Federal Court of Australia Capic v Ford Motor Company of Australia Pty Ltd (Third Party Suppression Orders) [2021] FCA 221 File number: NSD 724 of 2016 Judgment of: PERRAM J Date of judgment: 12 March 2021 Catchwords: PRACTICE AND PROCEDURE – application for suppression order – where commercially sensitive information produced by third party under subpoena – whether order necessary to prevent prejudice to proper administration of justice Legislation: Federal Court of Australia Act 1976 (Cth) ss 37AE, 37AF, 37AG, 37AI, 37AJ Federal Court Rules 2011 (Cth) r 24.22 Cases cited: Australian Competition and Consumer Commission v Air New Zealand Limited (No 3) [2012] FCA 1430 Australian Competition and Consumer Commission v Cement Australia Pty Ltd (No 2) [2010] FCA 1082 Australian Competition and Consumer Commission v Oscar Wylee (No 2) [2020] FCA 1361 Charlick Trading Pty Ltd v Australian National Railways Commission (1997) 149 ALR 647 Chief Executive Officer of Australian Transaction Reports and Analysis Centre v TAB Ltd (No 4) [2017] FCA 1532 Clark v Digital Wallet Pty Ltd [2020] FCA 877 Hogan v Australian Crime Commission [2010] HCA 21; 240 CLR 651 Motorola Solutions, Inc. v Hytera Communications Corporation (No 2) [2018] FCA 17 Steelforce Trading Pty Ltd v Parliamentary Secretary to the Minister for Industry, Innovation and Science (No 2) [2018] FCAFC 47 Titan Enterprises (Qld) Pty Ltd v Cross [2016] FCA 1275 Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Number of paragraphs: 22 Date of last submissions: 31 July 2020 (First and Second Interveners) Date of hearing: Determined on the papers Counsel for the Applicant: The Applicant did not appear Counsel for the Respondent: The Respondent did not appear Counsel for the First Intervener: Mr M P Nesbeth Solicitor for the First Intervener: Hall & Wilcox Solicitor for the Second Intervener: Mr P Thiel of Carneys Lawyers ORDERS NSD 724 of 2016 BETWEEN: BILJANA CAPIC Applicant AND: FORD MOTOR COMPANY OF AUSTRALIA PTY LTD ACN 004 116 223 Respondent PICKLES AUCTIONS PTY LTD First Intervener MANHEIM PTY LTD Second Intervener order made by: PERRAM J DATE OF ORDER: 12 MArch 2021 THE COURT ORDERS THAT: 1. Orders 1-3 made 23 June 2020 be set aside. 2. Pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth), the document produced under subpoena by Pickles Auctions Pty Ltd, being Packet S-40 in these proceedings (Pickles Document) is not to be published or disclosed to any person other than: (a) the Court; (b) the parties to this proceeding and their legal representatives, for the purposes of this proceeding (or any appeal); or (c) any other person who has been provided with a copy of the Pickles Document for the purposes of this proceeding after having given an undertaking in accordance with the orders made 8 October 2019. 3. The following references be marked as 'Confidential' in the electronic Court Book and not be copied or reproduced by, or disclosed to, persons not party to the proceeding: (a) Tab 7 Page 1 of the expert report of Mr Stockton dated 17 December 2019; and (b) the discussion of the Pickles Document on page 37 of the expert report of Dr Strombom dated 10 March 2020. 4. Orders 1-3 made 24 June 2020 be set aside. 5. Pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth), the document produced under subpoena by Manheim Pty Ltd, being Packet S-18 in these proceedings (Manheim Document) is not to be published or disclosed to any person other than: (a) the Court; (b) the parties to this proceeding and their legal representatives, for the purposes of this proceeding (or any appeal); or (c) any other person who has been provided with a copy of the Manheim Document for the purpose of the proceeding after giving an undertaking in accordance with the orders made 18 September 2019. 6. Orders 2, 3 and 5 operate until 12 March 2031. 7. Orders 1-6 be stayed until 19 March 2021. 8. The Respondent's name in this matter be changed to 'Ford Motor Company of Australia Pty Ltd'. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT PERRAM J: 1 During the trial of this matter, both Pickles Auctions Pty Ltd ('Pickles') and Manheim Pty Ltd ('Manheim') made applications under s 37AF of the Federal Court of Australia Act 1976 (Cth) ('the Act') for suppression and non-publication orders relating to the document that they had each produced to the Court ('the Pickles Document' and 'the Manheim Document' respectively). Each document contained sales data for Ford vehicles that are the subject of the proceeding along with vehicles produced by other manufacturers. The data had been produced in response to a subpoena issued by the Applicant in the proceeding on 21 August 2019. In the case of each subpoena, orders were made by a Registrar of the Court that access to the produced data would be restricted to the parties' legal counsel and those persons otherwise involved in the case who had provided a confidentiality undertaking. 2 On 24 July 2020 I ordered Pickles and Manheim ('the interveners') to file written submissions and any evidence on which they intended to rely, so that their applications could be determined on the papers. I also made interim orders on 23 June 2020 and 24 June 2020 for the Pickles Document and Manheim Document respectively under s 37AI of the Act. These orders have since been successively renewed, with the most recent renewal being ordered on 26 February 2021. Neither of the parties to the proceeding opposed the applications made by the interveners. 3 During the hearing of this matter, the Pickles Document and the Manheim Document were admitted into evidence and have been marked as 'Confidential' in the electronic Court Book. In addition, seven spreadsheets which contain the data in the Pickles Document and the Manheim Document were also marked as 'Confidential' upon their tendering. 4 The Court has the power to make suppression and non-publication orders where the order is necessary to prevent prejudice to the proper administration of justice: s 37AG(1)(a) of the Act. The principles to be applied when considering whether to make suppression and non-publication orders under Part VAA of the Act, including where, as is the case here, the information is said to be commercially sensitive are set out in: Motorola Solutions, Inc. v Hytera Communications Corporation (No 2) [2018] FCA 17 ('Motorola') at [6]-[9]; subsequently approved of by the Full Court in Steelforce Trading Pty Ltd v Parliamentary Secretary to the Minister for Industry, Innovation and Science (No 2) [2018] FCAFC 47 at [4]. The principles and authorities referred to therein show that the integrity of the litigious process is protected by preventing an entity from deriving a commercial benefit from the compulsory disclosure by a competitor of trade-sensitive information to the Court. The Court has an interest in incentivising third parties, such as the interveners here, fully to cooperate when complying with orders for the production of documents that they would otherwise prefer not to produce: Australian Competition and Consumer Commission v Cement Australia Pty Ltd (No 2) [2010] FCA 1082 at [14] per Greenwood J. However given the primacy of the public interest in open justice reflected in s 37AE of the Act, the scope and duration of any order must be necessary to achieve the desired protection: see Hogan v Australian Crime Commission [2010] HCA 21; 240 CLR 651 at [30]-[31] per the Court. The Pickles Document 5 Pickles submits that the order is necessary because disclosure of the data could cause significant financial detriment to its business and make available to its competitors confidential information relating to their operations which is said to be of significant value. To make good these submissions Pickles relies upon an affidavit of its Legal Counsel, Mr Giovanni Palumbo affirmed 17 June 2020. 6 Mr Palumbo states that part of Pickles' core business is the sale of motor vehicles, including by auction and gives detail of the number of vehicles sold in the last financial year. Mr Palumbo gives evidence that the data in the Pickles document had been extracted from Pickles' internal records relating to its vehicle sales ('Sales Data') and that this information is confidential and market-sensitive. The data in the Pickles Document includes sales from over an approximately 10 year period, ending in June 2019. 7 The commercial significance of the data is premised on its status as a subset of Pickles' overall Sales Data which it uses to give insights into a vehicle's current and historical market value, along with allowing prediction of future values. At §16 Mr Palumbo gives evidence that the Sales Data is unique in its quality and breadth across the market. Pickles derives income from selling various products and services that employ the Sales Data, amongst other things, to: forecast future vehicle values; produce current valuations; and provide customers portions of the Sales Data for certain types of recently sold vehicles. 8 These products and services are said to be in demand from individuals, fleet organisations, finance companies, banks, insurers and government bodies. Mr Palumbo states that Pickles enjoys a competitive advantage over its competitors (including Manheim) entirely because of the strength of its Sales Data. He goes on to give detail of the revenue currently derived from the Sales Data as a whole and of Pickles' plans to develop additional products and services which would further commercialise it. 9 Pickles made no attempt however to particularise the damage it would suffer if the Pickles Document were to be published as opposed to its broader collection of Sales Data. Significantly, there is no direct evidence about what proportion of the total vehicles in the Sales Data appear in the Pickles Document. In addition the estimates of revenue derived from products and services based on the Sales Data is not particularised for each product and service. 10 On the other hand, I note that the Pickles Document includes sales information for many popularly sold cars, in addition to the Ford vehicles that are the subject of this proceeding. Given that one of the products sold by Pickles is portions of the Sales Data for particular vehicle types, I accept that the information in the Pickles Document has some commercial value, even if I am left largely in the dark as to the precise detriment that would be suffered. 11 In that event I accept that the requested order is necessary in the relevant sense to prevent Pickles suffering damage to its business. This damage would come about from its competitors having access to a valuable portion of its confidential Sales Data and more directly from current customers being able freely to access something for which Pickles is currently charging a fee. 12 In reaching this conclusion I have considered that the Pickles data is unlikely to become a central plank in the resolution of this proceeding and therefore making this order will have no effect on the intelligibility of the judgment that will be delivered by the Court: see Motorola at [9]. This is because no direct reliance has been made at trial on the Pickles Document and the data it contains was not used in the model produced by the Applicant's expert on aggregate loss and damage, Mr Stockton. Although no balancing exercise is to be carried out between the utility of the order and the public interest in open justice, it does not appear that the public interest would be adversely affected by making the order: see Australian Competition and Consumer Commission v Air New Zealand Limited (No 3) [2012] FCA 1430 at [21]. 13 Pickles seeks that the order operate 'until further order'. Section 37AJ of the Act requires that any order made under Part VAA operates for no longer than is reasonably necessary to achieve the purpose for which it is made. It is common practice for orders relating to commercially valuable information to operate for a discrete period, after which the information has presumably lost any value it may have held: see eg Motorola; Chief Executive Officer of Australian Transaction Reports and Analysis Centre v TAB Ltd (No 4) [2017] FCA 1532; In-N-Out Burgers, Inc v Hashtag Burgers Pty Ltd [2020] FCA 193; Clark v Digital Wallet Pty Ltd [2020] FCA 877; Australian Competition and Consumer Commission v Oscar Wylee (No 2) [2020] FCA 1361. 14 Pickles has not provided any direct evidence about how long the information will remain valuable to it or its competitors and some of the data relates to vehicle sales that occurred 10 years ago. However, unlike in the usual case, the commercial information here is part of a historical data set that Pickles currently derives direct revenue from (and will likely do so in the future). As part of the analysis that Pickles provides its customers is based, at least in part, on the historical data set this is an appropriate case to deviate from the norm and make orders that operate for a longer duration than is usually ordered for commercially sensitive information. I will order that the orders relating to the Pickles Document operate for 10 years, until 12 March 2031. Pickles may at this point apply to have the order extended if the information has retained its commercial value. 15 Finally Pickles seeks its costs of the application. Despite the fact that the application was unopposed, Pickles points to r 24.22 of the Federal Court Rules 2011 (Cth) which allows the Court to order the issuing party to pay any reasonable loss or expense incurred in complying with the subpoena. I accept that the effect of Charlick Trading Pty Ltd v Australian National Railways Commission (1997) 149 ALR 647 ('Charlick') at 649 per Mansfield J and Titan Enterprises (Qld) Pty Ltd v Cross [2016] FCA 1275 ('Titan') at [9]-[12] per Logan J is that the scope of r 24.22 could extend to encompass the legal costs incurred in seeking the imposition of a confidentiality regime at the time that documents are first produced to the court. However these authorities do not go so far as to entitle a third party, who is applying for an order that will operate after the conclusion of the trial, to have its costs paid by an Applicant who took no steps to resist the application. Ultimately, whether any order for costs should be made is 'a matter to be determined in the particular circumstances of the case': Charlick at 649 per Mansfield J; see also Titan at [13] per Logan J. In the present circumstances, there is no cause for departure from the ordinary rule and there will be no order as to costs. The Manheim Document 16 Manheim also relies on the commercial value of the data it has provided to the Court to justify its application. The entirety of the evidence put on to support the existence of that value appears at §7 of an affidavit of Ms Nicola Pearce, Legal Counsel for the corporate group to which Manheim belongs. The paragraph states: The data contained in the documents produced by Manheim Pty Ltd: (a) contain records which have been collected over a number of years; (b) has a significant commercial value to Manheim Pty Ltd as they form part of the database which Manheim Pty Ltd relies on to provide unique services to its clients; and (c) is commercially sensitive and the release of the information would provide a risk that Manheim Pty Ltd's competitors could utilise the information to detriment of the business conducted by Manheim Pty Ltd. 17 Manheim expands on this evidence by way of its written submissions, which reveal that it operates a business selling second hand vehicles, acting as agent for its clients. It is said to maintain an extensive database spanning over 20 years, on all vehicles it has sold. This database is said to be an integral part of its business records and therefore is said to be commercially sensitive. Significantly, it emerges that, as for Pickles, Manheim has commercialised its database by developing price predicting software. It argues that it has put a large proportion of its total database into the public realm by complying with requests such as that made in this proceeding, and that if this data were made available, it would allow a competitor to replicate their price predicting product. 18 Manheim does not proffer any evidence as to the revenue it derives from its database and, as was the case for Pickles, it makes no attempt to quantify the proportion or value of the data produced in relation to its total database. Despite Manheim having relied upon the barest of evidence to support its application, I am prepared to infer that it sells a product that utilises its database to predict the sale prices of vehicles. For the reasons I have given above for Pickles, an order is therefore necessary to prevent undue detriment to Manheim's business. 19 While no direct reliance was made at trial on the Manheim Document, unlike the Pickles data, it forms an integral part of the raw data utilised by Mr Stockton in his excess depreciation model. However making the orders sought by Manheim would not affect the intelligibility of my final reasons for judgment as both Mr Stockton and the Respondent's corresponding expert, Dr Strombom, have performed extensive analysis on the data, meaning there will be no need for the reasons independently to engage with the data set. 20 Manheim also seeks that the order operate 'until further order'. As is the case for Pickles, it seems that Manheim will continue to rely on even the historical aspects of the database for its price predicting software into the foreseeable future. For the same reasons as I gave above, it is therefore appropriate for an order to be made for a longer period than is usual for information of this kind. I will make the orders relating to the Manheim Document for a period of 10 years, after which Manheim may reapply to the Court if it then wishes. ConClusion 21 I will therefore set aside the interim orders made with respect to both interveners and order that, for a period of 10 years, the contents of the documents they produced not be published or disclosed to any person other than the Court, the parties to this proceeding and their legal representatives or a person who has given an appropriate undertaking as to confidentiality. I will further direct that the references to the produced data be marked as 'Confidential' in the electronic Court Book. There will be no order as to costs. I will stay the effect of these orders for 7 days from the date of judgment to allow for any appeal. 22 Since the last judgment I delivered in this matter, the solicitors for the Respondent advised my Chambers that the Respondent had converted from a public company to a proprietary company and accordingly its name had changed. I will order that this change be reflected on the court file going forward. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Perram. Associate: Dated: 12 March 2021