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Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd (No 18) QLC 48
LAND COURT OF QUEENSLAND
Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors (No 18)  QLC 48
Cherwell Creek Coal Pty Ltd
(ACN 063 763 002)
BHP Queensland Coal Investments Pty Ltd
(ACN 063 763 002)
QCT Resources Pty Ltd
(ACN 010 808 705)
BHP Coal Pty Ltd
(ACN 010 595 721)
Mitsubishi Development Pty Ltd
(ACN 009 779 873)
QCT Investments Pty Ltd
(ACN 010 487 831)
Umal Consolidated Pty Ltd
(ACN 000 767 386)
QCT Mining Pty Ltd
(ACN 010 487 840)
Applications by the respondents to set aside orders made on 3 August 2016; for further disclosure by the applicant and for non-party disclosure
14 December 2018
15, 16, 20 & 26 November 2018
Regarding the application made on 25 June 2018 to set aside orders made on 3 August 2016, I make the following orders:
Regarding the amended application filed on 3 October 2018 for further disclosure by the applicant, I make the following orders:
not be disclosed by the Respondents, their agents or representatives to any person other than:
not be disclosed by the respondents, their agents or representatives to any person other than:
PROCEDURE – STATE AND TERRITORY COURTS – DISCLOSURE – where a non-publication order was set aside subject to a confidentiality regime – where the parties did not agree on whether certain documents were confidential and/or commercially sensitive – where the court determined what documents should be subject to the confidentiality regime
PROCEDURE – STATE AND TERRITORY COURTS – DISCLOSURE – where a party disclosed documents pursuant to a court order but redacted parts of those documents – whether the documents should be provided in an un-redacted form – where the parties agreed to a confidentiality regime – where the parties did not agree on whether certain documents were confidential and/or commercially sensitive – where the court determined what documents should be subject to the confidentiality regime
PROCEDURE – STATE AND TERRITORY COURTS – COSTS – where the respondents’ application for disclosure was largely successful – whether costs should follow the event
Land Court Act 2000, s 34
Bowen v Alsanto Nominees Pty Ltd  WASCA 39, cited
Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors (No 13)  QLC 25, considered
Ex parte Fielder Gillespie Limited  2 Qd R 339, cited
Harman v Secretary of State for Home Department  1 AC 280, cited
Hearne v Street (2008) 235 CLR 125, cited
J v L. & A. Services Pty Ltd (No 2)  2 Qd R 10, cited
Mobil Oil Australia Ltd v Guina Developments Pty Ltd  2 VR 34, cited
Moreton Bay Regional Council v Mekpine Pty Ltd & Anor (No. 2) (2014) 35 QLCR 273, cited
Oshlack v Richmond River Council (1989) 193 CLR 72, cited
Tri-Star Petroleum Company v Australia Pacific LNG Pty Ltd  QSC 136, cited
G Gibson QC, with J Chapple and N Loos (instructed by Holding Redlich Lawyers) for the applicant
S Doyle QC, with A Stumer and F Lubett (instructed by Allens) for the respondents
- The parties do not agree about the confidentiality or commercial sensitivity of certain documents provided or disclosed by Cherwell Creek Coal Pty Ltd, or about whether the Court should make orders restricting the access of the respondents (BMA) and others to the documents, or parts of them.
- The issues between the parties have arisen in two contexts. Firstly, the parties do not agree about orders restricting publication of information provided by Cherwell Creek in resisting BMA’s 2016 application that Cherwell Creek provide further security for costs. Secondly, Cherwell Creek has redacted documents recently disclosed to BMA, on the basis that the redacted material is confidential and commercially sensitive.
- In brief, Cherwell Creek says both the 2016 information and the redacted information is commercially sensitive and confidential, and BMA or another trade rival could use it to obtain a commercial advantage. BMA disputes the confidentiality and/or the commercial sensitivity of the 2016 information. In any case, it says the implied undertaking is sufficient to protect Cherwell Creek. For the documents recently disclosed in a redacted form, BMA says they should be provided in full and agrees that some of them should be subject to the same confidentiality regime as applies to the 2016 information.
- There are other matters outstanding, including costs of various hearings, which the Court must also address. I will address the issues under the following headings:
- The information provided in 2016;
- The information redacted from documents disclosed in 2018;
- The costs of BMA’s application for further disclosure; and
- The costs of the hearings on 20 & 26 November about confidentiality.
- The legal principles about restricting the use of and access to information disclosed during a proceeding are not in dispute.
- A party may only use information compulsorily disclosed to it for the purpose for which it was disclosed, unless that party has the court’s leave or the information is admitted into evidence. Although an obligation, this is referred to as the ‘implied undertaking’.
- The Court may impose restrictions on access to disclosed documents in an exceptional case, for example if the documents are confidential and commercially sensitive and the opposing party is a trade rival.
- In balancing the needs of a party and the concerns of a trade rival, the Court can mould orders that draw a distinction between a party, its officers, its legal advisers and experts.
The information provided in 2016
- Cherwell Creek provided the 2016 information by way of affidavits sworn by its solicitor, Mr Boys, and its accountant, Mr Whimp, in response to BMA’s application that Cherwell Creek provide further security for costs. At a hearing on 3 August 2016, Cherwell Creek sought to tender the affidavits on a confidential basis. Both counsel referred to some of the information in the affidavits during the hearing before Member Smith.
- At the end of the hearing, his Honour made an order preventing publication of or access to both the affidavits and the transcript. Earlier this year, I set aside that order.
- To the extent the information is confidential and commercially sensitive, BMA agreed to orders limiting access to BMA’s external lawyers and support staff and 2 named employees. I made interim orders prohibiting publication of any of the 2016 information, until the parties agreed or the Court determined any dispute about its confidentiality and commercial sensitivity.
- Prior to the hearing, Cherwell Creek identified 50 passages for which it sought protection. They are set out in a table annexed to BMA’s confidential submissions of 17 October 2018. Of those 50 passages, or items, Cherwell Creek no longer seeks to protect items 2, 4, 23, 26, 27 & 33.
- BMA now consents to the confidentiality regime applying to information about the personal income tax position of Mr Wallin, the sole Director of Cherwell Creek (item 29).
- Item 30 contains some information that is not confidential but provides publicly available information about real property owned by Mr Wallin.
- What remains in dispute falls into two categories.
- The first category is items 7, 9, 10, 11, 12, 13, 18 & 35. They relate to the operating position in 2016 of three mines: the Sonoma, Jax and Cows. Two of the items (18 & 35) are passages in affidavits of Toby Boys and Paul Whimp. The other items are passages of transcript that are derivative of the affidavits. Although the transcript references are in broad terms, it makes sense for the decision about them to follow from the decision about the affidavits.
- BMA says the information is neither confidential nor commercially sensitive. It is consistent with statements made in a 2016 report published by Wood Mackenzie about the Sonoma, Jax and Cows mines. The Wood Mackenzie report is a business analytic report, which is available for a fee.
- One difference is that the Wood Mackenzie report disclaims the accuracy and completeness of the information. It states:
“Wood Mackenzie’s products do not provide a comprehensive analysis of the financial position or prospects of any company or entity and nothing in any such product should be taken as a comment regarding the value of the securities of any entity.”
- A reader may take a different view of a sworn statement by the accountant or lawyer for the QCoal group of companies. Where the authors state, as a fact, what the Woods Mackenzie report only asserts without attribution to the companies operating the mines, I accept the information is confidential.
- Nevertheless, I consider the information is not sufficiently valuable commercially to warrant special protection. The information is about the operating position of three mines at one point in time. It is now dated. The report does not include source material. Nor do the affidavits. The information in both is at a high level of generality. Its commercial value appears to be very limited.
- The second category of documents includes items 1, 3, 5, 6, 8, 11, 14, 15 to 22, 24, 25, 28, 30, 31, 32, 34, 36 to 50. Mr Boys deposed to all of that information as being confidential. In broad terms, the items relate to the financial circumstances of the QCoal group of companies in 2015 and 2016.
- BMA argued the confidentiality of the information in items 1, 3, 15, 16 and 22 was lost because of statements made by its counsel in open court, and because of an inference that it says arises from statements made by Mr Boys in non-confidential affidavits. The inference is 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.
- Although the Court was open when the counsel made those statements, Member Smith subsequently imposed a non-publication order on the transcript as a whole.
- As to the inference drawn by BMA, it relies on two non-confidential affidavits sworn on 22 July 2016 and 3 August 2016. Read together, I accept the inference BMA relies upon does arise. For that reason, items 1, 3, 16 and 22, which merely state that inference, are not confidential.
- That does not mean there is a loss of confidentiality in all the items claimed. The remaining items refer to or include details of and the reasons for the financial position of Mr Wallin and the QCoal companies. Those were not in the public domain.
- Turning to commercial sensitivity, Cherwell Creek submitted that the disclosure of information about the financial position of the QCoal group of companies as at mid-2016 could cause detriment to the operations of the companies. BMA argued this was a matter of reputation only, involved merely historical information and could not be commercially sensitive some two and a half years later, if it ever was.
- It is not only a question of reputation. Cherwell Creek led uncontested evidence about the highly competitive and volatile nature of the market for coal and of BMA’s dominant position in that market. QCoal companies compete with BMA in the export market for coking coal. 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.
- 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.
- The process of disclosure involves a serious invasion of a litigant’s privacy and confidentiality and it “should not be allowed to place upon the litigant any harsher or more oppressive burden than is strictly required for the purpose of securing that justice is done.”
- BMA will not be prejudiced in its preparation for trial if this category of information is subject to the confidentiality regime.
- Accordingly, the confidentiality regime will apply to items 5, 6, 8, 14, 15, 17, 19, 20, 21, 24, 25, 28, 29, 30 (except for any publicly available information), 31, 32, 34, 36 to 50 and PAW-3 (as identified in the table annexed to BMA’s confidential submissions dated 17 October 2018).
- In conclusion on this aspect of these reasons, during the hearing on 20 November, Mr Doyle QC said BMA had never agreed that any part of the hearing would be held in closed court. The Court may make an order preventing publication of proceedings (or evidence led during the proceedings), but should not do so merely to avoid loss of privacy, embarrassment, distress, financial harm, or “collateral disadvantage” to a party or witness. Order 1 of 20 September 2018 applies to the information the Court determines to be subject of the confidentiality regime pursuant to order 7. Order 1 was agreed to by the parties, and, by its terms, would appear to apply to the hearing as well.
The information redacted from documents disclosed in 2018
- On 7 November 2018, I ordered Cherwell Creek to disclose certain documents. Pursuant to that order, Cherwell Creek disclosed numerous documents, some of which it provided in a redacted form. BMA seeks some of the redacted information. The parties agreed to certain disclosed documents being subject to the same confidentiality regime as imposed for the 2016 information. BMA submitted some of the redacted information could also be subject to that regime.
- Using the categories of documents identified by BMA in its application for further disclosure, there are two categories in dispute: category 3 and category 27. Cherwell Creek have provided both categories of information in a redacted form. BMA seeks un-redacted information, but agrees the category 27 information should be included in the confidentiality regime.
Category 3 – Exploration Permits (EPCs) and Mineral Development Licence (MDL)
- Category 3 includes six EPCs and one MDL referred to in paragraph 100 of Mr Wallin’s summary of evidence. Cherwell Creek has provided the EPCs and MDL as granted, but has redacted any subsequent endorsement of those authorities.
- Once granted, the term of an authority may be renewed, or there may be a change of holder, or in the area of the authority or in its conditions. Each of these matters is recorded in the register maintained by the Department of Natural Resources Mines and Energy and is endorsed on the authority. Throughout renewals and endorsements, it is the same authority. On its face, there is no temporal limitation in my order.
- The question now raised by Cherwell Creek is whether the authority as granted or as endorsed from time to time is relevant. It did not raise that point when I heard BMA’s application. Had it done so, I would have ordered disclosure of the EPCs and MDL, as endorsed.
- That is consistent with my rationale for requiring disclosure of the authorities. Mr Wallin drew on his experience of developing the mines, not just in securing the grant of tenure. That brings in changes to the scope of the relevant authority over time. At  of my reasons, I observed that Mr Wallin had marshalled all of his experience in developing mines in support of Cherwell Creek’s allegations that it could and would have commercialised the resource.
- Cherwell Creek must provide the documents in an un-redacted form.
Category 27 – Take or pay elements of railway agreements
- Category 27 involves the take or pay elements of four rail agreements for the Sonoma and Drake mines referred to in paragraph 142 of Mr Wallin’s summary of evidence.
- Cherwell Creek has provided the agreements in a format that redacts all clauses except the take-or-pay clauses and the deferral of those obligations. Many of the redactions are not in dispute. The parties have referred to those that are in dispute as “the price sensitive material”. BMA says the price sensitive information falls within the terms of my order because it relates to the take or pay element of the agreements.
- In effect, Cherwell Creek sought to argue the price sensitive material was so commercially sensitive that it should not have to disclose it at all. However, Cherwell Creek did not make that argument when I heard BMA’s application and I have already ordered Cherwell Creek to disclose the information.
- During the hearing, counsel for Cherwell Creek took me through the clauses disclosed. It seems to me to be impossible to understand them without access to the price sensitive material.
- 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.
- BMA accepts that is so. It has agreed to the category 27 information being included in the proposed confidentiality regime. This gives further protection than is provided by the implied undertaking. The question is whether any further protection is called for.
- The confidentiality regime excludes all but two officers of BMA: an in-house counsel and Mr Garner, who does not have a role in price setting.
- 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.
- 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.
- 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 must provide the category 27 information, including the price sensitive material. The category 27 information will be subject to the proposed confidentiality regime, modified to exclude in-house counsel and Mr Garner.
Costs of BMA’s application for further disclosure
- The parties made written submissions about the costs of BMA’s application for further disclosure by Cherwell Creek.
- Cherwell Creek argued a costs order should reflect the justice of the situation. As a statement of principle, I accept that is so.
- Cherwell Creek analysed the parties’ relative success by reference to the categories of documents sought by BMA. BMA wholly succeeded on more categories than Cherwell Creek, but was not so dominant that Cherwell Creek should bear all the costs. It submitted for a partial costs order in BMA’s favour.
- That might be a reasonable measure if the relevance of each category of document was the only issue. However, there were other matters in issue, on which BMA succeeded, including:
- whether the Court could (and should) order Cherwell Creek to disclose documents referred to in Mr Wallin’s summary of evidence; and
- whether the Court should make a sabre order, in case all the documents to be disclosed were not in Cherwell Creek’s possession or control.
- Further, Cherwell Creek resisted disclosure because it said many of the documents were not in its possession or control. In a strict legal sense that may be true. However, Mr Wallin’s affidavit of 14 November 2018, filed in compliance with the sabre order, demonstrates the documents held by Cherwell Creek and other QCoal companies are held in common repositories and Mr Wallin was able to direct his staff to search these repositories.
- A court should be wary of adopting an artificial approach to the question of costs. The courts risk adding uncertainty and complexity to the outcome of litigation if they adopt a general practice of analysing which party was successful on each issue.
- The event in question was an application for further disclosure. On any analysis, BMA was largely successful in that application. Costs should follow the event.
Costs of the hearings on 20 & 26 November about confidentiality
- Neither party asked for the opportunity to make submissions about the costs of the hearings on 20 and 26 November regarding the confidentiality of the 2016 material and the information redacted by Cherwell Creek when it made further disclosure.
- The parties largely agreed on the form of a confidentiality regime. The remaining issue was which documents should be subject to the regime. Before both hearings, the parties attempted to reach agreement about that and made some progress. The parties had mixed success in their submissions about particular documents. The costs of the hearings will be costs in the cause.
- These reasons deal with issues relating to the confidentiality of documents and the costs of hearings on 20 and 26 November arising from two applications: BMA’s application to set aside orders made in 2016, filed on 25 June 2018, and BMA’s application for further disclosure by Cherwell Creek, filed on 3 October 2018.
- Finally, BMA filed numerous applications for non-party disclosure against QCoal companies on 19 October 2018. I heard the applications on 15 November and gave oral reasons, including about costs, on 16 November 2018. I deferred final orders on those applications pending the hearing on 26 November 2018 regarding the confidentiality regime for those documents.
- I request BMA to:
- confer with the representatives of the non-party respondents about orders to give effect to my reasons of 16 November 2018, and in light of this decision; and
- by 5pm on 18 December 2018, provide my associate with proposed draft orders on those applications, noting any disagreement about their terms.
- I will then make final orders on the applications for non-party disclosure.
- Regarding the application made on 25 June 2018 to set aside orders made on 3 August 2016, I make the following orders:
- The confidentiality regime established by order 7 made on 20 September 2018 will apply to items 5, 6, 8, 14, 15, 17, 19, 20, 21, 24, 25, 28, 29, 30 (except for any publicly available information), 31, 32, 34, 36 to 50 and PAW-3 (as identified in the table annexed to the respondents’ confidential submissions dated 17 October 2018).
- The costs of the hearing on 20 November 2018 are costs in the cause.
- Regarding the amended application filed on 3 October 2018 for further disclosure by the applicant, I make the following orders:
- The applicant must provide the Explorations Permits and Mineral Development Licence requested in category 3 (as described in the respondent’s Amended General Application filed on 3 October 2018) in an unredacted form.
- 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:
- CCC.496611; and
not be disclosed by the Respondents, their agents or representatives to any person other than:
- (a)any solicitor or barrister acting in that capacity acting on behalf of the respondents in this proceeding;
- (b)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;
- (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;
- (e)any other person as determined by the Court or as agreed by the applicant.
- The applicant must provide the information requested in category 27 (as described in the respondent’s Amended General Application filed on 3 October 2018) in an unredacted form.
- 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):
not be disclosed by the respondents, their agents or representatives to any person other than:
- (c)any other person as determined by the Court or as agreed by the applicant.
- The applicant must pay the respondents’ costs of the amended general application filed on 3 October 2018, save that the costs of the hearing on 26 November 2018 are costs in the cause.
PRESIDENT OF THE LAND COURT
Hearne v Street (2008) 235 CLR 125, .
 E.g. Ex parte Fielder Gillespie Limited  2 Qd R 339; Mobil Oil Australia Ltd v Guina Developments Pty Ltd  2 VR 34.
Mobil Oil Australia Ltd v Guina Developments Pty Ltd  2 VR 34, 38.
 Confidential affidavit of Toby Boys filed 26 July 2016; confidential affidavit of Toby Boys sworn 3 August 2016; confidential affidavit of Paul Whimp sworn 22 July 2016.
 Restricted Access Transcript 3 August 2016.
 Orders made on 20 September 2018, for reasons given in Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd & Ors (No 13)  QLC 25.
 Affidavit of Stephen Hurford filed 26 October 2018,  and ex SJH-29.
 Affidavit of Stephen Hurford filed 26 October 2018,  and ex SJH-29, 8.
 Cf Tri-Star Petroleum Company v Australia Pacific LNG Pty Ltd  QSC 136.
 BMA Submissions dated 16 November 2018, -.
 There is a confidential affidavit sworn by Mr Boys on 3 August 2016. However, it was subject to the order of 3 August 2016 and is now subject to the order of 20 September 2018.
Harman v Secretary of State for Home Department  1 AC 280, 308.
J v L. & A. Services Pty Ltd (No 2)  2 Qd R 10, 45.
 Land Court Act 2000, s 34.
Oshlack v Richmond River Council (1989) 193 CLR 72, 81.
Moreton Bay Regional Council v Mekpine Pty Ltd & Anor (No. 2) (2014) 35 QLCR 273, .
Bowen v Alsanto Nominees Pty Ltd  WASCA 39, -.
- Published Case Name:
Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd, QCT Resources Pty Ltd, BHP Coal Pty Ltd, Mitsubishi Development Pty Ltd, QCT Investments Pty Ltd, Umal Consolidated Pty Ltd and QCT Mining Pty Ltd (No 18)
- Shortened Case Name:
Cherwell Creek Coal Pty Ltd v BHP Queensland Coal Investments Pty Ltd (No 18)
 QLC 48
14 Dec 2018
|Event||Citation or File||Date||Notes|
|Primary Judgment|| QLC 40||30 Oct 2018||Respondents' application for further disclosure granted: Kingham P.|
|Primary Judgment||MRA1332-08 (No Citation)||26 Nov 2018||Ruling that certain affidavit paragraphs relied upon by the applicant were inadmissible: Kingham P.|
|Primary Judgment|| QLC 48||14 Dec 2018||Applications 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|| QLAC 5||25 Oct 2019||In applicant's appeal LAC006-18: (appeal from  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  QLC 48): appeal dismissed; in respondents' appeal LAC002-19 (in respect of confidentiality regime from  QLC 48): appeal allowed with consequential directions: Mullins J with Members Cochrane and Isdale.|
|QCA Interlocutory Judgment|| QCA 276||02 Dec 2019||Application for a stay of  QLAC 5 granted: Fraser JA.|
|Notice of Appeal Filed||File Number: Appeal 12371/19||08 Nov 2019||-|
|Appeal Discontinued (QCA)||File Number: Appeal 12371/19||27 Feb 2020||Determined on the papers (by consent): leave to appeal granted; specific orders for disclosure made in  QLAC 5 set aside otherwise appeal dismissed: Sofronoff P.|