Warburton Environment Inc v Vicforests (No 3)
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•8 February 2021
IN THE SUPREME COURT OF VICTORIA Not Restricted AT MELBOURNE
COMMON LAW DIVISION
VALUATION, COMPENSATION AND PLANNING LIST
S ECI 2020 02461
WARBURTON ENVIRONMENT INC (ABN 28 871 873 830) Plaintiff v VICFORESTS Defendant ---
JUDGE:
GARDE J
WHERE HELD:
Melbourne
DATES OF HEARING:
3 and 8 December 2020
DATE OF JUDGMENT:
8 February 2021
CASE MAY BE CITED AS:
Warburton Environment Inc v VicForests (No 3)
MEDIUM NEUTRAL CITATION:
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PRACTICE AND PROCEDURE – Timber harvesting of State forests – Standing where plaintiff is an environment group – Statement of claim – Claim for declarations of criminal conduct in civil proceedings – Adequacy of prayer for relief – Interlocutory injunction – Confidentiality of documents to be produced – Civil Procedure Act 2010 (Vic) s 47 – Supreme Court (General Civil Procedure) Rules 2015 (Vic) rr 29.10, 29.11, 47.04 – Sustainable Forests (Timber) Act 2004 (Vic) ss 14(2), 16, 46(a) – Illegal Logging Prohibition Act 2012 (Cth) – Code of Practice for Timber Production 2014 – Management Standards and Procedures for timber harvesting in Victorian State forests 2014.
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APPEARANCES:
Counsel Solicitors For the Plaintiff Mr J Korman Oakwood Legal For the Defendant Mr E Nekvapil with
Ms M NarayanRussell Kennedy HIS HONOUR:
Introduction
1 This judgment follows the earlier decisions of Warburton Environment Inc v VicForests[1] and Warburton Environment Inc v VicForests (No 2).[2] Four issues are raised for consideration:
(a)Does Warburton Environment Inc (‘Warburton Environment’) have standing to bring this proceeding?
(b)Should leave be granted to Warburton Environment to file a proposed amended statement of claim dated 17 November 2020 (‘PASOC’)?
(c)Should an interlocutory injunction be granted?
(d)Should confidentiality orders be made in relation to some parts of some of the documents required to be produced under a notice to produce?
[1][2020] VSC 337 (‘Warburton Environment (No 1)’).
[2][2020] VSC 738 (‘Warburton Environment (No 2)’).
2 I will deal with each of these issues in turn.
Standing
3 In the PASOC, Warburton Environment alleges that it has a special interest in the preservation of the environment of the State forests in the Central Highlands that:
(a)is more than a mere intellectual or emotional concern for the preservation of that environment;
(b)goes beyond that of members of the public in upholding the law; and
(c)involves more than genuinely held convictions.[3]
[3]PASOC, [2B]-[2E].
4 Warburton Environment provides lengthy particulars of its claim to have a special interest in the preservation of the State forests in the Central Highlands.
5 The particulars may be briefly summarised as relying on Warburton Environment’s:
(a) mission statement and values;
(b) membership of the Central Highlands Alliance;
(c) public activities including rallies, meetings, forums, walking tours and educational courses;
(d) publications and petitions;
(e) preparation and lodgement of numerous forest reports concerning Tree Geebung with the Office of the Conservation Regulator of the Department of Environment, Land, Water and Planning (‘DELWP’); and
(f) grants and recognition from local government authorities.
6 These matters are relied on individually and cumulatively.
7 In Warburton Environment (No 2), I set out the principles and authorities relating to the determination of standing.[4] These principles and authorities remain applicable.
[4]Warburton Environment (No 2) (n 2) [39]–[44].
8 Review of past decisions shows that in some cases it has been possible to finally determine standing at the interlocutory stage while in others it was necessary for standing to be finally determined at trial.
9 In Australian Conservation Foundation Inc v The Commonwealth[5] and in Maguire v Parks Victoria,[6] the High Court and Court of Appeal respectively held at the interlocutory stage that the plaintiff had not shown sufficient standing to be able to bring the proceeding.
[5](1980) 146 CLR 493.
[6][2020] VSCA 172.
10 In Environment East Gippsland Inc v VicForests, Forrest J determined on a prima facie basis that the plaintiff had sufficient standing to bring the proceeding.[7] Osborn J determined at trial that the plaintiff had a special interest in the subject matter sufficient to give it standing to bring the proceeding.[8]
[7][2009] VSC 386, [71].
[8](2010) 30 VR 1, 26–7 [80]–[88].
11 In WOTCH Inc v VicForests (No 6), Keogh J determined that the plaintiff had established a special interest in the subject matter to the extent of only one species outside of the Central Highlands.[9]
[9][2020] VSC 674, [102].
12 More recently in Kinglake Friends of the Forest Inc v VicForests, Ginnane J held that it was not appropriate to rule on the plaintiff’s standing as a preliminary issue because of a reserved decision on a similar issue in another proceeding.[10] Ginnane J held that there was a serious issue to be tried in relation to standing, and that it was arguable that the plaintiff’s activities established that it had a ‘special interest’ in the subject matter of the proceeding.[11]
[10][2020] VSC 865, [19].
[11]Ibid.
13 Final determination of standing where contested at an interlocutory hearing is in substance the determination of a preliminary or separate question under r 47.04 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘Rules’).
14 In Hoh v Ying Mui Pty Ltd, the Court of Appeal held that a cautious approach should be adopted by courts to the trial of separate questions under r 47.04 in these terms:
In Murphy, this Court summarised the caution to be exercised before ordering the trial of separate questions under [r 47.04], in the following terms:
1)A separate trial should be ordered under r 47.04 only with great caution and only in a clear case.
2)The attraction of trials of issues rather than of cases in their totality, ‘are often more chimerical than real’, so that separate trials should ‘only be embarked upon when their utility, economy and fairness to the parties are beyond question’.
3)The advantages of trying separate questions for one party may unfairly disadvantage another party, including because the questions will be determined without the benefit of all the evidence relevant to the proceeding.
4)There should be no trial of a separate question on the basis of assumed facts unless the facts are agreed or can readily be determined judicially. Otherwise, the parties remain free to dispute the relevant facts at any later trial.
5)As a general rule, it is inappropriate to order that a preliminary issue be isolated for determination unless the determination of the issue in favour of the plaintiff or the defendant will put an end to the action, or where there is a clear line of demarcation between issues and the determination of one issue in isolation from the other issues in the case is likely to save inconvenience and expense.
6)Factors which tell against making order under r 47.04 include that the separate determination of the question:
a)may give rise to significant contested factual issues both at the time of the hearing of the preliminary question and at the time of trial;
b)may result in significant overlap between the evidence adduced on the hearing of the separate question and at trial; possibly involving the calling of the same witnesses at both stages of the hearing of the proceeding; and
c)may prolong rather than shorten the litigation.[12]
[12][2019] VSCA 203, [393], quoting Murphy v State of Victoria (2014) 45 VR 119, 126 [28] (‘Murphy’).
15 In some cases, the determination of standing ahead of trial will give expedition and save costs - for example, where the plaintiff’s claim for standing is unmeritorious and has no real prospect of success, or on the undisputed facts, the plaintiff plainly does have standing.
16 In the present case, consideration of the relevant facts points against the final determination of standing as a preliminary or separate issue before trial. The following matters are significant:
(a)the statement of claim and prayer for relief have been amended or sought to be amended on several occasions. It cannot be assumed that the statement of claim will remain in its current form or that the relief presently sought will be the relief ultimately sought;
(b)the pleadings are yet to close, and no defence has been filed to the PASOC;
(c)there are or are potentially contested issues of fact relating to standing;
(d)Warburton Environment’s case relies on affidavits filed with the Court. VicForests is yet to have the benefit of discovery as to matters of standing, or the opportunity to cross-examine deponents;
(e)while determination of the standing issue in favour of VicForests will conclude the proceeding, determination of the standing issue in favour of Warburton Environment is only a step towards success in the proceeding. The need for trial on all other issues would still remain;
(f)the Court has not had the opportunity to form an impression as to the strength of the witnesses’ evidence as to standing; and
(g)there will not be any significant saving of time or cost if standing is determined ahead of trial.
17 I do not consider it appropriate to finally determine Warburton Environment’s standing at this stage of the proceeding. However, I am of the view that the matters alleged in the statement of claim as supported by affidavits establish standing on a prima facie basis, and that there is a serious issue to be tried as to whether Warburton Environment has a special interest to support the conduct of the proceeding. Of the matters listed above,[13] the most significant is the preparation and submission of 16 forest reports concerning Tree Geebung in coupes in the Central Highlands where harvesting has occurred.
[13]See [5].
Statement of claim
18 In Warburton Environment (No 2), I upheld VicForests’ objection to claims by Warburton Environment for declarations of criminal conduct in civil proceedings. While there is jurisdiction in a proper case to make such a declaration, it will not ordinarily be made as a criminal court is the proper forum for the question.[14] It is necessary to demonstrate exceptional circumstances for a civil court to grant declaratory relief in relation to allegations that may be the subject of criminal proceedings.[15]
[14]Sankey v Whitlam (1978) 142 CLR 1; Imperial Tobacco Ltd v Attorney General [1981] AC 718; Corporate Affairs Commission (NSW) v Transphere Pty Ltd (1988) 15 NSWLR 596; Inglis v Moore (1979) 46 FLR 3.
[15]Australian Securities and Investments Commission v HLP Financial Planning (Aust) Pty Ltd (2007) 164 FCR 487, 494 [24] (Finkelstein J); The Pharmacy Guild of Australia v Ramsay Health Care Ltd [2019] NSWSC 1045, [167] (Ward CJ); Neil J Williams, LexisNexis Butterworths, Civil Procedure: Victoria, vol 1 [23.05.77].
19 In Kinglake Friends of the Forest Inc v VicForests (No 3) (‘Kinglake’), Richards J applied this principle to an application for a declaration that timber was harvested in contravention of laws in force in the place where the timber was harvested.[16] Her Honour held that the plaintiff (‘Kinglake FF’) had no real prospect of obtaining declaratory relief in relation to the Illegal Logging Prohibition Act 2012 (Cth).[17] A declaration in the form sought would not determine any real controversy, and would have no foreseeable legal consequences for VicForests which was not a timber processor. It would not vindicate any public interest that Kinglake FF had standing to protect.[18]
[16][2020] VSC 777 (‘Kinglake’).
[17]Ibid [28].
[18]Ibid.
20 Richards J declined to permit a declaration to be sought that timber was harvested in contravention of ss 14(2), 16 and 46(a) of the Sustainable Forests (Timber) Act 2004 (Vic) (‘Act’) as this formulation would still amount to declarations that VicForests engaged in unauthorised timber harvesting, and would in substance amount to a declaration that VicForests committed criminal offences.[19] Absent exceptional circumstances, Kinglake FF could not sidestep the problem by omitting from its proposed declarations the ultimate legal consequence of the breaches.[20]
[19]Ibid [31]
[20]Ibid.
21 Kinglake FF sought to uphold the allegations of material facts relevant to likely future conduct by VicForests, which was objected to by VicForests.[21] Richards J held that it would be most efficient to focus on the critical issues in dispute.[22] There were a range of case management measures available to achieve that end. The adoption of case management techniques was preferable to striking out the impugned paragraphs.[23]
[21]Ibid [38].
[22]Ibid [40].
[23]Ibid.
22 VicForests submitted that I should adopt the same approach and refuse leave to Warburton Environment to claim declarations in the form of paragraph AC of the proposed prayer for relief in the PASOC. This alleges that:
(a)the timber harvested by VicForests in Pat’s Corner was harvested in contravention of laws in force in the place where the timber was harvested, namely sections 14(2), 16 and 46(a) of the Act;
(b)the timber harvested by VicForests in the Tree Geebung Coupes was harvested in contravention of laws in force in the place where that timber was harvested namely sections 14(2), 16 and 46(a) of the Act;
(c)the timber harvested by VicForests in the Excluded Land was harvested in contravention of laws in force in the place where that timber was harvested, namely section 16 of the Act; and
(d)in harvesting the timber in the Excluded Land, VicForests caused property, namely forest produce comprising standing trees, harvested in the Excluded Land, to be lost, damaged or destroyed because of its contravention of section 16 of the Act.
23 VicForests submitted that case management techniques should be adopted in relation to allegations of past breaches. I agree that this is highly desirable. Unless kept under close control, investigation of the 27 different allegations of past failures to maintain buffer screening and 25 different instances of destruction of Tree Geebung pleaded by Warburton Environment coupled with the pleader’s statement that there will be more to come after discovery has real potential to result in prohibitive costs and significant delays. In this respect, the parties are reminded of their obligations under the Civil Procedure Act 2010 (Vic) (‘CPA’).
24 The course suggested by VicForests was not opposed by Warburton Environment which accepted the deletion of para AC of the prayer for relief on the basis that the other allegations made in the PASOC would remain.
25 I will adopt the course suggested by the parties to finalise the statement of claim and give leave to Warburton Environment to file and serve an amended statement of claim in the form of the PASOC less paragraph AC of the prayer for relief. Case management techniques will be necessary to keep the proceeding focused on the main issues.
Interlocutory injunction
26 By a summons filed 5 October 2020, Warburton Environment seeks interlocutory restraining orders applicable to coupes in the Central Highlands region.
27 The summons seeks orders prohibiting timber harvesting operations in coupes in the Central Highlands region including coupes within 5km of a previously identified Tree Geebung until:
(a)a 30m transect survey for Tree Geebung has been completed;
(b)VicForests has established 50m circular exclusion zones marked by red or brightly coloured tape around each Tree Geebung with each Tree Geebung not less than 15m from the perimeter;
(c)updated maps showing exclusion zones have been provided to the contractor; and
(d)personnel have been instructed not to carry out timber harvesting within the exclusion zones.
Relevant evidence
28 Warburton Environment relies on the expert reports of Stephen Mueck dated 3 August 2020 and 3 September 2020. For its part, VicForests prepared a Special Management Plan for the protection of Tree Geebung (‘plan’).[24]
[24]VicForests, Special Management Plan: VFSMP319 – Tree Geebung (9 October 2020).
29 VicForests relies on parts of the affidavit of Deon Kriek deposed 14 October 2020 (‘Kriek affidavit’).
30 Mr Kriek estimates that the harvestable area that would be lost if 50m buffers were applied across Central Highlands coupes where Tree Geebung have been found is 238ha.[25]
[25]Kriek affidavit, [162].
31 Where coupes have been surveyed by VicForests or DELWP, an average of 42% of the estimated net harvestable area has been lost because of the 50m buffer.[26] Operational constraints in achieving the buffer may result in small areas becoming inaccessible and unable to be harvested.[27]
[26]Ibid [164].
[27]Ibid [165].
32 Mr Kriek deposed that there are 165 harvesting coupes and 34 roadline coupes listed as ‘not started’ or ‘active’ that have a Tree Geebung recorded within 500m. The 165 harvesting coupes have an estimated net area of 3,254ha. Assuming that 42% of the estimated net area is impacted by 50m buffers, there would be a loss of harvestable area of 1,367ha. Taking into account other operational constraints which result in 78% of the estimated net area not being harvested, there would be a loss of 2,538ha.[28]
[28]Ibid [168]–[170].
33 Mr Kriek estimated that the decrease in net harvestable area would exceed 1 million m³ assuming a 42% decrease in net harvestable area and 2 million m³ assuming a 78% decrease.[29] Application of the same percentages to a further 61 coupes where Tree Geebung have not been observed within 500m but which overlap with high likelihood habitat would result in the loss of about 462,400 m³ to 859,200m³ of net harvestable area.[30]
[29]Ibid [174].
[30]Ibid.
34 Mr Kriek deposed that for the 605 coupes in the Central Highlands listed as ‘not started’ or ‘active’ within the scope of the interlocutory injunction sought by Warburton Environment, VicForests would incur 304 survey days (1,522 hours) assuming that it takes 1.2 hours/ha to conduct a survey based on 30m transects.[31]
[31]Ibid [182]–[185].
35 Warburton Environment relied on the affidavit of Adrian Lamande deposed 3 December 2020. He is employed by a commercial ecological consulting company and estimated that his company is able to conduct surveys in approximately half the time taken by VicForests and at a cost of approximately $44/ha. Warburton Environment contended that the surveying cost of $44/ha was negligible as against an income of approximately $36,390/ha generated by VicForests from timber harvesting.
Submissions
36 Warburton Environment submitted that:
(a)Tree Geebung is assessed as ‘Endangered’ by DELWP;
(b)forestry operations and regeneration burns were the primary causes of the loss of Tree Geebung;
(c)a 50m buffer area is the minimum protection required;
(d)there is no competing scientific opinion to that of Mr Mueck in evidence;
(e)past timber harvesting of coupes had caused considerable loss of Tree Geebung;
(f)individual mature Tree Geebung not retained in buffers are prone to fire, defoliation or windthrow due to exposure and are unlikely to survive;[32] and
(g)there is no substitute for pre-harvest surveys at 30m transects.
[32]Plan, 4-5.
As to the considerations against granting an interlocutory injunction, Warburton Environment submitted:
(a)Mr Kriek’s affidavit described only the losses that VicForests would suffer if permanently prevented from harvesting in the prescribed areas;[33]
(b)it is possible in the future to carry out further harvesting of coupes where Tree Geebung buffers have been retained should a lesser protection regime than that advocated by Mr Mueck ultimately prevail;
(c)30m transect surveys impose a negligible cost burden; and
(d)there was no reason to depart from the standard form of injunction restraining VicForests from harvesting in the prescribed areas.[34]
[33]See [27].
[34]Ibid.
38 VicForests submitted:
(a)since October 2020, VicForests has advised Warburton Environment by letter of its coupe harvesting schedule including the surveys to be undertaken and the protections to be applied in each coupe;
(b)there had been no need to vary the prescriptions set out in the Court’s orders of 16 October 2020;
(c)the letter writing regime giving details of future harvesting was more nuanced and less restrictive than the grant of an interlocutory injunction; and
(d)an interlocutory injunction was unnecessary in the circumstances.
Analysis
39 It is not in dispute that there is a serious issue to be tried. [35]
[35]Warburton Environment (No 1) (n 1) [15]; Warburton Environment (No 2) (n 2) [9].
40 The main issue in the proceeding is whether the plan complies with the Code of Practice for Timber Production 2014 (‘Code’)[36] and the Management Standards and Procedures for timber harvesting operations in Victoria’s State forests 2014 (‘Standards’)[37]. This principally involves the construction of the Code, Standards and the plan assisted by expert evidence.[38]
[36]Department of Environment and Primary Industries, Code of Practice for Timber Production 2014.
[37]Department of Environment and Primary Industries, Management Standards and Procedures for timber harvesting operations in Victoria’s State forests 2014.
[38]Warburton Environment (No 2) (n 2) [9]–[21].
41 Mr Mueck’s evidence that a 50m buffer is the minimum protection required by a mature Tree Geebung has been acted on by the Court on a number of occasions in granting interim injunctions. There is at least at present no competing scientific evidence which might point to an alternative protection or buffer prescription. No reason has been advanced why Mr Mueck’s prescription as to surveys and buffers should not be adopted pending the trial.
42 I am of the opinion that the balance of convenience favours the grant of an interlocutory injunction as:
(a)there is evidence that suggests that without protection by orders of the Court there is significant risk of damage to Tree Geebung through harvesting, or subsequent to harvesting;
(b)the Code adopts the precautionary principle, which states that risks to Tree Geebung should be minimised or at least reduced pending the trial of the proceeding;
(c)while Mr Kriek’s evidence shows that economic loss will be sustained by VicForests if it is unable to harvest areas within buffers, an interlocutory injunction is only operative until the trial and determination of the proceeding. If successful, VicForests will be able to harvest areas no longer subject to protection. There will be a postponement of revenue rather than a loss of revenue. I also accept that there may be some inconvenience and additional costs in returning to areas previously harvested although VicForests has not provided any quantification of these costs;
(d)the evidence does not suggest that the conduct of 30m transect surveys adds significantly to the cost of surveys. Under the plan, targeted species surveys for Tree Geebung already occur on the following basis:
(1)to confirm existing detection records in the field;
(2)where records exist within 500m of the coupe, or where the coupe overlaps with high quality habitat as mapped in the habitat distribution;
(3)on transects no greater than 100m apart;
(4)in conjunction with hollow-bearing tree pre-harvest surveys; and
(5)where a mature Tree Geebung is recorded within 15m of the detection to identify clusters;[39]
(e) Mr Lamande’s evidence is that 30m transect surveys cost about $44/ha.
[39]Plan, 5.
43 The grant of an interlocutory injunction will preserve Tree Geebung by ensuring that 50m buffer areas are provided within coupes until the trial. This may cause some modification of harvesting plans for coupes, but VicForests will continue to control the sequence and timing of the release of coupes. On the evidence before me, it does not appear that the cost of postponing the harvesting of buffer areas is likely to be significant.
44 In accordance with the principles set down in Bradto Pty Ltd v Victoria, the Court should take whatever course appears to carry the lower risk of injustice if it should turn out to have been ‘wrong’ in the sense of granting an injunction to a party which fails to establish its right at the trial, or in failing to grant an injunction to a party which succeeds at trial.[40]
[40](2006) 15 VR 65, 73 [35].
45 I am satisfied that there is a lower risk of injustice if an interlocutory injunction is granted. This will lead to the protection of Tree Geebung that might otherwise be lost if an injunction were not granted. Tree Geebung that are lost cannot be replaced. By contrast, areas of timber that are not harvested now can be harvested later.
46 In granting an interlocutory injunction, I adopt the form of injunction that was granted on 16 October 2020. The letter writing regime has been effective to ensure that the Court and Warburton Environment are advised of the harvesting schedule and intended protection measures. This process should continue. The injunction will be modified to permit the parties to agree on alternative survey and protection arrangements for an individual coupe, should this be necessary. This will avoid the need for the parties to return to court to seek a modification of the injunction by consent.
Confidentiality
47 By a summons filed 30 November 2020, VicForests seeks an order that it not be required to produce for inspection documents sought by paras 1, 2, 3 and 7 of a notice to produce dated 26 October 2020 (‘notice’) until Warburton Environment signs a confidentiality agreement in the form attached to the summons. VicForests has 3,617 pages of documents to produce in response to these paragraphs of the notice.
48 The proposed confidentiality agreement restricts access to the documents to legal representatives and expert witnesses, the maintenance of records of inspections, and the preservation of confidentiality indefinitely. The documents are to be deleted and destroyed within three months of any final orders in the proceeding.
49 The notice was before the Court on 23 November 2020. At this time I determined that the notice should have its ordinary effect as a notice given under r 29.10(2) of the Rules in relation to the Kriek affidavit.
Paragraph 1 of the notice
50 VicForests relied on the affidavit of Ms Hubble-Marriott deposed 3 December 2020. She stated that the documents to be produced included harvest and haulage agreements (‘contractor agreements’), containing highly commercially sensitive information. The information includes:
(a)contract rates and payments;
(b)performance and coupe management;
(c)equipment management and replacement;
(d)rates review and rates review mechanisms; and
(e)personal information such as email and phone numbers.
51 If this information was disclosed, Ms Hubble-Marriott deposed that the ability of VicForests to negotiate commercial arrangements with its contractors would be seriously constrained. A table in the affidavit shows that the confidentiality sought is mainly limited to specific information in the schedules of contractor agreements. Confidentiality is also sought in relation to clauses in contractor agreements dealing with coupe management and breaches of timber harvesting safety zones.
Paragraph 2 of the notice
52 Paragraph 2 includes 15 timber sales agreements which govern arrangements between VicForests and the saw mills. VicForests objects to the production of clauses that are commercially sensitive except under protection of a confidentiality regime, including:
(a)arrangements and charges for off specification timber;
(b)arrangements and charges for take or pay obligations;
(c)security obligations;
(d)the value of timber sales agreements including instalments and payment arrangements;
(e)special conditions in contracts;
(f)prices;
(g)volumes and supply levels; and
(h)price review mechanisms.
Paragraph 3 of the notice
53 This paragraph seeks production of 13 annual supply plans. Ms Hubble-Marriott deposes that these plans contain volume and supply commitments in timber sales agreements. Various tables and other information are highly commercially sensitive and confidential.
Paragraph 7 of the notice
54 This paragraph seeks production of a new contract with a sawmill operator. In fact, no new contract was made. There is nothing to produce under para 7.
Confidentiality clauses
55 Ms Hubble-Marriott deposes that the contracts and customer agreements made by VicForests contain confidentiality clauses. VicForests is required to maintain confidentiality under these contracts and agreements.
Warburton Environment’s submissions
56 Warburton Environment submitted that:
(a)the implied (or Harman)[41] undertaking not to use documents for purposes other than the present proceeding is sufficient;[42]
(b)a party to litigation has a clear prima facie right to inspect discovered documents;[43]
(c)the implied undertaking will usually provide sufficient protection to the producing party. Unless the documents are commercially sensitive, and the parties are trade rivals, confidentiality is not a sufficient reason to deny inspection by the opposing party;[44]
(d)important decisions in the conduct of litigation should be made by the parties personally rather than by advisors;[45] and
(e)restrictions on a party’s access to information should be avoided where possible because courts are concerned to promote and ensure open justice.[46]
[41]Harman v Secretary of State for the Home Department [1983] 1 AC 280.
[42]Referring to Riddick v Thames Board Mills Ltd [1977] QB 881, 896; Hearne v Street (2008) 235 CLR 125 (Gleeson CJ, Kirby, Hayne, Heydon and Crennan JJ); Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34, 37-38 (Hayne JA, Winneke P and Phillips JA agreeing) (‘Mobil Oil’); British-American Tobacco Australia Services Ltd v Cowell (2003) 8 VR 571, [19]-[20] (Phillips, Batt and Buchanan JJA).
[43]Referring to Hadid v Lenfest Communications Inc (1966) 70 FCR 403, 410 (Hill J) (‘Hadid’).
[44]Referring to Cadbury Pty Ltd v Amcor Ltd (No 2) [2009] FCA 663, [6]-[7] (Gordon J) (‘Cadbury’); Civic Video Pty Ltd v Paterson [2013] WASCA 107, [26] (Pullin and Murphy JJA) (‘Civic Video’).
[45]Referring to Uon Pty Ltd v Hoascar [2020] WASC 271, [25] (Archer J) (‘Uon’).
[46]Referring to Hadid (n 43) 406, citing Russell v Russell (1976) 134 CLR 495, 520 (Gibbs J).
VicForests’ submissions
57 VicForests submitted:
(a)the Court has a broad discretion to do what the case requires under r 29.11 and under the CPA;[47]
(b)the discretion extends to commercially sensitive information;
(c)the Court’s power to limit access to confidential discovered documents is not confined to circumstances involving trade rivals;[48]
(d)protection of commercially sensitive information may be necessary to the administration of justice, because controversies should be resolved without a party suffering severe and collateral commercial harm;[49]
(e)the proceeding should be case managed to resolve the real issues in dispute between the parties, which are questions of construction, and avoid the need for lengthy pre-trial processes and trial on extensive factual issues of marginal relevance;
(f)the documents sought by Warburton Environment are not admissible on the question of construction;
(g)the implied undertaking provides inadequate protection of VicForests’ sensitive commercial, confidential information, and will not prevent the filing or tender of confidential information in open court, or prevent third parties from using the information;[50] and
(h)the implied undertaking will not prevent Warburton Environment from including confidential information in an affidavit or prevent third persons from accessing that affidavit.
[47]Referring to Jefferson Ford Pty Ltd v Ford Motor Co of Australia Pty Ltd [2007] VSC 450, [32] (Hollingworth J) (‘Jefferson Ford’).
[48]Referring to Cargill Australia Ltd v Viterra Malt Pty Ltd [2018] VSCA 260, [122]-[127] (‘Cargill’) (Kyrou and McLeish JJA).
[49]Cargill Australia Ltd v Viterra Malt Pty (No 23) (2019) 58 VR 611, [70] (Elliott J).
[50]Relying on British American Tobacco Australia Services Ltd v Cowell (2003) 8 VR 571, [25] (Phillips, Batt and Buchanan JJA).
Relevant authority
58 In Cargill, Kyrou and McLeish JJA said:
It was common ground before us that a decision on who should have access to confidential discovered documents involves a balancing of competing considerations. On the one hand, a party to litigation has an interest in having access to documents held by its opponent that are relevant to the issues in the litigation. This is particularly so if the party is a defendant who is an unwilling participant in the litigation and who, as a matter of procedural fairness, is entitled to know the case it has to meet. On the other hand, where the parties are commercial competitors (or ‘trade rivals’) and one of the parties discovers sensitive business information which, if used by the other party for purposes other than the litigation, would prejudice the first party’s commercial interests, the first party has an interest in minimising the risk of such use. The ultimate question is what is necessary for the attainment of justice in a particular case.[51]
[51]Cargill (n 48) [122], citing NAK Australia Pty Ltd v Starkey Consulting Pty Ltd[2008] NSWSC 1136, [8] (Brereton J); Hadid (n 43) 410 (Hill J); Mobil Oil (n 42), 38, 40.
59 After referring to Mobil Oil,[52] Kyrou and McLeish JJ said:
As has already been stated, in the present case, the judge acknowledged that ‘the potential for inadvertent disclosure of confidential documents increases whenever an expanded number of people are given access’, and referred to a past instance of inadvertent unauthorised disclosure.
The mechanism that the courts use in seeking to balance the competing considerations to which we have referred is to make orders limiting the persons who may have access to confidential discovered documents and requiring those persons to provide an undertaking to the court which limits how they may use the documents and to whom they may disclose the contents of the documents. Those orders are fashioned to meet the circumstances of the particular case.
There are no fixed rules about the class of persons who are authorised to have access to confidential discovered documents or the terms of any confidentiality undertaking to be given by them. However, where the parties are trade rivals and the confidential discovered documents relate to intellectual property or other business matters which are of commercial interest to the party to whom the documents are discovered, it is ‘commonplace’ for access to those documents to be limited to the solicitors and counsel acting for that party in the proceeding — who necessarily are admitted to practice in the jurisdiction in which the proceeding is being conducted — and independent experts.
Courts have confidence in permitting the solicitors and counsel for an opposing party to have access to confidential discovered documents because they are officers of the court. As such, they owe duties to the court which override their duties to their client. They have powerful incentives to comply with the terms of any confidentiality undertaking they give to the court because they may be subject to three types of sanctions if they breach the undertaking.
The first sanction is professional disciplinary action by the court or a legal regulatory authority, including the ultimate sanction of being struck off the roll of practitioners. The second sanction is punishment for contempt of court, which may include a custodial sentence. The third sanction is an award of damages for any loss that is suffered as a result of the breach of the undertaking if the elements of a breach of confidence or another cause of action can be established.[53]
[52]n 42.
[53]Cargill (n 48) [125]-[129] (footnotes omitted), citing Mobil Oil (n 42) 40.
60 The fact that parties are trade rivals is a material consideration to the Court’s determination of who should be given access to confidential discovered documents. As Kyrou and McLeish JJA said:
…a key factual issue in the exercise of a court’s discretion to determine who should have access to confidential discovered documents is whether the parties are trade rivals. The parties’ status as trade rivals is significant because it informs the magnitude of the risk of loss of confidentiality, and the potential prejudice resulting from such loss, if access to such documents is not restricted to the opposing party’s external lawyers and independent experts who give confidentiality undertakings.
Accordingly, the parties’ status as trade rivals is a material consideration to a court’s determination of who should be given access to confidential discovered documents. The subject matter of the litigation and the identity, role, expertise and experience of every person whom a party nominates to be a recipient of confidential documents discovered by the opposing party subject to the giving of a confidentiality undertaking are important to that determination. The scope of confidentiality undertakings to be given by those persons and the nature and efficacy of any sanctions that may be available against them for breaches of such undertakings are also important.[54]
[54]Ibid [139]-140].
61 In Jefferson Ford, Hollingworth J said as to the scope of the Court’s discretion under r 29.11:
The harshness which might otherwise flow from a strict, literal reading of rule 29.10 can be alleviated by the breadth of the court’s discretion under rule 29.11. Where an application is made under rule 29.11, for an order compelling compliance with rule 29.10, the court ‘may order the [defaulting] party to do such act as the case requires.’
…
Whilst the court’s discretion is broad, the party resisting the production of a document to which it has referred in a court document, bears the onus of establishing why production should not be ordered.[55]
[55]Jefferson Ford (n 47) [32], [34].
62 The Court has wide discretionary powers under s 47 of the CPA to make any order it considers appropriate in the administration of justice, or in the public interest, and under r 29.11 to order a party to do such act as the case requires. It must balance the interests of Warburton Environment in obtaining access to documents against the commercial interests of VicForests and its contractors in preserving confidentiality to parts of the documents to be produced.
63 The ultimate question is what is necessary for the attainment of justice. For its part, VicForests is concerned to protect confidential information relating to its contractors. I accept the evidence that the release of this information, even if accidental or fortuitous, could adversely affect the commercial interests of VicForests or its contractors. That information concerns charges, rates review, payments, performance, security, volumes and supply. Commercial information of this type is frequently of a confidential character. Personal information such as contact information, email addresses, and phone numbers is also confidential for different reasons.
64 I also accept VicForests’ submission that the information sought to be protected is mainly or entirely irrelevant to the resolution of the main issue in dispute whether the plan complies with the Code and the Standards. It is irrelevant to the question of standing. I accept that some of the information might assist an expert witness dealing with economic matters. The personal information sought to be protected is unlikely to have any utility or relevance in the proceeding.
65 Parties to litigation have a prima facie right to inspect discovered documents. However, there is a balance to be struck between access to documents and preservation of confidentiality, particularly where one party is under contractual obligations to preserve confidentiality. Having regard to the nature of the information to be protected, and its limited relevance to the issues in the proceeding, it is unlikely that any decision in the conduct of the proceeding by Warburton Environment will be affected by the restriction of access to the confidential documents to legal advisers, subject to a right to approach the Court on a later occasion for an order for further access.
66 Warburton Environment is not a trade rival in the sense that it carries on business in competition with VicForests. However, it is not a disinterested bystander. The purposes and activities of Warburton Environment include the cessation of timber harvesting in the Central Highlands and the closure of VicForests’ business in the Central Highlands as soon as achievable. Warburton Environment stands for the permanent closure of VicForests’ harvesting trade. It would be naïve and unrealistic to disregard this circumstance.
67 I am of the view that VicForests’ request for a higher level of confidentiality than is provided by the implied undertaking is reasonable in relation to the confidential information sought to be protected. Rival contractors have a high level of interest in accessing commercially sensitive information about other contractors. VicForests is bound by confidentiality obligations in its contractor agreements. Even an accidental or fortuitous release of some information could be damaging to its commercial interests or legal obligations.
68 Warburton Environment helpfully referred to authorities which deal with access in litigation to confidential information.[56] As was said in Cargill, what is essentially required is a balancing process.[57] In the present case, the vast majority of documents can be made available to Warburton Environment on the basis of the implied undertaking whilst a limited range of confidential information is made available solely to legal advisers for the time being.
[56]Hadid (n 43) 410; Cadbury (n 44) [6]-[7]; Gall v Domino’s Pizza Enterprises Ltd [2019] FCA 1799, [11] (Murphy J); Civic Video (n 44) [25]; Mobil Oil (n 42) 38; Uon (n 45) [25]; Platinum Systems Resourcing Pty Ltd v NRW Holdings Ltd (No 2) [2013] WASC 390, [6] (Le Miere J); Skyscanner Ltd v Hotels Combined Pty Ltd (No 2) [2016] NSWSC 326, [7] (Slattery J); ICAP Australia Pty Ltd v Moebes [2010] NSWSC 738, [11] (Ball J).
[57] Cargill (n 48) [122].
69 The orders of the Court will give access to the bulk of the documents to be produced on the basis of the implied undertaking. The parts of the documents which are commercially confidential can be redacted and made available in an unredacted form to Warburton Environment’s legal advisers.
70 I do not intend that Warburton Environment be shut out from a further application to the Court for additional access to confidential documents after its legal advisers have reviewed them - for example to assist an expert witness on economic matters or to seek instructions on a matter of significance. Such access is likely to be confined to the documents necessary to achieve the intended purpose.
Subpoenas
71 It is necessary to prevent discovery in this proceeding from getting out of hand. The notice will result in the production of a large number of documents. The production of documents by contractors under subpoena can await the close of pleadings. It will then be possible to assess whether production of the documentation sought on subpoena will assist in the resolution of the proceeding or simply be a duplication of documentation already produced by VicForests or available to Warburton Environment.
Conclusion
72 I will give directions and make orders as indicated.
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