Federal Court of Australia

Ford Motor Company of Australia Pty Ltd v Capic (No 2) [2023] FCA 155

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 37AF(1) of the Federal Court of Australia Act 1976 (Cth) (the Act), on the ground stated in s 37AG(1)(a) of the Act, being that the order is necessary to prevent prejudice to the proper administration of justice, the information on pages 9, 26 to 30, and 33 of the document titled “2011 FWD Automatic Transmission High Prior Study (being Document ID VGS20143864), as identified by the mark-ups in pink coloured highlighting on pages 17, 34 to 38 and 41 of the affidavit of Matthew Fyie affirmed 14 February 2023 (the Confidential Information), be made confidential, and access to and disclosure (by publication or otherwise) of the Confidential Information be restricted to:

(a)    the Court (including Court staff);

(b)    Ford Motor Company and its legal representatives;

(c)    Ford Motor Company of Australia Limited and its legal representatives;

(d)    Biljana Capic and her legal representatives, for the purposes of this proceeding only; and

(e)    any other person who has been provided with a copy of VGS20143864 for the purpose of this proceeding, after giving an undertaking in accordance with the orders made 30 April 2018 (as amended on 22 May 2018, 17 March 2020, and 21 May 2020) in proceeding NSD 724 of 2016.

2.    Order 1 shall operate until 1 March 2026.

3.    Ford Motor Company has liberty to apply to the Court to extend the date referred to in Order 2 provided any such application is filed with the Court at least one month prior to the expiry of Order 2.

4.    Any person having sufficient interest may apply to the Court to vary or set aside these orders on sufficient grounds being established.

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

REASONS FOR JUDGMENT

Ex tempore (revised from transcript)

YATES J:

1    Ford Motor Company (Ford US) has filed an interlocutory application seeking orders pursuant to s 37AF(1) of the Federal Court of Australia Act 1976 (Cth) to restrict access to, and otherwise prevent disclosure of, a document titled “2011 FWD Automatic Transmission High Priority Study”, which has been given the Document ID VGS20143864 (the Transmission Study) or, alternatively, particular information on pages 9, 26 to 30, and 33 of that document (being the information marked in pink highlighting on pages 17, 34 to 38, and 41 of the affidavit of Matthew Fyie, affirmed 14 February 2023). The application is only pressed in relation to the last-mentioned particular information.

2    The Transmission Study was produced by Ford US by compulsory process. It is expected that the document will be deployed in submissions to be made by the respondent to this appeal (NSD 1321 of 2021).

3    Mr Fyie is a Technical Leader of Design Analysis Engineering for Ford US. He deposes that, as part of his job responsibility and duties, and based on his background and experience with Ford US, he is familiar with various types of documents that Ford US generates in its normal course of business, including engineering documents, root cause analyses, supply communications, customer relations, price and finance data, and dealer information. According to his evidence, he is in a position to say why such documents and information are considered by Ford US to be confidential.

4    Mr Fyie deposes that the Transmission Study includes consideration of the financial implications of discontinuing a particular transmission system and replacing that system with alternatives. The highlighted information on pages 9, 26 to 30, and 33 of the document compares certain financial metrics and contains underlying detail of how certain monetary figures have been calculated.

5    The figures are approximately 10 years old, but Mr Fyie’s evidence is that they can be readily adjusted for inflation to reflect Ford US’s present circumstances and strategy. Presently, this information is known only by Ford US. It would, however, be valuable information in the hands of a sophisticated competitor or supplier, who could adjust the figures for inflation and current market conditions.

6    In the case of a competitor, Mr Fyie’s evidence is that the information could be used to seek contractual arrangements with one of Ford US’s suppliers on the same or better terms than Ford US enjoys, knowing that the supplier is willing to supply Ford US on such terms. Mr Fyie says that if a competitor were able to negotiate better terms with the supplier, it may be able to produce lower cost comparable products for sale in the market, which might have a negative impact on Ford US’s market share.

7    Equally, Mr Fyie says that a competitor may seek to offer a better price to one of Ford US’s suppliers to become a preferred strategic customer, which would have an effect on that supplier’s ability to supply Ford US, requiring Ford US to seek alternative supply arrangements.

8    Mr Fyie says, further, that competitors would gain insight into the specific costs, price per unit and supplier profit margins that Ford US requires (or is willing to pay in the market) for transmission systems. Competitors could use this information to benchmark their own financial metrics, and use the data to assess, analyse, and improve their own operations. This may result in the competitor improving its own operations so as to produce a lower cost comparable product in the market, which might affect Ford US’s market share.

9    In the case of a supplier, Mr Fyie’s evidence is that manufacturers in the automobile manufacturing industry are reliant on third party suppliers and must be able to negotiate favourable arrangements to ensure that the costs of their final product remain competitive in the market. It is in Ford US’s interests to seek the lowest price from suppliers. If a supplier obtains confidential information relating to certain prices, profit components, and costs, it would be in a position to use that information to adjust its negotiating position to seek a higher price per unit, better margin on the sale of units supplied, demand more favourable volume pricing, or seek higher termination penalties should Ford US seek to discontinue the product or change suppliers before the expiration of a supply contract term.

10    On the evidence before me, I am satisfied that the information which Ford US seeks to protect is commercially sensitive information. It is well-established that commercially sensitive information can be the proper subject matter of an order under s 37AF(1).

11    In light of the circumstances in which the Transmission Study came to be produced in the litigation of which this appeal forms part; the apparent confidentiality of the highlighted information on pages 9, 26 to 30, and 33 of the document; and the potentially adverse consequences for Ford US if that information were to be disclosed to a competitor or supplier, I am satisfied that it is appropriate in this case that an order under s 37AF(1) be made. I am satisfied that such an order is necessary to prevent prejudice to the proper administration of justice.

12    Ford US requests that the order operate until 1 March 2026 (a three-year period). I am satisfied that it is appropriate to make an order for that period subject to the express proviso that any person having sufficient interest can make application to the Court to vary or set aside the order on sufficient grounds being established.

Associate:

Dated:    3 March 2023