Tyco (Australia) Pty Ltd T/As ADT Security v Signature Security Group Pty Ltd (No 6)

[2010] FCA 1322

FEDERAL COURT OF AUSTRALIA

Tyco (Australia) Pty Ltd T/AS ADT Security v Signature Security Group Pty Ltd (No 6) [2010] FCA 1322

Citation:		Tyco (Australia) Pty Ltd T/AS ADT Security v Signature Security Group Pty Ltd (No 6) [2010] FCA 1322
Parties:		TYCO (AUSTRALIA) PTY LTD TRADING AS ADT SECURITY v SIGNATURE SECURITY GROUP PTY LTD, SIMECORP PTY LTD, MARTIN SALAZAR, AUSTRALIAN SECURITY AND FIRE PTY LTD and GREGORY THOMAS; SIGNATURE SECURITY GROUP PTY LTD; SECURITY SELECT PTY LTD and MICHAEL PETER VINCENZO CALIFANO
File number(s):		NSD 779 of 2009
Judge:		PERRAM J
Date of judgment:		3 December 2010
Date of hearing:	5 November 2010
Date of last submissions:	5 November 2010
Place:	Sydney
Division:	GENERAL DIVISION
Category:	No Catchwords
Number of paragraphs:	8
Counsel for the Applicant:	Ms K Rees
Solicitor for the Applicant:	DLA Phillips Fox
Counsel for the First Respondent:	Mr E Hyde
Solicitor for the First Respondent:	Norton Rose

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 779 of 2009

BETWEEN:

TYCO (AUSTRALIA) PTY LTD TRADING AS ADT SECURITY
Applicant

SIGNATURE SECURITY GROUP PTY LTD
Cross-Claimant

AND:

SIGNATURE SECURITY GROUP PTY LTD
First Respondent

SIMECORP PTY LTD
Second Respondent

MARTIN SALAZAR
Third Respondent

AUSTRALIAN SECURITY AND FIRE PTY LTD
Fourth Respondent

GREGORY THOMAS
Fifth Respondent

SECURITY SELECT PTY LTD
First Cross-Respondent

MICHAEL PETER VINCENZO CALIFANO
Second Cross-Respondent

JUDGE:	PERRAM J
DATE OF ORDER:	3 DECEMBER 2010
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The parties bring in short minutes of order consistent with these reasons within seven days. 

2.The first respondent bear the costs of the applicant on the various applications.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 779 of 2009

BETWEEN:

TYCO (AUSTRALIA) PTY LTD TRADING AS ADT SECURITY
Applicant

SIGNATURE SECURITY GROUP PTY LTD
Cross-Claimant

AND:

SIGNATURE SECURITY GROUP PTY LTD
First Respondent

SIMECORP PTY LTD
Second Respondent

MARTIN SALAZAR
Third Respondent

AUSTRALIAN SECURITY AND FIRE PTY LTD
Fourth Respondent

GREGORY THOMAS
Fifth Respondent

SECURITY SELECT PTY LTD
First Cross-Respondent

MICHAEL PETER VINCENZO CALIFANO
Second Cross-Respondent

JUDGE:	PERRAM J
DATE:	3 DECEMBER 2010
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. I made orders previously putting in place a confidentiality régime.  Those orders were made necessary in substance because the applicant (Tyco) and the first respondent (Signature) are trade rivals.  The applicant has prepared an affidavit of Mr Gary Whelan.  Mr Whelan gives evidence about a number of matters going to the manner in which the applicant conducts its business.  His affidavit, together with another affidavit of Ms Bloye, forms the evidence upon which the applicant’s expert, Mr Potter, then expresses some opinions.

2. Tyco seeks an order which would extend the confidentiality régime to Mr Potter’s report and the affidavits of Mr Whelan and Ms Bloye.  There is no dispute that the régime should be extended to that evidence.  However, in the case of Mr Whelan’s affidavit there is a dispute between the parties as to whether the confidentiality régime should be varied so as to permit Signature to show the affidavit to its Group General Manager (Finance) (Mr van Bokhoven) and its Group Financial Analyst (Mr Dozzi) so long as they proffer a confidentiality undertaking.

3. But for one matter I would not be prepared to countenance that course.  The nominated officers are a central part of Signature’s business and to require Tyco to reveal to them Mr Whelan’s evidence would be to require one company to reveal the heart of its operations to its trade rival.  The difficulty is that Signature does not have an in-house counsel so that there is no ready way for Signature to give instructions about the content of Mr Whelan’s affidavit. 

4. That provides some reason for taking a different course.  However, it is not the end of the matter.  Whether such a course should be taken depends on whether the prejudice which will be caused to Tyco if the information is disclosed is outweighed by the prejudice to Signature in not being able to take instructions.  That observation directs attention to the necessity of understanding what it is that Signature wishes to do with Mr Whelan’s material.

5. As I understood the argument, the reason access was necessary was so that instructions could be obtained as to whether the matters outlined in Mr Whelan’s affidavit were correct.  This was a legitimate course, so the argument ran, because Mr Potter’s expert report rested, in part, on the correctness of Mr Whelan’s affidavit and it was permissible for Signature to be entitled to test that material.

6. Mr Whelan’s evidence touches on a number of topics.  It includes, for example, the amount of Tyco’s overheads, the level of activity of the monitoring centres operated by Tyco, cost reduction programmes undertaken by Tyco in recent years, details of Tyco’s debtors and the manner in which those debts are collected, and the incremental cost of customers.  There are many other similar matters.

7. I accept that Messrs Dozzi and van Bokhoven may be able to throw light on the correctness of Mr Whelan’s evidence in that regard.  However, I do not see that they are the only means by which that material may be tested.  Before I would be willing to compel Tyco to disgorge such material I would need to be satisfied both as to the avenues which Signature had pursued to find an independent third party who might consider the correctness of Mr Whelan’s evidence and as to the reasonableness of those inquiries.  In that regard, this is not a matter to be decided by mere assertion.  If a credible risk to Signature’s ability to defend itself appears then the question may need to be revisited.  However, the material thus far rises no higher than a vaguely articulated concern.  I am not prepared to require one trader to disgorge sensitive commercial matters to senior officers of its rival simply because that rival believes such a course is necessary to defend itself.  Rather, what needs to be established is that it is, in fact, necessary. 

8. The parties are to bring in short minutes of order consistent with these reasons within seven days.  Signature should bear the costs of Tyco on the various applications.

I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.

Associate:

Dated:        3 December 2010