Pioneer Mortgage Services v ANZ Bank [2013] NSWSC 1107

Supreme Court New South Wales

Medium Neutral Citation: Pioneer Mortgage Services v ANZ Bank [2013] NSWSC 1107 Hearing dates: 02/08/2013 Decision date: 02 August 2013 Jurisdiction: Equity Division - Commercial List Before: McDougall J Decision: Document not required to be produced for inspection. Catchwords: PRACTICE & PROCEDURE - production and inspection - notice to produce - where no forensic purpose. Category: Procedural and other rulings Parties: Pioneer Mortgage Services Pty Ltd (Plaintiff) Australia and New Zealand Banking Group (First Defendant) Columbus Capital Pty Ltd (Second Defendant) Representation: Counsel: L R Tyndall (Plaintiff) K H Barrett (First Defendant) A J McInerney SC (Second Defendant) Solicitors: Aktuna Oguz Sydney City Lawyers (Plaintiff) Ashurst (First Defendant) Brown Wright Stein Lawyers (Second Defendant) File Number(s): 2013/61317

Judgment (EX TEMPORE - REVISED 2 AUGUST 2013) 1HIS HONOUR: The question with which I am concerned today is whether a redacted or unredacted copy of a document referred to in a pleading should be made available to the party against whom some terms of the document are pleaded; or indeed, whether the document should be made available at all. 2So far as I can understand the plaintiff's Commercial List Statement, the dispute appears to relate to a mortgage origination and management agreement and fee agreement between the plaintiff and the first defendant, a bank. It seems to be said that what purports to be a sale or transfer by the bank to the second defendant of the benefit of those agreements is ineffective. Thus, as I understand it, it is said that the second defendant is not able to stand in the shoes of the bank, for example by giving rate increase notices to the plaintiff. 3The core of the plaintiff's pleaded case is that if the transaction between the defendants was to be effective, the plaintiff's consent was needed (see paragraph 11 of the Commercial List Statement). The plaintiff says that it has not given its consent. Thus, it says, the transfer or novation that appears to have occurred between the defendants "is unenforceable, null and void". 4It follows, the plaintiff says, that the second defendant has no ability to give any rate increase or other notice to the plaintiff. 5For reasons that are entirely unclear to me, the bank's Commercial List Response, apart from denying that the transfer was "unenforceable, null and void", continues to plead various clauses of the sale agreement made with the second defendant. I do not understand what forensic purpose those pleadings serve. If the plaintiff is right and the sale agreement is unenforceable, null and void, then it matters not what the clauses say. 6Alternatively, if the plaintiff is wrong and the sale agreement is enforceable according to its terms, the second defendant is in a position to enforce whatever its rights are. 7Thus, asserting that the second defendant is in a position to assert its rights, by reason of provisions of the sale agreement, is no answer to the pleaded case that the sale agreement is unenforceable, null and void. It is only if that core part of the pleaded case for the plaintiff fails that any question arises as to what the second defendant can do; and no such question is raised other than by reason of the matters to which I have referred. 8In those circumstances, it seems to me that the relevant allegations pleaded in the bank's list response do not go anywhere, forensically speaking. It follows that, at present, I am entirely unsatisfied that there is any forensic purpose to be gained by giving the plaintiff the document in question. 9I do not for a moment suggest that prima facie, the document having been referred to in a pleading (or in a document equivalent to a pleading), the plaintiff is not entitled to see it. But that prima facie entitlement needs to be measured against the question of forensic purpose. As I have said, I am not satisfied that there is any. 10Lest it be thought that this is a storm in a teacup, I should say that there is a body of evidence, from the second defendant, to the effect that the agreement in question is confidential. At first, the second defendant proposed production of a heavily redacted version of the agreement. That was opposed, on the basis that it was so heavily redacted that one could not make sense of what remains. Whilst expressing no view as to whether one can make sense of the document in any event, that complaint was certainly valid. 11The fallback position was to produce a far less redacted copy of the document. To the extent that the original document is comprehensible, that less heavily redacted version was. 12The plaintiff complains, apparently on the basis that the description given to the redactions in the affidavit does not match up exactly to what was done. That seems to me to be irrelevant, given that the claim for confidentiality is not seriously challenged, and it is apparent that what has been redacted is capable of being regarded as confidential. 13The plaintiff's solicitor, counsel and I think Managing Director entered into confidentiality agreements acceptable to the defendants. Thus, one might think, the storm in a teacup would go away. However, it appears that counsel for the plaintiff has an interest in a commercial advisory company, which on the second defendant's evidence is in some respects in direct competition with the second defendant. The plaintiff has sought to avoid that by saying that the plaintiff's counsel will respect his obligations of confidentiality, and that the businesses are not really in competition in any event. 14That seems to me to be an entirely unsatisfactory answer. As I pointed out in the course of argument, it seems to me that the plaintiff's counsel is putting himself in an entirely untenable position. Accepting, as I do, that he would not consciously seek to breach the undertaking as to confidentiality (be it express or implied), nonetheless he is being put in the situation where the one brain that engages in all aspects of his commercial and professional activity holds the information in it. Quite how counsel could subdivide his brain and keep the knowledge to one part only, is something that I simply do not understand. 15I have very grave doubts myself as to the efficacy of "Chinese walls" in large organisations. This is a case far, far different, and where in my view it is impossible to avoid the problem of unconscious communication and perhaps use of confidential knowledge for inappropriate purposes. I stress that in saying that I am not casting any reflection whatsoever on the integrity of the person concerned. 16The result is that, there being no legitimate forensic purpose shown, and it being, as I have said, apparently uncontested that the document is confidential, in my view it should not be produced. 17The second defendant proposed that the more lightly redacted copy should be held by the Court, as a confidential document (and it is appropriately marked) so that, if the legitimate forensic purpose were established, it could be made available for inspection. 18It does not it seems to me to be necessary to go to that length. I am confident that if I return the exhibits, as I propose to do, then the confidential exhibits will be kept in their present form pending the making of any application of the kind foreshadowed. 19What I have said deals with the substance of the second defendant's notice of motion. However, since it is appropriate that the motion be otherwise dismissed, the question arises as to the confidentiality undertakings given by the defendants. It seems to me to be appropriate that those undertakings should continue, and accordingly I direct that Mr Leo Tyndall, Mr Aktuna Oguz, Mr Stephen Stefanowicz and Mr George Piliotis each remain bound by the confidentiality undertaking executed by him on 2 August 2013 until the further order of the Court, but that otherwise the notice of motion be dismissed. 20The exhibits are to be handed back. 21I direct the plaintiff to serve its evidence by 16 August 2013 and stand the matter over for directions to 23 August 2013. 22In the circumstances where the battleground has shifted on two occasions and in very significant ways but where the second defendant has obtained substantial relief I think the appropriate order is that the costs of the motion be the second defendant's costs in the proceedings.