Australian Securities and Investments Commission v Westpac Banking Corporation
[2021] FCA 722
•16 June 2021
FEDERAL COURT OF AUSTRALIA
Australian Securities and Investments Commission v Westpac Banking Corporation [2021] FCA 722
File number: NSD 386 of 2021 Judgment of: LEE J Date of judgment: 16 June 2021 Catchwords: PRACTICE AND PROCEDURE – applications by non-parties seeking confidentiality orders over documents to be produced in accordance with discovery obligations – documents appear to disclose commercially and price sensitive information – whether order is necessary to prevent prejudice to the proper administration of justice – necessity requires that there is no other practicable avenue which exists to protect the legitimate interests of the person seeking the order – implied undertaking and requirement on the part of non-practitioners to sign an express obligation of confidence sufficient in the circumstances – consideration of the Hearne v Street obligation Legislation: Constitution Ch III
Federal Court of Australia Act 1976 (Cth) Pt VAA
Cases cited: Steelforce Trading Pty Ltd v Parliamentary Secretary to the Minister for Industry, Innovation and Science (No 2) [2018] FCAFC 47
Motorola Solutions, Inc. v Hytera Communications Corporation Ltd (No 2) [2018] FCA 17
Hogan v Australian Crime Commission [2010] HCA 21; (2010) 240 CLR 651
Haswell v Commonwealth of Australia [2020] FCA 915
Harman v Secretary of State for the Home Department [1983] 1 AC 280
Hearne v Street [2008] HCA 36; (2008) 235 CLR 125
Treasury Wine Estates Ltd v Maurice Blackburn Pty Ltd [2020] FCAFC 226; (2020) 385 ALR 562
Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Number of paragraphs: 19 Date of hearing: 16 June 2021 Counsel for the Plaintiff: Mr J Williams SC with Mr J Burnett Solicitor for the Plaintiff: Holding Redlich Counsel for the Defendant: Mr P Crutchfield QC with Ms J Granger Solicitor for the Defendant: Allens Counsel for PMC Treasury Limited: Mr B Katekar SC Solicitor for PMC Treasury Limited: Squire Patton Boggs Solicitor for AustralianSuper Pty Ltd and IFM Investors Pty Ltd: Corrs Chambers Westgarth ORDERS
NSD 386 of 2021 BETWEEN: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
PlaintiffAND: WESTPAC BANKING CORPORATION ACN 007 457 141
DefendantPMC TREASURY LIMITED
Interested PersonAUSTRALIANSUPER PTY LTD
Interested PersonIFM INVESTORS PTY LTD
Interested Person
ORDER MADE BY:
LEE J
DATE OF ORDER:
16 JUNE 2021
THE COURT ORDERS THAT:
Confidentiality Regime
1.By 4pm on 30 June 2021, PMC Treasury Ltd (PMC) is to notify ASIC and Westpac of the parts of each transcript or document (or part of document) which it identifies as being confidential and the basis for the claim for confidentiality (PMC Confidential Information).
2.By 4pm on 30 June 2021, AustralianSuper Pty Ltd as trustee for AustralianSuper and IFM Investors Pty Ltd (Consortium) are to notify ASIC and Westpac of the parts of each transcript or document (or part of document) which they identify as being confidential and the basis for the claim for confidentiality and, in each case, identifying whether the material falls within paragraph 1a. or 1b. of the Consortium’s Interlocutory Application filed 11 June 2021 (Consortium Confidential Information).
3.Subject to further order, if ASIC or Westpac intends to disclose any PMC Confidential Information or Consortium Confidential Information to a person other than to ASIC staff and members, a barrister or external solicitor (or their support staff) engaged for the purposes of this proceeding or an internal solicitor who holds a current practicing certificate, that person must: (a) have the legal consequences of giving an undertaking to the Court explained to them by a solicitor for either ASIC or Westpac (depending upon the identity of the party providing the information); and (b) following such advice, have executed a confidentiality undertaking substantially in the form of Annexure A (in the presence of the solicitor providing the explanation).
4.If ASIC or Westpac propose to file a document with the Court which discloses the contents of the PMC Confidential Information or the Consortium Confidential Information and which can be inspected in accordance with FCR 2.32(2), that party must provide three days’ notice to PMC or the Consortium (as applicable).
5.The parties to the proceeding have liberty to apply to the Associate to Justice Lee as to any dispute relating to:
(a)any claim for confidentiality in accordance with order 1 or 2; and
(b)any notification provided under order 4.
Pleadings and Disclosure
6.Order 1 of the orders made on 19 May 2021 be vacated.
7.By 4pm on 2 July 2021, Westpac serve a response to ASIC’s concise statement and provide a copy by email to the Associate to Justice Lee.
8.The date for compliance with Order 3 of the orders made on 19 May 2021 be extended, in respect of documents over which ASIC is considering making a claim for privilege, to 5pm on 18 June 2021.
9.The parties have liberty to apply.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Annexure A
Confidentiality Undertaking
No. NSD 386 of 2021
Federal Court of Australia
District Registry: New South Wales
Division: General
Australian Securities and Investment Commission Plaintiff
Westpac Banking Corporation ACN 007 457 141 Defendant
I, [name] of [address], on [date] hereby undertake to the Court as follows:
1. In this undertaking:
(a)ASIC means the Australian Securities and Investment Commission, the plaintiff in the Proceeding.
(b)Confidentiality Claimant means, in respect of the Confidential Information, [insert];
(c)Confidential Information means [insert]
(d)Court means the Federal Court of Australia.
(e)Proceeding means proceeding No NSD386 of 2021 brought by ASIC against Westpac (including any appeals from a decision of the Court in the Proceeding).
(f)Westpac means Westpac Banking Corporation ACN 007 457 141, the Defendant in the Proceeding.
2.I will not use the Confidential Information for any purpose other than for the purposes of the Proceeding.
3.I will keep the Confidential Information confidential and will not disclose the Confidential Information directly or indirectly to any person, other than for the purposes of the Proceeding.
4.The restrictions in this undertaking shall not apply if, and to the extent that, the Confidential Information are in, or enter, the public domain, other than as a result of the breach of this undertaking.
5.I acknowledge that:
(a)I have been told that a breach of this undertaking could constitute a contempt of court which, if proved, could result in the imposition of a penalty of a fine, imprisonment or sequestration of property; and
(b)my obligations in this undertaking will continue after the final determination of the Proceeding and the destruction or return of the Confidential Information to the Confidentiality Claimant (or its solicitors).
6.As to any other document provided to me that has been explained to me as having been produced pursuant to an obligation of disclosure in the Proceeding, I undertake to use that document only for the purpose of the Proceeding.
SIGNED by [name] in the presence of:
Signed by [Name]
Signature of the solicitor witness, whose name and address appears belowREASONS FOR JUDGMENT
(Revised from the Transcript)LEE J:
A INTRODUCTION
Before the Court are applications by three non-parties who seek both interim and final suppression orders in respect of a number of documents that I have ordered the Australian Securities and Investments Commission (ASIC) provide to Westpac in partial compliance with its standard discovery obligations. It is unnecessary to detail the substance of these applications at any length, save as to indicate that the evidence on the applications disclose that some of the documents and transcripts to be produced contain commercially sensitive information relating to, among other things, strategic risk management and structuring advice, as well as price sensitive information including specific details making up aspects of transactions that are not available to the public. The disclosure of at least some of this information, the evidence reveals, has the potential to impact future price movements in relation to various facilities entered into between Westpac and third parties, some of which remain current.
The principled approach to making confidentiality orders under Pt VAA Div 2 of the Federal Court of Australia Act 1976 (Cth) (Act) has been the subject of a large number of judgments of the Court and it is unnecessary to rehearse them in any detail. The relevant principles were conveniently summarised by the Full Court (Perram, Pagone and Bromwich JJ) in Steelforce Trading Pty Ltd v Parliamentary Secretary to the Minister for Industry, Innovation and Science (No 2) [2018] FCAFC 47 (at [4]), endorsing principles previously expressed by Perram J in Motorola Solutions, Inc. v Hytera Communications Corporation Ltd (No 2) [2018] FCA 17 (at [8]–[9]) as to the making of orders under s 37AF of the Act, where commercially sensitive information is sought to be suppressed from public view. In this regard, the following was said:
It might be thought that the mere protection of commercial-in-confidence information, which is essentially what Hytera seeks in this case, fits less comfortably within the statutory words ‘necessary to prevent prejudice to the proper administration of justice’. But this Court has held in a number of cases that commercial sensitivity can be an appropriate basis for making a suppression or non-publication order: see Australian Broadcasting Commission v Parish (1980) 29 ALR 228 at 235 per Bowen CJ; Australian Competition and Consumer Commission v Cement Australia Pty Ltd (No 2) [2010] FCA 1082 at [23] per Greenwood J; Cyclopet Pty Ltd v Australian Nuclear Science and Technology Organisation [2012] FCA 1326 at [7] per Jacobson J; Australian Competition and Consumer Commission v Air New Zealand Ltd (No 3) [2012] FCA 1430 (Air New Zealand (No 3)) at [35]; Australian Competition and Consumer Commission v Origin Energy Electricity Ltd [2015] FCA 278 (‘Origin Energy’) at [148] per Katzmann J; ASE16 v Australian Securities and Investments Commission [2016] FCA 321 at [93] per Markovic J.
There are cogent reasons for this which have variously been described in those cases, but they are generally associated with preserving the integrity of the litigious process, likely to be jeopardised if commercial competitors could benefit from court ordered production of trade secrets by parties to a suit. That said, it is important to recall that the order must be necessary to protect the administration of justice. It can readily be imagined that a carte blanche approach to applications for s 37AF orders for which commercial confidentiality is claimed as a basis, would jeopardise the interest the public has in being able to access court documents under the Federal Court Rules 2011 (Cth) or to engage meaningfully with reasons published by the Court. … [T]he safeguarding of that interest as a primary objective of the administration of justice is a mandatory consideration for the Court. Particularly is that so in cases such as the present, where the Agreement, and its interpretation, may become a central plank in the ultimate resolution of the proceeding, and thus, to the intelligibility of future reasons delivered by the Court.
This is not a case where commercial competitors are seeking to prevent the dissemination of commercially sensitive material to another party or a case involving the proposed disclosure of what are often described as “trade secrets”. Rather, it concerns information considered to be confidential by third parties who have either voluntarily or otherwise complied with requests from ASIC to assist it in relation to its investigations which have led to this proceeding.
As the High Court explained in Hogan v Australian Crime Commission [2010] HCA 21; (2010) 240 CLR 651 (at 666 [38] per French CJ, Gummow, Hayne, Heydon and Kiefel), the relevant question to be addressed is whether a proposed confidentiality order is necessary to prevent prejudice to the administration of justice. In endorsing what Jessup J had said in the Full Court, the High Court stated that in applications such as this it is of no assistance to assert that contentious documents are in some way inherently confidential. While it is true that generally speaking every individual has a right to keep from the view of others or the world at large documents and things which he or she regards as his or her private concern, this is merely to state a conclusion about the absence of a right of any other person to view the documents or information. It is important for the Court to keep its focus on the question which always remains: is an order necessary to prevent prejudice to the proper administration of justice?
There has been some suggestion that the public benefit of assisting ASIC in its executive function is somehow relevant to the Court coming to a conclusion as to whether a confidentiality order is necessary to prevent prejudice to the proper administration of justice. How assisting a public authority in its executive functions can relate to the proper administration of justice is a potentially large question that may need to be examined in further detail if consideration of this issue is regarded as determinative of whether an order should be made. That is not the present case.
In respect of the present applications, I am not satisfied that the relevant pre-condition exists for the making of the orders sought and the applicants have, with respect, sensibly, not pressed the orders in circumstances where a satisfactory alternative regime can be put in place. This makes sense because it recognises that the starting point of the inquiry mandated by Pt VAA of the Act is not an abstract assessment of the prejudice to the administration of justice (or in other cases, for example, the interests of the Commonwealth or a State or Territory in relation to national or international security (see s 37AG(1)(b)), but rather it is the satisfaction that the proposed order satisfies the criterion of “necessity”; which seems to me to imply that there are no other available and practicable avenues which exist to protect the legitimate interests of the person seeking the order.
B AN ALTERNATIVE REGIME
In the present case, I am satisfied that such an alternative regime can be calibrated by drawing on the common law “implied” undertaking and requiring non-practitioners to sign an express obligation of confidence.
In Haswell v Commonwealth of Australia [2020] FCA 915 (at [11]), I canvassed both the ambit and rationale of what used to be described as the “implied” or the “Harman” undertaking (after the decision of the House of Lords in Harman v Secretary of State for the Home Department [1983] 1 AC 280), the articulation of which can more recently be found in the High Court’s reasoning in Hearne v Street [2008] HCA 36; (2008) 235 CLR 125 (at 158–160 [107]–[108] per Hayne, Heydon and Crennan JJ, with whom Gleeson CJ agreed at 131 [4]).
As I explained (at [12]–[13]), consistently with its origin and nature, the obligation is best described as the substantive obligation which arises by virtue of the circumstances under which the party or others obtained the relevant information. Further, the obligation facilitates and protects the discovery process, thereby encouraging the necessary disclosure of documents and, in doing so, also balances interests of privacy with the compulsory nature of the Court’s processes, preventing the abuse of such processes for an ulterior purpose. Similarly, the obligation protects the process whereby third parties produce documents which they would otherwise be entitled to keep to themselves. As I went on to explain (at [14]):
When this rationale is understood, the scope of the obligation as stated by Hayne, Heydon and Crennan JJ in Hearne v Street (at 154–5 [96]) makes sense. That is, that where one party to litigation:
… is compelled either by reason of a rule of court, or by reason of a specific order of the court, or otherwise [Bourns Inc v Raychem Corp [1999] 1 All ER 908 at 916 [19]; affd [1999] 3 All ER 154 at 169 –170], to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence.
The rationale explains why the obligation extends not only to the documents themselves but also to the information derived from the documents. It further explains why the obligation does not just apply only to the parties and their privies, but to anyone into whose hands the documents come, if they know that the documents were obtained by way of coercive court processes, for example, experts, proposed witnesses or litigation funders.
Further, I explained (at [19]) that the continuing maintenance of the obligation in circumstances where the material becomes part of the public domain is inconsistent with its rationale, including the requirement in s 37AE of the Act that the public interest in open justice must be taken into account. Fundamental to the principled exercise of Ch III judicial power, and embodied in the principle of open justice, is that information (be it contained in evidence or submissions) is communicated publicly to those present in the court, which in turn allows public and professional scrutiny (including fair and accurate reports of judicial proceedings), and courts will not act contrary to this principle save in exceptional circumstances.
As I observed (at [20]), it follows that:
the Hearne v Street obligation no longer subsists in relation to information obtained from public domain documents such as: (a) publicly available Court documents, being pleadings or particulars of a pleading or a judgment or a transcript etc (see FCR 2.32); (b) documents that have been tendered; (c) affidavits which have been read; (d) expert reports which have been adduced into evidence; (e) answers to interrogatories tendered; and (f) a document read or referred to in open court in a way that discloses its contents (see FCR 20.03). As to the nature of a hearing in which such evidence is adduced (be it interlocutory, a voir dire, or a final hearing) this does not matter – as long as the hearing was in open court and there was no order made or relevant statutory exception applicable to the use or publication of the information.
In Treasury Wine Estates Ltd v Maurice Blackburn Pty Ltd [2020] FCAFC 226; (2020) 385 ALR 562 (at 586 [85]), the Full Court (Jagot, Markovic and Thawley JJ) indicated that despite some suggestions in cases to the contrary, what I set out above correctly reflects the state of the law in Australia.
It follows that the documents the subject of the confidentiality orders sought will only become available to non-parties to the litigation in circumstances where they come into the public domain, as identified above.
The documents the subject of the initial tranche of discovery are to be provided by ASIC over the balance of this week. There is some urgency in requiring these documents to be provided in order to comply with a relatively truncated timetable leading up to an initial trial in February next year. I am satisfied that the relevant documents can be provided to the legal representatives of the parties, and the solicitors who may instruct them that have a current practicing certificate, as there is no reason to believe that those barristers and solicitors are not well aware of their Hearne v Street obligations.
However, in accordance with the principles I have outlined above, if third parties (such as experts and the like) are provided with the documents and are apprised of the fact that those documents have been produced pursuant to ASIC’s discovery obligations, then those parties will also become subject to the Hearne v Street obligation. In the circumstances, there seems to me to be some merit in the case of non-practitioners for the importance of the obligation to be brought home to them, and for them to be subject to an express obligation of confidence in relation to the relevant documents before receiving them. With these protections in place, I am not satisfied that it is necessary, at least at this time, to make any further confidentiality orders.
Nothing that I have said here, however, should be regarded as any impediment to the applicants to the current applications to make a further application for a confidentiality order if it becomes necessary to do so, because, for example, there is some concern that the documents could travel into the public domain and no longer be subject to the Hearne v Street obligation or the express obligation of confidence to which I have referred.
C CONCLUSION
I have stood the matter over to 3pm this afternoon in order to allow the parties to discuss an appropriate regime to reflect these reasons, which, in my view, will adequately protect the interests of the parties who have made an application for confidentiality. The applications were certainly made responsibly and it is legitimate for these parties to seek to protect the documents the subject of the discovery order. There should, therefore, be no orders as to costs.
I note that the orders that accompany these revised reasons are those that were ultimately entered.
I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Lee. Associate:
Dated: 28 June 2021
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