including that of the US, UK, Australia, Germany, Japan, France and Switzerland). The rate of minor currencies was quoted against each of the major currencies, but not against each of the other minor currencies. 39 Mr Martin acquired knowledge in relation to foreign exchanges as a result of his experience at Pont Data. ["E9"] He describes this in paragraphs 12A-18 of his statement of 21 February 2001: "These rates referred to in the preceding paragraph are usually referred to as the "spot" rates. By spot rates I mean the immediate buy and sell rates. The "Spot" rate is the nominal exchange rate available as at the time of display, on the spot and available for an immediate trade. It may be possible to obtain a better rate for a large transaction, depending on negotiations, but the "spot" rate is the nominal rate. Conversely, an ordinary person cashing travellers cheques or foreign cash over the counter at a bank or foreign exchange bureau will not obtain such a good rate, due to, inter alia, the overheads involved and (generally) the small size of the transaction. The "spot" rates quoted on large, commercial quote vendor systems are applicable to institutional trading in large transactions, and are slightly different in value to the rates quoted by a bank for buying and selling travellers cheques or foreign cash. In addition to the "spot" rates, the corresponding foreign currency future rates were also supported, on the Pont Data system for a range of future time intervals. In the terminology often used by foreign currency market dealers and others the words "foreign exchange" are often abbreviated to "forex". I shall also use that abbreviation in this statement. "Forward rates" are in effect futures in currency markets and currency market transactions. Forward rates are quoted as the rate at which a party is willing to enter into a contract as at the time of display, for settlement at some point in the future, such as 1 day, 1 week, 1 month or 6 months in the future and so forth. The forward rate for 1 day forward is often called the "overnight" rate. Foreign exchange futures are one means by which companies involved in large importing or exporting transactions can "hedge" against the risk of currency fluctuations. For example a company importing American hospital X-ray equipment worth USD $1 million, which will take 1 month to arrive, has several choices : (a) pay US dollars today, but risk "losing" money if the AUD rises during the month; (b) arrange to pay US dollars on delivery but risk "losing" money if the AUD falls during the month; (c) buy US dollars forward 1 month, at a rate agreed today, to allow paying in US dollars to the supplier on delivery, at a rate known in advance. There are naturally other options, including combinations of (a) and (c) or (b) and (c). The option which is preferred depends on interest rates applicable to borrowings, expected currency movements, and the cash flow of the company. "Synthetic" rates refers to an artificially calculated rate between two (usually minor) currencies, based on multiple conversions using some major currency (usually USD) as an intermediate step. For example, a synthetic rate could be calculated between the Malaysian Ringgit and the Swedish Kroner, by reference to the known rates between the Ringgit and the US Dollar, and then the US Dollar and the Kroner. Of course, any actual transaction between these two minor currencies is subject to negotiation, but such a synthetic rate gives a yardstick for the appropriate theoretical value. Further, too great a departure from the "synthetic" rate gives rise to arbitrage opportunities." 40 The Pont Data systems included systems for professional traders as well as private investors. Mr Martin primarily worked on the Market Advantage system, a dialup videotex information system which was customised to the needs of private investors. The system emphasised ease of use and clarity of presentation, however the information displayed was derived from the same databases as the information displayed to the professional traders. The major difference was that the more technical information was usually on a second screen, rather than being amalgamated into the main screen, due to limitations of space. 41 The Pont Data system had to cope with international variations in price quoting and numeric formatting. Mr Martin gives an example of this in paragraph 20 of his statement of 21 February 2001: "For example, in France and parts of Europe, a space is used in numbers where we in Australia would use a comma, eg. "1 000 000" in France for one million, rather than "1,000,000" as in Australia. Further, in France and parts of Europe, a comma is used as the decimal point, that is "1,5" for "one and a half" instead of "1.5". There are many variations in this area. For example Switzerland is different again to France in this regard. The system therefore had to be able to display information, such as price or volume information, in a format which was customised to reflect the attributes of the information (such as the relevant currency symbol) as well as reflect the norms of the particular users (such as whether a comma or a period sign was used to donate the decimal point). 42 He describes other international variations with which he dealt or was involved in paragraphs 21-24: "In USA, on the larger exchanges (New York, Chicago), stock prices are not quoted in dollars and cents (even though it is a decimalised currency). Instead, stock prices are quoted in dollars and fractions of a dollar, for example "$ 51 3/4" rather than "$51.75". This practice extends to halves, quarters, and eighths of the dollar. On the other hand the NASDAQ exchange, also in USA, quotes prices in dollars and cents. Canada, as I recall in the time I was at Pont Data, quoted prices of major stocks (ie. whose price was above say $5 Canadian) using the dollar and fraction approach, similar to USA, but simultaneously quoted prices of minor stocks using the dollar and cents approach. Foreign exchange rates are normally quoted as plain decimals, and are stated to a very high precision, typically 4 decimal places at least. This is because the amounts of money being converted are typically in the equivalent of millions of Australian dollars or larger, and small differences (or inaccuracies) in the conversion rate can translate into a large sum. The conversion rates vary from thousands of units to one unit for currencies such as the Italian Lira relative to say Australian or US dollars, down to less than one for currencies such as the Pound Sterling, relative say to Australian or US dollars. The Pont Data systems, including the Market Advantage system (on which I predominantly worked), were capable of displaying any applicable security with any relevant display style or format. That is, every program, whether for charting graphs of prices and volumes, or displaying tables of numeric prices and volumes, or downloading data, had to support the full range of security types, from the full range of countries, and display information using the notation system appropriate to both the user's country and the security's country." 43 In the Market Advantage system, Mr Martin personally wrote all of the programs which allowed for price and volume charting displays, including charts for intraday, daily, weekly and monthly price data. He also wrote all of the programs which allowed for the tabular displays of price and volume history, for daily, weekly and monthly time periods. 44 The Market Advantage videotex system had 2000 paying subscribers in Australia alone, and hit peaks of 64 simultaneous users logged on. These figures are not inclusive of the users of the more comprehensive system aimed at professional traders, nor of the users of the Market Advantage videotex system in the UK and France. 45 The underlying database systems from which the Market Advantage system obtained its data ran on a distributed network of about 25 hosts in Sydney, plus further multiple hosts in UK and US, and used a client/server architecture. The operating system was mainly VMS, with some RSX, and a small amount of Unix, as well as custom operating systems developed in-house. 46 Mr Martin wrote the programs for the receipt, compiling, storage and display of the news articles database for AAP news story feeds for the Market Advantage system. This included a full text retrieval, searching and indexing system of his own design. He also wrote the program which received the data feed from AAP and extracted the news stories from the message protocol. 47 Mr Martin also wrote a videotex terminal emulator which was sold to Market Advantage customers. This terminal emulator supported double width displays compared to normal videotex screens. It also supported automated downloading of stock prices including in foreign currencies for use by customers in their own spreadsheets or on their own market analysis software. 48 Mr Martin introduced a means of system testing wherein a modified terminal emulator was simultaneously logged in to two sessions, one using the old software version and one using the new software version. This allowed any introduced discrepancies to be highlighted automatically as the same commands were sent to both software versions and discrepancies could therefore be measured and/or observed. 49 Mr Martin explained in his oral evidence that he had written every line of the terminal emulator program from beginning to end. Along the way, it occurred to him that much time could be saved in systems testing and comparison of whether a modification had inadvertently introduced a problem somewhere else by arranging for the terminal emulator to maintain two sessions simultaneously. It was logged into two different computers, one with the old version, one with the new, and could display those side by side. He modified the program to do this: (T6261/01-T6262/14). 50 When Mr Martin said he "introduced a means of testing", he meant that he went further than writing and making enhancements to the program. He conceived of this means of testing as a means of increasing the rigour of testing and saving time during testing: (T6261/01-T6262/14). 51 By "modification", Mr Martin explains that he changed the program source code so as to maintain dual contexts of what should be on screen and what the user was typing, so that the same instructions could be sent to both systems and have it display the responses back from the two systems, highlighting in red where the responses were different. The program had no innate way of knowing if the answer was correct or wrong, but it could highlight when the new system was getting a different answer to the old and leave it up to the operator then to decide what needed to be done: (T6261/01-T6262/14). 52 The Market Advantage system was interfaced with two other systems to allow users of those systems to access it without needing to separately dial into it. "Interfaced" means that each of these other systems was interconnected via computer networks to the Market Advantage system to enable users of those other systems to have available an additional menu choice, which allowed the users to enter all normal Market Advantage commands or selections and to display all normal Market Advantage screens and information, in addition to those services already available to them on their existing systems. Mr Martin interfaced Market Advantage to the Discovery 40 and Discovery 80 service operated by Telstra, and to the Info-One service operated by, amongst others (at various times), Info-One (previously known as CLIRS) which was at the time owned by Westpac Bank. The work included modifying the screen formatting software and the terminal driver software to support both VT100 terminals and Videotex terminals, in both 40 column and 80 column modes. The work also included modifying the chart generation to selectively use either colour graphics modes (for Videotex terminals) or monochrome character mode (for VT100 terminals). This allowed users of Discovery 40 to access Market Advantage with full colour graphics in 40 columns, and users of Info-One to access Market Advantage in monochrome in 80 columns. Users accessing Market Advantage directly could choose either 40 or 80 columns, in full colour graphics. The computer systems of Discovery 40 were interconnected to those of Market Advantage via the X25 network protocol. By "network protocol", he means an industry standard for network communication. The computer systems of Info-One were interconnected to those of Market Advantage via an SNA gateway protocol converter. 53 Mr Martin interfaced Market Advantage with one of the first Interactive Voice Response (IVR) systems in Australia, known as "Audiotex", which allowed people to dialup the Audiotex phone number, and then have stock prices and major foreign exchange rates read out to them over the phone by a computerised voice system. The price data was supplied from Market Advantage using a client/server interface. The work involved included specification of a simple message based protocol, and development of a server program to process incoming requests and to obtain the requested prices from the database and pass that price data to the IVR system at Audiotex. 54 When Market Advantage was modified for use in the UK and France, Mr Martin trained the UK staff and coordinated their customisation and porting of the software. The system was then available in the UK to all users of Prestel (operated by British Telecom) and in France to all users of Minitel (operated by the French telephony company PTT). The customisation work included the tailoring of system messages to the local language, tailoring of numeric displays, changes to the command options and changes related to X25 network interfacing. 55 At transcript 6336 Mr Martin gave the following evidence: "Q. In relation to those data entry fields and validation rules concerning Forex orders, what knowledge did you have in relation to what matters, for instance either at a design level or program level or a code level, and where did you obtain that knowledge from? A. Well, again, partly from working at Market Advantage and Pont Data for six years. You become just immersed in the whole general world of all idiosyncracies of the various security vehicles and the stock exchanges and the differing practices and terminology. In the end in designing data entry screens, essentially once you progress from being a trainee programmer and get beyond being able to enter somebody's name or address, in essence all data fields are the same, they are either numeric or prices or dates or names. At that level any data entry for any program is fairly much the same thing. What separates one application more from the other is more when you get into issues more tightly related to the particular application, such as with foreign exchange, for example, if a customer proposes to buy US dollars for $3 Australian each, obviously the system should have some cross-checks in it to show that something closer to $2 might be more practical." 56 The Market advantage system included the capabilities to retrieve and display the foreign exchange rates for all major currencies, and many minor ones, including spot rates, forward rates, some synthetic rates, and to display these rates as numbers, tables of numbers, or charts showing the change in value over a span of time ranging from intraday (within a single day), through to daily, weekly, and monthly charts spanning 10 years of historical data. Mr Martin personally wrote those charting programs and those tabular displays of price data, and supervised the work of other programmers who wrote other parts of the system. Foreign exchange rates could be displayed in all relevant parts of the system. 57 One of the services offered to customers of the Market Advantage system was the Pont Data Telebroking system which was an order routing system collecting offers to buy or sell shares and routing them to brokers for execution at the ASX. Mr Martin wrote the programs for that telebroking system. 58 As a result of working at Pont Data for six years, Mr Martin became familiar with and experienced in the processing, supply and systems design of professional securities information systems, including experience with the special terminology of foreign exchange rates, the manner of operations of currency markets and equities markets and their requirements. ["E10"] 59 In his oral evidence, Mr Martin explains that he is attempting to summarise six years of his experience at Pont Data as described by him in the relevant paragraphs in his statement of 21 February 2001: (T6263/03-T6265/14). 60 In mentioning his experience in "professional securities information systems", Mr Martin is referring to his experience in the two different systems of Pont Data (one for professional trainers and one for private investors). Mr Martin was in charge of the latter system. There was a lot of overlap between these two systems, so that the system that was aimed at primarily private investors actually looked up the same information in the same databases as the professional-oriented system. Each used aspects of the other where convenient or appropriate. During Mr Martin's time at Pont Data, he personally wrote quite a lot of things, particularly in the smaller of the two systems and his opinion was also often sought on broader matters where he was involved in discussions with people designing the other system: (T6263/03-T6265/14). 61 By "special terminology of foreign exchange rates, the manner of operations of currency markets and equities markets and their requirements" Mr Martin is attempting to demonstrate a familiarity with some of the idiosyncrasies of differing exchanges around the world, different practises, different terminology and claims that this shows a familiarity with that area: (T6263/03-T6265/14). 62 Mr Martin also gained experience in the calculation of theoretical value of options (that is, of "put" and "get" options on equities) based on the Black-Scholes method which is one of industry standard methods. ["E11"] 63 In his oral evidence, Mr Martin explained that toward the end of his time at Pont Data, he became interested in these calculations of the theoretical get and put option prices on equities. While he hadn't written the code that calculated that in the system as it was used, one of the things going on was a move from some older computer systems to newer ones running on VAX computers. These computers from Digital Equipment Corporation had some new instructions which Mr Martin felt may be beneficial to speeding up the calculations of this option pricing: (T6265/21-T6267/57). 64 In doing this, Mr Martin wanted to see if he could improve on the speed of their calculation compared to the existing method. It was promising, however it was wasn't put into the production version in the time Mr Martin was at Pont Data: (T6265/21-T6267/57). 65 His evidence was that there are various methods of calculating option pricing, of which Black and Scholes is one. A key part of the calculations involved in the Black-Scholes method involves some polynomial expansions, the point being that the VAX computers had some special instructions which at the assembly language level, could streamline the calculation of polynomials, compared to most prior machines where the same calculations would have had to be spelled out in a longer manner: (T6265/21-T6267/57). 66 His evidence was that there are entire textbooks written about the Black-Scholes method (such as one called "Options Pricing"), but the point is that it's a method of calculating theoretically what a fair price would be on a get or a put option for a certain equity at some date in the future. Whether in fact it actually trades at that price or not is on his evidence, another matter, as dictated by supply and demand. His evidence was that like most theoretical methods, there are some shortcomings of it and people will argue the pros and cons of other methods, but at least it's an accepted yardstick. 67 In giving evidence that the Black-Scholes method is one of "several industry standard methods" Mr Martin means the finance industry or the stock market trading industry. His evidence was that he knows this because during his six years at Pont Data, their system supported initially the Black-Scholes method and later another method called the binomial method. On his evidence it is a standard method and almost any company in the finance industry uses it. Other methods do however exist: (T6265/21-T6267/57). 68 Mr Martin also gained experience in the development of a customer portfolio management system, which tracked the share holdings of an investor, the change in value over time, and allowed comparisons between multiple portfolios and their valuations. For the customer portfolio management system within Market Advantage, Mr Martin designed the database layout, and implemented the database using RMS indexing files, and wrote the C interfaces to RMS indexed files which formed the foundation of the portfolio management system. He either wrote or supervised the writing of all other parts of that portfolio management system. ["E12"] 69 Mr Martin refers to the following pages of exhibit "BM-1": (a) Pages 1 - 8 are a copy of a brochure containing information about the Market Advantage system, and as it was formerly known "Bridge Advantage". On page 3, a photograph of a system screen shows a chart of the price of US dollar futures dated "13FEB87" (13 February, 1987). Mr Martin wrote the program which displayed that foreign exchange futures price data in graphical form as a price chart. (b) Page 10 is a copy of a full page advertisement on the back cover of a magazine named "Telecom DISCOVERY" issue no 2, dated Autumn 1990. The advertisement is for Market Advantage, and shows some price charts which were written by Mr Martin. (c) Pages 11-18 is a copy of a brochure for "Pont Advantage" which was the name used in the UK and Europe for their version of Market Advantage. Prices are generally shown in "GBP" (Great Britain Pounds or pounds Sterling). Page 16 is a copy of a photo of a screen showing the quote for the fledgling "Eurodollar" futures trading on the LIFFE exchange in about October 1987. Telstra CSSC - the FINE project 70 From 1992 to 1993, Mr Martin worked as a contractor to Computer People from Telstra's premises. He provided his services to a section of Telstra referred to as CSSC (the Customised Software Solutions Centre). At CSSC, Mr Martin worked on the FINE system which supported foreign exchange settlement operations. 71 The target customer base of the system were large companies with material exposure to currency fluctuations. 72 Mr Martin read a brochure in relation to the FINE system. A photocopy of this brochure is attached as page 19 of exhibit BM1 to Mr Martin's statement of 21 February 2001. He received this brochure when he commenced work. 73 The FINE system allowed companies to trade in forex contracts, either directly with each other, or via intermediaries. Mr Martin was aware of this from the specifications of the system, the proposals themselves, the source code, the testing that was done and the documentation kept in the library at the site. Reading these materials was a necessary part of learning the system. ["E13"] (Mr Martin's Statement dated 21 February 2001, paragraph 42)(T6272/50-T6273/12) General 74 Mr Martin dealt with a number of disparate issues in terms of his training, study and experience in his statement of 3 April 2001 in which his evidence was as follows: "2. Almost all of the computer and IT related books available in bookshops in Sydney are by authors in either USA or Europe or UK. I have read many computer or IT related magazines and journals. Most of the computer or IT related magazines and journals available in newsagents in Sydney are written and published in USA. These include "Open Systems Review", "C Language Users Journal", "PC Magazine", "PC Users Magazine", "Dr Dobbs Journal" and "Linux Journal". A small number are published in UK. 3. Most of the computer or IT related magazines and journals which have a title suggesting that their origin is Australian, such as "Australian Personal Computer" and "Australian PC Magazine", are actually either owned by or closely affiliated with corresponding USA publications and usually carry a significant number of articles which are simply reprinted from the original US article, but with Australian advertisements and additional local material. For example, Australian Personal Computer was originally founded by Sean Howard in Australia, in the 1970's but is currently a subsidiary of the Ziff Davis company, which produces several US computer magazines. 4. Whether the computer or IT related magazines and journals are published in the USA, UK or Australia, they often have advertisements for software and hardware which is not produced or manufactured in Australia. 5. Most personal computers used in Australia are designed and manufactured in Asia, typically Taiwan, Singapore, Korea, Thailand, Hong Kong, China, or Japan. Most personal computers are IBM compatible, and correspond to an original design by IBM in USA, or to enhancements of that design by IBM and Intel in USA. 6. Many personal computers are rebadged under other names, for example Packard-Bell computers sold in USA and Australia are actually manufactured by NEC, a Japanese company. Most Texas Instruments notebook computers were actually manufactured by Acer in Taiwan. 7. Almost all larger and more powerful computers used in Australia are of US or Japanese origin and design. For example, Sun, Hewlett Packard, IBM, Digital, Compaq are of US design, and Fujitsu, Hitachi, NEC are of Japanese design. 8. The standards used in the IT industry in Australia are generally of either US or European origin. By "standard" I mean a specification or application adopted or designated by a body with authority to do so as the method which will be used for an area such as the coding scheme, character set and format and structure of messages. 9. In USA computer related standards are usually set by the American National Standards Institute (ANSI). 10. In Europe computer related standards are usually set by the Comite Consultatif International de Telephonique et Telegraphique (CCITT), now replaced by the International Telecommunications Union - Telecommunications Standards Section (ITU-TSS). 11. In Australia, the Australian Standards Institute, or Standards Australia, normally adopts or ratifies the appropriate US (ANSI) or European (CCITT or ITU-TSS) standard. The standard so adopted or ratified becomes the Australian standard in respect of that matter. 12. The very purpose of standards is to ensure national and international compatibility and to avoid re-inventing the wheel in each country. 13. Interfacing two systems involves interconnecting the two systems in a manner such that they may communicate and cooperate together, while remaining two distinct systems. A distinct separation in the two systems remains. 14. Integrating two systems involves merging or blending the two systems in a manner such that they effectively form a blended or merged whole system, without distinct separation. 15. Sometimes the terms interfacing and integrating are used loosely and interchangeably but in the IT industry they have two distinct meanings in accepted jargon. 16. I was familiar with the architecture, design and interfaces used on the Pont Data Market Advantage system. I knew and understood how information was received from a wide variety of sources including stock exchanges and foreign currency trades from US, UK, Hong Kong, Japan, Singapore and other countries. I understood how the Pont Data Market Advantage system interfaced with those other systems so as to receive this information. I understood how the Pont Data Market Advantage system processed the information received so as to store, index, retrieve and display the information. ["E 13"] 17. At Pont Data I had a good understanding of several international standards such as ASCII, VT100, X25, Decnet, Videotex. ["E 14"] 18. ASCII is an international standard of US origin, for the character set and special control characters used in the most basic of data communications. I wrote several terminal emulators which used ASCII. 19. VT100 is an international standard originally from DEC, a US corporation, for the character set and control codes used by a certain model of terminal. I wrote several terminal emulators which used the VT100 standard. 20. X25 is an international standard of European origin, for a network protocol standardising the operation and control of a computer network. I configured and interfaced between the Market Advantage system and X25 networks to connect to Telecom's Discovery 40 service, and to connect to the Info-One legal information service. 21. Decnet is an international standard originally from DEC, a US corporation, for the network protocol standardising the operation and control of computer networks using Vax and Alpha computers made by DEC. I wrote programs which interfaced with Decnet while at Pont Data, and I enhanced and corrected programs which interfaced with Decnet while at Telstra. 22. Videotex is an international standard originally from UK, where it was called Prestel, and later adopted in France where it is called Minitel. It standardises the character set, graphics and control codes for a special type of terminal and also for television set top boxes, and for teletext transmissions in TV signals. At Pont Data the Market Advantage system used Videotex standard, and was deployed in Australia and UK, and was used by users in Australia, Singapore, UK and France. I also wrote several Videotex terminal emulators which were used by customers of Pont Data, Telecom Discovery, and the Teachers Credit Union, among others. 23. At AUSMAQ, among other things, I investigated the possible use of the FIX standard. The FIX standard was originated at Salomon Brothers, a stockbroker in USA. It is promoted for use in the financial and stockbroking industry worldwide. While not officially adopted so far by any government or official standards institutes, it has become a "de facto" standard by virtue of its popularity and usage. I have downloaded and read copies of the FIX standard. I have read application notes in respect of the FIX standard and considered how it could be used at AUSMAQ. I have followed its development since about 1997. I have worked out how it could be used at AUSMAQ. I have also followed announcements by the FIX standards committee, and generally kept up to date on FIX via the committee web site. The fact that the FIX standard originated in USA does not make it any harder, or different to interface with a system in Australia, but rather makes it more likely that it will continue to increase in usage. 24. The nature of interfacing between two computer systems is not dependent on geography. The purpose of international standards is precisely to standardise the use of and interfacing between different computer systems in different countries. 25. Although many standards are used in Australia, it is difficult to think of a single example of interfacing or a standard which originated in or is unique to Australia. Even if some standard originated in Australia, if it had sufficient merit, and if there was some need that it filled, it would probably become adopted as an international or industry standard. This is what occurred with software in the open software arena. For example the "Trumpet" software for dialup SLIP or PPP internet access. This software was written in Hobart and became one of the most used internet access software for Windows 3, prior to Windows 95 rendering its usage unnecessary. Another example is the "Samba" software which allows unix systems to act as file servers and print servers for networks of Windows PC's. This was written by Andrew Tridgell at ANU Canberra. It has become the accepted de facto standard software internationally in the unix arena. These are not international standards, but rather the international adoption and widespread use of Australian authored software which had sufficient merit, or filled a need at a certain time. 26. Many companies linked their systems internationally even before the internet. In my experience it was common practice to work cooperatively with IT staff in other countries. At Pont Data it was common practice to logon to computers in the UK or US from the Sydney office, and vice-versa, and to mail notes and program source to programmers working in the UK or US, and to receive notes and programs from them. It was common to continue working with colleagues on joint projects regardless of which country they were in. 27. During my 24 years of IT experience in Australia, almost every piece of hardware or software which I used had conformed with US or European standards, and has been of US or European manufacture or origin. I have frequently contacted hardware and software companies in UK, USA, Canada, NZ for support and clarification of issues, and find the standards and methods used are common to those used in Australia. 28. Annexed hereto and marked "A" is a definition of ATM, EFTPOS and Personal Identification Numbers ("PIN numbers"). 29. ATM's and EFTPOS process a customer's request (eg. account enquiry or withdrawal or in the case of EFTPOS the transfer of funds from the customer's account to the vendor's account) electronically and remotely. This naturally has security issues related to it such as the use of PIN numbers to ensure that the customer is the person authorising the transaction. The request is also encrypted. ATM and EFTPOS also involve reporting such as the production of a report or receipt detailing the transaction at the time and place of the transaction. 30. AUSMAQ also processed customers' requests such as balance enquiry and transfer of funds electronically and remotely (via the IVR). AUSMAQ customers also used PIN numbers as a security measure to ensure that the customer was authorising the transaction. AUSMAQ also used encryption for transfers of a customer's funds. AUSMAQ also sent reports to customers on each occasion on which funds of the customer were transferred (or applied for the purchase of units in a unit trust or received from a redemption of units)." [E numbers added for ease of identification] Returning to the defendants submissions –Off shore customisation-category D1.1 75 In their submissions in reply the defendants put the matter as follows: "4. The Plaintiffs' Submissions in relation to the Defendants' D1 category are misconceived. The Defendants do not assert that Mr Martin cannot express any opinions in relation to "offshore" software and systems issues. Rather the Defendants submit that Mr Martin lacks sufficient specialised knowledge to express the particular opinions relevant to the potential offshore customisation of AUSMAQ that are identified in the fifth column of the Defendants' Template (MFI D83). 5. The Defendants' Submissions do not proceed on the basis that Mr Martin lacks expertise and experience in interfacing computer systems, or that Mr Martin during his time at Pont Data did not personally write certain charting programs and tabular displays of price data, including charts for intra-day, daily, weekly and monthly price data, or that he did not write programs which allowed for the tabular displays of price and volume history, for daily, weekly and monthly time periods. (See paragraph 24 and 25 of Mr Martin's Statement 21 February 2001). [Paragraphs 6, 7 and 8 have, in substance, been referred to above] 9. The position, as the Defendants have submitted, might have been different had Mr Martin been given specific assumptions as to the functionality and performance characteristics of the main information technology systems used by the stockmarket, stockbroking firms, superannuation companies, life assurance companies, mutual fund companies and the banking industry in particular countries, and how it was intended that AUSMAQ operate in those countries. 10. The Defendants' principal proposition is that, although Mr Martin has experience in information technology, particularly at the level of writing code, he had not established contemporaneous experiential expert knowledge in relation to the main information technology systems used by offshore stockmarkets, stockbroking firms, nor indeed, any experiential knowledge in relation to superannuation companies, life assurance companies, mutual fund companies and the banking industry in countries other than Australia and New Zealand. 11. The Market Advantage system was a computer information service. It did not involve any trading or financial products and on no view could it be described as an automated securities trading platform or service (see the description of the Market Advantage system in paragraphs 26 - 34 of Mr Martin's statement of 21 February 2001 and paragraph 4.6 of the Plaintiffs' Submissions). 12. It is important to bear in mind that although Mr Martin wrote some of the code for the Market Advantage system there is no evidence that he was involved in the design of the system as a whole, particularly its architecture, nor is there any evidence that he wrote specific programs to enable interfaces to be established with, for example, foreign exchange traders, bond markets, commodities markets, commodities futures, treasury bonds markets and news service/agencies. 13. Mr Martin's experience in interfacing equips him with specialised knowledge to comment on issues that might arise in relation to the interfacing of computer systems. It does not in itself, however, equip him to comment, absent specific assumptions, on the degree of effort and complexity that might arise in customizing the AUSMAQ System to enable it to interface with systems used by key participants in foreign financial markets. Nor does Mr Martin's customisation experience equip him to comment as an expert on the ability of AUSMAQ to deal with, for example, bespoke life and pension wrappers and products in foreign financial markets. (See paragraphs 4.16 to 4.27 of the Plaintiffs' Submissions). Holding as to opinions on offshore customisation-category D1.1 76 There are a number of answers to the defendants objections to Mr Martin's entitlement to express expert opinions in relation to the offshore customisation issue. The first and most obvious is that his training, study and experience clearly demonstrates an acquisition of sufficient specialised knowledge upon which to express opinions substantially based upon his familiarity with the Ausmaq system, in relation to which his work had included: · becoming familiar with the Ausmaq mechanism for automatically selecting the appropriate national variant module to be dynamically called from the core system. · sufficient involvement with the trading engine to be in a position to be able to express opinions based on specialised knowledge as to the ability to implement unusual products as a new market style without fundamentally affecting the broader system. 77 The second answer to the defendants submissions in relation to the customisation issue which overlaps with the first, is that Mr Martin has, on the evidence before the court on the issue, demonstrated training, study or experience in areas E1 to E14 which include training, study and experience related to information technology systems in use across sufficient countries outside of Australia and New Zealand to equip him with the necessary specialised knowledge on which, at least substantially to be in a position to base the subject so-called customisation opinions. I note in this regard that I take into account all of his evidence allowed on the expertise issue including the last sentence of paragraph 4 of Mr Martin's statement of 21 February 2001 MFI D66 which is allowed on the issue. I take into account also the evidence before the court in relation to the standards used in the IT industry both in Australia and offshore, the purpose of those standards and Mr Martin's detailed evidence in relation to his experience and familiarity with those standards. During his 24 years of IT experience almost every piece of hardware or software which he used had conformed with the United States or European standards and had been of United States or European manufacture or origin. He had frequently contacted hardware and software companies in the United Kingdom, the United States, Canada and New Zealand for support and clarification of issues and had found that the standards and methods used had been common to those used in Australia. On his evidence the purpose of international standards is to standardise the use and interfacing between different computer systems in different countries. 78 It seems unnecessary to repeat paragraph 153 of the judgment going to Mr Maconochie's expertise. That reasoning remains pervasive in relation to the proper approach to Mr Martin's expertise. His strong suit stems from his demonstration of specialised knowledge of a very technical nature extending to and well beyond the writing of technical specifications and functional specifications. His specialised knowledge is shown to be based upon the training, study and experience described as E1 to E14. He is shown to be entitled to express opinions based wholly or substantially upon the areas described as E1 to E14. He does have some experience of a conceptual nature in relation to the Ausmaq service. His E1 to E14 training, study and experience as well as his wider experience (disclosed by the whole of his evidence) in relation to technical, software and information technology systems and issues as applicable to Australia/New Zealand as well as overseas is such as to equip him with the necessary specialised knowledge on which at least substantially to be in a position to base the subject customisation opinions. 79 Mr Martin is shown to have been experienced in Information Technology systems with worldwide distributed architectures undertaking processing functions globally across a number of differing jurisdictions. As already indicated his experience including his time at Pont Data led to his familiarity with a business which had offices in 22 countries and which supported clients in each of those countries. The Pont Data Systems supported all types of securities from all exchanges in each of those 22 countries. His evidence satisfies me for example that as a result of working at Pont Data for six years, he became familiar with, and experienced in area "E10", namely the processing, supply and systems design of professional securities information Systems, including experience with the special terminology of foreign exchange rates, the manner of operations of currency markets and equities markets and their requirements. His more detailed final statement of 3 April 2001 serves to explain the nature of interfacing between computer systems as not being dependent upon geography, to explain the purpose of international standards treating with the need to standardise the use of and the interfacing between different computer systems in different countries and to draw together several relevant aspects of Mr Martin's training, study and experience and familiarity with hardware and software of offshore manufacture of origin. It was common practice for him to work cooperatively with IT in other countries. It was common to work with colleagues on joint projects regardless of which country they resided in. 80 If one takes for example the opinion which he seeks to express in paragraph 45 of his statement of 27 June 2000, he may in my view express the opinion that the Ausmaq system could facilitate trading in any type of security or product as at November 1996. The weight to be attached to that expression of opinion in respect of securities or products with which he may only partially have had personal experience, is another matter. Mr Martin has the experiential knowledge on which to base an entitlement to rely upon his extensive reading for the purpose of expressing opinions. He has by his training, study or experience been shown to have become sufficiently acquainted with different views in the field of the relevant expertise so as to show that he is in a position to appreciate the arguments and studies relating to particular issues in the field in order to then be in a position to express expert opinions taking into account in an informed way, the literature which he has read. The proper approach to experiential knowledge is generally examined in the judgment going to Mr Maconochie's expertise and it is unnecessary to repeat the relevant sections of that judgment. 81 Mr Martin gives unchallenged evidence that he has kept up-to-date in the IT field by reading books and journals. To my mind it is appropriate to accept this evidence at face value. Indeed the court can do little else as this is the evidence on the question of his expertise. He gives as one example of his reading, detail of a number of books which he has read relevant to Internet Banking services. He gives as another example his reading of books on HTML protocol and on web server operation, including CGI interfacing techniques and e-commerce, security issues and solutions including Netscape's Secure Sockets Layer (SSL) and similar encryption techniques (Statement 27 June 2000, Vol 30, paragraph 800) [but see limited admissibility - transcript 7554.36]. Mr Martin's evidence as to the overseas authorship of most of the computer and IT related books available in bookshops in Sydney, he having read many computer or IT related magazines and journals, satisfies me of his extensive familiarity of offshore issues and perceptions gained through that reading. 82 The defendants addressed close submissions on the substance of the IT books and journals which Mr Martin had produced to exemplify certain of his reading over the years. The central submission appears to have been that a significant proportion of his experience in relation to Internet banking services appears to be by reason of the books and journals which he claims he had read in the IT field which were said by him to be relevant to Internet banking services. In my view the evidence as to Mr Martin's extensive reading cannot be dealt with at this stage in these proceedings in the manner with which the defendants seek to treat. Mr Martin was not cross-examined on his evidence. The selection of books to which he referred is to be regarded as but a selection. The Court does not require that a witness who is put forward as having relevant expertise refer to or produce every book or article that such a witness has read over the years in order to establish relevant experiential knowledge. The matter may have been different had the witness being cross-examined on his general reading. 83 The essential burden of the defendants submissions concerns drawing a line between on the one hand, Mr Martin's experience in information technology in a number of areas, and on the other hand, his suggested shortcoming in not having demonstrated acquisition of contemporaneous experiential knowledge in relation to: (a) the main information technology systems used by offshore stock markets and stockbroking firms (b) offshore superannuation companies, life assurance companies, mutual fund companies and the off shore banking industry 84 In my view the Court is unable to draw that line at this stage in the proceedings. As to the contemporaneity of Mr Martin's experiential knowledge, the evidence before the Court is that he has kept up to date in the IT field by reading books and journals. And as to the matters referred to in (a) and (b) in the previous paragraph, I see the matter as one of degree capable of being tested as to weight in cross examination. Whilst cross examination on the voir dire together with other evidence may have been capable of satisfying the Court of the above described suggested shortcomings in Mr Martin's acquisition of experiential knowledge in relation to the matters referred to in (a) and (b), in the absence of that cross examination and that further evidence it simply appears to me that Mr Martin has demonstrated by his training, study and experience sufficient specialised knowledge upon the basis of which substantially to be shown to have an entitlement to express the opinions which he seeks to express as to the offshore customisation category. The close inquiry into the reach of Mr Martin's demonstrated experiential knowledge which the defendants suggest must foreclose the Court from this finding extends too far, as it seems to me, into the interior scope of the subject, for the court to be in a position at this stage and on the basis of the evidence presently before the court, to uphold the defendants submission. [cf paragraph 73 of the judgment on Mr Maconochie's expertise]. It is to be recalled that as earlier pointed out, the defendants accept that Mr Martin had shown certain experiential knowledge in relation to superannuation companies, life assurance companies, mutual fund companies and the banking industry in Australia and New Zealand. Whilst the defendants cannot be taken as conceding that the extent of this experiential knowledge is overwhelming or indeed is substantial, to my mind it is extremely difficult once Mr Martin's experience, training and study is demonstrated as extending to these categories, for the court at this stage in the proceedings and in the absence of cross-examination of Mr Martin, to uphold the defendants submission as to suggested limit of that experiential knowledge. The question is one of degree. On the evidence presently before the court Mr Martin has the above described specialised knowledge upon the basis of which substantially to be shown to have an entitlement to express the opinions which he seeks to express as to the off shore customisation issue. 85 There is a further matter as it seems to me, to be noted in relation to the offshore customisation issue. In the light of Mr Martin's evidence, I would be inclined to infer for the purpose only of the challenge to expertise, that computer systems (including their operation, functionality, design, software etc) are likely to be marketed and used worldwide, although further evidence may go to this issue during the hearing in due course. No doubt many computer experts working in Australia have trained overseas and have had much of their experience overseas. 86 As to the defendants' submission that Market Advantage was not a trading system, the court has already referred to the evidence that the Pont Data Telebroking was an order routing system collecting offers to buy or sell shares and routing them to brokers for execution. Mr Martin wrote the programs for that telebroking system. The evidence is that he was also very familiar with the Telstra CSSC-FINE project which was a foreign currency dealing system providing the settlements of foreign exchange trades. 87 As to the defendant's submission that there is no evidence that Mr Martin was involved in the design of the system as a whole, particularly its architecture, I have already referred to Mr Martin's unchallenged evidence that he was familiar with the architecture, design and interfaces used on the Pont Data Market Advantage system; that he knew and understood how information was received from a wide variety of sources including stock exchanges and foreign currency trades from the United States, the United Kingdom, Hong Kong, Japan, Singapore and other countries; that he understood how the Pont Data Market Advantage system interfaced with those other systems so as to receive this information and that he understood how the Pont Data Market Advantage system processed the information received so as to store, index, retrieve and display the information. Holding-Defendants category D1.2 88 I am satisfied from the evidence given by Mr Martin and particularly from his evidence relating to the modification of Market Advantage for use in the United Kingdom and France where the customisation work which he supervised included the tailoring of system messages to the local language [see also his consultancy with Inference Group], that his training, study or experience has equipped him with sufficient specialised knowledge such that he may express opinions in relation to D1.2 opinions based substantially on that specialised knowledge. Further examination of the functionality comparison issue 89 The defendants submissions appeared to cover a number of related aspects. 90 An early submission went directly to the terms of the question put to Mr Martin in seeking his relevant opinion. The question is to be found in paragraph 10 of his functionality statement of 10 July 2000. He was asked whether in his opinion the Ausmaq Service as it existed in the Ausmaq system at particular dates could have been enhanced, modified or added to, if necessary, so that any or all of the particular named Bank Services had equivalent or similar functionality to the Ausmaq Service. 91 Mr Halley submitted that subject to being shown to have acquired the necessary specialised knowledge, it may have been possible for Mr Martin to be asked whether Ausmaq could have been technically enhanced so that it could for example provide margin lending services or FX Auto Dealing services. The submission was that in order to answer this type of question Mr Martin would have to be shown to have had the requisite training study or experience and to have acquired the requisite specialised knowledge such that he would be in a position to understand the functionality of Ausmaq and the functionality of margin lending services and of FX Auto Dealing services. He would then have had to have obtained material from the defendants in relation to their services and would have to be shown to be in a position to work out what modifications and the like would have been required to be carried out to Ausmaq in order to enable it to provide for example an FX Auto Dealing service. As I understood Mr Halley this would be a technical question to be answered by reference to the specifications, software and the like. 92 Mr Halley submitted as I understood him that the question in fact put to Mr Martin took him outside of this area of technical expertise and involved him straying into a different area altogether. This new area would require one, by training, study or experience, to have acquired specialised knowledge in order to be in a position to express opinions as to the parameters involved in being able to understand notions of equivalent or similar functionality and how that concept could or should be measured. The burden of the submission appeared to be that what Mr Martin in fact sought impermissibly to do was to approach the comparative issue "not from an IT perspective but rather from a commercial or market perspective". [transcript page 7133-7134]. 93 Here again it seems unnecessary for the court to repeat sections of the judgment dealing with Mr Maconochie's expertise. Paragraphs 120 and 121 are germane. Paragraph 153 is particularly apposite. It seems to me that Mr Martin's experience in relation to the development of what became the Ausmaq Service and his intimate involvement in technical aspects of preparation of that Service has been shown to have been acquired (and in the case of his involvement has been shown to have taken place) in association, at least to a real extent with some understanding of the Ausmaq Service at a conceptual, commercial and market perspective level. The close interrelationship between the technical level and the conceptual, commercial and market perspective levels is such that to differentiate between them and to define with precision the parameters of such differentiation, is exceptionally difficult in terms of a decision as to whether or not a particular witness is shown to have acquired the requisite specialised knowledge upon which to express opinions of the class sought to be expressed by Mr Martin. 94 Mr Halley further submitted that in relation to the key opinions sought to be expressed by Mr Martin which are to be found in paragraphs 48, 49, 69, 70, 72, 83, 88, 108 and 110 it would be necessary for Mr Martin to demonstrate that he had a familiarity with the writing of specifications, the preparation of detailed design documents, the writing of code, the testing and most importantly the architectural structure of the software that would be necessary for the particular bank services in focus before he could be shown to have acquired specialised knowledge to be in a position to express those opinions. 95 In dealing with the submission it is important, as it seems to me, to note that Mr Martin in paragraph 4 of his 10 July 2000 functionality statement makes plain that he concentrated his review on the technical documentation provided to him. Through this statement and on a number of occasions he clearly appears to refer to identified documents produced by the defendants on discovery of a technical nature - as for example: "National FX Dealing Technical Guide" [DEF.144.0050 ] [see paragraph 33A]; "National FX Dealing-Technical Guide" [DEF.179.0045] [see paragraph 35]; "National FX Dealing-User Guide" [DEF.179.0496] [see paragraph 35]; "e Dealing-FX Auto Dealing Phase 2 Project" [DEF.148.0069] [see paragraph 37]; "Review and define Ausmaq's capability to participate in technology solution" "Gateway Project Recommendations" [DEF.228.0049] [see paragraph 74]; "Master Fund Business Case" (DEF.226.0091) [see paragraph 82]; "Master Trust Requirements Spec" (DEF.226.0096) [see paragraph 82]; and see generally the documents described in annexure 1, which is in terms an annexure to annexure B to the statement. The proposition that Mr Martin has insufficient or no experience in implementing Automated Margin Lending Service and hence cannot, in the absence of being given precise assumptions, express particular opinions as to what would be involved in enhancing the Ausmaq Service to enable it to provide the functionality of an Automated Margin Lending Service (in particular the National Automated Margin Lending Service) is rejected. The matter goes to the whole of Mr Martin's experience, training and study as demonstrated by his evidence. He does have the technical competence/ specialised knowledge to be able to examine the technical documentation provided to him and to then substantially base his opinions on this subject matter upon that examination. The question of the weight of his opinions can only be determined following full cross-examination. 96 The fact that Mr Martin may not personally prior to his work in relation to these proceedings have: · written the specifications for the Bank Services · prepared detailed design documents for the Bank Services · carried out testing of or related to the Bank Services specifications/design documents · worked on the architectural structure of the software for the Bank Services does not mean that he lacks the requisite specialised knowledge upon the basis of which to substantially express the subject opinions. The issue is one of examining Mr Martin's broader background training, study and experience in the determination of the parameters of specialised knowledge shown to have been acquired. 97 In my view the training, study and experience which Mr Martin has shown serves to equip him with the requisite specialised knowledge upon which to substantially base his expression of these opinions on the functionality comparison area. It is important to recognise as Mr Halley appeared to concede that Mr Martin's training study and experience had indeed equipped him to be in a position for example to comment on forex systems [transcript page 7131] and to comment at least to an extent on margin lending [transcript page 7139]. The proposition for which Mr Halley contended appeared to be that Mr Martin's problem in not having demonstrated the requisite specialised knowledge stemmed from a lack of sufficient exposure to services of the type in respect of which he purports to express opinions. However the court at this stage of the proceedings and in assessing specialised knowledge, must be cautious not to apply altogether too narrow and confined a set of tests in categorising the suggested necessary specialised knowledge, as made plain in paragraph 120 of the judgment on Mr Maconochie's expertise. 98 There were then a number of questions of form which Mr Halley sought to raise. 99 In one particular respect the submissions went to the suggested failure to demonstrate relevant reasoning processes. This is the matter generally dealt with as to the relevant principles in paragraph 84 of the judgment on the expertise of Mr Maconochie where failure to demonstrate a relevant reasoning process was indicated as to be dealt with in terms of section 79. The same approach is here taken. 100 The defendants' submission was that in that section of Mr Martin's 10 July 2000 statement travelling from paragraph 10 up to paragraph 111, and particularly where the comparative exercise was carried out, Mr Martin had simply not satisfied the requirement to make his reasoning processes transparent. There are clearly some difficulties which I acknowledge and deal with below. Mr Martin does in certain areas give his reasoning although it is sometimes somewhat difficult to follow and to be found in a number of disparate paragraphs. At least in relation to the opinions which he expresses concerning the comparison between FX Auto Dealing and Ausmaq, and the comparison between Margin Lending (MLS) and Ausmaq, he sets out relevant tables. There are no similar tables dealing with the comparisons between the Gateway Service and Ausmaq and between Maple Leaf/Operation First Choice Service and Ausmaq. 101 Upon the basis that Mr Martin has at the commencement of page 13 of the functionality statement simply inadvertently omitted the sentence "A comparison of the two systems is as follows" [as appears immediately prior to the setting out of the second table], and upon this being made good by evidence, I am not disposed to reject paragraphs 12 - 49, the table which appears at pages 13-14, paragraphs 50-57, the table which appears at pages 15-17, paragraphs 58 - 69 or paragraph 71 [which generally cover the comparative exercise qua FX Autodealing and Automated Margin Lending] on the basis of failure to make reasoning processes transparent. An attempt has clearly been made to set out the reasoning processes. As I have said the weight to be given to the opinions which are sought to be given is another matter for address following cross-examination in the light of all of the evidence. And as appears generally from the reasons below, it will be necessary for the reasoning processes to be exposed in terms of the use of the words "virtually the same or equivalent functionality…" as appearing in paragraphs 12, 14 and 70. 102 The position is in my view somewhat different in relation to the opinions sought to be expressed in relation to the Gateway Service and in relation to Maple/Operation First Choice service in paragraphs 72-110. In the absence in relation to the opinions sought to be expressed qua these Services, of any form of comparative table of the nature utilised earlier in the statement for the purpose of the comparative exercises involving the FX Autodealing and the Automated Margin Lending Services, it does seem to me that the exposition of reasoning processes is simply so deficient, defective or opaque as to require the relevant sections of the statement to be rejected unless these reasoning processes are able to be made transparent. I am disposed to grant leave to permit the plaintiffs to endeavour to supplement Mr Martin's statement so as to make those reasoning processes transparent, if this can be done. Here again the reasons below deal with paragraphs 13, 15, 83, 88 and 110 - although rulings on all of paragraphs 72 - 110 are reserved to be reconsidered once supplementary evidence is filed. 103 In my view Mr Martin in his functionality statement made on 10 July 2000 has not sufficiently exposed his reasoning processes in relation to his use of the phrases "the same or equivalent functionality" or "similar functionality" or "equivalent or similar functionality". These phrases are to be found for example in paragraphs 12, 13, 14, 15, and 70. It will be necessary for these reasoning processes to be exposed by supplementary statement so that the Court is able to follow the manner in which Mr Martin uses theses phrases. I propose to grant leave to permit Mr Martin's evidence to be supplemented in this way. For the time being and pending that further evidence being adduced the Court's ruling on these paragraphs is reserved. 104 The court's ruling is also reserved in relation to paragraphs 83, 88 and 110. In the absence of a more detailed attempt to identify: · in the case of paragraph 83, the content of the words "many technical similarities …..processing" · in the case of paragraph 88, the content of the words "most of the features of Gateway" · in the case of paragraph 110, the content of the words "many aspects of the central functionality……….Service". the paragraphs are objectionable both as a matter of form as well as by reason of failure to expose reasoning processes. 105 Where Mr Halley submitted that the court could have no confidence in Mr Martin's opinions and for example in relation to the tables which he produces, no confidence as to the coverage of the criteria which Mr Martin had selected [transcript page 7131-7132], to my mind these are matters of weight for ultimate decision following cross-examination and following the adducing of all evidence in the proceedings. 106 As to of the question of whether or not Mr Martin has sufficiently exposed the process which he has engaged in when moving on the one hand from the examination of the particular documents to, on the other hand, his conclusions as to the characteristics of the subject Bank Services and as to the 'enhancement' conclusions, the matter is instant specific in terms of his references to particular documents. The general issue was examined in relation to Mr Maconochie's expertise in paragraphs 187 of that judgment. In my view and although the matter was clearly capable of more detail and precision, Mr Martin has sufficiently exposed the inferences which he drew from the documents which he inspected in the functionality statement when dealing with the FX Autodealing and Automated Margin Lending Services [paragraphs 16-71]. However the same cannot be said of the manner in which he has dealt with the documents inspected when dealing with the Gateway and Maple/Operation First Choice Services. As earlier pointed out the series of paragraphs purporting to lead to the conclusions in relation to these sections of the functionality statement are simply so deficient, defective or opaque as to make it too difficult to follow precisely what has been the process which Mr Martin has engaged in when moving from the examination of the particular documents to which he refers, to his conclusions as to the characteristics of the subject Bank Services and the 'enhancement' conclusions. In those circumstances it will be necessary for supplementary evidence to be filed to clearly expose the inferences which Mr Martin drew from the documents inspected in relation to the Gateway and Maple/Operation First Choice Services. I am disposed to permit that exercise at this stage in the proceedings so that the Court may assess whether the reasoning process is made transparent to satisfy the Court of the requisite connection between the opinions and the specialised knowledge on which the opinions are to be seen to be wholly or substantially based. 107 In the result to my mind Mr Martin, by his relevant training, study or experience, has been shown to have acquired sufficient specialised knowledge upon which he is entitled to draw at least substantially, in order to base his relevant opinions going to the functionality comparison issues. As already made plain on a number of occasions in the above reasons, the court at this stage of the proceedings and in assessing specialised knowledge must be cautious not to apply altogether too narrow and confined a set of tests in categorising the suggested necessary specialised knowledge. 108 The plaintiffs are granted leave to supplement Mr Martin's statement of 10 July 2000 to correct the form problems with paragraphs 83, 88 and 110 and to expose the reasoning processes leading to the conclusions sought to be expressed in those and the other paragraphs referred to above. Specialised knowledge in relation to Master Fund-Defendants categories D3, D4 IT/Systems perspective 109 The defendants submit that Mr Martin is not shown to have acquired specialised knowledge of and relating to the development, operation, design, specification, formulation, functionality, writing and composition of software code for computer systems and software for and relating to master funds. The submission is that Mr Martin cannot express opinions from an IT or systems perspective relating to the functionality of a master trust. 110 The defendants' submission is that (unless the proposition for which the plaintiffs contend that was that Ausmaq was a unit trust), a careful inspection of the detailed evidence will make good the proposition that Mr Martin, has had no direct experience of computer systems or software used by unit trusts. The defendants submission was that Mr Martin's specialised knowledge was of the systems used to provide the Ausmaq Service which it was put, is neither a unit trust nor a master fund. The submission was that Mr Martin's relevant experience was of systems which facilitate trades of units in a managed fund and reporting of such units but that he had not disclosed any specialised knowledge of the bespoke internal systems used by unit trusts and master funds. 111 Notwithstanding that Mr Martin's evidence was that he had not performed any systems or programming work in relation to a master fund, he did give evidence of his understanding of master funds and of fund of funds. He was unsure as to whether he could pin it down precisely, but somewhere in the course of working in computer systems mainly in finance over the last 24 years he had learnt, on his evidence, a great many issues including what comprised a master fund or a fund of funds. Although he had not programmed work for a master fund as such, his evidence was that he believed that he understood, at least in broad terms, what they were about. His evidence was that if he had the information as to the manner of operation and composition of a particular master fund, he considered himself able to formulate specifications for and/or to write computer programs for and to implement computer programs and specifications for such a master fund with that information. Provided he had that form of information as to the manner of operation and composition of the master fund, he was not aware of any significant difficulties in relation to the formulation of specifications, the implementation of specifications or computer systems or programs for a particular master fund. 112 In my view Mr Martin has been shown to have by his training, study or experience acquired sufficient of the necessary specialised knowledge of the type described generally as D3 in MFI D87 upon which to be in a position to substantially base the opinions which he does seek to express inter alia from an IT or systems perspective, relating to the functionality of master trusts. Market perspective 113 The defendants' further submission is that Mr Martin is not shown to have acquired specialised knowledge of or relating to the Australian mutual funds industry with particular emphasis on master trusts from a market perspective. The submission is that he is not shown to be qualified to express opinions relating to a comparison of the Ausmaq Service and a Master Trust at the level of business strategy and objectives. 114 In my view Mr Martin's training, study and experience has been shown to be such as to have furnished him with sufficient specialised knowledge derived from and related to his technical expertise upon which to substantially base opinions related to his technical expertise as to such a comparison at the level of business strategy and objectives. In this regard the following submissions of the plaintiffs are noted, accepted as of substance and adopted: "21,1 The plaintiffs do not put Mr Martin forward as having the market experience to express expert opinions on matters of market structure which are unrelated to Mr Martin's technical expertise . 21.2 Nevertheless, from Mr Martin's undoubted experience in relation to systems in the financial services industry, Mr Martin has undoubtedly obtained a high degree of the understanding of the operation of markets from a technical perspective so as to identify some matters which the defendants try to classify as opinions from a market perspective. 21.3 For example, Mr Martin wrote the AUSMAQ trading engine. Under market style 1 of the AUSMAQ trading engine "an offer to purchase shares is made at a price and an offer to buy shares is made at a price and if there is agreement as to price a transaction occurs": para 42, MFI P109. Because Mr Martin wrote the AUSMAQ trading engine he undoubtedly knows when AUSMAQ recognises a transaction as having been struck under market style 1. Because of his experience at Pont Data and AUSMAQ, Mr Martin also knows that market style 1 recognises that a transaction has been struck at the same event as when the ASX recognises that a transaction has been struck. 21.4 Similarly, Mr Martin knows how other trading in financial markets, inter alia, is effected such as the existence of fund managers who trade in periodic cycles (which is market style 4 in the AUSMAQ trading engine): para 37, MFI P109. 21.5 Therefore, Mr Martin has obviously gained knowledge about matters in the financial services industry (products, methods of operation etc) which are part of his technical expertise. 21.6 In other words, Mr Martin's knowledge of systems includes knowledge about operations in financial markets. Otherwise, if the operations in financial markets were incorrectly inserted into the computer systems, the transactions would not have occurred, or would have been altered immediately. 21.7 The plaintiffs submit that the defendants' D4 objections are in substance objections to Mr Martin expressing opinions on the technical functions or operation of a system (eg paras 81, 84 and 85 of Mr Martin's report (MFI D85 (tab 3))." [emphasis added] The evidence justifies the approach pressed in paragraph 21.1 and a finding in terms of paragraph 21.2. Specialised knowledge relating to Internet banking services -Defendants' category D5 115 The defendants' submission is that Mr Martin has not demonstrated an acquisition of specialised knowledge of and relating to the development, operation, design, specification, formulation, functionality, writing and composition of software code or computer systems and software for and relating to Internet banking services. 116 The defendants submission is that the critical issue is not whether Mr Martin has knowledge of the Internet, but rather the extent of his specialised knowledge in relation to Internet banking. The submission is that familiarity with web server interface issues in relation to Ausmaq and the receipt and processing of information electronically and remotely such as the receipt of buy and sell orders, does not equip Mr Martin with sufficient specialised knowledge on the basis of which to be in a position to express specific opinions in relation to the functionality of Internet banking and the scope and effort required to enhance the Ausmaq Service to enable it to provide the functionality necessary for the provision of Internet banking. 117 Mr Martin is clearly conversant through his training, study and experience, with message encryption. His experiential knowledge is such as to have equipped him with the entitlement to read broadly across the technical parameters going to various types of software. His experience, study and training is such as to have furnished him with sufficient specialised knowledge to be in a position to examine software and to express opinions in relation to that software. He is shown to have specialised knowledge on which substantially to be in a position to express an opinion, for example, that ultimately internet banking basically relies on message encryption, typically via the Netscape defined "Secure Sockets Layer" ("SSL") protocol. His evidence which is admitted on the question of technical expertise, is that at Ausmaq he and other technical staff investigated the SSL protocol, and other encryption software such as PGP as early as about 1995. The specialised knowledge which he is shown to have acquired entitles him to express the opinion that if necessary Ausmaq could have used external contractors or existing commercial software libraries, or used Star Systems, or used FICS, or competitors of FICS, in order to provide the capability for secure internet banking. 118 I have already referred to Mr Martin's wide reading relevant to Internet Banking Services. Mr Martin was also retained by the Local government and Shires Association to evaluate "tender submissions for development of [their] Website, including interfacing to databases": see Mr Martin's CV, page 2. In relation to internet browsers, Mr Martin is "familiar with the internal - what is under the hood, so to speak, in browsers and what makes them work": MFI D87, p17, last sentence. Mr Martin is "familiar with HTML market language (which most web pages are made in": MFI D87, p17, last paragraph. Mr Martin has given evidence that a web browser is in effect a terminal emulator: MFI D87, p18, first sentence. Mr Martin is shown to have experience in relation to terminal emulators. For example: (a) Mr Martin wrote the "Commspac" VT100 terminal emulator while performing work for Info One (See Mr Martin's CV, 4th page); (b) Mr Martin wrote the videotex terminal emulator for Market Advantage: para 29, statement 21/02/01. 119 Mr Martin has also demonstrated experience from AUSMAQ in areas related to internet banking and e-commerce such as: (a) the receipt and processing of information electronically and remotely such as the receipt of buy and sell orders; (b) the remote electronic transfer of funds from one account to another and the reporting associated therewith; (c) The security issues related to the remote and electronic transfer of funds. 120 In the result I am satisfied that Mr Martin's evidence establishes sufficient training, study and experience to have provided him with sufficient specialised knowledge upon the basis of which substantially to be in a position to express opinions relating to features of commercially available internet banking packages and the possibility of interfacing Ausmaq to these packages. The proposition for which the defendants contend to the effect that Mr Martin requires to have to have demonstrated familiarity with FICS as well as with each competitor of FICS to be in a position to give evidence as to the ability of such external contractors qua internet banking packages is not accepted. This is the domain of a person with (a) extensive training, study and experience in the development, operation, design, specification, formulation, functionality, writing and composition of software code for computer systems and software in the financial services industry and particularly in relation to financial products and e-commerce trading and financial systems. [and see generally categories "E1" to "E14" identified above] (b) experiential knowledge/capacity - that is to say, Mr Martin has by his training, study or experience been shown to have become sufficiently acquainted with different views in the field relating to Internet Banking Services so as to show that he is in a position to express expert opinions taking into account in an informed way, the literature which he has read. Opinions in relation to retail banking distribution channels D6 121 Mr Martin's experience in relation to Interactive Voice Response (IVR) facilities is referred to in: (a) paras 32 and 89, statement of 21/02/01 (Audiotex IVR for Pont Data); (b) para 90, statement of 21/02/01 (Hayle Heartwatch project); and (c) para 91, statement of 21/02/01 and para 14.6, MFI P109 (AUSMAQ IVR); 122 Mr Martin's experience in relation to Customer Response facilities other than IVR is given in paragraphs 92 - 100, of his statement of 21/02/01. 123 In relation to ATM's and EFTPOS Mr Martin has demonstrated training, study and experience giving him specialised knowledge upon the basis of which to substantially be in a position to express opinions as to how these systems work in terms of their architecture, their operation and design. 124 On the plaintiffs' submissions the Court should act upon the basis that ATM's and EFTPOS systems rely on processes and architecture that existed at AUSMAQ including: (a) the receipt and processing of requests electronically and remotely such as requests for account balances; (b) the electronic transfer of funds from one account to another and the reporting associated therewith; (c) the security issues related to the remote and electronic transfer of funds. These are matters going to the interior scope of the subject which the expert professes. 125 The plaintiffs draw attention to paragraph 83, of the statement of 21/02/01 wherein Mr Martin records: "At AUSMAQ, I performed the testing of the process by which a Direct Debit file was generated and transferred to Chase Manhattan Bank. I configured the network and unix setups required for this file transfer to Chase Bank. I liaised with technical staff from Chase Manhattan Bank to configure this transfer and to problem solve in production. I specified the level of encryption required and supervised the purchase, configuration and testing of the hardware encryption (Racal DC - 64 units) installed at AUSMAQ and at Chase Manhattan Bank. These tasks are similar to the process of debiting customer's accounts as a consequence of a transaction (eg. ATM withdrawal or EFTPOS purchase). When NAB became the new depositee, I liaised with technical staff from NAB to configure the file transfer of the Direct Debits file to NAB via the NAB supplied software, and I participated in tests of this file generation and transfer. After installation, I provided production support and problem solving to AUSMAQ. When AUSMAQ was released in New Zealand, I specified the different file format required for BNZ, and I implemented a means of AUSMAQ staff downloading the direct debits file for subsequent transfer to BNZ. My experience with the direct debits file at AUSMAQ is applicable to other funds transfer applications such as ATM and EFTPOS." 126 In my view Mr Martin has been shown by his training, study and experience to have acquire sufficient of the necessary specialised knowledge on the basis of which substantially and with the aid of his demonstrated experiential capacity permitting him to draw upon his wider reading, to be in a position to express the opinions on each of the areas described in the fifth column of MFI D83 as D6.1. Opinion relating to regulatory environment [D8/D8.1] 127 The words "either" and "or….point of view" in paragraph 16 of Mr Martin's reply to Professor Thomas are not pressed and not read. Opinion relation to strict real-time process control systems [D9/D9.1] 128 Mr Martin's training, study and experience has equipped him with sufficient specialised knowledge upon which to substantially base opinions described in D9.1 - particularly when his experiential capacity is taken into account. Opinion - Paragraph 195, Mr Martin's reply to Professor Thomas 129 As the earlier reasons make clear, Mr Martin's training, study and experience have equipped him with sufficient specialised knowledge and experiential capacity on the basis of which substantially to be in a position to express this opinion. Opinion - Defendants' category D11 130 The plaintiffs do not press: · Paragraph 72 (on the basis of specialised knowledge) or the last sentence of paragraph 453 or the second sentence of paragraph 707 of Mr Martin's statement of 27 June 2000; · Paragraph 609 of Mr Martins' reply to Mr Purcell. 131 Paragraph 304 and the first sentence of paragraph 305 and the first sentence of paragraph 306 of Mr Martin's statement dated 27 June 2000 (statement No. 30) are pressed and admitted only on the basis of Mr Martin's recording the technical operation of the AUSMAQ system and how different consequences result in its operation from a different treatment of events. Mr Martin has the specialised knowledge on which substantially to be able to base this opinion. 132 The sentence beginning "Nevertheless" in paragraph 707 of Mr Martin's statement dated 27 June 2000 (statement No. 30) is allowed. Mr Martin has been shown to have acquired sufficient specialised knowledge upon which to be in a position to substantially base the opinion as to how dividend reinvestment could be effected in the AUSMAQ system. In this respect I note that Mr Martin's evidence in relation to regular savings plans (referred to in paras 672 - 674 of the same statement) in respect of which the analogy of the appropriate mechanism was drawn were not objected to by the defendants on the basis of an absence of specialised knowledge. Opinions - Paragraphs 641, 646 of Martin's statement of 27 June 2000 133 These paragraphs are rejected on the basis of a failure to demonstrate reasoning processes. 134 Paragraph 641 is now the subject of agreement. 135 Paragraph 646 is now the subject of agreement. Breadth, Depth and Currency 136 The above reasons take into account the defendants several submissions with respect to suggested shortcomings in relation to the breadth, depth or currency of Mr Martin's study training or experience. To the extent that the court has held that Mr Martin has been shown by his training, study or experience to have demonstrated that he has acquired the specialised knowledge on the basis of which wholly or substantially to be in a position to express opinions, the court has taken into account all the evidence which he has given and has come to the conclusion that there is no substance in the defendants submissions as to relevant lack of breadth, depth or currency. These parameters are always both relevant and relative to the particular form of specialised knowledge sought to be upheld. They are always both relevant and relative to the type of opinions sought to be expressed. Schedule of Rulings - D91, D92, D93 137 The Courts' rulings as to individual paragraphs have been inserted into the seventh (added) column of appendices "E", "F" and "G" to this judgment. [The correlations are Specialised Knowledge "E" to "D91"; Form "F" to "D92"; State of Mind/extended to S.79 "G" to "D93"] Further Submissions 138 By reason of the complexity of the issues raised on the expertise challenge and by reason of the wide-ranging number of objections it is possible that the above reasons have overlooked some particular issue or matter which required to be treated with. To a certain extent it has been necessary to deal with questions as a matter of principle for obvious reasons. Hopefully the essential gravamen of the critical findings is clear. The court will entertain such further submissions as either party may wish to address by way of clarification of the reasons or by way of the Court having for whatever reason simply omitted to treat with a particular issue. At the same time submissions will be taken as to timetable by which the plaintiffs will attend to those areas treated with by the judgment as appropriate for leave. I certify that paragraphs 1 - 138 are a true copy of the reasons for judgment herein of the Hon. Justice Einstein given on 10 April 2001 ___________________ Susan Piggott Associate 10 April 2001 Last Modified: 06/13/2002 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.