Independent Cement and Lime Pty Ltdv. Australian Cement Ltd and Ors

[1988] FCA 749

JUDGMENT No. ?.??!/-L

CATCHWORDS

Practice and procedure - discovery of document .S - inspec :tion

- alleged confidential document - contract in writing on

which applicant's case based - whether inspection should be

denied or restricted -	whether notice to produce document a
condition precedent to an order for its inspection -	whether
further discovery should	be ordered.
Trade Practices Act 1974	s.45D
Federal Court Of'Australia Act 1976	s.50
Australian Customs Tariff	Anti-Dumping Act 1985

Customs Administration Act 1985 Freedom of Information Act 1982

INDEPENDENT CEMENT h LIME PTY. LTD.	v. AUSTRALIAN CEMENT
LIMITED, J.W.	LAURIE, MAX PARKER and CHRIS DRYSDALE

No. VG 127 of 1988

GRAY J.

27TH OCTOBER 1908

NELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA	)
1

VICTORIAN	DISTRICT	REGISTRY	1	No. VG 127 of 1988
)

GENERAL DIVISION	)
BETWEEN:

INDEPENDENT CEMENT & LIME PTY. LTD. Applicant

-and-

AUSTRALIAN CEMENT LIMITED, J.W. LAURIE,

MAX PARKER and CHRIS DRYSDALE Respondents

JUDGE: Gray J.

M:	Melbourne
DATE:	27th October 1988

EX TEMPORE REASONS FOR JUDGMENT

Before the Court are two notices of motion,

concerning the process of discovery in this proceeding. In

the proceeding the applicant alleges that it is importing	or
seeking to import into Australia cement from Japan.	For this

purpose it is building or has built facilities at Port

Melbourne, designed to receive the cement.

The respondents are alleged to be a manufacturer of

cement in Australia and three of its officers or employees.

Relief is sought pursuant to s.45D of the Trade Practices Act

1974, and on the basis of alleged Inducement of breach of

contract.	It is alleged that the respondents have done acts
resulting in delays in the construction of	the facilities at
Port Melbourne, and damages and injunctions are sought	in
respect of those alleged acts.	It is also alleged that the

respondents have done and will do acts to prevent the

importing of cement. Injunctions are sought with respect to

those acts. Fundamental to the applicant's case on the

latter aspect, is an allegation of an agreement between	it
and the Sumitomo Corporation	for the supply of cement for

import into Australia. The	existence of that agreement	is
pleaded in paragraphs	18 and 36	of the statement of claim.

It is that agreement, which I will call the Sumitomo

contract, which is the subject of the applicant's notice of motion, and of paragraph 1 of the respondent's notice of motion.

In its notice of motion, the applicant seeks

firstly an order that it have leave to produce the Sumitomo

contract for inspection by the respondents with certain

clauses sealed up or deleted, they being clauses relating to

the duration of the contract, the total quantity of cement,

the shipping schedule, the price, the costs, which I

understand to be shipping costs, and negotiation for

amendment of the contract. In the alternative, the applicant

seeks an order that the respondent's legal advisers be

permitted to inspect the whole of the Sumitomo contract,

subject to each person inspecting	l t undertaking to the Court
that he or she will retain the confidentiality	of the clauses

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referred to, and will not divulge the contents of those

clauses to any persons other than persons permitted to

inspect the whole of the Sumitomo contract.

The respondent's notice of motion, in paragraph 1,

seeks an order that the applicant forthwith make the Sumitomo

contract available for inspection, and provide the

respondents with a complete copy of it.

It is not altogether clear whether the Court has

power to make orders of the kind sought in the applicant's notice of motion. Reference was made to s.50 of the Federal

Court of Australia Act 1976. That section provides:

"The Court may, at any time during or after the hearing of a proceeding in the Court make such order forbidding or restricting the

publication of particular evidence, or the

name of a party	of witness as appears to the
Court to be necessary in order to	prevent
prejudice to the administration of justice	or
the security of the Commonwealth."

It sh ,ould be noted that the section in its terms, so far as

relevant to this application, deals with the restriction on

the publication of particular evidence. A document which	is
the subject of the process	of discovery of documents before
trial is not evidence.

It seems to have been assumed in Australian

Broadcasting Commission and Parish (1980), 29 A.L.R. 228,

that the Court could restrict the	right of a party to inspect
some agreements which were the subject of the proceeding	in

that case, and which were claimed to be confidential. AS is

revealed at p. 260 of that report, an order was made

restricting the right	to inspect the subject agreements to
named members and officers	of the Australian Broadcasting

Commission and named legal advisers and other experts, and

such an order was made only	in respect of persons who would
undertake to maintain the confidentiality	of the agreements

and not to divulge them to other persons. At pp. 233-234, Bowen C.J. spoke of a balance between the public interest in the administration of justice openly, and the public interest in not destroying or damaging seriously the subject matter of litigation.

For the purposes of these applications I am

prepared to assume that a power does exist to make the orders

sought by the applicant. If	it does not exist I am	prepared
to assume that a power exists to	refuse the order sought	in

paragraph 1 of the respondent's notice of motion on the basis

of the confidentiality of the document	of which production is
sought.

It should also be noted that at no stage of these

applications has the Court been invited to look at the

document concerned.

. 5.

The first argument put by counsel on behalf of the applicant was that, whilst the existence	of the Sumitomo
contract is relevant to these proceedings,	the terms of it

have no relevance at all. Counsel argued that it followed

from that that the confidential, or allegedly confidential,

portions of the Sumitomo contract could properly be sealed

up. In putting this argument, counsel for the applicant

stated, and emphasised	the proposition, that damages are not
sought in respect of any alleged inducement of breach of	the
Sumitomo contract.	It may be that the application filed in

the proceeding could be read as containing a claim f o r such

damages, but the	applicant	has	made	it clear	that	it
restricts	its	claim	to	injunctive	relief	in respect of

alleged induced breach of the Sumitomo contract.

c

It is an unusual case in which an applicant bases

its case on the existence of a document and then seeks to

conceal some of the terms of that document by contending that

they are irrelevant. In my view the argument of the

applicant with respect to relevance falls down when the

statement of claim is examined. It seems obvious to me that

factors such as the duration of the contract, the quantities

to be shipped under it, the shipping schedule, the price, the
bearing of shipping costs,	and any procedures for variation
of the contract, are important as to some of the	allegations
made in the statement of claim.	In the f i r s t place, they are

important as to the allegation in paragraph 22 that the

effect, or likely effect, of Sumitomo not supplying cement	to
the applicant would be to cause substantial loss	or damage to

the applicant's business. In the second place, they are

important to the question of the appropriateness or otherwise

of an injunction, whether on discretionary or on other

grounds.	Quite clearly,	if the Sumitomo contract were about
to run out, then there would	be no point	in granting an

injunction in the terms sought.

Counsel for the applicant then turned to argue the

alleged confidentiality of the Sumitomo contract. This was

put on three separate bases, which were outlined in an

affidavit of David Colin Noonan, sworn on 24th October 1988,

and filed in support	of the applicant's notice of motion.
The first basis was that the agreement is	said to be regarded

as confidential for another purpose altogether. It appears

that a complaint has been made under the Australian Customs

Tariff Anti-Dumping Act 1985 in respect of the activity of the applicant in importing cement into Australia. Under that

Act, the Australian Customs Service is required to

investigate that complaint. Under the Customs Administration

Act - 1985 there is apparently a peculiar provision, under

which a person making such a complaint is not entitled to see

any of the material which the person complained against

submits. Incidentally, the opposite applies as well; the

person resisting the complaint	1 s not entitled, apparently,
to see the complainant's	material. There exlsts machinery to

prevent access to such material under the Freedom of

Information Act 1982. The contention of the applicant is

that, if the respondents should be able to see the whole of the Sumitomo contract for the purposes of these proceedings, they will be in a better position to pursue their complaint

about anti-dumping.

The second way in which confidentiality is put is

that it is suggested that access to the whole of the Sumitomo
contract will enable the respondents to work out the

applicant's costjngs and to fix the prices of their cement so

as to undercut the applicant and destroy its attempts to

import and sell cement in Australia.

The third aspect of confidentiality relates to some events which are said to have occurred on 30th August	1988
when a shipment of cement arrived at the applicant's	facility
in Port Melbourne.	On that occasion there was said to be
picketing and a demonstration, involving police activity	and

some abuse, hurling of missiles, damage and general

misbehaviour.	Fears are expressed on behalf of the applicant
that the disclosure of shipping schedules will facilitate a

repetition of that sort of conduct.

It should be noted by all parties to this

proceeding that there is a fundamental principle applicable

to the law of discovery of documents. That fundamental

principle is that those who obtain discovery of documents
give an implied undertaking to the Court that they will not

use the documents other than for the purposes of the

litigation in which they are	obtained.	Any breach of	that
implied	undertaking, by improper	use of the	documents,

amounts to a contempt of court. The law on this subject is

conveniently laid down by the House of Lords in Harman v.

The Secretary of State	for the Home Department [l9831	A.C.
280.

In my view, confidentiality of a document for one

purpose does not carry with it confidentiality of that document for all purposes. The peculiar procedures which may

apply in respect of anti-dumping legislation cannot govern

the procedures of the Court and cannot govern the

circumstances in which the	Sumitomo contract may or may	not
be seen otherwise than in	the course	of the anti-dumping
procedures.

Counsel for the respondents argued that any

confidentiality attaching to the Sumitomo contract had been

waived.	In my view,	it is unnecessary for me to decide
whether there was	a waiver. Even if there was not,	it is
difficult for the applicant	to maintain the	confidentiality

of the Sumitomo contract in the light of two things. First,

in an affidavit of Mr. Noonan, filed on 7th April 1988 ln

respect of an application for an interlocutory in~unction,

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some detailed reference is made to some of the very terms

which are now said to be confidential. Second, in the

statement of claim itself, in the particulars appended to

paragraph 35, reference is made to the fact that the Sumitomo
contract was in writing and inspection of it is invited by
appointment at he offices of the solicitors for the

applicant.

In my view also, it is hard to see how the

respondents could be in a better position with respect to the anti-dumping complaint by receiving a copy of the Sumitomo

contract, or inspecting its full text. It appears from the

applicant’s material that the tribunal considering the

anti-dumping complaint is already in possession of the full

Sumitomo contract. No amount of communication of its full

terms by the respondents to that tribunal,	if it did occur,
could alter that situation.

The fears expressed by the applicant with respect

to undercutting in pricing, and with respect to a	repetition
which occurred on delivery of the shipment	on 30th August,

are largely speculative. Nothing in the evidence indicates

that either that there will be undercutting in prices or that there will be a repetition of the events of 30th August. Other remedies may exist to combat any pricing strategy that

the respondents may adopt	if it occurs, and slmilarly other
means may exist of protecting	the rights of the applicant and

of any shipper	when shipments do arrive in	the future.	It
should also be pointed	out	that the events	of 30th August

seem to have occurred despite the alleged confidentiality	of
the shipping schedules in the Sumitomo contract.

One of the disadvantages of engaging in litigation

is that a party is required to reveal in many cases documents

which it would prefer be kept secret. It seems to me to be

particularly inappropriate for an applicant who wishes to

claim relief with respect to a contract, although not

directly for breach of it, to come to the Court and contend

that the contract itself	is confidential and that its terms
should not be disclosed to the parties against whom relief	is

sought. For these reasons it seems to me to be appropriate

to dismiss the applicant's notice of motion and to make an order in terms of paragraph 1 of the respondent's notice of motion, or in terms substantially similar.

It is now necessary to turn to the other relief

sought in the respondent's notice of motion. Paragraph 2

seeks an order that he applicant make available for

inspection an agreement referred to in paragraph 12 of the

affidavit of David Colin Noonan sworn and filed on 7th April

1988. That paragraph refers to the existence of a technical

service agreement between the applicant and a company called

Ube Industries Limited. By 0.15 r.ll(l)(b) of the Federal

Court Rules, the Court is empowered to order the production

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for inspection of any document referred to in a pleading or

affidavit filed by a party. There is no doubt that the

document of which production for inspection is sought is

referred to in an affidavit filed on behalf of the applicant.

The applicant contends that 0. r.11, 15 is

applicable only after the procedure in	0.15 c. 10 has	been
carried out. That procedure involves the service of a notice to produce and the party receiving such a notice	is	allowed

four days after that service to appoint a time for inspection

of the document production of which is demanded. In the

present case, a notice to produce has been served. The

notice itself was dated 24th October and may have been served

on the 25th. Counsel for the applicant claims that the

applicant has not had its four days under 0.15 r. lO(2) to

consider its position with respect to the document sought.

In my view, the procedure by notice to produce is

not a condition precedent for the application of 0.15

r.ll(1). I have been referred to the decision of the Supreme Court of Victoria in Weir v. Greeninq (1957) V.R. 296, but

that seems to relate to rules in a form somewhat different

from the Federal Court Rules.

It seems to me clear that the document production

of which is sought should have been the subject of discovery

in the first place. By letter dated 13th October 1988, the

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12.

solicitors for the respondents did seek a further list of

documents from the applicant and made specific reference to

the document production of which is now sought. The

applicant has had	ample time to make a decision whether	it
has any ground for refusing to produce this document.	In	my

view, it is appropriate to make	an order that it should now
produce it for inspection.

Paragraph 3 of the respondents' notice of motion seeks relief pursuant to 0.15 r.8 of the Federal Court Rules. That rule provides:

"Where, at any stage of the proceeding, it appears to the Court from evidence or from the nature or circumstances of the case or from any document filed in the 'proceeding that

there are grounds for a belief that some

document or class of document relating to any matter in question in the proceeding may be or

may have been in the possession, custody or

power of a party,	the Court may order	that
party -

(a) to file any affidavit stating whether

that document or any document of that class is or has been in his possession, custody or power and, if it has been but is not then in his possession, custody or power, when he parted with it and what has become of it: and

(b) to serve the affidavit on any other

party."

Four separate applications are made in paragraph 3 of the respondents' notice of motion. The first, in sub-paragraph (a), seeks that he applicant file and serve on the respondents an affidavit stating whether it has or has had in its possession, custody or power, any document or documents

relating to any of the costs referred to in the particulars

under paragraphs 17 and 25 of the statement of claim,

including the incurring, calculating and paying of any of those costs. Paragraphs 17 and 25 of the statement of claim contain allegations that the applicant has suffered loss and

damage in its business, and the particulars to those

paragraphs set out various items of alleged costs incurred

that would make up that loss and damage.

It is plain from the nature and circumstances of

the case, and from the terms of those particulars, that

documents must exist revealing the manner in which those

costs are calculated or claimed by other persons, and the

manner in which they have been paid if they have.

Counsel for the applicant drew attention to some

items in the list of documents already filed, which he

claimed were sufficient to satisfy the requirement to make

discovery in respect of those matters. He did concede,

however, that in respect of such items as finance costs of

prolongation caused by delay in the particulars to paragraph
17, and cost of finance required over the period of delay in
the particulars to paragraph 25, documents were not listed in
the list of documents. It does seem to me that there is need
for someone on behalf of the applicant to direct his or her

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14.

mind to the question whether all documents have been	produced
with respect to these items of loss and damage.	No reference
appears in	the list of documents to cheque butts, cheque

requisitions, bank statements or other means whereby payment of the amounts alleged might be proved. For those reasons, it seems to me to be appropriate to make the order sought in

sub-paragraph 3(a) of the respondents' notice of motion.

Sub-paragraph (b) seeks documents relating to the

allegation in paragraph 22 of the statement of claim. That

is the allegation of likely substantial loss and damage to

the applicant's business if Sumitomo were not to supply

cement to the applicant. I suppose it could be said that the

Sumitomo contract	,is	a document which comes under this
heading, and since I	have already indicated my intention	of

making a separate order with respect to that, I shall

disregard that for this purpose.

Counsel for the respondent said that what was

sought was any document hat might show an alternative source

of cement, so that the applicant could remain in business

even if Sumitomo did not supply cement. There is nothing in

any of the documents so far filed which would indicate that

such alternative sources exist, and therefore that documents indicating them exist. It is pure speculation that there might be such documents, and pure speculation is not a

sufficient ground for the making of an order of the kind

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sought. I therefore propose not to make an order of the kind

sought by sub-paragraph 3(b).

Sub-paragraph 3(c) seeks documents relating to the

allegations in paragraph 23 of the statement of claim, and asks that insofar as such documents consist of investigator's reports or similar for which privilege is claimed, that each

such document be identified, individually by date and

sufficient description, and any grounds for privilege be	set
out.

Paragraph 23 of the statement of claim contains

allegations that the first respondent:

r-

(a) arranged surveillance of the site and/or the

contractors working at the site;

(b) made complaints to the Port of Melbourne Authority

about the conduct of construction at the site;

(C) notified various trade unions i cluding the

Federated Engine Drivers and Firemens Association, the Electrical Trades Union and the Australian

Workers Union, of the	conduct and progress of
construction at the site	and	of alleged breaches

of safety requirements and union policy committed

in the course of such constructlon;

(d) encouraged and/or allowed its employees to picket the site.

The existence of investigators' reports dealing with matters

the subject of paragraph 23 of the statement of claim is

evident from a letter written by the solicitors for the

applicant subsequent to the filing	of the applicant's list of
documents.

In my view, the respondents' case for an order

under	sub-paragraph	3(c) is made out with respect to
investigators'	reports and similar documents,	but not with

respect to any other documents which might relate to

paragraph 23.	There is no indication that any other such
documents exist.

It is objected by counsel for the applicant that -

reference has already been made to those documents	in	the
list of documents which has been filed.	It is true that	the

existing list of documents does contain a general paragraph

which refers to:

"correspondence, reports, minutes, notes,

memoranda, briefs and other documents,

prepared or brought into existence	by or for
submission to my ' legal	dvisers	in

anticipation of and relating to this

proceeding, and to proceedings contemplated,

threatened or pending,	in	relation	to	the
subject	matter	of this	proceeding,	and

prepared or brought into existence for the purpose of obtaining or giving advice, and for use in connection therewith."

Counsel for the applicant contends that hat

paragraph sufficiently refers to investigators’ reports and

similar documents. There is of course a practice which has

grown up of describing privileged documents in the manner in

which this list of documents describes	them. If, however,
specific description of allegedly privileged documents	and

specification of the grounds of privilege with respect to

each document are requested by an opposite party, then in	my
view it is proper to make an order	that that be done.

The relief sought in sub-paragraph 3(d) of the

respondents’ notice of motion is with respect to documents

relating to (1) any interruption; ( 2 ) the date of completion

or any extension or claim for extension thereof of the c

construction works at the site or any part thereof. Again,

there is no indication from any document filed in the

proceeding that such documents do exist, and the proposition

that hey might exist is one of speculation only. I

therefore propose not to make the order sought.

Paragraph 4 of the respondents’ notice of motion

seeks an order pursuant to 0.15 r.l6(l)(a) of the Federal
Court Rules.	The form of order sought is a self-executing

one, whereby the proceeding would be dismissed in the event

that the applicant failed to comply with any orders made on

the notice of motion on or before a speclfled date. In my view it is not appropriate to make a self-executing order of

A

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that kind at this stage of the proceeding. The applicant

should be given a proper opportunity to comply with any order

to produce documents, or to make further affidavits, before

such an order would be appropriate.

The final relief sought in the respondents' notice

of motion is that the applicant pay the respondents' costs of

and incidental to this application. Since the applicant has

been unsuccessful in its motion and the respondents have been

substantially successful in theirs, it seems to me to be

appropriate that the applicant should pay the respondents'

costs in respect of both applications.	I therefore make the
following orders:

(1) That the applicant make available for inspection by

the respondents and their legal advisers within

fourteen days of this day the agreement referred

to in paragraph 36 of the statement of claim at the

offices of the applicant's solicitors at a time to

be agreed	upon	between	the	solicitors	for the
parties.

( 2 ) That the applicant make available for inspection by

the respondents and their legal advisers within

fourteen days of this day the Technical Servlce
Agreement referred to in paragraph 12 of the
affidavit of David Colin Noonan sworn on 7th April
1988 at the offices of the applicant's solicitors

at a time to	be agreed between the solicitors	for
the parties.

( 3 ) That the applicant file and serve on the

respondents within twenty-one days an affidavit

stating whether it has or has had in its

possession, custody or power:

(a) any document or documents relating to any of

the costs referred to in the particulars

appended to paragraphs 17 and 25 of the

statement of claim including the incurring,

calculating and paying of any of those costs;

(b)	any investigators' reports or similar
documents relating to the allegations in
paragraph 23 of the statement of claim

identifying each such document individually by date and description, and if privilege is

claimed in respect of any such document

setting out the grounds upon which such claim

for privilege is made.

( 4 ) The applicant's motion, the subject of its notice

of motion filed on 24th October 1988 1s dismissed.

( 5 ) The motions, the subject of paragraph 3 ( b ) and (d)

and paragraph 4 of the respondents' notice of motion filed on 25th October 1988 are dismissed.

( 6 )	The applicant pay the respondents' costs of each motion.
(7)	Liberty is reserved to any party to apply on seven
days notice in writing to each other party.
Appearances
Counsel for the applicant:	Mr. P. Costello
Solicitors for the applicant:	Corrs Pavey Whiting  L Byrne
Counsel for the respondent:	Mr. Strahan Q.C. and Mr.
Maxwell
Solicitors for the respondent:	Blake Dawson Waldron
Date of hearing:	27th October 1988.

I certify that this and the

preceding nineteen (19) pages

are a true copy of the Reasons

for Judgment of the Honourable

Justice Gray.