FEDERAL COURT OF AUSTRALIA

Forty Two International Pty Limited v Barnes (No 4) [2012] FCA 1059

THE COURT ORDERS THAT:

1.    The applicants’ interlocutory application filed on 30 August 2012 is dismissed.

2.    Costs be the respondents’ costs in the cause.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1        The Court has before it today an interlocutory application filed on 30 August 2012 by the applicants in the proceedings, who were represented by Mr Ireland QC. The only issue which is necessary for me to determine relates to paragraph 1 of the interlocutory application. That paragraph relates to a dispute between the parties as to whether the first respondent in these proceedings, Mr Barnes, should be able to have access to documents which have been produced on subpoena by PriceWaterhouseCoopers (‘PwC’). To date, access to the documents has been provided, at least as a matter of entitlement, to lawyers, and also to an expert who has been retained by the respondents, one Mr Wettenhall. Although Mr Wettenhall has a right of access, it is my understanding that to date that right has not been exercised.

2        The basis of the resistance to Mr Barnes having access to the material is said to relate to the confidential nature of the material. There are in fact 46 documents which have been identified by Mr Davis, the solicitor for the respondents, as containing material in relation to which he says he needs to obtain instructions from Mr Barnes in order to properly discharge his obligations to his clients as a legal practitioner. Mr Davis was cross-examined. Mr Ireland QC highlighted the fact that Mr Davis, in his affidavit resisting the application, had not descended into any particularity in terms of any of the 46 documents which he thought he needed to get instructions on.

3        I should also mention that Mr Ireland QC gave some emphasis to the fact that the documents that have been produced on subpoena were so produced by reference to categories which are not coterminous with the categories of discovery. I understood him to submit that, in those circumstances, there is, in effect, an intuitive consequence that the material cannot be regarded on its face as being relevant to the issues in the proceedings. Mr Davis indicated that while the two different categories were not mirrors of each other, there was nevertheless some overlap in them.

4        Mr Davis swore two affidavits opposing the application. Paragraph 13 of his most recent affidavit dated 21 September 2012 reads:

As Solicitor for the Respondents, I believe that it is both appropriate and necessary for the First Respondent, Mr Kim Barnes, to have access to the documents identified in the abovementioned schedule so that Mr Barnes can provide me with instructions. The information contained within some of the documents is specialised and given the complex factual matrix of the matter generally it can be difficult in some instances to immediately recognise the significance and relevance of information contained in documents (sic). This places Herbert Geer, as the representatives of the Respondents, in a potentially embarrassing position.

5        Although, as I have already indicated, Mr Ireland QC highlighted that there was no particularity in that paragraph, I have no reason not to accept and believe that evidence.

6        Another matter which has weighed with me relates to the onus which the applicants carry to establish the confidential character of the documents. Mr Dubler SC, who appeared with Mr Shearer for the respondents, drew my attention to an unreported decision of Ball J in the NSW Supreme Court in ICAP Australia Pty Limited v Forrest Moebes [2010] NSWSC 738 dated 13 July 2010. In particular he relied on paragraph 8 which is as follows:

Generally, a party who seeks protection additional to that given by the implied undertaking in relation to documents bears the onus of establishing that the character of each document in relation to which additional protection is sought is such as to warrant that protection: Betfair Pty Ltd v Racing New South Wales (No. 5) [2009] FCA 1011; Idaport Pty Limited v National Australia Bank Limited [2001] NSWSC 1024; Cadbury Pty Ltd v Amcor Limited (No. 2) [2009] FCA 663.

7        My attention was also drawn to paragraph 11 of that judgment, the last two sentences of which read:

However, in my opinion, it will rarely be the case that a regime that limits access to external solicitors and counsel will meet the requirement of reasonableness. That is because those solicitors and counsel must act on the instructions of someone; and normally the person or persons giving those instructions should be entitled to see all the documents available to their advisors so that they can understand the basis of any advice given to them.

8        In my opinion, while Mr Ireland QC pointed to the fact that the documents in question are documents which had been created in 2007 and 2008 in the context of PwC’s retainer by BlueFreeway Limited and subsequently by NAB to conduct a review of the finances of the company, no persuasive evidence has been placed before me to establish that the documents are so sensitive that Mr Barnes should be totally denied access to them. It was open to the applicants to have led that evidence. They have the onus in the matter. In those circumstances, I would reject paragraph 1 of the interlocutory application.

9        That is not to say, however, that Mr Barnes should have unrestricted access to the documentation and be confined only by reference to the implied undertaking. The respondents themselves have advanced a confidentiality regime in respect of Mr Barnes’ access to the material. As I understand it, the elements of that regime comprise: first, that he not copy the documents; secondly, that he carry out his inspection of the documents at the office of the respondents’ solicitors; and, finally, that he provide an undertaking as to confidentiality in similar terms to that which he has proffered before.

10        I consider that there is also some force in what Mr Ireland QC has put to me, namely that Mr Barnes should not be able to have access “willy-nilly” to the 46 relevant documents. As is apparent from Mr Davis’ affidavit, either Mr Davis or his colleague have reviewed the 46 documents in question. Mr Davis gave evidence that, while some of those documents contain evidence which Mr Davis considers to be potentially relevant to the proceedings, and upon which he wishes to seek additional instructions from Mr Barnes, there is much other information in those 46 documents which is irrelevant and unrelated to these proceedings. The information in particular is evidence concerning, as I understand it, the financial affairs of portfolio companies within the BlueFreeway Group.

11        In those circumstances, I believe that it is appropriate, as Mr Ireland QC has suggested, that Mr Barnes’ access to the documents also be guided by his instructing solicitors and that his attention be brought only to those parts of the 46 documents which Mr Davis, or those who assist him, have reviewed and consider to be relevant for the purposes of obtaining additional instructions. The precise terms of the confidentiality regime can be sorted out, I would hope, by the solicitors between them in the light of my reasons.

12        For all those reasons, I would dismiss the interlocutory application filed on 30 August 2012 and order that costs be the respondents’ costs in the cause.

Associate:

Dated:    26 September 2012