John S Hayes and Associates Pty Ltd v Kimberly-Clark Australia Pty Ltd

[1992] FCA 1071

IN THE FEDERAL COURT OF AUSTRALIA	) )
NEW SOUTH WALES DISTRICT REGISTRY	) No. NG 231 of 1992

)

GENERAL DIVISION )

BETWEEN:JOHN S HAYES & ASSOCIATES PTY

LIMITED

Applicant

AND:KIMBERLY-CLARK AUSTRALIA PTY LIMITED

Respondent

KIMBERLY-CLARK AUSTRALIA PTY LIMITED

Cross Claimant

JOHN S HAYES & ASSOCIATES PTY LIMITED

Cross Respondent

11 September, 1992

REASONS FOR JUDGMENT

LOCKHART J.

There is before the Court a motion of the applicant John S

Hayes & Associates Pty Limited, which raises a number of

matters. I propose for the moment to refer to only one of them, found in paragraph 2 in the amended motion filed on 26 August

1992. In essence the applicant says that certain documents

discovered by the respondent (for ease of identification they

are referred to as documents 9.1 to 9.58) which are presently the subject of confidentiality orders should cease to be subject to those orders.

At present, the confidentiality order grants access to

those documents to the applicant's solicitors, counsel and any

independent expert who may be retained by them. Counsel for the

applicant states that the effect of the order is that he and his instructing solicitors are not at liberty to discuss the

documents or their contents with officers of their client or

anybody else.

Oral evidence was given today on behalf of the respondent

by the General Manager of the respondent's Washroom Systems

Division Mr Davids. His evidence expresses the view that the

documents which are the subject of the confidentiality order are documents that are described as being competitive activity

reports from the period 1 June 1989 to 1 April 1990 and they
then proceed through until comparatively recent months.

Each document is a collation of material derived from salesmen of the respondent called "territory managers" who call on customers, distributors and end users and obtain material in discussions with them or perhaps in observing documents held by

them, which are then collated into the form of these competitive

activity reports. These reports enable the respondent to derive pricing trends, product form trends and information with respect

to competitors activities in various areas.

The respondent asserts that the documents are truly in the

domain of commercially sensitive documents which are properly

covered by the confidentiality order. It is not so much the statements made piecemeal of each document that matters to the respondent but rather it is the impression the reader could gain by seeing numbers of these documents collectively over a

reasonable period of time. The fear is that this material may allow trends in prices and product forms to be derived by the reader, especially a reader who is a trade competitor of the respondent.

The purpose of these reports is to enable the respondent to

plan both short and long term strategy. Interestingly, the cost

of collecting the information has been roughly assessed by Mr Davids as being $175,000 which is one eighth of the cost of remuneration paid to the salesman. This figure is calculated from that proportion of the territory manager's time that is

spent in gathering the source material from which the

competitive activity reports are prepared.

The distribution list of the reports appears to be confined

to the sales and marketing team of the Washroom Systems Division

of the respondent. It is true as counsel for the applicant rightly points out that there is nothing on the face of the documents bearing a confidentiality stamp or something of that

order which marks them as confidential but as the cases with which I am familiar demonstrate, that is but some evidence of their confidentiality and not in fact very significant evidence.

It is the contents of the documents and the use to which they

can be put that is the critical evidence.

It is also true that no express undertaking is required

from the employees of the respondent not to use this particular

information other than for the purposes of the respondent but employees of course are bound by the confidence that customarily attaches to employee-employer relationships. There is some evidence, though admittedly in very general form, that there are written contracts of engagement between a respondent and its staff which contains some form of secrecy provision. However I do not know the reach of the secrecy provisions.

The number of persons who have access to these documents in

the sales and marketing team of the Washroom Systems Division of

the respondent appears to have varied a little over the years

and is usually in the order of nine or ten such people. Some of the documents are fairly old and I must confess to having had a

little doubt as to the extent to which documents going more than

two years ago could conceivably be confidential today. However,

the evidence from Mr Davids that the earlier documents can be utilized to confirm information that is of more current relevance or if not confirmatory then they can be used as some measure or yardstick to determine the validity of what are assessed as current trends. It seems to me that there is some substance in that evidence.

Without the oral evidence today I could see considerable

force in the applicants having brought the motion. It is the

evidence given in the box today that I think is the critical evidence adduced by the respondent. However, I am of the view that the problems that confront counsel and solicitors in preparing the case for hearing do exist if they are bound by the

present terms of the orders of the Court made on 29 May relating

to the confidentiality of these documents.

I think that the Court is able to fashion an amendment to

the order so as to allow counsel and solicitors to discuss the

contents of the documents with their client and its officers. They are not make available copies of them to them and not to

actually show the documents to them. It would be left in the hands of counsel and solicitors and the trust the Court has in

them to ensure that the spirit of the amendment is observed. I

have no doubt that will be observed.

In other words, information can be discussed with the clients. I doubt as presently advised if any impression could be gained of a worthwhile nature by the applicant and its staff,

including Mr Hayes, which would give them a collective

impression of the material appearing in the reports which would

enable him to discern trends over periods of time in relation to
pricing trends and product form trends.

1.    THE COURT ORDERS that the following proviso be placed at

the end of Order 3 of Orders made by Lockhart J. on 29 May 1992:

"Provided that it will not be a breach of this order for the applicant's solicitors and counsel to discuss with such of the applicant's officers and witnesses as they find it necessary to do so with respect to documents 9.1. to 9.58 for the purpose of obtaining instructions with respect to those documents for the purpose of conducting this proceeding, but the documents themselves and copies of them are not to be shown to the applicant or its officers or made available to them."

2. THE COURT MAKES ORDERS in accordance with the short minutes

of order, initialled by Lockhart J. dated 11 September 1992 and
placed with the papers.

3.    All exhibits tendered in any motion may be handed out.

4.    The respondent to pay two-thirds of the applicant's costs

of today.

I certify that this and the preceding five (5) pages are a true copy of the reasons for judgment herein of the Honourable Mr. Justice Lockhart.

Associate

Dated: 11 September 1992

Counsel for the Applicant :	C.D. Curtis
Solicitors for the Applicant :	Hunt & Hunt

Counsel for the Respondent : C.C. Hodgekiss

Solicitors for the Respondent :  Sly & Weigall

Date of Hearing : 11 September 1992

Date of Judgment : 11 September 1992