Australian Competition and Consumer Commission v Air New Zealand Limited (No 3)
[2012] FCA 1430
•14 December 2012
FEDERAL COURT OF AUSTRALIA
Australian Competition and Consumer Commission v Air New Zealand Limited (No 3) [2012] FCA 1430
Citation: Australian Competition and Consumer Commission v Air New Zealand Limited (No 3) [2012] FCA 1430 Parties: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v AIR NEW ZEALAND LIMITED (ARBN 000 312 685)
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v P.T. GARUDA INDONESIA LTD (ARBN 000 861 165)
File numbers: NSD 534 of 2010
NSD 955 of 2009Judge: PERRAM J Date of judgment: 14 December 2012 Catchwords: PRACTICE AND PROCEDURE – Suppression order – application by third party for suppression order – whether former s 50 of the Federal Court of Australia Act 1976 (Cth) applies to application – whether, alternatively, new Part VAA applies – consideration of the requirements of new Part VAA and comparison with former s 50 – whether principles that applied to s 50 can be applied to s 37AG(1)(a) – whether suppression order should be made – whether age of documents precludes suppression order Legislation: Federal Court of Australia Act 1976 (Cth) ss 4, 37AE, 37AF, 37AG, 37AH, 37AJ, 50, pt VAA
Access to Justice (Federal Jurisdiction) Amendment Act2012 (Cth) s 2, sch 2Cases cited: Australian Broadcasting Commission v Parish (1980) 43 FLR 129; [1980] FCA 33 cited
Australian Competition and Consumer Commission v Cement Australia Pty Ltd(No. 2) [2010] FCA 1082 cited
Cyclopet Pty Ltd v Australian Nuclear Science and Technology Organisation [2012] FCA 1326 cited
Hogan v Australian Crime Commission (2010) 240 CLR 651 applied
Sportsbet Pty Ltd v State of New South Wales (No 12) [2010] FCA 62 citedDate of hearing: 14 December 2012 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 40 Counsel for the Applicant: J Halley SC, E Collins SC, J Clarke, C Arnott, J Clark, N Shaw, V Bosnjak, T Dinh Solicitor for the Applicant: Australian Government Solicitor Counsel for Air New Zealand: RM Smith SC, NJ Owens, RA Yezerski Solicitor for Air New Zealand: Corrs Chambers Westgarth Counsel for Expeditors International: MJ Steele Solicitor for Expeditors International: Baker & McKenzie
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 534 of 2010
BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
ApplicantAND: AIR NEW ZEALAND LIMITED (ARBN 000 312 685)
Respondent
JUDGE:
PERRAM J
DATE OF ORDER:
14 DECEMBER 2012
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The evidence in the attached schedule not be disclosed (by publication or otherwise) to any person other than the ACCC and the external legal representatives of Air New Zealand and Garuda.
2.Order One shall operate until 31 January 2016.
3.Order One is made on the ground that non-disclosure of the evidence is necessary to prevent prejudice to the proper administration of justice.
4.Liberty to apply on 3 days notice.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
SCHEDULE
1.The agreement dated 5 November 2004 which is ACCC.918.001.0033 to ACCC.918.001.0035.
2.The following parts of the Memorandum of Understanding between Expeditors International Pty Ltd and Toshiba Australia Pty Ltd which is ACCC.921.002.0047:
a. Clauses 1, 2, 4 (final two sentences), 5, 6, 8 and 9;
b. The other material at ACCC.921.002.0050 and ACCC.921.002.0051 other than:
i.The section headed “SOP’s”; and
ii.The signature block.
c. The material at ACCC.921.002.0059.
3.The material in the 2nd column of the document which is ACCC.921.002.0002 other than the material which is adjacent to the heading “Office Information”.
4.The table headed “Import Breakbulk Monthly Measurements” which forms part of the document which is ACCC.921.002.0002.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 955 of 2009
BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
ApplicantAND: P.T. GARUDA INDONESIA LTD (ARBN 000 861 165)
Respondent
JUDGE:
PERRAM J
DATE OF ORDER:
14 DECEMBER 2012
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.The evidence in the attached schedule not be disclosed (by publication or otherwise) to any person other than the ACCC and the external legal representatives of Air New Zealand and Garuda.
2.Order One shall operate until 31 January 2016.
3.Order One is made on the ground that non-disclosure of the evidence is necessary to prevent prejudice to the proper administration of justice.
4.Liberty to apply on 3 days notice.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
SCHEDULE
1.The agreement dated 5 November 2004 which is ACCC.918.001.0033 to ACCC.918.001.0035.
2.The following parts of the Memorandum of Understanding between Expeditors International Pty Ltd and Toshiba Australia Pty Ltd which is ACCC.921.002.0047:
a. Clauses 1, 2, 4 (final two sentences), 5, 6, 8 and 9;
b. The other material at ACCC.921.002.0050 and ACCC.921.002.0051 other than:
i.The section headed “SOP’s”; and
ii.The signature block.
c. The material at ACCC.921.002.0059.
3.The material in the 2nd column of the document which is ACCC.921.002.0002 other than the material which is adjacent to the heading “Office Information”.
4.The table headed “Import Breakbulk Monthly Measurements” which forms part of the document which is ACCC.921.002.0002.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 534 of 2010
BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
ApplicantAND: AIR NEW ZEALAND LIMITED (ARBN 000 312 685)
Respondent
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 955 OF 2009
BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
ApplicantAND: P.T. GARUDA INDONESIA LTD (ARBN 000 861 165)
Respondent
JUDGE:
PERRAM J
DATE:
14 DECEMBER 2012
PLACE:
SYDNEY
REASONS FOR JUDGMENT
This is an application for an order that certain material to be tendered as evidence in these proceedings not be disclosed to any other person beyond the Commission and the external legal representatives of Air New Zealand and Garuda.
The party seeking the order is Expeditors International Pty Ltd (‘Expeditors’). Expeditors is a global logistics company based in Seattle, Washington. During the course of the evidence in this proceeding thus far, there has been some reference to commercial arrangements between Expeditors and another company, Toshiba.
In the main, it is said that the publication of certain materials could be such as to prejudice the commercial interests of Expeditors and, as it was developed in argument, also to prejudice the administration of justice in consequence.
The present application would ordinarily have been made under former s 50 of the Federal Court of Australia Act 1976 (Cth) in a form and by means which are familiar and well-known. However, on Wednesday of this week (12 December 2012), s 50 of the Federal Court of Australia Act was repealed by the operation of cl 5 of sch 2 of the Access to Justice (Federal Jurisdiction) Amendment Act2012 (Cth). Schedule 2 was, by s 2, taken to commence on the day after which the Act received the Royal Assent, which was on 11 December 2012.
The operation of cl 4 of sch 2 of the Act is to insert a new Part VAA into the Federal Court of Australia Act entitled ‘Suppression and non-publication orders’. The insertion of Part VAA was accompanied, in the amending Act, by transitional provisions, which are contained in pt 3 of sch 2.
A threshold question arises on the present application as to whether the amendments, which commenced on 12 December 2012, apply to the present application or whether it continues to be governed by s 50, as it was before it was repealed.
Clause 11(b) of sch 2 (which is in pt 3) provides:
The amendments made by Part 1 [i.e. the repeal of s 50 and the enactment of Part VAA] apply in relation to proceedings (including interlocutory proceedings):
...
(b) that are pending in a court immediately before [the] commencement [of Part 1].
Clause 12(1) of sch 2 provides:
Despite the amendment made by item 5, section 50 of the Federal Court of Australia Act 1976, as in force immediately before the commencement of this item, continues to apply on and after that commencement in relation to a proceeding heard by the Court before that commencement.
By s 4 of the Federal Court of Australia Act, a proceeding includes an interlocutory proceeding (or, in the words of s 4, includes an ‘incidental proceeding in the course of, or in connexion with, a proceeding’). My reading of cl 12(1), therefore, would be that s 50 continues to apply to matters which were argued and reserved on before 12 December 2012.
Consequently, the effect of cl 11(b) will be that the amendments wrought by Part 1 of sch 2 of the amendment Act (that is, the provisions of Part VAA) will govern applications for confidentiality orders in relation to evidence which are commenced by an application which was not pending on 12 December or which, although pending, had not yet been heard.
The present application is of the former kind. It follows, in my opinion, that Part VAA applies.
Section 37AE is contained in Division 2 of the new Part VAA. It sets out the principle of open justice in the following terms:
37AE Safeguarding public interest in open justice
In deciding whether to make a suppression order or non publication order, the Court must take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice.
This is unlikely to have had any impact upon the substantive operation of the law, the principle of open justice being already well-known.
Section 37AF(1) provides:
37AF Power to make orders
(1)The Court may, by making a suppression order or non publication order on grounds permitted by this Part, prohibit or restrict the publication or other disclosure of:
(a)information tending to reveal the identity of or otherwise concerning any party to or witness in a proceeding before the Court or any person who is related to or otherwise associated with any party to or witness in a proceeding before the Court; or
(b) information that relates to a proceeding before the Court and is:
(i)information that comprises evidence or information about evidence; or
(ii) information obtained by the process of discovery; or
(iii) information produced under a subpoena; or
(iv) information lodged with or filed in the Court.
Pertinent for present purposes is sub-s (1)(b), which will be enlivened where the information in question comprises evidence or information about evidence.
Section 37AG provides as follows:
37AG Grounds for making an order
(1)The Court may make a suppression order or non publication order on one or more of the following grounds:
(a)the order is necessary to prevent prejudice to the proper administration of justice;
(b)the order is necessary to prevent prejudice to the interests of the Commonwealth or a State or Territory in relation to national or international security;
(c) the order is necessary to protect the safety of any person;
(d)the order is necessary to avoid causing undue distress or embarrassment to a party to or witness in a criminal proceeding involving an offence of a sexual nature (including an act of indecency).
(2)A suppression order or non publication order must specify the ground or grounds on which the order is made.
It will appear therefrom that there are four grounds for the pursuit of a suppression or non-publication order and that, by s 37AG(2), the ground upon which an order is ultimately granted must be set out in the order.
Important for present purposes is the wording of s 37AG(1)(a). It will be noted that the wording is essentially identical to the equivalent part of s 50 of the Federal Court of Australia Act, except that the word ‘proper’ now appears in front of the word ‘administration’.
I do not think that the word ‘proper’ alters the meaning of the phrase, so that s 37AG(1)(a) reproduces a test with the same content as that which had formerly obtained in relation to s 50. That matters because the meaning and operation of those words have been comprehensively explained by the High Court in Hogan v Australian Crime Commission (2010) 240 CLR 651 at 664 [30]-[33] per curiam. Relevant matters to note about the wording in s 37AG(1)(a) are that, first, before the order is made, it must be ‘necessary’ and that ‘necessary’ is, as was explained in Hogan, a high standard. It is different to ‘convenient, reasonable or sensible’: Hogan at [31].
Secondly, the propinquity of the wording in sub-s (a) to the wording in sub-s (b), with its references to ‘prejudice to the interests of the Commonwealth or a State or Territory in relation to national or international security’, shows that, as the High Court noted in Hogan at [30], citing the judgment of Bowen CJ in Australian Broadcasting Commission v Parish (1980) 43 FLR 129; [1980] FCA 33 at 133 (FLR), orders of this kind are not concerned with trivialities; that is, they are not lightly to be made.
Thirdly, what is involved in assessing whether the order should be made is not a balancing exercise: Hogan at [31]-[32]. It is not a question, on the one hand, of seeking to serve, as best one can, the interests of open justice and, on the other hand, considering the prejudice which may occur if the information is released. The test to be applied is the posing of the question as to whether it is necessary to make the order to prevent prejudice to the proper administration of justice. No balancing exercise is required or permitted.
Section 37AH(5) provides that the suppression or non-publication order ‘must specify the information to which the order applies with sufficient particularity to ensure that the court order is limited to achieving the purpose for which the order is made’. This was probably already likely to have been the case.
Section 37AJ deals with the duration of orders. It is in the following terms:
37AJ Duration of orders
(1)A suppression order or non publication order operates for the period decided by the Court and specified in the order.
(2)In deciding the period for which an order is to operate, the Court is to ensure that the order operates for no longer than is reasonably necessary to achieve the purpose for which it is made.
(3)The period for which an order operates may be specified by reference to a fixed or ascertainable period or by reference to the occurrence of a specified future event.
This provision formalises what was probably good practice beforehand, namely, the placing on all suppression orders some form of sunset clause.
Having set those matters out, it does not seem to me that there is any substantive alteration in the way that the relevant principles are to be applied, although I accept that there are some mechanical alterations in the nature of what the order itself must require.
I turn then to the question of the order which is sought.
In support of the application, Expeditors relied upon the evidence of Mr Paul Arthur. Mr Arthur is the Senior Vice President of Expeditors and is based in New South Wales. He is a senior manager and is responsible for a region which includes the South Pacific, Indo China and the Philippines.
He gave evidence about the form of Expeditors' business, which I need not linger upon. He also gave direct evidence of the three documents in respect of which confidentiality orders are sought.
The first of these is a memorandum of understanding between Expeditors International and Toshiba Australia. The second is a block space agreement between Expeditors and Toshiba Australia. The third is a compendious document, entitled ‘Toshiba’, setting out a series of questions and answers.
The documents are all dated at periods of time which precede 2005. Mr Arthur's concern in relation to the memorandum of understanding is that, although of some age, its terms, in the hands of a competitor, would be likely to convey to that competitor valuable commercial information. In that regard, he made the point that agreements of this kind in this particular industry tend to be rolled over for periods of time, and it was the case that the information in it was, in a sense, current.
He made a similar point in relation to the block space agreement between Expeditors and Toshiba, again the point being that the information contained within it was, to an extent, present and, in any event, within this industry, capable of arming a competitor with information as to what current practice was.
The particular point he made was contained in paragraph 28 of his affidavit, where he said this:
Once a form of agreement has been negotiated with a particular customer, it tends then to be relatively settled with that customer and to continue from year to year, unless renegotiation is sought of specific terms for particular reasons.
In relation to the question-and-answer document, Mr Arthur developed a similar point, which was that the revelation of its contents would reveal to Expeditors' competitors the manner in which it approaches customers and the ways and circumstances in which it pursues those matters. Again, the point was repeated that Toshiba remained a client of Expeditors and that this reflected its current practices.
Ordinarily, it has not been my practice to accept that documents which are seven years old can have a commercial sensitivity of the kind which has been asserted on their behalf today. However, paragraph 28 of Mr Arthur's affidavit does, in combination with the other parts of his affidavit which make clear that what is actually involved is current practice, satisfy me of the sensitivity of these documents. The problem has been surmounted.
I should say, for completeness, that it is an accepted head, under what was formerly s 50 and what is now s 37AF, commercial sensitivity can be a basis for making an order of the present kind. Parish is, of course, the best example of that but, as Mr Steele, who appeared for Expeditors, pointed out, the decision of Greenwood J in Australian Competition and Consumer Commission v Cement Australia Pty Ltd(No. 2) [2010] FCA 1082 is another, as is the decision of Jacobson J in Cyclopet Pty Ltd v Australian Nuclear Science and Technology Organisation [2012] FCA 1326. There are a number of other cases to a similar effect: see, for example, Sportsbet Pty Ltd v State of New South Wales (No 12) [2010] FCA 62.
In the Cement Australia case, Greenwood J was also confronted with the difficulty that the material in question was of some antiquity. At [22], he said this:
I have examined a number of the documents falling within Schedule C and two things should be noted. First, the documents concern and discuss matters relating to rivalrous conduct between market participants. They therefore fall within that particular category of material. Secondly, although the material relates back some time, there remains an inter-relationship between the current working operation of particular agreements, present market conduct and the documents in question. In other words, they throw up matters concerning formulas and ratios for the calculation of rebates; pricing formulas, information relating to customers and the relevance of particular plants, their location and the way in which rebate arrangements work.
It will be observed that his Honour was content to make the orders there, notwithstanding the age of the material, because of the interrelationship between the information and present arrangements. In the present case, I am similarly satisfied and content to make the orders.
The Act requires that the order should operate for a finite period. The order proposed by Mr Steele would see it expiring on 31 January 2016. It seems to me that that is an appropriate time for it to expire. He submitted that the reason that date had been selected was because it was possible that in the intervening three years, there could be renegotiations of the contract, which might reduce the confidentiality. He also submitted that placing such a window upon it might provide an opportunity for the matter to be revisited at that time. I am content to proceed on that basis.
In those circumstances, I make the following orders:
1.The evidence in the attached schedule not be disclosed (by publication or otherwise) to any person other than the ACCC and the external legal representatives of Air New Zealand and Garuda.
2.Order One shall operate until 31 January 2016.
3.Order One is made on the ground that non-disclosure of the evidence is necessary to prevent prejudice to the proper administration of justice.
4.Liberty to apply on 3 days notice.
I will attach, in due course when the orders are processed, the schedule attached to Mr Steele’s proposed orders.
I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram. Associate:
Dated: 17 December 2012
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