Bergman and Bergman (No. 4)
[2008] FamCA 525
•30 May 2008
FAMILY COURT OF AUSTRALIA
| BERGMAN & BERGMAN (NO. 4) | [2008] FamCA 525 |
| FAMILY LAW – PRACTICE AND PROCEDURE – Subpoena – Use and disclosure of documents - Release from implied undertaking –Email produced pursuant to court from commercial solicitor - Collateral or ulterior purpose – Police Investigation – Special circumstances – Exercise of discretion – Stay of Order |
| Family Law Rules 2004 (Cth) Rule 15.27 |
| Bailey v Australian Broadcasting Corporation [1995] 1 Qd R 476 Commonwealth v Temwood Holdings Pty Ltd & Ors (2001) 25 WAR 31; [2001] WASC 282 Crest Homes v Marks (1987) 2 All ER 1074 Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 Home Office v Harman [1983] 1 AC 280; [1982] 1 All ER 532; [1982] 2 WLR 338 |
| APPLICANT: | MR BERGMAN |
| RESPONDENT: | MRS BERGMAN |
| POTENTIAL THIRD PARTY: | MR SARINSSON |
| POTENTIAL FOURTH PARTY: | MR PORTER |
| FILE NUMBER: | MLF | 5245 | of | 2005 |
| DATE DELIVERED: | 30 MAY 2008 |
| PLACE DELIVERED: | MELBOURNE |
| PLACE HEARD: | MELBOURNE |
| JUDGMENT OF: | YOUNG J |
| HEARING DATE: | 19 and 20 MAY 2008 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | MR ST JOHN SC |
| SOLICITOR FOR THE APPLICANT: | CAROLINE COUNSEL FAMILY LAWYERS |
| COUNSEL FOR THE RESPONDENT: | MS NIKOU SC |
| SOLICITOR FOR THE RESPONDENT: | CAREW COUNSEL |
ORDERS
IT IS ORDERED:
THAT the Case Guardian, on behalf of the husband, be authorised to disclose and provide a true copy to the Victorian Police, Australian Federal Police or the Fiji Police of the:
(a)email dated Friday 4 March 2005, 11.34 a.m., from Mr Porter to Mr Lewin; and
(b)documents produced to this court by Mills Oakley, solicitors pursuant to the subpoena dated 4 April 2005 issued to Mr Porter.
THAT the operation of this order be stayed until 1 July 2008 or until the date of hearing and determination of any Full Court Appeal that may be filed, whichever date last occurs.
THAT this order and these Reasons for Judgment (containing the whole of the email document identified in Order 1 hereof) be likewise restricted from publication outside of this court or circulation until the last of such future dates identified in order 2 hereof occurs.
IT IS CERTIFIED
THAT pursuant to rule 19.50 of the Family Law Rules 2004 this matter reasonably required the attendance of Counsel including Senior Counsel for each of the parties in this hearing.
IT IS NOTED that publication of this judgment under the pseudonym Bergman & Bergman is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLF 5245 of 2005
| MR BERGMAN |
Applicant
And
| MRS BERGMAN |
Respondent
And
| MR SARINSSON |
Potential Third Party
And
| MR PORTER |
Potential Fourth Party
REASONS FOR JUDGMENT
The interlocutory application currently before the court for hearing was filed on 23 October 2007 by the firm of solicitors acting for the husband through his appointed case guardian, his daughter. The sole order therein sought was:
“That the case guardian be granted leave to provide documents produced during the course of these proceedings including a copy of the email produced by Mr Stuart Lewin pursuant to subpoena filed 18 May 2007, for the purposes of supplying same to the Victorian and/or Fijian police.”
In the original form of that application as filed, the further words "and otherwise for the pursuit of criminal charges against [Mr Porter]" were then part of that order sought.
This matter, and the other various interlocutory applications, have now been before me, and other judges, over several years. I was reminded by Senior Counsel that on a prior occasion when I had sighted this application and was reviewing the order in which interlocutory applications were to be dealt with, that I had indicated to legal practitioners, and that they had accepted, that those additional words should be, and they were then deleted from the order sought. There was no formal order in that regard.
In summary, a number of boxes of commercial and financial documents have been produced to this court and those documents, together with a particular email dated Friday 4 March 2005 11.34 am from Mr Porter (‘Porter) to Mr Lewin (‘Lewin’), are now sought to be released from any implied undertaking or requirement of the Family Law Rules that they be held and relied upon only for proceedings in this court, and otherwise then be made available to law enforcement authorities, local and overseas, for investigation.
Mr St John, Senior Counsel, appears for the husband by his case guardian. Ms Nikou of Senior Counsel now appears only for Porter. Formerly she appeared for Mr Sarinsson (‘Sarinsson), who is the wife's brother and was - and he asserts is now no longer - a director of and a shareholder in W Corporation. Sarinsson appeared before me in person on Tuesday morning (20th May) in relation to a part-heard interlocutory application as to joinder and sought to be excused from the hearing in relation to these subpoenaed documents. There was no objection from any party. The solicitor acting for Porter, Carew Counsel, previously acted for Sarinsson though they have now filed a Notice of Ceasing to Act. Sarinsson has filed an updated Notice of Address for Service. The wife is represented by Mr Geddes of Queens Counsel and she likewise was excused, by agreement, from this subpoena hearing.
This interlocutory hearing of the release and use and availability of subpoenaed documents for the purposes outlined in the interlocutory application proceeded by way of submissions from Senior Counsel appearing for both the husband and Porter. Those submissions continued over two days.
To put in context this particular interlocutory hearing I am part-heard in the separate application of the husband to join Porter and Sarinsson as respondents to the primary property proceedings. That is an opposed application. The proceedings were commenced in October of last year for what was to be a day hearing only. Mr St John SC addressed the court for the day, and Mr Geddes QC commenced his response on behalf of the wife who was opposing that joinder application. Ms Nikou SC is yet to be heard.
Because of allocated cases and listing pressures, the hearing was initially to be adjourned until 2 January 2008. I was however persuaded upon by Senior Counsel that that was an untimely date, given the availability of certain of them. Accordingly the next available date that I had of two days duration was mid April 2008. The matter was fixed to that date but was adjourned, for reasons known to all counsel, by agreement. The matter was then re-listed in the second week of May (12th), but again, for personal reasons the matter was adjourned until 20 May.
What transpired on that 12 May mention date, and in my absence, was that Cronin J was persuaded to fix the release of subpoena application as a discrete two‑hour hearing on Monday 19 May before me with the joinder application to resume on Tuesday 20 May.
As it transpired, and I touch upon only very briefly these facts, Mr St John SC advised the court that a further detailed affidavit with voluminous annexures was to be filed on the joinder issue. That affidavit would allege ongoing inappropriate financial and commercial behaviour by Porter against the commercial and financial wellbeing of the husband and contrary to the interests of W Corporation. That affidavit will take time to be read and considered. It was a document that I concluded appropriate to be admitted into evidence and there has now been a separate case management hearing and extempore judgment on those issues and the joinder application remains part-heard and awaiting an extended hearing date. What I have provided for at the moment is for the matter to be further mentioned before me on Friday 30 May 2008.
Returning to the subpoena application now before me, the Family Law Rules2004 (Cth) (‘the Rules’) provide, in Rule 15.27(2), as follows:
“A person who inspects or copies a document under these Rules or an order must:
(a)use the document for the purpose of the case only; and
(b)not disclose the contents of the document or give a copy of it to any other person without the court's permission.”
Pursuant to this Rule that the husband seeks permission to use the document outside of the specific purpose of these Family Court proceedings and to disclose the contents of the documents, and indeed further to provide a copy of relevant documents to the proper officer of the Victorian Police, Australian Federal police or the police of Fiji.
Porter opposes the application. Sarinsson did not express a position. The wife, through her counsel Mr Geddes QC, and in prior documents filed with the court, had also opposed that course of action but today elected not to be involved in this interlocutory hearing and therefore did not address the court. I do not propose to have regard to any earlier statement in her opposition before the court as to her position on this interlocutory issue.
BACKGROUND TO THE COMMERCIAL DISPUTE BETWEEN ALL THE PARTIES
It is necessary to provide some further background to this complex web of legal argument and commercial issues that have been litigated in courts in Fiji and in Melbourne, in both the Supreme Court and the County Court and of course continuing in this court.
From my reading of all affidavits filed in this matter and by way of previous hearings and extempore judgments, and in brief summary only, the husband and Sarinsson, and thereafter Porter, were involved in a commercial acquisition and development of a real estate and tourism development resort on W property, a freehold title of approximately 27 acres located in Fiji at ….
On 1 October 2002, each of the three then partners executed a shareholders agreement which had been prepared by Melbourne solicitors, Rockman and Rockman, and that document is exhibit ‘KMJ1’ to the affidavit of the case guardian filed 20 April 2007 (document 193 in the court index). Pursuant to that agreement Sarinsson and the husband were each allocated 16,667 bearer shares, and Porter 16,666 - a total issue of 50,000 shares.
There are two companies that have been documented to the court: W Ltd, a company incorporated in April 2003 with a change of name effected in November of 2003 in Fiji; and W Corporation, a company incorporated in the British Virgin Islands. Initially, each of the three primary individuals held shares and were directors of that company.
Porter was appointed the project manager of the property development and there remains a substantial and ongoing dispute as to corporate, commercial and financial issues including his claim that the whole of the development and its end value had initially been overestimated by the husband and/or Sarinsson. There are other continuing disputes as to the initial available planning permits and other approvals, the costs of particular aspects of the development including the access routes to W property and overall financial and payment concerns. I do not intend this summary of disputes to be inclusive of each and every allegation, but merely to set the commercial flavour to the substantial disputes and conflict between all parties.
After the execution of the shareholders agreement all parties were required to make various financial contributions to the W project, and there were complaints and issues then raised as to the contributions themselves, as to the taking of accounts, and as to an audit of the financial records of W Corporation. In particular, it appears that the husband would allege the company has been managed improperly and he seeks appropriate financial adjustments which are beyond the intent of this judgment.
What is important to understand in this background is that late December 2004 there were proceedings brought by Sarinsson in the High Court of Fiji for the winding up of W Corporation. Subsequently in March 2005 the husband, Porter and W Corporation instituted proceedings in the Supreme Court of Victoria against Sarinsson for his failure to contribute to proper cash calls made of him. Both of these proceedings were ultimately discontinued subject to negotiated agreements.
In June 2006 the husband commenced proceedings in the County Court of Victoria against W Corporation, seeking strict enforcement and compliance with clause 14.1 of the shareholders agreement. Those proceedings were subsequently compromised by a consent order dated September 2007 and that document is an exhibit in these proceedings. An earlier exhibit in these proceedings was a prior case management order of the County Court in June of last year, and it does now seem to be the agreed position that the final County Court order was also an exhibit, tendered on behalf of the wife, in earlier interlocutory proceedings before me.
In any event, the importance of this background is to highlight that the husband did elect to institute proceedings in the County Court, no doubt it being then advised to him and accepted by him as the appropriate Victorian commercial court to seek the enforcement of the shareholders agreement particularly having regard to the fact that the law applicable to that agreement was stated to be the Law of Victoria. It was in those proceedings that various documents were then produced to the court. It is the production of those documents that was the subject of those final orders of September 2007.
Pursuant to those orders W Corporation was to produce to the husband corporate and financial documents as identified in subparagraphs (a) and (b) of order 1 thereof, save for the documents exempted by agreement and thereafter identified in subparagraphs (i) and (ii) thereof. Those subparagraphs included the documents that were produced pursuant to a subpoena addressed to Porter in this court but subsequently delivered by his solicitor Lewin on 16 December 2005, and additionally a lever arch binder of documents that was said to be provided to the husband's Senior Counsel by solicitors for W Corporation or Porter.
It is impossible to fully understand the number and identity of documents that have been produced to the County Court. By and large they have not been catalogued. They have been inspected and copied, certainly by the solicitors for the husband. I am unsure if other solicitors have so involved themselves. What is clear is that they are or were documents known to and available to Porter, which he at some time provided to his solicitors, Mills Oakley, and they in turn delivered up to this court, and/or produced pursuant to the consent order of the County Court. I do not accept any submissions that the restrictions on the production of documents in (i) and (ii) of the County Court Order are binding upon me. They were all independently produced to this court.
There was one other significant proceeding commenced in September 2006 in the County Court of Victoria by Porter against the husband pursuant to section 52 of the Supreme Court Act, claiming an amount that the husband was allegedly liable to contribute in respect of solicitors' fees and outgoings in opposing the Fijian High Court winding up action. That matter was ultimately resolved, on or about 1 December 2006, and a deed of settlement was executed.
As I now understand the facts, and as Mr St John SC detailed them to the court in response to my question, there are no other current and relevant proceedings in Australia or Fiji as between the Husband, W Corporation, Porter and/or Sarinsson. There are perhaps somewhat related proceedings in the Victorian Supreme Court which have now been transferred to the County Court for hearing in July 2008 and involving an action between the husband, the wife and her sister in relation to loan agreements. Additionally there have been other court proceedings in Fiji between companies allegedly associated with Porter and against W Corporation but the submission of Mr St John SC was that they were not of any relevance for the purpose of this disclosure and use of subpoena issue and there was no other contrary submission of Ms Nikou SC in that regard.
WATT J’S 9 MARCH 2007 JUDGMENT
I refer to the judgment of Watt J dated 9 March 2007. His Honour in these proceedings heard an interlocutory application in relation to the discharge or variation of an earlier order that I had made on 23 December 2005 (paragraph 8 thereof) which restricted the husband's solicitors ability to provide or use copies of documents delivered to this court by on or on behalf of Porter, pursuant to subpoena, for the purposes of litigation in the County Court proceedings commenced by the Husband in June 2006.
In the course of his judgment, Watt J identified that the documents before him were all of those that should have been provided to this court pursuant to a subpoena issued by the husband to Porter on 4 April 2005. This initially he failed to do, and an enforcement application was issued and came before Guest J on 16 December 2005. Mills Oakley, solicitors represented Porter on that day, but no documents were then produced. His Honour gave leave for a subpoena to be immediately issued and addressed to Lewin, a partner at Mills Oakley, and subsequently the documents were produced forthwith to the court and an order for costs was made in favour of the husband and against Porter. Those costs were ultimately paid.
In the course of his judgment, Watt J confirmed that Porter was the owner of the documents in question, that they all pertained to the affairs of W Corporation, and ultimately, and after an examination of the subpoena, the Rules of this court and of reported authorities, his Honour discharged the prior existing restraint order and provided the:
“use copies of any or all documents delivered up to the Court by the representatives of [Mr Porter] pursuant to subpoena filed 4 April 2005 for the purposes of pursuit of litigation in any Court within/or outside Australia wherein the husband (or any company of which he is a director or shareholder) is a party and [W] Corporation and/or [Mr Porter] and/or [Mr Sarinsson] and/or any company or entity with which any or all are associated is a party”
I endorse his Honours reasons for judgment and order.
The ratio of his Honour's judgment was that it was proper and that there were special circumstances to release the husband from any implied undertaking to retain and use documents in the proceedings to which they were subpoenaed, and that furthermore the exercise of discretion in consideration of those special circumstances was appropriate. His Honour at paragraph 59 concluded:
“I find there is thus a degree of commonality between the proceedings in this court and proceedings in other courts in which the husband is now involved or may be instituted in accordance with relief he seeks, and that amounts to special circumstances in this case.”
At the date of his Honours order the County Court proceedings were ongoing.
SUBMISSIONS
In support of the interlocutory orders sought by the husband, reliance was placed upon paragraphs of various affidavits filed with this court and I now propose to identify and refer to, in specific detail, that evidence to which no objection has been taken.
In paragraph 12 of the affidavit of the case guardian filed 20 April 2007 (court index document 193), the case guardian deposed to the fact that:
“12. The documents produced by Mills Oakley and enquiries that my father and I have made with the Westpac Bank directly have revealed security documents apparently emanating from [W Corporation] and/or [Porter] and/or [Sarinsson] falsely purporting to bear my father’s signature. Some documents addressed to Westpac were signed by [Porter] (together with the false appending of my father’s signature) and sought the withdrawal or transfer of [W Corporation] funds. The Westpac Bank required the signatures of two shareholders on a request for the withdrawals or transfer of funds from a [W Entity] bank account. Requests were signed by [Porter] that were not authorised by my father and contain what appear to be a photocopy of my father’s signature. This matter has been reported to the Bank and to the Fijian Police. From enquiries I have made it appears that some FJD$389,000 has been withdrawn from [W Entity] bank accounts without my father’s knowledge or consent. I have a copy of a facsimile from [W Corporation] to the ANZ (Westpac bank) dated 19 November 2004 requesting the transfer of $389,344.80FJD from the [W Entity] account 5730204 to the PriceWaterhouse Coopers trust account. A letter from [W Corporation] to PriceWaterhouseCoopers, signed by [Porter] and dated 21 February 2005 confirms that the sum of $389,344.80FJD was received by [Porter]. My father’s signature has been falsely appended to both the facsimile to the bank and the letter to PriceWaterhouseCoopers. Annexed hereto and marked with the letters “KMJ3” is a true copy of the said correspondence.”
In her further affidavit of 11 July 2007 (document 211 in the court index), paragraphs 32 and 33 thereof, the case guardian deposed as follows:
32. In response to paragraph 30 I say that the process for selling shares to another shareholder, as set out in part by [Porter], was not followed by [Porter] when he purportedly acquired [Sarinsson’s] shareholding.
33. In response to paragraph 32.9 I say that I have obtained evidence which confirms that [Porter] falsely photocopied my father’s signature to obtain the [W Corporation] funds, without my father’s authorisation to do so. My father’s solicitors caused to issue a subpoena to Mills Oakley on 18 May 2007 seeking production of an email sent by [Porter] to Mr Stuart Lewin on 4 March 2005. The email, which was produced by Lewin pursuant to the subpoena, states “…I instructed […] to scan [the Husband’s] signature onto the letter if [the husband’s] did not come through as [Mr E] needed it to defend his position in relation to assisting with the transfer of the Project Management fee”. Annexed hereto and marked with the letters “KMJ6” is a true copy of the email. PriceWaterhouseCoopers (“PWC”) transferred the amount of FJD $389,344.80 to [Porter] without first obtaining the necessary authorisation from two [W Corporation] shareholders. It is apparent that upon realising they did not have authorisation to transfer the amount, the matter was raised with [Porter]. Without having my father’s authorisation to do so, [Porter] had my father’s signature scanned and falsely appended to protect both his actions and those of PWC. I have reported the matter to the Fijian Police.”
More recently, and in the affidavit of the case guardian filed 16 October 2007, she deposed in paragraphs 4-8 (inclusive) as follows:
“4.I refer to and rely on affidavits sworn by me in relation to these proceedings on 13 April 2007 and 11 July 2007. At paragraph 12 of my affidavit sworn on 13 April 2007 and filed on 20 April 2007, I set out that [Porter] had falsely appended my father’s signature to facsimiles sent to the Westpac Bank in Fiji and to PriceWaterhouseCoopers (“PWC”) in Fiji. The facsimiles ultimately resulted in the sum of $389,344.80FJD being released by PWC to [Porter]. The funds belonged to [W] Corporation Ltd.
5.The email from [Porter] to Stuart Lewin dated 4 March 2005, confirms that [Porter] falsely photocopied my father’s signature to obtain the [W Corporation] funds. A copy of the email is annexed to my affidavit filed 11 July 2007 at paragraph 33.
6.On 11 September 2007 I attended upon a Detective Sergeant at the Victoria Police complex on St Kilda Road, Melbourne. I discussed the matter with a Detective Sergeant and showed him a copy of the facsimiles [Porter] sent to Westpac Bank and PWC. I advised him that my father did not sign the documents. I asked the Detective Sergeant if any documents existed which contained an admission that my father’s signature was falsely appended to the facsimiles, would they be of assistance? The Detective Sergeant said that he believed there was a case to investigate and that I should seek leave from the Court to enable the Victorian Police to use any relevant documents for the purpose of their criminal investigation.
7.On 21 September 2007 my father’s solicitor, Ms Sarah Vorwerg of Caroline Counsel Family Lawyers (“my solicitor”) wrote letters to the Wife’s solicitor and the solicitors of [Mr Porter] and [Mr Sarinsson] advising them of my intention to make an oral application at the hearing on 22 October 2007 for leave to use the email as set out above. Annexed hereto and marked with the letters “KMJ1” are true copies of the letters. The letters sought that the addressees advise my solicitor whether their respective clients will accede to the application. Mr Peter Carew, solicitor for [Porter], wrote to my father’s solicitor on 27 September 2007 advising that his client does not consent to the oral application. The Wife’s solicitor wrote to my solicitor on 3 October 2007 advising that the Wife does not consent to the oral application. Annexed hereto and marked with the letters “KMJ2” are true copies of those letters. I am informed by my solicitor and verily believe that they have not received a response to the letter from Mr Raymond Rockman, the solicitor for [Sarinsson].
8.It is my understanding from the police that in photocopying my father’s signature in the manner he did [Porter] may have committed a criminal act. Because all documents have not been made available I do not know whether [Porter] has falsely appended my father’s signature on other occasions for the purposes of authorising the release of further funds from [W Corporation] or other improper purpose. I seek leave to provide or use a copy of the email produced by Lewin to the Court and any other documents made available to me through the Family Court process, that may be of use to the police in their investigation, to the police forces in Australia and Fiji.”
I have carefully read and evaluated the admissible evidence of the case guardian. I find that her evidence is sufficient to lay the foundation for the Orders now sought. I do not need to wholly accept such evidence and I well understand that it has been eventually answered, at least in part, by Porter.
In addition, I should add that I have been assisted by the relevant written submissions of Senior Counsel on behalf of the case guardian for the husband as are contained in paragraphs 35‑38 of his document filed with the court on 5 October 2007 (document 216 in the court index).
PORTER’S AFFIDAVIT
On behalf of Porter, his Senior Counsel relied upon the position that her client had at all times opposed and has continued to contest the use and disclosure of any subpoenaed document outside of this court and these proceedings. That proposition must of course be read in the context of the judgment and orders of Watt J.
Ms Nikou took the court to Porter’s affidavit of 12 June 2007 (document 209 in the court index) and in particular to paragraph 32.10.1 thereof, where her client then deposed as follows:
“I deny any irregularities in the use of company assets.”
Subsequently, and on the morning of the second day of this interlocutory hearing, and ultimately with the leave of the court and with no opposition from Senior Counsel on behalf of the case guardian for the husband, Porter swore and filed a further affidavit which is now in evidence and which I have read. In that affidavit he does reply to the case guardian’s evidence and provide his version of commercial events and financial transactions and his explanation of the business practices between the husband, W Corporation the other then director Sarinsson and himself. I record in this judgment paragraphs 6-16 inclusive, which are as follows:
“6. I deny the allegations contained in paragraph 33 of the Case Guardians Affidavit. I did not photocopy the husband’s signature to obtain [W Corporation] funds without his authorisation to do so.
7.Normal business practice between the husband and I was to make payments for expenses on behalf of the company to creditors by faxing letters to the bank authorising payment. This method of payment was authorised by the husband on or about January 2003. The husband verbally instructed me to photocopy his signature when he wasn’t able to attend to authorising the payment in person. The husband provided me with a copy of what we referred to as a “standard transfer letter” with his signature for the purposes of effecting transactions when he was unable to sign for a payment to be made. The husband provided this blank signed [W Corporation] letter for his convenience so that he did not have to attend my office to effect payments. As we had known each other for many years he had complete trust in me to utilise the presigned [sic] [W Corporation] letter to effect payments per my recommendation and to his verbal approval.
8.The authorisation to photocopy the blank signature on the occasion in question was twofold and was sourced from the shareholders meeting and a telephone conversation which I had with the husband.
9.On 1 November 2004, a shareholders meeting was held for [W] Corporation. It was resolved at the meeting and is documented in resolution 51.2 and 51.3 of the Minutes of Shareholders meeting dated 1 November 2004 that I be paid the project management fee of:
(a)AUD$416,000.00 for the stage 1 works; and
(b)AUD$208,000.00 for Additional works (stage 1 and 2).
Now shown to me and marked with the letters “TP-1” is a true copy of the Minutes of Shareholders meeting dated 1 November 2004. The payments were to be paid in two equal instalments, the first of which to be paid on 8 November 2004 and the second on 1 July 2005. A payment of $312,000.00 was therefore due to be paid to me on 8 November 2004.
10.The husband was in attendance at the shareholders meeting and voted in favour of the resolutions to make the project management to me.
11.The transfer which is referred to in paragraph 33 of the Affidavit of the Case Guardian dated 11 July 2007 is the transfer to give effect to the abovementioned resolution.
12.On the occasion in question, I was verbally advised by the husband to use the standard transfer payment letter. The husband was in Cairns at the time and advised me by telephone that he signed the letter requesting the transfer of the specific amount and faxed it through to my office. The husband also advised me that if the signature did not come through clearly on the facsimile transmission that I was to use the standard transfer letter that was pre signed by the husband which he had provided me for such occasions.
13.The husband provided loan advances to the company in accordance with the company’s cash calls and specifically on 12 November 2004 along with the other the shareholder and myself to be able to pay the due project management fee.
14.I refer to paragraph 32.10.1 of my Affidavit of 12 June 2007 and repeat that I have not been involved in any irregularities in the use of the Company’s assets.
15.I did not consent to the email dated 4 March 2005 addressed to my then solicitor Stuart Lewin being released to any party. It was part of a private communication with my then solicitor which was part of an ongoing privileged discussion with him. At no stage were criminal investigations or prosecutions mentioned nor was I warned about the right to silence.
16.The release of the subpoenaed material will result in me potentially being subject to further legal costs and protracted legal proceedings unjustifiably.
The evidence in reply does provide a real alternative to the position of the case guardian. It is not for me to now determine any outcome but the option of a full and proper police investigation, if special circumstances exist and my discretion is exercised, is now available.
I did not have the benefit of any written legal submissions from Ms Nikou in response to those of Mr St John, though she did provide a list of four reported decisions upon which she relied upon in her case. Each of those decisions are known to and have been read by this court. Three of these were identified in the earlier judgment of Watt J and I have had careful regard to them in determining the appropriate order.
MEDICAL CIRCUMSTANCES AND CAPACITY OF THE HUSBAND
In the context of the reply affidavit of Porter and given the commercial disputes that are intended to be before this court by one or other parties, and subject to any joinder outcome, I did take the time to highlight to Mr St John the necessity to keep this court appraised of the medical circumstances of the husband, and in particular as to his physical health and mental capacity. The case guardian for the husband was appointed pursuant to an order of Registrar Marrone on 27 October 2005. Seemingly that was without contest. However, I am now acutely aware of the fact that the husband was representing himself and conducting the County Court proceedings throughout 2006 and 2007, and indeed it was he who compromised those proceedings and agreed to and signed the Order of 5 September 2007.
It was at or about that time that I had earlier raised in open court with Mr St John the requirement of this court to understand the health circumstances of the husband and how they were continuing. In response an affidavit was filed by his case guardian on or about 23 October 2007 (document 226 in the court index). That affidavit did not make any cross-reference to the County Court proceedings or the involvement of the husband in those proceedings. Until hindsight the facts and evidence therein were somewhat sparse. Accordingly I now require that on or before 30 May of this year a further updated and full and meaningful affidavit from an appropriate qualified medical practitioner is to be filed and served in this court.
SUBPOENAS
The first relevant subpoena to which I have previously made reference was issued on 4 April 2005 by the husband's solicitors and addressed to Porter. It is document 89 in the court index and it is that document that has been carefully described and considered by Watt J in his reasons for judgment on 9 March 2007. I agree with the orders and reasons of his Honour which I adopt in this hearing. The documents produced pursuant to that subpoena were delivered to the court by Mills Oakley, solicitors on behalf of Porter, and they remain in this court but subject to the extended use thereof granted by Watt J. Subsequently, a further subpoena was issued by the husband's solicitors on 18 May 2007 (document 198 in the court index). That subpoena was addressed to Lewin and it sought the production of a particular email, as follows:
“An email from [Mr Porter] to Mr Stuart Lewin sent on 4 March 2005 at 11.34 am and subject: "Response to B2B.””
Exhibit TP2 is a letter dated 31 May 2007 from Mills Oakley Solicitors, and signed by Stuart Lewin, a partner of that firm, delivering to the court the specific email sought in that subpoena. It is important to record that the accompanying letter is brief and to the point in delivering the document, and makes no claim for legal or client privilege or restricted use of the email.
As this email is at the centre of this interlocutory hearing I regard that it is important subject to the ultimate restraint I have ordered to set out in full, including the heading, its contents, and they are as follows:
“From: [Mr Porter] [[…]@[…]]
Sent: Friday, 4 March 2005 11:34 AM
To: Stuart Lewin
Subject: Response to B2B
Stewart,
Do not send letter until I approve same.
Reference in realtion [sic] to the PWC letter should be omitted at this stage as there is two copies of this letter. One which [the husband] did sign (or said that he signed and faxed to my office but he was in Cairns from the afternoon after our conference.) I instructed […] to scan his signature onto the letter if [the husband’s] did not come through as [Mr E] needed it to defend his position in relation to assisting with the transfer of the […] fee. [The husband] said on various occasions he would sign of and then asked me to get your approval which i did and then called him after the meeting and advised same. Again he said that he would sign off and fax that day as he was going to Cairns that afternoon. (Wed 23rd) I am unsure as to which copy was faxed to PWC and then back to [the husband] and [Sarinsson].
Hopefully this issue will not become a major as the letter merely maintains the position of [W Corporation’s] previous resolutions.
I will attempt again this afternoon to get [the husband] to give my his copy of the letter signed. If he refuses contray [sic] to his previous assurance, then i guess I know where I stand in relation to the future of [W Corporation].
I will need advise as to how to proceed without [the husband] and [Sarinsson] – ie complete project at my expense and protect same – CAVEAT???
[Mr Porter]
In any event, I record that the email was also annexed to the affidavit of the case guardian filed 11 July 2007, as annexure ‘KMJ6’. No complaint or allegation has been notified or taken to its inclusion in the body of evidence before this court. It is not contested by Porter that he sent that email to his solicitor.
In the course of his submissions, Mr St John responded to my question and advised that the email itself was first disclosed in the County Court cost proceedings when the issue as between the husband and Porter was as to what level of contribution should be made by the husband to the costs incurred by Mills Oakley in representing W Corporation in Fijian High Court proceedings.
Porter therefore had knowledge of the disclosure of that email in this court, and there has been no earlier prior affidavit filed by him seeking its removal or otherwise seeking particular orders in respect of that email or its contents. The email itself is a somewhat curious document. It is qualified in that the instructions from Porter to his then commercial solicitor were that a letter in response to the commercial conflicts was not to be sent to the solicitors, B2B, until approved. The letter did highlight the actions taken by Porter in instructing the scanning the husband's signature to a letter, but in the context of what he believed would be the husband's commercial response and actions. Other than that, the email is self-explanatory.
Its importance to the husband is that it is claimed on his behalf that it provides some form of admission or acknowledgment by Porter of his commercial actions which the husband alleges were improper or perhaps fraudulent and very much to his financial detriment. I make no finding on that claim or allegation and those matters have not yet been the subject of any further inquiry or investigation or court hearing.
Ms Nikou sought to identify and claim privilege, or at least a form of qualified privilege, on behalf of her client. She complained that the email was incomplete and certainly asserted that it should not be available for any investigatory use or disclosure outside of this court. She maintained Porter’s opposition was ongoing to any use of this email.
In response, Mr St John identified two letters which are now marked as Exhibits ‘CG1’ and ‘CG2’ before the court. The first of those letters is dated 29 March 2006, and that clearly identified to the benefit of Porter the allegation of the husband contained in the penultimate paragraph thereof that:
“We are further instructed our client's signature has been falsely placed on correspondence to the ANZ Bank and Price Waterhouse Coopers, relating to [W] Corporation. That fact has been reported by letter both to the bank, PWC, and to the directors of [W] Corporation.”
The second letter is dated 29 May 2007, and the relevance of that letter from the husband's solicitors to Mills Oakley is that it foreshadowed that in a telephone conversation between Lewin and an employee solicitor from Caroline Counsel, the firm of solicitors acting for the husband, that an assertion was made that the email was a privileged communication. The exhibit asserts that privilege, if it existed, had been waived by disclosure, but in any event what is of significance is that if Lewin was entitled to claim any degree of privilege, he did not do so by the unqualified and immediate delivery up of that email to this court without any claim or issue of privilege or any other qualification being raised.
I re-emphasise that my finding is that Porter knew previously of the presence of the email within the Family Court documents, knew that it was sought by the husband's solicitors and in any event took no action to claim privilege and did not in any way reasonably oppose or seek to limit the disclosure of that email on to remove same from the affidavit.
In respect of Porter’s submissions. I find there is no basis to claim any form of privilege. I do not accept the argument or submissions advanced on his behalf.
ANZ AND PWC LETTERS
These letters are annexure ‘KMJ3’ to the affidavit of the case guardian filed 20 April 2007 (court index document 193).
The first of those documents allegedly bears the signature of both Porter and the husband, and was a request to the ANZ Bank (and not WESTPAC) to transfer a sum of approximately AUD$312,000.00 from the W Corporation account to PricewaterhouseCooper trust account. That was dated 19 November 2004.
The second letter is dated 21 February 2005 and again is purportedly written under the joint signatures of Porter and the husband and is addressed to PricewaterhouseCoopers Suva, Fiji, confirming the transfer of moneys and dealing with other issues as identified therein.
I find that more likely the husband had prior access and copies of those two letters from his prior visits to their offices (ANZ and PWC) on commercial inspection and discovery in the now finalised County Court proceedings.
The particular issue in light of the evidence of the case guardian is that it is alleged that the husband did not sign and that his signatures were wrongly and/or fraudulently appended to each of those documents, presumably without his knowledge or prior authorisation. In response thereto, the most recent affidavit of Porter deposes to a different commercial and business scenario, and alleges actual or implied knowledge by the husband to those financial transactions and corporate actions. The case guardian has not had an opportunity to attain instructions, investigate or respond to that affidavit.
Again, I carefully make no finding on those issues. That is outside the scope of the interlocutory application, which seeks the release of subpoenaed documents including the email for particular and available police investigations. There is however a real and significant dispute between the parties which has not been independently and properly investigated.
THE IMPLIED UNDERTAKING
The House of Lords decision in Home Office v Harman (‘Harman’s Case’)[1] confirmed the common law principle that documents obtained through the process of discovery are subject to an implied undertaking that they, or any information gained from them, are not to be used for any other purpose than the conduct of those proceedings for which they were discovered without consent or the leave of the court.[2] That principle was subsequently adopted in the judgement of Wilcox J in Springfield Nominees Pty Ltd and ors v Bridgelands Securities Ltd and ors (‘Springfield Nominees’),[3] and is the authoritative position as to the common law implied undertaking in Australia. I have however limited my examination of the foundation of the implied undertaking at common law as the documents sought to be disclosed are those produced on subpoena in respect of which the common law has been codified and adopted in the Family Court by Rule 15.27(2).
[1] [1983] 1 AC 280; [1982] 1 All ER 532.
[2] Ibid, 532.
[3] (1992) 110 ALR 685.
The more relevant issue which on the facts of this case must be carefully considered and evaluated, on the basis of reported cases and what is just and proper, is whether it is appropriate to grant leave from that Rule and to therefore give permission in accordance to Rule 15.27(2)(b) for documents to be used for a collateral or ulterior purpose.
SPECIAL CIRCUMSTANCES
In considering whether or not to permit the disclosure and use of documents obtained subject to the implied undertaking the court must determine whether special circumstances exist. In Springfield Nominees[4] Wilcox J held that special circumstances exist if there was a ‘special feature’ of the case. He said:
“For "special circumstances" to exist it is enough that there is a special feature of the case which affords a reason for modifying or releasing the undertaking and is not usually present.”[5]
[4] Ibid.
[5] Ibid, 693.
Ms Nikou referred in her list of cases to Holpitt Pty Ltd v Varimu Pty Ltd,[6] where Burchett J discussed the process required for the court to grant permission to depart from the implied undertaking. To establish ‘special circumstances’ he said:
“As far as the expression 'special circumstances' is concerned, it is an expression which is liable to be misunderstood unless care is taken to ask and answer the question, special in relation to what? 'Special' is one of those words which derive almost all their meaning from the context ... If all that is required is that, among the great number of cases in the court in which documents have been discovered, this one must evince some special feature which affords a reason for releasing or modifying the undertaking, there will be no difficulty. Circumstances in which there is a legitimate reason why documents discovered in one proceeding should be made available in another will, viewed in this way, be rare.”[7]
[6] Ibid, 681.
[7] Ibid, 686.
His Honour continued and stated that:
“In my opinion, the court’s duty, in an application of this kind, is to consider whether the applicant has shown some circumstance which takes the matter out of the ordinary course”.[8]
[8] Ibid, 687.
The common law clearly provides that allegations of criminal conduct will not automatically give a party a right to disregard the implied undertaking. This position was authoritatively expressed in Bailey v Australian Broadcasting Corporation (‘Bailey’s Case’)[9] and was furthermore confirmed by Pullin J in Commonwealth v Temwood Holdings Pty Ltd & Ors[10] where any question of such an automatic release was quashed by the confirmation that the Commonwealth itself is not in a special position in this regard.
“[41] My conclusion is that the Commonwealth is bound, like any other third party, not to use information which is gained by one party from the other via the court proceedings under the court's compulsory processes for any purpose other than use in those proceedings. To seek to use the documents in deciding whether or not to prosecute, or whether or not to take enforcement action, is a "collateral or ulterior" use which requires the leave of the court.”[11]
[9] [1995] 1 Qd R 476.
[10] (2001) 25 WAR 31 at 41; [2001] WASC 282 at [41].
[11] Ibid, [41].
In the previous application for leave from the implied undertaking in these proceedings Watt J considered the nature of proceedings then before the Family Court and what would be required in the final determination of the matter. His Honour identified that the proceedings were for a division of property and that the proper approach in Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener)[12] necessitated the identification and valuation of the property interests of the parties. His Honour continued:
“58. A dispute between co-proprietors of an asset such as exists in this case between the husband and the other shareholders of [W Corporation] is something that may impact on the value of the husband’s interest, or may impede the capacity of a valuer to value the asset. It seems to me that the speedy determination of such disputes may produce more expeditious preparation of this case for trial and reduce the possibility of delay because of pending proceedings that have to be completed before the extent of the assets available for distribution can be determined: see Prince v Prince (1984) FLC 91-501.
59. I find that there is thus a degree of commonality between the proceedings in this court and proceedings in other courts in which the husband is now involved or may be instituted in accordance with the relief he seeks, and that amounts to special circumstances in this case.”[13]
[12] (2003) FLC 93-143.
[13] Bergman v Porter [2007] FamCA 161.
The circumstances and nature of this application are different from those before Watt J. However it remains arguable that any police investigation of Porter’s conduct as a director or shareholder of W Corporation could impact upon the final resolution of the property proceedings between the husband and wife in this court. If the husband is permitted to join Porter as a respondent one of the grounds he seeks to establish is the improper or allegedly fraudulent conduct by him, and therefore any police investigation in this regard may either be necessary or may assist in the more effective final determination of the proceedings.
The facts which I consider are a special feature and constitute special circumstances in this case include:
·the need for the understanding of the commercial and legal background to corporate decisions concerning the W entities in order to investigate any alleged wrongdoing;
·the fact that the husband may not hold all such documents in his possession although entitled to them as a director of W Corporation;
·the need for final resolution of the property proceedings in this court which may be aided by the investigations of any allegations of improper conduct on behalf of Porter which are also made before this court;
·the substantial litigation which has already arisen as between the husband and the shareholder/directors of W Corporation and W Corporation itself and the potential for parties to continue to exhaust every legal avenue before resolution can be had; and
·the fact that the husband has already been released from the undertaking for the majority of the documents for the purposes of ‘any litigation here or overseas’ by Watt J
On my evaluation of all the evidence and balancing the legal arguments and submissions I find that special circumstances do exist and there is good reasons for departing from the implied undertaking and Rule 15.27(2).
EXERCISE OF DISCRETION
Having established special circumstances the question to be answered is should the discretion of the court be exercised in favour of the application. The court must decide whether granting an order in favour of the application “would be in the interests of justice”.[14] It is therefore necessary to have regard to the underlying rationale of the implied undertaking so as to appropriately balance if the interests of justice weigh in favour of disclosure. One rationale is the broad notion of protecting the process of discovery in the court process so as to ensure and promote full and frank disclosure:
“The reason for compelling discovery of documents in this way lies in the public interest in discovering the truth so that justice may be done between the parties. That public interest is to be put into the scales against the public interest in preserving privacy and protecting confidential information. The balance comes down in the ordinary way in favour of the public interest of discovering the truth, ie in making full disclosure.”[15]
[14] Holpitt Pty Ltd v Varimu Pty Ltd (1991) 103 ALR 684.
[15] Riddick v Thames Board MillsLtd [1977] QB 881; [1977] 3 WLR 63; [1977] 3 All ER 677 at 687 per Lord Denning MR.
In Bailey’s Case[16] Lee J referred to the exercise of discretion as involving:
“a process of identifying and balancing competing factors in order to determine if the public interest is best served by discharging, relaxing or modifying the undertaking. In effect, the Court is called upon to exercise a value judgment in order to determine where the public interest lies, Millett J., [sic] in a passage which I would respectfully adopt, stated this proposition in Bank of Crete at 925 as follows:
"[A]lthough the basis of the law's protection of confidence is that there is a public interest that confidences should be preserved and protected by the law, nevertheless that public interest may be outweighed by some other countervailing public interest which favours disclosure." See also Distillers at 622-625 per Talbot J. and Rank Film at 442, 447.
In other words, the general rule should not be so rigidly applied as to defeat or prejudice the interests which it was designed to protect.”[17]
[16] [1995] 1 Qd R 476.
[17]Ibid, 487.
The applicant in these proceedings, being the case guardian for the husband, has the onus of convincing the court that there are good reasons for the exercise of its discretion including that the balance of public interest is in favour of granting disclosure.[18]
[18] Crest Homes plc v Marks and others [1987] 2 All ER 1074 at 1082 per Lord Oliver of Aylmerton.
In Springfield Nominees[19] Wilcox J sets out a non-exhaustive list of factors to be referred to in considering if the discretion should be exercised:
“It is neither possible nor desirable to propound an exhaustive list of those factors. But plainly they include the nature of the document, the circumstances under which it came into existence, the attitude of the author of the document and any prejudice the author may sustain, whether the document pre-existed litigation or was created for that purpose and therefore expected to enter the public domain, the nature of the information in the document (in particular whether it contains personal data or commercially sensitive information), the circumstance in which the document came into the hands of the applicant for leave, and perhaps most important of all, the likely contribution of the document to achieving justice in the second proceeding”[20]
[19] (1992) 110 ALR 685 at 693.
[20]Ibid, 693.
On these factors it was submitted by Mr St John that the bulk of the documents sought are commercial documents which should have rightly been in the possession of the husband as a director of W Corporation but which have, for whatever reason, improper or other, been withheld. It is submitted that these documents do not contain personal data and that no prejudice would be sustained by their release.
Ms Nikou submitted that it is impossible to advance an argument in regard to the order sought as the identity of the documents sought is not specified. Given, however, the earlier proceedings heard by Watt J in this matter in regard to the specific commercial documents produced pursuant to the 4 April 2005 subpoena, it may be said that any serious opposition would have been highlighted in those proceedings and again raised in these proceedings, given that they concern the same substantial bundle of documents. Watt J observed that:
“60.It was not argued on behalf of Mr [Porter] that he would suffer injustice if the documents were released. He did not submit that they contain information that is personal to him, or that is commercially sensitive. There can be no injustice in these circumstances.”[21]
[21] (2007) FamCA 161 per Watt J.
In those earlier proceedings Porter advanced arguments in relation to the subpoena being an abuse of process and the release having the occasion of opening the floodgates to these kinds of applications, which were rightly dismissed by Watt J.
As to the specific email it is submitted by Ms Nikou that its contents were personal and it was not made in contemplation of any legal proceedings, therefore its protection should be guarded more carefully. I do not agree. Furthermore it was maintained that Porter has consistently opposed the use of this email and his attitude has not changed in these proceedings given that he does not consent to the use of the email as is sought here. I understand his application as now expressed but I do not agree that the email should be withheld from any investigation.
WHERE THE ULTERIOR PURPOSE IS POLICE INVESTIGATION OR CRIMINAL PROSECUTION
In addition to the factors outlined by Wilcox J it may be that the collateral purpose of a police investigation gives rise to a different variety of considerations which should rightly be taken into account before deciding that the public interest is in favour of granting disclosure.
In EMI Records Ltd v Spillane (‘EMI’)[22] Sir Nicolas Browne-Wilkinson VC refused to give leave to release the applicant from the implied undertaking in a case where the discovered documents revealed evidence which would lead to the person being liable to criminal prosecution for tax evasion:
“so long as documents are held solely as the result of discovery…in my judgment it would be quite wrong to authorise their use in criminal proceedings brought under fiscal laws and having no connection with the original cause of action”
[22] [1986] 2 All ER 1016 at 1024.
His Honour departed from an earlier decision of Customs and Excise Commissioners v A E Hamlin & Co (a firm)[23] where it was held that the commissioner should have the leave of the court to use the documents for a collateral purpose. EMI is therefore a comparative authority for the position that the mere public interest in pursuing criminal prosecution will not automatically outweigh the counterveiling public interest in ensuring full and frank disclosure and the due administration of justice. I have reflected on that case but have nevertheless concluded that the email and other documents should all be released for police investigation.
[23] Ibid.
I am particularly conscious of the fact that, on the facts of this case, what is sought is a police investigation. There may or may not be any criminal prosecution. Porter has provided a strong explanation which may wholly explain and support his actions. I do not know and make no finding. I find that there is a very real difference in purpose and outcome which here disctinguishes this case from EMI. I am not authorising a criminal prosection, although that may well be a consequence. Furthermore the investigation does have a connection with the substantial primary application in this court, distinguishing the facts of this case from EMI where it was thought to be inapproprate to authorise disclosure.
In the more recent reported decision of Bailey v Australian Broadcasting Corporation[24] the plaintiff was seeking leave in the Supreme Court of Queensland from the implied undertaking after discovery in defamation proceedings revealed that the defendants had in their possession documents which they likely should not have legally had in their control. Lee J granted a departure from the implied undertaking because in that case the balance was in favour of the attainment of justice over the potential prejudice to the defendants. It is notable that Lee J held that leave of the court is required even where the documents reveal criminal activity, therefore endorsing the position that there is no automatic waiver when documents suggest criminality.
[24] [1995] 1 Qd R 476.
Mr St John submitted that the public interest here was in investigating the potential criminal activities of Porter in his dealings with W Corporation and he submitted that the circumstances of this application were analogous to those in Bailey’s case:[25]
“In the present case that countervailing public interest is said to be the location and prosecution of criminal offenders. In my opinion, in determining the weight to be given to a public interest of that kind, some of the factors on which the Court will focus include: the nature of the offence alleged; the cogency of the evidence sought to be adduced in support of it; the authority to which the documents are sought to be disclosed; the manner of the authority's intended user; the possibility of misuse by that authority and any prejudice, actual or potential, which may be occasioned to the respondents by the disclosure: cf. Holpitt at 579 per Burchett J. Of course this is not an exhaustive list.”[26]
[25] Ibid.
[26] Ibid, 488.
It was submitted that the nature of the potential offences alleged is serious and may likely involve the misuse or redirection of in excess of AU$300,000 and that the cogency of the evidence sought is compelling as it essentially amounts to a written admission by Porter of the offence alleged. Furthermore in respect of the considerations of the authority(s) to which the information is sought to be disclosed and the potential for misuse of that information by the police forces, it is submitted there should be no real concern in this case, as they are and should be, the accepted and appropriate investigation officers in the circumstances. Finally it was submitted that the potential prejudice to Porter is that he may be charged, but that there will be fair process and ‘if he committed a crime then so be it’.
Although it is for the applicant to persuade the court that the discretion should be exercised Ms Nikou responded with various arguments as to why the court should not exercise its discretion. Apart from a very general and confused argument that the email was privileged it was otherwise submitted if there was no privilege, that the email was produced for the purpose of financial matters in this court and not to assist in any police investigation of her client. She submitted that the potential prejudice to Porter in allowing disclosure of this email is such that it would amount to self incrimination. I do not accept that argument.
Ms Nikou further suggested that there are appropriate civil remedies which could be obtained by the husband in another court, for example damages, which would circumvent the necessity for police investigation and any criminal proceedings. That may indeed be ultimately the case.
I do not find, and do not need to find, any likely criminal offence. I have a sworn explanation of Porter before me of his actions that may be shown to be correct. It may be that it is factual and accepted by any investigating police force. The fraud or deception, if and when proved, does involve a substantial sum and the actions and documents are serious enough to warrant the proper scrutiny of the authorities. Without access to all of the documents delivered to the Court, and the email, any possible offence committed by Porter may not otherwise be detected and prosecuted by authorities. That is a further consideration which causes me to exercise my discretion.
Finally it was said that the public interest in maintaining the undertaking should not be departed with for the pursuit of some private purpose. In referring to Bailey’s case where distinction is made between the pursuit of private and public interests it was there stated that:
“a private interest of the applicant not within the parameters of the action which brought about their disclosure. In cases of that nature the policy of the law is clear: exceptional circumstances apart, the public interest in the administration of justice requires the undertaking to be strictly adhered to”[27]
[27] Ibid, 485.
The applicant has, I find, advanced good reasons why the leave should be granted to him. He has discharged his onus and satisfied me even on the additional considerations set out in Bailey’s case,[28] that Porter is not unfairly disadvantaged and that the public interest does necessitate an informed and well focused investigation of the husband’s complaint. I find that the husband, through his case guardian, has not acted out of malice or mischief or solely to harass Porter. This is not ‘a fishing expedition’. The leave of this court has properly been sought and the evidence has persuaded me, even to a higher level on the balance of probabilities, that both special circumstances exist and the discretion of the court should be exercised in favour of the applicant.
[28] Ibid, 485.
CIRCUMSTANCES IN WHICH THE UNDERTAKING WILL CEASE
The common law and the Rules provide that parties can be released from the undertaking with the permission or leave of the court. There are, however, other circumstances which arise out of the common law in which the undertaking may not apply and these were carefully detailed and explained the House of Lords in Harman’s Case.[29]
[29] [1982] 1 All ER 532.
For the purposes of this interlocutory judgment the circumstances in which the implied undertaking may be released without the leave of the court should also be identified. It is because of an abundance of caution in relation to this cessation of the undertaking that I have concluded that it is proper that there be a stay of the orders pending hearing and determination of any appeal, if filed, from this judgment.
The House of Lords unanimously agreed in Harman’s Case that the implied undertaking ceases when documents are received into evidence though the majority held the undertaking would not cease when documents were merely read in open court but not received into evidence.[30] The minority position was that:
“Once they are public knowledge, freedom of comment concerning them enures to the public at large. It is further not disputed that, once documents have been read aloud in open court and are not subjected to any specific lawful direction prohibiting publication (such as was envisaged as within a court's power by this House in A-G v Leveller Magazine Ltd[1979] 1 All ER 745, [1979] AC 440), they enter the public domain. They are no longer confidential; privacy has been stripped from them.
It is said, however, by the Home Office that, whatever may be the rights of the public, the litigant and his solicitor remain bound by their obligation not to use the documents, albeit public knowledge, for any purpose other than the conduct of the action in which they were disclosed.
Can it be good law that the litigant and his solicitor are alone excluded from the right to make that use of the documents which everyone else may now make, namely to treat them as matters of public knowledge? In our view, this is not the law. We do not think that a system of law which recognises the right of freedom of communication in respect of matters of public knowledge can decently or rationally permit any such exception.”[31]
[30] Ibid, 539 per Lord Diplock.
[31] Ibid, 544 per Lord Scarman, with whom Lord Simon agrees.
The position in the United Kingdom was ultimately resolved by Parliament by an amendment to the legislation providing that any implied undertaking is concluded when documents are read in open court unless a judge orders otherwise, thereby giving preference to the minority judges in Harman’s Case.
The significance of the timing of when the undertaking has concluded is of particular relevance in this matter as the specific email from Porter sought to be released has been read in open court and received into evidence both through its annexure to the case guardian’s 11 July 2007 affidavit (document 211 in the court index) and by its tendering as ‘Exhibit TP 2’ in these interlocutory proceedings. No submissions were made in this regard and it is somewhat beyond the scope of this hearing and on the submissions received to decide authoritatively whether the use and disclosure of the email in the proceedings and in its reproduction in this judgment has effectively ended any implied undertaking. I observe however that that the Victorian Supreme Court in BritishAmerican Tobacco Australia Services Ltd v Cowell[32] considered the cessation of and implied undertaking and said:
“Where documents are provided to a party to litigation under some coercive process of the court with the result that an implied undertaking attaches to the effect that, without the leave of the court, they not be used otherwise than for the purposes of the litigation, the party bound by that undertaking is not freed of it simply because the document in question is marked as an exhibit in the proceeding in the course of which it was provided. To the extent that knowledge of the document has become public by dint of its tender in open court, members of the public will be free to make use of that knowledge as they will (subject always of course to any order specially made protecting confidentiality and the like), but the party affected by the undertaking remains bound as to use of the document itself. The distinction seems to us a valid one between, on the one hand, use of the document the contents and probably the provenance of which are known in detail to the party by virtue of a privilege extended to it by the processes of the court and, on the other hand, use of the information about it which comes to the knowledge of the public by reason of the proceedings in open court (and during which, it may be supposed, the document is marked as an exhibit). The knowledge of the one cannot be equated with the knowledge of the other.”[33]
[32] (2003) 8 VR 571; [2003] VSCA 43 per Phillips, Batt and Buchanan JJA.
[33] Ibid, paragraph [48] per Phillips, Batt and Buchanan JJA.
In the Federal Court a different circumstance and outcome may apply because of the fact that they have a specific provision in their Rules as follows:
“Order 15 Rule 18 Use of documents
Any order or undertaking, whether express or implied, not to use a document for any purpose other than those of the proceedings in which it is disclosed shall cease to apply to such a document after it has been read to or by the Court or referred to, inopen Court, in such terms as to disclose its contents unless the Court otherwise orders on the application of a party, or of a person to whom the document belongs”
There is no such Rule operative in the Family Court. Argument on this topic was not addressed by either of Senior Counsel. Given the evidence and the manner in which the proceedings were conducted, and what has been read in open court, I propose to exercise my discretion in accordance to what I regard as a just and proper outcome to restrict the use or dissemination of all relevant documents pending the hearing and determination of any appeal that may be filed.
I certify that the preceding paragraphs are
a true copy of the reasons for judgment herein
of The Honourable Justice Young
………………………………………………………..
Associate:
Date: 28 May 2008
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