Australian Mud Company Pty Ltd v Coretell Pty Ltd [2012] FCA 778 | Case summary

REASONS FOR JUDGMENT 1 On 17 July 2012, this matter came before me by way of an interlocutory application of the first respondent filed 6 July 2012 for confidentiality orders in respect of a document described as Confidential PTA-2 which was annexed to the affidavit of Mr Paul Theodore Arns, sworn 6 July 2012, as well as for orders on the motion of the applicants for particulars of loss and damage and discovery by categories by the respondents. 2 The background to the first respondent's application for the confidentiality order was that on 22 June 2012 an issue arose at a directions hearing concerning the adequacy of the first respondent's pleading of claimed loss and damage filed in consequence of the declaration and order made by the Court on 22 December 2010 in this proceeding that threats made by or on behalf of the applicants in certain letters were unjustifiable and that there be an inquiry into the amount payable by the applicants to the respondents by way of damages for the making of those unjustified threats. 3 By para 21 of the first respondent's statement of claimed loss and damage filed 15 June 2012, the amount of $18,402,782 was claimed. The pleading there referred to particulars of loss and damage filed separately. The particulars of claimed loss and damage so filed claimed lost profits for financial years from July 2006 to June 2012 and continuing lost future profits from July 2012 to June 2017, in total comprising the claimed amount. The particulars in para 4 referred to "Confidential Annexure A" which was said to contain the first respondent's "calculations, computations and analysis in support of the Particulars". 4 The respondents had at that point been endeavouring to agree with the applicants a confidentiality regime to protect the information contained in Confidential Annexure A on the basis that the information disclosed would reveal confidential trading information in the hands of the respondents that should not be disclosed to its competitors, the applicants. The parties however had not been able to agree that regime at that point. 5 On 22 June 2012, the position of the applicants was that, if the respondents intended to plead particulars, then they should do so openly and not on a confidential basis. 6 As a result of exchanges between the bar table and bench, senior counsel for the first respondent moved to strike out para 4 of the particulars which included the Confidential Annexure A reference. Senior counsel then agreed that it would appropriate for the Court to make orders requiring the lodging of a confidential affidavit that included Confidential Annexure A, to be supported by an application for confidentiality orders. The respondents thereby considered by this means they could appropriately inform the appropriate representatives of the applicants of the nature of their claim for loss and damage. In the meantime, a restricted group of professionals, being the legal advisors of the applicants would be entitled to access to the confidential affidavit so filed. 7 Subsequent to the making of orders on 22 June 2012 to that effect, the applicants changed solicitors so that solicitors acting for the applicants in related proceedings in this Court in the New South Wales Registry thereafter acted for it. Relatively soon thereafter, the solicitors for the parties substantially agreed that there should be confidentiality orders made that mirrored confidentiality orders that had been made in the New South Wales proceedings. 8 However, there remained a question as to whether the Confidential Annexure A document could be accessed and copied or communicated to appropriate persons, within the confidentiality regime, in an electronic form, or whether it should be kept as a hard copy document. 9 Following submissions on 17 July 2012, I determined that, given the relatively small size of the confidential document it was appropriate to permit access and communication of the document to a relatively restricted group of persons as a hard copy document only. 10 It was also determined by me that the confidentiality regime proposed in a minute of proposed orders of the applicants in that regard should be adopted, which included the provision of access to that restricted group of persons to the document on the giving of a confidentiality undertaking, which should itself be provided to the first respondent as soon as practicable when made or given by any relevant person. 11 A question of costs then arose. The first respondent in substance claimed that it was entitled to the costs on an indemnity basis on the making of the confidentiality order. Following submissions I determined that in all the circumstances the first respondent had been successful on its application and that it was appropriate for it to have the costs of and incidental to the application to be taxed, if not agreed, but that there was no basis for an indemnity costs order. 12 The remaining issues concerned particulars and discovery. The first respondent, consistent with a previously expressed desire resisted by the applicants and the Court to obtain a degree of latitude in the conduct of its loss and damage claim, submitted that the expert accountant who had prepared the primary material in the confidential document should confer with an expert proposed by the applicants for the purpose of determining the parameters of the work required to be conducted by the experts in relation to the loss and damage claim stated by the first respondent. I was not attracted to that course of action. Not only was it unusual, but in a real sense the first respondent has not, in my view, sufficiently articulated in a formal way its damage and loss claimed to the point where proposed expert witnesses could be given latitude by the Court to determine just what expert evidence would be appropriate in a case like this. The apparent basis of the expert evidence that would be given on behalf of the first respondent clearly, on the evidence before the Court given by solicitors for the parties respectively, is not agreed. I therefore reject the proposal to that end put on behalf of the first respondent. 13 That then left the question of particulars, discovery and other programming orders that might, at this point, seem appropriate. 14 The applicants seek an order that the respondents give further and better particulars of paras 17, 18 and 20 of its statement of claimed loss and damage setting out the quantification and calculation of loss and damage and the basis upon which those amounts were calculated. 15 The first respondent submitted that if it were to fully comply with such an order, that would in effect oblige it to set out all of the information contained in the confidential document and, in effect, countermand that confidentiality order just made. 16 Following the submissions of the parties I was satisfied that it was appropriate for the first respondent to openly articulate its claim for damage and loss, although consistently with the terms of the confidentiality order protecting confidential information. 17 Accordingly, on the basis discussed in the course of submissions and acknowledged by counsel for the applicants, I indicated I would order that the respondents give further and better particulars of para 17, 18 and 20 of its claimed statement of loss and damage on or before 31 July 2012 without being required to publicly disclose evidence that is the subject of the confidentiality order referred to above. 18 At this point, then, leaving aside the first respondent's concerns about disclosure of confidential trade information that underpins its calculation of loss and damage, the pleadings are closed. The first respondent has put on its claim for loss and damage and the applicants have filed a defence to it. The defence raises a number of issues going to causation as well as generally denying that any loss or damage has been suffered by the first respondent as alleged. The applicants in these circumstances seek an order that the respondents give discovery regarding the first respondent's claim for loss and damage in accordance with certain categories of document, rather than standard discovery. 19 The respondents submit that discovery should not be given, that the experts should meet, as noted above, but that if discovery is to be given then it should be standard discovery under the Federal Court Rules 2011 (Cth) (Rules). 20 In my view, there is no particular need for any discovery more elaborate than standard discovery to be provided by the first respondent, at least at this stage of the proceeding. The current Rules, especially by R 20.11, make it clear that the basic principle is that a party must not apply for an order for discovery unless the making of an order will facilitate the just resolution of a proceeding quickly, inexpensively and efficiently. This principle reflects the overarching purpose of civil practice and procedure in the Court as stated in s 37M of the Federal Court of Australia Act 1976 (Cth). See generally Dennis v Chambers Investment Planners Pty Ltd [2012] FCA 63; (2012) 201 FCR 321. To require the discovery of documents by category, which the applicants have sought to develop by reference to the statement of claimed loss and damage, would, in my estimation at this point of the proceeding, simply add unnecessary complexity and delay to the proceeding and cause the respondents to incur unnecessary costs for no good reason. Standard discovery of documents, which by R 20.14(1)(a) must be those on which the party intends to rely, or adversely affect its case, or support the other party's case, or adversely affect the other party's case, will achieve sufficient disclosure at this point to advance the proceeding. The standard discovery must necessarily have regard to the matters pleaded by the first respondent in its statement of claimed loss and damage as well as by the applicants in their defence and therefore will necessarily cover documents in a number of categories identified by the applicants. In short, it is simply inappropriate to make a discovery order in the present circumstances by reference to categories when standard discovery plainly will do at this point of the proceeding. 21 In these circumstances, I will order that the respondents provide standard discovery. 22 The applicants also seek an order that at this point the respondents file and serve affidavits in support of the first respondent's claim for loss and damage and for further programming orders in respect of the putting on of evidence by way of affidavit and the provisional listing of the matter for hearing. 23 At this point I will not make further programming orders, but will relist the matter for directions as soon as the respondents' discovery period is completed. 24 At the next directions hearing I would particularly expect to consider the making of further orders concerning: (1) The question of the filing of expert evidence in the proceeding, including, if expert evidence is to be given, the issues that would be the subject of expert evidence. (2) Programming orders in respect of the putting on of evidence in chief in the proceeding and responsive materials. (3) The listing of the loss and damage inquiry for final hearing in the first half of 2013. 25 The Court therefore makes the following orders: 1. Subject to further order or any agreement between the parties, the annexure described as "Confidential PTA-2" to the affidavit of Mr Paul Theodore Arns sworn on 6 July 2012 and the information contained therein not be disclosed to any person other than in hard copy to: (a) solicitors or barristers acting for the applicants in these proceedings and independent experts engaged by the applicants; and (b) the respondents, solicitors or barristers acting for the respondents in these proceedings and independent experts engaged by the respondents, (c) who have signed a confidentiality undertaking in the form of the undertaking in Annexure A to these orders, which must be provided to the first respondent's solicitors as soon as practicable after signing. 2. The applicants pay the first respondent's costs of and incidental to the first respondent's interlocutory application filed 6 July 2012. 3. The parties have liberty to apply to vary order 1 above on short notice. 4. The respondents give further and better particulars of paras 17, 18 and 20 of the first respondent's claim for loss and damage on or before 31 July 2012 setting out the quantification and calculation of loss and damage and the basis on which those amounts were calculated but on the basis that any particulars that are the subject of the expert evidence that is subject to the confidentiality order made in Order 1 above may be supplied on the same confidentiality terms as provided for by Order 1. 5. The respondents give standard discovery in respect of the first respondent's claim for loss and damage and provide a verified list of documents on or before 21 September 2012. 6. The matter be listed for further directions at 10:15 am on Friday 5 October 2012. 7. Save in respect of the costs orders made by Order 2 above in respect of the first respondent's interlocutory application filed 6 July 2012, the costs of the directions hearing on 17 July 2012 be reserved. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker.

Associate: Dated: Annexure A Form 3 Rule 2.13(4) Confidentiality Undertaking No. WAD 132 of 2007 Federal Court of Australia District Registry: New South Wales Division: General Australian Mud Company Pty Ltd (ACN 009 283 416) & Ors Applicants Coretell Pty Ltd (ACN 119 188 493) & Anor Respondents I______________________________, of ______________________________ undertake to the Court and to the Applicants/Respondents that in relation to documents enumerated in the Schedule attached to this undertaking (Confidential Documents), and the information contained in those Confidential Documents (Confidential Information) that: 1. I will keep the Confidential Documents and the Confidential Information confidential at all times and I will not use the Confidential Documents or the Confidential Information for any purpose other than for the sole purpose of the conduct of these proceedings. 2. Subject to 3 below, the Confidential Documents and the Confidential Information will not be disclosed by me (either in whole or in part) either directly or indirectly to any person including the parties to these proceedings, their servants and agents without the prior written consent of the parties' external legal representatives, unless: 2.1 such disclosure is expressly authorised by the Court; or 2.2 the Confidential Documents or Confidential Information has already been disclosed other than in contravention of a confidentiality undertaking or obligation. 3. The Confidential Documents and Confidential Information may be disclosed by me to: 3.1 the Court in the conduct of the Proceeding; 3.2 the Applicants'/Respondents' external legal representatives, counsel and/or independent experts who have signed a confidentiality undertaking in the same form as this document; 3.3 any other person provided the prior written consent to such disclosure has been obtained from the Applicants'/Respondents' external legal representatives, and provided that person has signed a confidentiality undertaking in the same form as this document. 4. I will upon the conclusion of these proceedings: (a) return or cause to be returned to the external legal representatives for the Applicants/Respondents (as applicable) all copies of the Confidential Documents held by me; or (b) destroy any documents (including any electronic copies) made or caused to be made by me or given to me recording any or all of the Confidential Information. 5. I will promptly notify the Applicants'/Respondents' external legal representatives if I become aware of any unauthorised use or disclosure of any Confidential Documents or Confidential Information. Dated: Signed by: in the presence of:

Australian Mud Company Pty Ltd v Coretell Pty Ltd

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