Cargill Australia Ltd v Viterra Malt Pty Ltd
[2018] VSCA 260
•12 October 2018
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2018 0112
| CARGILL AUSTRALIA LTD and others according to the attached schedule | Applicants |
| v | |
| VITERRA MALT PTY LTD and others according to the attached schedule | Respondents |
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| JUDGES: | WHELAN, KYROU and McLEISH JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 2 October 2018 |
| DATE OF JUDGMENT: | 12 October 2018 |
| MEDIUM NEUTRAL CITATION: | [2018] VSCA 260 |
| JUDGMENT APPEALED FROM: | Cargill Australia Ltd v Viterra Malt Pty Ltd [No 16] [2018] VSC 529 (Elliott J) |
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PRACTICE AND PROCEDURE – Discovery – Confidential commercial documents – Access provided to opposing parties’ legal practitioners and experts subject to confidentiality undertakings – Application for access by opposing party’s overseas-based in-house counsel not admitted to practice in Australia – Whether judge’s discretion to grant application miscarried – Application for leave to appeal granted – Appeal allowed.
PRACTICE AND PROCEDURE – Principles for determining whether leave to appeal should be granted in respect of decision on practice and procedure – Molonglo Group (Australia) Pty Ltd v Cahill [2018] VSCA 147 and Bodycorp Repairers Pty Ltd v GDG Legal Pty Ltd [2018] VSCA 32 applied.
PRACTICE AND PROCEDURE – Principles for determining who should have access to discovered confidential commercial documents – Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34 considered.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicants | Dr C G Button | Gilbert + Tobin |
| with Mr C J Tran | ||
| For the Respondents | Mr A J Myers QC and Mr S R Senathirajah QC with Mr J K Carter | King & Wood Mallesons |
WHELAN JA:
I have read in draft the reasons of Kyrou and McLeish JJA. I agree with what they have said about proposed grounds 3, 5, 6, 7, 8 and 10, and I would not grant leave to appeal on those grounds for the reasons they have given. I also agree with what they have said in relation to proposed ground 4, save for the incorporation into their treatment of that ground of their analysis of proposed grounds 1, 2 and 9. With that qualification, I would also refuse leave to appeal on proposed ground 4 for the reasons they have given. I do not agree that leave to appeal should be granted, or that the appeal should be allowed, on proposed grounds 1, 2 and 9.
In substance, I disagree because, in my view, no error of the kind addressed in House v The King[1] has been established. The trial judge stated and applied the correct principles. He was not guided or affected by any irrelevant matters. He did not mistake the facts or fail to take account of any relevant matter. His decision was not so unreasonable or plainly unjust as to warrant interference by an appellate court notwithstanding that a particular error could not be identified.
[1](1936) 55 CLR 499, 505.
Whilst this application for leave to appeal does concern a matter of practice and procedure, its subject matter is such that considerations which often significantly militate against the granting of leave in such matters are not significant here.[2] The potential consequences of an erroneous decision concerning confidentiality in this context extend beyond the particular proceeding.
[2]See Molonglo Group (Australia) Pty Ltd v Cahill [2018] VSCA 147 [96]; Bodycorp Repairers Pty Ltd v GDG Legal Pty Ltd [2018] VSCA 32 [19].
Having said that, a trial judge will often be in a better position than an appellate court to weigh up the competing considerations which arise in disputes such as this and, in my view, that is the position here. Thus, this Court should, when considering whether to interfere in a decision of this kind pay due deference to the trial judge’s superior understanding of the issues in the case and the considerations relevant to the decision. This is particularly so in a case such as this where the trial judge has been hearing the trial since 18 June 2018.
I will endeavour to avoid repetition of matters which have been fully set out in the reasons of Kyrou and McLeish JJA, but it is necessary that I address the legal principles raised by the issue of Mr Weber’s request for access to the confidential documents, that I address the nature of the claim made by Cargill and the relevance of the confidential documents to that claim, and that I address some aspects of the material relied upon by the parties before the trial judge. I will then turn particularly to proposed grounds 1, 2 and 9. I will endeavour to use the same abbreviations as Kyrou and McLeish JJA have used.
The relevant legal principles
Before the trial judge and before us, it was accepted that the trial judge had accurately set out the applicable legal principles in his earlier decision in IOOF Holdings Ltd v Maurice Blackburn Pty Ltd [No 2].[3] The relevant factors to be addressed are: the degree of relevance of the documents, the extent to which they are confidential, the use to which the information might be put once known, the utility and procedural fairness of imposing restrictions, and any other matter relevant to the due administration of justice.
[3][2016] VSC 594 [10].
Given the way the argument was advanced before us, in my view it is necessary to supplement that accepted statement of the principles so as to address the issues of what constitutes a relevant ‘trade rivalry’, what approach the courts have taken to permitting in-house lawyers to have access to confidential material, and the role that in-house lawyers play in complex commercial litigation of this kind.
On the issue of trade rivalry, Kyrou and McLeish JJA have referred in some detail to the decision in Mobil Oil Australia Ltd v Guina Developments Pty Ltd.[4] I will not repeat their description of the facts of that case or their analysis of the judgment of Hayne JA, but the following matters about the position addressed in Mobil Oil need to be emphasised, in my view. In Mobil Oil:
·the parties whose information was to be disclosed were not parties to the litigation;[5]
·the information which would be revealed was information as to the contents of a directly competing tender, and as such was clearly information which could advantage the recipient and disadvantage the parties whose information was disclosed;[6]
·the damaging parts of the information which would be disclosed were not the parts which were relevant to the case;[7]
·the recipient of the information was to be the principal of the competitor, so that it was inevitable that the information would be compromised by his knowledge of it.[8]
[4][1996] 2 VR 34 (‘Mobil Oil’).
[5]Ibid 36.
[6]Ibid 35–6.
[7]Ibid 39.
[8]Ibid 37–8, 40.
Notwithstanding the above, the Court in MobilOil did not rule that the principal of the competing tenderer could not be a recipient of the information. The matter was remitted to the primary judge on the basis that he ought to have read the confidential material and taken its contents into account before determining whether access should be granted.
The issue of access to confidential information by in-house lawyers in the course of litigation often arises in the context of intellectual property disputes between competitors. In that context, access to in-house lawyers is often ordered. In Alphapharm Pty Ltd v Lundbeck Australia Pty Ltd[9] Lindgren J permitted Alphapharm’s in-house counsel, a legal practitioner admitted in New South Wales, to have access to a competitor’s confidential information. One of the reasons he did so was that the particular internal counsel was responsible for advising the parent company about Australian legal issues and, in conjunction with others, for ensuring that the Australian legal strategy was consistent with the global strategy.[10] In Conor Medsystems Inc v The University of British Columbia [No 4][11] Finkelstein J granted access to United States in-house counsel. I will return to that decision. In InterPharma Pty Ltd v Commissioner of Patents[12] Sundberg J followed the principles articulated by Finkelstein J in Conor Medsystems in granting access to confidential material to two US in-house counsel in relation to patent litigation. Perram J’s decision in Tyco (Australia) Pty Ltd v Signature Security Group Pty Ltd [No 6][13] is noteworthy, as in that case the absence of in-house counsel was seen as a ‘difficulty’ which complicated the position of how a confidentiality regime could be applied in a way which was procedurally fair to the party. Perram J returned to the issue in Luxottica Retail Australia Pty Ltd v Specsavers Pty Ltd [No 3].[14] In that case he refused to permit an in-house lawyer to have access to confidential discovered documents because the particular in-house lawyer was the company secretary of the litigant, attended board meetings, and was part of the executive management team. Perram J considered that the conflict between his fiduciary obligations as a result of the positions which he held within the litigant company and his obligation of confidentiality could not be overcome. In AstraZeneca AB v Medis Pharma Pty Ltd[15] Besanko J allowed three in-house lawyers to have access to confidential information. I will return to that decision. In Vringo Infrastructure Inc v ZTE (Australia) Pty Ltd [No 3][16] Yates J permitted a member of the New York bar employed as in-house counsel to have access to confidential information disclosed in relation to patent litigation. That particular nominee was one of three in-house counsel who had been nominated and the issue was not whether in-house counsel should be permitted to have access but rather whether all three ought to have access. Yates J applied the principles which had been applied by Besanko J in AstraZeneca.
[9][2006] FCA 1358.
[10]Ibid [14]–[15].
[11][2007] FCA 324 (‘Conor Medsystems’).
[12][2008] FCA 1422.
[13][2010] FCA 1322.
[14][2011] FCA 793.
[15][2014] FCA 549 (‘AstraZeneca’).
[16][2014] FCA 983.
I turn then to the two decisions which, in my view, set out the principles to be applied where access to confidential information is sought by in-house lawyers who are foreign based. The two relevant decisions are Finkelstein J’s decision in Conor Medsystems and Besanko J’s decision in AstraZeneca.
In Conor Medsystems, Finkelstein J had before him an application for discovery in a patent dispute between parties in direct competition with each other in relation to the design of medical devices. Each side had documents which were confidential and which would damage them if revealed to the other side. A confidentiality regime had been agreed and a select group of people had been given access to the respective documents upon giving undertakings. One of the parties sought to have included in the group to whom access could be granted its ‘associate general counsel for litigation’, a Ms Vinitskaya. Finkelstein J described her role as follows:
Ms Vinitskaya is qualified in the United States to practise in law and is a patent attorney. She joined the applicant in October 2006. She describes her role as being one of ‘co-ordinating patent litigation involving [the applicant] in five countries …’
Ms Vinitskaya’s role in the Australian litigation is to instruct the applicant’s external legal advisers in the United States who in turn instruct the applicant’s Australian lawyers. Ms Vinitskaya said that ‘it is very important to the conduct of the [Australian] proceeding that I have access to all documents that have been discovered on a confidential basis so that I can be properly involved in determining strategy and making decisions on behalf of [the applicant]. At the present time, it is extremely impractical because I cannot be involved in any discussions about nor review those documents’.[17]
[17][2007] FCA 324 [4]–[5].
Finkelstein J referred to the fact that the in-house counsel had deposed that she did not ‘participate in competitive decision-making’.[18] He said that in the United States this is a ‘crucial’ or ‘decisive’ factor in determining whether in-house counsel ought to have access to confidential information in the course of proceedings.[19] Finkelstein J then expressed the view that under Anglo-Australian law the position is similar.[20] He cited in that respect two UK decisions, one where access was given to the chief executive of the competing company and the other where access was given to in-house patent attorneys.[21] Finkelstein J addressed Mobil Oil,[22] observed that the significant risk was the risk of inadvertent or accidental disclosure,[23] that there was also a risk of in-house counsel being placed in a position of ‘conflict’,[24] and said that there was in the case before him a ‘real possibility’ that the information was capable of being used by Ms Vinitskaya’s employer to the other party’s disadvantage.[25]
[18]Ibid [6].
[19]Ibid [8].
[20]Ibid [9].
[21]Ibid [9]–[10].
[22]Ibid [11].
[23]Ibid [12].
[24]Ibid [13].
[25]Ibid [14].
Finkelstein J’s conclusion was expressed as follows:[26]
Nevertheless, to the extent it is possible to predict what may occur in the future, I do not think there is an unacceptable risk of inadvertent disclosure in the case of Ms Vinitskaya. For one thing she is an attorney of relatively long standing and is well aware of her obligations as regards discovery. More importantly, having regard to her involvement in the applicant’s intellectual property enforcement and international litigation, it is unlikely that she will have occasion to use information to further the applicant’s commercial interests. This is not to deny that Ms Vinitskava could make indirect use of confidential information in litigation between the parties that is taking place outside Australia. I rate the risk as slight, but an order can be designed to avoid the risk altogether.
[26]Ibid [15].
Similar issues were addressed by Besanko J in AstraZeneca. In that case, which also involved patent disputes, three in-house lawyers and one foreign external lawyer sought to be included in what was described as a ‘Confidentiality Club’, within the confines of which confidential documents discovered by the opposite party could be inspected. The three in-house lawyers were an Australian, the company’s assistant general counsel based in Sweden but who held a Victorian practising certificate, and a US based lawyer admitted in California and Delaware. Besanko J permitted all three in-house lawyers to join the ‘Confidentiality Club’. He did not include the foreign external lawyer because he was not a person providing instructions on behalf of the litigant, he was not within the jurisdiction, and the provision of confidential information to him raised practical issues.[27]
Besanko J referred to the relevant principles, and relied in particular upon Finkelstein J’s analysis in Conor Medsystems. He observed that in each case there was a balance to be struck, where the relevant matters included the nature and content of the confidential information, whether the particular person would have occasion to use the information, the professional attributes of the person, the security systems in place, the undertakings proposed to be given, and a further consideration, which he described as follows:
it is relevant to consider the extent to which a party’s ability to seek advice and provide instructions may be hampered if a claim for confidentiality is upheld. In this context, it is worth noting that a claim for confidentiality in relation to certain persons is not necessarily to be upheld because there is already one person able to seek advice and provide instructions. It may be appropriate for a number of people from within an organisation to have access to confidential information in order to seek appropriate advice and provide informed instructions, particularly in the case of a large organisation and complex litigation. Whether that is so or not depends on the outcome of weighing the relevant factors.[28]
[28]Ibid [10].
When applying that latter principle to the case before him, the judge said:
As to the applicants’ ability to seek appropriate advice and provide informed instructions, I accept without hesitation that that ability will be seriously impaired unless a person or persons from within the applicants is or are included in the Confidentiality Club. It seems to me that, if that does not occur, the applicants’ ability to advance the proceeding and to explore an out-of-court settlement will be seriously impaired.[29]
[29]Ibid [12].
Besanko J then referred to each of the in-house lawyers individually and concluded that access should be given to all three of them because of their role in relation to the litigation, their professional standing, and the undertakings proffered.
Amongst the undertakings proffered or required in AstraZeneca and in Conor Medsystems was an undertaking by the nominating litigant to be liable for any direct or indirect loss suffered as a consequence of disclosure by the nominated persons.
In my view these decisions recognise that foreign based in-house lawyers may have an important role in the conduct of complex litigation which they cannot properly perform unless they have access to all the relevant material, particularly where the litigant is a large multi-national organisation. Restricting access to relevant material may impair their ability to advance the proceeding and explore settlement. These are matters relevant to the decision whether to permit access. Other matters relevant to the decision include whether the nominated person has a relevant involvement in ‘competitive decision making’, and the professional standing of that person.
Nature of the claim and relevance of the documents
Broadly, Cargill alleges that the Viterra parties and Glencore misled them into acquiring the Joe White Malting business. The principal loss claimed is the difference between the purchase price which was paid, $420,000,000, and the true value of the business. In the course of the hearing before us we were told that the claim is ‘hundreds of millions’ of dollars. The Joe White Malting business was incorporated into Cargill’s global malting business. In the course of the trial, evidence emerged that Cargill is seeking to dispose of the global malting business. Documents were called for in relation to the proposed disposal and a discovery application was made.
On 19 July 2018 the trial judge ruled that Cargill should make discovery of documents related to the proposed disposal. He published reasons for that ruling on 6 August 2018 (Ruling 9).[30] In those reasons the trial judge referred to an issue of causation which was significant in the trial, being what was the cause of differences in performance of the Joe White Malting business before and after the relevant acquisition, and also set out two potential bases for the calculation of loss and damage should Cargill succeed, being a calculation as described in Potts v Miller[31] and an alternative approach described by the judge as the ‘left in hands’ approach. The judge held that the documents concerning the proposed disposal were ‘directly relevant’ to both approaches to the calculation of damages. The judge described the information revealed by the confidential documents as information ‘which may play a substantial part in the assessment of loss in this case’.[32]
[30]Cargill Australia Ltd v Viterra Malt Pty Ltd [No 9] [2018] VSC 433 (‘Ruling 9’).
[31](1940) 64 CLR 282.
[32]Ruling 9 [53].
Some aspects of the material before the trial judge
When the trial judge made his ruling concerning the discovery (Ruling 9), he had before him material concerning confidentiality which was relied upon by Cargill in resisting that application, as well as in support of an application for confidentiality should discovery be granted. Cargill relied upon a notarised statement dated 29 June 2018 by Eric De Munter, and affidavits by two in-house lawyers, Brooke Tassoni and Douglas Udjur. That material addressed the confidentiality of the documents. The concerns raised were that the documents would reveal Cargill’s ‘price expectations’ in relation to the proposed disposal, thereby potentially disadvantaging Cargill in the sale process and having other consequences; the fact that Glencore competes with Cargill globally ‘in multiple business domains’; and the fact that competitors could use the information as part of a ‘mosaic’ which could impair Cargill’s ability to compete ‘even outside of the malt business’.
Shortly prior to the hearing of the discovery application the Viterra parties and Glencore filed a short affidavit by Mr Weber in which he swore that the Viterra parties, including Glencore, no longer had any interest in the malting of barley and that they possessed no plan or present intention to invest in or acquire a malting business.
Before the first application concerning Mr Weber’s access was determined (Ruling 13),[33] Cargill filed additional material. Ms Janet Whiting, the solicitor for Cargill in the litigation, swore an affidavit producing extracts from Glencore’s website demonstrating its worldwide involvement in agricultural businesses. Tina Savona, an in-house lawyer for Cargill in Australia, swore an affidavit on 21 August 2018 deposing to the fact that Glencore is a barley trader and is in competition with the ‘Grain and Oilseeds Supply Chain business’ of Cargill (para 19). She deposed to the fact that the documents revealed information about the cost of barley (para 20) and that Cargill’s malt business had purchased barley from Glencore in the recent past (para 21). She also expressed the opinion that the two groups were likely to have merger and acquisition targets in common in the future (para 22).
[33]Cargill Australia Ltd v Viterra Malt Pty Ltd [No 13] [2018] VSC 478 (‘Ruling 13’).
That was the state of the material when the trial judge made his first ruling concerning Mr Weber’s access to the confidential material (Ruling 13). Mr Weber had not given any explanation of his role in the litigation or his role within Glencore. No material addressing what had been deposed to by Ms Savona concerning barley trading had been filed. The material as to actual and potential global competition was uncontradicted.
The second application for Mr Weber to have access seems to have been prompted by negotiations concerning an application which had been made by Cargill to limit the extent to which they were to be required to comply with the discovery which had been ordered on 19 July 2018. Glencore filed a detailed affidavit sworn by Mr Weber on 30 August 2018 which addressed his role, the issue of barley trading, and the other issues raised by Ms Savona’s affidavit, and which described his role in the litigation.
Mr Weber swore that his job functions were those ‘typical and customary’ of general counsel. He performs legal tasks as requested. He swore he had no input into whether Glencore will or will not enter into any particular transaction.
In relation to barley trading Mr Weber swore that he did not personally engage in day to day trading and, in particular, deposed: ‘I am not personally involved in the negotiation of prices for commodity contracts, such as, for example, barley’. He then specifically referred to paras 20, 21 and 22 of Ms Savona’s affidavit and swore that the grain and oil departments of Glencore were located in different physical locations to where he works. The grain department is in Rotterdam, the Netherlands, and the oil department is in London, England. Mr Weber is based in Switzerland. He deposed that each of the grain department and the oil department have their own in-house lawyers who deal with the day to day activities. As to the matters which had been deposed to by Ms Savona, he swore ‘those matters are not dealt with by me at all’. He repeated what he had said in his earlier affidavit to the effect that Glencore was not involved in the malting industry and that its only involvement in that industry had been during the nine month period when it had owned the Joe White Malting business.
Mr Weber deposed that he represented Glencore in the litigation and, as Kyrou and McLeish JJA have explained in relation to proposed ground 8, it was open to the trial judge to conclude from the material that Glencore as the holding company of the Viterra parties had ultimate responsibility for the conduct of the case on behalf of all of the defendants.
Mr Weber deposed that he had ‘oversight’ of the litigation and had given instructions in relation to it ‘from the outset’. He deposed that he was the ‘sole person’ giving instructions to the external lawyers and that no other person within Glencore was authorised to give instructions. He said that he had an ‘active role in directing Glencore’s defence’ and that ‘forensic judgments and litigation strategy’ were a product of collaboration between him and the external lawyers. He then swore:
That process has broken down with respect to the loss and damage and causation elements of the Cargill Parties’ claims.
He deposed that this was because he did not have access to the confidential documents. He deposed to the fact that he had been excluded from negotiations concerning limitation of the ambit of the discovery order. He deposed that his exclusion from access to the confidential documents meant that: ‘I also cannot give any instructions to promote settlement, or to narrow issues in dispute’.
Mr Weber deposed that he is admitted as an attorney in the State of New York and in the State of California. An issue had been raised as to whether he held a current practising certificate in the State of New York. It seems that he did not hold a current practising certificate at the time the application was made but that he had reinstated his practising certificate in New York before the judge determined the application. Mr Weber swore that he was ‘subject to the disciplinary authority of the Supreme Court of the State of New York, regardless of where my conduct occurs’.
Two further affidavits of Ms Whiting produced, amongst other things, material indicating there existed a multinational rivalry between Glencore and Cargill in global agriculture.
The Weber affidavit sworn 30 August 2018 was the critical factor that led the trial judge to reach a different conclusion in Ruling 16 to the conclusion which he had reached in Ruling 13. The five matters which he considered had altered the position have been set out by Kyrou and McLeish JJA, but in summary they were:
(1)The documents are ‘directly relevant’ to the amount of any loss which might have been suffered and Mr Weber had deposed that they were relevant to his ability to give instructions concerning settlement of the proceeding.
(2)Cargill had sought to confine the operation of the discovery order and Mr Weber has ‘taken exception’ to that issue being negotiated unless he was able to give informed instructions.
(3)Cargill had itself tendered some of the confidential documents.
(4)Mr Weber had gone on oath explaining the basis upon which access to the confidential documents was sought and offering to give a confidentiality undertaking to the Court.
(5)Cargill had made an open offer to give access to the in-house lawyer for the Viterra parties, Mr Fitzgerald.
The trial judge held that any of the first three considerations were sufficient to outweigh competing considerations. Two of those three considerations relied upon matters set out in Mr Weber’s 30 August 2018 affidavit. In all, three of the five relevant factors were based upon matters deposed to in Mr Weber’s further affidavit.
The trial judge addressed contentions by Cargill that Mr Weber did not have the relevant experience to be of assistance in relation to the confidential documents; that no undertaking as to damages had been offered by the corporate litigants in relation to Mr Weber; that Mr Weber resided outside the jurisdiction and that there was ‘nothing the court could do’ to make good any damage flowing from any breach; that Mr Weber had only recently obtained a practising certificate for the New York Supreme Court; that Mr Weber’s evidence about his role at Glencore was ‘guarded and limited’ and was in the circumstances insufficient to establish that he was unlikely to have any occasion to use the information; that no offer had been made by Mr Weber or Glencore to give an undertaking that Mr Weber would not be involved in any malt or grain deals in the future; and that, although Glencore was not presently involved in malting, publicly available material indicated that it took an opportunistic approach to mergers and acquisitions and might well be a trade rival of Cargill in the future.
In my view the critical matter which emerges from the review I have undertaken is that by the time of Ruling 16 there was no issue or controversy about the fact that parts of the Glencore group and the Cargill group each engaged in barley trading, that the two groups competed with each other globally, that Glencore had been in the malting business and that Cargill had a global malting business which had bought barley from Glencore, that Glencore was looking to expand its global agriculture interests, and that there existed ‘multi-national rivalry’ between the two groups. The relevant issue of controversy was not the existence of these considerations but rather Mr Weber’s role in relation to them.
It is relevant to observe that, in my view, the ‘trade rivalry’ existing here is not as direct and compelling as in Mobil Oil, and is similar to the ‘rivalry’ existing in the intellectual property cases.
Proposed ground 1
Proposed ground 1 reads as follows:
The trial judge’s exercise of discretion miscarried by failing to take into account material considerations concerning Glencore and Cargill’s competitive relationship in relation to grain trading, Glencore’s ambitions to expand its agricultural holdings, Glencore’s barley trading activities and Weber’s role in relation to these matters.
I do not consider that the judge overlooked any of the matters which were relevantly in issue, as I have previously described them. In my opinion, to address Ruling 16 in isolation and to conclude that matters not specifically referred to had been overlooked is unwarranted. The trial judge set out all of Glencore’s contentions, albeit in a summarised and shorthand manner, including reference to ‘malt or grain deals’ and he did address them.[34] The focus was on Mr Weber’s role. The judge observed that Mr Weber’s evidence about his role at Glencore had not been challenged.[35] Amongst that evidence was Mr Weber’s sworn statement that he was not involved in barley trading. In my opinion it cannot be concluded that the judge had overlooked the evidence about barley trading (which Mr Weber had specifically addressed), the global rivalry, or the possibility of some future rivalry as a result of, or in the context of, mergers or acquisitions. There was no issue about those matters. The issue was Mr Weber’s role concerning them. That is the issue the judge addressed.
[34]Ruling 16 [24]–[25].
[35]Ruling 16 [25(5)].
On the hearing before us the focus of complaint under this ground concerned the barley trading. In my opinion the contention that the judge had erroneously failed to address it, or had overlooked it, is unfounded.
Proposed ground 2
Proposed ground 2 reads as follows:
The trial judge’s exercise of discretion miscarried at [14]–[15] by mistaking the facts, taking into account an irrelevant consideration or making a decision that is unreasonable or plainly unjust, in that he relied on evidence given of past settlement offers in circumstances where the evidence was objected to, lacked any detail such as would warrant reliance being placed on it, and counsel for the respondent objected to the applicants addressing the current state of any settlement discussions.
The short answer to this proposed ground is that the judge’s reliance upon the evidence complained of was inconsequential for the reasons given by Kyrou and McLeish JJA. However, insofar as the applicants might be given the latitude to contend that the trial judge inappropriately relied upon the issue of Mr Weber’s capacity to address settlement, in my opinion the judge’s reliance on that matter was entirely appropriate. The fact that Mr Weber does not himself have authority to authorise settlement is beside the point, in my view. The formal decision to authorise settlement in litigation of this kind is the end of the process. There is much that is needed to be done to promote settlement before that point is reached. Mr Weber has an important role in conducting the litigation, including in relation to possible settlement. Mr Weber’s role in relation to the proceeding is, in my view, relevantly the same as the role of the in-house lawyers considered by Finkelstein J in Conor Medsystems and Besanko J in AstraZeneca. I consider their approach to be correct. Impairment of Mr Weber’s capacity to promote settlement was a relevant consideration.
Proposed ground 9
Proposed ground 9 reads:
The trial judge’s exercise of discretion miscarried at [25(2)] because his Honour made an error of principle or mistook the facts in suggesting that the Court could take steps against the respondents if Weber breached his confidentiality undertaking.
Mr Weber’s professional standing is similar to that of the foreign in-house lawyers in Conor Medsystems and AstraZeneca. He is admitted in the United States. He holds a practising certificate in New York. He is in good standing. He has sworn that he is subject to the disciplinary proceedings of the Supreme Court of New York. It is not the case that professional disciplinary sanctions against him will not be available.
Mr Weber will also be liable to be dealt with for contempt, or to be the subject of other relief, if he breaches his undertaking, notwithstanding the fact that he is resident overseas.
The fact that Mr Weber is resident overseas may well mean that these sanctions are more difficult to enforce. The trial judge was aware of that matter and he weighed it as a relevant consideration.[36]
[36]Ruling 16 [25(3)].
If I had been exercising the discretion I would have required an undertaking to be given by Glencore to meet any damages caused as a result of any breach by Mr Weber of his undertaking (as was required by Finkelstein J and Besanko J) but it is not this Court’s role to re-exercise the discretion. In my view the judge was cognisant of the relevant considerations, he weighed them in the balance and he reached a conclusion. No error of the requisite kind has been established.
The judge did refer to the fact that the Court will remain seized of the matter for some time into the future and that should there be any issue as to compliance Glencore and the Viterra parties will remain subject to the jurisdiction of the Court. I do not consider that that observation reveals a mistaken view that, absent conduct by the parties themselves, they would be liable for a breach of the undertaking by Mr Weber. As a practical matter, the only reason Mr Weber would breach the undertaking would be in furtherance of the interests of Glencore, so it is possible, if not likely (but not inevitable), that a breach by him would result in Glencore becoming liable. Further, there are consequences in the litigation itself which could be visited upon Glencore and the Viterra parties if Mr Weber were to breach his
undertaking. I do not consider that the judge erroneously believed a breach by Mr Weber would inevitably constitute a breach by Glencore or the Viterra parties.
Conclusion
In my opinion leave to appeal should be refused.
KYROU JA
McLEISH JA:
Introduction
This application for leave to appeal concerns an interlocutory order made in the course of a trial which is continuing in the Trial Division. By the order, the judge permitted an overseas-based internal legal counsel for one of the defendants/respondents to have access, upon undertakings, to certain confidential documents of the plaintiff/applicant companies. That order has been stayed pending the determination of this application, or further order.
For the reasons that follow, we would grant leave to appeal and allow the appeal.
Facts and procedural history
The parties to the present application are in dispute about the sale of a malting business, Joe White Maltings. The applicants are Cargill Australia Ltd, its holding company Cargill, Inc (a major international food, agricultural, financial and industrial products and services business) and Cargill Malt Asia Pacific Pty Ltd (formerly Joe White Maltings Pty Ltd) (together, ‘Cargill’). The respondents are three companies in the Viterra group of companies (‘Viterra parties’) together with their ultimate holding company Glencore International AG (‘Glencore’). Glencore is a global commodity producer, processor and trading organisation.
By an agreement dated 4 August 2013 which was completed on 31 October 2013, Cargill Australia Ltd purchased the Joe White Maltings business from Viterra Malt Pty Ltd for the sum of $420 million.
The proceeding was commenced on 1 October 2014. Cargill Australia Ltd alleges that the respondents breached contractual warranties, engaged in misleading or deceptive conduct or deceit and made negligent misrepresentations in the sale of Joe White Maltings. They claim for loss or damage reflecting the difference between the purchase price and the true value of the business at the date of sale or at the date of completion. The parties have filed expert evidence in the trial on the question of loss or damage. The experts express opinions as to the true value of Joe White Maltings as at the date of sale and at the date of completion.
Since completion, Joe White Maltings has formed part of Cargill’s global malt business. It has been exploring options for selling or otherwise dealing with the entirety of that business in what is referred to internally as ‘Project Colombo’.
On 19 July 2018, the judge ordered Cargill to make discovery of documents concerning the possible disposition of Cargill’s global malt business (’19 July discovery order’). Some additional documents were produced by Cargill in response to calls made during cross-examination. The documents included valuations of the global business. There was undisputed evidence before the judge that the sale process was live and ongoing.
By the 19 July discovery order, Cargill was required to make discovery of any documents recording, forming part of or referring to any valuation prepared since 1 October 2017 in respect of either the Joe White Maltings business or Cargill’s global malt business, including any documents recording the inputs, instructions or assumptions prepared or provided for the purpose of such valuations. The 19 July discovery order also required discovery — in relation to any proposed disposition of Cargill’s global malt business or part of it — of any information memoranda or similar documents, offers or proposals (formal or informal) made to or from any prospective party and of presentations to and minutes of any meetings of the board of directors of Cargill, Inc.
There was no dispute that the Project Colombo documents discovered by Cargill or produced by Cargill in response to calls (‘confidential documents’) were confidential and that Cargill had a legitimate interest in restricting access to them. By order dated 7 August 2018, access to the confidential documents was initially provided to the respondents’ external lawyers and their expert witness, subject to confidentiality undertakings.
On 21 August 2018, the respondents applied for orders permitting Matthew Weber, a Switzerland-based in-house counsel of Glencore, to have access to the confidential documents. The judge refused that application on 21 August 2018 for reasons to which it will be necessary to return.[37]
[37]Cargill Australia Ltd v Viterra Malt Pty Ltd [No 13] [2018] VSC 478 (Elliott J) (‘Ruling 13’).
On 27 August 2018, Cargill filed a summons seeking orders that Cargill be required to give discovery of certain defined documents coming into existence before the evidence in the proceeding is complete (subject to confidentiality undertakings), and that Cargill otherwise be relieved from making further inquiries to discover documents falling within the categories set out in the 19 July discovery order or otherwise relating to any proposed disposition of Cargill’s global malt business or the Joe White Maltings business.
By summons dated 30 August 2018, the respondents made a further application to permit Mr Weber to have access to the confidential documents. On 11 September 2018, the judge ruled that he would allow such access. On 14 September 2018, an order to that effect was made and reasons for that order were published.[38]
[38]Cargill Australia Ltd v Viterra Malt Pty Ltd [No 16] [2018] VSC 529 (Elliott J) (‘Ruling 16’).
The disposition of the 27 August summons has been deferred pending the determination of the present application. In the meantime, until the issue regarding access for Mr Weber arose, the parties were participating in a process whereby they sought to agree upon limitations to the operation of the 19 July discovery order.
Legal principles applied by judge
It was not in dispute either before the judge or in this Court that, in considering whether to permit access to confidential discovered documents, the Court takes account of the following factors:
(1) The degree of relevance of the documents.
(2)The extent to which the documents are confidential, including whether the information has already been disclosed in the proceeding.
(3)The use to which the information in the documents might be put once it is known, such as by an opposing party who is a trade rival or is also an opposing party in another proceeding (or anticipated or pending proceeding).
(4)The utility or procedural fairness or otherwise of imposing restrictions or conditions, including limiting production to certain persons upon the provision of confidentiality undertakings.
(5)Any other matters relevant to the due administration of justice, including ensuring compliance with the overarching purpose in the Civil Procedure Act 2010 (Vic).[39]
[39]IOOF Holdings Ltd v Maurice Blackburn Pty Ltd [No 2] [2016] VSC 594 [10] (Elliott J). See also the discussion of some of these principles at [122]–[140] below.
Judge’s decision on the first application
The first application (made on 21 August 2018) proceeded upon comparatively limited material. Mr Weber swore an affidavit dated 18 July 2018. He relevantly stated that, since the sale of the Joe White Maltings business the respondents and their ultimate parent company Glencore plc ‘no longer own or have any interest in any company that engages in the malting of barley’. He further stated that the respondents ‘possess no plan or present intention to invest in or acquire a malting business’.
Cargill relevantly relied on three affidavits. First, Douglas Ujdur, a lawyer employed by Cargill, Inc, deposed to potential corporate activity involving Cargill’s global malt business. Mr Ujdur went on to give evidence as to the likely consequences or impact of disclosure of the confidential documents. In particular, he stated that Glencore competes with Cargill globally in multiple business domains. He stated that it would be especially concerning to disclose particular confidential documents to competitors of Cargill, who may be particularly well-placed to use the information for their own purposes and contrary to the interests of Cargill’s malt business. Mr Ujdur stated that disclosure of the pieces going to make up any valuation exercise, such as margins, historical volumes and costs, could significantly impair and prejudice Cargill’s ability to compete ‘even outside of the malt business’. He stated that the risk that a competitor could ‘back into’ such information using the confidential documents or otherwise obtain the inputs into them ‘could jeopardize the day-to-day operation of the malt business or Cargill’s other businesses outside the context of any transaction’.
An affidavit sworn on 18 July 2018 by Janet Whiting, solicitor for Cargill, deposed to material extracted from the Glencore website. That material included statements that barley is one of Glencore’s ‘core commodities’ and that Glencore ‘participate[s] in both malting barley and feed barley’ and is ‘a major supplier to the malting and brewing market in China and across Asia’.
Finally, Tina Savona, another lawyer employed by Cargill, swore an affidavit on 21 August 2018 attesting to the confidentiality of individual documents. She further gave evidence as follows:
19Glencore is a barley trader. The Grain and Oilseeds Supply Chain business within Cargill is also a barley trader. For this reason, Glencore is a competitor of that part of Cargill’s business.
20Contained in the Valuation and Transaction Documents is confidential information regarding cost of barley purchased by various parts of Cargill’s global malt business. This information could be used by Glencore in an anti-competitive manner in respect of its own barley trading business. Sharing of this information would typically be prohibited by competition laws.
21I am informed by Simon Robertson, the Regional Merchandising Manager for the Cargill malt business, that although the global malt business does not currently have open contracts for the purchase of barley with Glencore, the malt business has purchased barley from Glencore in the past year. To the extent that Cargill purchases barley from Glencore in the future, it is my belief that the Valuation and Transaction Documents contain information which would put Glencore at an unfair advantage in relation to such transactions. In particular, the Documents contain information about barley costs.
22Further, I am informed by Mr De Munter that Glencore is likely to have merger or acquisition targets in common with Cargill which are active in the sectors in which both Glencore and Cargill operate, including in agricultural commodities. Disclosing Cargill’s potential targets to Glencore would clearly be detrimental to Cargill’s strategic position.
In the course of his ruling dated 21 August 2018 (‘Ruling 13’), the judge set out the background to the application and noted that access to the confidential documents was originally sought on behalf of both Mr Weber and Damian Fitzgerald, both of whom were in-house counsel. He noted that access was only sought now by Mr Weber, on the basis that Mr Fitzgerald was to be a witness in the trial.
The judge referred to the fact that Cargill and Glencore are trade rivals in the barley industry and said that, although the respondents are not presently in the malting business, there is no guarantee that they will not re-enter that business in the future, or that Mr Weber will not participate as in-house counsel in any such activities.[40]
[40]Ruling 13 [10]. See [141] below.
The judge held that the confidential documents were plainly relevant to the issue of Cargill Australia Ltd’s loss. That is not in issue on the present application. Nor is it in issue that, as the judge also held, the confidential documents are ‘highly confidential’ and their disclosure ‘in the market place would have the real potential to undermine any orderly sale’ of Cargill’s malting business.[41]
[41]Ruling 13 [13].
The judge held that the respondents had not demonstrated any pressing need for the confidential documents to be disclosed to Mr Weber. He held that, other than making broad statements about the need for the respondents to obtain advice and their ability to give fully informed instructions, no specific need or problem had been identified. The judge continued:
On the face of it, as has been demonstrated already, the lawyers and experts representing the [respondents] ought to be in as good, if not a better, position to identify the issues relevant to the proceeding and to adduce evidence on the question of any loss that Cargill Australia might or might not have suffered.[42]
[42]Ruling 13 [16].
The judge also referred to the fact that Mr Weber lives in Switzerland:
Another factor relevant to this ruling is the fact that Weber is located outside of the jurisdiction. There has been no undertaking as to damages proffered by the [respondents] in respect of any potential breach of the confidentiality undertaking by Weber, inadvertent or otherwise, in the future. As events prior to the hearing of this application demonstrated, the potential for inadvertent disclosure of confidential documents increases whenever an expanded number of people are given access.
To explain, the [respondents] prepared written submissions for this application, in which the contents of the Confidential Discovered Documents were extracted. Among those to whom the submissions were forwarded by the [respondents’] solicitors were 4 individuals who had not signed the confidentiality undertaking.[43]
[43]Ruling 13 [18]–[19] (citations omitted).
The judge stated that the Court had been assured that the persons who had been sent submissions in error had not read those submissions and that immediate steps would be taken to delete them from their email servers.
The judge concluded by stating that his ruling was not to be treated as final for all purposes of the trial and that if the respondents were able to demonstrate a substantive need for access to be given, that matter might be addressed by an application to the Court in due course.
Judge’s decision on the second application
On the second application (made on 30 August and heard on 11 September 2018), the respondents relied on a much more detailed affidavit of Mr Weber sworn on 30 August 2018. Mr Weber stated that he was a ‘Group Counsel’ of Glencore and was authorised by all the respondents to make the affidavit on their behalf.
Mr Weber stated that his ‘job functions are those typical and customary of a deputy general counsel’. He stated that he reviewed and commented upon contracts and agreements, worked on ‘corporate transactions (such as acquisitions, divestitures, and joint ventures)’ and provided advice and performed tasks customary and typical for the role of an in-house counsel for a large corporation. He stated that he had ‘no input whatsoever’ into whether or not Glencore will or will not enter into any particular transaction and that his job function was ‘to execute and implement tasks in consequence of decisions made by other people within the company’.
Mr Weber stated that, with respect to the present litigation, one of his job functions was ‘to have oversight of this litigation on behalf of Glencore’. He stated that Mr Fitzgerald has a similar function with respect to the Viterra parties.
The affidavit stated that Mr Weber had represented Glencore and given instructions to external lawyers since the outset of the proceeding and that he had executed and been bound by and complied with an earlier confidential undertaking in relation to the proceeding. He said that, on occasion, Glencore officers and employees had asked him questions which, unbeknown to them, might have required him to disclose information that was subject to the undertaking. He deposed that, on those occasions, his response was that a confidentiality undertaking precluded him from discussing those matters.
Mr Weber went on to say that he did not personally engage in ‘day-to-day trading’. In particular, he was ‘not personally involved in the negotiation of prices for commodity contracts, such as, for example, barley’. He stated that he had not engaged in the legal work for ‘day-to-day grain transactions’ in the past and was not likely to be involved in such transactions in the future. He stated that the grain department of Glencore was located in Rotterdam, the Netherlands and that it had its own team of in-house counsel who dealt with the day-to-day activities of that department. He stated that he did not deal at all with the kinds of transactions Ms Savona had referred to in paras 20 to 22 of her affidavit dated 21 August 2018.[44] Mr Weber went on to say that Glencore was no longer involved in the malting industry.
[44]See [69] above.
The affidavit stated that Mr Weber was ‘the sole person giving instructions’ to the solicitors for Glencore in the present proceeding for the purposes of its defence and that there was no other person authorised to give instructions on behalf of Glencore and who was permitted to inspect the confidential documents. He stated that, by reason of the earlier orders of the Court, he was unable to inspect the confidential documents or to receive advice in relation to them and was unable to give informed instructions in connection with the proceeding, so far as that advice and instructions pertain to or touch upon the confidential documents, or the elements of loss and damage and causation pleaded against Glencore.[45]
[45]As stated at [87] below, Mr Weber was not challenged on any of his evidence. The applicants pointed out, however, that the respondents did not lead evidence from their Australian lawyers to the effect that there was any particular document or class of documents among the confidential documents upon which they required instructions from Mr Weber.
Mr Weber deposed to his frequent presence in Court and involvement in directing Glencore’s defence of the proceeding. He stated that the forensic judgments and litigation strategy advanced by Glencore in the proceeding were the product of active collaboration and discussion between himself on behalf of Glencore and the external legal representatives. He stated that that process had broken down with respect to the loss and damage and causation elements of Cargill’s claims because he was unable to engage in any meaningful discussion with respect to the sale of Cargill’s global malt business and the use of the information set forth in the confidential documents in relation to matters of loss and damage and causation.
Mr Weber also stated that he could not ‘give any instructions to promote settlement, or to narrow issues in dispute’, without receiving advice pertaining to or touching upon the confidential documents, without access to those documents, and without obtaining advice pertaining to or touching upon those documents. He stated that it was necessary that any such advice be informed advice, meaning that it must fully disclose and discuss the confidential documents.
Mr Weber stated that he was not a member of the Swiss Bar and was not required to be admitted to the Swiss Bar or to be a member of a local bar association in order to give legal advice in his capacity as an employed corporate counsel. He stated that he was admitted as an attorney in the State of New York on 20 April 1998 and had inactive status with the New York State Bar. Because he was not employed by a law firm he was not required to maintain active status. He said that he was subject to the disciplinary authority of the Supreme Court of the State of New York regardless of where his conduct occurred and that he was, and always had been, a person of good standing to be admitted in that jurisdiction. He stated that he had no ‘disciplinary history’ in the State of New York or otherwise. Mr Weber also stated that he was admitted as an attorney in the State of California in December 1995 and, for similar reasons, was not required to maintain an active status with that State Bar.
Mr Weber stated finally that ‘Glencore companies’ had substantial assets situated within Australia.
Mr Weber was not cross-examined on his affidavit.[46]
[46]Leave is required to cross-examine a deponent of any affidavit read in support of an interlocutory application. The applicants gave the respondents notice of intention to cross-examine Mr Weber but did not pursue the matter once the respondents gave notice that they would oppose any application for leave to cross-examine him.
On 3 September 2018, the applicants served a notice to produce on the respondents requiring them to produce Mr Weber’s current curriculum vitae, his current role description at Glencore, the current structure or organisational charts for Glencore’s legal department, and any documents which record inquiries made of Mr Weber regarding the confidential information of the applicants which he has reviewed to date in the course of the proceeding.[47] When this notice was called upon, no documents were produced.[48]
[47]See [80] above.
[48]Ruling 16 [23].
The applicants filed a further affidavit of Ms Whiting, sworn on 4 September 2018. Ms Whiting deposed to media articles to the effect that Glencore was keen to grow its agricultural unit and had the resources to make acquisitions if and when it wanted to do so. Other articles were advanced as evidence of the multi-national rivalry between Glencore and Cargill in the agricultural trading market. Ms Whiting also deposed to material from the New York State Unified Court System website to the effect that New York does not have ‘inactive’ status and that all admitted New York attorneys were required to file a biennial registration form.
By a further affidavit sworn on 11 September 2018, Ms Whiting deposed to the involvement of Mr Fitzgerald in the litigation. She deposed to her understanding that Mr Fitzgerald was admitted to practice by the Supreme Court of South Australia, is currently resident in Australia and holds a current practising certificate. She exhibited a letter by which Cargill’s solicitors wrote to the respondents’ solicitors offering to give Mr Fitzgerald access to the confidential documents (except documents numbered 4 and 50) instead of Mr Weber.
The affidavit then set out Ms Whiting’s instructions that documents 4 and 50 were ‘particularly sensitive’. She stated that Ms Savona had instructed her that document 4 contained internal commentary regarding third parties which had the potential to damage Cargill’s commercial relationships and an internal aspirational comment as to the value of Cargill’s global malt business which was not founded on any valuation exercise. She stated that Ms Savona had also instructed her that document 50 was an email containing an internal comment as to an aspiration about the outcome of any proposed transaction involving Cargill’s global malt business which again was not founded on any valuation exercise.
In his second ruling dated 11 September 2018, reasons for which were published on 14 September 2018 (‘Ruling 16’), the judge stated that he would only revisit the relevant principles discussed in previous rulings to the extent strictly necessary. After addressing the background and some criticism which the respondents had directed at his reasons in Ruling 13 for refusing the first application, the judge went on to explain why access to the confidential documents should be given. He stated that there were five ‘fundamental differences’ between the two applications.[49]
[49]Ruling 16 [13].
First, since Ruling 13, Mr Weber had deposed that he requires access to the confidential documents in order to properly assess the appropriateness of any settlement proposal that might be made.[50]
[50]Ruling 16 [14]–[15]. See [165] below
Secondly, since Ruling 13, Cargill had made an application to confine the operation of the 19 July discovery order which, if acceded to by the respondents, would necessarily involve the giving away of a vested right to access relevant documents pursuant to the 19 July discovery order.[51]
[51]Ruling 16 [16]. See [187] below.
Thirdly, since Ruling 13, Cargill had sought to tender some of the confidential documents in its case.[52]
[52]Ruling 16 [17]. See [182] below.
Fourthly, since Ruling 13, Mr Weber had deposed to the basis upon which access to the confidential documents was sought and had offered to give a confidentiality undertaking to the Court.[53]
[53]Ruling 16 [18]. See [192] below.
Fifthly, the judge stated that, whereas Cargill had previously said that access to the confidential documents ought not be given to either Mr Weber or Mr Fitzgerald, since Ruling 13 it had made an open offer for Mr Fitzgerald to be given access.[54]
[54]Ruling 16 [19]. See [197] below.
The judge concluded this part of Ruling 16 as follows:
For the reasons set out above, in the exercise of the court’s discretion in balancing the relevant factors, Weber will be allowed access to the Confidential Discovered Documents. In my view, any 1 of the first 3 matters referred to above would be sufficient to outweigh the competing factors. When those matters are viewed collectively, together with the other matters referred to above, that position is fortified.[55]
[55]Ruling 16 [20] (citations omitted).
The judge stated that he had taken into account evidence relating to information concerning third parties contained in the confidential documents but concluded that private arrangements regarding non-dissemination of financial information must be subject to access being given in the limited circumstances proposed.[56]
[56]Ruling 16 [21]. See [204] below.
The judge then turned to the question whether it was appropriate for Mr Weber to have access to the confidential documents. Cargill had contended that Mr Weber had no relevant experience with respect to the subject matter of the confidential documents. The judge stated that regardless of his level of experience, Mr Weber was entitled to access in order to give proper instructions on matters pertaining to settlement, the proposed narrowing of Cargill’s discovery obligations and in respect of the respondents’ defence.
Cargill next contended that no undertaking as to damages had been offered by the respondents in respect of any undertaking given by Mr Weber. The judge stated that, if there were any issue as to compliance with the undertaking in the foreseeable future, the respondents would remain subject to the jurisdiction of the Court.[57]
[57]Ruling 16 [25(2)]. See [143] below.
Thirdly, Cargill had contended that Mr Weber resides outside the jurisdiction and that there was nothing the Court could do to make good any damage flowing from any breach of the undertaking. The judge noted that Mr Weber was directly responsible for the conduct of the proceeding on behalf of the respondents and stated that, while Mr Weber’s residence outside the jurisdiction was a relevant factor, it did not outweigh the competing factors relevant to the ability of the respondents to defend the case in a manner consistent with the due administration of justice.[58]
[58]Ruling 16 [25(3)]. See [143] below.
Next, Cargill had submitted that Mr Weber was unsuitable as a person to whom access should be given because he did not hold a current practising certificate in any jurisdiction in the world until he had recently obtained a certificate in New York. The judge regarded this as being of little moment. He added that Mr Weber had been an attorney since 1995 and had not been subject to any disciplinary hearing or other ‘disciplinary history’.[59] The judge said that, in short, there was no evidence to suggest that Mr Weber would or might act inappropriately with respect to any confidential information.
[59]Ruling 16 [25(4)]. See [143] below.
Cargill made three further submissions which the judge considered together. Cargill submitted that Mr Weber’s evidence about his role at Glencore was guarded and limited and should not be accepted in so far as he suggested that it would be unlikely that he would have any occasion to use the information the subject of the confidential documents for purposes other than those connected with the proceeding. They further noted that no offer had been made by Mr Weber or Glencore to give an undertaking to the effect that Mr Weber would not be involved in any malt or grain deals in the future. Finally, they submitted that, although Glencore was not presently involved in the malting industry, publicly available material indicated that it takes an opportunistic approach to mergers and acquisitions and may well be a trade rival of Cargill in the future.
The judge observed that Mr Weber’s evidence about his role at Glencore was not subject to challenge. He concluded that the possibility of Glencore and Mr Weber being involved in transactions concerning the malting industry in the future did not outweigh the legitimate forensic requirements identified for Mr Weber to have access to the confidential documents.[60]
[60]Ruling 16 [25(5)]. See [142] below.
The judge also noted that Mr Weber had given confidentiality undertakings in the proceeding in order to gain access to documents previously discovered on a confidential basis and that no exception had been taken. The judge also noted that there was no suggestion that Mr Weber had done anything in the past to breach those undertakings.
The judge referred to the open offer the applicants made for Mr Fitzgerald to be granted access to the confidential documents. He stated that this was not an appropriate course in circumstances where it was a matter principally for the respondents whom they nominate to receive access, Mr Fitzgerald was likely to be a witness in the case whereas Mr Weber was not, and Mr Fitzgerald was not the in-house counsel for Glencore which was the holding company with ultimate responsibility for the conduct of the respondents’ case. The judge stated that Mr Weber had ‘been responsible for the conduct of this proceeding on behalf of the [respondents] from the outset’.[61] The judge held that, in the circumstances, no compelling reason had been given as to why Mr Fitzgerald ought to be substituted for Mr Weber. The judge stated that the fact that Mr Fitzgerald was an Australian legal practitioner did not override the considerations in favour of Mr Weber being granted access.
[61]Ruling 16 [28(4)]. See [211] below.
Finally, the judge turned to the question whether access to confidential documents 4 and 50 should be excluded and concluded that they should not be excluded.[62]
[62]Ruling 16 [30]–[31]. See [216] below.
For the reasons given, the judge ordered that, upon the giving of an undertaking to the Court, access to the confidential documents be granted to Mr Weber (‘impugned order’). The judge prescribed a regime by which the documents were to be made available.
Principles relating to leave to appeal from interlocutory decisions
Section 14C of the Supreme Court Act 1986 provides that ‘The Court of Appeal may grant an application for leave to appeal … only if it is satisfied that the appeal has a real prospect of success’. This means that the Court may grant leave only where the appeal has a ‘real’ as opposed to a ‘fanciful’ chance of success.[63] The Court has a residual discretion to refuse leave, even in those cases where the appeal has a real prospect of success. By way of example, there may be cases where no substantial injustice will be done if the decision stands, especially when the appeal is from an order as to practice and procedure.[64]
[63]Kennedy v Shire of Campaspe [2015] VSCA 47 [12] (Whelan and Ferguson JJA) (‘Kennedy’).
[64]Kennedy [2015] VSCA 47 [14].
There is no separate requirement under s 14C that ‘substantial injustice’ be established if the decision sought to be appealed were to stand. The distinction is between those appeals whose prospects are real and those whose prospects are fanciful.[65] At the same time, the concept of substantial injustice may be useful in determining whether the residual discretion should be exercised. Observations regarding substantial injustice made by this Court in Swan Hill Chemicals Pty Ltd v MA & J Tripodi Pty Ltd[66] must be understood in the light of the requirements of s 14C as explained above.[67]
[65]Kennedy [2015] VSCA 47 [13].
[66][2016] VSCA 264 [21]–[22] (Santamaria JA and Riordan AJA).
[67]See also Smith v JZ Lee Interiors Pty Ltd [2017] VSCA 65 [4], [10] (Osborn JA, with Tate JA agreeing).
This Court held in Molonglo Group (Australia) Pty Ltd v Cahill as follows:
Even if this Court is satisfied that an appeal has a real prospect of success, it may nevertheless refuse to grant leave in the exercise of its residual discretion, such as when no substantial injustice will be done if the decision at first instance stands, or the order sought to be appealed against is one of practice and procedure. The question of leave may sometimes be approached by considering, first, whether discretionary considerations exist which justify a refusal of leave, regardless of an applicant’s prospects of success. Where discretionary considerations exist but by themselves are insufficient to justify a refusal of leave, refusal may nevertheless be warranted where those discretionary considerations arise in the context of an appeal that has low, albeit real, prospects of success.[68]
[68][2018] VSCA 147 [96] (citations omitted) (Maxwell ACJ, Whelan and Kyrou JJA).
The fact that an order in respect of which leave to appeal is sought is an interlocutory order regarding a matter of practice and procedure is a significant consideration bearing upon the exercise of the residual discretion. In Bodycorp Repairers Pty Ltd v GDG Legal Pty Ltd, this Court set out the governing principles as follows:
While the old distinction between interlocutory and final orders no longer exists, the principles which underlay the former requirement for leave whenever a party sought to appeal an interlocutory order continue to be potentially relevant. In particular, it is most important for the proper administration of justice that this Court keep a ‘tight rein’ upon interference with interlocutory orders at first instance, given the potential consequences of a failure to do so in terms of delay and increased cost, and given the potential for applications in relation to interlocutory orders to become a means whereby discretionary judgments in the trial division are in effect transferred to the Court of Appeal. That is especially so where, as here, there has already been a rehearing de novo of a decision made by a judicial registrar of this Court.[69]
[69][2018] VSCA 32 [19] (citations omitted) (Ferguson CJ, Whelan and McLeish JJA).
The respondents submitted that leave to appeal should be refused in the exercise of the residual discretion discussed in the above authorities, on two bases. First, it was submitted that the applicants had identified no substantial injustice that would flow from permitting the impugned order to stand. It was submitted that there was no evidence of any prospect of loss of confidentiality if the impugned order was to stand. Mr Weber had gone on oath as to how he would act to protect the confidentiality of the confidential documents consistently with the undertaking he had offered and had not been subject to cross-examination. It was submitted that there was nothing in the evidence to suggest that confidentiality may be lost even through inadvertence.
Secondly, it was submitted that the matter was classically one of practice and procedure, involving a balancing exercise comparable to the exercise of a discretion, with no matter of principle involved. In circumstances where the proceeding had been before the Court for more than three years, and the judge had had the carriage of the trial since it commenced on 18 June 2018, it was submitted that the interests of justice required that this Court not permit the function of the judge in deciding matters of practice and procedure to be transferred to the appellate jurisdiction. Moreover, the respondents noted that the applicants did not contend that the judge misstated the legal principles governing the balancing exercise in any respect.
In our view, this is not a case where the residual discretion should be exercised without first determining whether or not the application for leave to appeal has a real prospect of success. Although it concerns a matter of practice and procedure, the sensitivity of the confidential documents is such that the case carries with it the potential for significant harm to be done to one of the parties if confidentiality is lost beyond the extent contemplated by the orders of the Court. Moreover, at least on the case advanced by the applicants, the effect of the impugned order is that confidential information will be made available, albeit on strict terms, to a senior employee of a substantial trade rival of Cargill. The risk of harm to Cargill will subsist well after the proceeding is finalised and thus the effect of the impugned order is not confined to the conduct of the proceeding. In our opinion, these considerations take the case out of the ordinary class of matters involving practice and procedure and give it a potentially significant substantive character.
In these circumstances, the fact that it has not been established that there is a real risk of confidential information being disclosed to persons outside the intended scope of the orders is not decisive. Orders of this kind almost inevitably entail some risk of disclosure, even if it can be assumed that there would be no deliberate disobedience of the orders. This is not a case in our opinion where it can be said that there would be no substantial injustice caused if leave were to be refused on a discretionary basis.
We therefore turn to consider the prospects of success of the proposed grounds of appeal.
Proposed grounds of appeal
The applicants have sought leave to appeal on the basis of 10 proposed grounds of appeal. We will first discuss the proposed grounds which we have concluded have been made out, namely, 1, 2 and 9, before considering the other grounds. As proposed grounds 1 and 9 are closely related, we will deal with them together.
It was common ground before us that, as the impugned order involved the exercise of a discretion, the principles in House v The King[70] applied. The proposed grounds of appeal contend that the discretion miscarried for one or more of the following reasons: the judge acted on a wrong principle; the judge mistook the facts; the judge took into account irrelevant matters; the judge failed to take into account some material consideration; or notwithstanding that no error is apparent, the impugned order is unreasonable or plainly unjust and is amenable to appellate review on the ground that a substantial wrong has in fact occurred.[71]
[70](1936) 55 CLR 499 (‘House’).
[71]House (1936) 55 CLR 499, 505 (Dixon, Evatt and McTiernan JJ).
Grounds 1 and 9: Trade rivalry and sanctions for breach of undertaking
Proposed grounds 1 and 9 are in the following terms:
1The trial judge’s exercise of discretion miscarried by failing to take into account material considerations concerning Glencore and Cargill’s competitive relationship in relation to grain trading, Glencore’s ambitions to expand its agricultural holdings, Glencore’s barley trading activities and Weber’s role in relation to these matters.
…
9The trial judge’s exercise of discretion miscarried at [25(2)] because his Honour made an error of principle or mistook the facts in suggesting that the Court could take steps against the respondents if Weber breached his confidentiality undertaking.
Legal principles relevant to proposed grounds 1 and 9
It was common ground before us that a decision on who should have access to confidential discovered documents involves a balancing of competing considerations. On the one hand, a party to litigation has an interest in having access to documents held by its opponent that are relevant to the issues in the litigation. This is particularly so if the party is a defendant who is an unwilling participant in the litigation and who, as a matter of procedural fairness, is entitled to know the case it has to meet.[72] On the other hand, where the parties are commercial competitors (or ‘trade rivals’) and one of the parties discovers sensitive business information which, if used by the other party for purposes other than the litigation, would prejudice the first party’s commercial interests, the first party has an interest in minimising the risk of such use.[73] The ultimate question is what is necessary for the attainment of justice in a particular case.[74]
[72]NAK Australia Pty Ltd v Starkey Consulting Pty Ltd [2008] NSWSC 1136 [8] (Brereton J); Hadid v Lenfest Communications Inc (1996) 70 FCR 403, 410 (Hill J).
[73]Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34, 38 (‘Mobil Oil’).
[74]Mobil Oil [1996] 2 VR 34, 38, 40 (Hayne JA, Winneke P and Phillips JA agreeing).
In Mobil Oil Australia Ltd v Guina Developments Pty Ltd,[75] the respondent’s tender to the Roads Corporation to construct a service centre was unsuccessful. The respondent sued the Roads Corporation and sought an order that documents held by the Roads Corporation containing confidential commercial information relating to the applicant — which was the successful tenderer and a trade rival of the respondent — be produced not only to the respondent’s lawyers and experts upon the giving of confidentiality undertakings by them, but also to the respondent’s principal. The applicant intervened in the proceeding and submitted that the documents contained sensitive information about the rate of return it expected to achieve for the project and the ‘hurdle rate’ which it used to determine whether to bid for a new project. The judge in the Practice Court ordered that access to the documents be given to the respondent’s principal upon the giving of a confidentiality undertaking, and the applicant appealed to the Court of Appeal against that order.
[75][1996] 2 VR 34.
Hayne JA (with whom Winneke P and Phillips JA agreed) decided that, notwithstanding that the judge’s order involved an exercise of judicial discretion on an interlocutory matter of practice and procedure which attracted the principles in House, the appeal should be allowed, the judge’s order should be set aside and the proceeding should be remitted to the Practice Court to be heard and determined afresh. He said the following:
Once the documents are inspected by the principals of the trade rival the information which is revealed is known to the trade rival and cannot be forgotten. Confidentiality is destroyed once and for all (at least so far as the particular trade rival is concerned). To say that the trade rival is bound not to use the documents except for the purposes of the action concerned is, in a case such as this, to impose upon that trade rival an obligation that is impossible of performance by him and impossible of enforcement by the party whose secrets have been revealed. How is the trade rival to forget what internal rate of return the competitor seeks to achieve on a new investment of the kind in question? How is the party whose hurdle rate has been revealed to know whether the rival has used the information in framing a tender? Thus, if the trade rival may inspect the documents concerned, the confidentiality of the information in them is at once destroyed. Is that necessary for the attainment of justice in the particular case?[76]
[76]Mobil Oil [1996] 2 VR 34, 38.
As has already been stated, in the present case, the judge acknowledged that ‘the potential for inadvertent disclosure of confidential documents increases whenever an expanded number of people are given access’, and referred to a past instance of inadvertent unauthorised disclosure.[77]
[77]Ruling 13 [18]. See [74]–[75] above.
The mechanism that the courts use in seeking to balance the competing considerations to which we have referred is to make orders limiting the persons who may have access to confidential discovered documents and requiring those persons to provide an undertaking to the court which limits how they may use the documents and to whom they may disclose the contents of the documents. Those orders are fashioned to meet the circumstances of the particular case.[78]
[78]Mobil Oil [1996] 2 VR 34, 40.
There are no fixed rules about the class of persons who are authorised to have access to confidential discovered documents or the terms of any confidentiality undertaking to be given by them. However, where the parties are trade rivals and the confidential discovered documents relate to intellectual property or other business matters which are of commercial interest to the party to whom the documents are discovered, it is ‘commonplace’ for access to those documents to be limited to the solicitors and counsel acting for that party in the proceeding — who necessarily are admitted to practice in the jurisdiction in which the proceeding is being conducted — and independent experts.[79]
[79]Mobil Oil [1996] 2 VR 34, 40.
[T]he Cargill Parties have now sought to tender some of the Confidential Discovered Documents in their case, despite having previously argued that the documents were not relevant to issues in the proceeding. The court has also been informed that a significant number of the Confidential Discovered Documents are to be relied upon by the Cargill Parties’ experts. In circumstances where the Cargill Parties now positively rely upon the Confidential Discovered Documents to advance their case, Weber ought to be entitled to review them and give instructions for the purposes of the [respondents’] defence and related matters.[107]
[107]Ruling 16 [17].
The applicants submitted that it was inappropriate for the judge to rely on the fact that some of the discovered documents were tendered by them. This was said to be because they tendered the documents not for the purpose of relying on them but for the limited purpose of making them available to the experts in case they formed the view that the documents were relevant to their opinions. The applicants also submitted that, as the documents were Cargill documents which were created after 1 October 2017, long after Glencore ceased involvement in the malting business on 31 October 2013, the tender of some of the documents did not provide any basis for finding that Mr Weber required access to them. This was said to be particularly so because the respondents’ expert had access to the confidential documents and Mr Weber did not have any expertise in the malting industry, let alone valuation issues relating to that industry.
The respondents submitted that proposed ground 3 does not raise an issue falling within the principles in House. They also contended that rejection of this ground should result in the appeal being dismissed because the judge held that the tender was sufficient in itself to justify the impugned order.
In our opinion, proposed ground 3 is not made out. The fact that the applicants have tendered some of the confidential documents was a relevant matter for the judge to take into account in deciding whether to include Mr Weber in the disclosure class. No limit was imposed on the purposes for which the tendered documents could be used.[108] The weight to be given to that tender was a matter for the judge. However, for the reasons set out at [163] above, we do not accept the respondents’ submission that rejection of proposed ground 3 is determinative.
[108]When the documents were tendered, there was discussion about whether an order should be made under s 136 of the Evidence Act 2008 limiting the use to be made of the documents. No such order was made.
Proposed ground 4: ‘Vested rights’ to discovery
Proposed ground 4 is in the following terms:
The trial judge’s exercise of discretion miscarried at [16] by acting upon a wrong principle, in that he found, proceeded on the basis that, the respondents had a ‘vested right’ to further discovery pursuant to the 19 July Orders.
As has already been stated, the second of the ‘fundamental differences’ between the unsuccessful first application and the successful second application on which the judge relied was the applicants’ application to confine the operation of the 19 July discovery order. The judge explained the relevance of that application in para 16 of Ruling 16 as follows:
[A]n application has now been made by the Cargill Parties to confine the operation of the 19 July Orders. Weber has taken exception to the [respondents] conferring with the Cargill Parties in this regard, unless he is able to give informed instructions about how the ambit of the 19 July Orders ought to be limited. By the [respondents] participating in a process to limit the operation of the 19 July Orders (which was in progress until Weber sought to intervene), they would necessarily be giving away a vested right to access relevant documents pursuant to the 19 July Orders. In these circumstances, the lawyers acting for the [respondents] are entitled to get instructions before acceding to any limitation upon the operation of orders previously made by the court.[109]
[109]Ruling 16 [16].
The applicants submitted that the judge acted on a wrong principle because a party to civil litigation does not have a vested right in relation to discovery. Rather, so it was said, under O 29 of the Supreme Court (General Civil Procedure) Rules 2015 and s 55 of the CPA, the scope of the parties’ discovery obligations is at the Court’s discretion.
The respondents submitted that the judge did not act on a wrong principle. They contended that the judge’s reference to a ‘vested right’ meant to convey that a narrowing of the scope of the applicants’ discovery obligations under the 19 July discovery order would necessarily reduce the discovery rights which the respondents currently have under that order.
We agree with the respondents’ submission. Proposed ground 4 is not made out. However, for the reasons set out at [163] above, this conclusion does not mean that the judge’s finding in relation to the applicants’ application to limit the scope of the 19 July discovery order is a sufficient basis to dismiss the appeal.
Proposed ground 5: Differences between undertakings
Proposed ground 5 is in the following terms:
The trial judge’s exercise of discretion miscarried at [18] because it was unreasonable or plainly unjust to treat the difference between the undertakings given pursuant to orders dated 7 August 2018 and the undertaking proffered by Weber to the court as a material change of circumstance since the respondents’ previous application for Weber to have access to the Confidential Discovered Documents.
As has already been stated, the fourth of the ‘fundamental differences’ between the unsuccessful first application and the successful second application on which the judge relied was Mr Weber’s explanation on oath of the basis upon which access to the confidential documents was sought and his offer of an undertaking to the Court. In para 18 of Ruling 16, the judge said:
[N]ot only has Weber now gone on oath as to the basis upon which access to the Confidential Discovered Documents is sought, he has also offered to give a confidentiality undertaking to the court. This was not previously offered.[110]
[110]Ruling 16 [18] (citations omitted).
The applicants submitted that the fact that Mr Weber offered an undertaking to the Court whereas other members of the disclosure class previously provided undertakings to the applicants was not a material change which warranted Mr Weber’s inclusion in that class. They contended that an undertaking is significant whether it is given to the Court or another party[111] and that, in any event, having regard to Mr Weber’s overseas residence, the sanction of contempt of court for breach of his confidentiality undertaking ‘is likely to be of theoretical significance’.
[111]The applicants referred to Kraft Foods Group Brands LLC v Bega Cheese Ltd [No 3] [2018] FCA 1023 [5]–[7] (O’Callaghan J).
The respondents submitted that the judge did not err, as the nature of the undertaking offered by Mr Weber was relevant to the factors that needed to be balanced in the exercise of the judge’s discretion whether to include Mr Weber in the disclosure class.
In our opinion, proposed ground 5 does not raise an issue falling within the principles in House. The nature of the undertaking offered by Mr Weber was a relevant matter for the judge to take into account in deciding whether to include Mr Weber in the disclosure class. The weight to be given to the nature of the undertaking was a matter for the judge. Proposed ground 5 is not made out.
Proposed ground 6: Open offer of access to Mr Fitzgerald
Proposed ground 6 is in the following terms:
The trial judge’s exercise of discretion miscarried at [19][112] because it was unreasonable or plainly unjust to treat the making of an open offer for another representative of the respondents to have access (Fitzgerald) as an implicit concession that the respondents’ application had merit, or alternatively the trial judge mistook the facts and took into account an irrelevant consideration.
[112]Proposed ground 6 inadvertently referred to para 18 of Ruling 16.
As has already been stated, the fifth of the ‘fundamental differences’ between the unsuccessful first application and the successful second application on which the judge relied was Cargill’s open offer for Mr Fitzgerald to be given access to the confidential documents. The judge explained the relevance of that offer in para 19 of Ruling 16 as follows:
[T]he Cargill Parties’ have changed their position with respect to the access that ought to be given. Previously, the Cargill Parties said access ought not be given to either Weber or Damian Fitzgerald (‘Fitzgerald’). Fitzgerald is in-house counsel for the [respondents], except Glencore. In seeking to resolve the issues concerning this application, the Cargill Parties made an open offer for Fitzgerald, rather than Weber, to be given access. Such an offer appears to implicitly acknowledge that there is some merit in the application. However, during the course of the trial, the court has directed the parties to confer in order to seek to resolve the multitude of interlocutory applications that are continually made in this proceeding. Given the Cargill Parties were acting pursuant to this direction, I refer to this matter for completeness rather than as a primary basis for granting the application.[113]
[113]Ruling 16 [19] (emphasis in original) (citations omitted).
The applicants submitted that it was wrong for the judge to construe their open offer to include Mr Fitzgerald in the disclosure class as any form of concession regarding Mr Weber. This was said to be because they made the offer in furtherance of their overarching obligations under the CPA to cooperate,[114] and use reasonable endeavours to resolve the dispute[115] and narrow the issues in dispute,[116] and also because they expressly opposed Mr Weber’s inclusion in the disclosure class. They contended that the offer was not a relevant matter for the judge to take into account in deciding whether to include Mr Weber in the disclosure class. This was said to be particularly so because of the important differences between Mr Weber and Mr Fitzgerald in terms of their residence and amenability to the supervisory jurisdiction of the Court.
[114]CPA s 20.
[115]CPA s 22.
[116]CPA s 23.
The respondents submitted that the applicants’ open offer was a relevant consideration. In any event, so it was said, the judge made clear that the offer was not a primary basis for deciding to include Mr Weber in the disclosure class.
We agree with the applicants’ submission that their open offer in relation to Mr Fitzgerald could not be construed as any form of concession in relation to Mr Weber. Unlike Mr Weber, Mr Fitzgerald resides in Australia, is admitted to practice as a solicitor in this country and is liable to professional disciplinary sanctions in this jurisdiction. Nevertheless, as the judge would have made the impugned order irrespective of the open offer, any error on his part was not material to his decision. Accordingly, proposed ground 6 is not a basis for a finding that the judge’s discretion miscarried.
Proposed ground 7: Interests of third parties
Proposed ground 7 is in the following terms:
The trial judge’s exercise of discretion miscarried at [21][117] by failing to take into account a material consideration, namely that the respondents had proposed, and the applicants had agreed with, a process for addressing third party confidentiality concerns which the trial judge implicitly rejected without adverting to the proposal.
[117]Proposed ground 6 inadvertently referred to para 31 of Ruling 16.
In Ruling 13, the judge stated that ‘there is … evidence that the confidentiality in the Confidential Discovered Documents extends to the interests of third parties’.[118] The third parties to which proposed ground 7 refers are parties that have engaged with Cargill in relation to the proposed sale of its global malting business.
[118]Ruling 13 [13].
During the hearing, the respondents proposed a regime for the identification and management of documents containing information that was confidential to one or more third parties and the applicants agreed that the regime be adopted if Mr Weber were to be included in the disclosure class (‘agreed third party confidentiality regime’).
In para 21 of Ruling 16, the judge said the following about the interests of third parties:
A further matter which was taken into account in previously denying access was the evidence relating to information concerning third parties contained in the Confidential Discovered Documents. This evidence included financial information of a proposed joint venture partner provided to the Cargill Parties under a non-disclosure agreement imposing restrictions on dissemination. I have taken this matter into account in reaching the conclusion expressed above. In my view, the confidentiality regime to be imposed by the proposed undertaking, together with considerations of the due administration of justice in the conduct of this proceeding, mean that these private arrangements must be subject to access being given in the limited circumstances proposed.[119]
[119]Ruling 16 [21] (citations omitted).
The applicants submitted that the judge erred in deciding to include Mr Weber in the disclosure class without referring to, and thereby implicitly rejecting, the agreed third party confidentiality regime.
The respondents submitted that, as the agreed third party confidentiality regime was before the Court, the judge was entitled to reject it for the reasons set out in para 21 of Ruling 16.
In our opinion, there are three possible explanations for the judge’s failure to expressly refer to the agreed third party confidentiality regime. The first explanation is that the judge overlooked it. The second explanation is that the judge’s reference to ‘private arrangements’ in para 21 was intended to encompass not only arrangements between third parties and Cargill but also arrangements between the applicants and the respondents relating to third parties. The third explanation is that the judge considered that it was not necessary to refer to the agreed third party confidentiality regime expressly, because he formed the view that the confidentiality regime to be imposed on Mr Weber by his confidentiality undertaking would provide sufficient protection for the interests of third parties.
In our opinion, the second explanation should be rejected. The context of para 21 of Ruling 16 strongly suggests that the ‘private arrangements’ to which the judge referred related solely to the ‘non-disclosure agreement’ between Cargill and the third parties. It is also difficult to accept the third explanation, as the judge only adverted to the private arrangements and Mr Weber’s confidentiality undertaking. However, even if the first explanation is accepted, that would not necessarily give rise to an inference that the judge implicitly rejected the agreed third party confidentiality regime. Had the judge adverted to that regime, he may well have decided that effect could be given to it notwithstanding the making of the impugned order. The applicants could have sought clarification from the judge as to his intention in this regard.
It follows that, even if the judge overlooked the agreed third party confidentiality regime, this would not be a sufficient basis for a finding that the judge’s discretion miscarried. Accordingly, proposed ground 7 is not made out.
Proposed ground 8: Mr Weber’s responsibility for litigation
Proposed ground 8 is in the following terms:
The trial judge’s exercise of discretion miscarried at [28(4)] because his Honour mistook the facts in saying that Mr Weber has been responsible for the conduct of this proceeding on behalf of all the respondents.
In para 28 of Ruling 16, the judge gave four reasons why it was inappropriate to include Mr Fitzgerald in the disclosure class instead of Mr Weber. The fourth of those reasons was in the following terms:
Weber has been responsible for the conduct of this proceeding on behalf of the [respondents] from the outset. Although, on occasion, Fitzgerald has sworn affidavits on behalf of all the [respondents], including Glencore, it is Weber that has the ultimate responsibility.[120]
[120]Ruling 16 [28(4)] (citations omitted).
The applicants submitted that the judge made an erroneous factual finding because, in his affidavit dated 30 August 2018, Mr Weber said that he has oversight of the proceeding on behalf of Glencore and that Mr Fitzgerald has a similar function with respect to the Viterra parties.
The respondents submitted that it was open for the judge to infer from the fact that Glencore was the holding company with ultimate responsibility for the conduct of the respondents’ case that, as Glencore’s deputy general counsel, Mr Weber had overall responsibility for the conduct of the proceeding on behalf of all the respondents.
We agree with the respondents’ submission. Proposed ground 8 is not made out.
Proposed ground 10: Confidential documents 4 and 50
Proposed ground 10 is in the following terms:
The trial judge’s exercise of discretion miscarried at [31] because his Honour mistook the facts, failed to take into account Cargill’s submission as put, or reached an unreasonable or plainly unjust result in giving Weber access to Documents 4 and 50.
In paras 30 and 31 of Ruling 16, the judge said the following:
In the event that the court were minded to grant access, the Cargill Parties submitted that access should not be given to documents numbered 4 and 50 of the Confidential Discovered Documents. This was put on the basis that those documents expressed the aspirational position of Cargill, Inc, and the figures contained in them were not based upon any valuation method.
The Cargill Parties have not demonstrated any good reason why these 2 documents ought to be excluded. The double hearsay evidence put forward in opposition to the granting of access, referred to in the preceding paragraph, does not sit comfortably with the contents of the documents themselves. The first of the documents, on its face, adopts valuation methods, however rudimentary. The second document seems to use the same figure as that in the first document, albeit in the first document it is used as part of a range. In any event, even if that hearsay evidence were accepted, the documents are still relevant. Further, the distinction now sought to be drawn was not previously raised by the Cargill Parties in resisting the granting of access to external lawyers and experts.[121]
[121]Ruling 16 [30]–[31] (citations omitted).
The judge’s reference to double hearsay was explained by him in footnote 36 of Ruling 16 as follows:
The affidavit of the Cargill Parties’ solicitor relied upon instructions from the Cargill Parties’ in-house counsel, who was not the author of either of the documents in question. Further, the source of in-house counsel’s information was not disclosed. The same failure to disclose the source of information specifically with respect to these 2 documents existed in a previous affidavit sworn by in-house counsel on 21 August 2018.[122]
[122]Ruling 16 n 36.
Documents 4 and 50 to which the judge referred have been described at [91] above.
The applicants submitted that the judge failed to take into account a material consideration, namely that, unlike some of the other confidential documents which contain detailed valuation information, documents 4 and 50 contain an aspirational target that was not founded on a valuation exercise. They also submitted that their failure to object to the respondents’ external lawyers and expert having access to documents 4 and 50 was not relevant because, as the in-house counsel of a trade rival, Mr Weber was in a different position to the external lawyers and expert. According to the applicants, the judge erred in not excluding documents 4 and 50 from the confidential documents to which Mr Weber would be permitted to have access. They contended that the nature of the documents is such that Mr Weber did not need to inspect them for any purpose connected with the litigation.
The respondents submitted that it was open to the judge to decide that, as documents 4 and 50 were relevant, they should not be treated any differently from the other confidential documents to which Mr Weber would be permitted to have access.
In our opinion, proposed ground 10 does not raise an issue falling within the principles in House. The weight to be given to the different features of documents 4 and 50 were matters for the judge. Proposed ground 10 is not made out.
Conclusion
Our conclusion that proposed grounds 1, 2 and 9 are made out means that the exercise of the judge’s discretion miscarried, leave to appeal should be granted in relation to those grounds and the appeal should be allowed.
In our opinion, it is not appropriate for us to decide the merits of the respondents’ summons dated 30 August 2018. We have not had the benefit of full argument on that subject. Nor are we as familiar with the issues in the case as the judge obviously is. Further, because the class of documents covered by the 19 July discovery order is inevitably growing as the sale process proceeds, issues may have arisen of which we are unaware. It may also be that, as a result of our reasons in this appeal, the parties may wish to adduce further evidence, proffer different undertakings or seek leave to cross-examine witnesses. These would all be matters best raised before the judge.
For the above reasons, we would set aside the impugned order and remit the respondents’ summons dated 30 August 2018 to the judge for further hearing and determination.
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SCHEDULE OF PARTIES
| CARGILL AUSTRALIA LTD (ACN 004 684 173) | First applicant |
| - and - | |
| CARGILL, INCORPORATED | Second applicant |
| - and - | |
| CARGILL MALT ASIA PACIFIC PTY LTD (ACN 004 287 352) (formerly JOE WHITE MALTINGS PTY LTD (ACN 004 287 352)) | Third applicant |
| v | |
| VITERRA MALT PTY LTD (ACN 096 519 658) | First respondent |
| - and - | |
| VITERRA OPERATIONS PTY LTD (ACN 007 556 256) (formerly VITERRA OPERATIONS LTD (ACN 007 556 256)) | Second respondent |
| - and - | |
| VITERRA PTY LTD (ACN 084 962 130) (formerly VITERRA LTD (ACN 084 962 130)) | Third respondent |
| - and - | |
| GLENCORE INTERNATIONAL AG (D-U-N-S NBR 48 070 9963) | Fourth respondent |
[27]Ibid [18].
39
21
0