Yara Australia Pty Ltd v Burrup Holdings Limited

IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION WAD 333 of 2010

JUDGE: BARKER J DATE: 24 NOVEMBER 2010 PLACE: PERTH

confidentiality order 1 On 12 November 2010, soon after the applicant sought both interlocutory relief and, in one respect final relief, I made the following interim confidentiality order: 1. Until further order of the Court, the documents filed in these proceedings and held by the Court and identified in Schedule A to these orders be placed in a sealed envelope on the Court file marked "Confidential", and be available for inspection only by the parties or their solicitors. 2 The order was subsequently varied on 17 November 2010 at the request of the ANZ Bank (which was not opposed by the parties) to provide an exception in these terms: 2. The order in paragraph 1 shall not in any way restrict or otherwise limit any contractual rights of the Australia and New Zealand Banking Group Limited and ANZ Fiduciary Services Pty Ltd to inspect and obtain copies of any documents filed in these proceedings, including without limitation under the Senior Bank Subscription Agreement dated 18 December 2002, as amended and restated on 16 December 2005. 3 Schedule A to the order as varied, specifies the following documents as falling within the confidentiality order: 1. Annexure GSH-1 to the affidavit of Gabrielle Suzanne Holly, sworn 9 November 2010. 2. The affidavit of Soon Hee Koh, sworn 9 November 2010. 3. The affidavit of Matthew James Donnelly, sworn 9 November 2010. 4. The written submissions of the applicant. 4 At the conclusion of the hearing on 18 November 2010, when I made orders on the form of final relief granted in the proceeding, by way of inspection of the books of the first respondent, pursuant to the Corporations Act 2001 (Cth), I requested the respondents provide written submissions concerning the continuation of the confidentiality order. The applicant indicated at that time that it had no interest in the orders and would abide by the decision of the Court. 5 The respondents have now filed written submissions in which, put simply, they submit that, having regard to the principles that govern the making of orders going to the confidentiality of materials in the Court the documents referred to in Sch A of the existing confidentiality order, save for the written submissions of the applicant, should be the subject of a continuing confidentiality order. They contend that while not all of the information in all of the documents is confidential in all respects, the confidential information of concern to the respondents pervades the documents in such a way as to render it cumbersome to separate from other parts of the documents. However, the respondents recognise that to the extent that a proper and effective redaction of material could be carried out in respect of the core confidential portions, the respondents would not oppose disclosure of the remaining portions. 6 To that end, the written submissions of the respondents identify commercially sensitive information that has, in the submission of the respondents, the potential for damaging the legitimate interests of the respondents, including financial data, financing documents and certain settlement information. 7 In my view, it is appropriate that there be continuing confidentiality in respect of the particular categories of information identified by the respondents and I will make an appropriate order in those terms. 8 In order to facilitate any subsequent inspection by persons not a party to these proceedings pursuant to the Federal Court of Australia Act 1976 (Cth) (Federal Court Act) and the Federal Court Rules 1979 (Cth), I will require the respondents to file a true copy of each of the documents currently referred to in items 2 and 3 of Sch A, with the confidential portions or parts as I will identify them, redacted or removed.

The principles governing the making of a confidentiality order 9 The power of the Court to make confidentiality orders in respect of materials in proceedings in the Court and the principles or criteria by which that power should be exercised have recently been discussed by the High Court of Australia in Hogan v Australian Crime Commission [2010] HCA 21; (2010) 240 CLR 651 (Hogan) (the Court: French CJ, Gummow, Hayne, Heydon and Kiefel JJ). 10 Section 50 of the Federal Court Act, as it stood at the time of Hogan, was in the same terms as s 50(1) now stands. Since the time of the orders made and considered by the High Court in Hogan, s 50 has been amended by the addition of subs (2). 11 Section 50 of the Federal Court Act now provides: (1) The Court may, at any time during or after the hearing of a proceeding in the Court, make such 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. (2) This section does not limit section 23HC. 12 So far as s 23HC of the Federal Court Act is concerned, it is not presently relevant as it has to do with protecting witnesses and the power of the Court to make such orders as it thinks appropriate in that regard. 13 Nothing in s 50(2) as it now stands has, in my view, the effect of qualifying or limiting or otherwise effecting the principles enunciated in Hogan by the High Court concerning the application of s 50(1). 14 In Hogan the Court, at [7], made two points about what is now s 50(1). First, that it qualifies the general provision in s 17(1) of the Federal Court Act that the jurisdiction of the Federal Court is to be exercised in open court. Secondly, that the Federal Court is entrusted with the duty to ensure that "the administration of justice" is respected; it is not a duty that falls to the parties. 15 The touchstone for the making of a confidentiality order (an order forbidding or restricting the publication of particular evidence or the name of a party or witness) is whether it is "necessary" in order to "prevent prejudice to the administration of justice" or "the security of the Commonwealth". In this case, as in Hogan, the security of the Commonwealth is not in issue. The question here, as it was there, is whether it is "necessary" in order to "prevent prejudice to the administration of justice" that the confidentiality orders proposed by the respondents be continued in some form. 16 In Hogan, at [30], the Court emphasised that "necessary" is a strong word. In that regard, Parliament was not dealing with "trivialities". 17 The Court also emphasised, at [30], that "the administration of justice" spoken of in s 50 is that involved in the exercise by the Federal Court of the judicial power of the Commonwealth; and "this is a more specific discipline than broader notions of the public interest". 18 I take the last admonition to mean that the Court should not simply consider what the "public interest" might require by way of disclosure or nondisclosure in a particular case, but whether or not confidentiality is "necessary" to "prevent prejudice to the administration of justice" quite specifically. 19 In this same vein, the Court, at [33], emphasised that it may tend to distract attention from the particular terms of s 50 to describe the Federal Court as embarking upon the exercise of a "discretion" when entertaining an application under s 50. Accordingly, it would be a misreading of s 50 to treat it as empowering the Court to refuse to make the order, or to leave in operation an impugned order, if it has reached the requisite state of satisfaction. In other words, effectively it would not be open to the Court to refuse to make a s 50 order where it appeared to the Court to be necessary to prevent prejudice to the security of the Commonwealth, for example. 20 All of this focuses the mind of the Court in this case on whether an order under s 50 is necessary to prevent prejudice to the administration of justice. Put another way, the central question here is what prejudice there might be to the administration of justice if the current interim order were to be fully discharged. 21 In Hogan, at [42], the Court made it plain that the administration of justice by the Federal Court, which is the focus of s 50, includes not only the generally recognised interest in open justice, but also restraints upon disclosure where this would prejudice the proper exercise of its adjudicative function. In this, the Court referred to what Bowen CJ of the Federal Court of Australia said in Australian Broadcasting Commission v Parish [1980] FCA 33; (1980) 43 FLR 129 at 133. There, his Honour described the litigation in the Court in that case as analogous to a case where confidential information is "the subject matter of the proceedings". The Chief Justice concluded that it was in the interests of justice that the processes for determination of those very proceedings not destroy or seriously depreciate the value of that subject matter: 43 FLR at 135. The Court in Hogan, at [43], noted that the case before it was not such a case, that is to say a case concerning confidential information that might be destroyed or seriously depreciated in value. The Court also noted that Mr Hogan, not the other party, had put on the evidence which he then sought to protect from disclosure by way of a confidentiality order.

categories of confidential documents 22 In the case before me, the respondents note that the applicant has put on evidence including the confidential information, not them, and that they should now be entitled to an order protecting that information because it falls into the class of confidential information described by Bowen CJ. I generally agree. 23 I am not prepared to order that the entire content of the affidavits referred to in Sch A be kept confidential, as plainly only portions are properly to be regarded as confidential. The applicant's written submissions do not, as the respondents accept, need to be kept confidential at all. 24 The first category of confidential information identified by the respondents in this regard is financial data to be found in the affidavit of Soon Hee Koh in the following annexures and paragraphs to his affidavit, sworn 9 November 2010. They are also in the copy of his affidavit which is annexure GSH1 to the affidavit of Gabrielle Suzanne Holly, sworn 9 November 2010: (a) Annexure SHK 16; (b) Annexure SHK 17 and para 86, 87 and 88; (c) Annexure SHK 19; (d) Annexure SHK 29; (e) Annexure SHK 30; (f) Annexure SHK 32 and para 93; and (g) Annexure SHK 33. 25 I generally accept that the information in these annexures taken together is valuable commercial information that in the hands of nonparties, particularly trade rivals, could be used to prejudice the interests of the respondents - and in that regard, could also potentially damage the interests of the applicant, which is a member of the first respondent. Generally speaking, all of the material identified may allow a rival to determine with or without other information the profitability of the respondents' operations and otherwise to gain information in respect of the second respondent, which is a private company whose information is not generally available. A confidentiality order should be made in respect of it. 26 For the same reasons, I would also make a confidentiality order with respect to the financial data of either or both of the respondents that appears in the affidavit of Matthew James Donnelly in the following annexures: (a) Annexure MJD 2 and para 17, 18 of his affidavit; and (b) Annexure MJD 4. 27 The second category of confidential information is financing documents. The following parts of the affidavit of Soon Hee Koh and the copy of that affidavit that appears in the affidavit of Ms Holly contain details as to sources of finance and financing documents with respect to either or both of the respondents and their operations: (a) Annexure SHK 23 and para 62; (b) Annexure SHK 24; (c) Annexure SHK 25; (d) Annexure SHK 26 and para 66 and 70; (e) Annexure SHK 28 and para 76; (f) Annexure SHK 31 and para 83 and 84; (g) Annexure SHK 36 and para 102. 28 Annexure MJD 3 and para 19 of the affidavit of Mr Donnelly also contain details as to sources of finance and financing documents with respect to either or both of the respondents and their operations. 29 The material referred to in these paragraphs includes references to capital loan amounts, margin rates, financing documents and their terms or conditions (in particular, the Senior Bank Subscription Agreement and the PLAS). I consider this the sort of information that would enable a trade rival to become familiar with the arrangements which the respondents (in particular, the second respondent) has with its financiers with respect to its business operations, which is capable of giving those rivals a competitive advantage in any negotiations or disputes with either of the respondents. 30 For these reasons, the portion of the documents in question should be the subject of a confidentiality order under s 50. 31 I further accept a submission of the respondents that annexure SHK 7 to the affidavit of Soon Hee Koh, which also appears in the copy of his affidavit attached to Ms Holly's affidavit, should be the subject of a confidentiality order under s 50. It refers to the terms of a confidential settlement of an insurance claim involving the second respondent. That is an inherently confidential document and the second respondent is subject to confidentiality obligations with respect to that settlement, namely, in relation to a subrogation agreement with underwriters (pending possible proceedings in Western Australia and proceedings on foot in the United States).

conclusion and order 32 For these reasons I would discharge the order for confidentiality initially made on 12 November 2010, and varied on 17 November 2010, and make the following order in its place. This order, as noted earlier, is intended to achieve the practical outcome that there will be, on the Court file, true copies of the relevant affidavits save for confidential portions, that may be inspected by nonparties under the Federal Court Act and Federal Court Rules. As the relevant portions of Mr Koh's affidavit will be available for inspection, there is no need to provide for Ms Holly's affidavit to be filed in a redacted form. 33 The orders will be: 1. The confidentiality order of 12 November 2010, as varied by the order of 17 November 2010 be discharged and replaced by the following orders. 2. The documents filed in these proceedings and held by the Court and identified in Sch A to these orders be placed in a sealed envelope on the Court file marked "Confidential" and be treated as confidential for the purposes of the Federal Court of Australia Act 1976 (Cth) and Federal Court Rules and be available for inspection only by the parties or their solicitors. 3. The order in paragraph 2 shall not in any way restrict or otherwise limit any contractual rights of the Australia and New Zealand Banking Group Limited and ANZ Fiduciary Services Pty Ltd to inspect and obtain copies of any documents filed in these proceedings, including without limitation under the Senior Bank Subscription Agreement dated 18 December 2002, as amended and restated on 16 December 2005. 4. The respondents do file a true copy of the affidavit of Soon Hee Koh, sworn 9 November 2010, with the following portions or parts thereof redacted or removed therefrom: (a) Annexure SHK 7; (b) Annexure SHK 16; (c) Annexure SHK 17 and para 86, 87 and 88; (d) Annexure SHK 19; (e) Annexure SHK 23 and para 62; (f) Annexure SHK 24; (g) Annexure SHK 25; (h) Annexure SHK 26 and para 66 and 70; (i) Annexure SHK 28 and para 76; (j) Annexure SHK 29; (k) Annexure SHK 30; (l) Annexure SHK 31 and para 83 and 84; (m) Annexure SHK 32 and para 93; (n) Annexure SHK 33; and (o) Annexure SHK 36 and para 101. 5. The respondents do file a true copy of the affidavit of Matthew James Donnelly, sworn 9 November 2010, with the following portions or parts redacted or removed therefrom: (a) Annexure MJD 2 and para 17, 18; (b) Annexure MJD 3 and para 19; and (c) Annexure MJD 4. Schedule A

1. The affidavit of Gabrielle Suzanne Holly sworn 9 November 2010.
2. The affidavit of Soon Hee Koh sworn 9 November 2010.
3. The affidavit of Matthew James Donnelly sworn 9 November 2010. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker.