ConnectEast Pty Ltd v CityLink Melbourne Ltd

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

COMMERCIAL LIST

S ECI 2020 04353

BETWEEN:

CONNECTEAST PTY LTD (ACN 101 213 263)	Plaintiff
v
CITYLINK MELBOURNE LIMITED (ACN 070 810 678)	Defendant

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JUDGE:	RIORDAN J
WHERE HELD:	Melbourne
DATE OF HEARING:	6 September 2021
DATE OF JUDGMENT:	30 September 2021
CASE MAY BE CITED AS:	ConnectEast Pty Ltd v CityLink Melbourne Ltd
MEDIUM NEUTRAL CITATION:	[2021] VSC 626

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CONFIDENTIALITY – Equitable duty of confidence – Experts provided with information by the plaintiff for purposes of a government inquiry – Experts subsequently retained by the defendant to give evidence in this proceeding – Information in question not relevant to any issue in this proceeding – Principles to be applied – Whether alleged confidential information described with sufficient precision – Whether there is a real and sensible risk of disclosure – Application to restrain the engagement of the experts dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P H Solomon QC	Gilbert and Tobin
For the Defendant	Mr J W S Peters AM QC with Ms J Moir	King and Wood Mallesons

Contents

Litigation history

Background

Submissions

Plaintiff’s submissions
Defendant’s submissions

Principles

Consideration

Identification of allegedly confidential information with specificity
The plaintiff’s first submission to the ACCC
The plaintiff’s second submission to the ACCC
The plaintiff’s third submission to the ACCC
The CityLink Roaming Fee Presentation
The Follow Up Presentation
The plaintiff’s submission to the Inquiry

Real and sensible risk of misuse of confidential information

Orders

HIS HONOUR:

By summons filed 5 August 2021, the plaintiff applies for orders, in summary, that the defendant be restrained from continuing to engage:
(a)Mr Brendan Lyon as an expert in this proceeding; and
(b)Frontier Economics as experts or advisors in connection with this proceeding.

Litigation history

By statement of claim filed 23 November 2020, the plaintiff alleges that since 1 January 2009, the defendant has charged the plaintiff a fee under a Link roaming agreement (‘the roaming fee’) for the provision of a Link roaming service in excess of the net incremental marginal cost to the defendant of providing that Link roaming service,[1] in contravention of s 93AB of the Melbourne City Link Act 1995 (Vic) (‘the City Link Act’). The primary relief sought by the plaintiff, in substance, is the reimbursement of the amount by which the roaming fee, as charged by the defendant, exceeded the net incremental marginal cost to the defendant since 1 January 2009.
[1]The terms ‘Link roaming agreement’, ‘Link roaming service’, and ‘net incremental marginal cost’ are defined in s 93AA of the Melbourne City Link Act 1995 (Vic), which is set out in paragraph 5 below.
By concise statement of defence filed 12 February 2021, the defendant denies that the roaming fee exceeded, at any relevant time, the net incremental marginal cost, and alternatively, pleads defences based on the Limitation of Actions Act 1958 (Vic) and a change of position in good faith.
In relation to roaming fees, s 93AB of the City Link Act provides as follows:
(1)For the duration of the concession period (within the meaning of the Agreement) or the concession period (within the meaning of the EastLink Agreement) whichever expires first, the fee or charge that may be imposed by the relevant corporation on the Freeway Corporation under a Link roaming agreement for the provision of a Link roaming service must not exceed the amount that represents the net incremental marginal cost to the relevant corporation of providing that Link roaming service.
(2)Any agreement or arrangement existing on or after the commencement day that is inconsistent with subsection (1) is void to the extent of the inconsistency.
The definitions of terms relevantly referred to in s 93AB are set out in s 93AA of the City Link Act as follows:
Link roaming agreement means an agreement between the relevant corporation and the Freeway Corporation relating to the use in EastLink toll zones of a class or classes of vehicles that are registered with the relevant corporation;
Link roaming service means a service relating to the billing and payment of amounts for tolls and charges relating to the use in EastLink toll zones of a class or classes of vehicles that are registered with the relevant corporation;
net incremental marginal cost in relation to a Link roaming service, means—
(a)the additional cost to the relevant corporation of providing the Link roaming service (net of any savings) calculated in accordance with a determination under section 93AC(1); or
(b)the amount that is determined under section 93AC(2) to be the net incremental marginal cost to the relevant corporation of providing the Link roaming service; or
(c)if neither paragraph (a) nor paragraph (b) applies, the additional cost to the relevant corporation of providing the Link roaming service (net of any savings);
It is common ground that there has been no determination under sub-ss 93AC(1) or (2) of the City Link Act and therefore, the relevant definition of net incremental marginal cost is ‘the additional cost to the [defendant] of providing the Link roaming service (net of any savings)’.
On 26 February 2021, I directed that the defendant file and serve any expert report on which it intends to rely at trial, together with copies of all documents relied upon in compiling the report, addressing the following question:
What is the ‘net incremental marginal cost’ of providing the ‘Link roaming service’ (as those terms are defined in s 93AA of the Melbourne CityLink Act 1995 (Vic) as at each of 30 June 2015, 30 June 2017, 30 June 2019 and 30 June 2020?
On behalf of the defendant, the defendant’s solicitors have engaged:
(a)Mr Lyon to prepare an independent expert report; and
(b)Frontier Economics to assist Mr Lyon in preparing his independent expert report,
(collectively ‘the Experts’).
By confidentiality undertaking dated 18 August 2021, Mr Lyon gave the following undertakings:
1During the course of my role as Chair of the Inquiry into the regulation of toll service provider fees in New South Wales in 2019, I was provided with information in confidence by ConnectEast Pty Ltd (ConnectEast) (the ConnectEast Confidential Information).
2 In this proceeding, the question I am required to answer is as follows:
What is the ‘net incremental marginal cost’ of providing the ‘Link roaming service’ (as those terms are defined in s 93AA of the Melbourne City Link Act 1995 (Vic)) as at each of 30 June 2015, 30 June 2017, 30 June 2019 and 30 June 2020?
3That question does not require me to have regard to the ConnectEast Confidential Information.
4I will not request or seek to access any ConnectEast Confidential Information.
5To the extent (if any) that I recall any ConnectEast Confidential Information, I will not disclose that information to CityLink Melbourne Limited, their instructing solicitors or any other person; nor will I refer to or otherwise use that information for the purposes of answering the question I have been asked in this proceeding.
By confidentiality undertakings dated 19 August 2021, each of Mr Warwick Davis, Mr Ben Mason and Mr Alexus van der Weyden of Frontier Economics gave similar undertakings.

Background

The plaintiff and the defendant are competitors in the market of operating toll roads.
On 8 July 2016, Transurban Ltd, the defendant’s operating company, made a confidential, indicative and non-binding proposal to acquire 50% of the equity in Horizon Roads Holdings Pty Ltd, the plaintiff’s holding company.[2] The proposal was rejected. However, the plaintiff’s Chief Executive Officer, Mr Charles Griplas, gave evidence that the disclosure to Transurban of ‘the financials of ConnectEast’s operations provides an advantage to Transurban, if, in this stage or in the future, it seeks to again be a suitor for ConnectEast’.
[2]The Transurban group of companies includes Transurban Holdings Ltd, the defendant’s holding company, and Transurban Ltd, the defendant’s operating company.
In early 2019, Mr Lyon, then a partner at KPMG, was appointed by Transport for NSW as Chair of its Independent Inquiry into the Regulation of Toll Road Roaming Fees (‘the Inquiry’). In that capacity, he was assisted by Frontier Economics, which provided secretariat services.
The Issues Paper for the Inquiry dated September 2019 included the following statements:
(a)Under the heading ‘Background to the inquiry’, it was stated:
About this inquiry
In 2018, the NSW Government adopted the Roads Amendment (Toll Services) Regulation 2018, providing new powers for the Minister for Transport & Roads (Minister) to either:
1.Set a maximum roaming fee that may be charged by toll retailers; or
2.        Determine an appropriate mechanism to regulate roaming fees.
This regulation responded to investor concerns over the contingent risk that a future toll retailer might unreasonably increase roaming fee charges.
This independent public inquiry has been appointed to advise the Minister on the best mechanism to regulate roaming fees under this new regulation.
Sydney’s motorways: ‘motorway companies’, ‘toll retailers’ and ‘roaming fees’
…
Based on the stakeholder consultations, the level of roaming fees appear to vary between toll retailers and are not particularly transparent, having been established and maintained through bilateral contracts between each toll retailer and each motorway company. The MoU binds both motorway companies and toll retailers to minimise the transaction costs of tolling and to price roaming fees on the basis of cost recovery.
Roaming fees have not previously been price regulated or monitored in NSW.
(b)Under the heading ‘Toll retailers “make the world go around”’, it was stated:
Toll service provider revenues
Our initial inquiries suggest that toll retailers have a narrow range of revenue sources, which include:
•Transfer prices charged to vertically integrated motorway companies;
•Agreed roaming fees charged to unrelated motorway companies;
•Investment returns from motorist ’tag’ deposits and positive account balances;
•In some cases, additional processing fees charged to motorists for premium toll products and services;
•In some cases, additional fees paid by motorway companies for integrated trip processing by toll retailers; and
•        Commission on any enforcement fees collected by others.
(c)Under the heading ‘Key issues for comment’, it was stated:
What are toll retailer efficient costs?
Our consultations saw unanimous agreement that roaming fees should be calculated to efficiently recover costs - but there was little apparent consensus or clarity about what retailer costs should be included in working up a calculation of ‘efficient cost’ overall.
(d)The paper stated that ‘the inquiry should consider and make recommendations to the Minister covering the following areas’:
1.Appropriate approach to setting maximum roaming fees including fee levels. Recommendations should also be provided on how these should be indexed or reviewed in the future.
2.Efficient costs of providing tolling services - this will based [sic] on the costs of the current NSW toll services providers as well as benchmark analysis.
3.Current roaming fees - both those currently being charged in NSW but also those in other jurisdictions where relevant.
4.Benchmark fees from other jurisdictions and other industries - where available and relevant national and international tolling benchmarks should be considered but other industries such as energy or banking will provide insights into cost and price structures.
5.Broader market and policy considerations such as impact on toll road operators and end use customers.
6.        Any other matters considered relevant.
(e)Under the heading ‘Regulatory objectives and key issues’, it was noted that ‘[s]takeholders have broadly identified the need for some form of price control mechanism to remove an area of potential uncertainty for future and established investors’, and the following regulatory framework objectives were proposed:
The independent inquiry is seeking to develop a roaming fee regulatory framework, which:
1Supports efficient and effective competition, considering ‘in market’ competition for motorists; and impacts on the level of competition for future tolled road projects in NSW.
2Is technology neutral and flexible to future market arrangements.
3Takes into account the legitimate business interests of core stakeholders, like motorway companies and toll retailers.
4Is efficient and proportionate in terms of the administrative burden imposed on toll services providers and Government over time.
5.Improves transparency around the costs and price of toll retailer services.
(f)In Part B of the paper, under the heading ‘Key areas discussed’, several ‘Areas of divergence’ were noted under different sub-headings, including the following:
(i)Under ‘Inquiry principles and regulatory objectives’:
·Whether current roaming fees reflect efficient costs.
·The actual level of roaming fees, across the network and interstate.
·Whether roaming fees should be calculated to include a commercial return; or whether on a simple cost recovery basis.
(ii)Under ‘Understanding of toll retailers’:
·Whether the costs incurred and prices charged by toll retailers are efficient.
·Whether there are appropriate incentives for cost and other improvements over time.
·The basis and principles to calculate the efficient cost of toll retailers generally, and roaming fees specifically.
By letter dated 3 April 2019 to Mr Griplas, Mr Lyon issued an invitation to attend a private initial consultation to inform the Inquiry. The letter noted that the draft Inquiry objectives included: ‘Protect confidentiality of data provided to the inquiry’.
On 1 May 2019, Mr Griplas attended the initial consultation with Mr Lyon and representatives of Frontier Economics. Following the meeting, Mr Lyon sent a letter to Mr Griplas dated 1 May 2019 requesting the following information:
•        Data on roaming fees in Victoria.
•        A copy of the MOU document.
•        ConnectEast’s submissions to the ACCC on roaming fees.
•ConnectEast’s perspective on efficient costs to be recovered through roaming fees.
•        ConnectEast’s thoughts on an appropriate form of price control.
The letter stated that Mr Lyon was ‘happy to consider any particular legal agreements or protections you might require, to enable the release of the data and information I have requested above’.
By email of 2 May 2019 to Mr Lyon, Mr Griplas attached a copy of each of the plaintiff’s submissions to the Australian Competition and Consumer Commission (‘ACCC’) regarding the proposal by Sydney Transport Partners (a consortium led by Transurban) to acquire a majority interest in WestConnex (a network of toll roads being built in Sydney) dated 15 March 2018, 25 May 2018 and 14 August 2018 (respectively, ‘the plaintiff’s first, second and third submissions to the ACCC’). The email stated:
Please treat the attached documents (ACCC submission) as strictly confidential and not for distribution, except with my express permission.
By email of 17 May 2019 to Mr van der Weyden and Mr Mason, Mr Douglas Spencer-Roy of the plaintiff confirmed that the ACCC submissions were sent to Frontier Economics on a ‘commercial-in-confidence basis’ and ‘not for publication’. Mr van der Weyden replied on the same day stating ‘confidentiality noted’.
By email of 3 June 2019 to Mr Spencer-Roy, Mr Mark Robinson of the plaintiff and others, Mr Mason thanked them for sending the ACCC submissions and asked when the plaintiff would share the PowerPoint presentation, which they had been shown at a meeting, and the plaintiff’s underlying costs. The email further stated:
As with the ACCC submissions, we would treat this information confidentially and are happy to complete any paperwork required to formalise this confidentiality.
The PowerPoint presentation entitled ‘CityLink Roaming Fee’ (‘the CityLink Roaming Fee Presentation’) was provided by return email on the same day.
By email of 10 September 2019 to Mr Robinson, Mr Spencer-Roy and others, Mr Mason attached a slide pack for a presentation that he said they would ‘use to guide our discussion’. The presentation was entitled ‘Independent Inquiry into the Regulation of Toll Roads Roaming Fees – Follow up Discussion with ConnectEast on data relating to efficient costs’ and was dated 10 September 2019 and marked confidential (‘the Follow Up Presentation’).
On or around 10 September 2019, Mr Robinson and Mr Spencer-Roy attended a Zoom meeting with Mr Mason, Mr van der Weyden and Mr Michael Pham as part of the Inquiry.
On or around 18 October 2019, the plaintiff made submissions to the Inquiry in response to specific questions posed by the Issues Paper. The submissions were marked ‘confidential to the inquiry and must not be published’ (‘the plaintiff’s submission to the Inquiry’).

Submissions

Plaintiff’s submissions

The plaintiff submitted that it is entitled to an injunction restraining each of Mr Lyons and Frontier Economics from accepting the defendant’s retainer to act as experts in this proceeding because:
(a)Mr Lyon and Frontier Economics are, or have been, in receipt of confidential information of the plaintiff; and
(b)there is a risk of disclosure or misuse of that confidential information.
In relation to confidentiality, the plaintiff submitted that the information referred to in confidential exhibit JMVW-8 to the affidavit of Ms Janet Mary Vivienne Whiting sworn 5 August 2021 (‘the confidential exhibit’) is confidential, which is established by the following evidence:
(a)The plaintiff and the defendant operate in the same market and are competitors in operating toll roads.
(b)On 8 July 2016, Transurban Ltd made a confidential, indicative and non-binding proposal to acquire 50% of the equity in the plaintiff’s holding company. The disclosure of the financials of the plaintiff’s operations would provide an advantage to the defendant if Transurban seeks to make another bid to acquire the plaintiff in the future.
(c)The uncontested evidence of Mr Griplas is that Mr Lyon was provided with the plaintiff’s full operations budget in 2019, including all of the plaintiff’s direct and indirect costs. The information included all costs that impact, in any way, the cost to the plaintiff of providing its services to the defendant regarding its roaming fees. Mr Griplas deposes that he would never have provided this information had there ever been a remote possibility that all or some of it might be provided to the defendant.
(d)The evidence establishes that the information was only provided to the Inquiry generally, and to Mr Lyon in particular, on the basis that it would be kept confidential.
In relation to the risk of misuse or disclosure of the confidential information, the plaintiff submitted that there is such a risk if the Experts’ engagement by the defendant is not terminated, for the following reasons:
(a)With respect to the recollection of the contents of the confidential documents:
(i)Mr Lyon does not deny that he has any recollection of the documents; but rather says that he does not recall any particular details of the documents.
(ii)Mr van der Weyden and Mr Mason concede to a vague recollection of the documents.
(iii)Mr Davis says that he does not recall the contents of any of the documents.
(iv)Dr Stephen Gray of Frontier Economics merely states that he did not work on the Inquiry.
(b)Even if the Experts do not currently recall the confidential information, there is a real and sensible prospect of their memories being revived, particularly once involved in the preparation of evidence for this matter. Reliance was placed on the decisions of Sent v John Fairfax Publication Pty Ltd,[3] Babcock &Brown DIF III Global v Babcock & Brown International Pty Ltd,[4] and Dyer v Chrysanthou (No 2) (Injunction).[5]
(c)The confidentiality undertakings provided by the Experts do not rule out the real and sensible risk of misuse of the information because they were provided before the confidential exhibit was available and do not affect the fact that the Experts’ memories of the confidential information may be revived.
[3][2002] VSC 429 (Nettle J) (‘Sent’).
[4][2015] VSC 453 (Riordan J) (‘Babcock & Brown’).
[5][2021] FCA 641 (Thawley J) (‘Dyer’).

The plaintiff further submitted that the confidential information was relevant to the issues on which the Experts were asked to opine, ‘in at least the following ways’:
First, the identification of the ‘net incremental marginal cost’ to the defendant of providing the Link roaming service (as defined in s 93AA of the Melbourne City Link Act 1995 (Vic) (CityLink Act) is of course central to the proceeding.
There will, it can be assumed, be differences between the parties as to the appropriate approach or methodological choices to be adopted to calculate the net incremental marginal cost figure—including as to the categories of cost to be included in that calculation and the correct allocation of those costs.
The term ‘net incremental marginal cost’ is not a term of general use, nor is it an expression found in generally accepted accounting principles. As such, the calculation of the net incremental marginal cost to the defendant of providing the roaming service is unlikely to be resolved by reference to, for example, prescriptive accounting standards about which there may be little room for difference. Rather, and contrastingly, the question is likely to be resolved by reference to economic concepts of cost about which there may be a difference of views. …
Particularly where vertically integrated entities,such as CityLink are involved— being both a motorway company (maintaining and operating a toll road) and a toll retailer (a party that provides services relating to the levying of tolls)—a particular area of dispute will be the method by which common costs are allocated.
As set out more precisely in the confidential annexure, the plaintiff has provided information to Mr Lyon and Frontier Economics concerning its views on the approach to be taken to cost categories; and to allocation, when applying an incremental marginal cost approach.
Second, as also set out in the confidential annexure, the plaintiff has provided information to Mr Lyon and Frontier Economics concerning what it considers to be a reasonable outcome of various methodologies if applied to it. This information could be seen as relevant to the proceeding if it was deployed, subconsciously or otherwise, as a benchmark or cost floor (or otherwise as a point of comparison) in calculating the defendant’s net incremental marginal cost.

Defendant’s submissions

The defendant submitted that the Court should not grant the relief sought by the plaintiff, for the following reasons:
(a)The confidential exhibit does not sufficiently identify the actual confidential information. The three-page document is high level and in summary form only. It is unclear from the summary how some of the information is confidential. The application should fail because the plaintiff has not identified the confidential information with the required degree of specificity.
(b)There is no real and sensible risk of misuse of the information, for the following reasons:
(i)It is common ground that the confidential information is not relevant to the question Mr Lyon has been asked to address, nor any other issue in the proceeding.
(ii)Mr Lyon does not recall or retain the details of any of the confidential information, the relevant employees of Frontier Economics only have a vague recollection of the information and the relevant documents have been archived by Frontier Economics.
(iii)The confidentiality undertakings given by each of the Experts provide ample protection against the risk.
(c)The observations in Sent and Dyer are distinguishable for the following reasons:
(i)The information in each of those cases was treated as being relevant to the issues in the respective proceedings.
(ii)The cases related to lawyers’ confidentiality obligations that are made in the context that a lawyer is bound to employ all information at his or her disposal for the benefit of a client.

Principles

The equitable obligation of confidence has the following four elements:
(a)The information in question must be identified with specificity and not merely in global terms.
(b)The information must have the necessary quality of confidence.
(c)The information must have been received by the defendant in circumstances importing an obligation of confidence.
(d)There must be an actual or threatened misuse of the information.[6]
[6]Smith Kline & French Laboratories (Aust) Ltd v Secretary, Department of Community Services & Health (1990) 22 FCR 73, 87 (Gummow J); Optus Networks Pty Ltd v Telstra Corporation Ltd (2010) 265 ALR 281, 290 [39] (Finn, Sundberg and Jacobson JJ).
As noted above, the defendant contends that the plaintiff has failed to establish the first and fourth elements.

Consideration

Identification of allegedly confidential information with specificity

With respect to the specification of the confidential information, the courts have provided the following guidelines:
(a)The person claiming confidentiality must ‘identify the particular contents of the documents which he asserts constitute information the confidentiality of which he is entitled to protect’.[7]
(b)Equity will not exert itself to protect confidential information that is too widely expressed.[8]
(c)The requirement for precision may necessitate the disclosure of the confidential information to the Court, providing procedures can be adopted to minimise the risk of the confidentiality being lost.[9] However, a party will not usually be required to describe the confidential information so precisely that the confidence sought to be protected will be lost.[10]
(d)The degree of particularity required will depend upon the relevant facts and circumstances of the particular case.[11]
(e)If the description of the alleged confidential information is inadequate, the appropriate course is not to require the applicant to provide further detail but to consider the application on the basis of the evidence as it stands.[12]
[7]O’Brien v Komesaroff (1982) 150 CLR 310, 326 (Mason J, with whom Murphy, Aickin, Wilson and Brennan JJ agreed).
[8]Deta Nominees Pty Ltd v Viscount Plastic Products Pty Ltd [1979] VR 167, 190 (Fullagar J).
[9]Carindale Country Club Estate Pty Ltd v Astill (1993) 42 FCR 307, 314 (Drummond J) (citations omitted).
[10]Sent [2002] VSC 429, [69] (Nettle J).
[11]Kalenik v Apostolidis [2005] VSC 27, [32] (Hansen J).
[12]Gugiatti v City of Stirling (2002) 25 WAR 349, 356 [50] (Templeman J); Protec Pacific Pty Ltd v Cherry [2008] VSC 76, [41] (Habersberger J).
As referred to above, the plaintiff contends that the confidential information is contained within the following six documents:
(a)The plaintiff’s first submission to the ACCC.
(b)The plaintiff’s second submission to the ACCC.
(c)The plaintiff’s third submission to the ACCC.
(d)The CityLink Roaming Fee Presentation.
(e)The Follow Up Presentation.
(f)The plaintiff’s submission to the Inquiry.

The plaintiff’s first submission to the ACCC

The description of the confidential information is set out in item 3 in the confidential exhibit, but the affidavit of Mr Griplas described it as follows:
… I was aware that the ACCC were seeking submissions from interested parties in respect of preliminary competition concerns about Sydney Transport Partners (led by Transurban) proposed acquisition of a majority interest in the WestConnex project in 2018. The ACCC sought submissions from ConnectEast and advised that such submissions would be kept confidential and not disclosed to third parties unless compelled by law. It was on this basis that ConnectEast made submissions to the ACCC.
ConnectEast’s initial submissions to the ACCC outlines ConnectEast’s views on the roaming fees that should be charged for operating interoperability and the actual roaming fees charged under the roaming agreements with CityLink. If this information was made known to CityLink, it would allow them to gain an advantage in negotiating the roaming fee in the future. It may also give other toll road operators in Australia a commercial advantage in negotiating roaming fees if they were aware of the amount charged by CityLink.

The plaintiff’s second submission to the ACCC

The description of the confidential information is set out in item 4 in the confidential exhibit, but the affidavit of Mr Griplas described it as follows:
ConnectEast’s second submission to the ACCC reveals ConnectEast’s roaming costs data including a breakdown of the customer trips on EastLink and the roaming fees payable by ConnectEast and Transurban. Further, the submission contains ConnectEast’s internal views on net incremental marginal cost and how it is calculated. This is confidential as it reveals ConnectEast’s strategic approach and may allow CityLink to gain a commercial advantage if it knew this information in negotiating the roaming fee in the future.

The plaintiff’s third submission to the ACCC

The description of the confidential information is set out in item 5 in the confidential exhibit, but the affidavit of Mr Griplas described it as follows:
For the reasons outlined [in the two previous paragraphs], ConnectEast’s third submissions to the ACCC also contains ConnectEast’s confidential information.

The CityLink Roaming Fee Presentation

The description of the confidential information is set out in item 6 in the confidential exhibit, but the affidavit of Mr Griplas described it as follows:
The internal presentation titled ‘CityLink Roaming Fee’ contains excerpts financial information from excel spreadsheets that breaks down ConnectEast’s financial budget, overheads and internal cost structure to maintain its customer account. This is plainly commercially sensitive information.
If this information was known, it would prejudice ConnectEast’s interests by giving competitors an advantage in seeking to outbid ConnectEast in future tenders relating to toll roads or tolling services. It would also give Transurban knowledge of ConnectEast’s internal costs, which would give Transurban a significant bargaining position if it sought to re-put its offer to acquire ConnectEast and prejudice ConnectEast’s ability to negotiate.
The presentation also outlines ConnectEast’s considerations and strategy in dealing with CityLink under the roaming agreements, together with a view expressed at the time as to ConnectEast’s assessment of actual costs against two different methodologies. This information would give CityLink a commercial advantage in making decisions about matters such as the position to adopt in future negotiations with ConnectEast.
Finally, the presentation sets out details of arrangements with other Foreign Toll Operators which is confidential to both ConnectEast and the relevant Foreign Toll Operator. These third parties are not a party to the proceeding.

The Follow Up Presentation

The description of the confidential information is set out in item 1 in the confidential exhibit, but the affidavit of Mr Griplas described it as follows:
The presentation … reveals ConnectEast’s roaming costs data including a breakdown of the roaming fees per trip, processing costs and revenue. It also contains a breakdown of the incremental retail costs recovered through the roaming fees. This internal costing is commercially sensitive and may prejudice ConnectEast’s commercial interests and future tenders regarding toll roads. It may also allow CityLink to gain a commercial advantage if it knew this information about ConnectEast in tendering or negotiating roaming fees in the future.

The plaintiff’s submission to the Inquiry

The description of the confidential information is set out in item 2 in the confidential exhibit, but the affidavit of Mr Griplas described it as follows:
ConnectEast’s submissions to the Inquiry contained ConnectEast’s detailed views on what should be included in the calculation of an efficient cost for toll retailers, including the net incremental marginal costs of collecting tolls. It also reveals ConnectEast’s internal analysis on the roaming fees calculated under the roaming agreement with Transurban. Such information is confidential and may allow CityLink to gain advantage if it knew this information in negotiating the roaming fee in the future.
For the purposes of assessing whether the information claimed to be confidential by the plaintiff was adequately specified, I have particularly had regard to:
(a)the description of the confidential information in the confidential exhibit; and
(b)the fact that the plaintiff provided all of the information on a confidential basis.
On the basis of the description given and the insistence on confidentiality, it may be inferred that the documents in question contain at least some financial information in respect of which the plaintiff is entitled to protection. However, the confidential exhibit (the contents of which I will not disclose) contains little more description of the information in the documents than that to which Mr Griplas deposed, which I have referred to above.[13]
[13]See paragraphs 32 to 37 above.
I accept the defendant’s submission that the ‘three-page document [being the confidential exhibit] is high-level and in summary form only’ and that the ‘actual confidential information has not been provided’. In particular, the Court is not in a position to make an assessment of:
(a)how much of the financial data was in fact confidential;
(b)the extent to which the financial information provided has been the subject of published reports, or is otherwise publicly available; and
(c)whether in fact there was any basis for the plaintiff’s ‘views’ on the identified topics to be considered confidential at all.
It could be suggested that the inference that the documents in question contain some confidential financial data is sufficient to ground the injunctions sought. However, the lack of specificity about the extent and significance of the confidential information makes it difficult, if not impossible, to draw any inference that there is a real and sensible risk of disclosure by the Experts if they complete their retainers in this proceeding.[14] For example, it may be easier to conclude that there would be a greater risk of the recall and disclosure of a single secret ingredient, than detailed financial data spread across a spreadsheet with multiple pages.
[14]It was not contended that it was unnecessary to describe with precision the confidential information in the documents in question because the Experts were contractually bound to keep all of the information they were given confidential. See, eg, Protec Pacific Pty Ltd v Cherry [2008] VSC 76, [43] (Habersberger J).
In the circumstances, I consider that this application should fail because of the lack of specificity of the information alleged to be confidential.

Real and sensible risk of misuse of confidential information

Assuming that the plaintiff had established the first three elements giving rise to an equitable duty of confidence, in cases where an injunction is sought against a non-fiduciary, the onus to prove a threat of misuse of confidential information sufficient to justify the injunction remains with the applicant.[15]
[15]Worth Recycling Pty Ltd v Waste Recycling & Processing Pty Ltd [2009] NSWCA 354, [42] (Hodgson JA, with whom Spigelman CJ and Campbell JA agreed). Cf Babcock & Brown [2015] VSC 453, [70] (Riordan J) which held that where it is established that relevant confidential information is held by a solicitor, it is incumbent on the solicitor to establish there is no real and sensible risk of misuse.
In my opinion, the plaintiff has failed to establish that there is any real and sensible risk of misuse of the information by the Experts, for the following reasons:
(a)The alleged confidential information is not relevant to any issue in this proceeding. Despite the submission of relevance referred to in paragraph 26 above, in the affidavit of Ms Whiting sworn 5 August 2021, she deposes that the plaintiff’s entitlement to charge the defendant for roaming services is not subject to the statutory cap imposed by s 93AB of the City Link Act. She states:
Accordingly, the cost that ConnectEast incurs in providing its service to CityLink regarding the roaming fees are not relevant to any question that is before the Court in these proceedings. Because it is not relevant, all information concerning the costs that ConnectEast incur in providing the service to CityLink are not discoverable in this proceeding.
Of course, one effect of the information being irrelevant is that it is not discoverable by the plaintiff in this proceeding.
(b)The defendant’s evidence is that Mr Lyon does not recall any of the alleged confidential information and that the relevant employees of Frontier Economics have only a vague recollection of the alleged confidential information. The possibility of one or more of their memories being revived at some time cannot be discounted. However, I do not consider that possibility gives rise to a real and sensible risk of disclosure for the following reasons:
(i)The irrelevance of the confidential information makes it less likely for the Experts’ memories to be prompted to recall any such information.[16] The prospect of a memory being revived in the course of preparing a report or otherwise is not as great as in a case where the confidential information would be relevant to the matters in respect of which the Experts have been asked to opine.
(ii)If the memory of any of the Experts is revived, the expert would not be bound to disclose or use the information for the benefit of the party instructing it. This is to be contrasted with the position of a solicitor who, upon having information available, is bound to employ it for the benefit of his or her client. This represents a critical difference between the positions of lawyers and experts who recall confidential information during the course of a retainer. As Sperling J explained in Elliott v Ivey:
[A] solicitor is bound to employ all information at his or her disposal for the benefit of a client. The role of an expert witness is to be contrasted with that. The expert, as a witness, does not have a free wheeling brief to advance the interests of his or her client in the litigation. The expert witness’ role is to provide an opinion having regard to assumed facts. Sometimes those facts may include facts observed by the witness, such as an inspection, a laboratory test or the results of a scientific experiment. Then the witness is also a witness as to fact. That is an ancillary function, when it occurs. The opinion evidence is still provided on the basis of a body of assumed facts, however ascertained or hypothesised.
…
The capacity of a professional person to give an opinion based on an exclusionary set of assumptions is implicit in this process. The implication is reasonable because professional men and women are accustomed to forming opinions on assumed facts in the course of their ordinary professional work. It is part of their stock in trade, developed by training and by experience in the practice of their profession.
Thus it is that an expert witness has a much more limited role than that of a solicitor acting for a client. In particular, expert witnesses are not bound to use all information they might previously have obtained. On the contrary, expert witnesses are bound to confine their attention to specified factual assumptions which are made known to the court. The opinion is then only as good as the assumptions are established by evidence to be correct.[17]
(c)There is no evidence or reason to believe that any of the Experts will not comply with their confidentiality undertakings if any of them were to recall the alleged confidential information in the documents in question.[18]
[16]Babcock & Brown [2015] VSC 453, [82].
[17](Supreme Court of New South Wales, Sperling J, 23 April 1998) 12-14.
[18]Meat Corporation of Namibia Ltd v Dawn Meats (UK) Ltd [2011] EWHC 474 (Ch), [33]-[35] (Mann J).

Although it was conceded that the alleged confidential information was irrelevant to any issue in this proceeding, the plaintiff’s submission was, in summary,[19] that it could nonetheless be applied in the following ways:
(a)The plaintiff’s views on the approach to be taken to cost categories and to allocation could be applied by the Experts in their approach to assessing the net incremental marginal cost.
(b)The confidential information could be seen as relevant if it was deployed, subconsciously or otherwise, as a benchmark or cost floor in calculating the defendant’s net incremental marginal cost.
[19]The submission is set out in full at paragraph 26 above.
I do not consider this submission can stand in the face of the concession that the alleged confidential information is irrelevant to the issues in this proceeding; and the description of the confidential information is insufficient to allow the Court to make any assessment of the assertions underlying this submission.
Further, principally for the reasons set out in paragraph 43(b)(ii) above, I consider that only limited assistance can be derived from the authorities such as Sent,[20] Babcock & Brown,[21] and Dyer.[22] Some care must be exercised in applying the principles relating to the restraint of legal practitioners more broadly because ‘[t]he strictness of this test [in such cases] arises not least because of the special fiduciary position of a legal practitioner towards his or her client’.[23] As Drummond J explained in Carindale Country Club Estate Pty Ltd v Astill, the reason for the strictness of the test applicable to legal practitioners is twofold:
First, there is a public element in the work that a solicitor does in that he is an officer of the court and, in performing his professional function, he plays an integral part in the administration of justice. …
Secondly, the existence of legal professional privilege and the policy considerations which justify its continued recognition are inconsistent with a rule that would too readily allow a solicitor, who has received confidential information from one client, to later act for another client against the old client’s interests.[24]
[20][2002] VSC 429, [88]-[93] (Nettle J).
[21][2015] VSC 453, [81] (Riordan J).
[22][2021] FCA 641, [99] (Thawley J).
[23]Re Timbercorp Finance Pty Ltd (in liq) (2019) 137 ACSR 189, 200 [63] (Anderson J) (citations omitted).
[24](1993) 42 FCR 307, 311.

Orders

I propose to dismiss the plaintiff’s summons filed 5 August 2021 with costs to be assessed on a standard basis.

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[2021] VSC 626

30 September 2021