Consideration
37 The particular public interest Specsavers invokes is the public interest in the continuing use of private informants to expose false or misleading advertising campaigns by retail traders.
38 The public interest that The Optical Superstore invokes is the public interest in the capacity of a party to properly defend itself in legal proceedings.
39 I must weigh both these public interests together with the principle of open justice in reaching my decision. In addition, I must take into account the objectives of s 37M of the Federal Court Act.
40 It is important to remember that the respondent, The Optical Superstore, does not propose disclosure to the world at large, merely to the principals of the company against whom the proceeding is brought. It is equally important to recognise that Specsavers consents to disclosure to certain employees or agents of those principals.
41 Where, as here, there is no issue between the parties about whether or not a confidentiality order ought to be made and the dispute is limited to the scope of the order, the parties seeking the benefit of nondisclosure must still satisfy the court that the restriction it wants is necessary for the statutory purpose.
42 While many of Mr Studdy's criticisms of the affidavit evidence proffered on behalf of The Optical Superstore have force, they are of limited value where the burden is on his client to show that nondisclosure is necessary to prevent prejudice to the administration of justice (in this case, to the rights of the parties).
43 The evidence adduced by Specsavers deals with the subject of disclosure of the identity of the mystery shoppers. However, the regime it proposes would also conceal the locations of the stores where the purchases were made. There is no direct evidence touching on the necessity to maintain the confidence of this information. The argument is that the names of the purchasers could possibly be deduced from information about the stores where the purchases took place. I find this argument unconvincing especially if copies of the receipts were redacted so as to conceal the information pertaining to the particular purchasers.
44 Specsavers also argues that the use of the mystery shopping model by other commercial enterprises could be compromised if such an order were not made. When asked whether he could point to any authority in support of the proposition that this was a relevant consideration Mr Studdy was unable to do so. There is some hearsay evidence in Ms Peach's affidavit about the nature of the work of a business called Gap Buster. That evidence touches on the importance to its continued business of maintaining the secrecy surrounding the identity of these mystery shoppers and this type of assignment, that is, the purchase of prescription glasses. But the evidence does not go so far as to demonstrate any wider impact on commerce in general. Even if the use of the mystery shopping model by others were a relevant consideration, the weight to be attached to it must depend on the strength of the evidence adduced in the particular case and the strength of the competing considerations. For what it is worth I take this factor into account. The primary concern, however, must be the administration of justice inter partes.
45 The next question is: why should the disclosure regime exclude the principals of the company when it includes its staff? For the reasons set out in Ms Peach's affidavit, Specsavers wishes to limit disclosure to as few people as possible and argues that disclosure to Ms Douglas and Mr Melrose is not necessary, at least at this stage, to enable The Optical Superstore to prepare its defence. Of course it is difficult for Specsavers or me, for that matter, to know whether that is so, and to a degree I am dependent on what The Optical Superstore says in this regard. Specsavers does not point to any particular prejudice that would follow from the expansion of the limited pool of people to whom the information is disclosed so as to include Ms Douglas and Mr Melrose. Some of the concerns expressed in Ms Peach's affidavit could be realised in the event of disclosure to the limited classes of person that Specsavers proposes, that is, if the undertakings about confidentiality were not honoured. There is no reason to suppose that Ms Douglas and Mr Melrose would not honour such undertakings.
46 Furthermore, strong grounds are required for excluding a principal from knowledge his or her agents properly acquire on his or her behalf: Warner-Lambert Co v Glaxo Laboratories Ltd [1975] RPC 354 at 360 per Buckley LJ (cited in Parish by Franki J at 241). In this case the evidence does not offer such strong grounds.
47 Although I have some doubts about whether The Optical Superstore could show that its capacity to defend the proceedings would be compromised if it could not reveal the names of the mystery purchasers to the principals of the company, Specsavers could not demonstrate that there would be any necessary prejudice if the information were supplied to them when its own scheme proposed giving it to the store managers and other employees.
48 Specsavers contemplates the possible need to vary the current or proposed orders in the future but urges that such a decision be postponed until after it has served its evidence. Under the timetable fixed by the Court on 15 February, that would be next Monday. However, it is inefficient and expensive and inconsistent with the overarching purpose of the civil procedure provisions of the Act and Rules to require the parties to return to argue these matters if they can be satisfactorily resolved today.
49 The next question is whether if the disclosure regime were expanded, it should be expanded only to include Ms Douglas. Whereas it is true that Ms Douglas is the sole director and shareholder of the company and a stronger case could arguably be made for disclosure to her only, I can well understand the convenience of disclosure to both principals, particularly as the uncontested evidence is that they are both responsible for the overall management of the business, the products the company sells, the prices at which they are sold, the creation and implementation of discount offers and the design of all the respondent's marketing campaigns including television advertising. In short, the business is run by a husband and wife team.
50 Mr O'Bryan claims that the number of witnesses would be reduced and the cost of defending the proceedings limited if Ms Douglas and Mr Melrose were included in the restricted classes of person to whom the relevant information could be conveyed.
51 This of course is not a case in which the very subject matter of the suit would be destroyed unless the proposed orders were made. Neither is it a case where the trade secrets of one company would be disclosed unless the orders were made.
52 On the last occasion, Mr Studdy drew my attention to a judgment of McDougall J in the New South Wales Supreme Court in similar proceedings. That was Luxottica Retail Australia Pty Ltd v Specsavers Pty Ltd [2010] NSWSC 54. On that occasion the shoe was on the other foot; it was Specsavers' competitor, Luxottica - the company that owns OPSM - that was applying to the court for relief. In that case, his Honour made an order of the kind Specsavers seeks in the present proceedings.
53 However, the Court's power in that case stemmed from s 72 of the Civil Procedure Act 2005 (NSW), where the test is different. Section 72 provides that:
The court may, by order, prohibit the publication or disclosure of any information tending to reveal the identity of: (a) any party to proceedings, or (b) any witness in proceedings, if it is of the opinion that it is necessary to do so to secure the proper administration of justice in the proceedings [emphasis added].
54 Because this case is to be determined according to whether the evidence meets the test in s 50 of the Federal Court Act, the judgment of McDougall J in Luxottica Retail Australia Pty Ltd v Specsavers Pty Ltd is of limited assistance. The test here, as I have already stated, is whether the prohibition of disclosure is necessary in order to prevent prejudice to the administration of justice. Having considered the arguments of both parties and the competing public interest considerations, including the objectives in s 37M of the Federal Court of Australia Act, I am not satisfied that the disclosure of the information to Ms Douglas and Mr Melrose in the circumstances envisaged by the form of order The Optical Superstore proposes would prejudice the administration of justice and even if I were, I could not be satisfied that such an order is necessary to prevent that prejudice.