Mackay Sugar Co-operative Association Ltd & Ors v New Zealand Sugar Company Ltd [1996] FCA 132

CATCHWORDS PRACTICE - STAY - stay of production pending application for leave to appeal - confidential documents - principles to be applied - whether arguable case or substantial prospect need be shown Federal Court Rules O52 r10(2) Jennings Construction Limited v Burgundy Royale Investments Proprietary Limited (1986) 161 CLR 681 Refd Elspan International Ltd v Aerospatiale Holdings Ltd (1992) 67 ALJR 177 Refd Re Duke Group Ltd (In Liq) (1994) 68 ALJR 196 Refd Manfal Pty Ltd (In Liq) v Trade Practices Commission (1990) 65 ALJR 256 Refd Paringa Mining & Exploration Co PLC v North Flinders Mines Ltd (1988) 81 ALR 501 Refd J v L&A Services Pty Ltd [1993] 2 Qd R 380 Refd Sibuse Pty Ltd v Shaw (No 2) (1988) 13 NSWLR 125 Refd Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 Refd Mobil Oil Australia Ltd & McDonalds Australia Ltd v Guina Developments Pty Ltd (unreported judgment of the Supreme Court of Victoria, 3 November 1995) Refd Mackay Sugar Co-operative Association Ltd, ED & F Man Australia Pty Ltd, Mackay Refined Sugars Pty Ltd, ED & F Man New Zealand Limited and Mackay Refined Sugars (NZ) Limited v CSR Limited and New Zealand Sugar Company Limited No QG 178 of 1994 Kiefel J Brisbane 6 March 1996

IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION No. QG 178 of 1994 BETWEEN: MACKAY SUGAR CO-OPERATIVE ASSOCIATION LTD First Applicant AND: ED & F MAN AUSTRALIA PTY LTD Second Applicant AND: MACKAY REFINED SUGARS PTY LTD Third Applicant AND: ED & F MAN NEW ZEALAND LIMITED Fourth Applicant AND: MACKAY REFINED SUGARS (NZ) LIMITED Fifth Applicant AND: CSR LIMITED First Respondent AND: NEW ZEALAND SUGAR COMPANY LIMITED Second Respondent JUDGE MAKING ORDER: Kiefel J. DATE OF ORDER: 6 March 1996 WHERE MADE: Brisbane MINUTES OF ORDERS THE COURT ORDERS THAT: 1. The order of Spender J made on 23 February 1996 in the applicants' motion be stayed. 2. Cost be reserved. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION No. QG 178 of 1994 BETWEEN: MACKAY SUGAR CO-OPERATIVE ASSOCIATION LTD First Applicant AND: ED & F MAN AUSTRALIA PTY LTD Second Applicant AND: MACKAY REFINED SUGARS PTY LTD Third Applicant AND: ED & F MAN NEW ZEALAND LIMITED Fourth Applicant AND: MACKAY REFINED SUGARS (NZ) LIMITED Fifth Applicant AND: CSR LIMITED First Respondent AND: NEW ZEALAND SUGAR COMPANY LIMITED Second Respondent CORAM: Kiefel J. DATE: 6 March 1996 PLACE: Brisbane

REASONS FOR JUDGMENT

By order of Spender J the applicants were permitted access, restricted to named persons, to certain of the respondents' documents in respect of which a claim for privilege for production had been made based upon the need to preserve their confidentiality. The documents fell into five categories which may generally be described as relating to pricing, costings, supply and marketing and negotiations with customers. As their description suggests it was claimed that they were commercially highly sensitive and there was a need to keep them secret from the applicants who are direct competitors. The information was found by his Honour to be truly confidential, but it might be inferred from his Honour's Reasons that disclosure was necessary for the conduct of the applicants' case. There is one finding of fact indicative of such an approach. Nevertheless, the respondents contend that his Honour applied a test or tests different from that requiring considerations of necessity which it was conceded was the correct test. In his Reasons his Honour did advert to degrees of sensitivity of documents including a reference to those immediately current and those up to December 1995 and limited inspection to those not current. His Honour appears to have placed some weight upon the practical effect of disclosure of the documents to the named persons and raised the question whether that might be said to truly render them no longer confidential. The respondents will seek the leave of the Full Court to appeal from his Honour's orders, they being interlocutory. It is hoped that that application and the appeal itself might be heard together and in the next Full Court sittings in April although, of course, it cannot be assumed that that course will be followed. Nevertheless, the respondents have chosen to apply to the appeal court for leave and not to a single judge, a course which is clearly open to them under O52 r10(2). Were I of the view, however, that the applicant suffered any degree of prejudice by reason of the question of leave being outstanding for a time, Mr Doyle, Senior Counsel for CSR, indicated that a shorter course would be taken. It does not seem to me however that that will be necessary. To decline a stay would result in disclosure and a loss of confidentiality of the documents even though it might be said to follow from his Honour's reasons that the seriousness of that may be debateable. In any event I do not think it could be doubted that the appeal, if successful, would not remedy what confidence had been lost and whilst the applicants offered to further limit access at least until the hearing, that would still permit the Chief Executive Officer of Mackay Sugar to access to the information. It seems then that the exercise of the power to grant a stay of the order may be appropriate subject, however, to other relevant considerations: see Jennings Construction Limited v Burgundy Royale Investments Proprietary Limited (1986) 161 CLR 681, 685. Of the matters listed for consideration by Brennan J in that case, those as to whether the applicants would suffer prejudice and those affecting the balance of convenience arise, as does the first listed consideration namely "whether there is a substantial prospect that special leave to appeal will be granted". That phrase appears in some later reported judgments without further elaboration: see for example Elspan International Ltd v Aerospatiale Holdings Ltd (1992) 67 ALJR 177, 178 and Re Duke Group Ltd (In Liq) (1994) 68 ALJR 196, 197. Whilst a first reading of it might suggest that something more than an arguable case for leave is required, that is, something more weighty, I do not think that is borne out by his Honour's later finding that the prospects there were not "insubstantial." In Manfal Pty Ltd (In Liq) v Trade Practices Commission (1996) 65 ALJR 256, 257 Toohey J proceeded upon the basis, as the concessions made permitted, that the questions were fairly arguable: see also Paringa Mining & Exploration Co PLC v North Flinders Mines Ltd (1988) 81 ALR 501, 504-5; J v L&A Services Proprietary Limited (1993) 2 Qd R 380 and Sibuse Pty Ltd v Shaw (No 2) (1988) 13 NSWLR 125, 129. Whilst one might observe there would be some differences in the criteria applied to special leave applications, that does not suggest to me that the view to be reached concerning prospects of success should differ. What must be required as a minimum is that there be a decision arguably appealable, Paringa 505, although that is determined at this point by whether there is an arguable case for leave. That is not to say that in every case that will be sufficient. The approach taken to the grant of interim injunctions may be apposite and may require an applicant for stay to show, in some cases, for example where prejudice would be suffered, that the prospects are more substantial. That does not arise in the present case. On the application for leave here, the respondents would need to show that his Honour's judgment is attended by sufficient doubt to warrant reconsideration or that substantial injustice would result if leave were refused, Decor Corporation Pty Ltd v. Dart Industries Inc (1991) 33 FCR 397, or some other substantial basis to warrant an appeal. A possible matter of importance, namely, that questions relating to disclosure of commercially sensitive documents has not been commented upon at appeal court level, was urged upon me. I am not really persuaded that the view taken by his Honour, which may be compared with that taken in Mobil Oil Australia Ltd & McDonalds Australia Ltd v Guina Developments Pty Ltd, (unreported judgment of the Supreme Court of Victoria, 3 November 1995), is one where general guidance can be provided by an appeal court. It seems to me however that the applicant for a stay has at least an arguable case for leave. I do not think it is necessary or appropriate to go further. The only real potential prejudice will be suffered by the respondents and not the applicants, any delay in disclosure not being of great significance in the action. I certify that this and the preceding four pages are a true copy of the reasons for judgment herein of the Honourable Justice Kiefel. Associate Date: 6 March 1996 Counsel for the applicants: Mr JD Muir QC Solicitors for the applicants: McCullough Robertson

Counsel for the respondents: Mr SL Doyle SC Solicitors for the respondents: Clayton Utz

Date of Hearing: 28 February 1996 Place of Hearing: Brisbane Date of Judgment: 6 March 1996