REASONS FOR JUDGMENT - NO 6
BT's Motion
There are two motions presently before the Court. One motion was filed by BT Australasia Pty Ltd ("BTA"), and British Telecommunications plc ("BT plc") on 19 March 1998. (I refer to BTA and BT plc collectively as "BT".) Paragraph 6.1 of BT's motion seeks an order in the following terms:
"6.1 If documents discovered by BTA or BT plc contain information which BTA or BT plc assert are confidential business information of them or either of them and copies of the same are first delivered by BTA or BT plc to another party ("the other party") in a sealed envelope marked "BT Confidential Documents - Restricted Access" or the documents are so marked, or are so described to the other party by BTA or BT plc in writing, before they are first made available for inspection, until further order the said documents ("BT Restricted Access Documents") shall be dealt with by the other party subject to the terms of Schedule C to these orders, and access to the originals or copies of the said documents should be confined to persons specified in that Schedule who first executed a confidentiality undertaking in the form specified and included in Schedule C to these orders."
Paragraph 6.2 seeks a consequential order which it is not necessary to set out.
Schedule C to BT's motion was amended in the course of the hearing. It specifies a regime for access to BT Restricted Access Documents. The amended schedule provides, inter alia, that BT Restricted Access Documents, and information in them, are to be confined to certain classes of persons, subject to further order of the Court. The classes of persons are these:
· external solicitors and counsel representing the other parties;
· secretaries and similar support staff employed by external solicitors and counsel; and
· independent external witnesses retained by the other parties or their solicitors.
Access to BT Restricted Access Documents is to be further confined to persons within those classes who have executed a confidentiality undertaking in a form annexed to the Schedule. The annexures to the Schedule contain two forms of undertaking. The first is appropriate for execution by solicitors retained on behalf of Telstra Corporation Ltd ("Telstra") or the State of New South Wales ("State") and by counsel retained by those solicitors. The second form of undertaking is appropriate for execution by persons other than solicitors or counsel.
The State's Motion
The second motion before me was filed on behalf of the State. That motion, too, was amended in the course of the proceedings. As amended, the motion seeks orders that BT plc provide to the State unmasked versions of certain documents particularised in Attachment B to the report of the Honourable J Brownie QC, dated 27 February 1998.
Mr Brownie was appointed as a mediator to assist the parties in resolving certain discovery disputes. On some issues, the parties agreed that Mr Brownie could make decisions as an arbitrator rather than as a mediator. This process resolved most issues arising out of BT's practice of giving discovery of documents containing some material said not to be relevant to the issues in dispute, but masking that material. The State's motion seeks access to unmasked versions of twenty-eight documents which have been produced by BT on discovery, but which BT says should remain masked.
Scope of the Judgment
The present judgment is concerned with the relief sought in par 6 of BT's motion as against the State, and the relief sought by the State in its motion. Paragraph 6 of BT's motion is also directed to Telstra. However, BT and Telstra have reached agreement as to a confidentiality regime to apply to BT's discovered documents, except for one issue. I have addressed that issue in a separate judgment.
Background Information
By way of background, it is necessary to understand that there is an existing regime relating to confidentiality of discovered documents. That regime, so far as the State is concerned, was established by orders made as long ago as 1 April 1996. The terms of those orders were as follows:
"1. Access by [the State] to any document discovered by [BTA] be limited to:
1.1 Counsel, solicitors and their employed legal clerks for [the State]; and
1.2 any other person to whom a person mentioned in paragraph 1.1 has delivered an office copy of the terms of paragraph 2 below.
2. No person on behalf of [State] who is given access to any documents discovered by [BTA] ("BTA's Discovered Documents") shall use any confidential information derived from any of BTA's Discovered Documents for any purpose other than the conduct of or preparation for these proceedings, except with the consent of [BTA] or with the leave of the Court. The [State] shall provide an office copy of this paragraph to all persons given access by it to any of BTA's Discovered Documents."
That regime has applied thus far to documents discovered by BT and made available for inspection by the State.
As I have mentioned, the parties very sensibly agreed to refer certain matters to mediation before Mr Brownie. One of the outcomes of that mediation process was an agreement dated 3 February 1998 entitled "Agreement and Confidentiality Undertaking". The parties to that agreement were BTA, BT plc, the State, Telstra, Mr Stack (the State's counsel), Mr Lockhart (Telstra's counsel) and Mr Brownie as mediator.
The agreement contains the following recitals:
"C. In the Proceedings, BT plc has given discovery of a number of documents in which portions claimed by BT plc not to be material for discovery have been masked in the copies made available for inspection ("the Masked Documents").
D. On 29 August 1997, the State filed a Motion ("the Motion") seeking unmasked versions of the Masked Documents.
E. In support of the Motion, the State filed an affidavit sworn by Ms Grant on 29 August 1997 which identified 28 of the Masked Documents ("the 28 Documents") for which the State had been provided with unmasked versions by BTA.
F. Shortly after 29 August 1997, BT plc agreed to review the Masked Documents.
G. Counsel for BT accordingly proceeded to review all the Masked Documents and BT plc's solicitors advised the State of the results on 2 October 1997. As a result of the review, BT plc unmasked some of the Masked Documents, including parts of three documents of the 28 Documents and maintained the masking of the balance of the Masked Documents on the grounds that they were irrelevant and confidential."
The agreement includes the following terms:
"4. BT plc will give discovery of the previously masked portions of the Nominated Documents which do not become the Documents in Issue (if any) [that is, BT plc will give discovery of the previously masked portions of documents requested by the State or Telstra except for documents in respect of which BT plc claims that the masked portions are not material for discovery] but reserves its rights to seek appropriate confidentiality undertakings from the State and Telstra before making available for inspection an unmasked copy of these documents and its rights, if any, to object to tender of any document at trial.
6. If the Mediator decides that any masked portion of any of the Documents in Issue is material for discovery by BT plc, the parties have acknowledged in the Mediation that BT plc reserves its rights to seek appropriate confidentiality undertakings from the State and Telstra before making available for inspection an unmasked copy of that Confidential Document and its rights, if any, to object to tender of any document at trial.
7. For the avoidance of doubt it is recorded that the confidentiality requirements of this clause are intended to be stricter than, and to displace, those in the Mediation Agreement. [Then follow certain undertakings given by the State's counsel, Telstra's counsel and the mediator.]"
(It should be noted that the reference in Recital E to the State having been provided with unmasked versions of the 28 Documents relates to the fact that the unmasked versions were apparently provided to the State inadvertently.)
BT's position is that the State should be required to enter into more stringent confidentiality arrangements than those that are already in place in relation to confidential documents discovered by BT. Mr Margo, who appeared on behalf of BT on the motions, acknowledged that the State is in a different position than Telstra. This is because the State is not a competitor of BT. Thus the disclosure of documents to the State, will not, of itself, prejudice BT's commercial interests, even if those documents otherwise have some commercial sensitivity.
BT's Submissions
The main concern expressed by Mr Margo in the course of argument was that the State, through its officers or agents, might inadvertently disclose some of the discovered material to Telstra or to some other competitor of BT. There was no evidence to support any such risk. However, Mr Margo asserted from the Bar table that, although there were cross claims between the State and Telstra, they had a high degree of co-operation. This was said to make it more likely that State officers or agents would inadvertently divulge the contents of commercially sensitive documents to Telstra. This risk was said to be exacerbated by the fact that, as the State conceded, a large number of officers and agents were engaged in the process of examining discovered documents.
Mr Margo expressed other concerns about the position of the State. He referred to the possibility of the State annexing or referring to commercial sensitive documents in statements or in material prepared for tendering at the proceedings. However, as I understood BT's argument, it was directed primarily to the proposition that a strict regime should be set in place whereby officers and agents of the State, including legal representatives, should be specifically required to undertake not to disclose the contents of confidential documents, or to enable any other person to gain access to the documents or to their contents. The regime proposed by BT for the future contemplates that BT itself will identify discovered documents containing information of a confidential business kind. The regime would then apply to documents so identified, subject to further orders of the Court.
Reasoning
BT adduced no evidence to support the proposition that the documents listed in the mediator's report or documents yet to be discovered are more commercially sensitive than documents which have already been discovered and which are presently the subject of the confidentiality regime established on 1 April 1996. This very point was made in the submissions of the State, filed on 19 March 1998, six days prior to the hearing. Despite this submission, BT did not seek to file any evidence on the subject. Nor was any adjournment sought to put on such evidence.
BT's submissions on the present issue, which were filed on 23 March 1998, assert that the 28 masked documents and some documents yet to be discovered do or will contain confidential information different from that contained in the vast bulk of documents already discovered. The reason given is that some of the more recently discovered document and confidential documents yet to be discovered are not, or will not be, confined to events surrounding the TDN Agreement, but extend to matters of current commercial sensitivity.
In my opinion, the fundamental difficulty facing BT in relation to its motion is that there is simply no evidence as to the commercially sensitive nature of the documents in respect of which it seeks protection. While an assertion is made in BT's written submissions, it is not supported by evidence. This is so in relation to the documents listed in the mediator's report. A fortiori, it is the case in relation to documents not yet discovered, but in respect of which BT wishes to claim commercial sensitivity. In short, no evidence has been placed before me which supports the proposition that the documents are sufficiently commercially sensitive to warrant a more protective regime than that which is already in place. In addition, as I have already remarked, no evidence has been adduced to support the assertion that there is a real risk that the officers or agents of the State will divulge the contents of any confidential information to Telstra or any other competitor of BT, although I would be prepared to infer as a matter of common sense that there is some slight risk that this could occur.
I have been referred to two recent authorities. These are Mackay Sugar Co-operative Association Ltd v CSR Ltd (1996) 137 ALR 183 (FCA/Spender J) and Mobil Oil Australia Pty Ltd v Guina Developments Pty Ltd [1996] 2 VR 34 (Vic CA). Those cases make it clear that, where it is shown that discovered documents or those about to be discovered are commercially sensitive, care should be taken to protect that sensitivity in an appropriate manner. However, it is not sufficient, in my view, for one party to litigation simply to assert that documents are commercially sensitive. The claim should be supported by appropriate evidence, as occurred in both Mackay Sugar and Mobil Oil. Obviously, it is not necessary for that evidence to be adduced in the form that defeats the purposes for which protection is sought, that is, the evidence need not divulge the contents of the documents in a way that prejudices commercial sensitivity. There is ample room for the case for protection in relation to commercially sensitive documents to be made out without prejudicing the interest of the party seeking protection.
While I do not think that BT has made out a case for the strict confidentiality regime proposed by Mr Margo, I have some sympathy with the suggestion that some further steps might be put in place to protect BT from the risk of inadvertent disclosure of information to Telstra or to other competitors of BT. It is hardly necessary to say that Mr Margo cast no aspersions upon the integrity of the State's legal representatives or indeed on any agent acting on behalf of the State in connection with the litigation. Nonetheless, despite the evidentiary difficulties with BT's motion, I think that there may be a basis for going a little further than the current orders.
This issue was helpfully addressed by Mr Muddle on behalf of the State. Mr Muddle prepared draft orders, in an attempt to respond to certain suggestions made by me in the course of argument. One of the paragraphs in the draft order prepared by Mr Muddle reads as follows:
"No counsel, solicitor, employee or agent of the State of New South Wales ("the State") shall, without the consent of British Telecommunications plc ("BT plc"), disclose to any counsel, solicitor, employee or agent for Telstra Corporation Ltd, the content of any document which is either listed in attachment B to the report of John Brownie QC to the Court dated 27 February 1988 or agreed in writing between the State and BT plc to be the subject of this order, other than by the service of a statement or tender list herein, or by the adducing of evidence herein or by leave of the Court."
Mr Muddle, although not consenting to an order in these terms, did not resist the suggestion that this paragraph be included in any relevant orders governing the confidentiality regime between BT and the State.
In these circumstances, I propose, so far as BT's motion is concerned, to make no order against the State, except an order in terms of the paragraph set out above. I shall make an order in terms of the State's amended motion of 29 August 1997, since the only basis for BT's withholding of the documents appears to be its contention that a substantially stricter confidentiality regime should be introduced. BT should pay the State's costs in respect of the State's motion and par 6 of BT's motion on and from 27 February 1998.
I should add this. If the State includes or proposes to include in any statement or tender bundle discovered documents which BT claims to be commercially sensitive, I would not regard BT as foreclosed from seeking confidentiality orders in respect of those documents. Whether BT would be entitled to protection would depend on the evidence adduced in support of any application.
I certify that this and the preceding eight (8) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Sackville.