Barnel Investments Pty Ltd v Conceptual Technologies Pty Ltd [No 2]
[2023] WASC 153
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: BARNEL INVESTMENTS PTY LTD -v- CONCEPTUAL TECHNOLOGIES PTY LTD [No 2] [2023] WASC 153
CORAM: HILL J
HEARD: ON THE PAPERS
DELIVERED : 12 MAY 2023
FILE NO/S: CIV 1347 of 2019
BETWEEN: BARNEL INVESTMENTS PTY LTD
First Plaintiff
TZANEEN KOELKAMERS (PTY) LTD
Second Plaintiff
SOUTPANSBERG KOELKAMERS PTY LTD
Third Plaintiff
AND
CONCEPTUAL TECHNOLOGIES PTY LTD
First Defendant
STEELE CHRISTIAN WEST
Second Defendant
STEPHEN MARK WEST
Third Defendant
Catchwords:
Practice and procedure - Application for leave to use pleadings and submissions to consider commencement of other proceedings - Substantive legal obligation not to disclose documents for a collateral purpose - Whether documents are subject of substantive legal obligation - Whether special circumstances exist - Turns on own facts
Legislation:
Nil
Result:
Application granted
Category: B
Representation:
Counsel:
| First Plaintiff | : | No appearance |
| Second Plaintiff | : | No appearance |
| Third Plaintiff | : | No appearance |
| First Defendant | : | No appearance |
| Second Defendant | : | No appearance |
| Third Defendant | : | No appearance |
Solicitors:
| First Plaintiff | : | Minter Ellison |
| Second Plaintiff | : | Minter Ellison |
| Third Plaintiff | : | Minter Ellison |
| First Defendant | : | Gilbert + Tobin |
| Second Defendant | : | Gilbert + Tobin |
| Third Defendant | : | Gilbert + Tobin |
Case(s) referred to in decision(s):
Murray Riverside Pty Ltd v Toscana (WA) Ravenswood Estate Pty Ltd [2022] WASCA 67
Sandy v Yindjibarndi Aboriginal Corporation RNTBC [No 5] [2020] WASC 470
HILL J:
By letter dated 9 May 2023, the second defendant seeks leave to use certain documents filed by the parties in these proceedings for the purpose of considering the commencement of proceedings in the Federal Court of Australia against the first defendant's insurer, Chubb Insurance Company of Australia Ltd (Chubb).
Specifically, the second defendant seeks orders for leave to use the following documents in the any proceedings commenced in the Federal Court of Australia against Chubb:
(a)the second further amended statement of claim dated 1 December 2020;
(b)the third further amended statement of claim dated 18 March 2022;
(c)the second further amended defence dated 28 March 2022;
(d)the second further amended reply dated 4 April 2022; and
(e)the plaintiffs' outline of opening submissions dated 6 May 2022.
In support of the application, the second defendant relies on his affidavit filed 9 May 2023. The plaintiffs consent to orders being made for the use of these documents.
These proceedings
These proceedings were commenced by writ of summons on 26 February 2019, indorsed with an indorsement of claim. At that stage, the only parties to this action were the first plaintiff and the first defendant. Separate actions were commenced on the same date by the second plaintiff and third plaintiff against the first defendant.
On 10 April 2019, these proceedings were ordered to be consolidated with the proceedings commenced by the second and third plaintiffs and carried on as one action with these proceedings as the lead proceedings.
The plaintiffs' claim arises out of the supply of a power generation system by the first defendant to the plaintiffs. At trial, it was not disputed that the power generation system did not supply the power that was required under the relevant contracts. The primary issue was why this was the case.
From 11 March 2019 until 23 September 2020, the first defendant was represented in the proceedings by Clyde & Co, the solicitors for Chubb. In September 2020, the first defendant received a letter from Chubb informing it that Chubb considered the first defendant was not entitled to coverage under the relevant insurance policy and that Chubb declined to provide coverage.
In December 2020, the second and third defendants were joined to these proceedings.
In 2022, the defendants unsuccessfully applied to Chubb to review its decision to decline coverage.
The trial in these proceedings took place between 16 and 25 May 2022. At the conclusion of the trial, I reserved my decision and am yet to deliver judgment.
Since the trial of this matter, the third defendant has died and liquidators have been appointed to the first defendant.
The second defendant deposes that he intends to commence proceedings in the Federal Court of Australia against Chubb in the Insurance List to seek, among other orders, declarations that the declination of coverage is a breach of the relevant policy and for damages for breach of the policy.
Legal principles
The legal principles that govern this application were recently summarised by the Court of Appeal in Murray Riverside Pty Ltd v Toscana (WA) Ravenswood Estate Pty Ltd in the following terms:[1]
[1] Murray Riverside Pty Ltd v Toscana (WA) Ravenswood Estate Pty Ltd [2022] WASCA 67 [69] - [76].
Where one party to litigation is compelled, by reason of a rule or specific order of the court or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use the documents or information for any purpose other than that for which they are given, unless they are received into evidence. This principle applies to a range of material, including discovered documents, answers to interrogatories and documents produced on subpoena.
Traditionally, the obligation not to disclose was described as an implied undertaking. However, properly understood it is an obligation of substantive law.
Discovery is an invasion of the privacy and confidentiality of a litigant's affairs. The rationale for the imposition of the obligation in relation to discovered documents is to ensure that privacy and confidentiality are not invaded more than is necessary for the purpose of doing justice. The same rationale applies with equal force in the context of the production of documents on subpoena, as this is also an invasion of the privacy and confidentiality of the affairs of the subpoena recipient.
The power to dispense with or modify the Harman obligation is not freely exercised, but will be exercised if there are special circumstances.
In a passage in Liberty Funding Pty Ltd v Phoenix Capital Ltd that has been cited with approval many times, the Full Court of the Federal Court said as follows:
The notion of 'special circumstances' does not require that some extraordinary factors must bear on the question before the discretion will be exercised. It is sufficient to say that, in all the circumstances, good reason must be shown why, contrary to the usual position, documents produced or information obtained in one piece of litigation should be used for the advantage of a party in another piece of litigation or for other non litigious purposes. The discretion is a broad one and all the circumstances of the case must be examined.
Among the considerations that may be relevant to the exercise of the discretion are:
(a)the nature of the document;
(b)the circumstances under which the document came into existence;
(c)the attitude of the author of the document and any prejudice the author may sustain;
(d)whether the document existed before the litigation, or was created for that purpose and therefore expected to enter the public domain;
(e)the nature of the information in the document, in particular whether it contains personal data or commercially sensitive information;
(f)the circumstances in which the document came into the hands of the applicant; and
(g)the likely contribution of the document to achieving justice in another proceeding.
The last of these considerations has been recognised as being the most important. There is a public interest in ensuring that all relevant material is before a court to enable it to discharge its function. It has been said that special circumstances will fairly readily be found where it is established that the use of documents discovered in proceedings is reasonably required for the purpose of doing justice between the parties in other proceedings.
In the context of documents produced on discovery, it has been observed that, in weighing up the competing public interests, the importance of the public interest in the preservation of the confidentiality of discovered documents must be kept squarely in mind. Similarly, in the present case the private and public interest in protecting the confidentiality of a person's private documents produced under compulsion to a court must be kept in mind. (citations omitted)
In Sandy v Yindjibarndi Aboriginal Corporation RNTBC [No 5], Le Miere J summarised a number of authorities which discuss the scope of the Harman obligation and the documents to which it applies.[2] After referring to these authorities, his Honour concluded that:[3]
First, the Harman obligation ceases to apply to documents which have been read or referred to in open court in a way that discloses their contents. Secondly, the obligation ceases to apply to a document filed or referred to in court as a result of which the public is entitled to access the document. Thirdly, the obligation ceases to apply to documents which have entered the public domain by being accessible to the public. Fourthly, whilst it is not been determined authoritatively in this jurisdiction, the better view is that the obligation ceases to apply to a document once it has been received in evidence and marked as an exhibit or read out, in whole or in part, in open court.
[2] Sandy v Yindjibarndi Aboriginal Corporation RNTBC [No 5] [2020] WASC 470 [17] - [33].
[3] Sandy v Yindjibarndi Aboriginal Corporation RNTBC [No 5] [34].
Disposition
It is not in dispute that the second defendant is bound by the substantive obligation not to use documents obtained in these proceedings for any purpose other than these proceedings. It is also not in dispute that the second defendant must not use documents obtained in these proceedings or the information contained in them unless given leave to do so by this Court.
I am satisfied on the information before me that it is at least arguable that the obligation applies to each of the documents the subject of this application.
The documents the second defendant seeks to use are copies of pleadings, as well as the opening submissions filed by the plaintiffs. Each of these documents were relied upon at trial by the plaintiffs (apart from the second further amended statement of claim). Notwithstanding this, there is no entitlement under O 67B r 6 of the Rules of the Supreme Court 1971 (WA) for a member of the public to access any of these documents without leave of the court. The plaintiffs were not compelled to file a statement of claim (or any relevant amendments) or the reply. There is no decision of this Court that conclusively determines the extent to which pleadings are covered by the substantive obligation. The parties did not address this in this application. For the purposes of this application, I accept it is at least arguable that these documents fall within the terms of the substantive obligation.
In relation to the defence filed by the defendants, while this would not usually be covered by the defendants' substantive obligation (as it is their own document), in this case, I consider it is arguable that unless all defendants consent to its use in the proposed Federal Court proceedings, this document may also fall within the terms of the substantive obligation.
For the following reasons, I am satisfied there are special circumstances in this case which make it appropriate to grant leave to the second defendant to use the documents the subject of this application for the purpose of considering the commencement of proceedings in the Federal Court of Australia against the insurer of the first defendant.
First, the documents which the second defendant seeks to use are clearly identified and set out in the application.
Second, the documents which are sought to be used have been filed in proceedings between the plaintiffs and the defendants. The second defendant seeks to use these documents in relation to a possible claim against the first defendant's insurer which arises out of the matters the subject of these proceedings. On this basis, I accept there is likely to be significant overlap between the subject matter of these proceedings and any proceedings commenced in the Federal Court.
Third, there is no assertion that any information contained in these documents is confidential.
Fourth, the pleadings which were the subject of this application were prepared for the purposes of the litigation. For this reason, at the time the pleadings were prepared, the parties must have anticipated at that time that they would be relied upon at trial. In fact, each of the documents the subject of this application (apart from the second further amended statement of claim) was relied upon at trial.
Fifth, the plaintiffs consent to the application and did not seek to be heard. There is no evidence that the use of these documents will cause any harm or prejudice to the plaintiffs.
Sixth, there is a public interest in the information within the documents in these proceedings, being available to the second defendant. The public interest in the Federal Court having all relevant information before it outweighs any privacy and interest in the documents the subject of this application not being used for purposes other than these proceedings.
Conclusion
For these reasons, I consider it appropriate to grant leave to the second defendant to use the documents in any action to be commenced by the second defendant against its insurer in the Federal Court of Australia and will make orders in terms of the minute of consent orders filed by the second defendant.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
FD
Associate to the Honourable Justice Hill
12 MAY 2023
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