Huntsman Corporation Australia Pty Ltd v Brookfield Rail Pty Ltd
[2012] WASC 70
•1 MARCH 2012
HUNTSMAN CORPORATION AUSTRALIA PTY LTD -v- BROOKFIELD RAIL PTY LTD [2012] WASC 70
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2012] WASC 70 | |
| Case No: | CIV:1127/2011 | 24 FEBRUARY 2012 | |
| Coram: | ALLANSON J | 1/03/12 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Application allowed in part | ||
| B | |||
| PDF Version |
| Parties: | HUNTSMAN CORPORATION AUSTRALIA PTY LTD BROOKFIELD RAIL PTY LTD |
Catchwords: | Practice and procedure Release from undertaking Attendance of third party at mediation Turns on own facts |
Legislation: | Nil |
Case References: | 789TEN v Westpac Banking Corporation [2004] NSWSC 594 Australian Competition and Consumer Commission v Cadbury Schweppes Pty Ltd [2009] FCAFC 32 Cadbury Schweppes Pty Ltd v Amcor Limited [2008] FCA 398; (2008) ATPR 42-224 Crest Homes Plc v Marks [1987] AC 829 Hearne v Street [2008] HCA 36; (2008) 235 CLR 125 Springfield Nominees Pty Limited v Bridgelands Securities Limited (1992) 38 FCR 217 State Bank of South Australia v Smoothdale (No 2) Ltd (1995) 64 SASR 224 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
BROOKFIELD RAIL PTY LTD
Defendant
Catchwords:
Practice and procedure - Release from undertaking - Attendance of third party at mediation - Turns on own facts
Legislation:
Nil
Result:
Application allowed in part
(Page 2)
Category: B
Representation:
Counsel:
Plaintiff : Mr G R Hancy
Defendant : Mr J Campbell
Solicitors:
Plaintiff : WHL Legal Pty Ltd
Defendant : DLA Piper Australia
Case(s) referred to in judgment(s):
789TEN v Westpac Banking Corporation [2004] NSWSC 594
Australian Competition and Consumer Commission v Cadbury Schweppes Pty Ltd [2009] FCAFC 32
Cadbury Schweppes Pty Ltd v Amcor Limited [2008] FCA 398; (2008) ATPR 42-224
Crest Homes Plc v Marks [1987] AC 829
Hearne v Street [2008] HCA 36; (2008) 235 CLR 125
Springfield Nominees Pty Limited v Bridgelands Securities Limited (1992) 38 FCR 217
State Bank of South Australia v Smoothdale (No 2) Ltd (1995) 64 SASR 224
(Page 3)
1 ALLANSON J: Actions 1127 and 1129 to 1142 of 2011 are conveniently referred to as the 'cargo actions'. Huntsman Corporation Australia Pty Ltd (Huntsman) is the plaintiff in the first of those actions. The cargo actions may be distinguished from CIV 2768 of 2010, which I will refer to as the Asciano action, in which Asciano Services Pty Ltd is the plaintiff, Brookfield Rail Pty Ltd is the first defendant, and John Holland Pty Ltd is the second defendant. Brookfield Rail is the sole defendant in the cargo actions.
2 The Asciano action is listed for mediation on 19 March 2012. Before mediation in the Asciano action, Asciano will serve its expert evidence on Brookfield Rail. In an application heard on 24 February 2012, Huntsman Corporation seeks orders to the effect that:
1. Brookfield Rail is at liberty to disclose and provide to the plaintiffs in the cargo actions, and upon payment of Brookfield Rail's reasonable expenses of copying shall provide to the plaintiffs, copies of all documents provided to Brookfield Rail by Asciano and John Holland that relate to issues of liability and proportionate liability in the cargo actions.
2. The plaintiffs in the cargo actions, by their legal advisers and a representative with authority to settle the cargo actions, be at liberty to attend the mediation of the Asciano action on 19 March 2012.
3 Although order 2 refers to attendance by a representative with authority to settle, the plaintiffs in the cargo actions put their submissions in terms of passive attendance only.
4 The cargo actions are listed for mediation on 20 March 2012.
Background
5 Asciano owned and operated freight trains on railway tracks that were under the control of Brookfield Rail. Asciano and Brookfield Rail were parties to an agreement (the Draft Track Access Agreement) by which Brookfield Rail granted authority to Asciano to operate within the Westrail train control territory.
6 Brookfield Rail and John Holland are partners to a separate agreement for the maintenance of Brookfield Rail's infrastructure by John Holland.
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7 Huntsman and the other cargo action plaintiffs were the owners of goods that were being transported by rail by Asciano.
8 On 30 January 2005 a freight train owned and operated by Asciano was derailed in the vicinity of Koolyanobbing. About 70 minutes later, a second freight train owned and operated by Asciano derailed near Booraan. The Asciano action and the cargo actions are to determine who is liable for the loss and damage caused by the derailments.
9 Asciano commenced its proceedings against Brookfield Rail on 4 November 2010. The matter was admitted to my CMC list on 25 November 2010. On 14 January 2011, the writ was amended to add John Holland as a second defendant.
10 In relation to each derailment, Asciano alleges that Brookfield Rail breached its obligations under the Draft Track Access Agreement:
1. to control and regulate the movement of the train in a manner that was efficient, safe and effective;
2. to regularly inspect the track;
3. to keep the track and infrastructure in good and substantial order and repair;
4. to replace and make good as soon as practicable all parts of the track or infrastructure that may be broken or damaged; and
5. to comply with the Rail Safety Act 1998 (WA) and prescribed standards for rail safety.
Asciano also claims breach of statutory duty, and claims in negligence against John Holland.
11 Brookfield Rail denies the allegations regarding the cause of the derailments, and alleges that they were caused by Asciano's breach of the Draft Track Access Agreement and by Asciano's negligence. Brookfield Rail also claims that John Holland breached the infrastructure maintenance agreement.
12 There are extensive, detailed and quite technical particulars given of the allegations by both parties. The matters to be proved in support of all allegations will largely turn on the evidence of expert witnesses.
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13 The proceedings in the Asciano action were programmed from the initial strategic conference on the basis that the parties should have the benefit (and burden) of interlocutory procedures, including discovery and exchange of expert reports, to the extent necessary for them to engage in a court conducted mediation as soon as practicable. That mediation is listed to begin on 19 March 2012.
14 The cargo actions were begun on 27 January 2011, and admitted to the CMC list on 29 March 2011. I have been case managing all of the proceedings.
15 The first of the cargo actions, with the plaintiff Huntsman, may be taken as an example. Huntsman brings its claim against Brookfield Rail only. It alleges that the train which derailed at Koolyanobbing was carrying its goods, and it thereby has been caused loss and damage. Huntsman brings its claim in negligence, the particulars substantially following the allegations made by Asciano. Huntsman (and the other cargo plaintiffs) makes no claim against either Asciano or John Holland.
16 On 29 November 2011, I ordered that the matters be case managed together but adjourned the application for orders that they be tried together until after the mediation of the Asciano action.
The issues
Disclosure of documents
17 Asciano and John Holland do not oppose Brookfield Rail disclosing to Huntsman the documents that they have discovered and produced for inspection in the Asciano action, provided those documents are used only for the proper conduct of the cargo actions. I made it as an interim order in those terms, and reserved the balance of the question.
18 Both Asciano and John Holland object to other documents provided to Brookfield Rail being disclosed. In particular, they object to any expert report prepared on behalf of a party for the purpose of the Asciano action being made available to the cargo action plaintiffs. The objection is not, however, limited to expert reports.
19 The matter was argued on the basis that the relevant documents are subject to the restriction on use frequently referred to as the Harman undertaking. I am satisfied that this is correct - a party obtaining disclosure of documents or information by reason of a rule or order of the court cannot, without leave of the court, use it for any purpose other than
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- that for which it was given. The obligation includes documents inspected on discovery, but more generally documents, including witness statements, served pursuant to a judicial direction: Hearne v Street [2008] HCA 36; (2008)235 CLR 125 [96]. It applies to expert witness statements and reports, such reports being served under judicial direction: O 36A r 3(4) and r 7 of the Rules of the Supreme Court 1975 (WA). And see State Bank of South Australia v Smoothdale (No 2) Ltd (1995) 64 SASR 224 - cited in Hearne v Street.
20 In proceedings at first instance between Cadbury Schweppes Pty Ltd, Amcor Ltd and Amcor Packaging (Australia) Pty Ltd (together, Amcor), and Visy Board Pty Ltd, Visy Industries Holdings Pty Ltd and Visy Industries Australia Pty ltd (together, Visy), the question arose whether Visy should be released from its undertaking with regard to finalised proofs of evidence served on it by the ACCC in earlier separate proceedings: Cadbury Schweppes Pty Ltd v Amcor Limited[2008] FCA 398; (2008) ATPR 42-224 Gordon J said:
The balance of the argument proceeded on the footing that the critical question is whether Visy is to be released from its implied undertaking.
The ACCC placed heavy emphasis on the proposition that no case could be found in which a party had been released from the implied undertaking in circumstances analogous to these. That submission may be accepted but it does not lead to the conclusion asserted by the ACCC. Two points are to be made about the absence of authority directly on point. First, the absence of any decided case is not conclusive of the issue. But secondly, and more importantly, the absence of any decided case points to the importance of identifying accurately the question which now arises. At first sight, the question requires the resolution of what appear to be inconsistent obligations - the obligation to use the documents only for the purposes of the ACCC proceeding in which they were compulsorily produced with the obligation to produce for the inspection of opposite parties in another proceeding all discoverable documents that are not subject to a valid claim of privilege.
However, the resolution of any tension between what would otherwise be competing and inconsistent obligations, is readily apparent; resolution lies in properly identifying the contents of the implied undertaking. In particular, it is necessary to recognise that the undertaking impliedly given in one proceeding not to use documents compulsorily produced in that proceeding except for the purposes of that proceeding is necessarily subject to other requirements of the law. So to take what may be a clearer example of the limits of the undertaking, the implied undertaking given in one proceeding would provide no answer to a subpoena for production of these documents in another proceeding. When a party is subpoenaed to produce documents obtained in another proceeding, it is no answer to say
(Page 7)
- that 'I am subject to an undertaking about how I may use these documents'. The party's undertaking in the first proceeding restricts the uses to which that party may choose to put the documents. But the undertaking is no answer to otherwise valid compulsive processes of law: Esso Australia Resources Ltd v Plowman[1995] HCA 19; (1995) 183 CLR 10, 32, 36-37, 46. As the Court in Plowman stated (at 33):
'No doubt the implied obligation must yield to inconsistent statutory provisions and to the requirements of curial process in other litigation, eg discovery and inspection, but that circumstance is not a reason for denying the existence of the implied obligation.'
See also Patrick v Capital Finance Pty Ltd (No4) [2003] FCA 436 at [15] - [22]. Accordingly, Visy’s implied undertaking in the ACCC proceeding is no answer to its discovery obligations in these proceedings [11] - 13].
21 With respect, I agree. This is a sufficient basis to allow the application to release Brookfield Rail from its undertaking.
22 In any event, the court may modify or release the undertaking regarding the use of documents where there are special circumstances which justify it doing so: Crest Homes Plc v Marks[1987] AC 829. There is no exhaustive list of the factors guiding the court's discretion. They include the nature of the document, the circumstances in which it was created, and the likely contribution of the documents to achieving justice in the second proceeding: Springfield Nominees Pty Limited v Bridgelands Securities Limited(1992) 38 FCR 217, 225.
23 The issues of fact which are the subject of the expert evidence are the same in both proceedings. The object of achieving a just result over both proceedings, as well as the objectives of O 1 r 4B, would be best attained by the documents being available to the parties in both proceedings.
24 The application has been made by the cargo action plaintiffs, and not Brookfield Rail which is subject to the undertaking. That does not alter the result, because the applicants will be entitled to seek discovery of the documents from Brookfield Rail.
25 The second part of the order sought is that Brookfield Rail shall provide copies of the documents to the cargo action plaintiffs. The applicants for the order recognise that issues of privilege may arise, but submit that a witness statement that has been served in another action is not subject to legal professional privilege. There are conflicting authorities on whether legal professional privilege (subject to limited waiver) attaches to an expert report when it has been served, but before it
(Page 8)
- is used in evidence: compare State Bank of South Australia v Smoothdale (No 2) Ltd and Australian Competition and Consumer Commission v Cadbury Schweppes Pty Ltd [2009] FCAFC 32. Neither Asciano nor John Holland made submissions on privilege. At this stage, none of the documents have been identified. To make an order in the terms sought, requiring Brookfield Rail to provide copies of all documents that were provided to it, would potentially preclude claims to privilege being made in relation to specific documents. I am not prepared to do that without those parties having the opportunity to make that claim in relation to specific documents, and without argument.
26 In my opinion, once Brookfield Rail is released from its undertaking, the normal process of discovery should follow. The list of documents should also be served on the parties in the Asciano action. They will be entitled to be heard on any claim to privilege of identified documents.
Attendance at the mediation
27 The Asciano action has been case managed towards an early mediation. That has been done with the co-operation of all parties. All of the parties in the Asciano action object to the cargo plaintiffs being present at the mediation, even as passive observers. In my view, they are entitled to mediate in confidence.
28 There is, in my opinion, a real prospect that the presence of the cargo action plaintiffs would hamper the mediation. First, the mediating parties may not wish to disclose information between themselves in the presence of third parties. While mediation is confidential, the confidentiality that attaches to statements made at mediation may not preclude a party from presenting objective evidence of facts, just because the party first learned of the existence of those facts at a mediation: 789TEN v Westpac Banking Corporation [2004] NSWSC 594 [29]; and see the limited terms of Supreme Court Act 1935 (WA)s 71.
29 Second, the Asciano action parties are entitled, should they reach a mediated settlement, to keep the terms of their agreement confidential, subject to any court order in later proceedings.
30 I am not, in any event convinced of the benefits of the cargo plaintiffs attending. They referred in submissions to the advantage of consistency. There is no principle requiring consistency in mediated outcomes in the same way that consistency of judicial determinations should be promoted. The parties to the Asciano action have ongoing
(Page 9)
- commercial relationships, and may be guided by factors other than their understanding of their respective legal positions.
Conclusion
31 For these reasons, I would make the first order, releasing Brookfield Rail from its undertaking but claims of privilege, if made, need to be determined in relation to specified documents.
32 I would dismiss the application for the cargo action plaintiffs to attend the mediation in the Asciano action.
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