The substance of the working relationship defeated a written denial of agent relationship
A Federal Court ruling on April 10 confirmed that intra-group corporate structures cannot shield companies from discovery obligations over documents held by related entities.
In South32 Aluminium (RAA) Pty Ltd v Siemens Ltd [2026] FCA 399, Justice Derrington ordered Siemens Ltd to make further and better discovery of documents that employees of its Swedish-based related entity, Siemens Industrial Turbomachinery AB (SIT, now known as Siemens Energy AB), had created, finding those documents fell within Siemens's "control" under the Federal Court Rules 2011. The two companies' connection ran through their respective parent companies: Siemens Ltd's parent, Siemens AG, owned 10 percent of the shares in Siemens Energy AG, the parent of SIT.
The proceedings arose from the destruction of a steam turbine generator, Unit 6, at a power station in Worsley, Western Australia on 24 October 2015. The generator overheated during operation because its Programmable Logic Controller software lacked a critical piece of code, known as the "Software Flaw," that would have automatically triggered the Generator Circuit Breaker and prevented the overheating.
South32 alleged that Siemens, which contracted to provide commissioning services for Unit 6, engaged in misleading and deceptive conduct and acted negligently across three key events: the installation and commissioning of Unit 6 between about 2012 and 2013, a PLC software upgrade in May 2014, and a safety inspection in 2015. Siemens defended the claims on the basis that SIT actually carried out the relevant work, and that the SIT-generated documents sat outside its control and therefore outside its discovery obligations.
The court disagreed. Central to the dispute stood a Framework Agreement between Siemens and SIT, dated 1 April 2010, which provided for SIT to transfer personnel to Siemens to assist with its Australian projects. Clause 3 of that agreement expressly stated that SIT acted "solely as an agent on behalf of" Siemens for the purposes of providing those services.
Justice Derrington identified two separate agency relationships: one between Siemens and SIT, and another between Siemens and certain SIT employees that SIT transferred to Siemens under the agreement. Documents that an agent brought into existence in the course of an agency belonged to the principal, who could require the agent to deliver them up.
Siemens also argued that purchase orders issued after June 2014 contained a clause that negated any agency relationship. Justice Derrington rejected that argument, finding that despite the clause, the substance of the relationship between SIT employees and Siemens remained unchanged. SIT provided employees to Siemens to perform work Siemens had undertaken to deliver for South32, and Siemens authorised them to carry out that work on its behalf.
In the alternative, the court found that Siemens held an absolute contractual right under clause 21.3 of the post-June 2014 purchase order terms to inspect any "significant material" SIT employees produced in the course of their work. The court also noted that all intellectual property rights in documents SIT employees created vested in Siemens on creation, which further supported the conclusion that those employees acted as Siemens's agents.
The court ordered Siemens to produce the documents within 28 days. It also ordered a director of Siemens to file and serve an affidavit within 28 days deposing to the steps taken to locate discoverable documents, including the personnel whose email accounts were searched, any archives and document repositories searched, and the circumstances in which any email accounts had become unavailable.
Justice Derrington was pointed in his criticism of Siemens's conduct throughout the discovery process, observing that South32 had been forced to undertake the litigious equivalent of "pulling teeth" to secure compliance, and that the affidavit should include an explanation as to why the discovery process had been "so delinquent." Siemens was also ordered to pay South32's costs of the application.
