Lynx Engineering Consultants Pty Ltd v The ANI Corporation Limited

REASONS FOR JUDGMENT 1 The applicant carries on the business of designing, manufacturing and supplying railway wagons for carrying freight and bulk materials. From 1993 to about April 1997 the applicant was engaged in research and development for the design of a new or improved railway wagon body suitable for carrying freight and bulk materials. This project was known as the "Lynx 3CR12 Wagon Project". The respondents carry on business manufacturing railway wagons. 2 On 10 April 1996 the applicant entered into an agreement (the 1996 Confidentiality Agreement) with the first respondent to disclose confidential information to it in respect of the Lynx 3CR12 wagon for the purpose of cooperating with the first respondent in a joint response to BHP Iron Ore Ltd's (BHP) invitation to tender for the design, manufacture, supply and testing of 120 enhanced gondola ore cars. 3 Pursuant to the 1996 Confidentiality Agreement, the applicant provided the first respondent with a number of design drawings and technical information. The joint response to the BHP tender invitation by the applicant and the first respondent was unsuccessful. 4 In April 1997, the applicant and the first respondent entered a second confidentiality agreement in respect of the disclosure of confidential information by the applicant to the first respondent for the purposes of the joint response to a tender invitation from Hamersley Iron Ore Ltd (Hamersley) for the design and manufacture of bulk freight rail wagons. Pursuant to that agreement the applicant disclosed further information relating to various improvements, enhancements and modifications to the Lynx 3CR12 wagon. The applicant subsequently withdrew from the Hamersley tender. 5 In 2000, a third confidentiality agreement was entered into in respect of the joint participation by the applicant and the first respondent in responding to a tender invitation from Hamersley. Pursuant to that agreement the applicant disclosed further confidential information comprising substantial design changes by way of modifications, enhancements and improvements to the earlier design of the Lynx 3CR12 wagon which, by then, became known as the Lynx Golynx wagon. This tender was also unsuccessful. 6 Some time later, the respondents manufactured and supplied each of BHP and Hamersley with railway wagons known as the Bradken 9100 Wagon and the Rio Tinto Pilbara Iron Ore Car respectively. 7 On 2 August 2006, the applicant commenced an originating application in this Court alleging that the respondents had, in breach of the three confidentiality agreements, used and disclosed to others, the applicant's confidential information for the purpose of manufacturing, and procuring the manufacture of, rail wagons, known as the Bradken 9100 Wagon and the Rio Tinto Pilbara Iron Ore Car. 8 In their defence, the respondents denied the allegations and said that each of the wagons was designed by "a company in the Worley Group trading as Williams Worley Rail (Worley)" and that the respondents had not provided, or caused to be provided, any of the confidential information to Worley. The respondents pleaded that neither Worley nor its officers and employees had access to, or made use of, the applicant's confidential information. 9 As to the Bradken 9100 Wagon, the respondents alleged that in about March 2003, Mr Warren Williams of Worley and Mr Doug Cummings of the second respondent had conducted a detailed physical inspection of existing wagons owned by BHP, and of various items of infrastructure relating to the use of the wagons. These items included three dumpers used by BHP to empty ore from the wagons, the maintenance shop where wagons were repaired and serviced and the layout of the Port Hedland site, including the crusher plants. 10 As to the Rio Tinto Pilbara Iron Ore Car, the respondents alleged that the car was developed by Worley after a detailed physical examination of existing wagons owned by Hamersley and the infrastructure with which those wagons were required to interface. It was said that in April 2000 Mr Warren Williams of Worley and Mr Allan Walshe of Hamersley had conducted a physical inspection of the existing iron ore wagons owned by Hamersley. They had also inspected the Seven Mile facility infrastructure. 11 The reference in the defence to "a company in the Worley Group trading as Williams Worley Rail" as being the party responsible for the design of the Bradken 9100 Wagon and the Rio Tinto Pilbara Iron Ore Car led to the applicant's solicitors making further inquiries. The solicitors learned that the entity trading as Williams Worley Rail was not a company, but was an unincorporated joint venture between two companies, namely, WorleyParsons Services Pty Ltd and WP Williams & Associates Consulting Engineers Pty Ltd. In a letter Mr Warren Williams, the principal and director of WP Williams & Associates Consulting Engineers Pty Ltd, advised the solicitors acting on behalf of the applicant that: The entity known as Williams‑Worley Rail commenced trading in 1995. Williams‑Worley Rail was known as Williams‑Worley during the period 1995 until around 1998. The structure of Williams‑Worley Rail from 1995 until 22 June 2005 was that of an informal and unincorporated joint venture. On 22 June 2005 WorleyParsons Services Pty Ltd (ABN 61 001 279 812) procured all of the assets of WP Williams & Associates Consulting Engineers Pty Ltd via an Asset Purchase Agreement. WorleyParsons Services Pty Ltd did not purchase the corporate entity WP Williams & Associates Consulting Engineers Pty Ltd. The first application for preliminary discovery 12 By notice of motion dated 20 December 2006, the applicant commenced an application for preliminary discovery under O 15A r 7 of the Federal Court Rules (the Rules) from each of WorleyParsons Services Pty Ltd trading as "Williams Worley Rail" (WorleyParsons) and from WP Williams & Associates Consulting Engineers Pty Ltd formerly trading as "Williams Worley Rail". The applicant sought discovery of documents relating to the design and the development by WorleyParsons and/or any other company or group of companies known as the Worley Group trading as Williams Worley Rail, relating to the design of each of the Bradken 9100 Wagon and the Rio Tinto Pilbara Iron Ore Car; communications between WorleyParsons and each of the second and third respondents to the proceedings concerning the design of the cars and documents relating to the examination of the wagons and infrastructure at BHP and Hamersley operations referred to in the defence. 13 Before the hearing of the applicant's notice of motion, WP Williams & Associates Consulting Engineers Pty Ltd provided an affidavit of discovery sworn on 9 February 2007 by Mr Warren Williams. The discovery was confined to handwritten extracts from the diary of Mr Warren Williams recording the names of various persons with whom he had met and, on occasions, brief notes of meetings. 14 Notwithstanding that WP Williams & Associates Consulting Engineers Pty Ltd had not contested the applicant's notice of motion dated 20 December 2006, the applicant also obtained an order that it have liberty to apply for an order pursuant to O 15A r 3(2) of the Rules for the examination of WP Williams & Associates Consulting Engineers Pty Ltd by its appropriate officer. 15 WorleyParsons contested the applicant's notice of motion at a hearing before Nicholson J on 10 April 2007. The applicant relied upon a number of affidavits which annexed documents discovered by the respondents in the substantive application. These documents included emails, minutes, notes and other communications about the design of the relevant wagons between a number of identified persons from each of a number of identified companies including the respondents, WP Williams & Associates Consulting Engineers Pty Ltd, WorleyParsons, and BHP. 16 On 27 April 2007, Nicholson J made orders that WorleyParsons provide preliminary discovery of the documents, the subject of the applicant's notice of motion. In addition, his Honour also made an order that there be liberty to the applicant to apply for an order for the examination of WorleyParsons by its appropriate officer under O 15A r 3(2) of the Rules (Lynx Engineering Consultants Pty Ltd v The ANI Corporation Limited [2007] FCA 578). 17 WorleyParsons has, in compliance with the order of Nicholson J, given discovery. Counsel for the applicant handed to me a copy of the affidavit of discovery and the accompanying list of documents. The list of documents comprises, according to counsel for the applicant, 1,701 documents. The second notice of motion for preliminary discovery 18 On 7 May 2007, the applicant, pursuant to its liberty to apply, filed a notice of motion for the examination of WP Williams & Associates Consulting Engineers Pty Ltd by its appropriate officer, Mr Warren Williams, under O 15A r 3 of the Rules. 19 Order 15A r 3 of the Rules provides: 3 (1) Where an applicant, having made reasonable inquiries, is unable to ascertain the description of a person sufficiently for the purpose of commencing a proceeding in the Court against that person (in this rule called "the person concerned") and it appears that some person has or is likely to have knowledge of facts, or has or is likely to have or has had or is likely to have had possession of any document or thing, tending to assist in such ascertainment, the Court may make an order under subr (2). (2) The Court may order that the person, and in the case of a corporation, the corporation by an appropriate officer, shall: (a) attend before the Court to be examined in relation to the description of the person concerned; (b) make discovery to the applicant of all documents which are or have been in the person's or its possession relating to the description of the person concerned.