Cantor v Audi Australia Pty Limited

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

AND: VOLKSWAGEN GROUP AUSTRALIA PTY LIMITED (ACN 093 117 876) First Respondent GROSVENOR LITIGATION SERVICES PTY LTD Second Respondent

JUDGE: foster J DATE OF ORDER: 15 may 2020

1. Pursuant to s 37AF and s 37AG(1)(a) of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act), on the ground that it is necessary to prevent prejudice to the proper administration of justice, until further order , the information specified in the schedule below not be disclosed (by publication or otherwise) to any person other than: (a) The Court; (b) The applicant; and (c) The legal representatives of the applicant for the purpose of this proceeding only. SCHEDULE HEREINBEFORE REFERRED TO
2. The information specified at pages 8-59 (both inclusive) of Exhibit RH-2 to the affidavit of Richard Langley Stewart Hill sworn on 23 March 2020; and
3. The confidential information, set out in the table below, in the Litigation Co-Funding Agreement dated 20 February 2018 entered into by Grosvenor Litigation Services Pty Ltd with Vannin Capital Operations Ltd in respect of this proceeding (NSD 1308 of 2015) and proceeding NSD 1307 of 2015. Document Confidential Information Vannin Agreement (RH-2, pp160-218) Page i - Table of Contents, titles of clauses 3.2, 5.3 Page 1 - Name, address and contact details for the Grosvenor Entities, other than Grosvenor Litigation Services Pty Ltd Page 2 - Definition of other Grosvenor Entity, unit trust entity and trust deed Page 4 - Definition of "Default Rate"; definitions of other claim, other class action, and other funding document Page 5 - Definition of "Drawdown Amount" Page 6 - Definitions of other claim, other class action Page 7 - Definition of other funding document Page 9 - Definition (a) and (c) of "irrevocable directions"; definition of other funder, funding document; definition of "Litigation Funding Agreement, apart from the words "a VW Funding Agreement"; definition (a) of "Litigation Funding Amendment Agreements" Page 10 - Definitions of other Grosvenor Entity, trust entity, trust document Page 11 - Definition of proceedings, other than "VW Class Action Proceedings"; definitions of other class actions, funding documents; definition of "Recovery Fund Account" Page 12 - Definition of "Recovery Fund Account" Page 13 - Definition of "Total Co-Funding Commitment"; definition (c) of "Transaction Documents"; definitions (b) and (c) of "Trust"; definitions (b) and (c) of "Trust Deed"; definitions (b) and (c) of "Unit Holder Consents" Pages 14, 15 - Clause 3.2 Page 16 - Clause 4.3 Page 17 - Clause 5.2(a), the words between "under a" and "or a VW"; clause 5.2(b); clause 5.3 Pages 18-20 - Clauses 6.1-6.4 Pages 28, 29 - Clause 9.1 (b), (c) (e) and (o), the identity of other funder, funding documents Pages 30, 31 - Clauses 10.1-10.3 Page 33 - Clauses 12.3-12.5 Page 45 - Clause 19.6 (a) and (b); clause 20, details of other class actions Page 47 - Table "Condition Precedent", condition 3, details of other funding document Page 49 - Identity of other Grosvenor Entities Page 52 - Identity of other Grosvenor Entities Page 54 - Identity of other Grosvenor Entities

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

FOSTER J: 1 On 13 May 2020, I published my Reasons for making the orders which I made on 1 April 2020 in these proceedings and in certain other proceedings (NSD 1459 of 2015, NSD 1472 of 2015 and NSD 1473 of 2015) (Cantor v Audi Australia Pty Limited (No 5) [2020] FCA 637 (the main judgment)). 2 At [424] in those Reasons, I indicated that I would deliver a separate judgment dealing with an application made by Grosvenor Litigation Services Pty Ltd (Grosvenor) to suppress certain information. The information sought to be suppressed is described in Schedule A to a Written Submission wrongly dated 31 March 2019 which was furnished to my Associate on 31 March 2020, which is the date which should have been placed on that Written Submission. The information described in Schedule A to Grosvenor's Written Submission was, to a very large extent, different information from the information in respect of which Grosvenor sought a suppression or non-publication order at the commencement of argument on 26 March 2020. The original claim was specified in Annexure A to the draft orders circulated by Grosvenor prior to the hearing on 26 March 2020. Some items of information specified in Annexure A were also picked up in the Schedule to Grosvenor's Written Submission and other material was not repeated in the later document. During the course of the hearing on 26 March 2020, I indicated to Senior Counsel for Grosvenor that, in respect of those claims specified in Annexure A to Grosvenor's draft orders, I would only be disposed to protect pages 8-59 in Exhibit RH-2 to the affidavit of Richard Langley Stewart Hill sworn on 23 March 2020 and filed in these proceedings. I informed Counsel that I did not think that the other information in respect of which protection was sought should be the subject of a suppression or non-publication order. Those observations made by me were apparently taken into account when the Schedule to the Written Submission was prepared. Many of the previous claims were abandoned in that later document. 3 The information which is the subject of Grosvenor's claim for a suppression order forms part of the evidence tendered before me in support of Grosvenor's application for a common fund order in respect of the settlement of the five class actions brought against Volkswagen Aktiengesellschaft (VWAG) and its affiliates in respect of the emissions scandal described at [4] in the main judgment. 4 Grosvenor seeks a suppression order in respect of information set out in paragraphs 76-78, 96(d) and 97 in Mr Hill's affidavit sworn on 23 March 2020. 5 At par 76 of his affidavit, Mr Hill referred to a Litigation Co-Funding Agreement entered into by Grosvenor with Vannin Capital Operations Ltd (Vannin) dated 20 February 2018 in respect of proceedings NSD 1307 of 2015 and NSD 1308 of 2015 and in respect of other proceedings not connected with the Volkswagen litigation. In his affidavit, Mr Hill referred to that Agreement as "the Vannin Finance Agreement. At par 76 of his affidavit, Mr Hill described the effect of certain provisions in the Vannin Finance Agreement. At pars 77 and 78, he gave evidence as to draw downs made by Grosvenor under the Vannin Finance Agreement and the consequences for Grosvenor of not receiving all that it had hoped to receive as a result of its application for a common fund order. 6 At par 96(d), Mr Hill set out Grosvenor's net return in the event that it obtained the common fund order which it sought. At par 97, Mr Hill described the substance of that return in percentage terms. 7 In support of its application, Grosvenor submitted that, if the material to which I have referred is disclosed, respondents in other class actions currently funded under the Vannin Finance Agreement, or in future actions so funded, would gain a tactical advantage in the conduct of those proceedings and in any settlement discussions. Accordingly, so it was submitted, the Court should be satisfied that the material which I have described should be suppressed in accordance with the relevant principles applicable to the interpretation and application of ss 37AE, 37AF and 37AG of the Federal Court of Australia Act 1976 (Cth). 8 Grosvenor also sought a suppression order in respect of certain specific clauses in the Vannin Finance Agreement. In its Written Submission, at pars 8 and 9, Grosvenor submitted: Confidentiality is sought in order to prevent prejudice to the proper administration of justice. The relevant passages detail the "multiple-of-costs" pricing mechanism (from which the funders' assessment of the applicants' prospects of success across the funded class actions may be deduced), the total amount of funding available to Grosvenor under the Vannin Agreement, the 'trigger points' at which additional fees are incurred, other liabilities of the Grosvenor Entities under the Agreement and the identity of the other Grosvenor Entities and class actions. All of these are matters which, if disclosed, may confer on the respondents in the other class actions currently funded under the Agreement, or in future actions so funded, a tactical advantage in the conduct of those proceedings or in any settlement discussions. Further, publication of the relevant passages might disclose to trade rivals, including other funders or law firms such as Maurice Blackburn, confidential information regarding the structure and pricing of Vannin and Grosvenor's financing arrangements. Particularly in light of the likely return to "bookbuilding" exercises, in light of Brewster, the Court ought not require disclosure of this funder's background financial structures in a manner that provides "a vehicle for advantaging … trade rivals" [Clime Capital Limited v UGL Pty Limited (No 2) [2020] FCA 257, at [20], quoting Edelman J in Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (No 3) [2015] FCA 1406, at [10]]. 9 At [20] in Australian Competition and Consumer Commission v Volkswagen Aktiengesellschaft (No 2) [2020] FCA 661 delivered at the same time as this judgment, I set out the relevant principles. I will apply those principles in the present case. 10 I am not persuaded that paragraphs 76 to 78, 96(d) and 97 of Mr Hill's affidavit should be subject to a suppression or non-publication order. The information contained in those paragraphs is information which is confined to the present litigation and germane to the basis upon which Grosvenor sought the common fund order which was dealt with in the main judgment. The concerns which Grosvenor has in respect of that material do not engage the requirement specified in s 37AG(1)(a) and thus do not engage s 37AF. For these reasons, I am not prepared to make a suppression or non-publication order in respect of those paragraphs of Mr Hill's affidavit. 11 I think that the application for a suppression or non-publication order in respect of the particular clauses or parts of clauses in the Vannin Finance Agreement is in a different category. The clauses and parts of clauses in respect of which the order is sought concern litigation other than the Volkswagen litigation and address the identity of parties in addition to Grosvenor and Vannin involved in the financing of that other litigation and also concern particular arrangements made among those parties in respect of that other litigation. This material is highly sensitive commercial material which has nothing to do with the present litigation and should be protected from disclosure. Accordingly, I propose to make an order pursuant to s 37AF and s 37AG(1)(a) of the Federal Court of Australia Act 1976 (Cth) protecting this information from disclosure. 12 No other party to the litigation took an active role in respect of Grosvenor's application for a suppression or non-publication order. There is, therefore, no need for me to make any particular order for costs in relation to that application. 13 There will be orders accordingly. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster.