Harvey Norman Holdings Ltd v Fels

Harvey Norman Holdings Ltd sued the Australian Competition and Consumer Commission (ACCC) and others in the Federal Court, alleging that the ACCC had obtained confidential information from Harvey Norman’s former solicitors, Phillips Fox, in breach of their duty of confidentiality. The case centred on the extent to which the duty of confidentiality owed by solicitors to their former clients extends to prevent the use of such information by third parties like the ACCC. The key issue before the court was whether the court should intervene to prevent the ACCC from using potentially confidential information obtained from Phillips Fox, despite the proceedings being discontinued.

The court considered the principles established in cases such as Bolkiah v KPMG and Newman v Phillips Fox, which outline the duty of solicitors not to disclose confidential information to new clients, especially when there is a conflict of interest. The court recognised that this duty extends beyond preventing deliberate disclosure, encompassing any risk of inadvertent or negligent disclosure. While the case did not involve restraining the solicitors from continuing to act, the duty’s breadth justified Harvey Norman’s concern about the ACCC’s use of the information. The court concluded that the duty of confidentiality was sufficiently robust to warrant the measures sought by Harvey Norman.

In light of the above, the court granted Harvey Norman leave to discontinue the proceedings but imposed conditions to prevent them from recommencing without the court’s permission. The court did not make an order regarding costs. This decision underscores the importance of protecting confidential information in legal practice and the potential consequences for third parties who might misuse such information.