Wilmar Sugar Pty Ltd v Burdekin District Cane Growers Ltd
[2017] QSC 3
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- Notable Unreported Decision
- Wilmar Sugar Pty Ltd v Burdekin District Cane Growers Ltd[2017] QSC 3
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Wilmar Sugar Pty Ltd v Burdekin District Cane Growers Ltd[2017] QSC 3
Wilmar Sugar Pty Ltd v Burdekin District Cane Growers Ltd[2017] QSC 3
SUPREME COURT OF QUEENSLAND
CITATION: | Wilmar Sugar P/L v Burdekin District Cane Growers Ltd [2017] QSC 3 |
PARTIES: | WILMAR SUGAR PTY LTD ACN 081 051 792 AS AGENT FOR PIONEER SUGAR MILLS PTY LTD, WILMAR SUGAR (KALAMIA) PTY LTD AND THE NAUGHTON SUGAR COMPANY PTY LTD (applicant) v BURDEKIN DISTRICT CANE GROWERS LIMITED AS BARGANING REPRESENTATIVE FOR A GROUP OF GROWERS ACN 168 732 269 (respondent) |
FILE NO/S: | BS547/17 |
DIVISION: | Trial Division |
PROCEEDING: | Application |
DELIVERED ON: | Thursday 2 February 2017 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 30 January 2017 |
JUDGE: | Jackson J |
ORDER: | The order of the court is that:
|
CATCHWORDS: | ARBITRATION – CONDUCT OF THE ARBITRATION PROCEEDINGS – GENERALLY – where the arbitrator made an order that confidential information may be disclosed – where the applicant applied for an order under s 27H of the Commercial Arbitration Act 2013 (Qld) to prohibit the disclosure of the confidential information – whether the public interest in preserving the confidentiality of arbitral proceedings is outweighed by the public interest in the regulation of particular industries under valid legislation |
COUNSEL: | P Franco QC and D Fuller for the applicant D Pyle for the respondent |
SOLICITORS: | Minter Ellison for the applicant Holding Redlich for the respondent |
PUBLIC REASONS
- Jackson J: The applicant applies for an order prohibiting the respondent from disclosing confidential information in relation to an arbitral proceeding.
- As explained later in more detail, the questions are whether in the circumstances of this particular case the public interest in preserving the confidentiality of the arbitral proceedings is not outweighed by other considerations that render it desirable in the public interest for the confidential information to be disclosed or the disclosure is more than is reasonable for that purpose.
- This proceeding is not an appeal from a decision of the arbitrator. However, in substance, the same question has been addressed by the arbitrator who made an order that the confidential information may be disclosed to two nominated recipients. Although there are other considerations, in the circumstances of this particular case, the determination involves weighing the public interest in preserving confidentiality and, as the arbitrator described it, the public interest “in the due regulation of particular industries under valid legislation (that) … favours certainty and stability in the applicable legislative regimes.”
A dispute and arbitration
- The applicant acts as agent for five companies, including three named in this proceeding, which between them own eight sugar cane mills in Queensland. The mills crush sugar cane and manufacture raw sugar. Growers or collectives of growers supply sugar cane to the mills.
- Four of the applicant’s eight mills are within the Burdekin District of Queensland. Three of them are known as Invicta, Pioneer and Kalamia. The respondent represents growers that supply sugar cane to those mills.
- Historically, the sugar industry in Queensland was highly regulated. From 1923 until approximately 2006 a “single desk” marketing system operated under the relevant legislation. Speaking generally, before 2006 raw sugar vested in Queensland Sugar Ltd (“QSL”). QSL marketed it to both domestic and export markets.
- Since the Sugar Industry Amendment Act 2005 (Qld), raw sugar no longer compulsorily vests in QSL. However, the majority of mill owners continue to supply most of their raw sugar for export to QSL.
- It is common ground as a matter of fact that at least most of the growers within the catchment of a particular mill are effectively limited to making a cane supply agreement with that mill, because of practical factors relating to harvesting and getting the harvested sugar cane to the mill for crushing.
- As a result of disputes that it is unnecessary to recount, the relevant legislation was amended by the Sugar Industry (Real Choice in Marketing) Amendment Act 2015 (Qld).
- Under the current legislation, s 31(1) of the Sugar Industry Act 1999 (Qld) provides that a grower may supply cane to a mill for a crushing session only if the grower has a supply contract with the mill owner for the season. In accordance with ss 32 and 33, a supply contract may be either an individual contract or a collective contract.
- Section 33A(1) provides, relevantly:
“(1)This section applies if –
- a grower is negotiating, or has attempted to negotiate, a supply contract (an intended supply contract) with a mill owner, whether the grower is acting on the growers own behalf or is in a group of growers that has appointed a bargaining representative to negotiate the contract on behalf of the group;
- …
- at the end of the negotiation period, the grower and mill owner dispute a proposed term of the intended supply contract.
- The grower and mill owner are taken to have made an agreement (the referral agreement) –
- to refer the dispute to arbitration;
- for the dispute to be arbitrated under the Commercial Arbitration Act 2013 subject to subsections (5) to (9).
- If the grower or mill owner refers a dispute about a proposed term of the intended supply contract to arbitration, the Commercial Arbitration Act 2013 applies to the arbitration subject to subsections (4) to (9).
…”
- None of subsections (4) to (9) is significant to the outcome of this case. However, two further provisions should be noted. First, the arbitrator may decide the dispute about the proposed term only by deciding the term: s 33A(5). Second, the outcome of the arbitral tribunal deciding each dispute about the terms of the intended supply contract is that the parties are taken to have made a supply contract on the terms agreed between them and the terms decided by the arbitral tribunal: s 33A(10).
- An important feature of the statutory scheme under these provisions is that against the requirement in s 31 that there must be a supply contract (sometimes also described as a cane supply agreement in the material), s 33A provides a dead-lock breaking mechanism if the parties are unable to reach agreement on the terms. Otherwise, absent agreement, a grower or growers are not entitled to have their sugar cane crushed at the mill relevant to their catchment and the mill owner has no certainty of supply from the grower or growers in the catchment.
- Under these provisions, it may be assumed that the applicant and the respondent have sought to negotiate an intended supply contract; the respondent has given the mill owners a notice requiring the mill owners to use all reasonable endeavours to negotiate a supply contract within a stated period; and at the end of that negotiation period they dispute a proposed term of the intended supply contract.
- Accordingly, if s 33A(2) operates according to its terms, they are taken to have made an agreement to refer the dispute to arbitration and the dispute is to be arbitrated under the Commercial Arbitration Act 2013 (Qld). Perhaps as a matter of clarification, s 33A(3) expressly applies the Commercial Arbitration Act 2013 (Qld) to the arbitration, subject to irrelevant exceptions.
- The applicant and the respondent have appointed Mr John Muir QC as arbitrator and he has accepted the appointment.
- On 16 January 2017, the arbitrator made an order pursuant to s 27G(1) of the Commercial Arbitration Act 2013 (Qld) that the respondent be allowed to disclose certain confidential information to two named individual recipients. One of them is a member of parliament of the Commonwealth of Australia. The other is a member of the Legislative Assembly of Queensland.
- The orders made by the arbitrator contain provision for the confidential information not to be disclosed for a period so that an application could be made to this court under s 27H(1) of the Commercial Arbitration Act 2013 (Qld) for an order prohibiting the respondent from disclosing the confidential information.
The scope of the confidential information
- Section 27H(1) provides:
“(1)The Court may make an order prohibiting a party from disclosing confidential information in relation to the arbitral proceedings if the Court is satisfied, in the circumstances of the particular case, that—
- the public interest in preserving the confidentiality of arbitral proceedings is not outweighed by other considerations that render it desirable in the public interest for the confidential information to be disclosed; and
- the disclosure is more than is reasonable for that purpose.”
- Section 2 defines “confidential information, in relation to arbitral proceedings” as follows:
“…information that relates to the arbitral proceedings or to an award made in those proceedings and includes the following—
- the statement of claim, statement of defence and all other pleadings, submissions, statements or other information supplied to the arbitral tribunal by a party;
- any information supplied by a party to another party in compliance with a direction of the arbitral tribunal;
- any evidence (whether documentary or otherwise) supplied to the arbitral tribunal;
- any notes made by the arbitral tribunal of oral evidence or submissions given before the arbitral tribunal;
- any transcript of oral evidence or submissions given before the arbitral tribunal;
- any rulings of the arbitral tribunal;
- any award of the arbitral tribunal.”
- There is no dispute between the parties that the arbitrator’s order and this application concern confidential information for the purpose of s 27H(1).
- However, the applicant has conducted this application on the footing that it would be permissible for the respondent to disclose the substance of the subject matter of the confidential information in this case provided it is done without any connection to the applicant or the arbitration.
- The prohibition against the disclosure of confidential information in relation to an arbitral proceeding is contained in s 27E(2) of the Commercial Arbitration Act 2013 (Qld). It provides that the parties must not disclose such confidential information unless the disclosure is allowed under s 27F or the disclosure is allowed under an order made by the arbitrator under s 27G and no order is in force under s 27H prohibiting that disclosure, or the disclosure is allowed under an order made under s 27I.
- One of the circumstances in which confidential information may be disclosed under s 27F(2) is with the consent of all parties to the arbitral proceedings.
- The applicant submits that it is open to a party to disclose to a non-party a subject matter that is not inherently confidential provided it does not also disclose any information about or relating to the proceedings. Alternatively, the applicant submits that it consents under s 27F(2) to that form of limited disclosure of the subject matter of the confidential information in the present case.
- In principle, I accept those submissions. However, I have come to the view that no order prohibiting disclosure of other confidential information that is allowed to be disclosed under the arbitrator’s order should be made.
Disclosure that is more than reasonable
- A peculiar feature of s 27H(1) is that as a matter of ordinary meaning there are two conditions required to be satisfied before the court may make an order prohibiting disclosure. The first is that the public interest in preserving confidentiality is not outweighed by other considerations that render it desirable in the public interest for the confidential information to be disclosed. The second is that the disclosure is more than is reasonable for that purpose.
- Since the conditions must be satisfied before an order for disclosure to be prohibited can be made, “the disclosure” referred to in paragraph (b) of ss 27H(1) must be a proposed disclosure.
- As well, paragraph (b) is concerned with a proposed disclosure that is more than is reasonable for “that purpose”. The purpose referred to must be the considerations that render it desirable in the public interest for the confidential information to be disclosed referred to in paragraph (a), having regard to the context.
- However, on that footing, if the court is satisfied under paragraph (a) that the public interest in preserving confidentiality of arbitral proceedings is not outweighed by other considerations in favour of the proposed disclosure, it is difficult to identify the purpose of an additional requirement that the proposed disclosure is more than is reasonable for the considerations that render it desirable in the public interest for the confidential information to be disclosed. If the public interest in preserving confidentiality of arbitral proceedings is not outweighed by other considerations, the court would conclude that disclosure should be prohibited without any need to consider the extent of the disclosure.
- The mischief to which paragraph (b) is directed appears to be that it is possible that the other considerations in favour of the disclosure might outweigh the public interest in preserving the confidentiality of arbitral proceedings for some confidential information but do not warrant disclosure of all the relevant confidential information that is proposed to be disclosed.
- The probability, in my view, is that there is a drafting mistake in s 27H(1). The two conditions for an order prohibiting disclosure should be read as alternative, not cumulative, conditions. Reading them that way gives a common sense operation to paragraph (b). Where the considerations that render it desirable in the public interest for the confidential information to be disclosed do outweigh the public interest in preserving confidentiality of arbitral proceedings, the court is to limit the disclosure to what is not more than is reasonable for that purpose.
- It is permissible to so read the section in order to avoid absurdity.[1]
- Accordingly, even if the court is not satisfied that the public interest in preserving confidentiality is not outweighed by other considerations that render it desirable in the public interest for the confidential information to be disclosed it may still make an order prohibiting disclosure or part of the proposed disclosure if the proposed disclosure is more than is reasonable.
- The applicant submits that the proposed disclosure is more than is reasonable, because it would be enough if the respondent were able to disclose the substance of subject matter contained in the confidential information. I have reached the conclusion that this way of putting the argument on the facts of this case does not require a separate analysis because I have come to the view that no order prohibiting disclosure of other confidential information that is to be disclosed under the arbitrator’s order should be made having regard to the other considerations that are in favour of that disclosure.
Good reason and weighing the public interests and considerations
- By its terms, s 27H(1) recognises opposing matters of public interest. On the one hand there is the public interest in maintaining the confidentiality of confidential information in relation the arbitration. On the other hand, there are the other considerations that render it desirable in the public interest that the confidential information be disclosed.
- Stripped of some detail, the applicant’s submission is that there must be “good reason” why the public interest in maintaining the confidentiality of confidential information in relation to the arbitration should be outweighed by the other considerations. However, in my view, that submission is not supported by the text of the section, or the context in which the section appears. The section simply requires the court to consider whether the public interest in preserving confidentiality is not outweighed by the relevant other considerations.
- It is unnecessary to introduce any other threshold, such as a requirement of “good reason”. I do not accept the applicant’s submission that the context of ss 27E, 27F, 27G and 27I supports reading s 27H(1) in that way, or that the wider context of the importance of confidentiality in arbitral proceedings in general requires that s 27G should be read in that way.
Public and private reasons for judgment
- It is impossible to be specific about the confidential information in these public reasons for judgment. If, for example, I were to identify the relevant subject matter, the circumstances under which the application is made, as recorded above, would arguably communicate the substance of the balance of the confidential information which the applicant seeks an order to preserve.
- In many cases of confidential information, the nature of the information can be described in a judgment at a level of generality that does not threaten to disclose the confidence by virtue of that reference. The circumstances of these reasons for judgment do not permit that course. It is impossible to deal with the substance of the arguments advanced by the parties as going to the public interest in preserving the confidentiality of the arbitral proceedings on the one hand or other considerations that render it desirable in the public interest for the confidential information to be disclosed on the other hand without identifying the substance of the confidential information.
- Although the parties did not address this consideration, I have not overlooked that an order of the court under s 27H that is made within the limits of the authority of the court is “final”: s 27H(5). That might prohibit any appeal from any order I make on this application. Accordingly, if the order were to dismiss the application it may not be critical to preserve the confidential information from disclosure in these reasons for judgment. However, the order of the arbitrator only allows disclosure to two named individuals. They will not be bound by any obligation of confidence under s 27E(2), but it will be up to them whether they make any further disclosure.
- Accordingly, in my view, it is necessary for a part of these reasons to be given confidentially to the parties but not published in open court. I have decided to separate these reasons into public and confidential parts in accordance with the discussion of relevant principle in David Syme & Co Ltd v General Motors-Holden’s Ltd[2] and J v L & A Services Pty Ltd (No 2).[3]
Conclusion
- In the first place I agree with the arbitrator’s reasons for deciding that disclosure of the alleged confidential information should be allowed under s 27G of the Commercial Arbitration Act 2013 (Qld).
- While those reasons should not be made public either, because that would disclose the confidential information, they are enough to explain why no order prohibiting disclosure should be made under s 27H, although I have added some additional points in the confidential part of these reasons.
- For those reasons, in my view, the application must be dismissed.