British American Tobacco Australia Ltd v Gordon

[2007] NSWSC 230

CITATION:	British American Tobacco Australia Ltd v Peter Gordon & Anor [2007] NSWSC 230 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	26-27 February 2007
JUDGMENT DATE :	16 March 2007
JURISDICTION:	Equity Division
JUDGMENT OF:	Brereton J
DECISION:	Interim relief should include restraint on any use of allegedly confidential information, and not permit use to inform proposed institution of other proceedings. Proceedings should be transferred to Supreme Court of Victoria. Parties to bring in Short Minutes.
CATCHWORDS:	EQUITY – Breach of confidence – Injunction to restrain – Interim relief –injunctions to restrain “use” of information - whether “use” injunction should be granted when it might inhibit party in commencing other proceedings – whether exception on restraint to permit use to inform recipient’s decision to commence other proceedings should be permitted – held, it should not – whether use injunction granted only where use would involve further dissemination – held it is not so limited. - JURISDICTION – Cross-vesting – transfer of proceedings – between Supreme Courts of States – relevant considerations – where defendants resident in Victoria, cause of action arises in Victoria, threatened breach is in Victoria, and issues will arise as to conduct of persons involved in previous proceedings in Supreme Court of Victoria – held, Victoria is the natural forum.
LEGISLATION CITED:	(NSW) Jurisdiction of Courts (Cross Vesting) Act 1987
CASES CITED:	AG Australia Holdings Limited v Burton (2002) 58 NSWLR 464 AWB Limited v Cole (No 5) [2006] FCA 1234 Bankinvest AG v Seabrook (1988) 14 NSWLR 711 BHP Billiton Limited v Schultz (2004) 221 CLR 400 British American Tobacco Australia Ltd v Peter Gordon & Anor [2007] NSWSC 109 British American Tobacco Australia Services Ltd v Cowell [2002] VSCA 197 British American Tobacco Australia Services Ltd v Cowell [2003] VSCA 43 Calcraft v Guest [1898] 1 QB 759 Director of Public Prosecutions v Kane (1997) 140 FLR 468 Goddard v Nationwide Building Society [1987] QB 670 James Hardie & Coy Pty Ltd v Barry (2000) 50 NSWLR 357 Lord Ashburton v Pape [1913] 2 Ch 469 Malone v Metropolitan Police Commissioner (No 2) [1979] Ch 344 McCabe v British American Tobacco Australia Services Ltd [2002] VSC 112 Seagar v Copydex Ltd [1967] 1 WLR 923 Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 Sullivan v Sclanders & Goldwell International Pty Ltd (2000) 77 SASR 419 Terrapin Ltd v Builders Supply Company (Hayes) Ltd [1960] RPC 128
PARTIES:	British American Tobacco Australia Ltd (plaintiff 5898/06) British American Tobacco Australia Services Ltd (plaintiff 5940/06) Peter Gordon (first defendant 5898/06) Slater & Gordon Pty Ltd (second defendant 5898/06) Slater & Gordon Pty Ltd t/a Slater & Gordon Lawyers (defendant 5940/06)
FILE NUMBER(S):	SC 5898/06; 5940/06
COUNSEL:	R M Smith SC w GKJ Rich (plaintiff 5898/06) R R Stitt QC & MF Wheelahan SC w RS Hollo & MJ O'Meara (plaintiff 5940/06) R Merkel QC w CJ Horan (defendants)
SOLICITORS:	Baker McKenzie (plaintiff 5898/06) Corrs Chambers Westgarth (plaintiff 5940/06) Arnold Bloch Leibler (defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRERETON J

Friday 16 March 2007

5898/06 British American Tobacco Australia Limited v Peter Gordon & Anor

5940/06 British American Tobacco Australia Services Limited v Slater Gordon Pty Limited

JUDGMENT

1 HIS HONOUR: Consequent upon the judgment I delivered on 22 February 2007 [British American Tobacco Australia Ltd v Peter Gordon & Anor [2007] NSWSC 109] - in which I indicated that I would not hear the final trial of these proceedings, or any interlocutory application in which it would be necessary to consider the iniquity issue, but declined to disqualify myself from otherwise dealing with interlocutory matters, including the motion under the (NSW) Jurisdiction of Courts (Cross Vesting) Act 1987 for transfer of the proceedings to the Supreme Court of Victoria, and refused to set aside the interlocutory injunctions made on 29 November 2006 - on 26 and 27 February 2007, I heard and determined:

· An application by BATAS to have Mr Christopher Dale, a former partner of Clayton Utz, joined as a defendant in proceeding 5940/06 (“the BATAS Proceeding”). At the conclusion of the hearing (of which Mr Dale had notice but at which he did not appear) I made an order joining Mr Dale as second defendant and granted interim relief against him until 22 March 2007, upon which date the matter will return to the court;

· Applications by BATAL in proceeding 5898/06 (“the BATAL Proceeding”) and BATAS in the BATAS Proceeding to join Ms Roxanne Cowell, the executrix of the estate of the late Rolah McCabe, as an additional defendant. At the conclusion of the hearing I made an order joining Ms Cowell in each proceeding. Ms Cowell proffered an undertaking pending an interlocutory hearing in terms that were acceptable to BATAL, but not to BATAS, which sought a more extensive restraint than she was prepared to proffer.

2 The remaining issues argued on 26 and 27 February, which are the subject of this judgment, are:

· BATAS’s application for interim relief against Ms Cowell. I conclude that the more extensive relief sought by BATAS should be granted;

· The formal disposition of Slater & Gordon’s notices of motion filed on 12 December 2006, in which they sought to have the orders of 29 November 2006 set aside. I conclude that those motions should be dismissed;

· The costs of the disqualification application. I conclude that Slater & Gordon should pay the Plaintiffs’ costs of that application;

· The transfer motion. I conclude that the proceedings should be transferred to the Supreme Court of Victoria;

· The future conduct of the matter including any interlocutory hearing.

Background

3 Although this is an interlocutory hearing, which does not involve, except on a limited basis, finding of facts, the immediate background can be summarised - relatively uncontroversially for present purposes – as follows, largely based on an affidavit sworn by Mr Peter Gordon of Slater & Gordon.

4 BATAS retained Clayton Utz as its lawyers to act for it in the defence of the McCabe v BATAS proceedings in the Supreme Court of Victoria in 2001; Slater & Gordon acted for Mrs McCabe. Following the judgment of Eames J in McCabe v BATAS [2002] VSC 112 (22 March 2002), Clayton Utz appointed Mr Christopher Dale, who was a partner in Clayton Utz for nineteen and a half years until about September 2005, and in 2002 was a senior partner and board member, to conduct an internal review of the conduct by Clayton Utz of the defence of the McCabe proceedings on behalf of BATAS, which pertained in particular to the conduct of two partners, Richard Travers and Glenn Eggleton. As a result, Mr Dale became privy to certain reports and other internal Clayton Utz documents, which are based on and contain information at least some of which BATAL and BATAS claim is confidential and privileged (“the Relevant Information”).

5 In August 2005, Mr Dale was expelled from the Clayton Utz partnership for reasons unrelated to the McCabe proceedings or BATAS. Prior to his departure from Clayton Utz, he removed copies of the reports and other documents created in connection with the internal review (“the Relevant Documents”). In mid-August 2006, he met with Mr Jack Rush QC of the Victorian Bar, who had appeared for Rolah McCabe and subsequently her estate in the McCabe proceedings, and disclosed to him the existence and nature of the Relevant Documents.

6 Mr Gordon is the senior partner in Slater & Gordon. In mid-August 2006 he was contacted by Mr Rush QC, who informed him that he had met in chambers with Mr Dale and that Mr Dale had told him of a review of the conduct of Clayton Utz in the McCabe proceeding which had demonstrated a number of serious iniquities, which Mr Rush described.

7 On or about 22 September 2006, Mr Gordon met Mr Dale and Mr Rush. Mr Dale told him that he had a large number of documents relating to the Clayton Utz review, asserted that he would not be breaching any legal or ethical rule in providing Mr Gordon with copies - to which (after being informed of the iniquity allegedly disclosed by them) Mr Gordon agreed - and Mr Dale said he would provide a copy of them. Mr Dale also said that he wanted to meet with Mr William Birnbauer, a journalist employed by The Age and The Sunday Age, who had previously written articles on the McCabe proceedings. Mr Gordon said that Mr Birnbauer would be interested.

8 On 27 September 2006, Mr Dale and Mr Gordon discussed the information contained in the Relevant Documents with Mr Birnbauer. Mr Dale produced the Relevant Documents. Mr Birnbauer and Mr Gordon requested a copy, and Mr Dale agreed to provide them. Mr Gordon made a copy and provided it to Mr Birnbauer, and retained a copy for himself.

9 On Sunday 29 October 2006, articles written by William Birnbauer appeared in The Sunday Age, based on and containing extracts from the Relevant Documents. On 31 October 2006, Clayton Utz wrote to Mr Dale, observing that it was apparent from the articles in The Sunday Age that it had been provided with confidential information of Clayton Utz and/or BATAS, and asking Mr Dale to confirm that he was not responsible for disclosure of the information. Mr Dale’s solicitors, O’Donnell Salzano responded on 3 November 2006 that they were instructed that Mr Dale denied the allegations [that he was responsible]; if Mr Gordon’s affidavit is correct, and there is presently no reason to doubt it, that denial was false.

10 Mr Gordon subsequently obtained legal advice in relation to the Relevant Documents from Mr Rush, and also from Mr Leon Zwier of Arnold Bloch Liebler. He discussed the information they contained with Ms Cowell, and subsequently met with Ms Cowell and other members of the McCabe family, with whom he discussed that information and to whom he provided legal advice, including the information contained in the Relevant Documents. He retained Mr Rush QC, Mr John Gordon and Mr Bernard Quinn of counsel, and provided the Relevant Documents to them, as he did to some of his colleagues at Slater & Gordon. He also forwarded the documents to the Attorney General of Victoria, the Victorian Centre for Tobacco Control, and he provided the information contained in the documents to Mr Marcus Priest, a journalist employed by The Australian Financial Review in Sydney. It was in the context of apprehended publication in the AFR that each of BATAL and BATAS commenced proceedings, in this court, initially against the publisher of the AFR and subsequently joining the publisher of The Age (“the Fairfax Proceedings”). The present proceedings against Slater & Gordon were initiated when, in the course of the Fairfax proceedings, the source of the information that had been published in The Sunday Age emerged.

11 Slater & Gordon allege (and it may be assumed that the McCabe estate will also) that the Relevant Documents and Information are not entitled to protection as confidential because there is a prima facie case, or reasonable grounds for believing, that they relate to or contain an iniquity. On the presently available material, it can be said that in the present proceedings brought by BATAL and BATAS against Slater & Gordon (“the breach of confidence proceedings”), BATAL and BATAS have seriously arguable cases for final relief to restrain the use or dissemination of their confidential information, which has come into the hands of Slater & Gordon and Ms Cowell as a result of a breach of confidence by Mr Dale in circumstances in which the recipients ought to have been aware that there was a breach of confidence, but for the defence of iniquity. The main issue at the final hearing is likely to be whether there are “reasonable grounds for believing”, or “a prima facie case”, that the documents and information in which confidence and privilege are claimed disclose an iniquity; it will not be necessary for the Defendants to establish the iniquity on the balance of probabilities, although it would not suffice that the documents apparently “relate to” an iniquity; to be deprived of confidentiality or privilege they must contain or disclose an iniquity [AWB Limited v Cole (No 5) [2006] FCA 1234, [217]-[218]; AG Australia Holdings Limited v Burton (2002) 58 NSWLR 464, 520-1 [198]-[202], 523 [208]].

12 Though it has not yet been articulated as against BATAL, the iniquity case has been pleaded by Slater & Gordon in a defence filed in the BATAS proceeding; its substance is that the Relevant Documents, or part of them, disclose or relate to the following matters:

· That BATAS had a practice of destroying or concealing the existence of documents for the purpose of prejudicing claims which might be brought against BATAS by persons seeking damages for injury caused by smoking BATAS’s products (called “the document iniquity”);

· That for the purpose of concealing the document iniquity, BATAS in conjunction with its legal representatives deliberately gave inadequate and/or misleading discovery in the McCabe proceedings (called “the discovery iniquity”);

· That during the hearing of the application before Eames J in the McCabe proceedings, BATAS in conjunction with its legal representatives gave evidence that was false misleading or deceptive or deliberately withheld evidence for the purpose of concealing the document iniquity and the discovery iniquity (called “the evidence iniquity”);

· That BATAS in conjunction with its legal representatives used the litigation process to delay the McCabe proceedings in knowledge of her declining health and imminent death (called “the delay iniquity”);

· That Mr Wilson gave evidence and allowed submissions to be made on his behalf in the Victorian Court of Appeal that were misleading or deceptive for purposes which included concealing or overturning an adverse finding about the document iniquity (called “the Wilson iniquity”);

· That solicitors in Clayton Utz not otherwise involved in the McCabe proceedings, having discovered some or all of the iniquities so far mentioned, failed to disclose them to the Supreme Court of Victoria, or to the Court of Appeal or the High Court of Australia in connection with subsequent applications.

13 The allegations go further, and allege that this was all part of a course of conduct which was manifest in other tobacco litigation, including the Re Cannar proceedings in this court, the Re Mowbray proceedings in the New South Wales Dust Diseases Tribunal, and proceedings under RICO by the US Department of Justice in the United States District Court for the District of Columbia.

14 Slater & Gordon, and Ms Cowell, wish to use the Relevant Documents and Information for the purposes of an application to the Supreme Court of Victoria (or its Court of Appeal, or the High Court of Australia) by the McCabe estate, to reopen the judgment of the Victorian Court of Appeal (which set aside the judgment of Eames J in favour of Ms McCabe) and to reinstate the judgment of Eames J (“the Proposed Reopening Proceeding”).

Interim Relief against Ms Cowell

15 Ms Cowell and BATAL have agreed upon an interim regime, pending the hearing of an application for interlocutory relief against her, and on 27 February 2007, upon BATAL’s usual undertaking as to damages, I noted her undertaking in the following terms:

(1) Pending the hearing and determination of the application for interlocutory relief or further order, Roxanne Joy Cowell undertakes to the Court that she will not disclose, publish, disseminate or use the information claimed to be confidential or privileged and contained in the documents described in Schedule A to the amended summons filed 27 February 2007.

(2) The undertaking in paragraph (1) is not intended to and does not preclude Roxanne Joy Cowell from using the information for the purposes of these proceedings or from publishing or disseminating the information for the purposes of defending these proceedings;

(i) to such of the lawyers she has retained or who she may retain to act for her in these proceedings who have executed an undertaking to keep the information confidential; or

(ii) to such other persons as the plaintiff may in writing agree upon such terms as the plaintiff may stipulate; or

(iii) in accordance with such leave of the court as may be granted.

(3) The undertaking in paragraph (1) is not intended to and does not preclude Roxanne Joy Cowell from commencing a proceeding in which the primary relief sought is an order to set aside the judgment and orders, or the effect of the judgement and orders, of the Court of Appeal of the Supreme Court of Victoria delivered on 6 December 2002 provided that in doing so she does not disclose, publish or disseminate the information to any person.

16 Ms Cowell has offered a similar undertaking in the BATAS proceeding, but it is unacceptable to BATAS and accordingly I must resolve the dispute as to interim relief. Pending resolution of that dispute, she has undertaken to the court that until the determination of the application concerning the terms of the interim regime to operate concerning the use which she might or might not make of the information referred to the schedule to the amended statement of claim filed 27 February 2007, she will not do anything to alter the current status quo so far as publication, dissemination or use of that information is concerned.

17 The dispute pertains to:

· The absence from paragraph (1) of the undertaking proffered of the words “by herself or by her servants or agents or howsoever”. In accordance with the usual formula, which was used in the order made against Slater & Gordon on 29 November 2006, I will include the words “by herself, her servants or agents”. The further words “or howsoever” are not part of the usual formula and do not appear in the orders previously made in these proceedings against Slater & Gordon, and, in this context, do not appear to add anything. · The inclusion in paragraph (2) of the words “from using the information for the purposes of these proceedings or”. The corresponding “carve out” in the order against Slater & Gordon was in the terms “from publishing or disseminating the information for the purpose of defending these proceedings”. As there may be a “use” without there being a publication or dissemination, I accept that the carve out should extend to “using”. As against Slater & Gordon, the “carve out” was deliberately limited to “the purposes of defending these proceedings”, because of the foreshadowed possibility that a cross-claim might be brought, and I was unpersuaded why use for purposes beyond the defence of the proceedings ought be permitted, reserving liberty to apply for leave if use for such a purpose were to be pressed, in circumstances where the potential cross-claim was unexplained. Likewise, I do not see why use by Ms Cowell beyond the defence of these proceedings should be permitted; application may be made for leave to use it for some other purpose in connection with the proceedings, if required, when that purpose is articulated and can then be given due consideration.

· The exception contained in paragraph (3) in its entirety. This was the main dispute. In short, BATAS complains that this would permit Ms Cowell to use the relevant information to commence the Proposed Reopening Proceeding. Ms Cowell wishes to commence the Proposed Reopening Proceeding, and has served notice of her intention to do so expiring on the date on which the present application was heard (but has offered an undertaking to maintain the status quo until its determination). Ms Cowell submits that the McCabe estate ought not be restrained from exercising its right to invoke the jurisdiction of the Supreme Court of Victoria by commencing the Proposed Reopening Proceeding, and that an injunction should not be granted which “freezes her mind” rather than prohibits her from publishing or disseminating the information. She submits that until now BATAS has been content with an undertaking not to publish or disseminate the relevant information.

18 Once again, the only issue relates to the scope of the “carve out” from an interim restraint, which it is otherwise accepted should apply. The essential question is whether, assuming that there is otherwise a serious case to be tried for final relief, an injunction should prohibit not only the publication or dissemination of the information said to be confidential, but its intellectual use by the recipient (Ms Cowell) to decide whether to institute the Proposed Reinstatement Proceeding. In my previous judgment, I observed (at [58]), that no order presently in force or sought in these proceedings prohibits Ms Cowell from issuing the Proposed Reopening Proceedings: the orders prohibit, on an interim basis, the use of the information in which confidentiality is claimed, not the institution of proceedings. I also observed that the undertakings then proffered by Slater & Gordon, like those now proffered by Ms Cowell, would have excluded from prohibited uses the use of the information for the purposes of instituting the Proposed Reopening Proceedings. I then said “Permitting such use would at least potentially destroy the privilege and confidentiality which the plaintiffs seek to assert in these proceedings”. The modified form of paragraph (3) now proffered by Ms Cowell would still prohibit publication or dissemination or use in the proceedings (once instituted) of the relevant information, and is not open to the same objection. Nonetheless, BATAS submits that Ms Cowell should not be permitted to use the allegedly confidential information now in her possession for the purpose of instituting the Proposed Reopening Proceeding, even though that use is only an intellectual one for the purpose of deciding what to do.

19 Mr Merkel QC, for Ms Cowell, submitted that there is no case in which a party has been restrained from issuing proceedings, not involving the deployment in the public domain of confidential information. If that be so, in my view it is because the issue has usually arisen after and not before the confidential information has been abused to issue proceedings. Many cases illustrate the principle that courts will restrain recipients of confidential information from gaining any advantage from their possession of that information. Thus in Lord Ashburton v Pape [1913] 2 Ch 469, the ultimate order as varied by the Court of Appeal was that the defendants, their servants and agents be restrained until judgment or further order “from publishing or making use of any of the copies of such letters or any information contained therein” [the first instance order is at 470, from which the Court of Appeal struck out the exception which would have permitted use of the information in other pending proceedings].

20 In Goddard v Nationwide Building Society [1987] QB 670, the order made by the Court of Appeal restrained the defendant “from using or relying in any manner whatsoever in the action upon the copy of the attendance note and requiring the defendant forthwith to deliver up the copy document and all further copies thereof which the defendant might have made and were in its possession, power or control” [at 672C]. This was in accordance with the principle stated by May LJ (at 683E) (emphasis added):

If a litigant has in his possession copies of documents to which legal professional privilege attaches he may nevertheless use such copies as secondary evidence in his litigation: however, if he has not yet used the documents in that way, the mere fact that he intends to do so is no answer to a claim against him by the person in whom the privilege is vested for delivery up of any copies or to restrain him from disclosing or making use of any information contained therein .

21 In Seagar v Copydex Ltd [1967] 1 WLR 923, Lord Denning MR (at 931) cited the following passage from the judgment of Roxburgh J in Terrapin Ltd v Builders Supply Company (Hayes) Ltd [1960] RPC 128, 130 (emphasis added):

As I understand it, the essence of this branch of the law, whatever the origin of it may be, is that a person who has obtained information in confidence is not allowed to use it as a springboard for activities detrimental to the person who made the confidential communication, and springboard it remains even when all the features have been published or can be ascertained by actual inspection by any member of the public.

22 Lord Denning continued (emphasis added):

The law on this subject does not depend on any implied contract. It depends on the broad principle of equity that he who has received information in confidence shall not take unfair advantage of it . He must not make use of it to the prejudice of him who gave it without obtaining his consent. The principle is clear enough when the whole of the information is private. The difficulty arises when the information is in part public and in part private. As, for instance, in this case. A good deal of the information which Mr Seagar gave to Copydex was available to the public, such as the patent specification in the patent office, or the “Klent” grip, which he sold to anyone who asked. If that was the only information he gave them, he could not complain. It was public knowledge. But there was a good deal of other information he gave them which was private, such as the difficulties which had to be overcome in making a satisfactory grip; the necessity for a strong, sharp tooth; the alternative forms of tooth; and the like. When the information is mixed, being partly public and partly private, then the recipient must take special care to use only the material which is in the public domain. He should go to the public source and get it: or, at any rate, not be in a better position than if he had gone to the public source. He should not get a start over others by using the information which he received in confidence. …

23 In Malone v Metropolitan Police Commissioner (No 2) [1979] Ch 344, Megarry VC said (at 361) (emphasis added):

If A makes a confidential communication to B, then A may not only restrain B from divulging or using the confidence, but also may restrain C from divulging or using it if C has acquired it from B, even if he acquired it without any notice of impropriety … In such cases, what will be restrained is the use or disclosure of it after notice of the impropriety …

24 In Director of Public Prosecutions v Kane (1997) 140 FLR 468, where defendants had inadvertently been provided by the DPP with a copy of a privileged advice, Hunt CJ at CL restrained them “from using or otherwise dealing” with the document.

25 In Sullivan v Sclanders & Goldwell International Pty Ltd (2000) 77 SASR 419, the Full Court of the Supreme Court of South Australia restrained the plaintiffs/respondents – who had brought proceedings using the defendant/appellant’s confidential information which they had obtained by a subterfuge – from “disseminating or making use of the contents of the confidential documents”. The statement of claim, which had been filed making use of those documents, was struck out. The plaintiff was granted liberty to file a fresh statement of claim “making no use either directly or indirectly of the confidential documents or their contents”. In other words, no use – not even an intellectual use – of the confidential documents or their contents could inform the preparation of the fresh statement of claim.

26 In AG Australia Holdings Limited v Burton, Campbell J (as his Honour then was) said (at 526 [222]):

The decision of the English Court of Appeal in Lord Ashburton v Pape , which had the effect that surreptitiously obtained material could not be used at all in the bankruptcy court, illustrates how it is within the scope of the way in which an equity court will enforce an obligation of confidence, to ensure that no advantage is obtained in litigation from the breach of confidence.

27 This followed his Honour’s explanation (at 524 [215]) that conscionable behaviour required that the defendant give up the information it should not have had, and not in the future obtain any benefit from having once had that information – according with the principle in Terrapin that a party who has obtained information in confidence is not allowed to use it as a springboard for activities detrimental to the person who made the confidential communication.

28 As Mr Stitt QC, for BATAS, submitted, an “intellectual use” of confidential information – to inform a decision on a course of action - is just as much an unauthorised use to the detriment of the confider as a physical use by publication or dissemination, and provides a springboard for activities detrimental to the confider just as much as any dissemination might. Use of confidential information to institute proceedings, in which the same information might subsequently be obtained on compulsory process, is an abuse of information received in, or as a result of a breach of, confidence, and will be restrained by a court of equity.

29 Mr Merkel QC also submitted that injunctions against “use” are granted only where the apprehended use may potentially destroy the confidentiality of the information sought to be protected, and that “intellectual use” (Mr Stitt’s words, not Mr Merkel’s) by Ms Cowell to inform her own decision-making, without disclosure to her advisers, would not do so. I reject that submission: the passages cited above from Lord Ashburton v Pape, Goddard, and Malone show that use other than publication or dissemination is commonly restrained, and cases such as Terrapin, Seagar v Copydex and AG v Burton show that “use” injunctions are granted not only to prevent further dissemination, but to prevent a recipient gaining an advantage (or a “springboard”) in litigation or otherwise from possession of the confidential information. Plainly, such an advantage may be gained by an “intellectual use” without disclosure or further disclosure of the information. Moreover, in the present case, there is a certain artificiality about the suggestion that she could make intellectual use of the information to decide to institute the Proposed Reopening Proceeding but not disclose it to her advisers, where the relevant advisers include Slater & Gordon, who put her in possession of the information in the first place.

30 No injunction is sought restraining Ms Cowell from commencing the Proposed Reopening Proceedings. However, if in deciding to do so she cannot put out of account any of the Relevant Information, then the consequence may be that she is unable to commence those proceedings, because their commencement would involve an unauthorised use of the information. It is clear, on Mr Gordon’s affidavit, that Ms Cowell has been put in possession of the Relevant Information or some of it, so that at best this is a case of “mixed” information, partly public and partly private - which, as Lord Denning observed in Seagarv Copydex, requires the recipient to take special care to use only the material that is in the public domain. As Williams J pointed out in Sullivan v Sclanders (at 420 [4]), it may be prudent for anyone aware of the contents of the relevant documents to consider the possibility of embarrassment, and Ms Cowell and her advisors must understand the very considerable difficulties which they may face by reason of the knowledge that they have acquired. None of that is a reason to detract from the protection to which the Plaintiffs, if ultimately successful, are entitled against the misuse of their confidences.

31 In my view, therefore, if the Plaintiffs ultimately succeed the relief to which they would be entitled would include an injunction prohibiting use of the Relevant Information for the purposes of instituting legal proceedings. Unless the balance of convenience otherwise indicates, interim relief should not be less protective of the Plaintiffs.

32 As to the balance of convenience, the detriment to BATAS from declining relief in the more extensive form which it seeks, is that BATAS may then be exposed to proceedings, the decision to bring which is founded on information which Ms Cowell ought never have had. That is a real detriment, and one that cannot practically be undone after the proceedings are instituted. Thus, if there were use of the information even for the limited purpose which paragraph (3) of the proposed undertaking would permit, it is probable that a proceeding will then be instituted, and as a result processes invoked, which if at final hearing it is established that the information was confidential and ought not have been used for that purpose, cannot be undone. On the other hand, Ms Cowell will, if ultimately successful in the breach of confidence proceedings, be at liberty to bring the Proposed Reopening Proceeding, using the Relevant Information then, and is in any event at liberty to bring that proceeding in the meantime, if the decision to institute them is not informed by the Relevant Information. At present I am concerned only with the interim position, until there can be an interlocutory hearing when the issues, including the balance of convenience, can be more closely examined. As Mr Stitt QC for BATAS submits, there is at present no suggestion, let alone evidence, that any urgency attends the commencement of the Proposed Reopening Proceeding. No suggestion has been made that any time limitation or other consideration makes the early institution of that proceeding imperative. At least at this stage, no prejudice has been identified as flowing to Ms Cowell from not being able to institute that proceeding before the final determination of the breach of confidence proceedings, let alone before there can be an interlocutory hearing. In my view, the balance of convenience overwhelmingly favours the grant of interim relief in the wider form sought by BATAS.

33 It follows that unless an undertaking in equivalent terms or one otherwise acceptable to BATAS is proffered, the interim relief I will grant against Ms Cowell in the BATAS proceeding will be in the following terms:

Upon the plaintiff by its counsel giving to the court the usual undertaking as to damages:

(1) Order that until the hearing and determination of the application for interlocutory relief or further order, Roxanne Joy Cowell be restrained from by herself her servants or agents publishing disseminating or using the information referred to in the schedule to the amended statement of claim filed on 27 February 2007 (“the information”).

(2) Order (1) is not intended to and does not preclude Roxanne Joy Cowell from, for the purpose of defending these proceedings, using the information or publishing or disseminating it:


(a) to such of the lawyers she has retained or who she may retain to act for her in these proceedings who have executed an undertaking to keep the information confidential; or

(b) to such other persons as the plaintiff may in writing agree upon such terms as the plaintiff may stipulate; or

(c) in accordance with such leave of the court as may be granted.

Disposition of motions filed 12 December 2006

34 Slater & Gordon submit that their motions in each proceeding for the discharge of the injunctions of 29 November should not be dismissed, but should remain on foot, on the basis that it has further work to do and may connect with the question of interlocutory relief against Ms Cowell.

35 In this respect, it would involve raising grounds distinct from those on which until now it was said to be based. As I explained in my previous judgment, Slater & Gordon consented to interlocutory relief on 29 November 2006 [British American Tobacco Australia Ltd v Peter Gordon & Anor [2007] NSWSC 109, [32]-[39]]. Although Mr Merkel QC submitted that Slater & Gordon ought not be taken as having consented to interlocutory relief until the final hearing, examination of the transcript of 23 November shows that the matter was adjourned for interlocutory hearing on 29 November, and the short minutes proffered on behalf of Slater & Gordon on 29 November involved an offer of an injunction “until such time as the court may order”. While it was certainly envisaged that an application might be made to vary the extent of the “carve out” that described permitted uses of the Relevant Documents and Information (in particular, for the defence of these proceedings), there was no contemplation that this was simply a temporary interim order pending a further interlocutory contest. If there was to be an interlocutory contest, it was to take place on the three days available commencing on 29 November.

36 Interlocutory relief is not immutable, and may be open to reconsideration with the change of circumstances and the passage of time, but subject to that and to any application which might be made in respect of the extent of the “carve out”, the question of interlocutory relief against Slater & Gordon should be regarded as concluded by the orders of 29 November 2006.

37 The motion filed on 12 December 2006, to set aside the injunction of 29 November, was founded wholly and solely on the contention that those orders should be set aside as affected by apprehended bias. That contention has failed. If Slater & Gordon wish to agitate an argument that the injunction should be set aside on some other basis (such as a change of circumstances), then that is a fresh application, to be brought by a fresh notice of motion. The present motion, on the basis upon which it was brought and propounded, has been determined. It will be dismissed.

The Costs of the Disqualification Application

38 Slater & Gordon submit that the costs of the disqualification application should be costs in the cause. They contend that that application was put on the basis that I would have had a continuing and on-going involvement in applications concerning interlocutory relief, and that the essence of my decision was that I could not be involved in contested questions of interlocutory relief, so that I should be regarded as having found in their favour on the substantive question, though not on the application to set aside the orders of 29 November 2006. BATAL submitted that Slater & Gordon should pay the costs of the disqualification application, on the basis that their success on the proposition that I should not hear the iniquity issue was, in the circumstances, a very limited success and of no practical significance in the circumstances. BATAS submitted that, consistently with its position of neutrality on the disqualification application, part of the costs of the application should be its costs in the proceedings, but that there should be a costs order in its favour in respect of the allegation that it was guilty of non-disclosure, the additional costs occasioned by the change in Slater & Gordon’s position between 7 and 13 December as to whether the injunction of 29 November would be the subject of review, the wasted costs of the hearing of 7 November (said to have been wasted by reason of Slater & Gordon’s change of position), and the unsuccessful application to discharge the injunctions of 29 November.

39 It is correct, as Mr Merkel submits, that the potential of my future involvement in interlocutory proceedings was the vehicle for the disqualification application, and at one stage Mr Wheelahan SC fairly and frankly outlined the applications that might be made in that behalf to vary the existing injunction. However, it was clear throughout the hearing of the disqualification application that its primary focus and purpose was to procure the setting aside of the injunction of 29 November, in order to facilitate the commencement of the Proposed Reopening Proceeding. As I indicated in my previous judgment, the application for my disqualification insofar as it related to the final hearing was premature. Insofar as it related to the transfer motion, which was the only matter then set down before me, it failed. In respect of future interlocutory applications, not then filed let alone listed, that might raise the iniquity issue, such applications would not necessarily have been dealt with by me: that would have depended on the exigencies of the lists, and ordinarily they would have been dealt with by the duty judge of the day. As things have transpired, moreso given the outcome of the transfer motion, it can be said that the disqualification application, to the extent that it did not fail, was unnecessary.

40 The issues that arose on it are discrete from the other issues in the proceedings, and the entitlement to costs in respect of it should not be contingent on the outcome of the proceedings generally. While I note Mr Wheelahan’s position that, save in respect of specific identified issues, he seeks only that the costs of the application be the plaintiffs’ costs in the proceedings, it is practically impossible to disentangle the costs of the application to discharge the existing injunction from those of the disqualification application otherwise, and I see no reason why either plaintiff should be out of pocket on account of the disqualification application, to the costs of which they were put by a largely unsuccessful and otherwise unnecessary or premature application by Slater & Gordon.

41 In my view, Slater & Gordon should pay the plaintiffs’ costs of the disqualification application, including of the motion filed on 12 December 2006 for the setting aside of the orders of 29 November 2006.

The Transfer Application

42 Slater & Gordon apply for an order transferring the proceedings to the Supreme Court of Victoria, under section 5(2)(b)(iii) of the (NSW) Jurisdiction of Courts (Cross-Vesting) Act 1987, which provides that where a proceeding is pending in this court, and it appears to the court that it is “otherwise in the interests of justice” that the proceeding be determined by the Supreme Court of another State or of a Territory, this court should transfer the proceeding to that other Supreme Court.

43 Under s 5(2)(b)(iii), there is no requirement that there be a pending proceeding in the transferee court [cf s 5(2)(b)(i)], or that the proceeding in the transferor court rely on cross-vested jurisdiction [cf s 5(2)(b)(ii)]. No question arises as to whether the jurisdiction of the transferor court has been regularly invoked. The question is simply whether it is in the interests of justice that the proceedings be heard and determined in the other court, there being a statutory obligation to transfer the proceedings to the other court whenever it appears to be in the interests of justice to do so, for which purpose it is both necessary and sufficient that the transferee court be the “more appropriate” forum [BHP Billiton Limited v Schultz (2004) 221 CLR 400, 421 [14] , 434-435 [63]]. An applicant for a transfer bears no burden of persuasion or onus of proof [BHP v Schultz, 437 [71]; Bankinvest AG v Seabrook (1988) 14 NSWLR 711, 727], and no particular significance attends the plaintiff’s original choice of forum [BHP v Schultz, 425-426 [26]-[27], 439 [77]].

44 In identifying the “more appropriate forum”, relevant considerations include the cost and efficiency of proceedings in the respective jurisdictions, and the “connecting factors” described by Lord Goff in Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460, 478 - including matters of convenience and expense such as availability of witnesses, the places where the parties respectively reside or carry on business, and the law governing the relevant transaction [BHP v Schultz, 422 [18]]. Sometimes, consideration of relevant connecting factors will identify a “natural forum”. Ordinarily, the residence of the defendant is more significant than that of the plaintiff to establish jurisdiction and this may count in identifying the natural forum [BHP v Schultz, 423 [19]]. In James Hardie & Coy Pty Ltd v Barry (2000) 50 NSWLR 357, Spigelman CJ said (at 361 [7]):

To determine which court is, in the interests of justice, the appropriate court, it is necessary to inquire, in the case of a tort, as to what is the place of the tort. Indeed, in the context of administering the co-operative national scheme in the Jurisdiction of Courts (Cross-Vesting) Act , where the place of the tort and the residence of the parties coincide, this will generally be determinative of the issue of “appropriate court”, although other factors may need to be assessed in the process of determining where the interests of justice lie.

45 In BHP v Schultz, the majority considered that the proceedings should be transferred from New South Wales to South Australia, which was the “natural forum” having regard to the circumstances that the lex loci delicti was South Australia, and the courts of that State provided the forum which gave effect to the reasonable expectation of the parties as to where their dispute would be resolved, and to the policy manifested in the transfer provisions of the cross-vesting legislation; moreover the witnesses at trial would to a significant degree come from South Australia, and an appellant had a more generous scope for appellate procedures in that State than in New South Wales.

46 Mr Merkel QC, for Slater & Gordon and Ms Cowell, eschewed reliance on considerations of costs and convenience arising from the locality of the parties’ representatives and witnesses. He rightly accepted that the law firms in question had interstate practices, and that at this stage it was not practicable to say with any confidence what witnesses would be required, and whether they would be predominantly from New South Wales or Victoria. He relied on four main considerations said to be matters of juridical disadvantage in New South Wales but not in Victoria. In short, they were:

· Fragmentation of proceedings. It was submitted that this court was being asked to “fragment” proceedings, by determining what would be admissible in the Proposed Reopening Proceeding;

· Issue estoppel. It was submitted that if the matter proceeded in this court, the parties might be bound by an issue estoppel arising from the conclusion of the Victorian Court of Appeal in McCabe that the Relevant Documents were privileged, whereas there would be no such issue estoppel in the Proposed Reopening Proceeding, and if the breach of confidence proceedings were transferred and linked with the Proposed Reopening Proceeding then the Victorian court could mould its procedures to avoid the consequences of an estoppel;

· Misconduct of officers of the court. It was submitted that the iniquity defence would involve examination of the conduct of lawyers in the McCabe proceedings, which themselves were conducted the Supreme Court of Victoria, and ought more appropriately be undertaken in that court;

· The Harman undertaking. It was submitted that as Ms Cowell would seek to use, in the breach of confidence proceeding, documents that had been produced on compulsory process in the McCabe proceeding and thus were subject to the implied undertaking not to use them for purposes other than the proceedings in which they had been produced, without the leave of the court in which they had been produced – which was the Supreme Court of Victoria - the breach of confidence proceeding would more conveniently be conducted in that Court, which could deal with the Harman leave issue as well as the substantive issues.

47 At the outset, it should be observed that Schultz makes clear that when it comes to juridical advantage and disadvantage, the interests of justice concern those of both parties, and not the selection of the most advantageous, or least disadvantageous, forum for one of them. The “interests of justice” should be judged by more objective factors, and it is for that reason that identification of the “natural forum” – in which objectively judged it might be expected that the dispute would fall to be resolved, with its concomitant juridical advantages and disadvantages for each party – is important. This is particularly relevant to the “fragmentation” and “issue estoppel” arguments, because to the extent that either involves juridical disadvantage to one party it is equally juridical advantage to the other, and that does not necessarily mean that it is in the interests of justice to transfer proceedings to a forum in which the disadvantage to one party is removed or reduced.

48 The “fragmentation” argument proceeds on the theory that the “justiciable controversy” between the parties is whether the relevant information can be adduced in evidence in the Proposed Reopening Proceeding; that in that proceeding the McCabe estate would have to establish fraud or its equivalent; that a stepping stone to proving such fraud is the evidence that can be adduced, which is the ultimate issue, so it is said, in the breach of confidence proceeding; and thus, so it is said, permitting the breach of confidence proceeding to remain in New South Wales would require a contest here to establish whether there was iniquity such as could defeat privilege or confidentiality so that the Relevant Documents and Information could be used in the Proposed Reopening Proceeding, whereas the issue of what is or is not admissible in the Supreme Court of Victoria should be resolved by that court.

49 In my view, this argument depends on a fallacious identification of the issue in the present (breach of confidence) proceedings, and a conflation of it with the issue in the Proposed Reopening Proceeding. In the breach of confidence proceedings, the issue is not whether the relevant information is admissible in the Proposed Reopening Proceeding, but whether Slater & Gordon, Mr Dale and Ms Cowell should be permitted to make any further use of the Relevant Documents and Information.

50 In this context, “fragmentation” is unavoidable and essential: the breach of confidence proceeding is a separate proceeding, anterior to the proceeding in which it is hoped or apprehended that the confidential information may be used. This is because, unless an injunction is obtained before the information is tendered in evidence in the second proceeding, the fact that it has been obtained in breach of confidence or privilege does not render it inadmissible, and once in evidence its confidence is for all practical purposes destroyed [Calcraft v Guest [1898] 1 QB 759]. Thus in Lord Ashburton v Pape, the proceeding for an injunction to restrain publication in breach of privilege and confidence was a separate proceeding, which if it were to have utility had to be determined before the proceeding in which it was threatened to use the privileged information. As Cozens-Hardy MR explained (at 472-3) (emphasis added):

Apart, therefore, from these pending or threatened proceedings in bankruptcy, it seems to me to be perfectly clear that the plaintiff can obtain the unqualified judgment that he asks for. Now, can it make any difference that Pape says “I want, by means of these copies, to give secondary evidence in the bankruptcy proceedings?” In my opinion that is no ground for making any distinction. The rule of evidence as explained in Calcraft v Guest merely amounts to this, that if a litigant wants to prove a particular document which by reason of privilege or some circumstance he cannot furnish by the production of the original, he may produce a copy as secondary evidence although that copy has been obtained by improper means, and even, it may be, by criminal means. The court in such an action is not really trying the circumstances under which the document was produced. That is not an issue in the case and the court simply says “here is a copy of a document which cannot be produced; it may have been stolen, it may have been picked up in the street, it may have improperly got into the possession of the person who proposes to produce it, but that is not a matter which the court in the trial of the action can go into”. But that does not seem to me to have any bearing upon a case where the whole subject matter of the action is the right to retain the originals or copies of certain documents which are privileged. It seems to me that, although Pape has had the good luck to obtain a copy of these documents which he can produce without a breach of this injunction, there is no ground whatever in principle why we should decline to give the plaintiff the protection which in my view is his right as between him and Pape, and that there is no reason whatever why we should not say to Pape in pending or future proceedings, “you shall not produce these documents which you have acquired from the plaintiff surreptitiously, or from his solicitor, who plainly stood to him in a confidential relation”.

51 Kennedy LJ said (at 474) (emphasis added):

I agree that the better view seems to me to be that although it is true that the principle which is laid down in Calcraft v Guest must be followed, yet, at the same time, if, before the occasion of the trial when a copy may be used , although a copy improperly obtained, the owner of the original can successfully promote proceedings against the person who has improperly obtained the copy to stop his using it, the owner is nonetheless entitled to protection, because , if the question had arisen in the course of a trial before such proceedings , the holder of the copy would not have been prevented from using it on account of the illegitimacy of its origin .

52 And Swinfen Eady LJ said (at 476) (emphasis added):

Then objection was raised in the present case by reason of the fact that it is said that Pape, who now has copies of the letters, might wish to give them in evidence in certain bankruptcy proceedings, and although the original letters are privileged from production he has possession of the copies and could give them as secondary evidence of the contents of the letters, and, therefore, ought not be ordered either to give them up or to be restrained from divulging their contents. There is here a confusion between the right to restrain a person from divulging confidential information and the right to give secondary evidence of documents where the originals are privileged from production, if the party has such secondary evidence in his possession. The cases are entirely separate and distinct. If a person were to steal a deed, nevertheless in any dispute to which it was relevant the original deed might be given in evidence by him at the trial. It would be no objection to the admissibility of the deed in evidence to say you ought not to have possession of it. His unlawful possession would not affect the admissibility of the deed in evidence if otherwise admissible. So again with regard to any copy he had. … The fact, however, that a document, whether original or copy, is admissible in evidence is no answer to the demand of the lawful owner for the delivery up of the document and no answer to an application by the lawful owner of confidential information to restrain it from being published or copied .

53 In Goddard v Nationwide Building Society, May LJ reviewed those judgments and said (at 683) (emphasis added):

I confess that I do not find the decision in Lord Ashburton v Pape logically satisfactory, depending as it does upon the order in which applications are made in litigation . Nevertheless I think that it and Calcraft v Guest [1898] 1 QB 759 are good authority for the following proposition. If a litigant has in his possession copies of documents to which legal professional privilege attaches he may nevertheless use such copies as secondary evidence in his litigation: however, if he has not yet used the documents in that way, the mere fact that he intends to do so is no answer to claim against him by the person in whom the privilege is vested for delivery up of the copies or to restrain him from disclosing or making any use of any information contained in them .

54 Other cases that illustrate the necessarily separate and anterior nature of an application for injunctive relief in respect of a breach of confidence when it is proposed to seek to use the relevant information in other proceedings include Sullivan v Sclanders, and AG Australia Holdings Limited v Burton. Accordingly, the two proceedings – the proceeding to restrain use of information obtained in breach of confidence, and the proceeding in which tender of that information is apprehended - are necessarily separate and to that extent “fragmented”. The question of breach of confidence does not arise if the relevant information is tendered in the proposed reinstatement proceeding. Moreover, because the issues in the two proceedings are different, there is no risk of inconsistent findings. Nor is there duplication: if the plaintiff succeeds in the breach of confidence proceeding, the defendant in those proceedings is prohibited from using the information in the other proceeding; whereas if the plaintiff in the breach of confidence proceedings fails, the defendant is at liberty to tender the information, if otherwise admissible, in the other proceeding. Applied to the present case, if BATAL and BATAS succeed in the breach of confidence proceedings, Slater & Gordon and Ms Cowell will be prohibited from using the Relevant Information in the Proposed Reopening Proceeding and will be obliged to deliver up the Relevant Documents; whereas is BATAL and BATAS fail, Slater & Gordon and Ms Cowell will be at liberty to use the Relevant Information and tender the Relevant Documents, if otherwise admissible, in the Proposed Reopening Proceeding, and will retain possession of the Relevant Documents.

55 It follows that, because of the significance in this context of the order in which the proceedings are determined, the present (breach of confidence) proceedings must be heard and determined separately and before the Proposed Reopening Proceeding. Fragmentation, to that extent, is necessary in the interests of justice. Failure to adopt that course would deny to BATAL and BATAS the opportunity to have their breach of confidence claim determined, whereas adopting that course would permit that claim to be determined, and then permit the Proposed Reopening Proceeding to be determined on such material as was properly available for use in connection with it. That applies just as much if these proceedings are transferred to Victoria, as if they remain in New South Wales: the issues in the breach of confidence proceedings will still be separate and anterior to the Proposed Reopening Proceeding. Accordingly, I do not consider that this factor points to Victoria as being any more appropriate a forum than New South Wales; on the other hand, as the same considerations will inform the sequence of the litigation in Victoria, it does not weigh in favour of New South Wales either: it is neutral.

56 As to the issue estoppel argument, it was submitted for Slater & Gordon and Ms Cowell that the Victorian Court of Appeal had upheld a claim for privilege in respect of documents which were the subject of the present proceedings, and that it was arguable that that holding could not be revisited without first setting aside the decision of the Court of Appeal. However, in my view it is doubtful in the extreme that there is tenable estoppel issue. The question of privilege and iniquity was not debated in McCabe; the relevant documents were admitted at first instance on the basis that if entitled to privilege, that privilege had been waived. The holding of the Court of Appeal in McCabe was a limited one. It was expressed in terms to the effect that the documents in question if otherwise privileged had not lost that privilege by waiver; the Court of Appeal did not resolve whether or not the documents were properly entitled to privilege at all, but expressly left that open [BATAS v Cowell [2002] VSCA 197, [131], [192]]. Further, there is no identity of parties: BATAL was not a party to the McCabe proceedings; nor were Slater & Gordon. Moreover, those proceedings were interlocutory in character, involving an application to strike out a defence and for judgment. And, as it seems to me that in Victoria just as in New South Wales the breach of confidence proceeding will be a separate and anterior proceeding, if there were an issue estoppel it would apply just as much in that proceeding in Victoria as it would in New South Wales. Accordingly, this consideration does not suggest that it is in the interests of justice that the proceeding be determined by the Supreme Court of Victoria; but again, it does not weigh in favour of New South Wales: it is neutral.

Upon the plaintiff by its counsel giving to the court the usual undertaking as to damages:

(1) Order that until the hearing and determination of the application for interlocutory relief or further order, Roxanne Joy Cowell be restrained from by herself her servants or agents publishing disseminating or using the information referred to in the schedule to the amended statement of claim filed on 27 February 2007 (“the information”).

(2) Order (1) is not intended to and does not preclude Roxanne Joy Cowell from, for the purpose of defending these proceedings, using the information or publishing or disseminating it:


(a) to such of the lawyers she has retained or who she may retain to act for her in these proceedings who have executed an undertaking to keep the information confidential; or

(b) to such other persons as the plaintiff may in writing agree upon such terms as the plaintiff may stipulate; or

(c) in accordance with such leave of the court as may be granted.

77 The motion filed on 12 December 2006, to set aside the injunction of 29 November, was founded wholly and solely on the contention that those orders should be set aside as affected by apprehended bias. That contention has failed. If Slater & Gordon wish to agitate an argument that the injunction should be set aside on some other basis (such as a change of circumstances), then that is a fresh application, to be brought by a fresh notice of motion. The present motion, on the basis upon which it was brought and propounded, has been determined. It should be dismissed.

78 The issues that arose on the disqualification application are discrete from the other issues in the proceedings, and the entitlement to costs in respect of it should not be contingent on the outcome of the proceedings generally. It is practically impossible to disentangle the costs of the application to discharge the existing injunction from those of the disqualification application otherwise, and there is no reason why either plaintiff should be out of pocket on account of the disqualification application, to the costs of which they were put by a largely unsuccessful and otherwise unnecessary or premature application. Slater & Gordon should pay the plaintiffs’ costs of the disqualification application, including of the motion filed on 12 December 2006 for the setting aside of the orders of 29 November 2006.

79 As to the transfer application, when BATAL and BATAS commenced their proceedings against Slater & Gordon, the Fairfax proceedings - which related to an apprehended publication in New South Wales - were on foot in this court, and it was anticipated that they would be finally heard at an early date. There was an obvious connection between these proceedings and the Fairfax proceedings. But now that the Fairfax proceedings have settled, the circumstances that it was in Victoria that the alleged breaches of confidence took place and the Plaintiffs’ causes of action arose; that it is Victorian law that will govern the questions of privilege, confidentiality and iniquity; that it is in Victoria that the apprehended further breaches may take place; and that the Defendants reside in Victoria, make Victoria the natural forum for these proceedings. In the case of BATAS (though not of BATAL), the conclusion is reinforced by the circumstance that the conduct of BATAS and its lawyers in the McCabe proceedings in the Supreme Court of Victoria will be in issue, and is more appropriately addressed by the court in which those proceedings were conducted. Although that does not apply in the case of BATAL, it is plainly in the interests of justice that these two proceedings, in which there are so many common issues, be heard together. It follows that in my opinion the more appropriate forum for the hearing and determination of the breach of confidence proceedings is the Supreme Court of Victoria, and it is therefore in the interests of justice that they be heard and determined in that Court.

80 I will not at this stage make any orders, as that can be attended to on 22 March when the parties have had an opportunity of considering these reasons. I direct that by 20 March 2007, the parties lodge with my associate a draft minute of the orders they propose to give effect to this judgment, including directions for the further conduct of the matter; to the extent that they are not agreed, each party should lodge its competing draft.

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