UCPR 223: Further & better disclosure – practical considerations

Integrated Medical Technology Pty Ltd v Gilbert [2015] QSC 124

Pursuant to UCPR 223(1) and (2) the plaintiffs/applicants sought orders against the defendants/respondents to either make further and better disclosure of certain documents or alternatively, file and serve an affidavit stating that they did not exist, or never existed, or the circumstances in which they ceased to exist or passed out of the defendant’s possession or control. [1].

His Honour Jackson noted the practical difficulties with such applications because they are reliant on contentious and opposing affidavits as to compliance / non-compliance with  disclosure:

[5] Accepting that there is some greater flexibility under the rules for disclosure, in a practical sense it is difficult for a court to resolve a contest as to an order sought for further disclosure based on contentious affidavits. Deponents are not usually cross-examined, although that can and sometimes does occur. Ordinarily, the contest does not proceed to a final resolution of disputed questions of fact.

[6] The present case presents some of those difficulties. The claim in the proceeding is for breach of copyright, breach of confidence, breach of contract or breach of fiduciary duty or breach of statutory obligation. At the risk of over simplification, the plaintiffs allege that some of the defendants, who were former employees of the plaintiffs, copied or misused the plaintiffs’ computer software source code in writing the defendants’ software programs.

[7] A director of the plaintiffs swears that his experience in developing the plaintiffs’ software involved the production of classes of documents that have not been disclosed by the defendants. The defendants’ answer, on affidavit, is that they have no further directly relevant documents in their possession or power in respect of the development of their products.

His Honour was of the view that it was not enough for an affidavit to be sworn as to non-compliance, and if the court is in doubt to order an affidavit stating whether a specified document or class of documents does not exist or has never existed. Such an approach was considered by His Honour as “flawed” and should not been used as a “general panacea” for a party who cannot establish that there is objective likelihood disclosure has not been complied with [11] & [12].

To resolve the question of disclosure His Honour considered the Statement of Claim and the allegations made in respect of each category of documents [14] – [81] and whether they were directly relevant to the proceeding, and if there was an objective likelihood that disclosure had not been complied with.

Some of the documents were the subject of a previous consent order relating to restricted disclosure orders.

His Honour considered the authorities on restricted disclosure:

[103] In Queensland, the principles for restricted disclosure were established in ex parte; Fielder Gillespie Ltd[10] and Magellan Petroleum Australia Ltd v Sagasco Amadeus Pty Ltd.[11] There are many subsequent cases. Among them, reference is often made to Mobil Oil Australia Ltd & Anor v Guina Developments Pty Ltd & Anor.[12] The defendant in that case applied for restricted disclosure of confidential trade sensitive documents, so that the plaintiff’s director and chief executive officer would not see them. The documents related to a competitive expressions of interest process where the parties had competed for the award of a contract by a roads corporation. Hayne JA said:

“In the present matter, where the plaintiff did not challenge the evidence given below and the information supplied by [the defendant] to the corporation … was confidential and commercially sensitive, there would appear to be powerful reasons for limiting access to that information (at least in the first instance) to counsel, solicitors and nominated experts. It is by no means self-evident to me that disclosure to the principals of the plaintiff is necessary for the attainment of justice. In particular it is not self-evident that the plaintiff can properly consider the course which it will follow in relation to the litigation only if its principal has access to the material that is confidential.”[13]

[104] The plaintiffs also relied on Civic Video Pty Ltd v Paterson.[14] In that case, a franchisor started a proceeding against a trade rival alleging wrongful interference with the franchisor’s contractual relationships with its franchisees. The franchisor’s expert prepared a report as to loss. The report was based on the estimated franchise and advertising fees that would have been payable to the franchisor if the alleged wrongs had not occurred. The franchisor sought restricted disclosure of documents showing its advertising fees, profit and loss statements and summaries of total revenue figures during the relevant periods. At first instance, the court held that the degree of commercial sensitivity relating to those documents would not involve sufficient prejudice to warrant any restriction. On appeal, the Court of Appeal of Western Australia accepted that the primary judge had failed to weigh the degree of prejudice to the franchisor against the defendant’s interest in seeing the material.[15]

[105] The court stated a number of principles. The most relevant for present purposes is that:

“Where the relevant parties are trade rivals, and the documents in question contain confidential and commercially sensitive information, the court must strike a fair balance between the legitimate concerns of the party discovering the documents and the needs of the other party of the litigation …”[16]

[106] A later decision of the Court of Appeal of Western Australia, Alcoa of Australia Ltd v Apache Energy,[17] confirms the discretionary nature of the court’s power to make an order for restricted disclosure under rules such as rr 223 and 224 UCPR.[18]

On balance His Honour varied a previous consent order in respect of certain restrictive disclosure and provided a table of each category of document and the reason for the request for disclosure and the decision [108].

When the matter returned for the decision on costs His Honour made note that each party had to some degree been successful and that a further relevant factor was whether the defendants’ opposition was too stringent by reference to the duty to cooperate under r 5 of the UCPR.

His Honour concluded costs by ordering costs in the proceeding, noting:

[13]… Still, I am mindful that in separating out and weighing up the elements of success or failure upon the hearing of this part of the application, value judgments as to which of those factors should be regarded as more important are made with the benefit of hindsight that can suggest a clarity not necessarily apparent to those conducting the litigation on either side at the time when the relevant decisions were made and so I do not draw that inference.

[14] Having regard to the circumstances overall, in my view, the court is not in a position to form a clear or firm view about an order for costs which would favour one party or the other on the respective parts of the application, except to say that if separate orders were made the defendants would be likely to succeed on the substance of that part of the application concerned with the order for further disclosure whilst the plaintiffs would be seen to have been more successful on that part of the application concerned with the order for variation of the confidentiality orders. Overall, in my view, the appropriate order for costs is that the costs of the application are costs in the proceeding.

NB: The original application was heard on 16 December 2014, with the substantive decision delivered on 24 June 2015 and the costs decision delivered on 11 November 2015.

David Cormack – Brisbane Barrister & Mediator

 

 

 

 

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