Casey v 90 East (Asia Pacific) Pty Ltd [2001] ACTSC 123 (14 December 2001)

Last Updated: 11 June 2002

ANNE CASEY v 90 EAST (ASIA PACIFIC) PTY LTD [2001] ACTSC 123 (14 December 2001)

CATCHWORDS

PRACTICE & PROCEDURE - discovery - claim of commercial confidence - need for confidentiality agreement - duty of parties when discovery ordered - implied undertaking as to discovered documents.

Harman v Secretary of State for the Home Department, [1983] 1 AC 280

Holpitt Pty Ltd v Varimu Pty Ltd [1991] FCA 269; (1991) 29 FCR 576

Brearley v Whitcombe [1995] ACTSC 111

Centurian Roller Shutters Pty Ltd v Automatic Technology (Australia) Pty Ltd [1999] FCT 792

Ex parte Fielder Gillespie Ltd [1984] 2 Qd.R. 339

Magellan Petroleum Ltd v Sagasco Amadeus Pty Ltd (1993) 25 IPR 455

Church of Scientology v Department of Health and Social Security [1979] 1 WLR 723

No. SC 338 of 2001

Coram: Master T Connolly

Supreme Court of the ACT

Date: 14 December 2001

IN THE SUPREME COURT OF THE )

) No. SC 338 of 2001

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: ANNE CASEY

Plaintiff

AND: 90 EAST (ASIA PACIFIC) PTY LTD

Defendant

ORDER

Coram: Master T Connolly

Date: 14 December 2001

Place: Canberra

THE COURT ORDERS THAT:

1. The defendant produce for inspection and copying by the plaintiff at a date and time as determined by the court all documents listed in Schedule 1 of the Supplementary Affidavit as to Documents filed by the defendant on 29 October 2001.

2. The defendant pay the plaintiff's costs of this application.

1. This is an application by notice of motion that the defendant produce for inspection and copying by the plaintiff certain documents listed in the Supplementary Affidavit as to Documents filed by the defendant in these proceedings on 29 October 2001. It was common ground that the documents were properly discoverable, and were not the subject of any claim for privilege. The defendant had advised the plaintiff's solicitor that they would be prepared to allow inspection and copying of the documents on the condition that the plaintiff's solicitor sign a confidentiality agreement in respect of the documents. A similar agreement had been signed by the plaintiff's solicitor in respect of an earlier round of discovery in these proceedings. The issue before me in this application was whether such an agreement was appropriate, or whether the normal orders for discovery should be made.

2. The form of the confidentiality agreement was attached to the affidavits filed by the solicitors for the plaintiff and the defendant. The effect of the confidentiality agreement is, it seems to me, that the information will not be divulged to any person "for any purpose other than the conduct of these proceedings" (clauses 1 and 2). This is, of course, the implied undertaking that is given by any party seeking discovery. The law is stated in Civil Procedure ACT at [9650.15] as follows:

"There is an implied undertaking to the court by the parties and their legal advisers that documents obtained through the discovery process will be used only for the purposes of the case and no other purpose. Holpitt Pty Ltd v Varimu Pty Ltd [1991] FCA 269; (1991) 29 FCR 576, Harman v Secretary of State for the Home Department [1983] 1 AC 280, Crest Homes Plc v Marks [1987] AC 829."

3. The significance of this implied undertaking is well illustrated by the facts in Harman v Secretary of State for the Home Department, where the appellant was a solicitor who was acting for a plaintiff in a claim against the home office in respect of prison conditions. The solicitor obtained certain documents by discovery, and after the trial in the action, allowed a journalist to access the documents for the purposes of writing a feature story. Upon a complaint by the prison authorities, the solicitor was dealt with for contempt and the House of Lords dismissed the appeal. Lord Diplock stated that the law is that:

"An order for production of documents to a solicitor on behalf of a party to civil litigation is made upon the implied undertaking given by the solicitor personally to the court (of which he is an officer) that he himself will not use or allow the documents or copies of them to be used for any collateral or ulterior purpose of his own, his client or anyone else; and any breach of that implied undertaking is a contempt of court by the solicitor himself." (at 304)

4. The reason for the rule was also laid down with admirable clarity by His Lordship when he said,

"The use of discovery involves an inroad, in the interests of achieving justice, upon the right of the individual to keep his own documents to himself, it is an inroad that calls for safeguards against abuse, and these the English legal system provides, in its own distinctive fashion, through its rules about abuse of process and contempt of court."(at 300)

5. I have no doubt that this represents the law in Australia, and so much was made clear by Burchett J in Holpitt Pty Ltd v Varimu Pty Ltd [1991] FCA 269; (1991) 29 FCR 576 at 577.

6. Counsel for the defendant acknowledged that the confidentiality agreement, in seeking to impose an obligation on the plaintiff's solicitor to only use the discovered documents for the purposes of this litigation did not go beyond the common law obligation. But, he argued, the use of a confidentiality agreement helps to clarify in the mind of the other party, their common law obligations.

7. It seems to me that, where there is a clear obligation under the common law, there is no need for a confidentiality agreement. Rather than clarifying the obligation, it seems to me that the widespread use of confidentiality agreements as a precondition to complying with an obligation to make discovery of documents in ordinary civil litigation, could give rise to an undesirable misapprehension that the obligation to use discovered documents only for the purposes of the litigation is based on the agreement and not on the common law, and could lead to the dangerous misapprehension that, absent an express confidentiality agreement, no such obligation exists.

8. The substantive action is in the nature of an action for breach of an employment contract. The plaintiff, the former employee, brings action against her former employer in relation to the dismissal. The material sought to be discovered goes essentially, I was told, to the business affairs of the defendant. It contains, according to the affidavit of Mr Will, solicitor for the defendant, information going to potential investors, expenditure and revenue details of the defendant company, salary details of employees, client lists and profit margins. While he asserts that it is his belief that this information would be of commercial interest and benefit to commercial competitors of the defendant, the plaintiff is not a commercial competitor, but a former employee whose role in the company, according to the pleadings, was as a technical writer, which, I was told, involved preparation of manuals and the like. The defendant company is in the information technology field, but the plaintiff is, I am told, not a computer programmer or technical expert, but rather a person whose skills lie in putting technical information into plain English.

9. I am not satisfied, on the material before me, that there is anything unusual in the nature of the documents to be discovered that requires any additional protection beyond the very powerful common law implied undertaking that discovered documents are only to be used for the purposes of litigation. Additional requirements as to confidentiality can, of course, be made in the Court's discretion and the defendant referred me to a number of such instances. However, it seems to me that these all involved situations where there was a particular sensitivity or reason for an obligation going beyond the common law.

10. In Brearley v Whitcombe [1995] ACTSC 111, Master Hogan made a consent order with additional confidentiality provisions in an action between a real estate salesman and a former partner. The parties were now in commercial competition, and it seems to me that this explains the need for additional protection. Similarly, a confidentiality order in relation to client lists was made by French J in the Federal Court in Centurian Roller Shutters Pty Ltd v Automatic Technology (Australia) Pty Ltd [1999] FCT 792 in circumstances where his Honour was satisfied (at para 11) that the parties were commercial competitors. A confidentiality order in relation to inspection was made by McPherson J in the Supreme Court of Queensland in Ex parte Fielder Gillespie Ltd [1984] 2 Qd.R. 339 in proceedings involving revocation of a petty patent where the discoverable material went to the nature of an alleged invention and the parties were commercial rivals.

11. In Magellan Petroleum Ltd v Sagasco Amadeus Pty Ltd (1993) 25 IPR 455 White J in the Supreme Court of Queensland said that:

"Restricted inspection may be imposed to prevent abuse of the process where there is a risk of disclosure being used for a collateral purpose. That has most readily been used as a means of protecting commercially sensitive material such as trade secrets." (at 457).

This statement, with respect, seems to imply that it is for the party seeking the restriction on inspection to make out the case for the additional restriction. This much was made clear by Templeman LJ in Church of Scientology v Department of Health and Social Security [1979] 1 WLR 723 where his Lordship said at 746:

"A strong case must be made out for the court to impose restrictions, and the court will endeavour to ensure that the litigants are not prejudiced by the restrictions in the reasonable prosecution of their claims."

12. I am not satisfied that the defendant has made out the special circumstances necessary for anything other than the usual orders in relation to discovery. The case is not one between commercial rivals involving aspects of intellectual property. True it is that the type of relevant discoverable material in an employment dispute claim will contain material that is "confidential", but the same is true in nearly every case. Personal injuries cases will involve discovery of the plaintiffs' medical records and taxation records, contract disputes will involve discovery of financial or taxation records, or sales figures. All discovered material is inevitably, as Lord Diplock recognised in Harman's case, "an inroad upon the right of the individual to keep his own documents to himself", but it is an inroad made in the interests of achieving justice. The inroad has created the safeguard of the implied undertaking, and the sanction for a breach of this implied undertaking is a severe one, as was demonstrated by the facts of Harman, where the solicitor was dealt with for contempt of court.

13. It seems to me that it would be a most undesirable practice, and one that would inevitably lead to additional complexity and expense in the conduct of litigation, if parties seek to impose private confidentiality agreements into the ordinary process of discovery. While the real effect of the proposed confidentiality agreement in this matter did no more, it seems to me, than to restate the common law implied undertaking, and so was, it seems to me, unnecessary, there were also clauses that would cause unnecessary expense and inconvenience. The agreement would have required a further express consent to be obtained before discovered material could be shown to counsel, and would have required the discovered documents to be retained only at the premises of the plaintiff's solicitors. How counsel, who I was told was from the Sydney bar, would access the material for the preparation of trial was unclear- would he or she have to come to Canberra in order to inspect the documents, at additional expense, or would a further round of confidentiality agreements be entered into to allow counsel to retain a copy in the brief? Word processors are, of course, capable of producing confidentiality agreements at the touch of a button. Confidentiality agreements upon confidentiality agreements could be required when the solicitor seeks to show the discovered documents to counsel, or to an expert whose professional opinion is required for the purposes of the litigation. I see this as an undesirable practice with the potential to add unnecessary additional complexity and cost to the process of litigation.

14. Where the circumstances of the case require, and where the party seeking to impose the additional requirement can make out the case, the Court will impose appropriate safeguards over and above the significant protection provided by the common law implied undertaking. I was not persuaded that such a case was made out here. The ordinary process of discovery under the Rules should proceed.

15. I order that the defendant produce for inspection and copying by the plaintiff at a date and time as determined by the court all documents listed in Schedule 1 of the Supplementary Affidavit as to Documents filed by the defendant on 29 October 2001. The defendant should pay the plaintiff's costs of this application.

I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of Master T Connolly.

Associate:

Date: 14 December 2001

Counsel for the Plaintiff: Ms F N Rafferty

Solicitor for the Plaintiff: Dibbs Barker Gosling

Counsel for the Defendant: Mr M Will

Solicitor for the Defendant: Freehills

Date of hearing: 23 November 2001

Date of judgment: 14 December 2001