(2) This Act and any rules of court are to be so construed and applied, and the practice and procedure of the courts are to be so regulated, as best to ensure the attainment of the objects referred to in subsection (1)."
10 It is not uncommon in proceedings involving a substantial number of documents in respect of which a special claim of confidentiality is made for the parties, or in some cases the court, to develop regimes to avoid the necessity and expense of having to deal with claims of confidentiality on a document by document basis. The regime may take various forms. For example, there may be a blanket restriction on access to documents falling within particular classes. That blanket restriction may be subject to a procedure permitting a party subject to the restriction to notify the party claiming confidentiality of particular documents sought to be removed from the restriction and providing a mechanism for resolving disputes. Some classes of document may be subject to more onerous restrictions than others. In some cases, the parties may have put in place reciprocal arrangements in relation to documents in respect of which a claim for confidentiality is made. In yet others, restrictions may be placed on the activities of those who have inspected the documents and, in particular, their ability to advise a trade rival of the producing party for a period of time: see Telstra Corporation v Australis Media Holdings (unreported, Supreme Court of NSW, 6 December 1996, McLelland CJ in Eq); Sky Channel Pty Ltd v Austar Entertainment Pty Ltd [2005] NSWSC 853.
11 In my opinion, in many cases such as these, ss 56 and 57 of the Civil Procedure Act may require the court to consider the reasonableness of the regime rather than a claim on a document by document basis. That is so even when one party or the other seeks to resile from a regime that has been put in place, or seeks to oppose a regime proposed by another. Whether a court should depart from the document by document approach and, if it does, the nature of the regime that it should accept depends on all the circumstances of the case. One relevant factor is the number of documents involved. Another is the nature of the relationship between the parties - and, in particular, the extent to which they are trade rivals. A third is the nature of the documents sought to be protected - and, in particular the likelihood that they contain information that could properly be regarded as confidential and as requiring some special protection beyond that provided by the implied undertaking. A fourth is the nature of the case and the urgency in making the documents available for inspection. Each case will depend on its own facts. However, in my opinion, it will rarely be the case that a regime that limits access to external solicitors and counsel will meet the requirement of reasonableness. That is because those solicitors and counsel must act on the instructions of someone; and normally the person or persons giving those instructions should be entitled to see all the documents available to their advisors so that they can understand the basis of any advice given to them.
12 Returning, then, to the question of costs, the plaintiffs (the respondents to the motion) say that the defendants should pay the costs of the motion filed by them. The general principle is that costs normally follow the event: UCPR r 42.1. That principle, however, has no application where there has been no "event" because there has been no final determination by the court of the issues between the parties. In those cases, the court cannot try a hypothetical action between the parties to determine who the successful party would have been. However, it is appropriate for the court to determine whether the plaintiff (or applicant) acted reasonably in commencing the proceedings (or filing the relevant motion) and whether the defendant (or respondent) acted reasonably in defending the proceedings or motion and to award costs having regard to those matters: Foukkare v Angreb Pty Ltd [2006] NSWCA 335; Fordyce v Fordham [2006] NSWCA 274; Newcastle Wallsend Coal Co Pty Ltd v Industrial Relations Commission of NSW [2006] NSWCA 129; Re The Minister for Immigration & Ethnic Affairs of the Commonwealth of Australia, Ex Parte Lai Qin (1997) 186 CLR 622 per McHugh J at 624-5. In addition, the settlement itself may demonstrate that one party or the other was substantially successful: see Edwards Madigan Torzillo Briggs Pty Ltd v Stack [2003] NSWCA 302 at [5] per Davies AJA (with whom Mason P and Meagher JA agreed). That is particularly so in interlocutory applications where the respondent to a motion does or refrains from doing something which in substance reflects the orders sought in the motion.
13 In my opinion, this is not a case where the agreement reached by the parties could be described as a victory by one or the other. I accept Mr Braham's submission that what was agreed was a genuine compromise between what each party sought. The defendants sought a dismantling of the confidentiality regime completely, leaving it open to the plaintiffs to identify particular documents in respect of which special rules were to operate. The plaintiffs, on the other hand, sought to retain the confidentiality regime completely, but indicated that they were prepared to make exceptions in respect of particular documents identified by the defendants if the defendants could give in relation to those documents a reasonable explanation for doing so. It follows that I do not think that a costs order can be made in the plaintiffs' favour on the basis that they were substantially successful.
14 The question, then, is whether the conduct of the defendants was unreasonable so as to justify a costs order in favour of the plaintiffs.
15 The defendants say that their conduct in filing the motion was reasonable. They point to the fact that, over a period of time, they had been complaining about the effect that the confidentiality undertakings were having on their ability to prepare for the hearing. They were entitled to demand that the plaintiffs justify their claims for confidentiality on a document by document basis. It was reasonable of them to give the plaintiffs two weeks in which to accept that proposal particularly in circumstances where the case was subject to a tight timetable which the plaintiffs were insisting the defendants meet.
16 On the other hand, the plaintiffs say that the defendants acted unreasonably in filing the motion. For a period of six weeks the parties had proceeded on the basis that the defendants' solicitors would identify the documents that they wished to show to the defendants and BGC in particular. They say that it was reasonable for them to pursue the proposal that had initially been acceptable in principle to the defendants and that, having regard to all the circumstances, the defendants should have put forward a compromise if they did not want to pursue that proposal.
17 In my opinion, the defendants did not act unreasonably in filing the motion when they did. For the reasons I have given, I think that they were entitled to take the view that the confidentiality regime that they had agreed to initially was too restrictive. Although they may not have been entitled to insist in the circumstances of this case that the plaintiffs establish their claim for special orders in relation to confidentiality on a document by document basis, they were entitled to insist on a substantially less restrictive regime than the one that was in place. The fact that they took some time to do that does not seem to me to alter the position. It was clear that the plaintiffs were resisting any substantial change to the regime that had been agreed at the time the plaintiffs had sought interlocutory relief. Moreover, I do not think that it was necessarily up to the defendants to come up with an alternative regime. In those circumstances, I do not think that it was unreasonable for the defendants to take the view that the best way of bringing the issue to a head was to file a motion. Not long after they did so, the parties were able to reach a compromise.
18 In those circumstances, I think that the appropriate order is that the costs of the motion be costs in the cause.
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