Her Majesty's Attorney-General in and for the United Kingdom

[1988] HCATrans 33

IN THE HIGH COURT OF AUSTRALIA

office of the Registry

Sydney No Sll4 of 1987

B e t w e e n -

HER MAJESTY'S ATTORNEY-GENERAL

IN AND FOR THE UNITED KINGDOM

Appellant

and

HEINEMANN PUBLISHERS AUSTRALIA

PTY LIMITED

First Respondent

and

PETER MAURICE WRIGHT

Second Respondent

MASON CJ

WILSON J

Wright(2)

BRENNAN J
DEANE J
DAWSON J
TOOHEY J

GAUDRON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 8 MARCH 1988, AT 10 .18 AM

Copyright in the High Court of Australia

/

ClT 2/1/AC 1 8/3/88

MR T. SIMOS, QC:  May it please the Court, I appear with

my learned friends, MR W. CALDWELL, QC and

MR M. ROBINSON, for the appellant.

(instructed by Mallesons Stephen Jaques)

MR M. TURNBULL: If it please the Court, I appear for the

respondents. (instructed by Malcolm Turnbull & Co)

MASON CJ:	Yes, Mr Simos.
MR TURNBULL:	My learned friend is kind enough to let me

make a brief appJ.ication, Your Honour,. Would it

be convenient for my colleague, Miss Hughes, to

join me at the bar table?

MASON CJ: Certainly.

MR .TURNBULL:	Thank you very mJJch.
MR SIMOS:	Your Honours, this is an appeal from the

decision of the Court of Appeal of the Supreme Court

of New South Wales given on 24 September 1987.

If Your Honours would be kind enough to go to the

appellant's written submissions Your Honours will

find there, ·conveniently set out, the histdry of

the proceedings and if I could just take

Your Honours to that briefly. Your Honours will

see on page 1 there is an introduction. There

is no need for me, I imagine, to take Your Honours

to that. Your Honours will see in paragraph 1.4

on page 2 - I am sqrry, Your Honours, I am

referring to the big document.

MASON CJ:  Yes., not the outline.

MR SIMOS:  Not the outline. What Your Honours got yesterday

was a summary - - -

MASON CJ:  The outline was merely a formal compliance, I

suppose, with the Court's requirement.

MR SIMOS:	Your Honour, I do have another document which
is headed "Outline" in addition to the summary
but to some extent they do cover the same ground. But, for the moment, if I could just invite
Your Honours to the history in the larger volume -
page 2.

(Continued on page 3)

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MR SIMOS (continuing):  Your Honours will see the original

proceedings were heard by Mr Justice Powell between

17 November and 19 December. Judgment was given on

13 March dismissing the proceedings. The appellant

appealed to the Court of Appeal, the undertakings

continuing in the meantime. Paragraph 1.6, the

appeal was heard by the Court of Appeal between

27 and 31 July 1987 and judgment was given on

24 September 1987 dismissing the appeal. Then

Your Honours will see that we made applications to

His Honour Justice Deane and later to a Full Court

for the undertakings to continue, as it were, in the

form of injunctions. That was resisted and those

applications were refused.

Then on page 3, Your Honour, we set out the relief

that we seek, an injunction and declarations and a

reference to an account of profits and a declaration
of a constructive trust in relation to the

copyright in Spycatcher. That is all on page 3 in

paragraph 1.7. Now, Your Honours, there is an

appendix to this volume at page 151 and following

which contains a sunnnary of the holdings in the

Court of Appeal and if it would be helpful I will

take Your Honours to that.

At page 151 Mr Justice Kirby said the action

is one, directly or indirectly, for the enforcement

of the public law of secrecy and therefore the

court does not have jurisdiction. The evidence

of Mr Codd cannot make any difference to that rule.

Mr Justice Street, Your Honours will see in the

brackets at the end of paragraph 2, disagreed with

that. His Honour, as I will take Your Honours to in a

moment, Mr Justice Street, said although this was an

action for the enforcement of the public law of the

United Kingdom and prima facie the court does not

have jurisdiction, by reason of the fact that the

Australian Government supported the appellant's claim, the court did have jurisdiction.

As paragraph 2 reveals, Mr Justice Kirby disagreed
with that.	Mr Justice McHugh did not decide the

matter. Paragraph 3, Mr Justice Kirby rejected the

submission that the relationship was one of contract.

Paragraph 4, he held that a fiduciary relationship did come into existence, but that the terms of the fiduciary relationship were relevantly the same as

those which would have been imposed by the equitable

obligation of confidence.

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MR SIMOS (continuing): Then in paragraph 5 His Honour, as we

we have set out there, held that because the

appellant's action was an action by a government,

even though it was a foreign government, the principle

in COMMONWEALTH V FAIRFAX applied, namely, that
the appellant/plaintiff could not succeed unless,

in addition to other requirements necessary to be

proved,the plaintiff could prove that it had

suffered detriment.

We will be submitting, Your Honours, if I could

just foreshadow briefly, that that requirement in

COMMONWEALTH V FAIRFAX should be construed as having

been limited to a governmental plaintiff of the

forum and that it does not apply to a governmental

plaintiff of a foreign country. But having said

that it would be our submission that it does not

make any difference because we submit that the

evidence does establish that the appellant/plaintiff

would have suffered detriment by the original

publication of Spycatcher. And also, if I could

add there, if it be relevant, and we accept that

Spycatcher.

it is, that there was also detriment to the of

So although we do argue against the contingency

that the Court may hold that there is no relevant

evidence of detriment we address most of our

submissions to the basis that there is relevant

evidence of detriment.

MASON CJ:  Mr Simos, it may be a little inconvenient to you

but perhaps I should raise with you a matter that

does concern me and it is a matter that was

identified at the hearing of the special leave

application.

MR SIMOS:	Yes, Your Honour.
MASON CJ:

Perhaps the concern that the Court then evinced

has become a little more tangible in the light

of what we subsequently know as to developments

in the United Kingdom. At the heart of this case

is the question, "What is the legal relationship

between the United Kingdom Government and Mr Wright?"

(Continued on page 5)

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MASON CJ (continuing): That relationship is to be determined

as a matter of English law, not as a matter of

Australian law. And yet it seems that that issue

is currently the subject of determination and

further consideration by the courts of the United

Kingdom. As I understand it there is an appeal

proceeding from the recent decision of the English

Court of Appeal to the House of Lords.

That seems to present a real difficulty as far

as this Court is concerned. You are inviting us

to determine as a matter of English law what is
the legal relationship between the United Kingdom

Government and Mr Wright.

MR SIMOS:  Yes, Your Honour.

MASON CJ: And yet, as we know, that question is to be

conclusively determined as a matter of English law

by the courts of the United Kingdom.

MR SIMOS:  Yes, Your Honour.

MASON CJ: It presents a real difficulty as to what this Court should do in the circumstances. And, of

course, it is the matter that we specifically

identified as a reason for reserving the right

to revoke the grant of special leave.

MR SIMOS:	Yes, Your Honour.
MASON CJ:	Now, it seems to me on reading your submissions,

and on reading the written submissions of

Mr Turnbull, that is not a matter that is specifically

dealt with as such.	Now, you will need to turn your
attention to it.

MR SIMOS:  Yes, yes, Your Honour. Well, Your Honour, we would

submit, with respect, that -

MASON CJ:  I am not asking you to deal with it now.

MR SIMOS:	No, no, but if I could just foreshadow -
MASON CJ:	Yes.
MR SIMOS:	There is no material difference between English

law and Australian law for this purpose and indeed

we would submit that the authorities upon which

we will be relying would apply equally to Australia,

although, of course, we rely upon them in the

context of what is the English law. Of course we

accept that it is a material consideration that the

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House of Lords has yet to pronounce on the matter.

MASON CJ: But how do we know there is no difference betweeen

Australian law and United Kingdom law on this issue?

MR SIMOS: Well, we have at least this, Your Honours, we have

the decision at first instance of Mr Justice Scott in the proceedings against The Times news~aper and

The Guardian and The Observer, and we have the decision

of the Court of Appeal in those respects - in those

matters also.

(Continued on page 7)

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MASON CJ:  But we cannot necessarily assume that the House of

Lords is going to endorse the decision of the Court

MR SIMOS:  No, we cannot, Your Honour, but at least so far

as those courts are concerned we submit their

judgments indicate that the law is no different from

what it is in this country. As to the House of Lords,
we would submit that Your Honours could properly

and sensibly reserve Your Honours' decision in these

proceedings until that judgment is known and then

if Your Honours thought that Your Honours needed to

hear further argument on the matter we would ask

for an opportunity to be heard just on the House of

Lords' judgments if Your Honours thought that was the

sensible course.

MASON CJ:  Mr Simos, the next step that immediately leaps to

the mind, and I am relieved to say in a sense that

it does not only leap to my mind it seems to leap

to other minds as well, that if that is a course that

we ought to contemplate, why is it not a more sensible

course to adjourn the proceedings until we know what

the decision of the House of Lords is because it is

very difficult to predict in advance what the

ramifications of a judgment may be. We may be spending

time pursuing questions to finality that may disappear,
having regard to the way in which the House of Lords

enunciates the law of England upon this point?

MR SIMOS:  Yes, I see the force of that, Your Honours, and

may I just take this course if it is convenient. It

is a course that may not end up making any difference

to what Your Honour has said, but what I was proposing
to do,with Your Honour's permission,was to take

Your Honours very briefly to the judgment of

Mr Justice Scott at first instance in England to see how the issue presented itself there, and also to

the judgments of the Court of Appeal. The judgment

is rather long but I would only need to refer to

about six or eight pages, for instance. Do Your Honours

have a copy of the judgment of Mr Justice Scott of

21 December? (Continued on page 8)

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MASON CJ:	I think we have it in this large volume - C.	Yes,
it is C in the large volume, headed "File of unreported judgments".

MR SIMOS: If Your Honours please. Just by way of introduction,

as it were, and apropos my submission that the

law in England is the same as in Australia - I

do not propose to read this but just indicate to

Your Honours. If Your Honours would go to page 48

Your Honours will see a section headed "Section 5 -

the law" and then the first heading is "The duty

of confidence" and then there is mention of of

ARGYLL V ARGYLL and FACCENDA CHICKEN. And then,

going over to page 52 - in other words, these are

all the authorities that His Honour considers and

I would submit would be relevant here: SEAGER

V COPYDEX, which would be well known to this Court,

and then, of course, there is the decision of this

Court itself in MOORGATE TOBACCO V PHILLIP MORRIS, which is referred to on page 52.

I am missing some pages, Your Honours, and

some cases. But going on to page 56, there

His Lordship deals with ~CHERING CHEMICALS V FALKMAN.

At the bottom of page 56:  ATTORNEY-GENERAL V

JONATHAN CAPE; then, at page 57.His Honour refers

to the decision of Your Honour Mr Justice Mason

in the FAIRFAX case and Your Honour will see that

a large portion and the basically relevant portion

of Your Honour's judgment is quoted on pages 58

and the top of 59. Then~His Lordship at the middle

of page 59 deals with the decision of the Court

of Appeal in New South Wales. On page 60 His Honour

starts dealing with the cases about evidence of

national security~ maeters:of national security,

BURMA OIL.	A little further down in the quotation,
about letter E:	CONWAY V RIMMER and the decision
of this Court in SANKEY V WHITLAM.	And so on.

And then, page 62 "The duty owed by third parties" - could I just pause there to observe

that it would be apparent just from what I have

taken Your Honours through that so far as

Mr Justice Scott is concerned he would be apparently

proceeding on the basis that the law of England

is the same as the law of Australia for what that

is worth.	I mean, I know that does not bind the
House the Lords.	"The duty owed by third parties",

page 62, he deals with SCHERING V FALKMAN; page 63,

FRASER V THAMES TELEVISION: enen at page 65 there is a reference to what could have been a point

of difference, namely, "Articlfi! 10 of the European

Convention", about freedom of expression but so

far as, at any rate, the Court of Appeal is concerned,and

I think it is fair to say Mr Justice Scott also,

they are all of the view that that does not affect

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the common law or the general law of England.:

And then 66 is LION LABORATORIES V EVANS. Then, at

page 69, His Lordship deals with "The iniquity

defence" and, if I might say, the usual cases:

GARTSIDE V OUTRAM on page 70, INITIAL SERVICES

V PUTTERILL; page 71, again, LION LABORATORIES

V EVANS, FRANCOME V MIRROR GROUP. Then, at page 72,

His Lordship deals with "The obligation to account".

(Continued on page 10)

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MR SIMOS (continuing): And then at page 74, and I would

just take Your Honours to this briefly - it is

only three pages - His Honour deals with the

application of the law to the relationship with

Mr Wright. At the top of page 74 he says:

Mr Wright, in writing his memoirs and

submitting them for publication was, in my
judgment, in clear and flagrant breach of

the duty of confidence he owed the Crown.

And then he sets out some passages from

Sir Robert Armstrong's evidence.	At the bottom
of the page:

prima facie, members and ex-members of the

Security Services must carry their secrets

with them to the grave.

Mr Wright's duty of confidence would

not extend to information of which it could

be said that, notwithstanding the needs of

national security, the public interest

required disclosure. Nor, in my opinion,

would the duty extend to information which

was trivial or useless -

and then what is of relevance, Your Honours -

letter E and following - what His Lordship is

saying is: in relation to the public domain defence
and the iniquity defence those questions really

do not arise because the issue is as to the whole

of the book which goes beyond public domain and

beyond iniquity.

And then, towards the bottom of page 76,

letter F, he says:

the Attorney General remains, in my opinion,

entitled to an injunction against Mr Wright -

and then he goes on to deal with the case against

The Guardian and The Observer which, of course,

is all founded upon those findings. And then,

without reading it, Your Honours, there is a

summary on page 92. He says:

My conclusions are these:

Mr Wright committed a breach of duty -

and so on.

MASON CJ:  But that does not advance consideration of the

question very much, does it?

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MR SIMOS:	No it does not, Your Honour.	Not much, Your Honour.

MASON CJ: It is a decision of a judge at first instance

and, naturally, his judgment reflects the law as
it has been enunciated in cases in the

United Kingdom and in cases in this country. There

is always the prospect as the case travels further
up the judicial ladder that there will be a

distinct change in the enunciation of principle

and, of course, one expects the ultimate

9ourt of Appeal in any country to be more likely

to make that change than any other court.

MR SIMOS: Certainly, Your Honour. Your Honour, I really

cannot take the matter any further, with respect.

We do have the Court of Appeal decision which

approves Mr Justice Scott's judgment with the

exception that Lord Justice Bingham held that

there should not be an account of profits awarded

against The Sunday Times. Now, it is a matter

for Your Honours in the last analysis as to whether

in all those circumstances Your Honours find it

useful to proceed with a hearing at this point

of time or whether Your Honours find it more

appropriate to wait until the House of Lords has

delivered its decision which may be some months

away - not that that matters now that the urgency

has been taken out of the matter, Your Honour.

MASON CJ: No.	It seems to me that if the Court were to proceed now - certainly, if it were to proceed
now and give judgment in advance of the decision
by the House of Lords - we would run the risk that
we were expressing a view about the law of England
that the ultimate court of appeal in the United
Kingdom would disagree with. That is a risk which
we would unquestionably run. That, of course,
does not necessarily mean that we should adjourn the hearing at this stage but when you look at the further prospect that knowledge of what the
law of England is; knowledge of what the legal
by the House of Lords is, that may have corresponding relationship between the parties as enunciated
consequences in relation to other questions that
arise in the case.

(Continued on page 12)

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MR SIMOS:  Of course it may, Your Honour.

MASON CJ: Therefore, one would think there is a distinct

possibility that if we knew what the House of Lords

said the hearing in this case would perhaps be

facilitated and the issues in some way more readily

identified and perhaps reduced.

MR SIMOS:	And even be different.
MASON CJ:	Yes, and even be different.
MR SIMOS:	Yes, Your Honour.
MASON CJ:	Now they are the undeniable advantages of adjourning

the· hearing at this stage pending a decision

by the House of Lords.

MR SIMOS:  Your Honour, I cannot disagree with anything that

Your Honour has said and it is a question of

Your Honours weighing the pros and cons. I can

only say we would, of course, accept whatever

Your Honours thought.

MASON CJ:	Mr Turnbull, what do you say about this question?
MR TURNBULL:	The proposition Your Honour has made to Mr Simes,

with respect, is based on a misapprehension of the

relevant choice of law as applied to the relationship.

There is no question and, indeed, no issue between

the parties that if Wright's relationship be one

of contract then the relevant choice of law is

the law of England. If, however, this Court were
to take the view, as indeed every other judge that

has considered this case has done, that the

relationship, if any, is a relationship grounded

in the equitable obligation of confidence, then

it is plain on the authorities, we would submit - and indeed it is accepted by my learned friend in

his submissions - that the relevant choice of

law is that of the forum, New South Wales or,no

doubt now,the Commonwealth of Australia.

MR SIMOS:  Your Honours, I just have to interpose to say

we do not accept that.

MR TURNBULL:  There is a passage in my learned friend's

submissions where he does accept that and Miss Hughes

will no doubt find it. Mr Justice McHugh gathered

up the authorities in his judgment in the

New South Wales Court of Appeal and it would seem

to us that there is a necessary preliminary point

before Your Honours embarked on such an adjournment

to decide whether the relevant choice of law in

equity, the equitable obligation,is Australia or

Britain. And one may well consider the grave

consequences that would flow if the choice of law

were to be that of Britain because it would be

ClT9/l/MB 12 8/3/88

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abdicating the rules about free speech - which the

law of breach of confidence is a very important

one - abdicating those rules to the laws of another

country. Mr Wright is, after all, an Australian

citizen, Heinemann Publishers Australia Pty Limited

is an Australian company, the case was about an

effort to publish the book in this country not

in England and quite rightly, we would submit,

the courts have assumed that the law was that

of Australia.	Now, for precisely the same reasons
that Mr Simos has just articulated, namely, that	in this area because of the coincidence of the
JONATHAN CAPE case and the FAIRFAX case, the
principles, the relevant principles, we would
submit, are identical, not much has turned on it.

MASON CJ:  Am I not correct in saying that the courts

have assumed that the principles to be applied

are the principles of Australian law because it

has been assumed that there is an identity between

the principles of Australian law and the principles
of English law in relation to part, at least,

of the relationship between the United Kingdom

Government and Mr Wright.

MR TURNBULL:	Well, with respect, Your Honour, I do not think that is - certainly the basis upon which
that assumption has been made has not been stated but it has always been part of our case that the
relevant choice of law was Australia and the guiding
authority, the guiding statement of the legal principles applicable to this head of the obligation is your decision, Mr Justice Mason, in
COMMONWEALTH V FAIRFAX.
MASON CJ:	But we look to contract alone.- - -
MR TURNBULL:	Indeed, that is English law, th.era is no quest-ioo. -

MASON CJ: - - - and that-is-partofthe relationship between the

United Kingdom Government and Mr Wright?

MR TURNBULL:  Indeed. If I interrupt Your Honour there,

and I do so with respect, none the less the courts

of this country have a duty to deal with cases

on the evidence before them. The fact is that

Wright's relationship, the characterization of it, was put in issue in the English courts, no judge to date has held that it was one of contract

and it appears to have been concluded that that

point is now academic.

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MR TURNBULL (continuing):  May I add another matter. Mr Wright's

evidence is not before the English courts. Your Honour,

how can this Court allow itself to be guided in

determining the rights of an Australian citizen by

obiter dicta of English courts before which Mr Wright

is not a party. I can demonstrate to Your Honours,

and will do so in due course if given the opportunity,

that the English courts have made a series of grave

errors, if you like misapprehensions, on factual

matters which they would not have made had Mr Wright's

uncontroverted evidence been before them. Now that

brings me to the second point of the matter I was

going to raise with the Court and that is this: even

if the English courts said the norms that apply to

this equitable obligation was in such a form and

even if this Court concluded that the law of England

should apply to Mr Wright, a decision that would have

the most far reaching consequences - I mean you

can imagine, Your Honours, if I could just digress for a moment, imagine a journalist working for the

Melbourne Age, perhaps, who goes to five different

countries in his travels collecting information and he returns to Australia, are the governments or his informers or confiders in those five separate countries

able to restrain that Australian speech in Australia

by the laws of their several countries?

The principles of equity are governed by the laws

of the forum. And if this matter is to be reconsidered,

Your Honours, it would need the most careful consideration, if I may say so with respect - - -

MASON CJ:  Mr Turnbull, you seem to be assuming that if the

Court adjourned the hearing it would be necessarily

abdicating its function and merely giving effect to

whatever the House of L.ords had to say about the

English case? Now that is not the suggestion at all.

MR TURNBULL:	No.
MASON CJ:	I mean this Court would not under any circumstances

abdicate its function. What I am suggesting to you

is that if this Court has the advantage of knowing

what the decision of the House of Lords is, we will

at least have the advantage of an authoritative

exposition of the principles of English law that may

be relevant to the determination of the case in this

Court, in so far as we have to look to the principles

of English law?

MR TURNBULL:  And the English court may very well be grateful

for an authoritative exposition, Your Honour, of the

principles of Australian law.

MASON CJ:  Maybe it will, but we would be even more grateful

for an authoritative exposition of the principles of

English law and that is what we are considering?

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MR TURNBULL:	With respect, Your Honour, the only issue upon which you are considering English law is that in
respect of the contract argument.  The contract
argument, we would submit, is so patently hopeless
under any test that is likely to be established,
and it is plainly so unlikely that the House of Lords would conclude Wright had a contractual relationship
when the trial judge himself declined to find this
fact, that the mere possibility, Your Honour, of
the contract point emerging in the House of Lords
should not be sufficient to delay the determination
of this matter.

MASON CJ: But why should we embark into an inquiry about

unlikelihood and improbability, when the matter can

be settled beyond doubt by a decision of the

House of Lords?

MR TURNBULL:  Your Honours, no doubt it is a matter for the

Court, but when you get the decision, whether it be

before or after you have determined this appeal, when you get the decision of the House of Lords,

Your Honours will note no doubt that no evidence has been called by Mr Wright before it, so any decision

on his relationship has to be tempered by the fact

that no evidence has been given by him, whereas you

have before you all of his evidence, all of the

ready material and all that will be added by the

House of Lords decision is one more case on the

reading list. Your Honours, I would add also that
Your Honours would no doubt have noted from the

Court of Appeal's decision that there is a very live issue as to the application of Article 10 of the European Convention of Human Rights.

(Continued on page 16)

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MR TURNBULL (continuing):  One may well foreshadow an

appeal will be going to the Court of Human Rights

from the House of Lords if the newspapers are
unsuccessful. Should the High Court await that

determination also because that Convention of

Human Rights is, whilst not formally part of English

law, none the less there seems to be a great deal

more than lip-service paid to its provisions by the

English judges.	So the adjournment may well be a
lengthy one.

There are, of course, other cases in the English

courts relating to security matters. There seems

to be a rash of them at the moment and no doubt

the Court would be guided perhaps by those. We would

simply submit, Your Honours, that this case has been

before the Australian courts for over, getting on for

two and a half years. Litigants are entitled, we would

submit, to have their matters dealt with speedily.

The second respondent at least is a very old man and

we would submit that the assistance that is likely to

be given to this Court from the House of Lords is so

slight in the scheme of things that it would not

justify the further delay of these already much

de~ayed proceedings.

MASON CJ:	Yes, well it seems to me you have quite a strong point in relation to prejudice, particularly to one of
your clients.
MR TURNBULL:	I do not have anything further to add.

MASON CJ:  Yes. Mr Simos, what do you say in response to

what Mr Turnbull has had to say?

MR SIMOS:  Your Honour, just a number of matters, if I may.

If it is convenient - perhaps Your Honours need not

go to it, but in relation to the European Convention for the Protection of Human Rights, the Master of the Rolls dealt with that, or referred to that at page 7

of his judgment and at page 8 said, after looking

at it: 

For my part I can detect no inconsistency

between our domestic law and the

Convention.

I think - al though I am not sure - I think I am right

in saying that the others took the same view.

Secondly, Your Honours, as to the relevance of the

House of Lords judgment, having regard to the fact, as it is the fact, that Mr Wright was not a party to

those proceedings and gave no evidence in the English

proceedings, nevertheless in this case we would submit
the principal defence of Mr Wright is that this

material is in the public domain and even though

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Mr Wright did not give evidence in these English

proceedings, there were tendered before

Mr Justice Scott a bundle of agreed facts dealing

with twelve books and three television programmes.

So the public domain aspect of this case, which we

submit is the central aspect, was certainly raised

in the English proceedings.

So far as Mr Wright's age and ill health is

concerned, we accept, as obviously Your Honours do,

that that is a matter to be weighed in the balance and

we would not offer any objection to the matter

proceeding if that was the view Your Honours took.

MASON CJ:  Yes. Thank you, Mr Simos. The Court will adjourn

briefly in order to consider this matter.

AT 10.55 AM SHORT ADJOURNMENT

ClTll/2/HS	17	8/3/88
Wright(2)

UPON RESUMING AT 11.10 AM:

MASON CJ:  The Court, having considered the question which

the Court itself raised and having heard what the

representatives of the parties have had to say,

has decided to proceed with the hearing. Yes,

Mr Simos.

MR SIMOS:  Your Honours, I was taking Your Honours to the

sunnnary of holdings in the Court of Appeal on

page 151 of the appellant's written submissions,

the thick volume. I think I had got to paragraph 5

dealing with the requirement of detriment.

Paragraph 6 on page 151: the attack on

Sir Robert Armstrong's credit is misconceived - so

held Mr Justice Kirby.

Paragraph 7:  Mr Justice Powell was entitled

to reach the conclusion he did and to dismiss the

proceedings for want of proof of detriment. And

the reason for that, as we would submit, Your Honours,
as.what appears in paragra!)h 8 at the top

o_f page 152, because the overwhelming bulk of the

material in Spycatcher is already in the public

domain, and was when it was written by Wright, I

do not believe those matters should now be suppressed.

Now, Your Honours, if I could pause there just

to foreshadow what is perhaps one of our most

important arguments. And it is simply this: it

is our submission that the mere fact that matter

is in the public domain does not mean that the

plaintiff might not suffer detriment as a result

of a particular defendant publishing or republishing

public domain material. And in particular, put

another way, if notwithstanding that the matter is

in the public domain the plaintiff has legitimate

interests to protect, then it is entitled to an injunction, or maybe entitled to an injunction

particular defendant from republishing or using	against a particular defendant to restrain that
public domain material.

(Continued on page 19)

C1Tl2/l/JM	18	8/3/88
Wright(2)

MR SIMOS (continuing): If I could just give an example of	that, taken from an American case: in the course
of his employment an· employee learned certain trade
secrets relating to couplings of oil rigs and oil
jetties. He then left that employment and
commenced to manufacture couplings according to the process that he had learned whilst an employee.
He did more than that, he published a brochure advertising them and he made an application for a
patent and it was held that all that was in breach of confidence. But, of course, by reason of his conduct the matter was in the public domain.

Now, the court held that notwithstanding

everyone else in the world was free to use the public

domain material put there by the defendant in breach

of confidence, this particular defendant was not

entitled to do so. There is another case, which

I will not go to now, an English case called

SPEED SEAL V PADDINGTON, but I will leave that

for later if I may. Paragraph 9 on page 152,

still in the judgment of His Honour Mr Justice Kirby,

notwithstanding that the relevant allegations contained

in Spycatcher are not new and ar~ :in the public doma:in, there

is very high Australian public interest in the

disclosures and the defence of public interest

is therefore made out and will outweigh the residual

equitable duty of confidence or.fiduciary duty

of silence operating on Wright's conscience.

Now, if I can just expand that for a moment, Your Honours. What His Honour, in effect, said,

in our respectful submission, is this. There

are lessons to be learned by the Australian public interest in learning those lessons outweighs the detriment to the Australian public interest resulting
in relation to what happened in relation to the

from the publication of Spycatcher, as Mr Michael Codd,

the Cabinet secretary deposed to in an affidavit.

(Continued on page 20)

ClT13/l/MB	19	8/3/88
Wright(2)

MR SIMOS (continuing):  As to that, just to foreshadow what

we submit, we submit that even if it could be said

that there is some Australian public interest in

the Australian public learning the lessons of the

British Security Service through Spycatcher, that

interest did not outweight the detriment which

Mr Codd deposed would be caused to the Australian

public by reason of the publication of Spycatcher,

and of course, Mr Codd gave reasons in his

affidavit and was cross-examined at some length.	So
it is not a question of just accepting Mr Codd at
face value, his assertion was supported by reasons
which were exposed, not only in the affidavit, but

also in cross-examination. Paragraph 10, that should

read:  As to the defence there is "no confidence

in iniquity", the suggested inequities, it should be,

constitute only part of Spycatcher, some of them

are crimes and wrongdoings of Wright himself upon

which he can scarcely rely, and there is no particular

public interest here in the exposure of MIS's

illegalities. This provides no defence and nor does

the doctrine of "clean hands".

That may perhaps do a little less than justice

to what His Honour Mr Justice Kirby said. ·I think

perhaps more accurately the substance of what he

said was, I prefer to deal with those considerations
of alleged illegalities in the context of the
balancing between the detriment to the Australian
public interest and the benefit to the Australian
public interest. But in that way he did not have to
deal with the defence of no confidence in iniquity as

a separate matter, nor did he deal with the clean

hands defence, if there was one implicit in the pleadings.

And I think it would be fair to say that that is
the way it was dealt with in the pleadings, that

the illegalities were relied upon by my learned friend

and the respondents in the context of competing

public interest.

Paragraph 11, sorry if I could say this by way

of preface to paragraph 11. Involved in that

resolution of the matter of balancing the competing

public interests was necessarily, we submit, a

rejection of Mr Codd's evidence.

(Continued on page 21)

C1Tl4/l/SR	20	8/3/88
Wright( 2)

MR SIMOS (continuing):  Let me withdraw that, if I may.

His Honour did not reject Mr Codd's evidence

but he said that he could disregard it because

it was a derivative in the sense of being based

upon Sir Robert Armstrong's evidence of detriment

to the United Kingdom public interest. And

so Mr Justice Kirby characterized Mr Codd's evidence

as being in this form: having regard to the detriment

which will be suffered to the public interest

of the United Kingdom, so the Australian public

interest will suffer detriment because of the
liaison relationships between Australia's security

and intelligence agencies with British security

and intelligence agencies.

And since, as Mr Justice Kirby found, there

was no detriment to the United Kingdom public

interest by reason of all this material being

in the public domain, therefore there was no

foundation for Mr Codd's evidence of detriment

to the Australian public interest. We submit

that notwithstanding that much of the matter

may have been in the public domain, there was

still detriment suffered by the publication to
the United Kingdom public interest, even of public

domain material for reasons which will develop,

and therefore the foundation for Mr Codd's evidence

does exist. But in any event we say that Mr Codd's

evidence was not wholly derivative in that sense. There was some independent bases for his evidence

which I will take Your Honours to in due course.

Mr Justice McHugh was another one of the

majority. His judgment is summarized at page 153

but if I could foreshadow the judgment of

Mr Justice McHugh, although it covered a number

of other matters, in the final analysis rested

on this proposition, namely, that an Australian

court will not entertain proceedings brought

by a foreign government if the Australian court

is required, in the course of those proceedings,

to decide whether something is or is not in the
interest of the foreign government or the foreign

country because, as we submit, Mr Justice McHugh

said, in the event that the Australian court

were to decide that issue adversely to the foreign

government that could create embarrassment for

Australia's international and diplomatic relations

with that foreign government.

If I could foreshadow, very briefly, we

would simply submit that that approach was in

error having regard to two matters: first of

all that the proceedings were supported by the

Australian Government and so that even if the

court were to decide adversely to the foreign

ClTlS/1/ND	21	8/3/88
Wright(2)

government the foreign government could scarcely

be heard to complain about the attitude of the

Australian Government; and secondly, the foreign

government, of course, in invoking the jurisdiction

of the Australian court thereby submits to the

jurisdiction of the court for good or for ill

and cannot surely thereafter reasonably be heard

to complain if the decision goes against it.

MASON CJ:  Your argument seems to predicate that a foreign

governmental plaintiff is better off if he is

not supported by the Australian Government.

MR SIMOS:	My argument, Your Honour?
MASON CJ:	Your argument, yes.
MR SIMOS:	Perhaps that is involved but, of course, I would

submit that would be an irrelevant consideration,

Your Honour. As well as that being, in the final

analysis, the reason for Mr Justice McHugh's

decision, he did however make certain preliminary

findings which are dealt with in the subsequent

paragraphs on page 153.

(Continued on page 23)

ClTlS/2/ND	22	8/3/88
Wright(2)

MR SIMOS:  Equity will not protect the disclosure of

government infua::mation unless it retains its

confidentiality and it is in the public interest

to treat it as confidential. It is not enough

that the publication of the information "is"
it should be - a matter of "substantial concern

to the Government".

Now, could I pause there, Your Honours, to

foreshadow another important argument of ours

and that is in relation to the requirement which

is frequently expressed in the cases that it is

an essential element of a cause of action that

the information, the subject of the proceedings,

must retain its quality of confidentiality

or its quality of confidence. Now, it will be

our submissio~ which we will develop later, that

those principles properly understood are but

another manifestation of the principle, if it exists

in relevant circumstances, that the plaintiff is

entitled to relief in a confidential information

case only if the threatened publication would

cause detriment to the plaintiff. And that question

will often be answered by saying: "Does this

information retain its quality of confidence or
confidentiality?" because if it does not the

reason may be because it is ~ublicly known and

if it is publicly known then republication by

the defendant will not cause detriment any further,

or different or additional detriment to the plaintiff

beyond the detriment which the plaintiff suffered
by reason of the original publication by some other

party. ·

Now, to the extent that that approach and

that way of looking at the matter deals with the

question of confidentiality then this formulation

of the requirement that it must retain its quality

of confidence may be useful but we submit that

it is always necessary to understand, as we submit,

that in the last analysis the question is not:

does it retain its quality of confidentiality but,

in the relevant circumstances, will publication

of that material by this defendant cause additional

detriment to the plaintiff. Paragraph 3 -

Mr Justice McHugh held: it is not necessary that

the appellant should establish that the publication

would be detrimental to the public interest of

Australia.

Paragraph 4 - the existence of an obligation

of confidence creates a fiduciary relationship,

but if the appellant cannot establish a case of
breach of an equitable obligation of confidence,
he cannot establish a case of breach of fiduciary

duty.

ClT16/l/AC	23	8/3/88
Wright(2)

MR SIMOS (continuing):  Then 5, the contentions that the

claim constituted either the direct or indirect

enforcement of the OFFICIAL SECRETS ACT as a penal

law of a foreign State or the enforcement of the

sovereign authority of a foreign State should be

rejected. In 6, the courts of Australia have the

right to entertain an action based on the legal

rights or obligations acquired or imposed by the law
of a foreign country if the determination of that
action is contrary to the national interest of

Australia.

I think I have already explained to Your Honours

that holding, that His Honour Mr Justice McHugh held

that the court will not entertain such an action if

it involves the question of determining what is the

public interest of a foreign country. Page 154 - we

set out Mr Justice Street's basic propositions,

firstly that Wright's position and obligations were

not regulated by the law of contract. Secondly,

His Honour said that doctrines of equity do not

provide more than a broadly analog~ field. The

appellant's entitlement is to enforce confidentiality

in the public interest and it arises from the

confidential relation. In other words, His Honour

said, in effect, the right being enforced is not

the same as a private individual enforcing his

rights in relation to confidential information,

but rather is to be characterized as a manifestation
of the sovereign right of the government of a country
to restrain the publication of any information the
publication of which would be detrimental to the
public interest of that country, and he· said although,

in effect, that is the same sort of thing as you get

in equity, for relevant purposes you have ~o
characterize it as a public right.and, of course, that

had relevance and ramifications in relation to the doctrine that the court will not enforce a foreign

penal or revenue law, and the supposed additional

principle that in the same way and for the same

reasons an Australian court will not enforce a public

law of a foreign country, in the same way as it will

not enforce a foreign penal or revenue law of a

foreign country. It is an attempt to expand the

area within which the courts will not enforce foreign

laws. ·

(Continued on page 25)

C1Tl7/l/HS	24	8/3/88
Wright(2)

MR SIMOS (Continuing): Paragraph 3, Mr Justice Street held

that if the appellant is to succeed it must prove

detriment in the sense of harm to the national

interest not outweighed by counterveiling public

interest. Paragraph 4, the appellant's concern

about 3pycathcer is not simply a class objection,

but an objection to a publication within that class

that in fact contains a wealth of confidential

information - it is an aggregated contents

objection.

Then 5, there is not the slightest justification

for casting asperions on the credit of

Sir Robert Armstrong. The assertion of damage made

by Sir Robert Armstrong is consistent with the claim
by Mr Michael Codd with the authority of the Australian

Government as to the harm which would be occasioned

to Australia's national interest if the publication

were permitted in Australia and there is a mutually

corroborative effect of these expressions of concern.

Paragraph 6, Mr Justice Powell's finding does not

adequately address the substantial ground of the

appellant's concern, namely that this is a publication

of an insider of his first hand involvement, unique

in its authenticity. Nor does Mr Justice Powell

adequately recognise the forceful consistency of the

evidence given by Mr Codd and this led

Mr Justice Powell to err in his assessment of the

credibility of the evidence of Sir Robert Armstrong. Then 7, the evidence of prior publication, prior

knowledge and obsoleteness falls short of outweighing

the force and strength of the objection taken by

Sir Robert Armstrong as the proper officer of the

United Kingdom Government. I.n other words,

notwithstanding that the material was, to the
admitted extent that it was, in the public domain,
having been put there in large part by others and

in large part, we would submit, as a result of the

wrongdoing by Mr Wright himself, there was still

detriment to the United Kingdom public interest

which was not outweighed by the Australian public interest in knowing the contents of Spycatcher.

Iniquity - again misspelt, I am sorry, Your Honours,

in paragraph 8 - was rejected as a defence. Paragraph 9,

On the balancing exercise he said it must be resolved in favour of the appellant upon the strength of the monolith that stands clear in the evidence of

Sir Robert Armstrong. When 10, this is a claim by

the United Kingdom Government to enforce in this

country a penal law of a forei~n State and also lies

within the broader category of enforcement of a public

law of a foreign State, but whether resort needs to

be made to this wider category need not be decided.

ClT18/l/JM 25 8/3/88

Wright(2) (Continued on page 25A)

The express support given by the Australian

Government, through Mr Codd, should be recognised

by the Court as displacing the unenforceability generally of foreign penal and public laws. It lies within the authority of the Australian Government

to decide on an ad hoc basis to make available

positive executive assistance by lifting the

jurisdictional fetter on the local courts.

(Continued on page 26)

CIT18/2/JM	25A	8/3/88
Wright(2)

MR SIMOS (continuing):  The evidence of Mr Codd must be given

a high degree of deference and weight, although not

absolutely binding, and then on the balancing

exercise he came down in favour of Mr Codd.	And then
there is a paragraph about relief.	So they are the

principal findings of the judgments appealled from

and if I could now hand to Your Honours a copy of

our outline of argument. If Your Honours would be

kind enough, perhaps, to keep handy also the summary

of principal arguments of the appellant, which I

believe Your Honours received yesterday, but I will

be going through principally this outline of

argument, Your Honours. And if I could just give

Your Honours a perspective before I go to the details.

Your Honours will see in paragraph 8 we deal with

the terms of Mr Wright's obligations under the

heading ffr:stly, a "Fiduciary Duty", secondly, the

"Equitable Obligation of Confidence", and thirdly, the "Contractual Obligation"·of-confidence. Then

in paragraph B we deal with the defences. One,

the first defence is that no detriment is suffered
and I will.come back to this, but if I may just read
1.1. This is the first manifestation of the so-called

"public domain defence", because we submit that the

public domain defence in what I have called its

first manifestation, is to the effect that if the
material is in the public domain then no detriment is
suffered by republication of that public domain

matter by Mr Wright.

We submit that that is a non sequitur. But

that is the way the plaintiff puts it. We say it

does not constitute a defence on the facts of this
case. In other words if. on the facts of any

particular case, publication of public domain material

can cause detriment to the plaintiff, then the

plaintiff is entitled to relief even though the
matter is in the public domain. Page 3, paragraph 2:

The content of Spycatcher lacked the necessary

quality of confidence~ just reading 2.1, this is

the second manifestation, we submit, of the so-called

how we put that to Your Honours. public domain defence and I have already foreshadowed Page 4, paragraph 3, as we understand it, this

is another defence: if the publication of Spycatcher

would cause detriment to the British and Australian

public interests, that detriment is outweighed by

the benefit that would flow to the Australian public

interest. Paragraph 4 -this is the fourth defence

that we deal with as we understand it - because

of the conduct of the Crown in relation to prior publications, it is not in the Australian public interest that the appellant should not be permitted

to restrain Mr Wright from publishing Spycatcher.

And Your Honours will see we have a little subheading

C1Tl9/l/SR	26	8/3/88
Wright(2)

in brackets "Authorisation and Acquiescence", and

if I could just foreshadow, very briefly, how we

understand that to be used as a defence and what

we say about it. The first point we would wish to

make is this, Your Honours, if I could just say this

by way of foreshadowing: authorization and

acquiescence is not relied upon, as we understand it,

as some kind of independent defence but is relied

upon only in the context of balancing of competing

public interests. In other words, as we understand

it, this question of authorization and acquiescence

of the appellant or of the Crown in relation to

prior publications, is not relied upon as constituting

an abandonment or surrender by the appellant of

all its rights against all persons, including

Mr Wright, in respect of the subject information.

(Continued on page 28)

ClT19/2/SR	27	8/3/88
Wright(2)

MR SIMOS (continuing): If the conduct of the appellant

could be properly characterized and if it had been

pleaded in that way then maybe it could have had

that effect. But, as we understand it, it is only

relied upon in the context of public interest.

When I say it could have had that effect I mean

theoretically in another case it could have had that

effect because it is our submission that even if

it is sought to be relied upon as constituting a

defence in the nature of surrender or abandonment
it is abundantly clear from the facts that there
is no possibility that the appellant's conduct, in

relation to prior publications by others, could be

seen in any way as an abandonment by it of its

rights against Mr Wright. And in the last analysis}

if this is to be relied upon as authorization and

acquiescence as a separate defence, the conduct

must be of that kind or it is not a defence at

all.

We submit that the case has been conducted

upon the basis and pleaded upon that basis that

this is relevant only in the context of public

interest and we submit that considered in that

context also it is clear that the conduct relied

upon does not produce any additional Australian

public interest in the disclosure of the contents
of Spycatcher. In other words, either the Australian

public interest requires, as it were, the publication

of Spycatcher or it does not. It cannot be said

that the Australian public interest requires

publication of Spycatcher because the British

Government or the British Crown behaved· in a particular way in relation to prior publications. The behaviour

of the British Government, in our submission,
in relation to prior publications is simply irrelevant

to the question of whether there is a legitimate Australian public interest in the publication of

Spycatcher or not.

Then, Your Honours see, we have got some

contentions in relation to the defence of no

defence of non-justiciability which rs the	jurisdiction in respect of foreign laws and the
way we have chosen to describe Mr Justice McHugh's
point. Now, there is an appendix which I will
come back to in a moment, but may I then go back
to the beginning of the outline, Your Honours, in relation to the terms of the fiduciary duty.
Although we accept that what we have said there
is an over-simplification,in general terms an
indication of the existence of a fiduciary duty
is the fact that the person to whom the duty was
owed imposed trust, faith and confidence in the
fiduciary. There can be no doubt, in our respectful submission, that such great trust, faith and
confidence was reposed by the British Crown in Mr Wright and, indeed, there could have been no

ClT20/l/MB	28	8/3/88
Wright(2)

greater trust.t we submit, than to entrust him with

secrets relating to the British national security.

Now, we submit, in paragraph 1.2, that by reason

of that fact and all relevant circumstances he
became bound by _a fiduciary duty, not without authority,
to disclose or use any matter learned by him in
the course of his service other than for the purposes
of the Crown and irrespective of whether any disclosure
or use would cause detriment to the Crown.

Now, we emphasize bhose two aspects because as Your Honours are well aware - al though I will take

Your Honours to just one authority - if, in truth,

there is a fiduciary duty~ although I accept that

that can be a question-begging question.- the

consequences will be not that the fiduciary cannot

do anything which will cause detriment to the

plaintiff, or to the person to whom the duty is

owed, of course that is so, but the way the courts

have formulated the test is, he must not take

advantage of his position or anything he learned

by reason of his possession for his own benefit,

he can only use anything he learned for the purposes

of the person to whom the fiduciary duty is owed.

(Continued on page 30)

ClT20/2/MB	29	8/3/88
Wright(2)

MR SIMOS (continuing):  Now, one can stop there and observe

that there may be a breach of that requirement

of duty quite apart from the fact that the person
to whom the duty is owed has suffered no
detriment at all and the courts have expressly

recognized the detriment to the person to whom

the duty is owed is not a pre-condition for a

breach of fiduciary duty and, if I may - - -

BRENNAN J: Mr Simos, am I right in thinking that the

Crown there is the Crown in WRIGHT V UNITED

KINGDOM - - -

MR SIMOS:  Yes, Your Honour.

BRENNAN J: - - - and that the duty which is spoken of there

is a duty which arose under the English law which

governed the appointment of Mr Wright?

MR SIMOS:	Yes, Your Honour.
MASON CJ:	So that the existence, or non-existence, of a

fiduciary duty is governed by English law.

MR SIMOS:	That would be our submission, Your Honour.
MASON CJ:	And that accords with the course of events 1n

HOSPITAL PRODUCTS, does it not?

MR SIMOS:  Although the matter was not decided in

HOSPITAL PRODUCTS because the view was taken that

the law of Connecticut and/or New York was the

same as Australian law and therefore it was not

necessary to decide whether the proper law was Connecticut or New York law or Australian law.

MASON CJ: Was that so? Because evidence was called, was

it not, as to what the law in respect of fiduciary

obligations was in Connecticut?

MR SIMOS: It was, Your Honour, and one can conveniently

find a passage from Mr Justice McLelland's judgment

in the HOSPITAL PRODUCTS case set out in

Mr Justice Street's judgment in this case. In

Volume 7 at page 1513 at letter E, Mr Justice Street

says:

In the US SURGICAL CORP case, McLelland J

said, in relation to the problem of enforcing

the restriction in this country of fiduciary

duties arising under the law of a foreign

country:

ClT21/l/AC	30	8/3/88
Wright(2)

"A possible view is that the question of

the existence and scope of the fiduciary duties
relied on should be determined in accordance
with the law of New York/Connecticut, and
the question of the appropriate remedy for
any proved breach thereof determined in
accordance with the law of New South Wales.

I need not however pursue this matter

further, since, having heard a considerable

amount of evidence from highly qualified

witnesses as to the law of New York/Connecticut

relating to fiduciary reltionships and duties

and the consequences of breaches of such

duties ..... I have formed the view that there

is no material difference between the law

of those places and that of New South Wales on those subjects relevant to those facts."

MASON CJ:	But your submission is otherwise.
MR SIMOS:	Yes.
MASON CJ:	You say it is a matter that is governed by the

foreign law.

MR SIMOS:  We do, Your Honour, but, if we are wrong it makes

no difference.

MASON CJ:	Yes.
GAUDRON J:	You go so far as to say, do you, Mr Simos, that

the content of the duty that would be imposed by

New South Wales law - assuming that the relationship

is determined by the foreign law - is irrelevant?

MR SIMOS:	Except to remedy, yes, Your Honour.
GAUDRON J: Except to remedy.
MR SIMOS:	Yes, but it would not make any difference,

Your Honour.

GAUDRON J: Is it relevant to remedy because of the discretionary

nature of it?

MR SIMOS:  Your Honour, I do not have in my mind what the -

if I may put it this way - policy reasons are behind

that but it does seem to be accepted by the authorities

that if you come to a particular court then, even
though the substantive relationship may be determined

according to foreign law, since you are in this

particular court you must accept the remedies that

this particular court has available in this sort

of case but whatever the reason, Your Honours, we

accept that whatever is the proper substantive law the

appropriate remedy depends upon the law of New South Wales.

ClTZl/2/AC	31	8/3/88
Wright(Z)

BRENNAN J:  Do you contend that the law of New South Wales

would give rise to a duty in the circumstances

of this case?

MR SIMOS: Certainly, Your Honour.

BRENNAN J:	How would the New South Wales law have anything to say to the creation of rights as between the
British Crown and a person appointed to this service?

MR SIMOS:  I am sorry, Your Honours. I had meant to convey

if the same circumstances had arisen in Australia.

BRENNAN J:  And somebody in Australia had appointed somebody

to the Australian service.

MR SIMOS:	Yes, Your Honour.
BRENNAN J:	But the New South Wales law itself is silent

in this case?

MR SIMOS:  I am not sure what Your Honour means.

BRENNAN J: It has nothing to say as to the creation of

duties as between the parties.

MR SIMOS: In the United Kingdom.

BRENNAN J: In this instance?

MR SIMOS:  Yes, Your Honour, we do say that.

BRENNAN J: Just so we are not at cross purposes

MR SIMOS:  Yes.

BRENNAN J: - - - you do say that the New South Wales law has

nothing to say as to the creation of obligations

between the parties in this case?

MR SIMOS: If the proper law is United Kingdom law.
BRENNAN J:	Do you suggest that it is not?
MR SIMOS:	No, Your Honour, but we say that if Your Honours

hold that it is not United Kingdom law but it

is New South Wales law, the result is the same

and,Your Honours, I am going to take Your Honours

now, if I may - - -

MASON CJ: Before you do so, can I ask you where, in your

comprehensive written submissions you discuss

the application of foreign law to the existence

or non-existence of the fiduciary relationship?

MR SIMOS:  Yes, Your Honour.

ClT22/l/ND	32	8/3/88
Wright(2)

MASON CJ: There is no need to take us through it but just

identify it.

MR SIMOS:  Certainly, Your Honour. Pages 3 to 6 of the

written submissions, Your Honour.

MASON CJ:  Thank you.

MR SIMOS: If I could just take Your Honours to the case

in this Court of HOSPITAL PRODUCTS V UNITED STATES
SURGICAL CORPORATION, 156 CLR 41, and if

Your Honours would go first to page 88 - this

is where Your Honour Mr Justice Mason deals with

the point that was raised by Mr Justice McClelland

and referred to by Mr Justice Street and it is

just the paragraph headed "Choice of Law"

and the effect of what Your Honour says is that
it is not necessary to decide the question ..

Your Honours, I may have given Your Honours an incomplete reference in relation to fiduciary

duties. I think I said pages 3 to 6.

MASON CJ:	You did.
MR SIMOS:	That deals with the facts which we say give

rise to the fiduciary duty and as to the law

that is dealt with on pages 7 to 15 and on page 15

we start dealing with remedies.- 15 to 18. While

Your Honours have HOSPITAL PRODUCTS, if I could

just give Your Honours certain references: page 67

and following in the judgment of His Honour

Mr Justice Gibbs. Page 67 under the heading

"Fiduciary Relationship":

A person who occupies a fiduciary position may not use that position to gain a profit

or advantage for himself, nor may he obtain

a benefit ..... without the informed consent

of the person to whom he owes the duty.

So there is no requirement in that formulation

of the principle that the person to whom the fiduciary duty is owed must suffer detriment, it merely says he must not gain a profit or

advantage for himself.

(Continued on page 34)

ClT22/2/ND	33	8/3/88
Wright(2)

MR SIMOS (continuing):  Then at page 68, at the end of the

first incomplete paragraph, His Honour is saying:

The question however is whether any

fiduciary relationship did exist

between the parties -

meaning, of course, in the HOSPITAL PRODUCTS case - The authorities contain much guidance as to the

duties of one who is in a fiduciary

relationship with another, but provide no

comprehensive statement of the criteria by

reference to which the existence of the

fiduciary relationship may be established.

The archetype ..... is a trustee -

but there are others, and they include, Your Honours

will see, according to His Honour Mr Justice Gibbs,

in the examples, master and servant, and at least for

relevant purposes, for this purpose, in other words,

we submit that Mr Wright and the British Crown are

in the relationship of master and servant relevantly,

even if Your Honours were later to hold that it is

not contract. Then His Honour refers to something

Mr Justice McLelland said:

First, if one person is obliged, or

undertakes, to act in relation to a
particular matter in the interests of

another and is entrusted with the power to

affect those interests in a legal or

practical sense, the situation is, in his

opinion, analogous to a trust -

and Your Honour Mr Justice Mason took up a similar

point which I will come to in a moment:

Secondly~ he said that the reason tor the

principle lies in the special vulnerability

of those whose interests are entrusted to

the power of another or to the abuse of

that power.

Now, both those indicia are abundantly present, we

submit, on the facts of the present case. Then

page 69, first complete paragraph His Honour says

that:

I doubt if it is fruitful to attempt to

make a general statement of the circumstances

in which a fiduciary relationship will be

found to exist -

and he says they are of different types and they

carry different obligations, and the second-last

paragraph on that page, he says:

ClT23/l/HS	34	8/3/88
Wright ( 2)

One such circumstance is the existence

of a relation of confidence, which may

be abused.

We submit that is present here. Then on page 70,

first complete paragraph, he distinguishes commercial

relationships, and finally on page 72 he says:

The test suggested by the Court of Appeal -

which he refers to at the bottom of page 68:

the undertaking to act in the interests of another meant that the fiduciary undertook not to act in his own interests.

At 72 Mr Justice Gibbs says that that test, although

it can only be stated in general terms and it

depends on the facts and circumstances, was not

appropriate for the HOSPITAL PRODUCTS case.

MASON CJ:  Correct me if I am wrong, but are you not pushing

at a door that is to some extent already open here?

I had thought below the notion of detriment was

introduced because you had a governmental plaintiff.

MR SIMOS:  Yes, Your Honour.

(Continued on page 36)

ClT23/2/HS	35	8/3/88
Wright(2)

MASON CJ:  It being assumed that if it were not for the

character of the plaintiff and if it were not for

the character of the particular information, detriment

would not feature as an essential ingredient in

respect of a cause of action brought for breach of

fudiciary duty or breach of confidence.

MR SIMOS:  Well, we believe that to be the case although

I have to say I hear my learned friend saying he does not agree with that, Your Honour.

MASON CJ: Very well. The door, apparently, is not completely

open.

MR SIMOS: Well, we submit it is but my learned friend says

otherwise. If I could then, just very briefly, go

to Your Honour Mr Justice Mason at page 96, last

paragraph:

The accepted fiduciary relationships are

sometimes referred to as relationships of trust

and confidence or confidential relations - and Your Honour includes "employee and employer".

The critical feature of these relationships

is that the fiduciary undertakes or agrees to
act for or on behalf of or in the interests

of another person in the exercise of a power or

discretion which will affect the interests

of that other person in a legal or practical

sense.

And all this, we submit, applies directly to

Mr Wright.

The relationship between the parties is therefore one which gives the fiduciary a special

opportunity to exercise the power of discretion

to the ·" detriment of that other person who is

accordingly vulnerable to abuse by the

f . d . f h. . t. "f II II

i uciary o is posi ion ...... or , on

behalf of", and "in the interests of" signify

that the fiduciary acts in a "representative" -

capacity, and so on. And then Your Honour says

in the next paragraph because he has the power to -

adversely affect the interests -

the other -

is at the mercy -

and therefore he comes under -

a duty to exercise his pnwer or discretion

in the interests of the person to whom it

is owed.

ClT24/l/MB	36	8/3/88
Wright(Z)

In	the next paragraph His Honour says::
Contractual and fiduciary relationships may
co-exist -

and, indeed, His Honour says:

the existence of a basic contractual relationship

has ..... provided a foundation for the erection

of a fiduciary relationship.

Then Your Honour Mr Justice Wilson at page 116

I think relevantly simply agrees with the then

Chief Justice and Mr Justice Dawson and

Your Honour Mr Justice Dawson dealt with the matter

inter alia at page 140, about the middle of the

page:

No assistance is to be derived from the

authorities dealing with contracts

which establish what is a confidential

relationship -

and so on.

The confidential nature of the relationship

may require the· implication of a term or terms

in the abs.ence of express provisions in

order to protect the confidence.

We rely on that to the extent that we do when

we come to contract, Your Honours, to say that

there is an implied term in the contract relating

to confidence arising from the facts. Then at

page 141,in Your Honour Mr Justice Dawson's judgment,

about the middle of the page:

it is possible that a fiduciary relationship

might arise from the circumstances

surrounding the agreement but before

embarking upon an examination ..... it is

desirable to make some attempt to identify
the characteristics ..... not possible to

define it.

There are relationships which are ordinarily

recognized as fiduciary, at least in some

of their aspects -

and then a few lines further down -

Without any attempt at classification, obvious

examples spring to mind -

including "employee and employer".

ClT24/2/MB 37 8/3/88

Wright(2)	(Continued on page 37A)
MASON CJ:	Mr Simos, these judgments are all in agreement,

are they not - - -

MR SIMOS:	Yes, Your Honour.
MASON CJ:	- - - in terms of characterizing the fudiciary

relationship?

MR SIMOS:	Yes, Your Honour.
MASON CJ:	Is there any point in taking - - -
MR SIMOS:	No, Your Honour.  Your Honours, I just wanted to

also give Your Honours a reference to a decision

of this Court in MOORGATE TOBACCO V PHILIP MORRIS,

156 CLR 414 at 437 which is, we submit, to the

same effect. There is only one or two short

passages.

(Continued on page 38)

ClT24/3/MB	37A	8/3/88
Wright(2)

MR SIMSON (continuing): At 437 in the judgment of

Your Honour Mr Justice Deane, with which the other

members of the Court agreed, being the then

Chief Justice Mr Justice Gibbs, Your Honour Mr Justice Ma.sort,

Mr Justice Wilson and Mr Justice Dawson. At page 437

in MOORGATE, just below half-,way down the page:

If Philip Morris had acquired confidential

information by use or by reason of such a

fiduciary position or of opportunity or

knowledge resulting therefrom, it would, on

well established principles, be precluded from

using the information to its own advantage -

and then alternatively it would be precluded from

using the information -

to the detriment of Loew's.

And then just a few more lines, Your Honours. At the bottom of page 437: ·

It is unnecessary ..... to attempt to define the

precise scope of the equitable jurisqiction to

grant relief against an actual or threatenend

abuse of confidential information not involving

any tort or any breach of some express or

implied contractual provision, some wider

fiduciary duty or some copyright or trade mark

right. A general equitable jurisdiction to

grant such relief has long been asserted and
should, in my view, now be accepted. Like most

heads of exclusive equitable jurisdiction, its

rational basis does not lie in proprietary right.

It lies in the notion of an obligation of

conscience arising from the circumstances in or

through which the information was corrnnunicated

or obtained. Relief ..... is not available unless

it appears that the information has "the necessary

quality of Gonfidence about it" and that it

is significant, not necessarily in the sense of

corrnnercially valuable but in the sense that the

preservation of its confidentiality ..... is of

substantial concern to the plaintiff.

And so on. And a brief reference, if I may, to the

decision of the United States Supreme Court in

SNEPP V THE UNITED STATES, 444 US 507.

It may be convenient if I take Your Honour to other

passages in this at this time so we will not have

to go back to it, if that is convenient.	I can
do it,.~t,ly.

ClT25/l/JM	38	8/3/88
Wright (2)

If Your Honours would look at the headnote on

page 507:

A former employee of the Central Intelligence

Agency, who had agreed not to divulge classified

information without authorization and not to

publish any information relating to the Agency

without prepublication clearance, breached a

fiduciary obligation -

So they characterize it as fiduciary -

When he publtshed a book about certain Agency

activities without submitting his manuscript

for prepublication review. The proceeds of his

breach are impressed with a constructive trust

for the benefit of the Government.

And then at the bottom of that page, Your Honours,

last two lines:

As an express condition of his employment ..... Snepp had executed an agreement promising that

he would "not ... publish ... any information or

material ..... without specific prior approval

by the Agency." And then the Court deals with the decision below.

At the bottom of page 509, Your Honours, just

the last three or four lines. This is a footnote

to the majority judgment:

The Government has a compelling interest in

protecting both the secrecy of information

important to our national security and the

appearance of confidentiality so essential

to the effective operation of our foreign

intelligence service.

The bottom of page 510: 

Snepp's employment with the CIA involved an extremely high degree of trust. In the opening sentence of the agreement that he signed, Snepp explicitly recognized that he was entering a

trust relationship.

ClT25/2/JM	39	8/3/88
Wright(2)

MR SIMOS (continuing): Page 511, about half-way down:

The Government simply claims that, in

light of the special trust reposed in him

and the agreement that he signed, Snepp

should have given the CIA an opportunity

to determine -

and so on. Page 512, second line:

When a former agent relies on his own

judgment about what information is

detrimental, he may reveal information

that the CIA - with its broader

understanding of what may expose

classified information and confidential

sources - could have identified as harmful. In addition to receiving

intelligence from domestically based or
controlled sources, the CIA obtains
information from the intelligence
services of friendly nations and from

agents operating in foreign countries.

The continued availability of these foreign

sources depends upon the CIA's ability to

guarantee the security of information

that might compromise them and even

endanger the personal safety of foreign

agents.

A few lines down:

Admiral Turner ..... testified without

contradiction that Snepp's book and others

like it have seriously impaired the

effectiveness of American intelligence

operations. He said:

Over the last six to nine months,

we have had a number of sources

discontinue work with us. We have

had more sources tell us that they

are very nervous about continuing

work with us. We have had very

strong complaints from a number
of foreign intelligence services
with whom we conduct liaison,

who have questioned whether they

should continue exchanging information

with us, for fear it will not remain

secret. I cannot estimate to you

how many potential sources or

liaison arrangements have never

germinated because people were

unwilling to enter into business
with us.

ClT26/l/SR	40	8/3/88
Wright(2)

MASON CJ: That seems to suggest that detriment is an

ingredient?

MR SIMOS:  Yes, it does, Your Honour, it does. But I accept

that that is what it says, I was referring it all
to this case also for the description of the duty as

a fiduciary duty, Your Honour. And then the

rest of it really deals with the relief. At page 514:

The Government could not pursue

the only remedy that the Court of Appeals
left it without losing the benefit of

the bargain it seeks to enforce.

In other words, the Court of Appeals from which
this was an appeal held that there was no constructive

trust of the profits and if the CIA wanted to

recover compensation it had to sue for damages:

Proof of the tortious conduct necessary

to sustain an award of punitive damages

might force the Government to disclose

some of the very confidences that Snepp

promised to protect. The trial of such a

suit, before a jury if the defendant so

elects, would subject the CIA and its

officials to probing discovery into the

Agency's highly confidential affairs.
Rarely would the Government run this risk.

In a letter introduced at Snepp's trial,

former CIA Director Colby noted the

analogous problem in criminal cases.
Existing law, he stated, "requires the revelation in open court of confirming or additional information of such a nature

that the potential damage to the national

security precludes prosecution" ..... When

the Government cannot secure its remedy

without unacceptable risks, it has no

remedy at all.

A constructive trust, on the other

hand, protects both the Government and consequence of a breach of trust.

the former agent from unwarranted risks.

And then on the next page, just before the end of the

judgment:

We therefore reverse the judgment of the

Court of Appeals insofar as it refused to

impose a constructive trust on Snepp's

profits.

Now, if I could just take Your Honours briefly to some

of the facts. Now in Volume 1, pages 100 to 101, there

is sane short evidence from an anonyrrous deponent , a f oim=r

officer of the service, and in paragraph 4, at letter Fit refers

to the fact that:

ClT26/2/SR	41	8/3/88
Wright(2)
MR SIMOS (continuing):

On his first day in the Service, each new

officer was given a personal copy of

annexed and, marked "A:' - Security Notes, a cop6 of which is hereunto

Your Honours, there is an extract from those

MASON CJ: Is this not reviewed in the judgments?

MR SIMOS:  Not with any real reference to the substance,

Your Honours. I do not wish to occupy a lot

of time with this but it is - if Your Honours

would allow me just a moment or two to direct

Your Honours' attention to them.

MASON CJ:  I would be concerned if the argument is going

to comb through all the evidence in the case

because after all it has been before two courts

below this Court and they have reviewed the evidence.

MR SIMOS: Certainly: No,it will not do that, Your Honour.

There are non-confidential extracts annexed to another affidavit at pages 45 and 46 and 47 and

just in the interests of saving time - I do wish

to give Your Honours another short reference

but in the interests of saving time, while

Your Honours have that volume, could I just refer

to some correspondence relevant on the issue

of contract and that starts at page 42,

Your Honours. If Your Honours would be kind

enough to read that, this is the offer to

Mr Wright. This is the commencement of his employment

with the British Security Service.	Your Honours
see it has an express term:

terminable at all times by one month's notice

on either side .....

At the end of three years, if -

you are offered a permanent post -	you will be eligible for apppointment to
the Established Staff -

Then at 43:is Mr Wright's acceptance:

on the terms stated in your letter.

Now, I submit, Your Honours, this has the flavour

of contract about it.	That word there is "Marconi 1 s".
It says:

I have now formally resigned from Marconi's -

that is a former employer, or the previous employer

of Mr Wright. ·

ClT27/l/ND	42	8/3/88
Wright(2)

And then, at page 44, which is some three years

later, he is appointed to what is called the

"Established Staff". He is:

eligible to participate in the Superannuation

Scheme -

He encloses:

details of superannuation arrangements for

established Civil Servants, similar

artangements being applied to members of

this Service at the discretion of the Director

General.

I will just give Your Honours a reference to

this, if I may. Mr Wright, at volume 3 at page 597,

C to L, said that throughout his employment

he received from time to time copies of successive

editions of the security notes and copies of

successive editions of something which are called

Director General circulars and those documents,

Your Honour, are confidential exhibits.

(Continued on page 44)

ClT27/2/ND	43	8/3/88
Wright(2)

MR SIMOS (continuing):  These are the complete copies and

if Your Honours would just glance at confidential

volume 1, which is the pink volume, starting at

page 2 and this edition is dated January 1955.

If Your Honours would just look please at

paragraph 1, paragraphs 2, 3, 4, 5, 6 and 7.

Your Honours,it is a pink volume marked "Confidential"

and it is volume 1 of the pink volumes.

WILSON J: It is so confidential we have not got it.

MR SIMOS:  Yes, Your Honour - the volume that never was.

MASON CJ: Yes, I have got one. ~ do not know if it is pink.

WILSON J: It is not a pink cover. It is headed "Intelligence

and Security Royal Commission Fourth Reply".

MR SIMOS:  No. No that is not it, Your Honours. It is like

that if I may indicate, it has got the word

"Confidential" up here. There are two pink

confidential -

MASON CJ:  And how is it described in the centre of the

frontispiece?

MR SIMOS: "Confidential volume 1 of 2 confidential volumes,

pages 1 to 223."

WILSON J: It seems their confidence has been preserved.

MR SIMOS: Yes. Well, Your Honours, I can pass over it but

I do invite Your Honours to look so far as

Your Honours find it necessary at the successive editions of the security notes and the successive

editions of the Director General's circulars, all

of which emphasize the confidentiality of the work

upon which Mr Wright and other members of the service

were engaged and what steps he should take to ensure

that it was not even known that he was a member

of the service. If Your Honours just - - -

BRENNAN J:  Mr Simos, what order, if any, has been made

protecting the confidentiality of these documents,

assuming they are ever found?

MR SIMOS:  I cannot answer that, Your Honour, I am so sorry.

I think that they contain exhibits which were

ordered to be kept confidential by the court below

and I imagine, Your Honour, although I cannot say

that I have recently looked at the order, that
there is an order of the Court of Appeal which

I hope is not spent which still orders these documents

contained in these two volumes to be kept confidential.

But perhaps I should ask Your Honours to make an order,

if Your Honours would, about those two confidential

volumes for more abundant caution.

ClT28/l/AC	44	8/3/88
Wright(2)

MASON CJ:	Do you object to that, Mr Turnbull?
MR TURNBULL:	No, Your Honour, we assumed it was continuing.
DEANE J:	But if we have not got them, why should we be

making orders about them?

MR SIMOS:  Your Honour, I suspect they may be somewhere 1n

the building.

WILSON J: Locked away in the Registry.

MASON CJ:  We can defer consideration of this matter until the

books are found and when we know a little more about

the contents of them. But if it transpires that

they contain material which is confidential I

cannot imagine there would be any difficulty about

preserving their continued confidentiality.

MR SIMOS:  If Your Honour pleases. Now, Your Honours, in

addition to the security notes and the Director the appellant's written submissions in reply, if

Your Honours have those, which refers to and summarizes some evidence about secrecy.

(Continued on page 46)

ClT28/2/AC	45	8/3/88
Wright(2)

MR SIMOS (continuing): At page 3, paragraph 2.4, at the

bottom of the page and over the page - I will not
read that material but if Your Honours would be

kind enough just to look at that and the relevant

evidence references in - Sir Robert Armstrong's

affidavits are referred to in brackets.	I will not
got to those, Your Honour.	Now, Your Honours,

may I just, finally, on the law in relation to

this section, give Your Honours reference to

PHIPPS V BOARDMAN, (1967) 2 AC 46, and this case

contains statements quoted from the case of

REGAL (HASTINGS) LTD V GULLIVER, to the effect

that it is not necessary that the person to whom the

fudiciaryduty is owed should have suffered damage.

At page 86 Viscount Dilhorne quotes the relevant

passage from Lord Russell of Killowen in

REGAL (HASTINGS) BTD V GULLIVER, which is in

the same volume of reports immediately following

PHIPPS V BOARDMAN. I have not got the first page

but the relevant passage is quoted at page 86.

Again there are quotations of the same passage and similar passages at pages 101 by Lord Cohen,

at page 108 by Lord Hodson and page 116 by

Lord Guest. So just a final reference that the

principle is plain that in the ordinary case of

fiduciaries there can be a breach even without

detriment to the person to whom the duty is owed.

Now, Your Honours, we accept, of course, it

is possible that even in relation to the fiduciary duty there may be, in a particular circumstance or

set of circumstances, a different duty than what

one might call the normal duty. The normal duty

can be breached even without causing detriment to

the party to whom the duty is owed but we accept that

as a matter of principle. it may be that that rule is modified in particular circumstances -

although, we submit, it is not here - and there is

no breach unless there is detriment but I will

deal with the detriment separately later, if I may.

(Continued on page 47)

C1T29/l/MB	46	8/3/88
Wright(2)

MR SIMOS (continuing): Your Honours, we then go to

paragraph 2, under the heading, "Equitable Obligation

of Confidence", and we submit that the expression
of the relevant equitable duty is different from
the fiduciary duty which fastens in 1.2, as

Your Honours see, other than for the purposes of the

Crown, this is a somewhat different approach,

namely, in 2.1 that Mr Wright would not at any

time disclose or use anything learned by him in
the course of his service without the authority of
the appellant. It is the appellant's submission

that this formulation of obligation is the same

for all relevant purposes. I am just reading from

paragraph 2.2, if I may, I have read paragraph 2.1.

Your Honours will see the obligation we have

contended for in paragraph 2.1 is simply that

Mr Wright would not disclose anything without authority.

paragraph 2.2, is that paragraph 2.2 adds 1the disclosure Now, the distinction between paragraph 2.1 and

or use of which might cause detriment to the

appellant'.' So once again we have the notion of detriment.

But we do submit in paragraph 2.3. that - we submitted

that these two formulations of the obligation are

for relevant purposes identical because it is submitted

that every unauthorized publication by an officer

or former officer will ipso facto and without more and irrespective of the content of the publication

cause detriment to the service for the reasons set out

in the appendix. Now, I would wish to take Your Honours

to the appendix at the moment to make good that

submission and if I could just re-emphasi.ze, if I may,

that the submission is that quite apart from the

contents of what is published, the mere fact that
here is an officer of the service who is publishing
matter relating to his service without authority

causes detriment. And it is additional detriment

and different detriment from the detriment that

might flow from the disclosure of the contents as

such.

So, we submit that in relation to each

unauthorized publication there is detriment flowing

from disclosure of the contents or there may be, but there will always be detriment flowing from the fact

that it is an officer of the service who is making

an unauthorized disclosure and we have sought to spell

that out in the appendix,Your Honours,in this way.

First of all we say, any relevant publication, regardless
of content and regardless of the extent to which
it may already be in the public domain, any relevant
publication by an officer or former officer of the
service will disclose and/or authenticate the fact that

the maker of the statement is an officer or former

officer of the service.

GAUDRON J: What if that latter fact is already in the

public domain?

ClT30/l/SR	·47	8/3/88
Wright(2)

MR SIMOS:  Your Honour, it is a question of how it is in

the public domain.

GAUDRON J: It was in this case, was it not, the latter

fact had already been through the television broadcast?

(Continued on page 50)

ClT30/2/SR

Wright(2) 48 8/3/88

MR SIMOS:  Your Honour, that is an important qualification

and I will have to deal with that, if I may.	But
may I say at this stage the way we would deal
with it is this: we would say that detriment

flows from the fact that a former officer repeats

the statement that "I was a former officer and

I learned this and I learned that in the course

of my employment". It is, if I may so with respect,

a good question and a difficult one to answer

but that is the way we seek to answer it and

I will be dealing with that in more detail later

if I may.

GAUDRON J:	Thank you.
MR SIMOS:	The identification of an officer is such as

to cause detriment for the reasons that we set

out in the subsequent subparagraphs. If an officer

is so identified, hostile security ,services or

terrorist groups are thereby enabled to "target"

him for the purpose of locating his headquarters

or place of work and/or home, to identify other

officers by watching those with whom the officer

keeps company and those who also work at the

same headquarters or place of work to ascertain

by observation or inquiries the nature of the

operations being undertaken, to befriend or put

pressure on those officers and/or members of

their families and/or friends, for example, by

physical threats and so on.

(c) If an officer is identified, then

financial pressures and other inducements may

be offered to such officers by newspapers or

other publishers to induce them to disclose relevant

mater. Any unauthorized publication demonstrates

the failure of the service to maintain the

confidentiality of the matter disclosed and the

efficient functioning of the service will thereby

be impaired.

I will not take Your Honours to it at the

moment but Your Honours will see in paragraph I(a)

above we have a note in brackets at the end of

it saying compare section 92 of the AUSTRALIAN

SECURITY AND INTELLIGENCE ACT and I will go to

that in due course but that, in effect, prohibits

people, not only themselves but others, disclosing

the identity of officers and former officers

of ASIO and it merely reflects, we submit, a

recognition that if the identity of an officer

of ASIO becomes known, or any other security or intelligence service, detriment will flow

and therefore it is prohibited by section 92.

ClTJl/1/ND	49	8/3/88
Wright(2)

So that is the first point we make about -

and Your Honours can I just emphasize that that

detriment, namely, the identification of the

officere, or former officer, is irrespective

of the content of what he discloses. But it

is, we submit, a detriment.

(Continued on page 51)

ClT31/2/ND	so	8/3/88
Wright(2)

MR SIMOS (continuing):  At the bottom of the first page of the

appendix, II(a), if the legal principle is that any

officer or former officer of the service may publish
any matter learned by him in the course of his
service if, in the opinion of a court, its

publication will not cause detriment to the service,

it will be perceived by friendly security services

and others who co-operate with the service on a

confidential basis that any guarantee of confidentiality

given to them by the service is subject at any time

to being overridden by the decision of a court to the

effect that disclosure of certain material to the

public will not, in the court's opinion, cause any
detriment to the efficient functioning of the service,
notwithstanding that the Crown may take a different
view as to what is in the British public interest
and notwithstanding that, if the information is
information originally received by the service from

friendly security services or others who co-operate

with the service, that those services or persons do
not wish the information to be disclosed for their

own reasons.

Now, Your Honours, this is not intended to convey

any inferiority, if I may put it that way, in relation

to court, but it is merely to submit, with respect,

that courts - sorry, involved in this submission, if

I may put it this way - involved in this submission

is that courts are not expert or experienced in dealing

with matters of this kind and that if that is accepted

and if it is accepted that the fact that the court

will always have on one view power to override the

views of the relevant security service as to whether
a publication will or will not be detrimental, that
means and is perceived to mean that the service

cannot give an unqualified guarantee that this matter

will not be disclosed without its authority, and it is

a question -we are looking to see what are the terms of

the equitable obligation and we submit that this is a

relevant circumstance in the matrix of facts and

circumstances surrounding this relationship which the

Court can take into account for the purpose of deciding

whether or not the implied equitable obligation is

to the effect in 2.1 or 2.2 an4 if there is no

material difference between 2.1 and 2.2

for the reasons we are now endeavouring to put to

Your Honours, we contend that it should be 2.1.

(Continued on page 52)

ClT32/l/HS	51	8/3/88
Wright(2)

MR SIMOS (continuing): And if there is no material difference

between 2 .1 and 2. 2 for the reasons we are now

endeavouring to put to Your Honours, we contend that

it should be 2.1.

May I, at this point, just draw Your Honours'

attention to the fact that - and if Your Honours

have it handy, the document headed Sunnnary of

Principal Arguments of the Appellant refers to

this - the position in this country embodied in

the ASIO ACT is that by virtue of section 18 -

Your Honours, I think Your Honours may have copies

of the Act. If Your Honours have the sunnnary,

that is the document that Your Honours may have

received yesterday, in paragraph 1 under the

heading "The Australian Position as embodied in

the ASIO ACT of 1979",section 18 makes disclosure
of relevant matter by an officer or former officer

of ASIO an offence punishable by a fine of $5000

or imprisonment for two years or both. 2. the

prohibition is in respect of any information or

matter as more fully described in the section and

is not limited to confidential information or matter.

In other words, what the section is saying is: "You

can't disclose anything learned by reason of your
employment in ASIO without authority whether it is

confidential or not, whether its publication would

cause detriment or not." Now, that is not, of

course,an answer to this case but it is an

indication of a legislative response which indicates

that those who were considering this legislation

after at least two reports from Mr Justice Hope

decided that the best response - I am not saying

this binds Your Honours, of course, it does not, I use it arguendo - was to have a prohibition on

publication of anything whether confidential or
not, whether in the public domain or not, except

with authority.

MASON CJ:  And does this equitable obligation extend to

non-disclosure of criminal offences?

MR SIMOS:  I have so many things I want to say in answer to

that, Your Honour. May I just - - -

MASON CJ: Well, if it is inconvenient to deal with it now

MR SIMOS:  No, no, I can if I can deal with it this way.

This legislation, Your Honour, in section 18 deals

with that question in this way. In subsection (3) it says,

by way of exception:

The Director-General may in accordance with

the following paragraphs, by himself or by

CIT33/l/JM 52 8/3/88

Wright(2)

an officer authorised by him, communicate

information that has come into the possession
of the Organization in the course of performing

its functions under section 17:

(a) where the information relates, or appears to relate, to the commission, or intended

commission, of an indictable offence against

the law of the Commonwealth or of a State
or Territory that information may be
communicated to an officer of the Police Force
of a State or Territory, to a member or special

member of the Australian Federal Police or to
a member, or to a member, or a member of the

staff of the National Crime Authority.

So that is one response which has been made by the

Australian Government in this Act.

Our submission under the common law is to this

effect, Your Honour, that it is a question of fact

and degree and of considering all the circumstances

of the case, but prima facie if someone has knowledge

of illegal conduct gained in the course of his

employment in these circumstances prima facie he

should disclose that only to the responsible authorities.

Now, query who are the responsible authorities.	One
might say the police, or the Director of Public Prosecutions, or the Minister responsible, or the
Prime Minister, or what have you.

The Australian response is as I have told

Your Honour. We submit that under the common law

both of England and Australia, in the absence of

statutory provision, the answer to Your Honour's

question is it depends on the facts, but prima facie

you cannot disclose to the public, you can only

disclose to the relevant responsible authorities.

(Continued on page 54)

CIT33/2/JM	53	8/3/88
Wright(2)

MASON CJ: Is there authority to support that proposition?

MR SIMOS:  Yes, Your Honour. I will come to that in due course

if I may. Now, I should then perhaps, at this point,

hand Your Honours a copy of another Act which is

called the INSPECTOR-GENERAL OF INTELLIGENCE AND

SECURITY ACT 1986. The Inspector-General is referred

to in one or two places in the ASIO ACT - - -

MR TURNBULL:  Your Honours, may I raise a gentle and brief

objection to this? None of these Acts are binding

or even said to be binding on Mr Wright.

MR SIMOS:  I do not say that, Your Honours.

MR TURNBULL: This is the first time they have been raised, even

in argument, in these proceedings. We would submit

that they can be of no relevant assistance to the Court.

I am not even sure in what capacity they are being

raised, whether this is as evidence of Australia's

policy, or whatever, but we would object to them,

Your Honour.

MASON CJ: Yes. Well, after all, it is not a matter of fact.

Mr Simos is at liberty to refer to them in. the course of constructing his argument on the law.

MR TURNBULL: If Your Honour pleases.

MR SIMOS: Without going into this in any detail, this sets

up an independent statutory officer who is called

Inspector-General of Intelligence and Security and

as Your Honours see in section 4 on page 3: The objects of this Act are -

T34

(a) to assist Ministers in the oversight and

review of -

(i) the compliance with the law by, and

the propriety of particular activities

of, Australian intelligence or security

agencies -

and related matters -

(b) to assist Ministers in ensuring that

the activities of those agencies are

consistent with human rights; and

(c) to allow for ..... directions given .....

applies both within and outside Australia

and extends to every external Territory.

And then section 6 establishes the office of
Inspector-General of Intelligence and Security.

And then it says, in section 8, what his functions are.

ClT35/l/PLC	54	8/3/88
Wright(2)

(a) at the request of the responsible

Minister, of the Inspector-General's own

motion or in response to a complaint

..... to inquire into any matter that

relates to

(i)   the compliance by ASIO with the

laws of the Commonwealth and of

the States and Territories;

(ii)   the compliance by ASIO with direct~ons or guidelines.~··.

(iii)   the propriety of particular

activities --

and so on. I will not read all that, Your Honours.

GAUDRON J:  I take it that office has been filled?

MR SIMOS: It has, Your Honour. And then there are special

provisions about complaints in section 10. And then the Inspector-General has power to conduct an inquiry under section 17 and power to obtain

information in documents, and so on.

So, the purpose of my referring to those

two Acts is merely to show that there are other ways in which - in relation to what Your Honour

the Chief Justice put to me - security and

intelligence agencies consistently with keeping

their activities secret can be monitored and

dealt with. What is possible and what is appropriate

in this context are all matters that we submit

it is proper for Your Honours to take into account

in determining whether the terms of the equitable

obligation are according to 2.1 or 2.2.

BRENNAN J: Is this again an equitable obligation binding upon

Mr Wright by virtue of English law?

MR SIMOS: Yes, Your Honour.
MASON CJ: Mr Simos, I notice it is a quarter to one.	It may

be convenient now to adjourn until 2.15.

AT 12.45 PM LUNCHEON ADJOURNMENT

ClT35/2/PLC	55	8/3/88
Wright(2)
UPON RESUMING AT 2.16 PM:

MASON CJ:  Yes, Mr Simes.

MR SIMOS: If Your Honours please. Your Honours, I think I had

taken Your Honours to the appendix and I had left

it, if I may put it that way - this is the appendix

to the document headed "Outline of argument':

Your Honours. If Your Honours would go to the

appendix I think I stopped after reading the

paragraph at the bottom of page - the first page
of the appendix and the top of the second page
of the appendix. The point being made there was
the detriment that would be suffered from any

publication by an officer or former officer if the

rule was that the service could not give a total

guarantee to maintain confidentiality but rather

had, as it were, to defer to the court in particular

cases.

Now, Your Honours, this point was adverted to

by a decision of the United States Supreme Court

in 1985, and I might hand Your Honours a copy.

It is the case of CENTRAL INTELLIGENCE AGENCY V

SIMS AND WOLFE, 471 US 159. I think the copy

I am handing Your Honours is taken from

85 L Ed 2d. As appears from the summary on

page 173 it related to a request under the FREEDOM OF INFORMATION ACT seeking inter alia the names of the institutions and individual researchers who

had participated in a CIA financed project code

named MK.ULTRA.	It established for that
purpose.

(Continued on page 57)

ClT36/l/MB	56	8/3/88
Wright(2)

MR SIMOS (continuing):  Now, there was a statutory prov1s1on

that required interpretation and if Your Honours

would go to the second-last line of the summary:

the District Court, applying the Court of

Appeals definition of "intelligence sources"

as meaning only those sources to which the
CIA had to guarantee confidentiality in order
to obtain the information,held that the CIA

need not disclose the identities of researchers

who had sought and received express guarantees

of confidentiality -

a few lines down:

The Court of Appeals ..... reversed the

District Court's ruling with respect to which individual researchers satisfied "the need-

for-confidentiality" aspect of its formulation

of exempt "intelligence sources".

..... the United States Supreme Court reversed

in part and affirmed in part -

the decision. Now, I realize that has not been

a very clear exposition, Your Honours, but it will
become sufficiently clear for my purposes if

Your Honours would be kind enough to go to page 187, left-hand column just below the letter B:

The Court of Appeals narrowed the Director's

authority under§ 102(d)(3) to wtthhold only

those "intelligence sources" who supplied

the Agency with information unattainable without

guaranteeing confidentiality -

as I understand that it meant sources who said:

"Well, if you guarantee to keep this confidential,

we will tell you'', and that is what was held to

be within the definition or the meaning of··

"intelligence sources" under that section -

That crabbed reading of the statute contravenes

the express language of§ 102(d)(3), the statute's

legislative history, and the harsh realities

of the present day. The dangerous consequences

of that narrowing of the statute suggest why

Congress chose to vest the Director of Central

Intelligence with the broad discretion to

safeguard the Agency's sources and methods
of operation.

The Court of Appeals underestimated the importance of providing intelligence sources with an assurance of confidentiality that is

ClT37/l/AC	57	8/3/88
Wright(2)

as absolute as possible. Under the Court's

approach, the Agency would be forced to
disclose a source whenever a court determines,

after the fact, that the Agency could have
obtained the kind of information supplied
without promising confidentiality. This

forced disclosure of the indentities of its

intelligence sources could well have a

devastating impact on the Agency's ability

to carry out its mission.

And then there is a quote from SNEPP and after

the quote, top of the right-hand column:

If potentially valuable intelligence sources
come to think that the Agency will be unable

to maintain the confidentiality of its

relationship to them, many could well refuse

to supply information to the Agency in the

first place.

(Continued on page 59)

ClT37/2/AC	58	8/3/88
Wright(2)

:t1R. SIMOS (continuing):

Even a small chance that some court

will order disclosure of a source's

identity could well impair intelligence

gathering and cause sources to "close

up like a clam". To induce some sources

to cooperate, the Government must tender
as absolute an assurance of confidentiality

as it possibly can.

And then a little further down:

We seriously doubt whether a potential intelligence source will rest assured

knowing that judges, who have little or

no background in the delicate business of
intelligence gathering, will order his

identity revealed only after examining the facts of the case to determine whether the

Agency actually needed to promise

confidentiality in order to obtain the

information and the intelligence source

will "not be concerned with the underlying

rationale for disclosure of" his

cooperation if it was secured "under

assurances of confidentiality" ..... Moreover,

a court's decision whether an intelligence

source will be harmed if his identity is

revealed will often require complex political,

historical, and psychological judgments .....

There is no reason for a potential

intelligence source, whose welfare and

safety may be at stake, to have great

confidence in the ability of judges to

make those judgments correctly.

Then the second half of the next paragraph:

Under the Court of Appeals' approach, the Agency could not withhold the identity of

a source of intelligence if that information

is also publicly available. This analysis

ignores the realities of intelligence work,

which often involves seemingly innocuous

sources as well as unsuspecting individuals

who provide valuable intelligence information.

And so on. So we rely upon that, Your Honours, to

help make good the submission that we have sought to

make in paragraph II(a) of the appendix. And we

endeavour to make that point in paragraph (b) on page 2

of the appendix: in such circumstances it is likely

that some or all of those friendly security services and

others will become reluctant or will refuse to co-operate

or give information and so on. Then in paragraph (c):

ClT38/l/SR	59	8/3/88
Wright(2)

nnreover, we submit, it is likely that individual

members of the service will, for those reasons,

and indeed for their own reasons, take a view

contrary to the view which may be taken by a

court and may be inhibited in the disclosures made

by them to fellow officers in the course of their

work. This is likely to lead to a lack of trust

between officers in the service upon the basis

that some officers will consider that disclosure of

certain material would harm the service while

others may take a different view and the court may

be persuaded to share that different view. In this

context it is not a question of who is right, the

court or the officer who thinks that the information

should not be disclosed, rather the point is that

such differences of opinion are bound to occur

and can lead to a lack of trust amongst members

of the service. In extreme cases this is likely

to cause resignations and difficulties in recruitment.
In this context in particular the motivation of

the officer or former officer who wishes to publish

may be a matter of concern and, of course, once

the court permits disclosure of the matter then

other officers may wish to present their points of

view in relation to the matter and give their

own opinions, comments and interpretations in

respect thereof.

(Continued on page 61)

ClT38/2/SR	60	8/3/88
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MR SIMOS (,continuing):  Then paragraph III put another way -

well, I think, perhaps,if Your Honours would just look

at that for yourselves, please. It is just another

way of putting the same point. Then, Your Honours,

just coming back for a moment to the bottom of page 1

of the outline of argument, It is because,in our

submission, for the reasons we have given in the

appendix, every disclosure or publication without

authority is likely to produce non-contents detriment-

detriment flowing from the reasons set out in the

appendix which do not depend on content - that it

follows that every unauthorized disclosure or

publication by a member of the service, or former

member, will produce detriment; therefore, a rule

that says you cannot publish anything without authority

if the publication would cause detriment, in truth,

becomes equivalent to an obligation that says you

cannot publish anything without authority, and,

therefore, the effect of the submission is that

instead of the Court inquiring into detriment in

relation to various publications, and courts may be

faced with dozens or hundreds of such applications,

that judgment should be made, as we would put it,

prior to the formulation of the rule.

The rule then becomes no publication without

authority, full stop, and the only question that the

Court ever has to be concerned with is was there

authority given. Now i£ contrary to our submissions,

the equitable rule has to be formulated as in 2.2
with the express words "the disclosure or use of

which might cause detriment", then, for reasons

which we will discuss a little later, the relevant

detriment has in any event been proved.

(Continued on page 62)

ClT39/l/HS	61	8/3/88
Wright(2)

MR SIMOS (continuing): Now, if I could take Your Honours

then to the second page of the outline of argument,

under the heading "Contractual obligation of

confidence", and we submit that there was an

implied contractual term which reflected the

terms of the equitable obligation of confidence

and was another source of the obligation apart

from the fiduciary source and the equity source.

If Your Honours were in my favour on one of the

other two points, or both of them, it would not

be necessary to decide this point but if

Your Honours were against me on both the previous

points then this would become material but only

then.

Your Honours, the submission is as set out

1n paragraph 3.2. Even if -

GAUDRON J: Mr Simos, is that correct, if we were against

you but by reference of detriment?

MR SIMOS: No, I am sorry. That leaves detriment aside.

I am just talking about the terms of the obligation,

Your Honour, and I am proposing to deal with

detriment separately, but if whatever basis

of liability Your Honours were prepared to find included the necessity for proof of detriment,

we would, of course, have to satisfy Your Honours

that detriment had been proved and I will deal

with that in a moment. And, of course, we have

sought to deal with that in this appendix on
the basis that every publication without authority

causes detriment.

GAUDRON J: Yes, now that, I think - perhaps I could make

myself a little clearer. If the opinion were

formed, or the decision was reached that there

was a general fiduciary duty, for example, or

an equitable duty, but you were not entitled

to relief by reason that detriment had not been

shown, would it still be necessary to look at

the question of contract?

MR SIMOS: It would, Your Honour, but I apprehend that

if Your Honours were to say that we needed to

establish detriment in relation to the fiduciary

duty and the equitable duty, Your Honours would

also hold that we had to establish detriment

as part of the contractual obligation. So that to that extent they all stand or fall together,

Your Honour, subject, as my learned junior reminds

me, although I am not sure that this is exactly

responsive to what Your Honour is putting, but

in relation to the breach of a contractual

term being an implied negative stipulation you

are entitled, as we would sub:nit, to an injunction without

proof of damage.

ClT40/l/ND	62	8/3/88
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GAUDRON J: Yes.

MR SIMOS:	But that, I think, properly is at the stage of
relief not at the stage of what is the contractual
obligation, what are its terms.  So I adhere, if I may,
to the answer I gave to Your Honour first.

Now, in relation to contract, in paragraph 3.2

we have submitted that even if the whole relationship

between Mr Wright and the Crown could not be described

as contractual, because, for example, the engagement

was at the pleasure of the Crown and if that fact
was thought to be sufficient to prove that there was
no contract, even if that be right and, as we say here,

even if in particular the Crown had the right to

terminate Mr Wright's appointment at pleasure, our

submission is that that would not preclude the

possibility that on the evidence in this particular case

the relationship between the parties in relation to

what Mr Wright could and could not publish was regulated

by an implied contract the terms of which could survive

the determination of Mr Wright's appointment, whether

by retirement, dismissal or otherwise.

. In other words, even if in relation to contracts

between the Crown and civil servants and the Crown

and military servants generally speaking you cannot

say that they constitute contracts of employment.

Consistently with that, in our submission, it is

possible to say that certain aspects of that relationship,

even though not the whole relationship, are governed

by the law of contract, or may be governed by the law

of contract, depending on the facts. And we submit

that that is an appropriate result in the present

case. That whether Mr Wright was a military employee

or a civil service employee, whether or not the
whole relationship with the Crown could or could not
be chracterized as a contract of employment, or as
a contract of any kind, nevertheless consistently

with that you could have certain aspects of the

relationship regulated by contract.	And in particular,
a contract which entitles the employer to dismiss	there is no consistency, we would submit, between
the servant at will, at pleasure and having certain
aspects of that relationship regulated by contract.

(Continued on page 64)

CIT41/l/JM	63	8/3/88
Wright(2)

MR SIMOS (continuing):  We say, in paragraph 3.3, all the

indicia of a contract, contractual relationship, in this aspect of the overall relationship were

present including offer and acceptance, consideration

and intention to create legal relations. I remind that I took Your Honours to before lunch because

that is where it all is, in our respectful submission,

plus the nature of Mr Wright's work. Your Honours,

Mr Justice Powell dealt with the relevant factual background in this way at page 5 of the written

submissions. If I could invite Your Honours

attention to that. Perhaps I will not read it but

if Your Honours would just be kind enough to have

a look at the quotation from Mr Justice Powell,

contained on page 5 paragraph 2.2. He says the

obligation of secrecy derived from the purpose

for which it was established, the functions which

it is accustomed to undertake, the nature of

the information which it may from time to time

bring into being, and so on.

Then Mr Justice Street quoted, and it is set

out on the next page what Lord Justice Donaldson

the Master of the Rolls said in one of the earlier

cases.

DEANE J:  Mr Simos, what part in your submission does the

fact that we are dealing with the British Government

and a spy play? I mean, would you say if the

contract was, for example, between a newspaper
and a journalist, requiring the journalist to

lead a life that was, for practical purposes,

a lie, deceiving people, concealing what he was

really about and so on that the courts would dream

of enforcing it?

MR SIMOS:	No, Your Honour.
DEANE J:	Well then, if that is so, what is it that makes

this contract between the government of another

country and the spy that, which on your submission,

requires him to lead a secret life, to conceal what

he is doing and to mislead people as to what his

activities are about? What takes it out of the

category of the journalist and his newspaper?

MR SIMOS:  Well, if I could say this, first, in answer to

Your Honour.- - -

DEANE J: If this is something you are coming to in terms

of defences -but it seems to me it arises a threshold

rather than any of the matters that have been dealt

with by way of defence.

MR SIMOS: 

Your Honour, officers of the British Security Service

are not entitled to commit breaches of the general
ordinary law of the land.

ClT42/l/MB	64	8/3/88
Wright(2)

DEANE J:	I was not suggesting crimes.
MR SIMOS:	No.
DEANE J:	But if it is an obligation to conceal the fact that you are a spy or to reveal why you were doing
things.  I did not mean to put things to you in
coloured language. It seems to me what I put to
you would all follow.
MR SIMOS:	Well, Your Honour, I submit it would be a question

of fact in each case as to whether the court or judgment or opinion, perhaps, if the court took the view that such an arrangement as between the

newspaper and the employee was contrary to public

policy and therefore such a contract would not

be enforced for that reason, that the court would

have to form a judgment as to whether a contract

in the same terms for the purpose of the government
or the British Security Service was or was not

contrary to public policy.

DEANE J:  I can see the force of that. May it not be then

that the way you put your answer should really be

not that the contract is contrary to public policy
but that the enforcement of the contract would be

contrary to public policy?

MR SIMOS:	Yes, I would be content -
DEANE J:	Well now, if that is so, that would lead us

direct into the area of is it in the public interest

of this country, or public policy, that an exception

should be made to enforce the contract between

a foreign government and one of its spies or a

claimed confidential obligation of the spy to

a foreign governmend

(Continued on page 66)

ClT42/2/MB	65	8/3/88
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MR SIMOS: 

Your Honour, if there was nothing contrary to

public policy, Australian public policy, or British
public policy in relation to the contract, or the
relationship, or whatever it was, there would be no

reason why it would not be enforced here, in our

respectful submission.

DEANE J: 

I do not want to hold you up, but I just want to

direct your attention to it.

MR SIMOS:	Yes.
DEANE J:	I mean what, for example, if Mr Wright was going to

work in London one morning, is he under an

obligation to conceal from his wife where he is going?

Has he got to tell her a lie if she says to him,

"Look, I'm getting worried about this.	I think
you're a spy."

MR SIMOS:  He might well have to, Your Honour. I do not know.

DEANE J:  It is a very strange area for the courts to be

going into, is not it?

MR SIMOS:	Yes, it is, Your Honour.
DEANE J:	Are there any cases that are like it, I mean a secret
society whose members are not allowed to tell

anybody what they are doing or - a journalist

was the only case I can think of.

MR SIMOS:  I do not know whether there are or are not,

Your Honour. We have not looked for anything of that

nature.

DEANE J:	If you find any I would be grateful to have them, Mr Simas.
MR SIMOS:	Yes, certainly, Your Honour, we will have a look. But

I submit at the end of the day a judgment needs to be

made as to whether something is or is not contrary to

public policy.	Your Honour, if I could just, without
asking Your Honours to go to it, refer to section 18(2),

again of the ASIO ACT. What it is that is prohibited

from disclosure is:

any information or matter that has come

to his knowledge or into his possession

by reason of his being, or having been

an officer or employee of the

Organization.

Then there is something about contractors really,

so it may be that one has to take a sensible approach

to what that means and although, of course, I cannot

say that it means exactly the same in our case as it

means in the Australian statute. The Australian

ClT43/l/HS	66	8/3/88
Wright(2)

statute obviously casts some light on what the subject

matter of the obligation is, be it fiduciary,

equitable or contractural, and maybe, Your Honour,

the answer to Your Honour's question, does he have

an obligation about that to his wife; might fall

to be tested by this sort of an approach.

BRENNAN J:  I think that really points up, does it not, one

of the difficulties here if one looks at the

Australian statute because somewhere buried within

your argument and, in particula~ in your answers to

Mr Justice Deane, as I understand it, is a notion

that the action has to clear some kind of barrier
of public policy in order to lead to a coercive

order in your favour, is that correct?

MR SIMOS:  Your Honour, on the assumption which

His Honour Justice Deane put to me which, as I

understood it, contained an implicit assumption which

we do not necessarily accept, that there is something
wrong with what people who work for security

intelligence agencies have to do short of actual crime,

we would not accept that as being a relevant

consideration, but if it is then I answer it the way

I answered it to His Honour Justice Deane.

BRENNAN J: And if you are constrained to give such an answer,

I suppose the Court must inquire in this case as to

the relationship between Australian security services

and British security services in order to ensure that

whatever test it is that you have to pass can be

passed in fact.

(Continued on page 67)

ClT43/2/HS	67	8/3/88
Wright(2)

MR SIMOS: If there is a test, yes, Your Honour. It may

become clearer, Your Honour, when I go to detriment,

it may not, but - - -

BRENNAN J: Within principle there is no reason why this

should not apply to somebody who comes to publish

here from the security services of USSR, East

Germany, Japan, Uganda?

MR SIMOS:  Your Honours, we submit all those matters would

be dealt with on the evidence or by reference

to facts of which the Court could take judicial

notice to see whether or not there was something

contrary to public policy of Australia in enforcing

whatever the obligation was that was sought to

be enforced. I mean, that would be an overriding

control mechanism, if I may put it that way,

Your Honour, and we would not quarrel with that.

Your Honours, I can deal with this question

of contract fairly shortly by taking Your Honours

to the decision in BRUCE's case, or the correct

title is REG V CIVIL SERVICE APPEAL BOARD, which

is an unreported judgment - I think still - of

19 June 1987 and it was a divisional court consisting

of two judges, Lord Justice May and Mr Justice Roch,

and it arose in this way, that leave is required

before an application can be made to judicially

review an administrative decision and that leave

will be granted if there is a public or administrative

element in the decision sought to be judicially

reviewed.

BRENNAN J: Irrespective of whether it is founded on a

statute?

MR SIMOS:  Your Honour, I am sorry, I cannot answer that.

I can only say that the decision in BRUCE's case

dealt with an application for leave to have judicially

reviewed a decision of the Civil Service Appeal

Board confirming, as it were, a decision to dismiss

the applicant from employment. The judicial

review, if leave had been granted, would, so

far as the applicant is concerned, have been

based on the failure of the board to give reasons.

Now, in the context of the inquiry as to whether
there was a public or administrative element

in the board's jurisdiction to hear and determine

an appeal, the point was taken by the Crown that

the relationship between this particular civil

service and the Crown was one of contract and

if it was one of contract then it could not be

said that the board's decision had a public or

administrative element in it. Whether that

be right or wrong, that was the basis on which

it was argued.

ClT44/l/ND	68	8/3/88
Wright(2)

I can take Your Honours through it, I hope,

fairly briefly. Lord Justice May, on page 1,

sets out the facts saying it is an application:

moved ..... with leave of the Court of Appeal
for judicial review of a decision of the
Civil Service Appeal Board of 8th January,

1986.      The applicant seeks a declaration

that that decision was ultra vires and void -

and so son, because they did not give reasons. And:

the Attorney General sought and obtained

leave to intervene -

At letter (e) on page 1:

By a letter dated the 10th November, 1982 the Inland Revenue offered the applicant

an appointment as an established Executive

Officer in their Enforcement Office at Worthing.

The letter told - him there details of service. It refers to a

schedule and if Your Honours look at that quotation:

the Crown has the right to change its
employees' conditions of service at any
time, and that they hold their appointment
at the pleasure of the Crown ..... the Crown's

employees capnot demand a period of notice -

(Continued on page 70)

ClT44/2/ND	69	8/3/88
Wright(2)

:MR SIMOS (continuing):  He was accepted, but then he was

dismissed and then there was an appeal to the board.

The board confirmed the dismissal but did not give

any reasons. And at letter F on page 2:

The applicant now seeks judicial review of the

Board's decision on the one ground that it gave no reasons for it.

And then there are set out certain civil service

pay and conditions and the relevant ones are on

page 3.	Do Your Honours have that judgment? Your Honours
may have a different print from me, I am sorry.	Do
Your Honours have that print?

BRENNAN J: A different print, I think.

MR. SIMOS:  I am sorry, your Honour. I am reading then

from what in Your Honours' copy will be the bottom

of page 3 and your Honours will see that paragraph 11

says that· they hold office during the pleasure of the

Crown. And paragraph 14:

The relationship between the civil servant

and the Crown remains one regulated under the

prerogative and based on personal appointment.

As such a civil servant does not have a contract

of employment enforceable in the courts but

rather a letter of appointment.

And then, Your Honours, I go to page 8

where it says:

The first issue in this case, therefore, is

whether the Board's decision on the applicant's

appeal against his dismissal is capable of

challenge in this Court by means of judicial

review. This will only be if there was a

public or administrative element in the Board's jurisdiction to hear and decide such an appeal;

in other words, whether an issue of public

law was involved.

And then page 10, Your Honours:

A material, but by no means decisive consideration -

at the top of the page -

may be whether the applicant had in law a contract

of service with the Crown. Although each case

must depend on its OWJ. particular facts -

CIT45/l/JM	70	8/3/88
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And I would emphasize that, if Your Honours please,

because in this case if Your Honours were to decide

the matter according to contract it would be only

upon the basis of the particular facts of this

particular case. And we put the matter on that

basis, not on the basis that anything Your Honours

decide in this case is going to decide anything

about the position of civil servants in Englana

generally.

Although each case must depend on its own

particular facts,we were shown many decided

cases relevant to the position of civil

servants generally.

And then a little further down, all still on

page 10:

Nevertheless, due substantially to the
procedural difficulties involved in bringing

suit against the Crown before 1947, we were

shown no authority decisive of the question

whether the Crown can, or indeed ever has

entered into a contract of employment with its

servants, in the absence of a statutory power

to do so. The great majority of the authorities

to which we were referred dealt with and were

decided by recourse to the principle that the

Crown always has power under the prerogative

to terminate the service of any of its servants

at will and at any time.

And, Your Honours, not only do we accept that that is

so, in this case there was an expressed term of

Mr Wright's arrangements, we would say contract, to

that effect. So there is no need in this case for

Your Honours to look to see how it came about, if it was the fact,that Mr Wright's employment could

be terminated at will because it was expressly said

so.	So there is no difficulty about that.
A little further down:
Because of this and because the Crown cannot fetter or restrict its prerogative powers it
was submitted for the applicant that the Crown
cannot enter ito a contract of employment with
its servants.

(Continued on page 72)

CIT45/2/JM	71	8/3/88
Wright(2)

MR SIMONS (continuing):

An "agreement" which can at least

be determined, if not varied, at will

by one of the parties to it, could not
be a contract because it did not create
rights and obligations ..... in the Courts

of England and Wales.

Then there is a quotation from Lord Goddard:

If I may be bold enough to express a

conclusion on a matter on which the

Judicial Committee hesitated in REILLY's

case, it is that an established civil

servant is appointed ·.:o an off ice and

is a public officer

and so on -

his·employment depends not on a contract .....

but on appointment ..... though there may be,
as indicated in REILLY's, exceptionally

cases, as for instance, an engagement for

a definite period, where there is a

contractual element in or collateral to

his employment.

So we rely upon that and we say it would be no

different in this country from the position in the

Unit Kingdom that consistently with there not being an overall contract you can have a contractual

element in or collateral to his employment:

Nevertheless -

reading on page 11 -

Lord Goddard clearly recognised that even

in 1956 there was no definite and clear

decision whether there is a contract of	service between the Crown and its officers
in the Civil Service.

Dropping down to the bottom of page 11:

in REILLY V THE KING Lord Atkin said that

the Crown's power to dismiss -

a contract at will -

is not inconsistent with the existence

of a contract until so determined.

Then there is a reference to CODEESWARAM's case,

where it is said:

ClT46/l/SR	72	8/3/88
Wright(2)

A right to terminate a contract of

service at will coupled with a right to

enter into a fresh contract -

and so on -

may in effect enable the Crown to change

the terms of employment ..... if the true

inference to be drawn -

and so on -

But this cannot effect any right to salary

already earned under the terms of his

existing contract before its termination.

Then at page 13, on behalf of the Attorney-General

it was submitted that you should go back to first

principles. Was their offer and acceptance, was there

consideration, was there an intention to create

legal relations? Then at the middle of page 14,

His Lordship said, well, those principles are clear

but they are very hard to apply in this sort of

a case. And then eventually he says, in the middle

of-page 15:

On this evidence and the relevant

paragraphs of the Code, I do not think

that it is shown that prior to about 1985

that the Crown intended that civil servants

should have contracts of employment.

And Mr Justice Roch was to the same effect, he

said, if I could just read the passage:

Surprisingly there is no authority which

is decisive of the question can the Crown
enter into a contract of employment with

its servants in the absence of a statutory

power to do so?

An agreement which can be altered or terminated

was said to be not a contract because it did not

create rights and obligations enforceable in the

law courts of England and Wales. And he says:

For my part, I am not convinced that

an "agreement" containing such terms would

not amount to a contract ..... Even with

such terms, the servant might be able to

recover sums which -

had been paid and so on. So, Your Honours, briefly,

and I only propose to deal with this briefly, what

we say is this: whatever the position in relation to case Mr Wright's employment could be terminated at will.

military servants or civil servants, be they in the

ClT46/2/SR	73	8/3/88
Wright(2)

MR SIMOS (continuing): We accept that, overall, it cannot

be said that the whole arrangement is a contractual

arrangement but, we submit, on the evidence in
this case consisting of those letters and not

including those conditions of employment of the

civil service which were part of the evidence in

BRUCE's case, there is no such evidence that any

conditions of that nature were ever part of the

arrangements between Mr Wright and the Crown.

Quite the contrary, because the correspondence

and what Mr Wright said -he said that he was told

you can be instantly dismissed without reason and

you cannot join a trade union, and you have got

no enforceable right to a pension and matters of

that kind - I will just give Your Honours a reference

to it. It is in volume 3 of the appeal books at

page 521 and I will just read it. Your Honours

do not need to go to it unless Your Honours wish

to. This is letter Q on page 521D:

I was told by the MIS people referred to above:

"You can be instantly sacked, without any

reasons. You are not entitled to any pension,

however officers are usually paid, after

retirement, ex gratia payments. These can

be increased, decreased or terminated at the

discretion of the Director-General. No staff

association or trade union is allowed and

any attempt to establish such a body will

result in dismissal for all those concerned.'

So, we have that coupled with the correspondence

and we submit consistently with tha~ and as a matter
of the ordinary principles of contract law, if

the relevant requirements are satisfied; offer,

acceptance, consideration and intention to create
legal relations, there can be aspects of the
relationship dealt with by an implied contract.

We submit that in all the circumstances there was an implied contract in relation to the terms of

Mr Wright's employment so far as concerns what

he could and could not publish.

BRENNAN J:  Does anything turn on British constitutional practise about the appointment of officers?

MR SIMOS:  Your Honour, we would submit not. We would submit

that anything that might have flowed from such

matters is really expressly provided for in the

passage that I just read to Your Honour and, of

course, the correspondence that Your Honours looked

at this morning, 'that there is no occasion on the

evidence in this case to have regard to any material

other than that material. And, in particular,

there was not in evidence any conditions of employment

such as those that were in evidence in BRUCE's case.

ClT47/l/AC	74	8/3/88
Wright(2)

BRENNAN J:  Mr Simos, 50 years ago if a court had looked at

that correspondence it would be doubtful whether

a court would say that there was a contract but

the court that decided SUTTLING's case, for

example, might well say that there is a contract.

MR SIMOS:	Yes.
BRENNAN J:	And the difference between the two would not

lie in the evidence, it would lie in the court's

appreciation of the significance of the evidence.

MR SIMOS: Well, I understand and accept what Your Honour

said and I was going to give Your Honours a

reference to SUTTLING without taking Your Honours

to it but Your Honours will recall - and Your Honours

did not decide the case, of course - that it was

held, I think, by a majority in the Court of Appeal

that, as we would put it, in effect certain aspects

of the relationship could be regulated by contract

consistently with all the usual things that operate

in relation to the contract between the Crown and

one of its civil servants - public servants.

(Continued on page 76)

ClT47/2/AC	75	8/3/88
Wright(2)

MR SIMOS (continuing): Your Honour, we submit that none

of that background material is really relevant

on the facts of this case because the background

material to which Your Honour refers, so far

as material, we submit, establishes that civil

servants may be dismissed at will. Now, we

accept that and we accept it in this case as

flowing from the particular terms of the

arrangement in this particular case. It matters

not that the same result might have flowed from
some broader perspective, even if those actual
words had not been used. So, we submit, what

Your Honour has called, rightly, the constitutional position of the Crown in relation to contracts

of employment is irrelevant in this case.	We
simply say it is irrelevant, Your Honour.

My next submission then is irrelevant, if

that submission is correct, namely, that there is

no material difference in those respects, those general constitutional respects between the law of England and the law of Australia and, in

particular, the Australian cases,which we referred

to in our written submissions, have drawn on the

English authorities and the position is, in all respects, the same. But we do submit that there

is no reason, there is no necessity, to go beyond

the facts which are directly in evidence and
we accept that on the basis of those facts,which
are directly in evidence, Your Honours may still

find that there is no contract or there is no contract

having the terms for which we contend, but that

is a matter of construction and implication,

depending on how Your Honours see the effect of

the correspondence.

If I could just say shortly, we submit - and

we have made submissions about this - that the

relevant conditions for the implication of a term,

as set out in the BP REFINERY (WESTERNPORT) V

HASTINGS SHIRE case are present. Your Honours,

that is all we wish to say about contract and
the implied contractual term but I have now been

instructed, and am able to answer, one of

Your Honour Mr Justice Brennan's questions.

Non-statutory decisions are subject to judicial

review in the United Kingdon. This is established,

or it is an example of its application, in the

CCSU case, (1985) 1 AC 374.

Now, if I could then move on. We submit

that there is a relevant fiduciary duty, a relevant

equitable obligation and/or a relevant contractual

obligation. In paragraph Bon page 2 of the

submissions we move on to deal with the defences

to the claimed breaches of Mr Wright's obligations.

ClT48/l/MB	76	8/3/88
Wright(2)

The first defence, as we understand it, is that

there is no detriment suffered. Now, we have

submitted - and I will not repeat our submissions

of course - that the obligation,

whatever its source, contains no requirement or
no limitation that the matter sought to be published

must be such as would produce detriment. Now,

my learned friend relies, for his proposition,

that detriment is a necessary ingredient in the

cause of action, upon Your Honour Mr Justice Mason's

decision in FAIRFAX, 147 CLR 39.

(Continued on page 78)

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MASON CJ:  Your lengthy written submissions, I think, offer

four points of distinction, do they not?

MR SIMOS:  Yes, I was just asking my learned junior to

find those for me, Your Honour.

MASON CJ:  I was going to ask you, do your lengthy written

submissions set out what you want to say by way

of distinguishing the FAIRFAX case?

MR SIMOS:  I think they do, Your Honour. If I could just

recapitulate them, just the points. They are

on page 15, Your Honour, of the written submissions.

I think it is not necessary to develop them.

In 3.5.1 we say, firstly, it is a case concerning

an equitable duty of confidence owed, not a fiduciary

duty. At 3.5.2, on page 16, we say, and as

Your Honour specifically recognized, matters

of national security are in a special position

as FAIRFAX did not involve matters of national

security in this sense.

MASON CJ:  When you say "in this sense", what do you mean

by that?

MR SIMOS:  As I recall in FAIRFAX, it was not submitted

to Your Honour that publication would be detrimental
to the national security but merely that it would

be detrimental to diplomatic relationships with,

I think, it was Indonesia, was it, Your Honour?

MASON CJ: Certainly that was the primary thrust· of the

case as I recollect it but I do recall that the or if not the Secretary somebody who shortly

thereafter became the Secretary.

MR SIMOS:	Mr Pritchard, I think, was it not, Your Honour?
MASON CJ:	Yes.  Now, the difficulty in my recollection

at the moment is what was he doing giving evidence

if the matter did not, in some way, concern defence

or national security?

MR SIMOS:  Yes. Page 16, 3.5.2, Mr Justice Mason, second

line, referred to the facts that the Defence

Secretary did not state that disclosure of any

particular documents would be prejudicial to

natic•3l defence and that none of the documents

conu	ed any material of value to a hostile
power.	And the page references are given there,

Your Honours. It is page 16, 3.5.2.

MASON CJ:  He seems to have been an unnecessary witness

in the circumstances.

ClT49/l/ND	78	8/3/88
Wright(2)

MR SIMOS:  It appears so, Your Honour. And then, in 3.5.3,

page 17, we say that the detriment requirement

should not be extended to apply to a suit by

a foreign government to restrain the disclosure

in Australia of information relating, not to
the affairs of any Australian Government, but

to the functions of the security service of that

foreign government subject, of course, to any

relevance of public interest. About the middle

of the page, there should be a clear distinction

between matters of mere curiosity to the public

in relation to the affairs of the foreign government

and the real interest of the Australian public

in knowing and discussing the affairs of its

own government.

And then, fourthly - well, fourthly gets

into the balancing exercise. But, Your Honours,
what we are saying at this point is not that

detriment may not be relevant to be taken into

account if one gets to a point of time at which

one is balancing conflicting interests, that

is, the Australian public interest in being able

to read the contents of Spycatcher and the- detriment
to the Australian public interest having regard

to Mr Codd's evidence if that material becomes

known. We accept that in that context one has

to get into the balancing exercise but the submission

here is, in effect, that it is only at that point

that you need to look at detriment even if a

foreign government is a plaintiff. In other

words, it is not an essential element of the

cause of action but its consideration may be
involved in assessing a defence based on or involving

the Australian public interest.

(Continued on page 80)

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MR SIMOS (continuing):  So, I suppose, Your Honours, at the

end of the day it may not matter if we have to get

into detriment in the context of the public interest

and we fail there,that may be the end of the matter.

So whether we fail · because it is an essential

element of the cause of action or whether we fail because it is an element in the balancing process

of public interest~ there seems to be a necessity

to prove detriment anyway.

MASON CJ:  And this concession would apply to the three

causes of action?

MR SIMOS:	Yes, Your Honour.
MASON CJ:	And I take it that
MR SIMOS:	Well, no, I am sorry.  I withdraw that, Your Honour.

Depending on what the contractural term is, it does

not necessarily follow that the Court has power to

permit a defendant to commit a breach of contract just

because it is in the public interest that he should

do so. I mean, Your Honours might take the view

that that is what the term of the contract itself is,

in which event - so it depends on what the term of

the contract is, but there could be a distinction,

Your Honour, for the purposes of contract.

MASON CJ:  And this view you are putting forward of FAIRFAX

you concede is, according to your submission, English

law as well?

MR SIMOS:  Yes, Your Honour, but we would say that even in

England it would not apply to a foreign governmental

plaintiff in England, just as it does not apply to a

foreign governmental plaintiff in Australia.

MASON CJ:	Yes.
MR SIMOS:	I think it is fair to say that in the Court of Appeal

and maybe at first instance too, Mr Justice Scott and	the members of the Court of Appeal in fact said words
to the effect that what Your Honour said in FAIRFAX
was good law in England .too.

MASON CJ:	Yes.
BRENNAN J:	Does that mask one of the problems in this case?

Is one of the things that you have to prove so far

as England is concerned that there is a cause of

action which would be recognized by English courts - - -

MR SIMOS:	Yes, Your Honour.
BRENNAN J:	And that may, or may not, suffer some attrition if

it is to be enforced in an Australian court by

ClTS0/1/HS	80	8/3/88
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reference in particular to Australian public

interest?

MR SIMOS:	Yes, Your Honour.
BRENNAN J:	Then, so far as you must prove what the British

courts might do, are those questions of fact

entirely, so far as the litigation in Australia is

concerned, that is all the constituent elements of

fact, plus the elements of British law?

MR SIMOS:  I think the answer to that has to be yes, Your Honour.

We would have to satisfy Your Honours that there was

indeed detriment to the United Kingdom public

interest.

BRENNAN J:	So we must look for some evidence of that.
MR SIMOS:	Yes, Your Honour, and, of course, there is really -

apart from his cross-examination all of

Sir Robert Armstrong's evidence goes to that point,

the detriment being, inter alia, Your Honour, the

detriment that we mentioned in the appendix to this

outline of argument. In other words, if an officer

Qf the British Security Service publishes without authority, then there is detriment to the efficient functioning of the British Security Service and thereby to the British public interest.

(Continued on page 82)

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MASON CJ:	Do the courts of the forum ever concern themselves with a foreign public interest? Is there any instance,
any recorded instance, of a court of a forum ever
adjudging, making an assessment, evaluating what
is a foreign public interest?
MR SIMOS:	I cannot answer that, Your Honour. If I may, we will look

at it overnight.

MASON CJ:	Yes.
MR SIMOS:	Mr Justice McHugh says it should not, of course.

We disagree with that.

MASON CJ:	He goes further, he says it is non-justiciable.
MR SIMOS:	Yes, Your Honour.  But whether there is a precedent

or not - and we will certainly look - we submit

that there is nothing non-justiciable about that,

even inthe courts of this forum. Now, if I could

go, Your Honours, to the bottom of page 2 of the

outline of submissions:  no detriment is suffered,

this is the first manifestation of the so-called

public domain defence. The respondents allege that
there was no detriment to either the United Kingdom

public interest or the Australian public interest.

Now, could I just pause there, Your Honours.

To the extent the detriment is necessary at any point, if there was no detriment to the United Kingdom public interest but there was detriment to the Australian public interest, that -would be

sufficient, and vice versa. In fact, we say there

is detriment to both, so perhaps that is an academic

distinction. But the basis, as we understand it,

for what we call the first manifestation of a

public domain defence, namely, that there is no

detriment, is, as we have said at the top of page 3,

that the bulk of the contents of Spycatcher was

already in the public domain as a result of

publications by others.

Now, whether it was the bulk or whatever falls

to be determined by admitted particulars of public domain, and Your Honours will not be troubled with those. But I think it is fair to say that that is the fundamental basis of this no detriment argument, the

reason being that, as we understand the respondent's

case, any detriment which may have been suffered

by publication of the contents was already suffered

at the time of the original publication and no

further detriment is suffered as a result of the republication by Mr Wright of the same material.

The appellant submits that even if this be so

as to contents - I should add there, Your Honour,

because I have been talking about contents in the

previous paragraph, which is denied - further

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detriment, other than contents detriment, is suffered

as a result of the publication, even of the same

material, by an officer or former officer - see

paragraph A 2.3 above. That refers to the appendix.

It follows that the defendant's defence of lack

of detriment cannot succeed. It may be noted
that to uphold the respondent's defence of lack
of detriment necessarily involves the rejection

of the evidence of both Mr Michael Codd and

Sir Robert Armstrong.

Now, could I invite Your Honours, if it is

convenient, to the other document called "Sununary

of principal arguments of appellant". Page 3,

paragraph D, which deals with this same point but

just a little more fully. Your Honours will see

at the bottom of page 3 letter D, "The so-called

defence of 'public domain'". This defence is

to the effect that an essential element of the

appellant's cause of action is that the proposed

publication, if published, will cause detriment

and that because the contents of Spycatcher have

previously been published by others, no further
detriment is caused by republication of the same
contents by an officer or former officer since all

the detriment which disclosure of those contents

can cause will have been caused at the time of the

earlier publication.

This defence also finds expression in the respondent's case in submissions to the effect that,

by reason of the fact that those contents were

already in the public domain, those contents had

ceased to have the necessary quality of confidence.

(Continued on page 84)

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MR SIMOS (continuing):  Then in paragraph 3, and this is

the submission I wish to develop if I may - in
paragraph 3 on page 4: it is submitted that the

true analysis of the cases which hold that the

relevant subject-matter must have the "necessary

quality of confidence" is that that requirement

will be satisfied notwithstanding that the

subject-matter is already in the public domain,

if, notwithstanding that fact, further publication

or use of that public domain matter by the defendant,

will cause the plaintiff detriment. And I wish

to refer Your Honours to the case mentioned there,

if I may. SPEED SEAL PRODUCTS LIMITED V PADDINGTON,

(1985) 1 WLR 1327.

If I could take Your Honours to the headnote:

Pursuant to an agreement ..... the

first defendant worked for the plaintiffs ..... as a member of their coupling design

committee concerned with pipe couplings for

oil rigs and jetties. The plaintiffs brought

an action against the defendants, alleging

that knowledge of coupling designs acquired

by the first defendant as a member of the

committee was confidential but he and the

second defendant, which was a company controlled

by him, had used knowledge of the design of

a cam-operated coupling device so acquired

to obtain orders for the supply of coupling

devices. The plaintiffs claimed an injunction

restraining the defendants ..... The defendants

applied for an order striking out th~ claim

for an injunction on the ground that the

defendants had already published the information

in a brochure and a patent application.

In other words, it was already in the public domain

as a result of their act.

Held, allowing the appeal in part, that

the publication of confidential information
to the public at large by or with the consent

of the person who owed the obligation of
confidence did not necessarily deprive the

person to whom the obligation was owed of

protection by injunction; that whether the

plaintiffs' business interests still needed
protection would depend on the circumstances

and the state of the market but the facts

material thereto would not be established

until the trial and, therefore -

there should be an interlocutory injunction.

ClT52/l/AC	84	8/3/88
Wright(2)

Now, on page 1331, Lord Justice Fox said - under

the heading "The order to strike out the claim

for injunctions":

The defendants' attack upon the claim for injunctions is based on the contention

that the alleged confidential information

was no more than a concept, and had been

thoroughly published to the world. This was
based upon publication by the defendants of

a brochure, and the publication by the first

defendant of his European patent application

on 26 October 1983. The deputy judge concluded,

and it is not in dispute for the purposes
of this motion, that the alleged confidential
information had indeed been published to the

world by the defendants or one of them.

The plaintiffs contended before the judge

that, accepting that the information had been

so published to the world, such publication

was wrongful, that a wrongdoer cannot rely

upon his own wrongdoing and will be under

a special disability, and that the court could

grant an injunction on the "springboard"

principle. The judge rejected that, and .....

In relation to the the protection of

confidential information which has been published,

there are three situations. (1) The publication

is made by or with the consent of A (the person

to whom the obligation is owed). In such

a case, the owner of the confidential information,

A, has given it to the public at large. B, who

previously owed A a duty not to disclose the

information, is released from that duty.

Now, could I just pause there to submit that whether

that will be the result of publication by A will

always be a question of fact and degree. It may

be that A, the person to whom the obligation is

owed, has done something in relation to the information,

eg, by publishing it, the result of which can be construed as being a surrender or abandonment of

all his rights against all persons in respect of

that information. But it will not necessarily

always be so simply because the person to whom

the obligation is owed publishes the information

in some way or in some fashion or to some extent.

Then Lord Justice Fox goes on - on page 1331,

letter F:

ClT52/2/AC	85	8/3/88
Wright(2)
MR SIMOS (continuing):

(2) The publication is made by or with the

consent of X (a stranger).

And then there is a quotation from Lord Roskill in

CRANLEIGH PRECISION ENGINEERING LTD V BRYANT. At

the bottom of the page, Lord Roskill said: "In the present case, Bryant, as possessor of

what I have held to be the plaintiffs'

confidential information, is seeking to free
himself from his obligations of confidence,
not because of what the plaintiffs have
published, for they ha:ve published nothing

but because of what Bischoff published - a

publication of which Bryant only became aware

because of his contractual and confidential

relationship with the plaintiffs."

In the circumstances, RoskillJ. granted an

injunction against Bryant. It appears, therefore,

that the fact that a third P.arty has nublished the information

does not necessarily release B -(the person who

owed the duty of confidence) from his obligations.

Now, if I could pause there, Your Honours,

much of the material relied upon as being in the public
domain was published by Mr Wright and apart from

anything else we say he cannot profit from his own

wrong, so that cannot be relied upon. But, to the

extent that the public domain material was published

by others than Mr Wright, that will not necessarily

mean that Mr Wright is free to publish. It will always

depend upon the question of whether, even in those

circumstances, the plaintiff has legitimate interest

to protect vis-a-vis Mr Wright. Even though the

plaintiff in particular circumstances may not be
able to restrain anybody else in the world from using

public domain material because it is in the public

Court that publication by Mr Wright of public domain	domain, it does not follow that the plaintiff cannot restrain Mr Wright if the plaintiff can satisfy the
material will cause detriment.

And we submit that that is the case here. It

is all very well for third parties to have published this material and it is to that extent in the public

domain. But if Mr Wright, an insider, an officer,

or former officer, wants to republish the same material

and the plaintiff cannot stop him, the plaintiff will

suffer detriment caused by the perception of others,

friendly security services and others who co-operate

CITS3/l/JM	86	8/3/88
Wright(2)

with the service,that once matter gets into the

public domain at the hands of third parties, any

officer or former officer can no longer be controlled.

And it is even worse - - -

GAUDRON J:  Does not the detriment then follow from the lack of remedy, rather than from the publication?

MR SIMOS: Certainly the lack - - -

GAUDRON J:  If you put the detriment on that basis it is not

a detriment flowing from the publication, I think.

MR SIMOS:  I accept what Your Honour says. I do accept that

this submission cannot be made meaningfully except

in the context of what is the rule. Is the rule

that a defendant can publish anything that a court

decides the publication of which will not cause

detriment? Or is the rule that the defendant cannot

publish anything without the authority of the plaintiff?

So, it is a fair point, if I may say so, Your Honour,

and we accept it.	We have tried to deal with it and
in fact we rely on it.	But it certainly does involve -

Your Honour will see in the appendix that I have

taken Your Honours to, bottom of the first page paragraph 2 starts off: If the legal principle

is that any officer or former officer may publish

matter learned by him if in the opinion of the

Court, and so on, because we have found that

it is not meaningful to talk about it unless

there is some rule upon the basis of which you

say it will or will not cause detriment.

DEANE J:	But can you publish untrue information?
MR SIMOS:	Your Honour, if the publication would cause detriment

to the plaintiff he cannot publish.	We would
submit - - -

DEANE J: That is what makes it a bit different then, is not

it. I mean, what you are saying is not protection

so much of confidential information, but a right to

insist on complete silence.

(Continued on page 88)

CIT53/2/JM	87	8/3/88
Wright(2)

MR SIMOS:  'nlat may be involved in it, Your Honour.

yes, but we would rather put it that that may be

the result that flows from a principle which says,

that an officer or former officer may not publish

without authority if the publication would cause

detriment to the plaintiff. Now if the publication

of a lie would cause detriment, if the publication

of a truth would cause detriment, notwithstanding

it is in the public domain, then he can be restrained.

It is always a question, and we submit, that the

public domain argument and the quality of

confidentiality argument and all the difficulties

surrounding those concepts can be unravelled by

recognizing that in truth both those concepts are
dealing with the question. "Will this publication

cause detriment to legitimate interests of the

plaintiff which can be protected by injunction?"

GAUDRON J:  Can I then ask, Mr Simos, can that obligation

have any basis other than contractual?

MR SIMOS:	Yes, Your Honour.
GAUDRON J:	You say that is part of a duty to silence,

absolute silence, can it be -

MR SIMOS:  No, Your Honour, well yes - - -

C-AI.JDRON J: Well, I thought you had conceded to Justice Deane

that it may be a duty not to publish anything, true

or false,a duty to silence?

MR SIMOS:  Yes, or always subject to that it will produce

detriment. You can publish something that will not

cause detriment.

GAUDRON J: Then can that be founded on general equitable

duties?

MR SIMOS:  Yes, Your Honour, because we submit that if

information is imparted in circumstances of

confidentiality, it is elementary that there should

be implied a term that the receiver of the information

will not disclose or use that information, which

he received in confidence, to the detriment of him

who gave it to him.

GAUDRON J:  But that is only half the picture as you conceded

to Justice Deane. Let us assume that the masters

have not told him anything that has been published.

MR SIMOS:  Yes, Your Honour.

GAUDRON J: That the publication is a work of fiction passing

itself off as truth and bears no relationship

whatsoever to any information obtained in a

confidential manner?

ClT54/l/SR	88	8/3/88
Wright(2)

1:1R SIMOS: · He would be free to do that, Your Honour, but

this defendant has answered - - -

GAUDRON J: Even though that caused detriment?

1:1R SIMOS:  Yes, Your Honour, it has to be detriment flowing

from a breach of the confidential relationship.	And
what Your Honour has postulated would not be a
breach of the confidential relationship.

GAUDRON J:	Then it must be that he can publish lies, which you have just, I thought, conceded to Justice Deane
he could not if it caused detriment?
1:1R SIMOS:	There has to be some connection with the confidential relationship. I mean it must flow from the
relationship.

GAUDRON J: It flows from the relationship and not from the

confidential information?

1:1R SIMOS:  Yes, Your Honour, we would have to then expand it

to say that.

GAUDRON J:  Then I come back to my question, for can there be

a duty of that ambit, can there be any relevant

relationship other than a contractual one?

(Continued on page 90)

C1T54/2/SR	89	8/3/88
Wright(2)

MR SIMOS:	Yes, Your Honour, because we submit that where
there is detriment, where there is a wrong, there
should be a remedy an~ in conscience, someone who causes a person who has imparted information to
him in confidence detriment, either by reason of
matter disclosed in the course of the confidential
relationship or in some other way connected with or arising out of the relationship independently of matter, there will be detriment and there should be relief.

GAUDRON J: That goes beyond the FAIRFAX principle, does

it not?

MR SIMOS: It goes, perhaps, beyond the facts of FAIRFAX,

Your Honour, but it is not inconsistent with anything in FAIRFAX because His Honour

the Chief Justice said there must be detriment

beyond mere embarrassment and if as a matter of

fact the detriment that flows is beyond mere

embarrassment then the FAIRFAX principle will be

satisfied.

DEANE J: In favour of your approach, it would be a bit odd

if the valet or the employee was free to publish

that his master was a secret drinker unless the

master could prove that he was a drunkard?

MR SIMOS:	Unless the servant could prove that he was a
drunkard?

DEANE J: Unless the master could.

MR SIMOS:  I am not sure that I have followed Your Honour's

example.

DEANE J: Perhaps it is a bit obscure. What I was saying,

it would be a strange thing if the only way the

employer could complain about an allegation by

his confidential employee that he was a secret	drinker would be if he could prove that he was
a drunkard.

MR SIMOS: It is a question of fact as to whether that would

cause detriment but we would submit it would,·

Your Honour.

DEANE J:	I was trying to help you for once.
MR SIMOS:	Your Honour, right or wrong, our overriding submission
is: will the publication cause detriment? And
the point that we are seeking to get out of this case is that here was a case in which the information

was in the public domain, I have not yet come to

the reason why there were legitimate interests of the plaintiff that needs protecting. May I

just go on and do that, Your Honours.

ClTSS/1/ND	90	8/3/88
Wright(2)

At page 1332, letter C:

Now, in the present case, it is pleaded -

that there was -

an implied term -

or express term, et cetera. At letter E:

Now the CRANLEIGH case shows that the mere

fact that publication has been made by a third

party -

and we would say by the defendant himself -

does not necessarily release from his

obligations a person who previously owed a

duty not to disclose. The purpose of an

injunction is protection. Whether a

plaintiff, in circumstances such as the present,

needs protection might depend upon the state

of the market. If, for example, the only

traders seriously competing in the market

are the plaintiff and the defendant (the latter

being a person who, in breach of duty to the
plaintiff, wrongfully published the information

to the world) it may be a matter of continuing importance to the plaintiff that the defendant should not continue to get the benefit of

the wrongdoing.

So what His Lordship is saying there is the

wrongdoer has put the material in the public domain.

Everyone in the world, other than the wrongdoer,

may be free to use that information and set up

factories competing with the plaintiff but if the
fact of the matter is that no one in the world

is interested in doing that, except the defendant,

then the defendant can be restrained even though

the rest of the world is free and the plaintiff

will have a legitimate interest protected because	the rest of the world is not going to do anything
to harm the plaintiff. The only person in the
world who is going to do harm to the plaintiff
is the defendant.

(Continued on page 92)

ClT55/2/ND	91	8/3/88
Wright(2)

MR SIMOS (continuing):  So here is a case where the defendant

can be stopped from using public domain material.

Everyone else is free to use it because there is a

legitimate interest in that way in the plaintiff

having an injunction. Your Honours, there is an

American case to the same effect, we submit,

relevantly, in the United States Supreme Court called

SHELLMAR PRODUCTS CO V ALLEN-QUALLEY CO,

87 F (2d) 104. If I could just read the first

headnote numbered 1:

Where injunction restraining manufacturer

from using a certain type of wrap for candy

bars was based on proposition that wrap, process and machine were the plaintiff's trade secrets, that they had been disclosed

to the manufacturer in confidence, which it

had violated by manufacturing and selling

wrap without the plaintiff's authority -

so that in the course of the breach of confidence

it was diiclosed to the world -

held not entitled to dissolution of

injunction on ground that secrets had been

disclosed to the public by subsequently issued patents, since manufacturer by its inequitable

conduct had precluded itself from enjoying

the rights of the general public to the
patent disclosure and would not be permitted
to place upon plaintiff the burden of suing
for patent infringement when its proprietary
right in the process had already been

adjudicated against manufacturer, especially

where it appeared that manufacturer discovered
nothing from such patents.

Then number 5 is to the same effect:

Manufacturer to whom confidential trade

wrap held not entitled to dissolution of secrets were disclosed for patent for candy	injunction restraining it from use of trade
secrets on the ground that it was a member of
public to whom disclosure of secret was made in subsequent patents, since to so hold
would permit manufacturer to profit by its own wrong.

(Continued on page 93)

ClT56/l/HS	92	8/3/88
Wright(2)

MR SIMOS (continuing):  So because of obligations of conscience

he was put in a special and different position

from members of the public because after the patent

was filed and the relevant process became known

to the world, subject to infringement of patent,

of course, the rest of the world were free to

use it as they saw fit. The patent may have been

invalid, of course, and so there may have been a

publication without any patentable rights, and so

here is another example of information that has

been learned in confidence. In this case it has

become public knowledge by reason of the application

for a patent but prior to that the wrongdoer had

sought to use it in breach of confidence and the

court said even thereafter when it becomes public

knowledge this particular plaintiff cannot use it.

At page 107, top of the right-hand column:

The difference between secret processes and
patents is that the owner of a patent has
a monopoly against all the world, while
the owner of a secret process has no right
'except against those who have contracted,
expressly or by implication, not to disclose

the secret, or who have obtained it by unfair

means.' The jurisdiction of equity to

protect such trade secrets is founded upon trust

or confidence. The court 'fastens the obligation

upon the conscience of the party, and enforces
it against him in the same manner as it enforces
against a party to whom a benefit is given,
the obligations of performing a promise on the
faith of which the benefit has been conferred.

Whether the subject-matter is patentable or not,

if the designer discovers and keeps secret a

process of manufacture, though he will not
have an exclusive right to it as against the
public, after he shall have published it, or
against those who in good faith acquire

knowledge of it, yet he has a property right,

which a court of chancery will protect against

one who in bad faith and breach of confidence

undertakes to apply it to his own use.

(Continued on page 94)

ClT57/l/MB	93	8/3/88
Wright(2)

MR SIMOS (continuing):  To the same effect, I will not read

it, Your Honours, page 110, top of the left-hand

column.	Your Honours, the reference at first
31 F 2d 293, but I would wish to draw Your Honours 1	instance, which I will not read, is at
attention to a footnote - I do not think Your Honours have copies of this, may I therefore just read it
to Your Honours. This is footnote number 24 on page 334, of volume 742 F 2d, and before I read it may I explain what it is saying. It is saying that
there are other authorities which say in relation
to the SHELLM.AR case,or factual situations similar to the SHELLM.AR case, that the injunction granted
as it was in the SHELLM.AR case permanently should only be granted for a limited period of time, that is that period of time which it would have taken
the defendant to do what he wanted to do by way of competing with the plaintiff if he had started
getting ready at the time of the public disclosure.
I suppose that is a manifestation of the springboard
principle .. If I may just read these very few lines,
Your Honours:

There has been a long-standing

dispute among the federal circuits about

whether a party misappropriating trade secrets should be enjoined permanently

from using the information or whether

the duration of the injunction should be

limited to put the defendant in the

position it would have been in absent

the misappropriation. Compare SHELLM.AR

PRODUCTS CO ..... with CONMAR PRODUCTS -

another case where there was -

no injunction after disclosure and

WINSTON RESEARCH CORP V MINNESOTA MINING

& MANUFACTURING CO -

where an injunction was granted for a -	period needed for legitimate development
after disclosure.

(Continued on page 95)

ClT58/ 1/SR	94	8/3/88
Wright(2)

MR SIMOS (continuing):  So that, of course, was in a particular

context of trade secrets and it is only, as we submit,

illustrative of the approach that we submit is

relevant here, and that approach - the apuroach that

is relevant here~ is more-closely the approach

in the SPEED SEAL case and, if I may just say it

once more, Your Honours, our submission is that,

so far as Mr Wright is concerned, whether the matter

·is in the public domain because he told someone

who put it there, or because he puts it there himself,

if thereafter he seeks to republish the public

domain material, the plaintiff will suffer the

detriment set out in the appendix. Therefore it is

legitimate that Mr Wright should be restrained from

republishing public domain material.

Your Honours, we have sought to develop that

on page 4 of the document being Summary of Principal

Arguments of Appellant. I do not think I need say

any more on that issue. I am reminded by a note I

have just received that, subject to what the facts

are, whether something is true or false will or may

involve the disclosure or authentication of the fact,

in this case, that the maker of the statement is or

was a former officer of the Security Service

with the detriment that flows merely from that fact.

GAUDRON J:  In that context, can I ask you what is the implied

negative that you would say obliges the non-disclosure of anything that causes detriment; the non-publication of any matter causing detriment - just that?

MR SIMOS:  Just that, Your Honour. It is a stipulation or an

implied term in the contract, as if, in a written

any information without authority, 11 or, alternatively,	contract it is said, ••the defendant will not uublish
will not without authority publish informatio~ the
publication of which could, in the opinion of a
court, cause detriment to the plaintiff.

(continued on page 96)

ClT59/l/VH	95	8/3/88
Wright(2)

GAUDRON J: Well, I have some trouble with the word

"information". Do you want that in, or not?

MR SIMOS:  No, Your Honour. We have felt, with respect,

the same difficulty with the word "information"

and that is why we have tried, I think everywhere,

to use the word matter relating to his employment,

and that is the formulation for which we would
contend. Or, alternatively, "information or matter"

which is the formula used in the ASIO ACT,

Your Honour.

On page 4, Your Honours, paragraph E of the

document headed "Summary of Principal Arguments

of Appellant" - we now move to the question of

detriment to the Australian and United Kingdom

public interests, and we submitted that

Mr Justice Kirby and Mr Justice Powell were in

error in failing to hold that the question of detriment

to the public interest of the United Kingdom and

the public interest of Australia should be determined

in accordance with the evidence of the Cabinet

secretaries of the governments of both countries.

Your Honour~ I will come back to that a little

later.

Now, Your Honours, in relation to proof of

detriment there is, of course, the evidence of
Sir Robert Armstrong and - to the United Kingdom -
and we submit that that evidence cannot be disregarded.

(Continued on page 97)

ClT6O/l/AC	96	8/3/88
Wright(2)

MR SIMOS (continuing): Consistently with that,it was, of course,

possible to say that that detriment or the Australian
public interest detriment was outweighed by the

Australian public interest in having the matter

published, but one can achieve that result without

disregarding what Sir Robert Armstrong said and what

Mr Michael Codd said.

DAWSON J:  Mr Simos, I find some difficulty in all of this.

It seems to me that there might be an air of

unreality about it. You said, and no doubt correctly,

that people engaged in espionage are not entitled in

England to cormnit crimes.

MR SIMOS:	Yes, Your Honour.
DAWSON J:	But of course that is not so so far as other countries

are concerned. The very act of espionage would be

a breach of the law of another country.

MR SIMOS:  Yes, Your Honour.

DAWSON J: And so that people engaged in it who are operating under

contracts of this sort are in fact cormnitted to

illegality in their operations in other countries.

MR SIMOS:  Yes, Your Honour.

DAWSON J: Well, why should the law of those countries assist

them by enforcing contracts of that sort? Is not

there a broader public interest which says where these

people put themselves outside our law, which they do,

why should we help them. Now, it may be just

fortuitous that Britain is a friendly country, but

you can see what I am putting when you put another

country in the place of Britain.

MR SIMOS:  I can, Your Honour, and I was going to attempt to

answer what Your Honour said by observing that

Britain was a friendly country and that it -

DAWSON J: But nevertheless the nature of the contract is the

same.

MR SIMOS:  No, Your Honour, the nature of the contract, -with

respect, would surely be that you can do what you

consider legitimate, query, even if illegal in

hostile countries or in countries where to do so
is in the public interest of your country. But

you cannot do those things, and indeed you would have no occasion to do so in friendly countries. And, of course, Mr Codd has given abundant evidence

that the security and intelligence services of this

country are in co-operation and liaison with the

security and intelligent services in the United

Kingdom.

CIT61/1/JM	97	8/3/88
Wright(2)

DAWSON J:	What I was just wondering is whether the courts,
as opposed to the government of the day, may not properly take a broader view of the nature of this contract in determining whether they will enforce
it? Or this relationship, for that matter.
MR SIMOS:	Yes, Your Honours, we would not gainsay that if this Court took the view that there was something
contrary to the fundamental public policy of this
country in enforcing this contract, then it would not do so but so far from there being any evidence of that, and it is certainly not, we would submit, a matter of which the Court could take judicial notice, the overwhelming evidence from Mr Codd
is to the contrary, that this liaison relationship
is a good thing and it ought to be enforced and,
indeed, if it is - and the obligation of confidence ought to be enforced, and, indeed, if it is not
enforced, the Australian public interest will suffer.
So, I accept, I believe, what Your Honour is putting
to me as a matter of principle but I simply say on the facts of this case they all point in the
other direction.
D.EANE J:	Can you do those acts in a friendly country to
find out what is happening in the embassies of
unfriendly countries?
MR SIMOS:	Another good question, Your Honour.
DEANE J:	Thank you, Mr Simas.
MR SIMOS:	I think the answer has to be "No", Your Honour.
But one can only look at this particular case because all these other questions which, of course, are
material and helpful as throwing light on what
is involved in this case are really matters of
speculation.

(Continued on page 99)

ClT62/l/ND	98	8/3/88
Wright(2)

MR SIMOS (continuing): More particularly, having regard to the

fact that under the Maxwell Fyfe directive, so-called,

the British Security Service is enjoined not to

commit any breaches of the law, one can only

assume, if it becomes relevant, that they would

behave similarly if they were operating in Australia,

even in relation to hostile embassies.

DEANE J:  But following on what Justice Dawson asked you,

it is all extra legem in another sense, is it not?

Say, for example, the British Government failed

to pay Mr Wright's salary for a week and it would

not have justified rescinding any contract, what

could he do about it? On your submission, could

he sue them?

MR SIMOS:	Yes, Your Honour.
DEANE J:	He could sue them?
MR SIMOS:	Yes, Your Honour.
DEANE J:	Even though suing them would disclose that he was
a  spy?

MR SIMOS: Well, one would hope that some suitable orders

for confidentiality could be made, Your Honour.

DEANE J:	Yes.
BRENNAN J:	It would be difficult if the defence was misconduct

disentitling him to his salary.

MR SIMOS:  Well, Your Honour, if it was in the public

interest that issue should be - I mean, if that

was a legitimate bona fide defence, that could

also be heard in camera, Your Honour. If there
was evidence before the court that justified the

closing of the court.

DEANE J:	Could he tell his solicitor to take out the writ?
MR SIMOS:	Yes, Your Honour, because that would not cause

detriment, we would submit. At least it is arguable

that it would not cause detriment.

DEANE J: But detriment is essential for you to get relief.

What about breach of his obligations? I mean,

it seems he cannot tell his wife he is going to

work. Can he tell his solicitor to take out the

writ to recover the week's wages?

MR SIMOS:  Your Honour, it may be that if the test is -

detriment is an ingredient of the cause of action,

he could do both those things. He could tell his

wife that he is going to work - not necessarily where,but

that he is going to work, but maybe even where, if

the fact were that that was not going to cause

detriment.

C1T63/l/MB	99	8/3/88
Wright(2)

MR SIMOS (continuing):  And in the same way if the requirement

of the cause of action was that the disclosure

should cause detriment so he could tell his solicitor,

if in fact that was not going to cause detriment.

Your Honours, I think if I could now take Your Honours

to the outline of argument at the top of page 4. This

is the third defence, as we understand it. TfI could

remind Your Honours, we have dealt with,at the

bottom of page 2, no detriment, which we have called

the first manifestation of the public domain

defence.and paragraph 2 on page 3, "The Contents

of Spycatcher lacked the Necessary Quality of
Confidence", which we have called the second

manifestation of the so-called public domain defence.

The third defence, as we understand it, is at the

top of page 4. Your Honours, perhaps I should just

say this before I go to page 3 in relation to the
public domain defence in relatiop to how
material got in the public domain. It is the

respondent's case that most of the matter contained

in Spycatcher was already in the public domain by

reason of the publication of a book by Chapman Pincher

called, Their Trade is Treachery. And the case

of the respondents also is, and our case too, that

Mr Wright was Chapman Pincher's . main informant in

breach of duty.

MR TURNBULL:  I object to that. It is expressly our case that

he was not acting in breach of duty. I am sorry about that.

MR SIMOS:  No, that isall right. I mean if our case is

right, then what he was doing then was in breach of

duty.	I accept that if our case was wrong then
he was not.	But on our case, I am sorry I should

put it that way -on our case he was acting in breach

of duty in disclosing these contents to

Mr Chapman Pincher.

(Continued on page 101)

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MR SIMOS (continuing):  In turn, the material in that book

was the basis for more or less the same disclosures

in two further books, A Matter of Trust by

Nigel West, also known as Rupert Alison, and

Too Secret Too Long, also by Chapman Pincher.

In other words, when the defendant says the

publication of Spycatcher will not produce
detriment because that material is already in the
public domain - see those three books - the fact
of the matter is that the source of the information

contained in those three books was Mr Wright and

Mr Wright, we submit, gave that information in breach

of his duties and he cannot profit from his own

wrongdoing. I just wanted to make that clear.

So that is another basis.

So, Your Honours, if I could just go to page 4 of the outline. This is the third defence as we

understand it. If the publication of Spycatcher would

cause detriment to the British and Australian public

interests~ that detriment is outweighed by the benefit

that would flow to the Australian public interest.

We submit there that accepting that persons should be

free to publish what they wish unless there are good

reasons why this should not be so, such good reasons

do exist in the present case as it is established by

the evidence of Mr Codd and Sir Robert Armstrong,
that notwithstanding that the public might have found
the contents of Spycatcher interesting, Mr Justice Kirby

and Mr Justice Powell were in error in failing to hold

that the question of detriment to the public interest

of the United Kingdom and Australia should be determined in accordance with the evidence of

Mr Codd and Sir Robert Armstrong.

(Continued on page 102)

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MR SIMOS (continuing):  Now, if I could just pause there,

Your Honours, if I may. Mr Justice Kirby, as I

think I may have mentioned to Your Honours this
morning, held in effect that, because all this material
was in the public domain, therefore the republication

of the same material in Spycatcher could not cause any

detriment. Now we take issue with that for the reasons

that we have submitted and, if we are right, then

His Honour Mr Justice Kirby and Mr Justice Powell

are wrong; but that is the basis upon which

Mr Justice Kirby and Mr Justice Powell came to the

conclusion that he did. But it is important to observe

that those conclusions involved a rejection of the

evidence of Sir Robert Armstrong. I will just deal

with Sir Robert Armstrong at the moment, and really
of Mr Codd as well.

Yet there was no specific evic2nce of lack of

detriment which could be set again3t the evidence
of Sir Robert Armstrong and Mr Codd, except the
evidence as to no detriment because of public domain.
Now the persons best qualified to establish by evidence

what is or is not in the public interest, having

regard to considerations of national security, of a

particular country is, we would submit, the government

o·f the day.

(continuing on_ page 103)

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MR SIMOS (continuing):  And there are certain statements

in certain judgments of this Court to which we

would wish to take the Court briefly to see how

that kind of evidence has been dealt with in this

Court. And they are not necessarily directly in

point but they indicate an approach which the Court

has taken to evidence relating to matters of

national security. The first one is the case of

AV HAYDON, 156 CLR 532, and this was the case

that arose out of the ASIS exercise in Melbourne

during the course of which it was said criminal
offences were committed and the government asked
the Commonwealth to disclose to the State Chief

Commissioner of Police the identity of the

participants so that he might investigate the

alleged crimes.

In these proceedings the persons involved in that exercise sought to restrain the Commonwealth

from disclosing their identities to the Commissioner

for Police. Mr Justice Gibbs dealt with the matter

at page 548, the last paragraph:

The Court, in deciding whether the

plaintiffs are entitled to the discretionary

relief which they seek, cannot consider the

danger to the security of Australia that may

result if the identity is disclosed. This

is because the executive, which is responsible

for the national security, has considered

the matter and has apparently satisfied itself

that the safeguards which the passage of -

those Acts -

were intended to provide will prove sufficient.

(Continued on page 104)

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MR SIMOS (continuing):  I think they were Acts which contained

provisions for hearings in camera.

In THE COMMONWEALTH V COLONIAL COMBING,

SPINNING AND WEAVING CO LTD, Isaacs J said

that the well-known dictum in THE ZAMORA,

that "those who are responsible for the
national security must be the sole judges

of what the national security requires" is "unquestionable law". The statement would

nowadays be regarded as too absolute. It

does not mean that when the executive seeks

a special privilege or immunity on grounds

of national security the courts will defer

without question to the judgment of the

executive as to what the· national security
requires ..... However when the executive,

after consideration, asserts that the national

security will not be harmed by the disclosure

of information, it is not open to a private

individual to attempt to establish the contrary.

A private litigant cannot be expected to have

the knowledge that would be likely to make

his views on such a question preferable to

those of the executive, and in any case this

is an area of the exercise of the prerogative
into which the court would be reluctant to

intrude.

And then there is a reference to SANKEY V WHITLAM

and then at the last three lines of that paragraph:

The grave responsibility for deciding whether the national security will suffer if the

identity of the plaintiffs is disclosed must

rest solely on the executive.

Justices Wilson and Deane at pages 576 and 577 - - -

DAWSON J:  Dawson, I think.

MR SIMOS:  I beg Your Honouts pardon. Wilson and Dawson - yes

I do have Dawson written here.	About the middle
of page 576:

If it were open to the Court to conduct

as it were a balancing exercise between competing

principles of public policy ..... it·may be

difficult for the Court to reject the present

view of the Commonwealth. It is true ..... that

national security may be invoked by a private

litigant as a reason for the court to refrain

from allowing the production of a document

or oral evidence. It is the duty of the court

and not the privilege of the executive government

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to decide whether evidence will be admitted.

However, the considered opinion of the responsible

minister or government on a question of public

interest immunity will always carry great

weight. This is particularly so where questions

of a national security are involved.

(Continued on page 106)

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MR SIMOS (continuing):

The consequence of a decision of a court

on a matter of national security which

is contrary to the considered view of

the government could be very serious indeed.

Then there is further discussion at the bottom of

that page and over on the next page. And then

there is - I will give Your Honours a reference to

Mr Justice Murphy at the bottom of page 563 and

the top of page 564. Next, Your Honours, there

is the case - I am sorry I see that I have gone

over the time now. Your Honours will no doubt wish

to know how much longer I will be?

MASON CJ:	Yes, how much longer will you be, Mr Simos?
MR SIMOS:	Not more than two hours and probably less,

Your Honour.

MASON CJ:  How long do you anticipate your argument will take,

Mr Turnbull?

MR TURNBULL:  Your Honour, it is difficult to predict,

obviously but_if my learned friend is two hours, I do

not think I could finish tomorrow which I think is

probably the critical issue.

MASON CJ:  But I gather counsel anticipate that the matter

would conclude on Thursday?

MR SIMOS:	We certainly do, Your Honour.
MASON CJ:	And you Mr Turnbull?
MR TURNBULL:	Yes, I was hoping that my learned friend would

finish tonight but - - -

MASON CJ:  We are to be denied of that. Very well, the Court

will adjourn.

AT 4.19 PM THE MATTER WAS ADJOURNED

UNTIL WEDNESDAY, 9 MARCH 1988

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