FEDERAL COURT OF AUSTRALIA

Newcrest Mining Limited v Apache Northwest Pty Ltd (No 2) [2008] FCA 1663

Federal Court Rules O 15A

Newcrest Mining Limited v Apache Northwest Pty Ltd [2008] FCA 1527 referred to

Cappuccio v Australia & New Zealand Banking Group Ltd [1999] FCA 1188 followed

C7 Pty Ltd v Foxtel Management Pty Ltd [2001] FCA 1864 distinguished

NEWCREST MINING LIMITED (ABN 20 005 683 625) v APACHE NORTHWEST PTY LTD (ABN 58 009 140 854) and SANTOS (BOL) PTY LTD (ABN 35 000 670 575)

VID 742 of 2008

TRACEY J

7 NOVEMBER 2008

MELBOURNE

THE COURT ORDERS THAT:

1.                  The date for compliance with Order 1 of the orders made by Tracey J on 17 October 2008 ("the preliminary discovery order") (as varied by the order of Middleton J on 30 October 2008) be further extended to 28 November 2008.

2.                  If a proceeding in this Court between the applicant and the first respondent for claims arising out of or in relation to the Gas Supply Agreement made on 10 August 2004 between the applicant and the first and second respondents ("Gas Supply Agreement") or the supply of gas pursuant to that agreement, and/or the explosion on Varanus Island on 3 June 2008 and/or the first respondent’s conduct in relation to the supply of gas to the applicant following that explosion, is commenced within six weeks after the date upon which the applicant inspects the documents enumerated in the first respondent’s verified list of documents made pursuant to the preliminary discovery order, the first respondent's costs of complying with the preliminary discovery order shall be costs in that proceeding.

3.                  If a proceeding between the applicant and the first respondent is not commenced in this Court within the period set out in Order 2 hereof, the applicant shall pay the first respondent's costs of complying with the preliminary discovery order.

4.                  Each document produced by the first respondent which is referred to in the first respondent's verified list of documents as being confidential will bear the following notice: "CONFIDENTIAL: This document is confidential and is subject to a confidentiality undertaking given to the Federal Court of Australia".

5.                  Subject to further order, access by the applicant or its representatives to each document (or part thereof) referred to in the first respondent's verified list of documents as being confidential and marked in accordance with Order 4 hereof will be subject to the terms of the confidentiality regime set out in the attached Annexure.

6.                  On or before 5 December 2008, the first respondent will make available for inspection by the applicant (or, in the case of documents or parts of documents the subject of the confidentiality regime referred to in Order 5 hereof, the applicant’s representatives permitted access under the confidentiality regime) all of the documents referred to in the first respondent's verified list of documents.

7.                  Costs be reserved.

8.                  The further hearing of the applicant's application be adjourned sine die.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

ANNEXURE

CONFIDENTIALITY REGIME

This confidentiality regime is established in relation to:

(a)                the application for preliminary discovery pursuant to Order 15A r 6 of the Federal Court Rules brought by Newcrest Mining Limited (Newcrest) against Apache Northwest Pty Ltd (Apache) and Santos (BOL) Pty Ltd (Santos) (Federal Court of Australia, Victoria District Registry, proceeding numbered VID742 of 2008, filed on 17 September 2008) (Proceeding);

(b)               the orders made by Justice Tracey on 17 October 2008 in the Proceeding for discovery by Apache to Newcrest of documents (Preliminary Discovery Documents); and

(c)                any proceeding in a court of competent jurisdiction between Newcrest and Apache for claims arising out of or in relation to the Gas Supply Agreement made on 10 August 2004 between Newcrest and Apache and Santos ("Gas Supply Agreement") or supply of gas pursuant to that agreement, and/or the explosion on Varanus Island on 3 June 2008 and/or Apache’s conduct in relation to the supply of gas to Newcrest following that explosion (Prospective Proceeding).

Until further directed, access to and use of the Preliminary Discovery Documents and the information contained in the Preliminary Discovery Documents (including any copy, note, memorandum or extract thereof) in relation to which a claim of commercial confidentiality is made by Apache (without admission by or on behalf of Newcrest) (Confidential Documents and Confidential Information respectively), shall be restricted as follows:-

1.        Before being permitted to have access to or make use of the Confidential Documents or Confidential Information as permitted by this confidentiality regime:

(a)       the individuals named in schedule A to this confidentiality regime (Authorised Persons) must each execute an undertaking in the form of the undertaking set out in schedule B to this confidentiality regime; and

(b)       a copy of the undertaking must be provided to Apache by Newcrest.

2.        Each of the Authorised Persons are permitted to receive one photocopy of the Confidential Documents for their own use (each copy to be marked with the name and details of the recipient).

3.        The Authorised Persons shall not, other than in accordance with this confidentiality regime:

(a)       disclose the Confidential Documents or the Confidential Information to any person other than another Authorised Person (or an administrative assistant of an Authorised Person);

(b)       make further copies of the Confidential Documents;

(c)       make or permit the making of electronic copies of the Confidential Documents; and

(d)       make or permit the making of electronic copies of the Confidential Information.

4.        The Confidential Documents and the Confidential Information shall not be used or disclosed other than:

(a)       in accordance with this confidentiality regime; and

(b)       for the purpose of the Proceeding or the Prospective Proceeding.

5.        The Authorised Persons must:

(a)       maintain the confidential nature of the Confidential Documents and the Confidential Information, and in particular not use, disclose or divulge the Confidential Documents or the Confidential Information other than in accordance with the terms of this confidentiality regime;

(b)       establish and maintain effective measures intended to safeguard the Confidential Documents and the Confidential Information from unauthorised access, use, copying or disclosure;

(c)       as soon as practicable, notify Apache by its legal representatives of any unauthorised access, use, copying or disclosure of the Confidential Documents and the Confidential Information; and

(d)       as soon as practicable take such steps as Apache may reasonably require to retrieve, recover or protect the Confidential Documents and the Confidential Information if any unauthorised access, use, copying or disclosure has or may have occurred.

6.        If Newcrest wishes to nominate an additional person (Additional Authorised Person) to be an Authorised Person, before the Additional Authorised Person shall be considered an Authorised Person under this confidentiality regime, the following provisions must be satisfied:

(a)       Newcrest, by its legal representatives, must give not less than seven days written notice to Apache's legal representatives, identifying:

(i)        the name of the Additional Authorised Person;

(ii)       a brief description of the qualifications and background of the Additional Authorised Person, including details of any association between the Additional Authorised Person and Newcrest;

(iii)       the Confidential Information and/or Confidential Documents (or parts of them) to which access is proposed to be given; and

(iv)      the reasons for requesting the Additional Authorised Person to be given access to the Confidential Information and Confidential Documents;

(b)       If no objection in writing is received from Apache or Apache's legal representatives within seven days of receipt of the nomination, the Additional Authorised Person becomes an Authorised Person under this confidentiality regime; and

(c)       If an objection in writing is received from Apache or Apache's legal representatives within seven days of receipt of the nomination:

(i)         Newcrest may make an application to the Court that the Additional Authorised Person be an Authorised Person; and

(ii)        the Additional Authorised Person shall not be an Authorised Person under this confidentiality regime unless ordered by the Court.

7.        On or before the later of:

(a)       30 June 2009; and

(b)       the date being 21 days after the settlement or the conclusion of the Prospective Proceeding including any appeal,

each Authorised Person must:

(c)        deliver to Apache by its legal representatives (or as Apache reasonably directs); or

(d)        destroy,

all materials in the possession, custody or control of the Authorised Person which constitute or contain any of the Confidential Documents or the Confidential Information (save for any document filed with the Court in the Proceeding or the Prospective Proceeding), and certify in writing to Apache that he or she has done so.

Schedule A – List of Authorised Persons

Schedule B – Confidentiality Undertaking

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

                                                                                                                         No. VID742 of  2008

BETWEEN

NEWCREST MINING LIMITED
(Abn 20 005 683 625)

Applicant

and

APACHE NORTHWEST PTY LTD
(abn 58 009 140 854)

First Respondent

and

SANTOS (BOL) PTY LTD
(ABN 35 000 670 575)

Second Respondent

TO:                 The Federal Court of Australia

AND TO:        Apache Northwest Pty Ltd

UNDERTAKING IN RELATION TO CONFIDENTIALITY OF DOCUMENTS PRODUCED PURSUANT TO ORDERS OF JUSTICE TRACEY MADE ON 17 OCTOBER 2008

I, [Name of Authorised Person], undertake to act in accordance with the requirements of the attached confidentiality regime.

Signed:……………………………………………….

Name               ……………………………………………….

Position            ……………………………………………….

Date                 ……………………………………………….

REASONS FOR JUDGMENT

1                     On 17 October 2008 I ordered that Apache Northwest Pty Ltd (“Apache”) give preliminary discovery of certain classes of documents to Newcrest Mining Limited (“Newcrest”): see Newcrest Mining Limited v Apache Northwest Pty Ltd [2008] FCA 1527.  A verified list of documents was to be filed and served on or before 30 October 2008.

2                     Apache applied for leave to appeal from this decision.  On 30 October 2008 Middleton J varied my order by extending, until 14 November 2008, the period within which Apache was required to file and serve its verified list of documents.

3                     When I made the order for preliminary discovery I foreshadowed that it might be necessary, at a later time, for the matter to return to Court to deal with consequential issues such as confidentiality.  Apache subsequently advised the Court that it considered that it would be necessary for a confidentiality regime to be put in place to deal with commercially sensitive documents.  An issue also arose as to which party should bear the costs of preliminary discovery.

4                     When the matter was called on this morning to deal with these issues there was a considerable measure of agreement between the parties as to the orders which should be made in order to put a confidentiality regime in place.  During argument the few areas of difference were further confined such that there was either agreement or an absence of opposition to the proposed orders relating to confidentiality.  The issue of costs was contested.

5                     The dispute as to who should bear the costs of preliminary discovery focussed on the question of whether Newcrest should be required to bear such costs whether or not it subsequently determined to commence a proceeding against Apache or whether any costs orders should be deferred pending a decision by Newcrest as to whether it would commence a proceeding.  There was a complicating issue as to whether special provision should be made for the possibility that, following inspection, Newcrest might determine to commence the proceeding in a Court other than this Court. 

6                     The conventional approach to costs orders in this area was explained by Burchett J in Cappuccio v Australia & New Zealand Banking Group Ltd [1999] FCA 1188 at [3]-[4] where his Honour said that:

“3.       … I have a discretion as to just what I should do in respect of costs, and it seems to me that the costs order which would be appropriate in a case like this depends very much on the consequences of the discovery obtained.  If the applicant for preliminary discovery uncovers enough to enable that applicant to bring proceedings which are successful, there may be much to be said for the proposition that the costs of the preliminary discovery should form part of the costs of the action.  On the other hand, if the applicant proceeds, brings an action, fails, and is ordered to pay the costs of that action, there seems to be every reason why, generally speaking, the costs of the preliminary discovery should be included in the costs payable to the respondent.

4.         There may, of course, be cases where there are special reasons to vary the normal rule that costs follow the event.  In this particular case, having listened to the arguments of both sides, each of whom seeks a costs order, I have come to the conclusion that the appropriate order, in the event that a case is brought for substantive relief, is that the costs of this application be at the discretion of the tribunal which hears the substantive application.  In all the circumstances, I order that, if a substantive application is brought by the applicants against the respondent bank within six weeks of today’s date, the costs be dealt with in the way I have indicated.”

7                     A different approach was taken by Gyles J in C7 Pty Ltd v Foxtel Management Pty Ltd [2001] FCA 1864.  C7 had sought preliminary discovery of documents.  The application was opposed but C7 was largely successful.  His Honour expressed the view (at [50]) that an application pursuant to Order 15A of the Federal Court Rules was a discrete application and that he should deal with the costs issue.  In reaching this decision his Honour was influenced by the fact that, despite the fact that C7 had been successful, the relief which it obtained was offered prior to the hearing.  He was also concerned that the respondent would be out of pocket, awaiting “some indefinite future event” because it was required to undertake the expense of providing the preliminary discovery.

8                     In my opinion, in the circumstances of the present case, it is appropriate to make a conventional order.  Apache opposed the making of any order relating to preliminary discovery.  Moreover, orders of the conventional kind will not expose Apache to an indefinite delay in recovering its costs, at least no more delay than would attend recovery of the costs of discovery in an ordinary proceeding.  Apache’s interests will be protected by an order that Newcrest pay its costs in the event that no proceeding is commenced in this Court within six weeks of Newcrest undertaking inspection of the discovered documents.  Even if Newcrest commences a proceeding in a Court other than this Court Apache will be entitled to recover its costs of providing discovery once the six week period has elapsed.

Associate:

Dated:         7 November 2008