Australian Mud Company Pty Ltd v Coretell Pty Ltd

AN APPLICATION FOR 'CONFIDENTIALITY ORDERS', on behalf of the first respondent (coretell) 1 At the completion of the hearing of this matter, senior counsel for the respondents sought confidentiality orders (presumably pursuant to s 37AG(1)(a) of the Federal Court of Australia Act 1976 (Cth)) in respect of certain evidence. Counsel had previously alluded to the need for such orders in the course of the hearing. I made it clear that it would be necessary for such an application to be supported by proper grounds and that orders for confidentiality would not be made lightly having regard to the importance of the principle of open justice. 2 The first respondent has now pursued the application supported by an affidavit sworn by Mr Scott, solicitor for the respondents, who contends that an order is 'necessary to prevent prejudice to the proper administration of justice'. 3 Mr Scott relies on the fact that: In the course of the trial of this action … a number of sensitive documents relating to the operational and financial position of the Respondents have been disclosed to the Applicants' legal advisors and expert witnesses, subject to confidentiality undertakings. These documents have included ledgers, financial statements, customer contacts and invoices. 4 Mr Scott contends that if the respondents' sensitive operational and financial documents were freely available to be accessed by the applicants themselves (as distinct from the limited category of legal advisers to whom the documents were disclosed for the conduct of the proceeding), then the applicants as direct competitors of the respondents, would obtain an unfair advantage over the respondents in their market. This would be not only for 'core orientation products', the main topic of the substantive proceeding, but for 'survey equipment' generally. Mr Scott puts it on this basis: The relevant "market" extends more generally beyond core orientation products to survey equipment because the documents discovered by the Respondents or otherwise produced or disclosed during the course of this proceeding contain information about the Respondents' commercial dealings in respect of core orientation equipment and other survey equipment such as down-hole cameras which are not the subject of the patent infringement claims. Review of the Respondents' sensitive operational and financial documents would enable the Applicants to become informed of various matters about the Respondents' businesses, such as:- a. the corporate Respondents' costs of goods sold, including pricing arrangements with suppliers; b. the identity and nature of the corporate Respondents' suppliers; c. the profitability of the corporate Respondents and their profit margins; d. the corporate Respondents' customer lists and pricing arrangements with customers (due to the extensive tender of invoices required to rebut the joint tortfeasorship claims); e. the corporate Respondents' salary expenses (including for the possible purpose of poaching employees); and f. financial position with respect to the Respondents' ability to pay further legal costs in these proceedings as well as in further proceedings (noting that the Applicants have already commenced one additional set of proceedings, comprising the third proceeding in respect of the same core orientation equipment). 5 Mr Scott argues that if the applicants now oppose confidentiality orders for the first time (there having been a previously agreed confidentiality regime), the only reasonable inference is that they wish to have those documents publicly available for a purpose beyond seeking advice or advancing their case in this proceeding. He also adverts to the fact that the respondents are concerned that the applicants might attempt to gain access to the respondents' commercially sensitive and confidential documents as part of a fishing expedition to advance further proceedings or in an effort to determine the financial strength of their opponents. The speculation on these points appears to overlook fundamental obligations which preclude misuse of documents obtained through litigation. This is especially so considering the very broad range of documents as discussed below under 'Consideration'. 6 Coretell seeks orders that until 31 December 2021 (over seven years from now) a very substantial body of the exhibits in the trial listed in Mr Scott's affidavit, and the information therein: … not be disclosed to any person other than the Respondents and the external legal representatives of the Applicants who have signed confidentiality undertakings in accordance with the confidentiality regime agreed by the parties in July 2012.