Lloyds Ships Holdings Pty Ltd v Davros Pty Ltd
[1986] FCA 156
•18 APRIL 1986
Re: LLOYD'S SHIPS HOLDINGS PTY.LTD. and QUEENSLAND MERCHANT HOLDINGS LIMITED
And: DAVROS PTY.LTD.; LLOYD CORPORATION (a firm); KEITH BERNIE LLOYD; LLOYD'S
EXCLUSIVE CHARTERS PTY.LTD.
No. QLD G17 of 1986
Practice and procedure
COURT
THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Spender J.
CATCHWORDS
Practice and Procedure - Subpoena for Production issued to the Australian Trade Commission - Statutory immunity from production claimed - Whether statutory immunity applies.
Foley v. Tectran Coroporation (1984) 57 ALR 26
Australian Trade Commission Act, 1985 (cwth.)
HEARING
BRISBANE
#DATE 18:4:1986
For the applicants: Mr. Morris instructed by Clarke & Kann
For the Australian Trade Commission: Mr. Bickford instructed by the Australian Government Solicitor
ORDER
The Australian Trade Commission is immune from producing the documents referred to in the subpoena.
The applicants pay the Australian Trade Commission's costs of the hearing.
NOTE: Settlement and entry of orders is dealt with in Order 36
of the Federal Court Rules.
JUDGE1
This is the return date of a Subpoena for Production issued to the Australian Trade Commission. It raises a question of the scope of secrecy provisions contained in the Australian Trade Commission Act 1985. Leave to issue this subpoena was obtained on 14 April 1986 by the applicants in this action, the trial of which is due to commence on next Monday, 21 April 1986. Objection is made to the production of documents pursuant to the subpoena. Because the trial of the action is imminent, I am required to give an immediate ruling on this objection.
Reference must be made first to the nature of the proceedings in which the subpoena has issued. The proceedings involve claims for breaches of the Trade Practices Act, passing off, defamation, injurious falsehood, and breach of contract. These claims arise out of a dispute involving companies and individuals engaged in the business of ship or boat building. By an agreement dated 16 November 1984, the first applicant (under its then name of Q.M.H. Resources Pty.Ltd.) purchased from the first respondent a business carried on at Bulimba in Brisbane in the State of Queensland, together with the exclusive right to use certain names including "Lloyd's Ships". The provisions of the agreement are detailed and I need not make reference to them for present purposes. The respondents are alleged to have carried on the business of a ship and boat builder at various times at premises situated near the applicants at Bulimba in breach of the agreement and in such a manner as to constitute misleading and deceptive conduct and passing off.
I have yet to determine the relevance of the subpoenaed documents to any issue raised in these proceedings.
The steps involved in having a third party produce documents pursuant to a subpoena are summarised in the very helpful judgment of Moffitt P. in Waind v. Hill and National Employers' Mutual General Association Ltd. (1978) 1 NSWLR 372 at 381:-
"As Jordan C.J. pointed out in Small's case (1938) 38 S.R.(N.S.W.) 564, at p.574; 55 W.N.215, and, as appears in Burchard's case (1891) 2 Q.B. 241, at pp.247, 248, there are at least two steps in the procedure of having a third party bring documents to court, and in their use thereafter. Indeed, on a correct view, there are three steps. The first is obeying the subpoena, by the witness bringing the documents to the court and handing them to the judge. This step involves the determination of any objections of the witness to the subpoena, or to the production of the documents to the court pursuant to the subpoena. The second step is the decision of the judge concerning the preliminary use of the documents, which includes whether or not permission should be given to a party or parties to inspect the documents. The third step is the admission into evidence of the document in whole or in part; or the use of it in the process of evidence being put before the court by cross-examination or otherwise. It is the third step which alone provides material upon which ultimate decision in the case rests. In these three steps the stranger and the parties have different rights, and the function of the judge differs."
The subpoena directed to the Australian Trade Commission seeks production of:-
1. Any application and supporting or associated documents
lodged by any of the respondents, or by any company associated with the third respondent named in the business purchase agreement of 16 November 1984, pursuant to the Export Market Development Grants Act 1974 (Commonwealth)(as amended),( such companies being identified by name in the subpoena);
Any file note, memorandum or other document raised by
the Australian Trade Commission pursuant to receipt of such documents, or an investigation of any such application from any such company or person.
The objections to production are based solely on statutory privileges from disclosure and do not assert public interest immunity.
On 17 April 1986, an affidavit of Tyrrell William Walters McGeever, who is the officer in charge of the Brisbane Office of the Market Development Grants Group, and an employee of the Australian Trade Commission, was filed on behalf of the Australian Trade Commission. In paragraph 2 of his affidavit he deposes to having examined two files held by the Commission relating to the companies specified in the subpoena to which the affidavit refers. In paragraph 3 of his affidavit he deposes:-
"The whole of the Commissions' files relating to the aforesaid companies consist of -
(a) information concerning the affairs of a person or persons acquired by members of the Commission or members of the staff assisting the Commission or employees of the Commission as the case may be, by reason of their employment with the Commission; or
(b) documents relating to the affairs of another person furnished for the purposes of the Australian Trade Commission Act 1985."
Immunity of those documents for production to the Court is claimed pursuant to s.94(5) of the Australian Trade Commission Act 1985.
Section 94 of the Australian Trade Commission Act 1985 provides as follows:-
"94.(1) This section applies to a person who is or has been -
(a) Chairperson, Deputy Chairperson, acting Chairperson or acting Deputy Chairperson;
(b) any other appointed member of the Board, or an acting member of the Board appointed under sub-section 17(1);
(c) Managing Director, Deputy Managing Director, acting Managing Director or acting Deputy Managing Director; or
(d) employed by the Commission under section 60.
(2) Subject to this section, a person to whom this section applies shall not, either directly or indirectly, except for the purposes of this Act -
(a) make a record of, or divulge or communicate to any person, any information concerning the affairs of another person acquired by the first-mentioned person by reason of his or her employment; or
(b) produce to any person a document relating to the affairs of another person furnished for the purposes of this Act.
Penalty: $2,000 or imprisonment for 1 year, or both.
(3) Sub-section (2) does not apply to the disclosure of information, or the production of a document, to the Minister, to the Secretary to the Department, or to an officer of the Department designated by the Secretary.
(4) Sub-section (2) does not prevent the Commission from communicating, or making available to another person -
(a) particulars of -
(i) a guarantee given, or proposed to be given, under section 39, 41 or 43 or a guarantee of a like nature given, or proposed to be given, under section 44;
(ii) a contract of indemnity entered into, or proposed to be entered into, under section 40 or 42 or a contract of a like nature entered into, or proposed to be entered into, under section 44; or
(iii) a loan made, or proposed to be made, under section 49 or 50;
(b) the names of persons to whom the Commission has authorised payments of grants under the Export Market Development Grants Act 1974 and the respective amounts of those grants; and
(c) any information of a statistical nature relating to the making of grants under the Export Market Development Grants Act 1974.
(5) A person to whom this section applies shall not be required to divulge or communicate to a court any information referred to in sub-section
(2) or to produce in a court any document referred to in that sub-section, except when it is necessary to do so for the purposes of, or of a prosecution for an offence against, this Act or the Export Market Development Grants Act 1974.
(6) A person to whom information is communicated under sub-section (3) and an employee or other person under that person's control are, in respect of that information, entitled to rights and privileges, and subject to obligations and liabilities, under sub-sections (2) and (5) as if they were persons referred to in sub-section (1).
(7) In this section -
"court" includes any tribunal, authority or person having power to require the production of documents or the answering of questions; "produce" includes to permit access to.
Counsel for the applicant submits that s.94(5) does not preclude production of documents pursuant to the subpoena because s.94 applies only to the person specified in s.94(1), and not to the Australian Trade Commission itself.
Section 7 of the Act establishes the Australian Trade Commission as a body corporate. Section 11 creates an Australian Trade Commission Board, which consists of the members described in s.12. Section 60 enables the Commission to employ staff.
Given that the Commission is a separate legal entity from the board of the Commission, the applicants contend that the prohibition on disclosure in s.94(2) and the privilege against disclosure created by s.94(5) do not apply to the Commission itself, but only to the persons specified in s.94(1).
In support of this submission reliance is placed on the well known principle that courts should normally be able to secure information which is relevant for the determination of issues which come before them, including the securing by compulsion by means of a subpoena.
It was said that express words would be needed to cut down the application of that principle.
The competing policies involved in a case such as this were referred to by Kirby P. in Foley v. Tectran Corporation (1984) 57 ALR 26 at 31-2. The first is the public policy that courts should normally be able to secure relevant information, including under subpoena, for the determination of issues for trial coming before them. The second public policy, which underlies the inclusion of such a secrecy provision, is the need to protect the business secrets of those who, in faith of the confidentiality of their dealings with the Commonwealth and its agencies, disclose sensitive and confidential information in the hope of securing a benefit conferred by legislation.
I have been referred to the judgment at first instance of Miles J. in the Tectran Corporation case, (unreported, 23 November, 1984), where his Honour was concerned with s.37 of the Export Market Development Grants Act 1974. That section was entitled "Secrecy" and subsection 1 of it provided:-
"This section applies to every person who is or has been a member of the Board or of the staff assisting the Board."
The statutory scheme enacted by that section is similar to the scheme set out in s.94 of the Australian Trade Commission Act with which I am concerned. There was a significant difference however in that the subpoenas with which his Honour was concerned was directed to the proper officer of the Export Development Grants Board, and the proper officer of the Australian Industrial Research and Development Incentives Board, neither of which was a body corporate.
In the course of his reasons upholding the claimed immunity from production, his Honour said:-
"...having regard to the overall purpose of secrecy which s.37 seeks to attach to information contained within the Board's records concerning applications for grants or allied matters the section should, in my view, be widely construed. Otherwise the secrecy provisions of paragraph (b) of sub-section (2) relating to applications would easily be avoided by a reference to the terms of an application within a minute or other document of the Board which deals with or concerns that application. As I see it it is the policy of the Act that applicants for grants should be able to make claims for export development grants free from scrutiny by persons other than those concerned to consider the claims. On the face of it then the production of a document of the Board by its Proper Officer would result in divulging information contrary to s.37(5)."
That approach of Miles J. was referred to with approval by Finlay J. in Southern Pacific Hotel Services Incorporation v. Southern Pacific Hotel Corporation, (unreported, Supreme Court of New South Wales, 12 February 1985).
That also was a case directed to the Export Market Development Grants Board and was concerned with s.37 of the Export Market Development Grants Act 1974. Because of the differences between the Acts to which I have referred, neither of those cases is of direct relevance.
The matter is essentially one of statutory interpretation. If s.94 merely created a prohibition upon disclosure of the prescribed information by the specified individuals, the applicants' submission would be sustainable, since the section could be interpreted as penalising misfeasance by the individual members of the Board and staff of the Commission. However, s.94 does not merely prohibit disclosure. Section 94(5) creates privileges against the communication of certain information and the production of certain documents to a court.
This provision indicates to me that s.94 seeks to guarantee the secrecy of certain information both by penalising individuals who are responsible for any disclosure and by creating statutory privileges for representatives of the Commission who are subpoenaed by a court. In my opinion, the privileges created by s.94(5) are those of the Commission, despite the fact that the Commission itself is not referred to in s.94(1) as a person to whom the section applies.
The omission of the Commission itself from the application of the privileges is explicable on the practical basis that the Commission, in responding to the subpoena, must act through the persons specified in s.94(1).
My view that the Commission itself is intended to enjoy the privileges accorded to each of the persons through whom it must act, is fortified by reference to the opening words of s.94(4):-
"(4) Sub-section (2) does not prevent the Commission from communicating, or making available to another person -
..."
Sub-section (2) in its terms does not prevent the Commission from doing anything. The opening words of s.94(4) can only be given a meaning if "the Commission" is understood to mean the persons specified in s.94(1) through whom the Commission necessarily acts.
It was submitted that either s.94(4) was inserted as a result of a misapprehension of the earlier provisions or, alternatively, is a provision inserted out of an abundance of caution. In my view, however, there is a clear statutory intention to provide that documents supplied to the Australian Trade Commission in respect of the purposes of the Act should be regarded as confidential.
I conclude that the statutory privileges created by s.94(5) are effectively given to the Commission itself because the Commission may only respond to a subpoena by the attendance at court of one of the persons to whom s.94 applies.
This conclusion, in my opinion, gives effect to the legislative intention to be derived from s.94 in the context of the Act as a whole. The section sufficiently evidences the intention to override the ordinary policy that courts should be able to secure information relevant to issues which they are called upon to determine.
The result, then, is that the Australian Trade Commission is immune from producing the documents referred to in the subpoena.
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