Kang v My Fashion Republic Pty Ltd t/as Cosette

[2024] NSWCATCD 23

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Kang v My Fashion Republic Pty Ltd t/as Cosette [2024] NSWCATCD 23

Hearing dates:

25 January 2024

Date of orders:

30 January 2024

Decision date:

30 January 2024

Jurisdiction:

Consumer and Commercial Division

Before:

R C Titterton OAM, Senior Member

Decision:

1. The respondent’s applications for miscellaneous orders are dismissed.

Catchwords:

PRACTICE AND PROCEDURE – interlocutory application that respondent be permitted to rely on unredacted evidence in circumstances where only redacted evidence given to the applicants – whether non-publication orders should be made

Legislation Cited:

Uniform Civil Procedure Rules (2005 (NSW)

Civil and Administrative Tribunal Act 2013 (NSW), ss 38, 64

Government Information (Public Access) Act 2009 (NSW)

Government Information (Public Access) Act 2009 (NSW)

Privacy and Personal Information Protection Act 1998 (NSW)

Cases Cited:

Australian Broadcasting Commission v Parish (1980) 43 FLR 129

CYL v YSA [2017] NSWCATAP 105

McCarthy v Murphy [2016] IEHC 391

MDM v PR [2020] NSWCATCD 5

News Life Media Pty Ltd v Janeke [2016] NSWSC 1835

Seven Network (Operations) Limited & Ors v James Warburton (No 1) [2011] NSWSC 385

Thomas Marshall (Exports) Ltd v Guinle [1979] Ch 227

Wilson v Basson [2020] NSWSC 512

Category:

Procedural rulings

Parties:

2023/00367238:

Applicant: Jessica Kang
Respondent: My Fashion Republic Pty Ltd t//as Cosette

Representation:
Applicant: Self-represented
Respondent: D Solimena, Director

2023/00367968:

Applicant: Ms Gladys Oliva
Respondent: My Fashion Republic Pty Ltd t//as Cosette

Representation:
Applicant: No appearance
Respondent: D Solimena, Director

2023/00369584:

Applicant: Ms Sharron Severino
Respondent: My Fashion Republic Pty Ltd t//as Cosette

Representation:
Applicant: Self-represented
Respondent: D Solimena, Director

2023/00368469:

Applicant: Ms Amy Goeman
Respondent: My Fashion Republic Pty Ltd t//as Cosette

Representation:
Applicant: Self-represented
Respondent: D Solimena, Director

2023/00369568:

Applicant: Ms Gemma Redfern
Respondent: My Fashion Republic Pty Ltd t//as Cosette

Representation:
Applicant: No appearance
Respondent: D Solimena, Director

2023/00431230:

Applicant: Ms Cheryl Livock
Respondent: My Fashion Republic Pty Ltd t//as Cosette

Representation:
Applicant: Self-represented
Respondent: D Solimena, Director

2023/00369436:

Applicant: Ms Katelyn Hansen
Respondent: My Fashion Republic Pty Ltd t//as Cosette

Representation:
Applicant: Self-represented
Respondent: D Solimena, Director

2023/00370684:

Applicant: Ms Marija Nikolic
Respondent: My Fashion Republic Pty Ltd t//as Cosette

Representation:
Applicant: Self-represented
Respondent: D Solimena, Director

2023/00371376:

Applicant: Ms Yi Feng Percival Ho
Respondent: My Fashion Republic Pty Ltd t//as Cosette

Representation:
Applicant: Self-represented
Respondent: D Solimena, Director

2023/00372989:

Applicant: Ms Nikola Galeano
Respondent: My Fashion Republic Pty Ltd t//as Cosette

Representation:
Applicant: Self-represented
Respondent: D Solimena, Director

2023/00371123:

First Applicant: Ms Jennifer Lin
Second Applicant: Ms Zhen Ma
Respondent: My Fashion Republic Pty Ltd t//as Cosette

Representation:
Applicants: No appearance
Respondent: D Solimena, Director

2023/00370679:

Applicant: Ms Yunong Chen
Respondent: My Fashion Republic Pty Ltd t//as Cosette

Representation:
Applicant: Self-represented
Respondent: D Solimena, Director

2023/00370400:

Applicant: Ms Rebecca Gaspar-Blogna
Respondent: My Fashion Republic Pty Ltd t//as Cosette

Representation:
Applicant: No appearance
Respondent: D Solimena, Director

File Number(s):

2023/00367238; 2023/00367968; 2023/00369584; 2023/00368469; 2023/00369568; 2023/00431230; 2023/00369436; 2023/00370684; 2023/00371376; 2023/00372989; 2023/00371123; 2023/00370679; 2023/00370400

REASONS FOR DECISION

Introduction

1. These reasons relate to the hearing of applications for miscellaneous orders in 13 proceedings involving the respondent (hereafter the respondent or Cosette).

2. In summary, the respondent seeks orders permitting the hearings to continue with the Tribunal receiving unredacted evidence from the respondent, but the applicants receiving redacted evidence. In this case, the respondent relies on s 38 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act),

3. For the following reasons, that application is dismissed.

4. The respondent also seeks orders that claimed confidential information receive the benefit of a non-publication order under s 64 of the NCAT Act.

5. For the following reasons, that application is also dismissed.

Grounds, evidence and submissions of the respondent 

Applications for Miscellaneous Matters  

6. In the various Applications for Miscellaneous Matters filed the interlocutory orders sought by the respondent are identical in each proceeding. Those orders are: 

In accordance with section 38 and 64 of the Civil and Administrative Tribunal Act 2013, My Fashion Republic Pty Ltd seeks an order:

a. Permitting My Fashion Republic Pty Ltd to comply with the NSW Civil & Administrative Tribunal's ("Tribunal") order of 30 November 2023 by serving on the Applicant only a redacted version of the evidence Cosette wishes to rely on. 

b. Granting My Fashion Republic Pty Ltd leave to rely on the unredacted version of its evidence, as filed with the Tribunal. 

c. To the effect that the unredacted evidence filed and given before the Tribunal, or of the contents of unredacted documents lodged with the Tribunal are received in evidence by the Tribunal in relation to the proceedings, that these documents will not be provided to the [applicants].

d. Prohibiting the publication of evidence given before the Tribunal, whether in public or in private, or of the redacted matters contained in documents lodged with the Tribunal or received in evidence by the Tribunal. 

7. The grounds or reasons for those orders are identical and relevantly state: 

The evidence My Fashion Republic Pty Ltd seeks to rely on in the main proceedings, which it was compelled to file with the Tribunal and serve on the Applicant in the main proceedings includes information which is commercially and competitively sensitive. The evidence includes information relating to: 

a. My Fashion Republic's suppliers and their contact information. These details are not generally known nor in the public domain and their disclosure exposes My Fashion Republic Pty Ltd to inherent and irreparable harm. In addition, in light of the media attention on My Fashion Republic Pty Ltd, disclosure of these details could result in media attention or scrutiny on these suppliers and potentially affect the supply relationship. Disclosure thus exposes My Fashion Republic Pty Ltd to significant and irreparable harm. 

b. My Fashion Republic's pricing strategy with respect to the products it supplies. 

In this regard, the unredacted copies of invoices submitted as evidence contain the cost price of the products supplied to the Applicant in the main proceedings. Disclosure would enable individuals with access to this evidence, including My Fashion Republic's competitors and the media, to determine My Fashion Republic's margins and pricing strategy. This information is not generally known, nor in the public domain and could give rise to significant and irreparable harm. 

Statutory declaration of David Solimena 

8. Mr David Jean-Luc Solimena is the Chief Financial Officer and a director of the respondent. He relied on a statutory declaration declared 19 December 2023 in support of the respondent’s applications. 

9. As is usual in interlocutory matters, there was no cross-examination of witnesses: McCarthy v Murphy [2016] IEHC 391.

10. Mr Solimena’s statutory declaration is part evidence, and part submissions. Those parts which constitute submissions I will treat as such.  

11. Relevantly, Mr Solimena states the following as a “preliminary matter”: 

10. The evidence Cosette seeks to rely on and to which Cosette was compelled to file with the Tribunal and serve on the Applicant includes information which is commercially and competitively sensitive. The evidence includes information relating to: 

a. Cosette's suppliers and their contact information. These details are not generally known nor in the public domain and their disclosure exposes Cosette to inherent and irreparable harm. In addition, in light of the media attention on Cosette, disclosure of these details could result in media attention or scrutiny on these suppliers and potentially affect their relationship with Cosette. Disclosure thus exposes Cosette to significant and irreparable harm. 

b. Cosette's pricing strategy with respect to the products it supplies. In this regard, the unredacted copies of Cosette's invoices contain the cost price of the products supplied to the Applicants. This would enable individuals with access to this evidence, including Cosette's competitors and the media, to determine Cosette's margins and pricing strategy. This information is not generally known, nor in the public domain and could give rise to significant and irreparable harm. 

11. In the circumstances, Cosette has sought an order: 

a. Permitting Cosette to comply with the Tribunal's order of 22 November 2023 by serving on the Applicant only a redacted version of the evidence Cosette wishes to rely on. 

b. Granting Cosette leave to rely on the unredacted version of its evidence, as filed with the Tribunal. 

c. To the effect that the unredacted evidence filed and given before the Tribunal, or of the contents of unredacted documents lodged with the Tribunal are received in evidence by the Tribunal in relation to the proceedings, that these documents will not be provided to the Applicant. 

d. Prohibiting the publication of evidence given before the Tribunal, whether in public or in private, or of the redacted matters contained in documents lodged with the Tribunal or received in evidence by the Tribunal. 

12. Mr Solimena then sets out an overview of the respondent’s business. He states: 

Overview of Cosette's business 

12. Cosette primarily operates as a retailer of luxury handbags and other accessories. It has a retail store in Sydney, but is primarily an online retailer. Cosette's business, in summary, operates as follows: 

13. Cosette buys luxury designer handbags and other (typically leather) accessories from suppliers in Europe who operate in what is known as the secondary market (sometimes also called the grey market). These suppliers are typically either: 

a. brand supplied brokers, who deal directly with luxury brands; or 

b. licensee supplied brokers, who procure their products from brand licensees. 

14. The goods purchased from Cosette's suppliers are imported into Australia as parallel imports. As such, while Cosette does not have specific permission of the manufacturer of the goods to sell the goods, the importation and sale of the goods does not infringe any registered trade mark because, in accordance with section 122A of the Trade Marks Act 1995 (Cth).

15. In order to ensure that the goods purchased for supply in Australia are authentic, Cosette has various processes in place, including: 

a. Vetting suppliers - Cosette undertakes a diligence process on its suppliers. Suppliers are selected based on referrals, their relationship with the brands or licensees and a long-standing reputation of supplying authentic goods. Cosette also undertakes annual visits to suppliers in Europe to ensure that only genuine and high quality products are supplied. 

b. Supplier Confirmation - Cosette, in some cases, requires its suppliers to confirm that the products supplied are authentic. 

c. Prevenance check - Cosette, in some cases, requires the supplier to provide copies of sanitised invoices evidencing the source of the goods. 

d. Comparison - Cosette compares the products with known original products sourced directly from the primary market 

16. Historically, Cosette has also used third party authentication services to authenticate the products it purchases. The results of these authentications would be offered to customers, on request, as a peace of mind offering in order to assure customers of the authenticity of the products. In some cases, these authentication certificates have a QR Code or link to a website which show the certificate. However, some third-party authenticators only have the link available for a limited period, after which the page is not accessible. This is the case with the Real Authentication certificates included in the Applicant's evidence. 

17. If a customer raises a concern relating to the authenticity of a product, Cosette will arrange for the return of the product and arrange for reauthentication and physical re-inspection. Cosette will provide a full refund if the product is not authenticated as a genuine product. This reauthentication process is conducted on the basis of conducting provenance checks to ensure that the products supplied may be linked to the brand owner or a licensee of the brand. 

13. Mr Solimena then sets out a brief summary of events. It is not necessary to recite these for the purposes of these reasons as what I have to decide is a legal issue, and the individual circumstances of each applicant are not relevant. Suffice it to note:

1. Cosette's direct supplier (whose identity is subject to the confidentiality order sought) purchased black Saint Laurent Lou Camera bags in black from D'aniello Alina S.r.l (D'aniello), in Italy;

2. in July 2023, NSW Fair Trading and reporters from "A Current Affair" attended at Cosette's store following allegations that Cosette had been supplying counterfeit products. This prompted an influx of consumer complaints and requests for refunds. 

14. During the course of the hearing, Mr Solimena referred to another application brought against Cosette, application GEN 23/38416. In that matter, on 13 November 2023 the Tribunal dismissed the application “in its entirety”. In its reasons for decision, the Tribunal relevantly stated:

6. The consumer contends that the Tribunal should not accept the authenticity certificates in relation to the 3 bags whose authenticity has been established by the trader. She speculates that the trader may somehow have interfered with the authentication process, including by failing to submit satisfactory photographic evidence. She has filed a self-help guide to determining authenticity and submits that she has been able to establish using this guide that each bag is not authentic by reference to stitching, labeling, print, leather texture, buckle and lining quality. She contends that the trader, and persons associated with it, have a history of selling counterfeit designer goods which makes it probable that all goods sold are fake.

7. The consumer bears the onus of proof in establishing that the 3 bags authenticated by the trader are counterfeit. That involves placing before the Tribunal evidence that is sufficiently probative of that fact for the Tribunal to conclude in her favour on the balance of probabilities. In this respect it is not enough that the trader and persons associated with it may have supplied counterfeit goods in other instances. That fact must be proved with respect to these specific items. The Tribunal accepts that the consumer has an honest belief that the 3 bags a counterfeit based on her self-help examination of them. However, with respect, she is an advocate in her own cause and has no specialised skill or training that would enable her to draw that conclusion with any satisfactory degree of objectivity.

8. The trader contends that it has traced the origin of the bags through its supply chain and has been able to verify their authenticity via that process. The consumer challenged this evidence in cross-examination of Mr Solimena putting to him that no evidence of this had been produced. Mr Solimena gave evidence that the trader's supply chain was part of its business model and was commercial in confidence which meant that there were substantial commercial risks arising from the production of such evidence in proceedings. The consumer contends the trader has failed to prove the bags are authentic on this basis. However, it does not fall to the trader to prove the authenticity of the bags. it is the consumer who bears the onus of proof.

9. For the foregoing reasons, the consumer's claim in relation to the 3 bags that have been authenticated by the trader must be dismissed. She has not proved to the civil standard that these bags are counterfeit. 

(emphasis added)

15. I understood Mr Solimena to be stating that it was the unsuccessful applicant in that matter who had appeared on A Current Affair. That may or may not be the case and it is not necessary for me to decide that issue. But the point was that there was risk that the present applicants might disclose sensitive commercial information if disclosed to them.

Submissions filed in support of the applications 

16. Each of the respondent’s applications included submissions. By and large these were superceded by submissions made at the hearing. As I commented during the hearing, the Uniform Civil Procedure Rules (2005 (NSW), relied on the first iteration of submissions, do not apply in the Tribunal.

Further submissions delivered at the hearing 

17. Two iterations of submissions were spoken orally by Mr Solimena during the hearing and a copy of each provided to the Tribunal.

18. Here I note that I heard 7 applications in the morning of 25 January 2024, at the conclusion of which Mr Solimena spoke to and filed submissions.

19. I then heard 7 applications in the afternoon of 25 January 2024, at the conclusion of which Mr Solimena spoke to and filed a further version of his morning submissions. In my view, these submissions are the most relevant and most accurate for the respondent to rely on. These I summarise below.

20. The respondent submits that its evidence in response to the applicants’ claims is based on tracing the applicants' bags to either the brand owner, or to a licensee of the brand. However, because such evidence includes invoices showing Cosette's full supply chain and cost prices, this evidence is should be considered strictly confidential. To manage the issue of confidentiality:

1. Cosette has filed the confidential evidence with the Tribunal in its unredacted format;

2. Cosette has served on the applicants, a redacted version of the evidence. The reason for this “is simply to manage any prejudice on the applicant by allowing the Tribunal to confirm that the party identified on the invoice from the brand or authorised retailer is the same party who supplied the products to Cosette”.

21. The submissions then go on to claim that because the applicants, with one or two exceptions, filed no submissions or evidence opposing the applications, the applications were not opposed. I reject that submission, if for no other reason that at the hearings all the applicants save for one told me that they did oppose the orders sought.

22. The submissions then invoke s 64 of the NCAT Act, in particular s 64(1). the commencing words of which state that if the Tribunal satisfied that it is desirable to do so by reason of the confidential nature of any evidence or matter or for any other reason, it may (of its own motion or on the application of a party) make any one or more of the orders set out in s 64(1).

23. Here the respondent relies on the statement of the Tribunal in MDM v PR [2020] NSWCATCD 5 at [24]^[1] that:

The relevant word used in the [NCAT Act] is “desirable”. It is submitted that the ordinary meaning of that word is “being useful or advantageous”, “worth doing”, “advisable” …

1. Incorrectly referred to as par [20] in the submissions.

24. The submissions then address why the information is confidential. Then Cosette submits that the information should remain confidential the information includes “competitively sensitive information which Cosette’s competitors might use to obtain an unfair competitive advantage”.

24. This information is:

1. the name of Cosette's direct supplier. This is said to be important to Cosette because Cosette has a limited number of suppliers in Europe who supplies it with products at favourable prices. It is submitted that these suppliers acquire bags that are overstocked in Europe from the brands directly or from the licensees of the brand, and that the disclosure of their identity has the potential to terminate their supply relationship with Cosette and would unfairly advantage competitors of Cosette;

2. the details which identify the direct supplier such as its address, VAT registration number, contact information and shipping information;

3. information on Cosette's quantities and cost prices.

26. It is submitted that information on cost prices is specifically sensitive because Cosette offers luxury handbags at desirable prices because its suppliers buy the goods from overstocked retailers. It is submitted that:

1. if known this information would disclose Cosette's margins, and margins are considered “competitively sensitive information by competition regulators such as the ACCC”. It is submitted that disclosure to the applicants also threatens disclosure to the media which might have an impact on the customer relationships Cosette currently has;

2. the information regarding quantities supplied is linked to prices as the quantities are the subject of confidential commercial negotiations. It is submitted that this information, if known, would disclose certain details of the supply chain where it is advantageous to restrict such information. Additionally, even if the quantities were disclosed to the applicants, they would have no evidential value.

27. The respondent submits that all this information “pertains” to its goodwill and trade secrets. It is submitted that:

1. Cosette’s supplier relationships are the result of significant “vetting” and correspondence with brand owners to ensure that Cosette only supplies genuine products;

2. Cosette conducts annual visits with the suppliers to cultivate those relationships and to negotiate prices of supply;

3. this information, if known, would disclose “the resultant good will and Cosette’s trade secrets”.

28. The balance of the submissions address various precedents including CYL v YSA [2017] NSWCATAP 105, Wilson v Basson [2020] NSWSC 512, MDM v PR and News Life Media Pty Ltd v Janeke [2016] NSWSC 1835.

29. I will consider these authorities where relevant in the Consideration section of these reasons.

30. The submissions conclude with the respondent requesting that, in order to safeguard the confidentiality of its information, that the evidence in the hearing is restricted for publication and be stored by the Tribunal in a sealed envelope marked “CONFIDENTIAL”.

The position of the applicants 

31. The applicants Oliva, Redfern, Lin, Ma and Gaspar-Blogna did not appear at the interlocutory hearings listed. 

32. Of those applicants who did appear, all opposed the orders sought, save for Ms Hansen, who neither consented nor opposed the orders sought by the respondent. 

33. Ms Goeman made brief oral submissions. 

34. The applicant Ms Chen was the only applicant to file a written submission. She relevantly stated: 

1. In regard to the issue at hand, I believe that the redaction of important supplier information is not reasonable as the Respondent is submitting "the only way to determine whether luxury designer handbags are authentic is to trace their provenance" and if the evidence serviced to me is without disclosure of the actual supplier of the product I purchased, I have been denied the opportunity to examine the authentication of Cosette's claimed Direct Supplier to my product. 

2. However, I respect the judicial process, and I am willing to abide by the court's decision on this matter. 

Consideration - summary

35. The applications before me can be divided into two parts. The first part is that the hearings continue with the Tribunal receiving unredacted evidence, but the applicants receiving redacted evidence. In this case, the respondent relies on s 38 of the NCAT Act.

36. The second part is that any of the claimed confidential information receive the benefit of a non-publication order under s 64 of the NCAT Act.

The s 38 application

37. Section 38 of the NCAT Act relevantly provides:

38   Procedure of Tribunal generally

(1)  The Tribunal may determine its own procedure in relation to any matter for which this Act or the procedural rules do not otherwise make provision.

(2)  The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice.

,,,

(6)  The Tribunal—

(a)  is to ensure, as far as practicable, that all relevant material is disclosed to the Tribunal so as to enable it to determine all of the relevant facts in issue in any proceedings, and

(b)  may require evidence or argument to be presented orally or in writing, and

(c)  in the case of a hearing—may require the presentation of the respective cases of the parties before it to be limited to the periods of time that it determines are reasonably necessary for the fair and adequate presentation of the cases.

38. This section is invoked to support the application that the respondent be allowed to rely on unredacted evidence, in circumstances where the applicant are only able to see (and test) redacted evidence.

39. There are circumstances where this is a permissible procedure. But by and large, that is where there is a statutory basis for doing so: see for instance the Government Information (Public Access) Act 2009 (NSW), the Government Information (Public Access) Act 2009 (NSW) and the Privacy and Personal Information Protection Act 1998 (NSW).

40. As I understand the respondent’s submissions, the only basis for the matter proceeding with the respondent being allowed to rely on unredacted evidence, and the applicants are only able to see redacted evidence, is that the information is said to be commercially sensitive, and there is a risk that, if that information is provided to the applicants, the information will be released publicly thus providing a commercial advantage to the respondent’s competitors and damaging the respondent’s business.

41. Assuming that the information is commercially sensitive, a matter to which I will return in the next section of these reasons, I do not accept that there is a real risk that the applicants the subject of these proceedings would release that information to the world at large, let alone provide it to the respondent’s commercial rivals. Indeed, a number of applicants told me that they would abide by an order of the Tribunal that they not publish that information outside of the present proceedings.

42. Be that as it may, as Ms Chen succinctly submitted; if only redacted evidence is provided to her, that is without disclosure of the actual supplier of the product she purchased, she will be denied the opportunity to examine, or test the respondent’s claims, namely the product the respondent sold to her was a genuine product and not a “fake”. 

43. I think that there is substance in that submission. It is the respondent who has chosen to present evidence to the Tribunal to provide its products are genuine; it is axiomatic that the applicants who seek to prove that the products are not genuine, be able to test that evidence.

44. In summary, I am strongly of the view that these proceedings not proceed in circumstances where the applicants are not aware of the totality of the evidence to be relied on by the respondent.

45. During the course of the hearing, I indicated to Mr Solimena my preliminary view was that were real difficulties in me acceding to its s 38 application, and that if the respondent wanted to rely on the totality of its evidence, it would have to be disclosed to the applicants. I suggested that a “work around” could be that an order be made pursuant to s 64 of the NCAT to protect the confidentiality of that information (assuming of course that I accepted that the information was so commercially sensitive to warrant that protection).

46. Mr Solimena did not accept that suggestion. He submitted that the risk was of the applicants releasing or publishing the redacted information publicly, and the respondent’s competitors obtaining a commercial advantage was “too great”.

47. Be that as it may, as I observed during the hearing, and as the Tribunal observed in matter GEN 23/38416, it is the applicant who bears the onus of proof, not the respondent. If the respondent wishes to positively prove that its bags are real and authentic, the applicants are entitled to test the evidence on which the respondent relies.

The s 64 application

48. That leaves for consideration whether, presuming the respondent wishes to continue to assert that its products are genuine on the basis of the evidence it wishes to rely on, whether a non-publication order should be made.

Relevant principles

49. The respondent correctly submits that cases such as CYL v YZA and Wilson v Basson are authority for the proposition that a non publication order can be made to protect commercial confidentiality because:

1. open justice is a value that must be balanced against other values, including the need to protect commercial confidentiality: CYL v YZA at [94];

2. while open justice is a fundamental aspect of legal system, it is not an absolute one, and there are recognised common law exceptions where the disclosure of the information, including where the disclosure of confidential information or trade secrets which would seriously affect the commercial value of the information: Wilson v Basson at [22];

3. to the extent that information is confidential, it should be protected to the extent necessary to preserve its commercial value: New Life Media at [89].

50. To those authorities can also be added the statement of Pembroke J in Seven Network (Operations) Limited & Ors v James Warburton (No 1) [2011] NSWSC 385 that:

3. There are limited exceptions to the principle of open justice. Where those exceptions apply, the courts will restrict access where appropriate. But departure from the principle of open justice is only justified where observance of the principle would in fact frustrate the administration of justice by unfairly damaging some material private or public interest. To that end, an order restricting the public availability of information will only be made if it is really necessary to secure the proper administration of justice. Such an order must be clear in its terms and do no more than is necessary to achieve the due administration of justice. Furthermore, there must be some material before the Court upon which it can reasonably reach the conclusion that it is actually necessary to make an order of that type: John Fairfax & Sons Ltd v Police Tribunal of New South Wales (1986) 5 NSWLR 465 at 476-7 (McHugh JA); Caroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 4) [2010] NSWLEC 91 (Preston CJ); Idoport Pty Ltd v National Australia Bank [2001] NSWSC 1024 (Einstein J).

4. The consequence of the principle of open justice is that embarrassing, damaging and inconvenient facts may occasionally come to light. That consideration has never been regarded as a reason in itself for the suppression of evidence or for an order restricting access to documents: John Fairfax Group Pty Ltd (Receivers & Managers Appointed) v Local Court of New South Wales & Ors (1991) 26 NSWLR 131 at 142 (Kirby P). Equally, it is common for sensitive issues to be litigated and for information that is extremely personal or confidential to be disclosed. This is sometimes an unavoidable by-product, and a necessary consequence, of the application of the principle.

5. To avoid the consequences that sometimes follow from the conduct of proceedings publicly and in open view, parties can, and frequently do, choose to litigate their disputes by private commercial arbitration. But if they choose to litigate in court, they must accept the necessity for the Court to conduct its proceedings openly and with transparency.

6. … One of those exceptions is the protection of trade secrets and genuinely confidential information that might assist competitors. If it were otherwise, the operation of the system of justice may result in injustice to a person or entity whose legitimate confidentiality is exposed and infringed.

7. Whether information is confidential is a question of fact. … Sometimes, of course, the sensitive and confidential nature of the information, and the advantage to competitors if it is disclosed, will be immediately apparent on the face of the document.

8. If it is proved that documents were created in circumstances of confidentiality and that the confidentiality has been retained and is maintained, and if it is clear that the publication of the information in the documents will provide an advantage to competitors and be damaging to the party seeking to restrict access, then the case for invoking one of the exceptions to the principle of open justice will be made out. But the onus of demonstrating the confidentiality of the information rests squarely on the party seeking to restrict access. And as I said, the restriction must be no more than is necessary to avoid an injustice.

(emphasis added)

Application of principles

51. I accept unreservedly the statement of Pembroke J in Seven Network at [2] that:

The reason for the principle of open justice is that, if the proceedings of courts of justice are fully exposed to public and professional scrutiny and criticism, and interested observers are able to follow and comprehend the evidence, the submissions and the reasons for judgment, then the public administration of justice will be enhanced and confidence in the integrity and independence of the courts will be maintained: Russell v Russell ; Farrelly v Farelly (1976) 134 CLR 495 at 520 (Gibbs J). Not only does the conduct of proceedings publicly and in open view assist in removing doubts and misapprehensions about the operation of the system, but it also limits the opportunity for abuse and injustice by those involved in the process, by making them publicly accountable. Equally, public scrutiny operates as a disincentive to false allegations and as a powerful incentive to honest evidence: J v L & A Services Pty Ltd (No 2) [1995] 2 Qd R 10 at 45 (Fitzgerald P and Lee J). For all those reasons, the principle of open justice is not only an indispensable feature of our system, but it is also a healthy feature.

52. However, as noted above, one of the exceptions to that principle is the protection of trade secrets and genuinely confidential information that might assist competitors.

53. In my view, the principles are clear that commercially sensitive information may be the subject of a s 64 order, but ultimately the Tribunal needs to be satisfied by the respondent that:

1. the information is sufficiently commercially sensitive;

2. there would be a clear injustice if that information was disclosed;

3. the evidence provided by the respondent is sufficient to make those findings; and

4. the balancing of the principles of open justice and procedural fairness as against claims of the respondent are in favour of making the order.

54. The information said to be so confidential as requiring a non-disclosure order pursuant to s 64 of the NCAT Act is:

1. the identity of the direct supplier of the respondent;

2. any information that would identify the direct supplier of the respondent;

3. information appearing on invoices of the direct supplier to the respondent that discloses:

1. the quantities of the goods purchased by the respondent form the direction supplied; and

2. the prices of those goods.

55. As noted in Seven Network, if it is proved that documents were created in circumstances of confidentiality, and that the confidentiality has been retained and is maintained, and if it is clear that the publication of the information in the documents will provide an advantage to competitors and be damaging to the party seeking to restrict access, then the case for invoking one of the exceptions to the principle of open justice will be made out. But the onus of demonstrating the confidentiality of the information rests squarely on the party seeking to restrict access.

56. The evidence relied on does not satisfy me that any of the information was created in circumstances of confidentiality. Nor does it satisfy me positively that publication of the information in the documents will provide an advantage to the respondent’s competitors and be damaging to respondent. I accept that the respondent would prefer to keep the information confidential and out of the public domain, but, as I noted above, it is the respondent which wishes to introduce this evidence. While I accept that the information sought to be protected is commercially sensitive, Mr Solimena’s statement that the respondent’s competitors might use that information to obtain an unfair competitive advantage is simply an assertion.

57. At the risk of repetition, there is no obligation on any respondent to disprove an applicant’s case. It is up to an applicant to prove their case. In my view, the fact that the respondent wishes to positively prove that the products it sells are genuine militates against the fundamental principle of open justice being displaced.

Conclusion

58. It follows that the applications for miscellaneous orders a dismissed.

Orders

59. The Tribunal orders that:

1. The respondent’s applications for miscellaneous orders are dismissed.

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Endnote

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 15 August 2024