NT Power Generation Pty Ltd v Power and Water Authority

[1999] FCA 1434

FEDERAL COURT OF AUSTRALIA

NT Power Generation Pty Ltd v Power & Water Authority [1999] FCA 1434

NT POWER GENERATION PTY LIMITED (ACN 061 314 921) v POWER AND WATER AUTHORITY and GASCO PTY LIMITED (ACN 009 627 801)

D5 OF 1999

MANSFIELD J

19 OCTOBER 1999
DARWIN

IN THE FEDERAL COURT OF AUSTRALIA
NORTHERN TERRITORY DISTRICT REGISTRY	D 5 OF 1999

BETWEEN:

NT POWER GENERATION PTY LTD
(ACN 061 314 921)
Applicant

AND:

POWER AND WATER AUTHORITY
First Respondent

GASCO PTY LTD
(ACN 009 627 801)
Second Respondent

GASCO PTY LTD
(ACN 009 627 801)
Cross Claimant

NT POWER GENERATION PTY LTD
Cross Respondent

JUDGE:	MANSFIELD J
DATE:	19 OCTOBER 1999
PLACE:	DARWIN

REASONS FOR DECISION

1. In the course of discovery, the parties have each sensibly agreed to a regime of accepting claims that documents are of a confidential character, and that such documents when produced for inspection should be inspected only by counsel and solicitors (sometimes specified solicitors) and by experts (sometimes specified experts) who have signed confidentiality undertakings.

2. The respondents have now filed a proposed witness statement of Kenneth Bruce Clarke (“Mr Clarke”), the Under Treasurer of the Northern Territory.  He refers to a number of documents apparently produced under that agreed regime.  The applicant seeks orders in respect of some of the documents that they be released from the agreed regime to the extent that those documents can be examined by Jeffrey William Hutchison (“Mr Hutchison”).  He is the Chief Executive Officer of the applicant.  He is also its principal witness in relation to its dealings with the first respondent and its officers and in other respects.  He is an electrical engineer, and part of his evidence has been directed to technical issues.  It is said that the applicant needs him to see the documents for the purpose of giving instructions about them to its legal advisers.

3. I accept that, in a practical sense, the respondents in effect are now being called upon to justify the claim to confidentiality in respect of those documents, to the extent that they oppose Mr Hutchison being permitted to see them.  They rely upon the nature and contents of the documents in issue to make out that position.

4. As Mr Clarke’s evidence has not yet been given, I think I should approach the issue in accordance with O 15 of the Federal Court Rules.  I apply the observations of Spender J in Mackay Sugar Co-operative Association Ltd v CSR Ltd (1996) 63 FCR 408, esp at 412-415. I will not repeat those observations. I must strike a fair balance between the competing interests of the party seeking inspection and the parties claiming confidentiality. I must, in that process, address the extent of the legitimate claim for confidentiality. Most commonly, but not always (and in the present circumstances at least, not in respect of the documents to which that additional access is sought) that claim will be to preserve commercially confidential information from disclosure to a trade rival.

5. The documents in issue have been identified as exhibits A1 (the Merrill Lynch report), and exhibits KBC6-15, 17-19 and 21 to Mr Clarke’s statement of proposed evidence.  Those documents, other than the Merrill Lynch report, fall into three categories:

   (a)a minute dated 12 January 1999 reporting on inquiries interstate as to the process of developing a regulatory regime for the first respondent to provide access to its electricity infrastructure to those wishing to generate and sell electricity to consumers in the Northern Territory,

   (b)various minutes of the advisory group to the Northern Territory Government on development of such an access regime, and

   (c)four draft access codes showing the evolution of the proposed code to provide access to persons or entities which, from April 2000, wish to make use of the transmission and distribution infrastructure owned by the first respondent for the supply to consumers of electricity in the Darwin-Katherine area, or in the Northern Territory.

   I was told that the final version of the proposed access code has not yet been determined upon, but that when it is decided upon it will be released to the public.  It is then intended that it will be the subject of public comment.

6. In forming the balancing view process, it is necessary to have regard to those documents and their contents.  I have examined them.

7. The Merrill Lynch report is clearly a confidential document.  It was prepared for the Northern Territory Government and concerns consideration of a range of policy options about the future manner of operation of the first respondent including in relation to the role of the first respondent when the market for the supply of electricity in the Northern Territory is deregulated.  Examination of its contents, including the detailed discussion of those various matters, show that it is in the higher range of confidential documents.

8. I have carefully considered the contentions of counsel for the applicant about the desirability of Mr Hutchison being able to see that document, or parts of it.  Particular parts of the document were drawn to my attention.  I bear in mind that the applicant, through its legal advisers, has already had access to that document.  It has been tendered in evidence by the applicant.  The applicant’s appropriate experts have had access to that document.  Expert evidence is proposed to be adduced on topics to which the Merrill Lynch report relates.  Mr Hutchison’s evidence-in-chief has been almost concluded.  Having regard to the nature and contents of the Merrill Lynch report, to the course of evidence thus far, to the areas of expert evidence proposed, and to the extent to which the Merrill Lynch report has been available to the applicant and its experts, I have reached the conclusion on balance that it is not necessary in the interests of justice that Mr Hutchison have access to that report for the purpose of giving instructions.

9. The various minutes do not record in any detail matters which counsel for the respondents specifically identified as confidential in the course of submissions.  His contention was that the documents were generally of a confidential nature, and that insufficient material could be discerned from the documents to warrant that curtain of confidentiality being lifted.  I accept, as the applicant does, that those minutes should be accepted as confidential.  However, that does not mean that Mr Hutchison should not have access to them.  My examination of the minutes also did not identify any particular content of an apparently particularly confidential nature.  They show the process of consideration and inquiry about the development of the proposed access code.  The purpose of the process of development of the access codes, and their consideration, is at least in part to demonstrate that the first respondent has been progressing development and promulgation of a code for such access in a timely way.  Mr Hutchison, to my mind, is the person intimately associated with the respondent who can give instructions on that matter.  As things presently stand, the Northern Territory Government has announced the proposal that from April 2000 entities, potentially including the applicant, will be able to have access to its infrastructure for the purposes of supplying electricity generated by such entities to consumers within the Northern Territory or the Darwin-Katherine area.  That is part of the relief which the applicant seeks in these proceedings.  If it succeeds, it will need to establish that, but for the conduct of which it complains, it would have been able to get that access prior to that date.  The claim for damages indicates that the issue of the timing at which it might have been able to do so is a sensitive one.  Whatever may have been or may be the bona fides and the timeliness of the process of the first respondent in considering the question, it seems to me that the topic is of sufficient significance, particularly in the light of the plans for access from April 2000, that the applicant ought to be able to get some instructions directly from the applicant through Mr Hutchison.  No other person has emerged as the appropriate person from whom those instructions could be taken.  He is the person who was negotiating directly with the first respondent generally.  I do not know whether he will be able to give any significant instructions, but as the process itself and the timing of the process may be important, I think the applicant should have that opportunity.

10. As the applicant seeks to prove that in the proper course, it would have had access to the first respondent’s electricity infrastructure from a much earlier date than April 2000, in my view, it is desirable that the applicant through Mr Hutchison also have access to the draft access codes.  The applicant will then know what is proposed on that score, and to the extent appropriate it will be able to give instructions to its legal advisers as to its likely response to those proposed access terms.  The nature of the evolution of the proposed access terms itself may be something about which the applicant wishes to test Mr Clarke or other witnesses.

11. Accordingly, I order that the documents which are exhibits KBC6-15, 17-19 and 21 be available for the inspection of Mr Hutchison upon his undertaking (which I understand has already been given) to preserve the confidentiality of those documents.  The terms upon which he will examine those documents as part of the discovery process will, of course, include the undertaking to be implied that they will not be used for any other purpose by the applicant or by him than in connection with these particular proceedings.  I have previously varied that implied undertaking when it was proposed that the proceedings in matter D8 of 1998 would be heard and determined at the same time as these proceedings, but those proceedings have now been resolved.  I do not consider it appropriate to extend access to the Merrill Lynch report to Mr Hutchison notwithstanding the arguments which have been advanced on his behalf, having regard to the circumstances in which that document came into existence and its confidential character.

I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Decision herein of the Honourable Justice Mansfield.

Associate:
Dated:             19 October 1999

Counsel for the Applicant:	Mr I Barker QC Mr A Bannon SC and Mr A Henskens
Solicitors for the Applicant:	Colin Biggers & Paisley
Counsel for the Respondents:	Mr L Foster SC; Mr J V Nicholas and Mr A I Tonking
Solicitors for the Respondents:	James Noonan
Date of Hearing:	14 October 1999
Date orders made:	18 October 1999
Date of Reasons for Decision:	19 October 1999