Minter Ellison (A Firm) v Raneberg

[2011] SASC 159

SUPREME COURT OF SOUTH AUSTRALIA

(Civil)

MINTER ELLISON (A FIRM) & ANOR v RANEBERG

[2011] SASC 159

Judgment of The Honourable Justice Gray

29 September 2011

EQUITY - EQUITABLE REMEDIES - INJUNCTIONS - INTERLOCUTORY INJUNCTIONS - EX PARTE APPLICATIONS - GENERALLY

PROCEDURE - COURTS AND JUDGES GENERALLY - COURTS - PROCEEDINGS IN OPEN COURT OR IN CAMERA

The plaintiffs sought and obtained an urgent ex parte freezing order over the defendant's assets, in circumstances where the plaintiffs claim that the defendant, as accounting and finance manager employed by them, embezzled monies over some years - further interim orders were made to ensure confidentiality, including orders as to the sealing of documents on the court file - the plaintiffs now seek the continuance of orders to maintain confidentiality over limited material, that material relating to the plaintiff firm's partner's personal funds - whether there is a legitimate claim to confidentiality - whether appropriate in the circumstances of the case that the order as to confidentiality continue.

Consideration of the principle of open justice.

Held: the order as to confidentiality is to continue.

Evidence Act 1929 (SA) s 69A and s 49; Supreme Court Civil Rules 2006 (SA) r 4 and r 247(3); Supreme Court Practice Directions 2006 (SA), referred to.
Australian Broadcasting Commission v Parish (1980) 29 ALR 228; Black v S Freedman & Company (1910) 12 CLR 105; Sullivan v Sclanders (2000) 77 SASR 419; Lloyds Bowmaker Ltd v Britannia Arrow Holdings plc [1988] 3 All ER 178; Brink’s Mat Ltd v Elcombe [1988] 3 All ER 188; Dormeuil Freres SA v Nicolian International (Textiles) Ltd [1988] 3 All ER 197; Behbehani v Salem [1989] 2 All ER 143; Thomas A Edison Ltd v Bullock (1912) 15 CLR 679; Re South Downs Packers Pty Ltd [1984] 2 Qd R 559; Lane v Channel 7 Adelaide Pty Ltd (2004) 232 LSJS 234; Digital Equipment Corporation v Darkcrest Ltd [1984] Ch 512; Coulthard v South Australia (1995) 63 SASR 531; J N Taylor Holdings Limited (in liq) (2007) 249 LSJS 80; Russell v Russell (1976) 134 CLR 495; Scott v Scott [1913] AC 417; Attorney-General v Leveller Magazine Ltd [1979] AC 440; Hogan v Hinch (2011) 275 ALR 408, considered.

MINTER ELLISON (A FIRM) & ANOR v RANEBERG
[2011] SASC 159

Civil

GRAY J:

1. The plaintiffs are a firm of solicitors and their incorporated administration company.  The defendant was employed by the plaintiffs initially as their accounting and finance manager, and later as chief financial officer.  The plaintiffs claim that the defendant in the course of his employment embezzled monies over some years. 

2. The plaintiffs sought and obtained an urgent ex parte freezing order over the defendant’s assets.  Interim orders were made to ensure confidentiality.  These orders initially precluded access to the Court file.  The proceedings were heard in a closed Court.

   Background

3. Reasons for these orders included the serious nature of the allegations being made about the defendant without his being served and in his absence, and the plaintiffs’ claim to confidentiality of private material. 

4. The confidentiality orders have been varied.  However, the plaintiffs seek orders to maintain confidentiality over limited material.  In my view it is appropriate to continue limited orders as to confidentiality.  My reasons follow.

5. At the outset, it is relevant to recall the observations of Deane J in Australian Broadcasting Commission v Parish:[1]

   There lies at the heart of our legal system the ideal of the attainment of justice under the law in the individual case. Justice can be denied as much by effectively closing the doors of the courts to litigants as it can by an unjust or wrong decision. The results of an undue discounting of legitimate claims to confidentiality are likely to be both the deterrence of the subject from having recourse to courts of justice for the vindication of legal rights or the enforcement of criminal law and the discouragement of willing co-operation on the part of witnesses whose evidence is necessary to enable the ascertainment of truth. The interests of the administration of justice plainly make it desirable that obligations of confidence be not lightly overruled and that legitimate expectations of confidentiality as to private and confidential transactions and affairs be not lightly disregarded.

   In some cases, where publicity would destroy the subject matter of the litigation, the avoidance of prejudice to the administration of justice may make it imperative that the ordinary prima facie rule of open justice in the court room gives way to the overriding need for confidentiality. Even where publicity would not destroy the subject matter of the litigation, the need to respect legitimate claims to confidentiality will be a factor—and in some cases a determining factor—to be placed in the overall balance in considering whether an order under s 50 should be made. Damage and hardship to the individual from the working of legal processes can only be justified if they are warranted by countervailing benefit, or avoidance of prejudice, to the general administration of justice or by the legitimate claims and expectations of other individuals. When not so warranted, such damage or hardship is to the overall prejudice of the administration of justice.

   [1]    Australian Broadcasting Commission v Parish (1980) 43 FLR 129, 157-158.

6. Three affidavits were filed in support of the application for freezing orders, being an affidavit of Nigel Fergus McBride dated 21 July 2011 and two affidavits of Andrew Christie Mailler both dated 21 July 2011.  Two additional documents were tendered by counsel at the hearing – a chronology and a summary of losses. 

7. The orders made on the initial ex parte hearing included the following confidentiality orders:

   That the Court file in this action be kept confidential and that no person be entitled to inspect any part of the file without an order of this Honourable Court and upon notice to the plaintiffs of an application for such an order.

   That the materials ordered to be served not be disclosed to any person other than those served, the defendant and his solicitor and barrister.

8. Subsequent attendances before the Court on 26 July 2011, 2 August 2011 and 12 August 2011 proceeded in private. 

9. On 25 July 2011, the plaintiffs issued ex parte interlocutory applications under section 49 of the Evidence Act 1929 (SA), seeking inspection and production of documents from National Australia Bank Limited and Westpac Banking Corporation. Orders as to confidentiality and disclosure which mirrored those made earlier as part of the freezing order were made.

10. On 12 August 2011, the earlier referred to confidentiality and disclosure orders were revoked and replaced with the following:

    The freezing order made herein on 22 July 2011 be varied by revoking paragraphs 18 and 19 thereof and substituting in lieu thereof the following:

    18.    That the following documents on the Court file, namely:

    -      Affidavit of Mr Andrew Mailler dated 21 July 2011;

    -      Supplementary Affidavit of Mr Andrew Mailler dated 21 July 2011;

    -      Affidavit of Mr Nigel McBride dated 21 July 2011;

    -      Affidavit of Mr Andrew Mailler dated 26 July 2011;

    -      Affidavit of Mr Nigel McBride dated 1 August 2011;

    and the transcript of proceedings herein dated 22 July 2011, 26 July 2011, 2 August 2011 and 12 August 2011;

    and the following documents provided to the Court on 22 July 2011, namely:

    -      Chronology;

    -      Summary of Losses;

    be placed in a sealed envelope and kept confidential and that no person be entitled to inspect them without an order of this Honourable Court and upon notice to the plaintiffs of an application for such an order.

    19.  That the last-mentioned documents and their contents not be disclosed to any person other than those served with those documents, the Defendant and his solicitors and barrister.

    …

    The order for inspection of banking records made herein on 26 July 2011 be varied by revoking paragraphs 5, 6 and 7 and thereof and the words “The Following in relation to the Defendant, Craig Dean Raneberg, for the period 1 July 2006 to date:” which appear in the first two lines of the Schedule annexed thereto, and substituting in lieu thereof the following:

    5.   …

    6.   The affidavits of David Deakin Davies dated 25 July 2011 and Andrew Mailler dated 26 July 2011, filed in support of the interlocutory application, and the transcript of proceedings herein dated 26 July 2011, be placed in a sealed envelope and kept confidential as part of the Court file in this action, and no person is entitled to inspect them without an order of this Honourable Court, and upon notice being given to the Plaintiffs of an application for such order. 

    7.   The last-mentioned and their contents not be disclosed to any person other than National Australia Bank Ltd, its solicitors and barrister, the Defendant, his solicitor and barrister, and the Plaintiffs and their solicitor and barrister.

    [This same order was repeated with respect to Westpac Banking Corporation]

11. From this time, the Court file was no longer confidential and the file was available for inspection according to the usual practices of the Court.  The documents the subject of ongoing confidentiality were on file but sealed. Proceedings subsequent to 12 August 2011 have proceeded in open Court.

    The Present Application

12. The plaintiffs submitted that the confidentiality orders of 12 August 2011 should be continued on two grounds – because of the nature of the plaintiffs’ claims and the relief sought, and as a consequence of their content and provenance.

13. The defendant commenced employment with the second plaintiff in the position of “Accounting and Finance Manager” and reported directly to Mr McBride as the firm’s Managing Partner.  In July 2004, the defendant’s title changed to “Chief Financial Officer”.  He still reported directly to Mr McBride as Managing Partner.  However from 1 July 2007, the defendant reported to the Firm’s Chief Operating Partner, Gregory Mornington May.

14. In the present proceeding, it is to be understood that the plaintiffs are a firm of solicitors and a related administration incorporated body.  The firm has a number of partners.  The plaintiffs’ disclosure concerned the apparent misappropriation of the partners’ personal funds from the firm’s practice account. The ascertainment of the precise nature and extent of the misappropriation had been hampered by the deletion of the plaintiffs’ internal online banking records, an apparently deliberate process undertaken by the defendant on 6 June 2011.

15. The deletion of the plaintiffs’ internal banking records meant that when the plaintiffs sought an ex parte freezing order, they had been able to identify only three transactions, each of $8,750.00, for which there was direct evidence of unauthorised withdrawals from the firm’s practice account connected to corresponding unauthorised deposits in the defendant’s salary account.  The plaintiffs as a consequence made extensive disclosure of the monies withdrawn from the firm’s practice account, purportedly as profit distributions, and compared them with the profit distributions agreed by the partners of the firm to be distributed to them, as the basis for inviting the Court to infer that the discrepancies were likely to be unauthorised withdrawals, made by the defendant, to his benefit and to which he was not entitled.

16. Because of the deletion of the plaintiffs’ internal banking records from its computer records, the process of enquiry was ongoing.  Disclosure of the results of those enquiries as they became available continued to be made to the Court by the plaintiffs.

17. The plaintiffs’ claim for equitable relief includes both the tracing of funds said to be stolen together with their recovery on the basis of a constructive trust.  It was submitted that there is uncontested authority for the proposition that:[2]

    … Where money has been stolen, it is trust money in the hands of the thief, and he cannot divest it of that character. If he pays it over to another person, then it may be followed into that other person's hands. …

    [2]    Black v S Freedman & Company (1910) 12 CLR 105, 110; see also, Leak v James Moore & Sons Pty Ltd [1912] HCA 67; K & S Corporation Ltd & Anor v Sportingbet Australia Pty Ltd [2003] SASC 96, [12]; R v Telford [2005] SASC 349 (Bleby J); Clarke v Abou-Samra [2010] SASC 205, [89], [90].

18. The plaintiffs submitted that information put before the Court in relation to their personal finances and their attempts to ascertain how, and to where, those monies have been divested, is confidential information belonging to the partners of the plaintiffs.  It was pointed out that confidential information was required to be placed before the Court to seek relief arising from the unconscionable and reprehensible conduct of the defendant in breach of the trust and confidence reposed in him by the plaintiffs.  It was contended that there has been no countervailing conduct which might disqualify the plaintiffs from enlisting the Court’s assistance to preserve the status of their confidential information.  Finally it was said that equity should intervene to prevent third parties from having access to, and coming into possession of, the confidential information.[3]

    [3]    Relying on Sullivan v Sclanders (2000) 77 SASR 419.

19. The plaintiffs then submitted that an examination of the contents of the confidential documents discloses that it is impractical to order that only certain paragraphs should be made public – for example, by engaging in a process of redacting the paragraphs or exhibits which are confidential – on the basis that those paragraphs, standing alone, are uncontroversial and the only appropriate safeguard in the circumstances is to maintain the existing protection by leaving sealed the whole of the confidential documents[4] and suppressing their disclosure.

    [4] Once documents are used in open court, the power to place documents in sealed envelopes is found in section 69A of the Evidence Act1929 (SA) and the inherent power of the Court to control its proceedings ReJ N Taylor Holdings Limited (in liq) (2007) 249 LSJS 80, [28].

    Contents and Provenance

20. The plaintiffs submitted that disclosure was made necessary by the need to approach the Court urgently.  The confidential documents were brought before the Court in support of the plaintiffs’ ex parte interlocutory application for a freezing order.  Ancillary orders were sought to elicit information said to be relevant to the freezing order.[5]

    [5]    The role of ancillary orders to elicit information relating to assets relevant to the freezing order is recognised in Supreme Court Civil Rules 2006 (SA) r 247(3).

21. Attention was drawn to the obligations of the plaintiffs to produce the confidential material to the Court.[6]  Practice direction 4.5.19 provides:[7]

    [6]    A failure to comply with a Practice Direction is within the definition of a “procedural irregularity” as defined in Supreme Court Civil Rules 2006 (SA) r 4.

    [7]    Supreme Court Practice Directions 2006 (SA) 4.5.19.

    An applicant for a freezing order without notice to the respondent is under a duty to make full and frank disclosure of all material facts to the Court. This includes disclosure of possible defences known to the applicant and of any information which may cast doubt on the applicant’s ability to meet the usual undertaking as to damages from assets within Australia.

    Practice direction 4.5.20 further provides:[8]

    [8]    Supreme Court Practice Directions 2006 (SA) 4.5.20.

    The affidavits relied on in support of an application for a freezing or ancillary order should, if possible, address the following:

    4.5.20.1information about the judgment that has been obtained, or, if no judgment has been obtained, the following information about the cause of action:

    (i)    the basis of the claim for substantive relief;

    (ii)     the amount of the claim; and

    (iii)if the application is made without notice to the respondent, the applicant’s knowledge of any possible defence.

    4.5.20.2the nature and value of the respondent’s assets, so far as they are known to the applicant, without and outside Australia;

    4.5.20.3    the matters referred to in Rule 247(5); and

    4.5.20.4the identity of any person, other than the respondent, who, the applicant believes, may be affected by the order, and how that person may be affected by it.

22. The progenitor to the freezing order provided by the Rules of Court is the equitable relief known as a mareva injunction.  A freezing order is in the nature of an injunction; in the present proceeding, an ex parte injunction. The orders made in respect of examination and the production of banking records are of a similar character.  The need for full disclosure of all relevant matters, both in support of and against the granting of such relief, is self evident. 

23. The freezing order could be discharged if the plaintiffs did not make full disclosure of all relevant matters, including those of which it ought to have known.[9]  The obligation to make full disclosure on an ex parte application is a heavy responsibility.[10]  This is so, as orders on such applications are an exception to a fundamental principle of natural justice; that is, that a person against whom a claim is made must be afforded a reasonable opportunity of appearing and presenting his or her case.[11]  The duty of the moving party is one of complete candour and it is owed to the Court itself.[12]  The seriousness of the responsibility of full and frank disclosure on the part of the moving party is demonstrated by the fact that the consequences of a failure to make such disclosure apply whether the failure was deliberate or unintentional.[13]  The content of the obligation was described as follows by Isaacs J in Thomas A Edison Ltd v Bullock:[14]

    … it is the duty of a party asking for an injunction ex parte to bring under the notice of the Court all facts material to the determination of his right to that injunction, and it is no excuse for him to say he was not aware of their importance. Uberrima fides is required, and the party inducing the Court to act in the absence of the other party, fails in his obligation unless he supplies the place of the absent party to the extent of bringing forward all the material facts which that party would presumably have brought forward in his defence to that application. Unless that is done, the implied condition upon which the Court acts in forming its judgment is unfulfilled and the order so obtained must almost invariably fall. …

    [9]    Lloyds Bowmaker Ltd v Britannia Arrow Holdings plc [1988] 3 All ER 178; Brink’s Mat Ltd v Elcombe [1988] 3 All ER 188; Dormeuil Freres SA v Nicolian International (Textiles) Ltd [1988] 3 All ER 197; Behbehani v Salem [1989] 2 All ER 143.

    [10] Thomas A Edison Ltd v Bullock (1912) 15 CLR 679, 682.

    [11] See Re South Downs Packers Pty Ltd [1984] 2 Qd R 559, 570 (McPherson J), as referred to by the Court in Lane v Channel 7 Adelaide Pty Ltd (2004) 232 LSJS 234.

    [12] Digital Equipment Corporation v Darkcrest Ltd [1984] Ch 512, 524.

    [13] See Behbehani v Salem [1989] 1 WLR 723, 726-728.

    [14] Thomas A Edison Ltd v Bullock (1912) 15 CLR 679, 681-682; see for a further survey of these authorities, the decision of the Court in Lane v Channel 7 Adelaide Pty Ltd (2004) 232 LSJS 234.

    The Legal Principles

24. I consider the earlier extracted observations of Deane J in Australian Broadcasting Commission v Parish to be pertinent and to guide the approach I am to take to the issues arising in the within proceeding.  It is, however, worth mentioning the following further matters.  The Courts have recognised that there are exceptions to the general principle.  As Viscount Haldane LC observed in Scott v Scott:[15]

    … While the broad principle is that the Courts of this country must, as between parties, administer justice in public, this principle is subject to apparent exceptions … But the exceptions are themselves the outcome of a yet more fundamental principle that the chief object of Courts of justice must be to secure that justice is done. … As the paramount object must always be to do justice, the general rule as to publicity, after all only the means to an end, must accordingly yield.

    Lord Diplock expressed a similar view in Attorney-General v Leveller Magazine Ltd:[16]

    … since the purpose of the general rule is to serve the ends of justice it may be necessary to depart from it where the nature or circumstances of the particular proceeding are such that the application of the general rule in its entirety would frustrate or render impracticable the administration of justice or would damage some other public interest for whose protection Parliament has made some statutory derogation from the rule.

    [15] Scott v Scott [1913] AC 417, 437-438.

    [16] Attorney-General v Leveller Magazine Ltd [1979] AC 440, 450.

1. There are many examples of orders being made for the preservation of confidentiality by Australian courts.  In Re JN Taylor Holdings Ltd (in liq),[17] Debelle J made reference to the principle of open justice and the exceptions to that principle and set out a convenient summary of the authorities.

   [17] ReJ N Taylor Holdings Limited (in liq) (2007) 249 LSJS 80.

2. It is to be emphasised that the relevant decision involves a balancing process, to which a number of factors unique to the particular case are to be had regard.  This balancing process was described by Deane J in Australian Broadcasting Commission v Parish in the following way:[18]

   The decision whether an order under s 50 should be made will be the outcome of a balancing process in respect of which there will commonly be room for differences of opinion as to the weight to be attached to particular factors to be placed in the balance and, in the result, as to the precise outcome of the process itself. It is a decision that will ordinarily need to be made in the course and in the atmosphere of the particular proceedings. It will involve an assessment of a multiplicity of factors including the importance which the relevant evidence will play in the actual conduct of the particular proceedings and, in some cases, an assessment of the degree and nature of the publicity which is likely to follow a refusal to make an order. It is a process which may need to be repeated on a number of occasions in the course of particular proceedings in that the perception of the importance of the particular evidence to the result and understanding of the proceedings may vary, as the case proceeds, to an extent that an order for confidentiality which was justified, on balance, at the time it was made can no longer properly be sustained. The decision whether an order should be made under s 50 is a decision as to practice and procedure entrusted to the discretion of the judge hearing the proceedings. …

   [18] Australian Broadcasting Commission v Parish (1980) 43 FLR 129, 158.

3. Recently, the High Court in Hogan v Hinch[19] had occasion to consider the open court principle.  French CJ addressed the topic and reviewed relevant authorities from most common law jurisdictions:[20]

   An essential characteristic of courts is that they sit in public[21].  That principle is a means to an end, and not an end in itself.  Its rationale is the benefit that flows from subjecting court proceedings to public and professional scrutiny[22]. It is also critical to the maintenance of public confidence in the courts. Under the Constitution courts capable of exercising the judicial power of the Commonwealth must at all times be and appear to be independent and impartial tribunals. The open-court principle serves to maintain that standard[23].  However, it is not absolute[24].

   It has long been accepted at common law that the application of the open justice principle may be limited in the exercise of a superior court's inherent jurisdiction or an inferior court's implied powers[25].  This may be done where it is necessary to secure the proper administration of justice[26].  In a proceeding involving a secret technical process, a public hearing of evidence of the secret process could "cause an entire destruction of the whole matter in dispute"[27].  Similar considerations inform restrictions on the disclosure in open court of evidence in an action for injunctive relief against an anticipated breach of confidence.  In the prosecution of a blackmailer, the name of the blackmailer's victim, called as a prosecution witness, may be suppressed because of the "keen public interest in getting blackmailers convicted and sentenced" and the difficulties that may be encountered in getting complainants to come forward "unless they are given this kind of protection."[28]  So too, in particular circumstances, may the name of a police informant or the identity of an undercover police officer[29].  The categories of case are not closed, although they will not lightly be extended[30].  Where "exceptional and compelling considerations going to national security" require that the confidentiality of certain materials be preserved, a departure from the ordinary open justice principle may be justified[31].  The character of the proceedings and the nature of the function conferred upon the court may also qualify the application of the open-court principle.  The jurisdiction of courts in relation to wards of the State and mentally ill people was historically an exception to the general rule that proceedings should be held in public because the jurisdiction exercised in such cases was "parental and administrative, and the disposal of controverted questions … an incident only in the jurisdiction."[32]  Proceedings not "in the ordinary course of litigation", such as applications for leave to appeal, can also be determined without a public hearing[33]. 

   It is a common law corollary of the open-court principle that, absent any restriction ordered by the court, anybody may publish a fair and accurate report of the proceedings, including the names of the parties and witnesses, and the evidence, testimonial, documentary or physical, that has been given in the proceedings[34].

   [19] Hogan v Hinch (2011) 275 ALR 408.

   [20] Hogan v Hinch (2011) 275 ALR 408, [20]-[22].

   [21] Daubney v Cooper (1829) 10 B & C 237 at 240 [109 ER 438 at 440]; Dickason v Dickason (1913) 17 CLR 50; [1913] HCA 77; Scott v Scott [1913] AC 417; Russell v Russell (1976) 134 CLR 495 at 520 per Gibbs J; [1976] HCA 23.

   [22] Russell v Russell (1976) 134 CLR 495 at 520 per Gibbs J.

   [23] Forge v Australian Securities and Investments Commission (2006) 228 CLR 45 at 76 [64], 81 [78] per Gummow, Hayne and Crennan JJ; [2006] HCA 44.

   [24] Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 at 359 [56] per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ; [1999] HCA 9, adopting the remarks of Gaudron J in Harris v Caladine (1991) 172 CLR 84 at 150; [1991] HCA 9, referring to "limited exceptions" to the open and public inquiry involved in the exercise of judicial power.

   [25] Inferior courts lack the "inherent jurisdiction" of superior courts, but have analogous implied powers:  Grassby v The Queen (1989) 168 CLR 1 at 15-17 per Dawson J; [1989] HCA 45; John Fairfax Publications Pty Ltd v District Court (NSW) (2004) 61 NSWLR 344 at 354 [28] per Spigelman CJ, Handley JA and M W Campbell A-JA agreeing at 368. In federal courts created by statute implied incidental powers also take the place of "inherent jurisdiction": DJL v Central Authority (2000) 201 CLR 226 at 240-241 [25] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ; [2000] HCA 17; Jackson v Sterling Industries Ltd (1987) 162 CLR 612 at 618-619 per Wilson and Dawson JJ, 623-624 per Deane J, Mason CJ agreeing at 616, 630-631 per Toohey J; [1987] HCA 23.

   [26] John Fairfax & Sons Ltd v Police Tribunal (NSW) (1986) 5 NSWLR 465 at 476‑477 per McHugh JA, Glass JA agreeing at 467.

   [27] Andrew v Raeburn (1874) LR 9 Ch 522 at 523. See also Nagle-Gillman v Christopher (1876) 4 Ch D 173 at 174 per Jessel MR; Mellor v Thompson (1885) 31 Ch D 55; Scott v Scott [1913] AC 417 at 436-437 per Viscount Haldane LC, 443 per Earl of Halsbury, 445 per Earl Loreburn, 450-451 per Lord Atkinson, 482-483 per Lord Shaw of Dunfermline.

   [28] R v Socialist Worker Printers and Publishers Ltd; Ex parte Attorney-General [1975] QB 637 at 644 per Lord Widgery CJ, Milmo and Ackner JJ agreeing at 653, referred to with apparent approval in Attorney-General v Leveller Magazine Ltd [1979] AC 440 at 452 per Lord Diplock, 458 per Viscount Dilhorne, 471 per Lord Scarman. See also John Fairfax Group Pty Ltd v Local Court (NSW) (1991) 26 NSWLR 131 at 141 per Kirby P.

   [29] Cain v Glass (No 2) (1985) 3 NSWLR 230 at 246 per McHugh JA; John Fairfax & Sons Ltd v Police Tribunal (NSW) (1986) 5 NSWLR 465 at 472 per Mahoney JA, 480 per McHugh JA, Glass JA agreeing at 467; John Fairfax Group Pty Ltd v Local Court (NSW) (1991) 26 NSWLR 131 at 141 per Kirby P, 159 per Mahoney JA, Hope A-JA agreeing at 169; Herald & Weekly Times Ltd v Medical Practitioners Board (Vic) [1999] 1 VR 267 at 293 [85]; R v Lodhi (2006) 65 NSWLR 573 at 584 [25]-[26] per McClellan CJ at CL.

   [30] R v Kwok (2005) 64 NSWLR 335 at 340-341 [12]-[14] per Hodgson JA, 343-344 [29]-[31] per Howie J, 345-346 [38]-[39] per Rothman J; Commissioner of Police (NSW) v Nationwide News Pty Ltd (2008) 70 NSWLR 643 at 648 [32]-[38] per Mason P, Ipp JA agreeing at 657, 658 [90]-[91] per Basten J; P v D1 [No 3] [2010] NSWSC 644 at [11]-[20].

   [31] A v Hayden (1984) 156 CLR 532 at 599 per Deane J; [1984] HCA 67; John Fairfax Group Pty Ltd v Local Court (NSW) (1991) 26 NSWLR 131 at 141 per Kirby P; R v Lodhi (2006) 65 NSWLR 573 at 584-585 [26] per McClellan CJ at CL; R v Governor of Lewes Prison; Ex parte Doyle [1917] 2 KB 254 at 271-272 per Viscount Reading CJ; Taylor v Attorney-General [1975] 2 NZLR 675.

   [32] Scott v Scott [1913] AC 417 at 437 per Viscount Haldane LC. See also John Fairfax Publications Pty Ltd v Attorney-General(NSW) (2000) 181 ALR 694 at 723 [165] per Meagher JA.

   [33] Coulter v The Queen (1988) 164 CLR 350 at 356 per Mason CJ, Wilson and Brennan JJ; [1988] HCA 3.

   [34] Attorney-General v Leveller Magazine Ltd [1979] AC 440 at 450 per Lord Diplock, 459 per Lord Edmund-Davies, 469 per Lord Scarman; Raybos Australia Pty Ltd v Jones (1985) 2 NSWLR 47 at 55 per Kirby P, 61 per Samuels JA; John Fairfax & Sons Ltd v Police Tribunal (NSW) (1986) 5 NSWLR 465 at 476-477 per McHugh JA, Glass JA agreeing at 467; Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 at 43 per Toohey J; [1995] HCA 19; J v L & A Services Pty Ltd (No 2) [1995] 2 Qd R 10 at 44 per Fitzgerald P and Lee J; Rogers v Nationwide News Pty Ltd (2003) 216 CLR 327 at 335 [15] per Gleeson CJ and Gummow J; [2003] HCA 52; John Fairfax Publications Pty Ltd v District Court (NSW) (2004) 61 NSWLR 344 at 353 [20] per Spigelman CJ, Handley JA and M W Campbell A‑JA agreeing at 368.

   Consideration of the Application

4. An equity of confidence will arise where information has the necessary quality of confidence, where information is imparted in circumstances importing an obligation of confidence and where disclosure would cause detriment.[35]

   [35] Coulthard v South Australia (1995) 63 SASR 531, 546.

5. The imparting of confidential information to the Court does not impose on the Court any obligation of confidence.  The information is provided in contemplation and expectation that it will be used for the administration of justice according to law. The Court will exercise its powers in relation to the protection of confidential information, placing in the balance the equity of confidence that arises in relation to that information. Further, the equity of confidence is not lost because confidential information is imparted to the Court and in the hands of the Court.  It maintains its confidential nature: the secrecy attached to confidential information is relative, not absolute.[36]

   [36] Dean, The law of Trade Secrets and Personal Secrets (2nd ed, 2002) 77-8, 83-4.

6. Information as to a private citizen’s earnings and income is private. Where that information concerns profit distributions made by the partners of a commercial law firm in a competitive market for legal services, may be understood also to be commercially sensitive.

7. The information which would identify profit distributions received by individual partners and the firm’s profit from client fees is not otherwise available to the public, the firm’s competitors, the firm’s clients or the firm’s employees.

8. In my view, there is no legitimate public policy to be served by the release of the personal financial information to the public and the interests of justice are best served by preserving the privacy of the confidential documents by maintaining the existing orders. 

9. The object of encouraging an applicant for an ex parte freezing order to make full and candid disclosure would be inhibited, if not destroyed, if commercially sensitive material put before the Court in confidence would subsequently become public.  Confidentiality should be preserved to prevent prejudice to the administration of justice and to do justice between the parties.  It would defeat the purpose of the freezing application to do otherwise.[37]

   [37] Re J N Taylor Holdings Limited (in liq) (2007) 249 LSJS 80, [8]-[12].

10. During the course of the interlocutory hearings, I expressed the view, having regard to the contents of the affidavits and documents and the submissions advanced, that there should be a relevant disclosure to the Police, to the Law Society and to the public of the allegations concerning the defendant’s conduct.  I considered that a prima facie case had been established to support the plaintiffs’ claims for interlocutory relief.  It was submitted to me that there had been no apparent misapplication of trust funds and I considered that it was important that this information be disclosed to the Law Society.  I also formed the view that the material suggested the possibility of criminal conduct and that in these circumstances it was a matter for disclosure to the Police.  I have now been informed of the disclosure that has been made to the Police, the Law Society and to the public. 

    Conclusion

11. The present orders for confidentiality are restricted to documents and submissions that relate to the private affairs of the plaintiffs and the partners of the firm.  I do not see any proper public interest in the release of the information contained in the documents and referred to in submissions.  There is a risk of damage and hardship to the partners from the working of the legal processes if the order for confidentiality were to be discharged.  There is no evidence of prejudice arising to the general administration of justice or of the avoidance of prejudice to the legitimate claims and expectations of others. 

12. I consider there to be a legitimate claim to confidentiality in the within proceeding.  I consider that the paramount object – to do justice – in this particular case, having regard to the circumstances, is to be achieved by the maintaining of the confidentiality order.  In short, it is my view that the balance between the principles of open justice and of privacy come down on the side of the maintaining of the confidentiality order.