Brightstar Logistics Pty Limited v Australian Securities and Investments Commission [2010] FCA 245

FEDERAL COURT OF AUSTRALIA

Brightstar Logistics Pty Limited v Australian Securities and Investments Commission [2010] FCA 245 Citation: Brightstar Logistics Pty Limited v Australian Securities and Investments Commission [2010] FCA 245

Parties: BRIGHTSTAR LOGISTICS PTY LIMITED v AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

File number: NSD 565 of 2009

Judge: EMMETT J

Date of judgment: 4 May 2010

Date of hearing: 19, 20, 22 April 2010, 4 May 2010

Place: Sydney

Division: GENERAL

Category: No catchwords

Number of paragraphs: 21

Counsel for the Appellant: J Simpkins SC with T Baw

Solicitor for the Appellant: Sydun & Co Solicitors

Counsel for the Respondent: P Singleton

Solicitor for the Respondent: Australian Securities and Investments Commission

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION NSD 565 of 2009

ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL

BETWEEN: BRIGHTSTAR LOGISTICS PTY LIMITED

Appellant

AND: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Respondent

JUDGE: EMMETT J

DATE: 4 MAY 2010

PLACE: SYDNEY

REASONS FOR JUDGMENT 1 This proceeding is an appeal from a decision of the Administrative Appeals Tribunal (the Tribunal) affirming a decision of the respondent, Australian Securities and Investments Commission (the Commission), declining to make an order under Part 2M.6 of the Corporations Act 2001 (Cth) (the Corporations Act). On 23 March 2010, I ordered that the appeal be dismissed with costs, but did not publish my reasons for making those orders. However, I provided reasons to the parties on the basis that the reasons would remain confidential to the parties until the appellant, Brightstar Logistics Pty Ltd (Brightstar), had had an opportunity of making submissions concerning non-publication of the reasons either in whole or part. 2 I subsequently heard argument from both Brightstar and the Commission on Brightstar's application for orders that the reasons not be published pending the hearing of an appeal or, alternatively, that the reasons be published only in a redacted form, pending the hearing of an appeal. In the course of that argument, submissions were made on behalf of the Commission that no factual basis had been established by Brightstar for the making of the orders sought. Accordingly, I adjourned the hearing of the application to enable Brightstar to adduce evidence in support of its application. 3 When the hearing resumed today, Brightstar tendered a report by Ms Jennifer Exner, a partner in the forensic practice of Deloitte Touche Tohmatsu. The report was tendered as evidence of Ms Exner's opinion as to matters to which I shall refer directly. Brightstar also referred to a number of documents that were in evidence before the Tribunal. 4 Counsel for the Commission objected to Ms Exner's report. The Commission accepted that Ms Exner had specialised knowledge based on her training, study and experience as a member of the Institute of Chartered Accountants in Australia and a Bachelor of Economics from Macquarie University. Her experience includes the management and delivery of a range of investigation and evaluation assignments across Australia. However, the Commission contended that the report did not disclose how the opinions expressed in the report were based on Ms Exner's specialised knowledge. The Commission contended that Ms Exner's report did not disclose her reasoning process with the requisite particularity. Unless it is demonstrated that the opinion evidence of a witness is based on the specialised knowledge of the witness, s 79 of the Evidence Act 1995 (Cth) does not constitute an exception to s 76, which provides that evidence of an opinion is not admissible to prove the existence of a fact about the existence of which the opinion is expressed. 5 In the course of argument as to the admissibility of Ms Exner's report, I suggested some amendments to the reasons that I had furnished to the parties that may alleviate Brightstar's concerns, but at the same time satisfy the Commission's insistence that principles of open justice required that the Court's reasons for its decision be published in full. For reasons that I shall now give, I have concluded that no order should be made restricting publication of my reasons, amended in the circumstances to which I have just referred. It is appropriate that I give my reasons for that conclusion. 6 The circumstances of this present application are somewhat paradoxical. The basic issue in the proceeding before the Tribunal was whether Brightstar should be exempted from complying with the requirements of Part 2M.6 of the Corporations Act to lodge financial reports with the Commission. The basis upon which it sought that relief is that its suppliers or competitors would have access to information that is presently confidential, which they could use to approach Brightstar's principal customer, Telstra Corporation Limited (Telstra). Brightstar asserted that that could lead to the loss of its contractual relationship with Telstra. 7 A theme that pervaded Brightstar's case before the Tribunal and its contentions on appeal concerned the question of what was described as the reverse engineering argument. Brightstar asserted before the Tribunal that its suppliers and competitors could deduce profit share information from the information contained in the reports that it would be required to lodge with the Commission. Armed with that knowledge, suppliers or competitors could act so as to squeeze Brightstar's existing profit levels in negotiations with Brightstar. Accordingly, the suppliers or competitors could attempt to negotiate for the sale of products direct to Telstra, thus substantially interfering with Brightstar's existing contractual arrangements. 8 Brightstar says that there is nothing presently in the public domain that sets out the reverse engineering technique and that disclosure of the reverse engineering technique might permit suppliers and others to engage in the very process that the Tribunal determined it would not be engaged in. The basis upon which Brightstar now seeks orders that the whole or part of the reasons not be published pending the outcome of an appeal is that publication of the reasons could provide suppliers with a "How to Manual" of the very process that Brightstar said would cause it severe economic detriment. 9 Thus, Brightstar says, it would be put in a position where: · in order to advance its case before the Tribunal, it had sought to demonstrate how the information in the reports might be used to its disadvantage; · that case was rejected by the Tribunal; · in consequence of that rejection, the financial information in the accounts would be published; · publication of the reasons would make public the reverse engineering technique that Brightstar had advanced to the Tribunal on a confidential basis; and · suppliers and competitors would be placed in an advantageous position to analyse the information in the accounts by use of the reverse engineering technique.