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Tri-Star Petroleum Company v Australia Pacific LNG Pty Limited

 

[2017] QSC 136

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

Tri-Star Petroleum Company & Ors v Australia Pacific LNG Pty Limited & Ors [2017] QSC 136

PARTIES:

TRI-STAR PETROLEUM COMPANY

ARBN 050 415 739

(first plaintiff)

TRI-STAR AMERICA TRADING COMPANY

ARBN 082 870 371

(second plaintiff)

TRI-STAR AUSTRALIA HOLDING COMPANY

ARBN 109 075 078

(third plaintiff)

WEST TEXAS OIL AND GAS CORPORATION

ARBN 094 222 581

(fourth plaintiff)

v

AUSTRALIA PACIFIC LNG PTY LIMITED (FORMERLY OIL COMPANY OF AUSTRALIA LIMITED)

ARBN 68 001 646 331

(defendant/first plaintiff by counterclaim)

AUSTRALIA PACIFIC LNG (CSG) PTY LIMITED

ABN 23 099 577 769

(second plaintiff by counterclaim)

AUSTRALIA PACIFIC LNG (MOURA) PTY LIMITED

ABN 95 064 989 813

(third plaintiff by counterclaim)

AUSTRALIA PACIFIC LNG CSG PROCESSING PTY LIMITED

ABN 66 109 043 487

(fourth plaintiff by counterclaim)

AUSTRALIA PACIFIC LNG CSG MARKETING PTY LIMITED

ABN 72 008 750 945

(fifth plaintiff by counterclaim)

AUSTRALIA PACIFIC LNG MARKETING PTY LIMITED

ABN 51 141 937 920

(sixth plaintiff by counterclaim)

AUSTRALIA PACIFIC LNG CSG TRANSMISSIONS PTY LIMITED

ABN 52 138 156 466

(seventh plaintiff by counterclaim)

AUSTRALIA PACIFIC LNG GLADSTONE PIPELINE PTY LIMITED

ABN 68 144 653 921

(eighth plaintiff by counterclaim)

AUSTRALIA PACIFIC LNG PROCESSING PTY LTD

ABN 43 143 937 948

(ninth plaintiff by counterclaim)

AUSTRALIA PACIFIC LNG (SHARED FACILITIES) PTY LIMITED

ABN 53 141 941 595

(tenth plaintiff by counterclaim)

FILE NO/S:

SC No 10110 of 2014

DIVISION:

Trial Division

PROCEEDING:

Application

DELIVERED ON:

27 June 2017

DELIVERED AT:

Brisbane 

HEARING DATE:

19 May 2017

JUDGE:

Bond J

ORDERS:

The orders of the Court are that:

  1. Appendix 2 to these reasons for judgment be placed in a sealed envelope on the Court file and marked “Confidential. Not to be opened except with the order of the court first had and obtained.”
  2. The parties are to bring in proposed minutes of order to give effect to these reasons for judgment within 28 days of the date of this judgment.
  3. If the parties are unable to reach agreement, the following directions apply:
    1. APLNG is to deliver a proposed form of protocol, together with written submissions in support thereof, within a further 7 days;
    2. Tri-Star is to respond by delivering a proposed form of protocol (in the form of tracked changes to APLNG’s proposal), together with written submissions in support thereof, within a further 7 days;
    3. The proceeding be listed for hearing before me on a date to be fixed.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – DISCOVERY AND INTERROGATORIES – DISCOVERY AND INSPECTION OF DOCUMENTS – DISCOVERY OF DOCUMENTS – UNDERTAKINGS AND USE OF DOCUMENTS – GENERALLY – where the applicants have requested the production of documents referred to in pleadings and particulars, pursuant to r 222 of the Uniform Civil Procedure Rules 1999 (Qld) – where the respondents have withheld certain documents on grounds of confidentiality, and contend that a special protocol should be imposed constraining the manner in which the applicants can obtain access to and use the documents – where applicants apply for production of the documents – whether, and if so how, a special protocol should be imposed

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – PLEADINGS – PARTICULARS – FURTHER AND BETTER – where the applicants requested further and better particulars – where the respondents provided many, but not all, of the further and better particulars requested – where the applicants apply for further and better particulars – whether further and better particulars should be provided

Uniform Civil Procedure Rules 1999 (Qld), r 149, r 166, r 222

Ainsworth v Hanrahan (1991) 25 NSWLR 155, cited

Alcoa of Australia Ltd v Apache Energy Ltd [2014] WASCA 148, cited

Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 18 ACSR 218, cited

Bidvest Australia Limited v Auzcorp Pty Ltd [No 2] [2017] WASCA 23, cited

British American Tobacco Ltd v Cowell (No 2) (2003) 8 VR 571, cited

Cape York Airlines Pty Ltd v QBE Insurance (Australia) Ltd [2009] 1 Qd R 116, cited

Civic Video Pty Ltd v Paterson [2013] WASCA 107, cited

Coronar (Australia) Pty Ltd v Lake Vermont Marketing Pty Ltd [2017] QSC 120, cited

Derby v Weldon (No. 2) (Unreported, 20 October 1988, Sir Nicholas Browne-Wilkinson VC), cited

Eagle Star Insurance Co Ltd v Arab Bank Plc (Unreported, 25 February 1991, Hobhouse J), cited

Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10, cited

Gilbert v Goodwin (No 3) [2006] 1 Qd R 499, cited

Harman v Secretary of State for the Home Department [1983] 1 AC 280, cited

Hearne v Street (2008) 235 CLR 125, cited

Holdway v Arcuri Lawyers (a firm) [2009] 2 Qd R 18, cited

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

Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34, cited

Shun Kai Finance Co Ltd v Japan Leasing (Hong Kong) Ltd [2000] HKCA 518, cited

Universal Music Australia Pty Ltd v Pavlovic [2017] NSWSC 314, cited

COUNSEL:

A Pomerenke QC, with M Jones, for the plaintiffs

S Doyle QC, with A Stumer, for the defendant and plaintiffs by counterclaim

SOLICITORS:

Tucker & Cowen for the plaintiffs

Clayton Utz for the defendant and plaintiffs by counterclaim

Background

  1. The Tri-Star Group is a group comprising 6 companies which has carried on business in Australia and the United States as an explorer for petroleum deposits, the operator of petroleum joint ventures, the holder of working interests of numerous petroleum tenements, and an investor in petroleum joint ventures.  It has offices in Houston, Texas and Brisbane, Queensland.
  2. The group is closely held: the sole director and decision maker for the group is Dr Jim Butler.  He has a controlling interest in the companies comprising the group.[1]
  3. The plaintiffs are four of the six companies comprising the Tri-Star Group.  Each of them is a company incorporated in Texas and registered in Australia as a foreign company.  For the purposes of these reasons it is not necessary to distinguish between the plaintiffs and it will suffice to refer to them simply as Tri-Star.
  4. The defendant is Australia Pacific LNG Pty Ltd (APLNG), a company which is in the business of producing, processing, and selling coal seam gas in Queensland.  The shareholders of APLNG comprise three other corporations engaged in that industry namely Origin Energy Limited, ConocoPhillips Australia Pacific LNG Pty Ltd (ConocoPhillips) and Sinopec Australia Pacific LNG Pty Ltd (Sinopec).    
  5. In this proceeding, Tri-Star advances three claims founded upon the terms of a Sale and Purchase Deed made on 14 February 2002 (the 2002 Deed) between Tri-Star[2] and APLNG, pursuant to which Tri-Star assigned the “Assigned Interests”[3] (a term defined to encompass certain petroleum tenements and related choses in actions) to APLNG in exchange for:
    1. a purchase price of $US20 million;
    2. APLNG’s promise to make certain royalty payments; and
    3. a reversionary interest, by which 45% of the Assigned Interests would automatically revert to Tri-Star once the “Reversion Trigger” has occurred.
  6. First, Tri-Star claims that it has been underpaid royalties and seeks declaratory, injunctive and ancillary relief to establish the amount it should have been paid and to require APLNG to make good the underpayment together with interest.  As to this:
    1. APLNG had promised to pay royalties monthly as set out in clause 17 of the 2002 Deed.
    2. The amount to be paid was to be calculated as 3% of “Sales Proceeds” (which was defined essentially as “Revenue” to APLNG or any Affiliate of APLNG from “Petroleum” from the Assigned Interests).
    3. Tri-Star’s case that it has been underpaid royalties turns on establishing that the proper construction of the relevant terms of the 2002 Deed was such that Revenue should take account of:

      (i)the prices obtained for gas produced from the relevant tenements, not just pursuant to APLNG’s sales to related parties (Related Party Contracts), but also pursuant to sales from those related parties to outsiders (the Third Party Contracts); and

      (ii)the prices obtained for liquefied natural gas (LNG) processed from gas produced from the relevant tenements pursuant to sales of that LNG by APLNG or by parties related to APLNG (the LNG Contracts).

    4. If Tri-Star’s construction of the relevant terms is correct, the quantum of its claim for underpaid royalties would turn on the evidence which it could adduce of the existence of those contracts and the prices obtained under them.
  7. Second, Tri-Star claims that the Reversion Trigger has occurred and seeks declaratory, injunctive and ancillary relief to establish that fact and to ensure the performance of APLNG’s obligation to facilitate the reversion of 45% of the Assigned Interests.  As to this:
    1. Whether or not the Reversion Trigger has occurred turns on whether the application of the formula set out in clause 16.3 of the 2002 Deed returns a number greater than zero.
    2. One of 6 critical variables in the application of the formula is the variable “R”, which was defined essentially as the Sales Proceeds used for the royalty calculation together with an extended definition of Revenue.  Another variable is “COE”, a term defined essentially as the capital, operating and overhead expenditure relating to the Assigned Interests.
    3. Tri-Star’s case that the Reversion Trigger has occurred turns on establishing that that the proper construction of the relevant terms of the 2002 Deed was such that “R” should take account of:

      (i) the prices obtained for gas produced from the relevant tenements, not just pursuant to APLNG’s internal sales to related parties, but also pursuant to the Third Party Contracts;

      (ii) the prices obtained for LNG processed from gas produced from the relevant tenements pursuant to the LNG Contracts; and

      (iii) monies (thought to be in the billions of dollars) received from ConocoPhillips and Sinopec.

    4. If Tri-Star’s construction of the relevant terms is correct, its proposition that the formula should return a number greater that zero would turn (at least) on the evidence which it could adduce of the existence of those contracts and the prices obtained under them, and the amounts received from ConocoPhillips and Sinopec.
  8. Third, Tri-Star claims that one of the rights which falls within the “Assigned Interests” (and which will accordingly, be the subject of the 45% reversion in the event that Tri-Star establishes its Reversion Trigger claim)[4] is APLNG’s interest under a particular petroleum tenement, referred to as ATP 1178.[5]  Tri-Star seeks declaratory relief to establish that position.  As to this:
    1. One of the tenements assigned by Tri-Star in 2002 was ATP 702P.
    2. Tri-Star contends that:

      (i) the block of land which is now comprised in ATP 1178 was relinquished from ATP 702P in 2007 by APLNG;

      (ii) APLNG became the holder of ATP 1178 in 2013;

      (iii) ATP 1178 must relevantly be regarded as a replacement of, or substitute for, or as conferring the same or similar rights as ATP 702P insofar as it related to the relinquished block; and

      (iv) in those circumstances, APLNG’s interest under ATP 1178 falls within the definition of “Assigned Interest”.

    3. Tri-Star’s case turns on the proper construction of the relevant terms of the 2002 Deed and the evidence of what happened in relation to ATP 1178 and ATP 702P.
  9. APLNG served its defence and counterclaim on 29 April 2016.  That pleading comprises 170 pages plus some 132 pages of schedules. Two tranches of further and better particulars have been delivered.  APLNG traverses much of Tri-Star’s pleaded case (including Tri-Star’s contentions about what the proper construction of the 2002 Deed requires to be taken into account for the purposes of Tri-Star’s claims) and, amongst other things, advances a counterclaim with a face value of over $3 billion.  Nine companies related to APLNG are also plaintiffs by counterclaim, and participate in parts of the relief claimed by the counterclaim, but it is not necessary to distinguish between the plaintiffs by counterclaim and it will suffice to refer to them simply as APLNG.  It also suffices to observe that, amongst many other things, APLNG contends:
    1. Since the time that the various interests the subject of Tri-Star’s reversion claim would have reverted, if the Reversion Trigger had occurred as alleged, APLNG had incurred expenditure referable to those interests in the order of $3.1 billion.
    2. One reason that the Court ought not grant the relief claimed by Tri-Star in respect of those interests was that Tri-Star had not done equity by either reimbursing APLNG or offering to reimburse it for that expenditure.
    3. Tri-Star had made various representations (and/or induced APLNG to make various assumptions) inconsistent with those of its claims which are founded on the contention that the Reversion Trigger had occurred, which APLNG had relied upon.
    4. The incurrence of the alleged expenditure by APLNG would form the detriment element of a contention that Tri-Star should be the subject of an estoppel which would defeat any claims founded on the contention that the Reversion Trigger had occurred.
    5. However, if Tri-Star’s claims were found to be correct, then APLNG would have suffered actionable loss due to misleading and deceptive conduct by Tri-Star, part of the measure of which would be the expenditure which APLNG had incurred referable to the interests.  Alternatively the expenditure could be recoverable from Tri-Star as equitable compensation, on a restitutionary basis, or as damages.
  10. Broadly speaking, there are two issues presently before me.  First, whether, and if so, how, I should impose a special protocol imposing constraints on the manner by which Tri-Star and its servants and agents can obtain access to and use documents APLNG might be required to produce to Tri-Star under the usual interlocutory processes of this Court.  APLNG contends that confidentiality concerns justify the imposition of such a regime, and Tri-Star contends the contrary.  Second, the resolution of some disputes concerning the adequacy of APLNG’s response to requests for further and better particulars.
  11. It is convenient to deal with the latter issue first.

Further and better particulars

  1. By letter dated 9 June 2016 Tri-Star requested further and better particulars of the defence and counterclaim.  By letter dated 14 October 2016 APLNG provided many, but not all, of the further and better particulars requested.   The parties engaged in further correspondence about the requests for particulars, which narrowed the issues between them.
  2. I deal below with the requests still pressed by Tri-Star in its application.

Request 1:  Paragraph 19(b)(ii) of the defence

  1. Paragraph 19 of the statement of claim asserts the existence of:
    1. the Related Party Contracts in which APLNG entered into agreements for the sale of gas with Related Companies; and
    2. the Third Party Contracts in which some or all of the Related Companies entered into agreements with third parties for the sale of gas,

to which I have referred at [6](c) above. 

  1. Paragraph 19(b) asserts in relation to the Third Party Contracts that they included gas acquired pursuant to the Related Party Contracts and provide for, and have resulted in, payment of prices different from those paid pursuant to the Related Party Contracts. 
  2. Paragraph 20 then pleads that the amounts paid or to be paid by the purchasers under the Third Party Contracts are, or when paid will be, wholly or partly characterized as:
    1. Sales Proceeds for the purpose of the underpaid Royalties claim; or
    2. Sales Proceeds falling within the meaning of the variable “R” for the purposes of the Reversion Trigger claim.
  3. Ultimately by paragraph 29 of the statement of claim Tri-Star alleges that the result of the calculation to be performed under clause 16.3 returned a positive number, which, if correct, would justify its claim about the occurrence of the Reversion Trigger.  The particulars to the paragraph make it clear that the calculation depends in part on the allegations advanced in relation to the Third Party Contracts.
  4. Paragraphs 19(a) and (b) of the defence deny the allegations advanced by paragraphs 19(a) and (b) of the statement of claim concerning the Related Party Contracts and Third Party Contracts on the basis that the true facts are those which are pleaded in the defence.  Thus, in lieu of the Related Party Contracts and Third Party Contracts, APLNG asserted the existence of:
    1. Aggregator Upstream GSAs[6] (as identified in a schedule to the defence) in which APLNG entered into agreements for the sale of gas with Related Companies; and
    2. Aggregator Domestic GSAs in which the particular Related Companies identified in the schedule entered into agreements with third parties for the sale of gas.
  5. As to the latter type of contracts, paragraph 19(b) of the defence pleads:

As to paragraph 19 of the statement of claim:

  1. in respect of paragraph 19(b):

 

  1. the Aggregator Domestic GSAs provide for, and have resulted in, payment to the seller under the Aggregator Domestic GSAs of prices different from those paid to APLNG pursuant to the Aggregator Upstream GSAs …
  1. Then paragraph 20 of the defence denies paragraph 20 of the statement of claim, on the basis that the amounts paid or to be paid under the Aggregator Domestic GSAs cannot be characterised in the way pleaded by Tri-Star in relation to the Third Party Contracts, for various reasons.  Ultimately, paragraph 29 of the defence denies the proposition in paragraph 29 of the statement of claim, relying amongst other things, on what is pleaded in paragraph 19 of the defence and on the proposition that the result of the calculation to be performed under clause 16.3 did not return a positive number.
  2. Tri-Star seeks the following particulars:

Further and better particulars of:

  1. the prices paid to APLNG pursuant to each Aggregator Upstream GSA;
  1. the prices provided for, and paid to the seller, pursuant to each Aggregator Domestic GSA.
  1. The contractual documents which constitute the Aggregator Upstream GSAs and the Aggregator Domestic GSAs have been disclosed to Tri-Star (or will be disclosed once I resolve the dispute concerning the interim confidentiality protocol).  Accordingly Tri-Star has, or will eventually get, the documents concerned.  The question is whether APLNG should be required to particularise what it pleads concerning prices in paragraph 19(b)(ii). 
  2. APLNG resists providing the particulars.  It contends that the request seeks particulars of an admission made by APLNG of an allegation pleaded in the statement of claim, or alternatively of a basis of a denial of an allegation made by Tri-Star in the statement of claim.
  3. I reject the former argument.  Tri-Star cannot be regarded as seeking particulars of an admission made by APLNG of an allegation pleaded in the statement of claim because Tri-Star did not plead anything at all about the Aggregator Domestic GSAs.  The only party which has pleaded something about those contracts is APLNG.  Unless Tri-Star admits the allegation when it replies to the facts pleaded in the defence, there will be an issue of fact for determination at the trial concerning APLNG’s allegation.
  4. I also reject the latter argument.  It is true that there is authority that suggests that where, in compliance with r 166(4) of the Uniform Civil Procedure Rules 1999 (Qld) (UCPR), a party pleads an explanation for a denial, the plea of the explanation does not create an issue of fact for determination at the trial and, accordingly, a request for production of documents pleaded as part of such an explanation (or a request for particulars of such an explanation) would be denied.[7]  That much may be accepted, but it is commonplace that a party who pleads an explanation so as to comply with r 166(4) also relies on what is pleaded in the explanation to advance a positive case and to comply with the obligation under r 149(1)(c) of the UCPR to plead facts which, if not stated specifically, might take another party by surprise.  If facts pleaded in an explanation are also relied on in this way, then it is perfectly legitimate for an opponent to subject them to ordinary interlocutory scrutiny, including by requests for production of documents pleaded and requests for further particulars.
  5. APLNG is pleading a positive case which:
    1. (in paragraph 19 of the defence) asserts the existence of the Aggregator Upstream GSAs, the existence of the Aggregator Domestic GSAs, and that the Aggregator Domestic GSAs provide for, and have resulted in, payment to the seller under the Aggregator Domestic GSAs of prices different from those paid to APLNG pursuant to the Aggregator Upstream GSAs; and
    2. (in paragraph 29 of the defence) relies on what it asserts in paragraph 19 to form part of its positive case about the correct calculation which should be made under clause 16.3 of the 2002 Deed.
  6. Tri-Star is entitled to appropriate particularity of that positive case.  
  7. APLNG must provide the requested particulars.

Request 2:  Paragraph 37(c) of the defence and paragraph 446 of the counterclaim

  1. Paragraph 37 of the statement of claim is the pleaded conclusion concerning the character of ATP 1178, which is part of Tri-Star’s third claim as described at [8] above.  If ATP 1178 does form part of the Assigned Interests, then that conclusion may affect the application of the formula which is relevant for the Reversion Trigger claim. 
  2. Paragraph 37(c) of the defence asserts that if Tri-Star’s allegations regarding ATP 1178 are correct, then any calculation of the variable COE for the purpose of the Reversion Trigger claim would have to take into account the amounts paid by APLNG to the Queensland Government pursuant to its tender for ATP 1178, and the other capital, operating and overhead expenditure undertaken by APLNG on ATP 1178.  Paragraph 446 of the counterclaim asserts that APLNG spent $159,448,000 of the acquisition, exploration and development of the area the subject of ATP 1178.
  3. Tri-Star’s second request is as follows:

As to paragraph 37(c) of the Defence and paragraph 446 of the Counterclaim, further and better particulars of:

  1. the amount paid by APLNG to the Queensland Government pursuant to its tender for ATP 1178; and
  1. the other capital, operating and overhead expenditure undertaken by APLNG on ATP 1178.
  1. It is plain that the particulars requested must be provided.  APLNG does not appear to dispute this.  Rather, it contends that the particulars should be the subject of its proposed confidentiality protocol.  I will address that contention when I address the confidentiality protocol issues.[8]  The answer to this aspect of Tri-Star’s application is that APLNG must provide the requested particulars.

Request 3:  Paragraph 42(d) of the defence and paragraphs 90(d), 112(a), 122(b), 123(c)-(f), 124, 125 and 126 of the counterclaim

  1. Tri-Star’s third request is as follows:

As to each of paragraph 42(d) of the Defence and paragraphs 90(d), 112(a), 122(b), 123(c)-(f), 124, 125 and 126 of the Counterclaim, further and better particulars of the amounts expended by APLNG:

  1. since 1 November 2008; and
  1. since 1 February 2012,

in respect of those interests that would have reverted under clause 16.2 of the 2002 Deed if the reversion trigger had occurred.

  1. The identified paragraphs of defence and counterclaim relate to that part of APLNG’s case which alleges that expenditure of approximately $3.1 billion was incurred “in respect of” or “referable to” the interests the subject of Tri-Star’s Reversion Trigger claim.  I have earlier mentioned that that allegation is relevant to APLNG’s estoppel defence and to various pecuniary claims which it advances.
  2. By the further particulars of 14 October 2016, APLNG provided tables identifying large “headline” figures for expenditure by APLNG “referable to the Assigned Interests”, with one figure given for each ATP – that is, 15 line items totalling approximately $6.95 billion in expenditure between November 2008 and December 2015.  Many of the line items refer to expenditure in the vicinity of tens of millions of dollars, some are in the hundreds of millions and there are 2 figures in the billions. 
  3. Those particulars are plainly inadequate. 
  4. APLNG contends that the breakdown of the headline numbers can be found in documents to which APLNG refers in its particulars and which have been provided by way of disclosure under r 222 (to the extent that they have been requested by Tri-Star).  Mr McCabe’s affidavit describes the documents which have already been provided to Tri-Star.
  5. To justify this proposition, APLNG relies on the affidavit of Mr Cook, one of APLNG’s solicitors.  Mr Cook’s affidavit exhibits and explains “… a schedule … which calculates the total of the amounts which APLNG has paid pursuant to the ATP 592 Operating Agreement for its proportionate share of the expenses called during the period from November 2008 to December 2015”.[9]  The 13-page schedule would, if provided as particulars, explain to Tri-Star what APLNG’s case was in relation to the line item for ATP 592, and, because it would contain cross-references to documents which provide the detail in relation to the very many line items in the 13 pages, operate to commit APLNG to a particular case as to how it will seek to persuade the trial judge as to the figures which form one part of its multi-billion dollar claim.
  6. It seems to me that APLNG’s proposition is that it suffices in a case of this magnitude to say to the defendant to its counterclaim, in effect, “we have given you the documents and you can work out the detail of how we present our case”.  Presumably the proposition is that Tri-Star could prepare for itself schedules like the one which Mr Cook has exhibited.  Of course, even if Tri-Star did that, and the bottom line of each schedule which it prepared equated with the line item in APLNG’s current particulars, it would still be a matter of speculation whether Tri-Star had correctly worked out how APLNG proposed to present its case. 
  7. I do not accept APLNG’s proposition.  In this case, the proper course is the orthodox course of requiring APLNG to particularise its own case.  It should prepare the schedules which provide the requisite degree of breakdown and which, when provided as formal particulars, will operate to commit it to the detail which is contained within the schedules and in the particular documents to which cross-reference is made therein. 
  8. APLNG must provide the requested particulars.

Request 4:  Paragraphs 470, 475 and 484 of the counterclaim

  1. Tri-Star’s fourth request is as follows:

As to each of paragraphs 470, 475 and 484 of the Counterclaim, further and better particulars of the expenditure pleaded therein.

  1. The allegations are as to amounts expended on exploration and development of relevant tenements. 
  2. APLNG provided further particulars of the allegations in these paragraphs on 12 April 2017, which was after Tri-Star’s application was filed.  Accordingly, this aspect of the application remains relevant to the question of costs only.

APLNG’s application for confidentiality orders

Introduction

  1. The defence and counterclaim and the particulars provided by APLNG so far refer to a very large number of documents.  Tri-Star has requested production of such documents pursuant to r 222 of the UCPR.  A large number of documents have been provided by APLNG in response to those requests.  However, a large number have also been withheld.  They are the subject of Tri-Star’s application for production of documents. 
  2. Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise, to disclose documents or information, the party receiving the disclosure is subject to a legal obligation not to use it for a purpose unrelated to the conduct of the proceeding in which it was obtained, unless it is received into evidence: Hearne v Street (2008) 235 CLR 125 per Hayne, Heydon and Crennan JJ.[10]  It is common to say that the recipient of the documents is subject to “the implied undertaking”.  However, the obligation is better regarded as a substantive legal obligation to the court, which arises by operation of law by virtue of the circumstances under which the material was generated and received.[11]  The obligation so arising also binds third parties if they know of the origins of the material in legal proceedings.[12]
  3. As the juridical basis for the imposition of the substantive legal obligation is the operation of law, I will refer to the obligation as “the implied obligation”.
  4. APLNG accepts that Tri-Star has properly requested production of documents pursuant to r 222 and, prima facie, is entitled to be provided with copies of the documents it has requested. 
  5. For its part, Tri-Star accepts that the circumstances are such that any documents produced in response to its r 222 request would be subject to the implied obligation,[13] and that the obligation would extend to Tri-Star’s servants or agents who have the requisite knowledge.  Moreover:
    1. Tri-Star has assembled a team to manage this proceeding which includes two experienced in-house counsel, each of whom is admitted as a solicitor of this Court.  Mr Jim Butler and the two in-house counsel understand and intend to abide by the implied obligation. 
    2. Tri-Star has a relatively small roster of employees and contractors,[14] who are subject to a general requirement that they are required to keep confidential any information they learn in the course of their work for Tri-Star.  But in addition Dr Butler has caused an instruction to be given to all staff and contractors who are working on the proceeding as to the implied obligation and the fact that they are required to comply with it.  The two experienced in-house counsel have said that they will reinforce that instruction to Tri-Star’s staff and contractors working on the proceeding.
  6. However, APLNG contends that some of the documents which should be produced in response to Tri-Star’s application have a character which would not be sufficiently protected by the operation of the implied obligation.  For this reason, APLNG has withheld the documents from production and has made what is essentially a cross-application, for an order that directions be given concerning access to, and the use which may be made of, the documents withheld.
  7. APLNG has divided the documents which it has withheld into two categories, and has adduced evidence which addresses the confidential and commercially sensitive character of the documents falling within the categories.   It then contends:
    1. The appropriate response to the evidence concerning the confidential and commercially sensitive character of the documents is that I make a direction that access to the documents be governed by and be in accordance with a specified “Confidentiality Protocol”.  (The terms of the proposed Confidentiality Protocol are set out in Appendix 1 to these reasons.)
    2. Category 1 comprises documents which are confidential and in respect of which additional protection over and above the operation of the implied obligation is warranted.  The proposed protocol would permit any representatives of Tri-Star to have access to the documents, as long as they first signed an undertaking directed to the Court and to APLNG to act in accordance with the confidentiality protocol.
    3. Category 2 comprises documents otherwise falling within category 1, but which also contain material (identified by redaction) which is so confidential and commercially sensitive that Tri-Star’s key officers should not have access to it.  To achieve that end, the documents in their redacted form would be dealt with as per Category 1, but access to documents in their unredacted form would be limited to Tri-Star’s barristers and solicitors, the document management staff retained for the proceeding, and Tri-Star’s in-house general counsel.
  8. Tri-Star has been put in a position of being able to respond to APLNG’s application because, commendably, the parties agreed upon an interim regime to facilitate the efficient conduct of APLNG’s application.  This has meant that counsel appearing for Tri-Star and two of Tri-Star’s solicitors have had access to the documents (including the Category 2 documents in unredacted form) on a confidential basis, solely for the purposes of the application.  A senior in-house lawyer from Tri-Star has also had access to the documents on that basis (although so far as the Category 2 documents were concerned his access was limited to the documents in redacted form). 
  9. Tri-Star contends:
    1. The implied obligation provides adequate protection in respect of the Category 1 documents (which includes the Category 2 documents in their redacted form).  APLNG has not proved that this is a case of the kind that would warrant a Court-ordered protocol limiting access to documents only to persons who sign express written undertakings to the Court.
    2. So far as access to the redacted content of the Category 2 documents is concerned, Tri-Star disputes the justification for a small number of the proposed redactions, but otherwise accepts that the proposed redactions are justified, and may properly be the subject of appropriate Fielder Gillespie orders.[15]  The proper response is to make an orthodox form of Fielder Gillespie order, whenever appropriate.
    3. If, contrary to Tri-Star’s principal contention, I form the view that the imposition of a more onerous obligation than the implied obligation is justified, it should not be in the terms of the Confidentiality Protocol proposed by APLNG, because it is unduly onerous, disproportionate to the risks APLNG is seeking to address, in some respects premature, and in some important respects uncertain.
  10. The resolution of the issues which arise on Tri-Star’s application and APLNG’s cross-application essentially require me to determine whether the imposition of the proposed Confidentiality Protocol is the appropriate response to APLNG’s confidentiality concerns.

When might a Court impose a more onerous obligation than the implied obligation?

  1. In Hearne v Street the High Court recognized that the implied obligation was the mechanism by which the law ensured that those who, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise, were compelled to disclose documents or information, did not suffer a harsher or more oppressive invasion of their privacy and confidentiality than was necessary for the purpose of securing that justice was done in the proceeding.[16]
  2. Tri-Star correctly points out that in most cases, the fact that the documents obtained in that way may not be used except for the purposes of the litigation concerned will be sufficient protection for the party producing them: see Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34 per Hayne JA at 38 (with whom Winneke P and Phillips JA agreed); Alcoa of Australia Ltd v Apache Energy Ltd [2014] WASCA 148 per McLure P at [57], point 4 (with whom Buss and Newnes JJA agreed).
  3. Cases in which something more than the implied obligation is required are to be regarded as the exception, not the rule.  In Hearne v Street the High Court made that observation when discussing the circumstances in which it might be appropriate to require a party to make the implied obligation explicit by requiring the party to provide an express undertaking.  Hayne, Heydon and Crennan JJ explained (emphasis added):

The point of insisting on an express undertaking, commonly employed in relation to documents which it is particularly desired to keep secret, is to bring explicitly home to the minds of those giving it how important it is that the documents only be used for the purpose of proceedings. It does not follow that the obligation in question does not exist in more routine cases without the need for an express undertaking. If the appellants' stance were sound, it would be necessary for litigants, in order to obtain protection partially, but not completely, as effective as that given by the approach urged by the residents, to seek express undertakings to the court from all servants and agents of a party, from all potential lay and expert witnesses, and from all other persons into whose hands documents generated in the proceedings may come. At present this happens in exceptional cases for particular reasons. If it were necessary for that general practice to develop, it would be extremely cumbersome, and extremely wasteful of time, energy and money.[17]

  1. The descriptor “exceptional” has been used in other cases.  For example:
    1. In Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34 at 38, Hayne JA (with whom Winneke P and Phillips JA agreed) said that the question at issue was (emphasis added):

whether this is an exceptional case because the persons whose secrets are to be revealed are trade rivals of the party seeking inspection of documents containing secrets of use to that party.

  1. In Bidvest Australia Limited v Auzcorp Pty Ltd [No 2] [2017] WASCA 23 at [42], Martin CJ and Newnes and Murphy JJA wrote (emphasis added):

However, it is recognised that there may be exceptional circumstances where the implied undertaking may be insufficient protection and in such circumstances the court may impose conditions on an order for inspection in order to protect the efficacy of the implied undertaking: Alcoa of Australia Ltd v Apache Energy Ltd [2014] WASCA 148 [57]. One of those circumstances is where the parties are trade rivals and the documents discovered by one party contain confidential information of use to the other party in that trade rivalry: Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34.

  1. Where the circumstances of a particular case justify protection beyond the operation of the implied obligation, the issue for the Court is to determine where to strike the balance between competing interests.  Thus:
    1. In Mobil Oil Australia Ltd v Guina Developments Pty Ltd Hayne JA observed of the possibility of making arrangements restricting access only to legal advisers and experts:

… they are arrangements that are made and should be made when doing so would strike a fair balance between the competing interests of the party seeking inspection and the party claiming confidentiality. No more specific rule can be laid down - each case will fall for determination according to its own facts.[18]

  1. In Civic Video Pty Ltd v Paterson [2013] WASCA 107 at [28],[19] the Court of Appeal of Western Australia stated:

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…

  1. The result is that a court may impose a more onerous obligation than the implied obligation if it is persuaded by the party asserting the need for that course that the case involves exceptional circumstances such that the implied obligation provides insufficient protection.  If it is so persuaded, the court will then consider whether the course proposed by that party will strike the fair balance between its confidentiality concerns and the needs of the other litigant to have access to the documents concerned. 

The evidence as to the nature and content of the confidential information

  1. It is necessary to summarise what the evidence reveals about the documents and information which would be produced by APLNG in compliance with the r 222 request.  The principal evidence addressing this was contained in the affidavit of APLNG’s Mr McCabe, who was the Deputy CEO and also the CFO of APLNG.  Tri-Star did not seek to cross-examine Mr McCabe.

The category 1 documents

  1. The way in which Mr McCabe sought to justify the need for the confidentiality sought in respect of the category 1 documents was as follows.
  2. First, he described the characteristics of the domestic gas markets (in which APLNG operated as both a buyer and seller of gas) and the export LNG market (in which APLNG operated as a seller of LNG for both spot (i.e. short term) sales and longer term supply).
  3. Second, he explained that in his view the markets were not transparent, in the sense that Gas and LNG sale agreements were typically private bilateral agreements in which, amongst other things, information on the following matters were not generally known by other market participants:
    1. whether supply and purchase obligations were firm or not, including whether take or pay obligations were included and if so, how firm they were;
    2. price and pricing methodology;
    3. financing arrangements;
    4. gas transportation arrangements;
    5. forecast production profiles, supply commitments, and the degree of flexibility which one participant might have in relation to such commitments.
  4. Third, he explained that the general justification for the protection sought which was applicable to all the documents in the category was the need to avoid providing important market intelligence to other market participants, which they could use to APLNG’s commercial disadvantage.  He deposed as follows:
  1. 41.The characteristics of the Markets described in paragraphs 31, 33, 34 and 35 mean that it is particularly important for the Market participants, such as the APLNG Parties, to not disclose their commercially sensitive information to other Market participants or potential Market participants, including market rivals and potential counterparties. To do so would expose the APLNG Parties to a disadvantage in the operation of the Markets because, in the absence of the Category 1 Protection:
  1. the key financial and operational aspects of the businesses of the APLNG Parties which may become known to the market rivals and/or potential counterparties include:
  1. the revenue earned or to be earned from the sale of gas and LNG under the portfolio of gas and LNG sale agreements to which the APLNG Parties are parties;
  1. any profit or margin generated by the APLNG Parties;
  1. the operational capacity and functionality within the APLNG Parties' contracts, businesses and their infrastructure;
  1. the covenants and constraints to which the APLNG Parties are subject in operating their businesses and the consequences to which the APLNG Parties are exposed for any breach of those covenants or constraints;
  1. by reason of the matters referred to in paragraphs (i) to (iv) above:

A. the maximum amount which the APLNG Parties can afford to pay for the purchase of, amongst other things, gas;

B.  the minimum amount which the APLNG Parties can afford to accept for the sale of gas or LNG,

so as to not incur a loss or so as to avoid the consequence of any breach of a covenant or constraint to which the APLNG Parties are exposed;

  1. the knowledge referred to in paragraph (c) above is likely to advantage any market rival and/or counterparty because it will inform that party as to:
  1. the legal, financial and commercial imperatives and pressures which will inform the approach which is likely to be taken by the APLNG Parties in any negotiations or competitive processes (e.g. buying / selling gas, selling LNG and tendering for petroleum tenures);
  1. how that party should seek to negotiate with the APLNG Parties and/or how that party should seek to develop their own proposal, both as to pricing and as to terms, in order that any offer by that party is more likely to compare favourably when assessed against a competing offer by the APLNG Parties; and
  1. such advantages to any market rival and/or counterparty would subject the APLNG Parties to a corresponding disadvantage in their negotiations or in competitive processes.
  1. 42.The risks referred to in paragraph 41 are heightened in the circumstances alleged by the TriStar Parties in their statement of claim (but which are denied by the APLNG Parties), namely that the Reversion Trigger occurred pursuant to the Sale and Purchase Deed dated 14 February 2002 by no later than 1 November 2008 or, alternatively, 1 February 2012. This is because, in the circumstances alleged by the Tri-Star Parties, the key financial and operational aspects of the businesses of the APLNG Parties may need to be assessed in the context that part of the interest of APLNG in certain of the Upstream Tenements, or in the interests pursuant to the operating agreements for certain Upstream Tenements, have reverted to the Tri-Star Parties but there is no corresponding reduction to the covenants and constraints to which the APLNG Parties are exposed.
  1. Finally, he explained how the logic of the general propositions advanced in the previous paragraph applied to the particular sub-categories of documents within Category 1, by first describing the nature of the documents and then explaining why they were confidential and contained commercially sensitive information.  The details contained in this part of the affidavit were all variations on the same theme: absent the protection sought, other market participants might get reliable market intelligence which they could not otherwise get and that market intelligence could be used to APLNG’s disadvantage.  
  2. The sub-categories of documents within Category 1 which were dealt with by Mr McCabe in this way were as follows:
    1. Gas Sale Agreements – LNG Sale Agreements – Spot Sales;
    2. ConocoPhillips Subscription documents;[20]
    3. Sinopec Subscription documents;[21]
    4. Gas Transportation Agreements;
    5. Gas Sale Agreements – Upstream GSAs;
    6. Gas Sale Agreements – Domestic GSAs – Longer Term;
    7. Gas Sale Agreements – Domestic GSAs & Similar – Spot Terms; and
    8. Miscellaneous Project/Operating Documents.[22]
  3. The final sub-category of documents in Category 1 was described as “Other agreements containing confidential and commercially sensitive information of third parties”.  The evidence demonstrating the confidential nature of those documents was contained in correspondence from the third parties which was exhibited to affidavits from Mr Cook.  The third parties supported the approach to confidentiality taken by APLNG.  

The category 2 documents

  1. The evidence which was relevant in relation to Category 1 documents was also relevant in relation to the need for the confidentiality sought in respect of the Category 2 documents.  But Mr McCabe further explained that there was a risk that Tri-Star itself:
    1. could either now or in the future seek to compete with APLNG in relation to the acquisition of ATPs, the supply of gas to the domestic market, or the supply of LNG for export; or
    2. could seek to negotiate with APLNG for the sale of gas or for transportation rights in relation to gas,

and in those scenarios the provision of confidential and commercially sensitive information to Tri-Star could disadvantage APLNG. 

  1. Mr McCabe explained that the provision of information to Tri-Star which might provide a basis on which Tri-Star could draw inferences about the highest price at which and the most onerous terms on which APLNG would be willing to purchase gas would place APLNG at a commercial disadvantage.  The Category 2 documents contained information which be relevant to that task, including:
    1. the APLNG Parties’ forecasts for producing gas now and in the future;
    2. the nature of the AP LNG Parties’ existing portfolio of supply commitments, such as:
      1. the quantity of gas to be supplied;
      2. the term of the agreements to which the APLNG Parties are a party and whether there are options for expansion or renewal;
      3. the timing of the supply obligations;
      4. the nature of the supply obligation (i.e. firm or otherwise);
      5. whether there is any flexibility around the supply obligations;
      6. the ability of the APLNG Parties to substitute gas from other sources;
      7. the price of the gas to be supplied and the timing and basis of any pricing reviews; and
      8. the consequences to the APLNG Parties of not satisfying the supply obligations;
    3. the broader consequences to the APLNG Parties of not satisfying its existing supply obligations, such as cross defaults under financing agreements;
    4. the profit margin on existing supply obligations;
    5. the cost, or likely cost, to the APLNG Parties of acquiring gas from an alternative source, such as through the spot market or by accelerating gas field development and/or production in order to meet its supply commitments other than by the purchase of gas from the Tri-Star Group; and
    6. the cost, or likely cost, to the APLNG Parties of other commercial alternatives, such as re-negotiating existing supply obligations and/or re-financing.
  2. Mr McCabe’s affidavit went on to deal with the particular sub-categories of documents within Category 2, and to explain why each of them contained confidential and commercially sensitive information.  As was the case in relation to the Category 1 documents, the explanations were essentially all variations on the same theme: absent the protection sought, the documents contained information which could place Tri-Star in an advantageous position against APLNG in one or other of the ways mentioned in the previous paragraph.  The sub-categories of documents dealt with in this way were:
    1. Gas Sale Agreements – LNG Sale Agreements – Long Term;
    2. Gas Transportation Agreements;
    3. Gas Sale Agreements – Master GSA;
    4. Project Finance Documents;
    5. Gas Sale Agreements – Domestic GSAs – Longer Term; and
    6. Gas Sale Agreements – Domestic GSAs & Similar – Spot Sales.
  3. Mr McCabe’s evidence also explained why the particulars which had been sought in relation to ATP 1178 (see [29] to [32] above) should also receive Category 2 protection.  It will be recalled that the particulars will have to detail the amount paid by APLNG to the Queensland Government pursuant to its tender for ATP 1178 and the other capital, operating and overhead expenditure undertaken by APLNG on ATP 1178.  Mr McCabe deposed:
  1. the details of the amount paid by APLNG to the Queensland Government and the details of the other expenditure by APLNG would enable the Tri-Star Group to reverse calculate the price which the APLNG Group has paid per GJ for gas which is to be produced from the area the subject of ATP 1178. That price could be used by the Tri-Star Group in negotiations with the APLNG Group as a benchmark price which APLNG has already paid for the acquisition of gas and which the APLNG Group ought be willing to pay in the future for other purchases of gas;
  1. with knowledge of the amount paid by APLNG to the Queensland Government, the Tri-Star Group or other tenders/ participants in the market may be able to infer the bidding / pricing strategy which was used by APLNG to succeed in the competitive tender for ATP 1178. Knowledge of that strategy could be used by the Tri-Star Group or other tenderers or participants in the market:
  1. to understand how APLNG may formulate its tender price for other petroleum tenures which are the subject of competitive cash bidding processes by the Queensland Government;
  1. to formulate their own tender price in a way which they consider will be likely to be more attractive than the price offered by APLNG, so as to improve their prospects of being the successful tenderer;
  1. to understand the likely resource contained within the area the subject of ATP 1178 and to use that information to inform itself as to the likely resource within any adjacent or contiguous tenures. In this regard, a petroleum tenure operated by the QCLNG project is contiguous to ATP 1178;
  1. this knowledge is likely to prejudice the commercial interests of the APLNG Parties to succeed in those competitive tenders or, alternatively, may cause the APLNG Parties to need to pay more in order to succeed in those competitive tenders.

The protection sought

  1. The differential nature of the protection sought in relation to the two categories is identified in the Confidentiality Protocol set out in Appendix 1 to these reasons and described in [51] above. 

Does the case involve exceptional circumstances such that the implied obligation provides insufficient protection?

Category 1 documents

  1. Tri-Star contends that the implied obligation provides adequate protection in respect of the Category 1 documents (which would include the Category 2 documents in their redacted form) and that APLNG has not proved that this is a case of the kind that would warrant a Court-ordered protocol providing a greater level of protection.  Tri-Star contends that I should form the view that that Mr McCabe’s concerns were either exaggerated or non-existent
  2. I have mentioned that no attempt was made to cross-examine Mr McCabe.  Rather, Tri-Star sought to impugn his affidavit indirectly.  Tri-Star drew my attention to the fact that market participants may for a fee have access to material provided by EnergyQuest.  EnergyQuest produces a number of analytical reports on Australian oil, gas and transport fuel.  Essentially, it provides market intelligence addressing, amongst other things, a number of the variables which Mr McCabe identified as variables which were not generally known to other market participants.  Tri-Star invited me to discount the concerns expressed by Mr McCabe by reference to the availability of such information.  Tri-Star suggested that the market was much more transparent than contended for by Mr McCabe.
  3. I am not persuaded that that material provides a satisfactory basis for not acting on Mr McCabe’s evidence.  APLNG submitted (and I accept) that:
    1. the EnergyQuest information was (as one would expect) market research or opinions expressed at a high-level of generality and without source material, the accuracy of which was not warranted, and in respect of which EnergyQuest accepted no responsibility for errors, inaccuracies or omissions;  
    2. there is a significant difference between access to information of that kind and access to the actual primary source documents for the relevant data; and
    3. the fact that market participants are prepared to pay for market intelligence of this nature reinforces and corroborates Mr McCabe’s evidence as to the confidential and commercially sensitive nature of the information which the APLNG Parties seek to protect.
  4. I reject Tri-Star’s submission concerning Mr McCabe’s evidence.  I find the content of Mr McCabe’s affidavit to set out a persuasive case that the information contained in the Category 1 documents is sufficiently confidential and commercially sensitive to warrant protection beyond the operation of the implied obligation.
  5. Tri-Star drew my attention to some other facts which it suggested were relevant to my assessment of the risk of commercial harm to APLNG in relation to the Category 1 documents.
  6. First, Tri-Star is closely held and controlled by Dr Butler, and has a relatively small roster of employees and contractors.  It has two experienced in-house counsel who are solicitors of this Court who are responsible for managing this litigation.  The evidence reveals that each of Dr Butler and the two in-house counsel understands and intends to abide by the implied obligation, Dr Butler has caused an appropriate instruction to be given to all of Tri-Star’s staff and contractors who are working on the proceeding as to the implied obligation and that they are required to comply with it, and the two in-house counsel have said that they will reinforce that instruction.  
  7. Second, to address the possible (and admittedly legitimate concern) which APLNG might have that Tri-Star might seek to use the confidential documents within the proceeding in a manner that might make the documents public, Tri-Star has conveyed its preparedness to agree with APLNG that Tri-Star will not file a pleading or particulars disclosing the content of the documents, file an affidavit exhibiting or disclosing the content of the documents, or file submissions disclosing the content of the documents, without first giving APLNG five business days’ notice of its intention to do so.  Such an agreement would, Tri-Star contends, allow APLNG to apply for such relief as it may consider necessary to protect the confidentiality of the relevant documents (e.g. for the sealing of the documents or redaction of parts of them). 
  8. These matters are not insignificant.  Nevertheless, it seems to me that, in principle, I should accept APLNG’s contention that some further protection than the implied obligation is justified, notwithstanding the matters to which Tri-Star has directed my attention.  I agree that the fair balance between the competing interests lies in favour of requiring an express written undertaking from the persons who receive the requisite information.  Doing so will bring home to them the importance of the confidentiality of the relevant documents and the obligations which apply to their use.  It will do so more than would mere instruction from superior officers within the organization.  It will also ensure that there could be no future evidentiary issues as to whether third party recipients of the documents or the information in them have the requisite knowledge of the source of the documents to make them bound.  And it will avoid any future argument concerning the content of the instructions, which were implicit in Tri-Star’s proposal concerning reliance on instructions being made by superior officers within the organization.  I will return to the question of the appropriate form by which the further protection should be given.

Category 2 documents

  1. As I have mentioned, Tri-Star disputes the justification for a small number of the proposed redactions, but otherwise accepts that the proposed redactions are justified, and may properly be the subject of appropriate Fielder Gillespie orders.  Tri-Star contends that the proper response is to make an orthodox form of Fielder Gillespie order, whenever appropriate.
  2. If, as I have determined, it is appropriate to make an order which creates a protocol which gives APLNG some further protection than the implied obligation, then it seems to me that the most practical course is to do so within the context of one appropriate protocol.  It follows that that is the course I will adopt.  The protocol should contain provisions which replicate appropriate Fielder Gillespie orders.  I will return to the question of the appropriate form by which the further protection should be given.
  3. It remains to resolve the small number of matters in relation to which Tri-Star maintains that APLNG has not made out a case for the imposition of Fielder Gillespie orders. 
  4. The argument on these issues was expressed in confidential annexures to written submissions provided by the parties.  I will deal with the manner of expression of my reasons in the manner described in Coronar (Australia) Pty Ltd v Lake Vermont Marketing Pty Ltd [2017] QSC 120 at [2] to [4], namely:
    1. I will seek to formulate a statement of reasons which conveys an adequate account of my decision and its reasons, gives effect to the public interest in knowing what orders are being made, and which also seeks to ensure that any confidentiality which a party may be entitled to have protected is protected; and
    2. To the extent it is necessary for the reasons to reference confidential material, I have done so by reference to a confidential appendix. One of the orders I will make is that the confidential appendix be placed in a sealed envelope on the Court file and marked “Confidential. Not to be opened except with the order of the court first had and obtained.”
  5. The first issue in dispute concerned whether the particulars which had been sought in relation to ATP 1178 (see [29] to [32] above), should also receive Category 2 protection.  I have adverted to Mr McCabe’s evidence in this regard at [72] above. That evidence was not the subject of any confidentiality order, so my ruling on this issue does not need to be contained in the confidential appendix.  As to this:
    1. Tri-Star suggested that I should not be persuaded by Mr McCabe’s evidence that APLNG had made out a case of the requisite strength. 
    2. For its part, APLNG pointed out that Tri-Star had not challenged Mr McCabe’s evidence, nor had it sought to adduce any evidence on the question.   It submitted, and I accept, that there is no reason not to act on Mr McCabe’s evidence. 
    3. Tri-Star contended that its relevant decision maker, Dr Butler, would need to know the information in those documents because it would form part of the Reversion Trigger calculations and he would need to know the requisite amounts so that he could provide instructions.  Nice questions sometimes arise between the need to seek to preserve demonstrated commercial sensitivity and the need for sufficient information to be given to a decision maker as to enable decisions to be made in the litigation.  I am not persuaded that this is presently such a case.  Dr Butler already knows the pleaded total amounts spent.  The detailed breakup of the pleaded amounts presently does not seem to me to be at all critical to the ability of Dr Butler to give instructions to his lawyers.  The balance should presently be struck in favour of Category 2 protection being given to the particulars.   
  6. The second issue concerned aspects of 4 documents in Category 2.  Tri-Star developed submissions by reference to the particular terms of particular documents which sought to persuade me that that APLNG had made out a case of requisite strength.  APLNG contended the contrary.  For reasons identified in Appendix 2 (the confidential appendix to these reasons), I reject Tri-Star’s submissions. 

The form of the Confidentiality Protocol

  1. Tri-Star advanced a number of criticisms as to the form of the Confidentiality Protocol sought by APLNG.   I address them in the table below.

Item

Tri-Star’s criticism of proposed Protocol

My conclusion

1

A theme of Tri-Star’s complaints about the form of the protocol was that it was unduly onerous and uncertain. 

APLNG’s proposal has the undertaking operate by reference to the protocol rather than as a stand-alone document.  The undertaking would expose the signatory to the sanction of contempt.  It seems to me to be likely that some of the signatories to the undertaking will be persons not necessarily possessing the same degree of commercial sophistication (or access to legal advice) as the parties to this proceeding.  The result is that it is desirable that that the undertaking (1) be a self-contained document; (2) is expressed in plain English; and (3) contain only the obligations which are apposite to the person giving the undertaking.  There are clauses in the body of the protocol which are not so apposite.  The body of the protocol should be reserved for the expression of obligations applicable to the sophisticated commercial entity which is Tri-Star and which do not need to be reproduced in the undertaking.

2

Clause 2 deals with additional documents that may be delivered by APLNG in the future (e.g. by way of disclosure).  It is premature and unduly favourable to APLNG.   It is premature because it goes beyond what is necessary to deal with the present problem of what should be done about the documents that APLNG has elected to plead and particularise.  It is unduly favourable to APLNG because it enables APLNG unilaterally to nominate further documents, and then to establish a default position which would see the documents dealt with as Category 1 or 2 under the protocol for an indefinite period.  The effect is to cast an onus on Tri-Star (when it should be on APLNG) and in default to subject Tri-Star to onerous obligations for an indefinite period.  The clause does not even require APLNG to apply for court-sanctioned protection at any time, let alone within a prescribed time.  This is a notable omission given that the protocol is so detailed and prescriptive in other respects.

I do not think it is premature to try to strike a framework applicable to litigation in which it is inevitable that other documents which may contain confidential material will be produced during the course of the interlocutory stages of the litigation.  Save in the respect next dealt with, the proposed framework strikes me as sensible and workable.

However, I agree that if Tri-Star disputes APLNG’s proposal in relation to new documents, the clause should oblige APLNG to bring the application, and to do so within a particular time frame.  And the clause should be drafted in a way which would require APLNG to ensure that the application is prosecuted expeditiously, to avoid the possibility that it might simply be satisfied with the interim arrangement which would operate until either agreement or court ruling.

3

Clause 3(c) imposes an obligation on Tri-Star by reference to copying, etc, “to the extent necessary”.  This is unduly onerous and potentially uncertain.  The implied obligation is not to use the documents other than for the purposes of the proceeding.  The obligation should not be extended to require Tri-Star (and others) to focus on whether, for example, copying is more extensive than is strictly necessary.  Further, the question of extent is likely to be contestable and therefore uncertain.  Tri-Star (and others) should not be exposed to the sanction of contempt based on such matters.

I agree.  The language of clause 3 is unduly complicated.  It would suffice to change the drafting of the clause so that (1) insofar as it affected the Tri-Star it was limited to an expression of the implied obligation in relation to the documents concerned and (2) insofar as it referred to other persons it simply expressed Tri-Star’s entitlement to provide them with access to and use of the documents and stated that the entitlement was on condition of the prior due execution and delivery of an undertaking.  The language of the relevant part of the undertaking should be limited to an expression of the implied obligation in relation to the documents concerned, without the complexity of the language of clause 3.

4

Clause 5 and the accompanying undertaking in Schedule 4 have a number of problems.  The undertaking requires the person giving it “to act in accordance with the requirements imposed on [a person] as set out in the Protocol”.  The undertaking thus incorporates all of the uncertainties embodied within the protocol and exposes the person giving it to contempt based on such uncertainties.  Further, clause 5 has the effect of giving APLNG complete visibility as to the team assembled by Tri-Star for the purposes of the litigation.  This is not an advantage ordinarily enjoyed by litigants.

 

My observations in relation to item 1 above indicate that I agree with the substance of the first point advanced by Tri-Star.  I also think that the undertaking should be an undertaking to the Court, not to APLNG: cf Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority trading as Seqwater (No 6) [2016] NSWSC 1279 per Beech-Jones J at [30] to [39].

My observations in relation to items 1 and 3 also apply to the form of the undertaking. 

I also see no reason why APLNG needs to know the identity of the undertaking parties.  An acceptable solution would be that proposed by APLNG, namely that executed undertakings be provided to and held by the solicitors for Tri-Star, to be dealt with as may be ordered by the Court.

5

Clause 6 is premature, unduly onerous, and uncertain.  It is premature to be restricting the manner in which, for example, cross-examination may be conducted at trial.  The trial is a long way off.  The alleged confidentiality and commercial sensitivity may or may not still be subsisting by the time of the trial. Such issues should be addressed closer to trial.  It is unduly onerous because it prohibits Tri-Star from using the documents legitimately in the conduct of the proceeding.  And it is uncertain.  The obligation is, amongst other things, not to use the document in a manner that “has the potential to” reveal its content “in a manner which is inconsistent with this protocol”.  This involves questions of potentiality and consistency which are likely to be contestable and therefore uncertain.  Tri-Star (and others) should not be exposed to the sanction of contempt based on such matters.

There is merit to some aspects of this criticism.   The obligation of Tri-Star expressed in this clause should be consistent with the implied obligation (which would permit use of documents for the purpose of the proceeding).  Clause 6(a) is unnecessary.  Clause 6(b)(i) should be modified to be consistent with the implied obligation and to permit the use of the documents for the purpose of the proceeding.  I see no objection to the obligations in clause 6(b)(ii) to (iii).

However, I also think that there is merit in expressing terms which put in place a regime which addresses the legitimate concern that documents might be used consistently with the implied obligation, but in a way which could reveal their contents to the public.  I think that is better addressed in a separate clause.  I address that further in item 6 below.

6

Clause 7 is unduly onerous and uncertain.  It is unduly onerous because it gives APLNG the ability to comment on, and regulate, aspects of how Tri-Star proposes to conduct its case.  It is uncertain because it is not clear precisely when and how it would operate.  Compliance with the UCPR is an uncertain trigger (e.g. would a step driven by a view about compliance with r 5 be enough?).  What is required by way of implementation is uncertain (e.g., what is entailed in the notion of “extent reasonably practicable” within clause 7(b)(iii)?).  Tri-Star (and others) should not be exposed to the sanction of contempt based on such matters.

I agree.  Clause 7 seeks to do too much.  It should be split into 2 clauses, one dealing with prerequisites to certain uses of documents for the purposes of the proceeding and one dealing with compulsory disclosure for the purpose of complying with any obligation or compulsion of law. 

As to the first subject matter, the clause should express something along the lines of Tri-Star’s existing proposal not to file a pleading or particulars disclosing the content of the documents, file an affidavit exhibiting or disclosing the content of the documents, or file submissions disclosing the content of the documents, without first giving APLNG notice of its intention to do so.  The notice period should provide sufficient time to permit APLNG either to reach some form of consent position with Tri-Star or to approach the Court for a remedy.  I do not think it is presently necessary to deal with use of a document in the course of examination of a witness.  That question can be dealt with by the Court if that question ever becomes necessary. 

As to the second subject matter, the obligation should be limited to the expression of a requirement that notice be given of the nature and extent of the disclosure which is proposed to be made to meet the obligation or compulsion.  The notice should provide sufficient time to permit APLNG either to reach some form of consent position with Tri-Star or to approach the Court for a remedy.

7

Clause 8 is unduly onerous.  It is not appropriate for the onus to be on Tri-Star to make the application to the Court.  Tri-Star is not a party to the documents.  It has no confidentiality to protect.  It could have grave difficulty adducing admissible evidence to support the application.  The conventional course would be for Tri-Star to notify APLNG in sufficient time for APLNG to bring an application if so advised:  compare, e.g., Oswal v ANZ Banking Group Ltd [2017] VSC 19 at [14].  (The agreement offered by Tri-Star in paragraph 4(1)(d) above has this effect.)

I agree.  APLNG’s legitimate concerns should be addressed in the way I have indicated in item 6.

  1. It does not seem to me to be appropriate that I embark upon the task of revising the draft protocol to deal with the views I have expressed in the previous paragraph.  Rather, I should formulate orders which give the parties opportunity to reach an agreement, once they have had the opportunity to digest these reasons.  In the event that they are not able to reach an agreement, I will make directions which put in place a regime by which I can receive focused submissions on developed revision proposals and then make a decision on the form of the revisions.

Conclusion

  1. I order as follows:
    1. Appendix 2 to these reasons for judgment be placed in a sealed envelope on the Court file and marked “Confidential. Not to be opened except with the order of the court first had and obtained.”
    2. The parties are to bring in proposed minutes of order to give effect to these reasons for judgment within 28 days of the date of this judgment. 
    3. If the parties are unable to reach agreement, the following directions apply:
      1. APLNG is to deliver a proposed form of protocol, together with written submissions in support thereof, within a further 7 days;
      2. Tri-Star is to respond by delivering a proposed form of protocol (in the form of tracked changes to APLNG’s proposal), together with written submissions in support thereof, within a further 7 days;
      3. The proceeding be listed for hearing before me on a date to be fixed.
  2. I will hear the parties as to costs on a date to be fixed once the orders made consequent upon this judgment have been finalized.  

Appendix 1: Confidentiality Protocol proposed by APLNG

Recitals

  1. The APLNG Parties and the Tri-Star Parties are parties to the Proceeding.
  2. This Protocol governs the rights and obligations of the Tri-Star Parties and their Representatives with respect to documents which the APLNG Parties consider to be confidential or to contain information which is commercially sensitive.
  3. The Protocol deals with the position of Category 1 Documents and Category 2 Documents.
  4. The object of the Protocol as regards the Category 1 Documents is to reinforce the protection afforded by the implied undertaking through a regime which ensures that such documents cannot be dealt with in a manner whereby the APLNG Parties’ confidential and commercially sensitive information contained within them may become available to third parties to the Proceeding. Subject to the provision of undertakings in accordance with this Protocol, the Category 1 Documents will be provided to, and may be used by, any officers or employees of the Tri-Star Parties, and their professional advisers and experts in connection with the Proceeding.
  5. The Category 2 Documents represent a limited number of documents which retain confidential and commercially sensitive information that has been redacted. The object of the Protocol as regards the Category 2 Documents is that the un-redacted versions of these documents will only be provided to, and may be used by, a narrow class of people, which class excludes those, including officers or employees of the Tri-Star Parties, in whose hands the redacted information could expose the APLNG Parties to material commercial or competitive disadvantage. The redacted versions of these documents will be treated as a Category 1 Document.
  1. Definitions:

In this Protocol:

APLNG Parties has the same meaning given to that term in the defence and counterclaim filed in the Proceeding on 29 April 2016.

Authorised Person means:

  1. each person listed in Schedule 3 to this Protocol;
  1. each person who is entitled to become an Authorised Person in accordance with paragraph 9(a)(i), after they have provided to the APLNG Parties an undertaking in the form required by that paragraph;
  1. any production team employee of a third party document management service provider engaged by a Tri-Star Party or its Solicitors in the conduct of the Proceeding, after that service provider has provided to the APLNG Parties an undertaking in the form required by paragraph 9(a)(ii); and
  1. each person who becomes an Authorised Person in accordance with paragraph 9(c), after they have provided to the APLNG Parties an undertaking in the form of the undertaking in Schedule 4 to this Protocol.

Barrister means any independent barrister engaged by a Tri-Star Party or its Solicitors in the conduct of the Proceeding.

Business Day means a day that is not a Saturday, Sunday or public holiday and on which banks are open for business generally in Brisbane, Australia.

Category 1 Confidential Information has the meaning given in paragraph 3(b).

Category 1 Documents means:

  1. those documents listed or otherwise described in Schedule 1 to this Protocol;
  1. a copy of a Category 2 Document which constitutes a Redacted Document;
  1. such other documents as the APLNG Parties and the Tri-Star Parties may agree in writing (including pursuant to paragraph 2(b)) are, or such other documents as are determined by the Court to be, ‘Category 1 Documents’ for the purpose of this Protocol; and
  1. such other documents as are to be treated as Category 1 Documents pending any further order of the Court by reason of paragraph 2.

Category 2 Documents means:

  1. those documents listed or otherwise described in Schedule 2 which constitute Un-redacted Documents;
  1. the response by the APLNG Parties to paragraphs 30 and 65 of the request by the Tri-Star Parties for further and better particulars dated 9 June 2016;
  1. such other documents as the APLNG Parties and the Tri-Star Parties may agree in writing (including pursuant to paragraph 2(b)) are, or such other documents as are determined by the Court to be, ’Category 2 Documents’ for the purpose of this Protocol; and
  1. such other documents as are to be treated as Category 2 Documents pending any further order of the Court by reason of paragraph 2.

Corporations Act means the Corporations Act 2001 (Cth).

Confidential Information means the Category 1 Confidential Information and the Un-redacted Confidential Information.

Court means the Supreme Court of Queensland.

Documents means the Category 1 Documents and the Category 2 Documents.

Expert means any independent expert who satisfies all of the following requirements:

  1. a person who for the purpose of the Proceeding has been engaged solely to provide expert advice or evidence to or on behalf of the Tri-Star Parties as to any matter relating to the Proceeding; and
  1. who is not in the employ of a Tri-Star Party or any Related Body Corporate of a Tri-Star Party; and
  1. who has signified in writing their agreement to be bound by the terms of this Protocol and by any orders relating to confidentiality made in the Proceeding that are notified to them .

Proceeding means Supreme Court of Queensland proceeding no. 10110 of 2014, and any appeal therefrom.

Protocol means this confidentiality protocol, including all schedules and annexures to it.

Redacted Documents means:

  1. the copies of the documents listed or otherwise described in Schedule 2 which were delivered by the APLNG Parties to Tucker & Cowen Solicitors on or about 17 February 2017 and which were designated by the APLNG Parties as the ‘Redacted Documents’ for the purpose of this Protocol;
  1. the copies of any other documents delivered by the APLNG Parties to Tucker & Cowen Solicitors from time to time in which the APLNG Parties have redacted information which is agreed, or which is determined by the Court to be, commercially sensitive; and
  1. pending any further order of the Court, the copies of any other documents delivered by the APLNG Parties to Tucker & Cowen from time to time pursuant to paragraph 2 by which the APLNG Parties propose that the document be treated as a Category 2 Document and from which the APLNG Parties have redacted information which they consider to be commercially sensitive.

Related Body Corporate has the meaning given in the Corporations Act.

Representative means:

  1. each Authorised Person;
  1. any other director, officer or employee of any of the Tri-Star Parties;
  1. any other Barrister or Solicitor of any of the Tri-Star Parties;
  1. any other professional advisers or Experts retained by any of the Tri-Star Parties in connection with the Proceeding.

Solicitor means each partner and employee of the external solicitors for the Tri-Star Parties who are actually engaged in the conduct of the Proceeding.

Tri-Star Parties means each of the plaintiffs in the Proceeding .

Un-redacted Confidential Information has the meaning given in paragraph 4(b).

Un-redacted Documents means:

  1. the copies of the documents listed or otherwise described in Schedule 2 which were delivered by the APLNG Parties to Tucker & Cowen Solicitors on or about 17 February 2017 and which were designated by the APLNG Parties as the ‘Un-redacted Documents’ for the purpose of this Protocol;
  1. the response by the APLNG Parties to paragraphs 30 and 65 of the request by the Tri-Star Parties for further and better particulars dated 9 June 2016;
  1. the copies of any other documents delivered by the APLNG Parties to Tucker & Cowen Solicitors from time to time in which the APLNG Parties have not redacted the information which is agreed, or which is determined by the Court to be, commercially sensitive; and
  1. pending any further order of the Court, the copies of any other documents delivered by the APLNG Parties to Tucker & Cowen from time to time pursuant to paragraph 2 by which the APLNG Parties have proposed that the document be treated as a Category 2 Document and from which the APLNG Parties have not redacted the information which they consider to be commercially sensitive.
  1. Additional Documents:

In the event that the APLNG Parties propose that the delivery of a document which is not already a Category 1 Document or a Category 2 Document shall be governed by this Protocol:

  1. the APLNG Parties shall:
    1. in the case of a proposed Category 1 Document, send a copy of that document, together with a brief written statement of the reasons why the document should be treated as a Category 1 Document, to Mr Richard Cowen or Mr Justin Marschke of Tucker & Cowen Solicitors;
    2. in the case of a proposed Category 2 Document, send a copy of:

      Aan un-redacted version of that document;

      Ba redacted version of that document; and

      Ca brief written statement of the reasons for the redactions,

to Mr Richard Cowen or Mr Justin Marschke of Tucker & Cowen Solicitors;

  1. within 5 Business Days of the receipt of a proposal in accordance with paragraph 2(a) above, the Tri-Star Parties shall respond in writing as to the reasons for any disagreement with the proposal from the APLNG Parties;
  2. if no objection in writing is notified by the Tri-Star Parties or their Solicitors within 5 Business Days of the receipt of a proposal in accordance with paragraph 2(a) above:
    1. in the case of a proposed Category 1 Document or a redacted version of a proposed Category 2 Document, that document will be treated as a Category 1 Document for the purposes of this Protocol;
    2. in the case of a proposed Category 2 Document, the un-redacted version of that document will be treated as a Category 2 Document for the purposes of this Protocol;
  3. during the period from the receipt of the proposal from the AP LNG Parties pursuant to paragraph 2(a), until any agreement between the APLNG Parties and the Tri-Star Parties or any further order of the Court in relation to that proposal, the documents delivered by the APLNG Parties in accordance with paragraph 2(a) shall be treated in the same manner as paragraphs (c)(i) or (c)(ii) above (as the case may be).
  1. Provision of Category 1 Documents:

Subject to paragraph 5 below, until any Court order to the contrary, the Tri-Star Parties and their Representatives:

  1. shall be entitled to access to and use of the Category 1 Documents solely for the purposes of the Proceeding;
  2. shall not disclose the Category 1 Documents (including any copy, note, memorandum or extract from, or deriving from, any Category 1 Document (the Category 1 Confidential Information)) to any person other than the Court, the APLNG Parties or another Representative; and
  3. shall not copy, extract, record or reproduce any Category 1 Document or any Category 1 Confidential Information except to the extent necessary for the purpose of the Proceeding and only to the extent permitted by this Protocol.
  1. Provision of Un-Redacted Documents:

Subject to paragraph 5 below, until any Court order to the contrary, access to and use of:

  1. the Un-redacted Documents; and
  2. the information contained in or deriving from those parts of the Un-redacted Documents which have been redacted in the Redacted Documents (including any copy, note, memorandum or extract from, or deriving from, such parts) (the Un-redacted Confidential Information),

shall be restricted as follows:

  1. the Authorised Persons shall be entitled to access to and use of the Un-redacted Documents and the Un-redacted Confidential Information solely for the purposes of the Proceeding; and
  2. the Authorised Persons will:
    1. not disclose the Un-redacted Documents or any Un-redacted Confidential Information to any person other than to the Court, the APLNG Parties or another Authorised Person; and
    2. not make further copies of the Un-redacted Documents or any Un-redacted Confidential Information except to the extent necessary for the purpose of the Proceeding and only to the extent permitted by this Protocol.
  1. Undertaking:

Before a Representative is permitted to have access to, or make use of, the Documents or the Confidential Information to which they are entitled in accordance with this Protocol, that Representative must duly execute and deliver to the APLNG Parties an undertaking in the form of the undertaking set out in Schedule 4 to this Protocol.

  1. No use or Disclosure Contrary to the Protocol:
    1. Subject to the terms of this Protocol, the Documents and the Confidential Information:
      1. shall not be used or disclosed other than in accordance with this Protocol unless the prior written consent of the APLNG Parties has been given; and
      2. shall not be used or disclosed in the Proceeding, including in the pleadings, as evidence, in cross-examination, in submissions or in correspondence to any third party in such a way that does, or has the potential to, reveal the content of any Document or any Confidential Information in a manner which is inconsistent with this Protocol.
    2. Without limiting paragraph 6(a) above, the Tri-Star Parties and their Representatives must:
      1. maintain the confidential nature of the Documents and the Confidential Information, and in particular not use, disclose or divulge the Documents or the Confidential Information other than in accordance with the terms of this Protocol;
      2. establish and maintain effective measures intended to safeguard the Documents and the Confidential Information from unauthorised access, use, copying or disclosure;
      3. as soon as practicable, notify the APLNG Parties of any unauthorised access, use, copying or disclosure of the Documents or the Confidential Information; and
      4. as soon as practicable, take such steps as the APLNG Parties may reasonably require to retrieve, recover or protect the Documents and the Confidential Information if any unauthorised access, use, copying or disclosure has or may have occurred.
  2. Prerequisites to any Compulsory Disclosure:
    1. The Tri-Star Parties and their Representatives will comply with the requirements set out in this paragraph 7, if the Tri-Star Parties or any of their Representatives form the view that it is necessary to disclose a Document, any Confidential Information, or any part of a Document or the Confidential Information, for the purpose of:
      1. complying with any obligation or compulsion of law; or
      2. complying with any requirement of the Uniform Civil Procedure Rules 1999 (Qld).
    2. Prior to the Tri-Star Parties or their Representatives disclosing any Document or any Confidential Information in the circumstances set out in paragraph 7(a) above, the Tri-Star Parties shall:
      1. give written notice to the APLNG Parties of:

        Athe nature and extent of the disclosure which is proposed to be made of any Document or any Confidential Information; and

        Bthe steps which are proposed to be taken to ensure that such disclosure does not cause, permit or facilitate the disclosure of any Documents or any Confidential Information to any person other than to the Court, the APLNG Parties or such other persons as are entitled to access to, and use of, the Document or the Confidential Information in accordance with this Protocol;

      2. provide the APLNG Parties with a reasonable opportunity, being not less than 5 Business Days, to comment on the nature and extent of the proposed disclosure and the adequacy of the steps which are proposed by the Tri-Star Parties to protect the confidentiality of those documents;
      3. consider in good faith and implement to the extent reasonably practicable any comments given by the APLNG Parties in the manner contemplated by paragraph 7(b)(ii) above; and
      4. take such other steps as may be reasonably required to ensure that any Document or any Confidential Information which is required to be disclosed in the manner set out in paragraph 7(a) above, is dealt with on a confidential basis, consistent with the terms of this Protocol, and that any further disclosure of such Documents and Confidential Information is limited to the Court, the APLNG Parties and to such other persons as are entitled to access to, and use of, the Document or the Confidential Information in accordance with this Protocol.
  3. Sealing of Documents by the Court:

Without limiting the generality of paragraph 6 or 7 above, the Tri-Star Parties and their Representatives shall not cause, permit or facilitate any Document or any Confidential Information to be filed in the Court without previously applying, on notice to the APLNG Parties, for orders that the Document or any Confidential Information be sealed such that it may not be inspected without a further order of the Court.

  1. Authorised Persons:
    1. In addition to the persons listed in Schedule 3 to this Protocol:
      1. the following persons shall become Authorised Persons for the purpose of this Protocol upon the provision to the APLNG Parties of a duly executed undertaking in the form of the undertaking in Schedule 4 to this Protocol:

        ABarristers;

        BSolicitors;

        CExperts; and

        Dany person who may provide assistance of a secretarial nature to the Barristers, the Solicitors and/or the Experts;

      2. any production team employee of a third party document management service provider engaged by a Tri-Star Party or its Solicitors in the conduct of the Proceeding shall become an Authorised Person for the purpose of this Protocol upon the provision to the APLNG Parties of a duly executed undertaking by that service provider:

        Ain the form of the undertaking in Schedule 4 to this Protocol; and

        Bwhich undertaking also includes an undertaking by the third party document management service provider that it will take measures to ensure that such of its production team employees who have not themselves provided an undertaking to the APLNG Parties are aware of the terms of that service provider's undertaking, and that such production team employees will not engage in any act which will cause the service provider to be in breach of its undertaking.

      3. If the Tri-Star Parties propose to add a person (other than an additional third party document management service provider), who is not referred to in paragraph 9(a) above, to the list of Authorised Persons, the Tri-Star Parties shall write to the APLNG Parties:
        1. identifying the name of the person;
        2. setting out a brief description of the reason why that person is said by the Tri-Star Parties to require access to the Un-redacted Documents and/or the Un-redacted Confidential Information; and
        3. enclosing a copy of any undertaking already signed by the person being nominated in the form of the undertaking in Schedule 4 to this Protocol.
      4. For a nominated person to become an Authorised Person, the following provisions apply:
        1. if no objection in writing is notified by the APL NG Parties or their solicitors within 5 Business Days of receipt of the nomination under paragraph 9(b) above, the person nominated under paragraph 9(b) above becomes an Authorised Person;
        2. if the APLNG Parties object in writing to the Un-redacted Documents or the Un-redacted Confidential Information being provided to the person nominated pursuant paragraph 9(b) above, the APLNG Parties must set out in writing within 5 Business Days of the receipt of the nomination brief reasons for their objection; and
        3. any party may apply to the Court for orders to resolve any dispute as to the nomination of any additional person as an Authorised Person. A person will become an Authorised Person if the Court makes an order that a person is an Authorised Person or makes an order to that effect.
    2. Return or Destruction:

    Within 14 days after either any settlement or conclusion of the Proceeding or expiry of the period within which any judgment given in the Proceeding may be appealed (whichever first occurs), the Tri-Star Parties and each Representative must do one or more of the following, as directed by the APLNG Parties in writing:

    1. deliver to the APLNG Parties all materials in any medium in the possession or control of the Tri-Star Parties and the Representatives which contain any of the Documents or the Confidential Information;
    2. destroy any materials in their possession or control which contain any Document or Confidential Information together with any other information in respect of which the Tri-Star Parties or their Representatives owe an obligation of confidentiality to another person such that the Tri-Star Parties or their Representatives would breach confidentiality in delivering it to the APLNG Parties in the manner contemplated by paragraph 10(a) above;
    3. delete any Documents or Confidential Information that has been entered into a computer database or other electronic means of data or information storage, provided that to the extent that any automatic computer back-up process has created copies of the Documents or Confidential Information, the Tri-Star Parties may retain those back-up copies in their archival or back-up computer storage for the period they normally archive backed-up computer records. Any such back-up copies will be subject to the provisions of this Protocol until they are destroyed and must not, excepted as permitted by this Protocol, be accessed during any period of archival or back-up storage; and
    4. certify in writing that they have complied fully with the requirements of this Protocol.
    1. Applications to the Court:

    The APLNG Parties and the Tri-Star Parties reserve their respective rights to apply to the Court for such orders as they may be advised with respect to this Protocol. Without limiting the generality of the foregoing, the parties may apply:

    1. for orders as to whether any document is to be properly designated for the purpose of this Protocol as a Category 1 Document, a Category 2 Document or at all; and
    2. for orders concerning any breach or enforcement of this Protocol.

    Schedule 1 – Category 1 Documents

    [schedule not reproduced]

    Schedule 2 – Category 2 Documents

    [schedule not reproduced]

    Schedule 3 – Authorised Persons

    [schedule naming particular barristers, solicitors, document management staff and Tri-Star in house general counsel not reproduced]

    Schedule 4 – Undertaking

    TO:   THE SUPREME COURT OF QUEENSLAND

    AND TO:  THE APLNG PARTIES

    I, [insert name] [of [insert firm / organisation (if applicable)]]:

    1. am a [Barrister / Solicitor / Expert / third party document management service provider] as described in the Confidentiality Protocol contained in Schedule 1 to the orders of the Supreme Court of Queensland made on [insert date] in proceeding no. 10110 of 2014 (the Protocol);
    1. acknowledge receiving a copy of the Protocol; and
    1. undertake to act in accordance with the requirements imposed on [a Representative / an Authorised Person] as set out in the Protocol.

    Signed in the presence of:

    Signature of witness      Signature

    Full name of witness

Footnotes

[1] He presently owns 50% of the relevant shares and is beneficially entitled to a further 25%.  Once the estate of his late mother is administered his legal entitlement will increase to 75% and the remaining 25% will be owned by the children of his late brother.

[2] The third plaintiff was not a party to the 2002 Deed.

[3] The appearance of a capitalised term in quotation marks, denotes the fact that the term was a defined term in the 2002 Deed.  For ease of reading I will omit the quotation marks for second and subsequent uses of a defined term.

[4] It might also be relevant to the calculation of Royalties, but whether that forms part of the case advanced by Tri-Star was not made clear during the course of argument before me.  The lack of clarity is not relevant to this judgment.

[5] ATP is an acronym for Authority to Prospect.

[6] GSA is an acronym for Gas Sale Agreement.

[7] Gilbert v Goodwin (No 3) [2006] 1 Qd R 499 per Helman J; Cape York Airlines Pty Ltd v QBE Insurance (Australia) Ltd [2009] 1 Qd R 116 per Daubney J at [29], [30] and [35]; and the Court of Appeal decision of Holdway v Arcuri Lawyers (a firm) [2009] 2 Qd R 18 per Keane JA at [50] footnote 6, at which Gilbert v Goodwin is cited with approval.

[8] See [72] and [86] below.

[9] Affidavit of Brett Cook sworn 9 May 2017 at [18].

[10] Hearne v Street (2008) 235 CLR 125 per Hayne, Heydon and Crennan JJ at [96] and also at [105]-[108].  Their Honours’ articulation of the qualification regarding reception into evidence is sufficient to make the proposition authoritative for present purposes, but see also: Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 per Mason CJ at 32-33; Ainsworth v Hanrahan (1991) 25 NSWLR 155 per Kirby P at 167; Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 18 ACSR 218 per Giles CJ at 221; Universal Music Australia Pty Ltd v Pavlovic [2017] NSWSC 314 per Gleeson JA at [28] and, contra, Harman v Secretary of State for the Home Department [1983] 1 AC 280 per Lord Diplock at 306, per Lord Keith at 308-309 and per Lord Roskill at 324-325; British American Tobacco Ltd v Cowell (No 2) (2003) 8 VR 571 per Phillips, Batt and Buchanan JJA at [49].

[11] Hearne v Street per Hayne, Heydon and Crennan JJ at [105]-[108], with whom Gleeson CJ agreed at [3] and Kirby J agreed at [56]-[58].

[12] Hearne v Street per Hayne, Heydon and Crennan JJ at [109]-[112], with whom Kirby J agreed at [56]-[58].  Gleeson CJ agreed at [3]-[4] that the obligation would extend to servants and agents of the litigant who received the documents, but considered it unnecessary to decide how far the legal obligation extended beyond the class of persons consisting of servants or agents of a party.

[13] The contrary proposition might have been arguable (see Eagle Star Insurance Co Ltd v Arab Bank Plc (Unreported, 25 February 1991, Hobhouse J); Derby v Weldon (No. 2) (Unreported, 20 October 1988, Sir Nicholas Browne-Wilkinson VC); Shun Kai Finance Co Ltd v Japan Leasing (Hong Kong) Ltd [2000] HKCA 518), but would not have availed Tri-Star because it would have strengthened APLNG’s claim that a confidentiality protocol be imposed.

[14] Tri-Star has 21 fulltime employees or contractors in the Brisbane office (anticipated to increase to 23) and approximately 10 fulltime employees in the Houston office.

[15] Named after the form of order made in Ex parte Fielder Gillespie Limited [1984] 2 Qd R 339.

[16] Hearne v Street per Hayne, Heydon and Crennan JJ at [107].

[17] Hearne v Street at [116].

[18] Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34 at 40.

[19] Followed by Jackson J in Integrated Medical Technology Pty Ltd v Gilbert [2015] QSC 124 at [104] – [105].

[20] These included agreements and other documents concerning the subscription for shares in APLNG by ConocoPhillips, and concerning the obligations of each of the shareholders of APLNG in respect of those shareholdings: see the affidavit of Mark McCabe sworn 10 March 2017 at [13].

[21] These included agreements and other documents concerning the subscription for shares in APLNG by Sinopec, and concerning the obligations of each of the shareholders of APLNG in respect of those shareholdings: see the affidavit of Mark McCabe sworn 10 March 2017 at [13].

[22] These included documents relating to the development of fields, operating agreements governing the rights and obligations of participants in joint ventures, and documents supplementing and expanding upon those documents: see the affidavit of Mark McCabe sworn 10 March 2017 at [85]-[86].

Close

Editorial Notes

  • Published Case Name:

    Tri-Star Petroleum Company & Ors v Australia Pacific LNG Pty Limited & Ors

  • Shortened Case Name:

    Tri-Star Petroleum Company v Australia Pacific LNG Pty Limited

  • MNC:

    [2017] QSC 136

  • Court:

    QSC

  • Judge(s):

    Bond J

  • Date:

    27 Jun 2017

Litigation History

Event Citation or File Date Notes
Primary Judgment [2017] QSC 136 27 Jun 2017 -

Appeal Status

No Status