New South Wales Supreme Court CITATION : Carbotech-Australia v Yates [2006] NSWSC 269 HEARING DATE(S) : 5 April 2006 JUDGMENT DATE : 5 April 2006 JURISDICTION : Equity JUDGMENT OF : Campbell J EX TEMPORE JUDGMENT DATE : 04/05/2006 DECISION : Direction not made CATCHWORDS : PRACTICE - subpoenaed documents - claim of confidentiality made - documents concerning which claim made disclosed to solicitors for party issuing subpoena - whether party producing documents to be directed to identify those documents concerning which it maintains its claim for confidentiality CASES CITED : Harman v Secretary of State for the Home Department [1983] 1 AC 280 National Employers' Mutual General Association Ltd v Waind & Hill [1978] 1 NSWLR 372 PARTIES : Degussa Chemical Constructions Australia Pty Limited - Applicant Carbotech-Australia Pty Limited - First Plaintiff/Respondent FILE NUMBER(S) : SC 3813/05 COUNSEL : A Spencer - Applicant S A Goodman - Plaintiff/Respondent SOLICITORS : Henry Davis York - Applicant Clayton Utz Lawyers - Plaintiff/Respondent IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION EQUITY LIST CAMPBELL J WEDNESDAY 5 APRIL 2006 3813/05 CARBOTECH-AUSTRALIA PTY LIMITED AND ANOR v IAN KENNETH YATES AND ORS JUDGMENT – Ex Tempore 1 HIS HONOUR: Litigation is on foot between the plaintiff and one of its former officers and certain companies said to be connected with him, in which the plaintiff alleges that those defendants have breached confidentiality, amongst other things. The first defendant was formerly a senior officer of the plaintiff, and, according to the plaintiff, has gone out in competition against the plaintiff. The plaintiff is in a business which involves providing chemicals and services for the stabilisation of coal mines. The chemicals involved, and perhaps the services involved also to some extent, involved confidential know-how. 2 In connection with those proceedings the plaintiff served a subpoena on Degussa Chemical Constructions Australia Pty Limited. It is a company which is not only engaged in the same industry as the plaintiff, but also provides chemicals, and services, which are in competition with those of the plaintiff. It appears that part of the plaintiff's contention is that the first defendant has had various meetings, in the industry, which bear upon the question of whether the first defendant has disclosed confidential information of the plaintiff. The plaintiff has served subpoenas not only on Degussa, but also on three companies in the North Goonyella Coal Mine Group, and on the New South Wales Department of Primary Industries. Arrangements were made for the solicitors for Degussa to have access to the documents produced by the North Goonyella companies and the Department of Primary Industries, to see whether any of those subpoenaed documents contained information which Degussa said was confidential. As well, Degussa, in relation to the documents called for by the subpoena addressed to it, has made a claim of confidentiality. An interim regime has been agreed between the plaintiff and Degussa, under which access to the documents produced by Degussa, and by the other subpoena recipients that I have mentioned, will be available to lawyers of the parties only. 3 A Notice of Motion was filed by Degussa, which led to that restricted access regime being agreed upon. 4 Now, that Notice of Motion is brought back before me, as the plaintiff seeks to vary that interim regime, by having the opportunity to show certain documents to two nominated officers of the plaintiff. 5 There had been listed for hearing before me today an application concerning some 26 particular documents, which the plaintiff wished to show to those officers. An agreement has been reached, that some 14 of those documents may be shown, and that a part of another two can be shown. Thus, there are ten documents in relation to which it is agreed that the plaintiff's two officers should not have access. 6 There remains an issue about how the balance of the documents the subject of the interim regime should be dealt with. The plaintiff's solicitors wish to show as many documents as they can to their clients, for the purpose of instructions in the proceedings. The plaintiff proposes a regime under which Degussa should notify the plaintiff, by a particular date, of the particular documents which are not part of the 26 concerning which it maintains a claim for confidentiality, and concerning which of them no claim is made. It seeks that, in relation to those documents concerning which no claim is made, the documents should be released from the confidentiality regime which restricted them to legal advisers. 7 The dispute before me essentially concerns which party's lawyers should go first in categorising the documents. The plaintiff submits that Degussa should go first, in deciding the documents for which it wishes to maintain a claim for confidentiality. Degussa says that the plaintiff's solicitors should go first, and nominate which of the documents they particularly wish to show to their clients. 8 The order which the plaintiff seeks is one which depends upon the notion of documents "in relation to which a claim for confidentiality is maintained". That concept is one which, in the context in which this problem arises, seems to me to refer not only to identification of the documents which Degussa says are confidential, but also has implicit in it a notion of requiring Degussa to identify those documents which are of such a degree of confidentiality that it is not prepared to give that confidentiality up, in light of the issues in the case. There can be five-star confidential documents that the recipient of a subpoena would never voluntarily disclose. There can also be one and two-star confidential documents which are confidential, but not so important that the recipient might not agree to disclose them to a litigant in confidence if it were sufficiently important for the litigant's case that that be done. 9 The way in which subpoenaed documents are dealt with, as explained in National Employers' Mutual General Association Ltd v Waind & Hill [1978] 1 NSWLR 372 requires three quite distinct steps to be gone through. Once the documents are brought to court, there is then a quite separate question of whether access should be granted. If objection is taken on any ground to access being granted, it is the party who has issued the subpoena who has the onus of persuading the Court that it is appropriate for access to be granted. In Waind & Hill, the Court made clear that access to the private papers of a person is not granted as of course, and it is something concerning which the Court gives anxious consideration. 10 Ordinarily, the recipient of a subpoena knows nothing beyond the fact that it has been required to produce the documents, and the degree of importance that the documents have to it. The recipient of the subpoena has within its own knowledge whether the documents are, for instance, privileged, or are confidential. If it objects to producing the documents on those grounds, then unless the objection is one which is clearly untenable, it is for the person seeking access to demonstrate the need for access. 11 In the present case, demonstrating the need for access involves a consideration of not only the inherent degree of confidentiality of the documents, but also of the importance which they might play in the proceedings. The recipient of a subpoena often has no knowledge on this latter topic, and it nearly always is at a disadvantage on that topic by comparison with the party who issued the subpoena. I do not think it is appropriate to require Degussa to make that judgment call. It has already, it says, identified the documents which are confidential. It is for the plaintiff, in my view, to take the step of identifying those documents which it wishes to show to its clients, and, if it wishes the existing regime to be varied, it is it which would have the onus of persuading the Court to do so. 12 Of course, responsible lawyers would seek to minimise the occasions for actually coming to court to argue over such matters. However, even out of court, it seems to me that the appropriate way of proceeding bears an analogy to the way in which the matter would proceed in court. It is, it seems to me, for the lawyers for the plaintiff to put such facts and arguments as they might wish to the lawyers for Degussa to seek to persuade them to amend the existing regime. 13 Mr Goodman, counsel for the plaintiff, reminded me that there is some undesirability in having restricted access orders, whereby only the lawyers for the parties have access to the documents. There is, he reminds me, an inherent risk of inadvertent disclosure in breach of the restriction. Also, it puts the legal representatives of the inspecting party in a situation of conflict, or at least potential conflict, with their client. Those considerations are well recognised. As well, however, there are practical problems in a litigant itself seeking access to someone's confidential documents for the purpose of litigation. Even if documents are only shown to nominated officers of the litigant, and even if those officers are informed of the restrictions on use of the information contained in the documents which arise by analogy with Harman v Secretary of State for Home Department [1983] 1 AC 280, those officers are subject to the same risk of inadvertent disclosure as a solicitor to whom access is restricted is subject. As well, even if the officers are being punctiliously careful, the workings of the human mind are such that, once something is known, sometimes it cannot be completely obliterated. Use can sometimes be made unconsciously of information one has learned. Those considerations need to be balanced against the importance of the issues in the proceedings. 14 I decline to make the order which is propounded as order 3 in the short minutes of order, propounded by the plaintiff. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.