Global Advanced Metals Pty Ltd v Metallurg Inc - [2017] WASCA 188

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: GLOBAL ADVANCED METALS PTY LTD -v- METALLURG INC [2017] WASCA 188

CORAM: BUSS P
MURPHY JA
MITCHELL JA

HEARD: 4 OCTOBER 2017

DELIVERED : 18 OCTOBER 2017

FILE NO/S: CACV 81 of 2017

BETWEEN: GLOBAL ADVANCED METALS PTY LTD
Appellant
AND
METALLURG INC
Respondent

ON APPEAL FROM:
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram  :CHANEY J
Citation  :METALLURG INC -v- GLOBAL ADVANCED METALS PTY LTD [2017] WASC 212
File No  :CIV 1994 of 2017

Catchwords:

Contract - Proper construction - Shareholders Deed - Right under Shareholders Deed for Relevant Shareholder to obtain access to and inspection of confidential information for permitted purpose - Where Relevant Shareholder is also a trade rival - Obligation not to use confidential information in a way which damages or is reasonably likely to damage company

Legislation:

Nil

Result:

Appeal dismissed

Category: B

Representation:

Counsel:

Appellant: Mr R J Price
Respondent: Mr A Sullivan QC & Mr L Y T Lee

Solicitors:

Appellant: Allen & Overy
Respondent: Ashurst Australia

Case(s) referred to in judgment(s):

Abalos v Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167
Australia and New Zealand Banking Group Ltd v Manasseh [2016] WASCA 41
Black Box Control Pty Ltd v Terravision Pty Ltd [2016] WASCA 219
Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32; (2012) 86 ALJR 1044
Centaur Mining and Exploration Ltd v Anaconda Nickel Ltd [2001] VSC 224; (2001) 19 ACLC 1375
Chapmans Ltd v Australian Stock Exchange Ltd (1996) 67 FCR 402
Coughlan v Pyoanee Pty Ltd [2003] QCA 146; [2003] 2 Qd R 636
Dan v Barclays Australia Ltd (1983) 57 ALJR 442
Dering v Earl of Winchelsea (1787) 1 Cox 318
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118
Loughran v Loughran 292 US 216 (1934)
Metallurg Inc v Global Advanced Metals Pty Ltd [2017] WASC 212
Meyers v Casey [1913] HCA 50; (1913) 17 CLR 90
Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34
Mount Bruce Mining Pty Ltd v Wright Prospecting Co Pty Ltd [2015] HCA 37; (2015) 256 CLR 104
Nadinic v Drinkwater [2017] NSWCA 114
Robinson Helicopter Company Inc v McDermott [2016] HCA 22; (2016) 90 ALJR 679
Sang Lee Investment Co Ltd v Wing Kwai Investment Co Ltd [1983] HKLR 197
Sigiriya Capital Pty Ltd v Scanlan [2013] NSWCA 401; (2013) 97 ACSR 183
William Sindall plc v Cambridgeshire County Council (1994) 1 WLR 1016

JUDGMENT OF THE COURT: This is an appeal against a decision of Chaney J on 2 August 2017 in Metallurg Inc v Global Advanced Metals Pty Ltd[1] (primary decision). That decision concerned an application by the respondent (Metallurg) for declarations as to the proper construction of certain provisions of a shareholders deed concerning its rights to inspect and take copies of the appellant's (Global's) documents, and for an injunction compelling Global to allow Metallurg to inspect and take copies of certain documents.
[1] Metallurg Inc v Global Advanced Metals Pty Ltd [2017] WASC 212.
Justice Chaney found in favour of Metallurg and made orders substantively in the terms sought. The appeal was listed on an urgent basis for hearing on 4 October 2017.
For the reasons which follow, the appeal should be dismissed.

Background[2]

[2] The material facts are not in dispute. The following background is taken from the findings made in the primary decision, unless otherwise indicated.

Metallurg is a wholly owned subsidiary of AMG Advanced Metallurgical Group NV (AMG), which is the ultimate holding company for a global group of metallurgical and engineering companies (AMG Group).[3]
[3] Primary decision [1].
Global is an unlisted Perth‑based tantalum company, and is the ultimate holding company for a global group of tantalum and other companies (Tantalum Group).[4]
[4] Primary decision [2].
In August 2015, as partial consideration for the amendment of a long‑term supply contract under which another subsidiary of AMG sold tantalum to a related entity of Global, Metallurg acquired shares in Global. In conjunction with this acquisition, Metallurg executed an Assumption Deed Poll dated 31 July 2015 and thereby became party to an agreement entitled Third Amended and Restated Global Advanced Metals Shareholders Deed dated 23 April 2015 that has been amended from time to time (Shareholders Deed). The original parties to the Shareholders Deed were a number of entities none of which were in competition with Global.[5]
[5] Primary decision [4].
Following concerns by Metallurg about certain aspects of Global's accounts, various requests were made by Metallurg for access to Global's books and records. According to Mr Connor, the senior vice president of AMG, if the concerns in relation to the specified accounting matters proved correct, Metallurg would be required in its upcoming quarterly report to revalue its interest in Global for the purposes of its reporting.[6]
[6] Primary decision [6].
On 1 May 2017, Metallurg (through its solicitors) made a written request to Global, pursuant to cl 7.1 of the Shareholders Deed, for certain categories of information.[7]
[7] Amended agreed chronology, WB 88.
On 11 May 2017, Metallurg (through its solicitors) made a written request to Global, pursuant to cl 7.1 of the Shareholders Deed, for access to Global's premises to inspect and take copies of documents and to discuss matters with Global officers and employees.[8]
[8] Amended agreed chronology, WB 88.
Through May to June 2017, Global and Metallurg (through their respective solicitors) negotiated with a view to agreeing the terms of a confidentiality deed and protocol in relation to which access would be granted. In the course of those negotiations, Global expressed concern in relation to two principal issues. The first issue concerned competition, with Global asserting that certain entities in the AMG Group carry on similar businesses to those carried on by certain entities in the Tantalum Group, and that there is a potential for information to be misused by the AMG Group to gain a competitive advantage. The second issue concerned current litigation in the United States between AMG and Global subsidiaries in relation to a supply agreement, with Global expressing concern that the information may potentially be misused by AMG to gain a forensic advantage in that litigation.[9]
[9] Primary decision [7]; amended agreed chronology, WB 88.
Global advised that it was only willing to provide the requested information subject to Metallurg executing a confidentiality agreement that imposed significant further confidentiality obligations on Metallurg in addition to those already contained in the Shareholders Deed, and provided for a regime whereby Metallurg would not be given some of the requested information but would only be allowed to appoint an independent accountant to receive and review that information and then prepare a report, subject to restrictions, to be provided to Global and Metallurg.[10]
[10] Primary decision [8].
Attempts to agree on a workable confidentiality deed were unsuccessful, and, on 18 June 2017, Metallurg notified Global of its intention to commence proceedings.[11]
[11] Primary decision [9]; amended agreed chronology, WB 88.
On 19 June 2017, Metallurg commenced the primary proceedings in the General Division of the Supreme Court, seeking orders including:[12]
[12] Minute of proposed amended originating summons for orders pursuant to order 58 rule 10 of the Rules of the Supreme Court 1971 (WA), BB 28 ‑ 29; amended agreed chronology, WB 88 ‑ 89.
1.A declaration … that, properly construed, clause 7.1 of the [Shareholders Deed] … entitles [Metallurg] through its accountants, advisers, agents and employees to inspect and take copies of, and requires [Global] to allow [Metallurg], through such persons to inspect and take copies of, all books, accounts, records and other documents relating to:
(a)the affairs of [Global];
(b)the affairs of subsidiary companies of [Global];
(c)the tantalum mining business owned by [Global];
for the purpose of auditing and valuing [Global] and its subsidiaries or for any other reasonable purpose, after giving notice of at least 3 Business Days (as defined in the Shareholders Deed) (the Notice Period) and subject to clause 7.2 of the Shareholders Deed.
2.A declaration … that, properly construed, clause 7.2 of the Shareholders Deed requires that:
(a)accountants, advisers, agents or employees appointed by [Metallurg] to conduct an inspection under clause 7.1 of the Shareholders Deed must sign a confidentiality agreement if so requested by [Global], in a form approved by the Board of [Global];
(b)[Global] must, if it wishes to exercise the right to require such persons to sign a confidentiality agreement, tender a form of confidentiality agreement to [Metallurg] or to such persons before the expiry of the Notice Period;
(c)the terms of any confidentiality agreement under clause 7.2 must be reasonable, must not inhibit the delivery to [Metallurg] of information which [Metallurg] is entitled to inspect or copy under clause 7.1, and must be consistent with the confidentiality regime applicable to [Metallurg] under clause 16 of the Shareholders Deed.
3.An injunction compelling [Global] by its directors, officers, servants or agents, within 2 business days after the date of this order, to permit [Metallurg] by its accountants, advisers, agents or employees who:
(a)are nominated by [Metallurg] by notice in writing to [Global]; and
(b)have signed and given to [Global] at or prior to the time of inspection a confidentiality deed poll in the form annexed to the second affidavit of Michael Gerard Connor sworn 16 July 2017 and marked MGC-6,
to inspect and take copies of the documents, books, accounts and records of [Global] falling within the categories specified in paragraph 39(a) to (h) of the first affidavit of Michael Gerard Connor sworn 22 June 2017.
On 12 July 2017, the deadline (as stated by Metallurg) for receiving the requested information, in order for it to be incorporated in AMG's second quarter financial report for 2017, passed.[13]
[13] Amended agreed chronology, WB 89.

Shareholders Deed

There was no dispute that Metallurg is a 'Relevant Shareholder' for the purposes of cl 7 of the Shareholders Deed.[14] The Shareholders Deed defines 'Tantalum Group' in cl 1.1 as, in effect, Global and its subsidiaries. The 'Company' is defined to mean Global, and the 'Board' means, relevantly, the board of directors of Global.[15]
[14] Primary decision [11].
[15] GB 74 ‑ 75, 80.
Clause 7.1 and cl 7.2 of the Shareholders Deed are follows:[16]
[16] GB 90.
7.1 Right of access and information
After giving at least 3 Business Days' notice to the Company, each Relevant Shareholder (itself or through its accountants, advisers, agents or employee and at its own cost) will be entitled to reasonable access during the Company's normal business hours to:
(a)visit and inspect any premises occupied by any company in the Tantalum Group, the Registered Office and any property of any company in the Tantalum Group;
(b)inspect and take copies of documents relating to the Business and the Tantalum Group's affairs including its books, accounts and records; and
(c)discuss the Tantalum Group's affairs, finances and accounts with the Company's officers, employees and auditors,
for the purpose of auditing and valuing of the Tantalum Group or for any other reasonable purpose.
In addition, Relevant Shareholders shall be provided, on request, with such information regarding the Company and its Subsidiaries and Affiliates as they require in order to comply with their tax, accounting and regulatory filing and compliance requirements, including such information as is necessary to make any elections that they deem advisable under relevant tax laws and regulations.
7.2 Confidentiality
Before an inspection occurs or access is permitted under clause 7.1, any person appointed by a Relevant Shareholder to conduct the inspection or to be given the access, if requested, must sign a confidentiality agreement in the form approved by the Board.
Clause 16.3 of the Shareholders Deed provides:[17]
[17] GB 99.
16.3Use of Confidential Information
Each Relevant Shareholder (for this clause Recipient) agrees in relation to Confidential Information of another Relevant Shareholder or of the Company or any company in the Tantalum Group (Owner):
(a)to use the Confidential Information only for the purposes of monitoring and assessing its investment in the Tantalum Group and its Business; and
(b)to keep that Confidential Information confidential and not disclose it or allow it to be disclosed to any third party except:
(i)with the consent of the Owner;
(ii)with the consent of the Company and the Relevant Shareholders with respect to Confidential Information of the Company; or
(iii)to officers, employees and consultants or advisers of the Recipient and the Recipient's Related Bodies Corporate and Affiliates who have a need to know (and only to the extent that each has a need to know) and are aware that the Confidential Information must be kept confidential,
and the Relevant Shareholders must take or cause to be taken reasonable precautions necessary to maintain the secrecy and confidentiality of the Confidential Information.
Clause 16.4 and cl 16.5 of the Shareholders Deed provide:[18]
[18] GB 99 ‑ 100.
16.4Exclusions
The obligations of confidentiality under this deed do not extend to information that (whether before or after this deed is executed):
(a)is disclosed to a Recipient under or in relation to this deed but at the time of disclosure is rightfully known to or in the possession or control of the Recipient and not subject to an obligation of confidentiality on the Recipient;
(b)is independently developed or created by the Recipient or its officers, employees and consultants or advisers, which is not based on, derived from, includes or refers to, any of the Confidential Information;
(c)is public knowledge (otherwise than as a result of a breach of this deed); or
(d)is required by law to be disclosed and the Recipient required to make the disclosure has taken all reasonable steps to oppose or prevent the disclosure and to limit, as far as reasonably possible, the extent of the disclosure.
16.5Continuing obligations
On ceasing to be a Shareholder or on the termination of this deed each Relevant Shareholder must:
(a)continue to keep confidential all Confidential Information of each other Relevant Shareholder and the Tantalum Group; and
(b)at each Owner's option, return to that Owner or destroy and certify the destruction of that Owner's Confidential Information with the exception of any documents or other materials constituting Confidential Information which the Recipient is obliged by law, corporate governance policies or audit requirements to keep, provided that the Confidential Information retained is kept confidential in accordance with this Agreement.
Clause 4.1 provides:[19]
4.1 Commitments
Each Relevant Shareholder agrees:
(a) to co-operate and use its best endeavours to ensure that the Tantalum Group successfully carries on the Business;
(b)not to use Confidential Information in a way which damages or is reasonably likely to damage the Tantalum Group or any of the other Relevant Shareholders; and
(c)not to delay unreasonably any action, approval, direction, determination or decision required of the Relevant Shareholder.
[19] GB 83.
'Confidential Information' is defined in cl 1.1 of the Shareholders Deed as follows:[20]
Confidential Information means all information, forms, specifications, processes, statements, formulae, trade secrets, drawings and data (and copies and extracts made of or from that information and data) concerning:
(a)the operations and dealings of the Company, the Business or a Relevant Shareholder;
(b)the organisation, finance, customers, markets, suppliers, intellectual property and know-how of the Company, a Relevant Shareholder, a Related Body Corporate of the Company or a Related Body Corporate of a Relevant Shareholder; or
(c)the operations and transactions of a Relevant Shareholder concerning the Business and the Relevant Shareholder's shareholding in the Company,
which is not in the public domain (except by failure of a Relevant Shareholder to perform and observe its covenants and obligations under this deed) and which has been obtained through or by being a member of the Company.
[20] GB 75.
Clause 20(a) of the Shareholders Deed provides that each Party must 'exercise all its rights, powers and remedies in relation to the Company and each other company in the Tantalum Group in a way that gives effect to the terms of this deed'.
Also, by cl 5.1(c), a Relevant Shareholder may appoint a director to the Board of Global for each 20% of Shares held by the Relevant Shareholder. By cl 5.1(a) the Board of Global is responsible for the overall direction and control of the management of Global including the formulation of policies to be applied in the conduct of the Business (defined, in effect, as the business of owning and operating the tantalum mining business owned by Global, and such other activities as the Relevant Shareholders may determine from time to time).
Clause 5.5, in general terms, provides that where a Relevant Shareholder has a material commercial interest in a matter involving Global, it must declare it and the Relevant Shareholder and any director of Global appointed by the Relevant Shareholder is ineligible to vote on the matter.
By cl 6.2 and cl 6.3, the directors of Global and the Relevant Shareholders are entitled to monthly management reports and annual financial statements and reports. Under cl 6.2, the monthly management reports are to include:
[R]eports against the annual mine plan, reports on disputes or third party claims, … an unaudited statement of financial performance, statement of financial position and cashflow statement (with projections for the balance of the then current Financial Year) for the immediately preceding months and for the then current Financial Year to date … and, to the extent it is known, a statement of any material developments in the market for the products of the Tantalum Group, including any changes or expected changes in the requirements of the key customers of the Tantalum Group.
By cl 6.5, Global must also promptly provide to all directors of Global and to all Relevant Shareholders copies of other specified notices and reports relating to (in general terms) financial and audit matters.
There are also a number of provisions which, in general terms, appear designed to give the Relevant Shareholders strict control over the shareholding in Global. Clause 9.2 precludes a Relevant Shareholder granting a security or mortgage over its Shares in favour of another party without the consent of each other Relevant Shareholder, save where the other party has agreed to comply with the pre‑emptive provisions in cl 11. Clause 10 restricts the Transfer of Shares by a Relevant Shareholder except in accordance with its provisions. Clause 11 contains pre‑emptive rights provisions. Clause 14 provides, in effect, that subject to cl 5.3 and cl 5.4 (dealing with voting provisions), if Global proposes to allot and issue Shares to a person who is not already a Relevant Shareholder, the Relevant Shareholders must procure Global's Board to make the allotment and issue conditional on the proposed allottee first executing an Assumption Deed, and any Transfer to the proposed allottee is not to be registered unless an Assumption Deed has been executed. An Assumption Deed is in the form of Annexure A, and provides for the New Shareholder to assume the rights and be bound by the obligations under the Shareholders Deed.

Dispute at first instance

It was not in issue before the primary judge that the notice given by Metallurg of its intention to inspect and take copies of documents was a proper notice for the purposes of cl 7.1. Nor was it in issue that the entitlement to access is only 'during the Company's normal business hours'. Further, Global accepted that the purpose for which Metallurg sought access to the documents was a purpose within the permissible purposes for which documents may be inspected under cl 7.1.[21] Metallurg's purpose was to enable it adequately to assess the value of its shareholding in Global for the purposes of its published regulatory reports.[22]
[21] Primary decision [18].
[22] Primary decision [52].
The dispute at first instance centred on two key issues. One was the proper construction of cl 7 of the Shareholders Deed and the other concerned Metallurg's entitlement to injunctive relief. As to the second issue, Global contended, in effect, that even if its construction of the Shareholders Deed were wrong, Metallurg was nevertheless disentitled to injunctive relief.

The proper construction issue[23]

[23] Primary decision [20] ‑ [26].

Global's primary position was that if Metallurg's requests for access and inspection were fully met, that would have the consequence that commercially sensitive confidential information of the Tantalum Group would be obtained by a trade rival, namely the AMG Group, thereby destroying the confidence in that information. It submitted that, regardless of any obligations not to use the information in a detrimental way to Global, that information, or parts of it, would remain with officers of the AMG Group and could not be forgotten, with the consequence that it would inevitably be deployed to the commercial disadvantage of the Tantalum Group. Global submitted that the mere reading of confidential information amounts to use of confidential information 'in a way which damages or is reasonably likely to damage' the Tantalum Group. Reliance was placed on Mobil Oil Australia Ltd v Guina Developments Pty Ltd[24] and Centaur Mining and Exploration Ltd v Anaconda Nickel Ltd.[25] Further, it was said that AMG is a litigation adversary of the Tantalum Group in legal proceedings in the United States and some of the documents may be relevant to that litigation.
[24] Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34, 38.
[25] Centaur Mining and Exploration Ltd v Anaconda Nickel Ltd [2001] VSC 224; (2001) 19 ACLC 1375.
Global referred to the contractual obligations in cls 4.1(a) and (b) of the Shareholders Deed and submitted that those obligations would, in the event that Confidential Information were disclosed, be obligations impossible of performance by the AMG Group or enforcement by Global. Global submitted that the obligation under cl 4.1 necessarily regulates the right of access to Confidential Information under cl 7.1, and Global is entitled to impose conditions and limitations on access necessary to prevent any officer of Metallurg or AMG from reading any of the information to which they would otherwise be entitled under cl 7.1.
Global also relied on cl 20(a) and submitted that it requires Metallurg to exercise its rights under cl 7.1 in a way which gives effect to cl 4.1. Global submitted that if Metallurg were to gain access to Confidential Information, that would amount to a failure to cooperate and use Metallurg's best endeavours to ensure that the Tantalum Group successfully carries on its business. It submitted that, because an officer of the AMG Group reading the Confidential Information would be in immediate breach of cl 4.1(b), inspecting documents pursuant to cl 7.1 would be contrary to the obligation to give effect to the terms of the Shareholders Deed.
Global also argued that the obligation to provide access is qualified by the adjective 'reasonable', and any access to commercially sensitive information by a trade competitor is outside the rights conferred by cl 7.1 since such access would be unreasonable.
Metallurg, in effect, contended that cl 7.1 operates according to its own terms and is not to be read down in the manner contended for by Global.

The issue of entitlement to an injunction[26]

[26] Primary decision [56] ‑ [71].

There was no issue that the court had the power to grant injunctive relief.[27] The issue concerned the exercise of discretion in relation to the grant of injunctive relief. Global contended, in effect, that an injunction should not be granted on the basis that AMG had allegedly breached confidentiality obligations in the past and that injunctive relief for further disclosure would lead to a probable breach of cl 4.1 or cl 16.3 of the Shareholders Deed. Alternatively, Global alleged that injunctive relief should be denied on the basis that the alleged breaches by AMG constituted unclean hands.[28]
[27] Primary decision [51].
[28] Primary decision [68].

Primary decision

The judge found that AMG Group and the Tantalum Group are, to some degree at least, trade competitors.[29] His Honour concluded, however, that Metallurg's construction of cl 7.1 and cl 7.2, read with cl 16.3, ought to be preferred to Global's approach.[30]

The construction issue

[29] Primary decision [19].

[30] Primary decision [30].

His Honour said that the fundamental flaw in Global's contentions was that it equated access and inspection to use of information in a way which damages, or is reasonably likely to damage, the Tantalum Group. He said that that proposition is based on the notion that the loss of confidentiality vis‑à‑vis a Relevant Shareholder necessarily creates a reasonable likelihood of damage to the Tantalum Group. The judge did not accept that proposition.[31]
[31] Primary decision [31].
His Honour said that the effect of the Shareholders Deed is that Global has contractually bound itself to disclose confidential information to the Relevant Shareholder, and the Relevant Shareholder is entitled to receive and apprise itself of such information, subject to its duty under cl 16.3 and its obligation under cl 4.1. He said that the inevitable consequence of entry into the Shareholders Deed with Metallurg was that Global bound itself to provide information, including commercially sensitive information, to Metallurg, which was at that time, and is still, in competition with at least some aspects of Global's operations. In this regard, he said that the rights to information were obtained for valuable consideration by Metallurg in its capacity as a Relevant Shareholder, and the fact that it is also a competitor is immaterial.[32]
[32] Primary decision [32].
The judge said that the contractual obligation of disclosure distinguished this case from cases like Mobil Oil Australia.[33] He also said that the circumstances of the present case could be distinguished from those in Centaur Mining.[34]
[33] Primary decision [32].
[34] Primary decision [33].
The judge said that it could be seen from Centaur Mining that the starting point is the proper construction of the relevant contract, and that in this case there is an express obligation to permit access to, and inspection of, information, some of which is undoubtedly confidential information. He said that that right is conferred on Metallurg provided that its access and inspection of documents is undertaken for a permitted purpose, and that that permitted purpose arises by dint of Metallurg's status as a Relevant Shareholder. In this regard, his Honour said that Global's contentions have the effect that the operation of cl 7.2 would be different in relation to Metallurg than in respect of any other Relevant Shareholder who is not a competitor.[35]
[35] Primary decision [35].
In relation to Global's argument concerning the word 'reasonable' in the context of 'reasonable access' in cl 7.1, the judge said that in his view the use of the word 'reasonable' does not limit the nature or content of the information to which a Relevant Shareholder enjoys a right of access under cl 7.1.[36] Rather, on the plain reading of cl 7.1, the adjective 'reasonable' applies to the mode and means of access and inspection.[37]
[36] Primary decision [37].
[37] Primary decision [38].
The judge accordingly made declarations substantively in the terms sought by Metallurg in orders 1 and 2 above.
With respect to order 1 above, being the declaration as to cl 7.1, his Honour rejected Global's contention that the declaration sought in relation to that clause should be expressed as being subject to cl 4.1. He said that the obligation under cl 4.1 is an independent contractual duty imposed upon Relevant Shareholders not to misuse confidential information, and that the mere receipt of information by Metallurg does not amount to the use of that information in a way which damages, or is reasonably likely to damage, the Tantalum Group.[38]
[38] Primary decision [39].
With respect to order 2 above, being the declaration as to cl 7.2, the principal issue in dispute related to par (c). Metallurg submitted that cl 7.2 operates in relation to the access/inspection right conferred under the first paragraph of cl 7.1, but not in relation to the information right conferred by the second paragraph of that clause. It submitted that the latter right is conferred upon Relevant Shareholders who are already bound by the confidentiality obligation found in cl 16.3 and cl 4.1(b) of the Shareholders Deed, and that because the former access/inspection right is exercised by individuals, some of whom may not be employees of the Relevant Shareholder, the confidentiality provisions of the Shareholders Deed would not operate to bind those individuals.[39] Thus, it submitted that cl 7.2 is designed to fill the 'privity gap'.[40]
[39] The primary decision refers to 'Shareholders Agreement' on several occasions, which appear to be intended to be references to the 'Shareholders Deed'.
[40] Primary decision [45] ‑ [46].
The judge preferred Metallurg's construction of cl 7.2 and made a declaration in terms. He said that Metallurg's construction is consistent with the overall purpose and context of the Shareholders Deed insofar as matters of confidentiality are dealt with, and that there is no reason to suggest that any different confidentiality regime should exist in relation to confidential information obtained through cl 7.1 from that obtained through other provisions. On the other hand, he said that there is a lacuna in the agreement if no provision is made to require confidentiality on the part of individuals who are not bound by the terms of the Shareholders Deed but who may, by dint of rights exercised under it, come into possession of confidential information.[41]

The issue of entitlement to an injunction

[41] Primary decision [48] ‑ [49].

The judge found the following facts.
On 3 April 2017, the chairman of the management board and chief executive officer of AMG (Dr Schimmelbusch) sent an email to the managing partner of Resource Capital Funds (Mr McClements), being one of the parties to the Shareholders Deed.
In that email, Dr Schimmelbusch sought certain information, and said that he was 'sensitive to the fact that litigation is currently pending between [an AMG Group company] and Global Advanced Metals U.S.A. Inc' (a related entity of Global). He provided an assurance 'that we will treat any confidential information that you provide in response to my letter consistent with our obligations under the Deed and that we will not share any of that information with our litigation team' (confidentiality undertaking). The email was copied to a number of recipients, including Mr Rosen and Mr Friedman, who both work for the legal firm acting for the AMG Group company in the US litigation.[42]
[42] Primary decision [56].
Mr McClements replied by email and attached an encrypted confidential memorandum, which included a reminder that the memorandum was, in effect, provided to Metallurg on the basis of Dr Schimmelbusch's confidentiality undertaking.[43] Mr McClements' reply email was only sent to Dr Schimmelbusch.[44]
[43] Primary decision [57].
[44] GB 435.
On 16 April 2017, Dr Schimmelbusch forwarded Mr McClements' email, including the attached encrypted confidential memorandum, to a number of Metallurg officers and executives, including Mr Connor (senior vice president of AMG), Mr Dunckel (the chief financial officer of the AMG Group) and Mr Shea (vice president legal of the AMG Group). Dr Schimmelbusch also copied the email to Mr Rosen.[45] Mr Rosen, however, immediately recognised that the memorandum was confidential, and deleted it shortly after receiving it.[46]
[45] Primary decision [58] ‑ [60].
[46] Primary decision [67].
Approximately 12 minutes later, Mr Dunckel sent an email to Dr Schimmelbusch, copying in various other persons including Mr Connor, Mr Shea and Mr Rosen, and identified the password to the encrypted confidential memorandum.[47] At the time of trial, Mr Rosen had no present recollection of receiving this email and believed that he had deleted it.[48]
[47] Primary decision [62].
[48] Primary decision [67].
The next morning, on 17 April 2017, Mr Connor sent an email to those people, including Mr Rosen, who had received both a copy of the confidential memorandum from Dr Schimmelbusch and the password to the memorandum from Mr Dunckel. In that email, and in breach of the confidentiality undertaking, Mr Connor set out what appears to be a quote from the second page of the confidential memorandum concerning the book value of Global's inventory.[49] Again, at the time of trial, Mr Rosen had no present recollection of receiving this email. Further, although as a result of an oversight he had not deleted the email, Mr Rosen had not looked at it since the day it was received.[50]
[49] Primary decision [63].
[50] Primary decision [67].
On 18 April 2017, Mr Dunckel sent Mr Rosen an email stating 'Email sent to you in error. Please do not open and confirm deletion'. The email referred to was Dr Schimmelbusch's email of 16 April 2017 forwarding Mr McClements' email and the attached confidential memorandum.[51] Mr Rosen had already deleted Dr Schimmelbusch's email by this time.[52]
[51] Primary decision [65].
[52] Primary decision [67].
Approximately 13 minutes later, Mr Rosen replied to Mr Dunckel's email, simply saying 'confirmed'.[53]
[53] Primary decision [66].
The judge found that the conduct of Dr Schimmelbusch in forwarding the encrypted confidential memorandum onto Mr Rosen and Mr Friedman, the conduct of Mr Dunckel in forwarding the password onto Mr Rosen, and the conduct of Mr Connor in revealing a short passage from the confidential memorandum to Mr Rosen, amounted to serious acts of carelessness. He was satisfied, however, that Mr Rosen immediately recognised that he should not have access to the confidential memorandum and deleted Dr Schimmelbusch's email before being asked to do so, and that the error was sought to be corrected in a reasonably timely manner. The judge also said that he was satisfied that nothing in the confidential memorandum was in fact used for any purpose detrimental to Global, and that the conduct complained of was careless rather than an attempt to intentionally breach any obligations of confidentiality.[54]
[54] Primary decision [71].
The judge accordingly concluded that the conduct of the officers of the AMG Group in dealing with the encrypted confidential memorandum was not such as to disentitle Metallurg to the benefit of its contractual entitlements.[55]
[55] Primary decision [72].
The judge also referred to the evidence given by Mr Connor and Mr Eames (AMG's director of information technology) on behalf of Metallurg concerning the arrangements to be put in place to maintain the confidentiality of materials obtained under cl 7.1 of the Shareholders Deed. His Honour evidently accepted that evidence and was satisfied that the arrangements were such as to conclude that Metallurg would perform its obligations thereunder.[56]
[56] Primary decision [72].
That evidence was to the following effect:[57]
•Mr Connor would procure any person appointed by Metallurg to conduct any inspection and take copies of relevant documents to execute a confidentiality agreement in a form attached to his affidavit, and he would send those signed confidentiality undertakings to Mr Williams at Global.
•Mr Connor would execute a confidentiality undertaking and send that to Global before receiving the relevant information.
•Mr Connor has directed Mr Eames to establish a secured file within the AMG data storage system, accessible by Mr Connor and Mr Wahl (AMG's assistant controller), for the purpose of storing the information to be obtained by Metallurg from Global.
•Mr Connor would ensure that Mr Eames and Mr Wahl signed confidentiality undertakings that would be emailed to Global before access was given, and he directed Mr Eames that no other user is to be given access to the secured file unless Mr Eames is notified by Mr Connor that they have signed a confidentiality undertaking and that undertaking has been provided to Global.
•Mr Eames has received and implemented Mr Connor's direction to create a secured file or folder accessible only by specified users, and has confirmed his willingness to comply with the confidentiality requirements outlined by Mr Connor.
[57] Primary decision [53] ‑ [55].
Accordingly, the judge granted the injunction in the terms sought.[58]
[58] Primary decision [72].

Appeal

There are four grounds of appeal contained in Global's appellant's case dated 21 August 2017. Grounds 1, 2 and 3 relate to the proper construction of the Shareholders Deed, and ground 4 relates to the injunction order and the significance of evidence concerning Metallurg's past breaches of confidentiality.

Grounds 1 and 2

Grounds 1 and 2 are related.[59] Ground 1 is to the effect that the judge erred in law at [32], [35] and [72] of the primary decision in finding that the Shareholders Deed conferred on a Relevant Shareholder, including where they are a trade rival, the right to access under cl 7.1, and to use, for the purposes permitted under cl 7.1 and cl 16.3(a), documents held by Global containing commercially sensitive confidential information of the Tantalum Group.[60] Global contends that the primary court should have found that the right or exercise of the right under cl 7.1 was qualified by cl 4.1(b) and cl 20(a), such that the Shareholders Deed did not confer an unfettered right upon a Relevant Shareholder, being a trade rival, to access and use the Tantalum Group's commercially sensitive confidential information for a permitted purpose.
[59] Appellant's submissions, par 9.
[60] Appellant's grounds of appeal, par 1.
Ground 2 then alleges that the judge erred in law at [32] ‑ [33] and [35] of the primary decision in holding that the use of such information for permitted purposes under cl 7.1 and cl 16.3 by representatives of a Relevant Shareholder and trade rival could not, as a matter of construction or otherwise, constitute use of confidential information by that Relevant Shareholder in a way which damages or is reasonably likely to damage the Tantalum Group for the purpose of cl 4.1(b) of the Shareholders Deed, or alternatively would not infringe cl 4.1(b) of the Shareholders Deed.[61]
[61] Appellant's grounds of appeal, par 2.
Global contended, without dispute by Metallurg, that the relevant principles are those outlined in Mount Bruce Mining Pty Ltd v Wright Prospecting Co Pty Ltd[62] and Black Box Control Pty Ltd v Terravision Pty Ltd.[63]
[62] Mount Bruce Mining Pty Ltd v Wright Prospecting Co Pty Ltd [2015] HCA 37; (2015) 256 CLR 104 [46] ‑ [52].
[63] Black Box Control Pty Ltd v Terravision Pty Ltd [2016] WASCA 219 [42].
Global's submissions were, in substance, to the following effect:
(a)cl 7.1 is a 'right' or 'power' which must be exercised, by virtue of cl 20(a), in a way that gives effect to the terms of the Shareholders Deed;
(b)by cl 4.1(b), which concentrates on the likely effect of the use of information, a Relevant Shareholder must not 'use' Confidential Information 'in a way which damages or is reasonably likely to damage' the Tantalum Group;
(c)there is no express restriction on the operation of cl 4.1 in relation to the rights under cl 7 (cf cl 4.3);
(d)cl 4.1(b) and cl 20(a) combine to 'dampen and restrict' the rights under cl 7.1 so that cl 7.1 must not be exercised in a way that would necessarily damage, or be likely to damage, the Tantalum Group;
(e)where the use of information would necessarily damage or be likely to damage the Tantalum Group, cl 4.1(b), read with cl 20(a), 'precludes the exercise of the right to obtain and use the information in the first place' (original emphasis), and cl 4.1(b) operates upon even permissible purposes under cl 16.3(a);
(f)the placing of a company's commercially sensitive confidential information in the hands of a trade rival is destructive of confidentiality in the information and is 'therefore … damaging or likely to be damaging to the company';
(g)the reading and comprehension of information that might otherwise be thought to be obtainable under cl 7.1 is 'part and parcel of the overall use of the information' and the distribution of information under cl 7.1 to auditors and the like would 'involve (further) use of the information (for the permitted purpose)';
(h)the objective factual matrix supported its construction of cl 7 in that cl 7 had its origin in the original version Shareholders Deed where none of the parties were in competition with Global;
(g)Global's construction (unlike, it is said, in effect, the judge's) avoids the Shareholders Deed making commercial nonsense or working commercial inconvenience, and it is inherently unlikely that Global contracted to provide commercially sensitive confidential information to a Relevant Shareholder/trade rival, protected only by confidentiality undertakings which, in the context of trade rivals, are practically worthless;
(i)the judge's conclusion that cl 7, on Global's construction, operated differentially on Metallurg as opposed to any other Relevant Shareholder who is not a competitor lacks force for four reasons. One is that any Relevant Shareholder who nominated a trade rival to obtain access to and inspect documents under cl 7.1 (or for the purposes of cl 16.3(b)(iii)) would equally be caught by a similar restriction of right to access documents. Secondly, any differential operation merely reflects the fact that cl 4.1(b) focuses on the effect, or likely effect, of use in a particular factual context and Global's construction would capture any Relevant Shareholder who became a trade rival to the Tantalum Group. Thirdly, the judge's construction has its own discriminatory effect in that it allows a trade rival to obtain a collateral benefit unavailable to other Relevant Shareholders. Fourthly, even if there were an adverse differential operation, it 'pales into insignificance compared to the damaging consequences of the [judge's] construction'.

Ground 3

Ground 3 is principally concerned with the judge's order pursuant to par 2(c)[64] of the declaration sought by Metallurg referred to in [13] above, concerning cl 7.2 of the Shareholders Deed.[65]
[64] Order 3(c) of the judge's orders; BB 2.
[65] Appellant's submissions, par 44.
Ground 3 alleges that the judge erred in law in finding at [4] and [48] ‑ [49] of the primary decision that the terms of any confidentiality agreement under cl 7.2 of the Shareholders Deed must not inhibit the delivery to Metallurg of information which Metallurg is entitled to inspect or copy under cl 7.1, and must be consistent with the confidentiality regime applicable to Metallurg under cl 16 of the Shareholders Deed.
It is submitted, in effect, that if Global's position on the proper construction of cl 7.1 is accepted, it follows that cl 7.2 does not require, in the case of a trade rival, that Global provide unrestricted access to commercially sensitive documents to a Relevant Shareholder, and it does not preclude Global from imposing protocols and requiring confidentiality undertakings beyond those provided for in cl 16. Global submitted that if it succeeds on grounds 1 or 2, it should also succeed on ground 3,[66] but said, in effect, that ground 3 is ancillary to, and not independent of, grounds 1 and 2.[67]
[66] Appellant's submissions, pars 45 ‑ 46.
[67] Appeal ts 72.
Global's submissions in relation to cl 7.2 in this regard included submissions to the following effect:[68]
1.the terms of a confidentiality agreement under cl 7.2 are determined by the Board acting reasonably;
2.if it had been the intent of cl 7.2 to limit a confidentiality agreement to the content of cl 16, then it would expressly say so, which it does not;
3.there is no implied requirement that a confidentiality agreement under cl 7.2 must conform to cl 16; and
4.it is no function of cl 16 to circumscribe the confidentiality agreement that can be sought under cl 7.2.[69]

Ground 4

[68] Appellant's submissions, par 47.

[69] The appellant's submissions refer to cl 7.1, but presumably intend to refer to cl 7.2.

Ground 4 is concerned with the injunction order. Counsel for Global said, in effect, that ground 4 relates to Global's defences to the grant of injunctive relief on the bases that Metallurg was not ready, willing and able to perform its obligations of confidentiality, and that it had 'unclean hands'.[70]
[70] Appeal ts 73.
Grounds 4.1 and 4.2 allege that the primary judge erred in fact at [71] of the primary decision in finding that the conduct of Dr Schimmelbusch in forwarding the encrypted confidential memorandum onto Mr Rosen,[71] and the conduct of Mr Connor in sending Mr Rosen an email containing an extract from the confidential memorandum,[72] were serious acts of carelessness, but not attempts to intentionally breach any confidentiality obligations. These findings by the judge are said to be glaringly improbable and contrary to compelling inferences. It is said that his Honour should have found that Dr Schimmelbusch and Mr Connor sent the emails in wilful defiance of Metallurg's confidentiality obligations.[73]
[71] Ground 4.1.
[72] Ground 4.2.
[73] Appellant's case, pars 4.1 ‑ 4.2.
Ground 4.3 alleges that the judge erred in law or fact in failing to take into account, or give weight to, various matters.
Ground 4.4 alleges that the judge erred in fact in failing to find that the matters in grounds 4.1 to 4.3 constituted wilful disregard of confidentiality obligations on the part of Dr Schimmelbusch and Mr Connor, the making of false statements by Metallurg to Global about compliance with confidentiality obligations, a lack of candour to the primary court, a failure by Metallurg to sufficiently understand its confidentiality obligations, and a failure by Metallurg to accept or acknowledge that it breached its confidentiality obligations.
Ground 4.5 alleges that the judge erred in law and fact in impliedly holding at [68] and [72] of the primary decision that Metallurg was not likely to cause damage to the Tantalum Group in breach of cl 4.1(b) of the Shareholders Deed by misusing its confidential information, and in finding that there were not circumstances of unclean hands.
Ground 4.6 alleges that the judge erred in law and fact in failing to find, and alleges that the judge should have found, that Metallurg's conduct referred to in grounds 4.1 to 4.4 (together with the serious carelessness of Mr Dunckel identified at [63] and [71] of the primary decision):
(a)gave rise to a reasonable likelihood of damage to the Tantalum Group if Metallurg was permitted access to and use of commercially sensitive and confidential information under cl 7.1 of the Shareholders Deed; and
(b)further or alternatively, Metallurg had unclean hands, such that the court, in the exercise of its discretion, should not grant an injunction.

Disposition - grounds 1, 2 and 3

Grounds 1, 2 and 3 deal with the proper construction of the Shareholders Deed. The principal grounds are grounds 1 and 2. Ground 3 is said to be ancillary to, and not independent of, grounds 1 and 2. There was no dispute that the principles outlined in Mount Bruce and Black Box applied to the proper construction of the Shareholders Deed. For the reasons which follow, grounds 1, 2 and 3 should be dismissed.
Clause 7.1 is comprised of two paragraphs. The first paragraph includes subparagraphs (a), (b) and (c) and the second paragraph commences with the words 'In addition'.
The first paragraph of cl 7.1 provides that 'each' Relevant Shareholder has rights to reasonable access to Tantalum Group's premises for specified purposes being the auditing and valuing of the Tantalum Group, and for 'any other reasonable purpose'. Access for these purposes involves (a) visiting and inspecting the premises, (b) inspecting and taking copies of documents at the premises relating to the Business and to the Tantalum Group's affairs and (c) discussing the Tantalum Group's affairs, finances and accounts with Global's officers, employees and auditors.
The second paragraph of cl 7.1 gives each Relevant Shareholder an additional right to require the provision of information beyond the rights to obtain information by the inspection, copying and discussion provided for in cl 7.1(a), (b) and (c).
Clause 7.2 refers to 'inspection … or access … permitted under cl 7.1' and, accordingly, prima facie refers to the first paragraph of cl 7.1.
Clause 7.3 recognises that access or inspection pursuant to the first paragraph of cl 7.1 may cause disruption to Global, and provides that each Relevant Shareholder must use reasonable efforts to complete an inspection or access visit within ten days of its commencement, and must minimise any disruption to the Tantalum Group's operations.
The first paragraph of cl 7.1, but not the second paragraph of cl 7.1, expressly provides that the right referred to may be exercised by the Relevant Shareholder 'through its accountants, advisers, agents or employee'. The italicised words appear in context to refer to persons engaged by the Relevant Shareholder who are not its employees. The absence of similar wording in the second paragraph of cl 7.1 indicates, in this context, that the 'request' referred to in the second paragraph of cl 7.1 may only be made by the Relevant Shareholder through its employees, and not through its (external) accountants, advisers or agents.
Further, whilst cl 7.2 applies to any person nominated by the Relevant Shareholder under the first paragraph of cl 7.1 to inspect the documents, including employees of the Relevant Shareholder, its primary purpose is evidently to ensure that external appointees, over whom the Relevant Shareholder has no control through the employer/employee relationship, expressly undertake an obligation of confidentiality if required by Global. The evident purpose is to ensure that the external appointee is bound by an obligation of confidentiality consistent with the obligations upon the Relevant Shareholder itself under the deed.
The definition of 'Confidential Information' refers to the specified information which is not in the public domain 'and which has been obtained through or by being a member of the Company'. Accordingly, Confidential Information is specified information which 'has been obtained'. The obtaining of it precedes its use. 'Confidential Information' extends to information concerning or belonging to a Relevant Shareholder, and not just to information concerning or belonging to Global. In the latter case, the italicised words above are apt to include information concerning Global which has been obtained by a Relevant Shareholder under either or both of the first or second paragraphs of cl 7.1. In the case of cl 7.1(b), inspection and copying is the process by which the information is obtained by the Relevant Shareholder.
Clause 4.1(b) and cl 16.3(a) refer to the 'use' of Confidential Information which has been obtained. The word 'use' in its ordinary signification means to employ for some purpose, to put into service or turn to account.[74] There is no foothold in the language of the instrument to construe 'use' contrary to its ordinary meaning. The reading and comprehension of a document by an accountant, advisor, agent or employee of a Relevant Shareholder appointed and given access under the first paragraph of cl 7.1 is 'inspection'[75] of the document by the Relevant Shareholder. It is part of the process of obtaining information which, after it 'has been obtained', becomes 'Confidential Information'.
[74] Macquarie Online Dictionary.
[75] 'Inspect' means to 'look carefully at, … view closely and critically': Macquarie Online Dictionary.
Clause 4 is a general provision outlining three broad commitments required of a Relevant Shareholder to Global and to other Relevant Shareholders. Under cl 4.1(b), a Relevant Shareholder must not 'use' Confidential Information 'in a way' which damages or is reasonably likely to damage the Tantalum Group or any other Relevant Shareholder.
Clause 4.1(b) is to be read in light of cl 16, which is a specific provision in relation to Confidential Information. Clause 16.3(a) is expressed in permissive language. A Relevant Shareholder 'may' only 'use' Confidential Information 'for the purposes of monitoring and assessing its investment in the Tantalum Group and its Business'. Read in light of cl 7.1 (first paragraph), this would include the 'use' by a Relevant Shareholder of Confidential Information for the purpose of auditing and valuing its investment in the Tantalum Group (including Global). Read in light of cl 7.1 (second paragraph) it would also include the 'use' of Confidential Information concerning Global, for the purpose of the Relevant Shareholder's tax, accounting and regulatory filing and compliance requirements. The word 'only' in cl 16.3(a) conveys an implied negative, ie, that the Confidential Information is not (unless otherwise permitted under the deed) to be used for any other purposes.
Both cl 4.1(b) and cl 16.3 are subject to cl 16.4. Clause 16.4(d) provides, in effect, that the confidentiality obligations on a Relevant Shareholder under the deed do not extend to information required by law to be disclosed, and where the Recipient of the information has taken reasonable steps to oppose or prevent disclosure and to limit disclosure as far as reasonably possible.
It is unnecessary to determine whether Global's contention that cl 4.1(b) operates to prevent a Relevant Shareholder using Confidential Information, even for permissible purposes,[76] 'in a way which damages or is reasonably likely to damage' the Tantalum Group, is correct. That contention does not establish any error on the part of the judge in relation to the proper construction of cl 7.1 (which is the subject of the relevant declarations). That is so for four reasons.
[76] Under cl 16.3(a).
First, as noted earlier, access and inspection under cl 7.1 is not 'use' of Confidential Information within the meaning of cl 4.1(b), because that is part of the process of obtaining information. Only then, once it has been obtained, does it become 'Confidential Information' and subject to the restrictions on 'use' provided for by cl 4.1(b). Secondly, the Shareholders Deed does not draw any distinction between degrees of confidentiality or between types of confidential information. The definition of 'Confidential Information' encompasses information of a commercially sensitive nature which, if it were in the hands of a trade rival upon inspection, could not be forgotten as explained by Hayne JA in Mobil Oil.[77] Thirdly, the rights and obligations on a Relevant Shareholder are not qualified by reference to whether the Relevant Shareholder is, or is not, a trade rival. The rights and obligations under the Shareholders Deed are given to a Relevant Shareholder by virtue of its status as a Relevant Shareholder, and not by reference to its business operations. Fourthly, the phrase 'not to use Confidential Information in a way which damages or is reasonably likely to damage' the Tantalum Group would ordinarily not be read as precluding access to and inspection of documents, and the provision of information, under cl 7.1. That is because cl 4.1 is a provision of general application and where there are general provisions and specific provisions in a contract, ordinarily the specific provision would be construed as applying to the circumstances encompassed within its field of operation in the event of any inconsistency between it and the general provision: Dan v Barclays Australia Ltd;[78] Chapmans Ltd v Australian Stock Exchange Ltd;[79] Sigiriya Capital Pty Ltd v Scanlan;[80] William Sindall plc v Cambridgeshire County Council;[81] Australia and New Zealand Banking Group Ltd v Manasseh.[82]
[77] Mobil Oil (38).
[78] Dan v Barclays Australia Ltd (1983) 57 ALJR 442, 442.
[79] Chapmans Ltd v Australian Stock Exchange Ltd (1996) 67 FCR 402, 411.
[80] Sigiriya Capital Pty Ltd v Scanlan [2013] NSWCA 401; (2013) 97 ACSR 183 [30].
[81] William Sindall plc v Cambridgeshire County Council (1994) 1 WLR 1016, 1024.
[82] Australia and New Zealand Banking Group Ltd v Manasseh [2016] WASCA 41 [249].
The result is that cl 4.1(b) operates once the Confidential Information has been obtained under, relevantly, cl 7.1. It does not purport to prevent such information being obtained under cl 7.1 by a Relevant Shareholder through (in the case of par 1 of cl 7.1) its accountants, advisers, agents or employees.
Other than in cl 7.2 and cl 7.3, cl 7 contains no express limitation, nor is any limitation necessarily implicit in its language, in relation to the exercise of the entitlement to access and inspection conferred on a Relevant Shareholder. As noted earlier, the entitlement in cl 7.1 (par 1) applies in terms to 'each' Relevant Shareholder without discrimination. Global's construction seeks to incorporate into cl 7.1 concepts (trade rivals and a subset of confidential information being 'commercially sensitive confidential information')[83] having no foundation in the clause read on its own or in the context of the instrument as a whole. It also involves giving the word 'use' an unnatural meaning. Global's construction involves a marked re‑writing of the provision. Further, Global's construction imposes limitations on information available to a Relevant Shareholder which are difficult to reconcile with the scope of the information available to a Relevant Shareholder under cl 6, including by way of monthly management reports. The judge did not err in finding that cl 4.1(b) does not operate to preclude the exercise of the right to inspect and obtain information in accordance with cl 7.1.
[83] For example, appellant's written submissions, par 25.
Nor is the judge's construction of cl 7.1 commercially nonsensical or, in the broad, productive of commercial inconvenience. It is plainly in the interests of a shareholder of a company to know of matters affecting the value of its investment and affecting its obligations with respect to the tax, accounting, and regulatory environment to which it is subject. Where there is nothing in the terms of the Shareholders Deed or in the mutually known background circumstances to indicate that the parties contemplated that the Relevant Shareholder may be, or become, a trade rival, the commercial operation of the suite of measures for the provision of relevant information to a Relevant Shareholder, and for the protection of Confidential Information, cannot be assessed by singling out that particular eventuality. That is particularly so in this context where a Relevant Shareholder can, in any event, effectively prevent a trade rival or any other undesirable person from acquiring shares in Global (cl 10 and cl 11). Further, there is no compelling reason to suppose that an existing Relevant Shareholder who was not already a trade rival at the time it became a Relevant Shareholder, would choose to enter the relevant market other than through its investment in the Tantalum Group. Also, in matters affecting their respective investment and regulatory compliance obligations, it might be doubted that the Relevant Shareholders agreed to be subject to the kinds of limitations on inspection and access to information referred to by Hayne JA in Mobil Oil[84] in the very different context of discovery.
[84] Mobil Oil (41).
The reference to cl 20(a) does not materially advance the task of construction under consideration. An exercise of the power under cl 7 'in a way that gives effect to the terms' of the Shareholders Deed requires the power to be exercised in accordance with cl 7 properly construed.
As to the objective factual matrix, the fact that cl 7 had its origins in an earlier deed in which none of the Relevant Shareholders was a competitor of the other tends against, rather than in favour of, Global's construction. That is because it makes it less likely that, objectively, the parties to the Shareholders Deed, prior to the execution of the Assumption Deed by Metallurg, intended that cl 7 be read as subject to the kind of limitation for which Global now contends, and the Assumption Deed itself does not alter the operative terms of the Shareholders Deed.
Two final points may be made as to Global's submission that its construction is supported by its observations that the suggested limitations would apply to any Relevant Shareholder who appointed a trade rival to inspect documents, and to any Relevant Shareholder who itself was a trade rival. First, it is difficult to envisage a situation where a Relevant Shareholder who is not a trade rival would appoint a representative of a trade rival to inspect documents under cl 7.1 for use by the Relevant Shareholder in monitoring and assessing the Relevant Shareholder's investment in Global. Such an appointment would prima facie raise questions as to improper purpose. The hypothetical appointment suggested by Global for the purposes of its argument was not addressed with reference to any evidence as to the plausibility of that possibility. It prima facie strains commercial credulity. Secondly, whilst Global's construction would apply to all Relevant Shareholders who are trade rivals, the deeper point, unanswered or at least not satisfactorily answered by Global, is that the language of the instrument does not treat differently, or make an exception for, a Relevant Shareholder who is also a trade rival.

Disposition - ground 4

Grounds 4.1 and 4.2

Grounds 4.1 and 4.2 allege that the primary judge erred in fact in finding that the conduct of Dr Schimmelbusch in forwarding the encrypted confidential memorandum to Mr Rosen on 16 April 2017,[85] and the conduct of Mr Connor in copying Mr Rosen into an email containing an extract from the confidential memorandum on 17 April 2017,[86] were serious acts of carelessness, but not attempts to intentionally breach any confidentiality obligation. These findings by the judge are alleged to be glaringly improbable and contrary to compelling inferences, and reviewable in accordance with the principles in Robinson Helicopter Company Inc v McDermott.[87] Global contends that the judge should have found that Dr Schimmelbusch and Mr Connor sent the emails in wilful defiance of Metallurg's confidentiality obligations.[88] Global relies on various matters set out in its schedule of evidence.
[85] Ground 4.1.
[86] Ground 4.2.
[87] Robinson Helicopter Company Inc v McDermott [2016] HCA 22; (2016) 90 ALJR 679 [43].
[88] Appellant's grounds of appeal, pars 4.1 ‑ 4.2.

Mr Connor swore two affidavits in support of Metallurg's originating application, one sworn 22 June 2017 and the other 16 July 2017. Both affidavits were sworn prior to the disclosure by Metallurg of the emails of April 2017. After the disclosure of the emails, there was no application by Global to cross‑examine Mr Connor.[89] It was not suggested that an adjournment was required to properly consider the emails before making a decision as to whether to require Mr Connor for cross‑examination.
[89] Appeal ts 73, 82, 84.
Dr Schimmelbusch swore an affidavit on 19 July 2017 as to his conduct in relation to the 16 April 2017 email with the attached encrypted confidential memorandum. In his affidavit he deposed, amongst other things, that:[90]
I did not intend for [Mr Rosen] to read the Confidential Memorandum, and I believed that he would have understood that he was not to read that document given what I had said in my email of 3 April 2017.
[90] Dr Schimmelbusch's affidavit, sworn 19 July 2017, par 6; GB 434.
Also in cross‑examination, the following exchange occurred:[91]
[Counsel for Global]: I suggest that you sent the … email and the confidential memorandum to Mr Rosen knowing or hoping that he would open the confidential memorandum; that's correct, isn't it?---Absolutely not.
[91] ts 129; GB 27.
The judge's finding as to the absence of wilful defiance by Dr Schimmelbusch was, it may be inferred, based to a not inconsiderable extent on his assessment of the credibility of Dr Schimmelbusch.[92] It is also to be noted that, whilst Dr Schimmelbusch sent the encrypted confidential memorandum on 16 April 2017 to various persons (including Mr Rosen), he did not send the encryption code. The encryption code was sent independently by Mr Dunckel, and Mr Dunckel informed Mr Rosen a short time later that the email from Dr Schimmelbusch had been sent in error and asked him not to open it and to delete it. Mr Rosen had, in any event, by then deleted it.
[92] cf Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32; (2012) 86 ALJR 1044 [141].
There is nothing in the schedule of evidence to indicate that, in his assessment of Dr Schimmelbusch's evidence, the judge failed to use, or palpably misused, his advantage as trial judge.[93] In relation to Mr Connor's email of 17 April 2017, which was copied into Mr Rosen, the judge was no doubt, quite properly, unwilling to draw an inference of wilful breach and, in effect, dishonesty[94] in the absence of Global requiring Mr Connor for cross‑examination and putting the allegations to him.[95]
[93] See Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 [27] ‑ [29] and Abalos v Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167, 178 ‑ 179.
[94] Appeal ts 73.
[95] See, eg, Nadinic v Drinkwater [2017] NSWCA 114 [109].
Grounds 4.1 and 4.2 should be dismissed.

Ground 4.3

Ground 4.3 alleges that the primary judge erred in law or fact in failing to take into account, or to give weight to, the following matters:
(a)Mr Rosen did not delete, and Metallurg did not take steps to cause him to delete, the email he received from Mr Connor on 17 April 2017.
(b)Mr Rosen viewed Mr Connor's email of 17 April 2017 when he received it.
(c)On 18 June 2017, Metallurg's solicitors wrongly advised Global's solicitors to the effect that Mr Rosen had not been provided with any of the information previously provided by Global under the Shareholders Deed.
(d)Mr Connor failed to disclose in his two affidavits (sworn 22 June and 16 July 2017) that Mr Rosen received Mr Dunckel's email of 16 April 2017 and Mr Connor's email of 17 April 2017, and he failed to disclose the wrong advice provided by Metallurg's solicitors on 18 June 2017.
(e)Dr Schimmelbusch's affidavit sworn 19 July 2017 stated that, to the best of his knowledge and belief, Metallurg had not breached its confidentiality obligations. Also in that affidavit, he did not disclose that Mr Rosen had received Mr Dunckel's email of 16 April 2017 or Mr Connor's email of 17 April 2017. He also made a 'false statement' that Mr Rosen had informed him that the email of 16 April 2017 had been deleted when, in fact, Dr Schimmelbusch had been informed of that fact by another person in contact with Mr Rosen about the matter.[96]
(f)Metallurg did not disclose Mr Dunckel's email of 16 April 2017 or Mr Connor's email of 17 April 2017 until after the primary court had determined, on 21 July 2017, that Dr Schimmelbusch and Mr Rosen were to be cross‑examined on their affidavits.
(g)Dr Schimmelbusch asserted that Metallurg had not breached its confidentiality undertaking, and stated that there was a clerical mistake which was immediately corrected.
[96] Appellant's schedule of evidence, item 1.38; WB 39.
This ground has no merit. It may be inferred that the judge had regard to the matters in (a), (b), (f) and (g) above, given his references to such matters in the primary decision.[97] In relation to (c) and (d), the solicitors' correspondence of 18 June 2017 was referred to in a document described as 'Defendant's RESPONSIVE TABLE to Plaintiff's Aide Memoire'. That document was referred to by counsel for Global in submissions before the primary judge on 28 July 2017.[98] It is unlikely that it was overlooked by the judge. More importantly, the solicitors' correspondence dated June 2017 was not put to Dr Schimmelbusch or to Mr Rosen in cross‑examination. It was not suggested to them that the correspondence reflected an attempt on their part knowingly to mislead the court or Global. Mr Connor was not cross‑examined at all. Also, in relation to (d), it may be inferred that the judge appreciated that Mr Connor had not addressed the emails in his affidavit, given that the judge recognised that the emails emerged after the initial hearing and prior to cross‑examination of Dr Schimmelbusch.[99] In relation to the matters in (e), the judge referred to Dr Schimmelbusch's belief, and the reasons for it, that he had not breached his confidentiality undertaking.[100] There is no reason to suppose that the judge failed to have regard to that matter. Also, as noted above, the judge recognised that the emails emerged after the initial hearing and prior to cross‑examination of Dr Schimmelbusch. As to the 'false statement' by Dr Schimmelbusch that he had been informed by Mr Rosen that the email had been deleted, when it emerged in cross‑examination that he had actually been informed of that fact by another person in contact with Mr Rosen, three points may be made. First, the judge heard the cross‑examination at the hearing on 26 July 2017. He gave judgment on 2 August 2017. It is doubtful that this (or any) aspect of the cross‑examination was overlooked. Secondly, it was not suggested to Dr Schimmelbusch in cross‑examination that the error as to the informant was deliberate. Thirdly, it is doubtful that the identity of the informant would be seen as a matter of great weight, and it is not a matter to which one would expect the judge to have made specific reference. The fact was that Mr Rosen had deleted the email without being asked to do so.[101] The weight to be given to the matters raised in ground 4.3, in the context of the evidence as a whole, was a matter for the judge. Error has not been established.
[97] See primary decision [61] - [62], [64], [67].
[98] See appeal ts 81, 94, trial ts GB 44, 47.
[99] Primary decision [62].
[100] Primary decision [64].
[101] Primary decision [71].
Ground 4.4 depends, in effect, upon the establishment of error in relation to grounds 4.1 to 4.3. Grounds 4.1 to 4.3 have been dismissed.

Moreover, Global's characterisations, in ground 4.4, of the conduct to which it referred in grounds 4.1 to 4.3 are, in large measure, attacks on the ultimate findings by the primary judge to the effect that the past conduct was careless rather than an attempt to intentionally breach any obligations of confidentiality, and that Global had developed adequate protocols to maintain confidentiality in the future. There is no basis, on the arguments advanced by Global in this appeal, for disturbing those findings.[102] Ground 4.4 should also be dismissed.
[102] See also in this regard [105] - [106] below.
Grounds 4.5 and 4.6 allege, in effect, that the judge erred in finding that Metallurg was not likely to cause damage to the Tantalum Group in breach of cl 4.1(b), and that he should have found that, based on the conduct referred to in grounds 4.1 to 4.4, there was a reasonable likelihood of damage to the Tantalum Group if Metallurg were permitted access to and use of commercially sensitive and confidential information under cl 7.1. It is also alleged, in effect, that his Honour erred in failing to find that Metallurg was disentitled to relief on the basis of unclean hands.
The errors of fact alleged by grounds 4.5 and 4.6 have no merit. That is so for three reasons. First, the reliance on grounds 4.1 to 4.4 is misplaced. As indicated above, there is no merit in those grounds. Secondly, the judge found that there had not been intentional breaches of confidentiality obligations in the past, but merely acts of carelessness, and that finding has not been successfully challenged.[103] Thirdly, based on the evidence of Mr Connor and Mr Eames (both of whom were not cross‑examined), the judge evidently accepted that Metallurg had now developed appropriate arrangements and protocols to maintain confidentiality and to avoid the prospect of any further careless disclosure. That conclusion was open to his Honour on the evidence, and despite some criticisms in the appeal of the arrangements, there is no reason to disturb his Honour's conclusion.
[103] Primary decision [71].
In relation to 'clean hands', the maxim that 'a man must come into a Court of equity with clean hands' does not mean that a plaintiff must be entirely blameless, and the maxim is not simply invoked by establishing a 'general depravity': Dering v Earl of Winchelsea;[104] Loughran v Loughran.[105] The relevant conduct in question must be 'wanting in good faith', and there must be an 'immediate and necessary' connection between the conduct and the equity claimed: Sang Lee Investment Co Ltd v Wing Kwai Investment Co Ltd;[106] Coughlan v Pyoanee Pty Ltd;[107] Dering;[108] Meyers v Casey.[109] This means that the equitable right the court is being asked to protect or assist is 'itself to some extent brought into existence or induced by some illegal or unconscionable conduct of the plaintiff, so that protection for what he claims involves protection for his own wrong': Meyers.[110]
[104] Dering v Earl of Winchelsea (1787) 1 Cox 318, 319 ‑ 320.
[105] Loughran v Loughran 292 US 216 (1934), 229.
[106] Sang Lee Investment Co Ltd v Wing Kwai Investment Co Ltd [1983] HKLR 197, 208.
[107] Coughlan v Pyoanee Pty Ltd [2003] QCA 146; [2003] 2 Qd R 636 [16].
[108] Dering (319 ‑ 320).
[109] Meyers v Casey [1913] HCA 50; (1913) 17 CLR 90, 123 ‑ 124.
[110] Meyers, 124.
On the judge's findings of fact, which have not been disturbed, there is no basis for denying injunctive relief on the basis of 'unclean hands'.
Grounds 4.5 and 4.6 should be dismissed.

Conclusion

The appeal should be dismissed.