'WUDEMENT No. . LIMITED DISTRIBUTION CATCHWORDS PPACTICE AND PROCEDURE - Costs - Application for disclosure of confidential information - Intervention by interested parties not parties to application or principal proceeding - Whether interveners entitled to costs of intervention - Whether intervention justified - Factors to be taken into account in allowance of fees for two counsel - Appropriate apportionment of costs between applicant and respondent. NSW G.?53 of 1986 JOHN LYSAGHT (AUSTRALIA) LIMITED v THE MINISTER FOR INDUSTRY, TECHNOLOGY AND COMMERCE Wilcox J Sydney 5 February 1988 eerie oe wT y ren LIMITED DISTRIBUTION IN THE FEDERAL COURT OF AUSTRALTA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISTON BETWEEN : AND: CORAM: WILCOX J PLACE: SYDNEY DATE: 5 FEBRUARY 1988 NSW G.353 of 1986 ee JOHN LYSAGHT (AUSTRALIA) LIMITED Applicant THE MINISTER FOR INDUSTRY, TECHNOLOGY AND COMMERCE Respondent MINUTES OF ORDER THE COURT ORDERS THAT: 1. The interveners, Krupp Stahl AG and British Steel Corporation, recover against the applicant, John Lysaght (Australia) Limited, their costs of their intervention in the Notice of Motion taken out by the applicant on 11 November 1986. tJ The said costs be taxed on the basis that counsel's fees shall be allowed only for one junior counsel. "oO ot . 6 2 ee, an tone * rare ae . he Lee ener <a. Note: tJ The respondent, the Minister for Industry, Technology and Commerce, pay to the applicant one half of the said costs. Settlement and entry of orders is dealt with in Order 76 of the Federal Court Rules. SOT qn re mere <r ae LIMITED DISTRIBUTION IN THE FEDERAL COURT OF AUSTRALIA VEW SOUTH WALES DISTRICT REGISTRY NSW G.353 of 1986 wee vw GENERAL DIVISION BETWEEN: JOHN LYSAGHT (AUSTRALIA) LIMITED 1 Applicant AND: THE MINISTER FOR INDUSTRY, TECHNOLOGY AND COMMERCE Respondent | CORAM: WILCOX J PLACE: SYDNEY : DATE: 5 FEBRUARY 1988 EXTEMPORE REASONS FOR JUDGMENT When the debate this morning commenced, I indicated the very tentative view that I had formed after having read the written submissions put in on behalf of Krupp Stahl AG and British Steel Corporation. During the argument I confess -' that, from time to time, I have questioned each of the tentative views I have expressed but, at the end, I find that T have come back to those tentative views. wor Soqoecnr woe ep lee i ee ee oes . : . ' intervention of those two companies over a number of days when the matter was before the Court. For those reasons I think that there ought to be a costs order in favour of each of the interveners. However, I am of the opinion that there was no need for two counsel to be engaged in the matter. I appreciate that Krupp regarded the matter very seriously, but the proper test of the retention of two counsel -- and I am of course talking on the basis of whether casts ought to be debited to another party as distinct from the decision made by the company on its own behalf -- is whether the matter is of such difficulty, complexity and length as to require the involvement of two counsel. I do not think this was such a case. Krupp was in fact very capably represented by one counsel on the first occasion and it seemed to me that the decision to engage two counsel on the later occasions was a decision which should be regarded as a luxury of litigation rather than a necessity. I say that, of course, without any lack of appreciation for the submissions which were put by Mr Hughes and Mr James on subsequent occasions. I merely say that I think that Krupp's interest could have been adequately safeguarded by one counsel. In that regard it is fair to observe, as Mr Hosking has pointed out, that the respondent was also putting the case for confidentiality and, if I may say so, very capably through Mr Hosking. I do not see that as inconsistent with the view I think that the intervention of both Krupp and British Steel was justified in the circumstances which confronted those two companies in November 1986. The position was that each of those companies had supplied a considerable amount of information to the Australian Government under express promises of confidentiality. Much, although not all, of that information was highly sensitive and, without reference to either of those companies, certain of that information had been made available to the lawyers acting for John Lysaght (Australia) Limited. Both Krupp and British Steel became aware that John Lysaght was seeking the leave of the Court to make that information available to executives of the company, people who would be in a position, if they so chose, to use that information for commercial purposes and, even if they did not deliberately use the information, would find it difficult to oxpunge what they had learnt from their minds in their day to day commercial activities. Under those circumstances, I think that Krupp and British Steel were justified in feeling that they ought to be represented in the Court in order to safeguard their interests in terms of any further dissemination of the information. To the extent that they sought to "roll back" the disclosure which had already occurred, to use the phrase of Mr Hughes QC at the time, it seemed to me that this application was unnecessary. But they were here for another purpose as well, and it was that other purpose which caused the prolonged that Krupp and British Steel were justified in being here because, after all, they would have had in mind that a previous promise of confidentiality had been not fully honoured and I think that they were justified in feeling that they wished to safeguard their interest but, in my opinion, there was a degree of overkill in the representation retained on behalf of Krupp. Consequently, I think that the orders to be made in favour of each of Krupp and British Steel should be limited to the retention of one junior counsel only. The next question is who should bear the burden of those orders. There are arguments in favour of the view that the applicant should bear the whole of the costs. There are also arguments in favour of the view that the respondent should bear the whole of the costs. I bear in mind that the applicant was ultimately successful in the principal proceeding. I think that is an important consideration and relevant to the present question. That consideration has already intruded itself in the cense that, as between the applicant and the respondent, the vespondent will have to bear the costs of the Notice of Motion which created the applications for intervention. But bearing that matter in mind, I think that it does not dispose of the problem. One has to consider the position being taken by the parties at the time and to ask what was the reason why it was reasonably necessary for Krupp and British Steel to come to court in the first place. If that reason was because of the behaviour of one of the principal parties, which ultimately turned out to be misconceived, then there is a strong case for requiring that party to pay at least some of the costs. It is difficult, at this stage, to put oneself back in the atmosphere which occurred in November 1986 when the interventions occurred. However, I have been assisted by an agreed synopsis of the facts which confirms my recollection and indeed amplifies it in certain respects. The position at that date was that the respondent had made available to the counsel and solicitors representing the applicant the documents which had been provided by Krupp. The applicant then filed a Notice of Motion seeking an order permitting it to make that information available to executives of John Lysaght. The respondent resisted that application, taking the view that no information ought to be made available directly to John Lysaght. It was that Notice of Motion which gave rise to the intervention on behalf of Krupp. I was informed that there were other people in a like position. As a result I required that notice of the application be given to those other people. This notice led to the intervention of British Steel. In the end result, the applicant did not succeed in having the relevant information made available to executives of John Lysaght. On the other hand, nor did the respondent succeed in maintaining a position that no information should be made available to executives of John Lysaght. What egy ere re ee ae eye water Se ee cer es T happened was that there were discussions between the parties -- including, as I understand it, the lawyers representing both Krupp and British Steel -- for the production of what have been referred to as "sanitized versions" of the relevant documents. These versions eliminated the particular figures and statements of fact which gave sensitivity to the documents. In this way it was possible for the applicant to obtain the information which it required -- and which, as events subsequently showed, was critical to its success in the proceedings -- whilst, at the same time, avoiding any disclosure of information whose disclosure would be commercially damaging to Krupp and British Steel. The course ultimately taken lay somewhere in between the position taken on the first day respectively on hehalf of John Lysaght and the Minister. I think that it is fair to say that, had the suggestion been made on the first day for a sanitized version, a lot of subsequent appearances would have become unnecessary. It may be that Krupp and/or British Steel would have objected to that course on that day, but had they done so, I do not think that I would have ben very sympathetic to an application for costs of subsequent attendances. The strength of their case to have their costs was that, at that time, such a proposal had not been made and, indeed, the applicant was seeking much more. Similarly, if the respondent had, on the return of the Notice of Motion, offered to co-operate in the production of a sanitized version, then I would, I think, take the view that the subsequent costs lay at the door of the applicant. But the respondent did not take a seme — oreenie TT po this view, because to do so would have been regarded, apparently, as an unacceptable breach of the offer of confidentiality. I said something in my judgment in Kanthal Australia Pty Ltd v Minister for Industry, Technology and Commerce (1987) 71 ALR 109 at pp.116-118, about the problem of an unqualified promise of confidentiality, and that is equally applicable to this case. The necessity for a number of subsequent hearings therefore comes from the fact that both the principal parties were taking a stand which, in my view, was too inflexible. [I think that they each bear responsibility for the fact that the matter became prolonged and that, consequently, both Krupp and Beitish Steel had to continue to incur costs. I am inclined to think that the major share of the blame rests with the applicant rather than the respondent; and it is probably true to say that the extra mileage obtained by the applicant in terms of the end result was comparatively small. But, as against that, I have to take into account the ultimate result of the proceedings and, having regard to all of those matters, I think that justice would be done, insofar as one can make orders in these matters which accord with the total requirements of the case, if the principal parties bore the costs of the interveners equally. I think that the appropriate course would be for me to make an order against one of the principal parties, and I think that should be the applicant in the Notice of Motion, but to give an indemnity as to half those costs. The formal rower . . seer, ~ e order that I make is that Krupp Stahl AG and British Steel Corporation each recover against John Lysaght (Australia) Limited their costs of their intervention in the Notice of Motion taken out by John Lysaght (Australia) Limited on 11 November 1986, such costs to be taxed on the basis that counsels' fees shall be allowed only for one junior counsel. The respondent, the Minister for Industry, Technology and Commerce, is to pay to John Lysaght (Australia) Limited one half of such costs. LI certify this and the seven (7) preceding pages to be a true copy of the Reasons for Judqment of his Honour Justice Wilcox. Associate: (eorg foie Date: 25 February 1988 Counsel for the Applicant: Mr BW Walker Solicitors for the Applicant: C G Gillis & Co Counsel for the Respondent: Mr G $5 Hosking Solicitors for the Respondent: Australian Government Solicitor Counsel for British Steel Corporation (Intervener): Mr R J Weber Solicitors for British Steel Corporation (Intervener): Mallesons Stephen Jaques Counsel for Krupp Stahl AG (Intervener): Me L G Foster Solicitors for Krupp Stahl AG (Intervener) Baker & McKenzie Date(s) of hearing: 5 February 1988 eo neo ares co eet