Clime Capital Limited v UGL Pty Limited

Federal Court of Australia|2020-03-04|Before: Anastassiou J

Background 3 In Clime Capital I set out the background to the proceedings as follows (at [23]-[25]): … The applicant brings the proceeding against the respondent on its own behalf and on behalf of all persons who acquired shares in the capital of the respondent on the Australian Stock Exchange between 16 April 2014 and 5 November 2014, who are alleged to have suffered loss or damage by reason of the pleaded conduct of the respondent, and who have not opted out of the proceeding. The applicant's claim falls within the genre of Group Proceedings commonly referred to as securities class actions. The applicant alleges that the respondent breached its continuous disclosure obligations under s 674(2) of the Corporations Act 2001 (Cth) and Australian Stock Exchange Listing Rule 3.1. The applicant further alleges that by that conduct the respondent engaged in misleading and deceptive conduct. The subject matter of the alleged non-disclosure concerned problems the respondent encountered with a major project it had undertaken called the Ichthys Project. This was a $900 million project for the construction and commissioning of a combined cycle power plant in the Northern Territory. 4 On 24 October 2019, in advance of the settlement approval hearing, Murphy J granted leave to the applicant to file any affidavit or exhibit or part thereof in respect of which confidentiality orders may be sought marked confidential and dispensed with the requirement of service. His Honour further ordered that if settlement approval is given, the parties may thereafter make an application for a continuing confidentiality order given pursuant to ss 37AF and 37AG of the Act. 5 On 17 December 2019, at the time of approving settlement, I made the following order (Interim Order): Until 10 February 2020 and subject to further order, pursuant to s 37 AF and s 37AG(1)(a), on the ground that the order is necessary to prevent prejudice to the proper administration of justice, the following evidence is not to be published or disclosed without the prior express consent of the Applicant and/or prior leave of the Court to any person or entity other than the Court, the Applicant, IMF and their legal advisors: (a) the report of the Court-appointed costs referee Mr Ian Ramsey-Stewart dated 18 November 2019 including annexures, which report was provided to the Chambers of Justice Anastassiou on 18 November 2019; (b) the affidavit of Timothy Michael Luke Finney affirmed on 27 November 2019 including its annexure; (c) the affidavit of Timothy Michael Luke Finney affirmed on 4 December 2019 including its annexure; and (d) the affidavit of Timothy Michael Luke Finney affirmed on 12 December 2019 including its annexure. 6 On 4 February 2020, the applicant provided Proposed Confidentiality Orders for the continuing a confidentiality of the certain confidential material relied upon in support of the approval application. 7 On 7 February 2020, I extended the Interim Order until 24 February 2020 and directed the Applicant put on short submissions in support of the Proposed Confidentiality Order. 8 On 24 February 2020 I made the Proposed Confidentiality Orders. These are my reasons for making those orders.

Material over which confidentiality is claimed 9 As set out in more detail in the order above, the applicant claims portions of the following information should be kept confidential on the Court file: Portions of the report of the Court-appointed costs referee Mr Ian Ramsey-Stewart dated 18 November 2019 including portions of appendices 3 and 5, and columns of the spreadsheet entitled "131274_PFM Fees and disbursements_FV_181119" which formed part of appendix 4; Portions of the affidavit of Timothy Michael Luke Finney affirmed on 27 November 2019 including portions of its annexure; and Portions of the annexure to the affidavit of Timothy Michael Luke Finney affirmed on 12 December 2019. (Claimed Confidential Material) 10 The applicant has significantly narrowed the Claimed Confidential Material from the material covered by the Interim Order. In particular, any claim to confidentiality over the affidavit of Timothy Michael Luke Finney affirmed on 4 December 2019 is no longer pressed.

Relevant principles 11 The power to make a non-publication order is governed by Part VAA of the Act. 12 Section 37AG of the Act sets out the grounds on which a non-publication order may be made. Here reliance is placed on ss 37AG(1)(a): 37AG Grounds for making an order (1) The Court may make a suppression order or non‑publication order on one or more of the following grounds: (a) the order is necessary to prevent prejudice to the proper administration of justice; … 13 Section 37AE emphasises that such orders are not to be made lightly, and that the public interest is served by open justice: 37AE Safeguarding public interest in open justice In deciding whether to make a suppression order or non‑publication order, the Court must take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice. 14 The imperative of s 37AE is adopted in the Class Actions General Practice Note (GPN-CA): 17. Confidentiality Orders 17.1 The legal representatives of the parties should be aware that confidentiality or non-publication orders will not be made otherwise than in accordance with Part VAA of the Federal Court Act which provides that the starting point for consideration of such orders, for the Court to take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice. 17.2 Such orders will only be made if the Court must be satisfied that the order is necessary to prevent prejudice to the proper administration of justice (s 37AG(1)(a)). It should be recalled that "necessary" is a "strong word": Hogan v Australian Crime Commission (2010) 240 CLR 651; [2010] HCA 21 at [30]. 15 The High Court in Hogan (at [30] and [31]) note that to be 'necessary' is different than being "convenient, reasonable or sensible". It is well established, however, that commercial in confidence or commercially sensitive information may form a sufficient basis for the grant of a confidentiality order: Australian Competition and Consumer Commission v Air New Zealand Limited (No 3) [2012] FCA 1430 at [35]; Australian Competition and Consumer Commission v Cement Australia Pty Ltd (No. 2) [2010] FCA 1082; Cyclopet Pty Ltd v Australian Nuclear Science and Technology Organisation [2012] FCA 1326 at [7]; Sportsbet Pty Ltd v State of New South Wales (No 12) [2010] FCA 62; and Keyzer v La Trobe University [2019] FCA 646 at [30]. 16 In Hogan the High Court cited with approval (at [38]) the statement of principle of Jessup J below in Hogan v Australian Crime Commission (2009) 177 FCR 205 at [42], with whom Moore J agreed. His Honour there said in relation to the predecessor of s 37AF of the Act, s 50, which is materially the same as the grounds in s 37AG(1)(a) as relied on here: … It is true that, generally speaking, every person has a right to keep from the view of others, or of the world at large, documents and things which he or she regards as his or her private concern. But so to propose is no more, in my view, than to state a conclusion about the absence of a right in any other person to view such documents and things. There are, of course, all manner of situations in which a claim to keep a particular document confidential will be recognised by a court. For example, equity recognises that the information contained in certain documents is, of its nature and by reason of the circumstances of its communication, subject to a duty of confidence. So too will the law protect trade secrets in well-recognised situations. And it is commonly the case that the court will protect from the public eye personal or commercial information the value of which as an asset would be seriously compromised by disclosure. In this latter category, the source of the jurisdiction (in this court) to provide such protection is s 50 itself. That is to say, the question will always be: is an order necessary to prevent prejudice to the administration of justice? Absent an affirmative answer to this question it is, in my view, almost meaningless to propose that documents themselves are, or that the information in them is, inherently confidential to an extent justifying, or assisting in the justification of, the making of an order permanently protecting them from public view. [emphasis added] See also, Australian Competition and Consumer Commission v Valve Corporation (No 5) [2016] FCA 741 at [6] and Australian Competition and Consumer Commission v Singtel Optus Pty Ltd (No 4) [2011] FCA 761; 282 ALR 246 at [86] (appeal allowed on a different point). 17 The making of a non-publication order in such circumstances ensures the Court's processes should not result in the value of confidential information being destroyed or diminished. Otherwise, members of the public might lose confidence in the Court and the Court's processes "might open the way to abuse" by competitors or other persons: Australian Broadcasting Commission v Parish [1980] FCA 40; (1980) 29 ALR 228; (1980) at 230; 43 FLR 129 at 134; Australian Competition and Consumer Commission v Origin Energy Electricity Limited [2015] FCA 278 at [148] per Katzman J.

Application 18 The applicant's submissions helpfully categorised the Claimed Confidential Material within the following categories: (1) Category 1: Confidential information in relation to funding and legal costs which may confer a tactical advantage to respondents in future litigation; (2) Category 2: Confidential information subject to legal professional privilege which may confer a tactical advantage to respondents in future litigation, including regarding the applicant's prospects of success in the proceeding and the opinion of the applicant's legal advisors about those prospects; (3) Category 3: Confidential information subject to without prejudice privilege regarding mediation or settlement of the proceeding; and (4) Category 4: personal information concerning group members and employees of the applicant and IMF Bentham Limited (the funder of the litigation).

Categories 1 to 3 19 Categories 1 and 2 include confidential information in relation to funding and legal costs, including pricing mechanisms, the applicant's prospects of success in the proceeding and the formula and procedure for distribution of settlement funds, including their rationales. The applicant submits that this information, if disclosed, could be used by competitors of Phi Finney McDonald and IMF Bentham Limited. 20 In relation to this category I note that Phi Finney McDonald and IMF are regularly engaged in class action litigation as solicitors and lenders respectively. It is well accepted that the Court should not permit disclosure in a manner which allows the Court's processes to become "a vehicle for advantaging or prejudicing trade rivals": Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (No 3) [2015] FCA 1406 at [10] (Edelman J), citing Origin Energy at [148] (Katzmann J); Cement Australia at [23] (Greenwood J); and Yara Australia Pty Ltd v Burrup Holdings Limited (No 2) [2010] FCA 1304 at [25] (Barker J). 21 Needless to say, the commercial interest in the information to be protected is that of the Applicant's solicitors and litigation funder, not the applicant's. I do not regard that distinction as an impediment of the applicant bringing this application. The proper conduct of complex class action litigation requires specialised knowledge of experienced lawyers and, in most cases, experienced litigation funders. The services provided by solicitors and funders should not be impeded by the loss of confidentiality that may provide competitors for the provision of these services with an unfair advantage. In any event, any distinction between the applicant and its solicitors and funder for the purpose of this application is a matter of form only, as the solicitors and the funder would have standing to make the present application themselves. It would not be in the interests of the cost effective disposition of this application to require that the solicitors and funder be substituted as the moving parties for this application. 22 Category 3 contains information subject to without prejudice privilege. Maintenance of legal professional privilege or without prejudice privilege, where such privilege has not been waived, is protected as a necessary incident of the privilege itself. Where, as here, the information has been disclosed to the Court in accordance with express orders preserving the confidentiality of the material and for the purpose of a settlement approval, confidentiality orders to preserve the privileged material should be made as a matter of course. 23 The protection of privileged material is an accepted basis to make a confidentiality order: Farey v National Australia Bank Ltd [2016] FCA 340; Hopkins v AECOM Australia Pty Ltd (No 8) [2016] FCA 1096; and HFPS Pty Limited (Trustee) v Tamaya Resources Limited (in Liq) (No 3) [2017] FCA 650. The Category 2 information, in addition to containing confidential information of commercial sensitivity, is subject to legal professional privilege.

Category 4 24 Category 4 concerns the personal information of employees of the applicant and IMF, whose identities are unrelated to the controversy in the proceedings. Non-publication orders in respect of group members' personal information have been made in previous cases as necessary to prevent prejudice to the proper administration of justice (see e.g. HFPS Pty Limited; Santa Trade Concerns Pty Limited v Robinson (No 2) [2018] FCA 1491 at [27]).

Duration of the order 25 Section 37AJ of the Act concerns the duration of an order made under Part VAA: 37AJ Duration of orders (1) A suppression order or non‑publication order operates for the period decided by the Court and specified in the order. (2) In deciding the period for which an order is to operate, the Court is to ensure that the order operates for no longer than is reasonably necessary to achieve the purpose for which it is made. (3) The period for which an order operates may be specified by reference to a fixed or ascertainable period or by reference to the occurrence of a specified future event. 26 Section 37AJ(2) requires the order to be limited to a period that is 'reasonably necessary' to achieve the purpose of preventing prejudice to the proper administration of justice by disclosure of commercial in confidence, privileged and personal information. 27 The applicant referred to Steelforce Trading Pty Ltd v Parliamentary Secretary to the Minister for Industry, Innovation and Science (No 2) [2018] FCAFC 47. In Steelforce a Full Court made orders prohibiting publication of certain sections of an earlier judgment in that proceeding, without fixing an expiry date for the orders. In that case, the non-publication order was made on the basis that it would undermine the integrity of the processes of the Court if the price to be paid for bringing the appeal was the disclosure of the appellant's sensitive trade information. 28 The applicant also referred to several judgments of single judges of this Court in the class action settlement context where the confidentiality orders have been made 'until further order': Simpson v Thorn Australia Pty Ltd Trading As Radio Rentals (No 5) [2019] FCA 2196 (Lee J); Rushleigh Services Pty Ltd v Forge Group Limited (in Liquidation)(Receivers and Managers Appointed) [2019] FCA 2113 (Murphy J); Perazzoli v Bank SA, a Division of Westpac Banking Corporation Limited [2019] FCA 1707 (Lee J); Kuterba v Sirtex Medical Limited (No 3) [2019] FCA 1374 (Beach J); Gibson v Malaysian Airline System Berhad [2019] FCA 1007 (Perram J); Bradgate (Trustee) v Ashley Services Group Limited (No 2) [2019] FCA 1210 (Middleton J); McKenzie v Cash Converters International Ltd (No 4) [2019] FCA 166; 134 ACSR 327 (Lee J); Hopkins v Macmahon Holdings Ltd [2018] FCA 2061 (Jagot J); Santa Trade Concerns (Lee J); Hodges v Sandhurst Trustees Limited [2018] FCA 1346 (Lee J); Caason Investments Pty Limited v Cao (No 2) [2018] FCA 527 (Murphy J); Clarke v Sandhurst Trustees Limited (No 2) [2018] FCA 511 (Lee J); Dillon v RBS Group (Australia) Pty Limited (No 2) [2018] FCA 395 (Lee J); Lifeplan Australia Friendly Society Limited v S&P Global Inc (Formerly McGraw-hill Financial, Inc) (A Company Incorporated in New York) [2018] FCA 379 (Lee J); Hardy v Reckitt Benckiser (Australia) Pty Limited (No 3) [2017] FCA 1165 (Nicholas J); Newstart 123 Pty Ltd v Billabong International Ltd [2016] FCA 1194; 343 ALR 662 (Beach J); Hopkins v (Nicholas J); City of Swan v McGraw-Hill Companies, Inc [2016] FCA 343 (Wigney J); Collin v Aspen Pharmacare Australia Pty Ltd [2013] FCA 1336 (Davies J); and Collin v Aspen Pharmacare Australia Pty Ltd [2013] FCA 952 (Davies J). 29 In Origin Energy Katzmann J stated (at [150]): Section 37AJ states that the suppression or non-publication order operates for the period decided by the Court and specified in the order. As Perram J said in Air New Zealand at [38], this means that the order should operate for a finite period. [The applicant in that case] did not identify any period. But s 37AJ(3) provides that the period during which an order operates may be specified by reference either to a fixed or ascertainable period or by reference to the occurrence of a specified future event. In all the circumstances, I propose to order that the information in the annexure not be disclosed until further order. 30 I propose to follow the practice referred to above of limiting the duration of the suppression or non-publication order until further order. In my view, this practice in the class action context strikes the right balance between the protection of the legitimate interests that may be adversely affected by disclosure of the information, while not precluding any person who may be able to demonstrate a countervailing interest from applying to the Court for a variation to the orders.

Disposition 31 For the reasons set out above the confidentiality orders are made as sought. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Anastassiou.

Class Actions Practice Note (GPN-CA) Federal Court of Australia Act 1976(Cth)

Perazzoli v Bank SA, a Division of Westpac Banking Corporation Limited [2019] FCA 1707 Rushleigh Services Pty Ltd v Forge Group Limited (in Liquidation)(Receivers and Managers Appointed) [2019] FCA 2113 Santa Trade Concerns Pty Limited v Robinson (No 2) [2018] FCA 1491 Simpson v Thorn Australia Pty Ltd Trading As Radio Rentals (No 5) [2019] FCA 2196 Sportsbet Pty Ltd v State of New South Wales (No 12) [2010] FCA 62 Steelforce Trading Pty Ltd v Parliamentary Secretary to the Minister for Industry, Innovation and Science (No 2) [2018] FCAFC 47 Yara Australia Pty Ltd v Burrup Holdings Limited (No 2) [2010] FCA 1304

ANASTASSIOU J: 1 On 19 December 2019 I made orders approving the settlement of a class action brought against the respondent, UGL Pty Limited. Subsequently I gave reasons for making those orders: Clime Capital Limited v UGL Pty Limited [2020] FCA 66. 2 The applicant seeks orders pursuant to ss 37AF and 37AG(1)(a) of the Federal Court of Australia Act 1976 (Cth) in respect of certain identified portions of documents it relied upon in support of its application for approval of the settlement. The applicant contends the orders are required to prevent prejudice to the proper administration of justice. For the reasons that follow I accept that the orders should be made pursuant to s 37AG(1)(a) of the Act.

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