New South Wales Supreme Court CITATION : Ontario Teachers' Pension Plan Board & Anor v Macquarie Infrastructure Investment Management Ltd & Anor [2009] NSWSC 300 HEARING DATE(S) : 7/04/09 JUDGMENT DATE : 21 April 2009 JURISDICTION : Equity Division Commercial List JUDGMENT OF : Einstein J DECISION : Orders permitting application in so far as the extension of the undertakings necessary to allow access to the documents to be made available to nominate individuals. CATCHWORDS : Competing considerations involved in an application to release legal adviser from confidentiality undertaking to permit the disclosure of documents to a party, right of party to litigation to know the case it has to meet and to properly instruct solicitors and counsel CATEGORY : Procedural and other rulings C7 Pty Ltd v Foxtel Management Pty Ltd [2002] FCA 1189 Hadid v Lenfest Communications Inc (1996) 70 FCR 403 CASES CITED : ICAP Australia Pty Ltd v BGC Partners (Australia) Pty Ltd [2007] FCA 467 Macquarie Generation v Coal & Allied Industries Ltd [2001] FCA 1349 Mobil Oil Australia Ltd & McDonalds Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34 Reebok v Sydney Organising Committee for the Olympic Games [2000] NSWSC 295 Ontario Teachers' Pension Plan Board (First Plaintiff) PARTIES : Golden Apple Infrastructure Inc (Second Plaintiff) Macquarie Infrastructure Investment Management Ltd (First Defendant) Macquarie Infrastructure Group International Ltd (Second Defendant) FILE NUMBER(S) : SC 50031/08 COUNSEL : Mr J Stoljar SC, Mr D Sulan (Plaintiffs) Mr M Pembroke SC, Mr J Williams (Defendants) SOLICITORS : Atanaskovic Hartnell (Plaintiffs) Mallesons Stephen Jaques (Defendants) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST Einstein J Tuesday 21 April 2009 50031/08 Ontario Teachers' Pension Plan Board & Anor v Macquarie Infrastructure Investment Management Ltd & Anor JUDGMENT The notice of motion 1 The defendants by notice of motion filed on 3 April 2009 sought a number of orders. 2 One of those orders if made would permit disclosure of a number of identified documents subject to the confidentiality regime to a sub-committee of the MIG Board comprising MIG's Chairman (Mr Johnson), a non-executive director (Mr Walsh) and the CEO (Mr Hughes). 3 The matter was before the Court on 7 April 2009 when the parties respectively addressed inter alia mobilising written submissions. The Court was closed for a considerable period during which the motion was heard. 4 Ultimately the Court made orders permitting the application in so far as the extension of the undertakings necessary to allow access to the documents to be made available to Mr Johnson and Mr Hughes. At that time I made clear that reasons for the decision would be given in due course. The purpose of this judgment is to furnish those reasons. Background 5 Three MIG executives, Ms Williams, Mr Lim and Mr Sims, are responsible for giving instructions to Mallesons in respect of the proceedings. On 18 March 2008, Justice Hammerschlag granted permission to disclose specified documents which were subject to claims for confidentiality in these proceedings to these three executives to permit MIG's solicitors to take instructions as to a proposed Commercial List Response to be filed in response to OTPP's Amended Summons (but excluding the Indemnity Issues which are the subject of the order noted in paragraph 3(b) above). 6 Having now seen the documents, each of Ms Williams and Messr Lim and Sims are of the view that the information was materially price sensitive so as to support the proposed inclusion of paragraphs 16A-16D in the Commercial List Response (Black 1.4.09, [12]). 7 Ms Williams (who is the Head of Legal and Risk and Compliance for the first defendant), now having seen the documents, has also formed the view that, having regard to the nature of the matters disclosed in the documents and their obvious commercial significance and sensitivity, the decision whether MIG wishes to make the allegation in the proposed Commercial List Response should properly be made by the MIG board or a board subcommittee (Black 1.4.09, [13]). 8 I accept that that is a perfectly understandable position to adopt, particularly where OTPP is a significant security holder in MIG and there are ongoing commercial discussions between MIG and OTPP. 9 MIG has proposed that disclosure of the relevant documents be limited to a special subcommittee of the Board. 10 In ICAP Australia Pty Ltd v BGC Partners (Australia) Pty Ltd [2007] FCA 467, Jacobson J referred at [13]-[17] to the competing considerations involved in an application to release a legal adviser from a confidentiality undertaking to permit the disclosure of documents to a party, including the right of a party to litigation to know the case it has to meet and to properly instruct solicitors and counsel. His Honour in that case granted access to nominated representatives of the respondent to each class of documents in dispute on the basis that the documents, although confidential, went to important matters in the proceedings and that the respondent would be prejudiced in its defence without access to them. 11 In summarising the principles which included: Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34, Macquarie Generation v Coal & Allied Industries Ltd [2001] FCA 1349, C7 Pty Ltd v Foxtel Management Pty Ltd [2002] FCA 1189 and Reebok v Sydney Organising Committee for the Olympic Games [2000] NSWSC 295 his Honour observed as follows: 14 In Mobil Oil at 38, Hayne JA pointed out that ordinarily, the fact that documents are confidential is not a bar to inspection by the other party. He said, however, that where the parties are trade rivals, different considerations arise. 15 What underlies Hayne JA's analysis is his statement that the principles of a trade rival cannot forget the secret information once it is revealed. Thus, the value of the commercially sensitive information will be lost unless it is protected by an appropriate access regime. The implied obligation not to use the documents other than for the purpose of the proceedings is thought to be insufficient, as between trade rivals, to permit unrestricted access. 16 The balancing exercise to which Hayne JA referred in Mobil Oil at 39-40 involves weighing the needs of a party to litigation against the "legitimate concern" of a trade rival. 17 The principal factors which inform the exercise of the discretion have been stated in the authorities. A party to litigation is entitled to know the case it has to meet and to properly instruct solicitors and counsel. The nature and content of the documents, the degree of confidentiality of the information and the risk that the rival will use it to the detriment of the other party are important factors to be weighed in the balance; Mobil Oil at 39-40; Reebok at [43]; Hadid v Lenfest Communications Inc (1996) 70 FCR 403 at 410-411. Decision 12 As is apparent in from the above authorities a party to litigation is entitled to know the case it has to meet and to properly instruct solicitors and counsel. The defendants are entitled to be placed in a position where they may make informed decisions as to the conduct of the proceedings, particularly in respect of important matters such as whether to make significant amendments to their Commercial Division Response and/or to bring cross claims against the plaintiffs and their executives. 13 The current position is that Mallesons take instructions from Mr Williams, Mr Sims and Mr Lim, none of whom occupy board level standing. 14 The court's decision takes into account in a fairly delicate area the necessity for persons of the standing of Mr Hughes and Mr Johnson to act as a committee of two there being no real challenge to the bona fides of those persons. ******* 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.