FEDERAL COURT OF AUSTRALIA Airservices Australia v Transfield Pty Ltd [2000] FCA 1395 AIRSERVICES AUSTRALIA v TRANSFIELD PTY LIMITED A 19 OF 1999 GYLES J CANBERRA 15 SEPTEMBER 2000 IN THE FEDERAL COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY A 19 OF 1999 BETWEEN: AIRSERVICES AUSTRALIA APPLICANT AND: TRANSFIELD PTY LIMITED RESPONDENT JUDGE: GYLES J DATE OF ORDER: 15 SEPTEMBER 2000 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The respondent make discovery to the applicant of the document(s) described in paragraph 1(a) of the Application within 28 days of the date hereof on the terms of Order 3. 2. The respondent pay 90% of the costs of the applicant. 3. (a) The respondent will provide to the applicant one copy of the document/s ordered by the Court on 15 September 2000 within 28 days of the date hereof. (b) Access to the document/s produced be restricted to the applicant's client's counsel retained for the preliminary discovery application and Michael Will and Sean Field ("Will" and "Field"). (c) The applicant's counsel and Will and Field be permitted to disclose the contents of the document/s produced only to the applicant's in-house lawyers who are directly involved in this preliminary discovery application and only for the purpose of giving legal advice and obtaining instructions. (d) The applicant's counsel, Will and Field and applicant's in-house lawyers only to be permitted access to the document/s produced or the information contained in them if each such person has signed and returned to the respondent a confidentiality undertaking in the terms of the attached document. (e) Each document produced will bear the following notice: "CONFIDENTIAL: This document is confidential, and is subject to a confidentiality undertaking given to the Federal Court of Australia." The confidentiality undertaking will read as follows: "(1) I [blank] of [blank] undertake to the Court and to the respondent that (i) I will not, without the written consent of the respondent or its solicitors or an order of the Court, at any time or for any purpose other than the conduct of proceedings by the applicant against the respondent in this Court other than advice in relation to the proposed proceeding by the applicant against the respondents in this Court and the conduct of such proceeding, including submissions to the Court. (ii) Use or disclose to any person, other than permitted persons, which is a defined term, any document or information contained in or derived from any document discovered pursuant to the Court's order made 15 September 2000. (2) In this confidentiality undertaking permitted persons means: (a) applicant's counsel. (b) Michael Will. (c) Sean Field. (d) in-house lawyers of the applicant. (e) such other persons as are consented to by the respondent or its solicitors or approved by the Court provided that the persons referred to in (a), (b), (c), (d) and (e) above have signed a confidentiality undertaking in or substantially in the same form as this undertaking." Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY A 19 OF 1999 BETWEEN: AIRSERVICES AUSTRALIA APPLICANT AND: TRANSFIELD PTY LIMITED RESPONDENT JUDGE: GYLES J DATE: 15 SEPTEMBER 2000 PLACE: SYDNEY EX TEMPORE REASONS FOR JUDGMENT 1 This is an application under Order 15A, rule 6 of the Federal Court Rules, for discovery from a prospective respondent. The application arises out of negotiations between the applicant, Airservices Australia ("Airservices") on the one hand, and the respondent, Transfield Pty Limited ("Transfield") on the other, in relation to a tender which was called by the Department of Defence for garrison support in South Australia and Western Australia. Without endeavouring to summarise the evidence which is before me, in short form there were negotiations between Transfield, which was proposing to make a comprehensive tender, with Airservices, whereby Airservices might provide rescue and firefighting services on behalf of Transfield in the event that Transfield won the tender. 2 In the course of those negotiations Airservices provided to Transfield information in relation to the services it could perform in order that a tender could be developed by Transfield and its prices for the services. I have said "negotiations" because there is a live issue as to whether there are any contractual relations arising out of those negotiations. That question is not, it seems to me, of any particular relevance at this stage of the case because, in order to qualify under rule 6, there must be a right to obtain relief in the Court. Whilst it may be that contractual relief can be obtained if that is pendant to another aspect of the case, I do not think an applicant can found an application under rule 6 upon a claim which is not within the jurisdiction of the Court as such. 3 That, it seems to me, requires focus upon the applicant's claims that the course of dealings involved a breach of section 52 of the Trade Practices Act 1974 (Cth) by the respondent. It may be that there are some representations made in relation to the initial negotiations which could found such a claim. It does seem to me that there is a clear but narrower basis upon which such a claim might lie in relation to some dealings which took place in July which are sufficient to satisfy the requirement of rule 6(a). I refer here to the facts deposed to in paragraphs 15, 16, 17, 18 and 19 of the affidavit of Mr Butcher, together with the documents to which reference is made, when taken together with the failure on Transfield's part to give a substantive reply to the requests which were made of it in relation to the basis upon which it had tendered. 4 It seems to me that if the evidence in those paragraphs is accepted, if Transfield did not include Airservices Australia in its tender to the Department of Defence, then there was an arguable breach of section 52 on the basis that it lay upon Transfield, in view of the representations by Mr Allen, to correct his statement if there was to be a change from it. Mr Hammerschlag, on behalf of the respondents, puts that there is no evidence of reliance and no evidence of damage in relation to any such breach. It is true there is no express evidence of reliance, but it seems to me that, for the limited purposes of deciding whether rule 6(a) is satisfied, it can be inferred that Airservices took seriously what Mr Allen said to them. It is also true that there is no evidence of damage in the financial sense. However, if there were a change in mind, and if Airservices were not included in the tender in any way, and if they had been notified of that in sufficient time, they could have moved to injunct Transfield from making any use of the information it had provided, much as it had indicated in the letter of 8 July. The failure to advise meant that they lost that opportunity. This may sound in damages but will also, arguably at least, form the basis for an injunction under section 80 of the Trade Practices Act 1974 (Cth). 5 This of course is predicated upon the hypothesis that Airservices were not included in the tender in any relevant way. There is a reasonable basis to believe that that may be so based upon the hearsay information which has been received from the Department of Defence. The kind of section 52 case to which I have adverted would only lie if the tender did not include Airservices in any way. I should say I am not here endeavouring to define what may be meant by including Airservices in the tender. Whether that could be direct or indirect is a matter which is not before me at the moment. 6 It also seems to me that the relevant part of the tender is necessary to be produced in order that Airservices can see whether in fact the price which it had nominated and any other information provided by it was used. Of course the form of the tender may be such that that information is not disclosed in any event, but, if it were, it would be material information for an applicant to have before launching proceedings. Mr Hammerschlag says cases have been launched on less than this. That may or may not be so, but it seems to me that rule 6(a) is satisfied. 7 So far as rule 6(b) is concerned, I cannot myself see any other inquiries which could have been made which would have been directed to the relevant point. It is true, as I pointed out during the course of argument, that the precise question, "Were we included in the tender in any way?" was not asked and there is no precise answer to that question. However, even if the direct question had been asked and answered directly in the negative, an applicant, before launching this kind of proceedings, would be entitled to see the tender itself in order to have an understanding as to the basis upon which Transfield went to tender in order that it could form a view as to what might be called the economics of proceeding. It is not simply a case of having a bare cause of action. It is relevant for an applicant to know what may flow from a cause of action in practical terms. 8 In any event, it is perfectly clear that Airservices was at all material times doing its very best to find out what the situation was in relation to the tender and I do not think it could be said that Transfield were under any misapprehension as to that part of the object of the exercise. And indeed there has been no evidence put on by Transfield to disclose the true position on this aspect. 9 I should note a submission on behalf of Transfield that I should not find that rule 6(b) was satisfied because there was no decision maker called on the part of the applicant to depose to its corporate state of mind about the topic. There has been no disclosure about the state of advice or anything like that. In some of the other cases evidence of that type has been led. The point is a serious one and it has given me concern. It gave me concern during the argument but I have come to the view that the facts here are capable of objective examination. The applicant's absence of knowledge about the form of the tender is clear. Its importance to the decision is clear. I can be satisfied under rule 6(b) that the applicant objectively has not sufficient information to enable a decision to be made without my knowing precisely the corporate state of decision making on that topic. 10 There is no issue that there is reasonable cause to believe that Transfield has the copy tender, indeed so much I think is accepted in the evidence before me. Rule 6 is satisfied. 11 I was referred by counsel to a long line of authority on the manner in which rule 6 is to be applied and I need not burden this short judgment by reciting from that authority. I have taken it into account in giving consideration to the issue. 12 However, different questions arise in relation to the documents sought in paragraph 1(b) and 1(c) of the application. Whilst I can readily see that access to those documents would be desirable from the point of view of the applicant, and whilst I can see that if proceedings are commenced they may well be relevant and discoverable, I cannot see that they are of sufficient cogency to make it necessary that they be provided before a reasonable decision can be made as to whether to sue or not. 13 I propose to make an order as sought that the respondent make discovery to the applicant of the documents described in paragraph 1(a) of the application. I reject the application in relation to paragraphs 1(b) and 1(c). 14 On the question of costs, Mr Hammerschlag submitted that each party should bear its own costs of the application unless Airservices commences those proceedings within a period of approximately three months, and, if so, then costs be in the cause. For its part, Airservices sought the costs of the application on the basis that it had been substantially successful. I order that the respondent pay the applicant 90 per cent of its costs of the application. 15 The parties have agreed upon a confidentiality regime as follows: (a) The respondent will provide to the applicant one copy of the document/s ordered by the Court on 15 September 2000 within 28 days of the date hereof. (b) Access to the document/s produced be restricted to the applicant's client's counsel retained for the preliminary discovery application and Michael Will and Sean Field ("Will" and "Field"). (c) The applicant's counsel and Will and Field be permitted to disclose the contents of the document/s produced only to the applicant's in-house lawyers who are directly involved in this preliminary discovery application and only for the purpose of giving legal advice and obtaining instructions. (d) The applicant's counsel, Will and Field and applicant's in-house lawyers only to be permitted access to the document/s produced or the information contained in them if each such person has signed and returned to the respondent a confidentiality undertaking in the terms of the attached document. (e) Each document produced will bear the following notice: "CONFIDENTIAL: This document is confidential, and is subject to a confidentiality undertaking given to the Federal Court of Australia." The confidentiality undertaking will read as follows: "(1) I [blank] of [blank] undertake to the Court and to the respondent that (i) I will not, without the written consent of the respondent or its solicitors or an order of the Court, at any time or for any purpose other than the conduct of proceedings by the applicant against the respondent in this Court other than advice in relation to the proposed proceeding by the applicant against the respondents in this Court and the conduct of such proceeding, including submissions to the Court. (ii) Use or disclose to any person, other than permitted persons, which is a defined term, any document or information contained in or derived from any document discovered pursuant to the Court's order made 15 September 2000. (2) In this confidentiality undertaking permitted persons means: (a) applicant's counsel. (b) Michael Will. (c) Sean Field. (d) in-house lawyers of the applicant. (e) such other persons as are consented to by the respondent or its solicitors or approved by the Court provided that the persons referred to in (a), (b), (c), (d) and (e) above have signed a confidentiality undertaking in or substantially in the same form as this undertaking." I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. Associate: Dated: 5 October 2000 Counsel for the Applicant: Mr J Hammond QC Solicitor for the Applicant: Freehill Hollingdale and Page Counsel for the Respondent: Mr DJ Hammerschlag Solicitor for the Respondent: Minter Ellison Date of Hearing: 15 September 2000 Date of Judgment: 15 September 2000