The extract and a brief discussion is set out below.
The extract of the judgment is set out at  to  as follows, and I have left the endnote links in for ease of reference:
16 The applications before the Court highlight the current challenges of using discovery as a court procedure. It is important to briefly consider the recent reforms relating to discovery to understand the approach adopted by the parties and to understand my decision.
17 The vast amount of data created and stored by electronic means poses a new challenge for the use of discovery as a court procedure. Discovery is a topic that attracts a great deal of attention due primarily to the exorbitant costs that are incurred by the parties and the delay caused in litigation. The Court has long recognised that discovery disputes, large scale unfocussed discovery exercises and the resulting costs, work against the interests of the parties to the litigation, the operation of the civil justice system and ultimately the interest of the community.
18 Discovery has been the subject of reform over many years. Traditional restrictions on discovery have been removed, for example, enabling discovery before a proceeding is commenced and allowing discovery against non-parties. The Victorian Law Reform Commission (“VLRC”) report in March 2008 and the Australian Law Reform Commission report in March 2011, were critical of the time and cost involved in discovery, particularly where there are large numbers of electronic documents. Judges have become concerned with the time and costs devoted to discovery often for a comparatively small result in identification of documents relevant to the eventual resolution of the dispute.
19 These concerns have seen the narrowing of the discovery rules and a shift away from the Peruvian Guano test which found its origins in 19th century England.
20 The shift is seen in the recent amendments to the Civil Procedure Act 2010 (Vic) (“CPA”); order 29 of the Rules; and the Supreme Court Guidelines found in Practice Note No. 1 of 2007: Guidelines for the Use of Technology in any Civil Litigation.
21 The overarching purpose of the CPA is to facilitate the “just, efficient, timely and cost-effective resolution of the real issues in dispute.” In particular, the CPA flags discovery as an area in need of more judicial control.
22 The Explanatory Memorandum to the CPA expressed concern that discovery had become a largely contested process particularly in complex civil litigation where it has been criticised in a number of high profile cases. The VLRC recommended greater case management of litigation including case management of discovery.
23 The CPA provides that the Court may make any order or give any directions in relation to discovery that it considers necessary or appropriate. The CPA then, without limiting the orders or directions a court may make, lists a series of orders that may be made.
24 The CPA provides that discovery shall be made in accordance with the Rules of the Court or Court order. The new Rules of the Court give effect to the CPA.
25 The recent amendments to Order 29 mirror the Federal Court approach and have narrowed the test for discovery in Victorian Courts from 1 January 2011. The new rules introduce the concept of a “reasonable search, requiring a consideration of proportionality.” Under the new rule, the parties must discover any of the following documents of which the party giving discovery is aware after a reasonable search:
- documents upon which they rely;
- documents that adversely affect their own case or another party’s case; and
- documents that support another party’s case.
26 In making a reasonable search a party may take into account:- the nature and complexity of the proceeding;
- the number of documents involved;
- the ease and cost of retrieving a document;
- the significance of any document to be found; and
- any other relevant matter.
27 Finally, Practice Note No.1 of 2007 suggests that the parties agree to limits on discovery, including limits on searches for any category of discoverable documents where searches are considered to be unduly burdensome, oppressive or expensive having regard to the importance or likely importance of the category.
28 The CPA, the recently amended Rules and relevant Practice Notes, highlight that practical models for discovery, rather than strict adherence to legal rules, are the key to resolving problems of discovery in complex litigation where there are large volumes of material stored electronically and in hard copy. When intervening in the discovery process, the Court must try to achieve an optimum balance so that discovery is undertaken by each party in the most timely, efficient and cost-effective manner, while ensuring that discovery is proportionate to the size of the case and appropriate to the interests of justice.The critical points are in paragraphs 27 and 28: that the parties ought to agree to reasonable limits on discovery, and that practical models for discovery are preferred by the Courts.
For my readers' reference, the Peruvian Guano or the 'train of inquiry' test which the Courts have moved away from is set out in Comagnie Financiere et Commerciale du Pacifique v Peruvian Guano Company (1882) 11 QBD 55 by Brett LJ at 62-3 as follows:
"The documents to be produced are not confined to those which would be evidence either to prove or disprove any matter in question in the action ... It seems to me that every document relates to the matters in the action, which not only would be evidence upon any issue, but also which, it is reasonable to suppose, contains information which may -- not which must -- either directly or indirectly enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary. I have put in the words "either directly or indirectly", because ... a document can properly be said to contain information which may enable the party requiring the affidavit either to advance his own case or to damage the case of his adversary, if it is a document which may fairly lead him to a train of inquiry, which may have either of these two consequences".