Platinum Systems Resourcing Pty Ltd v NRW Holdings Ltd [No 2]
[2013] WASC 390
•25 OCTOBER 2013
PLATINUM SYSTEMS RESOURCING PTY LTD -v- NRW HOLDINGS LTD [No 2] [2013] WASC 390
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2013] WASC 390 | |
| Case No: | CIV:1894/2013 | 14 OCTOBER 2013 | |
| Coram: | LE MIERE J | 25/10/13 | |
| 9 | Judgment Part: | 1 of 1 | |
| Result: | Application allowed subject to undertaking | ||
| B | |||
| PDF Version |
| Parties: | PLATINUM SYSTEMS RESOURCING PTY LTD LEANNE CURTIS ZILIA KORPAS NICOLA WILSON CORINNE LENDON NRW HOLDINGS LTD KIMBERLY HYMAN MARK WALLACE SUSAN WORRALL |
Catchwords: | Procedure and practice Inspection of documents Confidentiality regime Undertaking |
Legislation: | Nil |
Case References: | Civic Video Pty Limited v Paterson [2013] WASCA 107 ICAP Australia v Forest Moebs [2010] NSWSC 738 Lenark Pty Ltd v Chairman 1 Pty Ltd (No 2) [2012] NSWSC 415 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- First Plaintiff
LEANNE CURTIS
Second Plaintiff
ZILIA KORPAS
Third Plaintiff
NICOLA WILSON
Fourth Plaintiff
CORINNE LENDON
Fifth Plaintiff
AND
NRW HOLDINGS LTD
First Defendant
KIMBERLY HYMAN
Second Defendant
MARK WALLACE
First Third Party
SUSAN WORRALL
Second Third Party
(BY ORIGINAL ACTION)
NRW HOLDINGS LTD
First Plaintiff by Counterclaim
AND
PLATINUM SYSTEMS RESOURCING PTY LTD
First Defendant by Counterclaim
LEANNE CURTIS
Second Defendant by Counterclaim
MARK WALLACE
Third Defendant by Counterclaim
SUSAN WORRALL
Fourth Defendant by Counterclaim
(BY COUNTERCLAIM)
Catchwords:
Procedure and practice - Inspection of documents - Confidentiality regime - Undertaking
Legislation:
Nil
Result:
Application allowed subject to undertaking
Category: B
Representation:
Original Action
Counsel:
First Plaintiff : Mr M L Bennett
Second Plaintiff : Mr M L Bennett
Third Plaintiff : Mr M L Bennett
Fourth Plaintiff : Mr M L Bennett
Fifth Plaintiff : Mr M L Bennett
First Defendant : Mr B H Taylor
Second Defendant : Mr B H Taylor
First Third Party : Mr L F Swanson
Second Third Party : Mr L F Swanson
Solicitors:
First Plaintiff : Bennett + Co
Second Plaintiff : Bennett + Co
Third Plaintiff : Bennett + Co
Fourth Plaintiff : Bennett + Co
Fifth Plaintiff : Bennett + Co
First Defendant : Rockwell Olivier
Second Defendant : Rockwell Olivier
First Third Party : Hotchkin Hanly
Second Third Party : Hotchkin Hanly
Counterclaim
Counsel:
First Plaintiff by Counterclaim : Mr B H Taylor
First Defendant by Counterclaim : Mr M L Bennett
Second Defendant by Counterclaim : Mr M L Bennett
Third Defendant by Counterclaim : Mr L F Swanson
Fourth Defendant by Counterclaim : Mr L F Swanson
Solicitors:
First Plaintiff by Counterclaim : Rockwell Olivier
First Defendant by Counterclaim : Bennett + Co
Second Defendant by Counterclaim : Bennett + Co
Third Defendant by Counterclaim : Hotchkin Hanly
Fourth Defendant by Counterclaim : Hotchkin Hanly
Case(s) referred to in judgment(s):
Civic Video Pty Limited v Paterson [2013] WASCA 107
ICAP Australia v Forest Moebs [2010] NSWSC 738
Lenark Pty Ltd v Chairman 1 Pty Ltd (No 2) [2012] NSWSC 415
1 LE MIERE J: The first defendant, NRW Holdings Ltd (NRW), has applied for an order that the first plaintiff, Platinum Systems Resourcing Pty Ltd (Platinum), allow the defendants to inspect the consultancy agreements referred to in [9] of the statement of claim. Platinum says that the consultancy agreements contain commercially sensitive information, being the rates paid by Platinum to its consultants. Platinum resists an order that it allow NRW to inspect unredacted copies of the consultancy agreements and seeks an order that it produce for inspection the documents in accordance with a confidentiality regime it has put forward. The confidentiality regime proposed is that Platinum allow inspection of unredacted copies of the consultancy agreements on the basis that:
1. access to the consultancy agreements is restricted to external counsel or solicitors; and
2. external counsel or solicitors provide written undertakings to Platinum and the court as to the non-disclosure of the consultancy agreements to NRW, its officers and employees and the maintenance of confidentiality of the consultancy agreements.
Legal principles
2 The legal principles relating to the inspection of documents containing commercially sensitive information was recently considered by the Court of Appeal in Civic Video Pty Limited v Paterson [2013] WASCA 107 where the court said:
Confidentiality is not ordinarily a sufficient reason to deny inspection by the opposite party as the implied undertaking that the documents be used only for the purpose of the litigation will provide sufficient protection to the party producing them. However, other considerations arise where the documents in question are commercially sensitive and the relevant parties are trade rivals: Cazaly Iron Pty Ltd v Minister for Resources [2007] WASCA 60 [7] - [10]. Lampson (Australia) Pty Ltd v Fortescue Metals Group Ltd[No 2] [2010] WASC 217 [55] - [59].
In this context, when it is said that the information is 'commercially sensitive', what is meant is that 'a rival in the market place who obtains access to it may turn the material to the advantage of that rival and to the disadvantage of the party who seeks to keep it secret': Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34, 38.
Where the relevant parties are trade rivals, and the documents in question contain confidential and commercially sensitive information, the court must strike a fair balance between the legitimate concerns of the party discovering the documents and the needs of the other party to the litigation: Mobil Oil, 39-40; Cadbury Pty Ltd v Amcor Limited (No 2) [2009] FCA 663 [6].
In relation to the court's duty to strike a fair balance, Hayne JA in Mobil Oil observed:
'Where, as here, the problem is one of balancing the needs of a party to the litigation and the legitimate concern of a trade rival to retain secrecy of commercially sensitive information, it may well be necessary to mould orders that will distinguish between the plaintiff, its officers, its legal advisers and experts. Again it may be accepted that generally a party is entitled to inspect the documents of an opposite party by itself its servants or its agents. But in the present kind of case, is it necessary to destroy the legitimate claim to confidentiality from trade rivals by permitting the principal of that rival to look at the documents? Is it sufficient to permit counsel and solicitors (and nominated experts) to do so? It is now commonplace in the courts for material to be made available only to the legal advisers of the parties and nominated experts. Of course such arrangements bring with them their own difficulties and are arrangements that should be adopted only where there is a need to do so; of course they are arrangements that may need to be reviewed as the matter progresses towards trial or as the trial itself proceeds. But they are arrangements that are made and should be made when doing so would strike a fair balance between the competing interests of the party seeking inspection and the party claiming confidentiality. No more specific rule can be laid down - each case will fall for determination according to its own facts. In particular the nature and the content of the disputed documents is a matter that will usually, if not invariably, be of great importance in forming a conclusion and, if that is so, it will be appropriate for the judge to inspect the documents concerned (39 - 40).'
Some of the relevant matters in assessing whether a document should attract additional protection beyond the protection of the implied undertaking include the age of the information, the identity of the persons who will inspect the documents, and the reason or reasons why the inspection of particular documents is necessary: Cadbury Pty Ltd v Amcor Limited (No 2) [7]. More generally, a relevant factor is the degree of commercial sensitivity involved and the extent of any prejudice to the party giving discovery: Lampson (Australia) Pty Ltd v Fortescue Metals Group Ltd[No 2] [58].
The striking of a fair balance may need to be revisited as the matter progresses to trial: Cadbury Pty Ltd v Amcor Limited (No 2) [6] [26] - [31].
The confidential information
3 Platinum says that its business model would be severely undermined if NRW inspects the consultancy agreements. Platinum says that NRW by its pleading does not accept that it is bound by the Master Services Agreement and has solicited and employed at least three of Platinum's consultants in breach of the Master Services Agreement. Platinum says that if NRW knows the rates which Platinum paid to persons it contracted to provide services to NRW then NRW could use that information to its advantage in approaching the consultants to work directly for NRW rather than through Platinum.
Undertaking offered by NRW
4 NRW is willing to provide an undertaking in the following terms:
NRW undertakes that it will not before 24 May 2014 engage as a consultant or make any offer of employment to, nor employ or contract for services, directly or indirectly, any of the following people:
1. Leanne Curtis;
2. David Mercovich;
3. Glenn Welsh;
4. Jase Robinson;
5. Carly Stewart;
6. Geoff Crocker;
7. Fiona Clark;
8. Pauric Keenan
9. David Whitehouse
5 NRW is already aware of the rates paid by Platinum to the consultants it provided to NRW except for the nine referred to in the undertaking and three others who are currently engaged by NRW.
Is a confidentiality order appropriate?
6 In Civic Video the court said that some of the relevant matters in assessing whether a document should attract additional protection beyond the protection of the implied undertaking include the reason or reasons why the inspection of particular documents is necessary, the degree of commercial sensitivity involved and the extent of any prejudice to the party giving discovery. NRW says, in effect, that the inspection of the documents or receipt of information in them about rates, by NRW, or relevant officers or employees, is necessary so that NRW may give necessary instructions and understand advice given to it in relation to the loss or damage allegedly suffered by NRW. The courts are reluctant to exclude the parties to the litigation from knowledge of relevant material by limiting access to their advisers: Lenark Pty Ltd v Chairman 1 Pty Ltd (No 2) [2012] NSWSC 415 [11] – [15] (Black J). Solicitors and counsel must act on the instructions of someone on behalf of the client; and normally the person or persons giving those instructions should be entitled to see all the documents available to their advisors so that they can understand the basis of any advice given to them: ICAP Australia v Forest Moebs [2010] NSWSC 738 [11].
7 NRW relies upon the affidavit of Kimberley Hyman sworn 13 September 2013 and the affidavit of Janelle Collins sworn 9 October 2013. In [9] of her affidavit Ms Collins refers to matters in the affidavit of Ms Hyman and says that, based upon those matters, NRW is aware of the rates paid by Platinum to six named consultants who were provided by Platinum to NRW. Ms Collins says in [10] of her affidavit that, based on matters in Ms Hyman's affidavit, NRW is aware of the rates proposed by REM Consulting to provide seven named consultants to Platinum who were then provided by Platinum to NRW. In [12] of her affidavit Ms Collins says that, based on the information in Ms Hyman's affidavit, NRW is not aware of the rates paid by Platinum to 11 Platinum consultants who were provided by Platinum to NRW. Three of those consultants are Fiona Landrigan, John Aspray and Philip Thompson who are currently engaged by NRW. The remaining eight, together with David Whitehouse, are those in respect of whom NRW is willing to give the undertaking referred to.
8 Based on that evidence, NRW submits that the confidentiality or commercial sensitivity of the rates paid to the consultants has been lost and Platinum will not suffer any prejudice by providing copies of the consultancy agreements on the basis of the undertaking offered.
Inspection should be given on basis of modified undertaking
9 The court must strike a fair balance between the legitimate concerns of the party discovering the documents and the needs of the other party to the litigation. In my view, a fair balance will be struck by requiring Platinum to allow NRW to inspect unredacted copies of the consultancy agreements on the basis of the undertaking offered by NRW.
10 Platinum initially said that the undertaking is deficient for a number of reasons. First, it does not address the prejudice which Platinum has identified and which has materialised by NRW engaging three former Platinum consultants directly to work for NRW. Secondly, Platinum says that the consultants were not 'employed' by Platinum and the undertaking initially offered failed to cover the role of consultants. The undertaking now offered by NRW overcomes that difficulty. Thirdly, Platinum says that NRW should undertake not to engage the named persons 'directly or indirectly'. NRW has declined to offer an undertaking in those terms. The court cannot direct a party to give an undertaking in particular terms. It must consider the undertaking offered by the party. The undertaking offered is reasonably adequate to meet the prejudice identified by Platinum. The court should not assume that NRW will attempt to evade the undertaking it has offered and NRW would do so at its peril.
11 NRW knows the rates paid by Platinum to the consultants or the rates at which REM was willing to offer to provide consultants to NRW who were provided by Platinum to NRW. There are 11, or possibly 12, consultants provided by Platinum to NRW in respect of whom NRW does not know the rates paid to by Platinum. NRW will learn those rates from inspecting the consultancy agreements, or most of them. Three of those consultants, Landrigan, Aspray and Thompson, are working directly for NRW and Platinum does not seek any protection in relation to them. NRW has offered to give an undertaking not to employ or contract for services any of the remaining nine consultants before 24 May 2014. In my view such an undertaking will provide substantial protection to Platinum.
12 A fair balance between the legitimate concerns of Platinum and the needs of NRW, favours allowing NRW access to the documents on the terms of the undertaking offered by NRW.
Conclusion
13 Upon NRW giving an undertaking that it will not before 24 May 2014 make any offer of employment to, nor employ or contract for services, any of the following people: Leanne Curtis; David Mercovich; Glenn Welsh; Jase Robinson; Carly Stewart; Geoff Crocker; Fiona Clark, Pauric Keenan and David Whitehouse, the plaintiff should allow NRW to inspect unredacted copies of the consultancy agreements referred to in [9] of the statement of claim.
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