Metal Manufacturers Ltd t/a Mm Cables v Comptroller-General of Customs

[1993] FCA 941

941 93

JUDGMENT No. ........ ........ .. I ........ ....

IN THE FEDERAL COURT OF AUSTRALIA	)
1
NEW SOUTH WALES DISTRICT REGISTRY	) No G 665 of 1993
GENERAL DIVISION	1

BETWEEN:  METAL MANUFACTURERS

LIMITED t/a MM CABLES

PACIFIC DUNLOP LIMITED t/a

OLEX CABLES

PIRELLI CABLES AUSTRALIA

LIMITED

Applicants

T H E C O M P T R O L L E R -

GENERAL OF CUSTOMS

First Respondent

T H E A N T I - D U M P I N G

AUTHORITY

Second Respondent

MIDLAND METALS OVERSEAS

PTE LIMITED

Third Respondent

m:	Davies J.
Date:	7 December 1993
Place:	Sydney

RECEIVED

EDERAL COURT OF

REASONS FOR JUDGMENT AUSTRALIA PRINCIPAL

EX TEMPORE REGISTRY

The proceedings in this Court arise out of complaints made as to dumping of a

certain cable in Australia. Complaints were first made in 1988 and investigations were

undertaken. In 1991 the Australian Customs S e ~ c e brought in a report on the then current complaint. It found no evidence of dumping. That report was affumed by the Anti-Dumping Authority in February 1992. Later in 1992 proceedings were instituted in

this Court seeking orders of judicial review with respect to those two reports. In the course of those proceed~ngs, an undertaking as to confidentiality in what I take to be the usual form was given by counsel and the solicitor for the applicants and disclosure of documents was made on that term.

Ultimately those proceedings resulted in a consent order that the matter be remitted back for further consideration and the decisions of December 1991 and February 1992 were set aside. Early this year, the Australian Customs Service brought

in its further report again finding no evidence of dumping. The Anti-Dumping Authority

affirmed that decision. These proceedings were then instituted in August of this year and on 1 October an order was made by consent for discovery. The order was in the usual

between the parties on or before 5 November 1993. The list of documents provided on form and it provided that discovery and inspection of documents would take place

behalf of the Comptroller General of Customs and the Anti-Dumping Author~ty each

contained a Part I1 of Schedule I and set out therein documents which had been obtained

by the Australian Customs Service on a confidential basis.

The Lists which were verified, contained paragraphs 3 and 4 which read:-

"3. The documents enumerated in Pan 2 of Schedule 1 are privllcged from
inspection on the ground that it a not in the pubhc interest that they be

d~scloscd. The documents arc conlidentlal commerc~al documents which were supplied to the First Respondent in confidence They contain information rclatlng to the commerc~al and tradlng actlnties of persons and 11 would be disadvantageous to the Interests of the suppliers of the lnformatlon if the Applicants were to be shown their contents.

4.          The documents enumerated m Part 2 of Schedule 1 were voluntarily supplred to the First Respondent durlng its investlgatlons under Pan XVB of the Customs Act 1901 for the purpose of assisting in the discharge of its statutory respons~bllitles. It is in the public Interest that the documents not be disclosed so as to ensure the F~rst Respondent continues to be able to obtaln all relevant

mformat~on for the future conduct of its lnqumcs and that suppl~crs of this type

of information contlnue to supply such information. Further, it is also necessary to ensure that the Commonwealth of Australia meets its obllgatlons m respect of confidential information arising under the General Agreement on Tanffs and Trade."

Notwithstanding those claims it appears that the Comptroller General and the Anti-

Dumping Authority would have been prepared to disclose the documents to counsel and

solicitor for the applicants on the usual undertalung as to confidentiality. But Midland Metals Overseas Pty Limited, which in October had been joined as a thlrd respondent

to the proceedings, objected on behalf of itself and an exporter from Korea, Daesung,
to the disclosure. The applicants therefore served a notice of motion which read:-

"That access to the documents hsted in Part 2 of Schedule 1 of the First and Second Respondents' List of Documents, and the documents IU Pan 1 of Schedule 1 of the Fmt Respondent's L~st of Documents referred to in the Third Respondent's Schedule of Objected Documents produced to the Court, be grantcd only to the Appl~cants' solicitors and Counsel upon they and each

of them undenahng to the Coun in the terms of the Undenahngs produced

to the Court."

When that motion came on for heanng I adjourned the matter so that
s p e c ~ c notice of it could be given to Daesung. The matter came on again this day and
I rejected an application by Mr Erskine of counsel, who appeared for Midland Metals

and who also sought an adjournment on behalf of Daesung. I rejected his application that the proceedings should be adjourned. I did that, not on the basis that there might be no matter that Daesung or Midland Metals might wish to put with respect to non-disclosure, but that the evidence that was before the Court indicated that the matters which might

be raised were likely to involve matters requiring long investigation and the consideration

of them would unduly hinder the efficient and prompt disposal of the present

proceedings.

The material which Mr Erskine relied upon did however show that there was

some concern on the part of Daesung that confidential information which had been supplied to the Australian Customs Service had found its way, to Daesung's disadvantage, to competitors. There was also material in the form of two articles which had appeared in Korea in or about March of this year which indicated that the Korean government was

concerned that there had been a disclosure of confidential information supplied by the Korean firms durlng the course of the investigation. Necessarily, I must take those

matters into account in thls present application.

Mr Erskine opposed the application for discovery fist on the ground that the

documents sought were not sufficiently relevant to the matters raised in the application

as to justify the disclosure having regard to the risk of damage to Mldland Metals and

to Daesung should the confidential information get out. On this point, however, it seems

to me that the public reports of the Australian Customs S e ~ c e and the Anti-Dumping Authority are so general in their treatment of wtal matters that adequate consideration

of the validity of the decisions could not be given without access to the background material. The essence seems to be in the cost of production, which 1s the basis upon which normal value was calculated.

Just looklng at the public reports, there are paragraphs, for example, stating

that raw material prices provided by Daesung were found to be at parity with world spot prices and that Customs also included a profit element in its determination of normal

values. I just pick those two paragraphs out as illustrating the generality of the statements, the validity of which one could not test unless one went to the background documents. Many of those background documents would of course be annexed to the

full reports whlch have not been released to the public.

It is usual in cases of this type for the full report to be provided to the Court

for its consideration, subject of course to the making of an appropriate order as to confidentiality. I would expect that at the hearing of this matter that would be done, or at least that such of the background material as bears upon the particular grounds relied upon by the applicants would be made available to the Court.

Mr Erslune pointed to the particular grounds set out in the application

lodged in August 1993 and to particulars which were supplied on 21 October 1993. It

is certainly true that the application makes no reference to precise figures and that the

in issue. Paragraph 2(c) of the application alleged that the decision of Customs involved	particulars so alleged at precise figures such as that precise figures are not themselves
the failure to take into account relevant consideration including "The actual cost of the drum". The particular given thereof said that what was m issue was "A cost for drum was
not included, and that such cost ought to be included!' Thus no issue concerning a
specific sum was raised in the particulars.

Notwithstanding these particulars however, it seems to me that it would not

be feasible to assess whether matters such as the drum were included or the significance

of the cost of the drum without having access to the materials which were taken into account in the challenged decisions. For those reasons, I am of the view that disclosure ought to be made in this case, as it is made either invariably or almost invariably in cases of this type.

Mr Erskine then submitted that there was a great rlsk of accidental disclosure

and that such a disclosure could destroy a company such as Midland or the ability of a company such as Midland Metals or Daesung to compete in the market place, particularly having regard to the fact that there are only a small number of traders in the

area and that the usual process by which transactions are done is a tender process. Mr Erskine submitted that in such a case, price and its confidentiality are crucial. Mr

Erskine also pointed to the GATT code which recognises that matters can be disclosed

by exporters in confidence to the investigating authority and that, in such event, the

confidence ought to be respected.

I accept what Mr Erskine has to say about the sig~uficance of confidentiality

as to price, it is a matter which is regarded as of the greatest sensitivity, particularly amongst companies which are competing on world markets. The companies neither wish it to become known what are the prices at which they are selling, nor even to be

embarrassed should they, having sold at one price to one company, have also sold at a substantially lower price to another. Confidentiality in these matters is regarded as an essential part of commerce.

Notwithstanding that, however, the usual practlce m these cases where orders

by way of judicial review are sought in relation to anti-dumping submissions, is to require discovery of the confidential matter, but to l~mit the discovery to persons who give

undertakings as to confident~allty. Moreover, the persons to whom discovery is given are invariably lawyers who would be unlikely to encounter situations where they would be

using or disclosing that material in any context outside the context of the judicial review

proceedings. It was for that reason that in Kanthal Australia Ptv Limited v. Minister f o ~

Industry. Technoloq and Commerce (1987) 14 F.C.R. 90, Wilcox J. declined to aUow the

confidential material to be disclosed to a Mr Day, who was a qualified accountant. His Honour held that Mr Day had occasion to deal with commercial people in circumstances

outside the context of the judicial review proceedings, and there was therefore some greater risk of accidental disclosure by hlm than would be the case if the disclosure was

made to lawyers who were acting for the parties in the judicial review proceedings and

who would be likely to be advising only on legal affairs.

In the present case it seems to me that the usual practice should be followed.

It does not seem to me that it has been shown that there is any reason for limiting the

matenal in the full reports, as distinct from the documents of which the applicants seek	disclosure to, for example, the documents specifically referred to in or supporting the
discovery. Mr Erslune has not raised any point of distinct~on in relation to such a matter.
Nor do I think that the matters which have been raised which show that there is some
fear that there may have been disclosure of confidential information provide a reason for
not making the order. Certainly, that information would not support a finding, even on a prima facie bans, that there had been any improper disclosure by the persons or the
lawyers to whom the documents were d~sclosed in the 1992 proceedings. I do not take
the allegations as supporting any such finding.

I have, however, sought to ensure that, if there is a disclosure, it should be

a disclosure to persons who would not be likely to encounter situations which might give rise to an accidental disclosure on their part. I am Informed by Mr Sackar, senior counsel for the applicants that neither he nor his junior who today is MS Abadee, would be hkely to encounter any circumstances in which they would have any conflict m relation

to this information. Some attention has been given to the position of Mr Gillis, solicitor for the applicants, for Mr Gillis acts in proceedings in this Court for many companies

who are active in the import and export trades. I wished to be assured that he would not be put in a position of embarrassment or in such a position that there would be likely to

be any material risk of accidental disclosure.

Mr Gillis has put in an affidavit statlng that he does not act otherwise for the

second and third applicants but he does act for the first applicant, Metal Manufacturers in a number of matters, but not in relation to commercial transactions of importing or

Metal Manufacturers has its own in-house lawyers to deal wlth those matters. In the	exporting or matters which involve price in buying or selling. Mr Gillis has deposed that
circumstances, it seems to me that he should be included w i t h the number of persons to whom the documents should be provided, if he is prepared to give the undertaking sought.

For these reasons, I will order that access to the documents listed in part 2

of schedule 1 of the first and second respondents list of documents and to the documents

in part 1 of schedule 1 of the first respondent's list of documents referred to in the third

respondent's schedule of objected documents be granted to the applicant's sol~citors and counsel upon they and each of them undertaking to the Court in terms of the usual undertaking.

The only matter that I need add is that I have not dealt in these reasons at

great length with the principles behind the making of these orders. I am content to

adopt the exposition by Wilcox J. m Kanthal's case, wh~ch fully sets the matter out and which expresses the principles which the Court as a matter of general practice acts upon in these cases reviewing anti-dumping decisions.

I should reserve liberty to apply in case some problem should arise.

The final matter is the matter is the matter of costs. I shall express the order

as costs reserved but I indicate my view that the objections whlch Mr Erskine raised were properly raised. I thmk the concerns of overseas traders are concerns which ought to be

carefully looked at. These matter do affect Australia's trade relations, and if there are

to the Court's attention for the Court to make some decision about them. I do not think	concerns in Korea about any investigation, they are concerns which properly are brought
that the costs should be treated otherwise than as an ordinary part of the costs of the proceedmgs. It seems to me that these concerns have been raised. The evidence shows
that. Therefore, there has been a circumstance which is part of the overall proceedings to be dealt with.

So the formal order I will make is that the costs be reserved and you have

my Indication that in the wind-up they should be dealt with as ordinary costs of the

proceedings.

I make a formal order that these orders be stayed until Friday, 10 December

I certlfy that this and the 9 preceding pages

are a true copy of the reasons for judgment herein

of the Honourable Mr Justice Davies.

Date:	7 December 1993
Counsel for the applicants:	Mr J. Sackar QC MS N. Abadee
Solicitors for the applicants:	C.G. Gillis & Co.
Counsel for the 1st & 2nd respondents:	Mr S. Daley

Solicitor for the 1st & 2nd respondents: Australian Government Solicitor

Counsel for the 3rd respondent:	C. Erskine
Solicitors for the 3rd respondent:	GaUens Crowley & Chamberlain
Date of hearing:	7 December 1993
Date of judgment:	7 December 1993