Fluor Australia Pty Ltd v Anaconda Operations Pty Ltd

[2001] VSC 508

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION

No. 8617 of 2001

FLUOR AUSTRALIA PTY LTD (ACN 004 511 942)	Plaintiff
v
ANACONDA OPERATIONS PTY LTD (ACN 076 717 505)	Defendant

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JUDGE:	Byrne J
WHERE HELD:	Melbourne
DATE OF HEARING:	11 December 2001
DATE OF JUDGMENT:	11 December 2001
CASE MAY BE CITED AS:	Fluor Australia Pty Ltd v Anaconda Operations Pty Ltd.
MEDIUM NEUTRAL CITATION:	[2001] VSC 508

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Practice and procedure – documents obtained by discovery in arbitration – implied undertaking as to confidentiality – release from undertaking to enable use in court proceeding.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr D. Collins SC	Allen Arthur Robinson
For the Defendant	Mr N. Pame	Clayton Utz

HIS HONOUR:

1. The application before the court is brought by Fluor Australia Pty Ltd against Anaconda Operations Pty Ltd by originating motion filed on 5 December 2001.  The summons seeks dispensation of various procedural matters and I will make those orders in due course. 

1. In substance what is sought on behalf of the plaintiff is that it be relieved from the ordinary incident of discovery, namely that it undertakes not to use the discovered material for a collateral purpose.  It asks that it be released from that undertaking with respect to documents that have been produced on discovery in an arbitration between the parties.

1. The arbitration is subject to the procedural law of this state and accordingly, Fluor comes to this court pursuant to section 47 of the Commercial Arbitration Act.  I accept, and it was not contended to the contrary, that section 47 warrants the making of the orders sought if they ought to be made.  The arbitration is a substantial one concerning a mining operation in Western Australia.  The parties to the arbitration, in terms of the arbitration agreement, are Fluor and Anaconda.  There is also on foot in this court a proceeding in which Fluor sues other parties involved in the mine project and that proceeding is moving forward in this court. 

1. The summons seeks relief from the undertaking in respect of two activities for which Fluor wishes to be permitted to use the material discovered in the Anaconda arbitration.  The first is in relation to the existing proceeding in this court and it was not argued on behalf of Anaconda that that indulgence should not be given. 

1. The second, which was opposed by Anaconda, seeks a relief from the undertaking "in and in relation to any claims which Fluor may wish to make against Anaconda arising out of or in connection with the design and construction of the Murrin Murrin nickel and cobalt plant in addition to the counterclaims made by Fluor in the arbitration."

1. My initial impression upon considering this application is that the application in respect of this extension is premature because if these claims were in addition to the counterclaims in the arbitration, they might be brought into the arbitration.  In that case the undertaking would not cause any difficulty.

1. I have been told by counsel on behalf of Fluor that it may not be so simple.  First, the decision whether the documents warrant the step of making a claim at all arguably may not fall within the implied undertaking. Second, the arbitration is due to start very shortly and it may be that the arbitrators will not permit the counterclaim to be enlarged in the way sought.  Third, the matters which are exercising the minds of those advising Fluor evidently involve other parties, that is to say the parties to the proceeding in this court.  It may be that the decision that is to be made whether that these further claims, if they are to be made, should be made not in the arbitration, but in this court.  I leave entirely to one side whether they might be so added to the proceeding in this court or even by a fresh proceeding in this court, having regard to the existence of the arbitration agreement.

1. For practical purposes it was said that it would be quite unreasonable to require Fluor to put out of its mind or the minds of those assisting in the preparation of the case the documents which they may have access to lawfully in the context of the arbitration.

1. On further consideration and having heard what counsel have said for and against, I believe that the appropriate course is to make the orders sought.

1. First, it has not been suggested on behalf of Anaconda that there is, to use the expression of Lord Oliver in Crest Homes v Marks, any injustice to the person giving discovery in the arbitration.

1. I apply as the principles appropriate for the exercise of the power in question those principles set out in Holpitt Pty Ltd v Varimu Pty Ltd[1], and, in this court, in Playcorp Ltd v Tyco Industries Incorporated[2].  What those cases make clear is that the undertaking given in one proceeding, in this case the arbitration, will not be released or modified, save in special circumstances and, in any event, only where the release or modification will not occasion injustice to the person giving discovery. 

   [1](1991) 29 FCR 576

   [2][2000] VSC 440

1. It has not been suggested that there is any injustice other than the normal injustice here of an intrusion into the private information in the possession of Anaconda. 

1. The special circumstances, it seems to me, arise from this.  By reason of the arbitration agreement contained in the construction contract, as modified, the normal dispute resolution processes, namely that the disputes between the parties would all be litigated at the one hearing, are not available to Fluor; it is obliged to conduct its disputes in two venues.  In a sense, it appears from the material that the issues that it has presently raised in the arbitration, those in this court and those which it contemplates are all intimately bound up in the one project and arise our of the same alleged deficiency in the work.  Accordingly, this to my mind is sufficient special circumstance to warrant the release of the undertaking, but only so far as is absolutely necessary for the purposes of deciding whether to bring, and in due course conducting, the litigation which may otherwise involve Anaconda.

1. I invite counsel at this stage, because so far we have been talking in principle, to make any submission as to the precise terms of the order of release or modification of the undertaking. 

1. Accordingly, I would propose the following order.  First of all the procedural orders, paragraph 1 and paragraph 2 of the summons, namely:

1. That the requirements of rule 5.03(1) and 8012 be dispensed with.

2. The plaintiff be authorised to commence this proceeding by originating motion in form 5C.

3. That the plaintiff have leave to use the documents discovered by the defendant in the arbitration between those parties being conducted before Messrs Paullson, Uff and Naughton, that Fluor had leave to use the documents (a) in and in relation to the conduct of proceeding number 6527 of 2000 in this court; and (b) in and in relation to any claims which the plaintiff may wish to make against the defendant arising out of or in connection with the design and construction of the Murrin Murrin nickel and obalt plant in addition to the counterclaims made by Fluor in the arbitration. 

1. I would reserve liberty to the parties to apply in case difficulties arise in working out this order.  Does anyone want to say anything about costs?

MR COLLINS:   No.

MR PANE:   No.

HIS HONOUR:   Shall we leave them where they fall?

MR COLLINS:   Yes, Your Honour.

HIS HONOUR:   In the circumstances there is to be no order as to costs.

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