Volpes v Permanent Custodians Limited

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.