Commonwealth Bank of Australia v Brick and Block Company Pty Ltd (in Liq)

[2016] NSWSC 1277

Supreme Court

New South Wales

Medium Neutral Citation:	Commonwealth Bank of Australia v Brick & Block Company Pty Ltd (in Liq) [2016] NSWSC 1277
Hearing dates:	12 September 2016
Date of orders:	12 September 2016
Decision date:	12 September 2016
Jurisdiction:	Equity - Commercial List
Before:	McDougall J
Decision:	Make limited suppression orders in respect of expert report and underlying documents
Catchwords:	PRACTICE AND PROCEDURE – expert evidence – where plaintiff seeks to rely on expert report – where non-party to proceedings seeks to prevent the plaintiff from relying on that report, or suppression orders in respect of certain documents relied upon in that report – balancing of competing considerations – where hearing date is imminent – limited suppression orders made
Category:	Procedural and other rulings
Parties:	Boral Masonry Limited (Applicant) Commonwealth Bank of Australia (Plaintiff / Cross-defendant) Brick & Block Company Pty Ltd (in liquidation) (First Defendant) Iyad Rafidi (Second Defendant / Cross-claimant)
Representation:	Counsel: F St John (Applicant) E Holmes (Plaintiff / Cross-defendant) R White (Defendants / Cross-claimant)     Solicitors: DLA Piper (Applicant) Gadens Lawyers (Plaintiff / Cross-defendant) Merchant Marriott Commercial Lawyers (Defendants / Cross-claimant)
File Number(s):	2011/251728

Judgment   (ex tempore – revised 12 september 2016)

1. HIS HONOUR: The application with which I am concerned is brought by a non-party, Boral Masonry Limited (Boral). Boral seeks either to exclude a party, the respondent plaintiff/cross-defendant (CBA) from relying on an expert report of Mr Geoffrey Goldsmith (and ancillary orders) or, alternatively, suppression orders in respect of Mr Goldsmith's evidence and in respect of the documents on which he relies. CBA does not oppose the latter course. For obvious reasons, it does oppose the former.

2. In principle, one might think, the making of appropriately crafted suppression orders, limiting access to the lawyers, would be the better way to go. However, the defendant/cross-claimant, also respondent to the motion, Mr Rafidi, opposes that course. He opposes it because he himself will give expert evidence on the questions (or some of them) on which Mr Goldsmith expresses opinions. If the suppression order is crafted so as to exclude Mr Rafidi from having access to the documents, he will be prejudiced in the presentation of his case on the cross-claim. On the other hand, there will be serious problems if he is not excluded from access.

3. Without going into the whole tedious background, the position is that Mr Rafidi is, or wishes to be and remain, a competitor of Boral in the masonry market. There is no doubt that the documentary material in question is material that would assist Boral's competitors in that market. Although some of the Boral documents are of considerable age, the affidavit evidence of, in particular, Mr Dell and Mr Condo satisfies me that they have very substantial ongoing commercial significance. It satisfies me, further, that having regard to the circumstances in which and purposes for which those documents were created, and the time, labour and expense of creating them, they ought properly to be regarded as truly confidential, and that Mr Goldsmith must have realised that they were confidential.

4. Mr Goldsmith had been an employee of a related company of Boral. After his employment ceased, he was retained for two years as some sort of consultant or contractor to Boral. The contracts in question contained express confidentiality clauses. Boral says that Mr Goldsmith took some of its material with him when he ceased to be a contractor, and relied on that material to express some of the opinions that are set out in his report, in a manner that would appear to be inconsistent with his obligations under those confidentiality clauses.

5. If it were not that the hearing date is pressing, and were it not for questions of very significant prejudice, the appropriate course might be to make the primary orders sought by Boral: namely, to refuse CBA leave to rely on Mr Goldsmith's evidence. However, to do that would be extremely oppressive to CBA. It obtained the report from Mr Goldsmith in circumstances where, the Court was informed without opposition, he was expressly asked not to breach any confidentiality obligations that he might have owed. So far as CBA was aware, at all times up until Boral brought the present application (or caused to be launched the correspondence battle that preceded it), CBA was entitled to proceed on the basis that Mr Goldsmith had not breached any relevant confidentiality undertaking or obligation.

6. The report was served approximately a year ago. Mr Rafidi has been aware of it for that length of time. He has chosen to reply to it, in part at least, through his own evidence rather than through the evidence of an independent expert.

7. Any decision that the Court makes is going to cause significant hardship. If it refuses Boral's application entirely, material that I am satisfied is confidential, and that would be of value to Boral's competitors (and would-be competitors, such as Mr Rafidi) would be publicly available. If CBA is refused leave to rely on Mr Goldsmith's report, its case would be very severely prejudiced. If Mr Rafidi is refused access to the material, his case will be prejudiced. Whichever way one turns, there is difficulty.

8. If Mr Rafidi were not himself a party, and a competitor or potential competitor of Boral, there would be no problem. I accept, of course, that Mr Rafidi could be asked to give a confidentiality undertaking, or could be made the subject of a suppression order. I do not for a minute suggest that Mr Rafidi would do anything other than seek conscientiously to adhere to whatever his obligations were under such an undertaking or order. But the reality is that the material would be lodged in his mind, and he would be unable to exclude it from his mind in any real way.

9. It is unfortunate that the situation has arisen at this very late time. In part, this situation has arisen because the parties are now undertaking detailed and, no doubt, comprehensive preparation for the hearing which is due to start in a few weeks' time. In part, that work has been delayed, and the preparation of Mr Rafidi's case has been disadvantaged, by the need to change Senior Counsel relatively late in the piece, for reasons that everyone understands and accepts and that do not need to be set out.

10. In balancing the considerations as best I can, there are a number of points of principle that should be borne in mind. One is that the Court should not become an instrument of oppression, so that its processes are used to the commercial disadvantage of those who are subject to its orders. Thus, at a level of some generality, where parties who are required pursuant to subpoenas to produce documents have a genuine and sustainable claim to confidentiality, the Court will do what it can to preserve that claim.

11. Another important principle is that litigation should be conducted on the basis that the parties have, within reasonable limits, access to all relevant information to assist them in the presentation of their cases. The quality of justice is enhanced where that happens because the Court is given the best material available on which to base its decision.

12. A third relevant principle is that, justice being in the general conducted openly and in the public gaze, suppression orders ought not be made unless it is absolutely necessary, and even when made should be limited to the bare minimum necessary to protect the legitimate interests that they are intended to protect.

13. Another important principle is that parties in general are entitled to hear the whole of the case against them, and to give instructions on material deployed against them. In the present case, if a disclosure order were made that affected Mr Rafidi's ability to consider the documents in question and give instructions on them, he would be prejudiced accordingly.

14. The material in question does not go to the question of liability. It goes to the question of quantum of damages, should liability be established. Thus, the position is a little removed from that where, it is often said, parties should be involved personally, although on advice, in the making of decisions such as whether to continue or abandon litigation. The material in question does not, I think, fall into the sort of category to which those remarks may be applicable.

15. Trying to balance all of those principles, and the fundamentally conflicting demands and interest of the parties and of Boral, is a very difficult matter. Inevitably, the outcome will be a compromise. It seems to me that the outcome that favours the principles to which I have referred, to the maximum possible, is that the suppression orders should be made, and that they should not be relaxed so as to allow Mr Rafidi access to the documents. I say that because if the suppression orders are made, Mr Goldsmith's report is likely to get into evidence (although I propose to reserve to the trial Judge the issues raised by prayers 1 to 3 of Boral's amended notice of motion). CBA will be able to present its case on damages. Mr Rafidi will still be able to present his case on damages. The Court will have as much information as possible on which, ultimately, its decision can be based.

16. I do accept that Mr Rafidi will be hindered in the way that his case is put. He will not be able to respond to Mr Goldsmith's views after taking into account the documents in question. Nor will his legal advisers be able to take instructions from him, at least in any way that involves breaching the confidentiality attaching to those documents. That is an unfortunate problem that arises from the fact that Mr Goldsmith has chosen to rely on documents that are confidential, in apparent breach of his obligations to Boral.

17. If there were more time, an appropriate outcome might be to send CBA back to the drawing board. But in the circumstances of this case, particularly bearing in mind, as I have said, that CBA sought to ensure that no relevant obligations of confidentiality were breached, that would be unjust in the extreme, as well as highly impractical.

18. For those reasons, it seems to me, I should be and am satisfied that making suppression orders is necessary to prevent prejudice to the proper administration of justice, and that in all the circumstances the public interest in open justice is outweighed by the very important public interest in permitting trade and commerce to flow without hindrance from the Court's compulsory processes. It follows in turn that I should (and do) make orders in accordance with paragraphs 8 to 11 and 13 to 15 of the amended notice of motion filed in court today. I should also order (and do) that prayers 1 to 3 of that notice of motion are stood over for agitation (if necessary) before the trial Judge.

[Counsel addressed on costs.]

19. I make no order as to the costs to date of Boral's notice of motion or amended notice of motion.

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Decision last updated: 16 September 2016