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Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd[2019] QLAC 5

Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd[2019] QLAC 5

LAND APPEAL COURT OF QUEENSLAND

CITATION:

Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors [2019] QLAC 5

PARTIES

Cherwell Creek Coal Pty Ltd

ACN 063 763 002

(appellant)

v

BHP Queensland Coal Investments Pty Ltd

ACN 098 876 825

(respondent)

QCT Resources Pty Ltd

ACN 010 808 705

(respondent)

BHP Coal Pty Ltd

ACN 010 595 721

(respondent)

QCT Mining Pty Ltd

ACN 010 487 840

(respondent)

Mitsubishi Development Pty Ltd

ACN 009 779 873

(respondent)

QCT Investments Pty Ltd

ACN 010 487 831

(respondent)

Umal Consolidated Pty Ltd

ACN 000 767 386

(respondent)

FILE NOs:

LAC006-18

LAC007-18

LAC001-19

Land Court No MRA1332-08

PARTIES:

BHP Queensland Coal Investments Pty Ltd

ACN 098 876 825

(appellant)

QCT Resources Pty Ltd

ACN 010 808 705

(appellant)

BHP Coal Pty Ltd

ACN 010 595 721

(appellant)

QCT Mining Pty Ltd

ACN 010 487 840

(appellant)

Mitsubishi Development Pty Ltd

ACN 009 779 873

(appellant)

QCT Investments Pty Ltd

ACN 010 487 831

(appellant)

Umal Consolidated Pty Ltd

ACN 000 767 386

(appellant)

v

Cherwell Creek Coal Pty Ltd

ACN 063 763 002

(respondent)

FILE NO:

LAC002-19

Land Court No MRA1332-08

DIVISION:

Land Appeal Court of Queensland

PROCEEDING:

Appeal from the Land Court of Queensland

ORIGINATING COURT:

Land Court of Queensland

DELIVERED ON:

25 October 2019

DELIVERED AT:

Brisbane

HEARING DATE:

14 May 2019

THE COURT:

Mullins J

WL Cochrane, Member of the Land Court

WA Isdale, Member of the Land Court

ORDERS:

In appeal LAC006-18:

  1. Appeal dismissed.
  2. Unless either party applies for a different order for costs in submissions filed within 14 days of the publication of these reasons, the appellant must pay the respondents’ costs of the appeal.

In appeal LAC007-18:

  1. Appeal dismissed.
  2. Unless either party applies for a different order for costs in submissions filed within 14 days of the publication of these reasons, the appellant must pay the respondents’ costs of the appeal.

In appeal LAC001-19:

  1. Appeal dismissed.
  2. Unless either party applies for a different order for costs in submissions filed within 14 days of the publication of these reasons, the appellant must pay the respondents’ costs of the appeal.

In appeal LAC002-19:

  1. Appeal allowed.
  2. Delete items 8, 14, 15, 19, 20, 21, 24 and 31 from order 1 made on 14 December 2018 by President Kingham regarding the appellant’s application filed on 25 June 2018. 
  3. Vary order 4 made on 14 December 2018 by President Kingham regarding the appellant’s amended application filed on 3 October 2018 by:

(a) substituting “(e)” for “(c)”;

(b) inserting after paragraph (b):

            “(c) Ms Jenny McCabe and any Legal Practitioner

         (with a current practicing certificate issued in Australia) who takes over Ms McCabe’s responsibility for the respondents in respect of these proceedings;

             (d) Mr Brett Garner subject to the terms of the undertaking signed by Mr Garner on 20 November 2018 and with any disclosure to him to not take place after his position and duties are no longer as deposed to in the Second Affidavit of Stephen James Hurford sworn 30 July 2018; and”

  1. Liberty to the appellant to apply on two days’ notice to the respondents, if Ms McCabe and/or Mr Garner no longer hold the positions they held when the appeal was heard.
  2. Unless either party applies for a different costs order in submissions filed within 14 days of the publication of these reasons, the respondents must pay the appellant’s costs of the appeal.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – DISCOVERY AND INTERROGATORIES – DISCOVERY AND INSPECTION OF DOCUMENTS  –  PRODUCTION AND INSPECTION OF DOCUMENTS – GROUNDS FOR RESISTING PRODUCTION –  IRRELEVANCE – where the proceeding is being case managed by the learned primary judge – where the primary judge ordered the disclosure of a category of rail agreement documents to the extent of any clauses relating to the take or pay element of the rail agreements – whether the primary judge erred in finding that the clauses were directly relevant to an issue in the proceeding

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – DISCOVERY AND INTERROGATORIES – DISCOVERY AND INSPECTION OF DOCUMENTS – PRODUCTION AND INSPECTION OF DOCUMENTS – GROUNDS FOR RESISTING PRODUCTION –  where the primary judge ordered the disclosure of a category of rail agreement documents to the extent of any clauses relating to the take or pay element of the rail agreements – where the party disclosed the clauses but redacted parts of them – where the party disclosing the documents sought to rely on three paragraphs of a confidential affidavit to explain why redacted parts of the clauses contained commercially sensitive information – whether the primary judge erred by refusing to admit the paragraphs of the confidential affidavit – where the primary judge had taken into account the commercially sensitive nature of the information in the clauses when ordering them to be disclosed

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – DISCOVERY AND INTERROGATORIES – DISCOVERY AND INSPECTION OF DOCUMENTS – PRODUCTION AND INSPECTION OF DOCUMENTS – GROUNDS FOR RESISTING PRODUCTION –  where the primary judge ordered the disclosure of a category of rail agreement documents to the extent of any clauses relating to the take or pay element of the rail agreements – where the party disclosed the clauses but redacted parts of them – whether the primary judge erred by not permitting the redaction of the price sensitive information in the clauses – where the primary judge had taken into account the commercially sensitive nature of the information in the clauses when ordering them to be disclosed

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – DISCOVERY AND INTERROGATORIES – DISCOVERY AND INSPECTION OF DOCUMENTS – PRODUCTION AND INSPECTION OF DOCUMENTS – TIME AND MANNER OF INSPECTION –  where the primary judge imposed a confidentiality regime in respect of a category of rail agreement documents that was limited as of right to the lawyers of the inspecting party – whether the primary judge erred in finding that the category of rail agreements  should be subject to a restricted confidentiality regime that had not been the subject of submissions by the parties

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – DISCOVERY AND INTERROGATORIES – DISCOVERY AND INSPECTION OF DOCUMENTS – PRODUCTION AND INSPECTION OF DOCUMENTS – TIME AND MANNER OF INSPECTION –where the primary judge imposed confidentiality orders on specified items of various extracts of documents and transcripts relating to a security for costs application – whether the primary judge erred in finding that the items were commercially sensitive and should be subject to confidentiality orders

Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170; [1981] HCA 39, considered

Cargill Australia Ltd v Viterra Malt Pty Ltd [2018] VSCA 260, considered

Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors (No 16) [2018] QLC 40, related

Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors (No 18) [2018] QLC 48, related

Just GI Pty Ltd v PIG Improvement Co Australia Pty Ltd [2001] QCA 48, cited

APPEARANCES:

DP O'Brien QC, with  LV Sheptooha (instructed by Holding Redlich) for the appellant in appeals LAC006-18, LAC007-18 and LAC001-19 and the respondent in appeal LAC002-19

SL Doyle QC, with SJ Webster and FY Lubett (instructed by Allens) for the respondents in appeals LAC006-18, LAC007-18 and LAC001-19 and the appellants in appeal LAC002-19

  1. [1]
    THE COURT:  In Land Court proceeding MRA1332-08 Cherwell Creek Coal Pty Ltd claims compensation from the respondents which are referred to collectively as BMA for a loss of opportunity to commercialise a coal resource on an area of land over which Cherwell Creek previously held an exploration permit (EPC545).  The claim is made pursuant to special purpose compensation provisions in chapter 12, part 4 of the Mineral Resources Act 1989 (Qld) that were introduced by the Mineral Resources (Peak Downs Mine) Amendment Act 2008 (Qld) (the Amending Act).  The proceeding is being case managed by the learned primary judge who made a number of decisions relating to disclosure of documents by Cherwell Creek.  The three appeals by Cherwell Creek (LAC006-18, LAC007-18 and LAC001-19) concern orders made by the primary judge requiring Cherwell Creek to disclose to BMA the “take or pay” elements of rail agreements for the Sonoma and Drake Mines (the mines). 
  2. [2]
    The mines are operated by the QCoal Group of companies.  The QCoal Group and BMA are trade rivals, competing in the export market for coking coal.  QCoal Pty Ltd is the parent company of the QCoal Group and owns 50 per cent of Cherwell Creek with the remaining 50 per cent owned by Mr Wallin who is the managing director of both QCoal Pty Ltd and Cherwell Creek. 
  3. [3]
    It is convenient to use the descriptions applied by Cherwell Creek in identifying each of the decisions that are the subject of the appeals.  The first appeal (LAC006-18) relates to order 1(c) made by the primary judge on 7 November 2018 that Cherwell Creek must disclose the category 27 documents listed in BMA’s amended application filed on 3 October 2018 (the disclosure application) “to the extent of any clauses relating to the take or pay element of those agreements”.  The category 27 documents had been described as “The rail agreements for the Sonoma and Drake mines referred to in paragraph 142 of the summary of evidence of Mr Wallin”.  The reasons for the making of that order are set out in Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors (No 16) [2018] QLC 40 (the disclosure judgment).
  4. [4]
    Pursuant to order 5 made on 7 November 2018, Cherwell Creek was required to file and serve on BMA by 15 November 2015 any affidavit material it intended to rely upon to assert that any documents referred to in order 1 should be the subject of a confidentiality regime and serve an outline of submissions on whether any documents referred to in order 1 should be the subject of a confidentiality regime.  Directions were given by order 6 made on the same date for filing and serving by BMA of any affidavit material it intended to rely upon to assert any documents referred to in order 1 should not be the subject of a confidentiality regime and serve an outline of submissions in response to Cherwell Creek’s outline.  At a hearing before the primary judge on 15 November 2018, the parties indicated they had reached agreement about an interim confidentiality regime in respect of the documents disclosed by Cherwell Creek pursuant to order 1 made on 7 November 2018 and the relevant order was made by the primary judge on 16 November 2018.    
  5. [5]
    There was a further hearing on 26 November 2018 in respect of the confidentiality issue identified in orders 5 and 6 that dealt with Cherwell Creek’s claim to redact the documents disclosed pursuant to order 1(c) made on 7 November 2018.  In the course of that hearing the primary judge refused to admit paragraphs 27 to 29 of the confidential affidavit of Mr Boys sworn on 26 November 2018 that was filed by leave on that date.  That ruling is the subject of the second appeal (LAC001-19).  The primary judge gave the following reasons in making that ruling (the evidentiary ruling):

“No, look, I’ll uphold the objection, Mr Gibson, for two reasons, firstly, I do think it is a matter that should have been raised at the hearing of the application, if there were particular documents that – that it was going to be argued that they were so confidential that they should not be disclosed.  That should have been identified at that hearing.  In fact, what happened was, the issue of confidentiality was put off to today so that the terms upon which any confidential material – or disputes about what material is confidential and the terms upon which access is to be provided, were to be debated.  It was certainly not flagged to me that it might be argued that a document that I otherwise ordered to be produced should not be produced because of concerns about confidentiality.  So ---

… I will allow the objection – uphold the objection as to paragraphs 27 to 29 of the confidential affidavit of Toby Boys sworn on the 26th of November.”

  1. [6]
    The third appeal (LAC007-18) arises out of the primary judge’s decision given on 14 December 2018:  Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors (No 18) [2018] QLC 48 (the confidentiality judgment) and the refusal to permit Cherwell Creek to redact the price sensitive information in the take or pay clauses.  (The second and third appeals fall away, if Cherwell Creek succeeds in its first appeal.)
  2. [7]
    The one appeal filed by BMA (LAC002-19) concerns two aspects of the confidentiality judgment.  The first aspect is in respect of the confidentiality regime imposed on BMA for the category 27 documents.  The second aspect concerns confidentiality orders imposed by the primary judge on specified items of various extracts of documents and transcripts relating to the security for costs application heard on 3 August 2016.

The relevant issue in the proceeding

  1. [8]
    The primary judge considered the disclosure application in the context of the issues raised by the pleadings in the proceeding.  The category 27 documents were sought by BMA in relation to the issue that arose as a result of the allegations in paragraphs 4(b) and 4(k) of the fourth amended annexure A to the originating application (the claim) that, but for the enactment of the Amending Act, Cherwell Creek would have:

“(b) between May 2008 and September 2008, prepared a margin rank and obtained preliminary engineering studies in relation to power and water supply, coal processing and handling and the rail spur design to identify the optimal location of infrastructure;

(k) commenced the extraction and selling of coal from the coal resource:

  1. in respect to the bulk sample, in about April 2009; and
  2. in respect of the mine production, in about July 2010;
  3. consisting of a coking coal product with a 9.5% and/or 10.9% ash content and a thermal coal product with a 25% ash content;”
  1. [9]
    It is pleaded by BMA in the defence at paragraph 3(b)(i)(C) in response to paragraph 4(b) of the claim that, even if Cherwell Creek would have obtained MDL364 in or about May 2008, Cherwell Creek would not have proceeded with the steps pleaded in paragraph 4(b) because:

“there were as at May 2008 extensive constraints on access to rail and port facilities which were necessary to enable the export of coal from the MDLA364 coal resource and the applicant had not secured a right of access to any such rail or port facilities to enable the export of coal from the MDLA364 coal resource;”

  1. [10]
    BMA in paragraph 12(a)(iv) of the defence denies the allegations in subparagraph (i) of paragraph 4(k) of the claim, because:

“there were as at April 2009 extensive constraints on access to rail and port facilities which were necessary to enable the export of coal from the MDLA364 coal resource and the applicant had not secured a right of access to any such rail or port facilities to enable the export of coal from the MDLA364 coal resource;”

  1. [11]
    BMA in paragraph 12(b)(iv) of the defence denies the allegations in subparagraph (ii) of paragraph 4(k) of the claim, because:

“there were as at 1 July 2010 extensive constraints on access to rail and port facilities which were necessary to enable the export of coal from the MDLA364 coal resource and the applicant had not secured a right of access to any such rail or port facilities to enable the export of coal from the MDLA364 coal resource;” 

  1. [12]
    Paragraph 142 of the summary of evidence of Mr Wallin is in the following terms:

“He will say that he knew at the time through his experience with developing the Sonoma mine that one of the ‘long lead items’ are the negotiations with the rail provider for the design and construction of a rail loop.  He would have been keen to get these discussions started immediately and to have the contract signed before Christmas so the project was not delayed over the Christmas break.  He will say that he would have sought and (in his view) obtained a clause in the contract which would have deferred the commencement of the take or pay element of the contract until after the rail loop joined QR infrastructure.  He will say that he had successfully negotiated a similar arrangement for the Sonoma project and later also successfully negotiated for the insertion of a clause of this nature in the Drake mine later in 2010/2011.”

  1. [13]
    The disclosure judgment at [12] proceeds on the basis of setting out the allegations in issue identified by BMA and, relevantly, the allegation that Cherwell Creek would not have proceeded to develop the coal resource because of constraints on rail and port facilities that was responsive to Cherwell Creek’s allegations about the timing of the extraction and selling of coal from the coal resource.

Approach on appeal against a ruling relating to practice or procedure

  1. [14]
    An appeal court generally exercises caution in reviewing decisions pertaining to practice and procedure:  Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170, 177.  To the extent the appeals relate to discretionary procedural judgments, the appellant needs to show error of the kind addressed in House v The King (1936) 55 CLR 499, 505.  Cherwell Creek relies on the approach of Kyrou and McLeish JJA on an application for leave to appeal the trial judge’s order permitting an overseas-based internal legal counsel for a defendant to have access, upon undertakings, to certain confidential documents of the plaintiffs in Cargill Australia Ltd v Viterra Malt Pty Ltd [2018] VSCA 260 at [116]-[117]:

“116   In our view, this is not a case where the residual discretion should be exercised without first determining whether or not the application for leave to appeal has a real prospect of success. Although it concerns a matter of practice and procedure, the sensitivity of the confidential documents is such that the case carries with it the potential for significant harm to be done to one of the parties if confidentiality is lost beyond the extent contemplated by the orders of the Court. Moreover, at least on the case advanced by the applicants, the effect of the impugned order is that confidential information will be made available, albeit on strict terms, to a senior employee of a substantial trade rival of Cargill. The risk of harm to Cargill will subsist well after the proceeding is finalised and thus the effect of the impugned order is not confined to the conduct of the proceeding. In our opinion, these considerations take the case out of the ordinary class of matters involving practice and procedure and give it a potentially significant substantive character.

117  In these circumstances, the fact that it has not been established that there is a real risk of confidential information being disclosed to persons outside the intended scope of the orders is not decisive. Orders of this kind almost inevitably entail some risk of disclosure, even if it can be assumed that there would be no deliberate disobedience of the orders. This is not a case in our opinion where it can be said that there would be no substantial injustice caused if leave were to be refused on a discretionary basis.”

  1. [15]
    It should be noted at the outset, however, that these observations by the majority in Cargill were made in the context of a statutory requirement that leave to appeal only be granted if the court were satisfied the appeal had a real prospect of success and where the authorities on the application of that test had established that, even if the court were satisfied that there was a real prospect of success, there remained a residual discretion to exercise as to whether or not leave should be granted in respect of which the concept of substantial injustice may be relevant (Cargill at [111]). 
  2. [16]
    The judgment of the plurality in Adam P Brown noted at 177 that there were cases in support of the view that on an appeal in respect of a decision relating to practice and procedure there must be both an error of principle and the decision appealed from must work a substantial injustice to one of the parties, but there were also cases in support of the opposing view that such criteria are disjunctive.  The plurality then stated at 177:

“For ourselves, we believe it to be unnecessary and indeed unwise to lay down rigid and exhaustive criteria.  The circumstances of different cases are infinitely various.”

  1. [17]
    The plurality then repeated with approval the statement of Sir Frederick Jordan in In re the Will of F B Gilbert (dec’d) (1946) 46 SR (NSW) 318, 323 and noted that “the question of injustice flowing from the order appealed from will generally be a relevant and necessary consideration”.  The view taken by the plurality of not being dogmatic in fixing the criteria for an appeal against a decision of practice and procedure, but considering the appeal in the light of the nature of the decision under appeal and any injustice caused by the decision has remained the approach to appeals against practice and procedure decisions:  see Just GI Pty Ltd v PIG Improvement Co Australia Pty Ltd [2001] QCA 48 at [14].

The disclosure judgment

  1. [18]
    There are some observations made by the primary judge in the early part of the disclosure judgment which give context to the reasons for ordering disclosure of the category 27 documents.  The primary judge dealt with the allegations in issue at [16]-[20] of the reasons:

“[16]  In this case, the realisation of the opportunity to commercialise the coal resource does not depend solely on a decision by Cherwell Creek. It must establish that it is more likely than not that the Minister would have granted it the necessary mining lease and that it would have gone on to operate the mine or sell it. That, in turn depends on the Court being satisfied that it is more likely than not that Cherwell Creek could have taken certain steps required to secure a mining lease and operate or sell the mine, and that it would have done so.

[17]  Whether it could have taken the necessary steps is a question of capacity. Whether it would have done so is a question of intention. In either case, capacity or intention, Cherwell Creek relies on Mr Wallin’s evidence about what he (Cherwell Creek) could and would have done.

[18] In his summary, Mr Wallin has referenced what he caused other companies associated with QCoal to do at various times for other mining projects. BMA described that as Mr Wallin’s track-record. Cherwell Creek says Mr Wallin’s track-record is not an issue on the pleadings.

[19] Mr Wallin’s track-record may not be directly in issue, but Cherwell Creek’s is. The allegations identified for this application are about past hypotheses. This means the Court must form an estimate of the likelihood of those hypotheses having occurred, had the Amending Act not commenced. Proving a past hypothesis is different from proving an historical fact.

[20] In this case, Cherwell Creek draws on Mr Wallin’s (and the QCoal companies’) track-record to prove past hypotheses about both its capacity and its intention.” (footnote omitted)

  1. [19]
    The primary judge then explained at [23]-[24] of the disclosure judgment the reasons why documents relating to Mr Wallin’s and QCoal’s track record were directly relevant in the proceeding:

“[23] Whether dealing with allegations of capacity or intention, Mr Wallin relies on historical facts about QCoal and its other mines, and what he personally did or decided, to prove what Cherwell Creek could or would have done. Particularly, he explains how his method of developing coal mines differs from that of publicly listed coal companies. That is Mr Wallin’s (and QCoal’s) track-record.

“[24] If evidence about those matters went to credit only, Cherwell Creek could not lead it. In general terms, documents evidencing such matters are directly relevant because of the way in which Cherwell Creek has framed its case.” 

  1. [20]
    Cherwell Creek does not challenge this finding that Mr Wallin’s track record and that of the QCoal Group in commercialising a coal resource is directly relevant to the case advanced by Cherwell Creek as to what it would and could have done in respect of MDL364. 
  2. [21]
    The primary judge also had to address the issue of whether the documents were in the possession or control of Cherwell Creek and, if not, whether Cherwell Creek should be required to take reasonable steps to obtain them.  The primary judge accepted at [45] of the disclosure judgment that it was a reasonable inference to draw for any document Mr Wallin referred to in clear and unambiguous terms in his summary that Cherwell Creek had a copy of those documents.  The primary judge was also satisfied at [53] of the disclosure judgment, given Cherwell Creek’s assertion the documents were not in its possession or control, that a sabre order should be made, in the alternative, for any documents that Cherwell Creek was ordered to disclose.  
  3. [22]
    The primary judge’s specific reasons for ordering disclosure of the category 27 documents are set out at [73]-[76] of the disclosure judgment:

[73] Category 27 is the rail agreements for the Sonoma and Drake mines ([142] of the summary).

[74] BMA identified them as relevant to a positive case it will put in denying two allegations made by Cherwell Creek. Firstly, that it would have undertaken certain studies, including the rail spur design, between May and September 2008. Secondly, that it would have commenced extracting and selling coal from the coal resource, in bulk sample, in about April 2009, and in respect of mine production, in about July 2010.

[75] Mr Wallin said he would have negotiated a clause in the contract for the Cherwell Creek mine to defer the take or pay element of the contract until after the rail loop joined QR infrastructure. He had negotiated similar clauses for the Sonoma and the Drake mine. The direct relevance of a clause of that nature to BMA’s allegation of constraints on rail and port facilities is not immediately obvious.

[76] However, Mr Wallin’s evidence explains what he would have done in terms of rail design and the QR contract, in the context of timing for the Cherwell Creek mine. He would have started negotiations early so the project was not delayed over the Christmas break. It seems to me that the contract arrangements are relevant to that, rather than to any question of rail and port constraints.  For that reason, only the clauses relating to the take and pay element of the contracts must be disclosed.”

  1. [23]
    Even though BMA had based its application for disclosure of the category 27 documents on the issue of whether Cherwell Creek would have proceeded to develop the MDL364 coal resource given the constraints on rail and port facilities, the primary judge at [76] based the decision to order disclosure of the clauses relating to the take and pay element of the rail agreements by reference to the issue of timing for the Cherwell Creek mine referred to at [74] and the emphasis in Mr Wallin’s evidence on the timing of the negotiations he would have undertaken in relation to the rail agreement and the terms he would have achieved, based on the rail agreements he negotiated for the mines. 
  2. [24]
    The primary judge noted in the conclusion of the disclosure judgment at [89]:

“The orders will require Cherwell Creek to disclose commercially sensitive material. I will hear from Cherwell Creek about a regime to preserve the confidentiality of documents that warrant that protection. Because I am making a sabre order in the alternative, I expect that Cherwell Creek will make submissions that address any concerns about confidentiality held by companies associated with QCoal as well as its own.”

  1. [25]
    Cherwell Creek appeals on the ground that the primary judge erred in finding in [76] of the disclosure judgment that the clauses relating to the take or pay elements of the rail agreements for the mines were directly relevant to an issue in the proceeding either for failing to take into account relevant considerations, or there was no evidence to support the finding that terms of the rail contracts for the mines were relevant to Mr Wallin starting “negotiations early so the project was not delayed over the Christmas break”, or the finding was unreasonable and illogical.  The relevant considerations that Cherwell Creek asserts the primary judge failed to take into account were that the only issue raised in the pleadings was whether Cherwell Creek would have developed the MDL364 coal resource given constraints on rail and port facilities and the terms of rail contracts for the mines were not directly relevant to that issue, or the evidence referred to in [142] of the summary of evidence of Mr Wallin in relation to the mines was limited to the negotiation of a clause for the deferral of the take or pay elements of the rail agreement with the rail provider and only clauses relating to the deferral of the take or pay elements of the rail agreements for the mines were directly relevant to that evidence.  The alternative ground is that the primary judge erred by failing to give adequate reasons for that conclusion. 
  2. [26]
    Cherwell Creek’s submissions are, however, premised on an interpretation of the primary judge’s reasons in the disclosure judgment that does not reflect the reasoning.  Although BMA had asserted on the disclosure application that the category 27 documents were relevant to the issue that Cherwell Creek would not have proceeded to develop the coal resource, because of constraints on rail and port facilities, the primary judge found expressly at [76] of the disclosure judgment that the rail agreements were relevant to the timing for the Cherwell Creek mine which must be a reference to the allegations in paragraphs s 4(b) and 4(k) of the claim that were expressly put in issue in paragraphs 3(b)(i)(C), 12(a)(iv) and 12(b)(iv) of the defence.  As the primary judge observed in effect at [74]-[76], the issues are not limited to the positive case asserted by BMA in response to Cherwell Creek’s claims, but are defined by what Cherwell Creek has to establish on its own case that is not admitted by BMA. 
  3. [27]
    The primary judge had been informed by Cherwell Creek’s counsel at the hearing on 18 October 2018 that, despite the fact that Mr Wallin made reference to the deferral of the take or pay elements of the rail agreements for the mines in the summary of his evidence, there was no intention on the part of Cherwell Creek to tender as exhibits any of those documents, asserting they were referred to “as part of the background or the history of Mr Wallin’s experience”.  That assertion was rejected in the findings made by the primary judge at [23]-[24] of the disclosure judgment.  The reference to the deferral of the take or pay elements of the rail agreements for the mines remains in Mr Wallin’s summary of evidence. 
  4. [28]
    Cherwell Creek advances an alternative argument that, if disclosure were required on the basis of the evidence referred to in [142] of Mr Wallin’s summary, the evidence was limited to the negotiation of a clause for the deferral of the take or pay elements of the rail agreements for the mines and the disclosure should have been narrower than was ordered.  First, it is apparent from the disclosure judgment that the primary judge’s decision to order disclosure of any clauses relating to the take or pay element of the rail agreements for the mines was not based on the bare reference in [142] of Mr Wallin’s summary of evidence, but on their relevance to the issue in the proceeding as to the timing of the steps that Cherwell Creek would have been able to undertake in commercialising the mine.  Second, the deferral of the take or pay elements of the rail agreements for the mines can be assessed only in terms of the context of the content of the take or pay obligations themselves.  The success of Mr Wallin in negotiating deferral clauses may have been related to the price for the services under the rail agreements.  Cherwell Creek has not shown an error of principle on the part of the primary judge in ordering disclosure of the take or pay elements of the rail agreements for the mines.  Even though BMA is a trade rival of the QCoal Group, the decision to order disclosure was made in the context of a foreshadowed confidentiality regime being imposed in respect of the category 27 documents.  In the light of that foreshadowed regime and the reliance of Cherwell Creek on [142] of Mr Wallin’s summary that is directly relevant to the timing of the steps that Cherwell Creek would have undertaken in commercialising the mine, it is apparent that the primary judge has taken into account the question of the interests of justice to both BMA and Cherwell Creek in making the decision to order disclosure of the take or pay elements of the category 27 documents.  
  5. [29]
    The alternative ground of appeal alleging a failure on the part of the primary judge to give adequate reasons proceeds on the basis the primary judge’s reasons for ordering disclosure of the clauses relating to the take or pay elements of the rail agreements for the mines were wholly contained in [76] of the disclosure judgment.  The analysis of the disclosure judgment shows that is an incorrect characterisation of the primary judge’s reasons in the disclosure judgment.  As submitted by BMA, the primary judge’s reasons at [16]-[24] and [74]-[76] of the disclosure judgment provide an explanation of the reasons for the primary judge’s conclusion to order disclosure of the category 27 documents to the extent of the clauses relating to the take or pay elements.               
  6. [30]
    Cherwell Creek does not succeed in establishing either ground of appeal against the order to disclose clauses relating to the take or pay elements of the category 27 documents.

The evidentiary ruling

  1. [31]
    After the disclosure judgment was published on 30 October 2018, BMA sought the clauses relating to the take or pay elements of the rail agreements for the mines from Cherwell Creek in an unredacted form.  Paragraphs 27 to 29 of the confidential affidavit of Mr Boys was responsive to that request with Mr Boys conveying his instructions as to how and why redacted parts of the clauses contained commercially sensitive information to the operation of the mines. 
  2. [32]
    The first ground of appeal is that the primary judge erred in not admitting those paragraphs into evidence by failing to take into account relevant considerations including the circumstances in which those paragraphs of the affidavit were prepared, that Cherwell Creek had during the hearing that resulted in the disclosure judgment expressly raised concerns about the confidentiality of the documents sought by BMA and reserved its position in that respect until after the determination of the application which was acknowledged by the primary judge in [7] of the disclosure judgment, and to the extent that BMA opposed the admission of those paragraphs into evidence because of the lateness of the affidavit, any prejudice to BMA was capable of being remedied by an adjournment and an order for costs.  The same matters are also relied on to express the basis for the error of failing to accord Cherwell Creek natural justice or the finding was unreasonable and illogical. 
  3. [33]
    The second ground of appeal is that the primary judge failed to give adequate reasons for the finding that the clauses relating to the “take or pay” elements of the rail agreements for the mines referred to in [142] of the summary of evidence of Mr Wallin were directly relevant to an issue in the proceeding.
  4. [34]
    During the hearing on 26 November 2018 counsel for Cherwell Creek submitted that the specific figures as to the times and dates which had been redacted in the take or pay clauses were not relevant to the issues in the proceeding.  Paragraphs 27 to 29 of Mr Boys’ confidential affidavit were relied on to support the argument of relevance and also confidentiality.  Although Cherwell Creek purported to argue during this hearing against disclosure of the take or pay elements of the rail agreements on the ground of relevance, that issue was determined by the disclosure judgment at [76].  Cherwell Creek’s reliance on the alleged failure of the primary judge to give adequate reasons for finding that the clauses relating to the take or pay elements of the rail agreements for the mines were directly relevant to an issue in the proceeding misses the point that was made in giving the evidentiary ruling.  The primary judge did not need to revisit the decision that had already been made in the disclosure judgment about the relevance of those clauses.
  5. [35]
    There was no inconsistency between the acknowledgements of requiring further submissions on confidentiality in [7] and [89] of the disclosure judgment (reflected in orders 5 and 6 made on 7 November 2018) and the refusal of the primary judge to receive paragraphs 27 to 29 of Mr Boys’ confidential affidavit.  The primary judge did not overlook Cherwell Creek’s reservation of its position in relation to confidentiality made at the hearing on 18 October 2018, as it is apparent from the disclosure judgment that the issue of what confidentiality regime should apply to preserve the confidentiality of documents ordered to be disclosed was postponed until after the disclosure judgment.  Cherwell Creek sought to rely upon paragraphs 27 to 29 of Mr Boys’ confidential affidavit to support its argument that the take or pay elements of the rail agreements were so commercially sensitive that they should not be disclosed at all.  The question of how to preserve confidentiality in respect of disclosable documents is a different issue from whether documents should be ordered to be disclosed, because of their confidential nature.  It is apparent from the disclosure judgment that it was the former and not the latter that was left for further submission.  In those circumstances, Cherwell Creek also fails on its first ground of appeal however expressed.  The appeal in LAC001-19 must be dismissed.

The confidentiality judgment

  1. [36]
    BMA had made an application on 25 June 2018 to set aside the restrictions in respect of the dissemination of materials relating to the security for costs application heard on 3 August 2016.  Another Member had heard the security for costs application and at the conclusion of the hearing had made an order preventing publication of, or access to, both the affidavits and the transcript of that hearing.  The primary judge by orders 1 and 2 made on 20 September 2018, but subject to orders 3 to 7, lifted the restriction on the transcript of the hearing in closed court on 3 August 2016 and set aside the confidentiality restriction imposed on the information in the affidavits that had been identified as Cherwell Creek as confidential.  Orders 3 to 7 set up a regime to enable the parties to agree on what parts of the transcript or the affidavits continued to be commercially sensitive and should be the subject of a continuing confidentiality regime.  There was then a further hearing before the primary judge in respect of passages from the transcript of the hearing on 3 August 2016 and parts of the affidavits relied on by Cherwell Creek on which the parties could not agree should be the subject of the confidentiality regime.  By order 1 made on 14 December 2018 for the reasons set out in [21]-[31] of the confidentiality judgment, the primary judge ordered that the confidentiality regime established by order 7 made on 20 September 2018 would apply to the listed items.  BMA appeals against the inclusion of items 8, 14, 15, 19, 20, 21 and 24 (the disputed items) in that list.  The appeal had also been proceeding in respect of item 31, but Cherwell Creek’s written submissions conceded that the appeal should be successful in respect of item 31.   
  2. [37]
    The issue disposed of at [40]-[50] of the confidentiality judgment applying to the take or pay elements of the rail agreements for the mines was that the price sensitive information that had been redacted in those agreements should be disclosed, subject to a confidentiality regime.  At [42] of the confidentiality judgment, the primary judge rejected Cherwell Creek’s argument that the price sensitive material was so commercially sensitive that it should not have to disclose it for the reason that Cherwell Creek did not put that argument when the disclosure application was heard on 18 October 2018 and the primary judge had already ordered Cherwell Creek as a result of the disclosure judgment to disclose the information.  The primary judge observed at [43] of the confidentiality judgment that the take or pay clauses were impossible to understand without access to the price sensitive material, but then noted at [44]:

“There is no dispute the information is commercially sensitive.  I accept that is so.  The price sensitive material explains how to calculate the access charges by reference to tonnages, loading times and other details factored into the formula.  That is commercially valuable information for a trade rival.” 

  1. [38]
    Pursuant to the confidentiality judgment, by order 3 made on 14 December 2018 in respect of BMA’s disclosure application, the primary judge ordered the applicant must provide the information requested in category 27 in an unredacted form.  By order 4 made on 14 December 2018 in respect of BMA’s disclosure application, the primary judge imposed the confidentiality regime for the relevant parts of the rail agreements that excluded BMA’s in-house counsel and another BMA employee Mr Garner from the confidentiality regime:

“The following documents disclosed by the applicant pursuant to paragraph 1 of the order of 7 November 2018 (being documents listed in the applicant’s Fourteenth Further Supplementary List of Documents dated 9 November 2018):

a. CCC.491791;

b. CCC.491836;

c. CCC.491930;

d. CCC.491984,

not be disclosed by the respondents, their agents or representatives to any person other than:

  1. any solicitor or barrister acting in that capacity acting on behalf of the respondents in this proceeding;
  2. a secretary or administrative assistant of a person identified in (a) who is instructed by that person to undertake secretarial or administrative work for the purpose of the proceeding;
  3. any other person as determined by the Court or as agreed by the applicant.”
  1. [39]
    The confidentiality regime for the take or pay elements of the rail agreements therefore differed from the confidentiality regime that was ordered by the primary judge to apply to other documents disclosed by Cherwell Creek pursuant to paragraph 1 of the primary judge’s order of 7 November 2018, as set out in order 2 made on 14 December 2018.  Apart from identical provisions to paragraphs (a), (b) and (c) of the confidentiality order applying to the take or pay elements of the rail agreements, order 2 made on 14 December 2018 also permitted the documents to be disclosed to the in-house counsel of BMA and Mr Garner.  The intention of the primary judge to protect Cherwell Creek against inadvertent disclosure of the take or pay elements of the rail agreements was explained in [47] of the confidentiality judgment:

“I accept there could be serious consequences for Cherwell Creek if a trade competitor misused this information. Given the confidentiality that attaches to commercial arrangements, it might be difficult to detect or prove its misuse. Providing the information to an officer of BMA might make it more easily accessible by others who are not authorised to access it. There is a risk, albeit speculative, that it could be disseminated without the knowledge or acquiescence of the officer to whom it was disclosed. In appropriate cases, the courts have restricted access to the external lawyers and their support staff to avoid misuse of information, whether deliberate or inadvertent.”

  1. [40]
    The primary judge acknowledged at [48]-[49] of the confidentiality judgment the difference in the confidentiality regime that the primary judge was proposing for the category 27 documents compared with the confidentiality regime that had been applied to the disclosure of other documents:

“[48] In striking a balance between the parties’ legitimate interests in and apart from this litigation, I am satisfied the price sensitive information has such commercial value there ought to be additional protection.

[49] BMA’s lawyers seek access to the price sensitive material so they can interpret the take or pay element of the agreements. The counsel and solicitors who represent BMA present with particular expertise in commercial dealings and in the resources sector. I see no prejudice to BMA if disclosure is further restricted to exclude in-house counsel and Mr Garner.”

Cherwell Creek’s appeal against the confidentiality judgment

  1. [41]
    Cherwell Creek appeals on a number of grounds against order 3 made on 14 December 2018 as a result of the confidentiality judgment relating to the disclosure application.  Cherwell Creek relies on the grounds of appeal against order 1(c) made on 7 November 2018, as a result of the disclosure judgment, but otherwise the first ground is that the primary judge erred in finding at [42] of the confidentiality judgment that Cherwell Creek did not argue that the “price sensitive material” was so commercially sensitive that it should not be disclosed and then relies on allegations the primary judge either failed to take into account relevant considerations or the finding was unreasonable and illogical. 
  2. [42]
    The matters relied on for finding error are: that the disclosure application had sought disclosure of 32 categories of documents; Cherwell Creek expressly raised issues about the confidentiality of the documents sought in the disclosure application and reserved its position until after the determination of the disclosure application which was acknowledged in the disclosure judgment at [7]; a discoverable document may be redacted for confidentiality; order 7 made on 7 November 2018 deferred confidentiality issues concerning clauses relating to the take or pay elements of the rail agreements for the mines to the hearing on 26 November 2018; on 19 November 2018 Cherwell Creek disclosed clauses relating to the take or pay elements of the rail agreements for the mines that had been redacted for confidentiality; and that it was only by letter dated 22 November 2018 the respondents sought those clauses in an unredacted form. 
  3. [43]
    The further grounds relied on in respect of this appeal were that the primary judge erred by misconstruing the take or pay clauses and the deferral of those obligations in the rail agreements for the mines and finding in the confidentiality judgment at [43] that it was “impossible to understand” those clauses without access to the “price sensitive material”, the evidence did not support such a finding, and the primary judge erred by failing to give adequate reasons for that finding. 
  4. [44]
    As Cherwell Creek has not succeeded in its appeal against the order to disclose any clauses relating to the take or pay element of the category 27 documents, for the same reasons the grounds of appeal in relation to that appeal likewise do not assist Cherwell Creek in its appeal against the confidentiality judgment in respect of providing the relevant clauses of the category 27 documents in unredacted form.   
  5. [45]
    When it is understood that the action of Cherwell Creek in providing the clauses relating to the take or pay elements of the category 27 documents redacted in respect of price and other commercially sensitive information was not disclosure in accordance with the order 1(c) made on 7 November 2018, the decision of the primary judge to order those clauses in unredacted form was, in effect, repeating the order that had already been made necessitated by the action taken by Cherwell Creek in the meantime in not implementing order 1(c) made on 7 November 2018 after the interim confidentiality regime was imposed by order made on 16 November 2018. 
  6. [46]
    The question of disclosure of the price and other commercially sensitive information in the take or pay clauses of the rail agreements for the mines was determined by the disclosure judgment. Cherwell Creek is relying on the same arguments that it advanced to challenge the evidentiary ruling arising out of its reservation about the confidentiality of the documents sought in the disclosure application at the hearing on 18 October 2018.  The conclusion that has been reached on the evidentiary ruling appeal in relation to the difference between the question of how to preserve confidentiality in respect of disclosable documents (which was deferred until after the disclosure judgment was given) and the question of whether the documents should be disclosed, because of their confidential nature (that was determined by the disclosure judgment), also disposes of this ground of appeal in relation to the confidentiality judgment.  Relying on the same factual matters to express the ground of appeal as the finding was “unreasonable or illogical” does not alter the outcome of the appeal.
  7. [47]
    The primary judge made the observation at [43] of the confidentiality judgment after having the opportunity at the hearing on 26 November 2018 to look at the disclosed clauses relating to the take or pay element (including the deferral of obligations) in the redacted form.  The redactions were those made to the take or pay element of the agreements to exclude price sensitive information and the terms on which access had been granted, including the particular rail tonnages for the mines and the Byerwen mine, the cost of rail and the dates for which access had been secured.  The observation was therefore made by the primary judge in the light of her Honour’s actual consideration of the disclosed clauses with redactions and understanding of the parties’ submissions as to the relevance of the price sensitive information (as set out in [44] of the confidentiality judgment), but in the context of the decision that had already been made in the disclosure judgment at [76].  The price sensitive information was within the terms of order 1(c) made on 7 November 2018.  Focusing on [43] of the confidentiality judgment does not assist Cherwell Creek, as the main reason the primary judge refused to permit the redactions of the price sensitive material was that it was an attempt to re-visit the decision the primary judge had made about the disclosure of category 27 documents.      
  8. [48]
    Cherwell Creek’s appeal against the order that has the effect of requiring Cherwell Creek to provide the price sensitive and other commercially sensitive information in the take or pay clauses in the rail agreements for the mines in unredacted form does not succeed.  The appeal in LAC007-18 must be dismissed.

BMA’s appeal in respect of confidentiality for security for costs disputed items

  1. [49]
    BMA does not dispute the categorisation process the primary judge used for determining which documents (or parts of documents) from the security for costs application remained confidential.  The primary judge had accepted (at [24] of the confidentiality judgment) that there was the inference open from the statements made by Cherwell Creek’s solicitor in non-confidential affidavits that “as of mid-to-late 2015, Cherwell Creek could not pay further security for costs because Mr Wallin or the QCoal Group could not provide those funds” (set out at [22]) and to the extent to which items merely stated that inference, they were not confidential.  What Mr Boys had said in paragraph 6 of his non-confidential affidavit sworn on 22 July 2016 was:

“I am informed by Mr Christopher Wallin and believe that if BMA had, at any time up to mid-to-late 2015, applied to the Land Court and the Land Court had ordered Cherwell Creek to provide further security for costs up to a total amount of $3.6 million, Mr Wallin would have been able to put up that security for costs on behalf of Cherwell Creek.”

  1. [50]
    It is apparent from the submissions made to the primary judge on 26 November 2018 that this paragraph was treated by BMA as allowing an inference that at some point after mid-to-late 2015 or as of mid-to-late 2016 Mr Wallin (or the QCoal Group) could no longer put up security for costs on behalf of Cherwell Creek.  To the extent that [22] of the confidentiality judgment records the inference otherwise, both parties on the hearing of this appeal asserted the reference in [22] to 2015 was erroneous and should be read as 2016.  That is the ambit of the disclosure that had already occurred and the primary judge then considered whether items identified by Cherwell Creek as confidential fell within that disclosure and thereby were no longer confidential which I will describe as the first category of information.   
  2. [51]
    The primary judge did not find the disputed items fell within the first category of information.  The primary judge discerned there was a second category of information which was “details of and the reasons for the financial position of Mr Wallin and the QCoal companies” that was not in the public domain, including “the details of QCoal’s financial position and the flexibility of its financing arrangements”.  The primary judge noted at [27] of the confidentiality judgment: 

“With knowledge of the details of QCoal’s financial position and the flexibility of its financing arrangements, BMA could adjust its price to QCoal’s detriment.”

  1. [52]
    The primary judge observed at [28] of the confidentiality judgment:

“As to financial reputation, QCoal is concerned about the impact on the decisions of its customers, suppliers and employees in their commercial and employment relationships. Risk assessment is a key issue in commercial dealings. As a matter of common sense, it is likely the commercial value of information about financial circumstances will fade with time. As BMA submitted, there is already some information in the public domain. However, the details of QCoal’s and Mr Wallin’s financial circumstances are not. It is for them to decide how much otherwise confidential information they disclose, to whom and under what circumstances. Excluding the information from the confidentiality regime would deprive them of their lawful choices about such matters.”

  1. [53]
    The primary judge found at [30] of the confidentiality judgment that BMA would not be prejudiced in its preparation for trial, if the second category of information was subject to the confidentiality regime.  On the basis the disputed items were in the second category of information and therefore confidential in the sense of disclosing information that was not otherwise in the public domain, they were made subject to the confidentiality regime.
  2. [54]
    The main issue on this aspect of BMA’s appeal is whether the disputed items were correctly characterised by the primary judge as falling within the second category of information.  BMA contends that the primary judge erred in including the disputed items within that category.  There is no challenge by BMA to the categorisation of information which the primary judge used for determining whether items should be the subject of the confidentiality regime. 
  3. [55]
    Apart from the submission that the disputed items are not confidential, BMA asserts that the primary judge made an error of principle in permitting Cherwell Creek to pursue a claim for confidentiality, when Cherwell Creek had elected to deploy the information forensically in the proceeding to resist an application for security for costs.  Cherwell Creek concedes that the fact that it relied on the information for that purpose is a matter which should be taken into account in determining whether the disputed items should be the subject of the confidentiality regime, but asserts that factor does not preclude a confidentiality order being made in relation to those items.  Cherwell Creek submits that when the context of the disputed items is considered, it was open to the primary judge to conclude the items were confidential and should be protected by the confidentiality regime that was imposed.  Cherwell Creek asserts that BMA’s appeal against the categorisation of the disputed items is an appeal from the exercise of discretion on a matter of practice and procedure and that the approach described in Just GI at [14] should be followed, but that in any case there was no error of the type detailed in House v The King or substantial injustice to BMA which would warrant interference by an appellate court with the primary judge’s categorisation of the disputed items as confidential. 
  4. [56]
    Item 8 is a passage of transcript in which senior counsel for BMA referred to a statement extracted from paragraph 6(g) in the confidential third affidavit of Mr Boys of 22 July 2016.  Paragraph 6 sets out the list of reasons relied on by Mr Wallin for why he, the QCoal Group and other associated entities would suffer, if a confidentiality order were not made.  By comparing the extract to paragraph 6(g), it appears the transcript incorrectly records the word that is used in paragraph 6(g) of “suspected” as “suggested”.  Proceeding on the basis that the transcript was meant to record the word that was actually used in paragraph 6(g), BMA submits that it was a reference to a hypothetical statement in the affidavit as to what could happen if a confidentiality order were not made and does not include any details of, or the reasons for, the actual financial position of Mr Wallin and the QCoal companies as at a particular date or otherwise.  Cherwell Creek submits that the statement is more than hypothetical speculation and must be read in the context of publicly known facts, including that a security for costs application was made by BMA and that, as at mid to late 2016, Cherwell Creek could not provide further security for costs because Mr Wallin or the QCoal Group could not provide funds for the security.  Cherwell Creek also relies on paragraph 6 of Mr Boys’ confidential third affidavit listing the reasons for why Mr Wallin and the QCoal Group would suffer significant irreparable harm, if a confidentiality order were not made, as part of the “background facts”. 
  5. [57]
    It is circular for Cherwell Creek to rely on that paragraph as background facts in the public domain, to the extent three of the subparagraphs are disputed items on this appeal and the disputed passage of transcript is taken from subparagraph (g) which is one of the disputed items.  The inference that Cherwell Creek asserts would be drawn from item 8 is in very general terms.  On the test applied by the primary judge, item 8 did not fall within the second category of information, as it was a submission made by reference to hypothetical circumstances and did not disclose any financial details required for, or give rise to an inference falling within, the second category of information.  
  6. [58]
    Item 14 is an extract of three lines of transcripts of submissions being made by BMA’s senior counsel that refers in general terms to refinancing of facilities.  Even though a reader of the transcript may infer that prior to the hearing of the security for costs application QCoal Group had sought to refinance its facilities, that does not necessarily lead to any other inference that justifies characterising the information as falling within the second category of information.
  7. [59]
    Item 15 is another passage of transcript of submissions being made by BMA’s senior counsel.  It is submitted the first part of the passage has no confidential character warranting a special order, as it is a reference to refinancing.  The second part of the transcript is submitted to be within the first category of information identified by the primary judge over which any possible confidentiality had been lost.  The first part of the passage does not fall within the second category of information for the same reason as item 14.  The second part of the passage is clearly within the first category of information and therefore also not confidential.
  8. [60]
    Each of items 19, 20 and 21 comprise a subparagraph from paragraph 6 of Mr Boys’ confidential third affidavit.  Item 19 is paragraph 6(g) of Mr Boys’ confidential affidavit.  Subparagraphs (a) to (f) of paragraph 6 of Mr Boys’ confidential third affidavit are not confidential.  Subparagraph (g) builds on the speculation of what might happen, as a result of it being a publicly known fact at the time of the security costs application that the QCoal Group mines were operating at a loss which is referred to in subparagraph (e).  The inference that Cherwell Creek asserts should be drawn from each of items 19, 20 and 21 is a general one not contemplated by the second category of information.  Item 19 is merely a matter of speculation and does not disclose material that falls within the second category of information.
  9. [61]
    Item 20 is paragraph 6(i) of Mr Boys’ confidential third affidavit.  It is of like nature to subparagraph (g) in that it is a matter of speculation that builds on the publicly available information referred to in subparagraph (e).  It therefore does not fall within the second category of information.
  10. [62]
    Item 21 is paragraph 6(k) of Mr Boys’ confidential third affidavit.  It is also a matter of speculation that builds on the publicly available information reflected in subparagraph (e).  It is not material falling within the second category of information.           
  11. [63]
    Item 24 comprises paragraph 10(d) of Mr Boys’ confidential third affidavit and sets out one of the reasons for delay in the preparation and delivery of Mr Whimp’s confidential affidavit.  (Mr Whimp is a chartered accountant who was the accountant for Mr Wallin and the QCoal Group.)  Subparagraph (d) refers to the information that Mr Whimp analysed and reviewed in order to form his opinion.  One document is identified in describing that information by referring to the document with the descriptor of the name of the party (other than the QCoal Group).  The document is identified without providing any detail about its date, terms or effect.  BMA conceded the document itself was confidential and does not challenge the primary judge’s inclusion of other material where reference is made to the same document in the second category of information, but submits that the mere reference to it without disclosing any details does not make paragraph 10(d) commercially sensitive or confidential.  Cherwell Creek asserts that item 24 should be treated consistently with other material in which reference is made to the same document where BMA has not challenged that material as falling within the second category of information. 
  12. [64]
    Paragraph 10(d) is in the most general terms, having regard to its purpose in dealing with the delay associated with Mr Whimp’s confidential affidavit, and does not reveal the nature of the opinion formed by Mr Whimp.  It is apparent that the reference to the document in item 24 is benign in contrast to the references to the document in the other material relied on by Cherwell Creek for the purpose of this argument.  The primary judge therefore erred in characterising item 24 as falling within the second category of information.  
  13. [65]
    Even though the conclusion has been reached that the disputed items were incorrectly categorised by the primary judge as falling within the second category information and the disputed items were not confidential, it remains to be considered as to whether it is appropriate to allow the appeal in relation to the imposition of the confidentiality regime on the disputed items which was a matter of practice and procedure.  The vice that was emphasised by senior counsel for BMA is the difficult position that BMA and its lawyers would be placed in by inadvertent reference to the disputed items that remain the subject of a confidentiality order which are described as “a disparate and fragmentary collection of references and passages” with the potential for being in contempt of court in relation to any reference to them such as in open court.  Cherwell Creek points out that BMA did not adduce evidence of any actual difficulties arising from the confidentiality orders which had been in place since August 2016 and that the risk of contempt was not one on which any real weight should be placed.  BMA also submits that the primary judge made an error of principle in the concluding sentence of [28] of the confidentiality judgment which offends the principle that litigation is conducted in public, relying on Hogan v Australian Crime Commission (2010) 240 CLR 651 at [43] and the statement in J v L & A Services Pty Ltd (No 2) [1995] 2 Qd R 10, 45 that “… information may not be withheld from the public merely to save a party or witness from loss of privacy, embarrassment, distress, financial harm or other ‘collateral disadvantage’ … ”.    
  14. [66]
    Having regard to the nature and content of the disputed items that are small passages of transcript, subparagraphs from paragraph 6 of Mr Boys’ confidential third affidavit where the other subparagraphs are disclosed and one subparagraph from paragraph 10 of the same affidavit, the likelihood of inadvertent reference in the future may not be significant, but the consequences of inadvertent reference that would amount to contempt in respect of the confidentiality order could be significant.  The concern for BMA’s counsel in making inadvertent reference to them is therefore a relevant consideration.  It is also relevant that there is no justification for keeping confidential material that is disclosed in public litigation which is not truly confidential.  The fact the disputed items are not confidential on the test formulated by the primary judge which was not the subject of challenge by either party is therefore a much more relevant consideration to the outcome of the appeal.  The appeal is not in respect of the exercise of a discretion, but in respect of an error of fact in the categorisation of the disputed items as confidential, when they are not.  Despite the caution that is appropriately exercised in considering an appeal from an interlocutory decision on a matter of practice and procedure, the balance of  the competing considerations favours allowing BMA’s appeal in respect of the disputed items. 

BMA’s appeal against exclusion of BMA personnel from confidentiality regime

  1. [67]
    BMA’s complaint is that the order prevents any person from within BMA seeing the relevant information in the rail agreements, particularly when the interim confidentiality regime put in place by the primary judge’s order of 16 November 2018 permitted the in-house counsel employed by BMA to see the take or pay clauses of the rail agreements as well as another employee of BMA, Mr Garner, subject to Mr Garner filing with the court an undertaking in the form set out in annexure A to the order with any disclosure to him not to take place after his position and duties were no longer as deposed to in the second affidavit of Mr Hurford sworn 30 July 2018.  The undertaking was to the effect that Mr Garner would not use the confidential material, other than for the purpose of providing instructions to the lawyers engaged on behalf of BMA in the subject proceeding and only pursuant to the terms of the undertaking which dealt with matters such as copying and the security of the confidential material. 
  2. [68]
    There are two grounds of appeal.  The first is that the primary judge erred by finding as fact that BMA would suffer “no prejudice … if disclosure is further restricted to exclude in-house counsel and Mr Garner” in the absence of evidence demonstrating that fact.  The second is the primary judge erred by denying BMA procedural fairness where the form of the confidentiality regime was largely agreed between the parties and did not exclude BMA’s in-house counsel and Mr Garner from the persons to whom disclosure could be made, Cherwell Creek did not seek such a regime at or consequent upon the hearing on 26 November 2018 and BMA was denied an opportunity to lead evidence addressing the potential prejudice arising from such a restricted regime or make submissions regarding the form of any such restricted regime.
  3. [69]
    Although Mr Hurford’s second affidavit was before the primary judge in relation to the application to set aside the restrictions in respect of the materials relating to the security for costs application heard on 3 August 2016, its contents were also relevant to the confidentiality regime for the category 27 documents.  Mr Hurford deposed to his firm’s receiving instructions from the legal and commercial units of BMA.  He further deposed that Mr Garner is the person within BMA’s commercial unit who provides the instructions in respect of the proceeding and that neither the in-house counsel nor Mr Garner is involved in the setting of prices for any coal mined by BMA or any decision-making by BMA relating to port and rail access. 
  4. [70]
    BMA relies on the fact that there was only limited evidence about the commercial sensitivity of the relevant parts of the rail agreements before the primary judge that was set out in paragraph 18 of the affidavit of Mr Boys sworn on 16 November 2018 to the effect that the clauses in the rail agreements relating to “the profile of the amount of tonnes of coal being railed” and “the terms of pricing for railing of coal” which “would provide a large amount of information, which would be of value to a competitor, such as BMA, regarding transportation costs associated with QCoal’s Drake Mine”.  BMA submits that there was no explanation in the confidentiality judgment or evidence of any mechanism by which information in the rail agreements, if disclosed to the in-house counsel or Mr Garner, could be inadvertently disclosed and there was no proper basis for the conclusion that BMA would suffer no prejudice, if information in the rail agreements relating to the take or pay obligations (which the primary judge had determined was relevant and ordered to be disclosed) could not be shown to anyone within BMA to obtain instructions.  BMA also submits that on the material there was no reason to conclude that the existing confidentiality regime was not appropriate. 
  5. [71]
    BMA also notes that by paragraph 6 of Cherwell Creek’s written submissions (made around the time the interim confidentiality order was imposed on 16 November 2018) for the purpose of the hearing on 26 November 2018, Cherwell Creek did not oppose the confidentiality regime continuing, if the rail agreements were ordered to be disclosed in the unredacted form: 

“As to the four documents comprising the rail agreements that were disclosed with particular details redacted, Aurizon has expressed concern about confidentiality and commercial sensitivity in those documents, so they ought to be the subject of a confidentiality regime.  QCoal’s position is that, as redacted, the implied undertaking of confidentiality is sufficient for those rail agreements.  However, if BMA were to contend (and the Court was to order) that un-redacted versions of those documents should be produced, un-redacted versions ought be subject to the more strict confidentiality regime for which Cherwell contends above.  The redacted details in the rail agreement are both confidential and highly commercially sensitive.  The information would be of value to a competitor of QCoal, such as BMA.  The information is squarely of the kind that confidentiality orders ought to protect.”  (footnotes omitted)

  1. [72]
    Cherwell Creek made the point that paragraph 6 of the written submissions was made at the time when the rail agreements for the mines had been disclosed revealing only those clauses which related to the deferral of the take or pay obligations in those agreements (and without disclosing any price or other commercially sensitive information).  When BMA’s solicitors by their letter dated 22 November 2018 pressed Cherwell Creek’s solicitors to disclose the take or pay element of the rail agreements as per order 1(c) made on 7 November 2018, Cherwell Creek re-disclosed the rail agreements with the relevant parts of the take or pay commitments and the relevant parts of the definitions referred to in those clauses unredacted, except for the price sensitive information and the terms on which access had been granted, including the particular rail tonnages for the mines and the Byerwen mine, the cost of rail and the dates for which access had been secured.  In anticipation of making that re-disclosure, on 24 November 2018 BMA’s solicitors requested confirmation from BMA that the interim confidentiality regime would apply to the further unredacted information which confirmation was then given by BMA’s solicitors.  Although paragraph 6 of the written submissions of Cherwell Creek pursuant to order 5 made on 7 November 2018 was therefore not made strictly in respect of the documents that were re-disclosed subsequently, Cherwell Creek was satisfied with the interim confidentiality regime applying to those documents and did not demur otherwise from paragraph 6 of the written submissions at the hearing on 26 November 2018.  Cherwell Creek therefore contemplated that if the commercially sensitive material was unredacted by order of the primary judge, the confidentiality regime proposed by BMA was acceptable. 
  2. [73]
    In relation to the alternative ground, BMA submits that it was deprived of the opportunity to lead evidence or make submissions about matters relevant to the critical findings set out in the confidentiality judgment that resulted in the making of order 4.  In particular, BMA asserts it was given no opportunity to lead evidence or make submissions about prejudice it may suffer, if the lawyers were unable to take instructions in any form from the in-house counsel and Mr Garner in relation to the take or pay clauses, and the steps which the in-house counsel and Mr Garner could and would take to keep the information secure which would have a bearing on the possibility of an inadvertent dissemination of the information.  BMA therefore seeks an order setting aside order 4 made on 14 December 2018 in respect of the disclosure application and either an order from this court that accords with the interim confidentiality regime reflected in the order of 16 November 2018 or an order remitting the matter to the primary judge for further consideration.    
  3. [74]
    Cherwell Creek seeks to uphold the confined confidentiality regime for the rail agreements on the basis that paragraph (c) of order 4 permits the disclosure of the relevant parts of the rail agreements to “any other person as determined by the Court or as agreed by [Cherwell Creek]” in addition to the external lawyers acting on behalf of BMA and their secretaries or administrative assistants.  It is therefore submitted that there is a two-step process that BMA would have to follow, if it were necessary for the lawyers to obtain instructions from BMA in respect of any of the disclosed confidential parts of the railway agreements and that process could be used by BMA to obtain access for its in-house counsel and Mr Garner to those documents.  Cherwell Creek concedes that the limitation in order 4 was not expressly raised by either party in the written or oral submissions, but submits that is of little consequence, when the order that was made did not exclude absolutely the ability of BMA to obtain the further access to those documents that they seek on this appeal.  It is therefore submitted that no error has been demonstrated in the approach of the primary judge that gives rise to sufficient prejudice that would warrant the court intervening in relation to interlocutory orders which relate to matters of practice and procedure.
  4. [75]
    Cherwell Creek’s submissions recognised that the two step process for BMA to endeavour to obtain consent from Cherwell Creek or an order from the court to disclose the information in the category 27 documents either to the in-house counsel or Mr Garner is inferior to the interim confidentiality regime that was acceptable to Cherwell Creek, although asserting it could possibly lead to the same outcome.  It is patent that the inability of the BMA lawyers to be able to seek instructions from either the in-house counsel for BMA or Mr Garner without first obtaining the agreement of Cherwell Creek to that course or, in the absence of agreement, applying to court, when Cherwell Creek was satisfied with the interim confidentiality regime is substantial prejudice to BMA.  Even though this aspect of the appeal is in respect of a matter of practice or procedure, because of the obvious prejudice to BMA, it must succeed in its appeal on the ground of being denied the opportunity to make submissions to the primary judge on the issue of whether a more restricted confidentiality regime than contemplated by both parties was warranted.
  5. [76]
    The issue arises whether this court should impose the confidentiality regime that BMA seeks or remit the matter to the primary judge.  It is most relevant that BMA had expressly sought before the primary judge that the existing confidentiality regime apply to the relevant clauses of the category 27 documents in unredacted form and Cherwell Creek did not contend for a contrary confidentiality regime, if it were unsuccessful in maintaining the redactions to the price and commercially sensitive material.  On the hearing of the appeal, Cherwell Creek did not submit that the matter should be remitted to the primary judge, if BMA succeeded on this aspect of the appeal.  Although the appeal is being allowed on the basis the primary judge did not give BMA the opportunity to be heard before making order 4 on 14 December 2018 in respect of the disclosure application, the fact that Cherwell Creek did not seek the more restricted confidentiality regime ordered by the primary judge suggests that a further hearing on this issue before the primary judge is unnecessary.  In those circumstances, it is appropriate to impose the confidentiality regime that BMA sought before the primary judge that was not the subject of any contrary submissions made by Cherwell Creek. 
  6. [77]
    In its amended notice of appeal, BMA sought an order reflecting a confidentiality regime for the rail agreements disclosed by Cherwell Creek pursuant to order 1(c) made on 7 November 2018 in terms that included paragraphs (c) and (d) of the order made on 16 November 2018.  In order to avoid requiring further submissions on the form of the orders that should be made in respect of this appeal or a further hearing for that purpose, it is proposed to vary order 4 made on 14 December 2018 by the primary judge in the manner sought in BMA’s amended notice of appeal.  In case there has been any change in in-house counsel or the employee performing Mr Garner’s role, it is appropriate to give BMA liberty to apply to amend the order to reflect the names of the current personnel.

Orders

  1. [78]
    In relation to the three appeals brought by Cherwell Creek and the one appeal by BMA, BMA has been successful and costs would usually follow the event.  It is therefore proposed that the costs order for each of these four appeals be in those terms, unless either party applies for a different order in submissions that are filed within 14 days of the publication of these reasons.   
  2. [79]
    The following orders (in which the parties are referred to by their respective roles in each appeal) should be made:

In appeal LAC006-18:

  1. Appeal dismissed.
  2. Unless either party applies for a different order for costs in submissions filed within 14 days of the publication of these reasons, the appellant must pay the respondents’ costs of the appeal.

In appeal LAC007-18:

  1. Appeal dismissed.
  2. Unless either party applies for a different order for costs in submissions filed within 14 days of the publication of these reasons, the appellant must pay the respondents’ costs of the appeal.

In appeal LAC001-19:

  1. Appeal dismissed.
  2. Unless either party applies for a different order for costs in submissions filed within 14 days of the publication of these reasons, the appellant must pay the respondents’ costs of the appeal.

In appeal LAC002-19:

  1. Appeal allowed.
  2. Delete items 8, 14, 15, 19, 20, 21, 24 and 31 from order 1 made on 14 December 2018 by President Kingham regarding the appellant’s application filed on 25 June 2018. 
  3. Vary order 4 made on 14 December 2018 by President Kingham regarding the appellant’s amended application filed on 3 October 2018 by:
  1. (a)
     substituting “(e)” for “(c)”;
  1. (b)
     inserting after paragraph (b):

“(c) Ms Jenny McCabe and any Legal Practitioner (with a current practicing certificate issued in Australia) who takes over Ms McCabe’s responsibility for the respondents in respect of these proceedings;

  1. (d)
     Mr Brett Garner subject to the terms of the undertaking signed by Mr Garner on 20 November 2018 and with any disclosure to him to not take place after his position and duties are no longer as deposed to in the Second Affidavit of Stephen James Hurford sworn 30 July 2018; and”
  1. Liberty to the appellant to apply on two days’ notice to the respondents, if Ms McCabe and/or Mr Garner no longer hold the positions they held when the appeal was heard.
  2. Unless either party applies for a different costs order in submissions filed within 14 days of the publication of these reasons, the respondents must pay the appellant’s costs of the appeal.

MULLINS J

WL COCHRANE

MEMBER OF THE LAND COURT

WA ISDALE

MEMBER OF THE LAND COURT

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Editorial Notes

  • Published Case Name:

    Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors

  • Shortened Case Name:

    Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd

  • MNC:

    [2019] QLAC 5

  • Court:

    QLAC

  • Judge(s):

    Mullins J, Member WL Cochrane, Member WA Isdale

  • Date:

    25 Oct 2019

Litigation History

EventCitation or FileDateNotes
Primary Judgment[2018] QLC 4030 Oct 2018Respondents' application for further disclosure granted: Kingham P.
Primary JudgmentMRA1332-08 (No Citation)26 Nov 2018Ruling that certain affidavit paragraphs relied upon by the applicant were inadmissible: Kingham P.
Primary Judgment[2018] QLC 4814 Dec 2018Applications by the respondents to set aside orders made on 3 August 2016; for further disclosure by the applicant and for non-party disclosure granted: Kingham P.
Primary Judgment[2019] QLAC 525 Oct 2019In applicant's appeal LAC006-18: (appeal from [2018] QLC 40) appeal dismissed; in applicant's appeal LAC007-18 (appeal from 26/11/2018): appeal dismissed; in applicant's appeal LAC001-19 (appeal from [2018] QLC 48): appeal dismissed; in respondents' appeal LAC002-19 (in respect of confidentiality regime from [2018] QLC 48): appeal allowed with consequential directions: Mullins J with Members Cochrane and Isdale.
QCA Interlocutory Judgment[2019] QCA 27602 Dec 2019Application for a stay of [2019] QLAC 5 granted: Fraser JA.
Notice of Appeal FiledFile Number: Appeal 12371/1908 Nov 2019-
Appeal Discontinued (QCA)File Number: Appeal 12371/1927 Feb 2020Determined on the papers (by consent): leave to appeal granted; specific orders for disclosure made in [2019] QLAC 5 set aside otherwise appeal dismissed: Sofronoff P.

Appeal Status

Appeal Discontinued (QCA)

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