Grofam Pty Ltd v Messrs KPMG Peat Marwick

Grofam Pty Ltd, a company, brought an action against Messrs KPMG Peat Marwick, a firm of professional accountants, in the Federal Court of Australia. The dispute arose from the alleged misuse of confidential information provided by Grofam to KPMG during the course of their professional services. Grofam sought to prevent KPMG from disclosing this information to the Australian Federal Police, who were conducting an investigation into a suspected criminal offence that may have been committed during the provision of these services. The central issue before the court was whether KPMG could lawfully disclose confidential information to the police when they suspected a crime had been committed.

The court needed to determine whether there were any circumstances under which professional accountants could disclose confidential information to law enforcement agencies. This required a balancing of the duty of confidentiality owed to the client against the potential public interest in preventing or investigating criminal activity. The court had to consider the nature of the confidential information, the context in which it was obtained, and the extent to which disclosure would be necessary to prevent or investigate the suspected offence.

The court found that the professional duty of confidentiality did not override the potential public interest in preventing and investigating criminal activity. However, the court was cautious to ensure that any disclosure was strictly limited to what was necessary for the investigation. The court held that KPMG could disclose the confidential information to the police but only with the consent of Grofam, except for information already disclosed in an affidavit filed in a previous proceeding. The court also ordered that KPMG file and serve their defences within a specified timeframe and listed the matter for further directions. The court reserved costs pending the outcome of the proceedings.

The court issued an order discharging the interim injunction previously made. It restrained KPMG and its associated parties from disclosing the confidential information to the Australian Federal Police or any other person without Grofam's consent. The court ordered KPMG to file and serve their defences within seven days and listed the matter for directions. The court granted general liberty to apply and reserved costs. The orders were subject to settlement and entry as per Order 36 of the Federal Court Rules.