Idoport v NAB

[1999] NSWSC 686

CITATION:	Idoport v NAB [1999] NSWSC 686
CURRENT JURISDICTION:	Commercial
FILE NUMBER(S):	50113/98
HEARING DATE(S):	25/06/99, 02/07/99
JUDGMENT DATE:	8 July 1999
PARTIES :	Idoport Pty Limited and Market Holdings Pty Limited - Plaintiffs National Australia Bank Limited, National Markets Group Limited, National Australia Financial Management Limited, Australian Market Automated Quotation (AUSMAQ) System Limited, Messrs G.L.L. Barnes, F.J. Cicutto, D.M. Krasnostein, K.F. Courtney and R.A. McKimm - Defendants
JUDGMENT OF:	Rolfe J

COUNSEL :	Plaintiffs - Mr J.J.J. Garnsey QC/Mr M.C.L. Dicker Defendants - Mr H.K. Insall
SOLICITORS:	Plaintiffs - Freehill Hollingdale & Page Defendants - Withnell Hetherington
CATCHWORDS:	Witness Statements - Claim for confidentiality such that they not be disclosed to certain parties - Rights of Parties - Purpose of Witness Statements.; Warner-Lambert Co v Glaxo Laboratories Limited [1975] RPC 354; Magellan Petroleum Australia Limited v Sagasco Amadeus Pty Limited [1994] 2 QdR 37; Ex parte Fielder Gillespie Limited [1984] 2 QdR 339 at p.341; Hadid v Lenfest Communications Inc & Ors (1996) 70 FLR 403 considered.
DECISION:	Claim for complete confidentiality rejected.

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

ROLFE J

THURSDAY, 8 JULY 1999

50113/1998 - IDOPORT PTY LIMITED & ANOR v NATIONAL AUSTRALIA BANK LIMITED & ORS

JUDGMENT

HIS HONOUR:

Introduction

1    Idoport Pty Limited, (“JMG”), and Market Holdings Pty Limited, (“Market Holdings”), for which Mr J.J.J. Garnsey of Queen’s Counsel and Mr M.C.L. Dicker of Counsel appeared, instituted these proceedings against National Australia Bank Limited, (“NAB”), National Markets Group Limited, (“NMG”), National Australia Financial Management Limited, (“NAFM”), Australian Market Automated Quotation (AUSMAQ) System Limited, (“AUSMAQ Systems”), and Messrs G.L.L. Barnes, F.J. Cicutto, D.M. Krasnostein, K.F. Courtney and R.A. McKimm, for which and whom Mr H.K. Insall of Counsel appeared.

2    On 3 February 1999 the plaintiffs filed a Further Amended Statement of Claim. I am presently concerned with two Notices of Motion filed on the plaintiffs’ behalf relating to the extent to which, if at all, access to several witness statements, including those of experts, relevant to the computation of the very substantial damages claimed by the plaintiffs in the order of some billions of dollars, should be given to some of the defendants; and the extent of discovery. In this judgment I shall consider the confidentiality issue, and, to understand what it raises, it is necessary to consider, albeit somewhat generally, the nature of the allegations made in the Further Amended Statement of Claim and certain agreements into which the parties entered.

The Further Amended Statement of Claim

3    I shall set out, firstly, some matters in the Further Amended Statement of Claim, which, relevantly for present purposes, are not materially in issue.

4    JMG and Market Holdings are, and were at all material times, controlled by Mr John Malcolm Maconochie. NMG and NAFM are, and were at all material times, subsidiaries of NAB, and AUSMAQ Systems has, since on or before 13 September 1996, been a wholly owned subsidiary of NMG.

5    Mr Barnes is the Executive General Manager, Business and Personal Financial Services, of NAB and has, since 11 December 1997, been a Director of NAFM. He was, until on or about 29 April 1998, a Director of and the Chairman of Directors of NMG and its wholly owned subsidiaries AUSMAQ Systems and AUSMAQ New Zealand Limited, (“AUSMAQ New Zealand”). Mr Cicutto is the Chief Operating Officer of NAB and, since on or about 9 March 1998, he has been a Director of NAFM. Since on or about 29 April 1998 he has been a Director and Chairman of Directors of NMG, AUSMAQ Systems and AUSMAQ New Zealand. Mr Krasnostein is the General Counsel of NAB, and since on or about 19 November 1996, 13 February 1997 and 23 January 1997 respectively, he has been a Director of AUSMAQ Systems, NMG and AUSMAQ New Zealand.

6    Mr Courtney and Mr McKimm have been Directors of AUSMAQ Systems since on or about 6 November 1996, and Directors of NMG since on or about 13 January 1997.

7    Prior to 1996 Mr Maconochie and Market Holdings developed and created an on-line, securities transaction, information and portfolio administrating and reporting service known as the “AUSMAQ Service”, and owned and controlled the various intellectual property rights for that service, including the Systems IP Rights as defined in a Consulting Agreement into which JMG entered with NMG, AUSMAQ Systems and NAB on 13 September 1996. The intellectual property rights, which are referred to in the pleading as the “AUSMAQ IP”, were licensed by Market Holdings in accordance with a Licensing Agreement to AUSMAQ Limited. This was sub-licensed to AUSMAQ Limited’s wholly owned subsidiary AUSMAQ Systems, which provided the AUSMAQ Service.

8    In paragraph 9 of the Further Amended Statement of Claim it is alleged, under the heading “Misrepresentations by NAB”, that in or about July, August and September 1996, Mr Maconochie, Market Holdings and Mr Peter Walker of Messrs Ferrier Hodgson, who had been appointed Voluntary Administrator of AUSMAQ Limited on 30 June 1996, participated in negotiations with NAB for the restructure of the Group of Companies “of which AUSMAQ Systems was a part and which were controlled by Mr Maconochie and Market Holdings”. It is alleged that in the course of those negotiations NAB represented to Mr Maconochie and Market Holdings, in relation to their entering into certain commercial transactions with it and NMG, that if those transactions were entered into NMG and its subsidiaries, including AUSMAQ Systems, would be organised and operated independently of NAB and not as a division of it; that NMG would be controlled by a management committee on which JMG would have two representatives with a right to attend and be heard, which management committee would determine and manage the affairs of the NMG Group; that the management committee of NMG would determine and be responsible for the development, operation and commercialisation of the AUSMAQ System throughout the world and for monitoring the performance of the business of NMG; that JMG would participate integrally in a planning process to devise the strategic correction and business plans of the NMG Group; that Mr Maconochie was critical to the success of the AUSMAQ Service and would be “effectively” the Chief Executive for a period of five years from November 1996 with various other requirements to enable NMG to undertake the commercialisation of the AUSMAQ business and the global exploitation of AUSMAQ IP and its potential; that the Performance Bonus to which JMG would be entitled under the Consulting Agreement was and would be equal in worth to a one third share in the equity of the NMG Group and would be struck on that basis; and that after seven years from the completion of the restructure, NAB could acquire JMG’s right to receive the Performance Bonus by payment to JMG of an amount nominated by NAB, which JMG could either accept, or reject and nominate its own price, and which NAB at its election could either accept, reject, or sell its share to JMG at twice JMG’s price.

9    By their Points of Defence, filed on 25 February 1999, the defendants deny that they made representations in the terms set out in paragraph 9 of the Further Amended Statement of Claim. Mr Maconochie will, accordingly, be a principal witness on the factual issue as to whether the representations were made.

10    The Further Amended Statement of Claim alleges that these representations were made by NAB in trade or commerce and, to the extent that each or any of them was as to a future matter, NAB had no reasonable grounds for making them. The plaintiffs also rely on s.51A of the Trade Practices Act and, inter alia, allege that the organisation, structure, and corporate culture of NAB did not, at the time the representation was made, and do not permit a subsidiary to be organised and operated independently of and not as a division of NAB. Suffice to say, for present purposes, that the essential allegations made by the plaintiffs in relation to the alleged misrepresentations and generally are denied.

11    In paragraph 10.6.2 of the Further Amended Statement of Claim it is pleaded that the Consulting Agreement has not been and is not being implemented, observed, administered or enforced by NAB and NMG, such that the Performance Bonus, to which JMG is entitled under it, is and will be equal in worth to a one third share in the equity of the NMG Group and will be struck on that basis, which allegation is denied.

12    It is pleaded, and once again denied, that, in consequence of the representations alleged, various agreements, including the Consulting Agreement, were entered into in consequence of which, inter alia, NMG acquired the AUSMAQ IP, and Mr Maconochie and Market Holdings procured JMG to comply with, to continue to comply with and to seek to continue to comply with its obligations under the Consulting Agreement. In these circumstances the whole of the issued capital of AUSMAQ Systems was transferred to NMG; the plaintiffs ceased negotiations with other interested parties and all activities aimed at locating other interested parties to develop and exploit commercially, with the aim of mutual profit, the AUSMAQ IP; and incurred substantial costs and expenditure to ensure the continued operation and viability of NMG’s business and the provision of the AUSMAQ Service and compliance by the plaintiffs with the various agreements into which they entered.

13    The Further Amended Statement of Claim then propounds the plaintiffs’ case in a number of ways, including obligations of NAB under a Guarantee of the Performance Bonus; implied terms in the Consulting Agreement; the existence of a fiduciary relationship between NAB and NMG, on the one hand, and JMG, on the other; breaches of contract and fiduciary duty by NAB and NMG; and participation and threatened participation by the various personal defendants in that conduct. It is pleaded that NAB and NMG acted in contravention of the Trade Practices and the Fair Trading Acts and the plaintiffs claim substantial damages. Put shortly, but I think sufficiently for present purposes, the defendants have denied all substantial allegations made against them.

The Consulting Agreement

14    The Consulting Agreement, (Exhibit 1 on the application), was entered into on 13 September 1996 between JMG, Valenti Pty Limited, (“the Company”), AUSMAQ and NAB. It defines “AUSMAQ Service” as:-

“.. the service of providing an automated securities trading system and related services known as the Australian Market Automated Quotation System or AUSMAQ System or EUROMAQ regardless of its name and includes but is not limited to, the holding of Securities and Entitlements for clients, the provision of a related deposit facility, execution of Securities transactions with related client portfolio administration and reporting and any service with equivalent or similar functionality, and any enhancements, modifications and additions to the service anywhere in the world.”

15    “Business plan” is defined as:-

“.. the latest business plan in respect of the operation, development and commercialisation of the AUSMAQ Service by the Group in respect of a financial year which has been delivered by the Company under this Agreement.”

16    “Confidential information” is defined as:-

“.. all information, knowledge, know-how, experience, expertise and designs which have been or in the future are disclosed (whether orally or in writing) by or on behalf of the Group or an Operating Entity in connection with this Agreement or which is otherwise obtained by JMG in connection with this Agreement or which is generated by JMG or any Consultant for the purposes of performing their obligations under this Agreement.”

17    “Group” is defined as:-

“The Company, System and any of their related bodies corporate from time to time who accede to this Agreement.”

18    Clause 3.1 imposes obligations on JMG to perform the services “ascribed to it in accordance with the provisions of this Agreement (including any Business Plan)”. The Services are stated as being ones which “may include, if so requested by any Authorised Officer” a range of services which, generally speaking, relate to the AUSMAQ Service and its promotion and utilisation. Clause 3.2 contemplates that other specific services could be required, and clause 4.1 provides for the preparation of business plans “regarding the operation, development and commercialisation of the AUSMAQ Service throughout the world”.

19    The Agreement contains a number of provisions to facilitate its operation and, in clause 7, provides for Performance Bonuses. These are additional consideration for the Services of JMG, and a detailed provision is made for their calculation.

20    Clause 11 deals in detail with the rights to software and data, and clause 12 contains a non-competition agreement. Clause 13 provides for the ownership of intellectual and industrial property, and clause 15 is concerned with the Purchase of Rights. It provides that after the seventh anniversary of certain specified events NAB may, any number of times but not more than once in any consecutive three months, initiate a process to purchase the rights by delivering to JMG a notice offering to do so and specifying the proposed purchase price. Within thirty days of receipt of such a notice, JMG is required to deliver a notice to NAB in which it either elects to accept or reject NAB’s offer and, if it rejects it, to specify a price at which JMG offers the rights to NAB. Within twenty one days thereafter NAB is required to deliver a notice to JMG in which it elects either to accept or reject JMG’s offer, and if it rejects it to offer the shares in the Relevant Operating Entity to JMG for an amount equal to twice JMG’s price, or to terminate the process without any transfer. Provision is made for resolving the situation in the event of a dispute.

21    Clause 16 deals with confidentiality and provides, inter alia, that JMG will hold the Confidential Information in strict confidence and not disclose any of it to any person save in certain stated circumstances.

22    Mr Garnsey has stated that JMG considers itself as still bound by the Consulting Agreement to perform the services for which it provides, and continues to do so. Thus the confidential information is to be shared with, among others, NAB.

The Guarantee

23    On 6 November 1996 NAB and JMG entered into an agreement entitled “Guarantee”, which was Exhibit E on the application. Under the definition of “Guaranteed Money” it is stated that it means all money which the Company, whether alone or with another person, becomes liable to pay to or for the account of JMG for any reason whatever under or in connection with clause 7 of the Consulting Agreement, being the payment of Performance Bonuses.

The Plaintiffs’ Case

24    It is sufficient, for present purposes, to note that the plaintiffs’ case is that it was induced by representations made by the defendants to enter into the Agreements to which I have referred, that the defendants have acted in breach of those Agreements and of their other obligations to the plaintiffs in the various ways pleaded and that, in consequence, the plaintiffs have suffered substantial damages. The plaintiffs seek to recover those damages and claim certain other relief.

25    Consistently with the practice in this List the plaintiffs have been required to furnish witness statements setting forth, inter alia, the way in which the claimed damages are computed. In due course the defendants will be obliged to file witness statements which will include statements relating to that issue. It is inconceivable that there will not be substantial disputes as to the methodologies adopted, the assumptions made and the quantum of damages. One significant reason for the provision of witness statements is to forewarn the other party of the matters in issue, so that they can be dealt with thoroughly at an evidentiary level at trial. Thus the true issues between the parties are exposed. Implicit in the procedure is the ability of the parties and their legal advisers to consider the witness statements properly and to reply to them fully. Prima facie, this can only be done if the party has access to the statements and is able to give proper instructions. Further, of course, the party, as a matter of procedural fairness, is entitled to know the case being made against him and to be in as good a position as possible to answer it. There are also assumptions, save in exceptional cases and circumstances, that the case will be heard in open Court and in the presence of the parties. Ultimately a judgment will be published, which, once again save for exceptional cases, will be available for all to read and it should set forth the reasoning process, which led to the conclusions. Finally, parties should be aware of the material to be deployed against them in advance of the hearing so that a compromise offer and settlement may be considered. All of this, if I may say so with respect, is well understood and deviations from the practice are only permissible in exceptional cases.

26    The method of computation of the damages, at least in part, is set forth in the Fourth and Fifth Statements of Mr Maconochie, which are Exhibits B1 and B2 on the application, the statement of Mr Ian David Joslin, which is Exhibit B3 on the application, and the statements of Mr Michael Christopher McLaren Hume, which are Exhibits B4 and B5 on the application. These are the only statements for which confidentiality is claimed. Mr Garnsey has submitted that these are all “expert” statements and, therefore, that they fall into a different category from statements dealing simply with facts. I do not agree that this is so and, in any event, in other statements Mr Maconochie is a witness as to matters of fact. His evidence in relation to those matters may well have to be considered in the light of his evidence in Exhibits B1 and B2 and vice versa.

27    Mr Garnsey stated that the application for confidentiality was in relation to employees, officers or agents of NAB, (“officers”), and the personal defendants, who are officers of NAB. He submitted that the plaintiffs were seeking to confine the reports to the legal representatives and expert witnesses of NAB and the officers and to an in-house legal officer of NAB, (but not Mr Krasnostein), to which legal representatives, expert witnesses and in-house legal officer access was to be given for the purpose of answering the allegations, but without taking instructions, save to the extent to which I shall refer, from NAB or the personal defendants or NAB’s officers.
28    In his oral submissions on 25 June 1999, at Tpp.17-19, Mr Garnsey stated the extent to which confidentiality was sought thus:-

“What we seek to prevent is what we see as the misuse of those statements by employees and officers of the National Australia Bank in relation to the business which the Bank says is the business of the Bank and there is dispute as to whether that should be the business of NMG. When I said we don’t object to NMG officers and executives having access or personnel having access, we say that with respect to persons who are also not employees or officers of the National Australia Bank.”

In his written submissions of 2 July 1999 he put:-

“1. The Plaintiffs submit that the contents of the documents the subject of the confidentiality motion, including the fourth and fifth statements of Mr Maconochie, contain confidential information. The confidential information consists, in summary, of an assessment of various components of markets in a number of countries around the world. Mr Maconochie has given evidence that he is not aware of such a study having been completed previously. It is submitted that the Court should infer that the study is detailed, comprehensive and a valuable one to potential competitors including NAB.
2. The fourth and fifth statements of Mr Maconochie provide expert opinions in relation to various markets. The statements provide expert evidence, not factual evidence relating to factual issues in dispute in the proceedings.
3. The Plaintiffs do not object to access being given to:
(a) NMG;
(b) a legal officer at NAB;
(c) counsel briefed in the proceedings for the Defendants;
(d) solicitors briefed in the proceedings for the Defendants,
subject to undertakings being given.
4. In the first instance it is likely that the legal advisers of the Defendant will form a view that the fourth and fifth statements of Mr Maconochie need to be considered by expert witnesses on behalf of the Defendants. That such decision is an appropriate one and the decision is an appropriate one and the likely one should be inferred from the contents of the statements.
5. If that view is expressed to the solicitor for NAB and through him to responsible officers at the NAB it should be inferred that that advice would be followed. At that stage it would not be necessary for persons other than a relevant legal officer at the NAB to have reviewed the statements.
6. The experts will then give their opinions on the matters contained in the documents sought to be made confidential. If in giving those opinions they form the view that factual instructions are needed in relation to certain matters then they will indicate the areas for factual instruction and the solicitor at NAB can make enquiries within the Bank as to the areas of expertise without disclosing the detail of the matters.
7. If it is necessary to disclose part of the documents sought to be made confidential to persons other than the NAB solicitor within the NAB then the solicitors on behalf of the Defendants can contact the solicitors for the Plaintiff. In such contact they can identify in general terms the areas where disclosure is sought to be made to persons other than the NAB in house solicitor and the identity of the persons to whom the disclosure is sought.
8. If such disclosure is limited to identified persons for identified reasons it is likely that the Plaintiffs would consent to it. The Defendants are protected by the ability to come back to Court to vary any confidentiality orders made for the purposes of disclosing further material to those in house NAB executives.
9. In our submission the above system is appropriate and workable.
10. It is to be noted that the Defendants did not take up the suggestion from the Court last Friday to provide a list of persons to whom access to the information is sought.”
……………
“1. The statements in respect of which a special regime for confidentiality is sought are expert statements and it is necessary normally that they be considered and met by other expert statements. The regime envisages complete access, subject to undertakings, of the defendants experts.
2. The defendants have not put on any evidence that access beyond that provided to independent legal representatives and expert witnesses in the regime is necessary for the purposes of obtaining or giving instructions.
3. The NMG Group is the party most directly concerned with the contents of the statements in respect of which the regime is sought and NMG’s chief operating officer and other employees under the regime sought have, subject to the provision of undertakings, complete access to the statements.
4. The statements in respect of which the regime is sought have the same quality as confidential commercial documents: they identify and examine addressable markets and ascertain the degree of penetration of which the AUSMAQ Service or any similar or equivalent service should have been capable by reference to an analysis of other market participants and market shares and by application of market theory and probable outcomes. The contents are therefore a prospective business plan for which the AUSMAQ Service or any similar or equivalent service , as NAB’s Maple Leaf and Independence One, viewed at the present time, which is preparatory to any more detailed business plan. The contents could also be used for the business activity of dealer groups and financial product suppliers, which are core business of NAB. This information would not be provided to such persons as customers. See Maconochie XXN 25/06/99 p15 line 35 to p16 line 45.”

29    Mr Garnsey submitted that the subject matter of the protection was that the statements contain novel market studies; i.e. studies which have not been done before in relation to the NMG and the AUSMAQ Service, and that when one looks at the contents, whilst some of it is publicly available, and some of it may or may not be in relation to concerns about the market share of AUSMAQ, the studies will be of direct benefit to NAB in respect of certain competing products it allegedly has, known as “Maple Leaf” and “Independence One”. Hence, it was submitted that NAB and its officers should not have access, other than through the indirect route I have noted.

30    The issue, accordingly, concerns the entitlement of the defendant NAB and its officers, who, of course, include the personal defendants, to have access to the statements, save to the very limited manner to which I have referred.

31    Mr Insall submitted that there was nothing novel in the statements such as to justify such a restrictive order; that, in any event, NAB was entitled to the information pursuant to the Consulting Agreement; and, more importantly for present purposes, that not only were the defendants bound by the implied undertaking as to the use to which the material could be put, but that they were entitled, as a matter of procedural fairness, to read the evidence sought to be used against them and they would be hampered in their preparation of the defence to the case if they were denied access to that evidence. Mr Garnsey’s response was that as these were expert statements the rights of the defendants denied access to them would be protected by a consideration of the statements by their own experts and legal advisers and the taking of such instructions as may be necessary, but under the supervision of the plaintiffs and/or the Court.

The Evidence Of Mr Maconochie

32    The evidence in support of the Notice of Motion for confidentiality was contained in two affidavits sworn by Mr Maconochie on 2 June 1999. Reliance was only placed upon paragraphs 1, 2, 3 and 65 to 68 of his longer affidavit. In paragraph 66 Mr Maconochie said he was concerned at the establishment and development of the Maple Leaf and Independence One Services, other than by NMG, and, after reading a press release of NAB, he wrote, on 4 May 1999, to a general manager of NAB and forwarded a copy of that letter to Mr Meikle setting forth those concerns.

33    In his shorter affidavit of 2 June 1999 Mr Maconochie referred to the reports in respect of which confidentiality is sought, and I admitted, subject to relevance, his evidence that he had spent “hundreds of hours preparing my fourth and fifth damages statements”. In paragraph 7 he said that having regard to the allegations made by the plaintiffs against the defendants he, as a director of the plaintiffs, had a considerable fear and concern that the material in those statements “if filed and served on the defendants without orders being made by the Court in terms of the Notice of Motion filed on 1 June 1999 … relating to confidentiality undertakings” would probably be misused “by the defendants, or some of them, or otherwise used solely for the commercial interests of the defendants, or some of them”. I find this last statement difficult to accept as, clearly enough, one purpose of using the statements would be to marshall evidence on the damages issue.

34    In the first sentence of paragraph 8, which I admitted subject to relevance, he said:-

“As far as I am aware, the analysis performed in the various reports referred to in paragraph 5 above is the first analysis of its type performed in the world relating to the development, marketing, commercial exploitation and work of the AUSMAQ System or any system having similar or equivalent, to any degree, functionality to the AUSMAQ System.”

I rejected the next sentences and admitted the following sentence subject to relevance:-

“They would also benefit and be of use to third parties who are or might be competitors of the AUSMAQ Service.”

I admitted the final sentence to establish that Mr Maconochie has the fear to which he referred in it, but not as evidence of the truth of the facts alleged therein: Tp.2. That sentence reads:-

“I fear if access to the various reports is not carefully restricted within NAB Group as sought in the Notice of Motion, especially in view of the size of the NAB Group and the number of its relevant employees, to whom the various reports could otherwise be shown, the confidentiality and value of the reports to JMG may be lost irretrievably.”

35    Mr Maconochie was cross-examined.

36    He said, Tp.5, that so far as he was aware JMG is complying with the terms of the Consulting Agreement “fully”, and that that is JMG’s only activity by which it is obliged to devote full time service to the performance of the Consulting Agreement. It would appear that this compliance could lead to certain of the material in the witness statements being made available to NAB and its officers in any event.

37    At Tp.6 he said he had examined the material in the five statements in respect of which the claim for confidentiality was made, and asserted that it is confidential to JMG.

38    He was taken to various portions of the statements, but it became clear that the claim for confidentiality, whether the information was inherently confidential or not, was based upon all the information in each statement being “confidential” irrespective of whether some of it was in the public domain, because it was the way in which the material was set out or drawn together to enable conclusions to be reached. It must, however, be borne in mind that these exercises were undertaken for the purpose of preparing witness statements specifying the claim for damages. There is no suggestion that any of them were prepared as working documents of the plaintiffs in the ordinary course of their business. Further, it is arguable that they contained information to which the defendants are entitled in any event pursuant to the Consulting Agreement with which the plaintiffs claimed to be conforming. His position was made clear by the following evidence, Tpp.10-11:-

“A. If you are asking me whether other people may not have the information on that page, I cannot say. All I am saying is that that page was provided to JMG as part of a confidential statement. Now, as to whether - it may well have been provided, the information, whether or not in that form, may well have been provided to other people for other purposes, but that page was provided to JMG as part of a confidential report for the particular purposes of this statement.”

39    Subsequently, at Tp.11, he said:-

“A. Mr Insall, I am sure that if I went through, as on the page of page 2 that you have just asked me, that much of that information may well have been provided by Mr Joslin to other people, and as such is not confidential per se, and that other information in his report, which relies on published figures, is not confidential per se because it is available publicly. What I do say is that the assembly of all that information in one report, in the format and the context in which it is presented, is confidential information. Now, that is not to say that the sources of the information or the information per se in which the report is based isn’t, itself, confidential, and that applies equally to the page 2 that you have been asking me about.
Q. Can you identify in the report any information whatsoever which is confidential to JMG?
A. Sir, the entire report in the context, in the form in which it is presented, is confidential to JMG. It is not available to any other person, except to JMG, and therefore it is all confidential to JMG. As I have just said, to the extent that sources, public sources of information which are identified in the report, throughout the report, are public information, that information is public.”

40    At Tp.12 he said:-

“What I am saying, Mr Insall, is what is confidential about this report is that it has been formulated and presented and it is drawn from sources, either public or non-public sources, and assembled in the one spot and, therefore, the entire report is confidential, even though some aspects of it may be based on public information.”

41    Mr Insall cross-examined Mr Maconochie about the obligation of JMG to prepare business plans, which would deal with certain of the matters referred to in the statements and, in particular, the growth of the AUSMAQ System overseas. This led to an argument as to breaches by the defendants of their obligation to fund the business plan, but not to one about the furnishing of that information pursuant to the Consulting Agreement.

42    Further cross-examination of Mr Maconochie disclosed that much of the material in the statements was derived from other sources in which there did not appear to be any particular confidentiality, the point of Mr Maconochie’s objection being encapsulated in his concluding answer in cross-examination, Tp.24:-

“But the fact that we have used certain techniques, together with the research and the other methodology that has been employed in reports, particularly reports filed, is confidential. One might not know, for example, whether those were relevant or were not relevant or applicable or how or might be used. I regard that as very confidential.”

Once again, at the risk of being repetitive, I note that the statements were prepared for a very specific purpose. They are not confidential business records of the plaintiffs, which have been discovered or produced pursuant to a subpoena or notice to produce. They are the proofs of evidence prepared for the express purpose of supporting the plaintiffs’ claim for damages, and to which the defendants are obliged to reply if they wish to contest that claim, which, I am prepared to infer from the pleadings, they do. Further, the legal advisers are, prima facie, entitled to the benefit of full instructions to enable full answer to be made to the witness statements and the makers of them to be cross-examined as effectively as possible.

43    At Tpp.25-26 Mr Maconochie said:-

“I have seen reports which deal with all the elements which I consider are necessary to do the analysis and I have used as many of those as I could find and use in the time available, so that the various reports, such as the Cerulli reports or the book that counsel referred to, which is publicly available, is a matter of knowing in this particular service and as far as I know there is not, and the report sets out why, there are not these services in the world and the reasons why certain people, certain corporations, would find it attractive on the one hand to develop them and not attractive on the other. But I have not seen a study where the available market information and the trends that have been measured in the marketplace by research houses have been put together in the one spot to evaluate a service such as the AUSMAQ Service and it is the - the information in these reports could be used to either build a competitive service or to provoke someone or stir someone into developing such a service, or they could be used by better net providers or, as I have called them, a broker/dealer or a product service supplier. And those two activities, those two activities are included in the activities with which the Bank and its executives are actively involved in every day. I have not seen this information in the one spot before, I don’t believe the Bank has that information.”

44    This evidence points up the difficulty the present application confronts. The plaintiffs wish to say that the damages are calculated by adopting that methodology, but they wish to deny certain of the defendants the opportunity of considering that claim for damages, as expressed in the statements, for themselves, and furnishing their legal advisers and experts with instructions based on mature consideration of them.

The Problem

45    The witness statements under consideration are ones whereby the plaintiffs seek to assert the basis on which they claim damages. In the fulness of time they will be answered and, on the hearing, subjected to objections and cross-examination. The ability for those representing the defendants to exercise those rights depends on them and qualified experts obtaining full and proper instructions. Efficiency in the administration of the case demands that that occur with the minimum of delay and impediment. Prima facie, litigants are entitled to full access to evidentiary material sought to be deployed against them. In circumstances where that information is of a confidential, and hence commercially sensitive, nature the Court can give directions confining the extent to which and to whom it may be disseminated. However, in doing so the Court must have regard not merely to the confidentiality or commercial sensitivity of the information, but also of the basic right of the party against whom it is tendered to have every reasonable opportunity to answer it fully. Prima facie, the restriction that only an “in-house” legal officer of NAB, in addition to NAB’s legal advisers and expert witnesses, may have access to the statements, on the basis for which Mr Garnsey contends, places an undue restriction upon the officers of NAB required to answer them or to furnish instructions such that the statements may be answered as effectively as possible. This is made clear when the lengthy statements are considered. They purport to be inter-related, they contain references to other statements and reference works, and they set forth tables and graphs. Any attempt to obtain instructions in the manner suggested by Mr Garnsey would not only be a most arduous task, but it may well be quite misleading to the defendants if they do not have the opportunity of assessing the context in which the matter about which they are asked to give instructions appears. It would certainly impair the furnishing of full instructions.

46    It seems to me it is necessary to consider, although briefly, each statement. The Fourth Statement of Mr Maconochie says, in paragraph 1.2:-

“I make this statement to the best of my present recollection, information and belief, but may seek to supplement it or correct it should that be necessary in light of fuller documents or information not presently available to me and material to this statement.”

Whilst this may be an understandable reservation, it hardly points to any inherent worth in the information which is said to be confidential. If Mr Maconochie has no greater confidence in it, the claim for confidentiality becomes highly suspect.

47    Paragraph 1.3 states that the information in the statement, and the documents referred to in it, are both confidential and commercially sensitive information “of or concerning JMG, NMG, and/or NAB”, and that the plaintiffs wish to maintain confidentiality and to seek Court orders in aid thereof. It is difficult to see why, if the information is of or concerning inter alia NAB, NAB and its officers are not entitled to it. Rather this would seem to provide an additional reason why it should be.

48    In paragraph 4 Mr Maconochie sets forth the purpose of the statement in the following terms:-

“4.1 To set out or exhibit financial calculations and information concerning the actual, projected and/or potential revenue and cash flows of NMG, and of certain NAB services (for example, the Maple Leaf and Independence One Services) which JMG contends are similar or equivalent services to the AUSMAQ Service for the purposes of the Consulting Agreement and the associated rights of JMG which can be relevant to its claims in these proceedings.
4.2 To state what, in my opinion, is or should have been the nature and relevant aspects of the actual, contingent or potential assets of NMG and JMG represented by the provisions of the Consulting Agreement concerning the buy out of the Performance Bonus rights of JMG; and the related rights of JMG under that Agreement, as assumptions to be made for the purposes of valuation of those assets and the ascertainment of the value or worth of business opportunities lost to NMG by reason of failure to exploit the AUSMAQ Service, and whether a value can be attributed to those assets and lost opportunities.
4.3 To state what, in my opinion, is the basis for the value and for the valuation of the actual, contingent or potential assets of NMG and JMG in relation to the Consulting Agreement and the buy out of the Performance Bonus rights of JMG and the related rights of JMG under that Agreement and to state what, in my opinion, is the basis for the value or worth and for the valuation of business opportunities lost to NMG by reason of failure to exploit the AUSMAQ Service, and the value which can or should be attributed to those assets and lost opportunities.
4.4 To state what, in my opinion, is or should have been the nature and relevant aspects of the actual, contingent or potential assets of NMG and JMG represented by the provisions of NAB’s Guarantee in relation to the Performance Bonuses payable under the Consulting Agreement, as assumptions to be made for the purposes of valuation of those assets, and the ascertainment of the value or worth of business opportunities of NMG by reason of failure to exploit the AUSMAQ Service, and whether a value can be attributed to those assets and lost opportunities.
4.5 To set out what, in my opinion, as a result of my experience and knowledge of JMG and NMG and the NMG Group, and the AUSMAQ Service, the System IP Rights, and my understanding of the Consulting Agreement, the NAB Guarantee of the Consulting Agreement and the other related Agreements are the relevant factors, and the appropriate and proper rationale and methodology for the valuation of JMG’s and NMG’s rights and actual, contingent or potential assets under or in relation to the Consulting Agreement, the AUSMAQ Service, the System IP Rights, the NAB Guarantee of the Consulting Agreement and other related Agreements and the ascertainment of the value or worth of business opportunities of NMG by reason of failure to exploit the AUSMAQ Service.
4.6 To place a value on assets and lost opportunities to the extent I am able and competent to do so, or to provide a basis for other expert witnesses so to do.
4.7 To provide the information therein to certain other expert witnesses for JMG in these proceedings for the purposes of their providing their opinion in relation to certain issues in these proceedings.” (My emphasis.)

49    I have set out the purposes in extenso, because it seems to me that once they are understood the importance of officers of NAB and the personal defendants having access to the statement is made clear. Central to a number of those purposes is the position and potential liability of NAB and the personal defendants. This is propounded in the context of Maple Leaf and Independence One Services as to which, according to the evidence, Mr Maconochie obtained confidential information.

50    The statement proceeds for one hundred pages. It contains assumptions, calculations, opinions and conclusions. In a number of respects it is argumentative. It seeks to set forth the issues as Mr Maconochie perceives them and to express his views, opinions and conclusions about those matters. The amount of damages claimed is set forth in paragraph 6.3 and is a very large sum. Whilst the amount in issue should not dictate the appropriate principles to be applied, when it is some billions of dollars it is obvious that the Court must ensure that the defendants are not, save for very good reasons, precluded from knowing the allegations they are required to answer and being able to do so as fully as possible. Anything less would be a serious denial of procedural fairness. An adverse conclusion to the defendants in this litigation would be financially ruinous to them. It is unthinkable that such a possibility could be brought about because the defendants could not consider the evidentiary material sought to be used against them properly.

51    It may be that, if objection is taken, portions of Mr Maconochie’s Fourth Statement will be held to be inadmissible. Many of the conclusions and opinions he expresses may be thought to be either matters in respect of which he has no relevant expertise or matters for the Court’s determination. The argumentative nature of the statement may be thought to go far beyond putting forward matters necessitating expert opinion and to travel into the area of the interpretation of documents relevant to the present situation. Whilst, at this stage, I am not ruling on the admissibility of the statement, it is not inappropriate that regard should be had to those matters when a claim for confidentiality is being made. Further, the tactics at trial may, depending on full instructions, mean that no objection is taken to some portions of such material to allow cross-examination on it. Such a tactical approach, particularly in a case of this nature, could only be taken on instructions from the clients, which instructions would demand an understanding of the witness statements.

52    An example of material, the prima facie admissibility of which may well be in issue, appears in the last three sentences of the fourth paragraph of paragraph 9.10.2, and the first two sentences of the fifth paragraph of that paragraph. That is followed by the following sentence:-

“I therefore consider it reasonable to make the simplifying assumption for the purposes of projecting a parallel growth rate in the gross operating revenues in NMG’s projections … that a similar rate of growth can be assigned to both the retirement and individual asset market places.”

53    A substantial part of the statement refers to information which is within the knowledge of the defendants. Also there are a number of tables and graphs, which can only be considered, in my opinion, by the personal defendants and officers of NAB looking at them in the context of the material concerning them. It would, in my opinion, be quite impossible for the legal representatives and experts to obtain instructions in relation to this statement by simply reading it and formulating questions, which seem appropriate from such a reading. The most obvious way to take instructions is to ask the party what he or she says about the matters raised. In that way the clients, with their own knowledge of the matter, are able to put to their legal advisers and experts points they think are worthy of consideration, and which otherwise may not have occurred to them.

54    A further example, and much of what I have said is only intended as exemplifying the difficulties, occurs in paragraph 12.7:-

“In my opinion, based on the growth performance of the NAB over the past five years (19% pa compound) and the NAB’s objective to double the share price in five years (15% pa compound), a (sic) this is a reasonable basis on which to project growth in the future in 2003 and beyond. In my opinion therefore, a growth rate of … past …. in the gross operating revenues of Maple Leaf and Independence One is a reasonable assumption to make in projecting cash flows for those services past ….. I refer to paragraphs 13.2 and 13.5 below.”

Those paragraphs refer to certain information said to support the assumptions.

55    I shall leave aside for the moment the admissibility of much of what is in the statement. Having read it I am of the opinion, for the reasons to which I have referred, that it is not a statement which is relevantly confidential, in the sense that access should be restricted in the way for which the plaintiffs contend. Nor do I consider that the plaintiffs have shown that the prima facie position in relation to a witness statement, particularly in the present context, should not apply.

56    The Fifth Statement relies upon the purposes to which I have referred and one further purpose. It is a very lengthy statement and follows, to a large extent, the form of the Fourth Statement in setting forth assumptions, conclusions and opinions. It draws heavily upon various texts and, in particular, one by J. Hagel from which it quotes extensively. In paragraph 9.8 it is stated:-

“I refer below to a number of quotes, charts and diagrams from this book which, in my opinion, can be applied to or in relation to the AUSMAQ Service and the matters considered in this statement.”

It is only necessary to have regard to this to appreciate the difficulty which would be experience by anyone seeking to take instructions from the defendants and officers of NAB, who would be required to have before them the work from which Mr Maconochie worked, the statements made by Mr Maconochie from that work, his commentary on them, and the ultimate conclusions and opinions drawn by Mr Maconochie. In my opinion, the remarks I made in relation to the Fourth Statement are equally applicable to it.

57    Mr Joslin’s statement of 19 April 1999, Exhibit B3, is aimed at assessing the damages caused to an entity by the delay in beginning operations in Europe. Once again the amount assessed is very large and, under the heading “Objective”, Mr Joslin states in paragraphs 3.1 and 3.2:-

“3.1 The initial objective of this report is to give an opinion on the likely revenues the National Markets Group (NMG) would have earned from its operations in the European investment market had the original business plans produced by JMG been implemented in full.
3.2 A further principal objective of this report is to give an opinion as to the extent to which NMG’s prospects have been damaged by the delay that has occurred in developing the business in Europe.”

58    Mr Joslin states that his analysis consists of answering the following five questions:-

“To what extent was the target market ready for automation?
To what extent could the structure and nature of the target market facilitate market entry by NMG?
How attractive would AUSMAQ/EUROMAQ have been to the marketplace?
What is the size and composition of the market likely to be by 1 January 2004?
What market share could NMG have achieved by 1 January 2004 and what is the likely annual gross income it could have generated?”

59    Mr Joslin states that by answering those questions he would calculate a range of the annual gross earnings (if any) that he estimates AUSMAQ/EUROMAQ could have earned from the UK market if the original business plans had been implemented.

60    Mr Joslin set out certain other matters he was considering and the assumptions on which he proceeded. He then commenced to answer the questions to which I have referred.
61    I think it necessary to say immediately that Mr Joslin’s statement, which runs to some thirty four pages and has a number of appendices, is structured more as an expert’s report than the statements of Mr Maconochie. If I may say so with respect, it is a very helpful document in determining the extent to which confidentiality should be given to it and the other statements because it sets forth the various factors which, in my opinion, the plaintiffs would probably have to establish in the course of seeking to prove the amount of damages to which they may be entitled. However, in reading the statement it becomes clear that Mr Joslin is relying upon an application of statistics and information available to him from which he has drawn various conclusions. As Mr Maconochie conceded, and a reading of the statement bears out the correctness of this concession, there is no inherent confidentiality, or confidentiality “per se”, in this material. Mr Joslin has used the material to calculate damages by the methodology he has adopted and, at the conclusion of his report, he expresses an opinion, based on an assumption that had EUROMAQ been launched earlier, what it could reasonably be assumed would have been the growth in its annual gross income.

62    In my opinion there is nothing inherently confidential in this material, and it seems to me that for NAB to be in a position to respond appropriate officers of it should have access to the report. The same applies to the personal defendants. As I have said, it is a quite lengthy report and it is very detailed. The proposition that instructions should be taken in the way submitted by Mr Garnsey is not, in my opinion, a fair method of taking instructions in relation to the statement. Nor do I consider that a case based on confidentiality has been made out.

63    The first statement of Mr Hume, for which confidentiality is claimed, is his second: Exhibit B4, Mr Hume’s expertise is in the provision of consultancy services. He sets forth, in paragraph 3.2, a summary of twelve conclusions he reached, concluding that he could not precisely quantify the loss to NMG, and consequently to JMG, occasioned by the former’s failing to pursue the operations. He expanded on this.

64    In paragraph 4 he sets forth characteristics of the AUSMAQ Service, and states that it has two extremely important attributes that make it unique, which he identifies.

65    In paragraph 4.9 he sets forth the position of NMG after entry into the Restructuring Agreement and the Consulting Agreement.

66    In paragraph 5 he deals with a different matter and, in paragraph 6, with the variety of markets to which the AUSMAQ Service and the AUSMAQ IP can be applied both in Australia and overseas.

67    In paragraph 7 he considers another business and some historical data and, in paragraph 8, he suggests the extent to which the global transaction markets of AUSMAQ System and AUSMAQ IP could compete.

68    In paragraph 9 he deals with the loss of opportunity and, as with Mr Maconochie’s statements, he sets forth certain opinions without, perhaps, stating the bases on which they can be substantiated.

69    In paragraph 10 he states that he has read Mr Joslin’s statement of 19 April 1999 and that he agrees with his conclusions on the damage to NMG’s and JMG’s commercial interests in certain markets. This bald assertion highlights the importance of being able to take full instructions in relation to Mr Joslin’s statement. In paragraphs 10.4 to 10.8 Mr Hume sets forth various generalisations, and he does not condescend to any particularisation in monetary terms. In his second statement of 9 June 1999, Exhibit B5, he sets forth his expertise and his own view of his qualifications. In paragraph 3 he refers to some discussions he had with Mr Maconochie and certain advice he gave Mr Maconochie without specifying the nature of that advice. In paragraph 4 he states that he had seen a copy of paragraph 11 of Mr Maconochie’s Fifth Statement and:-

“Mr Maconochie’s application of probabilities to determine the probable (‘expected’ in statistical terms) loss to NMG, and consequently to JMG, set out in paragraph 11 of his proposed Statement Five is correct and in accordance with standard actuarial and statistical practice.”

This assertion of correctness, which it may be thought is a matter for the Court, none-the-less requires Mr Hume’s statement to be read with Mr Maconochie’s.

70    In my opinion there is nothing inherently confidential in either of Mr Hume’s reports, which confidentiality and, if it exists, commercial sensitivity, cannot be accommodated by the giving of appropriate undertakings and the implied undertaking.

The Law

71 Both parties relied on the decisions of the English Court of Appeal in Warner-Lambert Co v Glaxo Laboratories Limited [1975] RPC 354 and the Queensland Supreme Court of Magellan Petroleum Australia Limited v Sagasco Amadeus Pty Limited [1994] 2 QdR 37, in each of which the Courts sought to balance the rights of the parties by having due regard to the confidentiality or commercial sensitivity of information upon which one party wished to rely against the other, and the right of the other to properly repulse the case thereby sought to be made against it.

72    The first decision concerned an alleged patent infringement and, accordingly, the confidentiality of the manufacturing processes pursuant to which certain material was produced. It was recognised that the parties were competitors “in a highly competitive market”. It is necessary to stress that in the present case Mr Garnsey submits that the proper inference to be drawn is that NAB is acting as a competitor through Maple Leaf and Independence One, notwithstanding his further submissions that the plaintiffs are seeking to comply with the Consulting Agreement. The consequence of the latter submission is, of course, that NAB and its officers become entitled to certain information conformably with the terms of that Agreement. This leads, to some extent, to the conclusion that the effect of competition and confidentiality associated with it, (assuming for the moment that Mr Garnsey’s submission as to competition is correct), is of far less significance than it may otherwise have been. Further, so it seems to me, the mere fact of competition cannot, of itself, clothe documents sought to be used against another party with confidentiality such that the other party cannot answer them effectively.

73    At p.358 Buckley LJ said:-

“None of these cases purports to lay down a form of order suitable for universal use. Nor, I think, does any of them indicate that the Court might not in appropriate circumstances at a later stage in the action have directed disclosure to a wider class of persons or on different terms. In my judgment, the Court must in each case decide what measure of disclosure should be made, and to whom, and upon what terms, having regard to the particular circumstances of the case, bearing in mind that, if a case for disclosure is made out, the applicant should have as full a degree of appropriate disclosure as will be consistent with adequate protection of any trade secret of the respondent.”

74    At pp.359-360 his Lordship continued:-

“The Judge was, as it appears to me, concerned to ensure that the plaintiff company, in the person of some responsible officer, should have an opportunity not only of being advised by technical experts and legal advisers, but of knowing the facts on which that advice was founded, so as to be able to form a personal judgment on how to deal with the action. There are obviously strong arguments in favour of a party to litigation being enabled so far as possible to chart his own course in the light of professional advice. It is right, however, I think, to say that in the present case there is a particular circumstance which complicates the problem. The processes patented by the plaintiff and the process employed by the defendant are such that it is impossible to discern, by analysis or otherwise, from the product of either how it has been made - that is, which of a number of possible chemical processes has been employed. This would make it, as I conceive, virtually impossible to police any terms imposed in the use of such information as is disclosed; and this would be even more so, having regard to the fact that the plaintiff operates outside this country and that the individuals to whom the plaintiff wants disclosure to be made are all resident outside the jurisdiction. This should, in my opinion, make the Court particularly careful not to expose the defendants to any unnecessary risk of their trade secrets leaking to any competitors.
If in a particular case it is right that disclosure of any facts should be made by one party to his opponent’s advisers before trial, it must normally follow as a matter of course that the opponent should be entitled to know the facts so disclosed. His advisers are his agents in the matter and strong grounds must be required for excluding the principal from knowledge which his agents properly require on his behalf.” (My emphasis.)

Whilst the present situation is far removed from a patent case, there is an analogy with the capacity to analyse, for in this case the plaintiffs’ claim, in essence, is that it has performed that task in relation to readily available non confidential information. Not only are the defendants entitled, on any view, to see how that has been done, but they could also, at least arguably, carry out the same task. Further, as his Lordship said, “strong grounds” must exist to preclude the principal from his agent’s knowledge.

75    His Lordship observed that the principle must be subject to some modification in relation to the protection of trade secrets, and continued:-

“Its” (the plaintiff’s) “legal and expert advisers are for the relevant purpose its agents to acquire knowledge but they are not authorised to make any major decisions on the company’s behalf such as, for instance, a decision whether to continue or abandon the action. Such a decision should be made by the company, not by its legal advisers, and still less by its scientific advisers. It must be made by a duly authorised officer or agent or body of agents such as a managing director or the board of directors of the company.”

In the instant case there has not been demonstrated by the plaintiff, to my satisfaction, any reason why the modification for which Mr Garnsey contends should be applied.

76    In Magellan Petroleum White J was concerned with the question of discovery of certain documents, which had come into existence in the course of an attempted takeover offer. At p.38 her Honour said:-

“The essence of Sagasco’s submission is that it is entitled to an order restricting disclosure of these documents to counsel and litigation solicitors because, notwithstanding the implied undertaking not to use for any collateral purpose the documents obtained on discovery, knowledge once gained will necessarily influence the controllers of Magellan and their advisers in informing and/or advising their shareholders about a future takeover offer by Sagasco. Sagasco argues that the takeover will proceed after the present litigation is concluded. Magellan submits that it may not.”

77 Her Honour then quoted from the judgment of McPherson J in Ex parte Fielder Gillespie Limited [1984] 2 QdR 339 at p.341, in which passage his Honour noted that the Courts have to strike a balance between the right to discovery for the purpose of the litigation and the interest in maintaining confidentiality in secret processes that may be used for purposes of competition.

78    After a consideration of further authorities White J concluded, at p.43:-

“I have concluded that the subject documents are directly relevant to some of the matters in issue between the parties in the litigation and that certain aspects of them can be characterised as commercially sensitive such as to attract the discretion of the Court to make an order for restricted disclosure. They are not of a technical nature such that Magellan’s officials could form no complete evaluation of them without the assistance of experts such as is often the case with trade secrets. It is highly undesirable that litigation solicitors and counsel should be left without the benefit of instructions from the client, particularly in a situation as here where the issues are much more subtle than a question of, for example, an infringement of a technical process . This does not mean that the balancing process requires general disclosure.” (My emphasis.)

I respectfully adopt her Honour’s conclusions. However, it seems to me, that in the present case they apply with even greater force.

79    As I have stated, on several occasions, the witness statements were not brought into existence as part of the confidential information utilised in the plaintiffs’ business, but to provide the basis on which the plaintiffs claim a vast amount of damages. Secondly, it is not suggested that much of the material in the documents is not in the public domain or, if not in the public domain, not known to the defendants, nor that it could not be similarly analysed by the defendants. Thirdly, as I have noted, the objection to the production of the material is that it brings together certain information, which is readily available, but in a form for which the plaintiffs seek to claim confidentiality because such material has not been brought together in that form previously. However, that exercise has been undertaken for the purpose of seeking to justify the Court in awarding the substantial damages the plaintiffs are seeking. Fairness in the administration of justice demands that all defendants have access to the witness statements.

80 In Hadid v Lenfest Communications Inc & Ors (1996) 70 FLR 403 Hill J considered the question in relation to discovered documents and having regard to ss.23 and 50 of the Federal Court of Australia Act 1976. I should note that neither party contended that my decision rested on any statutory provision. There was no argument that the Court has not the necessary jurisdiction, the issue being whether, for present purposes, it is appropriate to exercise it.

81    An issue in Hadid was the calculation of damages allegedly suffered by Mr Hadid, on which issue expert evidence had been adduced by the respondents based to some extent on discovered documents sought to be concealed from him. The basis for that was that he was said to be a competitor and that the information in the documents could be used disadvantageously to the respondents.

82    At p.406 his Honour said:-

“Whatever the source of power to deny access to documents otherwise relevant to the proceedings, two policy considerations govern the exercise of that power. First, is the concern of the Court to promote and ensure open justice. As Gibbs J (as he then was) said in Russell v Russel (1976) 134 CLR 495 at 520, albeit in the context of the holding of proceedings in camera:
‘It is the ordinary rule of the Supreme Court, as of the other courts of the nation, that their proceedings shall be conducted “publicly and in open view” … This rule has the virtue that the proceedings of every court are fully exposed to public and professional scrutiny and criticism, without which abuses may flourish undetected. Further, the public administration of justice tends to maintain confidence in the integrity and independence of the courts. The fact that courts of law are held openly and not in secret is an essential aspect of their character. It distinguishes their activities from those of administrative officials, for “publicity is the authentic hallmark of judicial as opposed to administrative procedure” …”
Secondly, is the requirement, as a matter of procedural fairness, that a party to proceedings has prima facie a right to access all documents properly discovered or produced before trial and all material in evidence at trial. That right may be qualified in a number of ways, for example it may be defeated by a valid claim of legal professional privilege or public interest immunity. Relevant to the present case it may be qualified if, on balance, the interests of justice require such a qualification. However, generally speaking it may be said that it is fundamental that a party to a proceeding know the case sought to be made against him or have access to material which would enable him to respond to that case.
However, as Lord Keith observed in Harman v Home Office [1983] 1 AC 280 at 308, in a passage cited with approval by Spender J in Mackay Sugar Co-operative Association Ltd v CSR Ltd (1996) 63 FCR 408 at 412:
‘Discovery constitutes a very serious invasion of the privacy and confidentiality of a litigant’s affairs. It forms part of … legal procedure because the public interest in securing that justice be done between the parties is considered to outweigh the private and public interest in the maintenance of confidentiality.’
Thus, where an application for confidentiality is made, consideration must be given both to the public interest in open litigation and the private interests of those affected by the litigation, be they parties or persons subpoenaed.”

At p.410 he said:-
“The inspection of documents discovered is an inseverable part of the process of discovery. Frequently, perhaps indeed almost always, the party to the litigation will be the person best placed to form an assessment of the real significance of documents produced, whether that assessment is made for the purposes of preparing an ultimate trial or for the purpose of prospective settlement negotiations. Thus there is a clear prima facie right in a party to litigation personally to inspect discovered documents. It is a far from satisfactory answer to the abrogation of this prima facie right, that the legal adviser to the party may be permitted to inspect the document, for that adviser is, if the client is restricted from inspecting the material, placed in the difficult and indeed sometimes impossible position where he or she cannot obtain instructions .
This prima facie right of a party to litigation to inspect documents discovered by another party is related to the obvious right of a party to litigation to be apprised of the case which is put against him. It is part of the principles of procedural fairness which are applied daily in our courts.
Where confidentiality in documents is made out the prima facie right to inspect discovered material and the prejudice to the party against whom an order denying access is sought, have to be weighed against the degree of confidentiality made out and the prejudice to the person seeking confidentiality, if that confidentiality should be breached.” (My emphasis.)


Conclusions

83    For all the reasons I have sought to explain it would be, in my opinion, highly inconvenient and, to that extent, prejudicial amounting to procedural unfairness, to NAB, its officers and the personal defendants not to have access to the statements which, as I have sought to explain, require a careful reading with other documents and with the information incorporated in them.

84    I am not satisfied that the plaintiffs have established their claim for confidentiality as against NAB, its appropriate officers and the personal defendants. Nor am I satisfied that unless less restricted access, than that for which the plaintiffs contend, is granted to the statements it will be possible for the legal advisers and experts retained on behalf of NAB and the personal defendants, (and I have not overlooked that there is no objection to their seeing the witness statements), obtaining proper instructions. In my opinion, it would be quite inimical to the purpose of the exchange of witness statements to restrict access in the manner suggested by the plaintiffs.

85    The suggestion that the legal representatives of the defendants should have to make known to those of the plaintiffs the areas, even in a general way, in respect of which instructions are being sought is, in my opinion, an impermissible infringement on the right of the defendants to conduct their case as they see fit. Even general information would alert the plaintiffs to areas on which the defendants were focussing, and provide a clue as to the course being followed.

86    On the other hand I consider that it is appropriate to provide for some element of confidentiality and that, at least in the first instance, the parties should be subjected to undertakings as to confidentiality in addition to the implied undertaking. This will preclude unfettered dissemination of the witness statements, without denying the defendants the right to consider them properly and furnish proper instructions. I consider that NAB should nominate the officers whom it wishes to have access to the witness statements, at least in the first instance, and consideration can then be given to the obtaining of appropriate confidentiality orders from them. I have in mind, for example, that such officers should be provided with copies of the statements on the basis that they do not take further copies or disseminate the information in the copies with which they are provided to other officers of NAB save, of course, for those to whom they are furnishing instructions and, further, that at the conclusion of the proceedings the statements be returned. In making the last observation I appreciate that by that stage it is highly likely that the information will be in the public domain in any event. I do not see how the case could be conducted where there is a limited claim for confidentiality against certain defendants, but such an all embracing one against others. It can hardly be that the evidence of the witnesses for the defendants, against which and whom no such restrictive order is made, will not be available to the other defendants. Further, I consider that the personal defendants should have access to the witness statements, subject to a confidentiality regime.

87    Even if the evidence were shrouded in some confidentiality it would require an extraordinary case to deprive some of the defendants of access to:-

(a) the evidence to be used against them;
(b) the other evidence answering that evidence;
(c) the Court where such evidence was being given;
(d) the transcript relating to such evidence; and
(e) the Court’s judgment.
I do not consider this is such a case.

88    I invite the parties to bring in Short Minutes of Order to give effect to these reasons.

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