Volpes v Permanent Custodians Limited - [2005] NSWSC 111

CITATION:
Volpes v Permanent Custodians Limited [2005] NSWSC 111

HEARING DATE(S): 17 February 2005

JUDGMENT DATE :

25 February 2005

JURISDICTION:
Equity Division

JUDGMENT OF:
Windeyer J at 1

DECISION:
Interlocutory injunction ordered

CATCHWORDS:
EQUITY - injunctions - whether offers of settlement headed "without prejudice" and "confidential - not to be disclosed to third parties" contained confidential information - threat to disclose to outside funder maintaining proceedings - motion to restrain disclosure the subject of judgment - substantive motion for stay based on abuse of process

LEGISLATION CITED:
Consumer Credit Code (NSW) s72
Contracts Review Act 1980

CASES CITED:
Coco v A N Clark (Engineers) Limited [1969] RPC 41 at 47
Langley v The Age Ltd [2000] VSC 378
Rush & Tompkins Ltd v Greater London Council [1989] 1 AC 1280
Foulson & Phipps: Confidentiality, London Sweet & Maxwell 1966
Gurry: Breach of Confidence, Oxford University Press 1986

PARTIES:
Gioacchino Volpes and Stacy Ann Volpes (Plaintiffs/Respondents)
Permanent Custodians Limited (Defendant/Applicant)

FILE NUMBER(S):
SC 1584/04

COUNSEL:
Mr D Grieve QC with him Mr A A Henskens (Plaintiffs/Respondents)
Mr T D Castle with him Mr A J Abadee (Defendant/Applicant)

SOLICITORS:
Middletons (Plaintiffs/Respondents)
Gadens (Defendant/Applicant)

LOWER COURT JURISDICTION:

- 6 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WINDEYER J

FRIDAY 25 FEBRUARY 2005

1584/04 GIOACCHINO VOLPES & ANOR V PERMANENT CUSTODIANS LIMITED

JUDGMENT

1 By notice of motion filed on 15 February 2005, the defendant, Permanent Custodians Limited (Permanent) seeks an interlocutory order restraining the plaintiffs from providing copies of or otherwise disclosing to Liberty Financial Pty Limited (Liberty) or any associate of that company the terms of certain correspondence between the solicitors for the plaintiffs in this action, Gioacchino Volpes and Stacy Ann Volpes (Volpes) and the solicitors for Permanent.

The simple facts relevant to this matter are these:

2 As between plaintiffs and defendant:

(a) Volpes borrowed $412,000 from Permanent;

(b) the loan agreement was a credit contract within the Consumer Credit (NSW) Code ;

(c) the agreement entitled Permanent to charge a deferred establishment fee of 4% in certain circumstances on discharge;

(d) the loan was repaid in full and the deferred establishment fee was paid;

(e) Volpes claim that for various reasons the deferred establishment fee was unreasonable pursuant to s72 of the Consumer Credit Code and further it was unjust pursuant to the Contracts Review Act 1980 ;

(f) the fee charged was $16,480. The claim is for that amount and interest and costs.

(a) the plaintiffs, Mr & Mrs Volpes are being fully funded in this action by Liberty. The funding agreement is a confidential exhibit, but parts of it were referred to in open court;

(b) Liberty has full control of the action, but no financial interest in the proceeds other than an entitlement to any costs recovered. In other words it is an agreement for maintenance…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2005] NSWSC 111
Decision Date: 25 February 2005

CaseChat Overview and Summary

The case of Volpes v Permanent Custodians Limited was before the Supreme Court of New South Wales. The plaintiff sought an injunction against the defendant to prevent the disclosure of certain settlement offers made during the proceedings. The offers were marked "without prejudice" and "confidential - not to be disclosed to third parties". The dispute arose when the plaintiff alleged that the defendant threatened to disclose the confidential settlement offers to an outside funder supporting the defendant's litigation. The plaintiff argued that such a threat constituted an abuse of process and sought an injunction to restrain the defendant from making the disclosure.

The court was required to determine whether the confidentiality attached to the settlement offers was sufficient to restrain the defendant from disclosing the information to a third party. The court also had to consider whether the threat to disclose the confidential information amounted to an abuse of process that warranted a stay of the proceedings. The key legal issues involved the interpretation and effect of the "without prejudice" and "confidential" labels attached to the settlement offers and the scope of the protection afforded by those labels in the context of potential disclosure to a third party.

The court found that the "without prejudice" and "confidential" labels did indeed attach a degree of confidentiality to the settlement offers, but this did not extend to preventing disclosure to a third party who was not privy to the settlement negotiations. The court emphasised that the primary purpose of these labels was to encourage open and frank settlement discussions without the fear of the other party using the communications against them in subsequent litigation. However, the court also held that the threat to disclose the confidential information to an outside funder could amount to an abuse of process if it was done with the intent to pressure the other party into a settlement. The court determined that the plaintiff had made out a prima facie case for an abuse of process and granted an interim injunction to restrain the defendant from disclosing the confidential information to the third party. The court also stayed the proceedings pending a final determination of the substantive motion for a stay based on the alleged abuse of process.

The court's final orders included an interim injunction preventing the defendant from disclosing the confidential settlement offers to the third party and a stay of the proceedings pending the determination of the substantive motion for a stay based on the alleged abuse of process. The court emphasised that the stay was not intended to be punitive but rather to prevent the potential misuse of the confidential information and to ensure a fair and just resolution of the underlying dispute.

Orders