Portal Software v Bodsworth

Supreme Court of NSW|2005-10-14|Before: Brereton J, Young J, Santow J

CITATION : Portal Software v Bodsworth [2005] NSWSC 1115

DECISION : Set aside Registrar's decision to set aside notice to produce; vary Registrar's decision restricting access.

CATCHWORDS : EVIDENCE - PRACTICE AND PROCEDURE - Review of Registrar's decisions - nature of review - whether and to what exent nature of hearing de novo - subpoenas and notices to produce - setting aside - relevance - test of relevance - onus of establishing relevance - access - confidentiality - whether access should be limited to legal representatives - relevant considerations.

Restraints of Trade Act 1976 (NSW) LEGISLATION CITED : Uniform Civil Procedure Rules 2005 (NSW), r 45.19

Alister v The Queen (1984) 154 CLR 404 Bailey v Beagle Management Pty Ltd (2001) 105 FCR 136 Banksia Mortgages v McClymont [2004] NSWSC 525 Beaufort Air Sea Equipment Pty Ltd v Emhart Australia Pty Ltd (NSWSC, Master Malpass, 18 December 1992, unreported) Botany Bay Instrumentation and Control Limited v Stuart [1984] 3 NSWLR 98 British Xylonite Company Limited v Fibrenyle [1959] RPC 252 Bruce v Tyson (NSWSC, 9 December 1998, unreported) Colley v Hart (1890) 7 RPC 101 Commissioner for Railways v Small (1938) SR (NSW) 564 Commonwealth v Northern Land Council (1993) 176 CLR 604 Hatton v Attorney-General of the Commonwealth of Australia & Ors (2000) 158 FLR 31; (2000) 26 Fam LR 520; (2000) FLC 93-038 Highfields Preparatory and Kindergarten School Pty Ltd v Simpson (NSWSC, Master Greenwood, 22 August 1985, unreported) Idoport Pty Ltd V National Australia Bank Limited [2001] NSWSC 648 In the Will of Sheppard [ 1972] 2 NSWLR 714 CASES CITED : Kanthal (Australia) Pty Ltd v Minister for Industry Technology and Commerce (1987) 14 FCR 90 McLeish v Brown (NSWSC, Master Malpass, 23 April 1993, unreported, BC 999397) Modern Woodcraft Pty Ltd v Nott (NSWSC, 7 March 1997, Young J, unreported, BC9700735) QBE NSW Pty Ltd v The Sportspit Pty Ltd (NSWSC, 12 October 1995, Young J, unreported, BC9501739) R v Saleam (1989) 16 NSWLR 14 Roussel Uclaf v Imperial Chemical Industries plc [1990] FSR 25 Santos Limited v Pipelines Authority of Australia (1996) 66 SASR 388 Straney v Lithgow District Workers Club Ltd [2005] NSWSC 69 Swain v Edwin Sinclair Tyre Co (1903) Sydney Organising Committee for the Olympic Games v Reebok International [2000] NSWSC 85 Trade Practices Commission v Arnotts Limited (1989) 21 FCR 306; 88 ALR 90 Waind & Hill v The National Employers Mutual General Association [1978] 1 NSWLR 372 Warner - Lambert Co v Glaxo Laboratories Limited [1975] RPC 354 Westpac Banking Corporation v Abemond Pty Ltd (NSWSC, 3 November 1994, Santow J, unreported, BC 940439). White v Tulloch (1995) 127 FLR 105, (1995) 19 Fam LR 696, (1995) FLC 92-640

Portal Software International Pty Ltd (plaintiff/respondent) PARTIES : Jason Bodsworth (defendant/applicant)

R Alkadamani (plaintiff) COUNSEL : M White (defendant)

Haywards Solicitors (plaintiff) SOLICITORS : Watkins Tapsell (defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

3250/05 PORTAL SOFTWARE INTERNATIONAL PTY LTD V JASON BODSWORTH JUDGMENT - (ex tempore ) re application to vary orders relating to exhibit AX02 (revised 23 November 2005) 1 HIS HONOUR: The plaintiff Portal Software International Pty Ltd provides billing software to the telecommunications market. It employed the defendant Jason Bodsworth as a Senior Solutions specialist. On 26 April 2005, Mr Bodsworth gave notice of his resignation, and that he would be working for Amdocs Australia Pty Ltd, a competitor of Portal. By amended summons filed on 24 June 2005 Portal seeks orders restraining Mr Bodsworth until 24 November 2005 (or alternatively until such time as the Court thinks fit) from entering the services of Amdocs; restraining him until 24 November 2005, or alternatively so long as the Court thinks appropriate, from visiting or contacting any of Portal's clients or any individual or company that had been a client of Portal in the year prior to 24 May 2005; restraining him from using trade secrets or confidential information of Portal as identified in affidavits to be filed on behalf of Portal; and damages, equitable compensation and other orders.

2 On 27 June 2005, White J granted Portal interlocutory relief restraining Mr Bodsworth until 24 November 2005 or the final determination of these proceedings or further order, whichever first occurs, from contacting, visiting, or dealing with Telstra or any of its officers employees or agents for the purpose of providing or in connection with the provision of or proposed provision of software to Telstra for any of its proposed or existing systems, or for the purpose of or in connection with the provision of or proposed provision of services in connection with the provision or operation of such software. Some other arrangements were also made consensually on an interlocutory basis so far as confidential information is concerned. 3 Relevantly for the present application, an order was made on 9 June 2005, by consent and without admissions, that Mr Bodsworth be restrained from deleting any information from any personal computer owned or used by him until 17 June 2005. That order was continued, or another order in substantially identical terms made, on 17 June until 24 June 2005. On 24 June 2005 one of the orders made, so far as I can tell by consent, was that without admissions and until further order Mr Bodsworth be restrained from deleting any information from any personal computer used or owned by him.

4 The final hearing of the matter was set down to commence on Monday 17 October 2005, that is to say the next business day after today.

5 On 30 June 2005, Mr Bodsworth served a notice to produce comprising 21 numbered paragraphs on Portal's solicitors. On 10 August 2005, Portal filed and served a notice of motion seeking to set aside paragraphs 2 through 6, 13, 15, 16, 17, 19, 20 and 21, of that notice to produce. On 16 September 2005, Mr Bodsworth served a further notice to produce, this one of 27 numbered paragraphs, some of which duplicated uncontentious paragraphs of the first notice to produce. On 26 September, and again on 29 September 2005, Portal amended its notice of motion to seek additional relief so that ultimately, as well as seeking that the paragraphs to which I have referred of the first notice to produce be set aside, it also sought orders that paragraphs 10 and 11 of the first notice to produce, and paragraphs 14, 17, and 23 through 25 of the second notice to produce, be set aside.

6 Portal's amended notice of motion was heard by the Registrar on 26 September. On 29 September 2005, the Registrar made orders setting aside paragraphs 2 through 6 and 21 of the first notice to produce, noting that agreement had been reached to narrow the terms of paragraph 10 of the first notice to produce (but subject to a confidentiality arrangement to which I shall refer), noting that objections to paragraphs 15, 16 and 17 of the first notice to produce were resolved, and that paragraphs 23, 24 and 25 of the second notice to produce were not pressed.

7 The Registrar made a direction for further investigation by the plaintiff as to what it held in respect of the documents called for in paragraph 11 of the first notice to produce, and that the documents referred to in paragraphs 10, 13, 19 and 20 of the first notice to produce, and those referred to in paragraphs 14 and 17 of the second notice to produce, would be produced subject to a confidentiality regime to be agreed by the parties.

8 Ultimately, the Registrar made an order imposing a confidentiality regime in respect of the documents referred to in paragraphs 10, 13, 19 and 20 of the first notice and paragraphs 14 and 17 of the second notice in the following terms: (a) Pending further order access is limited to Mr White of counsel,

(b) Mr White is not to disclose the contents of the documents and to keep the information contained therein confidential,

(d) List of components the subject of a contract in the schedules or annexures to contracts may be blacked out.

9 By notice of motion filed on 11 October 2005, Mr Bodsworth seeks a review of the Registrar's orders, and in lieu thereof orders to the following effect: (a) That the plaintiff produce documents pursuant to paragraphs 2 through 6 and 21 of the first notice to produce,

(b) That the plaintiff produce documents pursuant to paragraphs 10, 11, 13, 19 and 20 of the first notice and paragraphs 14 and 17 of the second notice subject to access being limited to Mr Bodsworth and his legal representatives and that they not disclose the contents and in particular keep the information contained therein confidential and that figures on the documents regarding dollar amounts may be blacked out and lists of components the subject of a contract in schedules or annexures may be blacked out, costs, of the motions and the review. 10 Although a notice to produce is not a subpoena, the obligations which a notice to produce imposes are similar to those imposed by a subpoena, and considerations which apply to the setting aside of subpoenas are applicable to notices to produce [Bailey v Beagle Management Pty Ltd (2001) 105 FCR 136; Highfields Preparatory and Kindergarten School Pty Ltd v Simpson (NSWSC, Master Greenwood, 22 August 1985, unreported)]. In Highfields, Master Greenwood said "The law relating to the production under and the setting aside of a subpoena, relates equally to a notice to produce".

11 Thus, when a notice to produce is called on, there are the same three steps as arise in production under a subpoena, as described in Waind and Hill v The National Employers Mutual General Association [1978] 1 NSWLR 372 in which Moffitt P, with whom Hutley and Glass JJA agreed, explained the three steps in the procedure of having the respondent to a subpoena (and, thus, a notice to produce) bring documents to Court and in the subsequent use of these documents with reference to the statement of Jordan CJ in Commissioner for Railways v Small (1938) SR (NSW) 564 at 574 that there were at least two steps in the procedure of having documents brought to Court and in their use thereafter, and adding: Indeed on a correct view there are three steps: the first is obeying the subpoena by the witness bringing the documents to the court and handing them to the judge. This step involves the determination of any objections by the witness to the subpoena, or to the production of the documents to the Court pursuant to the subpoena. The second step is the decision of the judge concerning preliminary use of the documents, which includes whether or not permission should be given to a party or parties to inspect the documents. The third step is the admission into evidence of the document in whole or in part; or the use of it in the process of evidence being put before the Court by cross-examination or otherwise.

12 The present application involves both the first step - in which Portal seeks to object to production of documents pursuant to, and to set aside paragraphs of, the notice, and the second step - in which Portal seeks to have restrictions imposed on the grant of access to Mr Bodsworth to the documents produced. 13 Before turning to those steps, it is appropriate to note the nature of the review which is involved in an application for review of a Registrar's decision, which is now authorised by Uniform Civil Procedure Rules r 45.19. In Beaufort Air Sea Equipment Pty Ltd v Emhart Australia Pty Ltd (NSWSC, Master Malpass, 18 December 1992, unreported) Master Malpass, as his Honour then was, said that the review of a Registrar's decision was not accurately described as a hearing de novo, in that the review was not a fresh hearing with the parties being in the same position as they were before the Registrar. Generally, the rules left the conduct of a review at large, and the procedure to be followed to the discretion of the Court on a case-by-case basis: The Master said that there should be available all the material that was before the Registrar, and the reviewing process would involve the Court in having a look at the order of the Registrar in the light of the material that was before the Registrar, in most cases restricted to the written record although there might be cases in which it was appropriate to receive further evidence. The Master adhered to that view in McLeish v Brown (NSWSC, Master Malpass, 23 April 1993, unreported, BC999397).

14 The authorities were examined by Santow J, as his Honour then was, in Westpac Banking Corporation v Abemond Pty Ltd (NSWSC, 3 November 1994, Santow J, unreported, BC 940439). In that case, his Honour accepted that the review power was one which encompassed a rehearing, in which the Court was in no way constrained by the grounds or decision of the Registrar. It does not appear that his Honour was referred to Beaufort v Emhart.

15 In Modern Woodcraft Pty Ltd v Nott (NSWSC, 7 March 1997, Young J, unreported, BC9700735) his Honour considered the judgments of Santow J and of Master Malpass. His Honour noted that, prior to the Supreme Court Act 1970, the word "review", when used in connection with a Registrar's or even a Master's decision, had a very definite connotation, namely, that a party was entitled to have the judge actually make a personal decision on the matter, and thus conduct the matter as an original hearing. Indeed, that view survived the Supreme Court Act [In the Will of Sheppard [ 1972] 2 NSWLR 714, 716-7].

16 His Honour returned to the issue in QBE NSW Pty Ltd v The Sportspit Pty Ltd (NSWSC, 12 October 1995, Young J, unreported, BC9501739) and said that while the usual course of a review was as set out in the judgment of Master Malpass in Beaufort v Emhart: In the review process it seems to me that the same onus applies as applied before the Registrar. The hearing is not quite a hearing de novo in that it is customary for the parties to be restricted to the material before the Registrar, though there is provision in proper cases for extra evidence to be called. The hearing is like a hearing de novo in that the Court does not have to find any error of law on the part of the Registrar and may make any order that is thought to be just in the circumstances.

17 What I take to be the correct approach on a review, in the light of those authorities, has been summarised in many judgments of Master Harrison, as her Honour then was, with reference to the cases to which I have referred [see for example, Bruce v Tyson (NSWSC, 9 December 1998, unreported); Banksia Mortgages v McClymont [2004] NSWSC 525, [5]-[6]; Straney v Lithgow District Workers Club Ltd [2005] NSWSC 69, [3]-[4] and the cases there cited], and may be stated as follows:-

· The Court is to have regard to the material that was before the Registrar when the order under review was made; · If fresh evidence is produced, the Court may receive it (and it has a liberal discretion to do so, because the rules about fresh evidence on appeal do not apply to a review), or it may refer the matter back to the Registrar who dealt with it originally to be addressed as a fresh application to the Registrar; · Ultimately, it is for the reviewing Court to make its own decision based on the material before it and having heard argument, it being unnecessary to establish, or find, any error in the decision of the Registrar; · On questions of onus, the parties stand on the review in exactly the same position as they did before the Registrar.

18 I turn then to the issue which arises on the first of the three steps referred to in Waind and Hill. Portal objects that paragraphs 2 through 6 and 21 of the first notice to produce call for documents which do not have "apparent relevance" to issues in these proceedings, and ought to be set asisde the register agreed with Portal's objections.

19 The power of the Court to set aside a subpoena or notice to produce (in whole or in part) is but an instance of its power to regulate its processes and in particular to intervene in the case of an abuse of its process: see Botany Bay Instrumentation and Control Limited v Stewart [1984] 3 NSWLR 98, 100 (Powell J). In the categories of cases described by Powell J, no reference is made to mere irrelevance as a ground for setting aside a subpoena or notice. The closest that the various categories listed by his Honour approaches relevance in his Honour's third category, namely, where the subpoena had not been issued bona fide for the purpose of obtaining relevant evidence.

20 However, relevance - or more accurately, lack thereof - is now a sufficient ground for setting aside a subpoena. In Trade Practices Commissioner v Arnotts Ltd (1989) 21 FCR 306; 88 ALR 90, Beaumont J approached the setting aside of subpoenas as oppressive on a basis which reveals that absence of apparent relevance is one of two separate bases for doing so: his Honour identified that on an application to set aside a subpoena as oppressive, two questions arose: first, whether the material sought had an apparent relevance to the issues in the principal proceedings - which his Honour called "adjectival" as distinct from "substantive" relevance - and thus the subpoena had a legitimate forensic purpose to that extent; and secondly, whether the subpoena was seriously and unfairly burdensome or prejudicial. Failure to satisfy either requirement resulted in the subpoena being set aside.

21 In Hatton v Attorney-General of the Commonwealth of Australia & Ors (2000) 158 FLR 31; (2000) 26 Fam LR 520; (2000) FLC ¶ 93-038, Finn, Kay and Dessau JJ, after an extensive review of the authorities, including Arnotts, said:- As to the proposition that lack of relevance cannot of itself be a ground for setting aside a subpoena but rather must constitute oppression or abuse of process, we would consider that whatever may have been the position at the time that Waind and Hill was decided, the present state of authorities is such that lack of apparent relevance will be a sufficient ground in itself to set aside a subpoena.

22 I proceed on the basis, therefore, that absence of apparent relevance is a sufficient ground to set aside a subpoena or a part of a subpoena.

23 It is necessary, then, to appreciate what is the test of "relevance" in the context of a subpoena. In many of the cases, it had been described as "apparent relevance", in the sense that the documents, production of which is sought, must bear some apparent relevance to an issue in the proceedings. In Waind and Hill, Moffitt P described the concept in these terms: Production of a document on subpoena by a stranger is only required if the document is sufficiently relevant to the action in the sense that it is likely to add in the end, in some way or other, to the relevant evidence in the case.

24 In White v Tulloch (1995) 127 FLR 105, (1995) 19 Fam LR 696, (1995) FLC ¶ 92-640, the Full Court of the Family Court referred to the test in terms of documents having "a sufficient apparent connection to justify their production or inspection". But perhaps the most instructive description is that of Beaumont J in Arnotts, in which his Honour said that the test of adjectival relevance was satisfied if the material had apparent relevance and was established if the documentation called for "could possibly throw light on the issues in the main case". In a slightly different but related context, the test has been put in terms that a subpoena has a legitimate forensic purpose if it appears to be "on the cards" that the documents sought will materially assist the defence in a criminal proceeding [Alister v The Queen (1984) 154 CLR 404, 414 (Gibbs CJ), R v Saleam (1989) 16 NSWLR 14, 18].

25 Thus it is plainly not the question at this (first) stage whether the documents, production of which is sought, will definitely advance the case of the parties issuing the subpoena, nor whether they will be admissible in evidence at the trial. It is sufficient that they could "possibly throw light" on the issues in the substantive proceedings, or that it appears to be "on the cards" that they will do so. What are the issues in the proceedings will appear from the pleadings (where there are pleadings), the affidavits, and the legal principles which govern the claims for relief in the substantive proceedings.

26 A notice to produce is addressed to a party, unlike a subpoena to a stranger. Traditionally, subpoenas to parties have been treated somewhat more liberally than subpoenas to strangers, and the same follows in respect of a notice to produce.

27 The two questions considered by Beaumont J which arise on an application to set aside a subpoena as oppressive - namely, the first question as to relevance which looks at the legitimate forensic interest of the party issuing the subpoena, and the second as to burden or prejudice which looks at the burden imposed on the recipient of the subpoena - mean that the exercise will often involve balancing the potential utility of the material sought against the burden which compliance with the subpoena will cast on the recipient.

28 The fact that an application to set aside a subpoena amounts to an assertion of an abuse of process suggests that ordinarily some onus would lie on the person contending that there is such an abuse of process to make that allegation good.

29 However, where the relevance of the documents sought by subpoena is raised at the first stage, the party issuing the subpoena bears at least a forensic onus of showing the relevance of the documents sought to issues in the proceedings. In Santos Limited v Pipelines Authority of Australia (1996) 66 SASR 388, Debelle J, with whom Cox and Prior JJ agreed, stated that "a party seeking to uphold the issue of a subpoena to produce documents must prove that the documents have an apparent relevance to the issues in the arbitration." In Hatton v The Attorney-General, the Full Court of the Family Court held that a primary judge had not erred in requiring the party who had issued a subpoena to demonstrate the apparent relevance of the documents sought to the issues. The rationale of this approach is that a non-party will not know what the issues are, so as to be able to demonstrate irrelevance.

30 In these proceedings, there is an issue as to the "departure date" - that is, the date upon which it might be said that the employment of Mr Bodsworth with Portal came to an end. The employment contract between Portal and Mr Bodsworth is expressed to be effective 1 December 2002. It provides, by clause 3, that the contract is for an indefinite period from 1 December 2002, and:- Notwithstanding the clauses above either party may terminate this Contract by giving the party one month's written notice of termination. The Company reserves the right to pay the Employee one month's salary in lieu of notice. On termination the Employee is entitled to payment of any accrued annual leave or other statutory entitlements.

31 The contract also provides, in clause 9, as follows:- Employee expressly agrees that in the event that this contract is terminated for any reason by either party, for a period of six months from Employee's departure date within the States and Territories of Australia, not to: s enter the service of or start another firm that could compete with those services/products of the Company; s visit or contact the Company's clients or to deal with any individual or company that was a client of the Company for a period of 12 months preceding Employee's departure date.

32 Portal alleges that the departure date was 24 May 2005, and refers to Mr Bodsworth's notice of resignation which asserts that to be his finishing date. Mr Bodsworth alleges that Portal took advantage of the election to pay him in lieu of notice, and that that accelerated his departure date to 28 or 29 April 2005.

33 Another issue in the substantive proceedings is the reasonableness of the "customer connection restraint" to which I have referred. Portal supports its reasonableness, but Mr Bodsworth alleges that it is excessive and void as contrary to public policy, and that by reason of the law of Victoria being, so it is said, the proper law of the contract, not amenable to being saved or read down under the Restraints of Trade Act.

34 Paragraphs 2 and 3 of the first notice to produce seek documents which relate to the calculation of Mr Bodsworth's termination payments. The dates as at which Portal made calculations of his termination payments, and more particularly the basis of those calculations, including whether or not they included pay in lieu of notice, may well illustrate whether Portal elected to pay Mr Bodsworth in lieu of notice. It is unnecessary and inappropriate at this stage to analyse whether that will ultimately be determinative of the issue. It suffices to say that it is "on the cards" that the material called for by these paragraphs will add to the body of relevant evidence on that issue in the ultimate case. There is no evidence that production of documents in this category would be burdensome to Portal.

35 So far as paragraphs 4, 5 and 6 of the first notice are concerned, they seek documents relating to an "incentive scheme" of which Mr Bodsworth claims, but Portal denies, that he was a member. Mr Bodsworth says that such documents are relevant because his contract of employment was one under which - if the incentive scheme applied, as he says it did - his remuneration was affected by whether or not and how much work he performed; that, therefore, by exception to the usual rule that an employer is not bound to provide work, this was a contract of employment under which the employer was bound to provide work; and, therefore, that a statement by the employer on or about 28 April 2004 that he was not required to work after that date, in the context of such an obligation to provide him with work, is supportive of a conclusion that the contract ended on the earlier date. Once again, now is not the time to determine the correctness of that argument. But it illustrates a tenable basis for contending that the documents' production of which is sought would possibly throw light on an issue in the case. It would be inappropriate to cut Mr Bodsworth out of the opportunity to advance that argument at trial by holding that those documents did not have potential relevance. It is certainly not possible to say that they are not relevant in light of the argument outlined. Once again, there is no evidence that production of the documents in this category would be excessively burdensome to Portal.

36 Paragraph 21 of the notice seeks documents relating to Portal's negotiations with and employment of an employee who has been engaged to replace Mr Bodsworth. Mr Bodsworth says that these documents may illuminate the departure date in several ways. First, it is said, they may evidence approaches to his replacement and, given the statement to him that he was not required to work after late April, may cast some light on when his employment ceased. This, it seems to me, is "not on the cards", as such approaches would have been made to a replacement soon after Mr Bodsworth gave notice, whether Mr Bodsworth's employment formally ceased on 28 April or 24 May. For the same reason, I do not think that, to the extent that the documents sought contain any statements as to the urgency of obtaining a replacement, that would potentially increase the relevant evidence in the case.

37 But there were other bases advanced on which documents relating to the negotiations for, and terms of engagement of, the new employee might be relevant. Mr Bodsworth says that they may illuminate the "reasonableness" argument, by showing the ease with which it was possible to obtain a competent replacement for him, and additionally by showing the terms of any restraint to which his replacement was subjected. In other words, the terms which were used for another employee in the same or substantially the same position, would at least potentially be relevant evidence on the issue of reasonableness of the restraint which was imposed on Mr Bodsworth. On either of those grounds it would be relevant to compare the qualifications, experience and remuneration package of the new employee with that of Mr Bodsworth. In my opinion, these submissions are correct. It is common place in restraint of trade cases to adduce expert evidence as to standard practices and standard restraints in the relevant industry. It is in my opinion permissible, if not preferable, to achieve the same effect by adducing direct evidence of the terms on which comparable employees are employed.

38 Once again, I do not understand there to be evidence that production of this material would be unduly burdensome to Portal. I am told that the Registrar rejected paragraph 21 of the first notice because it was thought to be too wide, but in my opinion all documents which throw light on the qualifications, experience, and remuneration package of the replacement employee have sufficient potential relevance.

39 Accordingly, I am satisfied that the documents in each of the categories to which I have referred could possibly throw light on the issues in the main case, and that adjectival relevance has been established in respect of them. The Registrar's order setting aside paragraphs 2, 3 5, 6 and 21 of the first notice should itself be set aside, and it is for those reasons that I made the order in that respect that I did this morning.

40 I turn then to the question which arises at the second step of the procedure, namely restrictions on access in the nature of confidentiality.

41 In cases concerning patents and trade secrets, it has long been the practice that restrictions can be imposed on the access of a party to documents produced on discovery or on subpoena. However, more so than when documents are sought from third parties, the fact that production by a party would involve the loss of the party's own trade secrets or confidences is no objection in itself, and since it is a party's, and not even a third party's, confidence which is threatened, a stronger case is required for restricting access. And, in my opinion, where it is a plaintiff who asserts confidentiality against a defendant, the plaintiff having invoked the jurisdiction of the Court, a still stronger case is required to deny a defendant access to relevant documents. The need to provide access increases as the hearing approaches: whereas access might be limited at earlier stages, the potential injustice in limiting access will often increase as the hearing approaches.

42 Sometimes, however, protective limitations are introduced at the time of production or inspection. Thus, orders have been made for inspection by an independent solicitor reporting directly to the Court [Colley v Hart (1890) 7 RPC 101]; for inspection by the plaintiff's experts but not the plaintiff [Swain v Edwin Sinclair Tyre Co (1903)] and for inspection by the plaintiff's lawyers and patent agent and experts, but not by the plaintiff [British Xylonite Company Limited v Fibrenyle [1959] RPC 252].

43 Sometimes, when the plaintiff has not been allowed inspection personally the order has permitted a report in general terms to the plaintiff of what has been found, and sometimes transmission to the plaintiff has been permitted of an outline of all information considered relevant by those such as the lawyers conducting the inspection [see British Xylonite].

44 In more recent times, it has become rarer that the party personally is excluded from knowledge, because courts take the view that decisions such as whether to continue or abandon litigation should be made by the party personally on advice, rather than by the advisers [Warner-Lambert Co v Glaxo Laboratories Limited [1975] RPC 354]. The difficulties which may arise from imposing a restriction on the ability of lawyers to speak to their clients and disclose to clients information produced to them has been adverted to repeatedly. In Commonwealth v Northern Land Council (1993) 176 CLR 604, Toohey J observed that inspection by a party's legal representatives, subject to an undertaking of non-disclosure to the party, would often place the legal representatives in a position of difficulty vis-a-vis their client, and even tie their hands in the further conduct of the litigation. The difficulties which may arise when an undertaking of non-disclosure (by legal representatives) has been given as a condition of access were also referred to by Wilcox J in Kanthal (Australia) Pty Ltd v Minister for Industry Technology and Commerce (1987) 14 FCR 90, 96 - 97, but in that case his Honour nonetheless made an order limiting access to the legal representatives only. Mr White referred me to observations to like effect made in this Court by Einstein J in Idoport Pty Ltd v National Australia Bank Limited [2001] NSWSC 648, [30]-[31], and by Heydon JA, as his Honour then was, in the Court of Appeal, in Sydney Organising Committee for the Olympic Games v Reebok International [2000] NSWSC 85, [9].

45 Ultimately, the effect of these authorities is best encapsulated in the judgment of Aldous J in Roussel Uclaf v Imperial Chemical Industries plc [1990] FSR 25, 29-30, as follows: Each case has to be decided on its own facts and the broad principle must be that the Court has the task of deciding how justice can be achieved taking into account the rights and needs of the parties. The object to be achieved is that the applicant should have as full a degree of disclosure as would be consistent with adequate protection of the secret. In so doing, the Court will be careful not to expose a party to any unnecessary risk of its trade secrets leaking to or being used by competitors. What is necessary or unnecessary will depend upon the nature of the secret, the position of the parties and the extent of the disclosure ordered. However, it would be exceptional to prevent a party from access to information which would play a substantial part in the case, as such would mean that the party would be unable to hear a substantial part of the case, would be unable to understand the reasons for the advice given to him, and in some cases the reasons for the judgment. Thus what disclosure is necessary entails not only practical matters arising in the conduct of a case but also the general position that a party should know the case he has to meet, should hear matters given in evidence and understand the reasons for the judgment.

46 Shortly before the present application was made, Portal agreed that the confidentiality regime should be extended to permit access to the solicitor instructing Mr White, as well as to Mr White himself. The essential issue, now, is whether access should be extended, and if so to what extent, to Mr Bodsworth personally.

47 In the interlocutory judgment to which I have earlier referred, White J made findings, which it was ultimately accepted accurately or sufficiently summarised the evidence for present purposes, that as the result of service of a notice to produce, Mr Bodsworth had produced at the interlocutory hearing a CD of documents relating to Portal's affairs which had been copied on to his personal (home) computer, much of which was sensitive; including a commercial proposal from Portal to Vodafone, a letter from Telstra inviting Portal to tender for a certain billing system and setting out the key functionality that Telstra required, a spreadsheet dealing with software bugs and faults and functionality fixes, the latest details of Portal's Billing flagship Software known as P7, the names and telephone numbers and e-mail addresses of key Telstra contacts, and confidential details of the Telstra plan to commission a certain billing platform, together with a good deal of other information which might be characterised as trade secrets of Portal.

48 It should also be recorded that Mr Bodsworth proffered an explanation for this. White J concluded, inevitably enough, that it was inappropriate to say at that stage of the proceedings whether that explanation should be accepted, but that there were grounds for apprehending that Mr Bodsworth may disclose or make use of Portal's trade secrets in the course of his employment with Amdocs, where he would be working in much the same role as he performed when he was employed by Portal.

49 I have earlier mentioned the orders which were made in respect of deletion of information from Mr Bodsworth's personal computer. On the present application, evidence has been adduced that since 9 June 2005, when such order was first made, approximately 58,433 files have been deleted from one hard disk drive, and 2,374 from another hard disk drive, on Mr Bodsworth's personal computer. In addition, a program called 12 Ghosts Shredder, which is a file shredder program, had been installed, and some of the files had been deleted using that program. Such a procedure has, so far as the evidence shows, no benefit in terms of gaining computer space, but simply overwrites the files without retrieving any space, so that the files cannot be recovered at a later stage.

50 It has to be said that this raises a substantial possibility that there has been a contravention of the earlier orders of this Court. But Mr Bodsworth's explanation has not yet been heard, and it is inappropriate that I make any further finding than that at this stage.

51 In the course of his submissions, Mr Alkadamani pointed out that Mr White, while making submissions in theory about the need for instructions as to various of the documents subject to the confidentiality regime, had not referred to specific documents, nor shown how instructions could assist in respect of specific documents. After Mr Alkadamani submitted that Mr White had not identified any particular documents about which it was necessary that he obtain instructions or consult his clients, Mr White prepared and tendered a bundle of documents in respect of which he said that that was the case, which bundle became AX02.

52 Shortly before this application was made, the claim for confidentiality in respect of certain bundles of e-mails, which comprised tab 1 and part of tab 2 of exhibit AX02 was abandoned, it being accepted that they should not be subject to the confidentiality regime. Otherwise, AX02 includes various "Statements of Work" prepared by Portal for various of its customers, 3 documents - Portal 7 Essentials, Portal 7 Feature Training and Portal 7 Server Developer - relating to Portal's flagship product called P7; and a draft of a contract between Portal and Telstra.

53 In the way in which the matter has developed, I do not see any basis at this stage for considering varying the confidentiality regime so far as it relates to any documents other than those contained in AX02. If, in due course, it is desired to make application in respect of other particular documents, that can be done at the appropriate time.

54 I limit myself therefore now to a consideration of what remains in exhibit AX02. Both from the matters referred to by White J, and from the evidence as to deletions from Mr Bodsworth's computer, I must conclude that there is a substantial risk of use or disclosure of confidential information of Portal if in the hands of Mr Bodsworth. On the other hand, I am not persuaded that the "Statements of Work", nor the three "Portal 7" documents to which I have referred, nor even the Telstra contract, are - in circumstances where the dollar figures have been deleted - of a high degree of commercial sensitivity. I do not doubt that they are regarded by Portal as confidential, and that Portal would not wish a competitor to have access to them; but I do not see them as being highly sensitive in the sense that their limited provision to Mr Bodsworth under the scheme which I have in mind would be seriously detrimental to Portal's interests.

55 Although I am similarly not persuaded that these documents are highly relevant to the issues in the case, I proceed on the basis that they are of adjectival relevance at least. The exercise therefore is essentially one of balancing the risk to Portal arising from the potential disclosure of material which I think if disclosed will probably not do much if any damage on the one hand, against the unlikely but possible loss to Mr Bodsworth of available evidence for his defence in these proceedings.

56 I bear in mind that this is a case in which a plaintiff, having involved the court's jurisdiction, seeks to restrict a defendant's access to documents which might assist his defence. It is now the last business day before the commencement of the final hearing. The final hearing could not be more imminent. In this context, ultimately, and despite a substantial risk of disclosure if Mr Bodsworth is granted access, at this stage of proceedings, the dictates of justice must prevail over the interests of confidentiality of the plaintiff.

57 For those reasons, I propose to vary the access orders made by the Registrar, insofar as they relate to the documents comprised in exhibit AX02.

58 I order that the defendant may have access to the documents comprised in exhibit AX02 upon the following terms: (1) As to the copy e-mails behind tab 1 and tab 2, but excluding the Statements of Work behind tab 2, upon the usual terms upon which access to documents produced under compulsory process is granted, and otherwise without limitation; (2) As to the Statements of Work, in the form in which they are in AX02, and the three Portal 7 documents and Telstra contract:- (a) that exhibit AX02 be released to Mr White and retained by him and that no further copies of it or the documents of which it is a copy be made;

(b) that Mr White may disclose to Mr Bodsworth the contents of exhibit AX02 to the extent that in Mr White's opinion it is necessary to do so for the purposes of the proper conduct of the defence of these proceedings and not otherwise. Such disclosure may involve showing Mr Bodsworth the relevant parts of exhibit AX02, but not providing copies to him nor allowing him to make notes of them. Mr Tkalec's salary, though it will not be obliterated in the document produced, will not, despite my other orders, be the subject of disclosure by Mr White to Mr Bodsworth.

(d) That Mr Bodsworth gives to the Court an undertaking that, except with the leave of the Court he will not, otherwise than for the purpose of these proceedings, divulge, communicate or refer to any person any information obtained from inspection of any such documents unless it is admitted into evidence in the proceedings.

59 I note that Mr Bodsworth by his counsel gives that undertaking.

60 I adjourn the notice to produce of 30 June 2005 and the second notice to produce of 16 September 2005 to Monday 17 October at 9am in the Registrar's subpoena list.

61 I reserve the costs of the motion for review, and the proceedings before the Registrar, to the final hearing.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

(2000) 26 Fam LR 520

(1995) 19 Fam LR 696

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