MINERAL RESOURCES LTD -v- WYATT [2021] WASC 185 (11 June 2021)

1. On 2 April 2020, the plaintiffs commenced CIV 1465 of 2020 against the second defendant. In these proceedings, the plaintiffs contend that the second defendant breached the general services consulting agreement and the general services engineering agreement by the use of the plaintiffs' intellectual property and confidential information.
2. In CIV 1466 of 2020 against the first defendant, which was commenced on the same date, the plaintiffs contend that the first defendant breached his employment agreement as well as the Corporations Act 2001 (Cth) by using the plaintiffs' intellectual property and confidential information. The alleged intellectual property and confidential information includes the design, manufacture and use of crushing, screening and processing plant designs for mobile and fixed plants.
3. On 10 December 2020, I ordered these proceedings to be consolidated.
4. Counsel for the defendants in these proceedings say that from the publicly available information obtained from the eCourts portal it is apparent that:

(a) on 3 March 2021, the plaintiffs filed a consolidated statement of claim;

(b) on 31 March 2021, the plaintiffs issued two subpoenas;

(c) on 29 April 2021, the plaintiffs filed an application and affidavit of Nicholas James Rohr sworn 28 April 2021; and

(d) on 18 May 2021, the plaintiffs filed submissions in opposition to the defendant's application dated 12 April 2021 to set aside subpoenas and to seek a confidentiality order.

1. The defendants seek orders for leave to use the following documents which have been filed in the Consolidated Proceedings:

(c) the affidavit of Nicholas James Rohr filed 29 April 2021;

(d) the letter application for orders dated 29 April 2021; and

(e) the plaintiffs' submissions in opposition to the defendant's application dated 12 April 2021 to set aside subpoenas and to seek confidentiality orders.

1. The defendants also sought orders for leave to use the second affidavit of Jessica Sara Chapman affirmed 18 May 2021 with attachments JSC‑4 to JSC‑15. It was acknowledged by the plaintiffs that this affidavit had been read and relied upon in the application to set aside the subpoenas, which was listed before Acting Registrar Hosking. For that reason, on the basis of Le Miere J's decision in Platinum Systems Resourcing Pty Ltd v NRW Holdings Ltd [No 3],[1] I accept that this document was no longer subject to the implied undertaking. That is, the affidavit is no longer subject to the substantive obligation of law and leave is not required for its use in these proceedings.

1. The relevant legal principles that govern this application were not in dispute between the parties. They were summarised by the High Court in Hearne v Street in the following terms:[2]

Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence.

It is common to speak of the relevant obligation as flowing from an 'implied undertaking'.

1. The obligation can be released or modified by the court, however the power to do so is not freely exercised. It will only be exercised where there are special circumstances.[3]
2. In Liberty Funding Pty Ltd v Phoenix Capital Ltd,[4] Branson, Sundberg and Allsop JJ discussed what was meant by 'special circumstances'. They held that:[5]

The notion of 'special circumstancesc does not require that some extraordinary factors must bear on the question before the discretion will be exercised. It is sufficient to say that, in all the circumstances, good reason must be shown why, contrary to the usual position, documents produced or information obtained in one piece of litigation should be used for the advantage of a party in another piece of litigation or for other non-litigious purposes. The discretion is a broad one and all the circumstances of the case must be examined.

1. Where the purpose of the release from the obligation is for use in another proceeding, commonality between the proceedings may be a sufficient factor to warrant the exercise of the dispensing power.[6]
2. In Laen Pty Ltd v At the Heads Pty Ltd, Davies J said:[7]

The mere fact of commonality of subject matter may be sufficient to establish that the party has a legitimate forensic purpose for the use of the material in the second proceeding, but the test is not commonality of subject matter. Generally, use in a subsequent proceeding would not be an improper use of material previously obtained subject to an implied undertaking, unless that material was obtained in the first proceeding for an ulterior purpose.

1. It was not in dispute in the hearing before me that the first and second defendants are bound by the substantive obligation not to use the documents they have obtained in the Consolidated Proceedings for any purpose other than defending those proceedings. In particular, they must not use those documents or the information contained in them in this proceeding unless given leave to do so by this court.
2. I am satisfied on the information before me that the substantive obligation applies to each of the documents the subject of this application which have been filed in the Consolidated Proceedings, apart from the second affidavit of Jessica Sara Chapman affirmed 18 May 2021.
3. In my view, for the following reasons, there are special circumstances in this case which make it appropriate to grant leave to the defendants to use the documents in these proceedings.
4. First, the documents which the defendants seek to use are clearly identified and set out in the application.
5. Second, the documents which are sought to be used have been filed in proceedings between the plaintiffs and the first and second defendants in these proceedings. That is, I accept that there is a commonality of some of the parties.
6. Third, there is a degree of commonality between the subject matters of both sets of proceedings and the specific documents which are sought. The subject matter of both actions arise from the employment agreement by the plaintiffs of the first defendant, a consulting agreement and an engineering services agreement concerning the second defendant and alleged breaches of those agreements, including in respect of the design of crushing machines. In respect of the particular documents sought in the Consolidated Proceedings, apart from the consolidated statement of claim, the documents concern two matters: first, an application by the plaintiffs for inspection of a particular crushing machine; and second, a subpoena issued to Rio Tinto Ltd for production of certain documents.
7. These proceedings concern an application by the plaintiffs for pre-action discovery in respect of a crushing machine. I accept that statements by the plaintiffs in respect of the applications in the Consolidated Proceedings, which require a crushing machine to be relevant to the issues raised in the Consolidated Proceedings, may be relevant to the question to be determined by the court on this application, namely whether the plaintiffs fall within the terms of O 26A r 4 of the Rules of the Supreme Court 1971 (WA).
8. Fourth, the plaintiffs do not claim that the information in these documents is confidential.
9. Fifth, each of the documents the subject of the application were prepared for the purposes of litigation. In relation to Mr Rohr's affidavit, this affidavit was prepared for the purpose of the plaintiffs' application for inspection in the Consolidated Proceedings. For this reason, the plaintiffs must have anticipated that the affidavit would be read in court in support of the application. Once this occurs, the defendants will be able to use the information in the affidavit for purposes other than the Consolidated Proceedings.
10. Sixth, I accept there is a public interest in the information in the documents in the Consolidated Proceedings, which relate to matters which will be raised in this application, being made available to the defendants in this action. The public interest in the court having all the relevant information before it, outweighs the plaintiffs' privacy interests in the documents the subject of this application not being used for purposes other than the Consolidated Proceedings.
11. Seventh, the plaintiffs have not demonstrated that the use of these documents will cause any harm or prejudice to the plaintiffs in the Consolidated Proceedings.

1. For these reasons, the defendants will have leave to use the documents the subject of the application, save for the following:

(a) the affidavit of Ms Chapman, which I have already dealt with; and

(b) in my view, the subpoenas that are the subject of the application should be restricted to the subpoena that has been issued to Rio Tinto Ltd.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Platinum Systems Resourcing Pty Ltd v NRW Holdings Ltd [No 3] [2013] WASC 402.

[2] Hearne v Street [2008] HCA 36; (2008) 235 CLR 125 [96] - [97].

[3] Hearne v Street [107]; Esso Australia Resources Ltd v Plowman [1995] HCA 19; (1995) 183 CLR 10, 37.

[4] Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3; (2005) 218 ALR 283.

[5] Liberty Funding Pty Ltd v Phoenix Capital Ltd [31] (Branson, Sundberg & Allsop JJ)

[6] Springfield Nominees Pty Ltd v Bridgelands Securities Ltd [1992] FCA 472; (1992) 38 FCR 217, 224 (Wilcox J).

[7] Laen Pty Ltd v At the Heads Pty Ltd [2011] VSC 315 [10]; cited with approval in Platinum Systems Resourcing Pty Ltd v NRW Holdings Ltd [No 3] [6] (Le Miere J).