FEDERAL COURT OF AUSTRALIA

Barrett Property Group Pty Ltd v Carlisle Homes Pty Ltd (No 2) [2008] FCA 930

PRACTICE AND PROCEDURE – disclosure of confidential information to trade rival

Mobil Oil Australia Limited v Guina Developments Pty Limited [1996] 2 VR 34 cited 

BARRETT PROPERTY GROUP PTY LTD and SRS PROPERTY HOLDINGS PTY LTD v CARLISLE HOMES PTY LTD

VID 1245 of 2005

HEEREY J

17 JUNE 2008

MELBOURNE

THE COURT ORDERS THAT:

1.                  The respondent permit the applicants’ solicitors to provide a copy of the confidential exhibit DJT-2 to the affidavit of David James Taylor sworn 13 May 2008 to Mr Darren Goodwin upon receipt of the respondent’s solicitors of a signed confidentiality undertaking in the form annexed to these orders and marked “A”. 

2.                  The time for the election set out in order 5 of the orders dated 28 April 2008 be extended until 1 July 2008. 

3.                  The proceeding be listed for directions on 15 July 2008.

4.                  Costs reserved.

5.                  Liberty to apply.

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

Annexure “A”

IN THE FEDERAL COURT OF AUSTRALIA                  )

VICTORIA DISTRICT REGISTRY                                   )           No. VID 1245 of 2005

BETWEEN:

BARRETT PROPERTY GROUP PTY LTD ACN 088 015 267

First Applicant

and

SRS PROPERTY HOLDINGS PTY LTD ACN 096 513 218

Second Applicant

and

CARLISLE HOMES PTY LTD ACN 106 263 209

Respondent

CONFIDENTIALITY UNDERTAKING

The Confidential Exhibit DJT‑2 (Confidential Exhibit), exhibited to the affidavit of David James Taylor sworn 13 May 2008, filed and served on Middletons on 13 May 2008, contains confidential information (Information) which is secret, confidential and valuable to the Respondent.  The Respondent is prepared to make the Confidential Exhibit and Information available to you for the limited purposes of the proceeding VID 1245 of 2005 (Proceeding) identified in paragraph 1 below if you agree to execute the following Confidentiality Undertaking:

I, Darren Goodwin, of 163 Princes Highway, Hallam in the State of Victoria, undertake to Carlisle Homes Pty Ltd (Respondent) in relation to the Confidential Exhibit and the Information contained in the Confidential Exhibit, that:

1.                  I will not use the Confidential Exhibit or the Information contained within the Confidential Exhibit, or any part of them, except for the sole purpose of deciding whether to elect between the taking of an account of profits or an inquiry into damages, as required by the orders of Justice Heerey in the Proceeding, made on 28 April 2008 (Election).

2.                  I will not discuss or disclose the Confidential Exhibit or the Information contained in the Confidential Exhibit with, or to any person other than my legal advisors namely solicitors at Middletons and Colin Golvan SC and Dr Sam Ricketson unless:

(a)                such disclosure is expressly authorised by a Court; or

(b)               the Confidential Exhibit or the Information contained in the Confidential Exhibit has already been disclosed otherwise than in contravention of this or similar undertaking; or

(c)                the Respondents have expressly agreed in writing that another identified party or parties may have access to the Confidential Exhibit or the Information and that party or parties has executed a confidentiality undertaking to the effect of this undertaking.

3.                  I will not copy or reproduce the Confidential Exhibit or the Information contained in the Confidential Exhibit for any reason, either for myself or any other person, without the consent in writing of the solicitors for the Respondent.

4.                  Once the Election has been made, I will immediately:

(a)                stop using the Confidential Exhibit and the Information contained in the Confidential Exhibit;

(b)               deliver the Confidential Exhibit and any copies of the Confidential Exhibit to the solicitors for the Respondent; and

(c)                destroy any documents  made by me or given to me recording, incorporating or otherwise referring to the Information contained in the Confidential Exhibit.

5.                  In this Confidentiality Undertaking, “document” takes the meaning it is given in the Evidence Act 1995 (Cth).

Date:                2008

REASONS FOR JUDGMENT

1                     On 20 March 2008 I found in favour of the applicant Barrett Property Group Pty Ltd in its claim for copyright infringement: Barrett Property Group Pty Ltd v Carlisle Homes Pty Ltd [2008] FCA 375.  Barrett now wishes to make an election between damages and an account of profits.  For that purpose, consequent on earlier orders I have made, Mr David Taylor, a director of Carlisle, has sworn an affidavit which exhibits as confidential exhibit “DJT-2” a report which includes estimates of sums received and receivable, costs, overheads and profits attributable to the 65 “Provence” houses found to have infringed Barrett’s copyright. 

2                     Carlisle does not object to making the confidential report available to Barrett’s solicitors and counsel, and to Mr Darren Goodwin, who is the Chief Financial Officer of Barrett, upon appropriate confidentiality undertakings being given.

3                     The contentious issue is whether the confidential report should also be made available to Mr Anthony Roberts.  Mr Roberts is the Chief Executive Officer of Barrett.  He and his family are the controlling shareholders of the company.  It is said on behalf of Barrett that Mr Roberts wishes to review the confidential report himself to review the claimed expenditure figures and methodology used to calculate the profit figures to

…benchmark them against his industry experience, and consider if there may be any anomalies.

He says that he is unable to properly discuss the claimed expenditure figures with Mr Goodwin if the latter cannot disclose to him any of the contents of the confidential exhibit.  Mr Roberts is the person who will make the final decision on behalf of Barrett as to the election.

4                     This sort of question has arisen before, and in particular is the subject of a decision of the Court of Appeal of Victoria, Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34.  The decision of the court was given by Hayne JA.  His Honour pointed out at 38 that when the question of disclosure of confidential information to a trade rival arises, it must be remembered that confidential information once received cannot be forgotten, and may be used in a way in which the party disclosing the information never becomes aware.

5                     I think that is an important consideration in the present case.  I am satisfied that the information in question is genuinely confidential.  The evidence in the substantive hearing disclosed there is very close competition in the project homes market.  Knowledge to a competitor of costings and margins would be very valuable for the purpose of setting prices. 

6                     I do not think Barrett are seriously disadvantaged for the purpose of making its election because, as already mentioned, their Chief Financial Officer will have access to the report.  If they wish, they could also retain some independent expert with knowledge of this particular industry.

7                     I note in particular that Mr Roberts is a person who is involved in the day-to-day operations of the business, and so the more likely to be in a position to take advantage of the information.  This is not necessarily a case of any dishonest or improper use of information.  As is stressed in Mobil Oil, once information is disclosed it becomes part of the person’s stock of knowledge and it is unrealistic to expect that knowledge to be ignored. 

Associate:

Dated:         17 June 2008