(d) His or her country of residence.
20 The company plaintiffs submitted that the expert should be required to provide an undertaking in writing to the Court by a specified date to pay the second, fourth and fifth plaintiffs and each of them damages for any loss or damage suffered by them which was caused by any breach by the expert of the undertaking referred to.
21 In support of their submissions, the company plaintiffs relied upon the often quoted judgment of Hayne J in Mobil Oil Australia Limited and Anor v Guina Developments Pty Limited [1996] 2 VR 34 at 38 where his Honour said:
"Where it is said that the documents are confidential, it may be accepted that the fact that the documents are confidential will not ordinarily be a sufficient reason to deny inspection by the opposite party. In most cases, the fact that the documents may not be used except for the purposes of the litigation concerned will be sufficient protection to the party producing them. But where, as here, the party obtaining discovery is a trade rival of the person whose secrets it is proposed should be revealed by discovery and inspection, other considerations arise.
Once the documents are inspected by the principals of the trade rival, the information which is revealed is known to the trade rival and cannot be forgotten. Confidentiality is destroyed once and for all (at least so far as the particular trade rival is concerned). To say that the trade rival is bound not to use the documents except for the purposes of the action concerned is, in a case such as this, to impose upon that trade rival an obligation that is impossible of performance by him and impossible of enforcement by the party whose secrets have been revealed. How is the trade rival to forget what internal rate of return the competitor seeks to achieve on a new investment of the kind in question? How is the party whose hurdle rate has been revealed to know whether the rival has used the information in framing a tender? Thus, if the trade rival may inspect the documents concerned, the confidentiality of the information in them is at once destroyed. Is that necessary for the attainment of justice in the particular case?"
22 By reference to that statement of principle, the company plaintiffs relied upon two decisions of the Court of Appeal of Western Australia being Hotrox Charcoal Co v Gebauer Nominees Pty Limited [2002] WASCA 293 and Gebauer Nominees Pty Limited v Cole [2008] WASSCA 38 and the Federal Court decision in Bayer Bioscience NV v Deltapine Australia Pty Limited [2006] FCA 68. Those cases extended the principle stated by Hayne J to the situation where disclosure of confidential information was to be made not to a trade rival but to an expert who may provide advice and expertise to a trade rival in the future. In the Hotrox cases and in Bayer the Court held that the nominated experts should not be given access to the confidential information.
23 The company plaintiffs submitted that the facts of this case were stronger than those in the Hotrox litigation and were more strongly supportive of Dr Wynn-Hatton being denied access to the confidential information. The particular matters relied upon were that Dr Wynn-Hatton's involvement with a trade rival was recent. The level of involvement was a primary one in that he was the formula expert. The particular products with which he was concerned would be in direct competition with the products referred to in this case. Dr Wynn-Hatton had agreed that it was not possible to put a formula out of one's mind. Finally, Dr Wynn-Hatton had not excluded the potential for his future involvement with a trade rival of the company plaintiffs. It was not suggested that Dr Wynn-Hatton would deliberately disclose confidential information but that such disclosure would be inadvertent due to his inability to put the formula out of his mind.
24 The company plaintiffs submitted that the only evidence before the Court was that an expert with similar qualifications to Dr Wynn-Hatton had been relatively easy to find, as was demonstrated by their retainer of Mr Fong, at short notice after 16 May. In the absence of any evidence from the defendants as to inquiries by them in respect of alternative experts to Dr Wynn-Hatton, the company plaintiffs should not be exposed to the risk of confidential information being communicated to rivals which would arise if Dr Wynn-Hatton gained access to that information. It was submitted that the Court should find that an appropriate alternative expert could be retained by the defendants if they looked.
25 The company plaintiffs submitted that there was no reason why the defendants should be entirely deprived of the expertise of Dr Wynn-Hatton. They had no objection to him giving evidence in relation to the performance of their cleaning products in the market and matters of that kind. Their objection was only to him being provided with the confidential information. They submitted that this information could be provided to a chemist who need not have expertise in the market place such as is possessed by Dr Wynn-Hatton. In other words the defendants would be required to use two experts rather than one but, it was submitted, this would address the concerns of the company plaintiffs while still enabling the defendants to have the benefit of the expert evidence which they desired.
26 It is clear from other parts of the judgment of Hayne J in Mobil Oil that a significant factor in his reasoning was that the proposed disclosure was to be to a trade rival and not to an intermediary. At page 40 of the judgment his Honour said:
"But in the present kind of case, is it necessary to destroy the legitimate claim to confidentiality from trade rivals by permitting the principal of that rival to look at the documents? Is it sufficient to permit counsel and solicitors (and nominated experts) to do so? It is now commonplace in the courts for material to be made available only to the legal advisers of the parties and nominated experts. Of course such arrangements bring with them their own difficulties and are arrangements that should be adopted only where there is a need to do so; of course they are arrangements that may need to be reviewed as the matter progresses towards trial or as the trial itself proceeds. But they are arrangements that are made and should be made when doing so would strike a fair balance between the competing interests of the party seeking inspection and the party claiming confidentiality. No more specific rule can be laid down - each case will fall for determination according to its own facts. … In particular it is not self evident that the plaintiff can properly consider the course which it will follow in relation to the litigation only if its principal has access to the material that is confidential."
27 It seems to me that the decision in Hotrox involves a significant extension of the statement of principle in Mobil Oil. No such extension occurred in Bayer since it is clear from its facts that not only was Professor Adang closely associated with Dow Chemicals, a direct competitor of Bayer, but he was the author of numerous patents and was himself a direct commercial competitor in the field of the patent with Bayer.
28 I accept for the purpose of this judgment that the formulae and methods of manufacture of the new and reformulated cleaning products constitute confidential information. Since the company plaintiffs object to Dr Wynn-Hatton having access to that confidential information, they bear the burden of persuading the Court that such disclosure should not be made. In reaching my decision I have to carry out a balancing process to determine whether and if so, to what extent, the company plaintiffs will be disadvantaged or suffer injustice if access to the confidential material is granted to Dr Wynn-Hatton.
29 As a start point, I do not accept that the facts of this case are more favourable to restricting access by Dr Wynn-Hatton to the confidential information than were the facts in the Hotrox litigation. When one analyses the facts of those cases, the basis for the extension of the principle outlined by Hayne J becomes clear. They are significantly different to the facts of this matter.
30 There was extensive evidence in the Hotrox litigation about the unique nature of the confidential information. There was an affidavit from a Mr Cole who deposed that he had invented a world unique technology that enabled the successful creation of sawdust wood and charcoal briquettes without the use of a synthetic binder. Dr Franklin, who was the expert whose access to the confidential information was challenged, was the principal of a consultancy firm which had provided services to trade rivals of Hotrox over a number of years in the specific field of trying to develop wooden charcoal briquettes, which did not require the use of synthetic binder. It seems that Dr Franklin, as of the date of the litigation, had been unsuccessful in developing such a product.
31 It was clear that Dr Franklin had undertaken a significant amount of work in the specific briquette area for a diverse range of clients over a number of years, all of whom were direct trade rivals of Hotrox. At the time of the litigation, however, he was not undertaking any work for those clients and had not for a number of years.
32 A matter of significance was that in 1991 Dr Franklin had made an application for a patent in relation to charcoal briquettes. That patent was directed at producing a briquette of suitable hardness without the use of binding agents. Even though that patent application had lapsed in 1993, there was ample evidence to justify an inference that although at the time of the litigation Dr Franklin was not a trade rival of Hotrox, if its manufacturing techniques were disclosed to him there was a real prospect that at some stage in the future he might become such a trade rival or assist such a trade rival.
33 In the 2002 decision, the Western Australian Court of Appeal accepted that Dr Franklin was not at the time a trade rival of Hotrox. The fact that he had at one time applied for a patent in that very area, however, was something which was given considerable weight. This was because it provided a real basis for the concern of Hotrox that in the future either Dr Franklin might become a direct trade rival, or act as a consultant for such trade rivals. The Court formed the opinion that the risk of disclosure of such confidential information by Dr Franklin in those circumstances was real.
34 There was evidence before the Court that there were other appropriate experts available. Dr Franklin himself identified another expert and Hotrox had identified a number of experts. There was no evidence that Gebauer had consulted any of those experts or had looked for other experts.
35 In summarising the conclusions of the Court in the 2002 decision, the Western Australian Court of Appeal in 2008 said:
"16 The Full Court concluded that the risk should have been assessed as significantly more substantial than slight. It noted that, on the evidence, Dr Franklin had been interested for some time from a professional point of view in the process of manufacturing briquettes without a binder. Although the project in which he was involved when the application for the provisional patent was lodged came to nothing, the Full Court observed that Dr Franklin would be less than human if he did not wish to take advantage of an opportunity to inspect a process which might show him a way of doing something that he was unable to do. Because of his professional interests, Dr Franklin would be most unlikely ever to forget or put aside what he learnt. It would remain forever as part of his professional know how.
17 The Full Court made it clear that there was no attribution of any dishonest motive or intention to Dr Franklin. But he was now a professional consultant in the field and it could well be imagined that in the future Dr Franklin may be asked about the possibility of doing something along the lines which Hotrox claimed to be able to do. He would then be put in a quandary as to whether directly or indirectly to make use of that information in advising his clients.
18 There would also be a danger that he may subconsciously disclose something learned on the inspection which he was obliged to keep confidential. The Full Court considered that unless in the future Dr Franklin declined to advise any client interested in pursuing a process similar to Hotrox's there would be a danger that he would, however unwittingly, make a disclosure which would imperil the confidentiality which he had agreed to preserve."
36 As indicated, there are a number of important differences between that scenario and the facts of this case.
37 There is no evidence that Dr Wynn-Hatton had anything like the intellectual and personal commitment to the product Sparkle Ultra which Dr Franklin had in manufacturing briquettes without a synthetic binder. Sparkle Ultra was in competition with only one of the number of new and reformulated products which the plaintiff companies were going to launch in the retail market. The evidence suggests the number of products to be well in excess of 25. In the case of Hotrox the manufacture of the briquette was fundamental to its whole business.
38 It is also of significance that while it is accepted that the formulae and methods of manufacture constitute confidential information, the plaintiff companies had at no time manufactured or sold the new and reformulated cleaning products in the retail market. Accordingly it is not correct to talk in terms of companies such as Lloyd Brooks being a trade rival of the plaintiff companies since those companies had never sold cleaning products in that market.
39 There is a certain unreality in the stance adopted by the plaintiff companies in this matter. Fundamental to their objection to Dr Wynn-Hatton having access to the confidential information is that he might convey this information in the future, albeit subconsciously, to a trade rival. On the other hand, the basis of this litigation is that the plaintiff companies claim to have forever lost the opportunity of developing and selling these new and reformulated products and seek damages accordingly. This is how the claim is pleaded. It is nowhere suggested that at the conclusion of these proceedings some use will be made by the plaintiff companies of these new and reformulated cleaning products.
40 Against that background, the contrast with the Hotrox case is stark. The concerns of Hotrox were with the possible use of confidential information by existing trade rivals. In this case there are no existing trade rivals nor will there ever be, because on their case the ability of the plaintiff companies to develop and market these products has been forever lost.
41 Put at its highest on behalf of the company plaintiffs, their concern about access by Dr Wynn-Hatton to the confidential information could only be on the basis that at the conclusion of this litigation, they might seek to utilise the confidential information and that their ability to do so would be impeded if inadvertently Dr Wynn-Hatton had conveyed some of it to entities which would be trade rivals if those circumstances eventuated. Moreover the evidence of 20 November 2007 on which the plaintiff companies rely, goes no further than to indicate the possibility not the likelihood that Dr Wynn-Hatton might work for a potential trade rival in the future.
42 That factual scenario is considerably different to that which the Western Australian Court of Appeal had before it in Hotrox. The Hotrox litigation was concerned with a real prospect of disclosure. This case is concerned with the possibility of disclosure in a hypothetical situation which on the company plaintiffs' case is unlikely to arise.
43 The fact that Dr Wynn-Hatton would not be able to put entirely out of his mind any formula, to which he had access, is not a decisive consideration. That risk would arise with any expert who has access to confidential information. If the courts are to effectively operate in this field and balance competing interests, that is a risk which will often arise and which has to be accepted. It would only be in rare cases that an expert would be expected to give an undertaking that he or she would not operate in a particular field in the future if access were given to confidential information. This is not one of those cases.
44 If Dr Wynn-Hatton, who already has considerable familiarity with this matter, were not to be given access to the confidential information, one can confidently anticipate further rounds of litigation identical to this. The defendants would put forward experts and the company plaintiffs would object to those experts on the basis that either at some time in the past they may have worked for a potential trade rival or at some time in the future they might do so. As was indicated in the affidavit of Mr Mitchell, it is this very experience with trade rivals and therefore with competition within the market, which makes the expertise of persons such as Dr Wynn-Hatton and Mr Fong so valuable, both to the plaintiff companies and the defendants.
45 When one looks at the regime which the plaintiff companies have suggested be put in place for the selection of alternative experts who can be used by the defendants, the inevitability of a further round of litigation such as this, is clear. That prospect should be eliminated if it can be done without causing serious disadvantage or injustice to the plaintiff companies.
46 I do not find particularly persuasive the submission that the defendants could use two experts instead of one, thereby having the benefit of Dr Wynn-Hatton's knowledge of the market without giving him access to the confidential information. The implementation of such a procedure would give rise to serious practical difficulties.
47 As indicated, it is by no means clear that the plaintiff companies would ever agree to any chemist with experience in the field of cleaning products having access to the confidential information. As the evidence of Professor Pailthorpe on the hearing of the motion made clear, experts such as he and Dr Wynn-Hatton who are active in this field are regularly retained by companies which would have been potential trade rivals of the plaintiff companies.
48 Even if an appropriately qualified chemist acceptable to the plaintiff companies could be identified, it is difficult to see how that person could communicate in any meaningful way with Dr Wynn-Hatton so as to enable him to usefully provide expert reports concerning the performance of these products in the market without that chemist being in breach of the confidentiality regime. Apart from the undoubted inconvenience and additional expense involved in having two experts rather than one, the practical difficulties associated with the sharing of information between the two experts are such as to make the proposal largely unworkable.
49 The retaining of Mr Fong, on behalf of the company plaintiffs, cuts both ways. It does indicate as was submitted, that there may well be other appropriate experts available who could be retained by the defendants instead of Dr Wynn-Hatton. On the other hand there is force in the defendants' submission that Mr Fong is in the same position as Dr Wynn-Hatton in that he is able to give expert evidence, not only about the formulae and methods of manufacture, but about the ways in which the chemical characteristics of the cleaning products would affect their performance in the retail market. The defendants submit that if the plaintiffs have a single expert who can provide evidence to that effect, they should not be deprived of access to the same expertise which they have in Dr Wynn-Hatton.
50 When giving evidence on the motion, Dr Wynn-Hatton impressed me as an honest person who was genuinely expressing an opinion without adopting a partisan stance. He made appropriate concessions and when he lacked knowledge on a subject he said so. I am satisfied that he would not consciously misuse confidential information of which he became aware in the course of this litigation. I am satisfied that he would conscientiously observe any undertakings which he gave to the Court. The contrary was not suggested.
51 In carrying out the balancing exercise which I must, I have not been persuaded by the company plaintiffs that Dr Wynn-Hatton ought be excluded from having access to the confidential information. I see his position being quite different to that of Dr Franklin in the Hotrox litigation. In particular, he lacks that personal involvement with the content of the formulae which Dr Franklin had. Unlike the Hotrox litigation, there is not one formula involved but a considerable number.
52 On the case as pleaded by the plaintiff companies, there will be no trade rivals in the future since they will never be able to develop and promote their new and reformulated cleaning products in the retail market. For the reasons indicated, I do not think it is practical or realistic to require the defendants to retain two experts when Dr Wynn-Hatton has all the qualifications and experience to provide the expert assistance which the defendants wish.
53 It is of concern that the defendants have made no attempt to inform the Court of the availability within Australia of other persons with the same qualifications and experience as Dr Wynn-Hatton and Mr Fong. While that is a matter of concern, it is not sufficient to tip the balance in favour of the company plaintiffs on this issue. The position of the company plaintiffs is sufficiently protected by the confidentiality regime which I have proposed.
54 For the above reasons I consider that the risk of the confidential information to which Dr Wynn-Hatton will have access being communicated to a trade rival of the company plaintiffs in the future is low. On balance I have not been persuaded that disclosure of the confidential information should not be made to Dr Wynn-Hatton.