FEDERAL COURT OF AUSTRALIA Cantarella Bros Pty Ltd v Du Bois [2016] FCA 1115 File number: NSD 1337 of 2015 Judge: RARES J Date of judgment: 11 August 2016 Catchwords: PRACTICE AND PROCEDURE – suppression and non-publication orders – protection of confidential information – Federal Court of Australia Act 1976 (Cth) – Federal Court Rules 2011 – where suppression and non-publication orders made under ss 37AF, 37AH and 37AI to protect confidential information – where proceedings discontinued by consent of the parties – where applicant seeks that certain documents be removed from the electronic court file and replaced with redacted documents pursuant to r 2.29(1)(a) or (b) – principles of open justice – whether pleadings and affidavits to be removed and replaced with redacted versions Legislation: Federal Court of Australia Act 1976 (Cth) ss 37AF, 37AH, 37AI Federal Court Rules 2011 rr 2.29, 2.32 Cases cited: Anchorage Capital Partners Pty Limited v ACPA Pty Limited (No 3) (2015) 331 ALR 512 Hearne v Street (2008) 235 CLR 125 Scott v Scott [1913] AC 417 Date of hearing: 11 August 2016 Registry: New South Wales Division: General Division National Practice Area: Intellectual Property Sub-area: Copyright and Industrial Designs Category: Catchwords Number of paragraphs: 19 Counsel for the Applicant: Mr M Green SC with Ms M Gaven Solicitor for the Applicant: Herbert Smith Freehills Counsel for the Respondents: The Respondents did not appear ORDERS NSD 1337 of 2015 BETWEEN: CANTARELLA BROS PTY LTD Applicant AND: CHARLES DU BOIS First Respondent LAVAZZA AUSTRALIA PTY LTD ACN 605 275 107 Second Respondent LUIGI LAVAZZA SPA Third Respondent FILIPPO TINNIRELLO Fourth Respondent JUDGE: RARES J DATE OF ORDER: 30 AUGUST 2016 THE COURT ORDERS THAT: 1. The exhibits and annexures listed in Annexure A Part 1, where filed or provided to the Court, be returned to the solicitors for the Applicant within 7 days of these Orders. 2. The documents listed in Annexure A Part 2 be removed from the Court file and replaced with redacted versions of the documents provided to the Court, in accordance with r 2.29 of the Federal Court Rules 2011, and stored in a sealed envelope recording the Order at 3 below. 3. No access be granted to any third party under r 2.32 of the Federal Court Rules 2011 to unredacted versions of the documents listed in Annexure A Part 2, contained in this envelope, without the leave of a judge of the Court. ANNEXURE A 1. Confidential documents to be returned to the solicitors for the Applicant Document Annexures to the First Affidavit of Fred Fadi Audi 1. Confidential Annexure FFA-5 2. Confidential Annexure FFA-9 3. Confidential Annexure FFA-11 4. Confidential Annexure FFA-12 5. Confidential Annexure FFA-13 6. Confidential Annexure FFA-14 7. Confidential Annexure FFA-15 8. Confidential Annexure FFA-16 9. Confidential Annexure FFA-17 10. Confidential Annexure FFA-19 Annexures to the Second Affidavit of Fred Fadi Audi 11. Confidential Annexure FFA-49 2. Documents to be replaced on the Court file with redacted versions and the original versions held by the Registry in an envelope Document Applications and pleadings 1. Amended Originating Application 2. Further Amended Originating Application 3. Statement of Claim 4. Defence of the Second and Third Respondents 5. Defence of the Fourth Respondent Annexures to the First Affidavit of Fred Fadi Audi 6. Confidential Annexure FFA-2 7. Confidential Annexure FFA-23 Annexures to the Affidavit of Crispian Paul Lynch 8. Confidential Annexure CPL-3 Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT (REVISED FROM THE TRANSCRIPT) RARES J: 1 These proceedings have been resolved by agreements between Cantarella Bros Pty Limited, the applicant, and each of the four respondents, being Cantarella's former employee, Charles Du Bois, their commercial competitors, Lavazza Australia Pty Limited and Luigi Lavazza SPA, and one of Lavazza's former Australian employees, Filippo Tinnirello. Background 2 The case involved claims made by Cantarella that, while in its employ, Mr Du Bois had misused and collected for himself confidential information of Cantarella relating to matters he learned in his capacity as one of Cantarella's employees. In essence, the allegations concerned Mr Du Bois using and also passing on to Mr Tinnirello and Lavazza some of that information. 3 No findings have been made about whether this was a breach of any equitable, common law or statutory obligation or duty by Mr Du Bois, or of any involvement in that conduct by any of Lavazza or Mr Tinnirello. The terms of the resolution of the proceedings are confidential to the parties and have not been disclosed to the Court, although each respondent has given certain undertakings to the applicant and the Court. 4 From the brief description of the allegations that I have just given, it will be obvious why, at the time I granted initially, ex parte relief on 5 November 2015 against, first, Mr Du Bois and subsequently, when the other respondents were joined, against each of them, and then continued each of those as interim injunctions against each of the respondents using the asserted confidential information. 5 During the course of the proceedings, I made a number of orders under ss 37AH and 37AI of the Federal Court of Australia Act 1976 (Cth) in order to preserve the confidentiality of the information the subject of Cantarella's asserted claims. Cantarella now applies for orders that some of the confidential exhibits on which it relied and certain parts of the pleadings be either returned to it, or, replaced by a redacted version on the Court's file under r 2.29(1)(a) or (b) of the Federal Court Rules 2011 or pursuant to an order that dispenses with the Rules but gives effect to such removals or replacements. 6 There is no particular provision of the Rules, other than those to which I have referred, that enables the Court to act on its own initiative to make an order to have the file altered by the removal of a document and returned to a party, who has caused it to be filed in circumstances where it claims that the document is confidential, or, alternatively, to order that a redacted version of the document be substituted so as to preserve a claim for confidentiality. Here, each of the parties has sought that documents, including pleadings, on the Court file be either returned or substituted with a redacted version. The proposed redactions 7 Several documents were not filed electronically because they were annexed to a very large bundle of confidential annexures to affidavits, principally, of Fred Audi, a senior executive of Cantarella, on which Cantarella relied to obtain the ex parte relief in November and December 2015 when it commenced the proceedings against Mr Du Bois and then later joined the other respondents. 8 The redactions principally concern the specific identification in the pleadings of limited amounts of information about customers or transactions that Cantarella claims are confidential. The substantive documents that are sought to be removed from the file in their entirety or returned are ones which include, among others, customer lists with pricing and commercial terms. Such matters appear prima facie to be information that is confidential to Cantarella and would be of considerable advantage, were its competitors to be able to have access to them as documents used in open Court or to be made accessible to members of the public seeking access to documents on the Court file under r 2.32. 9 Importantly, the documents were not used by Cantarella in open Court in a manner shorn of the maintenance of their asserted confidentiality. They were used subject to orders made for the suppression or non-publication of that evidence under ss 37AF and 37AI. Cantarella led evidence that established, prima facie, that the documents and information the subject of these reasons contained its confidential information. Consideration 10 The principal aim of the Court is to do justice, as Viscount Haldane LC identified in Scott v Scott [1913] AC 417 at 437-438. If a party, as the price of coming to Court to protect its confidential information, had to see its trade secrets destroyed by being forced to have them tendered in open court with no protection, the Court could not do justice to that party. In the circumstances of these proceedings, the question whether Cantarella would ultimately have been able to succeed is not the relevant consideration here. It had to disclose to the Court, under the protection of its inherent or implied power to limit publication or, under ss 37AF, 37AH or 37AI, what it asserted was confidential information in order that it could seek, first, ex parte and, secondly, interim relief to prevent what it claimed would be further misuse that would cause it damage were that information further published or disclosed in a way that was not subject to the suppression and non-publication orders that I made. 11 The proceedings have resolved consensually without the documents needing to be deployed in a fully contested case and Cantarella's claim to confidentiality determined. The position now is that, if the documents are left on the Court file or are accessible to third parties by applications for inspection of the Court file, there will come a time when people not familiar with the proceedings, such as a docket judge, may not be able to assess or protect the confidentiality of that material. 12 Since late 2014, the Court has had an electronic filing system for all new matters filed after that time. Those matters have no paper file kept at the Court at all, and all documents and all Court files initiated since that time have been kept electronically. Thus, in one sense, it will be much easier for people to be able to be given access to documents when they seek to inspect court files. However, this, itself, can create a risk of an unintended error or omission resulting in disclosure of confidential, or allegedly confidential, information stored on the electronic court file. 13 I am of opinion that it is both practicable, and will not interfere with the principle of open justice, for orders to be made enabling portions of the pleadings that refer to what, prima facie, can be classed as commercially confidential material to be redacted in a specific and tailored way. That can be achieved by ordering that names or numbers that convey apparently confidential information, be redacted from what appeared in the original unredacted pleading which can then be removed from the Court file and replaced with a redacted copy in the form that I have approved after going through each of the documents in Court with senior counsel for Cantarella. 14 Likewise, I am of opinion that documents or portions of the documents that I will identify in the orders I will make be either redacted or removed entirely from the Court file to the extent they have made their way on to it. 15 Perram J took a slightly different approach in a similar situation in Anchorage Capital Partners Pty Limited v ACPA Pty Limited (No 3) (2015) 331 ALR 512 at 523 [46]-[48]. As he there explained, during the course of the applications before him he had indicated to the parties that he proposed not to deal with any application under s 37AF at the time of the various earlier hearings, but would wait until the conclusion of the proceedings to determine how best to deal with confidential, or allegedly confidential, material. His Honour noted that, in that case, no member of the public had applied to inspect the exhibits. He said that on the final determination of the proceedings he would immediately direct the return of the relevant exhibits and the destruction of all copies of those exhibits held by the Court. That would leave copies that were already in the parties' hands extant and protected by the existing confidentiality undertakings and the implied undertaking or obligation referred to in Hearne v Street (2008) 235 CLR 125. However, his Honour took the view that where documents, such as written submissions had been filed, he would order them to be placed in an envelope on which was written an order that its contents were not to be accessed without leave of a judge, together with a reference to the reasons his Honour gave. 16 Last week a reporter for The Australian Financial Review made a request for access to some documents on the Court file in these proceedings. That request has not yet been resolved. However, no other third party has sought, let alone obtained, access to any of the documents that have been filed in, or relied on, during the course of these proceedings. 17 Pleadings are, and always have been regarded as, part of a Court's record since they delineate the issues that the Court must hear and determine in proceedings before it. I am of opinion that, ordinarily, it is desirable that the electronic version of the pleadings, that remain as part of the permanent record of the Court, be kept in a way that will not disclose something over which a bona fide claim for confidentiality has been asserted, but not determined. In those situations it may be appropriate, where, in the interests of justice, it is necessary to do so, to allow a redacted version of the pleading to be substituted at an appropriate time so as to guard against any risk that confidential, or allegedly confidential, information in the unredacted version not be disclosed to third parties through inadvertence or otherwise. Nonetheless, it seems to me that an original copy of such pleading should be kept in an envelope in the Court in the way Perram J identified in Anchorage 331 ALR at 532 [48], which is what I propose to order. 18 On the other hand, the affidavit material has only been disclosed to the Court and the parties and under orders made pursuant to ss 37AF, 37AH and or 37AI and subject to the implied undertaking as to confidentiality. In those circumstances, it is appropriate that, to the extent the affidavit material to which I have referred could be said to form part of the Court file, albeit that it has not been electronically added onto it, it should be removed or treated as not being part of the Court record. However, the electronic file should contain a notation that the relevant document has been relied on, on one or more particular occasions, when the matter was before the Court. Conclusion 19 For these reasons, I will make orders in the form discussed between senior counsel and myself. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. Associate: Dated: 12 September 2016