Santos Limited and BHP Petroleum Pty Ltd (Respondent) v Pipelines Authority of South Australia (Applicant) No. SCGRG 95/2276 Judgment No. 5607 Number of Pages 6 Procedure

[1996] SASC 5607

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA LANDER JJ

CWDS
Procedure - Supreme Court procedure - South australia - practice under Rules of Court - evidence - application for extension of time within which to comply with subpoena - application to stay compliance with previous order.

HRNG ADELAIDE, 7 May 1996 #DATE 7:5:1996 #ADD 4:7:1996

Counsel for applicant:         Mr J Sulan QC with Mr M Manetta

Solicitors for applicant:     Johnston Winter and Slattery

Counsel for respondent BHP:    Mr D Bleby QC with
   Mr G Edmonds-Wilson

Solicitors for respondent BHP: Minter Ellison Baker O'Loughlin

ORDER
Appeal dismissed.

JUDGE1 LANDER J On 3 May 1996 PASA applied to me to abridge the time for service of a subpoena for the production of documents in the matter of a commercial arbitration in which PASA is a party and Santos Ltd and other oil producers are parties.

2. The subpoena was directed to BHP Petroleum Pty Ltd, seeking the production of all reports prepared by or for management since 1 July 1994 (a) in relation to the construction of a proposed pipeline connection between Melbourne and Sydney along the east coast of Victoria and New South Wales concerning the timing and commencement of construction and completion of such pipeline and (b) concerning any offers or proposals made to any potential purchaser of gas from New South Wales of gas supplied by the company referred to in subpara.(a).

3. The application was then opposed by counsel for BHP Petroleum, but I granted the application, for the reasons I then gave on 3 May 1996 (judgment number 5702, unreported, available on SCALE). The orders that I made were that upon PASA, by its counsel, undertaking to use its best endeavours to effect service on BHP Petroleum Pty Ltd on or before 6 May 1996, then the time within which BHP Petroleum Pty Ltd must comply with subpoena issued to it on 3 May 1996 at the request of PASA be abridged to a period of three days after service thereof upon it. The effect of the order was to require BHP Petroleum Pty Ltd to comply with the subpoena by Thursday, 9 May 1996. At the same time as I made that order I gave liberty to both PASA and BHP Petroleum Pty Ltd to apply on short notice.

4. The reason for PASA seeking the abridgment time I was told, on that occasion, and have been told again today, was because the documents which were sought were needed to be produced to a witness, a Dr Carpenter, who is a citizen of the United States of America, who is presently in Australia giving evidence in relation to the commercial arbitration. His evidence is due to complete on Thursday, 9 May 1996, which is the last day on which the arbitrators will sit this week, and he is due to leave Australia on Saturday, 11 May 1996, and has commitments to give evidence in the United States, apparently, on his return.

5. It was put to me then that unless the documents were produced before Dr Carpenter left the witness box, then his evidence would be incomplete, in that he would not have had the opportunity to refer to these documents, which are themselves important for the purpose of his giving his evidence and for the purpose of PASA in the case it is presenting in the arbitration.

6. Pursuant to the liberty that I gave, BHP Petroleum has this day applied for an extension of time within which to comply with the subpoena, seeking an extension of time until Monday, 13 May 1996. At the same time, BHP Petroleum Pty Ltd has made an application to stay compliance with the order which I made on 3 May 1996 upon the basis that it wishes to apply to set aside the subpoena upon the ground that the subpoena is oppressive, in that it seeks documents which are so confidential in nature that if they were to be published to any expert, the mere publication of the documents would jeopardise BHP Petroleum's market position, and, by reason of that, would be contrary to the public interest, in that the publication of the documents to an expert might adversely affect competition in a substantial market.

7. I have heard both applications made by BHP Petroleum Pty Ltd. To accede to either of the applications by the company will cause harm to PASA, in that PASA will not have available to it the documents to present to its expert, Dr Carpenter and, thereby, will cause irreparable harm, so I am told, in the presentation of its case in the arbitration.

8. On the other hand, to refuse the application, or either of the applications, by BHP Petroleum Pty Ltd will, effectively, deprive that company of its right to challenge the subpoena, because it will be obliged to comply with the subpoena before it has an opportunity of challenging my decision in relation to a refusal to make an order for a stay. In a sense, therefore, my decision, I apprehend, is likely to finally determine one party's rights in relation to these matters.

9. The application for both orders was supported by an affidavit of Anthony Brendon Wheelan, who is a solicitor employed by the firm Deakins Graham and James, being BHP Petroleum Pty Ltd's Melbourne solicitors in this matter. Mr Wheelan has deposed to the circumstances giving rise to the subpoena, the proposed application to set aside the subpoena, and the difficulties which the company will face in complying with the order which I made last week.

10. It is the case, as I pointed out to Mr Bleby QC, who appeared for BHP Petroleum, that Mr Wheelan has not deposed to the fact that these documents are as confidential as Mr Bleby submits his instructions are. I, of course, accept anything that Mr Bleby says in relation to those matters, but it is a matter to be observed that notwithstanding this order was made more than four days ago, and two of those days have been working days, BHP has not been able in that time to either by one of its employees or by its solicitors depose to the confidentiality, and the extreme confidentiality, of the documents.

11. Mr Bleby accepted - appropriately, if I might say - that the fact that a document is confidential is not of itself sufficient reason to challenge a subpoena. The concession he made was right, as can be seen from the judgment of King CJ in Alliance v Australian Gaslight Company (1983) 34 SASR 215 at p.239. As his Honour said in that case:
    "The risk to the confidentiality of the information must be
    tolerated in the interests of the administration of
    justice.' His Honour went on to say: 'One can only express
    the hope that every proper effort will be made to protect
    the interests of the witnesses in the confidentiality of the
    information in the documents."

12. I cannot be satisfied, it seems to me, upon the information presently before me, that these documents are so confidential that there are some prospects of success in BHP Petroleum Pty Ltd challenging this subpoena. I cannot, also, be satisfied upon this application and upon the information presently before me that an order cannot be framed by the arbitrators, who are very experienced gentlemen, such that the confidentiality of the documents will be protected so far as they can. In those circumstances, the prospects of success, in my opinion - an opinion which I pass on incomplete information and on a short argument - the prospects of success, in my opinion, are not so substantial that it would be appropriate to make an order for a stay.

13. In relation to the second aspect of the application, that is to say, that BHP Petroleum will not be able to comply with the subpoena in the time available to it, again, I am not satisfied that, with proper effort, compliance cannot be achieved.

14. I recognise that what has been imposed upon the company is, I have said on another occasion, a hardship and an inconvenience. I recognise that the order that I previously made will put the company to a deal of trouble to comply with. I also recognise that the order has come about partly because of the inadvertence of PASA in the way in which it framed its original subpoena directed to BHP Petroleum Pty Ltd. I also recognise, as Mr Bleby has forcefully put, that a proper reading of that subpoena and a proper reading of the affidavit of Mr Price ought to have shown PASA that its previous subpoena was inadequate in some respects. However, notwithstanding all of that, and notwithstanding the hardship and inconvenience, I am satisfied that the balance of convenience, as it were, requires that all steps be taken by BHP Petroleum Pty Ltd in complying with the subpoena.

15. I therefore dismiss the application for a stay so as to allow BHP to apply to set aside the subpoena upon the ground that it is oppressive, and I also dismiss the application in relation to the liberty to apply that I previously gave, extending the time within which BHP might comply with the subpoena.

MR BLEBY: With respect - I know this may sound like some attempt to reopen the question - your Honour's concerns about the lack of evidence on confidentiality, there is, in fact, available a Mr Nicholson, who is a solicitor in the employ of the company, who can, in fact, depose to that confidential nature of those documents. I would formally make application to lead evidence from him as to the confidential nature of the documents, so far as they can be ascertained at the moment. Of course, that was part of the problem; until we get the documents which are required to be produced, by a very wide description, sometimes one can't even determine whether some documents are confidential or not. But in general terms I say that. HIS HONOUR: Mr Bleby, I understand the application. I have accepted all you have put to me, of course, as I said, and it would seem to me inappropriate, I think, at this stage, for you, as it were, to reopen your case after the result to seek to call evidence which I would have thought perhaps would confirm what you said to me. MR BLEBY: All I can do is make the application, and I do so. MR SULAN: We would certainly oppose the application. HIS HONOUR: Mr Bleby has now applied to call Mr Nicholson, a solicitor employed by BHP Petroleum Pty Ltd, for the purpose of giving evidence in relation to the nature of the documents and the sensitivity of the documents to point up the confidentiality of the documents. As I said to Mr Bleby when he made that application, I have accepted all that he put to me in relation to the argument that he would intend to run in relation to this matter. Whilst I have pointed out that I believe the company could have, prior to making this application, deposed to, with some degree of particularity, or even with some degree of generality, the nature of those documents and about the way that the company's interest in the documents might be affected, I did accept, and I have accepted, all of what Mr Bleby put to me. It seems to me, however, that, as I have said already, the prospects of success in relation to an argument based upon confidentiality of the kind identified by Mr Bleby does not enjoy sufficient prospects of success, in any event, for the stay order to be made, and I therefore reject the application to call evidence in relation to the rulings already made. MR BLEBY: I'm instructed to the extent necessary, I make an application for leave to appeal. I have no idea, at the moment, of course, whether if such were given it would be exercised I'm not even sure leave is necessary it's a precautionary application. HIS HONOUR: I think it's probably necessary, as I mentioned in the reasons, I think it may be difficult to test my opinion during the time available. I think that if there's any chance my opinion could be tested you ought to have it, but I will hear Mr Sulan on that. MR SULAN: Your Honour on the question of leave we would submit that this is not a case where leave ought to be granted because we would submit this in your Honour's reasons our further submission is there is just no prospect of success of this application. Your Honour has found that - HIS HONOUR: If that's right, I suppose, it will do no harm, if I give leave. MR SULAN: That response can be made to any counsel who opposes leave your Honour and I can't put the matter any higher than that. HIS HONOUR: What is the law Mr Bleby, do you know, which requires leave. Rule 94.01. Mr Bleby has now sought leave to appeal to the Full Court from the dismissal of the applications heard this evening. As I explained in my reasons I believe that having regard to the timing of my orders and the applications it may be that my opinion cannot be reviewed within the time within which Mr Bleby's client must comply with my order. However, notwithstanding that and so as to not prevent the opinion being challenged if a court can be arranged, insofar as it's necessary, I give leave to appeal to the Full Court from my decision to dismiss both applications. Any other applications? MR SULAN: I would make an application for costs. MR BLEBY: Normally that sort of application is difficult to resist, however, I would ask your Honour to take into account that the reason in the first place this application had to be made for shortening of the time was for the reason that your Honour has already identified in PASA not having done their homework, as it were, and not having included the thing in the first place. I would oppose the application on that ground. HIS HONOUR: Mr Sulan applies for costs in relation to both of the applications. The applications are opposed by Mr Bleby upon the ground that the reason for the necessity to seek abridgment arose out of PASA not identifying an error in it's own subpoena. I think that argument would have been appropriate in relation to an application for costs in relation to the matter of abridgment of time. These, it seems to me, are different applications which arise out of my having made the order that I did on 3 May. It seems to me that in those circumstances that costs ought to follow the event in the ordinary course and I order that BHP Petroleum Pty Ltd pay the costs of and incidental to both of the applications heard this evening. MR BLEBY: I make an application, perhaps having some understanding of what it's fate might be, application for stay of your Honour's order pending exercise of the right of leave to appeal. HIS HONOUR: There's a certain degree of circularity about it. Mr Bleby now applies for - staying what order? MR BLEBY: Staying the order requiring production of documents by I think Thursday. HIS HONOUR: I have dealt with that. MR BLEBY: Yes, but for the purpose of exercising the right to appeal, that's all. HIS HONOUR: I suppose what you're after is an extension of time within which to comply with the order so you might appeal? MR BLEBY: Yes. HIS HONOUR: Mr Bleby now applies for an extension of time within which to comply with the order of 3 May so that his client may pursue an appeal from my decision given this evening dismissing both applicants for an extension of time within which to comply with the order. The very application, in my opinion, shows a circularity of it and in my opinion it would be to render nugatory both orders that I made tonight and also the order of 3 May, to allow the application and it is refused.