Madan v Mineralogy Pty Ltd [No 2]
[2022] WASC 470
•7 FEBRUARY 2023
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: MADAN -v- MINERALOGY PTY LTD [No 2] [2022] WASC 470
CORAM: KENNETH MARTIN J
HEARD: 3 NOVEMBER 2022
DELIVERED : 3 NOVEMBER 2022
PUBLISHED : 7 FEBRUARY 2023
FILE NO/S: CIV 1292 of 2021
BETWEEN: HEM SHANKER MADAN
Plaintiff
AND
MINERALOGY PTY LTD
First Defendant
Catchwords:
Practice and procedure - Discovery - General discovery sought by plaintiff - Defendant proposes discovery by categories - Foreshadowed application by defendant to seek a separation of liability issues for trial and deferring quantum issues - application to limit discovery to liability issues presently - Express undertaking as to limited use of provided discovery sought by defendant and opposed by plaintiff as necessary by reason of applicability of Harman obligations
Legislation:
Rules of the Supreme Court 1971 (WA)
Result:
Programming orders for category discovery on liability issues and for express confidentiality undertakings
Category: B
Representation:
Counsel:
| Plaintiff | : | Mr M Blandford |
| First Defendant | : | Mr P Dunning KC & Mr E Robinson |
Solicitors:
| Plaintiff | : | Butcher Paull & Calder |
| First Defendant | : | Thomas Browning |
Cases referred to in decision:
Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Company (1882) 11 QBD 55
Harman v Home Department State Secretary [1983] 1 AC 280
Hearne v Street [2008] HCA 36; (2008) 235 CLR 125
KENNETH MARTIN J:
(This judgment was delivered extemporaneously on 3 November 2022 and has been edited from the transcript.)
The first question that arises is by reference to the rival minutes of yesterday that the court has received. An in-principle dispute between the parties is over whether there ought to be discovery generally as the plaintiff would seek, or by reference to categories. As I indicated in my dialogue with counsel for the plaintiff, it is a relatively rare case these days where a commercial court will proceed on the basis of ordering the 'Peruvian Guano' parameter general discovery that was established in Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Company (1882) 11 QBD 55.
The utility of having the settled-upon categories of discovered documents expressly identified, even if the response is that there are no such documents ultimately exposed in a particular ordered category, is important. Focussing upon the required classes of discovered documents also directs the parties and their advisers to the true issues in a case at an early stage. That is helpful in terms of producing a distillation for what might otherwise be a wider array of potential issues. So I approach the matter from the perspective that nowadays in the CMC List in this state, discovery and inspection orders will ordinarily be made for specific categories of documents.
In that respect, it seems that the parties, on the materials before me today, have made some progress in terms of identifying categories, particularly categories which the defendant seeks from the plaintiff, which are identified under Annexure B to the defendant's minute of orders filed on 2 November 2022 (folio 60). In terms of the categories which the defendant suggests that it should provide to the plaintiff, it seems to me the plaintiff needs to consider his own position, given that he has not focussed on this approach to date.
Categories 19 through 23, as are suggested by the defendant (at Annexure C of folio 60), seem to be appropriate. Then there should be a conferral over the par 8(a), par 8(b), par 8(c) and 8(d) matters as identified in the lawyers for the plaintiff's correspondence of 1 November 2022 under Mr Browning's affidavit of 2 November 2022 (folio 62).
In the course of my dialogue with counsel today, Mr Blandford has identified that from the categories of document that the defendant seeks from the plaintiff under Annexure B, the plaintiff would also seek the same categories from the defendant – albeit with adjustments indicating that the categories sought from the defendant are discovery categories 3, 4, 7 and 8.
Mr Dunning KC for the defendant, in a general way, has indicated that, as identified for the plaintiff, the defendant's position, subject to some clarifications in a temporal sense over discovery category 8, is unlikely to be a subject of real controversy.
I am inclined, then, in these circumstances of some progress on discovery, but not finalised progress (particularly from the plaintiff's perspective), to allow both sides a further seven days, through their lawyers, to confer further on this issue so as to, hopefully, finalise their respective ultimate discovery categories on liability. On that basis I am, at least, prepared in principle to sign off on orders to that extent once the categories are more settled.
Preferably, that would be by a submitted minute of consent identifying all the finalised discovery categories.
The current minute of the plaintiff lodged on 2 November 2022 (folio 63) seeks to go further. It would, by reference to its proposed orders 3 and 4, by 9 December 2022 and then 23 December 2022, seek further documents from the defendant, first in relation to the question of when the defendant first derived a profit from their involvement in the Balmoral Project. Then, second, under item 4 of the minute, the plaintiff would seek discovery on the quantum of profits made from the defendant's involvement in the Balmoral Project.
In light of the fact that there is a pending application to be brought on by the defendant, pursuing a proposed separation of issues for trial and bearing upon quantum, it is premature to make those discovery orders as sought by the plaintiff at this time.
Obviously, I need to hear and determine the substantive argument on the foreshadowed application of the defendant. Depending on the outcome of that application, that position will bear on my attitude to ordering further discovery in respect of the net profits issue and upon the quantum documents generally, as the plaintiff now seeks. For the present, those requests must be deferred.
In terms of the 'net profits' issue, it seems to me that the true meaning of that phrase which is relied upon as a component of a cause of action in the contract as pleaded by the plaintiff looms as being potentially problematic. If so, that may require an exercise over its proper construction within the liability phase of the case, whenever that is.
If the liability phase of the case is separated away, then the exercise would be at that point. If liability and quantum issues are all heard together, then the construction exercise would happen in that global context.
One thing looks to be relatively clear, prima facie. The phrase used and relied upon, that is, 'net profits obtained by Mineralogy', looks to present as something more than a mere reference to the financial statement profit and loss components of the annual financial years' trading outcome accounts for Mineralogy. Contextually, if one is talking about a long-term acquisition of tenements as a plan over many years, with the underlying idea to, one day, develop an operative magnetite mine and processing plant operation - to, ultimately, extract and process a product that is valuable and is capable of sale for profit – then the proper interpretation of the 'net profits' phrase looks to require close attention by a process of objective interpretation.
I have had some dialogue with counsel for the plaintiff about that exercise today. In the circumstances, I think, as regards discovery, that – subject to a resolution of identifiable discovery categories by reference to liability issues – there is no reason why that discovery work on liability issues cannot be undertaken contemporaneously with an exercise in determining whether there ought to be a separation of issues by the hiving away of quantum issues, under the application that is today foreshadowed by the defendant. I will make some programming orders in due course by reference to the defendant's minute, which foreshadows the plaintiff being heard at an appointment on that separation of issues application.
There are other aspects of the exchanged minutes presenting today, in terms of an electronic discovery protocol. That issue has now been resolved within the conferral dialogue between the parties. Hence, I am happy to make an order, essentially, by reference to items 11 and 12 on the defendant's minute of 2 November 2022 to that end.
The more problematic issue today was the suggested confidentiality protocol which the defendant propose, but which the plaintiff rejects as unnecessary, bearing in mind the force of the so-called 'Harman' undertaking (see Harman v Home Department State Secretary [1983] 1 AC 280). This objection is better understood as a Hearne v Street [2008] HCA 36; (2008) 235 CLR 125 undertaking as canvassed by the High Court in that decision. Documents inspected and obtained under a curial interlocutory discovery regime – and by the broader meaning of discovery, extending to documents produced in answer to a subpoena and, indeed, answers to interrogatories – are all a part of the discovery process.
Ordinarily, documentary materials obtained in the interlocutory discovery process may only be used in the advancement of, or in the furtherance of, the litigation within which a compulsive access and inspection of such document has taken place – unless the leave of the court is otherwise obtained.
The position of the defendant is that the confidentiality orders they seek under their suggested protocol (which is Annexure A to their minute) is orthodox and not unduly constrictive. It is usual, says the defendant, to be provided with such undertakings for sensitive documents in commercial cases of this kind. Indeed, the defendant says that much more onerous confidentiality undertakings are regularly presented to commercial courts – notwithstanding the force otherwise of the Harman undertaking obligations which apply. The in-principle dispute then for resolution is whether I should go any further than what is proposed already under the implied Harman undertaking in the circumstances of the present case.
In all the circumstances, I am left persuaded here that it is appropriate for a formalised confidentiality protocol to issue as well. Bearing in mind the sensitive financial character of some of the underlying documents which are sought, even those going only to liability, this is in my view appropriate. The documentary subject matter extends to the surrounding commercially valuable mining tenements that became the so-called Balmoral Project. They are the subject matter of the litigation for issues of liability and, indeed, in quantum, once that point is reached.
The character of some of these financial documents will be commercially sensitive. A greater level of protection for them is appropriate.
One benefit of an express confidentiality undertaking is that it should focus the respective lawyers and their clients' attention upon the specifics of their confidentiality obligations. At least it should do that. The express undertaking that is sought by the defendant, once ordered, ought to be provided in terms as notice, essentially, to every employee, lawyer, expert or other person participating in the litigation and who may in some way be likely to interact with these sensitive documents prior to, and during the course of, a trial – so that persons are made aware, in explicit terms, of this cohort of confidential and sensitive documentary material.
An express confidentiality undertaking also has the benefit, in the context of possible future applications for access to documents under order 67B, as acting as a 'red flag' – reinforcing to all participating in the court system that these materials are acknowledged as commercially sensitive – even if they do eventually become exhibits at a trial; see Rules of the Supreme Court 1971 (WA) O 67B r 10.
Whilst arguments can be made that this confidentiality order regime is strictly unnecessary – given the force of the Harman undertaking and so, the possibility of a contempt of court sanction directed against any conduct contrary to the obligation – a level of early pre‑emption, set down so as to limit the need to resort to such punitive measures, is not out of place here.
An appropriate focus and elaboration of these confidentiality obligations towards discovered documents, in my view, is of benefit generally, to everybody in the system, court staff included, so as to expressly remind each of us of the onerous nature of the applicable confidentiality obligations which need to be fully respected, but sometimes, usually inadvertently, are not.
Orders will be made to that effect as the defendant seeks.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
VC
Associate to the Honourable Justice K Martin
7 FEBRUARY 2023
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