Australian Competition and Consumer Commission v Oscar Wylee Pty Ltd (No 2)
[2020] FCA 1361
•23 September 2020
FEDERAL COURT OF AUSTRALIA
Australian Competition and Consumer Commission v Oscar Wylee Pty Ltd (No 2) [2020] FCA 1361
File number: NSD 2072 of 2019 Judgment of: KATZMANN J Date of judgment: 23 September 2020 Catchwords: PRACTICE AND PROCEDURE — application for suppression or non-publication order — confidential commercially sensitive information — whether order necessary to prevent prejudice to proper administration of justice — appropriate duration of order Legislation: Evidence Act 1995 (Cth) s 75
Federal Court of Australia Act 1976 (Cth) ss 37AE, 37AF, 37AG(1)(a), 37AI, 37AJ
Cases cited: Australian Competition and Consumer Commission v Air New Zealand Ltd (No 3) [2012] FCA 1430
Australian Competition and Consumer Commission v Origin Energy Electricity Ltd [2015] FCA 278; ATPR ¶42-495
Australian Competition and Consumer Commission v Sony Interactive Entertainment Network Europe Ltd [2020] FCA 787; 145 ACSR 353
Australian Competition and Consumer Commission v Ultra Tune Australia Pty Ltd [2019] FCA 12
In-N-Out Burgers, Inc. v Hashtag Burgers Pty Ltd [2020] FCA 193; 377 ALR 166; 150 IPR 73
Motorola Solutions, Inc. v Hytera Communications Corp Ltd (No 2) [2018] FCA 17
Steelforce Trading Pty Ltd v Parliamentary Secretary to the Minister for Industry, Innovation and Science (No 2) [2018] FCAFC 47
Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Number of paragraphs: 24 Date of last submission/s: 18 September 2020 Date of hearing: 14 September 2020 Counsel for the Applicant: Mr R Yezerski Solicitor for the Applicant: Australian Government Solicitor Counsel for the Respondent: Ms V Brigden Solicitor for the Respondent: Mid-West Law Practice ORDERS
NSD 2072 of 2019 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
Applicant
AND: OSCAR WYLEE PTY LTD
Respondent
ORDER MADE BY:
KATZMANN J
DATE OF ORDER:
23 SEPTEMBER 2020
THE COURT ORDERS THAT:
1.Pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth), on the ground that it is necessary to prevent prejudice to the proper administration of justice, for a period of three years from the date of this order:
(a)the information contained in the final two lines of the table in paragraph 51 of the Amended Statement of Agreed Facts and Joint Submissions filed on 15 September 2020, pertaining to the financial years 2017/18 and 2018/19, and the shaded information contained in paragraphs 52 and 120.2 (Confidential Information), is confidential for the purposes of rr 2.32(1)(b) and 2.32(3)(a) of the Federal Court Rules 2011 (Cth);
(b)publication and/or disclosure of the Confidential Information is prohibited, including in any transcript of a hearing in this proceeding or any appeals from the judgment(s) in this proceeding other than a confidential transcript, except that the Confidential Information may be disclosed to:
(i)the Court, including Court staff and any other person assisting the Court; and
(ii)the parties to this proceeding and their legal representatives, including any secretarial or administrative staff employed or engaged by them; and
(c)no person may have access to the Confidential Information pursuant to r 2.32 of the Federal Court Rules except for those persons who are permitted by these orders to have access to it.
2.The Statement of Agreed Facts and Joint Submissions filed on 11 September 2020 be removed from the Court file.
3.The parties have liberty to apply on seven (7) days’ notice.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
KATZMANN J:
On 18 September 2020 judgment in this proceeding was published: ACCC v Oscar Wylee Pty Ltd [2020] FCA 1340 (the principal judgment). On 14 September 2020, the day before the hearing, the respondent, Oscar Wylee Pty Ltd, filed an interlocutory application seeking a suppression or non-publication order pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth) (FCA Act). The application was supported by an affidavit affirmed by Aleco Vrisakis, the solicitor for Oscar Wylee. Submissions were filed the same day.
Mr Vrisakis’s evidence was given on the basis of information and belief, the information having been conveyed to him by Bob Teoh, executive director of Oscar Wylee. Although the application was interlocutory, it was made at a final hearing. It was therefore doubtful whether the exception to the hearsay rule in s 75 of the Evidence Act 1995 (Cth), which applies to interlocutory proceedings rather than to the hearing of interlocutory applications, applied to Oscar Wylee’s application. In any case, the evidence was sparse and by no means compelling. At the hearing, I expressed concern about the sufficiency of the evidence to support the order sought and granted Oscar Wylee leave to put on additional evidence and submissions as it saw fit. At the same time I made an interim order in Oscar Wylee’s favour, pursuant to s 37AI of the FCA Act, that the evidence the subject of the application not be published or otherwise disclosed until the application was determined.
On 17 September 2020 Oscar Wylee filed an affidavit affirmed by Mr Teoh. Further submissions were filed the next day.
Section 37AF(1) of the FCA Act gives the Court the power, by making a suppression or non‑publication order on grounds permitted by Pt VAA (listed in s 37AG), to prohibit or restrict the publication or other disclosure of certain information. Relevantly that information includes:
(b)information that relates to a proceeding before the Court and is:
(i) information that comprises evidence or information about evidence; or
…
(iv) information lodged with or filed in the Court.
One of the grounds permitted by Pt VAA is that the order is necessary to prevent prejudice to the proper administration of justice: s 37AG(1)(a).
The information the subject of the proposed order is contained in the Statement of Agreed Facts and Joint Submissions filed on 11 September 2020, and the Amended Statement of Agreed Facts and Joint Submissions filed on 15 September 2020 (together, the Statements). The Amended Statement of Agreed Facts and Joint Submissions was tendered by the Australian Competition and Consumer Commission (ACCC) at the hearing. The information in question consists of:
(1)the figures for the 2017/18 and 2018/19 financial years relating to Oscar Wylee’s total revenue; profit or loss before and after tax; total current assets; and total current liabilities; and
(2)Oscar Wylee’s national sales figures for the first six months of 2020.
The information is redacted in the principal judgment in accordance with the interim order.
Oscar Wylee noted that the sales figure in [120.2] of the Statement of Agreed Facts and Joint Submissions was incorrect, but pressed its claim over the figure because it “provides a general indication of [its] revenue”.
Oscar Wylee submitted that the information is confidential and commercially sensitive. It contends that there is a risk that, if the information were to be made public, it could be used by its competitors, suppliers and lessors to their commercial advantage and to its disadvantage and so damage its competitive position in the market.
The application was not opposed.
The relevant principles in a case such as this were summarised by Perram J in Motorola Solutions, Inc. v Hytera Communications Corp Ltd (No 2) [2018] FCA 17. This summary was approved by the Full Court in Steelforce Trading Pty Ltd v Parliamentary Secretary to the Minister for Industry, Innovation and Science (No 2) [2018] FCAFC 47 at [4]. I recently referred to it in In-N-Out Burgers, Inc. v Hashtag Burgers Pty Ltd [2020] FCA 193; 377 ALR 166; 150 IPR 73 at [360]–[361]. It is sufficient at this point to refer to what I said in that case at [361]:
In short, as Perram J noted in Motorola at [6], a suppression order pursuant to s 37AG(1)(a) is not to be made lightly. Any such order must be necessary to prevent prejudice to the proper administration of justice, not merely desirable, and “necessary is a strong word”: Hogan v Australian Crime Commission (2010) 240 CLR 651 at [30]. In deciding whether to make such an order, the Court is required to take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice: FCA Act, s 37AE. The mere fact that information relevant to a proceeding is not in the public domain will rarely be a sufficient basis to suppress its publication: Australian Competition and Consumer Commission v Valve Corporation (No 5) [2016] FCA 741 at [9] (Edelman J). There must also be a real risk that disclosure could cause commercial harm: Betfair Pty Ltd v Racing New South Wales (No 5) [2009] FCA 1011 at [9] (Perram J).
For the following reasons, on the basis of Mr Teoh’s evidence and the submissions made on Oscar Wylee’s behalf, I am persuaded that, with one exception, the orders sought should be made.
The exception relates to the order sought relating to the Statement of Agreed Facts and Joint Submissions. As this document has been superseded by the Amended Statement of Agreed Facts and Joint Submissions, the better course, it seems to me, is to order that the original version be removed from the Court file and that is what I shall do.
Mr Teoh’s evidence indicates that, not only has the information in question not been publicly disclosed, but it is indeed confidential.
Mr Teoh deposed to the following matters. In the absence of any reason to think otherwise, I accept that evidence.
Oscar Wylee operates in a highly competitive retail market dominated by two “global international corporate groups”: the group trading as Specsavers and the group trading as OPSM (together, major competitors). Oscar Wylee is not obliged to publicly disclose any information regarding its revenue, merchandise sales, profit or loss before or after tax, total current assets or liabilities, or national sales figures or revenue per financial year. Oscar Wylee treats this information as highly commercially sensitive and has strictly maintained the confidentiality of all such information, except where it provides the information, on a confidential basis, for the purpose of entering into a lease of a store. The maintenance of confidentiality over the information is important to protect Oscar Wylee’s position in the marketplace.
Disclosure of the information could have the following consequences.
First, Oscar Wylee’s major competitors and suppliers could assess and accurately compare Oscar Wylee’s actual revenue to that of the major competitors. Those entities could then use the information to their advantage and to the disadvantage of Oscar Wylee. Second, it would be possible to determine Oscar Wylee's average sales per store, as information concerning the number of its stores is publicly available and the information could be used by lessors to negotiate rents and by suppliers to negotiate terms and prices, in each case to their advantage and to the disadvantage of Oscar Wylee, although the information was provided in confidence for a limited purpose.
I am satisfied that disclosure of the information could give Oscar Wylee’s major competitors a commercial advantage and compromise its ability to negotiate rents with lessors and terms and prices with suppliers. Factors such as these can support the making of a suppression or non‑publication order. Australian Competition and Consumer Commission v Air New Zealand Ltd (No 3) [2012] FCA 1430 at [35] (Perram J); Australian Competition and Consumer Commission v Origin Energy Electricity Ltd [2015] FCA 278; ATPR ¶42-495 at [148] (Katzmann J); Motorola at [8] and the other cases referred to there. In Motorola at [9] Perram J explained that there are cogent reasons for this, described in various ways in the authorities, but “generally associated with preserving the integrity of the litigious process, [which is] likely to be jeopardised if commercial competitors could benefit from court ordered production of trade secrets by parties to a suit”.
In In-N-Out Burgers at [373] I said:
It is not in the interests of the administration of justice that litigation becomes “a vehicle for advantaging or prejudicing trade rivals”: Australian Competition and Consumer Commission v Cement Australia Pty Ltd (No 2) [2010] FCA 1082 at [23] (Greenwood J); Origin Energy at [148]. Furthermore, as I said in Origin Energy, it is in the interests of the administration of justice that the value of confidential information not be destroyed or diminished lest the parties and members of the public lose confidence in the Court and the Court’s processes: see Australian Broadcasting Commission v Parish (1980) 43 FLR 129 at 134 (Bowen CJ).
I accept Oscar Wylee’s contention that a suppression order is necessary to prevent prejudice to the proper administration of justice. As Oscar Wylee submitted, it is necessary for the proper administration of justice that respondents to regulatory proceedings both comply with compulsory notices and voluntarily disclose confidential and sensitive information in the course of settlement negotiations so as to facilitate the early and efficient resolution of proceedings. Submissions to similar effect were accepted by Bromwich J in Australian Competition and Consumer Commission v Ultra Tune Australia Pty Ltd [2019] FCA 12 at [385] and Steward J in Australian Competition and Consumer Commission v Sony Interactive Entertainment Network Europe Ltd [2020] FCA 787; 145 ACSR 353 at [114].
Mr Teoh said that most of the information was provided to the ACCC under compulsion pursuant to a notice issued under s 155 of the Competition and Consumer Act 2010 (Cth). Some of the information, including the financial information regarding sales in 2020, was provided to the ACCC for the purpose of agreeing to orders. There is a real risk that companies would be discouraged from providing information of this kind to regulators without the protection of a non-publication or suppression order.
In accordance with s 37AE of the FCA Act, I take into account that a primary objective of the administration of justice is the safeguarding of the public interest in open justice. I have considered the interests of the public in being able to access court documents and engage meaningfully with the Court’s published reasons: Motorola at [8]–[9]. But Oscar Wylee’s proposed order is narrow in scope and does not unduly encroach upon those interests. None of the information is necessary to “engage meaningfully” with the reasons in the principal judgment. The evidence in question was far from, and never likely to be, “a central plank in the ultimate resolution of the proceeding”: see Motorola at [9].
Section 37AJ requires that the Court decide the period in which a suppression or non‑publication order is to operate, specify the period in the order, and ensure that it is no longer than is reasonably necessary to achieve the purpose for which it is made. Oscar Wylee asks for a period of three years on the basis that this is likely to be the period necessary to provide the protection over the information it seeks because the commercial utility of the information is limited after that time. I accept that three years is no longer than reasonably necessary to preserve the commercial utility of the information.
I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Katzmann. Associate:
Dated: 23 September 2020
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