Jess & Jess (No 15)
[2024] FedCFamC1F 772
•22 November 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Jess & Jess (No 15) [2024] FedCFamC1F 772
File number MLF 3444 of 2006 Judgment of WILSON J Date of judgment 22 November 2024 Catchwords FAMILY LAW – MAJOR COMPLEX FINANCIAL PROCEEDINGS LIST – PRACTICE AND PROCEDURE – discovery – documents sought by litigation funders –respondents seeking the imposition of conditions to the release of documents sought – implied undertaking – adequacy of confidential undertaking. Legislation Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia Act 2021 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Cases cited Alphapharm Pty Ltd v Lundback Australia Pty Ltd [2006] FCA 1358.
Alterskye v Scott [1948] 1 All ER 469
Astrazeneca AB v Medis Pharma Pty Ltd [2014] FCA 549.
Betfair Pty Ltd v Racing New South Wales (No 5) [2007] FCA 1011.
Cadbury Pty Ltd v Amcor Ltd (No 2) [2009] FCA 663
Cadence Asset Management Pty Ltd v Concept Sports Ltd [2006] FCA 711
Coco v AN Clark (Engineers) Ltd [1969] RPC 41
Conor Medsystems Inc v Re University of British Columbia (No 4) [2007] FCA 324
Conrock Ltd v CSR Ltd (1990) 96 ALR 690
Harman v Secretary of State, Home Department [1983] 1 AC 280
Hawksford v Hawksford [2007] NSWSC 661
Hearne v Street (2008) 235 CLR 125
Hill v Zuda Pty Ltd (2022) 275 CLR 24.
ICAP Australia Pty Ltd v BGC Partners (Australia) Pty Ltd [2007] FCA 467
Interpharma Pty Ltd v Commissioner of Patents [2008] FCA 1422
Jess & Jess (No 10) [2023] FedCFamC1F 1013
Kimberley Mineral Holdings Ltd (in liq) v McEwan [1980] 1 NSWLR 210
Kirby v Centro Properties Ltd [2009] FCA 695
Mobil Oil Australia Lt v Guina Developments Pty Ltd [1996] 2 VR 34
QPSX Ltd v Ericsson Australia Ltd (No 5) [2007] FCA 244.
Riddick v Thames Board Mills Ltd [1977] QB 881, 896
Shearpond Pty Ltd v Atune Financial Solutions Pty Ltd (No 3) [2014] FCA 1448
Warner-Lambert Co v Glaxo Laboratories Ltd [1975] RPC 354 , 356
Division Division 1 First Instance Number of paragraphs 39 Date of last submission 8 November 2024 Date of hearing 8 November 2024 Place Melbourne Counsel for the applicant Mr CR Solicitor for the applicant Kenna Teasdale Lawyers Counsel for the represented third parties Mr Michael Kearney SC with Mr Springthorpe Solicitor for the represented third parties Taussig Cherrie Fildes Counsel for the interveners Mr Hamish Austin KC with Ms Papaleo Solicitor for the interveners Lander & Rogers ORDERS
MLF 3444 of 2006 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN MS JESS
Applicant
AND MR J AS LEGAL REPRESENTATIVE FOR MR JESS SNR (DECEASED)
First Respondent
MR JESS JNR & ORS (THE REPRESENTED THIRD PARTIES)
Second to 29th Respondents
MR K & MR L AS TRUSTEES OF THE BANKRUPT ESTATE OF MR JESS SNR
Interveners
ORDER MADE BY
WILSON J
DATE OF ORDER
22 NOVEMBER 2024
THE COURT ORDERS THAT –
1.Pursuant to ss 30 and 69(1) of the Federal Circuit and Family Court of Australia Act 2021 (Cth), ss 114Q(2)(b) and/or 114S(1) of the Family Law Act 1975 (Cth) and r 6.04(1)(b) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), each of the persons named in Annexure B to these orders who have given a signed undertaking in the form contained in Annexure A to these orders may receive from the applicant (or her legal representatives) the following -
(a)all documents filed or otherwise provided to the court by the parties to this proceeding and any appeals (Proceeding);
(b)all documents produced by the parties by way of discovery in the proceeding;
(c)all judgments, orders and other documents authored or provided by the court to the parties in the proceeding;
(d)all correspondence in relation to the proceeding, including correspondence between the parties;
(e)all documents produced pursuant to subpoena issued in the Federal Circuit and Family Court of Australia and
(f)transcripts of the proceeding,
(collectively, the Proceeding Documents).
2.For the avoidance of doubt, to the extent necessary to allow provision of the proceeding documents within the terms of order 1, the applicant (and their legal representatives) are excused from compliance with any non-publication or suppression order which otherwise applies to the proceeding documents and from the implied obligation described in Hearne v Street (2008) 235 CLR 125.
3.The response dated 30 October 2024 is dismissed.
4.All questions of costs of and incidental to the trustee’s application dated 28 October 2024 are reserved.
5.Any application for costs of and incidental to this application by the applicant must be filed and served by noon on 20 December 2024;
6.If the applicant applies for costs in accordance with paragraph 5, it must be supported by all relevant affidavits and submissions.
7.Any opposition to costs must be supported by affidavit material and submissions to be filed and served by noon on 20 January 2024.
8.Costs will thereafter be decided on the papers.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Jess & Jess has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
WILSON J
INTRODUCTION
The forward progress of this litigation by the applicant and the trustees of the bankrupt estate of Mr Jess Snr is wholly dependent on litigation funding. Two separate litigation funders[1] seek the provision of documents relevant to this litigation to enable them to make strategic decisions relevant to the funding of this litigation. Mr Jess Jnr has sought the imposition of conditions to the release of the documents sought. The applicant and the trustees oppose the imposition of those conditions.
[1] The wife’s and the trustees’.
On 8 November 2024 all parties debated the orders to be made. Embedded in the contentions of all parties was the concept that the documents sought to be presented to the litigation funders were impressed with an implied obligation not to use the documents otherwise than for this litigation, relying on the High Court’s decision in Hearne v Street.[2] The applicant and the trustees submitted that the provision of the documents to each litigation funder was not inconsistent with the implied obligation in Hearne v Street, relying on the observations of Finkelstein J in Cadence Asset Management Pty Ltd v Concept Sports Ltd.[3] The resistance pressed by Mr Jess Jnr was founded on his contention that sensitive commercial information would be divulged if the litigation funders are provided with the information sought. The applicant and the trustees submit that adequate protection is provided to Mr Jess Jnr by the confidentiality undertakings proposed.
[2] (2008) 235 CLR 125.
[3] [2006] FCA 711.
For the reasons set out below, I take the view that –
(a)the advance of this litigation on an ongoing basis by the applicant and the trustees can only be achieved if each is adequately funded by litigation funders;
(b)those litigation funders will only provide funding if supplied with documents relevant to this proceeding;
(c)even if commercially sensitive information of Mr Jess Jnr and of the companies he controls is divulged to the litigation funders, the confidential undertaking proposed by the applicant and the trustees is an orthodox[4] method of protecting that commercially sensitive information;
(d)in any event, it fell to Mr Jess Jnr to demonstrate that the information he asserted was commercially sensitive should be immunised from disclosure and he failed to discharge that evidentiary burden on that issue; and
(e)the mechanism proposed by Mr Jess Jnr for a 14 day prior notification period has the capacity to bring the funding process to a halt.
[4] Mobil Oil Australia Lt v Guina Developments Pty Ltd [1996] 2 VR 34, Kirby v Centro Properties Ltd [2009] FCA 695, Cadbury Pty Ltd v Amcor Ltd (No 2) [2009] FCA 663 and Hawksford v Hawksford [2007] NSWSC 661.
LITIGATION FUNDING FOR THE APPLICANT
In support of her application the applicant made an affidavit on 1 October 2024. Relevantly synthesised, she deposed to the following matters –
(a)in 2017 the applicant and PPP Investments Pty Ltd entered into a funding deed with CS Pty Ltd which was varied on 31 May 2024;
(b)since 2017 the applicant’s legal representatives have been funded to prosecute this proceeding;
(c)under the funding arrangements between the applicant and CS Pty Ltd, she has agreed to dispose of and assign in favour of CS Pty Ltd a success sum;
(d)CS Pty Ltd requires access to the documents sought[5] and the applicant’s solicitor (Mr AL) will be limited in what he can communicate when discussing the proceeding with CS Pty Ltd unless each has access to proceeding documents;
(e)CS Pty Ltd’s solicitor needs the proceeding documents in order to advise whether CS Pty Ltd should continue to advance funding;
(f)CS Pty Ltd’s solicitor has told the applicant that only two representatives of CS Pty Ltd seek access to the proceeding documents, namely Mr CT and Mr AN;
(g)CS Pty Ltd and its legal representatives are all prepared to execute a confidentiality undertaking as a condition to accessing the proceeding documents;
(h)the former solicitors for Mr Jess Jnr, DK Lawyers responded to a request made of them to execute a confidential undertaking asking for a precise identification of the documents to be provided to CS Pty Ltd and why each document is to be given to the funder;
(i)during August 2024 DK Lawyers communicated with the applicant’s solicitors asserting that CS Pty Ltd had no rights in respect of this proceeding and unless full specificity was given of the documents proposed to be provided to CS Pty Ltd and why, the Mr Jess Jnr parties would not consent to the provision of the proceeding documents to CS Pty Ltd;
(j)in August the trustees’ solicitors wrote to the applicant’s solicitors indicating that the trustees intended to provide their litigation funder DL Pty Ltd with documents in the proceeding;
(k)on 21 August 2024 DK Lawyers ceased acting for Mr Jess Jnr, replaced by Taussig Cherrie Fildes; and
(l)no prejudice has been identified by the Mr Jess Jnr parties that they might suffer if the proceeding documents were produced to CS Pty Ltd.
[5] They are called by the applicant “the proceeding documents”.
The applicant’s affidavit of 1 October 2024 was sworn in support of her application in a proceeding dated 1 October 2024. In that application the applicant sought three orders, namely –
1.Pursuant to ss 30 and 69(1) of the Federal Circuit and Family Court of Australia Act 2021 (Cth), ss 114Q(2)(b) and/or 114S(1) of the Family Law Act 1975 (Cth) and r 6.04(1)(b) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), each of the persons named in Annexure B to the Application who have given a signed undertaking in the form contained in Annexure A to the Application may receive from the Applicant (or her legal representatives) the following:
a.all documents filed or otherwise provided to the Court by the parties to this proceeding (Proceeding);
b.all documents produced by the parties by way of discovery in the Proceeding;
c.all judgments, orders and other documents authored or provided by the Court to the parties in the Proceeding;
d.all documents produced pursuant to subpoena issued in the Federal Circuit and Family Court of Australia and
e.transcripts of the Proceeding,
(collectively, the Proceeding Documents).
2.For the avoidance of doubt, to the extent necessary to allow provision of the Proceeding Documents within the terms of paragraph 1, the Applicant (and their legal representatives) are excused from compliance with any non‑publication or suppression order which otherwise applies to the Proceeding Documents, and from the implied obligation described in Hearne v Street (2008) 235 CLR 125.
3. The costs of this Application be paid by the Second Respondent [Mr Jess Jnr].
The application was carefully worded. It specified the identification of persons (named in Annexure B) who had given an undertaking (in the form of Annexure A) who were entitled to receive the five categories of documents set out in paragraph 1 of the application. It also set out the legislative and subordinate legislative foundation for the application, namely ss 30 and 69(1) of the Federal Circuit and Family Court of Australia Act, s 114S(1) of the Family Law Act, rle 6.04(1)(b) of the Federal Circuit and Family Court of Australia (Family Law) Rules and the High Court’s decision in Hearne v Street (op cit). The form of annexure A was sophisticated and contained a proper, well constructed enforceable undertaking. In schedule B was the list of persons who would give the undertaking, namely solicitors at DC Lawyers, barristers and directors of CS Pty Ltd. The terms and circumstances of the undertaking resembled those addressed by me in Jess & Jess (No 10).[6]
[6] Jess & Jess (No 10) [2023] FedCFamC1F 1013.
The response to the applicant’s application in a proceeding was dated 28 October 2024. In it Mr Jess Jnr (and no other respondent) set out the orders he sought in answer to those propounded by the applicant. His version was long yet there is no short way to reproduce it beyond setting it out in terms, as follows –
1.Subject to paragraph 3, the applicant and the applicant’s legal representatives be permitted to disclose the following documents to each of the persons named in Annexure B to this Response, provided they have first given a signed undertaking to the Court and the first respondent in the form contained in Annexure A to this Response (“Named Persons”):
a. documents filed in these proceedings up to 25 October 2024;
b.documents produced by any party in these proceedings by way of discovery up to 25 October 2024;
c.documents produced pursuant to subpoenas issued in these proceedings up to 25 October 2024; and
d. transcripts of any hearing in these proceedings up to 25 October 2024,
(“Specified Documents”).
2.The applicant and the applicant’s legal representatives be permitted to disclose the following documents to each of the Named Persons provided they have first given a signed undertaking to the Court and the first respondent in the form contained in Annexure A to this Response:
a. documents filed in these proceedings from 26 October 2024;
b.documents produced by any party in these proceedings by way of discovery from 26 October 2024;
c.documents produced pursuant to subpoenas issued in these proceedings from 26 October 2024; and
d.transcripts of any hearing in these proceedings from 26 October 2024 or part thereof which includes the evidence given by a party or their witness,
subject to:
a.paragraphs 3, 4 and 5;
b.first giving the first respondent not less than fourteen (14) business days written notice identifying the specific documents proposed to be disclosed (“Provisional Specified Documents”) (such notice not to be given between 9 December 2024 and 1 January 2025 (inclusive) to account for the Christmas/Court shut down period and limitations on judicial availability); and
c.further order, including any order made pursuant to an application made by the first respondent as contemplated by paragraph 4.
3.[Mr CT] (and any other director, employee or agent of [CS Pty Ltd] to whom documents may in future be provided pursuant to orders made in these proceedings) is to be permitted to access the Specified Documents or the Provisional Specified Documents solely through a computerised platform […] with read-only authorisation giving no ability to download, copy, save or print documents, such platform to be hosted by the applicant’s legal representatives.
4.The first respondent has liberty to apply to the court, specifically to the chambers of His Honour Justice Wilson, on short notice, seeking orders restricting the disclosure of documents for which notice has been given by the applicant pursuant to paragraph 2 AND IN THE EVENT THAT such an application is served (whether or not a filing or listing date has been given by the court), the applicant and the applicant’s legal representatives are not permitted to disclose any document that is the subject of the first respondent’s application, pending determination of that application.
5.Subject to further order, the applicant and the applicant’s legal representatives are not permitted to disclose the following documents to the Named Persons:
a.Documents relating to or recording the business operations of individual [Y Business] stores (franchised or business owned);
b.Documents relating to business plans or strategies of [Y Business] including individual stores;
c.Leases and related documents for commercial properties owned by the first respondent’s family or related entities and for the [Y Business] corporate stores; and
d.Documents relating to planning applications, permits or the potential development or redevelopment of properties held by the first respondent’s family or related corporate entities.
6.The applicant pay the first respondent’s costs of and incidental to her Application in a Proceeding and this Response to an Application in a Proceeding.
7. The Court NOTES:
a.These orders constitute approval pursuant to s 114Q(2)(b) of the Family Law Act 1975 (Cth) (“Act”) and r 6.04(1)(b) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“Rules”) and to the extent production of documents is permitted by these orders the applicant and the applicant’s legal representatives are excused from compliance with any nonpublication or suppression order which otherwise applies and the implied obligation described in Hearne v Street (2008) 235 CLR 125; and
b.the applicant and the applicant’s legal representatives are not excused from compliance with Part XIVB of the Act, r 6.04 of the Rules, any non-publication or suppression order which otherwise applies or the implied obligation described in Hearne v Street (2008) 235 CLR 125 with respect to disclosing documents or information to any person other than the Named Persons.
In support of his own applications contained in his response to the applicant’s application in a proceeding, Mr Jess Jnr made an affidavit affirmed on 28 October 2024. As a general observation, Mr Jess’s affidavit contained material that went beyond the matters an affidavit is confined to do, namely, to state facts within the personal knowledge of the deponent. Instead, Mr Jess Jnr’s 28 October 2024 contained submissions,[7] commentary on exhibits,[8] submissions and commentary by a layman about documents said to be confidential[9] and unparticularised assertions about approaches he said he received from third parties about the wife’s funding arrangements.[10]
[7] For example, paragraph 9.4 in which he asserts that the applicant’s funding agreement did not identify individual investors or interested third parties standing behind CS Pty Ltd.
[8] For example, paragraph 10 in which he purports to narrate how to read and construe various documents lodged with the Australian Securities and Investments Commission.
[9] For example, paragraph 11 where he asserts what is a confidential document, despite having no legal qualifications to enable him to say as much.
[10] For example, paragraph 14.
Strictly speaking, hearsay evidence is admissible in an interlocutory application such as this. Yet even hearsay evidence, to be utile, should be underpinned by reference to the source of the information and belief expressed. The information given in the opening portions of paragraph 15 of his affidavit fell well short of being utile for the simple reason that it was unverified. The point became relevant when Mr Jess Jnr asserted in a wholly unsubstantiated manner that the return on investment for the funder that was funding the applicant was $100 million. Equally unsubstantiated was his assertion that a particular business was owned by Mr CU, Mr CV, Mr CW and Mr CX. He deposed to a man known as Mr CY funding Mr Jess Snr before he funded the applicant having advanced $11 million and was “paying for [Ms Jess]’s penthouse apartment in [Suburb CZ]”.
Mr Jess Jnr asserted in his affidavit, without giving the factual basis for the assertion, that Mr CY and Mr AN were (to use the words used by Mr Jess Jnr in inverted commas) “driving the process”.
Mr Jess Jnr asserted in his affidavit that Mr CY owns real property in Suburb DA and Suburb DB. Mr Jess Jnr asserted that the Y Business is a large independent retailer with a network of franchised and company-owned stores throughout Australia. He did not say –
(a)whether his assertion of size was based on turnover, profitability, asset base or staff and shareholder numbers; or
(b)how that was relevant to his assertions of his fears about persons in CS Pty Ltd seeing the documentation to be provided to CS Pty Ltd.
He said the business was very competitive. That too told me nothing of the basis of Mr Jess’ apprehensions about CS Pty Ltd seeing certain documentation in this case.
However, he did state (in a manner seemingly more relevant) that pricing and strategic information of his business was confidential and commercially sensitive. That assurance caused me pause because so far as confidentiality was concerned, he took no step to demonstrate the existence of confidentiality within the classis formulation by Sir Robert Megarry in Coco v AN Clark (Engineers) Ltd[11] and in respect of allegedly commercially sensitive information, he took no step to demonstrate the allegedly sensitive nature of the information or for that matter what precise information was said to be commercially sensitive as was considered in such cases as Conrock Ltd v CSR Ltd[12] or Mobil Oil Australia Ltd v Guina Developments Pty Ltd.[13] That said, as a matter of ordinary commercial activity I accept that commercially sensitive information, if it is proved to be that, can be exploited by competitors. Hayne JA said as much in Mobil Oil Australia Ltd v Guina Developments Pty Ltd. But to get to the point of embarking on any consideration of the protection of commercially sensitive information a deponent is required to do vastly more than Mr Jess Jnr did on this application. A deponent must prove that the relevant information is not in the public domain and that it is, in fact and in law, commercially sensitive. A mere assertion to the effect that certain undefined information is commercially sensitive, without deposing in considerable depth to why it is allegedly sensitive and in what particular segment of an asserted market will not suffice.
[11] [1969] RPC 41.
[12] (1990) 96 ALR 690.
[13] [1996] 2 VR 34.
Here Mr Jess Jnr made glib assertions that various unidentified leased premises contained the names of tenants and the terms of leases which were said to be commercially sensitive. Without more, I am unable to accept that assertion. I am unable to see how the name of a tenant is “commercially sensitive” in the way described by Hayne JA in Guina. But even if the name of a tenant was properly characterised as being “commercially sensitive”, nowhere did Mr Jess Jnr explain how a rival in the market (whatever market he was discussing) could turn that name to the advantage of a rival.
So far as the documents in paragraph 32 were concerned, likewise, nowhere did Mr Jess Jnr depose to the way he and his officers kept that information secret such as to attract the law’s protection. Mr Jess Jnr faintly hinted at a competitor possibly using the information in paragraph 32 to obtain a competitive advantage. That seemed to me to amount to no more than alarmist suspicion, devoid of actual content or actual evidence of risk beyond mere possibility.
But the starting point which Mr Jess Jnr failed to demonstrate was the precise information that was said to be secret, how that secrecy arose, why it was not in the public domain already and why this court should lend its assistance to the protection of unproven assertions of allegedly confidential documents.
I was not persuaded that the documents allegedly commercially sensitive are in fact not capable of protection by the confidentiality undertaking proposed by the applicant. My view is fortified by the observations of Gordon J (as her Honour then was) as a member of the Federal Court of Australia in Cadbury Pty Ltd v Amcor Ltd (No 2) especially her Honour’s comments about the protection conferred by the implied undertaking mentioned in paragraph 7 of her Honour’s reasons.
AN EXAMINATION OF HEARNE V STREET
Parties to civil litigation must bear the invasive nature of discovery. They have no choice but to tolerate it, subject to a claim to privilege and subject to the implied undertaking. Important in an assessment of the operation of the implied undertaking are such matters as the age of the information, the identity of the persons who will inspect the documents and the reason why the inspection of the document is necessary.
Here, provision of the documentation to CS Pty Ltd is pursuant to a contractual requirement by CS Pty Ltd without which funding may be terminated. That seemed to be a normal and unusual requirement of a litigation funder. As a case progresses through its interlocutory phases, the funder is undoubtedly interested in seeing propositions raised by opposite parties, especially affidavits in the nature of trial affidavits. To my mind, a litigation funder’s interest in obtaining documentation is akin to (although not identical with) to a professional indemnity insurer which ordinarily sees documents so as to gauge its level of exposure on liability and costs even on a progressive basis. It usually obtains regular updates of that documentary information to enable it to engage in reinsurance activities or hedging of risk. In this instance, CS Pty Ltd is seeking documentation to assess on an ongoing basis any impediments to its client, the applicant, successfully progressing through the interlocutory phases of this litigation on the path to trial and for the trial itself. Self-evidently, it will be keen to know as soon as possible of the existence of information that imperils the ongoing provision of financial accommodation pursuant to its funding facility. To my way of thinking, that is a legitimate reason for its request for documentation.
It also seems to me that the concerns expressed by Mr Jess Jnr to the effect that information not in the public domain should not be disseminated to the public can adequately and effectively be managed by the confidential undertaking attached to the applicant’s application in a proceeding.
The precise form I favour is the version propounded by the applicant. I was not attracted to the requirement insinuated in the proposal advanced by Mr Jess Jnr for a 14 day period to elapse. Such an order serves no useful purpose when the confidentiality undertaking procedure operates.
THE TRUSTEES’ LITIGATION CONCERNING FUNDING APPLICATION
The trustees’ application in respect of litigation funding resembled the applicant’s. It was as follows –
1.To the extent necessary, pursuant to the implied power of the Federal Circuit and Family Court of Australia (Court), alternatively ss 30 and 69(1) of the Federal Circuit and Family Court of Australia Act 2021 (Cth), ss 114Q(2)(b) and/or 114R(2)(b)(i) of the Family Law Act 1975 (Cth) and rr 1.31, 6.04(1)(b) and 6.36(2)(b) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), each of the persons named in Annexure B to this order who have given a signed undertaking in the form contained in Annexure A to this order may receive from the Intervenors (or their legal representatives) the following:
1.1all documents filed or otherwise provided to the Court by the parties to this proceeding and any appeals (Proceeding);
1.2all documents produced by the parties by way of discovery in the Proceeding;
1.3all judgments, orders and other documents authored or provided by the Court to the parties in the Proceeding;
1.4all correspondence in relation to the Proceeding, including correspondence between the parties;
1.5 all documents produced pursuant to subpoena issued in the Court; and
1.6 transcripts of the Proceeding,
(collectively, the Proceeding Documents).
2.For the avoidance of doubt, to the extent necessary to allow provision of the Proceeding Documents within the terms of paragraph 1 above, the Intervenors (and their legal representatives) are excused from compliance with any non-publication or suppression order which otherwise applies to the Proceeding Documents, and from the implied obligation described in Hearne v Street (2008) 235 CLR 125.
3. The Second Respondent pay the Intervenors' costs of this application.
The trustees’ solicitor swore an affidavit in support of the trustees’ application on 28 October 2024. Relevantly synthesised, the trustees’ solicitor deposed to the following –
(a)DL Pty Ltd and the trustees entered into a funding agreement on 14 April 2020, consent to enter into it having been given by a judge of the Federal Court on 7 December 2020;
(b)DL Pty Ltd’s funding agreement requires the trustees’ solicitors to regularly report to DL Pty Ltd and to consult on strategic discussions involving DL Pty Ltd; and
(c)Mr Jess Jnr’s legal representatives have not consented to providing documents to DL Pty Ltd.
In his response to the trustees’ application for permission to produce documents to DL Pty Ltd, Mr Jess Jnr provided a response that mimicked his response to the applicant. It was in the following terms –
1.The Trustees of the Bankrupt Estate of [Mr Jess Snr] (deceased) (referred to as the “Trustees”) and their legal representatives be permitted to disclose the following documents to each of the persons named in Annexure B to this Response, provided they have first given a signed undertaking to the Court and the first respondent in the form contained in Annexure A to this Response (“Named Persons”):
a. documents filed in these proceedings up to 25 October 2024;
b.documents produced by any party in these proceedings by way of discovery up to 25 October 2024;
c.documents produced pursuant to subpoenas issued in these proceedings up to 25 October 2024; and
d. transcripts of any hearing in these proceedings up to 25 October 2024,
(“Specified Documents”).
2.The Trustees and their legal representatives be permitted to disclose the following documents to each of the Named Persons provided they have first given a signed undertaking to the Court and the first respondent in the form contained in Annexure A to this Response:
a. documents filed in these proceedings from 26 October 2024;
b.documents produced by any party in these proceedings by way of discovery from 26 October 2024;
c.documents produced pursuant to subpoenas issued in these proceedings from 26 October 2024; and
d.transcripts of any hearing in these proceedings from 26 October 2024 or part thereof which includes the evidence given by a party or their witness,
subject to:
e. paragraphs 3, 4 and 5;
f.first giving the first respondent not less than fourteen (14) business days written notice identifying the specific documents proposed to be disclosed (“Provisional Specified Documents”) (such notice not to be given between 9 December 2024 and 1 January 2025 (inclusive) to account for the Christmas/Court shut down period and limitations on judicial availability); and
g.further order, including any order made pursuant to an application made by the first respondent as contemplated by paragraph 3.
3.The first respondent has liberty to apply to the court, specifically to the chambers of His Honour Justice Wilson, on short notice, seeking orders restricting the disclosure of documents for which notice has been given by the applicant pursuant to paragraph 2 AND IN THE EVENT THAT such an application is served (whether or not a filing or listing date has been given by the court), the Trustees and their legal representatives are not permitted to disclose any document that is the subject of the first respondent’s application, pending determination of that application.
4.Subject to further order, the Trustees and their legal representatives are not permitted to disclose the following documents to the Named Persons:
a.Documents relating to or recording the business operations of individual [Y Business] stores (franchised or business owned);
b.Documents relating to business plans or strategies of [Y Business] including individual stores;
c.Leases and related documents for commercial properties owned by the first respondent’s family or related entities and for the [Y Business] corporate stores; and
d.Documents relating to planning applications, permits or the potential development or redevelopment of properties held by the first respondent’s family or related corporate entities.
5.The Trustees pay the first respondent’s costs of and incidental to their Application in a Proceeding and this Response to an Application in a Proceeding.
6. The Court NOTES:
a.These orders constitute approval pursuant to s 114Q(2)(b) of the Family Law Act 1975 (Cth) (“Act”) and r 6.04(1)(b) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“Rules”) and to the extent production of documents is permitted by these orders the Trustees and the their legal representatives are excused from compliance with any nonpublication or suppression order which otherwise applies and the implied obligation described in Hearne v Street (2008) 235 CLR 125; and
b.the Trustees and their legal representatives are not excused from compliance with Part XIVB of the Act, r 6.04 of the Rules, any non‑publication or suppression order which otherwise applies or the implied obligation described in Hearne v Street (2008) 235 CLR 125 with respect to disclosing documents or information to any person other than the Named Persons.
Mr Jess Jnr’s affidavit in support of his response was in similar terms to the affidavit he made in opposition to the applicant’s application. The comments made above by me in respect of Mr Jess Jnr’s affidavit filed in opposition to the applicant’s application apply in relation to Mr Jess Jnr’s affidavit find in opposition to the trustees’ application.
THE APPROACH BY FINKELSTEIN J
Several years ago Finkelstein J held[14] that it was not a breach of the implied undertaking to provide documents in a proceeding to a litigation funder. His Honour said that the litigation funder was in reality no stranger to the litigation.
[14] Cadence Asset Management Pty Ltd v Concept Sports Ltd [2006] FCA 711.
When his Honour’s reasons in Cadence Asset Management Pty Ltd v Concept Sports Ltd are carefully examined, it seems to me that there is considerable merit in his Honour’s observations. I regard those reasons as being dispositive of this application. Of course, in terms of precedential value, I am bound by Hearne v Street whereas according to Hill v Zuda Pty Ltd[15] a decision of a single judge of the Federal Court is persuasive only. Yet I see nothing inconsistent in the reasoning of Finkelstein J with the reasoning in Hearne v Street. I propose to follow Hearne v Street, as I am bound to do, and I propose to follow the ratio decidendi of Finkelstein J in Cadence Asset Management Pty Ltd v Concept Sports Ltd, because I am permitted to do if so persuaded, as I am. To my way of thinking, there is no contravention of the implied undertaking in Hearne v Street by the provision of the documents in this litigation to a party’s litigation funder.
[15] (2022) 275 CLR 24.
RELEVANT LEGAL PRINCIPLES
The Family Law Act specifically creates a criminal offence for a person communicating to the public accounts of proceedings that identify parties or others involved in proceedings.[16] In addition, litigants in this court are bound by the implied obligation recorded originally in Harman v Secretary of State, Home Department[17] more recently restated in Hearne v Street.[18] It may be accepted that since Riddick v Thames Board Mills Ltd[19] discovery is an invasive process pursuant to which a party who seeks discovery gets discovery on condition that he will use the discovery only for the purpose of the proceeding and for no other purpose. Further, to use a document produced for inspection for a collateral or ulterior purpose is a misuse against which the court will proceed for contempt or by injunction.[20]
[16] Sections 114Q, 114R and 114S of the Family Law Act.
[17] [1983] 1 AC 280.
[18] (2008) 235 CLR 125.
[19] [1977] QB 881, 896.
[20] Kimberley Mineral Holdings Ltd (in liq) v McEwan [1980] 1 NSWLR 210 applying Alterskye v Scott [1948] 1 All ER 469.
According to the locus classicus on discovery, Bray on Discovery (1885 edn) the purpose for compelling discovery is to enable the court to get at the truth. Finkelstein J in Cadence Asset Management Pty Ltd v Concept Sports Pty Ltd[21] held that such a notion was more important than the right to privacy. His Honour held that privacy nevertheless required protection against the use of documents otherwise than for the proceeding in which the documents are discovered. Famously Finkelstein J held as follows (at [6]) –
“The view that I take is that the implied undertaking does not prevent absolutely a party giving discovered documents to a non-party. There are circumstances in which a party has a legitimate interest in disclosing discovered documents to a non-party. Obvious examples include showing a discovered document to an actual or prospective witness or to an expert non-witness. Of course that is permissible; because in each case the document is being used for the action. There are also cases where a non-party has a legitimate interest in seeing discovered documents. I have in mind, for example, a parent company whose subsidiary is involved in litigation to which the parent is not a party. Or take the case of an insured person whose insurer has not assumed the conduct of an action and the insured wishes to keep his insurer informed of what is going on in a case where he claims to be indemnified. I have never heard it suggested that in those instances it would be wrong to hand the documents over. No doubt this is what occurs every day, without anyone believing that it is necessary to approach the court for permission. The reason permission is not required is that the provision of the documents is not for an ulterior or foreign purpose. Another way of putting it is that the non-party is not a true stranger to the action.”
[21] [2006] FCA 711.
On the facts of the case, his Honour held that IMF was not a stranger to the proceeding as it had a sufficient interest to be provided with the documents that were discovered in order to enable IMF to assess the merits of the proceeding.
A repeat theme of discovery is the very serious invasion of the privacy and confidentiality to a litigant’s affairs that it orchestrates. French J referred to the statements of principle to that effect in Lord Keith’s speech in Harman when French J considered the implied undertaking in QPSX Ltd v Ericsson Australia Ltd (No 5).[22]
[22] [2007] FCA 244.
The 2008 decision of Hearne v Street[23]held that the implied undertaking is an obligation of substantive law. So far as third party obligations were concerned, the plurality held that the implied undertaking binds expert witnesses who are not third parties. The plurality held that it is “likely that, in the future, documentation and information will be provided to persons funding litigation, who will likewise be bound by the obligation”.
[23] (2008) 235 CLR 125.
When a party to litigation asserts that the implied undertaking is insufficient for the protection of its confidential information, greater protection can be achieved by the entry into confidential undertakings of the sort explained in Mobil Oil Australia Ltd v Guina Developments Pty Ltd.[24] It is for the party asserting the need for greater protection than that conferred by the implied undertaking to establish that the character of each document is such that it should attract additional protection.[25]
[24] [1996] 2 VR 34.
[25] Authorities favouring that approach include Mobil Oil Australia Ltd v Guina Developments Pty Ltd [1996] 2 VR 34, Cadbury Pty Ltd v Amcor Ltd (No 2) [2009] FCA 663, ICAP Australia Pty Ltd v BGC Partners (Australia) Pty Ltd [2007] FCA 467 and Betfair Pty Ltd v Racing New South Wales (No 5) [2007] FCA 1011.
In cases where a claim to confidentiality is asserted, the onus is on the party making the claim.[26] In considering whether a claim for confidentiality should be upheld or refused, a balancing exercise is engaged in where the risk of inadvertent disclosure is contrasted with the benefit of a party having access to relevant information is addressed so that appropriate advice can be given to the client and informed instructions received from the client.[27] In determining where the balance lies in a particular case, the following matters are relevant –
(a)the nature and content of the confidential information;
(b)the extent to which the person to whom confidential information is disclosed will have occasion to use the information to further a party’s commercial interests;[28]
(c)the professional attitudes of persons to whom it is proposed to disclose the information;
(d)the extent to which the court can be satisfied that the person to whom the confidential information is released has in place a security system to protect the confidentiality of the information;[29]
(e)undertakings given; and
(f)what matters when information is supplied, say, to a litigation funder is the purpose in making the disclosures;[30]
[26] Alphapharm Pty Ltd v Lundback Australia Pty Ltd [2006] FCA 1358.
[27] Warner-Lambert Co v Glaxo Laboratories Ltd [1975] RPC 354 , 356 and Astrazeneca AB v Medis Pharma Pty Ltd [2014] FCA 549.
[28] Conor Medsystems Inc v Re University of British Columbia (No 4) [2007] FCA 324.
[29] Interpharma Pty Ltd v Commissioner of Patents [2008] FCA 1422.
[30] Shearpond Pty Ltd v Atune Financial Solutions Pty Ltd (No 3) [2014] FCA 1448.
Applying those considerations set out immediately above, in my view –
(a)the disclosure to the litigation funders is not a breach of the implied obligation because in Hearne v Street it was contemplated that documents would be supplied to financiers without contravening the implied undertaking;
(b)according to Finkelstein J’s formulation in Cadence, the applicant as well as the trustees in this case have a legitimate interest in disclosing discovered documents to a non-party; and
(c)the litigation funders have a legitimate interest in seeing the discovered documents because the litigation funders have a substantial interest (their ongoing provision of financial accommodation to the applicant and to the trustees) in seeing the documents; and
(d)the confidential undertaking method proposed by the applicants and the trustees is a secure, commercially realistic method of preserving the confidentiality of the documents produced and it is a method sanctioned by authority of immense veneration in Anglo Australian Jurisprudence.
DISPOSITION
For the above reasons, I make orders in terms of the minute handed to me on 8 November 2024 on behalf of the wife when Mr CR commenced his application. I make orders in terms of paragraphs 1 and 2 of the trustees’ application in a proceeding dated 28 October 2024 together with annexures A and B. I dismiss Mr Jess Jnr’s response dated 30 October 2024 to the trustees’ application in a proceeding. I reserve all questions of costs of and incidental to the trustees’ application in a proceeding dated 28 October 2024.
Accordingly, in the applicant's application in a proceeding I make orders in terms of paragraphs 1 and 3 incorporating the annexures A and B. I reserve costs of and incidental to this application.
It follows that I dismiss paragraphs 1 - 7 of Mr Jess Jnr's response and reserve costs on and incidental to that application.
THE TRIAL
The trial of this proceeding remained fixed to commence on 2 June 2024. It has been earmarked for one month. Whether the orders made herein cause any change to the fixture remains to be seen. An amended statement of claim must be delivered shortly. Thereafter defences must be filed together with counterclaims. Whether it is being unduly optimistic to think the start of the trial of this prehistoric piece of litigation can be achieved by its current fixed date remains to be seen.
I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wilson. Associate:
Dated: 22 November 2024
ANNEXURE A
CONFIDENTIALITY UNDERTAKINGI, [NAME], [occupation] at [entity or organisation], of [address]:
ACKNOWLEDGE THAT:
1.I am a director of CS Pty Ltd (Funder), who is engaged by Ms Jess to provide funding in relation to proceeding MLF3444/2006 in the Federal Circuit and Family Court of Australia and any appeals (Proceeding).
OR
I am engaged in the giving of instructions on behalf of CS Pty Ltd (Funder), who is engaged by Ms Jess to provide funding in relation to proceeding MLF3444/2006 in the Federal Circuit and Family Court of Australia and any appeals (Proceeding).
OR
I am engaged to act as a legal representative on behalf of CS Pty Ltd (Funder) in relation to proceeding MLF3444/2006 in the Federal Circuit and Family Court of Australia and any appeals (Proceeding). I am engaged to advise and/or appear in relation to the Proceeding.2.On the giving by me of this undertaking, the Court has ordered that I be permitted to receive access to all documents filed or otherwise provided to the Court by the parties in the Proceeding, all documents produced by the parties by way of discovery in the Proceeding, all documents produced in response to subpoenas issued in the Proceeding, all correspondence in relation to the Proceeding including correspondence between the parties, all transcripts of the Proceeding and all judgments, orders and other documents authored or provided by the Court to the parties in the Proceeding (collectively, the Proceeding Documents).
3.The Proceeding Documents and their contents are strictly confidential but are relevant to the Funder's interests in relation to the Proceeding.
4.Unauthorised disclosure of the Proceeding Documents or their contents may cause significant injury and / or loss to the persons named therein, or to their business activities. It may also constitute a criminal offence pursuant to s 114Q of the Family Law Act 1975 (Cth).
As a condition of receiving the Proceeding Documents, I hereby UNDERTAKE to the Court that:
5.I will keep confidential and not use the Proceeding Documents and their contents other than for the purpose of:
(a)enabling the Funder to receive advice in relation to, and to itself review, its funding arrangements with Ms Jess; and/or
(b)enabling the funder and its Legal Representatives to consult with Ms Jess' Legal Representatives in relation to all issues in the Proceedings (Purpose). To this end, I will access and engage with the Proceeding Documents and their contents only to the extent necessary for me to perform my function as described in paragraph 1.
6.I will not disclose the Proceeding Documents or their contents (whether orally or in writing) to any person unless:
(a)such disclosure is in a form which maintains the confidentiality of the Proceeding Documents and is to:
(i)the court hearing the Proceeding, or any appeal or application for leave to appeal from any decision in that proceeding; and / or
(ii)the parties participating in the Proceeding, or any appeal or application for leave to appeal from any decision in that proceeding, for the purposes of its determination; and / or
(iii)a person who has already been provided with the Proceeding Documents for the purposes of the Proceeding, provided that such person has first filed with the Court and served on the parties to the Proceeding a written confidentiality undertaking in respect of the Proceeding Documents in a form as ordered by the Court; or
(b)such disclosure is expressly authorised by order of the Court or the court hearing the Proceeding, or any appeal or application for leave to appeal from any decision in that proceeding; or
(c)the Proceeding Documents or their contents have already been disclosed to that person other than in contravention of this undertaking.
7.I will not derive any personal benefit from the Proceeding Documents or their contents other than for the Purpose, except if I receive the Proceeding Documents by means other than in contravention of this undertaking.
8.I will maintain reasonable security measures to safeguard the Proceeding Documents and their contents from unauthorised access, use, copying or disclosure.
9.I will promptly notify the Court and parties to the Proceeding in writing if I become aware that:
(a)I have inadvertently lost, ceased to be in possession of, or made any unauthorised use or disclosure of the Proceeding Documents or their contents; or
(b)the Proceeding Documents or any documents recording information derived from them may have come into the possession of a person not authorised to receive the Proceeding Documents or their contents.
Date Signature
ANNEXURE B
Name Entity / Organisation Role Mr AP DC Lawyers Solicitor for Funder Mr DE DC Lawyers Solicitor for Funder Ms DF DC Lawyers Solicitor for Funder Mr DG DC Lawyers Solicitor for Funder Mr DH DC Lawyers Solicitor for Funder Any other employee, consultant or partner of DC Lawyers acting for CS Pty Ltd DC Lawyers Solicitor for Funder Mr DJ Professional organisation Counsel for Funder Mr DK Professional organisation Counsel for Funder Any other Counsel acting for CS Pty Ltd Professional organisation Counsel for Funder Mr CT CS Pty Ltd Director Mr AN CS Pty Ltd Managing Partner
0
16
3