GOOGLE'S APPLICATION FOR PRODUCTION OF CORRESPONDENCE
9 Under s 157(1) of the TPA, where the ACCC institutes proceedings for an order against a respondent, the ACCC shall at the request of the respondent furnish to it a copy of any document in the possession of the ACCC which comes to its attention in connection with the matter to which the request relates and which tends to establish the case of the respondent, unless it is a document obtained from the respondent or the ACCC or its advisors. If the ACCC does not comply with the request, the Court must, on an application by the respondent, make an order directing the ACCC to comply: s 157(2). However, there is an exception to this requirement, namely, that the Court may refuse to make such an order in respect of a document or part of a document if it considers such an order inappropriate by reason that the disclosure of the document or part of the document would prejudice any person, or for any other reason: s 157(3).
10 One matter to note from this summary of s 157 of the TPA is that documents prepared by a professional advisor or officer of the ACCC are not subject to the section. Another is that the Court has a broad discretion in s 157(3) not to make an order if it is considered inappropriate by reason of prejudice or any other reason.
11 The request by Google for production in this case is resisted by the ACCC on the basis that the documents sought were brought into existence for the purpose and in the course of negotiating a settlement between Trading Post and the ACCC. The settlement is embodied in an undertaking to the ACCC, given pursuant to s 87B of the TPA on 21 April 2008. In that undertaking, Trading Post admitted that its conduct was misleading and deceptive and in breach of ss 52 and 53(d) of the TPA. Conditionally upon the Court being satisfied of the existence of these breaches, Trading Post provided an enforceable undertaking to the ACCC that it would consent to suitable orders being made by the Court in respect of its conduct. The five letters sought by Google in its current interlocutory application were correspondence between the advisors to Trading Post and the ACCC.
12 The relationship between s 157 of the TPA and the principles concerning legal professional privilege were considered by the Full Federal Court in Arnotts Limited v Trade Practices Commission (No 1) (1989) 21 FCR 297. In that case, the Full Court held that it could refuse to make an order under s 157(2) of the TPA in respect of a document where it considered that the conditions giving rise to legal professional privilege were satisfied in respect of the document or part of it, and privilege was not waived. The Full Court held that it had power to refuse to order disclosure in exercise of the statutory discretion conferred by s 157(3). It also held that the intention disclosed by s 157 is that a respondent is to be given fair treatment in the sense that it is to be given documents which the ACCC has in its possession and which would tend to establish or support the respondent's case. The Full Court considered that where a document tends to impeach the ACCC's case, it also tends to establish the case of the respondent. Such documents would therefore fall within the ambit of the section. The Full Court further observed that a document which might merely suggest some line of enquiry which could be of assistance to the respondent in conducting its case, was not a document which "tends to establish" that case. The Full Court observed that it could require the documents to be produced for inspection and, having inspected them, make an order for disclosure subject to conditions. The Full Court considered that, by on the one hand qualifying the scope of the ACCC's common law privilege, but on the other hand affording the ACCC an opportunity to demonstrate prejudice (or some other reason for non-disclosure) in a particular case, the legislative scheme contained in s 157 of the TPA achieved an appropriate balance of the respective interests involved.
13 In Australian Competition & Consumer Commission v FFE Building Services Limited (2003) ATPR 41-967 at [59], Wilcox J summarised, in a manner accepted by the parties, the position in relation to s 157 of the TPA and legal professional privilege, in these terms:
It follows that I should be guided by the following principles:
(a) the Court has a discretionary power, under s 157(2) of the [TPA], to order production of documents notwithstanding that they ordinarily would be protected by legal professional privilege;
(b) nonetheless, legal professional privilege is not abrogated by s 157; the existence of the privilege is a factor to be taken into account in considering the proper exercise of the Court's discretion;
(c) in exercising its discretion, the Court should take into account the 'general intention disclosed by s 157'; that is, 'that a corporation is to be given fair treatment in the sense that it is to be given documents which Commission has and which would support the corporation's case', including by tending to impeach ACCC's case.
(Emphasis added.)
14 In FFE Building Services (2003) ATPR 41-967 at [50], Wilcox J referred to the decision in the House of Lords in Rush & Tompkins Ltd v Greater London County Council [1989] 1 AC 1280, where the House of Lords considered the principles relating to the privilege attaching to documents which came into existence for the purpose of negotiating settlement. Lord Griffiths, with whom the other members agreed, said at 1301:
It seems to me that if those admissions made to achieve settlement of a piece of minor litigation could be held against [a litigant] in a subsequent major litigation it would actively discourage settlement of the minor litigation and run counter to the whole underlying purpose of the "without prejudice" rule. I would therefore hold that as a general rule the "without prejudice" rule renders inadmissible in any subsequent litigation connected with the same subject matter proof of any admissions made in a genuine attempt to reach a settlement. It of course goes without saying that admissions made to reach settlement with a different party within the same litigation are also inadmissible whether or not settlement was achieved with that party.
(Emphasis added.)
In the present case it is not disputed that the relevant correspondence was in the cause of a genuine attempt to reach settlement. At 1305, his Lordship continued:
If the party who obtains discovery of the "without prejudice" correspondence can make use of it at the trial … [i]t may give some insight into his opponent's general approach to the issues in the case but in most cases this is likely to be of marginal significance and will probably be revealed to him in direct negotiations in any event. In my view this advantage does not outweigh the damage that would be done to the conduct of settlement negotiations if solicitors thought that what was said and written between them would become common currency available to all other parties to the litigation. In my view the general public policy that applies to protect genuine negotiations from being admissible in evidence should also be extended to protect those negotiations from being discoverable to third parties.
15 The present case is not one in which a party has simply inscribed the heading "without prejudice" on a communication; rather, there is evidence in the form of a sworn verification of a List of Documents that the documents sought by Google were made for the dominant purpose of negotiating a settlement with Trading Post. There is no evidence to the contrary. Moreover, in my view, it would be inherently unlikely that documents written by the solicitors for Trading Post to the ACCC would contain evidence or admissions by the ACCC which might reasonably assist the case for Google.
16 Counsel for Google suggests that there could be something in the correspondence which may possibly assist Google's case, such as information demonstrating the extent of Trading Post's involvement in activities in contravention of the TPA, or some other information which might counter an assertion that the conduct was carried out by an agent in an unauthorised way. Google speculates that there may be some other material to support the proposition that Google could not be expected to be responsible for the actions of Trading Post because those actions were beyond Google's control. Google submits that that correspondence may contain something in the nature of an admission by the ACCC, which could be relied on by Google in the present case.
17 In my view these submissions should not be accepted. They are, at best, speculative. The five letters in question have not been shown on the material presently before me to tend to establish the case of Google. In making this finding, I had regard to the fact that the undertaking given by Trading Post itself contains admissions, and it is unlikely that the documents sought could carry the matter much further. To test my initial view, after hearing submissions from the parties, I inspected the contents and had regard to the form of the documents in question. They cover the period from August 2007 to February 2008, and the contents and form of the documents reinforce the conclusion that the documents were prepared for the purposes of negotiating a settlement between the ACCC and Trading Post. In my view, the documents do not tend to establish the case of Google. They are rather directed to putting forward Trading Post's own substantive case, and are designed to obtain the best outcome for Trading Post. Accordingly, so far as the position of Google is concerned, the documents do not carry the matter further than what is disclosed in Trading Post's undertaking.
18 In any event, I consider that in this case there are cogent underlying reasons of principle, similar to those set out in Rush & Tompkins Ltd [1989] 1 AC 1280, to weigh the balance in favour of non-disclosure. This approach protects the important interests in encouraging negotiated settlements of disputes, ensuring that parties in such negotiations are frank and open with each other, and ensuring that parties communicate without apprehension that confidential (and potentially prejudicial) material may later be made public at the behest of a third party.
19 Accordingly, because inspection of the documents in question leads me to conclude that nothing contained therein "tends to establish" Google's case, and having regard to the above authorities, the application by Google is refused with costs.
20 I now turn to the next issue, namely, whether the ACCC should be given leave to file and serve a Second Further Amended Statement of Claim and a Second Further Amended Application.