Frigger v Trenfield (No 5)
[2020] FCA 827
•16 June 2020
FEDERAL COURT OF AUSTRALIA
Frigger v Trenfield (No 5) [2020] FCA 827
File number: WAD 141 of 2019 Judge: JACKSON J Date of judgment: 16 June 2020 Catchwords: PRACTICE AND PROCEDURE - interlocutory application - contempt of court - alleged breach of implied undertaking not to use certain documents obtained in the course of proceedings for collateral or ulterior purpose - affidavits found to have been lodged voluntarily and not pursuant to compulsion of the court - no breach of implied undertaking - respondent not guilty of contempt of court - interlocutory application dismissed Legislation: Bankruptcy Act 1966 (Cth) s 77
Federal Court (Bankruptcy) Rules 2016 (Cth) rr 1.04, 2.01, 3.01, 8.01
Federal Court Rules 2011 (Cth) rr 8.01, 8.05
Cases cited: Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98
Bashour v Australian and New Zealand Banking Group Limited [2017] FCA 163
Bourns v Raychem Corporation (No 3) [1999] 1 All ER 908
Central Queensland Cement Pty Ltd v Hardy [1989] 2 Qd R 509
Coco v AN Clark (Engineers) Ltd [1969] RPC 41
CSR Ltd v Eddy [2005] HCA 64; (2005) 226 CLR 1
Davey v Silverstein [2019] VSC 724
De Santis v Aravanis [2014] FCA 1243; (2014) 227 FCR 404
Deputy Commissioner of Taxation v Rennie Produce (Aust) Pty Ltd (in liq) [2018] FCAFC 38; (2018) 260 FCR 272
Esso Australia Resources Ltd v Plowman (Minister for Energy & Minerals) (1995) 183 CLR 10
Forty Two International Pty Ltd v Barnes [2010] FCA 397
Frigger v Trenfield (No 2) [2019] FCA 2009
Frigger v Trenfield [2019] FCA 1746
Harman v Secretary of State for Home Department [1983] 1 AC 280
Hearne v Street [2008] HCA 36; (2008) 235 CLR 125
Helicopter Aerial Surveys Pty Ltd v Robertson [2015] NSWSC 2104
King v AG Australia Holdings Ltd [2002] FCA 872; (2002) 121 FCR 480
Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3; (2005) 218 ALR 283
Perton v Walters [2018] VSC 445; (2018) 56 VR 306
Prudential Assurance Co Ltd v Fountain Page Ltd [1991] 1 WLR 756
Rowe v Silverstein [2009] VSC 157
Saltman Engineering Company Ltd v Campbell Engineering Company Ltd (1948) 65 RPC 203
Sinnott v Chief of Defence Force [2020] FCA 643
Springfield Nominees Pty Ltd v Bridgeland Securities Ltd (1992) 38 FCR 217
Uniflex (Australia) Pty Ltd v Hanneybel [2001] WASC 138
Witham v Holloway (1995) 183 CLR 525
Date of hearing: 5 June 2020 Registry: Western Australia Division: General Division National Practice Area: Commercial and Corporations Sub-area: General and Personal Insolvency Category: Catchwords Number of paragraphs: 66 Counsel for the Applicants: The applicants appeared in person Counsel for the Respondent: Mr SD Majteles Solicitor for the Respondent: Carles Solicitors ORDERS
WAD 141 of 2019 BETWEEN: ANGELA CECILIA THERESA FRIGGER
First Applicant
HARTMUT HUBERT JOSEF FRIGGER
Second Applicant
AND: KELLY-ANNE TRENFIELD
Respondent
JUDGE:
JACKSON J
DATE OF ORDER:
16 JUNE 2020
THE COURT ORDERS THAT:
1.The applicants' interlocutory application lodged on 10 April 2020 is dismissed.
2.The applicants must pay the respondent's costs of the application in any event.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
JACKSON J:
By interlocutory application the applicants in this proceeding, Angela and Hartmut Frigger, seek orders that the respondent, Kelly-Anne Trenfield, is guilty of three counts of contempt of court, and an order for punishment for the alleged contempt. Ms Trenfield is the trustee of the bankrupt estate of each of the applicants. They allege that she breached an implied undertaking to the court not to use certain documents obtained in the course of these proceedings other than for the purposes of the proceedings. In the interlocutory application the Friggers also seek summary judgment in relation to final relief in the proceeding for Ms Trenfield's removal as trustee in bankruptcy, and a separate order that the administration of the bankrupt estates be returned to the original trustee in bankruptcy, the Official Trustee.
I previously directed that the question of whether Ms Trenfield is guilty of any of the charges would be heard separately to any hearing on the question of punishment, so these reasons only address that first question. The orders for summary judgment and for the reinstatement of the Official Trustee as trustee in bankruptcy are sought consequent on any finding of guilt.
The proceeding as a whole concerns disputes about whether certain assets are part of the bankrupt estates, or were at the time of the bankruptcy held on trust on the terms of a superannuation fund known as the Frigger Super Fund (FSF), so that they fall outside those estates. I have described the issues in some detail in Frigger v Trenfield [2019] FCA 1746 and Frigger v Trenfield (No 2) [2019] FCA 2009, and I will not repeat the description here. These reasons assume familiarity with the previous reasons.
At the hearing I gave the Friggers leave to rely on an amended statement of charge. The charges are:
1.On 9 April 2019 you sent a letter to the Australian Tax Office and attached documents which had been annexed to the applicant's affidavits filed in these proceedings, in breach of the implied undertaking you gave to this Honourable Court that you would not use the documents for collateral or ulterior purposes:
Particulars:
1.Document 1: 'Frigger Super Fund (FSF) Minutes' dated 8 November 2018
2.Document 2: 'FSF Trust Deed dated 1 July 1997'
3.You attached the above documents (and other documents) to a letter informing the Australian Tax Office of contravention/s which you believe the FSF has committed, in order to persuade the Australian Tax Office, the statutory regulator of the FSF, to find the FSF is a non-complying unregulated superannuation fund.
3.[sic]By sending the letter and the documents you had the collateral and or ulterior purpose of claiming the assets of the FSF (current value in excess of $24,000,000) vested in you on the sequestration date.
2.On 14 May 2019 you sent a message to the Australian Tax Office business portal and attached five documents that you obtained in this proceeding, in breach of the implied undertaking you gave to this Honourable Court that you would not use the documents for collateral or ulterior purposes:
Particulars:
1.A request for specific advice about a self-managed superannuation fund can only be made by the fund's registered tax agent, the trustee or a legal personal representative of a member. You are none of these.
2.In a letter dated 15 October 2019 the Australian Tax Office advised you are not an authorised person for FSF and you are not entitled to any information about FSF.
3.You sent the message and the documents for the purposes of informing the Australian Tax Office of 'unrectified contravention/s' which you believe the FSF has committed for the purpose of persuading the Australian Tax Office, the statutory regulator of the FSF, to find the FSF is a non-complying unregulated superannuation fund.
4.By sending the message together with the documents you had the collateral and or ulterior purpose of claiming the assets of the FSF (current value in excess of $24,000,000) vested in you on the sequestration date.
3.On 4 October 2019 you sent an email to 'SMSF Regulatory Contravention [email protected]', being an email address that is to be used by a trustee, member or authorised representative of a self-managed superannuation fund, and attached the same documents referred to in Charge 2 above, in breach of the implied undertaking you gave to this Honourable Court that you would not use the documents for collateral or ulterior purposes:
Particulars:
1.You are not a trustee, member or authorised representative of the FSF and had no authority to send the email and the documents.
2.You sent the email for the purposes of informing the Australian Tax Office of 'unrectified contravention/s' which you believe the FSF has committed for the purpose of persuading the Australian Tax Office, the statutory regulator of the FSF, to find the FSF is a non-complying unregulated superannuation fund.
3.By sending the email together with the documents you had the collateral and or ulterior purpose of claiming the assets of the FSF (current value in excess of $24,000,000) vested in you on the sequestration date.
There is no dispute about the basic facts of the charges. Ms Trenfield admits that she did send the documents described in the charges as the FSF minutes dated 8 November 2018 and the FSF trust deed dated 1 July 1997 to the Australian Taxation Office (ATO). This occurred on the three occasions as stated in the charges. Although charge 2 and charge 3 refer to her sending five documents, the Friggers accept that it is only the two specific documents referred to in charge 1 that potentially attract the implied undertaking, and they only press the charges insofar as they relate to the disclosure of those documents.
Ms Trenfield accepts that she obtained those documents from an affidavit dated 6 March 2019 that was sworn and filed by the first applicant, Mrs Frigger, in this proceeding. The affidavit was filed in support of the originating application in the proceeding.
Nevertheless, Ms Trenfield pleads not guilty to all the charges. Two bases for that plea pertain to all three charges, and there is a third basis which is specific to the third charge. First, she submits that the affidavit of Mrs Frigger to which the relevant documents were annexed was sworn and filed voluntarily, in support of and at the time of filing of, the originating application in the proceeding. The affidavit was not filed or served under compulsion of any order of the court so, Ms Trenfield submits, no implied undertaking arose.
Second, Ms Trenfield submits that the relevant documents are documents which Mr and Mrs Frigger were required to give to her anyway, under s 77(1)(a) of the Bankruptcy Act 1966 (Cth) She submits that since she had an independent entitlement to obtain the documents, there was no alteration of that entitlement by any compulsory power of the court that would give rise to the implied undertaking.
Third, it is said that on 20 September 2019, Mrs Frigger's affidavit of 6 March 2019 was relied on in open court, so that any implied undertaking that attached to it ceased. This only relates to the third charge because the occasions specified in the first and second charges took place before 20 September 2019.
For the following reasons, Ms Trenfield is not guilty of the charges and the application will be dismissed. As will be seen, in my view the implied undertaking arises in relation to a document only if the party who produced it was compelled to disclose the document, whether by reason of a rule of court or a specific order of the court or otherwise. After briefly considering the principles that apply to charges of contempt of court, I will consider whether Mrs Frigger as the original sole applicant was compelled to produce the FSF minutes or FSF trust deed. I will then review the authorities on the question of the extent to which compulsion is necessary for the implied undertaking to arise.
Those authorities are not always consistent with each other, and in one respect at least cannot be reconciled. But because I do not consider that there was any relevant element of compulsion in the production of the documents under dispute here, it will not be necessary to choose between them. It will, however, be necessary to consider whether some broader principle applies, so that the fact that the affidavit was filed for the purposes of the litigation is, by itself, enough to give rise to the implied undertaking. My view is that such a conclusion is neither compelled by the authorities nor warranted.
Principles applicable to contempt charges
Subject to two possible qualifications, the charges concern civil contempt, since they are laid on the motion of one party to civil proceedings alleging disobedience of an undertaking to the court given in the course of those proceedings: see Witham v Holloway (1995) 183 CLR 525 at 530. The first possible qualification is that, in their written submissions, the Friggers assert that certain conduct of Ms Trenfield was contumacious, which could entail that the charges are charges of criminal contempt: see Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 108. However that assertion is not made in the statement of charge, and it appears from the submissions only to relate to alleged misuse of Commonwealth property by way of claimed improper use of the ATO business portal. Any such misuse is not on its face capable of being contempt of court.
The second possible qualification is that contempt proceedings against officers of the court have been held to be examples of criminal contempt: see AMIEU v Mudginberri Station at 107. Trustees in bankruptcy have traditionally been recognised as officers of the court: De Santis v Aravanis [2014] FCA 1243; (2014) 227 FCR 404 at [43]. I raised this second possibility with counsel for Ms Trenfield at the hearing so that she had fair notice of the issue, but neither party submitted that anything turned on the distinction between civil and criminal contempt at this stage of the proceeding, and there is no need to address it further in these reasons. It is clear that the standard of proof for contempt, whether civil or criminal, is proof beyond reasonable doubt: Witham v Holloway at 534. Neither party disputed that.
To what extent was Mrs Frigger compelled to produce the disputed documents?
When the proceeding was commenced, Mrs Frigger was the sole applicant. The application she filed sought relief under the Bankruptcy Act. The procedure was therefore governed by r 2.01 of the Federal Court (Bankruptcy) Rules 2016 (Cth) (Bankruptcy Rules). In accordance with r 2.01(1)(a), the application was in Form B2 of the Bankruptcy Rules. At the time of filing, none of the orders sought were of a kind for which there was any requirement in the Bankruptcy Rules for an affidavit of support. For example, at that time there was no application for any order that Ms Trenfield cease to be the trustee of the bankrupt estates, as to which see r 8.01(2).
However r 1.04(2) of the Bankruptcy Rules provides that the other rules of court apply to the extent that they are relevant and not inconsistent with the Bankruptcy Rules. Rule 8.01 of the Federal Court Rules 2011 (Cth) provides that a person who wants to start a proceeding in the Court's original jurisdiction must file an originating application in accordance with Form 15 of those rules. Rule 8.05(1) of the Federal Court Rules provides that an originating application seeking relief that includes damages must be accompanied by a statement of claim unless a practice note requires it to be accompanied by an alternative accompanying document. Rule 8.05(2) effectively requires an originating application seeking relief that does not include damages to be accompanied by a statement of claim or an affidavit (unless a practice note requires that a different accompanying document be used).
The application filed to commence this proceeding seeks orders for Ms Trenfield to make good losses. That is, in substance, a claim for damages. However I doubt that either r 8.05(1) or r 8.05(2) apply to the present case because they only apply to an 'originating application', which appears to refer back to the document in Form 15 which is required by r 8.01. That doubt is strengthened by the fact that several rules in the Bankruptcy Rules do require an affidavit in support to be filed with certain types of application (see e.g. r 3.01), suggesting that applications governed by the Bankruptcy Rules are subject to their own regime in relation to the documents that must accompany them.
The practice note of the court that applies to personal insolvency matters is the Commercial and Corporations Practice Note: see para 2.2. That practice note is not prescriptive about the kind of document that must accompany an originating application, including an application under the Bankruptcy Rules, although it does contemplate that there will be an accompanying document: see paras 5.3, 5.4, 5.9.
The upshot is that, on any view, Mrs Frigger was not required by any rule of court or practice direction to file the affidavit of 6 March 2019. The affidavit was filed at the commencement of the proceedings; no order of the court requiring it had been made. Nor did the Bankruptcy Rules did require it. If I am wrong about the applicability of r 8.05 of the Federal Court Rules, that rule in any event did not require an affidavit; it required a statement of claim (because a claim for damages is included) or, conceivably, at the applicant's election, a statement of claim or an affidavit (if the claim to make good losses is for some reason not a claim for damages within the meaning of r 8.05(1)). The practice direction, if it applies, gives the party commencing a proceeding a variety of options as to what document must accompany it. Mrs Frigger could have filed a pleading annexing no evidence at all. On no view, then, was Mrs Frigger compelled to file an affidavit annexing the two documents that are the subject of the charges.
Must production be compulsory for the implied undertaking to arise?
Hearne v Street [2008] HCA 36; (2008) 235 CLR 125 is the leading case in Australia on what is sometimes called the implied undertaking or the Harman obligation (after Harman v Secretary of State for Home Department [1983] 1 AC 280). In Hearne v Street, the High Court confirmed that despite the terminology of 'undertaking' which is often used, the obligation is a substantive one which arises as a result of the circumstances in which documents are generated and received and regardless of the intentions of the parties: [3], [46], [102], [105]‑[108]. Nevertheless, the High Court accepted that the terminology of implied undertaking still serves a useful purpose (see the quote at [107] from Prudential Assurance Co Ltd v Fountain Page Ltd [1991] 1 WLR 756 at 764‑765) and I will use it in these reasons for convenience.
In Hearne v Street at [96] Hayne, Heydon and Crennan JJ, with whom Gleeson CJ and Kirby J agreed, stated the fundamental principle as follows (footnotes removed):
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, 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. The types of material disclosed to which this principle applies include documents inspected after discovery, answers to interrogatories, documents produced on subpoena, documents produced for the purposes of taxation of costs, documents produced pursuant to a direction from an arbitrator, documents seized pursuant to an Anton Piller order, witness statements served pursuant to a judicial direction and affidavits.
However, it does not seem to me that Hearne v Street is authority for the broad proposition that affidavits are always subject to the implied undertaking. The affidavit and expert's report in question in Hearne v Street had both been filed pursuant to directions for the filing of evidence to be used in the proceedings: see [66]. To that extent they were filed as a result of compulsion. In any event, it was not necessary for the High Court to consider these issues because it was accepted on all sides that the witness statement and expert's report were in the same legal position as documents produced pursuant to an order for discovery: see [1], [79], [83], [96].
There are numerous references in Hearne v Street to the rationale of the implied undertaking as laying in compulsion, or the intrusion on the right of a person to keep documents private which is often necessary in litigation, and ensuring that the intrusion goes no further than is necessary. For example, at [107] the plurality explained:
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' [Harman v Secretary of State for Home Department [1983] 1 AC 280 at 308].
Also at [107] their Honours quoted with evident approval the following statement of the rationale for the rule given by Lord Diplock in Harman v Secretary of State for Home Department at 300:
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.
See also Hearne v Street at [5], [105] and the following quote at [110] from Mason CJ (Dawson and McHugh JJ agreeing) in Esso Australia Resources Ltd v Plowman (Minister for Energy & Minerals) (1995) 183 CLR 10 at 33:
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, eg discovery and inspection, but that circumstance is not a reason for denying the existence of the implied obligation.
Ms Trenfield relied on Hearne v Street and on other cases for the proposition that the implied undertaking does not extend to a document, including an affidavit, filed at a party's initiative and discretion rather than as a consequence of any compulsion. For reasons which follow, I accept that the decisions relied on do support the respondent's submission. But as will be seen, there is a competing line of authority which also requires consideration.
In Uniflex (Australia) Pty Ltd v Hanneybel [2001] WASC 138 the plaintiff had filed an affidavit in support of a claim to a Mareva injunction. Hasluck J characterised that as voluntary: see [142]. The defendant had provided parts of the affidavit to a third party for a purpose said to be collateral to the litigation in which the affidavit was produced. After a survey of several of the authorities, his Honour concluded (at [148]):
It is apparent from these cases that the rationale of the rule is referable to the fact that the discovery process represents an interference with a private right of confidentiality. In the present case, however, the document in question and the information reflected in the document was not brought to light as a consequence of the requirements of the Court concerning discovery. Shortly after the plaintiff commenced the Mareva injunction proceedings, affidavits were brought into existence on both sides bearing upon the application for an injunction. The plaintiff was not compelled to produce the information and exhibits comprising the Sterling affidavit (especially page 7) as part of a process of discovery. The information and related exhibits were put up by the plaintiff voluntarily in support of a case that was to be argued in open court.
So, in Hasluck J's view, the implied undertaking did not apply to the documents that had been handed to a third party for a purpose unrelated to the litigation: see [154], [155]. Uniflex (Australia) Pty Ltd v Hanneybel was decided before Hearne v Street but it seems, with respect, that Hasluck J's treatment of the subject is consistent with the later decision of the High Court.
The next case on which Ms Trenfield relied was Rowe v Silverstein [2009] VSC 157. This was decided after Hearne v Street. The documents in question were four affidavits which the Commissioner of Taxation had filed in support of an application for a Mareva injunction. Forrest J held that they were not subject to the implied undertaking. At [25] his Honour held (footnotes removed):
These affidavits were not filed in the course of a compulsory process such as witness statements or answers to interrogatories where rules of a Court or orders of a Court require the production of such material. In this case, the affidavits were filed voluntarily by the Commissioner to obtain the injunction.
He then applied Uniflex (Australia) Pty Ltd v Hanneybel to conclude that the implied undertaking did not operate.
Ms Trenfield also relied on the decision of this court in Bashour v Australian and New Zealand Banking Group Limited [2017] FCA 163. In so far as it is relevant to the present matter, that case concerned an application for leave to use, in Victorian Civil and Administrative Tribunal proceedings, certain evidence that had been filed by the parties in a proceeding in the court. The respondents to the application opposed it in relation to some affidavits, on the basis that affidavits filed but not read are the subject of an implied undertaking that they not be used for any collateral purpose: see [159]. Tracey J observed (at [160]) that this proposition 'may be somewhat overstated'. At [160]‑[161], his Honour referred to Rowe v Silverstein, Uniflex (Australia) Pty Ltd v Hanneybel and Hearne v Street as authority for the proposition that the implied undertaking applies only to affidavits the filing of which was compelled by a rule of court or a court order. There were affidavits in question before him which 'may have been filed at the respondents' initiative and discretion rather than as a consequence of any compulsion': see [162]. His Honour did, however, refer to authorities that suggested that the implied undertaking might operate more broadly. I will refer to those authorities (and others) below.
However in the case before Tracey J, the party seeking leave to use the affidavits did not submit that the wider approach should not be followed, so his Honour proceeded on the basis that the court's leave was required in order to use the affidavits in other proceedings. It was not necessary for Tracey J to resolve or choose between the different authorities, but his Honour noted (at [164]) that 'the question is not free from doubt in respect of affidavits which were not filed under compulsion'. So while it seems that his Honour was attracted to the view that compulsion was necessary for the implied undertaking to arise, he did not need to decide the point. Ultimately, he resolved the application on the basis that the request for leave to use all the affidavits was too wide and it would not promote efficiency to give the applicant carte blanche in respect of the use of the respondents' affidavits: see [167].
The final case on which Ms Trenfield relied in this respect was Davey v Silverstein [2019] VSC 724. The plaintiff there alleged that the defendants breached the implied undertaking owed to the Magistrates' Court of Victoria by providing to a third party certain affidavits that had been filed in that court. None of the affidavits had been read or tendered in court at the time they were provided to the third party, and the Magistrates' Court had not released the defendants from any implied undertaking. Relying on Hearne v Street and Bashour, Richards J held (at [56], footnotes removed):
In my view, the implied undertaking applies only to documents that are filed or disclosed in a proceeding under compulsion of a court order or a rule of the court. Because that compulsion involves an invasion of a person's privacy, the implied undertaking is a safeguard to ensure that the compulsion is pressed only so far as the course of justice requires. It does not extend to a document - such as an affidavit in support of an interlocutory application - filed at a party's 'initiative and discretion rather than as a consequence of any compulsion'.
Applying that to the affidavits in issue before her, Richards J found that two of them were filed in support of a summons seeking summary judgment. While a rule of court required any such application to be supported by an affidavit, it did not compel the making of the application. Like the Mareva injunction in Rowe v Silverstein, it was made at the relevant party's initiative. Hence Richards J held that the two affidavits were not subject to the implied undertaking: see [58]‑[59]. A third affidavit, filed in support of an application for preliminary discovery, was subjected to the same analysis: while a rule of court required the making of the application to be supported by affidavit, the application was voluntary so the affidavit was not subject to the implied undertaking: see [60]. A fourth affidavit was filed in response to a summary judgment application in a debt recovery proceeding. Her Honour held, referring to a particular rule of court, that 'it is a matter for a defendant whether it files anything to show cause why summary judgment should not be given': [61]. So that affidavit, too, was not compelled by court order or court rules, and was not subject to the implied undertaking.
I accept that the cases on which Ms Trenfield relies do support her submission that the implied undertaking did not apply to the two relevant documents which she sent to the ATO, albeit Bashour does so less fulsomely than the others. However there is, as I have said, a different line of authority. It too must be examined, in particular because it is possible to read it as applying a wider principle that any document provided for the purpose of litigation may only be used for that purpose.
This line of cases may be traced back to the decision of McPherson J in Central Queensland Cement Pty Ltd v Hardy [1989] 2 Qd R 509. There, an order had been made in a certain proceeding, applying a practice direction which required the service of signed witness statements before trial. Pursuant to that requirement the defendant in the proceeding served a witness statement of a Mr Town. Press reports that were based on the contents of the witness statement then appeared. In a judgment which appears to have been delivered ex tempore, McPherson J inferred that the reporters had obtained the statement from the plaintiff in the proceeding. The defendant applied for an injunction restraining use of the witness statement for any collateral or improper purpose. That was based on an analogy between the witness statement and the uses to which a discovered document can be put, the latter kind of document being undoubtedly covered by the implied undertaking.
McPherson J rejected a submission that the principle was confined to discovered documents and should not be applied to witness statements like that of Mr Town. At 510‑511 his Honour held that:
the underlying principle is in my view plain enough. It is that a document furnished for use for one purpose may not legitimately be used for another. That is, I conceive, what was meant by Lucas J when, in Nicol v. Brisbane City Council [[1969] Qd R 371 at 377], he spoke of not using the document for any 'collateral or ulterior purpose'. I take that to mean any purpose collateral or ulterior to the purpose which the document or its production or delivery is intended to serve. In this case there can be no doubt that that purpose is the proper conduct of the litigation.
I am therefore in no doubt that the undertaking applies equally to the witness statement by Mr Town as it would to any other document produced by one side to the other for the purpose of litigation. Indeed, one can very well see how it would apply with equal force to the answer or answers to interrogatories delivered in an action, that being a form of compulsory disclosure commonly resorted to in proceedings in this Court. I cannot see any distinction in nature or substance between such an answer and the present witness statement of Mr Town. At one time, of course, the practice in equity was such that the answers to interrogatories were the only form of evidence used in those proceedings. One has only to look at the Practice Direction and use the experience that all of us have in trying actions in the commercial causes jurisdiction to realise that these procedures are available and are intended for use only for the purpose of properly conducting the litigation, and for no other.
Once that conclusion is reached the rest follows as a matter of course. A document of this kind, delivered as it was for a particular purpose, may not be used for another purpose. That is an aspect of a general principle not confined to documents delivered for the purpose of litigation. See, for example, Saltman Engineering Limited v. Campbell Engineering Limited (1948) 65 R.P.C. 203; Coco v. A. N. Clark (Engineering) Limited [1969] R.P.C. 41. It matters not for present purposes whether the information contained in the document is confidential or not, provided that the limitation on its use is clear, as I consider it to be in this case.
McPherson J therefore granted an injunction restraining the plaintiff in the previous proceeding from using Mr Town's witness statement for the purpose of furthering a public debate.
In Esso Australia Resources Ltd v Plowman at 36, Brennan J cited Central Queensland Cement v Hardy as authority for the 'underlying principle' stated by McPherson J at the beginning of the passage above. But McPherson J's statement puts the principle more widely than it was subsequently stated in Hearne v Street. And it puts it in a form - 'a document furnished for use for one purpose may not legitimately be used for another' - which does not anchor it to any doctrinal basis, such as those that have evolved in connection with limiting the incursions on privacy which can follow from the processes of the court. As straightforward as the underlying principle may be as a rule of common sense or fair dealing, it does not follow that it is the rationale for the substantive legal obligation that was the subject of Harman v Home Department. McPherson J may have intended to refer to it as an underlying principle which helps explain more specific operative rules, rather than as a rule of that kind.
Later in the passage quoted, McPherson J explicitly states that the principle is not confined to that obligation. And his Honour then cites authorities in support (Saltman Engineering Company Ltd v Campbell Engineering Company Ltd (1948) 65 RPC 203 and Coco v AN Clark (Engineers) Ltd [1969] RPC 41) which are not authorities about the implied undertaking, but about equitable obligations of confidence. Even if such obligations do arise in a given case, there is a gap between that and any conclusion that disclosure of the documents for an unauthorised purpose is a contempt of court. Indeed, the reasons in Central Queensland Cement do not indicate that any allegation of contempt was made. It was an application for an injunction where it may perhaps have been understandable why the wider principle, which can explain equitable obligations of confidence, was invoked.
It should also be observed that elsewhere in the passage, McPherson J indicates that the outcome in the case before him may, nevertheless, have been based on the notion that the witness statement was provided under compulsion. That is because his Honour could not 'see any distinction in nature or substance' between Mr Town's witness statement and answers to interrogatories delivered in an action, 'that being a form of compulsory disclosure commonly resorted to in proceedings in this Court'. The closing words to this second paragraph in the passage quoted, namely 'these procedures are available and are intended for use only for the purpose of properly conducting the litigation' suggest that his Honour did have in mind that compulsion as a result of the processes of the court was a necessary precondition to the relevant obligation in the case before him. That seems to be the way that Yates J read the decision in Forty Two International Pty Ltd v Barnes [2010] FCA 397 at [70].
For those reasons, and conscious of the great respect which must be given to any judgment of McPherson J, I do not consider that Central Queensland Cement is a sound basis for any general principle that any document provided for the purpose of litigation can only be used for that purpose, on pain of contempt of court, regardless of whether the document was provided under any kind of compulsion.
Nevertheless, Central Queensland Cement has been applied in several subsequent decisions, including decisions of this court. In Springfield Nominees Pty Ltd v Bridgeland Securities Ltd (1992) 38 FCR 217, Wilcox J applied it to hold that a witness statement which had been given in a previous proceeding was subject to the implied undertaking and could not be used without the consent of the witness or the leave of the court. The statement had been given by a defendant to the previous proceeding setting out the evidence he proposed to give in defence of the claim. It was done pursuant to a direction for witness statements to be exchanged before trial, but as the matter had settled before trial, it was never tendered as an exhibit. However while Wilcox J quoted McPherson J's statement of the 'underlying principle' in Central Queensland Cement, and agreed generally with his Honour, the reasons in Springfield Nominees (at 222) place emphasis on the analogy noted by McPherson J with the use of a document produced in discovery, and also (at 223) on the second paragraph from the passage quoted above, the significance of which I have discussed. So it may be that Wilcox J was not endorsing the widest statement of principle in the Central Queensland Cement, to the effect that the mere use of material for the purposes of litigation prevents its use for any other purpose.
It must be acknowledged, however, that Wilcox J also emphasised the importance of rules of court restricting inspection of certain kinds of documents on court files and said (at 223), 'All are documents brought into existence for the purpose of the instant litigation which may contain confidential or personal information and which may, or may not, ultimately be read in open court. There is every reason for subjecting their use to the same constraints'. So his Honour may have had a wider principle in mind.
Finally, it is to be noted that in Springfield Nominees, both parties before the court accepted that leave was required to use the witness statement, so its value as a precedent in relation to the anterior question of whether the implied undertaking applied is limited: see 223.
Both Central Queensland Cement and Springfield Nominees were followed in King v AG Australia Holdings Ltd [2002] FCA 872; (2002) 121 FCR 480. Relevantly, an affidavit had been filed in contempt proceedings in this court which a party wished to use in the Supreme Court of New South Wales. The party applied for leave. Moore J held that leave to use the affidavit was required. His Honour commented on Central Queensland Cement (at [73]) as follows:
While his Honour [McPherson J] did note that the defendant had given the witness statement to the plaintiff pursuant to the Practice Direction, his Honour's conclusion did not appear to be based solely on the implied undertaking not to use documents and/or information furnished through a process of compulsion in legal proceedings for a collateral purpose. The principle, concerning the implied undertaking relating to documents obtained in legal proceedings through compulsion, is well established and some of the more recent debate has involved whether the principle has relevance to proceedings or processes not involving a court: see Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 which GIO relied on in this matter.
Then at [75] his Honour said:
I am satisfied leave is necessary, in principle, to use both the notice of motion and affidavit of Mr Murphy in contempt proceedings in the Supreme Court. To obtain the orders he sought, Mr King was required, by O 19, r 1 of the Federal Court Rules 1979 (Cth), to file a notice of motion and an affidavit in support (I put to one side applications which might be made orally and applications for which no notice of motion is necessary). I see no material difference in principle between a requirement in the rules of a court to create, file and serve a document and a court order applying a practice direction requiring witness statements to be served: see also Akins v Abigroup Ltd (1998) 43 NSWLR 539 especially at 550-552. They both compel a party to create and serve a document or documents if the party wishes to conduct proceedings in a particular way. In one instance it is to secure an order, in the other it is to call a witness. Both acts are voluntary in the sense that the failure to perform them would not result in a sanction or penalty (unlike discovery and interrogatories) other than, potentially, the inability to seek an order or to call the witness. However each is a step viewed by a party as a necessary one and taken to prosecute litigation in accordance with rules determined by a Court which require specified steps to be taken. A conclusion that leave is necessary to use the notice of motion and the affidavit may be viewed as widening the class of document to which an implied undertaking attaches, where the undertaking was developed to afford protection to discovered documents. In the context of discovered documents the form of the compulsion was clear. However the class has already been extended to witness statements and affidavits where the nature of the compulsion is different. Perhaps ultimately the broader approach of McPherson J provides the appropriate touchstone limiting, without the leave of the Court, the use of documents furnished in legal proceedings for purposes outside those proceedings.
Despite the last sentence, it seems to me that Moore J did rest his conclusion that leave to use the witness statement was necessary on his view that the relevant party had been compelled to file the document by rules of court, albeit in order to pursue an application that was itself voluntary. The way his Honour summarises Central Queensland Cement in [73] suggests that he considered it was decided on a principle wider than and different to the principles governing the implied undertaking. But be that as it may it is not, in my view, possible to reconcile Moore J's approach with Davey v Silverstein: see [31] above. For it is clear from Richards J's reasons in the latter case that her Honour did not consider that a rule of court requiring an affidavit to accompany an application made the disclosure compulsory in any relevant way.
Central Queensland Cement, Springfield Nominees and King v AG Australia Holdings Ltd all predated Hearne v Street and the extent to which they remain good authority must be considered with that in mind. It is worth noting that while the first two cases were cited as authority in the key statement of principle in Hearne v Street quoted at [20] above, they were cited in support of the proposition that the implied undertaking applies to 'witness statements served pursuant to a judicial direction' and in the case of Central Queensland Cement, also in relation to answers to interrogatories.
A relevant case in this court which post‑dates Hearne v Street is Sinnott v Chief of Defence Force [2020] FCA 643. It concerned an application for leave to use for other purposes an affidavit which had been filed in support of an application for judicial review and an associated application for an extension of time. There was a particular document annexed to the affidavit which the applicant for leave wished to use. Logan J considered that on any view the document was directly relevant to the judicial review application and the application for extension of time: see [13], [15]. His Honour considered that the affidavit was necessarily filed and served in support of the application for an extension of time as well as in relation to the substantive application: [26]. He referred (at [27]) to the requirement in r 31.02(2)(a) of the Federal Court Rules that any application for an extension of time be accompanied by an affidavit stating the facts on which the application relies and why it was not filed. His Honour also considered that the annexure to the affidavit was 'an advanced form of discovery of a relevant document'.
Logan J concluded at [29]:
I consider that I am bound by Liberty v Phoenix [Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3; (2005) 218 ALR 283] and Hearne v Street to hold that the [applicant] is bound not to use the December affidavit for other than the purposes of the present proceeding unless he obtains the leave of the Court. The position is subject to what McPherson J in Central Queensland Cement Pty Ltd v Hardy [1989] 2 Qd R 509 (Central Queensland Cement) described as an underlying principle, which was, at p 510, that:
… a document furnished for use for one purpose may not legitimately be used for another.
In Springfield Nominees, Wilcox J expressed agreement with that observation by, and the reasoning of, McPherson J in Central Queensland Cement in terms I have noted. Wilcox J's judgment is cited with evident approval by the Full Court in Liberty v Phoenix.
Logan J went on to consider the merits of the application for leave to use the affidavit, and granted leave. It appears to have been common ground that leave was required. His Honour appears to have been influenced by the clear requirement in the Federal Court Rules that the affidavit be filed and contain relevant content, and by his characterisation of the pertinent annexure as having been provided as an advanced form of discovery.
As for Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3; (2005) 218 ALR 283, in that case the Full Court (Branson, Sundberg and Allsop JJ) was not called upon to consider whether the implied undertaking applied to the document in question. The document was an affidavit which had been filed pursuant to an order of the court specifically requiring an affidavit to be filed dealing with a particular subject. So it had been provided under direct compulsion by the power of the court. The Full Court was dealing with an application for leave to use the document where it appears to have been common ground that leave was required. Their Honours also characterised the affidavit in question as fulfilling the role of an affidavit of discovery: see [6], [20]. The Full Court accordingly proceeded on the basis that leave to use the affidavit was required and gave no consideration to whether in fact it was required. Leave to use it was granted.
While the Full Court did cite Springfield Nominees with approval, that was in connection with the principles on which leave is to be granted and does not, in my respectful view, necessarily endorse Wilcox J's reasoning on the question of when the implied undertaking arises or, by extension, the application of the wide statement of the 'underlying principle' in Central Queensland Cement.
For those reasons, I do not consider that Sinnott v Chief of Defence Force or Liberty Funding Pty Ltd v Phoenix Capital Ltd stand for the proposition that a document which has been voluntarily disclosed for the purposes of litigation attracts the implied undertaking.
As well as Sinnott, the Friggers relied on Deputy Commissioner of Taxation v Rennie Produce (Aust) Pty Ltd (in liq) [2018] FCAFC 38; (2018) 260 FCR 272 and Perton v Walters [2018] VSC 445; (2018) 56 VR 306. However the latter two cases do not assist the Friggers' argument. Deputy Commissioner of Taxation v Rennie Produce did not determine whether the implied undertaking applied to any document. The question was, rather, whether the obligation must yield to a compulsory notice for production pursuant to s 353‑10 of Schedule 1 to the Taxation Administration Act 1953 (Cth). The Full Court held that it did need to yield. The Friggers relied in particular on [31] in the case, but that was just a quote of a passage of the judgment of Brennan J in Esso Australia Resources Limited v Plowman at 36-37 to which I have already referred. It is not any endorsement by the Full Court of the applicability of the wider underlying principle which McPherson J stated in Central Queensland Cement.
Perton v Walters does not assist the Friggers either. In it, Derham AsJ held that documents were not subject to the implied undertaking because they had been produced voluntarily: see [61].
The final case I need to mention in this survey of the authorities is Helicopter Aerial Surveys Pty Ltd v Robertson [2015] NSWSC 2104. That concerned an application for leave to use affidavits that had been served in a proceeding for the purpose of another proceeding. It appears that the affidavits had been served in the ordinary course of the first proceeding for use in the hearing as the evidence of witnesses (see [32]). At [30]‑[38] Brereton J discussed why affidavits filed in the ordinary course of a proceeding may not be subject to the implied undertaking. At [39] his Honour said:
… I seriously doubt whether in principle the implied obligation attaches to affidavits sworn and served in the ordinary way in the course of proceedings. By reference to 'the ordinary way', I exclude affidavits sworn in response to orders for disclosure, such as of the type referred to in Medway v Doublelock [Ltd [1978] 1 WLR 710]. But, in referring above to 'the ordinary course', I do not regard a mere timetable requiring affidavits to be used in proceedings to be served by a particular date as amounting to compulsory process. Such a timetable does not compel a party to disclose information that it does not wish to disclose, and it does not compel a witness to disclose any information; it simply fixes a time by which any evidence to be relied on must be served. It is quite distinct from an order which requires a party to make an affidavit deposing to certain matters, which would amount to compulsory process in the relevant sense.
Nevertheless, Brereton J went on to refer to the affidavit that was the subject of the decision in Hearne v Street. His Honour noted that in that case, the High Court did not have to decide whether the implied undertaking did apply to the affidavit in question because, as I have already explained, there was no dispute about that. But his Honour held (at [41]):
While the High Court did not have to decide this particular question, in circumstances where it upheld the decision based on the application of the principle to, inter alia, an affidavit, I ought not, sitting at first instance, depart from that position. Thus, I will proceed on the basis that affidavits do attract the implied undertaking. And, in any event, given the judgment of the High Court in Hearne v Street, a litigant would act very reasonably in proceeding on that basis.
However this must be understood in the context that Brereton J was dealing with an application for leave to use the affidavits, and he ended up giving that leave. I read the statement just quoted as going no further than saying that in view of Hearne v Street, Brereton J (and the parties) were justified in assuming that the implied undertaking applies to affidavits served in the ordinary course of litigation. Since the point was not in issue in Hearne v Street, the fact that the High Court proceeded on the basis that the implied undertaking applied did not bind Brereton J and does not bind this court: see CSR Ltd v Eddy [2005] HCA 64; (2005) 226 CLR 1 at [13]. Nor did the High Court express any view on the subject, which a court of first instance should follow, whether or not it is strictly bound to do so.
In any event, it seems from his Honour's comments in [39] quoted above that he was dealing with affidavits served pursuant to a direction of the court, as was the High Court in Hearne v Street. That distinguishes both Hearne v Street and Helicopter Aerial Surveys from the present case. I do not consider that the latter case requires this court to hold that Mrs Frigger's affidavit of 6 March 2019 was subject to the implied undertaking.
Conclusion
I have discussed two different lines of authority. One, represented by Davey v Silverstein, is to the effect that affidavits filed in pursuance of an application that is voluntarily made do not attract the implied undertaking, even if they were filed pursuant to a rule or other requirement which requires the application to be supported by affidavit. The other, represented by King v AG Australia Holdings Ltd, is to the effect that in those circumstances, the necessary element of compulsion will be present, so that the implied undertaking does arise. Of all the cases surveyed, Bashour is the only one my research has identified in which the court has engaged with both lines of authority, but Tracey J did not find it necessary to choose between them.
I consider that I am in a similar position in the present application. It is not necessary to decide whether the filing of an affidavit pursuant to a rule requiring one to be filed gives rise to the implied undertaking because, as I have explained, Mrs Frigger's affidavit of 6 March 2019 was not filed pursuant to any such rule. It was sworn and filed voluntarily.
It has, however, been necessary to examine the authorities in order to assess a third possibility, which is that, pursuant to the 'underlying principle' expressed in Central Queensland Cement, the mere fact that the affidavit was provided for the purpose of the litigation means that it will be a contempt of court for Ms Trenfield to use it, or documents annexed to it, for any other purpose.
For reasons I have given, I do not consider that Central Queensland Cement, or the general approval it has received in subsequent decisions, compels that outcome. Nor do I think that outcome would be warranted. With respect, I share the doubts that Brereton J expressed in Helicopter Aerial Surveys as to whether the implied undertaking does or should apply to affidavits filed in the ordinary course of litigation. And it would be a sweeping step for a court to say that the mere fact that a document has been served for the purposes of litigation means it is a contempt of court to use it for any other purpose. That would seem to entail that every document filed in court attracts the obligation. That would be wider than the rationale of the rule expressed in Hearne v Street and the established authorities cited in that decision, namely that it would be inequitable if a party were compelled by court process to produce documents for the purposes of the litigation yet be exposed to their use for other purposes: see Esso Resources Ltd v Plowman at 33 (Mason CJ).
That is not to say that the courts apply a narrow notion of what may amount to the necessary compulsion. In the statement of the fundamental principle from Hearne v Street that is quoted at [20] above, the plurality cited Bourns v Raychem Corporation (No 3) [1999] 1 All ER 908 at [19] as authority for the proposition that the compulsion may arise otherwise than by a rule of court or a specific order of the court. That case involved the taxation of the costs of a party that had been successful in patent litigation. The rules of court and certain practice directions required the party to submit a variety of documents to the taxing master, but since many of the documents by their nature would be privileged, the opposing party was not automatically entitled to see them. A practice had arisen whereby, if the opposing party wished to challenge items in the bill of costs, it could call on the taxing master to direct the other party to allow some or all of the underlying documents to be produced. The taxing master had no power under any legislation or practice direction to compel production, but the request did put the other party to an election as to whether to allow the document to be supplied, rely on alternative evidence to support the item in the bill, or to jettison the claim in respect of that item: see [14]. The documents in dispute had been produced pursuant to such an election. Laddie J held that in those circumstances the production of the documents was, relevantly compulsory, because the taxing master has made the successful party 'an offer he cannot refuse': see [19].
Nevertheless, in my view no relevant element of compulsion was present in relation to Mrs Frigger's affidavit of 6 March 2019, so the implied undertaking did not attach to it. I do not accept the submission which Mrs Frigger advanced that she was relevantly compelled to file the affidavit in order to establish the proprietary rights of the trustee of the Frigger Super Fund to what are, she says, assets of that fund. A litigant will always be able to assert that it was necessary to file a court document in order to vindicate rights or to defend against a claim. On the analysis of the implied undertaking set out above, that cannot be enough to give rise to the obligation. It is, rather, an intrusion by the court into the rights of a party not to disclose private documents which is essential to the obligation. Nor would it be appropriate in the present interlocutory application to examine whether the trustee did in fact have those proprietary rights, or whether the documents were a necessary part of the evidence that supports the existence of those rights. That would be to prejudge issues of substance that must be determined at trial.
Since the implied undertaking did not attach to the trust deed and minutes of meeting which Ms Trenfield sent to the ATO, it follows that Ms Trenfield is not guilty of the three charges of contempt of court set out in the statement of charge. This conclusion makes it unnecessary to consider the other arguments Ms Trenfield has raised.
The interlocutory application will be dismissed. There is no reason why costs should not follow the event.
I certify that the preceding sixty-six (66) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jackson. Associate:
Dated: 16 June 2020
Frigger v Trenfield (No 5) [2020] FCA 827
Yap v Lee (No 2) [2024] VSC 730
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