Attorney-General of the Commonwealth v Davids Holdings P/L

[1992] FCA 830

NO DISTRIBUTION

JUDGMENT No. .... ... ........ .. i.3.A.

IN THE FEDERAL COURT OF AUSTRALIA	I
NEW SOUTH WALES DISTRICT REGISTRY	t

GENERAL DIVISION	No. NG575 of 1992	L	I
BETWEEN:

ATTORNEY-GENERAL OF THE COMMONWEALTH

ADD^ icant

AND :  DAVIDS HOLDINGS PTY. LIMITED

Respondent

m:  QIW RETAILERS LIMITED

Second Respondent	i
L..'

G3012/92

MINUTES OF ORDER

JUDGE MAKING ORDER:	Cooper J.
WHERE MADE:	Brisbane  1 6 NOV 1992 .

~ L V L ~

DATE OF ORDER:	4 November, 1992	L	pRlNCIPA'
R E Q I ~
THE COURT ORDERS :-

l. That the first respondent produce for inspec

the legal advisers and independent experts of the

applicant, upon the same executing a written	I
undertaking to treat the information contained in	I

the documents confidential to themselves and not to use the information for any purpose other than these

I ~

proceedings, the documents discovered by the first

respondent, in respect of which a claim for	1
confidentiality is made.	i'

2 .	The applicant have liberty to apply on twenty-four	I !
( 2 4 ) hours notice for an order for disclosure to	;
such other persons as are named in the application	<. I
upon such terms as the Court shall deem meet of any	1
identified document discovered by the respondent in	1
l '-

i ,

its affidavit of documents. l . .

3.	The costs of all parties be costs in the cause.	I -
!.

I DIRECT that Counsel settle forthwith a form of undertaking	I , .
to be executed by any expert and such legal advisers of the
applicant who have not signed an existing undertaking.	!
L
I DIRECT that Counsel settle forthwith a form of order
excluding such legal advisers of the applicant to whom	!
inspection is not intended to be made pursuant to this order.	I .
,

Note:	Settlement and entry of orders is dealt with in	I
Order 36 of the Federal Court Rules.	E
!

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION	NO. NG575 of 1992
BETWEEN :

DAVIDS HOLDINGS PTY. LIMITED

Respondent

QIW RETAILERS LIMITED

Second Respondent

fOG3012/92\

CORM:	Cooper J.
PLACE :	Brisbane
m:	4 November, 1992

REASONS FOR JUDGMENT

The applicant QIW Retailers Ltd. and the respondent and its subsidiaries compete in the sale and distribution of groceries at a wholesale level in Queensland. The first respondent has made a takeover offer for the applicant. Proceedings have been instituted in this Court seeking to restrain the sending out of offers. One of the issues in the proceedings is the allegation that if the takeover succeeded a

contravention of section 50 of the Trade Practices Act 1974

would occur. The applicant and the Attorney-General of the
Commonwealth have sought declarations and injunctive relief.

On 27 August, 1992 at or about the time discovery was to take place it was agreed between the parties that copies of documents would be provided on the basis that they would be treated as confidential and limited to the legal

representatives of all parties. Written undertakings were executed to give effect to this agreement. Since that time discovery has proceeded. From time to time when the matter has been reviewed, comment has been made by the applicants that the terms of the undertaking were too restrictive. On each occasion I refused to give a blanket release from the undertakings and was advised that the matter would be resolved by the parties. This has not occurred.

The parties as between themselves have indentified the documents in respect of which they seek to maintain confidentiality; the applicant in a positive way by listing the documents for which confidentiality is claimed; the first respondent in a negative way by identifying the documents for which confidentiality is no longer claimed.

On Friday 30 October, 1992 the applicant sought that the undertaking be amended in such a way that access to the documents could be given to personnel of the applicant for the purpose of obtaining instructions. This was objected to on

even with an undertaking it would be impossible to identify	the grounds that the nature of the documents was such that
any breach by an unknown employee or officer and further that the nature of the information was such that it could not simply be excluded from the knowledge of the recipient in the ordinary conduct of the competitive businesses. The first respondent offered a proposal whereby the officer or employee and the document would be identified and agreement to inspect

given or refused within 24 hours. There were additional provisions relating to marking of documents and the like. This was refused by the applicant.

As the trial is imminent (it commences on Wednesday next, 11 November, 1992), I directed that any party seeking an order for inspection of material presently treated as confidential between the parties make application today upon notice to the other party identifying the documents sought, the identity of the person to whom inspection was sought to be made, the conditions of such inspection and the material intended to be relied upon in support of the application. The applicant, by its Counsel, stated that the course adopted was satisfactory to it.

On 3 November, 1992 the applicant wrote to the first respondent's solicitors referring to the direction I had given and stated inter alia :-

"We are not prepared t o concede t o your c l ient the forensic advantage o f knowing

obtain instructions upon beyond what was

what particular documents we wish t o

oral ly submitted t o the Court on October 30, 1992. Nor do we think it appropriate or relevant that your c l ient be appraised o f the i den t i t y o f the particular o f f i c e r or employee o f QIW from whom we wish t o obtain instructions i n respect o f speci f ic documents. Your proposed "protocol" involves an unnecessary and improper intrusion upon our entitlement t o obtain instructions from our c l i en t , and our c l ient ' s r ight t o conf ident ia l i ty i n relation t o the matters upon which it confers instructions upon us".

No application of the type contemplated by my direction was made today; rather it was sought to return to the submissions made on Friday last that there be disclosure to persons including unnamed personnel of the applicant upon those persons signing an undertaking as to confidentiality. It was further submitted that a register of the persons who had had access to the documents, identifying the documents, be prepared and that it be made available to the first respondent after the conclusion of the litigation. It was also submitted that information prior to January, 1992 was stale and transient and did not justify confidentiality from the employees of the applicant. In support of this submission reference was made to an affidavit of John James Deuchars, the Managing Director of Davids Distributions Pty. Ltd.

The paramount principle in this Court is one of open justice. However, it is implicit in section 50 of the Federal C s t Act that the principle may be encroached upon where it is necessary to do so in the administration of justice and

only so far as is necessary to ensure that so far as possible,	justice will be done between the parties to the litigation
(Australian Broadcastinq Commission v. Parish (1980) 29 ALR 228 at 235).
The justice between the parties spoken about in Australian Broadcastinq Commission v. Parish acknowledges that there are occasions upon which it is necessary that certain information of one party not be generally disclosed or that

such disclosure as is allowed goes only to the extent necessary to enable the other party to the litigation to properly prepare and litigate its case. This is recognised in Parish at pages 233, 241-242.

The Court will always be particularly careful as to trade secrets and confidential information if disclosure would harm the party in possession of that information. (See Warner Lambert Co. v. Glaxo Laboratories Ltd. [l9751 RPC 354 at 360, where the Court deals with the concern not to expose a party to any unnecessary risk of trade secrets leaking to any competitor).

At the end of the day it is a balancing exercise between the interests of both parties. If the applicant truly needs greater disclosure than presently available to properly and effectively prepare its case, it may be that such disclosure is necessarily at the cost of the perceived forensic advantage in not discovering the identity of the

Court and the first respondent.	document or the employee or officer of the applicant to the	It is not possible to now go through the numerous documents for which confidentiality is claimed by the first respondent and require that the basis of confidentiality be sustained and a particular order made dealing with that particular document. If the applicant is not prepared to nominate the documents in respect of which it has a specific
need to be allowed to disclose the contents to others not presently entitled to inspect the document under the existing arrangements, then, I must deal with the matter generally.
I am satisfied that there are some documents of the first respondent in relation to its finances and trade dealings which are particularly sensitive and which, if disclosed, would or could cause serious commercial detriment to it in its business. I include in this class documents which include information which would, if known to the applicants, constitute additional information to the working knowledge of that employee in discharging his or her ordinary employment with the applicant. That information, in reality, cannot be expunged when the employee is making commercial decisions which will impact on its competitive behaviour when competing against the respondent. Similarly, there are documents which may not have that degree of sensitivity provided reasonable safeguards are in place. The problem is that those documents cannot now be readily identified.
There can be no prejudice if all documents are open to inspection to the applicant's independent experts provided that expert is not in any professional or business relationship with the applicant and provided that the expert sign an appropriate undertaking to preserve the confidentiality of the information contained in the document and not to use it for any purpose other than giving advice to the applicant's legal advisers and for the purpose of giving
evidence in these proceedings.
I remain unpersuaded that there is any general category of documents which requires the documents to be disclosed to the personnel of the applicant in order that the experts may properly prepare their advice. In saying this, I appreciate the submission of the applicant that the approach the applicant takes to this case is one of examining historically and on a contemporary basis the external conduct in the market place of the respondents as revealed by the internal workings of the respondents and the documentation held by the respondents from which their market behaviour can be ascertained. To my mind to know that a former client of the applicant changed allegiance to the respondents because of alleged poor servicing, which assertion is recorded in the documents of the respondents, does not advance the applicant's case even if the applicant disputes the allegation. For the
customer to be approached to challenge the basis allegedly given by the customer to the respondent does nothing more than
relationship between the customer and the respondents. If I to embarrass the customer and put pressure on the trading am wrong and there is a demonstrable need to show a document
to an employee, remembering that the applicant's legal advisers have copies of the documentation, then a value judgment will have to be made by the applicant's legal advisers as to whether the need to get instructions outweighs the perceived forensic advantage.

It always remains open to the parties to agree to further disclosure of documents as between themselves. It is also a paramount principle in this Court that litigation is not to be conducted by ambush.

THE COURT ORDERS :-

l. That the first respondent produce for inspection by the legal advisers and independent experts of the applicant, upon the same executing a written undertaking to treat the information contained in the documents confidential to themselves and not to use the information for any purpose other than these proceedings, the documents discovered by the first respondent, in respect of which a claim for confidentiality is made.

The applicant have liberty to apply on twenty-four

(24) hours notice for an order for disclosure to

such other persons as are named in the application upon such terms as the Court shall deem meet of any identified document discovered by the respondent in its affidavit of documents.

3.        The costs of all parties be costs in the cause.

I DIRECT that Counsel settle forthwith a form of undertaking

to be executed by any expert and such leqal advisers of the
applicant who have not signed an existing undertaking.

I DIRECT that Counsel settle forthwith a form of order excluding such legal advisers of the applicant to whom inspection is not intended to be made pursuant to this order.

I certify that this and the eight (8) preceding pages are a true copy of the reasons for judgment herein of the Honourable Mr. Justice Cooper.

Date: 4 November, 1992

, I nnit Associate

Counsel for the Applicant:  G . A . Thompson Q . C .

Solicitors for the Applicant:	Clarke & Kann
Counsel for the Respondent:	C . A .  Sweeney Q . C . , P .
Morrison Q . C .  and P. O'Shea
Solicitors for the Respondent:	Allen Allen & Hemsley