FEDERAL COURT OF AUSTRALIA

Spatialinfo Pty Ltd v Telstra Corporation Ltd [2005] FCA 1902

SPATIALINFO PTY LIMITED v TELSTRA CORPORATION LIMITED and AUTODESK AUSTRALIA PTY LTD

V 240 OF 2004

SUNDBERG J

22 DECEMBER 2005

MELBOURNE

THE COURT ORDERS THAT:

1.         The use and disclosure of documents provided or to be provided in this proceeding, which a party claims to be confidential, be subject to and in accordance with Annexure X to these Orders.

2.         Upon receipt of signed confidentiality undertakings from the second respondent (Autodesk), the applicant (Spatialinfo) forthwith produce to Autodesk the documents listed in the Notice to Produce dated 31 October 2005 and the first respondent (Telstra) forthwith produce to Autodesk the documents listed in the Notice to Produce dated 24 October 2005.

3.         Telstra file and serve any request for further and better particulars of Spatialinfo’s Second Further Amended Statement of Claim (Claim) on or before 20 January 2006.

4.         Spatialinfo answer any request for further and better particulars filed and served in pursuance of Order 3 on or before 3 February 2006.

5.         Autodesk file and serve any request for further and better particulars of Spatialinfo’s Claim on or before 10 February 2006.

6.         Telstra and Autodesk file and serve any further motion or motions to strike out Spatialinfo’s claim, together with any supporting submissions, on or before 10 February 2006.

7.         Spatialinfo answer any request for further and better particulars filed and served in pursuance of order 5 on or before 17 February 2006.

8.         On or before 17 February 2006:

(a)        Telstra file and serve its Defence to Spatialinfo’s claim;

(b)        Telstra file and serve any Amended First Cross Claim on Spatialinfo;

(c)        Telstra file and serve any Amended Second Cross Claim on Autodesk.

9.         If Telstra files and serves a motion in accordance with Order 6:

(a)        Orders 11, 12, 14 and 16 be vacated;

(b)        Spatialinfo file and serve any submissions in reply on or before 24 February 2006; and

(c)        the matter be re-listed before Justice Sundberg on the first available date after 3 March 2006.

10.       If Autodesk files and serves a motion in accordance with order 6:

(a)        Orders 13 and 15 be vacated;

(b)        Spatialinfo file and serve any submissions in reply on or before 24 February 2006; and

(c)        the matter be re-listed before Justice Sundberg on the first available date after 3 March 2006.

11.       On or before 10 March 2006:

(a)        Spatialinfo file and serve its Defence to Telstra’s First Cross Claim or Amended First Cross Claim (as the case may be); and

(b)        Spatialinfo file and serve any Reply to Telstra’s Defence.

12.       On or before 24 March 2006 Telstra file and serve any Reply to Spatialinfo’s Defence.

13.       On or before 31 March 2006 Autodesk file and serve its Defence to Spatialinfo’s Claim.

14.       On or before 31 March 2006 Autodesk file and serve its Defence to Telstra’s Second Cross Claim or Amended Second Cross Claim (as the case may be).

15.       On or before 14 April 2006 Spatialinfo file and serve any Reply to Autodesk’s Defence.

16.       On or before 14 April 2006 Telstra file and serve any Reply to Autodesk’s Defence to Telstra’s Second Cross Claim or Amended Second Cross Claim (as the case may be).

17.       The matter be adjourned for directions before Justice Sundberg on 28 April 2006.

18.       Costs be reserved.

19.       There be liberty to apply.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

RULING

BACKGROUND

1                     The parties have been unable to agree upon a regime to govern the treatment of their confidential documents. The applicant (Spatialinfo) has proposed its model which the first respondent (Telstra) and the second respondent (Autodesk) do not accept. Telstra and Autodesk have prepared a model acceptable to both of them which Spatialinfo does not accept. The parties’ inability to agree has delayed action on notices to produce given by Autodesk to Telstra and Spatialinfo nearly two months ago. See [14].

2                     A copy of the Spatialinfo model is annexed to this ruling marked “Annexure 1”. A copy of the Telstra/Autodesk model is annexed marked “Annexure 2”.

SPATIALINFO’S MODEL

3                     The Spatialinfo model has too many unsatisfactory features for it to be accepted as the governing regime.

4                     The starting point in clause 1 is that all documents and information exchanged during the proceeding are to be treated as confidential. It cannot at this early stage of the proceeding be said with any confidence that all such documents and information will be confidential. More importantly, however, this confidentiality default position is neither conventional nor appropriate. Putting privilege to one side, the proper course, both in principle and practice, is for a party who is requested to provide documents to make a bona fide assessment as to whether those documents or any of them are confidential, and then make a claim in relation to such as them that are considered to be confidential. An agreed or approved confidentiality arrangement will then apply to those documents.

5                     Clauses 3 and 10 impose “additional restrictions” in relation to the parties’ Confidential Software Information (CSI) and Confidential Financial Information (CFI). There is no machinery for notification of the information that is claimed to have this special character.

6                     Clauses 5 to 8 of the “Applicant’s obligations” more or less correspond with clauses 11, 12 and 16 to 18 of the “First and Second Respondents’ obligations”. It is convenient to deal with such of the latter clauses as require comment, because the respondents’ attack on the Spatialinfo model was directed to the provisions that applied to them. For ease of exposition I will use Telstra as the example rather than referring to both respondents.

7                     Clause 12 prohibits the disclosure of Spatialinfo’s CSI to “any prospective or actual witness of fact in the proceeding” other than CSI that has been previously disclosed to the witness during the period to which the witness’ evidence relates. In my view this is not a workable arrangement. A solicitor handling the matter on Telstra’s behalf will have to approach the disclosure question on the basis that the information is prima facie CSI. In consultation with a prospective or actual witness the solicitor will have to determine, without disclosing the contents of the information to the witness, whether it has previously been disclosed to the witness during the relevant period. No harm will ensue if at the end of the consultation it appears that it has been earlier disclosed. But it is easy to imagine cases in which the determination process may itself result in the disclosure of CSI to a witness who is not qualified to receive it. Clause 12 thus puts the solicitor in an invidious position.

8                     The observations in [7] are applicable to clause 15.

9                     The observations in [7] are applicable to clause 16. Without disclosing the content of the CFI, Telstra’s solicitor will have to determine, in consultation with a prospective or actual witness, whether that person had previously received the CFI in the ordinary course of his or her duties as a Telstra employee.

10                  Clauses 17 and 18 require Telstra to give notice of its intention to disclose CSI or CFI to an expert. That notice must include details of the expert’s qualifications, current employment, previous dealings with Telstra and any current or previous dealings with persons in the telecommunications and utilities software industries. This is said to be necessary so that Spatialinfo can determine whether the expert is a competitor or associated with a competitor such that disclosure will cause damage to Spatialinfo. The expert will already have signed a confidentiality agreement under clause 11. Clauses 17 and 18 go beyond what is customary in confidentiality agreements, and are unduly onerous. Telstra and Autodesk have their own confidential information, and are content to rely on a written undertaking by an expert to keep confidential information confidential. I am not persuaded by the affidavit of Anthony Cotter that Spatialinfo is in such a special position, and so different from Telstra and Autodesk in relation to its confidential information, that the proposed intrusive regime should be imposed on them.

11                  Clause 20 simply provides that the confidentiality regime does not apply to any information that has lawfully entered the public domain. No mechanism is provided for determining whether this has happened. The undertaking to which clauses 4 and 11 refer does not deal with it. It does not require Spatialinfo to inform Telstra that it treats or proposes to treat their information as in the public domain, so that Telstra can dispute that treatment or seek to prevent the disclosure of the information.

12                  The proposed orders are not fairly balanced between the respective parties. Clause 5 excludes three of Spatialinfo’s prospective or actual witnesses from its scope. There is no exclusion in clause 12. Clause 6 excludes at least two prospective or actual witnesses from its scope. There is no exclusion from clause 16. Mr Cotter’s affidavit does not explain Spatialinfo’s preferred treatment.

13                  Spatialinfo’s proposed regime does not accommodate or reflect the lengthy course of dealing between it and Telstra during which much confidential information has been passed to Telstra pursuant to various licences. That information may be confidential as between Spatialinfo and third parties, but not between it and Telstra.

CONCLUSION ON CONFIDENTIALITY

14                  The confidentiality arrangement proposed by Telstra and Autodesk does not possess the features of Spatialinfo’s arrangement referred to at [3] to [13]. The former arrangement should, with some amendments, be approved. I will order that the use and disclosure of documents provided or to be provided in the proceeding, which a party claims to be confidential, be subject to and in accordance with Annexure X to the Orders, and that upon receipt of signed confidentiality undertakings, Telstra forthwith produce to Autodesk the documents listed in the Notice to Produce dated 24 October 2005 and Spatialinfo forthwith produce to Autodesk the documents listed in the Notice to Produce dated 31 October 2005.

15                  The approved confidentiality agreement does not apply to confidential information and confidential documents now or in the future lawfully in the possession of a party independently of this proceeding. See par 7 of Annexure X.

TIMETABLE

16                  The parties were also in disagreement as to the timetable for further steps in the proceeding. I was asked to arbitrate. The result of the arbitration appears in pars 3 to 17 of the orders herein.

JOINDER

17                  Telstra asked for an order adding Autodesk as a respondent. Autodesk has already been joined. See the order of 26 October 2005. Some of the documents filed reflect this.

Associate:

Dated:              22 December 2005

ANNEXURE X

1.                  Subject to further order and to paragraphs 7 and 9 of these orders (Orders), where a party (Discloser) provides to another Party (Recipient) any document which the Discloser has already designated or at that time designates as confidential for the purposes of these Orders by written notice to that effect to the Recipient (Confidential Document), the Recipient must, unless the Court otherwise orders, keep the Confidential Document, including any copies, and its contents (Confidential Information) confidential in accordance with these Orders.

Obligations on Recipient

2.                  Unless the Court otherwise orders, a Recipient must not disclose any Confidential Document or Confidential Information other than:

(a)           to counsel and solicitors of record for the Recipient in the Proceeding;

(b)          to the secretaries or assistants working for the solicitors and counsel acting on behalf of the Recipient in the Proceeding including officers and employees of any third party engaged to provide document management or litigation support services in relation to the Proceeding;

(c)           to representatives or employees of the Recipient, which for avoidance of doubt shall include, in the case of the Respondent/Cross-Respondent, Mr Eric Braun, and in the case of the Second Cross-Respondent, Ms Marcia Sterling, Mr Richard Foehr and Mr Stuart Ong and in the case of the Applicant Mr James Madigan;

(d)          to persons who are engaged by the Recipient to assist as experts in the Proceeding and whether or not in the capacity of a witness;

(e)           to former employees of the Recipient, or current or former employees of the Recipient’s contractors or agents, who were at any relevant time involved in the development, operation, maintenance or replacement of Telstra’s cable plant records system, and who are or may be witnesses of fact in the Proceeding;

(f)            to any other third party prospective or actual witness of fact in the Proceeding;

(g)           to any legal adviser to any prospective or actual witness of fact in the Proceeding;

(h)           to any other person who has been approved in writing by the Discloser;

(i)             to the Court; or

(j)            if compelled by law to do so.

3.                  Other than disclosures under paragraphs 2(i) and (j), no Confidential Document or Confidential Information may be disclosed to or used by any person unless a Recipient has provided the Discloser with a copy of a written undertaking executed by that person in favour of the Discloser in the form of “Annexure A” to these Orders (Undertaking). Subject to paragraph 4 of these Orders, the name of the person who executed the Undertaking may be redacted from the copy provided and the Discloser shall not unless the Court otherwise orders be entitled to (and shall not) unless the Court otherwise orders be entitled to (and shall not) seek discovery, production or inspection of any such Undertaking in the Proceeding.

4.                  Further, no Confidential Document or Confidential Information may be disclosed to any person under paragraph 2(d) (Independent Expert) unless, at least 14 days prior to such disclosure, a Recipient has provided the Discloser with written notice of its intention to disclose Confidential Documents and/or Confidential Information to the independent Expert which notice contains the person’s full name and details of their current employment and any relevant formal qualifications, so far as known to the Recipient.

Prior disclosures in the proceeding

5.                  These Orders shall be effective to terminate all confidentiality undertakings previously executed by individuals with respect to documents produced in the Proceeding (Prior Disclosed Confidential Documents) in each case as and upon execution by that individual of the attached form of confidentiality undertaking.

6.                  Within 14 days of the date of these Orders a Discloser may provide written notice to the Recipient of the Prior Disclosed Confidential Documents which it designates as confidential for the purposes of these Orders, and such Prior Disclosed Confidential Documents shall be deemed to constitute Confidential Documents subject to these Orders.

Disclosures otherwise than in the proceeding

7.                  These Orders do not apply to confidential information and confidential documents that at the date of these Orders or hereafter are lawfully in the possession of a party independently of the Proceeding

General

8.                  Nothing in these Orders is an admission or evidence of the confidential or proprietary or other status of any Confidential Document or its contents.

9.                  Where a Discloser designates as confidential a Confidential Document pursuant to paragraph 1 of these Orders, any Recipient may at any time, by notice in writing to the Discloser (Objection), object to the designation of the whole or part of that Confidential Document as being confidential (Challenged Document). In the absence of agreement between the Discloser and the Recipient, whether the Challenged Document or part of it is confidential will be determined by the Court.

10.              All parties have liberty to apply to vary these Orders.

ANNEXURE A

I, [Name], [Title], of [Address] undertake to the [Applicant/Respondent] (Discloser) as follows:

1.             I have read the Confidentiality Orders in the Proceeding dated 22 December 2005 (Orders) which apply to Confidential Documents and Confidential Information as defined in the Orders.

2.             I acknowledge that the Confidential Documents and Confidential Information I obtain in pursuance of this undertaking are asserted by the Discloser to constitute or contain its proprietary or Confidential Information.

3.             Unless the Court otherwise orders, I undertake to keep each Confidential Document and all Confidential Information confidential in accordance with this undertaking at all times, including keeping the Confidential Documents and Confidential Information in a manner which will preserve their confidentiality at all times.

4.             Other than disclosures to the Court or which are compelled by law, the Confidential Documents and the Confidential Information may be disclosed by me only to persons:

(a)           within the categories specified in paragraph 2 of the Orders;

(b)          who have given undertakings in respect of paragraph 3 of the Orders; and

(c)           if applicable, who have been notified to the Discloser under paragraph 4 of the Orders.

5.             I will, within seven days of receiving written notice of the final determination of this Proceeding, take all reasonable steps to ensure that:

(a)           all Confidential Documents and parts of Confidential Documents, and copies of any such Confidential Documents are returned to the solicitors for the Recipient; and

(b)          any Confidential Documents made by me or given to me recording any part of the Confidential Information are returned to the solicitors for the Recipient for storage as part of those solicitors’ files or for destruction.

6.             I will promptly notify the solicitors for the Recipient if I become aware of any unauthorised use or disclosure of any Confidential Documents or Confidential Information or any part of them.

7.             Nothing in these undertakings is an admission or evidence by me of the confidential or proprietary or other status of any Confidential Document or its contents.

8.             These undertakings do not restrict or limit my use or disclosure of any document which is a copy of all or part of any Confidential Document or any information contained in any Confidential Document:

(a)           which was or comes within my possession or knowledge independently of my receiving the Confidential Document or Confidential Information in accordance with these undertakings; or

(b)          which is in the public domain.

DATED:

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Signature                                                          Witness signature

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