|
|
[Home]
[Databases]
[WorldLII]
[Search]
[Feedback]
Federal Court of Australia |
COURT
FEDERAL COURT OF AUSTRALIACATCHWORDS
Trade Practices - Application by cross-claimant for delivery up of documents handed to Trade Practices Commission by former employee of cross-claimant and to restrain use of such documents in any proceedings for breaches of s. 45 of Trade Practices Act 1974 - Confidential information - Breach of copyright - Detinue - Wrongfully inducing breach of contract - Jurisdiction of Federal Court - Public policy - Extent to which power of Commission to obtain documents is circumscribed by s. 155 of Trade Practices Act 1974 - Whether Trade Practices Commission agency of Crown - The Constitution (63 & 64 Vict. c. 12), s. 75 (iii) - Federal Court of Australia Act 1976 (Cth), s. 32 - Trade Practices Act 1974 (Cth), ss. 45, 77, 155 - Copyright Act 1968 (Cth), s. 183. In proceedings brought by the Trade Practices Commission (the Commission) against Allied Mills Industries Pty. Ltd. (Allied Mills) and others for penalties for breaches of s. 45 of the Trade Practices Act 1974 (the Act) and for injunctive relief, Allied Mills sought certain relief against the Commission by a cross-claim instituted by leave. In November 1976 an employee of Allied Mills, M., gave certain information to the Commission. In the course of questioning by officers of the Commission he was told of s. 155 of the Act and its effect. It was explained that, if the Commission had reason to believe that a contravention of the Act had occurred and that M. or any person were capable of providing information in relation thereto, the Commission could obtain both documents and information from M. and from the company which employed him. The following day M. voluntarily produced a number of documents for the Commission. In December 1976 M. ceased to be employed by Allied Mills. In July 1977 he delivered more documents to the Commission, and further documents were delivered in 1979.The documents in question were divided into two categories: those detailed in the affidavit of discovery sworn on behalf of the Commission (Exs. B, E and 4); and those documents not included in the affidavit of discovery because they were not considered relevant to the proceedings (Ex. F). Exhibit B was a black binder and typewritten sheets of paper. The typewritten sheets were prepared by M. at his home whilst he was still employed by Allied Mills. The entries were prepared from a pocket diary and a desk diary provided to M. for the purposes of his employment. Such documents as were still in existence, and from which the typed sheets were prepared, constituted Ex. E. Exhibit 4 was a witness statement taken by officers of the Commission from M.
It was claimed by Allied Mills that all save two of the documents were the property of Allied Mills; furthermore it was claimed that certain of the documents, though not all, were confidential or if not containing matters strictly confidential were commercially sensitive and remained private information. Allied Mills relied upon four heads of claim for the return of the documents: (i) Detinue. (ii) Breach of confidence. (iii) The wrongful inducing by the Commission of a breach of the contract of service by M. (iv) Breach of copyright.
Held: (1) The Commission is an emanation or agency of the Crown and therefore the Federal Court has jurisdiction to determine a claim, or as in this case a cross-claim against the Commission.
Thomson Publications (Australia) Pty. Ltd. v. Trade Practices Commission
(1979), 40 FLR 257, followed.
(2) So far as the claim in detinue was concerned (although it was
unnecessary to decide the point) even if Allied Mills were entitled
to relief
on this ground they would only be entitled to the return of the original
documents and not to the real relief which they
sought which was to prevent
the Commission from making use of the information contained in the documents
in the course of the proceedings.
(3) So far as the claim for wrongfully inducing breach of contract was
concerned it was unnecessary to decide the point but quaere
whether there was
sufficient evidence to decide that there had been any inducement.
(4) Use by the Commission of documents in which copyright might exist in
favour of Allied Mills would not be a breach of the Copyright Act 1968 by
reason of s. 183 as such acts would have been done for the services of the
Commonwealth.
(5) So far as the claim based upon breach of confidence was concerned Allied
Mills had established a prima facie case under this
head.
(6) The reasonable belief of Allied Mills that the information contained in
the documents was not already "in the public domain"
entitles the owner to the
protection of such information from breach of confidence.
Thomas Marshall (Exports) Ltd. v. Guinle (1979) Ch 227, referred to with
approval.
(7) Notwithstanding the matters contained in (5) above, public policy
requirements prevented the court from acceding to the request
of Allied Mills
for the return of the documents and the prevention of their use against it in
proceedings under the Act because:
(i) Parliament intended the Act to protect
the public against acts and practices contrary to the public interest. (ii)
Although the
breaches of the Act which were alleged by the Commission against
Allied Mills were not criminal breaches in the strict sense, they
would be, if
established, acts in respect of which substantial penalties could be imposed
and such penalties indicate the seriousness
with which Parliament regarded
such conduct. Mikasa (N.S.W.) Pty. Ltd. v. Festival Stores [1972] HCA 69; (1972), 127 CLR
617; Trade Practices Commission v. Stihl Chain Saws (Aust.) Pty. Ltd. (1978)
TPRS 305.14; Melbourne Home of Ford Pty. Ltd. v. Trade Practices Commission
[1979] FCA 15; (1979), 36 FLR 450; Commercial Bank of Australia Ltd. v. Insurance Brokers
Association of Australia (1977), 16 ALR 161; World Series Cricket Pty. Ltd.
v.
Parish (1977), 16 ALR 181; Elna Australia Pty. Ltd. v. A.F. Harding & Co. Pty.
Ltd. (1978), 4 TPC 308; Hornsby Building Information Centre Pty. Ltd. v.
Sydney Building Information Centre Ltd. (1978), 140 CLR 216, referred to with
approval.
(iii) There can be no confidence as to the disclosure of an
iniquity. Gartside v. Outram (1856), 26 LJ Ch 113, followed. (iv) Disclosure
of confidential information to the appropriate authorities may be proper
disclosure if a breach of the
trade practices legislation is thereby
disclosed. Initial Services Ltd. v. Putterill, (1968) 1 QB 396, referred to.
(v) Even where no crime or fraud is alleged against the writer of the document
and neither is it alleged that such
a document was prepared in furtherance of
any criminal or fraudulent purpose, protection of such a document by the
invoking of the
court's equitable jurisdiction may not be granted where the
document is relevant to and admissible in court proceedings against,
for
example, the recipient thereof. Butler v. Board of Trade, (1971) Ch 680;
Garfinkel v. Metropolitan Police Commissioner, (1972) Crim LR 44; Frank Truman
Export Ltd. v. Metropolitian Police Commissioner, (1977) 1 QB 952, referred to
with approval. (vi) Once in the possession of the prosecution a document which
would have been privileged from production
is not thereby inadmissible.
Admissibility depends upon relevance not upon the method by which such
document came into the possession
of the prosecution. R. v. Tompkins (1977),
67 Cr App R 181, referred to with approval. (vii) The public interest involved
in disclosure of iniquity to the appropriate authorities will always
outweigh
the public interest in the preservation of private and confidential
information; an "iniquity" in this context is more far
reaching than merely
the commission of a crime. Gartside v. Outram (1856), 26 LJ Ch 113; British
Steel Corporation v. Granada Television Ltd., (1981) 1 A11 ER 417; Initial
Services Ltd. v. Putterill, (1968) 1 QB 396, referred to.
(8) Documents not in themselves disclosing an iniquity, which the Commission
desires to hold for the purposes of prosecution of
an identifiable party
against whom proceedings are to be or are being taken in respect of alleged
breaches of the law, should not
be ordered to be returned to Allied Mills. Any
confidentiality in such documents can be protected by an order of the court
pursuant
to s. 50 of the Federal Court of Australia Act 1976.
(9) The retention of documents by the Commission is lawful even when they
have been handed over voluntarily, but in breach of contract
or confidence.
Section 155 of the Act does not provide the sole way in which such documents
can lawfully come into the possession
of the Commission Cross-claim dismissed.
HEARING
Sydney, 1980, December 1-4, 8-9, 12, 15-16; 1981, February 18.Cross-claim by Allied Mills for orders restraining the Commission from making use of or disclosing information contained in certain documents, and for the delivery up to Allied Mills of all such documents and copies thereof.
The facts are set out in the judgment.
R. V. Gyles Q.C. and W. W. Caldwell, for the cross-claimants.
K. R. Handley Q.C. and J. O. North, for the cross-respondent and for the Commonwealth Attorney-General.
B. A. Beaumont Q.C. and J. A. O'Shea, for the Attorney-General for New South
Wales.
Cur. adv. vult.
Solicitors for the cross-claimants: Sly & Russell.
Solicitor for the cross-respondent: B. J. O'Donovan, Commonwealth Crown
Solicitor.
D. LEVIN.
DECISION
February 18.The following judgment was delivered.cross-claimant (hereinafter referred to as Allied Mills) on 13th November, 1980. I refer to my reasons for granting that leave published on 10th November, 1980 (see Trade Practices Commission v. Allied Mills Industries Pty. Ltd. (No. 2) [1980] FCA 131; (1980) 55 FLR 108.
SHEPPARD J. The cross-claim in this matter is brought by leave granted the
2. The cross-respondent is the Trade Practices Commission (the Commission). The cross-claim is brought in proceedings brought by the Commission against eight respondents of which Allied Mills is one. In the principal proceedings the Commission sues for penalties for breaches of s. 45 of the Trade Practices Act 1974 (Cth) (the Act). It also seeks injunctive relief. The proceedings were instituted pursuant to ss. 77 and 80 of the Act.
3. By its cross-claim Allied Mills seeks orders restraining the Commission from making use of or disclosing information contained in certain documents. It also seeks an order that the Commission deliver up to Allied Mills the said documents and all copies thereof in its possession or power. Certain additional and consequential relief is also sought. The documents and the circumstances in which they came into the possession of the Commission are described in the evidence of Mr Matthews, who was formerly employed by Allied Mills as its Victorian manager, and in the evidence of two officers of the Commission, Mr Conlan and Mr Jordan.
4. I propose to proceed by referring to that evidence and certain other evidence as well. I shall then refer to the causes of action upon which Allied Mills relies and to the Commission's defences thereto. It will then be necessary to say something of the jurisdiction of this Court to entertain the cross-claim. I shall then come to the questions of substance which must be resolved in order to determine what the outcome of the proceedings should be.
5. The documents which are in question, with one or two exceptions, are, firstly, those specified in par. 7 of the schedule to Mr Conlan's affidavit of discovery sworn in the principal proceedings on 14th December, 1979. They secondly comprise some other documents which were not made the subject of discovery because the Commission considered, at the date the affidavit of discovery was sworn, that they were not relevant to any issue in the principal proceedings. The documents which were discovered were tendered in these proceedings and are comprised in Exs. B, E and 4. The documents not discovered were also tendered and are comprised in Ex F During the course of the proceedings counsel for the Commission made an open offer to settle Allied Mills' claim by the handing over of a number, but not all, of the documents comprised in Ex F In the alternative he made, in open court, a tender to Allied Mills of the same documents. I was not informed whether the tender was accepted. Certainly the open offer to settle the claim was rejected.
6. The document which is Ex B is the document specified in item 7.1 of the schedule to Mr Conlan's affidavit of discovery. At times it was referred to in the evidence as "the diary" or the "black diary". It is not in fact a diary but that is a convenient means by which to refer to it and I propose to refer to it as such accordingly.
7. The diary comprises a black loose-leaf binder and a number of typed sheets of paper. According to Mr Matthews, whose evidence was not challenged on any material point, it was typed on 9th October, 1976, at his home. Some of the typing was not satisfactory and some pages were retyped at later dates. Mr Matthews was then still in the employ of Allied Mills. His employment terminated on 2nd December, 1976, not 2nd December, 1979, as stated in my reasons for judgment published on 10th November, 1980. The date 2nd December, 1979, was transcribed from Mr Huntington's affidavit therein referred to which stated the date of the termination of Mr Matthews' employment incorrectly.
8. The binder and the sheets of paper inside it were at all material times the property of Allied Mills. They had been furnished to Mr Matthews in the course of his employment, but it was not intended that he should make entries upon the pages which he in fact made. The sources of the typewritten material were entries contained in Mr Matthews' handwriting in a pocket diary. The entries in the pocket diary came in turn from handwritten notes made by Mr Matthews on various pieces of paper. Some of these were pages torn from a loose-leaf desk diary which Mr Matthews had in his office. Both the pocket diary and the desk diary were the property of Allied Mills and were also provided by it to Mr Matthews for the purposes of his employment. It is clear, however, that he was not expressly or by implication required by Allied Mills to make any of the notes to which I have referred. Nevertheless, it may have been within the scope of his employment, bearing in mind that he was Victorian manager, to make the notes.
9. Except for a few pages from the desk diary all the sheets containing notes which were transcribed into the pocket diary have been destroyed. The pages from the desk diary are in the possession of the Commission and amongst the documents possession of which is sought to be recovered in these proceedings. They are referred to in item 7.55 of par. 7 of the schedule to Mr Conlan's affidavit of discovery. The pocket diary has also been destroyed. The circumstances surrounding its destruction are described in Mr Matthews' evidence. It is unnecessary to refer further to that evidence except to say that it was not challenged.
10. The Commission intends to call Mr Matthews to give evidence in the main proceedings. He has made a statement of his evidence to the Commission's solicitor. This statement is substantially based upon the information which is in the black diary. A question arises whether, if an order were made restraining the use by the Commission of the entries in the black diary or their disclosure, it would be unable by its counsel to lead from Mr Matthews the evidence he is intended to give. At this point it ought to be said that the principal purpose for which these proceedings are brought is to prevent the use by the Commission of material which it would wish to tender or otherwise make use of in conducting its case in the principal proceedings. There are other purposes in the bringing of the proceedings, but they are subsidiary to the principal purpose of hampering the Commission in leading, and Mr Matthews in giving, evidence of events, claimed by the Commission to be relevant to issues involved in the principal proceedings, which transpired in 1976.
11. The remaining documents specified in par. 7 of the schedule to Mr Conlan's affidavit are also said to be relevant to these issues. I do not find it necessary to refer to the detail of them. But it should be said that each of the documents is written on paper which was at one time the property of Allied Mills. In one or two cases there is a question of whether the documents were not given to Mr Matthews by Allied Mills and thus became his property. In the majority of cases this is not the case. Many of the documents are documents which came into existence in the ordinary course of Allied Mills' business. In that respect they are to be distinguished from the entries made in the desk diary pages and the black diary. The documents referred to in par. 7 of the schedule to Mr Conlan's affidavit of discovery, other than the black diary, are comprised in Ex E I have earlier referred generally to the nature of the documents in Ex F Exhibit 4 is a statement taken from Mr Matthews by officers of the Commission.
12. Counsel for Allied Mills specified some documents in respect of which no claim was made that the documents were confidential documents. In all but two cases, the return of the documents was nevertheless claimed upon the basis that the documents were the property of Allied Mills. The two exceptions were the documents described in items 7.51 and 7.52 of the schedule to Mr Conlan's affidavit of discovery, it being conceded that in respect of the first the claim to property had not been made out and in respect to the second that it had been produced pursuant to a notice served under s. 155 of the Act. The documents in respect of which property, but not confidentiality, was claimed were those specified in items 7.2, 7.5, 7.6, 7.7, 7.16, 7.27, 7.30 and 7.50 of the schedule to Mr Conlan's affidavit, together with a number of documents from Ex F which I do not find necessary to specify. The return of the balance of the documents was claimed upon the basis both of property and confidentiality.
13. Mr Duckett is the group chief accountant of Allied Mills. He was present in court when counsel for Allied Mills excepted from the claim for confidentiality the above-mentioned documents. Mr Duckett said that he believed, speaking on behalf of the company, that all of the documents which were included in the documents which he had seen, save for the ones excepted by counsel, had aspects of confidentiality about them. Prior to giving that evidence he had given the following evidence: "Q. In case any question arises as to the continuing confidentiality of those documents, I would like you to explain to his Honour how it is that the 1976 documents concerning the topics you have been mentioning might retain confidentiality even up to the present day - in this industry? A Your Honour, we are looking back now a relatively short period within this industry to the extent that the same competitors are basically within it, production capacities are generally pretty much unchanged during the period. We know that; all competitors would know that. The relationship of our share of the market, our costs and our customers, while the customers may have changed somewhat, would be known throughout the industry and from this data, together with industry published figures, it would be possible to get a pretty meaningful indication of where we stood presently in terms of our performance financially, not only as far as we are concerned, but as far as the relativities to our competitors may be concerned as well. To that extent, we would be most concerned that our position were known generally throughout - outside our own four walls, if you like. And the information that is available would enable that picture, I believe, with all-meaningful constraints to be produced."
14. Nothwithstanding that evidence, it became clear, once Mr Duckett was cross-examined, that very little of the material in the documents referred to in par. 7 of the schedule to Mr Conlan's affidavit is now confidential or commercially sensitive. Some of it is, but documents which appear to be important for the purposes of the conduct of the principal proceedings by the Commission which are not are the black diary and the loose desk diary sheets earlier referred to. Some of the material in the black diary remains, according to Mr Duckett's evidence, confidential but only two or three entries in it fall into that category. That is, of course, the position at the present time. Counsel's cross-examination was directed to the present rather than to November 1976 when many of the documents were handed over. The position was no doubt then different and counsel for the Commission was not concerned to submit that it was not. Furthermore, although much of the information is no longer confidential or commercially sensitive, it remains private information relating to Allied Mills' affairs. It is information which Allied Mills would prefer to keep private rather than to have in other hands, albeit that the information is not any longer confidential or commercially sensitive. It should be observed at this point that this Court has express power (s. 50 of the Federal Court of Australia Act 1976 (Cth) to make an order restricting the publication of documents tendered in evidence before it. It depends upon the circumstances of each case as to whether a judge will exercise his discretion in favour of making an order; and it is true that judges will exercise their discretion, to a degree, unevenly; compare the judicial disagreement evidenced in the cricket case, Australian Broadcasting Commission v. Parish [1980] FCA 33; (1980) 43 FLR 129.
15. If a case of this kind were in a court other than this one, the court would have power at common law to restrict publication just as this Court has express statutory power to do so. I made it clear to counsel for Allied Mills that I would be prepared in appropriate cases to exercise the jurisdiction which I have under s. 50. I did in fact exercise it in relation to some of the documents tendered in the present proceedings. Upon reflection I think I may have been a little over cautious in the interest of Allied Mills in exercising it, but at that stage I was not quite sure what the position would turn out to be in relation to a number of the documents and I thought it better to err on the side of caution. I have from time to time made orders in the principal proceedings in relation to some documents which have been tendered. The fact that the jurisdiction to restrict publication exists and that the court has shown a willingness to exercise it has not acted as a break upon Allied Mills' wish to persevere with these proceedings. The reason for that approach is obvious. The real object of the proceedings, as I have earlier said, is to prevent the use of the documents by the Commission in its conduct of its case in the principal proceedings.
16. I should next refer to the circumstances in which the documents came to be handed over to the Commission. Although a number of documents were handed over in November 1976, not all of them were.
17. Mr Matthews called at the Commission's offices in Melbourne on 1st
November, 1976. He was interviewed by Mr Conlan. He was at
first unwilling to
disclose the identity of his employer or the product with which he was
concerned. But Mr Conlan said that after
about forty-five minutes of
questioning Mr Matthews gave his name "and eventually the products concerned
and the companies concerned".
Mr Conlan's evidence continued: "Following that,
he proceeded to give us a rough outline of the details as he knew them, and
specific
instances of conversations, etc." Mention was made of documents but
no documents were produced on that occasion. Nor was any produced
on the
second occasion but there was a conversation about their production. Mr
Conlan's evidence is that he had to leave the room
during the interview which
was being conducted by himself and Mr Jordan. When he returned Mr Jordan said
to him in Mr Matthews' presence:
"I have just been telling Mr Matthews about
s. 155 of the Trade Practices Act." Mr Conlan then said to Mr Matthews: "If
the Commission has reason to believe that a contravention has occurred, and
you or any
person is capable of providing information in relation to the
contravention, the Commission can obtain both documents and the information
from yourself or from the company you are employed by or any other person." Mr
Conlan's evidence proceeded as follows:
"Q. Yes, and can you remember any other parts of the conversation relating
to s. 155 of the Act? A. Yes, I recall, I have a recollection
that I said to
Mr Matthews from the information he had given me that morning and the
interview before that there seemed to me reason
to believe that he was capable
of providing information, and also I advised Mr Matthews that was not be taken
as committing the Commission
to any course of action.
"Q. What happened after that? A. Well, Mr Matthews - and I cannot recall his
exact words - but he replied to the extent: 'If you
can get them from me I
might as well give them to you.'
"Q. Did the interview continue for any appreciable time after that? A. I
think about ten minutes to fifteen minutes after that,
and Mr Matthews agreed
at the end of the interview that he would bring the documents in the next
day."
18. The following day Mr Matthews returned with a number of documents. He went through the details of them with Mr Conlan. It is unnecessary to specify which of the documents they were but they included the black diary.
19. Mr Jordan's evidence is not as specific as that of Mr Conlan. But he said
that the subject of documents was discussed. He added:
"I told Mr Matthews
that the Commission had powers under s. 155 of the Act to require a
corporation or a person to produce evidence,
documents, material that may be
of assistance in the investigation." Mr Jordan said he told Mr Matthews of the
effect of s. 155 of
the Act on one further occasion. He was present when Mr
Matthews produced the documents. The date of Mr Matthews' second visit was
deposed to by Mr Jordan (at least so the transcript recods) as 2nd December,
1976. There is no question but that the date was 2nd
November, 1976. Mr
Matthews was asked about the circumstances in which he handed over the
documents. The questions were asked him
in cross-examination rather than in
his evidence in chief. He referred to the fact that there had been a series of
discussions with
officers from the Commission. His evidence continued as
follows:
"Q. In the course of which they told you, and I am putting to you, in
effect, they could force you to disclose information?
A. They did.compulsorily acquired you may as well give it voluntarily?
"Q. And following that you determined that if the material could be
20. Neither Mr Conlan nor Mr Jordan was cross-examined about their evidence in chief concerning the statements which were made to Mr Matthews about the effect of s. 155 of the Act. In those circumstances, and notwithstanding the answers given by Mr Matthews in his cross-examination, I have no hesitation in saying that I accept the evidence of Mr Conlan and Mr Jordan. To the extent that there is any difference in the evidence of the two witnesses I prefer that of Mr Conlan. In reaching my conclusion I bear in mind that Mr Matthews, along with Mr Conlan and Mr Jordan, was called in the Commission's case and that his evidence was given after the evidence of Mr Conlan and Mr Jordan. Nevertheless, no application was made that Mr Conlan and Mr Jordan be brought back for further cross-examination after Mr Matthews' evidence was concluded. Mr Conlan was in court for a good deal of the hearing and, in any event, I would have had no hesitation in requiring both witnesses to return to the witness-box if counsel for Allied Mills had sought to ask them further questions.
21. Further documents were delivered by Mr Matthews to the Commission in July 1977. These were the loose sheets from the desk diary earlier referred to. According to Mr Matthews, whose evidence on this point I accept, they were discovered by him in the glove box of his car. He had not been aware that they were there until he cleaned out the glove box at about the time he sent the documents to Mr Conlan. The other documents were found by Mr Matthews amongst papers he had at home and were handed over to the Commission's solicitor in 1979. It is to be observed that at the time the first documents were handed over, Mr Matthews was still in the employment of Allied Mills. But his employment ceased on 2nd December, 1976, so that on the later occasions when he handed over documents he was not in Allied Mills' employ.
22. The only other evidence to which I find it necessary to refer is evidence given by Mr Matthews in the course of his cross-examination as to the purposes for which he prepared the entries in the pocket diary and those in the black diary. He said that he had not been given any instructions by anybody in Allied Mills to keep the notes and he was asked the purpose for which he made them. His answer was as follows: "In order that I might, as I visualized it, at some later date persuade my immediate superior to join me in approaching his immediate superior, the executive director, in that my immediate superior Mr Street, with me - and I visualized with my opposite number at Sydney, Mr Trist, who had already agreed with me he would never go along with any improper agreement, if the three of us with the evidence I accumulated went to the executive director who, on the information I had, was planning to do this thing, we could persuade him to drop it. Alternatively, we could persuade him to seek to have the arrangement registered and let the Trade Practices Tribunal Commission (sic) determine whether it was proper or not."
23. I propose to accept the evidence which Mr Matthews gave as to his purposes. Neither counsel suggested that I should do otherwise.
24. It is now convenient to mention the causes of action relied upon by Allied Mills and the defences to them relied upon by the Commission. Four causes of action are relied upon. They are as follows: 1. An action in detinue for the recovery of the documents upon the basis that they are the physical property of Allied Mills. It is submitted that equity will require, in those circumstances alone, not only the return of the documents which it is said have been wrongfully detained from Allied Mills but also the delivery up of all copies thereof in the possession or power of the Commission. 2. An action based upon breach of confidence for the return of what are said to be confidential documents belonging to Allied Mills. The action is based alternatively upon breach of an implied term in Mr Matthews' contract of service and upon an obligation which it is said he owed Allied Mills in equity to keep its affairs confidential except in the course of his employment. It is the submission of Allied Mills that it is not to the point that many of the documents are not now confidential or commercially sensitive, or that they are less confidential or less commercially sensitive than they were four years ago. In its submission it is the time at which the documents came into existence which is material: Thomas Marshall (Exports) Ltd. v. Guinle (1979) Ch 227, at pp 248-249. . It is said that the Commission stands in no better position than Mr Matthews either because, by reason of the very contents of the documents themselves, it must have been obvious to the Commission that the documents were confidential with the result that it had notice of that circumstance, or, because it took the documents as a volunteer. Reliance was placed upon Ashburton v. Pape (1913) 2 Ch 469. . 3. The wrongful inducing by the Commission of a breach by Mr Matthews of his contract of service. It was said that his contract of service contained an implied term that he would keep information confidential and would not hand over documents concerning it to strangers to the company otherwise than in the course of his employment. The cause of action was said to be maintainable, notwithstanding that some of the documents were handed over long after Mr Matthews' contract had been terminated. 4. Breach of copyright.
25. The defences to those causes of action were as follows: 1. The court would not grant all the relief sought solely upon the basis that the property in the folders and pieces of paper upon which writing appeared were the property of Allied Mills. In particular it would not order the delivery up of copies nor restrain the Commission from disclosing or making use of the documents. 2. Very little of the material in the documents was now of a confidential nature. The material date was the present time and neither the dates when the documents came into existence nor when they were handed by Mr Matthews to the Commission. 3. Considerations of public policy required the dismissal of the proceedings because: (a) the documents disclosed an iniquity and there is "no confidence as to the disclosure of iniquity"; Gartside v. Outram (1856) 26 LJ Ch 113, at p 114. , or (b) the documents were to be used directly or indirectly in proceedings to recover a penalty for breach of the law. In those circumstances public policy required that the return of the documents to their owner should await the outcome of the proceedings. 4. As to copyright - (a) there was no copyright in some of the documents; (b) in cases where there was copyright, the copyright was not in each instance the copyright of Allied Mills; (c) the copying of the documents was authorized by s. 43 and/or s. 183 of the Copyright Act 1968 (Cth); (d) the same considerations of public policy referred to in par. 3 above applied to justify the copying of the documents.
26. As earlier foreshadowed, it is now necessary to say something of the jurisdiction which I have assumed. Both parties submitted that I had jurisdiction but their agreement in that respect does not relieve me of the task of satisfying myself that there was jurisdiction to give or refuse the relief which is claimed.
27. Because of doubts as to jurisdiction, I directed, pursuant to s. 78B of the Judiciary Act 1903 (Cth), service of notice of the proceedings upon the Attorneys-General for the Commonwealth and for the States of New South Wales and Victoria. When the hearing of the cross-claim commenced on 1st December, 1980, counsel for the Commission announced that he appeared also for the Attorney-General for the Commonwealth who sought leave to intervene. The Attorney-General for the State of New South Wales appeared by senior counsel and also sought leave to intervene. I granted both applications for leave to intervene. There was no appearance by the Attorney-General for Victoria. It was submitted on behalf of the Attorney-General for the Commonwealth that there was jurisdiction. That submission was based upon a wide view of the ambit of operation of s. 32 of the Federal Court of Australia Act 1976 and also upon a narrower view of it. It was submitted on behalf of the Attorney-General for New South Wales that s. 32 was invalid. Alternatively it was submitted that it had a narrow and restricted operation.
28. Senior counsel for the Attorney-General for the Commonwealth and for the Commission submitted that, whatever operation s. 32 might have, it was plainly valid and effective to confer on this Court jurisdiction to hear a matter which was essentially federal in its nature, provided it was associated with another matter in respect of which jurisdiction was otherwise conferred on the court, that is conferred otherwise than by reason of the operation of s. 32. Counsel were all in agreement that the two proceedings, that is the principal proceedings and the cross-claim, were associated matters. In my opinion counsel are clearly correct in their joint view on that aspect of the problem.
29. The cross-claim was submitted to be a federal matter because it was, within the meaning of s. 75 of the Constitution, a matter in which the Commonwealth was a party (par. (iii)). It was submitted that the Commission, if not the Commonwealth, was an emanation or agency thereof. The case was one in respect of which the High Court had original jurisdiction. The Supreme Courts of the States would also have jurisdiction but only by reason of their being invested with federal jurisdiction: Judiciary Act 1903, s. 39 (2).
30. In support of his submission counsel embarked upon a review of the Act for the purpose of demonstrating that the Commission was in effect the Crown or the Commonwealth. I shall come to refer in detail to that submission in a moment. Before I do so I should mention that the submission was adopted by counsel for Allied Mills. Counsel for the Attorney-General for the State of New South Wales sought instructions and said that these were that if jurisdiction were to be rested on the narrower ground relied upon by counsel for the Commission and the Attorney-General for the Commonwealth in the submission which had been put, he would not wish to be heard. Certainly he did not wish to say anything in opposition to my assuming jurisdiction upon that basis. I said that I was satisfied, upon the basis of the argument put, that I had jurisdiction on the narrower view of s. 32 of the Federal Court of Australia Act which was advanced. I said that I would publish reasons later and that these might be included, as indeed they are, in my reasons for judgment when announcing my decision on the cross-claim. Counsel for the Attorney-General for the State of New South Wales then withdrew.
31. At that point it seemed unlikely that the matter would be referred to again. But when counsel for Allied Mills came to reply upon the submissions made by counsel for the Commission in relation to copyright, particularly those based upon s. 183 of the Copyright Act, counsel submitted that the Commission was not the Commonwealth nor any agency or amanation thereof. I put to him that the matter had already been decided in that I had assumed jurisdiction upon the basis that it was. I further pointed out to him that he had adopted submissions made by counsel for the Attorney-General for the Commonwealth and the Commission. He said, notwithstanding those considerations, that he wished nevertheless then to submit that the Commission was not the Commonwealth nor any emanation or agency of it, and to the extent that this involved a retraction of his earlier adoption of the Commission's submissions he did not shrink from facing up to the problems that then confronted him. The essential problem for him then was that if I were to adopt his submission for the purposes of the Copyright Act, it would follow that I would also take the view that I had not jurisdiction upon the narrower view of s. 32 which counsel for the Commission had propounded. If that were right, and if there were not upon some other basis jurisdiction, the proceedings would fail for want of jurisdiction. Of course it might have been that the wider view of s.32 of the Federal Court of Australia Act would have proved to be correct; that matter was not determined until the High Court gave judgment in two matters it then had under reservation, namely, Philip Morris Incorporated v. Adam P Brown Male Fashions Pty. Ltd. [1981] HCA 7; (1981) 55 ALJR 120. . Judgment was delivered in this matter on 10th February, 1981. The wider view of s. 32 was rejected, but the judgment supports the narrower view of its operation upon which I have relied.
32. I confess to having had doubts as to whether the submission made by
counsel for Allied Mills in relation to the Copyright Act was open to him to
make at the point of time he made it. That was because my decision on the
question of jurisdiction was founded
upon the Trade Practices Commission being
an agency or emanation of the Commonwealth. However, the submission originally
went to
jurisdiction, and, if during the hearing, something had come to my
attention which suggested to me that, after all, I had no jurisdiction,
it
would seem to me that I ought to have reconsidered the question. The question
of jurisdiction must, in one sense, always remain
open until after judgement
is delivered. If a more detailed consideration of the matters relied upon by
counsel for the Attorney-General
for the Commonwealth and the Commission had
led me to the view that my earlier decision was incorrect, I would have been
inclined
to throw the whole matter open for argument again. Certainly I would
have seen to it that counsel for the Attorney-General for New
South Wales was
informed of what had transpired. However, upon further reflection, I have not
changed my mind. In my opinion the
Commission is an emanation or agency of the
Crown. My reasons for that conclusion may be shortly stated. They are based
upon: (1)
The purposes and objects of the Trade Practices Act. I shall say
something more of this matter when I come to the question of public policy.
(2) The provisions of s. 29 of the Act which
are as follows:
"29. (1) The Minister may -Commission in determining applications for authorizations or in making decisions for the purposes of paragraphs 93 (3) (a) or (b); and
(a) give directions as to matters to be given special consideration by the
33. It is to be observed that s. 93 is in Pt VII of the Act. It is understandable, in my opinion, that the directions which the Minister might give the Commission in relation to authorizations applied for pursuant to Pt VII of the Act should be limited in the way that is provided for in sub-s. (1) (a) of the section. In my opinion that does not at all detract from the fact that the Commission acts in relation to all other matters subject to any directions which the Minister may give. The principal proceedings are proceedings in which the Commission sues for penalties and injunctive relief. They are brought pursuant to Pt VI of the Act. The Minister might have given a direction that the proceedings be brought or not brought as he saw fit. It is to be observed also that s. 77 of the Act provides that the penalties provided for in s. 76 may be recovered in proceedings instituted either by the Minister or the Commission. Section 80 contains similar provisions in relation to an injunction. (3) The functions of the Commission being ordinary functions of government. The contrary was submitted by counsel for Allied Mills. It is true that trade practices legislation is comparatively recent in Australia. But the predecessor of the legislation was the Australian Industries Preservation Act 1906 (Cth). That Act did not have any counterpart to the Commission or the Commissioner appointed pursuant to the provisions of the Trade Practices Act 1965, ss. 23 and 24. It is true that there is not, in that Act, any general subjugation of the Commission to directions by a Minister. But the provisions of s. 47 (4) provided that the Attorney-General might direct the Commissioner to investigate the facts and circumstances with respect to an examinable agreement or examinable practice. Furthermore, the Commissioner did not institute proceedings for offences. These were instituted by the Crown in the usual way. In coming to the conclusion that the functions of the Commission are ordinary functions of government I have also taken into account the purpose and policy of the Act referred to in par. 1 above. It cannot be correct to say that because Parliament enacts new legislation empowering or obliging the executive to undertake new fields of activity, that those fields of activity are not ordinary functions of government simply because they have not previously been undertaken or required.
34. Since reserving my decision my attention has been drawn to the joint judgment of Deane and Fisher JJ. in Thomson Publications (Australia) Pty. Ltd. v. Trade Practices Commission (1979) 40 FLR 257. . They reached the conclusion that the Commission was "plainly an instrumentality or agent of the Crown in right of the Commonwealth" (1979) 40 FLR, at p 275. . Their decision in that respect is, of course, binding on me.
35. For the reasons I have given I am satisfied that I do have jurisdiction to entertain the cross-claim. The later submissions made by counsel for Allied Mills in relation to copyright have not persuaded me that the earlier view which I had formed was incorrect. The only other matter which I should mention in relation to jurisdiction is the alternative basis for jurisdiction relied upon by counsel for Allied Mills. It was their submission that the court had jurisdiction because of the provisions of the Judicial Review (Administrative Decisions) Act 1977 (Cth). In the view that I took of the matter I did not think it necessary to embark upon a lengthy consideration of the questions to which this submission gave rise. Accordingly I express no view upon them but I do indicate that the Act last mentioned was relied upon strongly by counsel for Allied Mills as an alternative basis for the jurisdiction of this Court to entertain this claim.
36. I can now turn to the questions of substance that are between the parties. Subject to the positive matters raised by way of defence by the Commission, I am prepared to accept that Allied Mills ought to succeed in its claim for breach of confidence. A detailed consideration of its cause of action for breach of confidence would reveal that there is a question as to whether the cause of action is founded on the breach of an implied term of the contract of service or whether it is founded upon the breach of an obligation imposed, not by reason of any contract, but because equity considers that the relationship of the parties is such as to require that there be imposed upon a servant an obligation to keep the affairs of his master confidential.
37. A large number of cases establishes that on one basis or the other (or perhaps on both bases) Allied Mills has the rights which it claims against Mr Matthews and that the Commission can for one reason or another (but subject again to the positive matters on which it relies) stand in no better position than he. I do not propose to go to the detail of the authorities but I mention Prince Albert v. Strange [1849] EngR 261; (1849) 1 Mac & G 25; 41 ER 1171. ; Lamb v. Evans per Bowen L.J. and per Kay L.J. (1893) 1 Ch 218, at pp 229, 236-237. ; Robb v. Green (1895) 2 QB 315, at pp 316-318. ; Measures Brothers Ltd. v. Measures per Joyce J. (1910) 1 Ch 336, at pp 342-343. (in passing I note that the appeal did not affect what Joyce J. said (1910) 2 Ch 248. ); Ormonoid Roofing and Asphalts Ltd. v. Bitumenoids Ltd. (1930) 31 SR (NSW) 347. and Interfirm Comparison (Australia) Pty. Ltd. v. Law Society of New South Wales (1975) 45 FLR 21. . Argyll v. Argyll (1967) 1 Ch 302. is a case in a somewhat different category but, nevertheless, in my opinion throws light on the present problem. I also think that Allied Mills gains assistance from Ashburton v. Pape (1913) 2 Ch 469. notwithstanding that that was a case, not of confidence, but of an attempt to get round legal professional privilege. I agree with counsel for the Commission that there is a substantial question as to whether very much of the information in any of the documents could now be regarded as confidential because it has, from the point of view of Allied Mills, not now any substantial commercial sensitivity. But, as counsel for Allied Mills submitted, I do not think that is of consequence. I would respectfully adopt what was said by Megarry V.C. in Thomas Marshall (Exports) Ltd. v. Guinle (1979) Ch, at p 248. . In my opinion it is enough if the owner (Allied Mills) believes that the information is confidential or secret "i.e. that it is not already in the public domain". As his Lordship says, it may be that some or all of his rivals already have the information; but as long as the owner believes it to be confidential he is entitled to try to protect it. The owner's belief must, of course, be reasonable. In my opinion the belief which Allied Mills held was reasonable. Counsel for the Commission did not cross-examine Mr Duckett to suggest that it was not.
38. The causes of action with which the cases I have cited deal are those founded either upon breach of an implied term in the contract of service or breach of an obligation imposed by equity upon Mr Matthews to keep the affairs of the company confidential. I do not believe that Allied Mills would be entitled to the relief it claims simply because it had the property in folders in which the information is contained or in the pieces of paper upon which it is written. It would be entitled upon that basis to a return of those folders and pieces of paper but not to the consequential relief which it claims. I do not express a final view on that matter because it is unnecessary to do so. Subject to the positive matters relied on by the Commission, Allied Mills would, in any event, be entitled to succeed on its causes of action based on breach of confidence.
39. In so far as reliance is placed upon a cause of action for inducing a breach of contract I think there is a question as to whether the evidence establishes any inducement. That question is in part dependent upon the correct understanding of the ambit and operation of s. 155 of the Act. Again, I do not find it necessary to decide the questions which are involved. If they were to be answered favourably to Allied Mills, it would be in no stronger position than it is in relation to the causes of action for breach of confidence which it has. The question of the resolution of the conflict of public policies which I believe to be at the heart of the case remain whether Allied Mills is otherwise entitled to succeed only on its causes of action for breach of confidence or whether it is entitled, in addition, to rely on a cause of action for inducing a breach of contract. Subject to the cause of action based upon breach of copyright, the question of public policy is the remaining question to be decided. I propose to leave copyright until after I have dealt with that question.
40. A starting point for the consideration of it is the purpose and policy of the Act. The Act was passed in 1974. It replaced earlier Acts passed in 1965 and 1971 respectively, the latter being the Restrictive Trade Practices Act 1971. The precursor of trade practices legislation in Australia was, as earlier mentioned, the Australian Industries Preservation Act 1906.
41. No lengthy analysis of the various provisions of the Act passed in 1974 is needed to demonstrate that Parliament intended, by the enactment of its provisions, to guard the public generally, or in some cases, sections of it, against acts and practices which it considered contrary to the public interest. The provisions upon which the Commission relies in the principal proceedings are to be found in s. 45, which, as the sidenote indicates, has to do with contracts, arrangements or understandings in restraint of trade or commerce. Section 45 and some of the other provisions to which I am about to refer have been amended since the events with which this litigation is concerned. But it is to the form of the Act as it was in the latter months of 1976 that I shall refer.
42. Section 45 is found in Pt IV of the Act which is headed "Restrictive Trade Practices". Also in that Part are ss. 46, 47, 48 and 49. These specify monopolization, exclusive dealing, resale price maintenance and price discrimination as other restrictive practices with the legislature is concerned to forbid or at least affect. Section 50 provides that a corporation shall not acquire, directly or indirectly, any shares in the capital, or any assets, of a body corporate where the acquisition is likely to have the effect of substantially lessening competition in a market for goods or services.
43. To be read with the sections I have mentioned is s. 51 providing for certain exceptions and also Pt VIII dealing specifically with resale price maintenance. Complementary to Pt IV is Pt VII which contains provisions which empower the Commission in the circumstances there provided for to grant authorizations or clearances in respect of conduct otherwise unlawful by reason of the provisions of Pt IV.
44. Part V deals with consumer protection. It has two divisions, the first dealing with unfair practices, and the second with conditions and warranties in consumer transactions. It is unnecessary to deal with the detail of the provisions of those divisions except to mention the provisions of ss. 52 and 53. The former section provides that a corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive. Section 53 deals with false representations. A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services, for example, falsely represent that goods or services are of a particular standard, quality or grade, or that goods are of a particular style or model. There are other specific representations referred to which if false involve a breach of the section.
45. Part VI of the Act provides for the enforcement of remedies. Section 76 provides that if the court is satisfied that a person has contravened a provision of Pt IV the court may order the person to pay such pecuniary penalty not exceeding $50,000 in the case of a person not being a body corporate, or $250,000 in the case of a body corporate in respect of each act or omission by the person to which the section applies as the court determines to be appropriate having regard to all relevant matters including the nature and extent of the act or omission and of any loss or damage suffered as a result of the act or omission, the circumstances in which the act or omission took place and whether the person has previously been found in proceedings under the Act to have engaged in any similar conduct. Section 76 is to be contrasted with s. 79 which provides that a person who contravenes a provision of Pt V, other than s. 52, is guilty of an offence punishable on conviction. In the case of a person not being a body corporate conviction results in a fine not exceeding $10,000 or imprisonment for a period not exceeding six months. In the case of a body corporate the fine is not to exceed $50,000.
46. By both the provisions of ss. 76 and 79 the legislature has demonstrated that the observation of the terms of the Act, particularly the stamping out of the unlawful practices specified in Pt IV and Pt V of Divn I was in its view of substantial public concern. A penalty of $250,000 in the money of 1974 is a very substantial penalty indeed. I have not so far mentioned the provisions of s. 78. It provides that criminal proceedings do not lie against a person by reason only that the person has contravened a provision of Pt IV. Thus there is a distinction in the view that the legislature had of breaches of Pt IV and breaches of Pt V. Conduct which amounts to a breach of Pt V is criminal; conduct which amounts to a breach of Pt IV is not. On the other hand, at least so far as corporations are concerned, conduct amounting to a breach of Pt IV might be punished by a penalty five times as great as that which could be imposed in relation to conduct amounting to a breach of Pt V. In my opinion the fact that s. 78 does not make conduct constituting a breach of Pt IV criminal does not detract from the fact that the legislature intended, by empowering the court to impose very substantial penalties, to see to it, so far as it could, that the provisions of Pt IV were obeyed. The very size of the penalties which are able to be imposed indicates the seriousness of the view which the legislature took as to the conduct which it was proscribing. It is true that the provisions of s. 78 may indicate that a breach of one of the provisions of that Part may not have the same moral heinousness as is involved in the commission of a misdemeanour, for example one of those provided for in s. 53. That is a matter strongly relied upon by counsel for Allied Mills. To his submission in that regard I shall in due course come.
47. There are dicta in some of the authorities which support the view that the provisions of the Act were intended to benefit the public and were regarded by the legislature as matters of high public policy from the point of view of the regulation of the community's trade and commerce. Mikasa (N.S.W.) Pty. Ltd. v. Festival Stores [1972] HCA 69; (1972) 127 CLR 617. was a case in which the provisions of the 1965 Act relating to resale price maintenance arose for consideration. In the course of his judgment Barwick C.J. said: "The essence of the practice of resale price maintenance, though its manifestations may be various, is the endeavour of a vendor of goods to restrict the purchaser's ability to sell his goods at prices of his own designation and thereby to extend the control by the vendor of the market in the goods. This endeavour, when not restrained by law, can be successful because of the relevant positions of the parties, the vendor to be able to exact the purchaser's assent to the restriction being, in some way, in an advantageous or overpowering position. Monopolising, and other methods and devices designed to distort the market in goods and to limit the ability of traders to trade therein, have long been regarded as unacceptable in a free society. Their prohibition or control has from time to time been accepted as a proper adjustment of the rights inter se of traders in the market. It seems to me that a law preventing entirely or sub modo such a practice as resale price maintenance is no more than a law accommodating the liberty of the vendor to trade to the liberty of the purchaser to trade, each under the law to be free, in the proper sense of that word, to trade in the goods. Part VIA of the Act is, in my opinion, relevantly, in its nature, a regulatory law" (1972) 127 CLR, at p 630.
48. In the same case Menzies J. said: "It is, of course, obvious that not every regulation of trade which is imposed by the Commonwealth Parliament or a State Parliament falls within this description of permissible regulation (having regard to s. 92 of the Constitution) but resale price maintenance is a practice that has so generally been found to require legislative regulation in the public good that I have no difficulty in concluding that to regulate it as has been done by Pt VIA of the Act is to do no more than provide part of the legal framework within which inter-State trade may be freely carried on. Part VIA of the Act can stand with s. 92 of the Constitution" (1972) 127 CLR, at p 640. (Both the interpolation and the emphasis are mine.)
49. In Trade Practices Commission v. Stihl Chain Saws (Aust.) Pty. Ltd. (1978) TPRS. 305.14 Smithers J. was also concerned with resale price maintenance. The matter arose prior to the 1977 amendments of the Act so that the Act had, for Smithers J., the same form as it has for me. After referring to ss. 48 and 76 and to the penalty provided for in the latter section he continued: "It is clearly the intention of Parliament to lay down conditions for the conduct of corporate trade and commerce which will ensure that traders operate in competitive conditions and that the public has the benefits which flow therefrom. So far as resale price maintenance is concerned the object of the Act is to create conditions in which the public will benefit from traders competing with each other in respect of prices unfettered by price restraints imposed by suppliers of goods upon retailers" (1978) TPRS., at p 305.32.
50. In Melbourne Home of Ford Pty. Ltd. v. Trade Practices Commission [1979] FCA 15; (1979) 36 FLR 450. , Smithers J. was concerned with the provisions of Pt XII of the Act in which are to be found ss. 155 and 156. The former section provides that where the Commission, the Chairman or the Deputy Chairman has reason to believe that a person is capable of furnishing information, producing documents or giving evidence relating to a matter that constitutes, or may constitute a contravention of the Act, a member of the Commission may by notice in writing served on the person require him to furnish information, produce documents or to appear before the Commission to give evidence. Of these provisions Smithers J. said: "Part XII takes its place in an Act which is designed to introduce practices in trade and commerce which accord in matters of competition, prices, commercial morality and otherwise with standards prescribed by Parliament. By subjecting persons who contravene the provisions of the Act to remedial action at the hands of private persons and to proceedings for penalties and allied actions of considerable severity by the Commission and other persons, Parliament has indicated an intention to ensure, so far as possible, that the Act is obeyed. Part XII is obviously designed by Parliament to confer upon the Commission the authority to seek and obtain information from corporations and others for the purpose of facilitating the enforcement of the Act by legal process. So important did Parliament consider this function that it authorized the Commission to seek and obtain such information even from those suspected of contraventions of the Act and even where in supplying it the persons concerned may make incriminating admissions" (1979) 36 FLR, at pp 455-456. . His Honour's decision was upheld on appeal [1980] FCA 94; (1980) 47 FLR 163.
51. In Commercial Bank of Australia Ltd. v. Insurance Brokers Association of Australia (1977) 16 ALR 161. Bowen C.J. was dealing with the provisions of s. 52 of the Act. It is to be remembered that there is no penalty provided for breach of that section but, pursuant to s. 80 of the Act, an injunction may be obtained to restrain breaches of it. In the course of his judgment Bowen C.J. said: "It is necessary to say something at the outset about the task of the Court in approaching a claim for interim relief. Under s. 80 of the Trade Practices Act, it is provided that the Court may, on the application of the Minister, the Commission, or, subject to an immaterial qualification, 'any other person', grant an injunction restraining a person from engaging in conduct that constitutes or would constitute a contravention of the provisions of Pt V of the Act which includes s. 52. It is apparent that in some cases where a private person brings the proceedings, that person may be endeavouring to protect his own proprietary interest. This is so where, for example, a plaintiff seeks to restrain the misleading conduct in the course of trade or commerce which results in the goods of another being passed off as his goods, thereby causing him loss and damaging his goodwill. On the other hand, there are cases where no proprietary interest is involved but what is sought to be protected is the interests of consumers, that is, the public, and to protect them from being misled in the course of trade or commerce" (1977) 16 ALR, at p 167.
52. That view of the considerations properly to be taken into account in the exercise of the court's jurisdiction to grant injunctive relief has been followed on many occasions. I refer to World Series Cricket Pty. Ltd. v. Parish particularly per Bowen C.J. (1977) 16 ALR 181, at p 191. and Brennan J. (1977) 16 ALR, at p 204. ; and to Elna Australia Pty. Ltd. v. A.F. Harding & Co. Pty. Ltd. (1978) 4 T.PC 308, at p 311. . Finally I refer to Hornsby Building Information Centre Pty. Ltd. v. Sydney Building Information Centre Ltd. [1978] HCA 11; (1978) 140 CLR 216. where Murphy J. said that in the granting of an interim injunction in proceedings under the Act, the convenience of the defendant was, of course, relevant "and the public interest is a powerful consideration" (1978) 140 CLR, at p 234. . The proceedings were proceedings between private parties brought pursuant to ss. 52 and 80 of the Act.
53. In the review of the Act that I have undertaken, I have omitted mention of some Parts of it. Apart from its preliminary provisions I have not made mention of Pt IX dealing with the review by the Trade Practices Tribunal of determinations of the Commission nor of Pt X dealing with overseas cargo shipping. The provisions contained in these Parts would not alter or affect any view expressed concerning the considerations of public policy and public interest which underly the provisions of the Act. Indeed, those of Pt X would, if anything, add weight to the view that the important purpose of the legislation was to protect the community, or sections of it, in relation to the terms and conditions upon which goods and services are provided to it. The Act, looked at as a whole, is a declaration of policy on this matter. It provides a code of conduct for the regulation, in economic matters, of the commercial community. Its design in Pt IV is to outlaw the most notorious restrictive trade practices and, in Pt V, to endeavour to protect consumers from a number of other practices which have proved undesirable. Unlike the Sherman legislation of the United States, it contains a number of provisions, particularly those in s. 51 and in Pt VII, which expressly except conduct otherwise unlawful from the operation of the Act enable, upon the grounds provided for, persons who fear that their conduct may be a breach of the Act to obtain the Commission's (and on appeal the Tribunal's) authority to carry it out. But if the conduct is contrary to one or more of the provisions of the Act, and is not excepted or authorized, those responsible for it are subject to the heavy penalties which the legislation provides.
54. A review of the Act for present purposes is not complete without consideration of the provisions of s. 155. I have earlier referred to the terms of it when citing Melbourne Home of Ford Pty. Ltd. v. Trade Practices Commission [1979] FCA 15; (1979) 36 FLR 450. . The fact that the Commission is given the wide powers provided for in the section is a further indication that the legislature regarded the provisions of the Act as of great public importance. Otherwise it would not have facilitated its enforcement by including in it a provision such as s. 155. For that reason the powers conferred by the section ought not to be regarded as restrictive of the Commission's function but rather as enabling provisions empowering the Commission more expeditiously to carry out its functions.
55. It was submitted by counsel for Allied Mills that their effect was such that documents or information could not lawfully be obtained from a person unwilling to provide them except by recourse to the section. If another person's documents came into the Commission's hands by way of an informant, as in the present case, the Commission's proper course, so it was said, was to offer to return them to their true owner, in this case Allied Mills. Any other course was unlawful. I am satisfied that that submission should be rejected, but I prefer to state my reasons for that conclusion after I have dealt with the submissions on public policy to which I am about to come.
56. Before I do so, it is convenient to mention some other submissions in relation to s. 155 of which it is now convenient to dispose. The first was that the documents were obtained unlawfully from Mr Matthews because they were obtained by Mr Conlan under duress and by colour of office. Reliance was placed upon the evidence of Mr Matthews earlier cited. But, as previously said, the evidence which I accept of what occurred immediately before the documents were handed over is that of Mr Conlan. In my opinion he gave Mr Matthews a very fair and objective account of the provisions of the section. He pointed out that the matter was one for the Commission and not for him, Mr Conlan. He was under no obligation to go further. Importantly he did not represent, as counsel's submission suggested, that he himself had authority to serve a notice. Mr Matthews was a businessman of some experience. He could have declined to produce the documents until the service of a notice upon him. If the notice were in any respect not in accordance with the section he could have declined to comply with its terms.
57. It was also submitted by counsel for Allied Mills that no notice served on Mr Matthews pursuant to s. 155 could have been effective because the documents were not Mr Matthews' documents; they belonged to Allied Mills. The provisions of s. 155 authorize the service of a notice upon a person whom the Commission, its Chairman or Deputy Chairman, has reason to believe "is capable of furnishing information, producing documents or giving evidence relating to a matter that constitutes, or may constitute, a contravention" of the Act. It was submitted that those words should be construed so as to refer to persons who were lawfully in possession of documents. In other words, so it was submitted, a person was not within the meaning of the section "capable of furnishing . . . documents" unless he was the true owner thereof or was in possession of the documents with the true owner's consent. Reliance was placed upon the decision of the Court of Appeal in England in Eccles & Co. v. Louisville & Nashville Railroad Co. (1912) 1 KB 135. . That case is authority for the proposition that it is inappropriate to serve a subpoena for the production of documents upon a servant in whose possession the documents are. The subpoena must be directed to the person entitled to possession of them. So here it was said that the notice under s. 155 must be directed to Allied Mills and could not have been directed to Mr Matthews. Thus it was improper and illegal for Mr Conlan to suggest that he, Mr Matthews, as distinct from Allied Mills, could lawfully be served with a notice. I reject this submission because I consider that there is revealed by the terms of the legislation in question an intention on the part of the legislature to enable the Commission to serve a notice for the production of documents no matter that the person who has possession of the documents may not have a legal right to that possession. I take that view for two reasons. Firstly, the provisions of s. 155 are such as to enable the obtaining not only of documents, but also of information and evidence. It seems to me that the Commission is entitled to ask, by the issue of a notice, for information or evidence from any person who is capable of giving it. I see no reason to distinguish the position in relation to documents. Then the provisions of s. 156 (2) empower the Commission to take and retain, for as long as is necessary for the purposes of the Act, possession of a document produced in pursuance of a notice under s. 155. The section goes on to provide that the person otherwise entitled to possession of the document is entitled to be supplied, as soon as practicable, with a copy certified by a member of the Commission under his hand to be a true copy. The certified copy is to be received in all courts as evidence as if it were the original. Thus, a distinction is plainly drawn in s. 156 between a person capable of producing a document and a person entitled to possession of a document (if it were not for the fact of service of a notice). A person unlawfully in possession of documents produced by him pursuant to a notice would not be entitled to a copy. The person entitled to the copy is the true owner. The same distinction is drawn in s. 156 (3).
58. In order that I may come to grips with the arguments on public policy or public interest it is necessary that I should refer in some detail to a number of authorities. I do not believe that the authorities are necessarily consistent with one another. I think this is because the courts have had to grapple with the problem in a variety of situations and have done their best to do justice between parties taking into account the public interests that are in play in the different sets of circumstances that have arisen for consideration.
59. In Gartside v. Outram (1856) 26 LJ Ch 113. the plaintiffs sought to restrain a former clerk from disclosing any of their dealings and transactions. In answer to the claim the defendant stated that the plaintiffs were in the habit of conducting their business in a fraudulent manner, and specified a particular instance. In support of his answer the defendant filed interrogatories for the examination of the plaintiffs as to the fraudulent transactions. The plaintiffs declined to answer them. On exception to the answer of the plaintiffs it was held that there was no privilege to protect them from answering, the discovery being material to support the defendant's answer, which, if proved, would be a complete defence to the action. In the course of his judgment Wood V.C. said: "The true doctrine is, that there is no confidence as to the disclosure of iniquity. You cannot make me the confidant of a crime or a fraud, and be entitled to close up my lips upon any secret which you have the audacity to disclose to me relating to any fraudulent intention on your part: such a confidence cannot exist. I quite agree that a clerk or a person employed in confidence would not be allowed upon a mere roving suggestion, that there was or might be fraud in the transactions of his employer, or even, perhaps, on a general suggestion, that he believed that he could disclose fraud if he had an opportunity of seeing the books of his employers, (although it is not necessary to decide that), to obtain from his employers that disclosure of their books which, as Mr Eddis says, the very object of the jurisdiction is to prevent. But this gentleman has put in an answer which has nothing of the character which Mr Eddis attributed to it, but is as plain and as definite a case as can well be conceived" (1856) 26 LJ Ch, at p 114.
60. Later his Lordship said: "The real ground of the jurisdiction, as it is properly put, is founded first upon property, because the Court attempts not to interfere with morals, except in administering civil rights connected with rights of property. There is the property of the employer in those secrets of his business which he is obliged to communicate to others, and which are not to be trifled with. It is a sacred and solemn deposit, but there is no property in these transactions with this gentleman which were of the character I have been describing, and in his answer he has made no disclosures except as to these fraudulent transactions. If he makes out that case set forth by his answer he will make out a very good case for resisting this injunction, and therefore the plaintiffs must enable him, as far as they can by any knowledge in their possession, to arrive at the discovery" (1856) 26 LJ Ch, at p 116.
61. R. v. Cox and Railton (a Crown case reserved) (1884) 14 QBD 153. was a case concerning legal professional privilege. The material question in a trial was the date of dissolution of a partnership between the two accused. Their case was that it had been dissolved at a date earlier than that upon which the Crown relied. A solicitor was called in the Crown case to prove that after a judgment had been obtained against the two accused they consulted the solicitor in order to be advised how they could defeat the plaintiff's judgment. They asked whether a bill of sale could legally be executed by one of them in favour of the other so as to defeat the judgment. There was at the time they sought the advice no suggestion that any dissolution of the partnership had taken place. The evidence was objected to on the ground that the communication was one between solicitor and client and privileged. The evidence was received but the question of whether it was properly received was reserved for the court. It was held that it had been properly received. In the course of giving the court's judgment Stephen J. said: "This rule (as to the privilege of legal professional communications) has been accepted and acted upon ever since, and we fully recognise its authority, but we think that the present case does not fall either under the reason on which it rests, or within the terms in which it is expressed. The reason on which the rule is said to rest cannot include the case of communications, criminal in themselves, or intended to further any criminal purpose, for the protection of such communications cannot possibly be otherwise than injurious to the interests of justice, and to those of the administration of justice. Nor do such communications fall within the terms of the rule. A communication in furtherance of a criminal purpose does not 'come into the ordinary scope of professional employment'" (1884) 14 QBD, at p 167. . (The interpolation is mine.) The words quoted by Stephen J. are those of Lord Brougham in Greenough v. Gaskell [1833] EngR 333; (1833) 1 My & K 98; 39 ER 618.
62. Later Stephen J. referred to Gartside v. Outram (1856) 26 LJ Ch 113. After discussing a number of other authorites he concluded as follows: "Courts must in every instance judge for themselves on the special facts of each particular case, just as they must judge whether a witness deserves to be examined on the supposition that he is hostile, or whether a dying declaration was made in the immediate prospect of death. In this particular case the fact that there had been a partnership (which was proved on the trial of the inter-pleader issue), the assertion that it had been dissolved, the fact that directly after the verdict a solicitor was consulted, and that the execution creditor was met by a bill of sale which purported to have been made by the defendant to the man who had been and was said to have ceased to be his partner, made it probable that the visit to the solicitor really was intended for the purpose for which, after he had given his evidence, it turned out to have been intended. If the interview had been for an innocent purpose, the evidence given would have done the defendants good instead of harm. Of course the power in question ought to be used with the greatest care not to hamper prisoners in making their defence, and not to enable unscrupulous persons to acquire knowledge to which they have no right, and every precaution should be taken against compelling unnecessary disclosures" (1884) 14 QBD, at p 176.
63. Next is Weld-Blundell v. Stephens (1919) 1 KB 520. where the plaintiff had lent money to a company. He sought a further advance and employed the defendant, a chartered accountant, to look into the affairs of the company. In a letter of instructions to the accountant the plaintiff inserted libellous statements concerning the former manager and an auditor of the company. The accountant handed the letter to his partner who negligently left it at the company's office. It was found by the manager who communicated its contents to the two persons defamed. They sued the plaintiff for libel. It was held by the Court of Appeal that it was the duty of the defendant to keep secret the contents of the letter. However, a majority of the court held that the plaintiff was entitled to recover no more than nominal damages. After referring to the decision of Darling J. (1918) 2 KB 742. in which the learned judge said that he had reached the conclusion that the law did not imply any promise or term as that upon which the plaintiff relied, and saying that he was unable to agree with that view, Bankes L.J. continued: "There may no doubt be cases to which the rule laid down by the learned judge may be applied, as for instance confidential communications to a professional adviser as to the proposed commission of a crime, or as to the proposed commission of a civil wrong upon an individual. A contract to keep such a communication secret may well be considered as an illegal contract, and the duty to the public to disclose the criminal or illegal intention may properly be held to override the private duty to respect and protect the client's confidence. Apart from the special nature of the jurisdiction which was invoked in the case of Gartside v. Outram (1856) 26 LJ Ch 113. (a case which was much relied upon by Mr Hogg) I think that that case falls within the class of cases to which I have alluded, and which are entirely distinct in their nature from the present case, where the wrong is completed before the communication is disclosed, and where, as I think, public policy is better served by respecting the confidence than by abusing it" (1919) 1 KB, at p 527.
64. Warrington L.J. left open the question of what the position would have been if the document had disclosed "a contemplated crime" (1919) 1 KB, at pp 532-533. . He then discussed Gartside v. Outram (1856) 26 LJ Ch 113. and suggested that its application was a narrow one. He continued: "But even if the judgment is of the wider application, it does not cover such a case as the present. The fraud there alleged was a systematic fraud pursued by the plaintiffs in the course of their business, and the disclosure of the evidence in the defendant's possession would tend to prevent such frauds in the future. I doubt whether the Vice-Chancellor would have come to the same conclusion where, as in the present case, the question relates to a single document, the writing and publication of which is no doubt a cause of action, but the disclosure of which serves no useful purpose, except to enable the person libelled to recover damages for a libel, the existence of which, but for the defendant's neglect, might never have been known to anyone" (1919) 1 KB, at p 534.
65. Scrutton L.J. dealt with the matter also (1919) 1 KB, at pp 544-546. , but I do not find it necessary to cite any passage from his judgment. The decision of the Court of Appeal was upheld by the House of Lords (1920) AC 956. . It is unnecessary to refer to the detail of their Lordships' judgments but I refer in passing to Lord Wrenbury (1920) AC, at p 1000. and I should cite a passage from the judgment of Viscount Finlay by reason of the fact that some reliance was placed upon it by counsel for Allied Mills. It is as follows: "Somewhat similar considerations might apply if the agent's breach of confidence had led to an action for penalties. A man may without any moral delinquency have made himself liable to penalties to a considerable amount at the suit of any common informer. It could not be suggested that there would be any obligation upon him to make these facts generally known in order to give an opportunity to any person who might be so minded to play the part of the common informer. Under such circumstances it may well be, as was suggested in Neville's case (Neville v. London Express Newspaper) (1919) AC 368. , that any person who maintained an action for such penalties would be liable to substantial damages in respect of the penalties, the payment of which had been compelled by the maintained action. It might be no answer that there was a legal liability to pay the penalties, as that potential legal liability would never have become effective but for the wrongful act of the maintainer. The same observations might apply if the action for penalties was due to the betrayal by an agent of his principal's confidence" (1920) AC, at p 970.
66. Initial Services Ltd. v. Putterill (1968) 1 QB 396. is a case involving the English restrictive trade practices legislation. In August 1966 the first defendant, who had resigned his position as sales manager of the plaintiff launderers, left the plaintiff's employment. He took with him a number of the plaintiff's documents which he handed to reporters of a national newspaper published by the second defendant. He also gave the reporters information about the company's affairs. In September the paper published articles alleging a liaison system between laundries to keep up the prices. The article said that the plaintiffs had increased their prices after the imposition of the selective employment tax ostensibly to offset that tax when in fact they were getting substantial extra profit. The plaintiffs issued a writ against the defendants claiming an injunction, damages and delivery up of confidential papers which were their property. The plaintiffs claimed that the first defendant was in breach of an implied term of his contract of service with them that he would not disclose to strangers confidential information obtained by him in the course of or as a result of his employment. By his defence the first defendant alleged, inter alia, that the plaintiffs had agreed with other laundries to keep up prices; that the agreement was contrary to s. 6 of the Restrictive Trade Practices Act, 1956 (Imp.) and should have been registered under s. 9 of that Act and referred to the Monopolies Commission; and that a circular issued by the plaintiffs to their customers stating that increases in their charges were mainly to offset the selective employment tax was misleading to the public. It was held by the Court of Appeal in England that the defence would not be struck out since it was at least arguable that the information supplied by the defendant was not within the realm of confidence to which a master could hold his servant. In the course of his judgment Lord Denning M.R. referred to Gartside v. Outram (1856) 26 LJ Ch 113. and Weld-Blundell v. Stephens (1919) 1 KB 520. . He referred to the dictum of Wood V.C., "there is no confidence as to the disclosure of iniquity", and continued: "Mr Michael Kerr suggested that this exception was confined to cases where the master has been 'guilty of a crime or fraud'. But I do not think that it is so limited. It extends to any misconduct of such a nature that it ought in the public interest to be disclosed to others. Wood V.C., put it in a vivid phrase: 'There is no confidence as to the disclosure of iniquity'.
67. "In Weld-Blundell v. Stephens (1919) 1 KB, at p 527. Bankes L.J. rather suggested that the exception is limited to the proposed or contemplated commission of a crime or a civil wrong. But I should have thought that was too limited. The exception should extend to crimes, frauds and misdeeds, both those actually committed as well as those in contemplation, provided always - and this is essential - that the disclosure is justified in the public interest. The reason is because 'no private obligations can dispense with that universal one which lies on every member of the society to discover every design which may be formed, contrary to the laws of the society, to destroy the public welfare': see Annesley v. Anglesea (Earl) (1743) LR 5 QB 317.
68. "The disclosure must, I should think, be to one who has a proper interest to receive the information. Thus it would be proper to disclose a crime to the police; or a breach of the Restrictive Trade Practices Act to the registrar. There may be cases where the misdeed is of such a character that the public interest may demand, or at least excuse, publication on a broader field, even to the press" (1968) 1 QB, at pp 405-406.
69. Strong reliance was placed by the plaintiff upon the fact that the disclosure had been to the press rather than to someone who could be regarded as a proper authority. Salmon L.J. (as he was) thought that such a proposition was not self-evident. Later he said: "I regard this case, however, from a more fundamental point of view. I am by no means satisfied that there is this general blanket of confidence for which Mr Kerr contends. I am not, however, deciding that it is not so. All I am saying is that I am not convinced that it is so. An alternative view is this, that in every case in which it is suggested that there has been a breach of confidence by the servant, the first question for the court to decide is: was the information which the servant received in fact clothed with confidence? May I test it in this way? Suppose the servant had entered into a contract with the master not to disclose certain information, would that contract be enforceable or would it be illegal? To my mind that must depend on the circumstances of the particular case. Consider this case: the Restrictive Trade Practices Act, 1956, is an Act which certainly was very much concerned with the public interest. It imposed an obligation upon these plaintiffs to disclose to the registrar the agreements into which they had entered with their fellow launderers in relation to the supply of goods. That obligation was imposed in the public interest. Such agreements are under the Act deemed to be contrary to the public interest unless, as Mr Kerr put it, the persons who entered into the agreement can succeed in the extremely difficult task of getting through one or more of the very narrow eyes of the needle in section 21 of the Act.
70. "Suppose the master had said to the servant: "We, of course, appreciate that these agreements into which we have entered ought in the public interest to be disclosed to the registrar, but we hope that the registrar will never find out about them. We propose to ignore our statutory obligation to disclose these agreements. You must agree with us that you will never make any disclosure about them to anyone.'
71. "Suppose that the servant had agreed. I am by no means convinced that any court would do other than regard such an agreement as illegal on the ground that it was clearly contrary to the public interest. I do not think that the law would lend assistance to anyone who is proposing to commit and to continue to commit a clear breach of a statutory duty imposed upon him in the public interest. If such agreements between masters and servants were to be enforced by the courts, it would be of great assistance to those who propose ignoring their statutory duties. I do not believe that the courts should or would render them any assistance" (1968) 1 QB, at pp 409-410.
72. Winn L.J. said: "It would be perhaps harsh to regard this case as in any degree analogous to that of a gang leader making a contract with his minions, his 'tools', that they will not 'grass' in advance of the completion of a contemplated bank raid to anyone other than the local police or the Director of Public Prosecutions. Not only is such a hypothetical term absurd but it could not be enforced for obvious reasons of public policy or illegality were the gangster to tell someone other than the police or the Director of Public Prosecutions.
73. "I do not desire to burden this judgment with quotations from the judgment of the Court of Appeal in Weld-Blundell v. Stephens (1919) 1 KB 520. If I had felt that time would be thus usefully employed, I would have drawn attention to the fact that nothing in any of those judgments touches upon the precise point here; all the judgments are certainly open to the construction that the members of the court would have been ready enough to refuse to enforce the agreement had they thought the agreement itself offended against public policy, that being the essential point in the present appeal" (1968) 1 QB, at pp 411-412.
74. Before proceeding to the next authority I should note a number of matters. Firstly, it is not possible from a reading of the report to ascertain precisely what the nature of the documents taken by the first defendant was. Some indication is perhaps to be obtained from the account of the pleadings (1968) 1 QB, at p 398. , but the detail of what was said in the documents is not there indicated. I mention this matter because it has an importance when I come to consider one of the submissions made by counsel for Allied Mills. Secondly, the English legislation which was in question did not provide for any offence. Section 6 of the Restrictive Trade Practices Act, 1956 provided that that part of the Act in which s. 6 appeared applied to any agreement between two or more persons carrying on business within the United Kingdom under which restrictions are accepted in respect of the prices to be charged, quoted or paid for goods. Section 9 provided that every agreement to which "this part of this Act" (s. 9 is in that part) applies shall be subject to registration thereunder. Finally, I should go ahead a little to indicate that Initial Services Ltd. v. Putterill has been referred to in the recent decision of the House of Lords in British Steel Corporation v. Granada Television Ltd. (1981) 1 All ER 417. . Lord Wilberforce said: "One final point. There is an important exception to the limitations which may exist on the right of the media to reveal information otherwise restricted. That is based on what is commonly known as the 'iniquity rule'. It extends in fact beyond 'iniquity' to misconduct generally (see Initial Services Ltd. v. Putterill (1968) 1 QB 396. . It is recognised that, in cases where misconduct exists, publication may legitimately be made even if disclosure involves a breach of confidence such as would normally justify a prohibition against disclosure. It must be emphasised that we are not in this field in the present case; giving the widest extension to the expression 'iniquity' nothing within it is alleged in the present case. The most that it is said the papers reveal is mismanagement and government intervention. Granada has never contended that it had a right to publish in order to reveal 'iniquity'" (1981) 1 All ER, at p 455.
75. The case was also referred to by Lord Fraser (1981) 1 All ER, at p 479. who quoted, with approval part of the passage from the judgment of Lord Denning M.R. which I have quoted. His Lordship also referred to the judgment of Salmon L.J.
76. It would therefore appear that the decision in Initial Services Ltd. v. Putterill has received the imprimatur of two of the members of the House of Lords. Lord Salmon was also a member of the Bench in the Granada Television case. He dissented but nothing in his judgment suggests that he, at this time, would take a different view of what he had said in the Initial Services case. The Granada Television case is a case to which I shall in due course return after discussing some other authorities.
77. The next case to which I refer is Butler v. Board of Trade (1971) 1 Ch 680. After I have discussed that case it will be necessary for me to refer to some earlier authorities referred to by Goff J. (as he was) in his judgment in addition to Gartside v. Outram (1856) 26 LJ Ch 113. and R. v. Cox and Railton (1884) 14 QBD 153. The earlier authorities are O'Rourke v. Darbishire (1920) AC 581. Ghani v. Jones (1970) 1 QB 693. and Varawa v. Howard Smith & Co. Ltd. [1910] HCA 11; (1910) 10 CLR 382. Butler v. Board of Trade was a case where, amongst papers at a solicitor's office handed over to a representative of the official receiver of a company in compulsory liquidation, was a copy of a letter written to the plaintiff by the solicitor in which he volunteered a warning to the plaintiff that he might incur serious consequences, which he described, if he did not take care. In criminal proceedings against the plaintiff under one of the sections of the Companies Act 1948 the Board of Trade intended to adduce the copy of the letter in evidence. The plaintiff sought the opinion of the court whether there was any equity to prevent the Board of Trade from tendering the copy in evidence in those proceedings on the ground that the original of the letter was privileged and the copy confidential. The Board of Trade contended that since the plaintiff was being charged with criminal offences and the letter was relevant thereto the privilege did not apply. The plaintiff contended that the Board would have to show first that the professional advice given was in furtherance of crime or fraud. It was held by Goff J. that the fact that the letter was relevant to criminal proceedings was not sufficient by itself to destroy the privilege, the correct test to apply being both whether there was a bona fide and reasonably tenable charge of crime or fraud and whether the letter could be shown prima facie to be preparatory to the commission of a crime of fraud. It was further held that on the limited facts before the court the warning in the solicitor's letter should not be regarded as being in preparation for or in furtherance of or as part of any criminal designs on the plaintiff's part and that therefore the letter was privileged and the copy confidential. But, although there had been a breach of confidence, and in such circumstances an innocent recipient of information could be restrained, there were good reasons why it would not be proper for the court to interfere in cases where there was a conflict between the private right of the individual in equity and the duty of the State to prosecute offenders. Accordingly, the recipient being the Board of Trade and the intention being to use the letter in a public prosecution, the court's equitable jurisdiction in confidence would not be exercised and the action was dismissed. Goff J. considered a number of authorities including Gartside v. Outram (1856) 26 LJ. Ch 113. , R. v. Cox and Railton (1884) 14 QBD 153. Weld-Blundell v. Stephens (1919) 1 KB 520. and O'Rourke v. Darbishire (1920) AC 581. . In the course of his judgment he said: "It is submitted on behalf of the defendants, however, that as the plaintiff is charged with criminal offences, and the letter is relevant thereto, which it undoubtedly is, the privilege does not apply. Now, it is clear that a sufficient charge of crime or fraud will in certain circumstances destroy the privilege, but there is a dispute between the parties as to what it is necessary to show for that purpose.
78. "The defendants say that relevance is alone sufficient, and that the position is in effect so stated in note 24/5/9 on p 377 of The Supreme Court Practice 1970. The plaintiff submits, however, that it is necessary to go further and show that the professional advice was in furtherance of the crime or fraud, as is said in Phipson on Evidence, 11th ed. (1970), p 251, par. 590 and Halsbury's Laws of England, 3rd ed., Vol. 36 (1961), p 51, par. 72. . . .
79. "As questions of this nature have to be determined on a prima facie basis, often without seeing the documents or knowing what was orally communicated, the two tests will, I think, in many and probably most cases be found in practice to produce the same result because in most cases of relevance the prima facie inference will be that the communication was made in preparation for or in furtherance or as part of the criminal or fraudulent purpose. However, the two tests are not the same and in the present case, cannot, I think, possibly produce the same results. On the information before me the letter was nothing but a warning volunteered - no doubt wisely, but still volunteered - by the solicitor that if her client did not take care he might incur serious consequences, which she described. I cannot regard that on any showing as being in preparation for or in furtherance or as part of any criminal designs on the part of the plaintiff" (1971) 1 Ch, at pp 686-687.
80. His Lordship went on to say that he preferred the narrower view and thought that this was supported by the decision in R. v. Cox and Railton and O'Rourke v. Darbishire. There are dicta in what his Lordship has said which would suggest that he thought that for privilege to be lost there had to be established a prima facie case of crime, fraud or, perhaps, other breach of the law.
81. Nevertheless, relief was refused. Goff J. rested himself upon the following considerations: "In my judgment it would not be a right or permissible exercise of the equitable jurisdiction in confidence to make a declaration at the suit of the accused in a public prosection in effect restraining the Crown from adducing admissible evidence relevant to the crime with which he is charged. It is not necessary for me to decide whether the same result would obtain in the case of a private prosecution, and I expressly leave that point open.
82. "My reasons for the conclusion I have reached are as follows: First, it is clear that if the copy letter were in the hands of a third party I would in restraining him have to except the power of the trial court to subpoena him to produce the letter and his obligation to comply with that order: see per Bankes L.J. in Weld-Blundell v. Stephens. It would be strange if the defendants could subpoena a witness to produce this document yet, having it themselves, not be allowed to tender it in evidence. Secondly, and even more compelling, is the effect of the conflict between the two principles to which I have already referred. In Elias v. Pasmore (1934) 2 KB 164. it was held accordingly by Horridge J. that the police were justified in retaining and using at the trial of Hannington documents belonging to Elias which they had seized irregularly when entering the premises to arrest Hannington. True it is that in Ghani v. Jones (1970) 1 QB 693. Lord Denning M.R. criticised the dictum of Horridge J. as being too wide in that he gave the police a right to use the documents in the trial of any person, but with that qualification Lord Denning accepted what Horridge J. had said. Thus Elias v. Pasmore is authority for the proposition that the right and duty of the police to prosecute offenders prevails over the accused's right of ownership. He cannot demand his own goods back. By analogy it seems to me that the interest and duty of the defendants as a department of the state to prosecute offencers under the Companies Act must prevail over the offender's limited proprietary right in equity to restrain a breach of confidence, and here, of course, the doubt suggested by Lord Denning does not arise because the accused and the person entitled to the benefit of the confidence are one and the same. This view of the matter is further supported by Ghani v. Jones itself, and the statement by Lord Denning M.R. (1970) 1 QB, at pp 708-709. of the relevant principles, and particularly the second and third, guiding the right of the police to retain and use articles where no man has been arrested or charged and a fortiori where, as here, a criminal prosecution is actually pending. I find some further support for this conclusion in Saull v. Browne (1874) 10 Ch App 64. and Kerr v. Preston Corporation (1876) 6 Ch D 463. , which say that in general a court of equity will not interfere with a criminal prosecution, although the question there was one of restraining it altogether" (1971) 1 Ch, at pp 690-691.
83. In so far as Goff J. has said that for privilege to be lost there must be evidence of a prima facie case of crime or fraud, he ought not to be taken as departing at all from what was said by members of the House of Lords in O'Rourke v. Darbishire, a case to which he not only refers but upon which he relies for the propositions which he has stated. It would seem that the view that he took of R. v. Cox and Railton was that there was actual evidence of the commission of a crime because in that case the jury had convicted the accused. But the question arises as to whether the result in R. v. Cox and Railton would have been different if, instead of the matter being raised before the Court for Crown Cases Reserved, it had been raised in proceedings of the kind currently in question here prior to the trial of the two accused. In any event the judges in O'Rourke v. Darbishire make it clear that what is meant by a prima facie case is not a prima facie case in the sense in which a magistrate called upon to decide whether an accused person should be committed for trial would use it. For instance, Viscount Finlay said: "The appellant also relied on the proposition that no privilege comes into existence with regard to communications made in order to get advice for the purpose of carrying out a fraud.
84. "This is clear law, and, if such guilty purpose was in the client's mind when he sought the solicitor's advice, professional privilege is out of the question. But it is not enough to allege fraud. If the communications to the solicitor were for the purpose of obtaining professional advice, there must be, in order to get rid of privilege, not merely an allegation that they were made for the purpose of getting advice for the commission of a fraud, but there must be something to give colour to the charge. The statement must be made in clear and definite terms, and there must further be some prima facie evidence that it has some foundation in fact. It is with reference to cases of this kind that it can be correctly said that the Court has a discretion as to ordering inspection of documents. It is obvious that it would be absurd to say that the privilege could be got rid of merely by making a charge of fraud. The Court will exercise its discretion, not merely as to the terms in which the allegation is made, but also as to the surrounding circumstances, for the purpose of seeing whether the charge is made honestly and with sufficient probability of its truth to make it right to disallow the privilege of professional communications. In the present case it seems to me clear that the appellant has not shown such a prima facie case as would make it right to treat the claim of professional privilege as unfounded" (1920) AC, at p 604. . I refer also to what was said by Lord Sumner (1920) AC, at pp 613-614. , by Lord Parmoor (1920) AC, at pp 662-623. and by Lord Wrenbury (1920) AC, at pp 632-633.
85. Butler v. Board of Trade (1971) 1 Ch 680. is important in highlighting the fact that although a document may not be one in respect of which a claim for privilege can be overcome, it may nevertheless be retained by the Crown and used in a prosecution. That is how Goff J. resolved the case in favour of the Board of Trade. In doing so he relied, as has been mentioned, on an earlier decision of the Court of Appeal in Ghani v. Jones (1970) 1 QB 693.
86. Before coming to Ghani v. Jones I should say something of Varawa v. Howard Smith & Co. Ltd. [1910] HCA 11; (1910) 10 CLR 382. . There the plaintiff sued the defendant for malicious arrest and for abuse of the process of the court. The plaintiff administered interrogatories to the defendants as to whether the defendants had obtained any advice from the solicitors as to the liability of the plaintiff before they arrested him. It was held that if the arrest were unlawful, the unlawful proceeding did not begin until after the advice had been given, and that as the communication between the defendants and their solicitor was not shown to have been made in furtherance of an illegal object, it was privileged. Griffith C.J. referred to the decision of the Privy Council in Bullivant v. Attorney-General for Victoria (1901) AC 196, at p 200. where Lord Halsbury LC. had said that no court could be called upon to protect communications which are in themselves parts of a criminal or unlawful proceeding. Griffith C.J. continued: "The rule is very well illustrated in the case of R. v. Cox and Railton (1884) 14 QBD 153. , in which the communication stated and put in evidence was a communication made by a solicitor to his client for the purpose of enabling him to carry out an unlawful enterprise. In the present case the supposed communication inquired into is one made by the solicitor before the enterprise was commenced. How can that be said to be part of a criminal or unlawful proceeding? There is nothing criminal or unlawful in a solicitor telling his client that he does not think he has a good cause of action" (1910) 10 CLR, at p 385.
87. It seems to me, with very great respect to his Honour, that his explanation of the decision in R. v. Cox and Railton is not strictly accurate. The communication there made was a communication by a solicitor, acting in good faith, explaining why it was that a charge could not be given by one of the partners to the other, the partnership still being in existence. It was that letter which no doubt prompted the accused to fabricate a story that the partnership had been dissolved prior to the judgment. But it seems hardly accurate to say, as his Honour has said, that the communication made by the solicitor to his client was a communication for the purpose of enabling him (the client) to carry out an unlawful enterprise. Nevertheless, the view of the case adopted by Griffith C.J. is the same as that adopted by Goff J. in Butler v. Board of Trade (1971) 1 Ch 680. . To the same effect as the judgment of Griffith C.J. are the judgments of O'Connor J. (1910) 10 CLR, at p 387. and Isaacs J. (1910) 10 CLR, at p 389.
88. Ghani v. Jones (1970) 1 QB 693. is one of a number of cases referred to in argument dealing with the situation in relation to documents procured by the police otherwise than in the course of the execution of a search warrant or from an accused person at the time of his arrest. The documents in questions were passports. They had been procured by the police upon a search, without a warrant, of the plaintiff's house. Lord Denning M.R. said: "What is the principle underlying these instances? We have to consider, on the one hand, the freedom of the individual. His privacy and his possessions are not to be invaded except for the most compelling reasons. On the other hand, we have to consider the interest of society at large in finding out wrongdoers and repressing crime. Honest citizens should help the police and not hinder them in their efforts to track down criminals. Balancing these interests, I should have thought that, in order to justify the taking of an article, when no man has been arrested or charged, these requisites must be satisfied: "First: The police officers must have reasonable grounds for believing that a serious offence has been committed - so serious that it is of the first importance that the offenders should be caught and brought to justice.
89. "Second: The police officers must have reasonable grounds for believing that the article in question is either the fruit of the crime (as in the case of stolen goods) or is the instrument by which the crime was committed (as in the case of the axe used by the murderer) or is material evidence to prove the commission of the crime (as in the case of the car used by a bank raider or the saucer used by a train robber).
90. "Third: The police officers must have reasonable grounds to believe that the person in possession of it has himself committed the crime, or is implicated in it, or is accessory to it, or at any rate his refusal must be quite unreasonable.
91. "Fourth: The police must not keep the article, nor prevent its removal, for any longer than is reasonably necessary to complete their investigations or preserve it for evidence. If a copy will suffice, it should be made and the original returned. As soon as the case is over, or it is decided not to go on with it, the article should be returned.
92. "Finally: The lawfulness of the conduct of the police must be judged at the time, and not by what happens afterwards.
93. "Tested by these criteria, I do not think the police officers are entitled to hold on to these passports or letters. They may have reasonable grounds for believing that the woman has been murdered. But they have not shown reasonable grounds for believing that these passports and letters are material evidence to prove the commission of the murder. All they say is that they are of 'evidential value', whatever that may mean. Nor have they shown reasonable grounds for believing that the plaintiffs are in any way implicated in a crime, or accessory to it. In any case, they have held them quite long enough. They have no doubt made photographs of them and that should suffice" (1970) 1 QB, at pp 708-709. . (The emphasis is mine.)
94. Lord Denning's judgment was agreed in by Edmund Davies L.J. (as he was) and Willmer J. (as he was). Lord Denning referred to a number of other authorities including Chic Fashions (West Wales) Ltd. v. Jones (1968) 2 QB 299. and Elias v. Pasmore (1934) 2 KB 164.
95. I have referred to Ghani v. Jones firstly because of the reference which is made to it by Goff J. in Butler v. Board of Trade and, more importantly, because of the strong reliance placed by counsel for Allied Mills upon the passage from Lord Denning's judgment above cited. To that submission I shall later come.
96. Two judges sitting at first instance in the High Court of Justice in England have followed the decision of Goff J. in Butler v. Board of Trade. They are Ackner J. (as he was) who followed it in Garfinkel v. Metropolitan Police Commissioner (1972) Crim LR 44. and Swanwick J. who followed it in Frank Truman Export Ltd. v. Metropolitan Police Commissioner (1977) 1 QB 952. . His Lordship said: "The question seems to me to be one of the balance of public policy and of discretion in the exercise of an equitable remedy on the facts and in the circumstances of the particular case. On the one hand, there was here a warrant authorising entry and search for forgeries. Search must involve sorting. The method of sorting was consented to and the documents handed over for that purpose. In the course of the sorting evidence came to light of a crime which the police were already investigating and for which they had already arrested one of the plaintiffs and interviewed the other, and, in my judgment, the police were acting reasonably. On the other hand, although the police were entitled to search and sort, the documents they found in the third category were in the hands of an innocent bailee and were privileged, at least until handed over.
97. "In these circumstances, are the police, on the balance of public policy, entitled to retain them and use them as evidence in the prosecution of the crime which was already alleged at the time of finding the documents and charged before there was time to sort them? On the balance, I hold that they are, and I follow the lead of Goff J. and Ackner J. in refusing the relief asked for" (1977) 1 QB, at p 965.
98. It should be noted that it is not easy from a reading of the report to determine whether the documents which were in question would themselves be evidence of wrongdoing and able to be tendered in the proceedings to be brought.
99. In R. v. Tompkins (1977) 67 Cr App R 181. the accused was charged with handling stolen goods which included a stereo unit which was identified as having certain special characteristics including a loose button. The accused had denied that it had been loose but was confronted in cross-examination with a note he had written to his counsel admitting that the button was loose and that he had glued it back on. The note came into the possession of prosecuting counsel after it had been found lying on the floor of the court. The recorder ruled that the document should not be used in cross-examination. Nevertheless counsel for the prosecution asked one question based on its contents which was whether the appellant had tried to glue the button back on. He admitted that he had and was convicted. The ground of the appeal to the Court of Criminal appeal was that the use by the prosecution of information obtained in breach of the privilege existing between counsel and his client was contrary to natural justice and that the conviction was unsafe and unsatisfactory. It was held that it was not a breach of natural justice for a perjurer to be confronted with a note in his own handwriting admitting his perjury and written within hours of it - natural justice would seem to demand such an exposure, otherwise gross injustice would have been caused. It was impossible for the court to conclude that the verdict of the jury was unsafe or unsatisfactory. The judgment of the court was delivered by Ormrod L.J. who said: "Privilege, in this context, relates only to production of a document; it does not determine its admissibility in evidence. The note, though clearly privileged from production, was admissible in evidence once it was in the possession of the prosecution: Butler v. Board of Trade (1971) 1 Ch 680. Admissibility depends essentially on the relevance of the document; the method by which it has been obtained is irrelevant: Kuruma, Son of Kanui v. The Queen per Lord Goddard C.J. (1955) a.c. 197, at p 203. The judge in a civil case cannot exclude such a document though in criminal proceedings the judge has a limited discretion to exclude evidence, indisputedly admissible, in the interests of justice to the accused (per Lord Goddard C.J. supra). It is therefore for counsel in the first place to decide in his discretion whether or not to use such a document.
100. "Some complaint is made in this case that counsel for the prosecution did not disclose to his opponent that he was in possession of the note. In the view of the Court that also must be a matter for the discretion of counsel to be exercised in the light of the surrounding circumstances or, at most, a matter of professional ethics. It cannot affect the question of admissibility" (1977) 67 Cr App R, at p 184. . Thus Butler v. Board of Trade and the cases which follow it were impliedly approved by the English Court of Criminal Appeal.
101. Malone v. Metropolitan Police Commissioner (1980) 1 QB 49. was a case where police seized banknotes (both English and foreign) from a house which a search warrant authorized them to enter. The plaintiff and eight other persons were committed for trial on charges of conspiracy and of handling stolen property but no charge was laid in respect of the money. The police refused to return the money before the trial. The plaintiff commenced an action in detinue and also sought a mandatory injunction ordering the Metropolitan Police Commissioner to deliver up the banknotes. It was held that although there was no general power in the police to retain property lawfully seized which was not the subject of any charge and that the police must justify such retention upon some ascertainable ground, circumstances could arise under which it would form material evidence at the trial so that it would become necessary for it to be produced.
102. I do not find it necessary to discuss the detail of the reasoning of Stephenson L.J. and Roskill L.J. who were the members of the Court of Appeal who decided the matter. Their judgments contain references to Ghani v. Jones (1970) 1 QB 693. (which was distinguished) and to Frank Truman Exports Ltd. v. Metropolitan Police Commissioner (1977) 1 QB 952. . However I find it useful to quote a passage from the judgment of Roskill L.J. He said: "It seems to me that the line of authorities to which Mr Serota (counsel for the plaintiff) referred, and to which I do not find it necessary to refer in detail, show that there is no general power in the police, when they have lawfully seized property which is thereafter not the subject of any charge and is clearly shown not to have been stolen, to retain that property as against the person entitled to possession of it against some uncertain future contingency. The police must be able to justify the retention of such property in such circumstances upon some clearly ascertainable ground. To my mind the only question in this case is whether it can be predicted with sufficient certainty that under no circumstances irrespective of the fact that that money was not exhibited in the committal proceedings, will it become necessary to adduce that money in evidence at the trial which starts next month, so that it can now, without risk to the administration of justice, be safely returned to the plaintiff. If it became necessary for the prosecution to adduce that money in evidence, it would obviously gravely hamper the administration of justice if that money had been handed back and spent, so that it was no longer available to be put in evidence whenever required. Whatever Mr Serota's present instructions are (and, of course, I unreservedly accept that he has received those instructions I have mentioned) as to the course which the plaintiff at present intends to take at the trial, this will be a long trial and it seems to me quite impossible to predict, at this juncture, every turn which that long trial may ultimately take. It is not difficult to envisage circumstances in which it might become highly material for that money to be produced, either on behalf of the prosecution or of the defence, even though the prosecution do not seek to say that the money itself was stolen and have not so far exhibited it as part of the police officer's evidence. I think, therefore, on this narrow ground the defendant is entitled to retain this money until the conclusion of the criminal proceedings against the plaintiff, and in this respect I venture to disagree with the judge. On this ground I would allow the appeal and discharge the injunction" (1980) 1 QB, at p 70.
103. In R. v. Inland Revenue Commissioners; Ex parte Rossminster Ltd. [1979] UKHL 5; (1980) AC 952. revenue officers suspected that a tax fraud had been committed. A senior revenue officer placed information before a circuit judge and obtained search warrants for named revenue officers to search specified premises and seize anything which they had reasonable cause to believe might be required as evidence in proceedings in respect of the fraud. The warrants were issued pursuant to s. 20c of the Taxes Management Act, 1970. A critical question for determination by the court was whether the warrants were validly issued pursuant to the section. Although there were other subsidiary questions and some of what their Lordships said may be thought to touch upon the present problem, I do not regard the case as helpful in its resolution. It is a case upon its own facts and upon the particular legislation which was involved. I have mentioned the case only because it is a decision of the House of Lords and was much referred to in the argument before me.
104. That completes the review of the authorities. Upon the basis of it and of the analysis of the legislation earlier undertaken I can now come to the submissions which counsel for Allied Mills made in relation to the question of public policy and reach some conclusions.
105. The authorites establish that the public interest in the disclosure (to the appropriate authority or perhaps the press) of iniquity will always outweigh the public interest in the preservation of private and confidential information. To the extent that that was not clear beforehand, it has been made clear by the House of Lords in the Granada Television case. In addition to the reference to the judgments of Lord Wilberforce and Lord Fraser earlier made (1981) 1 All ER at pp 455, 479. I refer to what was said by Viscount Dilhorne (1981) 1 All ER, at p 461. . The public interest in the preservation of the secrecy of confidential communications was the basis upon which British Steel Corporation succeeded in the Granada Television case. It was said to be a matter of high public policy. But their Lordships, as I have shown, were careful to except cases of iniquity from the operation of the principle which they enunciated. The words used by Viscount Dilhorne were "some iniquity or crime".
106. Counsel for Allied Mills did not contend that the law was otherwise. But, as an initial submission, he said that the disclosure of evidence or material which established or tended to establish the breach of trade practices legislation, in particular a breach of a provision of Pt IV of the Act in question here, was not the disclosure of an iniquity. No crime or misdeamenour was involved. The liability for breach was civil only. The legislature had been careful to distinguish what it had regarded as the more serious infringements of the Act by providing that breaches of the provisions of Pt V Divn I would be misdemeanours. Breaches of these provisions involve, except in relation to a breach of s. 52, criminal and not civil liability.
107. In my opinion the cases, particularly Initial Services Ltd. v. Putterill (1968) 1 QB 396. and the Granada Television case (1981) 1 All ER 417. conclude this argument against Allied Mills. Because of the nature of the application dealt with by the Court of Appeal in the Initial Services case (it was an application to strike out a defence) the views expressed by the judges did not have the same force as would have been the case if it had been a final hearing. But both Lord Wilberforce and Lord Fraser have expressly approved the case, and Viscount Dilhorne distinguished between a crime and an iniquity, thus taking the view that an iniquity embraced more than criminal conduct. Initial Services Ltd. v. Putterill was a case involving the English trade practices legislation. As in the present case no criminal conduct was involved. But in the court's view Parliament in the United Kingdom had evinced a clear intention that the legislation was of the utmost importance in the public interest. Breach of it, in the eyes of Parliament, militated against the public good. In my judgment Parliament here took no less serious a view of the importance of the legislation from the standpoint of the public interest. It outlawed the various restrictive practices which are dealt with in Pt IV believing that they were, unless special circumstances excepted them from the operation of the legislation, to be detrimental to trade and commerce. Heavy penalties were provided for breaches of the relevant provisions. The enforcement of the legislation was facilitated by the enactment of s. 155.
108. Earlier I have reviewed the various provisions of the Act in an attempt to demonstrate that they reveal an intention on the part of Parliament that they have the utmost public importance. I do not wish to repeat what I have said. I recognize that to decide whether the disclosure of a breach of the legislation amounts to an iniquity involves the making of a value judgment. But it is not a subjective judgment. It is a judgment based upon the view that ought to be taken of the intended effect of the legislation in question once it has been understood and properly construed. In my opinion a breach of the provisions, whether of Pt IV or Pt V of the Act, is an iniquity within the rule formulated in Gartside v. Outram (1856) 26 LJ Ch 113. and referred to in the later cases including the Initial Services case and the Granada Television case.
109. In reaching that conclusion I have taken into account the dictum of Viscount Finlay in Weld-Blundell v. Stephens earlier cited (1920) AC, at p 970. But his Lordship was concerned with actions for penalties by common informers. There is no suggestion in any of the later authorities that the considerations mentioned by Viscount Finlay warrant the conclusion that any breach of the law which may be punished as the result of an action for penalties, whether brought by a common informer, or not, is, because the breach is punishable in that way, not an iniquity for the purpose of the rule.
110. It was then submitted that notwithstanding that the disclosure of an iniquity might not be restrained if an employee disclosed documents concerning it to a proper authority, the authority had nevertheless to establish (that is plead and prove) that: (a) there was prima facie evidence of the iniquity; and (b) the documents in question themselves disclosed the iniquity relied upon.
111. In support of the first of these propositions counsel for Allied Mills relied particularly upon Butler v. Board of Trade (1971) 1 Ch 680. and the dictum of Lord Denning M.R. in Ghani v. Jones (1970) 1 QB, at pp 708-709. . I have already said what I think Goff J. meant in that context by a prima facie case. In order to reach my conclusion I cited what had been said by Viscount Finlay in O'Rourke v. Darbishire (1920) AC 581. . When his Lordship refers to "probability" he ought not to be taken to be speaking of a case which is more probable than not. He is using the word probability in the sense in which it was used and explained by the judges in Koufos v. Czarnikow Ltd. (1969) 1 AC 350. and Beecham Group Ltd. v. Bristol Laboratories Pty. Ltd. [1968] HCA 1; (1968) 118 CLR 618. . I refer to the judgment of Deane J. in Transport Workers' Union of Australia (N.S.W. Branch) v. Leon Laidely Pty. Ltd. [1980] FCA 25; (1980) 43 FLR 168, at pp 177-182.
112. The principal documents which are in question in this case are the the black diary (Ex B), the desk diary pages (item 7.55 of the schedule to the Commission's affidavit of discovery, part of Ex E) and Mr Matthews' statement (Ex 4). The statement, although prepared in consultation with officers of the Commission and for the Commission's purposes, is largely based upon the black diary which was in turn prepared from information written on various sheets of paper, including desk diary pages similar to those in item 7.55. If evidence were given by Mr Matthews along the lines of the black diary and the statement, it would be capable of showing, or, to put it another way, it would be some evidence, that Allied Mills entered into an arrangement or understanding of the kind relied upon by the Commission in the principal proceedings. That is not to say that there will not be serious questions about the accuracy and veracity of Mr Matthews' evidence if the evidence he gives is in accordance with the diary and his statement. From the conduct of Allied Mills' case in the principal proceedings, I would expect Mr Matthews' evidence to be the subject of serious challenge in cross-examination and, in the event that a foreshadowed submission of no case to answer fails, contradiction or innocent explanation by evidence called in Allied Mills' case. Furthermore, if the material in the diary and the statement were the only evidence, one would have to consider very carefully what weight one would attach to it and whether it, standing alone, would result in a finding against Allied Mills. A preliminary question to any so far mentioned is whether all or part of Mr Matthews' evidence, if given in accordance with his statement, will be admissible against Allied Mills. There are a number of questions not the least of which will be questions concerning Mr Matthews' authority and the authority of persons who are said to have had conversations with him to say what is alleged they have said. And, assuming the evidence is led, it will be called initially only against Allied Mills. In due course the further question will arise as to whether it is admissible against any of the other respondents. If it is not admitted against any of them, as well as against Allied Mills, the proceedings may fail against all respondents because the Commission's case is one which depends upon there having been an arrangement or understanding to which at least two (query, all) of the respondents were parties.
113. But none of the considerations I have mentioned affect the fact that for the purposes of the principle which is here in question the contents of Mr Matthews' diary and statement establish as against Allied Mills a prima facie case. I do not think it is of consequence that that particular matter has not been pleaded; it is of consequence evidence which was either led by counsel for Allied Mills or which was not the subject of any objection by him. In my opinion there is much truth in what was said by Goff J. in Butler v. Board of Trade (1971) 1 Ch, at p 687. , namely that questions of this nature have to be determined on a prima facie basis often without seeing the documents or knowing what was orally communicated. In my opinion the black diary and the statement do establish against Allied Mills a prima facie case in the sense in which Goff J. (and Viscount Finlay) used that expression. But it is to be remembered that it is a case which has not been tested in any way and also a case which may not, for the various reasons I have earlier given, ever be established. I have not (and could not have) any opinion whatsoever as to whether it is a case which will eventually be made out even upon a prima facie basis, using the words "prima facie" on this occasion in their more conventional sense.
114. I should mention at this point that I formed the view, during the hearing of the proceedings, that, because the trial of the principal proceedings is part heard and because documents which are the subject of this claim may not ultimately be tendered in evidence in those proceedings, I should endeavour to look as little as possible at the documents which are in question. Since reserving my decision, I have decided that my earlier view was an inappropriate one. In order for the case properly to be decided it was necessary for me to look at the documents. Accordingly, I asked for them to be returned from the custody of the Commission's solicitor so that I might inspect them. I do not believe that my having done so will advantage or disadvantage any party in the principal proceedings.
115. For the reasons I have given, I am of opinion that the first submission should be rejected. In reaching that conclusion I have taken into account what Lord Denning M.R. said in Ghani v. Jones (1970) 1 QB, at pp 708-709. . It will be remembered that after citing that passage I emphasized certain words. I refer again to that emphasis. What Lord Denning propounded in the passage in question applied firstly to a case where no one had been arrested or charged and secondly to a case where there were not shown to be reasonable grounds for believing that the plaintiffs were in any way implicated in a crime or accessories to it. Subject to the fact that there is here in question no more than a civil liability so that notions of arrest and the charging of a crime are not relevant, this is a very different case. Here proceedings have been taken against Allied Mills and there are, upon the basis of what I have earlier said, reasonable grounds for believing that Allied Mills may be implicated in a breach of the Act.
116. Then, is it correct to say that each of the documents in question must disclose the iniquity. I was at one stage inclined to regard the diary and the statement as being in a different category from documents which have been the subject of consideration in any of the cases to which I have referred. That was because the documents purported to record accounts of conversations with and the conduct of the various persons who are referred to therein. But Mr Matthews prepared the diary for use by his employer. He had, in my opinion, implied authority to prepare it. He was the company's Victorian manager. His purpose in preparing and compiling the diary was to endeavour to persuade the company's management to change its course of action. It is true that the statement was prepared for the Commission and not for his employer, but it is based upon the entries in the diary and, as earlier said, can stand in no different position from the diary itself.
117. It follows, however, from what is contained in the black diary that if it is necessary that a document, before a claim to recover it as a confidential document will be defeated, must disclose iniquity, the Commission has established to the necessary extent that it does. The balance of the documents I do not believe to be in that category. The documents are the documents comprised in Exs. E and F But the Commission wishes to retain the majority of those documents either as evidence relevant to the issues in the principal proceedings to be tendered along with the other evidence in the case or for use in the cross-examination of witnesses, particularly those to be called by Allied Mills. Its judgment that the documents in Ex E are relevant to the issues in the main case is verified by Mr Conlan's oath made at the time he swore the affidavit of discovery.
118. Certainly Goff J. thought that only documents which themselves disclosed an iniquity were within the iniquity rule. His view in that respect was followed by Ackner and Swanwick JJ. in the cases earlier cited and by the English Court of Criminal Appeal. But he thought, and the other judges agreed, that there was another basis upon which the appropriate authority who had decided to prosecute the case was entitled to keep the documents. It was submitted by counsel for Allied Mills that since the decision of the House of Lords in the Granada Television case (1981) 1 All ER 417. the decision of Goff J. and those who followed him should no longer be regarded as sound. The only exception made by their Lordships in the Granada Television case was as to documents which fell within the iniquity rule. But their Lordships were not dealing with cases of the kind dealt with in Butler v. Board of Trade (1971) 1 Ch 680. and the other cases. They were not concerned with the question which arises where a proper authority is conducting a prosecution for an offence which, if not criminal, is, in the view of Parliament, against the public interest. No question of any prosecution for any offence could possibly have arisen in the Granada Television case which was a case concerning the extent to which the media were entitled to protect their confidential sources of information. It would seem surprising to me if the law were such as to compel a prosecutor in the position of the Commission here to return documents which might be evidence, or at least relevant to an issue in the prosecution of the person charged, prior to the completion of the prosecution. That is particularly so where, as here, the purpose of the claimant is to recover the documents, not for the purpose of preventing their disclosure commercially to competitors or customers, but to hamper the prosecution which is being brought. A substantial degree of protection can, as I have earlier said, be afforded by the making of an order under s. 50 of the Federal Court of Australia Act 1976, or, if the case were in a court which did not have that express power, by the making of an order under powers which exist by reason of the common law. These considerations point strongly, in my opinion, to the alternative basis relied upon by Goff J. and those who followed him as providing a sound reason for refusing relief of the kind here claimed. It is to be emphasized that that relief will usually be refused only in a case where there is found to be some prima facie evidence of the commission of a breach of the law which is against the public interest generally and in a situation where an identifiable person has been or is to be proceeded against for that breach. It is not a case of allowing the Commission, or for that matter any prosecutor, simply to allege without any basis for it that there has been or may have been a breach of the law.
119. There is sometimes a question of whether documents which a prosecutor wishes to retain have come into his possession lawfully or unlawfully. The Rossminster case [1979] UKHL 5; (1980) AC 952. was a case where the real issue was whether the documents had come into the possession of the taxation authorities pursuant to a warrant which was lawfully issued. As earlier mentioned counsel for Allied Mills submitted that here the documents were not lawfully in the possession of the Commission because they were confidential documents held by the Commission against the will of Allied Mills. In his submission the only lawful way that such documents could be obtained was by the issue of a valid notice under s. 155 of the Act. I have already rejected that submission. I rejected it because the public interest considerations with which I have earlier dealt indicate to me that this was not the intention of Parliament. The Commission is charged with the administration of the Act. The Commission is an agency or emanation of the Crown. The provisions of s. 155 ought to be regarded as provisions the better to enable or empower the Commission to carry out its task of seeing to it that the provisions of the Act, and thus the will of Parliament, are obeyed. It may be that a person such as Allied Mills has not the same protection if its documents reach the hands of the Commission otherwise than as the result of its consent or the issue of a notice under the section. But it would, in my opinion, defeat the consequences of the public policy considerations to which I have referred if, in the event that a breach of the law were disclosed by a member of the staff of a company, it could nevertheless successfully claim an injunction to prevent the use of the documents and information which had come into the Commission's hands, and which the Commission sought to use in support of a prosecution. It is not suggested in the present case that Mr Matthews could not lawfully give information to the Commission, notwithstanding that that information might itself be confidential. Why should documents stand in any different position? In my opinion the Commission's retention of the documents is lawful for all the earlier reasons I have given. The fact that it did not obtain them with Allied Mills' consent nor as a result of a s. 155 notice can make no difference to that conclusion. My view in that regard makes it unnecessary for me to consider whether Allied Mills would be entitled to the relief which it seeks if the Commission's retention of the documents had been unlawful ab initio.
120. For the reasons I have given I am of the opinion that the causes of action based upon breach of confidence and inducing breach of contract must fail. It remains to consider the question of copyright.
121. Section 183 of the Copyright Act provides that the copyright in a work is not infringed by the Commonwealth or a State, or by a person authorized in writing by the Commonwealth or a State, doing any acts comprised in the copyright if the acts are done for the services of the Commonwealth or State. As a matter of precaution the Commission obtained an authority from the Commonwealth to use the various documents. But I have held that the Commission is an agency or emanation of the Crown. The authority was not therefore necessary. I am satisfied that the use to which the Commission has put the documents or to which it will put them in the future has been or will be for the services of the Commonwealth. The claim based on breach of copyright therefore fails. It is unnecessary, in those circumstances, to mention a number of other submissions that were made by counsel in relation to the copyright claim.
122. For the reasons I have given I have reached the conclusion that the claim made by Allied Mills should be rejected. I would be prepared, however, to consider the making of an order directing the return of the documents which the Commission offered to return during the proceedings. That is a matter which can be considered when the matter is in the list for short minutes.
123. I propose to stand the matter over for a short time to enable counsel to consider what I have said. When the matter is again in the list I shall deal with the question of costs. Counsel for the Commission are directed to bring in short minutes of the orders which they consider appropriate to be made.
AustLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.austlii.edu.au/au/cases/cth/FCA/1981/11.html