Cadbury Schweppes Pty Ltd (ACN 004 551 473) v Amcor Limited

Federal Court of Australia|2008-03-28|Before: Gordon J

INTRODUCTION 1 In Cadbury Schweppes Pty Ltd (ACN 004 551 473) v Amcor Limited (ACN 000 017 372) [2008] FCA 88 I considered a claim by a non-party, the Australian Competition and Consumer Commission ("ACCC"), of legal professional privilege and public interest immunity privilege in relation to specified documents created in connection with proceedings commenced by the ACCC against Visy Industries Holdings Pty Limited and related entities ("Visy") ("the ACCC proceeding"). In the ACCC proceeding, Visy were ordered to pay approximately $36 million in penalties as a result of those entities colluding with Amcor Limited ("Amcor") to fix prices in the cardboard box market. 2 The ACCC contended that legal professional privilege held by it prevented Amcor and Visy's production to Cadbury of three categories of documents:

Six witness statements - of which three were drafted by Amcor's external solicitors at the direction of the ACCC and three were drafted by ACCC staff and then forwarded to Amcor's in-house counsel. Copies of the statements were retained by Amcor's external solicitors and Amcor respectively. Each of the 6 statements summarises statements made by Amcor employees to ACCC investigators in the course of the Visy investigation (Category I);
111 witness proofs, summarizing statements made to ACCC investigators, drafted by the ACCC in the ACCC proceedings and, at the direction of the Court, filed and served on Visy in those proceedings (Category II); and
Eight specified witness proofs from Amcor employees which, although a subset of the 111 witness proofs in Category II, are alleged to be protected from disclosure by public interest immunity in addition to legal professional privilege (Category III). 3 I rejected the ACCC's claim of public interest immunity. I also rejected the ACCC's claims of legal professional privilege, except as to the documents in Category I. However, production of the 111 witness proofs forming Categories II and III was stayed for further consideration of whether Visy's implied undertaking to the Court not to use documents produced by other parties in the course of the ACCC proceedings except in those proceedings prevent their disclosure to Cadbury in this proceeding ("the damages proceedings"). These reasons for decision now address that issue. 4 Visy has made no submission on the implied undertaking issue. The ACCC submits that Visy remains bound by the implied undertaking and should not be released from it.

111 proofs not discovered by Visy 5 Visy and the ACCC submit, as a preliminary matter, that the circumstances surrounding the listing of the 111 proofs by Visy in the damages proceedings do not amount to Visy discovering those proofs. This submission was not made at any earlier point in these proceedings. It was made solely in relation to the question of whether Visy's implied undertaking in the ACCC proceeding impedes or prevents production of the proofs in the damages proceeding and was made, as I understand it, in support of the ultimate proposition advanced only by the ACCC (but not Visy), that no order should be made permitting inspection of the 111 proofs by Cadbury. It is a surprising submission and one which I reject. 6 The ACCC's earlier contentions that legal professional privilege and public interest immunity prevented Amcor and Visy's production to Cadbury of the three categories of documents presupposed that the documents were discoverable and had been discovered. No different position was adopted by counsel for Visy at the directions hearing on 9 November 2007. The position then adopted by the ACCC and by Visy is not surprising given the correspondence sent by Visy's solicitors to Cadbury's solicitors some 9 days earlier, on 31 October 2007, in which they stated, in part, that: Our clients will not oppose the making of an order that they be released from the implied undertaking to the extent that release is necessary for our clients to give discovery of the witness statements served on them in Federal Court of Australia proceeding no 1650 of 2005. Subject to an order releasing our client from the implied undertaking being made, our client will give discovery of the witness outlines. However, if our clients are released from the implied undertaking and give discovery of the witness outlines, they are not to be taken to waive privilege in the witness outlines nor consent to production of them to your client. The witness outlines will be discovered as privileged documents. We ask that you confirm that your client will not seek to inspect the witness outlines before the [ACCC's] claim for privilege in the witness outlines is heard and determined by the Court. 7 After this letter had been sent, Visy filed and served lists dated 16 and 21 November 2007 of the 111 witness outlines or proofs. 8 If listing the witness outlines on 16 and 21 November 2007 was not to be taken as Visy discovering the documents, why did the ACCC appear at the directions hearing on 9 November 2007 and at the hearing of its application on 13 December 2007 to prevent production of the documents to Cadbury? Why was no argument advanced by either the ACCC or Visy that the documents were not discoverable? Why was argument directed only to the questions about production of the documents, as distinct from whether they were discoverable at all? 9 In the absence of Visy discovering the documents, the court would not have been required to address the ACCC's claims of legal professional privilege and public interest immunity at this point in the litigation. Those issues would have been simply irrelevant to the parties to the proceedings and to the ACCC. At a practical level, if one or more of the ACCC's claims of legal professional privilege and public interest immunity had been upheld, Visy would have been prevented from producing the documents to Cadbury. But, the only basis on which the questions arose was that Visy was compelled to produce the proofs to Cadbury in the damages proceedings by way of discovery under O 15 of the Federal Court Rules. 10 I, therefore, do not accept that discovery of the documents has not yet occurred. Even if the listing of the 111 proofs by Visy on 16 and 21 November 2007 is not taken to be a listing of them for the purposes of discovery by Visy, I would order the proofs to be discovered by Visy in these proceedings. Contrary to Visy's submissions, raised for the first time only at this stage in the matter, all of the 111 proofs are relevant to the issues in the litigation. In particular, I reject Visy's argument that only those witness proofs filed on behalf of employees or ex-employees of Cadbury, Amcor and Visy are relevant. Such an argument is, on any view, a change to the position adopted by Visy in October 2007 as set out in the letter from its solicitors dated 31 October 2007, an extract of which is set out above.

Implied undertaking yielded 11 The balance of the argument proceeded on the footing that the critical question is whether Visy is to be released from its implied undertaking. 12 The ACCC placed heavy emphasis on the proposition that no case could be found in which a party had been released from the implied undertaking in circumstances analogous to these. That submission may be accepted but it does not lead to the conclusion asserted by the ACCC. Two points are to be made about the absence of authority directly on point. First, the absence of any decided case is not conclusive of the issue. But secondly, and more importantly, the absence of any decided case points to the importance of identifying accurately the question which now arises. At first sight, the question requires the resolution of what appear to be inconsistent obligations - the obligation to use the documents only for the purposes of the ACCC proceeding in which they were compulsorily produced with the obligation to produce for the inspection of opposite parties in another proceeding all discoverable documents that are not subject to a valid claim of privilege. 13 However, the resolution of any tension between what would otherwise be competing and inconsistent obligations, is readily apparent; resolution lies in properly identifying the contents of the implied undertaking. In particular, it is necessary to recognise that the undertaking impliedly given in one proceeding not to use documents compulsorily produced in that proceeding except for the purposes of that proceeding is necessarily subject to other requirements of the law. So to take what may be a clearer example of the limits of the undertaking, the implied undertaking given in one proceeding would provide no answer to a subpoena for production of these documents in another proceeding. When a party is subpoenaed to produce documents obtained in another proceeding, it is no answer to say that "I am subject to an undertaking about how I may use these documents". The party's undertaking in the first proceeding restricts the uses to which that party may choose to put the documents. But the undertaking is no answer to otherwise valid compulsive processes of law: Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10, 32, 36-37, 46. As the Court in Plowman stated (at 33): No doubt the implied obligation must yield to inconsistent statutory provisions and to the requirements of curial process in other litigation, eg discovery and inspection, but that circumstance is not a reason for denying the existence of the implied obligation. (Emphasis added) See also Patrick v Capital Finance Pty Ltd (No4) [2003] FCA 436 at [15]-[22]. Accordingly, Visy's implied undertaking in the ACCC proceeding is no answer to its discovery obligations in these proceedings.

Visy should otherwise be released 14 If, contrary to the views earlier expressed, the question is properly framed as whether Visy should be released from its implied undertaking, I have no hesitation in concluding that it should be: QPSX Limited v Ericsson Australia Ltd (No 5) [2007] FCA 244 at [13] - [17]. Neither the ACCC nor Visy submitted that QPSX did not accurately summarise the applicable authorities and principles. And although the ACCC couched its submission in terms requiring demonstration of "special circumstances … such as would justify releasing a party from the implied undertaking, in relation to a specified document for a specified purpose", the ACCC did not submit that the discretion to be exercised was one in which it is possible or desirable to propound an exhaustive list of the factors that may bear upon the discretion: QPSX at [17]; Springfield Nominees Pty Limited v Bridgelands Securities Limited (1992) 38 FCR 217 at 225; Holpitt Pty Ltd v Varimu Pty Ltd (1991) 29 FCR 576 at 578. 15 In the present case, it is important to recall that the issues that arise in this litigation are not substantially different in any relevant way from the issues that arose in the ACCC proceeding. The documents in question are statements of what potential witnesses had said they were willing to say in evidence in the ACCC proceeding. There is no persuasive reason why the use of that material should be confined to the proceeding instituted by the ACCC for the recovery of civil penalties from Visy and not made available to a party claiming damages from Amcor, the other participant in the price-fixing behaviour the subject of the ACCC proceeding. 16 Given the nature of the documents and the circumstances in which they were created, it is unsurprising that neither the ACCC nor Visy pointed to any prejudice that the witnesses whose proofs are at issue would sustain if the documents were produced. In particular, it was not suggested that any of the documents contained any personal data or commercially sensitive information not appropriately dealt with by the elaborate arrangements that now exist between the parties in respect of commercially sensitive information. 17 Having regard to the various matters I have mentioned and with particular regard to the nature of the documents at issue, I am of the view that production of the documents will contribute to achieving justice in the damages proceedings and that refusing to permit production would tend to hinder the achievement of that end. 18 Before dealing with the form of order, it is appropriate I say something about the conduct of this litigation and the position adopted by the ACCC. To suggest, as it did, that Visy was required to file an application in the ACCC proceeding to be relieved of the implied undertaking, is both contrary to authority (see Patrick by way of example) and contrary to the position adopted by Visy in its letter of 31 October 2007 and its stated position at the directions hearing on 9 November 2007 which the ACCC attended. 19 It follows that I would direct Visy to produce for inspection the 111 witness proofs to Cadbury. If an issue of confidentiality arises in relation to any one of the 111 witness proofs, that issue can be raised between solicitors and resolved in the usual manner.

Stay and Costs 20 The ACCC seeks a stay of the order for production for a period of days to allow time for the ACCC to consider whether to apply for leave to appeal from Cadbury Schweppes Pty Ltd (ACN 004 551 473) v Amcor Limited (ACN 000 017 372) [2008] FCA 88 and, if such an application was made, for the Full Court to hear the application. In the circumstances, I would grant the ACCC a stay until 28 April 2008 or further order. 21 The motion having substantially failed, the moving party, the ACCC, should pay Cadbury's costs of and incidental to the motion, such costs to be taxed in default of agreement. The costs of the other parties should be costs in the proceedings. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon.

Associate: Dated: 28 March 2008 Counsel for the Applicant: Mr M Wyles Mr R Peters

Solicitor for the Applicant: Mallesons Stephen Jaques

Counsel for the Respondents: Mr P Anastassiou SC

Solicitor for the Respondents: Allens Arthur Robinson

Counsel for the Cross-Claimants: Mr P Crutchfield

Solicitor for the Cross-Respondents Arnold Bloch Leibler

Counsel for the ACCC Mr N O'Bryan SC Mr P Gray

Solicitor for the ACCC Australian Government Solicitor

Date of Written Submissions: 27 February, 29 February, 4 March and 7 March 2008

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Judgment (14 paragraphs)

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Cases Cited (6)