Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd (No 13)
[2018] QLC 25
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- Unreported Judgment
- Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd (No 13)[2018] QLC 25
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Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd (No 13)[2018] QLC 25
Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd (No 13)[2018] QLC 25
LAND COURT OF QUEENSLAND
CITATION: | Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors (No 13) [2018] QLC 25 |
PARTIES: | Cherwell Creek Coal Pty Ltd ACN 063 763 002 (applicant) |
| v |
| BHP Queensland Coal Investments Pty Ltd ACN 098 876 825 QCT Resources Pty Ltd ACN 010 808 705 BHP Coal Pty Ltd ACN 010 595 721 QCT Mining Pty Ltd ACN 010 487 840 Mitsubishi Developments Pty Ltd ACN 009 779 873 QCT Investment Pty Ltd ACN 010 487 831 Umal Consolidated Pty Ltd ACN 000 767 386 (respondents) |
FILE NO: | MRA1332-08 |
DIVISION: | General division |
PROCEEDING: | Application to set aside orders |
DELIVERED ON: | 4 September 2018 |
DELIVERED AT: | Brisbane |
HEARD ON: | 23 August 2018 |
HEARD AT: | Brisbane |
PRESIDENT: | FY Kingham |
ORDER: |
|
CATCHWORDS: | PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – AMENDING, VARYING AND SETTING ASIDE ORDERS – whether a change in circumstances is required for the court to set aside orders – whether there was a change in circumstances - where orders were made to restrict access to information said to be confidential and to the transcript of a closed court hearing – where the orders were made without the court determining the merits of the application – where the hearing was adjourned for further hearing - where the orders were made until further order – where the application was later withdrawn – where the orders were set aside EVIDENCE – ADMISSIBILITY – EXCLUSIONS – CLIENT LEGAL PRIVILEGE – LOSS OF PRIVILEGE – where a party claimed privilege in affidavits disclosed during a closed court hearing – whether the information was privileged – whether disclosing the affidavits waived any privilege – where it was found the claim of privilege was not a reason to refuse the application to set aside orders restricting access to affidavits and to the transcript Australian Competition and Consumer Commission v Cadbury Schweppes Pty Ltd (2009) 174 FCR 547, applied Baker v Campbell (1983) 153 CLR 52, applied Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44, applied Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501, applied Ex parte Edwards [1989] 1 Qd R 139, applied Goldberg v Ng (1995) 185 CLR 83, cited Goodman v Lorenzen [2000] QCA 11, applied Grant v Downs (1976) 135 CLR 674, applied Hall v Nominal Defendant (1966) 117 CLR 423, cited Mann v Carnell (1999) 201 CLR 1, applied National Crime Authority v S (1991) FCR 203, applied Queensland Local Government Superannuation Board v Allen [2016] QCA 325, applied Wilkshire and Coffey v Commonwealth of Australia (1976) 9 ALR 325, applied |
APPEARANCES: | G Gibson QC (instructed by Holding Redlich Lawyers) for the applicant S Doyle QC, with Mr A Stumer of Counsel (instructed by Allens Linklaters) for the respondents |
- [1]This application concerns information about Cherwell Creek’s financial capacity, which it claims is confidential because of its commercial sensitivity.
- [2]BMA seeks orders that would allow it limited access to and use of the information for the purpose of the proceedings. That would require the Court to set aside orders made on an earlier application and make fresh orders to preserve the confidentiality of any information that warrants that protection.
- [3]During a closed court hearing on 3 August 2016, Member Smith made the orders BMA wants set aside. That hearing took place on the date set for hearing an application by BMA that Cherwell Creek provide further security for costs. Cherwell Creek applied for leave to file further affidavits on that application, subject to orders that imposed a confidentiality regime. BMA opposed the Court granting Cherwell Creek leave to file the affidavits. It also disputed the information recorded in the affidavits was confidential. During a closed court hearing, Cherwell Creek provided the affidavits to the Court and to BMA so his Honour could deal with Cherwell Creek’s application.
- [4]As matters transpired, Member Smith did not dispose of Cherwell Creek’s application, and he did not hear BMA’s application at all. After his Honour expressed a tentative view on its application, he offered Cherwell Creek time to reconsider its application and anticipated the parties would try to resolve the dispute about access and confidentiality.
- [5]Before adjourning the hearing, Member Smith made orders on Cherwell Creek’s application, to operate until further order. The orders prevent BMA disclosing the information in the affidavits to any person not present for the closed court hearing. They also restrict access to the transcript of that hearing. Both orders exceed the terms of the orders applied for by Cherwell Creek.
- [6]Subsequently both Cherwell Creek’s application about the affidavits and BMA’s application for security for costs resolved without the Court hearing further from the parties. Member Smith’s orders remain in force.
- [7]BMA says the Court made the orders to provide interim protection only. By their terms, they unnecessarily restrict access to relevant information and inhibit BMA in preparing its case. Cherwell Creek says there is no change in circumstances that would allow the Court to set aside its previous orders. Further, it claims there is no utility in doing so because the affidavits are privileged and the transcript is not relevant or admissible. BMA disputes the information in the affidavits is privileged. Even if it is, BMA contends Cherwell Creek waived privilege by disclosing the information to BMA’s lawyers and to the Court. Assuming the Court sets aside the orders, BMA proposes a new confidentiality regime. Cherwell Creek opposes some aspects of that regime.
- [8]Those arguments raise the following issues:
- Can the Court set aside the orders in the circumstances of this case?
- Is Cherwell Creek’s claim of legal professional privilege a reason not to set aside the orders?
- Are BMA’s proposed orders appropriate?
Can the Court set aside the orders in the circumstances of this case?
- [9]Although the parties agree the Court has power to set aside orders that are not final, they disagree about whether the circumstances in this case enliven the Court’s discretion to do so.
- [10]Cherwell Creek relies on a general rule that a court will not set aside interlocutory orders without additional facts or a change in circumstances. BMA denies there is a general rule that sets preconditions to a court exercising its discretion.
- [11]There is some foundation for asserting a change in circumstances is a prerequisite to varying or setting aside an interlocutory order.[1] The overriding principle is what the interests of justice require in the particular circumstances of the case.[2] The rule reflects the prospects of succeeding on such an application. Without new facts or changed circumstances, an application will ordinarily be “fruitless”.[3] That does not mean a party is precluded from applying if there is no change,[4] or that the Court can only grant the application on that basis.
- [12]In any case, BMA argues this Court can and should set aside the orders for two reasons. Firstly, because the rule does not apply to orders of the kind in question here. Secondly, if the rule does apply, there has been a relevant change in circumstances.
- [13]BMA characterises the orders as interim rather than interlocutory. It asserts they are merely procedural in nature, and that his Honour made them without determining any substantive issue between the parties.
- [14]The nature of the orders is a relevant consideration on such an application. An interlocutory order may settle a substantive issue even if it does not finally determine the dispute between the parties. A court should not disturb that type of order lightly. Applying the general rule to an order of that type serves the public interest in finality in litigation. The same public interest consideration does not arise for merely procedural orders, which have not determined the rights or status of parties on essential issues involved in the case.[5]
- [15]The transcript reveals the purpose of the orders. BMA had applied for orders requiring Cherwell Creek to provide further security for the costs of the proceeding. On the day set for hearing that application, Cherwell Creek applied for leave to file additional affidavits, and for orders to restrict access to and use of some of them on the ground of confidentiality. BMA contested both the assertion of confidentiality and the terms of the proposed orders.
- [16]At the beginning of his submissions, counsel for Cherwell Creek advised Member Smith that amendments to the proposed order would accommodate some concerns raised by BMA. In particular, he proposed orders that would allow BMA to use the material in both the security for costs application and to test Cherwell Creek’s financial capacity at trial. He also did not oppose to Member Smith’s suggestion that BMA’s in-house counsel should have access to it.[6]
- [17]Further, Member Smith observed that some of information Cherwell Creek sought to protect was already in the public domain. Counsel for Cherwell Creek conceded as much.[7]
- [18]After some discussion about how to proceed, Member Smith said he would not receive the material at that point and suggested a number of options were open to Cherwell Creek. They included being more specific about what material Cherwell Creek said was confidential. He anticipated they might be able to reach agreement on a confidentiality regime.[8]
- [19]His Honour trusted all parties to understand the spirit in which he indicated the orders in the form that he did.[9] That closing statement reinforces the transitory nature and limited purpose of the orders. They were clearly procedural in nature, to preserve Cherwell Creek’s claim for confidentiality on an interim basis.
- [20]Although he expressed some tentative opinions, Member Smith did not make any findings about the merits of the application. He did not determine whether any of the material warranted protection. He did not resolve who might have access to the material and for what purpose. All these matters were live issues on Cherwell Creek’s application.
- [21]There is no indication his Honour intended the orders would operate until the final resolution of the proceedings. To the contrary, counsel for Cherwell Creek formulated the orders on the run at the end of the hearing when his Honour and both counsel anticipated Cherwell Creek’s application would be resolved either by agreement or by the Court.[10] His Honour’s confirmation that “[o]f course it’s only until further order” reinforces the transitory objective of the orders.[11]
- [22]Given the nature of the orders, I consider it unnecessary for BMA to establish additional facts or a change in circumstances before the Court can vary them or set them aside.
- [23]If I am wrong in that finding, I am satisfied what has transpired since the hearing constitutes a sufficient change in circumstances to enliven the Court’s discretion.
- [24]When Member Smith adjourned the hearing there were two applications on foot, BMA’s application for security for costs and Cherwell Creek’s application for leave to file affidavits, some subject to confidentiality orders. His Honour only heard from the parties about Cherwell Creek’s application and, as I have already observed, he did not determine it on the merits.
- [25]Subsequently, both applications were resolved without the Court having to determine either. On 2 September 2016 and 17 October 2016 I made orders by consent that disposed of both applications. On neither date did either party raise Member Smith’s orders.
- [26]His Honour anticipated the orders, made to protect one party’s position on an interim basis, would be revisited.[12] They impose restraints that go well beyond the effect of the orders requested by counsel for Cherwell Creek at the hearing. Specifically, they prevent disclosure of the information to any person other than those present in closed court. That is contrary to the proposed orders, which would have allowed BMA’s legal representatives to disclose the information to the respondents’ in-house counsel. Further, they prevent any person using the information in the affidavits for any purpose. That is fundamentally at odds with what counsel foreshadowed before Member Smith. As noted above, he said Cherwell Creek sought orders that would have allowed BMA’s legal representatives to use the information for the purpose of both the security for costs application and the trial.
- [27]The change in circumstances is that orders made for a transitory and limited purpose, and which went beyond the orders requested by Cherwell Creek, have been overtaken by the passage of events. Cherwell Creek’s application for confidentiality orders has been withdrawn. BMA’s application for security for costs has been resolved. The purpose for the orders being made has been superseded.
Is Cherwell Creek’s claim of legal professional privilege a reason not to set aside the orders?
- [28]Cherwell Creek argued there is no utility in setting aside the orders, because the information restricted by those orders is subject to legal professional privilege. The onus is on the person claiming privilege to establish it.[13]Ordinarily, the claimant must expose the facts from which the Court can make an informed decision as to whether the claim is supportable.[14] The only basis upon which Cherwell Creek has claimed privilege is that its lawyers prepared the affidavits in order to resist BMA’s application for security for costs. That is not in dispute.
- [29]However, BMA drew a valid distinction between the affidavits and the information they record. Although “it is natural to speak of legal professional privilege in terms of documents”[15] the privilege does not attach to the documents but to a communication, written or oral.[16] The affidavits record information that may or may not be privileged. It is appropriate, therefore, to focus on the information itself.
- [30]BMA said the information relates to: financing arrangements for the QCoal Group; future operations and financing of the QCoal Group; the financial position of Mr Wallin; and opinions as to financial circumstances of entities associated with Mr Wallin. Cherwell Creek did not dispute that summary.
- [31]BMA submitted the information is a record of commercial transactions, which took place prior to the affidavits being prepared. It also relied on the public nature of some of the information, which lacks the confidentiality essential to a claim for privilege.
- [32]There is no privilege for documents:
“which are the means of carrying out, or are evidence of, transactions which are not themselves the giving or receiving of advice or part of the conduct of actual or anticipated litigation.”[17]
- [33]Financing arrangements for the QCoal Group and the financial position of Mr Wallin are categories of information that seem transactional in nature. Perhaps Cherwell Creek might have been able to mount an argument about some information in the other categories of documents, but it did not do so.
- [34]In any case, if privilege did exist for any of the information, Cherwell Creek waived it by its conduct during the hearing on 3 August 2016.
- [35]The principles that apply are summarised in the Queensland Local Government Superannuation Board v Allen.[18] The test is objective. The focus is on the conduct of the privilege holder. The privilege holder will waive privilege if their conduct is inconsistent with maintaining it. The court must evaluate that conduct in the context and circumstances of the case, where necessary informed by considerations of fairness.[19]
- [36]Cherwell Creek submitted it took all possible steps to permit only limited and conditional access to the documents, and that its conduct was consistent with maintaining privilege. That submission contains two propositions. The former proposition is true; the latter is not.
- [37]From the outset, Cherwell Creek was concerned with maintaining confidentiality, not privilege. Although the two concepts are related, they are distinct.[20]
- [38]Cherwell Creek’s concern was with the confidentiality and commercial sensitivity of the information. Mr Boys recorded his instructions in his affidavit of 3 August 2016 that if the Court does not grant confidentiality orders in respect of the affidavits:
“[20] (a) I am instructed by Mr Wallin on behalf of the applicant that the Applicant will not seek to rely upon any of those confidential affidavits for the purpose of BMA’s further security for costs application filed 29 April 2016 due to the confidentiality and commercial sensitivity of the information contained in those affidavits.”[21]
(emphasis added)
- [39]Prior to the hearing, Cherwell Creek formulated proposed orders that would have prevented BMA’s lawyers from using the information for any purpose other than for the security for costs application. Putting to one side whether it might be possible to effect a limited waiver of privilege within a proceeding,[22] Cherwell Creek abandoned that restriction at the hearing. Instead, it asked for orders that would restrain BMA from using the confidential information “other than for the purpose of this proceeding”[23] Former counsel for Cherwell Creek made the effect of that formulation clear when he said:
“The restrictions we propose would allow the material to be used for the security for costs application and, if the other side thinks it’s appropriate to do so, to test Cherwell Creek’s financial capacity to conduct the mine at the substantive trial next year.”[24]
- [40]Member Smith discussed with counsel the best way to proceed and suggested that the he and the lawyers for BMA could read the affidavits in closed court.[25]
- [41]Counsel for BMA raised the very dilemma that now faces him in representing BMA. He observed that once he read the affidavits, he would have the knowledge of their contents, regardless of the fate of Cherwell Creek’s application. He said the information was relevant and he did not want to be constrained as to the use he could make of the material later on.[26]
- [42]Member Smith was careful to ensure counsel for Cherwell Creek considered what Mr Doyle said before proceeding.[27] Former counsel for Cherwell Creek was unconcerned about counsel for BMA having the knowledge and using the material in the proceeding. He reiterated Cherwell Creek’s concern was about unrestricted disclosure of confidential information. He said he might ask for his Honour to close the court if counsel for BMA was to cross-examine a witness on a confidential affidavit. He said the confidentiality regime “wouldn’t prevent that issue being explored at trial.”[28] It was after that exchange that Cherwell Creek provided the affidavits to Member Smith and BMA’s lawyers.
- [43]Disclosing the affidavits to the Court, and to its opponents, is inconsistent with maintaining privilege.[29] When it did so, it was not compelled to disclose the affidavits. Cherwell Creek knew BMA did not agree to be constrained from later using the information in the proceedings, even if the Court refused Cherwell Creek’s application for leave to file the affidavits. Nevertheless, Cherwell Creek voluntarily disclosed them to the Court in an attempt to deploy them against BMA in the litigation. At that point, by its conduct, Cherwell Creek waived any privilege in the documents.
- [44]It was Member Smith’s decision to return the affidavits to Cherwell Creek, which he announced when he expressed doubts about the confidentiality of “the bulk of the material in the affidavits”.[30] Again, the focus of the subsequent discussion with counsel was on confidentiality and the mechanics of disposing of the application. Cherwell Creek was to decide whether it wished to proceed with its application and, if so, for what orders. The parties were to attempt to resolve the matter by agreement. In the interim, Cherwell Creek asked for a “non-publication” order, which Member Smith made. Cherwell Creek made no claim of privilege. Its actions were consistent with asserting the commercial confidentiality of the information in the affidavits, but it was not consistent with maintaining any legal professional privilege that might have applied to the information.
- [45]Cherwell Creek has not persuaded me the orders should stand because it now asserts legal professional privilege. It has not established privilege in the information contained in the affidavits and, if there is any privilege, by its conduct, Cherwell Creek has waived it.
- [46]Before turning to the next topic, I will briefly refer to arguments about the transcript. Cherwell Creek questioned its relevance and admissibility. As to relevance, Cherwell Creek did not contest BMA’s assertion that the information in the affidavits is relevant. While it is only secondary evidence of the contents of the affidavits, if the Court removes the restriction on use of the information in the affidavits, it is difficult to see why the Court should retain the restriction on the transcript. Further, Cherwell Creek has not articulated a reason for retaining the restriction on those sections of the transcript that do not disclose information said to be confidential.
- [47]What use BMA might make of the transcript is a different question. Cherwell Creek argued the transcript was not admissible and that counsel for BMA could not ask a witness to comment on the evidence of another witness. It is not clear to me that this is what counsel for BMA intends to do. BMA might use the transcript in a number of ways, including to prepare to cross-examine a witness and to apply for non-party disclosure. Whether counsel can provide the transcript to a witness during evidence or whether the transcript is admissible are questions that may never arise. Removing the restriction on the transcript will not defeat any sound objection to its use during the trial.
Are BMA’s proposed orders appropriate?
- [48]Assuming the Court does set aside Member Smith’s orders, BMA proposed orders:
- To preserve the confidentiality of the information in the affidavits until the parties agree on what is and is not confidential or until the Court determines any dispute about that; and
- To provide limited access to the information agreed or determined to be confidential.
- [49]Cherwell Creek raised 3 issues with BMA’s proposed orders. Counsel are confident they will be able to settle the following issues by minor amendments to the orders:
- the scope of the restriction in proposed orders 3 & 7 which only prohibits disclosure to “any employee or contractor of the respondents”; and
- the description of the person who may assume the responsibilities of in-house counsel in proposed order 3(b).
- [50]However, counsel seek a ruling on the remaining issue, which is whether the Court should allow Mr Brett Garner access to the information.
- [51]Cherwell Creek said there is no evidence Mr Garner needs to provide instructions regarding the use of the information in the affidavits. That may be so, but it is usually a matter for a party to decide how they provide instructions to their lawyers. If another party wants the Court to restrict that choice, the onus is on it to justify that.
- [52]BMA provides instructions to its lawyers through both its legal and commercial units. Mr Garner is the person within the commercial unit who provides instructions.
- [53]It may be sufficient for BMA to take instructions from in-house counsel on whether the information is confidential. That is a relatively confined question. The use of the information in the proceedings is a different matter. This is complex, lengthy and expensive litigation involving multiple issues and dozens of expert witnesses. On BMA’s case, Cherwell Creek’s financial capacity is a key consideration.
- [54]Unless the risk of misuse of commercial information is too great, BMA should be able to bring a commercial as well as a legal perspective to bear in its instructions to its external lawyers.
- [55]Cherwell Creek raised some specific concerns that BMA has responded to by nominating a person who is not involved in making decisions of that nature. Mr Garner’s current title is Manager Approvals, Land & Tenements – Business Development. He is involved in project planning and co-ordinating the internal and expert teams who develop BMA’s coal mine portfolio in Central Queensland. He is not involved in setting prices for coal mined by any of the respondents or in their decisions relating to port and rail access.[31]
- [56]I would strengthen the proposed orders by requiring Mr Garner to give an undertaking and by making his authority conditional on his duties remaining as deposed to.
- [57]Counsel have asked for the opportunity to consider these reasons before submitting on the form of orders on the application. The application is listed for further hearing on a date to be fixed by the Court after consultation with the parties.
FY KINGHAM
PRESIDENT OF THE LAND COURT
Footnotes
[1] Goodman v Lorenzen [2000] QCA 11, [6].
[2] Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44, 46.
[3] Hall v Nominal Defendant (1966) 117 CLR 423, 440—441.
[4] Ex parte Edwards [1989] 1 Qd R 139, 142.
[5] Wilkshire and Coffey v Commonwealth of Australia (1976) 9 ALR 325, 330.
[6] T 1-11, lines 22 to 45.
[7] T 1-28, line 40.
[8] T 1-34, lines 29 to 45.
[9] T 1-47, lines 1 to 3.
[10] T 1-45, line 35 to 1-47, line 3.
[11] T 1-46, line 45; 1-47 lines 1 to 3.
[12] T 1-34, lines 29 to 45; 1-47, lines 1 to 3.
[13] Grant v Downs (1976) 135 CLR 674, 689.
[14] National Crime Authority v S (1991) FCR 203, 211.
[15] Commissioner of Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501, 525.
[16] Ibid; Mann v Carnell (1999) 201 CLR 1, [16].
[17] Baker v Campbell (1983) 153 CLR 52, 122—123.
[18] Queensland Local Government Superannuation Board v Allen [2016] QCA 325, [69].
[19] Mann v Carnell (1999) 201 CLR 1, [29].
[20] Ibid [119].
[21] Fifth affidavit of Toby Boys, sworn 3 August 2016.
[22] Goldberg v Ng (1995) 185 CLR 83, 96.
[23] T 1-10, lines 36 to 37.
[24] T 1-11, lines 37 to 40.
[25] T 1-22, lines 3 to 6.
[26] T 1-18, lines 5 to 14.
[27] T 1-18, line 30 to 1-21, line 11.
[28] T 1-19, lines 4 to 5; 1-21, lines 1 to 11.
[29] Australian Competition and Consumer Commission v Cadbury Schweppes Pty Ltd (2009) 174 FCR 547, [37].
[30] T 1-34, line 13 to 1-35, line 26.
[31] Second affidavit of Stephen Hurford, filed 16 August 2018, [3]—[4].