Nuske v Boyde Waldemar Baker - [2013] SADC 73

District Court of South Australia
(Civil)
NUSKE v BOYDE WALDEMAR BAKER & ORS
[2013] SADC 73
Judgment of His Honour Judge Slattery (ex tempore)
27 May 2013
PROCEDURE - DISCOVERY AND INTERROGATORIES - DISCOVERY AND INSPECTION OF DOCUMENTS
Mobil Oil Australia & Anor. v Guina Developments Pty Ltd & Anor. (1996) 2 VR 34; Hearne v Street (2008) 235 CLR 125 ; Clone Pty Ltd v Players Pty Ltd (in liq.) [2012] SASC 12 , applied.
Addstead Pty Ltd (in liq.) v Simmons [2004] SASC 260 ; Clone Pty Ltd v Players Pty Ltd (in liq.) [2013] SASCFC 25 ; Esso Australia Resources Limited v Plowman (1995) 128 ALR 391; K & S Corporation Limited v Number 1 Betting Shop [2005] SASC 228, discussed.

NUSKE v BOYDE WALDEMAR BAKER & ORS
[2013] SADC 73

HIS HONOUR: In this application the plaintiff brings an urgent interlocutory application of today’s date seeking the following orders:-
“1. That this application be made specially returnable on 27 May 2013.
2. On production of that taxation returns of Active Asphalt for the financial years ending 30 June 2005 to 30 June 2012 inclusive, such documents to be produced solely for the reference and use of Peter Holmes of Ferrier Hodgson Accountants and Tim Clifton of Clifton Hall Accountants for the purposes of preparing an accounting opinion for the within proceedings and not to be disclosed to any person other than the accounts and the parties legal advisors.
3. Such further or other Orders as this Court deems appropriate.”
The application is supported by an affidavit sworn by Mr Peter John Humphries, solicitor, of 24 May 2013, FDN21. The plaintiff reads that affidavit for the purposes of these proceedings.
In the affidavit Mr Humphries briefly recites some of the history of the matter and he identifies that in or around December 2001 the plaintiff formerly owned and operated an asphalt-laying business which he then ceased operating. He also deposes to the fact that the plaintiff’s brother owns and operates a business in the asphalt industry and that the plaintiff intends to use the financial results of the business of the plaintiff’s brother as a comparator for the purpose of establishing his loss of potential future earning capacity sustained as a result of the injuries which are the subject of these proceedings. The plaintiff alleges that, but for his injuries, he would have recommenced a business in asphalt laying and that he has suffered loss because his injuries prevent him from so doing.
Mr Humphries then identifies that the plaintiff’s brother is reticent to produce his financial documentation relevant to his asphalt business which he claims may be commercially sensitive. This is the same documentation which the plaintiff would intend to use as a comparator for the purpose of establishing his potential future earning capacity loss. It appears to be assumed that the performance of the plaintiff’s brother’s asphalt-laying business will inform the plaintiff’s assessment of his loss.
I have received the plaintiff’s most recent statement of loss and that document contains an assessment, as I am now told, made by a solicitor of the amount of the loss allegedly sustained by the plaintiff having regard to his inability to carry on a business in the asphalt industry. The assessment of the loss is in an amount of $150,000.
In the affidavit, para.10, Mr Humphries says that:
'The plaintiff makes the application to protect the confidentiality of any business taxation returns of the business [of the plaintiff’s brother] upon their production.'
The plaintiff then seeks orders limiting the scope of the production to the extent that any such disclosed financial documents be provided to and only to Peter Holmes of Ferrier Hodgson, Accountants and Tim Clifton of Clifton Hall, Accountants and their legal advisers who have been engaged by the defendant and plaintiff respectively to prepare expert opinions in these proceedings for reference and use of the accountants in preparing any such expert opinion. It is to be noted that this application would exclude access to the documents to any person who may give instructions to the defendant. That is a very significant limitation.
Finally, in his affidavit, Mr Humphries informs the Court that the plaintiff asserts that the financial information of the plaintiff’s brother should not be required to be produced other than in accordance with the orders sought.
I have heard argument on this matter today. The argument put by Mr Baker in support of the application is, in essence, a recitation of paras.9, 10, 11 and 12 of the affidavit of Mr Humphries.
I asked Mr Baker in argument to identify any particular document or matter (within the plaintiff’s brother’s financial records concerning his business) that was of a commercially sensitive nature and that required further protection from the Court over and above the usual principles concerning the protection of discovered documents.[1]
[1] The general rule is that a Court will not require an express undertaking in respect of confidentiality concerning discovered documents where the Court forms the view that an implied undertaking is sufficient in all of the circumstances: Addstead Pty Ltd (in liq.) v Simmons [2004] SASC 260 (per Bleby J).
Mr Baker was unable to provide any details to me in response to the question that I put to him because, as he informed me, he has not seen the relevant documentation and so the production of that documentation would provide the answer to the question that I have put to him.
In argument, I referred Mr Baker to the decision of Hayne J in the Victorian Supreme Court in Mobil Oil Australia & Anor. v Guina Developments Pty Ltd & Anor. (1996) 2 VR 34, in which his Honour gave consideration to the question of the need for and the willingness of a Court to make orders for further protection of ‘the sensitive confidential information’.
That case essentially concerned a challenge to a decision under a tender process in respect of a successful tenderer. The question in that proceeding was whether a Court would review the decision of the Victorian Roads Corporation in respect of the successful tenderer and whether it would compare the tenders that had been lodged. There was an obvious commercial sensitivity in relation to the information provided by tenderers and his Honour was prepared to make orders, in limine, restricting access to the information to those legal advisers identified. His Honour restricted access to officers of corporations of the competing tenderers to one person who could give instructions to legal advisers. His Honour there recognised the need for at least one person outside of the parties’ advisors to be permitted to see the documents and to give instructions on them.
In the circumstances, his Honour reiterated the general legal principles concerning the requirement for all parties to keep confidential information confidential, particularly that information comes forward in discovery.[2]
[2] It is well settled that there is an implied undertaking that a party may not use any information obtained through inspection of the document during the course of disclosure for any collateral or improper purpose. This rule is often described as the rule of preclusion: Clone Pty Ltd v Players Pty Ltd (in liq.) [2012] SASC 12 per Kourakis J (the decision of Kourakis J was overruled by the Full Court in its decision [2013] SASCFC 25 but not in relation to the existence or the effect of the rule). An obligation of confidence (upon the recipient of documents provided in disclosure) applies to documents produced for any litigation: Esso Australia Resources Limited v Plowman (1995) 128 ALR 391; once a document produced in disclosure has been tendered into evidence, the contents will come into the public domain and terminates the implied undertaking however, the Court retains a residual discretion to make Orders for the protection of any confidentiality in respect of those documents: K & S Corporation Limited v Number 1 Betting Shop [2005] SASC 228.
In Hearne v Street (2008) 235 CLR 125 at [86] Hayne, Heydon and Crennan JJ observed:
“Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence. The types of material disclosed to which this principle applies include documents inspected after discovery, answers to interrogatories, documents produced on subpoena, documents produced for the purposes of taxation of costs, documents produced pursuant to a direction from an arbitrator, documents seized pursuant to an Anton Piller order, witness statements served pursuant to a judicial direction and affidavits.
[Footnotes omitted.]”
In the circumstances, I have formed the view that based upon the affidavit material that has been read in evidence in this application, no sufficient basis has been made out by the plaintiff to justify the making of any further Orders (to protect the plaintiff’s brother’s financial information) supplementary to the existing obligations upon the parties and their advisers in relation to discovered documents.
In those circumstances, it behoves me to reiterate that as between litigating parties, there is an implied undertaking that the parties would not use any information obtained through inspection of a document during the course of disclosure for any collateral or improper purpose. And there is an obligation upon each of the parties and their advisers and any expert persons retained by them to maintain as confidential any documentation and any information arising from documentation which comes forward in the disclosure process.
This means that, for example in the event that the plaintiff is now in a position to give disclosure or to produce documents from the plaintiff’s brother, then there is an obligation not to use any such information for any collateral or improper purpose and there is an obligation upon all parties to keep those documents confidential and not to use them for any purpose except those for the purposes of the proceedings, unless leave of the Court is otherwise obtained.
This is a long standing common law rule that is well established and understood. It is a rule which applies to all parties and all of their advisers in all proceedings.
In this case it applies to the plaintiff and to the defendant.
In those circumstances, having regard to the information that has been put to me, it is my view that despite the suggested need for an order for confidentiality, no basis has been made out for any order for further protection of the plaintiff’s brother’s information.
That information is sufficiently protected by the usual rules in relation to discovered documents. In particular, those documents may not be used for or communicated in respect of any purpose other than the purpose of these proceedings.
I will hear the parties further in relation to these matters in the event that something is identified within the documents which require some particular order for protection. I will also hear the parties further in relation to the protection of any aspect in terms of evidence but it should be made clear that in the event that this matter comes to judgment and these materials are relevant, then it will be necessary in one form or another, to identify the information upon which my judgment might be based having regard to the plaintiff’s claim.
In those circumstances, I am not prepared to make any orders in relation to the interlocutory application dated this day. I give liberty to the plaintiff to reinvigorate the application in the event that this becomes necessary. I reserve the question of costs.
RULING COMPLETED 3.43 P.M