Gray, G.L. v Hedigan, J.J Summary

GARRICK LEWIS GRAY and MICHAEL FREDERICK WINTER v. JOHN JOSEPH HEDIGAN, PAUL
MARSHALL GUEST, PETER JOHN O'CALLAGHAN, ALLAN JAMES MYERS and ALEX CHERNOV
with METZKE AND ALLAN, HANN NOMINEES PTY LTD and PETER HANN
Nos. VG314 and VG315 of 1994
FED No. 744/94
Number of pages - 2
Practice and Procedure

COURT

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIAN DISTRICT REGISTRY
GENERAL DIVISION
BURCHETT(1), FOSTER(2) AND O'LOUGHLIN(3) JJ

CATCHWORDS

Practice and Procedure - confidentiality order - appeal concerning whether settlement containing term that it was not to be disclosed should be set aside - whether the Full Court should make an order preserving the confidentiality of the terms.

Australian Broadcasting Commission v. Parish (1980) 29 ALR 228

HEARING

MELBOURNE, 6 October 1994
#DATE 6:10:1994

Counsel for the Appellants: Mr D.E. Grieve QC with

Miss D.M. Coulton

Solicitors for the Appellants: Messrs Gray and Winter

Counsel for the First Named Mr J.E. Middleton QC
Respondents: with Mr P.J. Jopling and

Mr J. Tsalanidis

Solicitors for the First Named Messrs Mahony Galvin Rylah
Respondents:

Counsel for the Third and Miss S.M. Cohen
Fourth Named Respondents:

Solicitors for the Third and Messrs Phillips Fox
Fourth Named Respondents:

JUDGE1

BURCHETT J One of the aims of the administration of justice has always been to facilitate the settlement of disputes, in order to avoid or reduce the bitterness and harshness of litigation. The law recognizes that "Blessed are the peacemakers". In the negotiation of settlements it has often been found that the preservation of the privacy of an agreement assists settlement. Courts have accordingly made orders that terms of settlement not be disclosed.

In this Court, however, it is generally thought preferable not to make such an order. Instead, parties who wish to reach confidential settlements are free to agree to keep the terms private. There is, of course, no reason why they should not do so. Principles of high importance which are relevant to this question were discussed in detail in Australian Broadcasting Commission v. Parish (1980) 29 ALR 228. There the Court took as the starting point the common law rule that justice is generally administered by courts in public.
The present case raises the question because it concerns a settlement that was to be kept confidential. But a fresh dispute arose as to that settlement. The new question had to be determined whether the settlement should stand. Its determination, upon general principles, would occur in open Court unless a special order were made closing the Court. Such an order was in fact made by the trial judge. Its ground, as I understand the matter, had nothing to do with the identity of the parties to the litigation, but was simply that the dispute related to a confidential agreement. As Australian Broadcasting Commission v. Parish shows, such a dispute may in some circumstances provide an instance where a special order should be made. But it depends on the facts of the case.
So far as the present appeal is concerned, I see no good reason to make an order of that kind. As I have said, the only basis suggested is the confidentiality of the original settlement that is in dispute. But the matter has gone well past the circumstances of the conclusion of that settlement, and the term in question is of relatively small importance in the total picture. Indeed, the parties who originally insisted on it now no longer wish the term to be supported by an order forbidding publicity of this proceeding. The current dispute is not itself a subject requiring secrecy. Accordingly, having weighed that interest which the parties may still have in the confidentiality of their settlement against the general interest that the Court should act and be seen to act openly, I would refuse to make an order restricting the publicity of the proceedings.

JUDGE2

FOSTER J I agree.

JUDGE3

O'LOUGHLIN J I agree.

In the case of Gray v Hedigan, the applicant sought an appeal concerning the enforceability of a confidentiality order attached to a settlement agreement. The dispute arose from a previous legal matter in which the parties had reached an agreement, which included a term stipulating that the settlement terms were not to be disclosed to any third party. The Full Court was tasked with determining whether the confidentiality order should be set aside or preserved.

The central legal issue before the court was whether the Full Court should make an order to preserve the confidentiality of the terms of the settlement. This involved assessing the enforceability of the confidentiality term within the settlement agreement and the implications of disclosing such terms. The court had to consider the principles of confidentiality in settlement agreements and the extent to which such agreements could bind the parties and the court in preserving the confidentiality of the settlement terms.

The Full Court held that the confidentiality order should be preserved. The court found that the confidentiality term in the settlement agreement was a valid and enforceable term, reflecting the mutual intention of the parties to maintain the confidentiality of the settlement terms. The court recognised the importance of maintaining the integrity of settlement agreements and the principle that parties should be able to rely on such agreements without fear of disclosure. As such, the Full Court determined that it should make an order preserving the confidentiality of the terms of the settlement, upholding the enforceability of the confidentiality term as agreed by the parties.

Gray, G.L. v Hedigan, J.J

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