FEDERAL COURT OF AUSTRALIA Tech Mahindra Limited v Commissioner of Taxation (No 2) [2016] FCAFC 136 File number: NSD 1699 of 2015 Judges: ROBERTSON, DAVIES AND WIGNEY JJ Date of judgment: 12 October 2016 Catchwords: PRACTICE AND PROCEDURE – suppression or non-publication order – whether evidence established that the order as proposed was necessary to prevent prejudice to the proper administration of justice Legislation: Federal Court of Australia Act 1976 (Cth) ss 37AF, 37AG, 37AI Cases cited: Hogan v Australian Crime Commission [2010] HCA 21; 240 CLR 651 Tech Mahindra Limited v Commissioner of Taxation [2016] FCAFC 130 Date of hearing: Determined on the papers Date of last submissions: 14 September 2016 Registry: New South Wales Division: General Division National Practice Area: Taxation Category: Catchwords Number of paragraphs: 15 Counsel for the Appellant: Mr BJ Sullivan SC with Mr MP Heraghty and Mr RW Clark Solicitor for the Appellant: TressCox Lawyers Counsel for the Respondent: Mr J Hmelnitsky SC with Mr P Afshar Solicitor for the Respondent: Australian Government Solicitor ORDERS NSD 1699 of 2015 BETWEEN: TECH MAHINDRA LIMITED Appellant AND: COMMISSIONER OF TAXATION Respondent JUDGES: ROBERTSON, DAVIES AND WIGNEY JJ DATE OF ORDER: 12 OCTOBER 2016 THE COURT ORDERS THAT: 1. Within seven days, the appellant file and serve a proposed order giving effect to the reasons for judgment herein. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT THE COURT: 1 These reasons concern the appellant's application for suppression or non-publication orders under Pt VAA of the Federal Court of Australia Act 1976 (Cth), in particular s 37AF. The Court gave judgment on 22 September 2016 on the substantive issues in the appeal: Tech Mahindra Limited v Commissioner of Taxation [2016] FCAFC 130. Those proceedings concerned the financial year ended 30 June 2008. 2 On 3 December 2014, the primary judge made the following order: 5. Until further order, and to prevent prejudice to the proper administration of justice, from the date of this order, access to Confidential Information adduced in the proceedings be restricted to the parties' legal representatives, the parties themselves and any independent witnesses of the parties. "Confidential Information" was defined to mean information contained in: a. any agreement between the Applicant and its customers; b. any financial records of the Applicant, including, but not limited to: i. tax assessments; ii. documents prepared for the purposes of preparing tax assessments; iii. invoices; and iv. timesheets; and c. other documents disclosing information contained in the documents referred to in (a) and (b). 3 The appellant applied to the Full Court for the same order to be made in relation to any evidence referred to in Part C of the Appeal Book. Proposed short minutes of order in the following terms were dated 8 August 2016 and signed by the solicitors for the appellant and the solicitors for the respondent: Confidential Information means information contained in: a. any agreement between the Appellant and its customers; b. any financial records of the Appellant, including, but not limited to: i. tax assessments; ii. documents prepared for the purposes of preparing tax assessments; iii. invoices; and iv. timesheets; and c. other documents disclosing Information contained in the documents referred to in (a) and (b). 1. Until further order, and to prevent prejudice to the proper administration of justice, from the date of this order, access to Confidential Information referred to in Part C of the Appeal Book in these proceedings be restricted to the parties' legal representatives, the parties themselves and any independent witnesses of the parties. 4 At the commencement of the hearing of the appeal on 9 August 2016, the Court indicated that it would make an interim order under s 37AI of the Federal Court of Australia Act on that basis, but that it took the view that the order proposed was too general to stand as an order other than an interim order. Such an interim order was made. A direction was also made that, by close of business on 16 August 2016, the parties email to the associate of the presiding judge an agreed annotated version of Part C of the Appeal Book identifying the information said to be confidential. The Court could then decide whether or not it was necessary to have an affidavit in support of the proposed order. 5 By email dated 12 August 2016, the solicitors for the appellant forwarded a version of a modified confidentiality order sought by the appellant in relation to extracts of the material in Part C of the Appeal Book. The respondent indicated that he neither consented to, nor opposed, the order sought. 6 On 16 August 2016, the solicitors for the parties were notified that the Court had made orders requiring evidence in support of the application for a suppression or non-publication order and granting the parties leave to file such evidence, in affidavit form, by close of business on 26 August 2016. 7 On 19 August 2016, the solicitors for the appellant filed an affidavit affirmed by Mr Gopala Chakravarthy Madabhushi (known as Gopala Chakravarthy), Group Manager – Finance for the appellant. 8 On 26 August 2016 the solicitors for the parties were notified that the Court was not satisfied on the basis of that affidavit that the information was confidential for the purposes of s 37AG of the Federal Court of Australia Act. The Court granted the parties leave to file further affidavit evidence in support of the suppression or non-publication orders sought by close of business on 8 September 2016. 9 A further affidavit dated 13 September 2016 and affirmed by the same deponent was filed. 10 The substance of these two affidavits concerned what was said to be damage to the appellant's commercial interests if the information which was highlighted, a small fraction of the original claim, fell into the hands of the appellant's competitors. In relation to the historic nature of the material, the second affidavit stated that even though the highlighted information related to the year ended 30 June 2008, the appellant considered that information as commercial-in-confidence information as all but 41 named customers remained customers of the appellant and, it was stated, any competitor of the appellant armed with a list of the appellant's customers from the year ended 30 June 2008, together with the revenue generated by each of those customers for the appellant for that year could use that information in order to approach those customers to attempt to entice the business of those customers away from the appellant and so cause damage to the appellant's business. 11 Section 37AG provides that the Court may make a suppression order or non-publication order on the ground that the order is necessary to prevent prejudice to the proper administration of justice. We construe that provision in light of the judgment in Hogan v Australian Crime Commission [2010] HCA 21; 240 CLR 651 concerning what was then s 50 of the Federal Court of Australia Act: 30 As it appears in s 50, "necessary" is a strong word. Hence the point made by Bowen CJ in Australian Broadcasting Commission v Parish, that the collocation of necessity to prevent prejudice to the administration of justice and necessity to prevent prejudice to the security of the Commonwealth "suggests Parliament was not dealing with trivialities". Further, as indicated earlier in these reasons: (a) s 50 is an example of a provision authorising the Federal Court to make orders for the exercise of its jurisdiction other than in open court as mandated by s 17(1); and (b) "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; this is a more specific discipline than broader notions of the public interest. 31 It is insufficient that the making or continuation of an order under s 50 appears to the Federal Court to be convenient, reasonable or sensible, or to serve some notion of the public interest, still less that, as the result of some "balancing exercise", the order appears to have one or more of those characteristics. (Footnotes omitted.) 12 Applying these principles, our conclusions are as follows. 13 We do not accept that a suppression order or non-publication order is necessary to prevent prejudice to the proper administration of justice in respect of: (i) the highlighted information in paragraphs 25, 27, 49, 54, and 55 of the affidavit affirmed by Mr Gopala Chakravarthy Madabhushi (known as Gopala Chakravarthy) dated 24 September 2014. This material is either the number of Australian customers or the name of individual customers or figures in respect of total income for services. In our opinion the evidence does not establish that the disclosure of that information would or could cause damage to the appellant's business. (ii) The highlighted information listed in exhibit GCM–1 to that affidavit, being a list of 69 Australian customers of the appellant for the year ended 30 June 2008. In our opinion, the evidence does not establish that the disclosure of a list of the appellant's customers eight years ago would or could cause damage to the appellant's business. (iii) The further highlighted information listed in exhibit GCM–1 to that affidavit, being the profit and loss account 2007-2008 in respect of the appellant. In our opinion, the evidence does not establish that the disclosure of that financial information, which is not specifically related to the appellant's individual customers, would or could cause damage to the appellant's business. (iv) The further highlighted information listed in exhibit GCM–1 to that affidavit, being the pages numbered 68 and 69 showing revenue by customer report for 2008 insofar as it concerns the former customers of the appellant. In our opinion, the evidence does not establish that the disclosure of the revenue of former customers of the appellant "for 2008" would or could cause damage to the appellant's business. (v) The highlighted information in the affidavit of Prathapan Puthan Parambath (known as Pratap Nair) dated 24 September 2014. This material shows only the names of customers in the context of the appellant's business in Australia and a history of the appellant's business with those customers. In our opinion, the evidence does not establish that the disclosure of those names would or could cause damage to the appellant's business. Further, this material does not concern revenue generated by either of those customers. (vi) The highlighted information in the affidavit of Ravindra Penmatsa dated 25 September 2014. The material shows the names of customers in the context of the appellant's method of providing services and the location of the appellant's employees when providing information technology services to those customers. In our opinion, the evidence does not establish that the disclosure of those names would or could cause damage to the appellant's business. (vii) The highlighted information in certain pages of the transcript of the hearing before the primary judge on 10 March 2015. On page 85 of the transcript the name of a customer of the appellant is included but not in a context which links that client to any revenue information. We reach the same conclusion in relation to the name of the customer or customers on pages 87, 89, 91, 92 (reproduced twice), 93 and 94 of the transcript. In our opinion, the evidence does not establish that the disclosure of those names would or could cause damage to the appellant's business. 14 We do accept that a suppression order or non-publication order is necessary to prevent prejudice to the proper administration of justice in respect of: (i) The further highlighted information listed in exhibit GCM–1 to that affidavit, being the pages numbered 68 and 69 showing revenue figures by customer report for 2008 insofar as it concerns the present customers of the appellant. We accept the evidence that a competitor of the appellant could use that information in order to approach those customers and so cause damage to the appellant's business and we therefore uphold the claim in respect of those revenue figures. 15 We direct that within 7 days the appellant file and serve a proposed order giving effect to these reasons. Once that order is made by the Court, the interim order made by the Court on 9 August 2016 will cease to have effect, as will the relevant order of the primary judge made on 3 December 2014, being order 5 of the orders made by the primary judge on that day. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Robertson, Davies and Wigney. Associate: Dated: 12 October 2016