FEDERAL COURT OF AUSTRALIA Brannaghan v Thiess Pty Ltd and Degremont Pty Ltd trading as Thiess Degremont Joint Venture [2013] FCA 790 Citation: Brannaghan v Thiess Pty Ltd and Degremont Pty Ltd trading as Thiess Degremont Joint Venture [2013] FCA 790 Parties: DAVID TRISTAN BRANNAGHAN v THIESS PTY LTD (ACN 010 221 486) AND DEGREMONT PTY LTD (ACN 051 950 068) TRADING AS THIESS DEGREMONT JOINT VENTURE, AUSTRALIAN SECURITY AND INVESTIGATIONS (TAS) PTY LTD (ACN 040 959 701), BRUCE TOWNSEND and STEPHEN JOHN CONRAD File number: VID 242 of 2012 Judge: NORTH J Date of judgment: 17 July 2013 Legislation: Federal Court of Australia Act 1976 (Cth); s 33V Date of hearing: 17 July 2013 Place: Melbourne Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 19 Solicitor for the Applicant: B Phi of Slater & Gordon Lawyers Counsel for Mr Graham Stafford: S M Keating Solicitor for Mr Graham Stafford: Francis Alan Rutherford Counsel for the First Respondent: P G Crennan Solicitor for the First Respondent: Ashurst Solicitor for the Second, Third and Fourth Respondents: D Markham of Cornwall Stodart IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 242 of 2012 BETWEEN: DAVID TRISTAN BRANNAGHAN Applicant AND: THIESS PTY LTD (ACN 010 221 486) AND DEGREMONT PTY LTD (ACN 051 950 068) TRADING AS THIESS DEGREMONT JOINT VENTURE First Respondent AUSTRALIAN SECURITY AND INVESTIGATIONS (TAS) PTY LTD (ACN 040 959 701) Second Respondent BRUCE TOWNSEND Third Respondent STEPHEN JOHN CONRAD Fourth Respondent JUDGE: NORTH J DATE OF ORDER: 23 JULY 2013 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. Pursuant to section 33V of the Federal Court of Australia Act 1976 (Cth) (Act), the proposed settlement of this proceeding as against the First Respondent, in accordance with the Deed of Release at annexure MRC-1 of the confidential affidavit of Marcus Rogers Clayton affirmed on 11 July 2013 (the Settlement Agreement), be approved. 2. Subject to order 8 below, and pursuant to section 33ZB(a) and/or section 33ZF of the Act, the persons affected and bound by the settlement of the proceeding be the Applicant, the First Respondent and the group members (as defined in the Originating Application filed by the Applicant on 16 March 2012) (the group members). 3. Subject to order 8 below, and pursuant to section 33ZF of the Act or otherwise, the Applicant be authorised nunc pro tunc on behalf of the group members to enter into and give effect to the Settlement Agreement on behalf of the group members. 4. Pursuant to section 33V of the Act, the Applicant have leave to discontinue the proceeding as against the First Respondent. The proceeding be otherwise dismissed in respect of the First Respondent. 5. Subject to order 6 below, pursuant to section 37AF(1)(b)(iv) of the Act, and on the ground that the order is necessary to prevent prejudice to the proper administration of justice, the confidential affidavit of Marcus Rogers Clayton affirmed on 11 July 2013 and its annexures be made confidential, forbidden from publication, and be sealed on the Court file in an envelope marked "Confidential - Not to be opened except by leave of the Court or a Judge." 6. Counsel for Graham Stafford have leave to uplift, inspect and return to the custody of the Court on or before 29 July 2013 the Settlement Agreement, noting that Counsel for Graham Stafford undertakes to the Court that: (a) she will hold the Settlement Agreement confidential and not provide the Settlement Agreement to any person; and (b) she will not disclose the terms of the Settlement Agreement to any person other than Mr Stafford and his solicitors for the purpose of providing Mr Stafford with advice regarding the effect of the Settlement Agreement on group members in the proceeding. 7. Graham Stafford and his solicitors must hold any information provided to them by Counsel for Mr Stafford pursuant to order 6(b) confidential, and must not disclose such information to any other person. 8. Pursuant to section 33ZF of the Act or otherwise, Graham Stafford has leave to apply to the Court for orders that he not be bound by the settlement approved under order 1 above, on or before 9 August 2013. 9. The Applicant has leave to file and serve an Amended Originating Application on or before 29 July 2013, in the terms of annexure MRC-1 to the non-confidential affidavit of Marcus Rogers Clayton affirmed on 11 July 2013. 10. The First Respondent has leave to file and serve a Confidential Affidavit in accordance with clause 2.3 of the Settlement Agreement, which Affidavit and its annexures are to be made confidential, forbidden from publication, and sealed on the Court file in an envelope marked "Confidential - Not to be opened except by leave of the Court or a Judge", on the ground that the order is necessary to give effect to the terms of the Settlement Agreement. 11. Except as required by law, the First Respondent will not by itself, its directors, employees, servants, agents or any of them use, disclose, publish, send in electronic form or otherwise communicate to any person other than a lawyer for the purpose of obtaining legal advice or for the purposes of the conduct by any party of this proceeding or Supreme Court of Victoria proceeding number S CI 2011 04865, information about an Employee or Prospective Employee (as those terms are defined in the Originating Application of the Applicant dated 16 March 2012 in this proceeding) held by, or in the possession custody or control of the First Respondent which was provided to the First Respondent by one or more of the Second, Third or Fourth Respondents or their servants or agents and which was not otherwise provided to the First Respondent with the knowledge and consent of the Employee or Prospective Employee. 12. The Applicant has leave to file and serve an Amended Outline of Damages Claims and any further Affidavits on which the Applicant intends to rely on or before 9 August 2013. 13. The Second, Third and Fourth Respondents have leave to file and serve any Cross-Claims and any Affidavits on which they intend to rely on or before 6 September 2013. 14. The proceeding be referred for mediation by a Registrar of the Court, to be held on or after 11 September 2013 if possible. 15. The proceeding be adjourned for directions on 16 September 2013. 16. There be no order as to the costs of the proceeding as between the Applicant and the First Respondent. 17. Liberty to apply on two days' notice. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 242 of 2012 BETWEEN: DAVID TRISTAN BRANNAGHAN Applicant AND: THIESS PTY LTD (ACN 010 221 486) AND DEGREMONT PTY LTD (ACN 051 950 068) TRADING AS THIESS DEGREMONT JOINT VENTURE First Respondent AUSTRALIAN SECURITY AND INVESTIGATIONS (TAS) PTY LTD (ACN 040 959 701) Second Respondent BRUCE TOWNSEND Third Respondent STEPHEN JOHN CONRAD Fourth Respondent JUDGE: NORTH J DATE: 17 JULY 2013 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 Before the Court is an application under s 33V of the Federal Court of Australia Act 1976 (Cth) (the Act) for the approval of a proposed settlement of this proceeding between the applicant and the first respondent. The terms of the settlement are contained in a written agreement between the applicant and the first respondent. 2 Section 33V of the Act provides: (1) A representative proceeding may not be settled or discontinued without the approval of the Court. 3 The applicant also seeks leave to file an amended application reflecting the discontinuance of the proceeding against the first respondent. The applicant accepted that if the settlement with the first respondent was approved, the proceeding between the applicant and the second, third and fourth respondents would continue. 4 The applicant and the first respondent also seek an order that the agreement and the affidavit in support of the application for approval, affirmed by the solicitor for the applicant, Mr Clayton, on 11 July 2013, remain confidential. 5 The proceeding concerns the alleged wrongful collection, use and disclosure by the respondents of confidential information relating to the applicant and group members. The applicant and group members are employees or potential employees of the first respondent. 6 The agreement provides that the first respondent will institute a regime to manage and protect the confidential information in question from being wrongfully disseminated or disclosed. In this sense, by the agreement the applicant and the group members achieve in substance the result which they sought from the proceeding against the first respondent. 7 Two matters of concern were raised by the Court in relation to the application for approval of the agreement. 8 The first matter of concern relates to costs. It is agreed between the applicant and the first respondent that there be no order as to costs. The question raised was whether it was reasonable for the Court to approve an agreement that each party to the agreement bear their own costs. Of concern was that there might be costs consequences which flow to the applicant from the outcome of the ongoing litigation between the applicant and the second, third and fourth respondents for which the first respondent might, but for the agreement, reasonably be called on to contribute. 9 The reasoning behind the agreement that each party bear their own costs was not explained in the affidavits in support of the application for approval. 10 Mr Crennan, who appeared as counsel on behalf of the first respondent, explained that in coming to the agreement, each party was legally advised and likely made an assessment of the risks of a litigated outcome of the proceeding against the value of the terms of the agreement. Mr Crennan submitted that whilst the applicant was giving up any entitlement he may have to costs, on the other hand, the applicant is also avoiding any risk of any costs being ordered against him in favour of the first respondent. Whilst certain causes of action originally instituted in relation to the first respondent would not be pursued under the agreement, the agreement also contains terms which go beyond what a Court might order in a litigated outcome. Mr Crennan's oral submissions that the agreement in relation to costs is a reasonable approach should be accepted. 11 The second matter of concern was whether it was a reasonable for the applicant to settle with the first respondent when the proceeding would continue against the second, third and fourth respondents. The allegations of wrongful acquisition and misuse of information centrally point to liability on the part of the second, third and fourth respondents, albeit as agents or otherwise of the first respondent. Again, the question was whether there might be consequences which flow to the applicant from the outcome of the litigation between the applicant and the second, third and fourth respondents for which the first respondent might be liable, but enforcing that liability would be foreclosed by the agreement. 12 Mr Crennan submitted that the Court must assess the reasonableness of the agreement and that exercise does not require every potential future possibility which might bear on the value of the agreement to be considered. Mr Crennan contended that the concern with the potential consequences of the litigation between the applicant and the second, third and fourth respondents was not within the realm of reasonably predictable circumstances. Hence, they should not be determinative in the assessment of the reasonableness of the agreement between the applicant and the first respondent. This submission should be accepted. 13 Consequently, the agreement should be approved. The applicant will have leave to file an amended application reflecting the discontinuance of the proceeding against the first respondent. 14 The final matter relates to whether the agreement and the affidavit in support of the approval application affirmed by Mr Clayton on 11 July 2013 should be kept confidential. 15 The effect of a confidentiality order means that the circumstances and terms of the settlement remain closed to the public. There is a public value in the outcome of the proceeding and circumstances of the Court's approval being available for public scrutiny. At the same time there is a public benefit, as well as a benefit to the parties, in the encouragement of the resolution of litigation by agreement. 16 Where certain issues are regularly litigated it is particularly important to make settlement outcomes publicly available. Parties to later litigation need to refer back to outcomes in other cases in order to assess the likely outcome in comparable litigation. An example is to be found in the increasing number of disability discrimination claims brought by students against schools in this Court. In those cases, the settlements usually include a confidentiality clause. Hence the range of outcomes is not available to litigants involved in similar cases later. In due course, the desirability of this practice might need to be examined by the Court. That would involve determining how the value of open justice is to be balanced against the need to encourage litigants to reach negotiated settlements of litigation. 17 Those considerations do not arise in an acute form in this case. The causes of action and the circumstances of this proceeding are unusual. The disadvantage referred to above which arises from keeping the terms of the settlement confidential do not arise. The orders of the Court will be on the public record. To some degree the outcome of the case will thus be public. 18 The Court will make orders that ensure that the agreement between the applicant and the first respondent and the affidavit of Mr Clayton affirmed on 11 July 2013 will be kept confidential. 19 The parties are to file a minute of proposed orders to reflect these reasons. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice North. Associate: Dated: 8 August 2013