Progresso Pty Ltd v Hansen Price Pty Ltd
[2020] WASC 151
•4 JUNE 2020
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: PROGRESSO PTY LTD -v- HANSEN PRICE PTY LTD [2020] WASC 151
CORAM: HILL J
HEARD: 28 FEBRUARY 2020
DELIVERED : 13 MAY 2020
FILE NO/S: CIV 1223 of 2018
BETWEEN: PROGRESSO PTY LTD formerly known as MINING TECHNICIANS GROUP - AUSTRALIA PTY LTD
First Plaintiff
MICHAEL JANSEN
Second Plaintiff
AND
HANSEN PRICE PTY LTD
Defendant
Catchwords:
Practice and procedure - Application by interested party for orders restricting inspection of documents produced on subpoena by third party - Whether documents confidential - Disputed documents inspected - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA), O 36B r 9
Result:
Application upheld in part
Category: B
Representation:
Counsel:
| First Plaintiff | : | No appearance |
| Second Plaintiff | : | No appearance |
| Defendant | : | Mr B D Campbell |
| Interested Party | : | Mr R E Lindsay |
Solicitors:
| First Plaintiff | : | Irwin Legal |
| Second Plaintiff | : | Irwin Legal |
| Defendant | : | HHG Legal Group |
| Interested Party | : | Capital Legal |
Case(s) referred to in decision(s):
Boase v Axis International Management Pty Ltd [No 3] [2012] WASC 498
Cazaly Iron Pty Ltd v Minister for Resources [2007] WASCA 60
Civic Video Pty Ltd v Patterson [2013] WASCA 107
Hearne v Street [2008] HCA 36; (2008) 235 CLR 125
Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34
Re Forge Group Construction Pty Ltd (in Liq); Ex parte Jones [No 2] [2016] WASC 87
HILL J:
On 18 October 2019, Autonomo Pty Ltd brought an urgent application to, inter alia, limit inspection of documents to be produced on a subpoena issued to Rio Tinto Ltd. The subpoena required production of documents to the court on or before 25 October 2019. The basis for the application was that the documents to be produced contained correspondence between Rio Tinto and Autonomo, which Autonomo asserted was confidential.
Initially, Autonomo claimed that over 2,800 of the 3,082 documents produced by Rio Tinto were confidential. Following conferral between the parties, the number of documents over which there is a disputed claim for confidentiality has been reduced to 69 documents (Disputed Documents).
The Disputed Documents, together with a table summarising the basis for the claim for confidentiality, were in evidence before me at the hearing.[1]
[1] Confidential affidavit of Gerard Bradley McNamara sworn 5 February 2020, 'GM2.2'.
For the reasons that follow, I consider that certain information in the Disputed Documents is commercially sensitive and confidential and should be redacted prior to representatives of the defendant inspecting the documents. Otherwise, Autonomo's claim for confidentiality in respect of the remainder of the Disputed Documents should be dismissed.
Relevant procedural history
These proceedings were commenced by the plaintiff on 12 February 2018. The plaintiffs seek declaratory relief in respect of a deed of restraint, and assert that the restraint of trade contained in a sale of business agreement is void and unenforceable.
The restraint is contained in cl 4 of the agreement and provides that:[2]
From the Settlement of the Business pursuant to the Agreement [the second plaintiff] covenants not to directly or indirectly, and whether solely or jointly with or as a director, manager, agent, consultant, trustee or employee of any person corporation or entity carry on, or be engaged or interested in, any business of the nature of the business sold by the Seller to the Buyer or any significant component of it, or permit the Seller's name or names of any of them to be used in connection with such business:
(i)within the Restraint Area,
(ii)for the Restraint Period.
[2] Second Re-Amended Statement of Claim dated 16 April 2019, [4].
In the agreement, Restraint Area is defined as Western Australia and the Restraint Period is five years.
On 5 September 2018, the defendant filed a defence and counterclaim, which has been amended on a number of occasions. The defendant pleads that the restraint of trade is enforceable[3] and that it has suffered loss as a consequence of the plaintiffs' breach of the restraint.[4] I note that the original defence and counterclaim refers to Rio Tinto Ltd as a major client of the defendant,[5] which allegation remains in the current pleading.[6] If the restraint is enforceable to the maximum extent, which is an issue for trial, the Restraint Period expired on 1 December 2019.[7]
[3] Second Further Re-Amended Defence and Counterclaim dated 27 September 2019, [5].
[4] Second Further Re-Amended Defence and Counterclaim dated 27 September 2019, [34].
[5] Defence and Counterclaim dated 5 September 2018, [5(b), particular (xiv)].
[6] Second Further Re-Amended Defence and Counterclaim dated 27 September 2019, [5(b), particular (xvi)].
[7] Defence and Counterclaim dated 5 September 2018, [3(b)(ii)].
On 14 March 2019, the court, at the request of the defendant, issued a subpoena to Autonomo. The subpoena sought production of documents evidencing work performed by the second plaintiff for and on behalf of Autonomo, correspondence between the second plaintiff and clients or potential clients of Autonomo, and various documents concerning the attempts by the second plaintiff to secure work for Autonomo.
On 12 April 2019, Autonomo complied with the subpoena by delivering documents to the Supreme Court. On the same date, Autonomo by its solicitors, Capital Legal, wrote to the defendant's solicitors concerning these documents. This letter did not disclose that Autonomo had replaced its server in January 2019 and that, as a result, all emails prior to this date were lost. This matter was not known to the defendant until August 2019.
On 30 August 2019, the defendant, by letter to the case manager, sought orders against Autonomo in respect of its alleged non-compliance with the subpoena. On 18 September 2019, I dismissed the defendant's application on the basis that any application for orders for contempt needed to be made by summons and personally served on Autonomo.
On 4 October 2019, the court, at the request of the defendant, issued a subpoena to Rio Tinto Ltd. The subpoena sought production of any emails to the email address '[email protected]' and 'any correspondence between Rio Tinto Limited and Autonomo Pty Ltd which included the names "Michael Jansen", "Mike Jansen", "Michael", "Mike", or "Jansen"'. In response to that subpoena, on 25 October 2019, Rio Tinto produced a USB containing an index and copies of 3,082 documents.
On 25 October 2019, the Principal Registrar directed that the documents produced by Rio Tinto not be inspected by any party until Autonomo's application had been determined, and further directed that conferral occur between the parties.
On 1 November 2019, the application was resolved in part by allowing the solicitors and counsel for the defendant (and subsequently by orders made on 6 November 2019, the plaintiff) to inspect the documents. These orders were made without substantive determination of the issues because the trial in the matter was originally listed to commence on 18 November 2019. The orders required Autonomo to inform the defendant's solicitors by 5:00 pm on 5 November 2019 which of the documents it considered to be commercially sensitive and confidential.
Autonomo advised the defendant's solicitors that it considered 2,854 of the documents produced by Rio Tinto were commercially sensitive and confidential. The defendant did not accept that characterisation of the documents and sought to have the claim for confidentiality determined by the court.
On 8 November 2019, the defendant sought orders vacating the trial. On 13 November 2019, I made orders vacating the trial to enable this issue to be determined.
On 27 November 2019, I ordered Autonomo to provide the solicitors for the parties with a revised list of the documents over which a claim for confidentiality was asserted and the basis for such claim. On 17 December 2019, I made orders programming Autonomo's application through to a hearing.
Following further conferral between Autonomo and the defendant, a number of Autonomo's claims for confidentiality have been accepted or withdrawn, or agreement has been reached for the redaction of documents in full or in part. As a consequence of that further conferral, the number of documents in dispute between Autonomo and the defendant has been reduced to 69 documents.
Legal principles governing inspection of subpoenaed documents
Pursuant to O 36B r 8A(2) of the Rules of the Supreme Court 1971 (WA) (Rules), on a request from a party with a sufficient interest in the documents produced under subpoena, the court may make directions for the inspection of any documents produced in compliance with the subpoena. It was not in dispute that Autonomo was a party with a 'sufficient interest' in the documents produced by Rio Tinto.
Inspection by parties of documents produced pursuant to a subpoena is governed by O 36B r 9 of the Rules. Order 36B r 9 relevantly provides that:
(2)After the date and time for production specified in the subpoena, a registrar, subject to -
(a)any direction made or relief granted under rule 8A; and
(b)rule 8A(6) and this rule,
may permit any party to the proceeding to inspect, copy or remove any document or thing produced under the subpoena.
(3)A document or thing produced cannot be removed from the Registry except on a written application that is signed by the solicitor for a party and approved by —
(a)a registrar; or
(b)a Court officer authorised in writing for the purposes of this subrule by the Chief Justice.
(4)An application made under subrule (3) may be approved with or without conditions, or refused.
In Boase v Axis International Management Pty Ltd [No 3], Beech J summarised the relevant principles governing inspection of subpoenaed documents as follows:[8]
The first question is whether the documents, or the passages to which objection is taken, have apparent relevance to the litigation.
Apparent relevance is a low threshold. It is not a question of whether it appears that the party issuing the subpoena could, or could probably, tender the document in evidence. It is enough to establish apparent relevance if a document or class of documents gives rise to a line of enquiry relevant to the issues before the trier of fact, including for the purpose of meeting the opposing case by way of cross-examination.
[8] Boase v Axis International Management Pty Ltd [No 3] [2012] WASC 498 [10] ‑ [11]. See also Re Forge Group Construction Pty Ltd (in Liq); Ex parte Jones [No 2] [2016] WASC 87 [18] ‑ [19].
He went on to state:[9]
If a document is apparently relevant, inspection will usually be permitted, even though it is not admissible as it stands and the party seeking the document has not undertaken to tender it or use it in cross‑examination.
Confidentiality is not of itself a ground to refuse inspection of an apparently relevant document. In the end, the public interest in the administration of justice prevails over the interest in confidentiality of the information. However, confidentiality can be taken into account, together with any assessment of the extent of the document's apparent relevance, in the exercise of discretion whether to permit inspection.
[9] Boase v Axis International Management Pty Ltd [No 3] [19] - [21].
Where a party objects to inspection of documents on the basis of a claim of confidentiality, the courts recognise that there is some need to balance competing interests. Ultimately, the public interest in the administration of justice must prevail. Where parties are trade rivals, this will be a relevant consideration in determining whether any restrictions ought be imposed upon the inspection of documents.[10]
[10] Cazaly Iron Pty Ltd v Minister for Resources [2007] WASCA 60 [9].
In Mobil Oil Australia Ltd v Guina Developments Pty Ltd, Hayne JA said:[11]
Where it is said that documents are confidential, it may be accepted that the fact that the documents are confidential will not ordinarily be a sufficient reason to deny inspection by the opposite party. In most cases, the fact that the documents may not be used except for the purposes of the litigation concerned will be sufficient protection to the party producing them. But where, as here, the party obtaining discovery is a trade rival of the person whose secrets it is proposed should be revealed by discovery and inspection, other considerations arise.
Once the documents are inspected by the principals of the trade rival the information which is revealed is known to the trade rival and cannot be forgotten. Confidentiality is destroyed once and for all (at least so far as the particular trade rival is concerned). To say that the trade rival is bound not to use the documents except for the purposes of the action concerned is, in a case such as this, to impose upon that trade rival an obligation that is impossible of performance by him and impossible of enforcement by the party whose secrets have been revealed. How is the trade rival to forget what internal rate of return the competitor seeks to achieve on a new investment of the kind in question? How is the party whose hurdle rate has been revealed to know whether the rival has used the information in framing a tender?
Thus, if the trade rival may inspect the documents concerned, the confidentiality of the information in them is at once destroyed. Is that necessary for the attainment of justice in the particular case?
[11] Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34, 38.
He went on to state:[12]
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.
[12] Mobil Oil Australia Ltd v Guina Developments Pty Ltd, 39.
Each case must be determined on the facts of that particular case. In determining whether a document or documents should attract additional protection (beyond the protection of the substantive obligation that the information is not to be used other than for the purpose of the proceedings),[13] it is relevant to consider the age of the information; the identity of the persons who will inspect the documents; the reason or reasons that inspection is necessary; the degree of commercial sensitivity involved and the extent of any prejudice to the party producing the documents or whose documents are the subject of production.[14]
[13] Hearne v Street [2008] HCA 36; (2008) 235 CLR 125.
[14] Civic Video Pty Ltd v Patterson [2013] WASCA 107 [30].
In the exercise of discretion whether or not to permit inspection of the subpoenaed documents, the principles of case flow management and the objects of O 1 r 4B of the Rules must be kept in mind.[15]
[15] Boase v Axis International Management Pty Ltd [No 3] [21]; Re Forge Group Ltd; Ex Parte Jones [19].
Disputed Documents
The Disputed Documents fall into four broad categories, namely:
(a)purchase orders for the provision of services by Autonomo to Rio Tinto – being 42 of the Disputed Documents (Category 1);
(b)pricing documents of which Autonomo seeks partial redaction – being 14 of the Disputed Documents (Category 2);
(c)four emails which Autonomo seeks redaction in full (Category 3); and
(d)nine miscellaneous documents (Category 4).
In support of its application for confidentiality, Autonomo relied upon two affidavits of Gerard Bradley McNamara; one sworn 5 February 2020 and one sworn 24 February 2020.
The defendant relied on the affidavit of Gina Nofal filed 12 February 2020.
At the hearing, the parties handed up an updated schedule dated 5 February 2020 titled 'Third Revised List' which summarises the position of the parties in respect of each Disputed Document (Schedule).
The primary basis for the objections by Autonomo to the defendant's inspection of the documents produced by Rio Tinto is that the defendant is a trade rival of Autonomo. While the defendant did not accept that Autonomo was a trade rival and/or competitor, counsel for the defendant conceded that Autonomo works in a related field to the defendant, being autonomous mining vehicles and equipment.
There is not sufficient evidence before the court to enable me to make a positive finding on whether Autonomo and the defendant are trade rivals. For the purpose of this application, I have proceeded (without finding) on the basis that Autonomo and the defendant are trade rivals.
Disposition
Purchase Orders (Category 1)
These documents comprise purchase orders for work provided by Autonomo to either Rio Tinto or one of its related companies. The dates of the purchase orders commence in 1 October 2018 and continue throughout 2019.
Most of the documents are purchase request forms which were issued by Rio Tinto following receipt of a quotation from Autonomo. The parties have agreed that the quotations should be excluded, although there was a dispute as to the basis of this agreement. I accept that the defendant's agreement to exclude these documents was 'in the interests of efficiency' and does not bind them to any position in respect of the remaining documents.[16]
[16] Exhibit 1.
The evidence of Autonomo was that its pricing structure has remained constant over this period[17] and that its pricing strategy is and remains commercially sensitive.[18]
[17] Affidavit of Gerard Bradley McNamara sworn 24 February 2020, [5(c)].
[18] Affidavit of Gerard Bradley McNamara sworn 24 February 2020, [5].
Counsel for Autonomo submitted that both the scope of work and price should be redacted from each of these documents. Autonomo contended that if the defendant is made aware of this information, the defendant will know what work Autonomo is carrying out for Rio Tinto which will give the defendant a competitive advantage. Specifically, Autonomo submitted that providing the defendant with access to this information will allow the defendant to understand the scope of work undertaken by Autonomo, the price at which it does this work and where the work is being done. This will enable the defendant to approach Rio Tinto to undertake this work instead of Autonomo as it will know Autonomo's 'business strategies, scope of works and the pricing'.[19] Autonomo emphasised that its work for Rio Tinto as disclosed in these documents is ongoing and is not historical.
[19] Autonomo's written submissions dated 27 February 2020, [5].
Counsel for the defendant submitted that the documents should be partially redacted to remove either the scope of work or the value. The defendant contended that inspection by its representatives of documents detailing the scope of the work separated from the price charged for the work would not assist the defendant commercially. Counsel for the defendant submitted that the only information in these documents that might be considered confidential was the price of work when linked to specific tasks. The defendant acknowledged that the link between this information could be commercially sensitive and confidential and that its disclosure could confer an advantage on the defendant if they were both bidding for similar work from Rio Tinto in the future.
By way of example, the parties referred me to documents REL00605[20] and REL03218.[21] I now turn to consider these specific documents.
REL00605
[20] Confidential affidavit of Gerard Bradley McNamara filed 5 February 2020, 'GM2.2', p 46 (Document 31 in Schedule).
[21] Confidential affidavit of Gerard Bradley McNamara filed 5 February 2020, 'GM2.2', p 94 (Document 112 in Schedule).
This document is a purchase request form. Counsel for Autonomo contended that this was a form produced by Rio Tinto and that the date on the document was the date of the form (1 October 2018) as opposed to the date it was completed. I note that neither of these matters were in evidence before me. However, in considering this document, I have proceeded on the basis that these contentions are accurate.
The form specifies the desired vendor, the value of the service to be provided, the site at which the services will be delivered, a brief description of the services to be provided and when the services will be performed. As mentioned above, counsel for Autonomo emphasised that this work is ongoing and not historical.
For the following reasons, I accept and find that the purchase request forms have apparent relevance to the issues in these proceedings. First, the claim by the defendant against the plaintiffs is that the second plaintiff breached the restraint of trade contained in the sale of business agreement. The restraint, if enforceable, extends beyond the second plaintiff in his personal capacity, to the second plaintiff in his capacity 'as a director, manager, agent, consultant, trustee or employee of any person, corporation or entity'. For this reason, it will be relevant at trial to consider what work, if any, the second plaintiff has done for and on behalf of Autonomo and whether this work falls within the scope of the restraint. Second, the defendant specifically refers to Rio Tinto as a client for whom work has been done in breach of the restraint of trade. Accordingly, documents evidencing the work done by Autonomo for Rio Tinto or its associated companies during the period of the restraint in which the second plaintiff had some involvement have apparent relevance to the issues in the proceedings.
It is clear on the face of the document that the work to be performed was in September 2019 - that is, this information is relatively recent. In my view, the price at which Autonomo carried out work for Rio Tinto approximately six months ago, where that price is coupled with details of the scope of work, is commercially sensitive. If the defendant, as a trade rival of Autonomo, has access to this information, this information will be revealed and cannot be forgotten. I accept that access to this information may cause prejudice to Autonomo as it would give the defendant access to its pricing information that the defendant would not otherwise be entitled to.
For this reason, I consider that this purchase request form is sufficiently confidential to warrant special orders being made.
However, I do not consider that both the scope of work and price should be redacted. I accept the defendant's submission that the combination of price and scope of work is confidential but that knowledge of the scope of work by itself is not sufficiently confidential to warrant special orders being made.
There is no evidence before me as to the prejudice that Autonomo will suffer if the scope of work is disclosed to the defendant. Counsel for Autonomo submitted that the prejudice that would be suffered is that the defendant would be aware of the work that Autonomo was doing for Rio Tinto and could attempt to approach Rio Tinto for that work. For the following reasons, I do not accept that submission. First, there is no evidence before me that this is likely to occur. Second, the defendant is bound by the substantive obligation to only use these documents for the purpose of these proceedings. The use of the documents in this manner would be a breach of that substantive obligation. Third, without knowledge of the price at which Autonomo is doing that work, the defendant is not able to attempt to undercut the rates or price being offered by Autonomo. In my view, any prejudice that might be suffered by Autonomo does not outweigh the public interest in the administration of justice in the defendant having access to these documents which contain this information.
For these reasons, I consider that this document should be partially redacted so as to remove any reference to the price at which the work, or any of its component parts, is to be undertaken.
Other purchase request forms
I am satisfied that my reasons set out above apply to each other purchase request form within the Disputed Documents. To that effect, any reference to pricing of work to be provided by Autonomo will be redacted from the following documents: REL00611; REL00614; REL00617; REL00620; REL00660; REL00663; REL00666; REL00669; REL00672; REL00675; REL00678; REL00681; REL00684; REL00690; REL03320; REL03323; REL03328; REL03331; REL03334; REL03788; REL03790; REL03857; REL03861.[22]
REL03218
[22] Confidential affidavit of Gerard Bradley McNamara sworn 5 February 2020, 'GM2.2'.
This document is a purchase order issued by Hamersley Iron, a member of the Rio Tinto Group, to Autonomo in respect of an order dated 15 August 2019. The purchase order sets out the description of equipment and services to be provided by Autonomo, the unit price for each item, where the work will be performed and when it will be performed.
I accept and find that the purchase order has apparent relevance to the issues in the proceedings. As noted above, in determining whether the defendant's claim for breach of the restraint of trade is made out, it will be relevant to consider what work the second plaintiff has undertaken, including through Autonomo. For this reason, I consider that the scope of work to be undertaken by Autonomo for Hamersley Iron has apparent relevance to the issues in the proceeding.
As set out above, I accept the defendant's submission that the combination of price and scope of work is confidential but that knowledge of the scope of work by itself is not sufficiently confidential to warrant special orders being made.
For these reasons, I consider that the document should be partially redacted so as to remove any reference to the price at which the work, or any of its component parts, is to be undertaken.
Other purchase orders
I am satisfied that these reasons apply to each other purchase order within the Disputed Documents. To that effect, each of the following documents should be partially redacted so as to remove any reference to pricing of work to be provided by Autonomo: REL01824; REL02460; REL02462; REL02464; REL03201; REL03206; REL03209; REL03225; REL03227; REL03487; REL04394; REL04980; REL05170; REL06199; REL06242; REL06244; REL06463.[23]
Emails containing pricing (Category 2)
[23] Confidential affidavit of Gerard Bradley McNamara sworn 5 February 2020, 'GM2.2'.
These documents comprise emails between Autonomo and representatives of Rio Tinto or its related companies which discuss the price at which Autonomo will provide goods and services to Rio Tinto.
Counsel for Autonomo contended that this information, if read with the other documents produced by Rio Tinto, could be used by the defendant to reconstruct the price at which work has been done by Autonomo.
The defendant disputed that this was the case. Counsel for the defendant contended that there was nothing confidential about the price unless it was coupled with information about the work to be performed. Counsel for the defendant submitted that there was no evidence before the court that the defendant could reconstruct these matters by reading this email alongside any additional documents. On this basis, it was submitted that the court should not speculate as to the likelihood of this occurring.
By way of example, the parties referred me to documents REL00302[24] and REL03154.[25]
REL00302
[24] Confidential affidavit of Gerard Bradley McNamara filed 5 February 2020, 'GM2.2', p 42 – 44 (Document 18 in Schedule).
[25] Confidential affidavit of Gerard Bradley McNamara filed 5 February 2020, 'GM2.2', p 83 - 84 (Document 107 in Schedule).
This document is an email chain passing between representatives of Rio Tinto. In the first email in the chain, there is a table which refers to Autonomo, together with two purchase order numbers and the value of each of these purchase orders. No further information about these purchase orders is contained in the email.
It was not in evidence before me as to whether the specific purchase orders referred to in the email were in the documents produced on subpoena by Rio Tinto. If those purchase orders were produced by Rio Tinto, I accept that, on the basis of my findings above, the provision of the scope of work together with the pricing would be confidential information.
However, there is no evidence before me to support such a finding being made. In my view, as stated above, it is the combination of information about price and the scope of work which makes the information commercially sensitive and creates the potential prejudice to Autonomo. Where this information can be linked, it is the link that gives the information the degree of commercial sensitivity, and which warrants special orders being made to protect the information. Without that link, I do not consider the information is sufficiently commercially sensitive to warrant special orders.
On this basis, I do not consider that the prices contained in this email should be redacted.
REL03154
This document comprises a table setting out the location and activity, comments, expected hire duration, modular and AVI of a number of items. It is not clear on the face of this document whose document it is, what it relates to and whose pricing information is contained in the document.
Mr McNamara did not descend to detail in his affidavits in support of Autonomo's application as to any of these matters. Rather, Autonomo asserted in its response in the Schedule that the information concerning the installation cost, the installed unit cost and the sub-total cost are 'trade secrets'.[26]
[26] Schedule (Document 107, Column O).
Whilst I am prepared to accept that the provision of pricing information to a trade rival is likely to be confidential information, on the evidence before me, I cannot be satisfied that this information is Autonomo's information. Further, there is no evidence before me as to how the provision of this document to the defendant will cause Autonomo harm or what prejudice it will suffer.
For these reasons, I do not consider that this document should be redacted.
Remaining documents
The remaining documents within Category 2 were not individually addressed at the hearing before me, nor did either counsel address these documents within their written submissions. It is evident from the written submissions of both Autonomo and the defendant that their arguments regarding relevance and confidentiality of the emails containing pricing pertain to all Disputed Documents within Category 2.
I am satisfied, having reviewed each of these documents which are in evidence before me,[27] that my above reasons apply to each other email containing pricing. To that effect, the prices will not be redacted from the following documents: REL00950; REL03153; REL03337; REL03881; REL06777; REL06783; REL06787; REL06788; REL06797; REL06798; REL06800.
[27] Confidential affidavit of Gerard Bradley McNamara filed 5 February 2020, 'GM2.2'.
In respect of document REL02894, this document contains a quotation for work proposed to be done by Autonomo for Rio Tinto. It includes a description of the work together with a quotation of the price at which the work can be done. Consistent with my reasons set out above, the price should be redacted from the last page of this document.[28]
Emails to be redacted in full (Category 3)
[28] Confidential affidavit of Gerard Bradley McNamara filed 5 February 2020, 'GM2.2', p 77- 80 (Document 102 in Schedule).
Autonomo seeks the full redaction of four documents which it contends are confidential or contain commercially sensitive information.
REL00199[29]
[29] Confidential affidavit of Gerard Bradley McNamara filed 5 February 2020, 'GM2.2', p 41 (Document 11 in Schedule).
This document is a quotation from Autonomo to Rio Tinto dated 17 September 2018. Counsel for the defendant conceded at the hearing that this document should be redacted in full.[30]
REL06158[31]
[30] ts 110 - 111.
[31] Confidential affidavit of Gerard Bradley McNamara filed 5 February 2020, 'GM2.2', p 154 – 155 (Document 226 in Schedule).
This document is an email exchange between a representative of Rio Tinto and 'Mike' at Autonomo in July 2019 and requests that Autonomo provide a quote. The final email in the chain from Mr McNamara of Autonomo to Rio Tinto is a response providing two trailer options. Each option contains a list of the items to be provided and the price for the unit.
Counsel for Autonomo submitted that this document should be redacted in full on the basis that it was a request for quotation for a new project and the supply of the quotation. Autonomo contended that the attachments to the email were a unique form of trailer, although the trailer was not manufactured or assembled by Autonomo.
Consistent with the position the defendant had taken in respect of other documents, counsel for the defendant accepted that the price should be redacted from the email but did not accept that the entirety of the document should be redacted. Counsel for the defendant submitted that this document was apparently relevant to the issues in the proceeding as the email chain indicated that the second plaintiff continued to send and receive emails from an email address at Autonomo in July 2019, during the period of the restraint. The defendant emphasised that there was no evidence before the court as to the alleged uniqueness of the design or the equipment, which was not manufactured or assembled by Autonomo, such that it would constitute a trade secret.
I accept and find that the email and its attachments have apparent relevance to the issues in these proceedings. As noted above, the claim by the defendant against the plaintiffs is that the second plaintiff breached the restraint of trade contained in the sale of business agreement. The restraint, if enforceable, extends beyond the second plaintiff in his personal capacity, to the second plaintiff in his capacity 'as a director, manager, agent, consultant, trustee or employee of any person, corporation or entity'. For this reason, it will be relevant at trial to consider what work, if any, the second plaintiff has done for and on behalf of Autonomo and whether this work falls within the scope of the restraint. The email chain includes an email from Rio Tinto to 'Mike' at Autonomo. I accept that this email chain has apparent relevance to the issue in the proceedings as to whether the second plaintiff has breached his restraint of trade.
Turning then to the question as to whether Autonomo's claim for confidentiality ought to be upheld. Consistent with the views I have expressed earlier in these reasons, I consider that where information as to price is coupled with details of the scope of work, this information is commercially sensitive. For this reason, I consider that details of the price should be redacted from the email.
However, in relation to the remaining parts of the email, there is no evidence before me upon which I could conclude that the information is commercially sensitive and that its disclosure to the defendant would cause Autonomo to suffer any prejudice.
Counsel for Autonomo submitted that the prejudice that would be suffered is that the defendant would have the capability to make a similar trailer and that this was an ongoing project. For the following reasons, I do not accept that submission. First, there is no evidence before me that this is likely to occur. Second, the defendant is bound by the substantive obligation to only use these documents for the purpose of these proceedings. The use of the documents in this manner would be a breach of that substantive obligation. Third, without knowledge of the price at which Autonomo is supplying the trailers, the defendant is not able to attempt to undercut the rates or price being offered by Autonomo.
For these reasons, I consider that this document should be partially redacted so as to remove any reference to the price at which the equipment was to be supplied.
REL06165[32] and REL06965[33]
[32] Confidential affidavit of Gerard Bradley McNamara filed 5 February 2020, 'GM2.2', p 156 - 159 (Document 229 in Schedule).
[33] Confidential affidavit of Gerard Bradley McNamara filed 5 February 2020, 'GM2.2', p 191 – 194 (Document 249 in Schedule).
These two documents are identical, each being a series of photographs. The first of these documents was attached to REL06158.
Autonomo says that they are photographs of products to be supplied by Autonomo in response to a request from Rio Tinto to submit a proposal. Counsel for Autonomo repeated the submissions made in respect of REL06158.[34]
[34] ts 117.
Counsel for the defendant submitted that there was a low threshold for demonstrating apparent relevance and noted that there was no evidence to support the submission that this equipment was Autonomo's or that it was unique.
For the reasons set out above in respect of REL06158, I do not consider that these documents should be redacted. As REL06165 was attached to REL06158, I consider that it has apparent relevance to the issues in the proceedings. There is no evidence that these documents are confidential or that the photographs are of equipment manufactured or assembled by Autonomo.
Miscellaneous documents (Category 4)
There were only nine documents which fell within this category. I deal with each document below.
Ariba 1[35]
[35] Confidential affidavit of Gerard Bradley McNamara filed 5 February 2020, 'GM2.2', p 23 – 40 (Document 1 in Schedule).
This document is a response by Autonomo to a request for proposal from Rio Tinto dated 14 February 2019. Autonomo contends that the answers contained in this response are confidential and should be redacted as they contain sensitive information from which a trade rival would benefit and would cause prejudice to Autonomo.
The defendant rejects this contention and submits that Autnomo has made no genuine attempt to identify the confidential information contained in this document. The defendant contends that much of this document contains 'meaningless puffery',[36] which is not a trade secret.
[36] Defendant's submissions dated 26 February 2020, [53].
In my view, much of the content of this document contains broad general statements by Autonomo that cannot be described as a trade secret nor confidential. By way of example, the response to the query on safety, health and the environment includes reference to the business operating under the fundamentals of a named Australian standard and international standard and states that 'our business strives towards zero harm and to provide a safe and incident free work environment'. In my view, this response is essentially a statement that Autonomo proposes to comply with its legal obligations. Nothing in this response is confidential nor sensitive, and would not provide a benefit to any trade rival to the disadvantage of Autonomo.
However, in my view there are sections of this document that are commercially sensitive which could potentially prejudice Autonomo if provided to the defendant. These sections are the responses of Autonomo to current business scale (p 26), additional services (p 32), and alternative structures (p 33). I consider that the document should be partially redacted to remove these responses but that otherwise the document should not be subject to any restrictions on inspection.
REL03506[37]
[37] Confidential affidavit of Gerard Bradley McNamara filed 5 February 2020, 'GM2.2', p 114 – 115 (Document 136 in Schedule).
This document on its face is an estimate provided by a third party to a subsidiary of Rio Tinto. The work summary states that the third party proposes to engage a subcontractor to complete the work. The estimate contains details of the scope of work, the cost of each scope and the total cost of the work to be provided.
Counsel for Autonomo submitted that this document is a quotation of Autonomo and that Autonomo partnered with another entity to provide this quote to Rio Tinto. The defendant submits that there is no evidence of this and that the court has been asked to speculate about the contents of this document.
While I accept there is no direct evidence before me that this is a quotation of Autonomo, there is some indirect evidence from which an inference can be drawn. I note that this document has been produced by Rio Tinto in compliance with the subpoena issued to it that requires production of Autonomo's documents and not documents of the third party. In these circumstances, I do not accept that it is necessary for me to speculate as to whether this is a quotation provided by Autonomo. On the basis that this document has been produced by Rio Tinto in answer to the subpoena, I find that this document is a quotation containing Autonomo's information and not the information of the third party.
As a consequence, for the reasons set out above in respect of categories one and two, I accept that the provision of a document containing both scope of work and price is commercially sensitive and its inspection by representatives of the defendant may cause prejudice to Autonomo. For this reason, I consider that the columns entitled 'Sub‑Cost' and 'Total' should be redacted prior to its inspection by the defendant.
REL04204[38]
[38] Confidential affidavit of Gerard Bradley McNamara filed 5 February 2020, 'GM2.2', p 133 (Document 190 in Schedule).
On its face, this document is a quotation provided by a third party to a subsidiary of Rio Tinto. However, in contrast to the above document, the quotation specifically refers to Autonomo. The quotation sets out the work that is proposed to be done by Autonomo although no price is set out for this work.
The evidence of Autonomo is that if this document is disclosed to the defendant, it could, in context with other documents, reveal Autonomo's pricing structure. However, no evidence was given or submissions made, apart from this general statement, as to how the defendant could reconstruct this information.
Consistent with my decision in respect of categories one and two, it is not apparent from this document that the pricing information contained in the document is Autonomo's information or how the provision of this document to the defendant will cause Autonomo harm or what prejudice it will suffer.
For these reasons, I do not consider that this document should be redacted.
REL03549 and REL03562[39]
[39] Confidential affidavit of Gerard Bradley McNamara filed 5 February 2020, 'GM2.2', p 123 – 125 (Documents 139 and 140 in Schedule).
These documents are internal emails between employees of Rio Tinto which are copied to '[email protected]'. The email notes that Rio Tinto is currently using Autonomo through four different third parties due to the fact that Autonomo does not currently have a vendor number.
Autonomo contends that these documents are confidential on alternate grounds: first, that Autonomo authored the document; or second, Autonomo provided its own commercially sensitive information which caused the creation of the document. There is no evidence before me as to either of these grounds.
The defendant submits that the names of the third parties are not confidential and that it is well known in the market that Autonomo deals with them. The defendant contends that these documents do not disclose any special arrangement between Autonomo and the third parties or any other evidence of a commercial arrangement that requires particular protection. Further, the defendant states that it is and was already well-known to the defendant from at least November 2018 that Autonomo was working with each of these entities.
There is no evidence before me on which I could conclude that the generalised statements contained in these emails are confidential or commercially sensitive information. At their highest, the emails between internal representatives of Rio Tinto are drawing attention to limitations within the existing Rio Tinto contracting model. While the documents refer to the broad nature of the works being done by Autonomo for Rio Tinto, there is no pricing or other information contained in the emails that is commercially sensitive or confidential.
For these reasons, it is my view that no orders for confidentiality or redaction should be made in respect of these documents.
REL00451[40]
[40] Confidential affidavit of Gerard Bradley McNamara filed 5 February 2020, 'GM2.2', p 45 (Document 26 in Schedule).
This email is an email from the second defendant to an employee of Rio Tinto. It refers to a third party. Autonomo contends that the name of the third party should be redacted from this document.
For the same reasons as are set out above at [96] ‑ [99], I do not consider that any orders for confidentiality or redaction should be made in respect of this document.
REL04205, REL04206, REL04207[41]
[41] Affidavit of Gerard Bradley McNamara filed 5 February 2020 'GM2.2', p 134 – 138; Documents 191 - 193 in Schedule).
These documents are emails between Autonomo and Rio Tinto in June 2018. The portions that Autonomo seeks to redact contain the same references to third parties that I have dealt with above at [96] ‑ [100].
For the same reasons, I do not accept that this information is confidential nor commercially sensitive or that any orders for confidentiality or redaction should be made in respect of these documents.
Conclusion
For the reasons set out above, it is my view that save for the specific redactions provided for in these reasons, Autonomo's application should be dismissed.
I will hear from the parties as to the precise terms of the orders and costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
ME
Associate to the Honourable Justice Hill
12 MAY 2020
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: PROGRESSO PTY LTD -v- HANSEN PRICE PTY LTD [2020] WASC 151 (S)
CORAM: HILL J
HEARD: 13 MAY 2020
DELIVERED : 4 JUNE 2020
PUBLISHED : 4 JUNE 2020
FILE NO/S: CIV 1223 of 2018
BETWEEN: PROGRESSO PTY LTD formerly known as MINING TECHNICIANS GROUP - AUSTRALIA PTY LTD
First Plaintiff
MICHAEL JANSEN
Second Plaintiff
AND
HANSEN PRICE PTY LTD
Defendant
Catchwords:
Costs - Application for costs against non-party - Costs should follow the event
Costs - Application for special costs order - Whether amount of costs allowable under costs determination is inadequate - Whether matter is unusually difficult, complex or important – Whether limit on costs imposed by Legal Practitioners (Supreme and District Courts) (Contentious Business) Determination 2018 (WA) should be raised
Legislation:
Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2018 (WA)
Legal Profession Act 2008 (WA), s 280(2)
Rules of the Supreme Court 1971 (WA), O 66
Supreme Court Act 1935 (WA)
Result:
Order for costs against non-party
Special costs order made
Category: B
Representation:
Counsel:
| First Plaintiff | : | No appearance |
| Second Plaintiff | : | No appearance |
| Defendant | : | Mr B D Campbell |
| Interested Party | : | Mr R E Lindsay |
Solicitors:
| First Plaintiff | : | Irwin Legal |
| Second Plaintiff | : | Irwin Legal |
| Defendant | : | HHG Legal Group |
| Interested Party | : | Capital Legal |
Case(s) referred to in decision(s):
AGC Industries Pty Ltd v Karara Mining Ltd [2019] WASC 140 (S)
Frigger v Lean [2012] WASCA 66
Kaur v Sikh Gurdwara Perth (Inc) [No 2] [2018] WASC 99
Progresso Pty Ltd v Hansen Price Pty Ltd [2020] WASC 151
Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76 (S)
Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96
HILL J:
On 13 May 2020, I delivered reasons for decision dismissing Autonomo's application to, inter alia, limit inspection of documents produced in answer to a subpoena that had been issued to Rio Tinto Ltd.
The defendant seeks orders for Autonomo to pay its costs of the application as well as an order that its costs be assessed without regard to the limit imposed by Item 10 of Table B of the Legal Profession (Supreme and District Courts) (Contentious Business) Determination 2018 (WA) (2018 Costs Determination).
Autonomo submits that the appropriate order is that no order for costs should be made on the application.
On 13 May 2020, I made orders for the filing of any affidavits and submissions by each party and for the application for costs to be determined on the papers.
For the reasons which are set out below, it is my view that Autonomo should pay the defendant's costs of the application and that the limit imposed by Item 10 of Table B of the 2018 Costs Determination should be lifted to $35,000.
Costs - general principles
Costs against non-parties
Under s 37 of the Supreme Court Act 1935 (WA), the court has a wide discretion to award costs. However the discretion is not unfettered and must be exercised judicially.[42]
[42] Frigger v Lean [2012] WASCA 66 [53].
The general rule is that costs should follow the event; that is, the successful party should recover their costs of the application from the opposing party.[43] Ordinarily, this is a just outcome because a party who has required the other party to apply to the court to enforce the rules or procedure of the court or who has unjustifiably resisted the application should be required to recompense the applicant for its costs.
[43] Rules of the Supreme Court1971 (WA), O 66 r 1(1).
As was noted by the Court of Appeal in Strzelecki Holdings Pty Ltd v Jorgensen:[44]
What constitutes 'success' in proceedings is to be determined by the reality of the circumstances involved in the case. The Court may depart from the general rule that costs follow the event and modify a costs order to take into account matters such as any unreasonable conduct of a generally successful party, or to the failure of that party on one or more specific issues. The exercise of the discretion in that way is recognised by a number of rules in the [Rules of the Supreme Court], together with the practice of the Court, and authority. So, for example, if the Court is of the opinion that the conduct of a successful party - either before or after the commencement of the litigation - has resulted in costs being unnecessarily or unreasonably incurred, the Court may deprive that party of costs, either wholly or in part, and it may further order that party to pay the costs of an unsuccessful party, either wholly or in part. (footnotes omitted)
[44] Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96 [50].
It was not in dispute between the parties that, while unusual, orders for costs can be made against non‑parties. In Kaur v Sikh Gurdwara Perth (Inc) [No 2], Le Miere J summarised the principles governing an award of costs against a non‑party:[45]
The exercise of the discretion to make non‑party costs orders is to be exercised 'judicially and in accordance with general legal principles pertaining to the law of costs'.
The court will only make a non‑party costs order where the interests of justice justify a departure from the general rule that only parties to proceedings may be subject to costs orders: that is, where, in the circumstances of the case it is just and equitable for the interested non‑parties to pay the defendant's costs.
Generally costs orders against non‑parties should be granted 'sparingly', and only when 'exceptional circumstances make such an order reasonable and just'. However, 'exceptional' means no more than 'outside the ordinary run of cases where parties pursue or defend claims for their own benefit and at their own expense'.
There are no closed categories of cases where the costs discretion may or should be exercised against a non‑party. Whether costs should be awarded against a non‑party is a fact specific inquiry informed by various relevant considerations. Two factors that are highly relevant to the exercise of the discretion are the non‑party's connection with the proceedings and the incurrence of costs.
…
As to the connection between the non‑party and the incurrence of costs, the authorities establish that there must be a causal link: if the costs would have been incurred even without the non‑party's involvement the non‑party should not ordinarily be made liable for them. This causal link must be real and direct. (citations omitted)
Special costs orders
[45] Kaur v Sikh Gurdwara Perth (Inc) [No 2] [2018] WASC 99 [8] - [13].
The costs of the application by Autonomo fall within Item 10 of Table B of the 2018 Costs Determination. For this reason, unless a special costs order is made, the costs of the application is limited to a maximum of $12,540.
Pursuant to s 280(2) of the Legal Profession Act 2008 (WA) (Act):
[I]if a court or judicial officer is of the opinion that the amount of costs allowable in respect of a matter under a costs determination is inadequate because of the unusual difficulty, complexity or importance of the matter, the court or officer may do all or any of the following ‑
(a) order the payment of costs above those fixed by the determination;
(b) fix higher limits of costs than those fixed in the determination;
(c) remove limits on costs fixed in the determination;
(d)make any order or give any direction for the purposes of enabling costs above those in the determination to be ordered or assessed.
The principles concerning special costs orders under s 280(2) of the Act are well settled.[46] Before exercising the power under s 280 of the Act, the court must form an opinion which has two components. First, the court must determine that the amount of costs allowable under the relevant legal costs determination is inadequate. Second, the court must conclude that the inadequacy arises because of the unusual difficulty, complexity or importance of the matter.
[46] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [2017] WASCA 76 (S) [11] - [16].
It is not necessary for the court to find that the costs allowable under the relevant determination are inadequate; it is sufficient if the court considers it is fairly arguable that a greater amount should be allowed than that allowable under the relevant determination.[47]
[47] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] [13].
The exercise of determining whether the amount of costs allowable is inadequate is more straightforward where the question relates to the time reasonably spent compared with that allowed. It is more difficult where the question is whether the costs allowable under the determination are not adequate because the prescribed hourly rate would result in inadequate compensation for the successful party.[48]
[48] AGC Industries Pty Ltd v Karara Mining Ltd [2019] WASC 140 (S) [9].
The adjective 'unusual' qualifies only the 'difficulty' of the matter, and not its 'complexity' or 'importance'. In the context of s 280 of the Act, this means unusual having regard to the 'usual run of civil cases determined in the court'.[49] This essentially involves the making of a value judgment by the court, having regard to the court's experience of the particular case when compared with the usual run of cases.
[49] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] (S) [15].
The reference to 'importance' allows the court to have regard to the significance of the issues that arose in the litigation. Significance can arise either because of the significance of the issues to the parties, or because of the significance of the issues to other prospective parties, or to the public or community generally.[50]
[50] Sino Iron Pty Ltd v Mineralogy Pty Ltd [No 2] (S) [15].
Autonomo's submissions
Autonomo opposed any costs order being made against it. Autonomo submitted that in considering the application, two considerations needed to be addressed: first, the application by the defendant in respect of Autonomo's non‑compliance with the subpoena issued to it (on which I made costs orders on 18 September 2019); and second, Autonomo's application which was the subject of the reasons for decision on 13 May 2020.
Autonomo contended that it had no connection to the substantive proceedings and that it was obliged to bring the application to protect its trade secrets and commercially sensitive information from inspection by the defendant, which is a direct competitor.
Autonomo submitted that the initial position it took was a direct consequence of the wide scope of the subpoena issued by the defendant to Rio Tinto. It contended that its initial objections were primarily on the grounds of relevance as opposed to commercial sensitivity. For these reasons, Autonomo submitted that the appropriate order was that no order for costs be made in respect of its application.
In the alternative, Autonomo submitted that if costs were to be ordered against it, the costs should be fixed for a limited sum. The basis for this submission was Autonomo's assertion that the defendant's solicitors had not conferred with its solicitors to narrow down the documents relevant to the proceedings. Autonomo contended that had this occurred, the costs incurred by both parties on the application would have been significantly less. Apart from these submissions, Autonomo did not expressly address the defendant's application for special costs orders.
Defendant's submissions
The defendant submitted that it was clearly the successful party in respect of Autonomo's application. In this regard, the defendant emphasised that, after the hearing of the application, less than 200 documents (or only 6% of the number of documents produced by Rio Tinto) were redacted. This was in contrast to the almost 3,000 documents over which the claim was initially made. The defendant contended that Autonomo unnecessarily and unreasonably prolonged the application by advancing claims that were unreasonable, misconceived and without foundation.[51]
[51] Defendant's submissions [12].
In support of its special costs application, the defendant contended that the application was unusually difficult, complex and important. In particular, the defendant referred to the length of time taken to resolve the application (a period of seven months); the number of documents that were required to be filed in support of the application; the necessity for the defendant's solicitors to review more than 3,000 documents; and the preparation, review and exchange of spreadsheets reflecting the parties' respective positions on each of the documents in dispute.
For these reasons, the defendant submitted that the allowance in Item 10 of Table B of the 2018 Costs Determination, being $12,540, is inadequate.
The defendant relied on an affidavit of Ms Nofal, a solicitor employed by the defendant's solicitors who has assisted in the day‑to‑day conduct of the matter.[52] Ms Nofal's evidence is that the defendant's solicitors have spent a total of 140 hours working on the matter. On the basis of the rates provided under the 2018 Costs Determination, this equates to costs in respect of the application of almost $70,000. In addition, counsel has charged the defendant more than $15,000 in respect of the application.[53]
[52] Affidavit of Gina Nofal filed 22 May 2020 [6] - [8].
[53] Affidavit of Gina Nofal filed 22 May 2020 [9].
Disposition
Costs against non-party
For the following reasons, I consider that in the circumstances of this application, it is just and equitable for Autonomo to pay the defendant's costs of the application.
First, the defendant was largely successful in the application. Ultimately, the orders made by the court substantially reflected the position advanced by the defendant. In my view, the conduct of Autonomo in rejecting the defendant's position, particularly in relation to the purchase orders and pricing documents which comprised the majority of the disputed documents, unnecessarily prolonged the determination of the application.
Second, the application by Autonomo was made in respect of a subpoena issued to Rio Tinto Ltd and not to Autonomo. The plaintiff did not appear on the application nor did Rio Tinto Ltd. Accordingly, any costs that were incurred by the defendant in respect of the application were caused by Autonomo seeking orders in respect of the documents. If Autonomo had not sought to limit inspection of these documents, the defendant would not have incurred these costs.
Third, the position initially adopted by Autonomo to claim confidentiality over more than 90% of the documents produced in answer to the subpoena was unreasonable. Notwithstanding that following conferral between the parties, the dispute was narrowed to only 69 documents, the defendant was required to oppose the application because of the initial claim made.
Autonomo contended that the costs of the application were increased due to the defendant's conduct in refusing to inform it of which documents it wished to rely on at trial. I do not accept this submission. As set out in my reasons for decision on the application, the defendant was required to establish that the documents were of apparent relevance to the issues in the proceeding, which is a low threshold.[54] Once this was established, it is usual for inspection to be permitted. Confidentiality is not, of itself, a ground to refuse inspection of a document as the public interest in the administration of justice prevails over confidentiality. In determining whether additional orders should be made to protect any confidentiality in the document, it is relevant to consider, inter alia, the age of the information, the degree of commercial sensitivity and the extent of prejudice to the party whose documents were the subject of production.
[54] Progresso Pty Ltd v Hansen Price Pty Ltd [2020] WASC 151 [21].
The basis for Autonomo's application filed on 18 October 2019 was that the documents to be produced by Rio Tinto were commercially sensitive and confidential.[55] The application did not assert that the documents were not relevant or apparently relevant to the issues in the proceeding. In my view, the defendant was not required to inform Autonomo which documents it intended to rely on at trial; it was for Autonomo to establish a claim for confidentiality over the relevant documents. For this reason, I do not consider that the refusal of the defendant's solicitors to provide the information requested should disentitle the defendant to a costs order in its favour.
[55] Letter from Capital Legal to Supreme Court of Western Australia, 18 October 2019.
Fourth, the defendant proposed a partial redaction to a significant proportion of these documents which, if accepted, would have disposed of the application consistent with the determination made on 13 May 2020.
Fifth, Autonomo was on notice from at least 31 October 2019 that the defendant was seeking its costs of the application to be paid by Autonomo.[56] Autonomo contended that the defendant's earlier application in respect of Autonomo's alleged non-compliance with the subpoena issued to it was relevant to the question of whether a costs order should be made on the application. I do not accept that submission. The orders made on 18 September 2019 required the defendant to pay the third party's costs thrown away by reason of the defendant's application. Whether these costs have been paid or not is not relevant to the exercise of my discretion on a separate application.
Special Costs Orders
[56] Defendant's minute of proposed orders, 31 October 2019.
The defendant contends that the application was unusually difficult, complex and important.
I do not accept that the application involved a matter of unusual difficulty. The application by Autonomo was a claim for confidentiality over documents produced on subpoena by Rio Tinto Ltd. The legal issues associated with the determination of the application are well settled and there was nothing unusually difficult about the application in this case.
However, I accept that the issues raised on the application were factually complex. As noted above, claims were initially made over almost the entirety of the documents produced on subpoena by Rio Tinto. This required the defendant to review the documents and address the claims for confidentiality made by Autonomo in respect of each document, including proposing redactions that might address the issues raised.
I also accept that the application was important in the relevant sense. The question of the confidentiality of the documents, what information can be shared by the defendant's solicitors and counsel with representatives of their client, the relevance of these documents to the question as to whether there has been a breach of the restraint of trade as pleaded in the defence and counterclaim, and whether the documents contained trade secrets or confidential information, are important to the parties.
Accordingly, I am of the opinion that the amount of costs allowable in respect of the application by Autonomo under the 2018 Costs Determination is inadequate because of the factual complexity and importance of the matter. As a consequence, my discretion to make a costs order under s 280(2) of the Act is enlivened.
The relevant item in Table B of the 2018 Costs Determination is Item 10(a) 'proceedings in chambers other than proceedings to which Item 11 applies'. The time allowed for this item is two days' preparation and one day for the hearing, with a maximum amount claimable of $12,540.
In my view, the time allowed for this application is inadequate having regard to the factual complexity and importance of the matter, as well as my assessment as case manager of the amount of work which was reasonably necessary to defend the application.
The fees billed by the defendant's solicitors and counsel in relation to the application are almost seven times the amount allowed for by the 2018 Costs Determination. Notwithstanding the factual complexity and importance of the matter, in my view, it is not appropriate to allow that amount or an amount approaching that for the costs of this application. In my view, costs of $85,000 would be disproportionate to the nature and subject matter of the application. In this case, I consider that the appropriate order is to raise the total amount allowed to a maximum of $35,000.
Ultimately, it will be for the taxing officer to determine in relation to the work actually performed whether it was reasonable to incur the costs of each item of work and, if so, the number of hours that were reasonably employed in doing the work having regard to the work that was done and the person who did it.
Conclusion
The appropriate costs orders in respect of Autonomo's application are:
(1)Autonomo pay the defendant's costs of the application and any reserved costs to be taxed, if not agreed, and paid forthwith.
(2)Pursuant to s 280(2) of the Legal Profession Act 2008 (WA), the costs of the application be taxed in accordance with Item 10 of Table B of the Legal Practitioners (Supreme and District Courts) (Contentious Business) Determination 2018 (WA) with a limit of $35,000 (inclusive of GST and counsel fees but exclusive of other disbursements) substituted for the limit of costs fixed in the determination.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
ME
Associate to the Honourable Justice Hill
4 JUNE 2020
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