Wimmera Industrial Minerals Pty Ltd v Iluka Midwest Ltd

The respondent file and serve any affidavit of Dr Ian Grey by 18 October 2002.

The respondent pay the applicant's costs of the respondent's amended notice of motion dated 17 September 2001.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The respondent/cross claimant undertakes to this Honourable Court that until determination of this proceeding, or until further order of this Court releasing it from this undertaking, it will:

1. not communicate with Dr Ian Edward Grey ("Dr Grey") of the Commonwealth Scientific & Industrial Research Organisation ("CSIRO") any matters concerning:

(a) confidential information of the applicant relating to work undertaken by Dr Grey for and on behalf of the applicant in development of the patent which is the subject of Australian patent Application 639,089 ("Hybrid Parent Patent") and Australian petty patent Application 649, 946 ("Hybrid Petty Patent") or any other work undertaken for the applicant or a company related to the applicant except insofar as the work has been published, including, without limitation:

(i) privileged information, including information relating to strategy, patents, draft patents and the like, communicated by the applicant or its representatives to Dr Grey;

(ii) commercial information relating to ongoing and future developments communicated by the applicant or its representatives to Dr Grey;

(iii) technical information communicated by the applicant or its representatives to Dr Grey;

(iv) all the information gained by Dr Grey in or for the purposes of his retainer by the applicant and imparted by him to the applicant or its representatives in the course of performing his functions on behalf of the applicant.

(b) Dr Grey's views, opinions or thoughts on the invention claimed in the Hybrid Parent Patent, the Hybrid Petty Patent or any other patent lodged by the applicant or any company related to the applicant;

or if any such information, views, opinions or thoughts are conveyed, not make use of them;

2. ensure that all communications between Dr Grey and the respondent/cross‑claimant or the respondent/cross‑claimant's solicitors or counsel occur through or in the presence of the solicitors for the CSIRO.

The Common Seal of ILUKA MIDWEST ) LIMITED (ACN 008 763 666) was affixed in ) COMMON SEAL AFFIXED the presence of )

---------------- SIGNED --------------- ---------------- SIGNED --------------- ………………………………………… ………………………………………… Signature of Director Signature of Secretary

KEITH MICHAEL FOLWELL IAN EDWARD GREGORY ………………………………………… ………………………………………… Name of Director in full Name of Secretary in full

BACKGROUND 1 The applicant ("WIM") is the patentee of two patents in suit in this proceeding: Australian Standard Patent No 639 089 for an invention entitled "Production of Synthetic Rutile" and Australian Petty Patent No 649 946 for an invention entitled "Production of Synthetic Rutile". The inventors named in the patents are Dr Michael Hollitt, Dr Ian Grey and Mr Anthony (Tim) O'Brien. Dr Grey is employed by CSIRO. The application was filed on 30 June 1994. By letter dated 22 December 1995 WIM's solicitors wrote to CSIRO's solicitors seeking permission to interview Dr Grey in connection with the proceeding. In follow‑up correspondence WIM's solicitors confirmed that they wished to speak to Dr Grey about "factual matters" relating to work he had carried out for WIM, including matters relating to the patent arising from that work. They said they did not wish Dr Grey to disclose any confidential information arising from work he had done for the respondent. The respondent was formerly known as RGC Mineral Sands Limited. Depending on the temporal context I will call the respondent either RGC or Iluka, and sometimes RGC/Iluka. On 20 March 1996 WIM's solicitors received a letter from RGC's solicitors in which it was pointed out that CSIRO personnel, including Dr Grey, had been retained by RGC in 1994 to provide expert technical assistance for the purpose of the proceedings. On 7 June 1996 WIM's solicitors wrote to CSIRO's solicitors expressing concern that WIM's confidential information, in CSIRO's hands generally, and in Dr Grey's in particular, was at risk of disclosure to RGC by CSIRO employees who were assisting it in the proceedings. After further correspondence, on 15 October 1996 WIM's solicitors received a letter from CSIRO's solicitors advising that in view of the existence of a dispute between WIM and RGC about their respective interests in Dr Grey, CSIRO would no longer make him available to WIM or RGC. Between then and 18 July 2001 the issue of Dr Grey's assistance to either side seems to have been dormant. On that date WIM's solicitors received a letter from Iluka's solicitors stating that Iluka wished to reinstate its retainer of Dr Grey to provide assistance on certain technical matters relevant to the proceedings, including matters arising from Dr Grey's prior work for Iluka and aspects of the prior art. On the same day CSIRO's solicitors said they proposed to allow Dr Grey to assist Iluka unless restrained by a court from doing so.

WIM'S APPLICATION 2 By notice of motion filed on 30 July 2001 WIM applied for orders that Iluka be restrained until the determination of the proceeding or further order from

"(a) obtaining, seeking or receiving assistance, advice or information from Dr Ian Grey, Chief Research Scientist of CSIRO Minerals … in or in connection with these proceedings; or

(b) using or relying on in any way for any purpose in these proceedings any information of the Applicant (whether held solely or jointly) obtained from Dr Grey in or in connection with these proceedings."

Subsequently WIM provided particulars of the information the use of which it sought to restrain under par (b) of its notice of motion:

"Any of the Applicant's information, from whatever source the Applicant has obtained that information, which the Respondent obtains from Dr Grey.

Clearly such information of the Applicant would include, without limitation: · privileged information, including information relating to strategy, patents, draft patents and the like, communicated by the Applicant or its representatives to Dr Grey; · commercial information relating to ongoing and future developments communicated by the Applicant or its representatives to Dr Grey; · technical information communicated by the Applicant or its representatives to Dr Grey; · information in relation to these or other similar matters communicated by Dr Grey to the Applicant or its representatives, in the course of performing his functions on behalf of the Applicant. The words 'in or in connection with these proceedings' which concluded paragraph 1(b) of our client's motion are intended to clarify the circumstances in which it is anticipated that the Respondent may obtain or seek to obtain the Applicant's information from Dr Grey."

The fourth dot point was later further particularised as

"all the information gained by Dr Grey in or for the purposes of his retainer and imparted by him in the course of performing his functions on behalf of the Applicant."

Although not stated in the notice of motion or the particulars, it is common ground that the information in question is restricted to confidential information.

MATERIAL IN SUPPORT OF APPLICATION 3 WIM's solicitor, Mr Goatcher, swore an affidavit in which he exhibited correspondence passing between his firm, CSIRO's solicitors and Iluka's solicitors in relation to the dispute about Dr Grey. Mr Goatcher swore a second affidavit in which he described another proceeding between the same parties arising out of the filing of a Patent Application by RGC claiming a process for the enhancement of synthetic rutile ("the SREP Application"). WIM filed a Notice of Opposition to the grant of the SREP Application on the basis that RGC had obtained the invention by means of the unauthorised use of confidential information belonging to WIM, which WIM had disclosed to third parties on a confidential basis. A hearing in relation to the SREP Application took place in March and April 2000 before a Delegate of the Commissioner of Patents. Mr Goatcher exhibited that part of the transcript of proceedings recording Dr Grey's cross‑examination, and in reliance thereon claimed that Dr Grey had conceded that he had in the past disclosed to RGC confidential information belonging to WIM. 4 Dr Hollitt swore an affidavit in which, amongst other things, he described the work he and Dr Grey had done for WIM. Dr Hollitt was employed by WIM between 1987 and 1996. From 1992 to 1996 he was WIM's General Manager. He said that WIM, a wholly owned subsidiary of CRA/Rio Tinto, was responsible for the proposed commercial development of a new business based on zirconium and titanium mineral resources. WIM did not itself maintain experimental laboratories. That work was referred to outside research bodies, including CSIRO. In the case of commercially sensitive WIM research, the outside research was done on the basis of confidentiality clauses in WIM's Standard Conditions. In relation to major projects, specific consultancy agreements were entered into which contained confidentiality clauses. 5 Dr Hollitt said he worked closely with Dr Grey in the course of the confidential projects. Much of the information he shared with Dr Grey is still confidential to WIM. Dr Grey was the main team member from CSIRO. Dr Hollitt ensured that Dr Grey was fully briefed in relation to the background and objectives of the research. This method of work required Dr Hollitt to have a great degree of trust in Dr Grey and to be assured of the strict maintenance of confidentiality in what was being disclosed. One matter discussed was the strategic benefit that could be derived from the way in which WIM's various zircon and titanium minerals upgrading projects complemented each other. These discussions were also aimed at identifying potential markets and competitors that might be interested in sublicensing technology from WIM. Accordingly, part of the discussions focused on the perceived commercial merit of various process alternatives. This led Dr Grey to have a good knowledge of what aspects of titania upgrading technology WIM regarded as important. Reports from other research organisations were routinely sent to Dr Grey for his opinion. Several of these reports are directly referable to the present proceeding because they involve process variants or steps relating to WIM's Hybrid Process. These reports are particularly confidential. 6 Dr Hollitt then described other confidential work Dr Grey had done for WIM that was related to the Hybrid Process ‑ drafting patent applications, strategic and technical developments planned by WIM, the commercial merits of process alternatives, the potential for WIM's processes to be used to solve problems experienced by other players in the industry, confidential technical results and data, and confidential technical information and reports provided by other research organisations. Dr Grey was also involved in discussions with Dr Hollitt directed to obtaining advice from Dr Grey for incorporation into Dr Hollitt's communications with WIM's patent attorneys in relation to aspects of WIM's patent application. Dr Grey commented on Dr Hollitt's draft Hybrid provisional specification. The sole purpose of these communications was to incorporate Dr Grey's comments into Dr Hollitt's instructions to the patent attorneys. Dr Grey was named as one of the inventors. He gave advice on the draft of the complete patent specification. 7 Dr Hollitt said that prior to July 1992 he was aware that Dr Grey had done research work for RGC in the past. He did not know or believe Dr Grey was doing or had done work of a kind that would give rise to a conflict of interest with WIM. He understood that Dr Grey's work for RGC had been research into fundamental chemistry rather than new process development work. When he discovered in July 1992 of the possibility that Dr Grey had been involved in the transfer of information from a WIM project to an RGC project, he terminated all further instructions to Dr Grey and CSIRO's Mineral Products Division.

WIM'S CASE FOR RELIEF 8 WIM submitted that the injunctions sought should be granted on three bases:

· to prevent misuse of information given confidentially by WIM to an adviser (Dr Grey) who received it in confidence

· to prevent the breach by Dr Grey of obligations of loyalty, trust and confidence he owed to WIM

· to prevent conduct giving rise to and inducing a breach of contract between WIM and CSIRO.

Confidential information 9 In reliance on Prince Jefri Bolkiah v KMPG (a firm) [1999] 2 AC 222 ("Prince Jefri"), Pradhan v Eastside Day Surgery Pty Ltd [1999] SASC 256 ("Pradhan"), Colonial Portfolio Services Ltd v Nissen (2000) 35 ACSR 673, World Medical Manufacturing Corporation v Phillips Ormonde & Fitzpatrick Lawyers (a firm) [2000] VSC 196, Newman v Phillips Fox (1999) 21 WAR 309, Yunghanns v Elfic Ltd (Supreme Court of Victoria, 3 July 1998, unreported) ("Yunghanns") and Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357, WIM propounded the following propositions:

· a supplier of services has an obligation to preserve a former client's confidential information

· the duty is unqualified: to keep the information confidential; not merely to take all reasonable steps to do so

· it is not merely a duty not to communicate the information to a third party; it is a duty not to make any use of it, or cause any use to be made of it by others, other than for the former client's benefit, without the client's consent

· the court should intervene unless it is satisfied that there is no risk of disclosure, though the risk must be real (but not necessarily substantial) and not fanciful or theoretical

· once an applicant establishes that a supplier of services is in possession of confidential information that is relevant to the instant proceedings, the evidential burden shifts to the supplier to show there is no risk that the information will come into the possession of another party to the proceedings

· where the information is not only confidential but privileged, the case for injunctive relief is unanswerable

· what is confidential information will depend on the circumstances of the case, as will the degree of particularity with which the information needs to be specified

· the risk of disclosure of confidential information extends beyond intentional disclosure to inadvertent or unintended disclosure.

10 WIM submitted that since the basis for restraint is the preservation of confidential information, there is no reason in principle why the obligation of confidentiality should be confined to any particular class or classes of service providers. 11 In relation to the confidentiality of the information conveyed to or obtained by Dr Grey, WIM submitted that the length and intensity of Dr Grey's work on WIM's behalf, and his involvement not only in the invention but in the formulation of the specifications of the patents in suit, gave rise to what has been called, at least in solicitor‑client cases such as Yunghanns, 'getting to know you' factors including the client's strengths or weaknesses, its attitudes to litigation, and its business strategies and activities.

Duty of loyalty 12 WIM submitted that the relationship that existed between it and Dr Grey in connection with the work culminating in the grant of the patents in suit was such as to give rise to duties of loyalty, trust and confidence on Dr Grey's part that imposed on him an obligation not to place himself in a position in which he undertakes functions for one client which are inconsistent with the duty owed to another. It was said that an obligation of loyalty arises where the relationship between parties is such that one is entitled to expect that the other will act in the former's interests in and for the purposes of the relationship. Reliance was placed on Dr Hollitt's evidence summarised in pars 4 to 7. In WIM's written submissions the matter was put as follows:

"48. The trust and confidence placed in Dr Grey by WIM in the circumstances established a relationship whereby Dr Grey was obliged, and remains obliged not to act against WIM's interests in connection with the patents in suit. In disclosing its highly relevant information to Dr Grey, WIM relied on Dr Grey not to disclose it to another or to use it for the benefit of another. WIM was left vulnerable to misuse of the information. 49. By reason of the nature of the relationship between WIM and Dr Grey, WIM was entitled to expect that Dr Grey would act in WIM's interests in and for the purposes of that relationship. 50. The principal relevant duty owed by Dr Grey pursuant to the relationship existing between him and WIM, is that of loyalty. By reason of his relationship with WIM Dr Grey is under a duty not to place himself in a position in which he owes a duty to another which is inconsistent with his duty to WIM. He is under a duty not to assist a party whose intentions are dramatically opposed to those of WIM in relation to the patents in suit. He is not at liberty to 'change sides'. His function in assisting Iluka would be to undermine the invention made by reason of and in the course of the work performed for and with WIM and of which he is a co‑inventor. 51. Dr Grey's duty of loyalty continues to this day and was not extinguished with his agreement with WIM."

Reliance is placed on Spincode Pty Ltd v Look Software Pty Ltd [2001] VSCA 248 ("Spincode") and various cases referred to in Brooking JA's judgment in that case, including Wan v McDonald (1992) 33 FCR 491 and McVeigh v Linen House Pty Ltd [1999] 3 VR 394. These were all solicitor‑client cases in which such a duty was said to survive the termination of the solicitor's retainer.

Inducing breach of contract 13 WIM's case here was put on two bases. The first is founded on the provisions of the Consultancy Contract of 27 April 1988 between WIM and CSIRO. Clause 1 provides:

"Dr I E Grey of the CSIRO Division of Mineral Products will diligently and efficiently act as a consultant to Wimmera Industrial Minerals Pty Limited in conformity with sound professional practices and to the satisfaction of Wimmera Industrial Minerals Pty Limited as far as is possible."

"The property and copyright in all material created in connection with the consultancy shall rest in WIM. The consultant will not, without the prior approval of WIM in writing, use any of the information gained, other than in the performance of the consultancy."

"CSIRO, its employees and agents will not, without prior written approval from WIM disclose other than to WIM any information [acquired] in connection with the performance of the consultancy service, or release other than to WIM, any material created in connection with performing the consultancy."

It was submitted that clauses 6 and 7 prevent Dr Grey doing what he is invited by Iluka to do. It was said that those clauses continue to constrain Dr Grey notwithstanding the termination of the retainer. WIM's contention was that Iluka was proposing to induce a breach of the contract by consulting with Dr Grey in the manner proposed. 14 The second basis on which WIM put this part of its case is that there was an implied term of the agreement under which it retained CSIRO/Dr Grey that the latter would not place knowledge gained in or for the purposes of the retainer at the disposal of a party having a contrary interest in respect of the subject matter of the retainer. For Dr Grey to do this, it was said, would be to deprive WIM of the benefit of the retainer and breach the implied term of which Griffith CJ spoke in Butt v M'Donald (1896) 7 QLJ 68 at 70‑71:

"It is a general rule applicable to every contract that each party agrees, by implication, to do all such things as are necessary on his part to enable the other party to have the benefit of the contract."

See also Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 at 607. It was said that for Dr Grey to place his knowledge at Iluka's disposal to assist in undermining the patents in suit was to act in breach of his duty to act in WIM's interests in relation to those patents. WIM's contention was that Iluka was proposing to induce a breach of the implied term by consulting with Dr Grey in the manner proposed.

ILUKA'S RESPONSE Dr Grey's involvement with RGC 15 Soon after this proceeding commenced on 30 June 1994, RGC retained CSIRO to assist it. The letter of retainer dated 28 September 1994 from RGC's solicitors to CSIRO records that CSIRO has been retained, until the determination of the proceeding or any appeal, to provide the services of three employees (including Dr Grey) and various colleagues to assist RGC's legal team in connection with the proceeding. The "assistance" was described as

"1. the provision of expert advice, including advice in relation to the chemistry of the processes which are subject of the Proceedings; 2. if requested at a later date, the preparation of one or more reports on matters within the expertise of the team members in connection with the Proceedings; and 3. if the matter proceeds to a hearing and, if requested, appearance at the hearing to give evidence, including evidence in relation to any reports which may be prepared for RGC or RGCMS."

The letter went on to say that in view of the fact that WIM had commenced proceedings, the CSIRO team should open a separate file for the above tasks and for each report that may be requested, and keep any materials used in a report completely apart from other material. It was pointed out that these steps were directed to protecting the privilege and confidentiality attaching to documents and information the CSIRO team might obtain or provide in the course of rendering their services. After stating that it was desirable that each CSIRO team member enter into a confidentiality agreement in the form attached, the letter continued:

"Also, we note that it is your wish to make the following points clear to us on the question of confidentiality: … 2. RGC and RGCMS understand that the CSIRO's Division of Mineral Products has previously undertaken work on behalf of CRA/WIM and that in relation to that work the Division is subject to obligations of confidentiality. The CSIRO wishes to stress that no information in relation to that work will be disclosed."

16 By letter to CSIRO's solicitors of 4 January 1996 WIM's solicitors said they wished to speak to Dr Grey about factual matters relating to work conducted for WIM, including matters relating to the patent arising from that work. They added:

"For the avoidance of any misunderstanding or doubt, we confirm that [WIM] would certainly not wish Ian Grey to disclose any confidential information arising from work he has done for RGC."

17 Dr Grey carried out two projects for CRA in 1986. WIM was formed in 1987, and Dr Grey commenced projects for it in late 1987. His involvement with Consolidated Gold Fields Aust Ltd (later RGC) began in 1970 when he joined CSIRO as a research scientist to work on a Consolidated Gold sponsored project on ilmenite upgrading. This work appears to have been done in the period 1970 to 1974. Then Dr Grey led a project sponsored by another Consolidated Gold subsidiary (1975‑1976) to investigate the thermodynamic effect of sulphur on the reduction of ilmenite. In 1985 he undertook research for the same subsidiary on the modification of its Becher process that would result in the production of synthetic rutile with high solubility in concentrated sulphuric acid. During the period 1970 to 1987 Dr Grey carried out sponsored work on various aspects of mineral processing, particularly ilmenite upgrading, for a number of other companies. In his statutory declaration of 20 August 1998 in the SREP Application (see par 4) he said:

"To summarise, by the end of 1987, before I had commenced any work with Wimmera Industrial Minerals …, I had carried out a vast amount of both fundamental and applied research on the chemistry of ilmenite and other titanium minerals and synthetic equivalents, particularly relating to their reactions at high temperatures, in different gaseous atmospheres and with a variety of different additives. I had written over 30 reports to sponsoring companies, had published 45 papers on titanium ‑ containing phases and had received two prestigious awards for the research. By this time, after 18 years of intensive knowledge acquisition and practical experience concerning the chemistry, mineralogy and processing of ilmenite and related minerals, I was fully equipped to subsequently contribute to the development of the Synthetic Rutile Enhancement Process (SREP) for RGC."

Paragraph 1(b) relief 18 Iluka accepts that the information particularised by WIM's solicitors (see par 2) is confidential. But it says it has not threatened to use or disclose or procure the use or disclosure of that information. 19 It will be recalled that between June and October 1996 WIM was in correspondence with CSIRO's solicitors about possible breach of confidentiality on Dr Grey's part, which led to CSIRO deciding in October that Dr Grey would no longer be available to assist either party in the litigation. Iluka indicated its wish to reinstate its retainer of Dr Grey in its solicitors letter of 18 July 2001 to WIM's solicitors:

"At a fairly early stage of the exchange of correspondence leading up to the retainer agreement under which CSIRO agreed to assist Iluka in these proceedings, an amendment was made to the retainer agreement between CSIRO and Iluka expressly to confirm that CSIRO has also undertaken work of a confidential nature for WIM and that CSIRO was not obliged to disclose any confidential material to Iluka. This step was taken out of an abundance of caution and did not reflect any change of attitude on the part of Iluka or the CSIRO. … In all cases, consistently with the terms of the retainer agreement between Iluka and CSIRO, Dr Grey will not be asked to disclose any confidential information of WIM in his possession."

20 On 20 July 2001 Iluka's solicitors gave a further assurance as to confidential information:

"As a practical measure, we have already indicated that, consistently with the terms of the retainer agreement between Iluka and CSIRO, Dr Grey will not be asked to disclose any confidential information of WIM in his possession. In addition, Iluka is also prepared to indicate that Dr Grey will not be asked to express any views on the validity of the patent in suit. However, Iluka is not obliged to disclose more to WIM about its intended communications with Dr Grey and it does not propose to do so."

21 On 28 September 2001, after seeing WIM's evidence on the motion, Iluka offered a more extensive undertaking:

"if your client's true concern is in respect of sub‑paragraph (b) [of the notice of motion], this concern can be addressed by our client voluntarily, or by court order, undertaking that it will not discuss with Dr Grey any issues concerning: (a) work undertaken by him for or on behalf of WIM in development of the patent the subject of Australian Patent Application 639,089 ('Hybrid Parent Patent') and Australian Petty Patent Application 649,946 ('Hybrid Petty Patent') or any other work undertaken for WIM or a related company except insofar as the work has been published; (b) his views, opinions or thoughts on the invention claimed in the Hybrid Parent Patent, Hybrid Petty Patent or any other patent lodged by WIM or related companies. Our client considers the above undertaking satisfies your client's true concerns. However, it is prepared to consider any drafting issues relating to the above voluntary undertaking."

Iluka submits that the undertaking thus offered is co‑extensive with the particulars provided by WIM (see par 2). In its Outline of Submissions on the motion Iluka states that if the Court considers that the undertaking does not adequately cover the matters set out in the four dot points of the particulars, it is prepared to amend its undertaking to cover the full extent of WIM's confidential information. In oral submissions counsel said that reference to the dot points should be read into its 28 September undertaking.

Paragraph 1(a) relief 22 Iluka contends that the restraint sought in par (a) of the notice of motion can only be supported on the basis of the alleged duty of loyalty owed by Dr Grey, and that cases dealing with the solicitor‑client relationship, where the solicitor's status gives rise to the full range of fiduciary obligations, do not apply to other relationships such as that between WIM and Dr Grey. Iluka also contends that no such duty exists in the present case, because it would be inconsistent with the contractual arrangements between the parties. 23 Iluka questioned the account given by Dr Hollitt in his affidavit in support of the motion (which is summarised in pars 4 to 6), claiming it gave a misleading impression of his and Dr Grey's respective roles in the work Dr Grey did for WIM by downplaying Dr Hollitt's qualifications and contributions and exaggerating those of Dr Grey. Illuka's counsel had proposed to cross‑examine Dr Hollitt on parts of his affidavit in the light of a statutory declaration he had made in the SREP Application before the Delegate. However Iluka agreed that in order to save court time, Dr Hollitt would not be cross‑examined, and instead Iluka should be at liberty to put before me a comparison of the two documents and make submissions about the differences between them and the significance of those differences. It is clear, as Iluka submits, that the declaration is the template for the affidavit, and that certain passages from the declaration have been excised in the course of converting it into an affidavit, and new material added. The two documents before me were marked up so as to show the deletions and additions. The following matters appear from a comparison of the two documents: (a) For reasons given in earlier paragraphs of his declaration Dr Hollitt pointed out that "Consequently, I have acquired a great deal of specialised knowledge in areas associated with the chemistry, process and engineering constraints, and economics of zircon and titanium mineral processing systems". This passage is omitted from the affidavit, as are three of the matters from which the consequence is said to flow. (b) Passages in the declaration dealing with Dr Hollitt's involvement in business strategy, marketing, and mine and business planning do not appear in the affidavit. (c) The affidavit contains information not appearing in the declaration about an advisory group set up by WIM, consisting of personnel from research organisations who discussed projects at a strategic level and in which Dr Grey played a key role. The discussions were aimed at identifying potential markets and competitors who might be interested in sublicensing technology from WIM. (d) The declaration records that Dr Hollitt explained in detail to WIM's main contacts (naming four of them including Dr Grey) the process and objectives of WIM's work, expecting them to communicate the information to other team members, and that this required Dr Hollitt to have a great degree of trust in the researchers and to be confident in the strict maintenance of confidentiality. The comparable passage in the affidavit mentions only Dr Grey and the confidence reposed in him. (e) Material in the declaration recording Dr Hollitt's contribution to the relevant research area does not appear in the affidavit. Instead the affidavit concentrates on the assistance provided by Dr Grey and CSIRO in the progress of the project. 24 On the basis of the contrast between the two documents, Iluka contends that the truth about Dr Grey's involvement with WIM is to be found in the declaration. He was part of a team that did work which led to the invention in suit, and this involved him coming into possession of information that at the time was confidential and some of which remains confidential. The claim in the affidavit that Dr Grey had a strategic or commercial role should, it was submitted, not be accepted. In particular, it was submitted that I should reject the contention in WIM's written submissions that

"By reason of the nature of the relationship between WIM and Dr Grey, in addition to confidential information of WIM relating to the processes under development, Dr Grey received confidential information of WIM and its associated companies relating to the strategic and commercial benefit and merits of technology under development, potential markets, prospective sub licensees and likely competitors for that technology and potential capital expenditure to be incurred in relation to that technology ."

CONFIDENTIAL INFORMATION ‑ PARAGRAPH 1(B) OF MOTION 25 I accept WIM's submission that there is no reason in principle why the obligation of confidentiality should be confined to any particular class or classes of service providers. While all but one of the cases referred to in par 9 involve solicitors, who are perhaps the paradigm repositories of confidential information, and about whose potential disclosures, whether intentional or not, courts are especially sensitive, Prince Jefri concerned a firm of accountants and Pradhan concerned a liquidator. The nature of the service provided by the repository of the confidential information is but one of the circumstances of the case. The relationship between the parties, the nature of the information and the circumstances in which it was imparted, are more important than the label attached to the service. I need not pursue this matter further because Iluka accepts that the information in question is confidential. 26 Before WIM's motion was filed on 31 July 2001 Iluka had made clear that it did not intend to seek to elicit from Dr Grey any confidential information. See the letters referred to in pars 19 and 20. After the filing of the motion and the affidavits in support, Iluka offered the more extensive undertaking set out in par 21, and said it was prepared to consider any drafting issues. At that stage WIM's solicitors had not particularised the information sought to be protected. This they did about a week before the date fixed for the hearing of the motion. In its outline of submissions filed on 26 March 2002 Iluka said that if the Court thought the undertaking already offered did not adequately cover the matters set out in the particulars, it was prepared to amend it as necessary. WIM was tardy in providing the particulars, and Iluka's offer to match its undertaking with the particulars was made within a reasonable time after it received them. In addition Iluka proposes that CSIRO's solicitors be present at any interview Iluka may have with Dr Grey. Iluka urged me to accept its undertaking in lieu of granting the relief sought by WIM. The offering of such an undertaking is relevant to whether there is in truth a risk of irreparable injury to WIM, and bears on the balance of convenience and the exercise of my discretion in all the circumstances. See Spry, The Principles of Equitable Remedies 6th ed (2001) at 478‑479 and Meagher, Gummow and Lehane, Equity: Doctrines and Remedies 3rd ed (1992) at 596‑597. 27 WIM submitted that Iluka's undertaking should not be accepted because in the course of providing assistance to Iluka there is a real risk that Dr Grey may unconsciously or inadvertently disclose part of WIM's confidential information. It pointed to the list of topics upon which Mr Fitzpatrick, Iluka's solicitor, said Dr Grey's assistance is required. He said that assistance is necessary to

"(a) describe research or testwork performed by CSIRO prior to 1989 in relation to upgrading ilmenite for both the Respondent and its predecessor and Westralian Sands Ltd; (b) describe research or testwork performed by CSIRO for the Respondent in 1995 to 1996 in relation to these proceedings; (c) explain the development of the Respondent's SREP Process [and] the phases which are formed during the SREP Process and the differences between the SREP Process and the Hybrid Process.; (d) explain and discuss the prior art which existed prior to 1990."

WIM submitted that pursuing topic (c) with Dr Grey would involve examining the ingredients of the Hybrid Process and seeking to identify differences between them and the SREP Process. This, it was said, involves understanding the claims of the patent in suit and what the specification conveys and denotes, and how it is to be construed. Iluka's representatives would be interrogating the draftsman of the specification as to how one should understand the claims, and about aspects of the specification and whether they reach areas that are to be found in the SREP Process. This line of questioning was likely to cause Dr Grey to impart, albeit unintentionally or unconsciously, matters that are within his knowledge only by reason of the work he has done for WIM. Mr Archibald described the scenario in which Dr Grey will be placed at an interview or conference ‑ "it's the likely candour and the forthcoming nature of the scientific mind that tend to exacerbate the problem and the risks". 28 WIM submitted that topic (d) would involve a consideration of whether common general knowledge extended into areas that are claimed by the patents in suit. In substance a discussion of topic (d) would see Dr Grey, one of the inventors, discussing with the party challenging the invention whether the claims in the specification are inventive or non‑inventive. It was said it was likely that Dr Grey, in discussing the margins of common general knowledge, might reveal vital elements of the work that founds the invention claimed by the hybrid patents. Common general knowledge will not be discussed in a vacuum but in the context of the patents in suit and what they reveal and how they were achieved. Pursuing that topic, it was said, could well involve revelations by Dr Grey of confidential material, either because it would tumble out despite endeavours to hold it back or by way of unconscious revelation. 29 In responding to WIM's submissions about topic (c), Iluka's counsel pointed to a later affidavit by another Iluka deponent in which the words "and the differences between the SREP Process and the Hybrid Process" are omitted. He confirmed that Iluka does not wish to ask Dr Grey about those differences. Counsel for WIM's response was that the omission of the last limb of topic (c) does not reduce the practical risk arising from the exercise. It was said that the only relevance of addressing the features of the SREP Process is to identify features which differentiate it from the Hybrid Process. The deletion of the words from topic (c) will not alter the course of the questioning or discussion with Dr Grey. The focus will inevitably be the same whether the differences are articulated or not. 30 In connection with unintentional or unconscious disclosure WIM relied on passages in Dr Grey's cross‑examination in the SREP Application before the Delegate which it was submitted show that Dr Grey is not good at keeping the information of one client separate from that of another, and had previously disclosed WIM's confidential information in response to questioning by RGC's counsel. It was said that this demonstrates that he would find it "impossible to segment those elements of the intertwined amalgam of information stored in his brain" that are confidential to WIM, and confine his disclosures to Iluka to information and knowledge sourced otherwise than in the course of his relationship with WIM. 31 Since the transcript is a confidential exhibit, I will simply say that my reading of the relevant passages causes me to accept the Delegate's view of Dr Grey's "admissions". The Delegate's decision was not in evidence. However WIM did not object to Iluka's quotation of passages from the decision, or dispute that those passages accurately recorded what the Delegate had said. I propose therefore to take the Delegate's observations into account. Referring to one of the passages, the Delegate said:

"I am far from convinced that Dr Grey's discussion with Mr Nicholson says anything of whether he was inclined to misuse the confidential information of WIM. Any disclosure of information was, in my belief, technical and certainly not malicious, reflecting a naivety, if not ignorance, in industrial property matters. Importantly, no evidence has been adduced which suggests that WIM's perceived level of understanding of the radioactivity issue in any way assisted the SREP project team. The result is that, in my view, the imputation which WIM seek to draw here falls well short of establishing to the necessary degree of certainty any impropriety on the part of Dr Grey. Indeed, Dr Grey consistently stated during cross‑examination (see eg TS 485.2, TS 512.30 and TS 574.29) that he was careful not to breach his confidentiality obligations in discussions with the SREP project team."

32 As to another so‑called lapse in security, the Delegate said:

"Moreover, the most that can be said on the evidence is that there was apparently a failure of security involving confidential WIM information of which Dr Grey was unaware at the time. Dr Grey was not challenged on this point and no evidence has been tendered to confirm the tacit suggestion that he was the source of the information recorded in Mr Harris' diary ."

Dr Grey said he accepted responsibility for this lapse, not in the sense that he was in breach, but that he was the person in charge of the project in relation to which the lapse occurred. He went on to say that he was not aware of it until he began preparing for "this case" and didn't know how it happened. This is what the Delegate meant when he said Dr Grey was "unaware at the time" of the failure of security. In other words, Dr Grey was not himself involved in the breach of security. 33 In relation to another lapse, the Delegate said:

"after carefully examining the matter, the basis for WIM's proposition regarding Dr Grey's alleged inability to maintain a Chinese wall is, in my opinion, misconceived ."

34 The lapses, such as they were, do not lead me to conclude that Dr Grey cannot be trusted to observe confidentiality when questioned by Iluka. There are several contributing reasons for this conclusion: · My own assessment of the cross‑examination, admittedly limited to the written word, is that the lapses were either not by Dr Grey or were of a minor nature, resulting, as Dr Grey's "confessions" indicated, from a lack of awareness of the extent to which the obligation of confidentiality extended. · Dr Grey readily agreed with counsel's suggestions that in a technical sense he should have remained silent or left the room when a matter involving WIM came up. · He was, at times, too ready to concede impropriety on his part, for example when he "took full responsibility" when he was unaware of a lapse committed by someone else. · The Delegate, who had the benefit of seeing Dr Grey give evidence and was fully immersed in the SREP Application as a whole, made an assessment of the lapses that essentially accords with my own ‑ any disclosure of information was technical, reflecting a naivety, if not ignorance, in industrial property matters. · As a result of the cross‑examination Dr Grey is now well aware of how careful he needs to be in answering questions and holding discussions with Iluka. · I would expect that Dr Grey will be instructed as to the ambit and seriousness of confidentiality requirements, so that when in doubt about a WIM‑related topic, he will decline to comment. · I accept, as did WIM's counsel, that there is no fear of entrapment of Dr Grey by Iluka's lawyers, and that WIM is concerned solely about unintended or unconscious lapses. · It is proposed that CSIRO's solicitors will be present at any meeting between Iluka's lawyers and Dr Grey, and will be able to establish a regime for dealing with privileged and confidential material. 35 In the circumstances detailed in par 34 I am not persuaded by the transcript lapses that I should not accept Iluka's undertaking as sufficient to meet WIM's concerns. If CSIRO is prepared to be involved in the manner contemplated by Iluka, appropriate provisions can be inserted in a draft confidentiality undertaking to be brought into court for consideration. CSIRO has an interest in the preservation of privileged and confidential information obtained by its researchers. Many of the reasons set out above also cause me to conclude that WIM's fears (recorded in pars 27 to 29) are sufficiently accommodated by Iluka's undertaking. In light of the undertaking I do not think there is a "real" risk of disclosure (in the sense described in the cases listed in par 9) or of irreparable injury to WIM in Iluka consulting with Dr Grey in the manner proposed. In this connection I refer in particular to the matters appearing in the fifth, sixth and eighth dot points in par 34. The balance of convenience favours accepting the undertaking rather than enjoining Iluka in the manner appearing in par 1(b) of the notice of motion. Dr Grey performed much work for RGC before he was consulted by WIM. To grant WIM the relief sought would enable it to confer with Dr Grey for the purposes of the proceeding but preclude Iluka from doing so, despite its earlier and equally intense involvement with Dr Grey. That would be unfair, and can be avoided by accepting Iluka's undertaking. I refer again to the fifth, sixth and eighth dot points in par 34. In deciding, in the exercise of my discretion, to accept the undertaking in lieu of granting the injunction, I have taken into account the fact that Iluka has at all times offered a confidentiality undertaking. That its form and content has developed over time is due to WIM's tardiness in identifying the confidential information in question and not because of any reluctance on Iluka's part to offer an undertaking that meets WIM's legitimate concerns. Conclusion 36 For the reasons contained in pars 25 to 35 WIM is not entitled to the relief sought in par 1(b) of its notice of motion.

OBTAINING ASSISTANCE FROM DR GREY ‑ PAR 1(A) OF MOTION Relationship between WIM and CSIRO 37 In clause 6 of WIM's standard conditions of appointment CSIRO is described as an independent contractor who "shall not act as or be an agent or employee" of WIM. CSIRO is described as "the Consultant". Clauses 1, 6 and 7 of the "Consultancy Contract" of 27 April 1988 are set out in par 13. Dr Grey's services as a consultant to WIM are to be "required on average for no greater than one day per week": clause 2. By clause 9

"CSIRO may at any time, reduce, by way of notice in writing, the extent of the consultancy if it is interfering with Dr Grey's other research projects."

38 The specific obligations contained in clauses 6 and 7 of the Consultancy Contract fall short of a duty of loyalty such as that applicable to solicitors. CSIRO and Dr Grey were independent contractors performing specific work. CSIRO made its researchers available to various clients. Clause 9 of the Consultancy Contract refers to Dr Grey's other research projects, and clause 2 contemplates that he will spend on average no more than one day a week on WIM's consultancy. Further, WIM was aware from July 1992 that CSIRO had done and was doing work for RGC in the very area in which it was working for WIM. In those circumstances it is not appropriate to erect the duty of "undivided loyalty" contended for by WIM, namely that Dr Grey is not to place himself in a position in which he undertakes a function for one client that is inconsistent with the duty owed to another client. Cf Prince Jefri at 235 and Kelly v Cooper [1993] AC 205 at 213‑215. 39 The agreement between the parties contains no "undivided loyalty" term. No such term can be implied. Given the background referred to in par 17, neither CSIRO nor Dr Grey would have agreed to such a term had WIM sought its inclusion. See Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 at 347. 40 In Hospital Products v United States Surgical Corporation (1984) 156 CLR 41 at 147 ("Hospital Products") Dawson J said:

"a fiduciary relationship does not arise where one of the parties to a contract has failed to protect himself adequately by accepting terms which are insufficient to safeguard his interests. Where a relationship is such that by appropriate contractual provisions or other legal means the parties could adequately have protected themselves but have failed to do so, there is no basis without more for the imposition of fiduciary obligations in order to overcome the shortcoming in the arrangement between them."

Of course contractual and fiduciary relationships may exist between the same parties: Breen v Williams (1996) 186 CLR 71 at 132‑133. But as Mason J said in Hospital Products (at 97):

"Indeed, the existence of a basic contractual relationship has in many situations provided a foundation for the erection of a fiduciary relationship. In these situations it is the contractual foundation which is all important because it is the contract that regulates the basic rights and liabilities of the parties. The fiduciary relationship, if it is to exist at all, must accommodate itself to the terms of the contract so that it is consistent with, and conforms to them. The fiduciary relationship cannot be superimposed upon the contract in such a way as to alter the operation which the contract was intended to have according to its true construction."

See also Kelly v Cooper, supra, at 215. 41 In light of the written agreement, CSIRO's acknowledged role as a provider of research consultants to industry, and Dr Grey's history as a consultant to both WIM and RGC, I conclude that Dr Grey did not owe WIM a duty of undivided loyalty as contended in par 50 of WIM's written submissions. The terms of the consulting agreement reflect CSIRO's/Dr Grey's multiple consultancies, and clauses 6 and 7 accommodate WIM's confidentiality concerns without hampering these consultancies. Dr Grey as co‑inventor 42 I have recorded parts of the extensive correspondence between the solicitors for WIM and RGC/Iluka relating to the potential for breach of confidence on Dr Grey's part and Iluka's offers and undertakings in response. From time to time in that correspondence WIM's concerns are put in a broader fashion. In a letter to RGC's solicitors of 18 October 1996 WIM's solicitors spoke of the risk the provision of assistance by Dr Grey to RGC poses of

"breach of confidence and conflict of interest given Dr Grey's status as a co‑inventor of the patent in suit and his involvement in confidential work for WIM on related subjects".

This source of the conflict of interest was repeated in WIM's solicitors' letter of 25 October 1996. By letter of 29 October RGC's solicitors sought an explanation of the duty alleged to be owed by Dr Grey in his capacity as a co‑inventor. WIM's solicitors declined to provide an explanation. See their letter of 7 November. After the confidentiality issue came back to life in mid 2001, Iluka's solicitors again invited an explanation of the juridical basis of the duty said to be owed by Dr Grey over and above the duty not to disclose confidential information. Again the response, on 19 July, was that Dr Grey's position as an inventor of the patent in suit made it impossible for him to be retained to assist Iluka in its opposition to that patent. On 20 July Iluka, in addition to offering an undertaking that Dr Grey would not be asked to disclose any confidential information, said he would not be asked to express any views on the validity of the patent in suit. This appears to have been a response to WIM's claim that Dr Grey could not, as an inventor of the patent, assist Iluka in opposing it. 43 At no stage during the exchange of correspondence, nor on the hearing of the present motion, was any authority offered by WIM for the proposition that as a co‑inventor of the patent in suit Dr Grey owed a duty of loyalty to WIM that travelled beyond the obligation of confidence. WIM's claim, at least in its solicitors' correspondence, is that Dr Grey's status as a co‑inventor disables him from assisting Iluka in its opposition to the patent. This claim is adequately met by par (b) of Iluka's undertaking ‑ he will not be asked about "his views, opinions or thoughts on the invention claimed" in the patents. That would preclude seeking Dr Grey's views as to whether the patents in suit, or other WIM patents, involve an inventive step or are novel over the prior art. No property in a witness 44 In Harmony Shipping Co SA v Saudi Europe Line Ltd [1979] 1 WLR 1380 ("Harmony Shipping") the Court of Appeal had to decide whether an expert witness who had been consulted by one side and had given his opinion to that side can thereafter be consulted or subpoenaed by the other side to give his opinion on the facts of the case. Lord Denning MR first considered the case of a witness of fact. His Lordship said (at 1384):

"There is no property in a witness. The reason is because the court has a right to every man's evidence. Its primary duty is to ascertain the truth. Neither one side nor the other can debar the court from ascertaining the truth either by seeing a witness beforehand or by purchasing his evidence or by making communication to him. In no way can one side prohibit the other side from seeing a witness of fact, from getting the facts from him and from calling him to give evidence or from issuing him with a subpoena."

His Lordship then considered whether an expert witness is in any different position (at 1385):

"[Expert witnesses] may have been told the substance of a party's case. They may have been given a great deal of confidential information on it. They may have given advice to the party. Does the rule apply to such a case?

Many of the communications between the solicitor and the expert witness will be privileged. They are protected by legal professional privilege …. Subject to that qualification, it seems to me that an expert witness falls into the same position as a witness of fact. The court is entitled, in order to ascertain the truth, to have the actual facts which he has observed adduced before it and to have his independent opinion on those facts."

His Lordship also noted (at 1386) that if an expert could have his hands tied by being instructed by one side, it would be very easy for a rich client to consult all the acknowledged experts in a field, thereby disabling them from giving evidence against him. His Lordship said the Court had been told that in the Admiralty courts, where there is a very limited number of experts, one side may consult every one of them. Waller LJ expressed the same view at 1387. This was another consideration of public policy lying behind the rule that there is no property in an expert witness. Harmony Shipping has been applied on many occasions. See for example Ward v The Queen (1981) 3 A Crim R 171 at 183, 191, Reg v King [1983] 1 WLR 411 at 414, W v Egdel (1988) 14 IPR 632 at 650‑652, Trade Practices Commission v Arnotts Ltd (No 5) (1990) 92 ALR 527 at 532, R v R [1994] 4 All ER 260 at 262‑263, Connolly v Dale [1996] QB 120 at 126, Kimbers Pty Ltd v Hartley (Supreme Court of Western Australia, 11 December 1998, unreported), In re L (A Minor) [1997] AC 16 at 25. See also Freckelton and Selby, The Law of Expert Evidence (1999) at 533‑534, Phipson on Evidence 15th ed (2000) par 37‑49, Cross and Tapper on Evidence 9th ed (1999) at 442 and Hodgkinson, Expert Evidence: Law and Practice (1990) at 56, 105‑106, 193‑194. 45 Another aspect of Harmony Shipping was an argument by the party who had first consulted the expert that there was an express or implied contract to the effect that the expert would not voluntarily assist the other side. Lord Denning dismissed this argument on the facts, but added (at 1386):

"If there was a contract by which a witness bound himself not to give evidence before the court on a matter on which the judge said he ought to give evidence, then I say that any such contract would be contrary to public policy and would not be enforced by the court ."

46 The observations of Lord Denning and Waller LJ about experts in a highly specialised field are applicable to the present case. I was told that the titanium industry in Australia is small, and the knowledge held by a limited number of participants. If WIM is correct, it could by instructing all of them neutralise their use by its competitors with whom it is litigating. WIM could quarantine Dr Grey despite the fact that, at the time of instructing him, CSIRO and Dr Grey had been providing consultancy services to Iluka for over 20 years, and despite the fact that the consultancy agreement with CSIRO was a non‑exclusive one. 47 WIM's counsel did not dispute that there is no property in a witness. Yet that is what par 1(a) of the notice of motion seeks to obtain. Iluka is not to be permitted to obtain, seek or receive assistance, advice or information from Dr Grey in connection with the proceeding. WIM is to be at liberty to obtain his assistance, but Iluka, for whom Dr Grey has done work spanning more than 25 years, is not. And this is so notwithstanding the undertakings offered by WIM on 28 September 2001. Inducing breach of contract The Consultancy Contract 48 WIM contended that clauses 6 and 7 of the Consultancy Contract disable Dr Grey from assisting Iluka. Both clauses deal with "any information" acquired by Dr Grey in connection with performing the consultancy. They are not limited to confidential information. At least in Australia a solicitor's duty of loyalty survives the termination of the retainer: Spincode. An employee's duty of loyalty (good faith and fidelity) does not: Faccenda Chicken v Fowler [1987] Ch 117 at 135‑138 ("Faccenda Chicken"). What does survive is a more limited obligation. The Court of Appeal in Faccenda Chicken said (at 136):

"The implied term which imposes an obligation on the employee as to his conduct after the determination of the employment is more restricted in its scope than that which imposes a general duty of good faith. It is clear that the obligation not to use or disclose information may cover secret processes of manufacture such as chemical formulae …, designs or special methods of construction …, and other information which is of a sufficiently high degree of confidentiality as to amount to a trade secret. The obligation does not extend, however, to cover all information which is given to or acquired by the employee while in his employment, and in particular may not cover information which is only 'confidential' in the sense that an unauthorised disclosure of such information to a third party while the employment subsisted would be a clear breach of the duty of good faith."

49 The Court went on to consider the factors to be taken into account in determining whether any particular item of information falls within the implied term so as to prevent its disclosure after the employment has ceased. They were · whether the nature of the employment was such that the employee habitually handled confidential material · the nature of the information itself ‑ trade secrets and material which, while not strictly a trade secret, is of such a highly confidential nature as to require comparable protection · whether the employer impressed on the employee the confidentiality of the information · whether the relevant information can be easily isolated from other information which the employee is free to use or disclose. 50 What Faccenda Chicken makes clear is that an employee's general duty of loyalty (good faith and fidelity) ceases upon the termination of his or her employment and is replaced by an implied term relating to non‑disclosure of especially confidential information. Ordinary confidential information can be disclosed after the employment ceases. In the absence of terms to the contrary in the contract of retainer, I do not see why an independent contractor should be subject to any more onerous obligation after the retainer has come to an end. Thus, if a duty of loyalty exists during the retainer, in the absence of contractual provision it will not survive its termination. The duty of loyalty may well be replaced by an implied term of the type considered in Faccenda, and the considerations to which the Court of Appeal referred will be helpful in determining the confidences that survive the termination. The distinction between the two classes of confidential information, and the difficulty in some cases of drawing the line, is not material in the present case because of Iluka's general undertaking as to confidential information. The implied term 51 WIM's counsel said that the implied term basis for relief (see par 14) was "perhaps in some respects intertwined with the second", that is to say the duty of loyalty. Although a term based on Butt v M'Donald is to do all such things as are necessary to enable the other party to have the benefit of the contract, for the purposes of the present case WIM formulated it in several different ways: · an obligation not to deprive WIM of the benefit accorded by the contract, namely the availability of an advantageous rutile process resulting from Dr Grey's work · an obligation not to place knowledge gained in or for the purposes of the retainer at the disposal of Iluka, a party having a contrary interest in the subject matter of the retainer · an obligation on Dr Grey not to place his knowledge at Iluka's disposal to assist in undermining the patents in suit. Given that the terms in clauses 6 and 7 of the Consultancy Contract did not survive its termination, substantially the same implied terms would not do so. Further, the first and third formulations of the implied term significantly overstate what it is that Iluka wants to do in relation to Dr Grey. Iluka's undertaking shows that it does not intend to ask Dr Grey to assist it in undermining the patents, or to ask him questions the answers to which will deprive WIM of the availability of the rutile process resulting from his work. See par 21. Even if terms are to be implied to the effect of these formulations, Iluka's proposal would not involve any breach. The second term restates the loyalty ground which has been rejected. Public policy 52 If clauses 6 and 7 of the Consultancy Contract survived the termination of the contract, and were, on their true construction intended to disable CSIRO/Dr Grey from assisting Iluka in the preparation of its case in the proceeding, they would be contrary to public policy and void for the reasons given by Lord Denning in Harmony Shipping. The other members of the Court of Appeal did not consider this issue. However the commentators have cast no doubt on the correctness of his Lordship's observations (see par 45), which accord with the general principle that any contract which impedes the due course of justice is against public policy. See Collins v Blantern (1767) 2 Wils 341. Obviously a term that is contrary to public policy would be implied neither by law nor from the facts. Conclusion 53 For the reasons contained in pars 37 to 50 WIM is not entitled to the relief sought in par 1(a) of its notice of motion.

ILUKA'S MOTION 54 Iluka's motion is in part related to WIM's. It seeks an extension of the time within which Iluka is to file and serve its affidavits in answer on infringement and in chief on validity until 18 October 2002 or, in the event that WIM's notice of motion is not determined by 19 July 2002, a date three months after such determination. 19 July 2002 is the date on which Dr Grey returns from long service leave. I propose to extend the time for the filing of any affidavit by Dr Grey until 18 October 2002. Dr Grey is taking his leave overseas, and I do not accept WIM's submission that he can just as easily prepare an affidavit there as here. It does not appear where he has taken his leave, but wherever he may be it is unlikely that he has with him the necessary notebooks and materials properly to prepare an affidavit. Nor does it appear that conferences with him could reasonably be organized wherever it is that he is presently located. I am not persuaded that the other affidavits should be delayed until Dr Grey's is finalised. I will extend the time for their filing and service to 20 August 2002. ORDERS 55 Subject to the Court's approval of an appropriate confidentiality undertaking by Iluka, I will dismiss WIM's motion. On Iluka's motion I will extend to 18 October 2002 the time within which Dr Grey's affidavit is to be filed. I will extend to 20 August 2002 the time within which the other experts are to file their affidavits. WIM should pay Iluka's costs of WIM's motion. I will hear counsel as to the costs of Iluka's motion when the proposed undertaking is brought into Court. I certify that the preceding fifty-five (55) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg.

Associate: Dated: 24 May 2002 Counsel for the Applicant: A C Archibald QC and H Rofe

Solicitors for the Applicant: Allens Arthur Robinson

Counsel for the Respondent: D K Catterns QC and A J Maryniak

Solicitors for the Respondent: Clayton Utz by Freehills