Cargill Australia Ltd v Viterra Malt Pty Ltd (No 13)

[2018] VSC 478

IN THE SUPREME COURT OF VICTORIA	Not Restricted
AT MELBOURNE COMMERCIAL COURT

S ECI 2014 000146

CARGILL AUSTRALIA LIMITED (ACN 004 684 173)	Plaintiff
v
VITERRA MALT PTY LTD (ACN 096 519 658) AND OTHERS	Defendants
and
CARGILL, INCORPORATED AND OTHERS	Third parties

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JUDGE:	ELLIOTT J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	21 AUGUST 2018
DATE OF RULING:	21 AUGUST 2018
CASE MAY BE CITED AS:	CARGILL AUSTRALIA LTD v VITERRA MALT PTY LTD (No 13)
MEDIUM NEUTRAL CITATION:	[2018] VSC 478

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PRACTICE AND PROCEDURE – Discovery – Confidential documents – Production – Produced to external legal practitioners and experts subject to confidentiality undertakings – Inspection sought by in-house counsel – Need for documents to be disclosed to in-house counsel not demonstrated – Application refused.

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APPEARANCES:	Counsel	Solicitors
For the plaintiff and the 1st and 2nd third parties	Dr C Button Mr C Tran	Gilbert + Tobin
For the defendants	Mr G Nell SC Mr J Carter Mr S Prendergast Ms K O’Gorman	King & Wood Mallesons
For the 3rd third party	Mr S Rosewarne	Maddocks
For the 4th third party	Nil	Ward Lawyers
For the 5th third party	Nil	Ward Lawyers
For the 6th third party	Mr C Archibald	HWL Ebsworth
For the 7th third party	Nil	Ward Lawyers

HIS HONOUR:

A.       Introduction

1. The defendants brought an application seeking that certain individuals be granted access to confidential documents discovered by the plaintiff, Cargill Australia Ltd (“Cargill Australia”) and the first and second third parties (together, “the Cargill Parties”).  Access has already been granted to external lawyers and experts of the parties on the basis of confidentiality undertakings.

B.       Background

1. On 19 July 2018, the court ordered that the Cargill Parties discover further documents.[1]  The orders of the court[2] (“the 19 July Orders”) included:

   [1]Brief oral reasons were delivered on 19 July 2018.  Written reasons were provided on 6 August 2018: Cargill Australia Ltd v Viterra Malt Pty Ltd (No 9) [2018] VSC 433.

   [2]The orders as originally made were subsequently varied at the request of Cargill Australia, and without opposition from the defendants.  The orders as set out above are the orders made as varied.

By 4:00 pm on 27 July 2018, the Cargill Parties make discovery of:

(1)         Any documents recording, forming part of or referring to any valuation prepared since 1 October 2017 in respect of:

(a)         the business operated by Cargill Malt Asia Pacific Pty Ltd (formerly Joe White Maltings Pty Ltd) (“the Australian Business”);

(b)         Cargill’s global malt business which includes the Australian Business (“Cargill’s Malt Business”),

including any documents recording the inputs, instructions or assumptions prepared or provided for the purpose of such valuations.

(2)         In relation to any proposed disposition of Cargill’s Malt Business or part of it since 1 October 2017:

(a)         Any information memoranda or any similar documents.

(b)         Any offers or proposals, whether formal or informal, made to or from any prospective party.

(c)         Presentations to, and minutes of, any meetings of the Food Ingredients & BioIndustrial Platform and the Board of Directors of Cargill, Inc.

1. On 27 July 2018, the Cargill Parties provided a list of documents pursuant to the 19 July Orders.[3]  An updated list of documents was exhibited to an affidavit sworn by Janet Whiting on 5 August 2018 on behalf of the Cargill Parties (“the List of Documents”).

   [3]The defendants have raised an issue about whether the 19 July Orders have been complied with.  This is the subject of a separate application.

1. On 7 August 2018, the court made further orders (“the 7 August Orders”), which included:

The plaintiff produce for inspection the documents on the [List of Documents], and any other documents discovered pursuant to the [19 July Orders], to:

(1)the external legal representatives (solicitors and counsel) of each of the parties; and

(2)Meredith, Klein and Potter (and those assisting those persons in respect of their expert reports),

upon those persons giving undertakings in the form annexed to these orders, from 7:00 pm on 7 August 2018.

1. The 7 August Orders limited access to the documents on the List of Documents (“the Confidential Discovered Documents”) to the external legal representatives of the defendants, as well as certain experts.  Senior counsel for the defendants consented to this course on the basis that the 7 August Orders represented an interim measure and not a final determination of the relevant issues concerning confidentiality.  It was expressly stated that the defendants intended to revisit the issue of access to the Confidential Discovered Documents for the in-house counsel of the defendants in due course.  In making the 7 August Orders, the court accepted this position.

1. As already noted, confidentiality undertakings have been given by external lawyers and experts, and access to the Confidential Discovered Documents has been provided to those who have given an undertaking.  As may be seen, the orders of the court to date have not permitted access to any employee of the defendants or the third parties.

1. Further, since access has been given to the defendants’ external lawyers and experts, further witnesses have been called on behalf of Cargill Australia.  Senior counsel for the defendants has cross-examined on the Confidential Discovered Documents without any apparent difficulty, despite obviously not having any instructions from any of the defendants’ employees or officers.

C.       The application

1. The defendants originally sought an order that 2 employees of the fourth defendant, Glencore International AG (“Glencore”), obtain access to the Confidential Discovered Documents upon giving confidentiality undertakings in the form previously given by those persons and categories of persons listed in the 7 August Orders.  Those 2 employees are Matthew Weber (“Weber”) and Damian Fitzgerald (“Fitzgerald”), both of whose roles include being in-house counsel. 

1. Only as recently as 14 August 2018, it was said on behalf of the defendants that it was “necessary” to give access to Fitzgerald.   Now, access is only sought by Weber, on the distinction that Fitzgerald is to be a witness in the case.  The defendants submit that, if access is not granted to Weber, the defendants will be unable to obtain and receive advice or to provide instructions on a “critical” element of the Cargill Parties’ case, namely the issue of Cargill Australia’s loss.

1. Although the defendants are not presently in the malting business, they have substantial interests in the grain business in many parts of the world; a business in which the Cargill Parties are also extensively engaged.  Further, despite there being no present intention of the defendants to participate in the malting business, there is no guarantee that they will not do so in the future, or that Weber will not participate as in‑house counsel in any such activities.  Furthermore, the evidence before the court shows that, not only are Glencore and the Cargill Parties competitors in the barley trade, but that Glencore has been actively involved in the last year in selling malt‑grade barley to the Cargill Parties.  Moreover, an affidavit sworn by Tina Savona on 21 August 2018 on behalf of the Cargill Parties contended that confidential information regarding the cost of barley purchased by them could be used by Glencore in “an anti-competitive manner” to further its business interests in the barley trade.

D.       Legal principles

1. It was not in dispute that, in relation to whether or not access to confidential documents should be granted, the factors to be considered are as follows:[4]

   [4]IOOF Holdings Ltd v Maurice Blackburn Pty Ltd (No 2) [2016] VSC 594, [10].

(1)         The degree of relevance of the document or documents.

(2)         The extent to which the document or documents are confidential, including whether the information has already been disclosed in the proceeding.

(3)         The use to which the information 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 an 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).[5]

[5]Section 7.

1. In addition to these matters, the defendants emphasised that a party to litigation generally has a right to have access to documents relevant to the issues in the proceeding.  This is particularly so when it is a defendant seeking access to documents from a plaintiff who has invoked the jurisdiction of the court.[6]

   [6]NAK Australia Pty Ltd v Starkey Consulting Pty Ltd [2008] NSWSC 1136, [8] (Brereton J).

E.        Ruling

1. Turning to the issues in this case, the Confidential Discovered Documents are plainly relevant to the issue of Cargill Australia’s loss.[7]  The Confidential Discovered Documents are also highly confidential, and their disclosure in the market place would have the real potential to undermine any orderly sale of Cargill’s Malt Business.[8]  Without referring to any confidential information disclosed to date, it is readily apparent from publicly available information that any such sale would involve many millions of dollars.  The Cargill Parties are understandably very sensitive to any disclosure of the contents of the Confidential Discovered Documents, including to Glencore itself.  Further, there is also evidence that the confidentiality in the Confidential Discovered Documents extends to the interests of third parties.

   [7]Cargill Australia Ltd v Viterra Malt Pty Ltd (No 9) [2018] VSC 433, [50]-[52].

   [8]Ibid, [2].

1. In my view, the defendants have not demonstrated any pressing need for the Confidential Discovered Documents to be disclosed to Weber.  Other than making broad and sweeping statements about the need for advice and the ability to give fully informed instructions, no specific need or problem has been identified. 

1. In this regard, the Cargill Parties have previously requested that the defendants put forward evidence to articulate any basis for the alleged need to extend the 7 August Orders to include Weber.[9]  Given the nature of the Confidential Discovered Documents, it was reasonable to expect that the defendants would plainly identify how the existing orders rendered the defendants unable to give full and proper instructions to their solicitors.  And yet, no evidence was put before the court in respect of this issue.

   [9]The defendants were placed on notice by the Cargill Parties that this was sought as early as 18 July 2018, with formal “advance notice” being given by the Cargill Parties on 14 August 2018. 

1. This is not surprising, given the nature of the documents in question.  They are all concerned with Cargill’s Malt Business.  On the face of it, as has been demonstrated already, the external lawyers and experts representing the defendants 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.

1. Although the onus lies with the Cargill Parties to demonstrate the appropriateness of the restrictions sought to be imposed,[10] the absence of an obvious pressing need at this stage of the proceeding is material.  Further, given the highly confidential nature of the Confidential Discovered Documents, the Cargill Parties have discharged the onus at the present time. 

   [10]NAK Australia Pty Ltd v Starkey Consulting Pty Ltd [2008] NSWSC 1136, [8] (Brereton J). See also AstraZeneca AB v Medis Pharma Pty Ltd [2014] FCA 549, [10] (Besanko J), citing Alpharm Pty Ltd v Lundbeck Australia Pty Ltd [2006] FCA 1358, [17] (Lindgren J).

1. 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 defendants 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 defendants 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 defendants’ solicitors were 4 individuals who had not signed the confidentiality undertaking.[11]

   [11]The court was assured that those recipients had not read the Submissions and that immediate steps would be taken to delete the Submissions from their email servers.

F.        Conclusion

1. On balance, on the limited material presently before the court, I can see no good reason to require further dissemination of the Confidential Discovered Documents beyond those to whom access has already been granted pursuant to the 19 July Orders and the 7 August Orders.

1. For completeness, this should not be treated as a final ruling for the purposes of the trial.  If the defendants are able to demonstrate a substantive need for access to be given to the Confidential Discovered Documents, that matter may be addressed by an application to the court in due course.  This should be able to be done without being unduly onerous, and without unfairly disclosing the conduct of the defendants’ case.  If there might be any unfairness with any such application, that could be addressed at the time it arises, depending upon the particular circumstances. 

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