Daniels v TAB Ltd
[2009] FMCA 148
•27 February 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| DANIELS v TAB LTD & ANOR | [2009] FMCA 148 |
| COPYRIGHT – Intellectual Property – Alleged breach of copyright. CONTEMPT – Alleged breach of implied undertaking to this Court – use of discovered documents for purpose other than in these proceedings. |
| Federal Court of Australia Act 1976 (Cth), s.22 Federal Magistrates Court Rules 2001 (Cth), r.14.11(1) |
| Ainsworth v Hanrahan (1991) 25 NSWLR 155 Black's Law Dictionary, 6th Edition (West Publishing, 1990) | ||
| Applicant: | BRENT WESLEY DANIELS | |
| First Respondent: | TAB LIMITED (ACN 081 765 308) |
| Second Respondent: | TABCORP HOLDINGS LIMITED (ACN 063 780 709) |
| File number: | SYG 1705 of 2008 |
| Judgment of: | Lloyd-Jones FM |
| Hearing date: | 3 November 2008 |
| Delivered at: | Sydney |
| Delivered on: | 27 February 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr A.R. Lang |
| Solicitors for the Applicant: | Carters Law Firm |
| Counsel for the Respondents: | Mr C. Bova |
| Solicitors for the Respondents: | Ms M. Nelson of TAB Limited and Tabcorp Holdings Ltd |
ORDERS
The alleged undertaking was breached by Brent Wesley Daniels on 20 October 2008.
The application for leave to grant an order nunc pro tunc is dismissed.
The Application in a Case for contempt is a discrete matter and Brent Wesley Daniels is to pay the costs of TAB Ltd and Tabcorp Holdings Ltd forthwith on an indemnity bases as agreed, or in the absence of agreement, to be assessed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 1705 of 2008
| BRENT WESLEY DANIELS |
Applicant
And
| TAB LIMITED (ACN 081 765 308) |
First Respondent
| TABCORP HOLDINGS LTD (ACN 063 780 709) |
Second Respondent
REASONS FOR JUDGMENT
Background to the main proceedings
The Applicant, Brent Wesley Daniels, is a professional photographer of 27 years standing who conducted a photography business in Sydney trading as Brent Daniels Photography since 1997. He studied photography at Langara College in Vancouver, Canada between 1979 and 1980. Between 1981 and 1987, he conducted a photographic business in Vancouver and Toronto. He specialises in still life photography. A substantial part of his business involves producing photographs for advertising and promotional purposes. Mr Daniels was born in Canada and is a Canadian citizen. He has resided permanently in Australia since 29 September 1997 and was granted permanent residency in Australia on 23 January 1997.
In November 2003, Mr Daniels was contacted by the advertising agency, DDB Sydney Pty Ltd (“DDB”) to quote on a photograph to be used on point of sale posters and printed material at TAB Ltd and Tabcorp Holdings Ltd (“TAB”) outlets in New South Wales for a period of one year. The photograph was a picture of a man crossing his fingers on both hands held behind his back promoting a new betting product called “Quadrella”. DDB placed a purchase order with Mr Daniels on 1 December 2003 to produce the photograph. The terms and conditions of the production and supply of the photograph were:
Usage: one year Australian POS advertising use only. All rights reserved. Copyright Brent Daniels.
On or about 10 December 2003, the finalised image was forwarded to DDB for the production of the TAB promotional material which consisted of:
a)A1 size posters;
b)A3 size posters;
c)A5 size posters; and
d)Brochures.
The subject of these proceedings concerns the use of the “Quadrella” product image by TAB in circumstances not covered by the terms of the agreement.
The proceedings were commenced on 3 July 2008 and relates to the alleged misuse of the “Quadrella” photograph by TAB. In late July 2008, orders were made for TAB to provide discovery by 5 September 2008 with inspections to take place by 12 September 2008. On 10 September 2008, TAB served its list of documents. On 15 September 2008, Carters Law Firm for Mr Daniels advised that they had received TAB’s list of documents and would arrange for inspection shortly after. Such inspection occurred on 18 September 2008 and copies of the documents requested by Mr Daniels were provided to him on 22 September 2008.
Contempt – Application in a Case
On 22 October 2008 the Respondents, TAB Ltd and Tabcorp Holdings Ltd, filed an Application in a Case setting out the following claims:
1. That the applicant be found guilty for contempt of this Court for breaching the implied undertaking to the Court not to use documents discovered by the respondents in these proceedings for any purpose other than these proceedings.
2. That the applicant be punished for breaching the implied undertaking by committal to prison or fine or both.
3. That the applicant pays the respondents’ costs of an incidental to this application on the indemnity basis.
4. That such further or other orders may be made as the Court thinks appropriate.
Contempt Alleged
The applicant is in contempt of this Court for breaching the implied undertaking to the Court not to use documents discovered by the respondents in these proceedings, or the information contained in those documents, for any purpose other than these proceedings in that on 20 October 2008 the applicant sent an email to Mr Cameron Gray headed: “FW: TAB Bookie Bag Copyright Infringement” which alleged copyright infringement and attached inter alia the document annexed and marked “A” to this Application.
Affidavit/s
The respondents rely on the affidavit of Margo Nelson sworn 21 October 2008.
Evidence in respect of the claim of contempt
The Respondents in these proceedings (Applicants in the contempt application) filed and rely upon the following evidence:
a)Affidavit of Margot Justine Nelson sworn on 21 October 2008 (first affidavit of Ms Nelson);
b)Affidavit of Margot Justine Nelson sworn on 28 October 2008 (second affidavit of Ms Nelson);
c)Affidavit of Margot Justine Nelson sworn on 3 November 2008 (third affidavit of Ms Nelson); and
d)Affidavit of Jeffrey Simpson sworn on 28 October 2008.
The Applicant in these proceedings (Respondent in the contempt application) filed the following affidavits and sought to have the following exhibits marked:
a)Affidavit of Brent Wesley Daniels affirmed on 27 September 2008 (not read in the contempt application)
b)Affidavit of Brent Wesley Daniels affirmed on 29 October 2008;
c)Affidavit of Brent Wesley Daniels affirmed on 3 October 20008 (not read in contempt application);
d)Affidavit of Brent Wesley Daniels affirmed on 31 October 2008;
e)Exhibit 1 - Letter from Carters Law Firm to Margot Nelson dated 29 October 2008; and
f)Exhibit 2 - Letter from Carters Law Firm to Margot Nelson dated 1 October 2008.
Events giving rise to the claim of contempt
One of the documents Mr Daniels requested from the TAB’s list was the Bookie Bag photograph (second affidavit of Ms Nelson, para.7). On 23 September 2008, Mr Daniels sent an email to Jennifer Wills of DDB. Ms Wills was employed as an Art Buyer at DDB from March 2003 until 3 October 2008 (affidavit of Mr Simpson, para.3).
The email from Mr Daniels stated:
Hi Jennifer
I have been trying to find some of my past job records / materials and have found that the film from a job I did with DDB in 2003 has not been returned to me. This is an older TAB job that was done pre yourself through Ryan Dunshee. After all this time I presume that the actual film is long gone. However I thought it may be possible to achieve a PDF of the ad from your archives with the job number.
The DDB job number is TABG34374, the purchase order is 168565, and is dated 31/01/02.
If you can let me know if it would be possible to drag out a PDF of this ad for me I would greatly appreciate it.
Best Regards
Brett Daniels (Affidavit of Mr Simpson, para.5; Exhibit “A”)
On 22 October 2008, Mr Lang, counsel for Mr Daniels, filed in Court the “Bookie Bag Motion” and the “Bookie Bag affidavit”. Specifically that Notice of Motion sought an order:
…that the applicant and his legal representatives be released from their implied undertaking to the Court not to use the documents discovered by the respondents in these proceedings which is annexed to this Notice of Motion and marked “A” or any purpose other than present proceedings.
The “Bookie Bag Motion” was adjourned to allow the Application in a Case to be heard. I set it down for an interlocutory hearing on 3 November 2008.
On 20 October 2008, Mr Daniels sent the following email (“Bookie Bag email”) to Cameron Gray of DDB Worldwide Pty Ltd together with the Bookie Bag affidavit which annexed a photograph of the Bookie Bag:
Hi Cameron
I have sent the following message to Jennifer. However, she has skipped the house. Since you are not a permanent fixture at DDB it would be great if you let me know who you pass this onto so that I can follow it up with it.
Hi Jennifer
As part of my Quadrella legal action with TAB I have discovered that the TAB bookie bag project I did for DDB in 2002 has been used for purposes outside the contracted usage licence. I have attached an affidavit and annexed documents from an application to the Court for your review.
The only contracted usage licence for this project was with DDB and DDB Tribal is responsible for the TAB web-site. So any action in this regard to unlicensed use / copyright infringement of photographs from the Bookie bag project would be directly with DDB & DDB Tribal not TAB.
As I mentioned in my phone message to you last week, and in Court, I really do think this can be dealt with without another run through the courts. I really do not want to go through another year of such headaches. However this needs to be dealt with.
Once you have had a chance to review the attached documents could you please contact me and we can see if we can settle this issue.
Best Regards
Brent Daniels
On 20 October 2008, the Bookie Bag email came to the attention of Mr Simpson of DDB who forwarded that email to Ms Nelson of TAB on 22 October 2008 (affidavit of Mr Simpson, paras.10-11; first affidavit of Ms Nelson, para.5).
The Bookie Bag Motion was returnable for hearing on 22 October 2008. At the commencement of that hearing Mr Bova for TAB raised the issue of an alleged infringement of the implied undertaking. Consequently, the following orders were made:
1. The respondents are granted leave to file an Application in the Case and a supporting affidavit in Court on 22 October 2008.
2. The application be set down for interlocutory hearing on 3 November 2008 at 10.15am.
3. The parties to file any affidavit material by 29 October 2008.
4. Costs be reserved.
Implied undertakings
Discovery compels litigating parties in the course of preparing for trial in a civil action to produce to one another all documents in their possession or control for inspection and copying, containing information which may either directly or indirectly enable the other party to advance their cause or damage the opponent’s case: Home Office v Harman [1983] AC 280 at [299] per Lord Diplock. The litigant and their solicitor on whom a notice of discovery is served, or to whom documents are produced under that process, are subject to an implied undertaking not to use any of the documents for a collateral or ulterior purpose. Improper use of any document within this category amounts to contempt or an abuse of process. In Riddick v Thames Board Mills [1977] QB 881 at 896, Lord Denning MR held that:
documents disclosed on discovery are not to be made use of except for the purpose of the action in which they were disclosed.
An implied undertaking was recently considered by the High Court of Australia in Hearne v Street (2008) 248 ALR 609. The joint judgment of Hayne, Heydon and Crennan JJ at [96] (with whom Gleeson CJ agreed) described the implied undertaking as:
Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise,66 to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence.
66 Bourns Inc v Raychem Corp [1999] 1 All ER 908 at 916 [19]; affd [1999] 3 All ER 154 at 169–170.
Their Honours held at [105]-[108] that the “implied undertaking” was an obligation under substantive law:
[105] Originally the restriction on the use of documents generated by litigious processes depended on an express undertaking.81 Then in Williams v The Prince of Wales Life, &c, Co,82 Sir John Romilly MR, while requiring an express undertaking, put the matter in terms of legal rights: "[I]t is not the right of a Plaintiff, who has obtained access to the Defendants' papers, to make them public." The following year the protection was not said to rest on an express undertaking, but on a "rule" that "where documents have been produced in obedience to an order of this Court, the Court has a right to say to the person who has obtained their production: 'Those documents shall never be used by you except under the authority of the Court'".83 In Alterskye v Scott,84 although Jenkins J referred to a concession by counsel that his client obtained discovery on an "implied undertaking", in the operative part of his reasoning he did not analyse the matter in terms of "undertaking", either express or implied, but in terms of an "implied obligation not to make an improper use of the documents." And other judges have preferred to the language of "implied undertaking" the words "implied obligation"85 or "obligation"86 or "duty".87 Another formula is that the party obtaining discovery is "taken to undertake to the court that the documents obtained on discovery will not be used for any purpose other than the action in which they are produced".88 In Harman v Secretary of State for the Home Department89 Lords Simon of Glaisdale and Scarman, who accepted the general rule of limited use but disagreed with the majority about applying it to documents read in open court, said:
Imposed by law the obligation is formulated as arising from an undertaking exacted by the court from the party and his solicitor to whom the documents are disclosed. It is the condition upon which discovery is ordered. (emphasis added)
Lord Denning MR in Riddick v Thames Board Mills Ltd90 said:
A party who seeks discovery of documents gets it on condition that he will make use of them only for the purpose of that action, and no other purpose. (emphasis added)
[106] The fact that the role of the word "undertaking" is merely to indicate the way in which an "obligation" which is "imposed by law" as a "condition" of discovery binds the disclosee highlights the substantive nature of the obligation. There is nothing voluntary about the "undertaking".
The implied undertaking not to make collateral use of documents disclosed on discovery arises automatically as an incident of the discovery process. It is in no sense implied as a result of dealings between the parties. The discloser may well not have thought of the implications of giving discovery and the disclosee may well not have turned his mind to the matter of what use he can make of the documents outside the action. Had he thought of it, he might well have wanted full freedom to do what he liked with the material, particularly if his own discovery is non-existent or very limited. So the obligation is not to be likened to a term implied in a contract between the parties to the litigation. On the contrary, it is an obligation to the court, not the other party, which is implied. It is for that reason that its breach is treated as contempt. The obligation is imposed as a matter of law.91
[107] The expression "implied undertaking" is thus merely a formula through which the law ensures that there is not placed upon litigants, who in giving discovery are suffering "a very serious invasion of the privacy and confidentiality of [their] affairs", any burden which is "harsher or more oppressive … than is strictly required for the purpose of securing that justice is done."92 To that statement by Lord Keith of Kinkel of the purpose of the "implied undertaking" may be added others. In Riddick v Thames Board Mills Ltd93 Lord Denning MR said:
Compulsion [to disclose on discovery] is an invasion of a private right to keep one's documents to oneself. The public interest in privacy and confidence demands that this compulsion should not be pressed further than the course of justice requires. The courts should, therefore, not allow the other party — or anyone else — to use the documents for any ulterior or alien purpose. Otherwise the courts themselves would be doing injustice.
In Harman v Secretary of State for the Home Department94 Lord Diplock said:
The use of discovery involves an inroad, in the interests of achieving justice, upon the right of the individual to keep his own documents to himself; it is an inroad that calls for safeguards against abuse, and these the English legal system provides … through its rules about abuse of process and contempt of court.
In Watkins v A J Wright (Electrical) Ltd95 Blackburne J said:
In my judgment, a serious inroad into [the safeguards referred to by Lord Diplock] and, therefore, into the utility of the discovery process in the just disposal of civil litigation would occur if it were open to a litigant (or his solicitor) to enjoy the fruits of discovery provided by the other side, but avoid the risk of committal for contempt for acting in breach of the countervailing implied obligation on the ground that he was unaware of the existence of the undertaking. I take the view that it does not lie in the mouth of a person to plead ignorance of the legal consequences of the discovery process.
To speak in terms of "undertaking" serves:
a useful purpose in that it confirms that the obligation is one which is owed to the court for the benefit of the parties, not one which is owed simply to the parties; likewise, it is an obligation which the court has the right to control and can modify or release a party from. It is an obligation which arises from legal process and therefore is within the control of the court, gives rise to direct sanctions which the court may impose (viz contempt of court) and can be relieved or modified by an order of the court.96
Staughton LJ said: "[A]lthough described as an implied undertaking it is a rule which neither party can unilaterally disclaim."97 The importance with which the courts have viewed the obligation under discussion is indicated by the fact that although it can be released or modified by the court, that dispensing power is not freely exercised, and will only be exercised where special circumstances appear.98
Circumstances under which that relaxation would be allowed without the consent of the serving party are hard to visualise, particularly where there was any risk that the statement might be used directly or indirectly to the prejudice of the serving party.99
[108] Hence Hobhouse J100 was correct to conclude:
The expression of the obligation as an implied undertaking given to the court derives from the historical origin of the principle. It is now in reality a legal obligation which arises by operation of law by virtue of the circumstances under which the relevant person obtained the documents or information.
81 Richardson v Hastings (1844) 7 Beav 354 [ 49 ER 1102]; Hopkinson v Lord Burghley (1867) LR 2 Ch App 447.
82 (1857) 23 Beav 338 at 340 [ 53 ER 133].
83 Reynolds v Godlee (1858) 4 K & J 88 at 92 [ 70 ER 37 at 39] per Sir William Page Wood V-C.
84 [1948] 1 All ER 469 at 470–471. Cf the reading given to the case in Distillers Co (Biochemicals) Ltd v Times Newspapers Ltd [1975] QB 613 at 618; Riddick v Thames Board Mills Ltd [1977] QB 881 at 896; Ainsworth v Hanrahan (1991) 25 NSWLR 155 at 163.
85 Riddick v Thames Board Mills Ltd [1977] QB 881 at 901 per Stephenson LJ; Home Office v Harman [1981] QB 534 at 541 and 545 per Park J and 563–564 per Dunn LJ
86 Harman v Secretary of State for the Home Department [1983] 1 AC 280 at 312 per Lords Simon of Glaisdale and Scarman; State Bank of South Australia v Smoothdale (No 2) Ltd (1995) 64 SASR 224 at 229 per King CJ; Akins v Abigroup Ltd (1998) 43 NSWLR 539 at 548 per Mason P.
87 Harman v Secretary of State for the Home Department [1983] 1 AC 280 at 302 per Lord Diplock and 314 per Lords Simon of Glaisdale and Scarman.
88 Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34 at 38 per Hayne JA (emphasis added).
89 [1983] 1 AC 280 at 313.
90 [1977] QB 881 at 896.
91 Bourns Inc v Raychem Corp [1999] 1 All ER 908 at 915 [16] per Laddie J.
92 Harman v Secretary of State for the Home Department [1983] 1 AC 280 at 308.
93 [1977] QB 881 at 896.
94 [1983] 1 AC 280 at 300.
95 [1996] 3 All ER 31 at 42.
96 Prudential Assurance Co Ltd v Fountain Page Ltd [1991] 1 WLR 756 at 764–765 per Hobhouse J; [1991] 3 All ER 878 at 885.
97 Mahon v Rahn [1998] QB 424 at 453.
98 Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 at 37.
99 Prudential Assurance Co Ltd v Fountain Page Ltd [1991] 1 WLR 756 at 775 per Hobhouse J; [1991] 3 All ER 878 at 895.
100 Prudential Assurance Co Ltd v Fountain Page Ltd [1991] 1 WLR 756 at 764 ; [1991] 3 All ER 878 at 885, approved in Mahon v Rahn [1998] QB 424 at 454 per Staughton LJ
The rationale for the rule was expressed by Mason CJ in Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 at [32]:
It would be inequitable if a party were compelled by court process to produce private documents for the purposes of the litigation yet be exposed to publication of them for other purposes. No doubt the implied obligation must yield to inconsistent statutory provisions and to the requirements of curial process in other litigation, e.g. discovery and inspection, but that circumstance is not a reason for denying the existence of the implied obligation.
The scope of the rule was expressed by Lord Oliver in Crest Homes Plc v Marks [1987] AC 829 at 854:
It has recently been held by Scott J in Sybron Corp v Barclays Bank plc [1985] Ch 229, and this must, in my judgment, clearly be right, that the implied undertaking applies not merely to the documents discovered themselves but also to information derived from those documents whether it be embodied in a copy or stored in the mind. But the implied undertaking is one which is given to the court ordering discovery and it is clear and is not disputed by the appellants that it can, in appropriate circumstances, be released or modified by the court.
The authority in respect to a release from the rule is expressed in Harman v Home Department State Secretary; sub nom Home Office v Harman (ALLER) [1983] 1 AC 280:
The question is whether it affects the implied obligation in respect of a discovered document that it has been read out in open court. There are two possible answers, and the choice is a question of policy. Is the obligation a continuing one in respect of those documents? The document enters into the realm of public knowledge when it is read out in open court, though the knowledge is imperfect because everyone does not know what has gone on. Anyone can take notes or obtain a transcript (the proceedings may be recorded on tape). The question arises: is a party to the litigation in whose favour an order for discovery has been made in a special position? The obligation that arises on discovery has no further operation once the document has been read out in open court.
Rule 14.11(1) of the Federal Magistrates Court Rules 2001 (Cth) varies that rule. Rule 14.11(1) provides:
An order or undertaking, whether expressed or implied, not to use a document for any purpose other than for the proceeding in which it is disclosed does not apply to the document after it has been read to or by the Court or referred to in open Court in such terms as to disclose its contents.
A party is not released retrospectively if a document is used for a collateral purpose before the “reading of” or “reference to” that document in Court. A party will be released from its implied undertakings only if the “reading of” or “reference to” documents are discovered in proceedings that occur at trial: British American Tobacco Australia Services Ltd v Cowwell (No 2) (2003) 8 VR 571.
In British American Tobacco Australia Services Ltd v Cowell (No 2), the Court held that a party was not released from the implied undertaking not to use interrogatories or witness statements that were not tendered at the trial, but at an interlocutory trial application. Their Honours Phillips, Batt and Buchanan JJA stated at [50]:
[50] The foregoing applies in particular to documents provided to an opponent as the result of discovery, subpoena duces tecum or the like, documents which for the most part will have come into existence well before the commencement of the proceeding in which they are made available and generally without thought to their being required at some stage in evidence. It is otherwise with the witness statement of Dr Seiden, Exhibit P51, and the answers to interrogatories, Exhibit P45, for these were brought into existence specifically for use in the proceeding between the appellant and the respondent and their being made public at the trial of the proceeding was to be expected. That does not mean that the witness statement and the answers to interrogatories were not the subject of the implied undertaking when first provided by the appellant to its opponent; for they were, by reason of the circumstances of their creation. It may, however, mean, if (as we have suggested) the undertaking is properly regarded as intended to provide protection only pending their use at trial, that once put in evidence at trial everyone, parties and members of the public alike, are free to make whatever use they choose of the contents of such documents. But here the witness statement of Dr Seiden and the answers to interrogatories did not cease to be subject to the implied undertaking by reason of their going into evidence because, even if that would have resulted from the tender of such documents at trial, in this instance they were tendered only on an interlocutory application and then for a purpose other than that for which they were brought into being.
Use of any information or document not in furtherance of the purposes of the action in which the documents are disclosed will be for a collateral or ulterior purpose and, therefore, in breach of the implied undertaking: Esso Australia Resources Ltd v Ploughman (supra) at [32] per Mason CJ.
The charge of civil contempt for breach of the implied undertaking must be proved beyond a reasonable doubt: Hearne v Street (supra) at [133]. The Court retains the discretion, regardless of whether it considers contempt may have been committed or not, not to exercise its jurisdiction to make any contempt finding. In particular, this may occur in circumstances where the application of the law to the alleged contempt is unclear, or the contempt is technical: Re Perkins; Mesto v Galpin [1998] 4 VR 505 at 512-513; Temwood Holdings Pty Ltd v Oliver [1999] WASC 212 at [37]-[50].
The argument that the contempt is of a technical nature is not, in itself, a defence: Ainsworth v Hanrahan (1991) 25 NSWLR 155 at 168. Whether the contempt is of a technical nature is only relevant to the question of penalty.
The absence of an intention to interfere with the administration of justice is neither an answer nor a defence to a charge of contempt: Attorney-General (NSW) v Dean (1990) 20 NSWLR 650 at 656B. This issue can only be relevant to the question of penalty. In addition, ignorance of the law of contempt and reliance on third parties are not excuses for, nor defences to, a charge of contempt: Attorney General of New South Wales v Dean at 656E. Ignorance of the existence of an implied undertaking is also not a defence to the proceedings of full contempt based on a breach of the undertaking: Miller v Scorey [1996] 3 All ER 18; Watkins v AJ Wright (Electrical) Ltd [1996] 3 All ER 31.
The concept of an implied undertaking does not apply to documents which are not private and have already been disclosed to the relevant person. Mr Lang, in written submissions, raised two aspects of the rule and its rationale which he submits are critical to this case. One aspect is that the implied undertaking applies only to private material, see Esso Australia Resources Ltd v Ploughman (supra) at [41] per Mason CJ:
…the implied undertaking is subject to the qualification that once material is adduced in evidence in court proceedings it becomes part of the public domain unless the Court restrains publication of it.
In Hearne v Street at [5] Gleeson CJ stated:
[5] Compulsory pre-trial exchange or disclosure of materials, such as witness statements and experts' reports, is now extensive. The rationale sometimes given for the obligation concerning discovered documents (it is the condition upon which a court compels disclosure of private documents) may not always be applicable to witness statements or experts' reports. There may be little or nothing about them that is private. This, in turn, is connected with the scope of the potential liability of strangers to the litigation into whose hands such materials may come. In this case, however, the appellants were no strangers to the litigation. The issue, as framed, assumes that they were agents of a party, that they were aware that the documents were prepared for legal proceedings, and that the documents were subject to the rule against use other than for purposes of the proceedings. This case does not raise a question whether, in the events that occurred, the documents were used for a collateral purpose, or whether the particular use to which they were put (political lobbying) involved any special considerations.
Another example of a document which may be disclosed is one obtained under Freedom of Information legislation. In Morgan v Mallard [2001] SASC 364, Bleby J (with whom Mullighan and Wicks JJ agreed) stated at [29]:
[29] It is to be noted that the reason for the implied undertaking which protects the misuse of documents the subject of discovery is the public interest in privacy and confidence which would, but for the process of discovery, be preserved, and which would not require the person in possession of the document to produce it. In the case of documents held by the Crown or by an agency as defined in the Freedom of Information Act, that privacy and confidence is removed. It would follow that the principle enunciated by Lord Denning MR in Riddick v Thames Board Mills Ltd can have no application to documents which can be required to be disclosed pursuant to the Freedom of Information Act 1991.
Thus it is necessary to enquire whether the information contained in a discovery document contains any private information, or has already been disclosed by the discovering party to the relevant person. If so, the implied undertaking does not apply.
Mr Lang also raised the issue that the rule is directed towards conduct serving a collateral or ulterior purpose, which is not relevant to the present case. He submits that the use of discovery documents to add a new cause of action or a new party is not a collateral or ulterior purpose and is permissible. This circumstance was dealt with in Allstate Life Insurance Co v ANZ Banking Group Ltd (1995) 57 FCR 360 at [93] and [95] per Hill J:
93. Curiously there appear to have been no cases which have considered the issue in the context of the use of discovered material for the purpose of bringing cross-claims. If the rule be formulated broadly, as it was by Mason CJ in Esso Australia Resources Ltd in the use of the words "in relation to the litigation", such use would not contravene the undertaking. Various formulations of the rule have been made in various contexts. Lord Diplock in Harman distinguished between collateral or ulterior purposes on the one hand, and purposes "necessary for the proper conduct of the action" on the other. Lord Denning MR in Riddick likewise spoke of the "purposes of the action". Wilcox J in Springfield Nominees Pty Ltd v Bridgelands Securities Ltd spoke of the "purposes of the litigation". In Complete Technology v Toshiba (Australia) Pty Ltd (1994) 124 ALR 493, I spoke in terms of the "purposes of the proceedings". A like formulation was accepted by Lockhart J in Sentry Corp v Peat Marwick Mitchell and Co (1990) 95 ALR 11 at 38, although Northrop J at first instance in that case, whose statement of principle was accepted by the parties in that case, spoke of use of documents other than for the "purposes of the case itself".
95. The ambit of discovery is defined by the pleadings which will ordinarily have been settled by the time discovery is given. Thus it would be possible to argue that any use beyond the case as pleaded would be in contravention of the implied undertaking. The cases which indicate both that new parties can be added on the basis of discovery and that new claims can be added indicate that this is not the case. The reason for these exceptions can be found in the basic philosophy of all Judicature Act systems as expressed, for example, in s22 of the Federal Court of Australia Act 1976, namely, that, so far as may be possible, all matters in controversy between the parties are to be completely and finally determined in the one set of proceedings and multiplicity of proceedings concerning the matter before the Court is to be avoided. To this end the rules of this Court permit the adjoinder in one proceeding of multiple claims in respect of more than one cause of action Federal Court Rules (O6 r1) and the joinder of parties, particularly where common questions of law or fact arise or the relief claimed arises out of the same transaction or series of transactions: O6 r2.
In that case, Hill J dealt with two allegations of impermissible use of discovered material. The first was the use by parties to the litigation to prepare and serve cross claims. The second was the similar use of such material by persons who had been parties but were no longer parties, who intended to be joined for the purposes of maintaining cross claims. Relevantly, his Honour held that the use of discovery documents by those who were parties, for the purpose of drafting and serving fresh cross claims, did not breach the undertaking. His Honour found at [97]:
97. It seems to me to follow that, in principle, there should be no difference between the use of discovered materials by an applicant in adding new causes of action against a respondent, on the one hand, or indeed new respondents, and an application by a respondent to the main proceedings for leave to cross-claim against a party not a party to the main proceedings or for the bringing of a cross-claim against an applicant by a respondent, on the other. In my view the principle in Harman has no application to any of these cases. In all of them use of discovered material is a use for the purpose of the legal proceedings and involves no contempt.
Submissions on behalf of the TAB and Tabcorp Holdings
Mr Bova, for the Respondents, submits that the sending of the Bookie Bag email (see [12] above) by Mr Daniels was in contempt of Court. Mr Bova relied on the affidavit of Ms Nelson, the in-house solicitor for TAB. Ms Nelson’s evidence was that the document in question, Annexure “A” entitled “Bankstown Quadrella, Friday, 25 December 2015”, was not in the public domain nor was it accessible to users of the internet. Annexure “A” was a mock up created in 2004 advertising a race to be held on 25 December 2015 eleven years later. He submits that the contempt charge does not relate to any other use. It is immaterial that the photograph may have been online at some time in the future and none of the parties to the litigation were aware of this. Mr Bova submits that the contempt charge relates to the whole document discovered in these proceedings and for the purposes of these proceedings.
It is contended that Mr Daniels was not entitled to use Annexure “A”, particularly to threaten DDB with proceedings before there was a need to. Despite the fixing of a date to hear Mr Daniels’ Notice of Motion seeking a release from his implied undertakings (see [10] above), Mr Daniels chose to email the document to DDB without leave of the Court (see [12] above). Mr Bova submits that when the contempt is of a technical nature it is only relevant to the question of penalty.
Mr Bova referred to Plechowski v The Registrar, Court of Appeal (NSW) [1999] HCA 19 at [147] per Kirby J:
[147] In approaching this submission, it is essential to remember a number of general propositions which govern punishment for contempts of the kind in question here where the punishment is not limited by statute153 but is at large154. In determining the order which is appropriate to the contempt found, the Court must take into account those general principles which govern the sentencing of persons convicted of criminal offences which are apt to the peculiar character of contempt. The underlying purpose of the law on this form of contempt is to vindicate the due administration of justice. Contempts of the kind illustrated in this case may be technical155, wilful but without a specific intent to defy the authority of the Court156 and contumacious157. In the last category a serious act of deliberate defiance of judicial authority is evidenced158.
153 See, for example, Act, s199(7) where a term of imprisonment not exceeding 28 days is provided.
154 Registrar, Court of Appeal v Maniam [No 2] (1992) 26 NSWLR 309 at 314; R v Dunbabin; Ex parte Williams (1935) 53 CLR 434 at 442.
155 For example, Ainsworth v Hanrahan (1991) 25 NSWLR 155. These cases are sometimes called "casual, accidental or unintentional" contempts: Steiner Products Ltd v Willy Steiner Ltd [1966] 1 WLR 986 at 992; [1966] 2 All ER 387 at 390.
156 For example, Attorney-General for NSW v Dean (1990) 20 NSWLR 650.
157 cf Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483 at 500.
158 Registrar, Court of Appeal v Maniam [No 2] (1992) 26 NSWLR 309 at 315.
His Honour conceded that such categories often overlap and stated at [148]:
[148] Conceding that such categories of contempt may sometimes overlap, in a case of a technical contempt, where the contemnor has offered an apology which the Court accepts, it will sometimes be sufficient to make a finding of contempt159 coupled with an order for the payment of costs. Where a wilful contempt is shown, in the sense of deliberate conduct but without specific intent to defy judicial authority, a finding of contempt and an order for the payment of costs may not be sufficient160. In such a case, a fine (and sometimes more) may be needed to vindicate the authority of the court. But in a case of contumacious defiance of a court's orders and authority, it will frequently be appropriate for a custodial sentence to be imposed as a response to an apparent challenge to the authority of the law161.
159 Director of Public Prosecutions v John Fairfax & Sons Ltd (1987) 8 NSWLR 732 at 742.
160 European Asian Bank AG v Wentworth (1986) 5 NSWLR 445 at 461-463; AMIEU v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 112.
161 Registrar, Court of Appeal v Maniam [No 2] (1992) 26 NSWLR 309 at 318; R v Sergiou (1983) 5 Cr App R (S) 227.
Mr Bova submits that contempt which is the result of a deliberate act of defiance resulting in a deliberate breach of a Court’s order would be described as contemptuous and the different between wilful contempt and a contemptuous contempt was described in Australian Competition & Consumer Commission v Globex Systems Pty Ltd [2005] FCA 550 at [60] per Lander J:
[60] A wilful contempt is not a contumacious contempt but is something more than ‘casual, accidental or unintentional’. A wilful contempt will be committed where, in the case of a company, the company has taken no proper steps to comply with a Court’s order. A technical contempt will be committed where a company has taken all reasonable steps to comply with the Court’s orders but the breach has been casual, accidental or unintentional.
Mr Bova submits that in respect of this matter, Mr Daniels’ contempt was wilful and cannot be said to be causal, accidental or unintentional. He submits that Mr Daniels took the positive step of sending the Bookie Bag photograph to DDB and the contempt was wilful in the following respects:
a)Mr Daniels was aware of the need to apply for release from the implied undertaking.
b)Mr Daniels gave evidence that he was aware from as early as September 2008, and had received legal advice, of the need to be released from that undertaking in order to use the document.
c)Mr Daniels was in Court on 17 October 2008 and knew that the matter had been set down for hearing of his application to use the document on 22 October 2008.
d)Despite these factors, Mr Daniels took matters into his own hands and emailed DDB seeking to settle or resolve any possible action outside the main proceedings.
Submissions on behalf of Mr Daniels
Mr Lang submits that the document forwarded by Mr Daniels to DDB (the advertising agency responsible for TAB’s websites) only contained screen shots. It is submitted that the forwarding of the document to DDB was not a breach of the implied undertaking for two reasons:
a)There was no private or confidential information in the screen shots and the communication to DDB who originally created them could not prejudice any rights of the TAB.
b)The forwarding of the screenshots to DDB was directly connected to the main proceedings in a way permitted on the authorities and does not interfere with the administration of justice in these proceedings.
Mr Lang submits that the Notice of Motion filed in Court on 17 October 2008 (see [10] above) was made out of an abundance of caution because Annexure “A” was a discovered document.
Mr Lang acknowledges that the rationale for this rule is the inequity of a party compelled by a court process to produce private documents which may potentially be published for other purposes. He submits that there are two aspects of that law which are relevant to these proceedings:
a)The undertaking only applies to private or confidential material. Material which is not private or confidential is not subject to the implied undertaking and so the relevant question is whether the information contained in Annexure “A” is of a private or confidential nature.
b)Conduct serving a collateral or ulterior purpose.
Mr Lang submits that the ambit of discovery is defined by the pleadings, which will ordinarily have been settled by the time discovery is given. Thus it would be possible to argue that any use beyond the case as pleaded would be in contravention of the implied undertaking. The authorities indicate that new parties can be added on the basis of discovery, and new claims can be added, but this is not the situation in this case. The reason for the exceptions can be found in the basic philosophy of all judicial systems. For example, see s.22 of the Federal Court of Australia Act 1976 (Cth):
Determination of matter completely and finally
The Court shall, in every matter before the Court, grant, either absolutely or on such terms and conditions as the Court thinks just, all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by him or her in the matter, so that, as far as possible, all matters in controversy between the parties may be completely and finally determined and all multiplicity of proceedings concerning any of those matters avoided.
In Allstate Life Insurance Co v ANZ Banking Group Ltd (supra) at [92], Hill J stated:
92. The cases make it clear, however, that it will not be a collateral or ulterior purpose to use documents disclosed on discovery to add new causes of action or parties to the action in which the documents have been disclosed: Matthews and Malek Discovery 1992 Sweet and Maxwell Ch 12 at 257; Wilden Pump and Engineering Company v Fusfeld (1985) FSR 581; Sybron Corporation v Barclays Bank PLC (1985) 1 Ch 299.
In that case His Honour was dealing with two sets of allegations. The first set concerned the use of discovered documents by persons who were parties to the proceedings, to commence fresh cross claims. The second was the use by other persons who had been parties but were no longer parties. His Honour held in relation to the people who were parties, that the use of discovery documents for the purpose of drafting and serving cross claims did not breach the undertaking. Similarly the use of a document to found a new cause of action or a cause of action against a new party is not a breach of the undertaking. Similarly the use of a document to found a new cause of action or a cause of action against a new party is not a breach of the undertaking.
Mr Lang submits in respect of the first aspect of the law that the discovered documents contained nothing more than screen shots. The screen shots are of a draft or mock up website and it may be inferred that such material would then become part of TAB’s public website. It is submitted that there is nothing private or confidential about the contents as they were fictitious. Alternatively, if the contents were not fictitious then they related to past information which, it may be inferred, was in the public domain. It is argued that it had to be one of those two possibilities and, more importantly for the present purposes, the website contained an advertisement.
Mr Lang submits that the inference is not that fictitious advertisements are created with the intention that they are never to be used. Rather such advertisements were used, which TAB does not deny. It cannot be said that a web banner mock-up with a photograph of a Bookie Bag and a slogan is private or confidential material, regardless of whether or not it was used on the website. Consequently, the document in this case has nothing in common with the usual kinds of documents which are the subject of alleged breaches of implied undertakings. Mr Lang submits that in the circumstances this is sufficient to dispose the contempt allegation.
The second aspect in Allstate Life Insurance Co v ANZ Banking Group Ltd (supra) concerns the addition of a new party or a new cause of action. Mr Lang submits that this is not different in substance from what Mr Daniels actually did. Following the adjournment application by TAB on 17 October 2008, Mr Daniels took the view that the hearing would be adjourned. He considered that the issue of the Bookie Bag photograph should be included in the present proceedings and he wanted to put DDB on notice of the issue.
Mr Lang submits that to add DDB as a party without notice would be inappropriate where it is not clear that litigation is necessary. It may also expose Mr Daniels to a risk of a costs order. It is submitted that the use of the document for the purposes of adding a party or a cause of action is a use connected with the litigation and is not a breach of the undertaking. Mr Lang submits that the authorities support the proposition that the purpose of joining parties or new courses of action is not just to file fresh pleadings but also includes preliminary steps of the kind that arose in the matter before this Court.
In Bell Group Ltd (in liq) v Westpac Banking Corp; Commonwealth Bank of Australia v The Law Debenture Trust Corp Plc [2001] WASC 315 per Owen J, a new plaintiff (LDTC) sought to be joined and was to propound a new cause of action against certain defendants. The defendants objected on the basis that the existing plaintiffs used their discovery documents to bring this about. The documents had been used by the plaintiffs and the existing parties to propound a case for LDTC on behalf of this extraneous party. The plaintiffs and those associated with LDTC appeared to have decided that, on the material available to them, LDTC had a cause of action. During the time that LDTC were preparing its case, the plaintiffs had engaged in negotiations about financial arrangements with LDTC and other parties. Who the parties were or what indemnities were provided, was not disclosed to the Court.
Justice Owen held that this conduct did not breach the implied undertakings and stated at 291:
I am satisfied, in the circumstances of this case, that the use of the discovery documents for the purposes of joining LDTC as a party for it to assert a cause of action is not a contravention of the implied undertaking. I should not be taken as saying that this will be the result in every case. Each case must be judged according to its own particular fact circumstances. The place which discovery holds in litigation process and the integrity of that process must not be undermined. Nonetheless, in this case I think there is a close nexus between the relevant interests. The documents were not used for a collateral or improper purpose.
Wilden Pump & Engineering Company v Fusfeld [1985] FSR 581 per Falconer J was referred to by Hill J in Allstate Life Insurance. In Wilden Punp, documents obtained on discovery by the defendants caused the plaintiff to infer that a former employee of the defendants may have further documents. The plaintiff wished to obtain such documents for use in the primary action. They sought their former employee’s assistance to obtain further material but this was refused and similar proceedings were commenced for a discovery order. The defendants alleged that the use of their discovered material for that purpose constituted a breach of the implied undertaking. Justice Falconer held that no contempt was involved in any of those steps. Steps were taken, although not in the action against the defendants but in the furtherance of it, which was not a breach of the implied undertaking.
In Temwood Holdings Pty Ltd v Oliver (supra), documents discovered by a plaintiff caused the defendants to infer that the plaintiff had work done which had not been paid and therefore new facts for a new cause of action existed. The dispute centred around the issue of fresh influences which were not part of the discovered material. The defendants relied upon the fact that this was considered to be a necessary preparatory step before commencing a fresh cause of action against the plaintiff. His Honour Steytler J stated that he considered that it was not a strictly necessary step, yet, it was clear that the issue of certain invoices did not cause any real prejudice. His Honour found at [49]-[50]:
[49] In all of these circumstances it seems to me that if there was any contempt (and I should reiterate that the law in this respect is somewhat unsettled) it is not one which, in my opinion, warrants the exercise, by this Court, of its discretion.
[50] Consequently, in the case of each of the alleged contempts, it seems to me that I should decline to make any formal adjudication that a contempt has been committed.
Mr Lang submits that what Mr Daniels did has no bearing of the Hearne v Street kind. He submits that Mr Daniels’ actions did not involve the disclosure of private confidential material the subject of matters adjudicated in the present proceedings. Rather it was directed towards the entirely orthodox matter of a new claim being made against a new party and did not breach the undertaking. Consequently this second issue is a matter that is sufficient to dispose of the allegation of contempt.
Consideration on the issue of contempt
The document the subject of the contempt claim is a full page A4 colour printout of a computerised website giving race results. The colour printout has been variously described as a “mock up” or “screen shot of a hypothetical web page race result printout”. The hypothetical race results relate to the “Bankstown Quadrella Fri 25 Dec 2015”, being a fictitious race result 11 years after the page was created. The details of the creation are contained in the part screen printout on the upper portion of the A4 sheet:
Page created 7 Jan 2004 at 13; 41; 51 AEST by TAB Ltd © 2004
On the lower portion of the colour printout is a photograph of a white bookmaker’s bag used by on-course bookmakers and commonly referred to as a Bookie Bag. The bag has a green and red design which states “TAB Fixed Odds”. Mr Daniels indicated in cross examination that the Bookie Bag image had been licensed to TAB in early 2002 for 12 months only and excluded internet use (Transcript of hearing, pp.18-19).
During the inspection of discovered documents in the main proceedings on 18 September 2008, the A4 colour printout of the mock up screen identified as the “Bankstown Quadrella” was viewed by Mr Daniels.
The evidence given in cross examination in respect of the license of the Bookie Bag photograph was:
Mr Bova: So, the period would extend from sometime in February 2002 from when the photograph was taken for twelve months; is that correct?
Mr Daniels: It would have been from the-yes. The quote does not mean it actually happened or when it happened. It could have been three months from the quote.
Mr Bova: So, to your mind the web page that you have found in the discovered documents was outside the period of usage; wasn’t it?
Mr Daniels: Outside the period and the type of usage. (Transcript of hearing, p.19)
A copy of the A4 printout was provided to Mr Daniels on 22 September 2008. The subsequent events are set out at [8]-[14] above. Similarly the operation of implied undertakings and the rationale for the rule are set out at [15]-[30] above.
Although the Application in a Case seeks punishment for breaching the implied undertaking by committal to prison or fine or both, Mr Bova indicates that the TAB no longer seeks that Mr Daniels be committed to prison. Rather Mr Bova asks the Court to impose a fine and order Mr Daniels to pay the TAB’s costs on an indemnity basis.
Mr Lang concentrated on the photograph of the white Bookie Bag as being the issue in the application. In contrast, Mr Bova relied on the entire A4 colour printout of which the Bookie Bag is only one part. No evidence was led as to the source of the panel which includes the Bookie Bag photograph. However, the Bookie Bag photographic image was used on print material including posters during the license period. Consequently, that image identified by the words “TAB Fixed Odds” was in the public domain. There is no evidence whether the words “it’s just like betting with the bookies” were part of the previous print campaign or created for the mock-up. The words “click here” would appear to have been added when the banner was incorporated on the web page. These details are not significant to either party’s argument. Mr Bova relies on the uniqueness and content of the entire colour printout, while Mr Lang relies on the prior use of the photographic image in isolation.
The fact that Mr Daniels forwarded the Bookie Bag email to Mr Gray at DDB on 20 October 2008 together with the Bookie Bag affidavit annexing the A4 colour printout is not in dispute between the parties. Essentially Mr Lang argues that the A4 colour printout only contains screen shots, part of which included the Bookie Bag photograph. Mr Lang argues that DDB was the agency responsible for the production of websites for the TAB. He maintains that there was no private or confidential information in the screen shots and their communication to DDB (their creator) could not prejudice any of the TAB’s rights. Secondly Mr Lang argues that the forwarding of the screen shots to DDB cannot interfere with the administration of justice in these proceedings and does not breach any implied undertaking.
Mr Bova argues that any use of information or documents not in the furtherance of and for the purposes of the action in which the document is disclosed, will be for a collateral or ulterior purpose and therefore in breach of the implied undertaking: Hearne v Street (supra) at [96] per Hayne, Heydon and Crennan JJ (with whom Gleeson CJ agreed). Therefore he claims that the sending of the Bookie Bag email attaching the A4 printout was in contempt of Court.
I accept that the photographic image of the Bookie Bag was in the public domain as it had been used for up to 12 months by the TAB in poster advertising and possibly other forms of print material. It can be assumed that the TAB has withdrawn posters containing that image and substituted it with subsequent advertising campaigns. However, print material containing the image may still exist with respect to areas not under the direct control of management of the TAB. Further, this does not address the claim in the Application in the Case relating to the A4 colour printout identified as Annexure “A” to the Notice of Motion filed in Court on 22 October 2008.
This page forms part of a sequence of six screen mock ups prepared by the TAB which are contained in Exhibit “MJN-01” annexed to the third affidavit of Ms Nelson. The circumstances of their creation are set out in the affidavit as follows:
2. Annexed and marked” MJN -01” is a true copy of the whole document number 14 in the respondent’s affidavit of documents sworn 14 August 2008 (“document 14”).
3. I am informed by Mike Boyd, the E-Business Manager of TAB Ltd from 2005 to date, and previously the [DDB] Account Manager from 2000-2005, invariably believe that document 14 is a series of mock up draft website pages created as part of a marketing campaign for the introduction of the Quadrella bet into the market place.
4. The website address, is an internal website used to quality-assure web pages. It is not accessible to the public.
5. The mock up web page that contained the “Bookie Bag” photograph, is set out on pages 4 and 5 of Exhibit “MJN-01” (the “Bookie Bag” webpage). The race meeting which features that photograph is said to be run on Christmas Day in 2005.
6. I am informed by M. Boyd and invariably believe that the mock up webpage did not go live and was never accessible by registered or unregistered members of the public.
Ms Nelson was cross-examined on the contents of her third affidavit and the preparation of the mock-ups. I accept Ms Nelson’s evidence that she was providing information in response to inquiries and that she determined the creation and purpose of these mock-up web pages. I acknowledge that she was not aware of a number of issues in the production of the web page as she had no direct involvement in it. Nor was she able to provide information as to whether DDB had any involvement in the creation of the web pages. There is no evidence before the Court about whether material for the production was supplied by DDB.
In the absence of evidence to the contrary, I am willing to accept that a standard web page format supplied by DDB in their role as the producer of websites for the TAB has been utilised by TAB staff to produce a series of mock-up screens. A number of modifications have been made to the standard matrix to create the mock-ups. The details for the race on Christmas day in 2015 is fictitious, as are the runners listed. There is no evidence of- the source of the banner that contains the Bookie Bag.
I accept that the A4 colour printout (Annexure “A” to the Notice of Motion) was discovered as a whole document. It is unique by its contents which identify it as “Bankstown Quadrella Fri 27 Dec 2005”. In support of this, Mr Hansen of Carters Law Firm filed a Notice of Motion seeking release from their implied undertaking to the Court and annexed a photocopy of the full page. The application was not qualified or limited in any way to suggest that the Notice sought release from anything other than the full page. Mr Daniels confirmed in cross examination that he knew the document was subject to the implied undertaking and that legal advice was the source of that knowledge.
I am satisfied that the circumstances in respect of this the matter breached the implied undertaking: Hearne v Street (supra). Although a Notice of Motion was filed in Court on 22 October 2008, Mr Bova sought leave to file an Application in a Case and supporting affidavit on the same date in respect of the alleged breach of the implied undertaking. The hearing of the Application in the Case was listed for hearing on 3 November 2008. Consequently, the Notice of Motion was not heard and the matter adjourned to permit the Application in a Case to be heard. Consequently release from the implied undertaking in respect of Annexure “A” (the A4 colour printout) was not granted.
When Mr Daniels forwarded the Bookie Bag email to Mr Gray of DDB on 20 October 2008, he was still bound by the implied undertaking in respect of the material he inspected during the discovery process. Even though the colour printout was not forwarded to Mr Gray but contents of that document were used within the email there was still a breach the implied undertaking: Quest Homes Plc v Marcs (supra). Nor can it be argued that Mr Daniels was ignorant of the law because the Notice of Motion was filed in Court on 22 October 2008, had been prepared prior to that date and was anticipated to be filed at the directions hearing on 17 October 2008. Similarly, an absence of intent to interfere with the administration of justice (Attorney General of NSW v Deane) or the argument that the contempt was of a technical nature is not a defence (Ainsworth v Hanrahan).
I find that the implied undertaking was breached by Mr Daniels when he forwarded the Bookie Bag email and supporting material on 20 October 2008.
Submissions on leave nunc pro tunc
During the course of submissions Mr Lang made an application for leave nunc pro tunc. He relied upon the final orders sought in the original Application filed in this Court on 3 July 2008. Order 14 of that Application states:
Such further or other orders as the Court thinks fit.
Mr Lang contends that the other side and their representatives were put on notice of that application by way of letter (Exhibit 1).
Black's Law Dictionary, 6th Edition (West Publishing, 1990) contains the following definition:
Nunc pro tunc (Latin): Now for then
A phrase applied to acts allowed to be done after the time when they should be done, with a retroactive effect. i.e. with the same effect as if regularly done. Nunc pro tunc entry is an entry made now of something actually previously done to have effect of former date; office being not to supply omitted action, but to supply omission in record of action really had but omitted through inadverstance or mistake. Seabolt v State, Okl.Cr. 357 P.2d. 1014
Nunc pro tunc merely describes inherent power of court to make its records speak the truth, ie. to correct record at a later date to reflect what actually occurred at trial. Simmons v Atlantic Coast Line R. Co., D.C.S.C. 235 F. Supp. 325,330. Nunc pro tunc signifies now for then, or in other words, a thing is done now, which shall have same legal force and effect as if done at time when it ought to have been done. State v. Hatley, 72 N.M. 377, 384, P.2d, 252, 254
Fed. R. Civ.P. 15(b) permits amendment of pleadings to conform to evidence. Clerical mistakes in judgments, orders, or other parts of the recrd can be made by the court under Rule 60(a).
Mr Lang’s written submissions refer to Allstate Life Insurance Co v ANZ Banking Group (supra) where Hill J dealt with two allegations of impermissible use of discovered material made against parties and non-parties in that matter. An application for leave nunc pro tunc to use the discovered documents was made. His Honour had found that there had been no breach of the undertaking in respect of the action of the existing parties, but there had been a technical breach by those who were not existing parties. Nevertheless His Honour dealt with the question of leave nunc pro tunc in relation to both sets of allegations. His Honour held that even if he was wrong in concluding that the existing parties had not breached the undertaking he would grant leave retrospectively for the following reasons:
Having regard to the circumstances of this case, exercise of the discretion adversely to the cross-claimants would be disproportionate to the misconduct involved, particularly where the question is ultimately not one upon which there is any authority. Second, there is no doubt that the common law holding writs should ultimately be consolidated with the main proceeding and heard as part of it, once cross-vested to this Court. Although the cross-claims are more detailed than the common law holding writs, applications could be made to add new causes of action to the common law holding writs and in accordance with principle, use of discovered material for this purpose would be permissible. Third, I do not think the present is a case where the interests of the administration of justice dictate that no leave should be given. It is in the interests of all the parties and the administration of justice that the matters in controversy between the parties be finally determined in one set of proceedings.
In respect of the allegations made against the non-parties to the litigation, His Honour also granted leave nunc pro tunc for the following reasons:
However, as this still leaves exposed a contempt, albeit technical, it is appropriate finally to consider the application made nunc pro tunc for approval to be given retrospectively (if retrospectivity be involved) to the use of the discovered materials for the purposes of formulating the cross-claims of the Group A banks.
As I have already indicated, application for this purpose was made at a very late time, namely, in the course of submissions and indeed in answer to a question from the bench as to whether such an application was intended to be made. As not all parties were represented, notice of the application was ordered to be given.
I doubt if there is in truth a question of retrospectivity. Until leave of the Court is given in the present case, there exists no pleading which is a cross-claim; there exists only a draft. Thus if the Court now grants approval to the use of discovered material for the purpose of the cross-claim, it gives approval to the whole process which culminates in the Court giving leave to the putative cross-claimant to bring cross-claims.
Whether or not this be the case, I am of the view that the present case exhibits the special circumstances of which Wilcox J spoke in Springfield Nominees. Here the Group B banks had until recently been parties. Although dismissed from the proceedings, they were really necessary parties to the proceedings and even without the cross-claims it would have been necessary that they again be joined. As it is an appropriate use of discovered materials in my view to use those materials to formulate cross-claims or add parties to the litigation any breach of the Harman principle is in the present case but technical. The grant of approval would offend neither of the two rationales put forward.
In Springfield Nominees Pty Ltd v Bridgelands Securities Limited (1992) 38 FCR 217 per Wilcox J, leave was granted to use a statement prepared for a party, notwithstanding the absence of the party’s consent. In particular, given that the statement contained no personal data or commercially sensitive material, and that it was necessary to achieve justice in respect of the proposed cause of action, leave was granted.
Mr Lang submits in light of these authorities that even if Mr Daniels’ actions are considered to be in breach of the implied undertaking, the Court should grant leave nunc pro tunc in respect of those actions. The relevant circumstances are:
a)The screenshots were not private or confidential;
b)The screenshots provided DDB with a document as DDB is and was responsible for the TAB’s website.
c)Mr Daniels’ use of the screenshots was to put DDB on notice of its possible joinder to the present proceedings.
d)Mr Daniels’ conduct did not prejudice any of the TAB’s rights and it could not be said that it could have interfered with the administration of justice in the proceedings.
e)The Bookie Bag photograph concerned the website of the Respondents to these proceedings and the same agency, DDB.
f)Mr Daniels may be put in a position where he cannot vindicate his rights in respect of the Bookie Bag photograph if leave is not given, thus it is in the interest of justice that leave be granted.
Mr Bova opposed the application nunc pro tunc on the basis that the Notice of Motion was filed in Court on 22 October 2008 but was adjourned for a future date. It is acknowledged that oral submissions were made by both counsel at the directions hearing on 17 October 2008 about the Notice of Motion seeking the release from the undertaking but the document was not filed then. He submits that the time when the Court should consider whether leave ought to be granted for Mr Daniels to rely on the Bookie Bag photograph is when the matter was listed for hearing and the TAB should be entitled to put on evidence in respect of that motion.
Mr Bova submits that ordinarily a Court will not hear an application from a party in contempt until it has purged that contempt: Young v Jackson (1986) 7 NSWLR 97; KP Cable Investments Pty Ltd v Meltglow (1995) 56 FCR 189. Although there may be a residual discretion to hear a person in contempt, where the contemptor asks a Court to exercise its discretion for his/her benefit, the Court would ordinarily refrain from so doing: Australian Securities Commission v Macleod & Ors (1994) 54 FCR 309 per Drummond J.
Mr Bova submits that the facts in Allstate Life Insurance Co v ANZ Banking Group (supra) are different from the facts in this case. The Allstate proceedings did not concern a contempt application but was an application for proceedings in the Federal Court to be struck out and for leave to cross claim. There were 11 applicants and 46 respondents to those proceedings as originally constituted. There were also cross claims against a series of law firms and accountants. During the course of the proceedings, claims against the “Group B Respondents” were dismissed by consent or otherwise discontinued while the claims against the “Group A Respondents” remained intact.
Members of both Group A and Group B commenced proceedings in the Supreme Court. Those proceedings were cross-vested to the Federal Court. Both Group A and Group B also sought leave to serve cross claims in the proceedings which was opposed on the basis that there was an abuse of process in the drafting of the cross claims because documents had been used which had been discovered in the main proceedings. His Honour found that they were entitled to use the documents. His Honour also found that it would not be for a collateral or ulterior purpose to use documents discovered to add new causes of action for parties to the proceedings. His Honour held that the principle in Harman v Home Department State Secretary (supra) had no application in relation to the Group A Respondents. In relation to Group B however, those Respondents with cross claims which had been drafted at the time when they were not parties to the proceedings were in breach of the Harman principle.
Mr Bova submits that in Allstate Life Insurance, the documents which were the subject of those proceedings were used for a purpose within those proceedings; which was a distinguishing factor and the reason why an order for nunc pro tunc was made. However, he submits that the email sent by Mr Daniels was not for a purpose in these proceedings but was to seek an alternative outcome. Consequently, there cannot be an order for nunc pro tunc.
It is submitted that if Mr Daniels wishes to use the Bookie Bag photograph in the present proceedings, the appropriate course is for him to seek leave to file an Amended Points of Claim but this has not been done. Alternatively, if Mr Daniels wishes to use the Bookie Bag photograph in separate proceedings, he should argue the claims as in the Notice of Motion filed on 22 October 2008.
Consideration of an Application nunc pro tunc
A nunc pro tunc order is to correct a record at a later date to reflect what has actually occurred. In this matter, a number of issues which were anticipated to occur have not yet been formerly before the Court. The Notice of Motion seeking the release from the implied undertaking and the Application in a Case alleging contempt were filed on 22 October 2008. Both documents carry the “Filed in Court” stamp of that date. The hearing transcript of 17 October 2008 contains references to the Notice of Motion but the document was not tendered. The document as filed on 22 October 2008 carries the handwritten notation that the “above named applicant will at 9.30am on 17/10/08 at the Federal Magistrates Court of Australia at John Maddison Tower, Level 12, 88 Goulburn Street Sydney NSW, move the Court for orders”.
Although the Notice of Motion was returnable for hearing on 22 October 2008, the issue of the alleged infringement of implied undertakings was raised on that date and leave was granted for an Application in a Case and supporting affidavits to be filed in Court. The matter was adjourned to an interlocutory hearing on 3 November 2008. Consequently, the Notice of Motion was stood over to a later date and the Notice of Motion is yet to be heard. Despite these developments, Mr Daniels issued the Bookie Bag email on 20 October 2008.
On a fair reading of that email, there is no statement or inference of Mr Daniels’ intention of joining DDB to the existing proceedings. To the contrary the email suggests that the issue should be negotiated and settled independently of the current proceedings. The argument that an email was sent as notification of intent to join DDB to the current proceedings cannot be sustained.
For Mr Daniels to use the Bookie Bag photograph in the present proceedings the appropriate course is for him to seek leave to file an Amended Points of Claim. No such application has been received by the Court nor has there been any reference to this course in written or oral submissions. Alternatively, if Mr Daniels intends to use the Bookie Bag photograph in separate proceedings the Notice of Motion would need to be decided by this Court. This has not occurred. In the circumstances I am satisfied that the Bookie Bag photograph has been used for a collateral or ulterior purpose. On the information before the Court the clear intention of Mr Daniels was to seek separate and independent settlement of the alleged misuse of the Bookie Bag photographic image outside of the proceedings against the TAB. DDB is a party extraneous to the current proceedings.
The TAB is entitled to present arguments in respect of the Notice of Motion and it is inappropriate for this Court to make an order nunc pro tunc from Mr Daniels’ implied undertaking to the TAB who provided him with the opportunity to present the argument. Consequently in exercising my discretion I decline to grant the application nunc pro tunc.
Penalty
Mr Bova referred to Plechowski (supra) at [147]-[149] which sets out the general proposition governing penalties for contempt:
[147] In approaching this submission, it is essential to remember a number of general propositions which govern punishment for contempts of the kind in question here where the punishment is not limited by statute153 but is at large154. In determining the order which is appropriate to the contempt found, the Court must take into account those general principles which govern the sentencing of persons convicted of criminal offences which are apt to the peculiar character of contempt. The underlying purpose of the law on this form of contempt is to vindicate the due administration of justice. Contempts of the kind illustrated in this case may be technical155, wilful but without a specific intent to defy the authority of the Court156 and contumacious157. In the last category a serious act of deliberate defiance of judicial authority is evidenced158.
[148] Conceding that such categories of contempt may sometimes overlap, in a case of a technical contempt, where the contemnor has offered an apology which the Court accepts, it will sometimes be sufficient to make a finding of contempt159 coupled with an order for the payment of costs. Where a wilful contempt is shown, in the sense of deliberate conduct but without specific intent to defy judicial authority, a finding of contempt and an order for the payment of costs may not be sufficient160. In such a case, a fine (and sometimes more) may be needed to vindicate the authority of the court. But in a case of contumacious defiance of a court's orders and authority, it will frequently be appropriate for a custodial sentence to be imposed as a response to an apparent challenge to the authority of the law161.
[149] Unless courts are seen to respond firmly to deliberate defiance of their orders, their effectiveness in the authoritative determination of disputes of law would be undermined. And if they were not effective, "serious and lasting damage to the fabric of the law may result"162. Obviously, the culpability of the contemnor is relevant to the order which must be made163. The contemnor must then be punished in an emphatic way. He or she must be deterred effectively from any temptation to re-offend. However, the focus of attention is not solely on the contemnor. It is also addressed to the community at large and to any others who might consider acting in a similar manner.
154 Registrar, Court of Appeal v Maniam [No 2] (1992) 26 NSWLR 309 at 314; R v Dunbabin; Ex parte Williams (1935) 53 CLR 434 at 442.
155 For example, Ainsworth v Hanrahan (1991) 25 NSWLR 155. These cases are sometimes called "casual, accidental or unintentional" contempts: Steiner Products Ltd v Willy Steiner Ltd [1966] 1 WLR 986 at 992; [1966] 2 All ER 387 at 390.
156 For example, Attorney-General for NSW v Dean (1990) 20 NSWLR 650.
157 cf Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483 at 500.
158 Registrar, Court of Appeal v Maniam [No 2] (1992) 26 NSWLR 309 at 315.
159 Director of Public Prosecutions v John Fairfax & Sons Ltd (1987) 8 NSWLR 732 at 742.
160 European Asian Bank AG v Wentworth (1986) 5 NSWLR 445 at 461-463; AMIEU v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 112.
161 Registrar, Court of Appeal v Maniam [No 2] (1992) 26 NSWLR 309 at 318; R v Sergiou (1983) 5 Cr App R (S) 227.
162 AMIEU v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 115.
163 Director of Public Prosecutions v John Fairfax & Sons Ltd (1987) 8 NSWLR 732 at 741.
It is submitted that contempt which is the result of a deliberate act of defiance resulting in a deliberate breach of a Court order is described as contemptuous: Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 108; Witham v Holloway (1995) 183 CLR 525 at 530. The difference between a wilful contempt and a technical contempt was described in Australian Competition & Consumer Commission v Globex Systems Pty Ltd (supra) at [60].
Mr Bova submits that Mr Daniels’ contempt was wilful and not casual, accidental or unintentional. Mr Daniels took the positive step of sending the Bookie Bag photograph email knowing that the application for release of the implied undertaking had not been heard. Mr Bova further submits that Mr Daniels did not provide the Bookie Bag photograph to DDB accidentally nor did an officer of DDB sight the photographs at Mr Daniels’ studio. The Bookie Bag photograph was forwarded to DDB threatening to commence proceedings in order to facilitate the negotiation of a settlement.
The other issue in respect of penalty concerns the payment of costs. An order for indemnity costs can be taken into account in determining the quantum of penalty: Construction, Forestry, Mining & Energy Union v BHP Steel AIS Pty Ltd (2003) 196 ALR 350 at [6]. In some circumstances an order for indemnity costs can be made without imposing a monetary penalty: Ark Hire Pty Ltd v Barwick Event Hire Pty Ltd [2007] NSWSC 488; Attorney General (NSW) v Dean (supra). In bringing the Application in a Case for contempt, the TAB was seeking to ensure that the implied undertakings to the Court were obeyed. Whilst the appropriate order for costs is within the Court’s discretion, there are powerful factors for making orders which indemnify the TAB from the costs incurred by it on its successful application: McIntyre v Perkes (1988) 15 NSWLR 417. It is appropriate that the TAB’s costs of and incidental to the Application in a Case be paid on an indemnity basis. An order for Mr Daniels to pay costs “incidental to the Notice of Motion” extends the ambit the order to include costs as part of the preparation of the Application.
The Application in a Case for contempt is a discrete matter and it is appropriate that the costs be payable forthwith. The TAB remains out of pocket for the costs it has incurred in bringing the Application until the substantive proceedings are finalised. Accordingly, the appropriate cost order will be that Mr Daniels pays TAB’s costs of and incidental to its Application in a Case filed on 22 October 2008 on an indemnity basis, and that such costs may be assessed and be payable forthwith after agreement or assessment. Although the breaches were wilful in the sense described above, I do not consider that the breaches constituted wilful disobedience of the implied undertaking in the sense described in Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd (supra). In my view, whilst the breach was deliberate, in that Mr Daniels knew that the Annexure was subject to an implied undertaking he appears to have naively sought to resolve the issue in an informal manner without expanding the current proceedings or initiating a separate action. At this stage I will not make an order for monetary penalty and will provide Mr Daniels with an opportunity to formally purge his contempt.
I certify that the preceding eighty-nine (89) paragraphs are a true copy of the reasons for judgment of Lloyd-Jones FM.
Associate:
Date: 13 March 2009
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