Ultra Tune Australia Pty Ltd v Cole (No 2)

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
MAJOR TORTS LIST

S ECI 2021 00208

BETWEEN:

ULTRA TUNE AUSTRALIA PTY LTD (ACN 065 214 708) & ANOR (according to the attached Schedule)	Plaintiffs
v
JENNIFER COLE & ANOR (according to the attached Schedule)	Defendants

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JUDGE:	Daly AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	2 August 2021, 1 August 2022, written submissions filed on 19 August 2022, 21 August 2022, and 2 September 2022
DATE OF JUDGMENT:	6 December 2022
CASE MAY BE CITED AS:	Ultra Tune Australia Pty Ltd v Cole (No 2)
MEDIUM NEUTRAL CITATION:	[2022] VSC 720 (revised 6 December 2022)

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PRACTICE AND PROCEDURE – Application to strike out further amended statement of claim pursuant to rr 23.01 and/or 23.02 of the Supreme Court (General Civil Procedure) Rules2015 (Vic) (‘Rules’) – Whether pleading or any part thereof fails to disclose cause of action or may prejudice, embarrass or delay the fair trial of the proceeding, or is otherwise an abuse of the process of the Court – Further amended statement of claim partially struck out – Leave granted to plaintiff to file a second further amended statement of claim.

PRACTICE AND PROCEDURE – Application for early discovery pursuant to r 29.07 of the Rules and a disclosure order – Orders sought by plaintiffs to require defendants to provide a list of all persons who have been provided with copies of any recordings of private conversations – Norwich Pharmacal Co v Customs and Excise Commissioners [1974] AC 133 referred to – Whether order would mean the defendants may be compelled to incriminate themselves – Application dismissed where no evidence that recordings other than a recording in the public domain are in existence and where the application is a fishing expedition – Computershare Ltd v Perpetual of Registrars Ltd (2000) 1 VR 626 referred to and applied – No evidence of the practical utility of early discovery or a disclosure order.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr J Searle of counsel	Belleli King & Associates
For the First Defendant	Mr D Baker, solicitor	Baker Jones
For the Second Defendant	Mr S V Palmer of counsel	Boris Pogoriller Solicitor

HER HONOUR:

Introduction and background

This proceeding was commenced on 2 February 2021, when the plaintiffs, Ultra Tune Australia Pty Ltd (‘Ultra Tune’) and its chief executive officer (‘CEO’) and sole shareholder, Mr Sean Buckley, brought an urgent application to restrain the defendants, Ms Jennifer Cole and Mr Anthony Swords, from disseminating a recording made of a private conversation between Mr Buckley and Ms Cole in a room at the Crown Metropol Hotel in Southbank in January 2020 (‘recording’). Mr Buckley and Ms Cole were in an intimate relationship until 18 December 2020, and they have a young daughter together. As well as being the owner and CEO of Ultra Tune, a car service and repair business with approximately 260 franchisees Australia wide (‘franchisees’), Mr Buckley also has commercial interests in the horse racing and adult entertainment industries. Mr Swords was a friend of Mr Buckley’s and an employee with Ultra Tune’s racing subsidiary until he and Mr Buckley had a falling out in December 2020.

It is not necessary for present purposes to go into too much detail about the contents of the recording, save to say that the provision of the recording to Victoria Police, various media organisations, and various business and personal associates of Mr Buckley has understandably caused Mr Buckley embarrassment and distress. Certain statements made by Mr Buckley during the course of the recording, and events which are said by Ms Cole to have taken place during the making of the recording have given rise to a number of criminal charges against him. On 19 October 2021, Victoria Police laid charges of, among other things, assault, stalking, making threats to kill, installation of a hidden camera, and breach of an intervention order. Three of the 12 charges laid against Mr Buckley arise directly from the contents of the recording. The laying of the criminal charges against Mr Buckley has caused, and will continue to cause delays in the progress of this proceeding, as discussed further later in these reasons.

The plaintiffs’ summons of 2 February 2021 was originally returnable before John Dixon J on 4 February 2021, when an interim injunction was granted restraining the defendants from publishing and/or disseminating any recording made by Ms Cole of any private conversations between Ms Cole and Mr Buckley between 1 September 2019 and 18 December 2020, including, but not limited to the recording (‘injunctions’). On 19 February 2021 orders were made extending the injunctions until the trial of the proceeding, or further order.

The injunctions were not limited to the recording, but included any recording of any other private conversation between Mr Buckley and Ms Cole (‘other recordings’), as there was (disputed) evidence from Mr Buckley to the effect that Ms Cole told him that she had recorded other conversations between them, and had threatened to disseminate the other recordings. Similar allegations (which are also disputed) were made with respect to threats said to have been made by Mr Swords.

Also on 19 February 2021, the plaintiffs filed an amended statement of claim. A further amended statement of claim was filed on 19 May 2021, which was largely filed in response to demands made by the defendants that the plaintiffs provide further and better particulars of a number of the allegations made in the amended statement of claim. The defendants continue to maintain that the particulars provided by the plaintiffs are deficient.

These reasons concern two interlocutory applications: one by the plaintiffs seeking to compel the defendants to provide discovery of documents and other information regarding the recording and the other recordings, and an application by Mr Swords to strike out the plaintiffs’ further amended statement of claim and/or obtain summary judgment in his favour.

Prior to turning to the applications, it is necessary to explain the parties’ pleadings in some detail.

The pleading

The allegations made by the plaintiffs in the further amended statement of claim can be summarised as follows:

(a) Mr Buckley and Ms Cole commenced an intimate personal relationship in about 2017, which ended acrimoniously on 18 December 2020, during which period they had many conversations where Mr Buckley confided in Ms Cole about his business dealings, business activities, and business hardships, and during which time Mr Buckley and Ms Cole had disagreements which on occasion led to heated discussions between them;

(b) accordingly, the relationship between Mr Buckley and Ms Cole was one of mutual trust and confidence;

(c) Mr Buckley and Mr Swords commenced a friendship in 2016 or 2017, and Mr Swords became a confidant of Mr Buckley by virtue of Mr Buckley confiding in Mr Swords in respect of confidential matters; and

(d) at Mr Swords’ request, and as a consequence of their friendship, Mr Swords commenced employment with Ultra Thoroughbred Racing Pty Ltd on 3 September 2018, but left that employment on 2 December 2020, at which time their friendship also came to an end.

The plaintiffs alleged that Ms Cole secretly and surreptitiously recorded numerous private and personal conversations between herself and Mr Buckley, including the recording. The further amended statement of claim went on to allege, as follows:

Subsequent to the conclusion of the Relationship, and in breach of confidence, Cole has, without the knowledge and/or consent of Buckley:
(a)communicated, published and/or disseminated copies of the Recording to numerous people including Swords, and others;
(b) communicated, published and/or disseminated copies of the Other Recordings and/or parts of them to numerous people including Swords, and others;
(c) threatened to communicate, publish and/or disseminate copies of the Recording to numerous other people including media outlets; and
(d) threatened to communicate, publish and/or disseminate copies of the Other Recordings to numerous other people including media outlets.

Save for providing details of the threats allegedly made by Ms Cole to Mr Buckley to the effect that she would disseminate the recording and the other recordings if Mr Buckley did not pay her large sums of money, the plaintiffs said that they were unable to provide particulars of the dissemination of the recording and the other recordings by Ms Cole until after discovery.

The plaintiffs alleged, in relation to Mr Swords, that:

Swords received the copies of the Recording and the Other Recordings:
(a)knowing that they had been secretly surreptitiously made;
(b)knowing that they had been made without Buckley’s knowledge and/or consent;
(c)knowing that they constituted private and confidential conversations between Cole and Buckley during the Relationship and that the Relationship had been one of mutual trust and confidence;
(d)knowing that Buckley had not consented to copies of them and/or their contents being provided to him;
(e)knowing that he was not entitled to possess copies of the Recording and/or the Other Recordings;
(f)knowing that he was not entitled to communicate, publish and/or disseminate to any third parties copies of the Recording and/or the Other Recordings; and
(f)knowing that publishing and/or disseminating to third parties copies of the Recording and/or the Other Recordings would likely cause Buckley and Ultra Tune humiliation, distress, harm, loss and damage.
Particulars of Swords’ Knowlege [sic]

Swords had the knowledge by virtue of the nature of the recordings, the device upon which they were recorded, namely Cole’s phone, the manner in which they were made, the relationship that he had with Buckley, the relationship he had with Cole and the knowledge he had of the business dealings, business operations and business generally of the plaintiffs. The plaintiffs are unable to currently provide any further particulars. Further particulars may be provided after discovery.

Subsequent to receiving a copy of the Recording and copies of the Other Recordings, Swords has without the knowledge and/or consent of Buckley:
(a)communicated, published and/or disseminated copies of the Recording to numerous people including Mr Mathews, many of the Franchisees, and others;
(b)communicated, published and/or disseminated copies of the Other Recordings and/or parts of them to numerous people including Mr Mathews, many of the Franchisees and others;
(c)threatened to communicate, publish and/or disseminate copies of the Recording to numerous other people including other Franchisees and media outlets;
(d)threatened to communicate, publish and/or disseminate copies of the Other Recordings to numerous other third parties including other Franchisees and media outlets.

The plaintiffs said that, save to say that the recording was sent to various media organisations after Mr Swords received the recording from Ms Cole, and save to provide details of threats made by Mr Swords to Mr Buckley via various identified third parties, they are unable to provide any further particulars of any dissemination by Mr Swords of the recording or other recordings, but that further particulars may be provided after discovery.

The plaintiffs alleged that the conduct of Ms Cole and Mr Swords contravened s 11 of the Surveillance Devices Act 1999 (Vic) (‘SDA’), which entitles the plaintiffs to an injunction to restrain Ms Cole and Mr Swords from continuing to disseminate the recording and/or the other recordings.

The plaintiffs stated that on 21 January 2021 they requested that Ms Cole and Mr Swords:

(a) retract, retrieve, recover and destroy all copies of the Recording and the Other Recordings distributed, disseminated and or published by her and/or her servants and agents;
(b) have her servants and agents destroy all copies of the Recording and the Other Recordings in their possession;
(c) return to the solicitors for Buckley the Recording and any Other Recordings; and
(d) desist, refrain and cease dissemination, distribution, communication and/or publication of the Recording or any Other Recordings to any person(s) whatsoever;

but they have failed to do so.

The plaintiffs allege that the conduct of Ms Cole and/or Mr Swords:

(a)is and has been done with malicious and wilful intent to harm and or damage the business reputation and or earning capacity of Ultra Tune and/or Buckley;
(b)has been done in circumstances where they each owe Ultra Tune and/or Buckley a duty not to harm their business reputations, earning capacity and/or cause them loss or damage; and
(c)has breached the duty they owe to Ultra Tune and/or Buckley such that they have harmed their business reputations, earning capacity and/or caused them loss or damage.

The plaintiffs also allege that the conduct of Ms Cole and/or Mr Swords has been performed so as to:

(a)encourage, induce and/or entice Franchisees generally to breach contractual arrangements with Ultra Tune and/or Buckley and/or bring any Franchise Agreement they have to an end;
(b)encourage, induce and/or entice customers of Ultra Tune and/or Buckley and/or potential customers of Ultra Tune and/or Buckley not to deal with Ultra Tune;
(c)cause loss and damage to Ultra Tune and/or Buckley; and
(d)… to extort money from Ultra Tune and/or Buckley.

Save for providing particulars of the alleged attempts by Mr Swords to extort money from the plaintiffs, the plaintiffs say they are unable to provide further particulars of the allegations above, but may be able to do so after discovery.

The plaintiffs then went on to allege that the conduct of Ms Cole and Mr Swords has caused and will continue to cause injury, loss and damage to the plaintiffs, or either of them, and that their conduct constituted an “interference with the contractual relations of Ultra Tune”. However, the plaintiffs are unable to provide particulars of loss and damage said to have been caused to Ultra Tune at this time.

The plaintiffs allege in the alternative that Ms Cole, by making and disseminating the recording and the other recordings, has breached the duty of mutual trust and confidence she owed to Mr Buckley, and Mr Swords has knowingly aided and abetted Ms Cole’s breach of duty by providing copies of the recording and other recordings to others, and by threatening to provide copies of the recording and the other recordings to others.

Further, the plaintiffs alleged, again in the alternative, that as a consequence of the relationship between them, Ms Cole assumed a duty to Mr Buckley not to intentionally inflict any “mental harm, anxiety, stress, humiliation, embarrassment and/or other mental distress” upon him, but breached that duty by making the recording and the other recordings, by distributing them to other people, including Mr Swords, and by threatening to distribute them further, thus entitling Mr Buckley to an injunction and/or damages. No particulars have been provided of any recognised psychiatric or psychological condition said to have been caused to Mr Buckley by Ms Cole’s conduct, or of any loss and damage said to have been suffered by him as a consequence of Ms Cole’s alleged breach of duty.

Finally, the plaintiffs allege that Ms Cole was engaged by Ultra Tune on about 1 August 2019 to provide promotional services for an initial term of one year, pursuant to what was described as the ‘Ambassador retainer’, which was terminated on 22 January 2021 on the grounds of Ms Cole’s alleged breaches of the terms of the Ambassador retainer.

The terms of the Ambassador retainer included, among other things:

(d)Cole would not during the term of the Ambassador Retainer or after its cessation bring the name of Ultra Tune or the “Ultra Tune” brand into disrepute;
(e)Cole would not during the term of the Ambassador Retainer or after its cessation make disparaging remarks against Ultra Tune, Ultra Tune’s director (Buckley), staff or employees or the related entities of Ultra Tune their directors (including Buckley), staff or employees; and
(f)Cole would not during the term of the Ambassador Retainer or after its cessation allow her conduct to injure the reputation or standing of Ultra Tune.

The plaintiffs allege that by making the recording and the other recordings, and disseminating them to others, including media outlets, Ms Cole has:

(a)brought the name of Ultra Tune and the “Ultra Tune” brand into disrepute;
(b)made disparaging remarks against Ultra Tune and/or Buckley; and
(c)Cole has allowed her conduct to injure the reputation or standing of Ultra Tune.

The plaintiffs alleged further that, by reason of Ms Cole entering into the Ambassador retainer, Ms Cole owed the plaintiffs a fiduciary duty to “act with the utmost good faith and in the best interests of and not to cause detriment” to the plaintiffs or either of them. The plaintiffs allege that by making and disseminating the recordings and the other recordings, Ms Cole has breached that fiduciary duty, and as a consequence, has caused the plaintiffs loss and damage.

The further amended statement of claim includes the following prayer for relief:

A.Orders pursuant to paragraphs 12. 13, 20, 21, 23 [sic] 28, and 30 that Cole and/or Swords whether by themselves, their employees, agents and/or servants or howsoever:
(i)retract, retrieve, recover and destroy all copies of the Recording and the Other Recordings, received, distributed, disseminated, held and/or published by them and/or their employees, agents and/or servants;
(ii)destroy the originals and all copies of the Recording and/or the Other Recordings in their possession; and
(iii)both permanently and or an interlocutory basis be permanently restrained from further distribution, dissemination, copying, and/or publishing of the Recording and/or the Other Recordings or part any of them to any other persons.

B.Damages pursuant to paragraphs 17, 18, 19, 20, 21, 23, 28 and 30.
C.Equitable compensation or damages pursuant to section 38 of the Supreme Court Act 1986.

D. Interest pursuant to Statute.
E. Costs.

On 26 March 2021, Mr Swords filed a request for further and better particulars of the amended statement of claim (‘request’). The plaintiffs provided some further and better particulars in response to the request in the further amended statement of claim, and in a letter dated 7 June 2021 (‘7 June letter’). The request and the particulars covered the following topics:

(a) the conversations between Mr Buckley and Ms Cole during the course of their relationship where they were said to have discussed personal and private matters, including matters concerning Mr Buckley’s business dealings;

(b) the facts, matters and circumstances by reason of which the plaintiffs say that Mr Swords was a confidant of Mr Buckley;

(c) the making of the other recordings, the dissemination of the recording and other recordings by Ms Cole, and the threats said to have been made by Ms Cole to disseminate the recording and the other recordings to various media outlets;

(d) Mr Swords’ alleged receipt of the recording and the other recordings, his knowledge that they evidenced private and personal conversations, and that Mr Swords knew that they were made without Mr Buckley’s knowledge and consent;

(e) the dissemination of the recording and the other recordings by Mr Swords;

(f) complaints and comments made by various Ultra Tune employees and franchisees to Mr Buckley and others regarding the contents of the recording;

(g) enquiries made by representatives of the media regarding the contents of the recording;

(h) the facts, matters and circumstances relied upon to support the allegation that Mr Swords owed the plaintiffs a duty not to harm their business reputations and earning capacity, or to cause them loss and damage;

(i) details of how Mr Swords was said to have encouraged, induced or enticed the Ultra Tune franchisees to breach their contractual arrangements with the plaintiffs or either of them, or otherwise interfered with the plaintiffs’ contractual relationships;

(j) when and how Mr Swords was said to have attempted to extort money from the plaintiffs or either of them;

(k) how Mr Swords was said to have aided and abetted Ms Cole to breach her obligation of confidence to the plaintiffs;

(l) the facts, matters or circumstances by which it is alleged that Ms Cole had a duty not to intentionally inflict mental harm, anxiety, stress, humiliation or embarrassment and/or mental stress upon Mr Buckley; and

(m) the loss and damage said to have been caused to the plaintiffs by the defendants’ conduct.

In her defence to the further amended statement of claim filed on 18 November 2021, Ms Cole raised objections to a number of paragraphs. Under cover of those objections, Ms Cole:

(a) admitted that she was in a personal relationship with Mr Buckley from around 2017, but did not admit the allegation that many conversations between her and Mr Buckley were of a private and confidential nature;

(b) denied that their relationship was one of mutual trust and confidence, and said that she did not know that information and conversations shared with her by Mr Buckley were not to be divulged without his consent;

(c) admitted that she made recordings of her conversations with Mr Buckley, including the recording, and that she communicated the recording to “several people”;

(d) denied that making and disseminating the recording entitled the plaintiffs to obtain an injunction in the terms sought by the plaintiffs, and denied that this conduct was a breach of s 11 of the SDA. She said further that the recording could not be the subject of an obligation of confidence, that she was not under a duty to keep the recording confidential, and that the communication of the recording was in the public interest within the meaning of s 11(2)(b) of the SDA;

(e) admitted that Mr Buckley made certain requests of her on 21 January 2021 concerning the recording and the other recordings, and that she did not comply with those requests, but denied that she has “continued, or threatened to continue to disseminate the recording and the other recordings”;

(f) denied that the dissemination of the recording was done with the malicious and wilful intention to harm the business reputation and/or earning capacity of the plaintiffs or either of them, or breached any duty she owed to the plaintiffs or either of them, or that she encouraged franchisees to breach their contractual arrangements with Ultra Tune;

(g) denied that she had breached the duty of mutual trust and confidence she owed to Mr Buckley, or any duty not to intentionally inflict mental harm to Mr Buckley; and

(h) admitted that she was engaged by Ultra Tune to provide promotional services pursuant to the Ambassador retainer, but denied that the Ambassador retainer included the terms referred to in paragraph 22 above, and denied that she breached the terms of the Ambassador retainer or any fiduciary duty owed to the plaintiffs or either of them.

In his defence to the amended statement of claim filed on 18 May 2021[1], Mr Swords objected to a number of the paragraphs in the amended statement of claim, but under cover of those objections:
[1]Which has been partially redacted pursuant to orders made by John Dixon J on 28 April 2021.

(a) said that if the relationship between Mr Buckley and Ms Cole had ever been one of mutual trust and confidence, it had ceased to be so by late 2019;

(b) made a number of allegations about the quality of the relationship between Mr Buckley and Ms Cole, and referred to events which took place during the course of the relationship between them and after the relationship ended;

(c) admitted that Ms Cole sent him a copy of the recording, but said that Ms Cole told him that she made the recording because she was afraid for her personal safety, and that Ms Cole was under no duty or obligation to keep the recording confidential;

(d) denied having disseminated any recording of any conversation between Mr Buckley and Ms Cole to any media organisation or franchisee or having threatened to do so, although he did send the recording to another person for his safety, and to Victoria Police;

(e) said that any communication of the recording by him was in the public interest and for the protection of his lawful interests within the meaning of s 11(2) of the SDA;

(f) said that he was entitled to provide a copy of the recording to Victoria Police, and that matters recorded in the recording were referred to by Victoria Police in a successful application for an interim intervention order to prevent Mr Buckley from contacting him, which has subsequently been breached by Mr Buckley;

(g) admitted that he had not destroyed or returned the recording in response to Mr Buckley’s request, and said that he told Mr Buckley’s solicitors on 12 January 2021 that he had distributed the recording to other people for his own safety and the safety of others;

(h) denied that the plaintiffs, or either of them, have suffered any loss or damage by reason of his conduct in providing the recording to others;

(i) said that:

(i) he has not provided a copy of any recording to any franchisees or media outlets;

(ii) he has not encouraged, induced or enticed any customer or franchisee to do anything;

(iii) he has not attempted to extort money from Ultra Tune or Mr Buckley; and

(iv) if any damage was caused to the plaintiffs or either of them by publication of the recording by media outlets (which is expressly denied) he did not cause that loss or damage, with such loss and damage having been caused by Mr Buckley’s own conduct as evidenced by the contents of the recording;

(j) Ms Cole did not breach any duty by disclosing Mr Buckley’s “iniquities”[2], as evidenced by the recording, as they were no longer in a relationship of mutual trust and confidence. Ms Cole was under no obligation to keep the recording confidential, and Ms Cole had a lawful justification for publishing the recording;

(k) further, significant parts of the recording were published on the Age website on 4 February 2021, where it remains accessible to the public, and as such the recording is in the public domain and is no longer confidential; and

(l) by reason of Mr Buckley’s conduct as evidenced by the recording, and by breaching the interim intervention order, Mr Buckley is not entitled to relief in equity or otherwise, and Ultra Tune is not even mentioned by name in the recording.

[2]An ‘iniquity’ is described in Australian Football League v The Age Company Ltd (2006) 15 VR 419 [63] as ‘a crime, civil wrong or serious misdeed of public importance’, referring to the statement of Gummow J in Corrs Pavey Whiting and Byrne v Collector of Customs (Vic) (1987) 14 FCR 434, 454-6.

The current applications and the stay application

Turning now to the applications at hand, paragraph 4 of the original summons filed by the plaintiffs on 2 February 2021 sought the following relief:

The Defendants are to provide a full and complete list, including the relevant date of every person to whom they and/or their employees, agents and/or servants distributed, disseminated, copied and/or published the Recording and/or the Other Recordings or any part of them (stating which) to the plaintiffs’ solicitors within 2 days.

The plaintiffs’ application for discovery pursuant to r 29.07 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘Rules’) (‘early discovery’) and the relief sought in paragraph 4 of the summons (‘disclosure order’) was referred to me for determination, along with an application made by Mr Swords in a summons filed by him on 31 May 2021. Mr Swords’ summons sought the following relief:

1. An order, pursuant to sections 62 and 63 of the Civil Procedure Act 2010 (Vic) (CPA) and rule 22.16 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (the Rules), that there be summary judgment for the second defendant.
2. Alternatively, an order that the proceeding be dismissed pursuant to rule 24.02 of the Rules for failure to provide further and better particulars as ordered by His Honour Justice John Dixon on 28 April 2021.
3. Alternatively, an order that the plaintiffs’ further amended statement of claim filed on 19 May 2021 be struck out pursuant to rules 23.01 and 23.02 of the Rules.
4. Alternatively, an order pursuant to sections 62 and 63 of the CPA and rule 22.16 of the Rules that the plaintiffs’ claims in respect of the The [sic] Recording contained in the further amended statement of claim filed on 19 May 2021 be dismissed.

At the first hearing of the applications on 2 August 2021, the plaintiffs sought orders that the defendants file and serve affidavits setting out:

(a)each and every recording of a conversation between the second plaintiff and first defendant they have now or have held in their possession, stating so far as they are able in relation to each such recording:
1.the date upon which the recording was made;
2.the location at which it was recorded;
3.the device upon which it was recorded;
4.the length of the recording;
5.the date upon which the recording came into their possession; and
6.the date upon which they disposed of the recording, indicating how the recording was so disposed.

(b)a list identifying which of the recordings or parts thereof they have forwarded or provided to any other person or entity, stating:
1.what other people or entities the recordings have been forwarded to;
2.the date upon which each such recording or part thereof was so forwarded; and
3.the manner/media by which it was so forwarded.

In some respects, the plaintiffs’ application for early discovery and a disclosure order is connected with Mr Swords’ application to strike out the further amended statement of claim, in that part of the rationale for the application is the failure of the plaintiffs to provide particulars of, among other things, the alleged dissemination of the recording and any other recordings. The plaintiffs say that they cannot provide the further particulars sought in the request unless and until the defendants comply with the disclosure order, as the matters about which the particulars are sought are matters which are peculiarly within the knowledge of the defendants.

Notwithstanding the objections to the adequacy of the pleading of the further amended statement of claim in her defence filed in November 2021 (after the first hearing of the applications), Ms Cole has made no application with respect to the adequacy of the plaintiffs’ pleading and particulars, but has supported Mr Swords’ application, and has to some extent relied upon the alleged deficiencies in the further amended statement of claim to support her opposition to the plaintiffs’ application for early discovery and a disclosure order.

The applications were originally returnable on 2 August 2021. During a break in the hearing on that day, I listened to the recording.

During the course of the hearing of the applications, counsel for the plaintiffs indicated that the plaintiffs were in the process of seeking assistance from technical experts based in the United States regarding the question of whether the recording had been tampered with in some way. While I had heard full argument on the issues in the applications, it was clear to me that any doubt about the authenticity of the recording was relevant to the factual foundation underpinning Mr Swords’ submission to the effect that summary judgment should be granted on the basis that the plaintiffs have no real prospects of obtaining relief in equity in circumstances where the recording discloses unlawful and/or disgraceful conduct on the part of Mr Buckley, or an “iniquity” (‘iniquity issue’)[3]. If there are reasonable doubts about the authenticity of the recording, it would be inappropriate to grant summary judgment on the basis of the contents of the recording. Accordingly, I directed that the hearing of the applications be adjourned to a date to be fixed to provide the plaintiffs with an opportunity to obtain expert evidence and put that before the Court, and to enable the parties to make further submissions regarding the iniquity issue, if necessary.
[3]See footnote 2.

I anticipated that the applications might be able to be resolved within a matter of weeks. However, events intervened. The plaintiffs and Ms Cole may have been distracted by the hearing of a summons filed by the plaintiffs on 27 April 2021 seeking that Ms Cole be dealt with by the Court for contempt in the face of the Court (‘contempt application’) for breaching the injunctions when she forwarded copies of the recording to other people on 7 and 8 March 2021. Ms Cole admitted breaching the injunctions in an affidavit sworn by her on 18 June 2021, when she said that she had sent the recording to a number of named individuals, including two journalists. The contempt application was heard by Keogh J on 28 September 2021, and on 29 September 2021, Keogh J ordered that Ms Cole be judged guilty of contempt, and ordered that she pay a fine of $500, along with the plaintiffs’ costs of the contempt application.[4]
[4]Ultra Tune Australia Pty Ltd & Anor v Cole & Anor [2021] VSC 634.

More problematic for the progress of the current applications and the proceeding generally was the decision by Victoria Police on 19 October 2021 to charge Mr Buckley with the offences referred to in paragraph 2 of these reasons. On 2 December 2021, the plaintiffs filed an application for a stay of this proceeding pending the determination of the criminal proceeding (‘stay application’). Given that Mr Swords had also been charged with offences connected with the charges laid against Mr Buckley (albeit unconnected with the conduct said to have been evidenced by the recording), and given that there were a number of pending court dates in the criminal proceeding, I adjourned the further hearing of the outstanding applications, including the stay application, to 11 April 2022. Orders were made by consent for further adjournments on 11 April 2022 and 16 May 2022, and the outstanding applications, including the stay application, returned to Court on 1 August 2022.

By 1 August 2022, the charges against Mr Swords had been resolved. I was informed that Mr Buckley had exercised his right to require that the charges against him be determined in the “indictable offences” stream, and that a committal hearing has been listed to commence on 27 February 2023.

I acceded to the stay application, at least in part. An extract of the relevant part of my reasons follows:

In some cases, an evaluation of the risk of compromising the second plaintiff’s right to silence will result in a conclusion that something less than a complete stay is warranted. In my view, this is such a case. In particular, there is limited, if any prejudice to the second plaintiff for the Court in determining [sic] the outstanding applications, save for the application in the second defendant’s summons filed 31 May 2021, insofar as it seeks to strike out the further amended statement of claim, or obtain summary judgment upon the second plaintiff’s claim for equitable relief based upon the iniquity issue.
I accept that determining the iniquity issue, especially on a summary basis, would involve, in effect, prejudging some of the issues in the criminal proceeding, and that for the second plaintiff to properly defend that allegation, he would be compelled to, in effect, waive his right of silence prematurely. Further, given the level of media interest in this proceeding, any publicity concerning any adverse finding (if it were made) regarding the iniquity issue may carry with it a risk that potential jurors will see and be influenced by such reporting, without an appreciation of the different balance of proof which applies to civil and criminal proceedings.
However, in my view, no such risk arises with respect to the balance of the outstanding applications. Taking first the plaintiffs’ application, that application has already been heard, save that there may be a question of whether part of the information sought by the plaintiffs has already been provided by the first defendant during the course of the contempt proceeding. Secondly, the second defendant’s application, which has also already been heard, concerns, apart from the iniquity issue, largely technical arguments regarding the form of the pleading and the adequacy of the particulars. Finalising these applications and making consequential orders will not jeopardise the second plaintiff’s right to remain silent pending the hearing and determination of the criminal proceeding.

I afforded the parties the opportunity to file further written submissions with respect to the outstanding applications, given the events which had taken place and the period of time which had elapsed since the original hearing of the applications. The parties availed themselves of that opportunity, filing further written submissions on 19 August 2022, 21 August 2022, and 2 September 2022.

Accordingly, the current issues for determination are:

(a) the applications in paragraphs 2 and 3 of Mr Swords’ summons filed on 31 May 2021 (‘strike-out application’), being that the further amended statement of claim be struck out pursuant to r 23.02 of the Rules, or alternatively, r 24.02 of the Rules; and

(b) the plaintiffs’ application for early discovery and a disclosure order.

The strike out application

Rule 23.02 of the Rules provides as follows:

Striking out pleading
Where an indorsement of claim on a writ or originating motion or a pleading or any part of an indorsement of claim or pleading—
(a)       does not disclose a cause of action or defence;
(b)       is scandalous, frivolous or vexatious;
(c)       may prejudice, embarrass or delay the fair trial of the proceeding; or
(d)       is otherwise an abuse of the process of the Court—
the Court may order that the whole or part of the indorsement or pleading be struck out or amended.

Rule 24.02 of the Rules provides as follows:

Failure to obey order
(1) Where a party fails to comply with an order to give particulars of any pleading or with an order for the discovery or inspection of documents or for answers to interrogatories, the Court may order—
(a) if the party is the plaintiff, that the proceeding be dismissed;
(b) if the party is a defendant, that the defendant's defence, if any, be struck out.

(2) A defendant whose defence is struck out in accordance with paragraph (1)(b) shall, for the purpose of Rule 21.02(1), be taken to be a defendant who, being required to serve a defence, does not do so within the time limited for that purpose.

The relevant order relied upon by Mr Swords for the purpose of his application pursuant to r 24.02 is paragraph 4 of the orders made by John Dixon J on 28 April 2021, which provided as follows:

By 19 May 2021, the plaintiffs shall file and serve a further amended statement of claim substantially the form provided to the Court by email on 27 April 2021, together with answers to the second defendant’s request for further and better particulars filed 26 May 2021.

Mr Swords’ complaints about the further amended statement of claim (save for his complaints concerning the iniquity issue) fall into two categories:

(a) the plaintiffs have failed to plead the necessary material facts to support the various causes of action referred to in the further amended statement of claim; and

(b) the failure to provide proper particulars in response to the request means that he does not know the case he has to meet at trial.

Mr Swords’ complaints about the plaintiffs’ failure to plead the material facts necessary to support their purported causes of action are discussed later in these reasons. As for the adequacy of the particulars provided by the plaintiffs, Mr Swords submitted, in summary, as follows:

(a) the plaintiffs have failed to provide details of the business dealings, business activities and business hardships discussed between Mr Buckley and Mr Swords and/or Ms Cole;

(b) the plaintiffs must, in order to obtain relief, specify with some precision the information which is said to be confidential to the plaintiffs or either of them and warrants protection by the Court;

(c) in particular, there are no details of any information which is said to be confidential to Ultra Tune, and there is no substantive information in the recording which could be said to be confidential to Ultra Tune; and

(d) the 7 June letter is an inappropriate vehicle for the provision of further and better particulars. The 7 June letter also contains new allegations of material fact which are not pleaded in the further amended statement of claim and are not of themselves adequately particularised, and includes argumentative submissions and unwarranted and incorrect allegations about Mr Swords’ solicitor.

As previously noted, to some extent the complaints about the inadequacy of the particulars are bound up with the plaintiffs’ application for a disclosure order. In summary, the plaintiffs say they are unable to provide proper particulars of the dissemination of the recording unless the defendants provide a list of the parties to whom the recording has been disseminated. Further, they say they are unable to provide particulars of the other recordings, and of the dissemination of the other recordings, unless the defendants each provide a list of the other recordings in their possession, custody or control, and a list of the people to whom the other recordings have been disseminated. On the other hand, the defendants say that the inadequacy of the particulars provided by the plaintiffs, along with the other deficiencies in the further amended statement of claim, supports their contention that the plaintiffs have not established a prima facie case of wrongdoing which justifies making an order for early discovery or making a disclosure order.

Taking first the plaintiffs’ alleged failure to provide proper particulars of the allegations in the further amended statement of claim, I would make the following observations:

(a) the manner in which the plaintiffs have provided particulars to date is deficient. In particular, the 7 June letter does not amount to a proper response to a request for further and better particulars. I also agree that the 7 June letter is confusing, contains extraneous material, and in some respects fails to properly engage with the request;

(b) insofar as the further amended statement of claim makes allegations with respect to the recording, the plaintiffs should be in a position to provide proper particulars, based upon enquiries that they have made, or are capable of making, along with the evidence and information provided by the defendants to date, and they should do so;

(c) insofar as the further amended statement of claim makes allegations with respect to the other recordings, the failure of the plaintiffs to provide any particulars supports the position advanced by Mr Swords (and supported by Ms Cole), being that the allegations that Ms Cole and Mr Swords have disseminated the other recordings in breach of obligations owed by them to the plaintiffs or either of them have no real sound factual basis; and

(d) however, given the above, and given that the plaintiffs’ inability to provide particulars of some of their applications is explicable, I do not consider that the plaintiffs’ conduct warrants striking out the further amended statement of claim pursuant to r 24.02 at this stage.

Further in relation to (a) above, I agree with the submissions of Mr Swords to the effect that the manner in which the plaintiffs have provided further and better particulars to date has been unwieldy and confusing. However, given that as a consequence of these reasons the plaintiffs will need to file a second further amended statement of claim at some stage, the position is salvageable, as some of the problems with the particulars can be addressed in the next version of the statement of claim. Given the stay of the proceeding, the plaintiffs will have ample time to get their pleading in order.

Further in relation to (b) above, the plaintiffs should, as earlier indicated, be in a position to provide some further and better particulars based upon the evidence and information provided by the defendants to date regarding the dissemination of the recording , and I would not strike out the further amended statement of claim or give judgment against the plaintiffs with respect to their allegations about the recording solely upon the basis of the current absence of particulars. Further, it is possible that the plaintiffs may be able to provide further and better particulars after discovery is undertaken in the usual way.

However, I agree that the plaintiffs must identify, with some degree of precision, the confidential information in the recording which the plaintiffs seek to protect. Any further failure on the part of the plaintiffs to do so will expose the plaintiffs to a further strike out and/or summary judgment application. Further, given the current state of the pleading, I have real doubts as to whether Ultra Tune has any viable cause of action against the defendants, or either of them. The fleeting references to other employees and contractors of Ultra Tune in the recording do not seem to me to be particularly sensitive or confidential, and it is difficult to see how the disclosure of that information could cause Ultra Tune any material commercial harm. However, I am prepared to defer reaching a concluded view on these issues to a later date.

However, the position is quite different in relation to (c) above. For reasons which are also relevant to the plaintiffs’ application for a disclosure order, in the absence of any proper particulars, or other cogent evidence, there currently appears to be no solid factual basis to support any allegation that either or both of Ms Cole and/or Mr Swords have disseminated any other recordings, save in the manner deposed to by Ms Cole. I do not accept the plaintiffs’ submissions to the effect that the question of whether there has been any dissemination of any other recordings is a matter entirely within the knowledge of the defendants or either of them, as discussed further in the section of these reasons concerning the application for a disclosure order. In those circumstances, the existence, contents, and dissemination of other recordings is a matter of mere speculation, and even if there are other recordings, the question of whether such recordings contained confidential information of the plaintiffs or either of them is also a matter about which the parties and the Court can only speculate.

The only evidence of the existence of any other recordings is the evidence of Mr Buckley to the effect that both Ms Cole and Mr Swords threatened him, directly or via third parties, with the dissemination of recordings of private conversations. Ms Cole has also admitted to providing other recordings to her lawyers and Victoria Police. However, the plaintiffs’ allegations that such threats were made have been vigorously denied, and, it seems to me that, even if some threats were made, the evidence indicates they were made in the context of the breakdown of the relationships between Mr Buckley and Ms Cole, and Mr Buckley and Mr Swords: that is, at a volatile time. However, in the two years that has lapsed since December 2020, no evidence of any other recordings has emerged.

Accordingly, the allegations in the further amended statement of claim concerning the other recordings should be struck out, albeit with a right to replead.

Some of Mr Swords’ complaints about the inadequacy of the particulars provided by the plaintiffs really raise more fundamental questions about the tenability of some of the plaintiffs’ causes of action. In particular, Mr Swords submitted that the plaintiffs have failed to plead the necessary material facts (or provide proper particulars) in relation to the following matters:

(a) what information in the recording (or any other recordings) was confidential information which warrants protection;

(b) the alleged breach of s 11 of the SDA:

(c) the plaintiffs’ entitlement to relief in equity;

(d) the tort of inducing breach of contract/interference with contractual relations;

(e) the alleged attempt by Mr Swords to extort money from the plaintiffs; and

(f) the allegation that Mr Swords aided and abetted Ms Cole in her breach of duty of mutual trust and confidence.

I also have some concerns, independently of the issues raised by Mr Swords in the strike out application, about the manner in which the allegation that Ms Cole has breached her duty to avoid inflicting mental harm upon Mr Buckley has been pleaded. In particular, the preponderance of authority suggests that, where a plaintiff seeks compensation for the tort of the intentional infliction of mental harm, that plaintiff must plead that they have suffered a recognised psychiatric or psychological illness or condition as a consequence of the defendant’s conduct[5], and the plaintiffs have not done so.
[5]See Giller v Procopets (No 2) [2008] 24 VR 1, per Ashley and Neave JA, Maxwell P dissenting.

Further, while Mr Swords has not expressly sought orders for the dismissal of the proceeding insofar as it is brought by Ultra Tune, the thrust of his submissions was to the effect that the further amended statement of claim discloses no cause of action by Ultra Tune against the defendants, or either of them. As indicated above, I tend to agree, but I would give the plaintiffs a further opportunity to make out a viable cause of action which would entitle Ultra Tune to obtain relief from the Court, rather than in effect grant summary judgment on that issue at this stage. I would say that, having listened to the recording, it is difficult to see how it supports a claim by Ultra Tune for injunctive relief to remedy any breach of any obligation imposed upon the defendants to keep confidential its commercial secrets.

Mr Swords submitted that the plaintiffs’ failure to provide details of what confidential information of the plaintiffs (or either of them) is contained in the recording (or the other recordings) justifies striking out the further amended statement of claim, relying upon the following extract from Professor Dal Pont’s ‘Law of Confidentiality’:

Generally speaking, an identifiable use of specific confidential information, or at least circumstances from which such an inference could properly be drawn, must be shown. At least six reasons may be proffered for the need for specificity. First in the case of a plaintiff seeking injunctive relief to prevent a threatened or continuing publication of confidential information the need for the information alleged to be confidential to be clearly defined feeds into the terms of an injunction being sufficiently certain in scope. Court eschew imprecisely worded injunctions for fear it may render them difficult to enforce, and to this end render them potentially ineffective. Second, a lack of proper particulars may compromise the defence of the claim as the defendant may not know what case he or she has to meet. In all forms of litigation, civil or criminal, and in professional disciplinary proceedings, courts and tribunals have emphasised the need for a defendant to be properly apprised of the case against him or her. Third, absence of specificity may prompt the inference that the action aims to harass or oppress the defendant rather than protect the plaintiff. If so, the court may strike it out as an abuse of process. Fourth, as the court demands caution in making allegations of improper or fraudulent conduct, it stands to reason that an allegation of breaching confidence that imputes conduct of a gravely improper character must be supported by clear particularisation.
Fifth, the more general the description of the information the plaintiff seeks to protect, the more difficult it is for the court to satisfy itself that information so described was imparted to or received by the defendant in circumstances giving rise to an obligation of confidence…
Sixth, indiscriminate claims in relation to a wide range of information without an attempt to disentangle obvious public material from that alleged to be confidential serve to cast doubt over whether the latter is indeed confidential.”[6]

[6]GE Dal Pont ‘Law of Confidentiality’ (2015, Lexis Nexis Butterworths Australia) (‘Dal Pont’), [13.18].

I accept that the extract above accurately summarises the relevant legal principles regarding the pleading of actions seeking to protect confidential information, and that at this stage, the plaintiffs have failed to identify with the necessary precision the information which they say is confidential to them, or either of them.

In reaching this conclusion, I note the following principles which can be derived from the relevant authorities:

(a) liability for breach of confidence is founded on the unauthorised use of information having the necessary quality of confidence where it was imparted in circumstances importing an obligation of confidence[7];
[7]Coco v AN Clark (Engineers) Ltd [1969] RPC 41, 47.

(b) what amounts to confidential circumstances is to be ascertained objectively[8]. The fact that the information was obtained surreptitiously may of itself attract equitable intervention, founded upon equity’s jurisdiction to prevent unconscionable conduct[9];
[8]Deta Nominees Pty Ltd v Viscount Plastic Products Pty Ltd [1979] VR 167, 193.
[9]Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 [172]-[174], [298].

(c) confidential information may include sensitive personal information, but liability for breach of confidence must still meet the test set out in (a) above[10];
[10]Stephens v Avery [1988] Ch 449, 456.

(d) the nature of the relationship between the parties is relevant to determining whether there is an implied obligation of confidence with respect to personal information, but the existence of a ‘confidential relationship’ does not mean that all communications made within the relationship are confidential[11];
[11]Ibid.

(e) where a confidential relationship has been found to exist, the obligation to keep confidential information private may well survive the cessation of the confidential relationship[12];

(f) in the case of third party recipients of confidential information, the critical issue is the knowledge of the third party. If the third party knows (or should have known) that the information sought to be protected is the subject of an obligation of confidentiality, then the third party is also subject to the obligation to keep the information confidential[13]; and

(g) while there is some conflict in the authorities as to whether it is necessary for a plaintiff to establish that the disclosure of confidential information has or may caused them detriment,[14] the likelihood of and extent of any detriment would be relevant to the discretion of the Court to grant injunctive relief.

[12]Dal Pont [2.13]–[2.15].

[13]See Hunt v A [2008] 1 NZLR 368 [94].

[14]Dal Pont [13.21].

As can be seen from the above, determining liability for breach of confidence is a very fact specific inquiry. Accordingly, the defendants are entitled to know the case they have to meet with some precision. In my view, a glaring deficiency in the further amended statement of claim is the absence of any proper pleading of what information in the recording was confidential, and why.

Further, I note the defendants’ criticism of the plaintiffs’ pleading of their allegations that the defendants, and each of them, were in a relationship of trust and confidence with Mr Buckley and/or Ultra Tune. In particular, the defendants have observed that any duty of trust and confidence owed by Ms Cole to Mr Buckley could not extend to the recording, given its contents. While I accept that Mr Buckley may have some difficulties in establishing the existence of a relationship of trust and confidence with Mr Swords in particular, and, in the case of Ms Cole, the scope of any duty owed by her to keep communications between her and Mr Buckley confidential, it seems to me that these issues are ultimately matters for trial. However, I also accept that there is a real question mark as to whether the defendants or either of them owed such a duty to Ultra Tune, and that the pleading of the matters relied upon the support the existence of such a duty falls short of what is required.

However it seems to me that the question of whether any duty owed by Ms Cole to Mr Buckley (or, for that matter, Ultra Tune) extends to the recording is inextricably bound up with the iniquity issue, and therefore will not be addressed in these reasons. Further, while Ms Cole has supported the strike-out application, and has objected to certain paragraphs of the further amended statement of claim in her defence, she has not herself made a strike out application or an application for summary judgment. However, given the orders I will make in respect of the strike out application, the plaintiffs should, when formulating a second further amended statement of claim, take on board the defendants’ legitimate criticisms of the pleading of this aspect of the plaintiffs’ claim.

In relation to the alleged breach of s 11 of the SDA, Mr Swords submitted that no civil liability is imposed upon the defendants by that provision, even if the defendants are unable to avail themselves of the defences in s 11(2) of the SDA. I agree, although if the dissemination of the recording or the other recording is unlawful, then that may be a matter relevant to whether the Court should grant final injunctive relief, such that the allegation is not entirely irrelevant to the plaintiffs’ claim. The alleged unlawfulness of the defendants’ conduct is also a material element of the tort of wrongful interference with trade or business. However, the pleading could be improved by making it clearer as to how the plaintiffs seek to rely upon the defendants’ alleged breaches of the SDA, and for what purpose.

Mr Swords says that the further amended statement of claim fails to disclose a cause of action which would give rise to equitable relief. Given that this submission is made on the basis of the iniquity issue, I decline to deal with that submission for the reasons I advanced when granting the stay application. However, I note that the plaintiffs would also fail to obtain equitable relief if they cannot establish that the defendants have disclosed the plaintiffs’ confidential information, which illustrates the importance of the plaintiffs providing, with some precision, the facts, matters and circumstances supporting the plaintiffs’ contention that the defendants have disclosed confidential information of the plaintiffs in breach of any duty owed by them to the plaintiffs.

As for the torts of inducing breach of contract and interference with contractual relations, Mr Swords submitted that these are two separate torts, which should have been pleaded separately. I agree. I also agree that the pleading of each of these causes of action is deficient, largely for the reasons advanced by Mr Swords. In particular, it is correct to say that the plaintiffs have failed to plead that there were any breaches of any contracts to which the plaintiffs or either of them were a party, which is a necessary precondition to establishing liability for a secondary tort of this kind. As observed by Mr Swords, the plaintiffs have not identified a single contract which was said to have been breached by reason of the dissemination of the recording, or any other recordings.

I also agree that in order to press their “economic tort” claims further, the plaintiffs ought to be in a position to plead more than just a bare allegation that they have suffered loss and damage by reason of the conduct of the defendants.

The question of loss and damage is both a material element of the tortious causes of action sought to be advanced by the plaintiffs, and is also relevant to the plaintiffs’ entitlement to equitable relief. While it might have been appropriate to give the plaintiffs some latitude in relation to their pleading of loss and damage at an earlier stage of this proceeding, nearly two years on, the plaintiffs should be in a position to know whether and how their commercial interests have been damaged by the conduct of the defendants in disseminating the recording. One can assume that if, for example, any franchisees have ended their relationships with Ultra Tune by reason of the dissemination of the recording, they would have done so by now, and the plaintiffs would be in a position to know about those departures and the reasons for those departures. While I accept that quantifying any loss and damage claimed by the plaintiffs may be a complex task, in the absence of any pleading of any material facts (perhaps of a kind which would form the basis of instructions to an expert), it is hard to avoid a conclusion that no loss and damage has in fact been suffered by the plaintiffs by reason of the dissemination of the recording, or at the very least, that it has not yet become apparent to the plaintiffs that they have suffered any loss or damage.

I also agree with Mr Swords’ submissions regarding the pleading of the allegation that Mr Swords attempted to extort money from the plaintiffs. This allegation may be relevant to the question of whether Mr Swords owed a duty of confidence to Mr Buckley and/or Ultra Tune, and may also be relevant to whether the Court should exercise its discretion to award final injunctive relief if the plaintiffs’ causes of action are otherwise made out. But as the allegations are currently pleaded, they go nowhere. If, as suggested by Mr Swords’ submissions, the plaintiffs are attempting to plead the tort of intimidation, they need to plead how the plaintiffs responded to the alleged threats.

As for the pleading of the plaintiffs’ claim that Mr Swords aided and abetted Ms Cole’s alleged breach of confidence, it seems to me that those allegations largely rise and fall with the claims against Ms Cole, and touch upon the iniquity issue, such that this issue needs to be set aside for the time being.

Accordingly, the relevant paragraphs of the further amended statement of claim, which are specified in the final section of these reasons, should be struck out.

The application for a disclosure order

The plaintiffs rely upon the Court’s power to make orders for early discovery under r 29.07(1), and to make orders for particular discovery under r 29.08 of the Rules. However, the plaintiffs also seek that the defendants go on oath in relation to their possession and dissemination of the recording and any other recordings.

The application for a disclosure order calls for consideration of the principles set out in the decision of the House of Lords in Norwich Pharmacal Co v Customs and Excise Commissioners[15], which were the subject of discussion by Warren J in Computershare Ltd v Perpetual Registrars Ltd[16] (‘Computershare’).
[15][1974] AC 133.
[16](2000) 1 VR 626 (‘Computershare’).

Rules 29.07 and 29.08 of the Rules provides as follows:

29.07 Order for discovery
(1)In a proceeding within Rule 29.01, notwithstanding that the pleadings between any parties are not closed, the Court may order that any of those parties make discovery of documents to any other of those parties.
(2)In a proceeding not within Rule 29.01, the Court may at any stage order any party to make discovery of documents.
(3)An order under paragraph (1) or (2) may be limited to such documents or classes of document, or to such questions in the proceeding, as the Court thinks fit.

29.08 Order for particular discovery
(1)This Rule applies to any proceeding in the Court.
(2)Where, at any stage of a proceeding, it appears to the Court from evidence or from the nature or circumstances of the case or from any document filed in the proceeding that there are grounds for a belief that some document or class of document relating to any question in the proceeding may be or may have been in the possession of a party, the Court may order that party to make and serve on any other party an affidavit stating—
(a)whether that document or any, and if so what, document or documents of that class is or has been in that party's possession; and
(b)if it has been but is no longer in that party's possession, when the party parted with it and that party's belief as to what has become of it.

(3)An order may be made against a party under paragraph (2) notwithstanding that the party has already made or been required to make an affidavit of documents.

In Computershare[17], the Court made disclosure orders of the kind sought by the plaintiffs in their application in this proceeding. In her reasons, Warren J noted that the purpose of making an order compelling a defendant to disclose the identity of parties to whom confidential information has been wrongfully disclosed is to protect the applicant for the order. Her Honour observed that the Court should only make a disclosure order of that kind if it is satisfied that the applicant would suffer irreparable damage from any delay in obtaining the evidence sought to be obtained from the defendant or prospective defendant, and that the order was necessary for the long term protection of the applicant’s interests.
[17]Ibid.

Her Honour held that it was appropriate to make a disclosure order in the proceeding before her (which was in its infancy), because there was unchallenged and unrebutted evidence that there had been an unauthorised disclosure of confidential information, the identity of the parties to whom the information had been disclosed was within the exclusive knowledge of the defendants, and the delay arising from forcing the applicant to utilise the usual pre-trial disclosure procedures might cause the applicant to suffer irreparable damage.

Her Honour also ordered that the defendants make early discovery pursuant to r 29.07 of the Rules. She rejected a submission that early discovery should only be granted in exceptional circumstances, stating that reading in such a qualification may be contrary to the purpose of the rule. She observed that the enactment of r 29.07 enacted a more liberal approach to discovery, particularly in relation to the question of whether some ‘fishing’ was permissible. However, Warren J also noted that the rule could not be used for the purpose of ascertaining whether a case exists, as distinct from attempting to obtain further evidence to support or confirm an existing case. She granted the application for early discovery, on the basis that there was a pre-existing contractual relationship between the parties, the documents sought were in the exclusive possession of the defendants, there was a strong and unrebutted suspicion that there had been misuse of the applicant’s confidential information, and the applicant required the documents in order to provide particulars of its pleading, which was under attack.

Turning now to the current application it is clear that somewhat different considerations apply to the application for a disclosure order with respect to the recording, and the disclosure order sought with respect to the other recordings. In short, Ms Cole submitted that there is no utility in granting early discovery or making a disclosure order with respect to the recording, and that there is no justification for making any disclosure order with respect to the other recordings.

For the most part, I agree, although I note that while Mr Swords has pleaded that he has not distributed the recording to anyone other than one other person and Victoria Police, he has not gone on oath to that effect.

It seems to me that there is also a material difference between the test governing whether an order for early discovery ought to be made and the principles governing the exercise of the Court’s discretion to compel the parties in the position of the defendants in this proceeding to go on oath regarding their possession and dissemination of the recording and the other recordings. Making an order for early discovery is not the norm, but, subject to some qualifications regarding the need to restrain impermissible ‘fishing’, only involves the defendants producing what documents they have, and does not require the plaintiffs to establish the existence of exceptional circumstances. On the other hand, in order to obtain an order requiring the defendants to each create and produce a new document, and to go on oath regarding the central issue raised by the allegations in the further amended statement of claim, requires the plaintiffs to establish that prima facie, a wrongdoing has occurred, and that there is a real likelihood that they would suffer irreparable harm if the disclosure order was not made.

However, in the current case, there seems to me to be a fundamental overarching difficulty with granting early discovery and making a disclosure order, and perhaps even an order that the defendants make discovery in the ordinary course with respect to the recording and the other recordings, when the time comes.

In the further amended statement of claim, the plaintiffs plead that the conduct of Ms Cole and Mr Swords in disseminating the recording and the other recordings breached s 11 of the SDA. A breach of s 11 of the SDA is punishable by up to two years imprisonment and/or a fine of up to $44,380.80.[18] In relation to the recording, both Ms Cole and Mr Swords have made certain admissions, but deny that they have breached s 11(1) of the SDA, relying upon the terms of s 11(2) of the SDA, which provides that the prohibition in s 11(1) of the SDA does not apply to the communication or publication of private conversations where the communication is in the public interest, or the communication is reasonably necessary to protect the lawful interests of the person making the communication or publication.
[18]In 2022/2023.

Whether a breach of s 11(1) of the SDA has occurred or whether the exceptions in s 11(2) of the SDA apply cannot be resolved in the context of the current applications. However, adopting the same reasoning as I did in response to the stay application, it seems to me that it would be inappropriate to make orders in this proceeding which have the potential to jeopardise the defendants’ right to invoke their privilege against self-incrimination, at least prior to exploring the issue further with the parties and their legal advisers.

Of course, it may be arguable that the defendants, or at least Ms Cole, have waived any privilege against self-incrimination with respect to the recording, by (in the case of Ms Cole) going on oath about the making of the recording and its dissemination. In the case of Mr Swords, he has made certain admissions in his defence, and in the course of his submissions in these applications. But there can be no suggestion of any waiver in relation to the other recordings. It seems to me that to deploy the compulsory processes of this Court to compel the defendants to disclose information about possible criminal offences they have committed in order to assist the plaintiffs to make out a claim they currently otherwise do not have the evidence to support would be an inappropriate exercise of the Court’s discretion.

The reasons above are, in my view, sufficient to dispose of the plaintiffs’ application. However, I will now deal with the other arguments advanced by the parties with respect to the application.

First, I accept that the plaintiffs would be in a better position to provide proper particulars of their allegations with respect to the dissemination of the recording and the other recordings if early discovery and/or a disclosure order was made. However, again, different considerations apply to the particulars of the dissemination of the recording, and particulars of the existence and the dissemination of the other recordings.

In relation to the recording, in my view, the defendants have already disclosed to the plaintiffs sufficient information to enable the plaintiffs to provide the necessary particulars of the dissemination of the recording. Ms Cole has actually gone on oath regarding this issue in the context of the contempt application, and there has been no evidence or submission to the effect that her evidence was untruthful or otherwise incorrect. There is simply no utility in ordering early discovery or making a disclosure order with respect to the recording directed at Ms Cole. Mr Swords has not gone on oath, but he has made certain admissions in his defence and via his solicitors. There may come a time where it would be appropriate for him to give sworn evidence regarding this matter, but, given the stay of the proceeding, and the state of the pleadings, that time has not yet arrived.

As for the application for a disclosure order in relation to the other recordings, the difficulty facing the plaintiffs is that the evidence in support of the contention that Ms Cole has disseminated any other recordings beyond what she has deposed to, being that she has provided copies of some other recordings to her solicitors and to Victoria Police, or that Mr Swords even has any other recordings in his possession is very scant indeed. Both Ms Cole and Mr Swords deny the plaintiffs’ allegations with respect to the alleged threats said to have been made by them to Mr Buckley to the effect that they had other recordings and planned to disseminate them. While I accept that the credibility of both Ms Cole and Mr Swords may well be an issue at trial, the same could be said for Mr Buckley.

However, unlike the position in Computershare[19], where the evidence supporting the applicant’s allegations that there had been a misuse of what was clearly confidential information appeared to be quite compelling, the allegations supporting the contention that there has been dissemination of any other recordings is scant, the plaintiffs’ allegations in that regard have been vigorously disputed by the defendants, and I am not satisfied that the plaintiffs have established that there is a prima facie case that a wrongdoing has occurred.
[19](2000) 1 VR 626.

This proceeding has now been on foot for nearly two years, and, to the best of my knowledge, no evidence has emerged of any other recordings having been disseminated to any other person. If any such evidence had emerged, it seems to me to be highly unlikely that the plaintiffs would not have brought that to the attention of the Court, given that such conduct would have been a breach of the injunctions. In those circumstances, it seems to me to be difficult for the plaintiffs to establish that if the disclosure order was not made, they are likely to suffer irreparable harm, particularly while the injunctions are in place.

While the plaintiffs might say that they would not necessarily have been aware of any dissemination of the other recordings, it seems to me that, given Mr Buckley’s high public profile, the media interest in this proceeding and in his personal and business affairs generally, his close control of Ultra Tune, his relationship with the franchisees and his other extensive business connections, that he would have been made aware of any dissemination of any other recordings. Accordingly, it is difficult to avoid reaching a conclusion that the plaintiffs are, indeed, seeking to use the application for early discovery and a disclosure order, at least insofar as it concerns the other recordings, to cast about to see if they do in fact have a case, not to seek evidence in support of a case they already have.

Further, while the plaintiffs relied upon the decision in Computershare[20] to support their application for a disclosure order, it seems to me that there are a number of material differences between the facts and circumstances in that case and those in the current proceeding. The parties in Computershare[21] were in a contractual relationship. The confidential information was identified in the relevant contract, and concerned the applicant’s proprietary software, which was at the core of its business, and was indisputably confidential information. The party to whom the information was said to have been disclosed was a direct commercial competitor of the applicant, and the evidence regarding the alleged disclosure of confidential information was unchallenged and unrebutted. In those circumstances, it was unsurprising that the applicant could clear the hurdle of establishing irreparable harm if the disclosure order was not made.
[20]Ibid.
[21]Ibid.

In the current case, the plaintiffs have failed to specify with any precision (or at all) the confidential information they say has been disclosed to third parties, and the factual foundation for establishing a relationship of trust and confidence between the plaintiffs or either of them and the defendants or either of them is somewhat less solid than was the case in Computershare[22]. Further, the plaintiffs have the protection of the injunctions, and, apart from the events leading to the contempt application, which occurred more than eighteen months ago, nothing further has emerged to suggest that there has been further dissemination of the recording (part of which is in any event now in the public domain), or any dissemination of any other recordings.
[22]Ibid.

Finally, while the difficulties with the pleading of the further amended statement of claim identified in the previous section of these reasons to some extent weigh against the granting of the application for a disclosure order, those difficulties are not determinative of the application. Of more critical relevance to the determination of the application for a disclosure order is the failure of the plaintiffs to establish, in the case of the recordings, any practical utility in making the disclosure order, and in the case of the other recordings, any sound factual basis for concluding that there has been any dissemination of any other recordings. Further, the fact that compelling the defendants to go on oath about these matters may, on the plaintiffs’ own case, expose the defendants to a risk of self-incrimination, also tends against the exercise of the Court’s discretion in the plaintiffs’ favour in that regard.

For completeness, I would add that the plaintiffs have not satisfied me that it is necessary or appropriate to make orders for early discovery under r 29.07, or particular discovery under r 29.08. Again, there seems to me to be no utility in making an order for early discovery with respect to the recording, and in my view, seeking discovery regarding the other recordings amounts to an impermissible fishing expedition. Further, in the case of documents concerning the other recordings, I am not satisfied that Mr Swords is likely to have any such documents in his possession, custody or control.

The application for early discovery and the disclosure order should be dismissed, while reserving to the plaintiffs the right to make a fresh application should the circumstances warrant such a course of action.

Disposition

Given the deficiencies in the further amended statement of claim, and the desirability of the plaintiffs incorporating at least some of the particulars provided in the 7 June letter in a formal pleading, I did give some consideration of whether the best course of action would be to strike out the further amended statement of claim in its entirety, and require the plaintiffs to start again after the stay is lifted. However, I do not consider that the defective parts of the further amended statement of claim are so intertwined with the other parts of the pleading such as to warrant striking out the whole of the further amended statement of claim.

Accordingly, I propose to order as follows:

(a) paragraphs 9(b) and (d); 10, 11, 12 and 13 (insofar as they refer to the other recordings); 17, 18 and 19; 20 and 21 (insofar as they refer to the other recordings), and 22 and 23 (if Mr Buckley is unable to provide particulars of any recognised psychological or psychiatric injury suffered by him as a consequence of Ms Cole’s conduct) of the further amended statement of claim be struck out;

(b) the plaintiffs have leave to file and serve a second further amended statement of claim not before 31 March 2023[23], which must:
[23]Being a date approximately four weeks after the conclusion of the committal proceeding.

(v) plead the necessary material facts of any allegation which has been struck out pursuant to (a) above in a manner consistent with these reasons;

(vi) amend the pleading of their allegations with respect to what recordings have been provided to Mr Matthews;[24]
[24]The allegation in the further amended statement of claim that other recordings were provided to Mr Matthews was retracted in the 7 June letter.

(vii) incorporate, where appropriate, the particulars provided in the 7 June letter;

(viii) provide particulars of the confidential information of the plaintiffs (or either of them) said to have been included in the recording, including the facts, matters and circumstances by which it is said the defendants or either of them owed the plaintiffs a duty to keep the identified information confidential;

(ix)provide particulars of any recognised psychological or psychiatric injury said to have been suffered by Mr Buckley by reason of Ms Cole’s alleged breach of duty to avoid causing him mental harm; and

(x) provide particulars of loss and damage, at least at a high level;

(c) Mr Swords’ applications in his summons filed on 31 May 2021 be adjourned to a date to be fixed not before 6 May 2023; and

(d) the plaintiffs’ application in paragraph 4 of their summons filed on 2 February 2021 be dismissed, without prejudice to their right to renew the application.

In relation to (c) above, it seems to me to be appropriate to keep Mr Swords’ application on foot. First, although the timing of the further hearing of the application will depend upon what happens in the criminal proceeding, at some stage it may be open to Mr Swords to press his application for summary judgment based upon the iniquity issue. Secondly, depending upon the contents of any second further amended statement of claim, it may become apparent that Ultra Tune has no viable claims against the defendants, or either of them. Thirdly, given that the plaintiffs will have leave to file and serve a second further amended statement of claim, it may be necessary at some stage to deal with any deficiencies in that document. Finally, if the second further amended statement of claim fails to address the need for the plaintiffs to precisely identify the confidential information which the plaintiffs contend warrants protection, the plaintiffs may be exposed to a further strike-out application or application for summary judgment.

In relation to (d) above, while I am not currently satisfied that it is appropriate to grant early discovery or to make the disclosure order, I accept that circumstances may change, and evidence may emerge which might cause me to alter my view.

I invite the parties to consider the proposed orders, and to consider whether a directions hearing should be convened to discuss the future conduct of this proceeding.

SCHEDULE OF PARTIES

S ECI 2021 00208
BETWEEN:
ULTRA TUNE AUSTRALIA PTY LTD (ACN 065 214 708)	First Plaintiff
PETER SEAN BUCKLEY	Second Plaintiff
- v -
JENNIFER COLE	First Defendant
ANTHONY SWORDS	Second Defendant

[2022] VSC 720

6 December 2022