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

Litigation almost always involves the disclosure of more information than the parties would prefer. Corporate litigation in particular throws up issues of commercial sensitivity on a regular basis, particularly where the litigants are not only fighting in court but in the marketplace.

In a decision handed down in mid last year, the Supreme Court of Queensland outlined the test for determining when a court will impose a more onerous obligation than the implied undertaking in respect of confidential documents. The implied or 'Harman' undertaking is a substantive legal obligation not to use documents or information obtained in litigation for a purpose unrelated to the conduct of the proceeding in which it was obtained.

The case involved an application by the Tri-Star Group (Tri-Star) for production of documents and a cross-application by Australia Pacific LNG Pty Ltd (APLNG) for orders imposing a special protocol on the access to, and use of documents, that were to be produced by APLNG.

The background to the case is that Tri-Star had assigned certain petroleum tenements to APLNG under a Sale and Purchase Deed in 2002 (Sale and Purchase Deed). Tri-Star was advancing various claims under the Sale and Purchase Deed including that it had been underpaid royalties and that a reversion trigger had occurred.

The Test

After analysing the relevant case law including Hearne v Street (2008) 235 CLR 125, Justice Bond stated that a court may impose a more onerous obligation than the implied undertaking if it is persuaded that the case involves exceptional circumstances such that the implied obligation provides insufficient protection. If it is so persuaded, then the court will consider whether the course proposed will strike a fair balance between its confidentiality concerns and the needs of the other litigant to have access to the documents concerned.

Types of documents requiring protection

In this case two categories of documents were identified:

  • documents which APLNG claimed would, if disclosed, provide important market intelligence to other market participants, which could be used by competitors to APLNG's commercial disadvantage, and
  • documents which APLNG claimed would allow Tri-Star to draw inferences about the highest price at which, and the most onerous terms on which, APLNG would be willing to purchase gas which would place APLNG at a commercial disadvantage in circumstances where Tri-Star itself could now or in the future seek to compete or negotiate with APLNG.

Relevantly, the domestic gas markets and export LNG markets (in which both APLNG and Tri-Star operated) were not transparent and sale agreements were typically private bilateral agreements which meant that certain information, such as pricing methodology, was not generally known by other market participants.

Protections and Protocol

Based on the above, Justice Bond was satisfied that some further protection than the implied undertaking was justified. These protections included:

  • for the first category – representatives of Tri-Star could only have access to the documents provided they had first signed an express written undertaking as this would bring home to them the importance of the confidentiality of the relevant documents, and
  • for the second category – a protocol should be adopted which enforces the confidentiality of the documents (known as Fielder Gillespie orders). This protocol included:
    • that APLNG would produce a redacted form of these documents to a Tri-Star representative who had signed the express undertaking, and
    • that access to the unredacted versions of these documents would be restricted to Tri-Star's barristers and solicitors, their document management staff and in-house general counsel.

Take-away

This case assists parties who are concerned about disclosing documents which they consider contain confidential information to determine whether it is appropriate to apply to the court for orders imposing a special protocol. It is important to understand that there is a high threshold to satisfy a court that greater protection than the implied undertaking is required. Helpfully, the Confidentiality Protocol sought by APLNG is annexed to the judgment, and Justice Bond's conclusions on how it needed to be amended to strike a fair balance between the parties is set out.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.