Australian Competition and Consumer Commission v BlueScope Steel Limited

Introduction 1 On 22 September 2021, the applicant (ACCC) served a notice to produce on the second respondent (BlueScope) under r 30.28(1) of the Federal Court Rules 2011 (Cth) seeking production of the following documents: The mailbox or .PST files for Jason Ellis and Matthew Hennessy (Jason.pst and Matthew.pst) referred to in paragraph 5 of the affidavit of Paul Bickley dated 22 September and pages 100 to 101 of Exhibit PB-1 to that affidavit. 2 On 23 September 2021, BlueScope filed and served an interlocutory application to set aside the notice. The interlocutory application was supported by an affidavit of Antonia Jane Garling sworn 23 September 2021. Ms Garling is a partner of the firm Gilbert + Tobin, the solicitors for BlueScope. Subsequently, the second respondent, Mr Jason Ellis, filed and served an unsworn affidavit of Nicholas Patrick McHugh which was dated 23 September 2021. Mr McHugh is a partner of the firm Norton Rose Fulbright, the solicitors for Mr Ellis. BlueScope also tendered a letter dated 17 January 2020 from the ACCC to Gilbert + Tobin and a letter dated 11 May 2020 from Gilbert + Tobin to the ACCC. 3 In response to the unsworn affidavit of Mr McHugh, on 23 September 2021 the ACCC filed and served an affidavit of Christopher Michael Steger affirmed 23 September 2021. Mr Steger is a Senior Executive Lawyer of the Australian Government Solicitor, the solicitors for the ACCC. 4 I heard argument on the interlocutory application on 23 September 2021. In the course of argument, the ACCC narrowed the class of documents sought by the notice to produce to the mailbox or .PST file for Mr Ellis (and not Mr Hennessy). After hearing submissions from the ACCC, I made an order setting aside the notice to produce. These are my reasons for making that order. 5 The ACCC also sought an order for further discovery from Mr Ellis within a relatively narrow compass. That order was not opposed and I made the order in the form sought.

Background 6 In this proceeding, the ACCC alleges that each of BlueScope and Mr Ellis attempted to induce certain suppliers of flat steel products in Australia to make an arrangement or arrive at an understanding that contained a cartel provision in contravention of s 44ZZRJ of the Competition and Consumer Act 2010 (Cth) (Act). The period of the allegedly infringing conduct was September 2013 to June 2014. Amongst other forms of relief, the ACCC seeks pecuniary penalties against the respondents. As an individual, Mr Ellis has until recently claimed the privilege against self-exposure to a penalty and has elected not to file an affidavit or witness statement in the proceeding. 7 The trial of the proceeding commenced on 30 August 2021. The ACCC closed its case on 17 September 2021. On the application of Mr Ellis, which was not opposed by the ACCC, the trial was adjourned until 23 September 2021 to provide Mr Ellis with a short period of time to decide whether he wished to waive his privilege and give evidence in the proceeding. On the evening of 21 September 2021, Mr Ellis notified the Court that he proposed to give evidence in the proceeding and that an affidavit would be filed and served on 22 September 2021. As it turned out, there was some delay in the filing and service of the affidavit, but it was received by the Court and the parties on the morning of 23 September 2021. The affidavit is unsworn but includes a notation that, in accordance with paragraph 4.2 of the Federal Court of Australia Special Measures Information Note (SMIN-1) dated 31 March 2020, the affidavit is filed and served on the basis that Mr Ellis has read it carefully, is willing to swear that it is true and correct, and understands that he will be required to swear its accuracy at the hearing. It is anticipated that Mr Ellis will give evidence in the week commencing 27 September 2021, and he will be cross-examined by the ACCC. 8 On 22 September 2021, BlueScope filed and served an affidavit of Paul Bickley affirmed 22 September 2021 which BlueScope seeks to read in its case. Mr Bickley is the Head of Global Security Operations for BlueScope. Mr Bickley exhibits to his affidavit copies of Microsoft Outlook calendar entries dated between 29 July 2013 and 3 November 2013 and an entry on 8 April 2014 for Mr Ellis. Counsel for BlueScope explained that Mr Ellis kept his diary for work purposes in electronic form using Microsoft Outlook software. Mr Bickley's affidavit exhibits Mr Ellis' diary for the periods stated above. Counsel for BlueScope submitted that the diary evidence is relevant to two issues that have arisen on the ACCC's case: whether a meeting occurred between Messrs Ellis and Hennessy of BlueScope and Messrs Collis and Gregory of Selection Steel Trading Pty Ltd at BlueScope's head office in Mount Waverley in August or September 2013 (but prior to 13 September 2013); and the extent of Mr Ellis' commitments on 8 April 2014. 9 In his affidavit, Mr Bickley explained the source of Mr Ellis' Microsoft Outlook calendar entries. Mr Bickley deposed that, in April 2016, he instructed Computer Science Corporation (CSC), an external information technology service provider which supplied and managed the servers and data storage facilities for BlueScope, to export the mailboxes of three BlueScope employees from BlueScope's Microsoft Exchange server, including the mailbox of Mr Ellis. CSC carried out that instruction, and the file was exported as "Jason.pst" and contained 2 gigabytes of data. On 22 September 2021, Mr Bickley was instructed by Gilbert + Tobin to obtain copies of Mr Ellis' Microsoft Outlook calendar entries for the period 29 July 2013 to 3 November 2013 and 8 April 2014 from Mr Ellis' mailbox, and Mr Bickley extracted those entries from the file "Jason.pst" that had been created in 2016 and created a PDF version. 10 In her affidavit, Ms Garling deposed that Microsoft Exchange software provides an integrated system for creating and storing email and electronic calendars, messaging and task lists. The software utilises a personal storage folder (.pst file) which is a single data file that contains a record of a user's messages, emails, calendar entries, contacts and other tasks for a particular period of time. The size of the "Jason.pst" data file is 2.6 gigabytes and contains approximately 13,000 messages, emails and calendar invitations and the date range of the "Jason.pst" data file covers at least the period 21 August 2010 to 14 April 2016. Ms Garling gave similar evidence about an equivalent data file in respect of Mr Hennessy called "Matthew.pst" which is no longer sought by the ACCC. Ms Garling further deposed that, based on her experience in large and complex document reviews, her best estimate is that it would take Gilbert + Tobin: (a) at least two to three days to upload the Jason.pst and Matthew.pst files to their Ringtail database and prepare the documents for review by a legal team; and (b) between four to six weeks to review the approximately 26,000 files in the "Jason.pst" and "Matthew.pst" files to ensure, among other things, that appropriate claims are made by BlueScope in relation to privilege, commercially sensitive and/or confidential documents. 11 I consider that Ms Garling's estimates may be on the generous side, but even excluding the review of the "Matthew.pst" file, I accept that an appropriate review of the "Jason.pst" file for the purposes of relevance and privilege would take up to two weeks. It follows that, if the ACCC's notice to produce were not set aside and BlueScope's solicitors were give an appropriate period in which to review the documents within the "Jason.pst" file before production (or before the documents were released to the ACCC), the trial would have to be adjourned for that period which is likely to be at least 2 weeks. 12 Ms Garling further deposed that, prior to the commencement of this proceeding, the ACCC issued ten notices under s 155 of the Act which sought production of information and documents from BlueScope and that, in response, BlueScope produced approximately 20,428 documents. I note that, in a notice dated 11 April 2016, the ACCC sought production of copies of all documents, including but not limited to diary entries, emails, mobile phone text messages, notes or records (in any form) and/or documents that plan for, refer to, report or otherwise arose from meetings or communications that occurred or were scheduled to occur in the period from 1 September 2013 to 1 July 2014 between (amongst others) Mr Ellis and/or Mr Hennessy on the one hand and representatives of competing suppliers of steel products in Australia on the other. Ms Garling also referred to the orders for discovery made by the Court by consent on 7 July 2020 which resulted in the production of a further 3,533 documents by BlueScope. 13 In the course of submissions, counsel for the ACCC did not advance a submission that the ACCC considered that BlueScope was in default of discovery orders. 14 In his affidavit, Mr McHugh deposed to the execution of a search warrant at the residential premises of Mr Ellis on 22 September 2017 and the electronic devices that were imaged pursuant to that warrant. In his affidavit, Mr Steger contested whether Mr Ellis' laptop or phone were imaged in the execution of the search warrant. It is unnecessary to address that matter in the resolution of the interlocutory application.

Submissions of the ACCC 15 The ACCC submitted that, in Mr Ellis' affidavit that has been recently served, Mr Ellis provides an account of the events that are in issue in the proceeding and seeks to produce selected parts of his electronic diary in support. 16 The ACCC noted that the "Jason.pst" file was extracted by BlueScope in April 2016 from BlueScope's records and submitted that "It wasn't something that could ever be obtained and wasn't obtained by the ACCC by seizing any devices from Mr Ellis" (by reason that the file was extracted from BlueScope's server). The ACCC accepted, however, that the file could have been sought from BlueScope either by a notice issued under section 155 of the Act before the proceeding was commenced or by an order for discovery in the proceeding. 17 The ACCC submitted that the "Jason.pst" file is sought to be used by BlueScope and Mr Ellis in a selective manner in the course of Mr Ellis' proposed evidence. It argued that it required production of the file so that it could test Mr Ellis' evidence. The ACCC gave the example of the contested meeting involving Mr Collis, referred to above, about which Mr Collis has given evidence in the proceeding. The ACCC argued that Mr Ellis should not be able to select items from the "Jason.pst" file in support of his version of events concerning that meeting, without the ACCC being able to consider other documents that may bear upon those facts. By way of further example, the ACCC submitted that Mr Ellis proposes to give evidence about his practices at the time, which can only be tested by reference to his electronic files. 18 The ACCC acknowledged that the "Jason.pst" file is likely to contain irrelevant as well as relevant documents, but argued that the most efficient course is for BlueScope to produce the whole of the file to enable the ACCC to identify relevant material. The ACCC further submitted that the task of reviewing the file for privileged documents is unlikely to be burdensome because it is likely that Gilbert + Tobin have already identified any privileged documents.

Consideration 19 A notice to produce has the same coercive effect as a subpoena duces tecum and similar principles are applicable to each: Seven Network Ltd v News Ltd (No 5) [2005] FCA 510; 216 ALR 147 (Seven Network No 5) at [6], [10] per Sackville J; Re Ox Operations Pty Ltd [2008] FCA 61 at [42] per Gordon J. The grounds on which a subpoena or a notice to produce may be set aside include: (a) where it is an abuse of process, in that it is being used for the purpose of discovery: Commissioner for Railways v Small (1938) 38 SR (NSW) 564 (Small) at 574-575 per Jordan CJ (with whom Davidson and Owen JJ agreed); National Employers' Mutual General Insurance Association Ltd v Waind [1978] 1 NSWLR 372 (Waind) at 381-382 per Moffitt P (with whom Hutley and Glass JJA agreed); (b) where it is oppressive: Small at 575; Trade Practices Commission v Arnotts Limited (No 2) (1989) 88 ALR 90 (Arnotts) at 102 per Beaumont J; and (c) where the documents sought to be produced do not have apparent relevance to the issues in the proceeding (which may be expressed as whether the documents are reasonably likely to add, in some way, to the relevant evidence in the case): Waind at 385; Arnotts at 103; Seven Network No 5 at [10]; Dorajay Pty Limited v Aristocrat Leisure Limited [2005] FCA 588 at [17] per Stone J. 20 The above principles are reinforced by s 37M of the Federal Court of Australia Act 1976 (Cth) which requires that the Federal Court Rules must be interpreted and applied, and any power conferred by those rules must be exercised, in the way that best promotes the overarching purpose which is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. 21 In my view, the notice to produce served by the ACCC should be set aside on each of the grounds referred to above. The notice is being used as a form of discovery. Even as a form of discovery, the category of documents sought, being the whole of Mr Ellis' Microsoft Outlook file for an approximate 6 year period, would be rejected as too broad and fishing. It is unknown at this point in time whether any of the documents that would be produced will be relevant to the issues in the proceeding. The contents of the Microsoft Outlook file are unknown, and it cannot be known whether any of the documents are likely to add, in some way, to the relevant evidence in the case. In these circumstances, the notice is oppressive, as it would require BlueScope to review a very large number of documents most of which are likely to have no relevance to the issues in the proceeding. 22 The difficulties with the request for production are only exacerbated when the request is made in the fourth week of a six week trial. As noted earlier, I am satisfied that compliance with the notice would require an adjournment of the trial for at least 2 weeks. It would then be necessary for the Court to find new dates for the completion of the trial that are convenient to all of the parties. 23 In the course of argument, the ACCC referred to difficulties it may face in cross-examining Mr Ellis, who has elected to give evidence and has recently filed and served an unsworn affidavit. I do not accept the breadth of that submission. It has always been a possibility that Mr Ellis would give evidence in the proceeding. In the course of its investigation and preparation for trial, the ACCC must be taken to have known that Mr Ellis may give evidence and have sought production from BlueScope and Mr Ellis of all documents that the ACCC considered would be relevant to the events the subject of the proceeding, and which might be put to Mr Ellis in the course of cross-examination. Although it was not a matter of specific submission, I would expect that the ACCC has previously sought from BlueScope all emails sent or received by Mr Ellis that bear upon the issues in dispute. If the ACCC has not previously done so, I can only assume that that was a forensic decision made by the ACCC in preparing for trial. It would be inconsistent with the overarching obligation to permit the ACCC to revisit such decisions after the close of its case. At this point in time, the ACCC has not demonstrated that it has been taken by surprise in respect of any issue sought to be raised by Mr Ellis in his evidence. Nevertheless, as I indicated to counsel for the ACCC in the course of argument, it is open to the ACCC to make an application for the production of particular documents or categories of documents if it can be demonstrated that Mr Ellis, by his affidavit, has put in issue some fact or event that could not reasonably have been anticipated by the ACCC. 24 For those reasons, I ordered that the notice to produce be set aside. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O'Bryan.