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[2010] FCA 151
Federal Court of Australia
2010-02-22
Katzmann J
Original judgment source is linked above.
AND: THE OPTICAL SUPERSTORE PTY LTD (ACN 095 737 894)
I, __________________ of ___________________________, undertake to the Federal Court of Australia (Court) that, in relation to the identity of the mystery shoppers referred to in the affidavit of Zeina Ajaka sworn on 9 February 2010 (Mystery Shoppers), The Optical Superstore stores they visited, the identity of the managers of those stores and the identity of the sales assistants that assisted the Mystery Shoppers (together the Confidential Information):
AND: THE OPTICAL SUPERSTORE PTY LTD (ACN 095 737 894)
I, __________________ of ___________________________, undertake to the Federal Court of Australia (Court) that, in relation to the identity of the mystery shopper who visited the store I manage (Mystery Shopper), The Optical Superstore store they visited, the individual sales assistant who assisted the Mystery Shopper and the fact that I am assisting with or involved in this proceeding (together the Confidential Information):
AND: THE OPTICAL SUPERSTORE PTY LTD (ACN 095 737 894)
I, __________________ of ___________________________, undertake to the Federal Court of Australia (Court) that, in relation to the identity of the mystery shopper that I am identified as serving (Mystery Shopper), The Optical Superstore store they visited, the manager of the store they visited and the fact that I am assisting with or involved in this proceeding (together the Confidential Information):
AND: THE OPTICAL SUPERSTORE PTY LTD (ACN 095 737 894)
I, Margaret Douglas, undertake to the Federal Court of Australia (Court) that, in relation to the identity of the mystery shoppers referred to in the affidavit of Zeina Ajaka sworn on 9 February 2010 (Mystery Shoppers), The Optical Superstore stores they visited and the identity of the managers of those stores and the identity of the sales assistants that assisted the Mystery Shoppers (together the Confidential Information):
AND: THE OPTICAL SUPERSTORE PTY LTD (ACN 095 737 894)
I, Ian Melrose, undertake to the Federal Court of Australia (Court) that, in relation to the identity of the mystery shoppers referred to in the affidavit of Zeina Ajaka sworn on 9 February 2010 (Mystery Shoppers), The Optical Superstore stores they visited and the identity of the managers of those stores and the identity of the sales assistants that assisted the Mystery Shoppers (together the Confidential Information):
AND: THE OPTICAL SUPERSTORE PTY LTD (ACN 095 737 894)
REASONS FOR JUDGMENT (Revised from transcript) 1 The principal proceeding relates to the telecasting of commercials that the applicant claims contain representations that are false and misleading. The parties are competitors in the business of the retail sale of spectacles. Apparently, the commercials purport to compare the prices of the applicant's products with those of the respondent. The evidence that supports the applicant's claims will apparently come from a number of individuals scattered throughout the country who purchased spectacles from the respondent's stores. They are referred to in evidence before me by the sobriquet of "mystery shoppers". The applicant seeks to preserve the anonymity of those individuals through confidentiality orders. The respondent, of course, needs to investigate the circumstances surrounding the purchases in order to meet the applicant's concerns. 2 The proceeding first came before the Court when the applicant (Specsavers) sought interlocutory injunctive relief. On the last occasion, however, after the respondent (The Optical Superstore) had agreed to no longer air the offending commercials, and when it became apparent that an early hearing date was possible, the claim for injunctive relief was not pressed. 3 On that occasion I fixed a hearing date and made orders for the further conduct of the proceedings. At the request of Specsavers and to preserve the status quo, by consent I also made some confidentiality orders which limited the disclosure of the identity of mystery shoppers to the lawyers for the parties and the store managers of the stores where the purchases were made, all on undertakings of confidentiality. They did not, therefore, envisage disclosure to the principals of the respondent company. 4 At that time, Mr O'Bryan of counsel, who appeared for The Optical Superstore, expressed grave reservations about his client's capacity to defend itself because of the restrictions in the confidentiality orders. As it was clear he needed further instructions and his client is based in Melbourne, I anticipated that the orders might need to be revised and granted liberty to the parties to apply on two days' notice. Today, The Optical Superstore seeks a variation of the confidentiality regime. There is no dispute that confidentiality orders are appropriate. Specsavers opposes the variation, however, offering its own adjusted regime. The Optical Superstore is dissatisfied with that proposal. The Optical Superstore also seeks a variation of the timetable for the serving of certain evidence.
The Specsavers' proposal 5 Specsavers proposes a variation of order 7 of 15 February 2010 in the following way: (a) replacing the confidentiality undertaking annexed to the orders dated 15 February 2010 and marked 'A' referred to in subparagraph (a) with the confidentiality undertaking annexed to a copy of its proposed Short Minutes of Order dated 22 February 2010, initialled by me and placed with the papers (the proposed short minutes); (b) replacing the confidentiality undertaking annexed to the orders dated 15 February 2010 and marked 'B' referred to in subparagraph (b) with the confidentiality undertaking annexed to a copy of the proposed short minutes and marked 'B'; (c) inserting a new subparagraph (which it numbers (2A)) after subparagraph (b) as follows: Information from which the identity of each Mystery Shopper may be revealed or using which it could be deduced, may be revealed to the individual sales assistant identified as having assisted the Mystery Shopper upon receipt of a signed Confidentiality Undertaking in the form which is annexed to these orders and marked 'C'. (d) inserting a new subparagraph (which it numbers (2B)) after subparagraph (2A) as follows: The product numbers for each of the products purchased by each of the Mystery Shoppers, the prices at which those products were purchased and the date on which they were purchased be revealed to Margaret Douglas upon receipt of a signed Confidentiality Undertaking in the form which is annexed to these orders and marked 'D'. (I pause to state that Margaret Douglas is one of the principals of the company, The Optical Superstore Pty Ltd) (e) Deleting subparagraph (c) and inserting the following: The identity of the Mystery Shoppers, The Optical Superstore stores they visited, the Managers and sales assistants involved and the fact that they are assisting with this proceeding shall otherwise remain confidential.
The Optical Superstore's proposal 6 In contrast, The Optical Superstore offers a different form of the order made on the last occasion. The order made on the last occasion was, in fact, order 7, wrongly described as order 6 in Specsavers' Short Minutes of Order, and the proposal by The Optical Superstore is to vary order 7 in the following way: (a) replacing subparagraph (a) with the following: (a) The identity of the mystery shoppers referred to in paragraph 4 of the affidavit of Zeina Ajaka, sworn 9 February 2010 together with The Optical Superstore stores they visited, the store managers and store assistants involved and any other information containing Confidential Exhibit ZA-1 may be disclosed to: (1) external solicitors and counsel for the Respondent only upon receipt of a signed confidentiality undertaking in the proposed form annexed to these orders and marked "A"; (2) the manager of a store at which the mystery shopper made the purchase upon receipt of a signed confidentiality undertaking in the form annexed to these orders and marked "B"; (3) the individual sales assistant identified as having assisted the Mystery Shopper upon receipt of a signed Confidentiality Undertaking which is annexed to these orders and marked 'C'; (4) Margaret Douglas, upon receipt of a signed Confidentiality Undertaking which is annexed to these orders and marked 'D'; and (5) Ian Melrose, upon receipt of a signed Confidentiality Undertaking which is annexed to these orders and marked 'E'. (b) Delete subparagraph (b) of the earlier order. (c) Replace subparagraph (c) with the following: The identity of the Mystery Shoppers, The Optical Superstore stores they visited, the Managers and sales assistants involved and the fact that they are assisting with this proceeding shall otherwise remain confidential. 7 The principal differences in the confidentiality regime that would result from the proposals are: (a) Under Specsavers' proposal, certain confidential information would be disclosed to Ms Margaret Douglas, the sole director and shareholder of The Optical Superstore, but not to Mr Ian Melrose, who is her husband and with whom she runs the business; whereas under The Optical Superstore's proposal, certain confidential information would be disclosed to both Ms Douglas and Mr Melrose; and (b) Under Specsavers' proposal, Ms Douglas would have access to more limited information about the mystery shoppers and their purchases than her employees and this information would not include the stores at which the purchases were made; whereas, under The Optical Superstore's proposal Ms Douglas (and, for that matter, Mr Melrose) would have access to the same level of information. 8 The Optical Superstore also seeks an order today in the following terms: The applicant produce to the respondent within two days of the date of this order a copy of each invoice or receipt that records a purchase of products from the respondent's stores by mystery shoppers and on which the applicant intends to rely in this proceeding. That further order is opposed.
The evidence in support of the application 9 Specsavers relies on the evidence contained in two affidavits: an affidavit sworn by Ms Ajaka on 9 February 2010 and one sworn by Lynn Elizabeth Anne Peach, a partner in the firm of solicitors acting for the company. Ms Ajaka is an employee of that firm. The only evidence to which I was taken in Ms Ajaka's affidavit deals with the text of the advertisements and appears in annexure A of her affidavit. 10 Specsavers substantially relies on the affidavit of Ms Peach, who, in turn, largely relies on the opinions of others. Her evidence, which is unchallenged, is to the effect that if the identity of the shoppers were disclosed, particularly in small and regional areas: (a) their future usefulness as informants could be compromised, because the company is likely to flag them to their shop assistants for special treatment; (b) as the pool from which those shoppers is drawn is limited, that would adversely affect Specsavers' ability to test the truth of the boasts of its competitors in their future advertising; (c) the shoppers are afraid of possible reprisals and this could inhibit their cooperation in the future; and (d) the shoppers who are paid for the "mystery shopping" exercises would lose a significant amount of money (the amount is un-stated), with the loss of assignments.
The evidence of The Optical Superstore 11 The Optical Superstore relies on evidence drawn from an affidavit of Michelle Elizabeth Dixon, a partner in the firm of solicitors which acts on its behalf in this case. She states that: Extending the Current Confidentiality Regime to include Ms Douglas and Mr Melrose will not cause any harm or prejudice to the mystery shoppers or the Applicant. 12 Neither Mr Melrose nor Ms Douglas works in the respondent's stores, and therefore neither has direct contact with mystery shoppers. She argues that the proper conduct of the defence of the proceeding will be materially impaired unless the variation is made. She states: The following questions arise in the proceeding: a. in what regions of Australia were the Respondent's advertisements broadcast; b. which products of the Respondent were referred to in the advertisements; c. were those products available for sale at the Respondent's stores in the regions of Australia in which the advertisements were broadcast; d. what products were purchased by the mystery shoppers; and e. in what stores were the products purchased by the mystery shoppers? She goes on to state that: A further question that may arise in the proceeding is what products were requested by the mystery shopper, although there may be debate about the ultimate relevance of that question…. 13 She asserts that in preparing the defence on the respondent's behalf, she has to seek information and take instructions relating to each of those questions. As the ultimate owners of the Optical Superstore are Ms Douglas and Mr Melrose and it is they who provide all the instructions to the solicitors in relation to the proceeding, as well as all the information she needs to take instructions from them concerning the questions that I mentioned earlier, numbered (a), (b) and (c). She goes on to recite in her affidavit that: The Respondent sells a large range of spectacle frames and lenses and consumers have a very wide choice of frame and lens specifications. 14 Ms Douglas and Mr Melrose are the source of her instructions about the technical specifications of the different spectacles that the Optical Superstore sells. Further, Ms Douglas and Mr Melrose created the television advertisements that are the subject of this proceeding, and therefore understand better than anyone else what constitutes the products that were advertised. She goes on to say that: [T]he Respondent's store managers were not involved in the creation or broadcasting of the advertisements. 15 Although the issue for the Court may be the objective meaning of the advertisements and not the intentions or beliefs of either Ms Douglas or Mr Melrose, she deposes that it is necessary for her, and the legal team engaged on their behalf to defend the proceedings, to understand the intentions or beliefs of the principals of the company to assist them to understand the issues in the proceedings and to enable them to prepare a defence. She adds that: Ms Douglas and Mr Melrose are the only people who can give definitive instructions about whether the Respondent believes that the products purchased by the mystery shoppers fall within the advertised categories. And to that end, it is necessary to discuss the details of each product purchased by the mystery shoppers with Ms Douglas and Mr Melrose. She also states that: Ms Douglas and Mr Melrose are the only people who can give definitive instructions about whether the stores in which the mystery purchases occurred were within the regions in which the advertisements were broadcast. 16 She asserts that she needs instructions from them concerning the range and number of advertised products available within those stores at the time of the advertisements. Further, she states that both or either of Ms Douglas and Mr Melrose will need to be in Court while the mystery shoppers give evidence in order to give instructions to their legal advisers, as the evidence might be controversial particularly concerning any discrepancies between the products that the mystery shoppers asked for and those that were, in fact, sold to them. 17 She maintains that it would be impractical, expensive and time consuming for her to seek instructions on behalf of the Optical Superstore from each of the store managers where the purchases were made, bearing in mind that it is anticipated there would be evidence concerning 20 mystery purchases from stores across the country. She states, and this evidence is unchallenged, that having regard to the expedited timetable for the hearing it is not possible for her to attend upon every store manager to seek information and take instructions and it would be a very expensive exercise to do that. It would also be highly disruptive to the company's business for each store manager to meet with her to provide those instructions. She says that she does not expect that it would be necessary for the store managers to give evidence in the proceeding. 18 Furthermore, even if she were able to conduct the defence in that way or to prepare the defence in that way, store managers could not provide definitive instructions on behalf of the company to her and she would still need to seek those instructions from Ms Douglas and Mr Melrose. She concludes that leaving the current orders in place puts both Ms Douglas and Mr Melrose and her firm in an invidious position. She says that she is left in the position of taking instructions from Ms Douglas and Mr Melrose about the purchases while at the same time not revealing whether they are in fact the mystery purchases upon which the applicant relies.
The legal principles 19 Section 50 of the Federal Court of Australia Act 1976 (Cth) confers a power on the Court at any time during or after the hearing of a proceeding in the Court to make: [S]uch order forbidding or restricting the publication of particular evidence, or the name of a party or witness, as appears to the Court to be necessary in order to prevent prejudice to the administration of justice or the security of the Commonwealth. 20 There being no issue about the security of the Commonwealth in this case, the question is whether it is necessary to make the orders sought in order to prevent prejudice to the administration of justice. The fundamental principle is that of open justice. It is clear that whether or not it may be desirable in the public interest to make the orders sought is immaterial. The question is whether it is necessary to do so to prevent prejudice to the administration of justice. This involves three preliminary questions. What is meant by the administration of justice in this context? What prejudice would follow if the orders were not made? And is it necessary to make the order to prevent such prejudice? 21 The principles governing the exercise of the power under the s 50 were set out by the Full Court in Australian Broadcasting Commission v Parish (1980) 29 ALR 228. That was a case arising out of an agreement between the members of the Australian Cricket Board, PBL Marketing Pty Ltd, World Series Cricket Pty Ltd and Publishing and Broadcasting Limited concerning the promotion of cricket matches and associated commercial activities. The ABC alleged that the agreement was contrary to s 45 of the Trade Practices Act 1974 (Cth). 22 During the proceedings the respondent sought to maintain the confidentiality of parts of the agreement. Brennan J declined to make an order forbidding or restricting the publication of certain parts of the agreement. In the Full Court the majority allowed the appeal from his Honour's decision in that regard holding that, subject to appropriate undertakings as to confidentiality and forbidding the publication of the confidential parts of the agreement, discovery of the whole agreement should only have been made to particular senior officers of the respondent and to named legal or specialist advisers from whom the respondent might reasonably wish to receive expert advice in relation to the conduct of the case. 23 Bowen CJ said at pages 232, 47 to 233, 3: This court is a court established by statute. It is clear from section 17(1) of the Federal Court of Australia Act 1976 that, in general, it is obliged to exercise its jurisdiction in open court. This provision gives statutory force to the principle that justice must be administered publicly in open court and gives recognition to the weight of public interest which attaches to that principle. 24 After referring to s 50 (at 233/15) his Honour went on: Again, we are familiar with cases where an order forbidding or restricting publication is appropriate. Thus, where the proceedings concern a secret process and publication of the process would destroy a secret process and publication of the process would destroy the subject-matter of the proceedings and render them nugatory, an order is necessary to prevent prejudice to the administration of justice. Where proceedings are brought to restrain publication of confidential material, similar consideration apply. Disclosure would prejudice the court's proper exercise of the function it was appointed to discharge, to do justice between the parties. The possible cases where an order may be necessary to prevent prejudice to the administration of justice range fairly widely. The categories of this public interest are not closed and must alter from time to time whether by restriction or extension as social conditions and legislation develop [citations omitted]. 25 His Honour observed that, although open justice is the underlying premise of s 50, it is not the criterion it prescribes. The section refers to what is necessary to prevent prejudice to the administration of justice. So the public interest with which s 50 is concerned is not the public interest in open justice but the public interest that the court should try to do justice between the parties. 26 He went onto make the following additional points. (a) First, the decision is a discretionary one. (b) Secondly, although there are no precise guidelines prescribing the degree of prejudice to the administration of justice that would justify an order in any particular case, "the collocation of the alternative phrase 'security of the Commonwealth' suggests Parliament was not dealing with trivialities" (at 234/10). (c) Thirdly, the ordinary case that would attract the exercise of the discretion is one where the failure to make an order under s 50 would result in the destruction of the subject matter of the suit. In such a case, refusing to make the order might "defeat the purpose of achieving justice between the parties and disappoint the public interest in having the court deal responsibly with the confidential affairs of citizens" (at 234/15). (d) Finally, in deciding whether to make the order the Court should weigh the countervailing public interest involved including the public interest in open justice. 27 Only last year the Full Court reaffirmed these principles in Hogan v Australian Crime Commission [2009] FCAFC 71; (2009) 177 FCR 205. 28 Since that time the Parliament amended the Federal Court of Australia Act 1976 (Cth), amongst other things to insert s 37M into the Act. That requires that the practice and procedure restrictions of the Act and Rules are to be interpreted and applied and any power conferred or duty imposed by them to be exercised or carried out in the way best promotes the overarching purpose of those provisions, namely the facilitation of the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. 29 Subsection (2) provides that without limiting the generality of subsection (1), the overarching purposes include the following objectives: (a) the just determination of all proceedings before the Court; (b) the efficient use of the judicial and administrative resources available for the purposes of the Court; (c) the efficient disposal of the Court's overall caseload; (d) the disposal of all proceedings in a timely manner; (e) the resolution of disputes at a cost that is proportionate to the importance and complexity of the matters in dispute. 30 It is common ground that Specsavers, as the applicant, bears the onus of proof and that the Court is obliged to undertake a balancing exercise.
The arguments for the parties 31 Mr Studdy for Specsavers argued that: The respondent's preparation of its defence would not be impaired. (a) Relying on the affidavit of Ms Dixon, Mr Studdy argued that none of the matters to which she referred would require evidence from the two principals of the company and so excluding them from the classes of persons to whom the information could be disclosed would not impede The Optical Superstore in the preparation of its defence. By way of an example, the information concerning the regions in Australia where the respondent's advertisements were broadcast is information that could be obtained from records and would certainly not require disclosure of the identities of the mystery shoppers. Additionally, the question whether the products were available for sale at the respondent's stores in the regions where the advertisements were broadcast could be settled, he assumed, by looking at business records and from evidence given by store managers and assistants. The question of which products of the respondent were the subject of the advertisements is something that Specsavers addresses in its proposed form of variation of the order, specifically the proposed new subparagraph (2B). Mr O'Bryan disputed the argument that there was no need to discuss the details of the case, including store locations, with the principals and insisted that when the particular matters were considered in the context of all of the evidence set out in Ms Dixon's affidavit, that was abundantly clear. (b) Disclosing the names of the stores would disclose the identity of the mystery purchasers. Mr Studdy argued that if the name of the store were disclosed, it would be easy to trace the identity of the purchaser through the records of the store. Although he appeared to accept that this should not happen merely if the store names were disclosed to the principals, he appeared to base his argument on the risk of inadvertent disclosure. When he was asked whether the information about the stores could be revealed and the name and patient number of the individual shoppers masked, bearing in mind there were only about 20 purchasers, he professed that he did not know whether that would be sufficient to alleviate his client's concerns. I also floated with him the question of whether or not he could reveal a list of the stores but, once again, he said he did not know whether the mere provision of that list could be used to discover the identity of the purchasers and maintained that it was premature to be looking at these issues but that everything would be clearer once the applicant put on its evidence. Mr O'Bryan insisted that it was necessary for his client, that is, the principals of his client, to know the particular stores involved with the particular purchasers to prepare the defence. (c) Mr Studdy argued that not only was there a problem for the privacy concerns of the individual mystery shoppers if their identities were further revealed, but there was also a potential harmful impact on other businesses that use mystery shoppers in the conduct of their enterprises, for example, to check the prices of competitors. (d) With respect to the additional orders that The Optical Superstore seeks, Mr Studdy argued that it was inappropriate for his client to be forced to produce invoices before 1 March, at which time it was going to put on its evidence. As this was only a short time away, there could be no serious prejudice to the respondent. 32 For his part, Mr O'Bryan accepted that the mystery shoppers had an interest in protecting their identities, but agreed that that interest was outweighed by the impact the orders Specsavers proposes would have on his client's ability to effectively and efficiently prepare its case for an expedited hearing. It was his position that it was necessary for the preparation of the case for the principals to know everything about the purchasers, with the possible exception of the identities of the mystery shoppers. 33 Although he alluded to the possibility that it may be relevant for them to know the identity of those shoppers, he conceded that, at present, there was no evidence before the Court to support such a submission. However, he argued that in practice there was a risk of inadvertent disclosure to the principals when they came to examine the relevant business records and, for that reason, it was impractical to conceal their identities from those individuals. 34 He maintained that, in essence, it would further the object of the civil procedure provisions of the Act and Federal Court Rules for the principals to give evidence in the defence case rather than to go to the trouble and effort of adducing evidence from potentially 20 store managers and other company employees or agents. 35 Finally, with respect to the additional order he sought, he argued that the only prejudice was to his client, not Specsavers, because they could waste time preparing for a purchase that ultimately Specsavers did not rely on. 36 Neither party referred to any authority in support of its arguments, save that Mr Studdy on the previous occasion drew the Court's attention to an unreported decision of a single judge of the NSW Supreme Court to which I will come later.
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.
Conclusion 55 I therefore vary the orders made on 15 February and make orders in accordance with order 2 of the Respondent's Proposed Short Minutes of Order, which I shall initial and place on the file. 56 The remaining question concerns the Respondent's proposed order 3. That order would require Specsavers to serve its evidence two or more working days earlier than the timetable previously fixed by the court. There is no good reason why the timetable should be so varied. The Optical Super Store will have sufficient time to consider the evidence if the current timetable remains in place.
Costs 57 In all the circumstances, and in the absence of argument to the contrary, costs should be costs in the cause. I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Katzmann.
Specsavers Pty Ltd
The Optical Superstore Pty Ltd