Welfare, Robert v Birdon Sands Pty Ltd

[1997] FCA 1178

FEDERAL COURT OF AUSTRALIA

Contempt - allegation that director of respondent company guilty of contempt by disclosing for a collateral purpose confidential information gained by reading documents produced on subpoena - whether implied undertaking or obligation not to use confidential information in documents produced on subpoena for a collateral purpose - whether applicant’s medical file maintained by a hospital contained confidential information - whether disclosure was for a collateral purpose.

National Employers’ Mutual General Association Limited v Waind and Hill [1978] 1 NSWLR 372
Davidson v Lloyd Aircraft Services Ltd [1974] 3 All ER 1
McIvor & Another v Southern Health and Social Services Board [1978] 2 All ER 625
Alterskye v Scott [1948] 1 All ER 469
Harmon v Secretary of State for the Home Department [1983] 1 AC 280
Riddick v Thames Board Mills Limited [1977] QB 881
Crest Homes Plc v Marks [1987] 1 AC 829
Central Queensland Cement Pty Ltd v Hardy [1989] 2 Qd 509
Ainsworth v Hanrahan (1991) 25 NSWLR 155

Gregory v Phillip Morris (1987) 74 ALR 300
Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10

Matter No. DI 1222 of 1995

ROBERT WELFARE v BIRDON SANDS PTY LIMITED

VON DOUSSA J
ADELAIDE (heard in Darwin)
3 NOVEMBER 1997

IN THE FEDERAL COURT OF AUSTRALIA
NORTHERN TERRITORY DISTRICT REGISTRY	DI 1222  of   1995

BETWEEN:	ROBERT WELFARE APPLICANT
AND:	BIRDON SANDS PTY LIMITED RESPONDENT
JUDGE:	VON DOUSSA J
DATE OF ORDER:	3 NOVEMBER 1997
WHERE MADE:	ADELAIDE

THE COURT ORDERS THAT:

1. The charge of contempt against Russell Craig Byrnes made by notice of motion dated 9 May 1997 be dismissed.

2. The applicant Robert James Welfare pay Russell Craig Byrnes his costs of the notice of motion fixed at $7,000.

IN THE FEDERAL COURT OF AUSTRALIA
NORTHERN TERRITORY DISTRICT REGISTRY	DI 1222 of 1995

BETWEEN:	ROBERT WELFARE APPLICANT
AND:	BIRDON SANDS PTY LIMITED RESPONDENT

JUDGE:	VON DOUSSA J
DATE:	3 NOVEMBER 1997
PLACE:	ADELAIDE

REASONS FOR JUDGMENT

The present proceedings were commenced by notice of motion filed by Robert James Welfare in the Industrial Relations Court of Australia on 9 May 1997. The proceedings are now heard in this Court pursuant to Item 64 of Schedule 16 to the Workplace Relations and Other Legislation Amendment Act 1996 (Cth).

The notice of motion seeks an order that Russel Craig Byrnes is in contempt of Court. In support of his notice of motion, Mr Welfare, who has conducted these proceedings without legal representation, filed a statement of charge, and affidavits sworn by himself and Mr Martin John Donnelly. These documents were filed in purported compliance with O 40 of the Rules of Court.

The statement of charge originally filed sought to charge three separate contempts. At a directions hearing on 4 September 1997 the solicitor then appearing for Mr Byrnes gave notice of his intention to apply at the commencement of the trial to have all charges dismissed. Counsel outlined the basis of the proposed application. The main complaint in respect of the first count arose from the generality of the allegation made. As originally drafted the first count read:

“1)      That RUSSELL CRAIG BYRNES did on 6th of June, 1996, within the hearing of the court, disclose to a third person privileged and confidential information pertaining to the applicant which seriously damaged his reputation.”

The complaint about the second and third counts raised matters of jurisdiction, which were explained to Mr Welfare by the Court at the directions hearing. He has since abandoned those counts, and nothing more need be said about them.

At the hearing of the notice of motion Mr Welfare applied to amend the statement of charge in terms that had been notified in advance to Mr Byrnes. The re-drawn statement of charge, reads:

“1.That Russell Craig BYRNES did on 6th June 1996 disclose to a third person privileged and confidential information pertaining to the applicant which seriously damaged the applicant’s reputation.

2.That on the 6th June 1996 at the Industrial Relations court, Darwin, RUSSELL CRAIG BYRNES, a Director of the Respondent herein, disclosed to MARTIN JOHN DONNELLY, a witness in the proceeding herein, privileged medical information pertaining to ROBERT JAMES WELFARE, namely his Royal Darwin Hospital medical file.

3.Within the hearing of the court RUSSELL CRAIG BYRNES has used this information to damage the applicant’s personal and professional reputation. This disclosure is referred to in MARTIN JOHN DONNELLY’S affidavit of the 22nd of April 1997.”

Upon clarification of the re-drawn statement of charge being sought by the Court, Mr Welfare stated that paragraph 2 is to be understood as a particular of the disclosure to a third person as alleged in paragraph 1, and paragraph 3 is intended only to establish that the disclosure alleged in the earlier paragraphs was a serious matter as it brought about damage to Mr Welfare’s reputation. The disclosure complained of was constituted by oral statements by Mr Byrnes to Mr Donnelly. Mr Donnelly in the affidavit filed in support of the notice of motion deposes that:

“On the 6th of June I spent most of the day outside the Industrial Relations Court, Darwin. During that time Mr. Russell Byrnes came and spoke to me privately and stated that he had read the medical records of Mr. Robert Welfare. He said that in his opinion Mr. Robert Welfare was ‘a bit of a nut’ and that ‘the government departments also thought he was a ‘bit of a nut’’.

I thought that the Government Departments referred to by Mr. Byrnes must have been the Department of Transport and Works, Marine Division. I was not aware before Mr. Byrnes had spoken to me that Mr. Robert Welfare had been incarcerated in a mental asylum and I naturally asked Mr. Welfare if this was in fact true. I was astounded that Mr. Byrnes and his legal team were able to access this information. ...”.

The affidavit of Mr Donnelly and the statement of charge are to be understood against background facts which at all times have been common ground between the parties. Mr Welfare had been an employee of Birdon Sands Pty Ltd, a dredging company carrying out work in Darwin Harbour in 1995. Mr Donnelly was another employee of the company. On about 30 October 1995 the employment of Mr Welfare and Mr Donnelly was terminated by the company. On 31 October 1995 Mr Welfare commenced proceedings in the Industrial Relations Court of Australia under s 170EA of the Industrial Relations Act 1988 (Cth) alleging that his employment had been unlawfully terminated. Mr Donnelly also commenced similar proceedings. It was agreed that both proceedings would be heard together. On 6 June 1996 both matters came on for hearing before a Judicial Registrar of the Industrial Relations Court in Darwin. Mr Roberts, a legal officer employed by CFMEU appeared as counsel for both applicants. Birdon Sands Pty Ltd was represented by counsel, Mr Coleman. Mr Byrnes, a director of Birdon Sands Pty Ltd, was present at Court. Mr Byrnes is also a solicitor who has a practice in New South Wales. During the day there were a number of discussions between the parties, and the contempt is said to have occurred during one of them.

Prior to the commencement of the June 1996 proceedings before the Judicial Registrar (“the June 1996 proceedings”), Mr Welfare had issued a number of subpoenas requiring production of documents from third parties. Solicitors for Birdon Sands Pty Ltd had also issued and served subpoenas for the production of documents on the Medical Registrar of Royal Darwin Hospital, and the Commissioner of Police. In answer to these subpoenas confidential health records relating to Mr Welfare maintained by the Royal Darwin Hospital (“the medical file”), as well as the conviction record and other information relating to Mr Welfare maintained by the Northern Territory police, were delivered to the Court.

Early in the hearing of the June proceedings Mr Coleman sought permission for the respondent to inspect the documents which had been produced to the Court on subpoena, including the medical file. The disclosure alleged in the statement of charge occurred after inspection had been permitted. Mr Welfare said that the disclosure constituted a contempt of court because those who inspected the medical file on behalf of the respondent company had done so subject to an implied undertaking by them not to use information in it for any collateral or ulterior purpose. By analogy with the obligations under which a litigant receives documents in the course of discovery and inspection, Mr Welfare contended that Mr Byrnes, being one of the people who inspected the medical file, was obliged to maintain and safeguard the private character and confidentiality of the information in it, save only to the extent that the Court might permit its use in the ensuing litigation. Mr Welfare contended that a similar implied undertaking also arose because Mr Byrnes, as a solicitor, was an officer of the Court.

Mr Welfare contended that the statement by Mr Byrnes to Mr Donnelly that Mr Welfare was “a bit of a nut”, and that government departments also thought that he was “a bit of a nut” constituted a breach of the implied undertaking as these statements disclosed information in the medical file. The medical file as a matter of fact contains information relating to hospital admissions and outpatient treatments of Mr Welfare. In particular there are records relating to an admission in February 1995 for several days as a result of an acute psychiatric episode.

After this explanation of his proposed case was given by Mr Welfare, counsel for Mr Byrnes did not object to the amended statement of charge being substituted.

Before continuing with a summary of what occurred at the present trial it may be helpful to record for completeness that on the evening of 6 June 1996 there were discussions between Mr Roberts, Mr Coleman and Mr Byrnes which concluded in all three of them believing that the claims of both Mr Welfare and Mr Donnelly had been settled for agreed monetary sums. Mr Coleman returned to Sydney early the following morning, but when the parties arrived at Court Mr Welfare denied that there had been any settlement. The proceedings were adjourned. The matter was relisted before another Judicial Registrar who, on 13 September 1996, held that Mr Welfare had settled his claim for $4,000, and made a declaration accordingly. Mr Welfare sought to have this decision reviewed under s 377 of the Workplace Relations Act 1996 (“the Act”). On 29 November 1996 Wilcox CJ dismissed the application for an order of review after a rehearing at which Mr Welfare, Mr Donnelly, Mr Roberts, Mr Byrnes and another witness gave evidence. On 5 June 1997 Moore J dismissed an application by Mr Welfare for an extension of time within which to appeal from the judgment of Wilcox CJ. Moore J also dismissed a notice of motion filed by Mr Welfare on 23 January 1997 alleging contempt by Mr Byrnes. His Honour did so in the knowledge that the notice of motion now before the Court had been filed, and because the earlier notice of motion was not supported by an affidavit containing admissible evidence. His Honour considered that the second notice of motion should be the vehicle for the trial of the charge of contempt by Mr Byrnes.

I return to the summary of the present hearing. In the course of his explanation to the Court about the charge of contempt set out above, Mr Welfare also said that the alleged disclosure to Mr Donnelly constituted an improper interference with a witness which constituted another ground of contempt. No such allegation can be inferred from either the original or amended statement of charge. Counsel for Mr Byrnes objected to a new and serious allegation of this kind being introduced after the commencement of the hearing. The Court ruled against Mr Welfare pursuing that allegation. It was explained to him that the evidence to be led by him must be confined to the amended statement of charge.

Mr Welfare informed the Court that he had subpoenaed a number of witnesses, including two policemen, to give evidence that they knew he had been confined in the psychiatric wing of the Royal Darwin Hospital in February 1995. Mr Welfare alleged that they had illegally disclosed this information to Birdon Sands Pty Ltd (see s 76(1) of the Criminal Code (Northern Territory)), and that because of this knowledge Mr Byrnes arranged for the medical file to be subpoenaed so that the information could be publicly disclosed to Mr Welfare’s detriment. It was contended that this evidence was relevant to show the motive of Mr Byrnes in having the medical file subpoenaed. The Court ruled against the admissibility of this evidence, and directed that evidence be confined to that which proved the circumstances surrounding the inspection of the medical file by Mr Byrnes, and the alleged disclosure charged. Why the medical file was subpoenaed by Birdon Sands Pty Ltd, and on whose instruction, was not relevant to those issues.

Mr Welfare then tendered evidence from a number of sources to prove the contempt charged. The evidence included a portion of the transcript of the hearing of the June proceedings when inspection of the subpoenaed documents was briefly discussed as a “preliminary matter”. Mr Coleman indicated to the Judicial Registrar that Birdon Sands Pty Ltd had issued subpoenas which resulted in the medical file and police records being in Court. He noted that they had been produced without appearance or claim to privilege of any kind being made by either the Hospital or the police, and contended that there could be no objection to the respondent to the proceedings inspecting the documents. Mr Roberts said he had not seen the documents and was unaware that the subpoenas had been issued by Birdon Sands Pty Ltd. He pointed out that the respondent had objected at a directions hearing (prior to the June 1996 proceedings) to Mr Welfare examining documents produced on a subpoena which Mr Welfare had issued, and the respondent should not assume that there could be no objection to inspection by the respondent of documents produced on subpoenas issued by the respondent. However, events moved on before there was time for Mr Roberts to seek instructions about raising an objection. The transcript records that the Judicial Registrar said:

“THE J. REGISTRAR: I have not looked through the documents. This is - the documents in this envelope relate to the documents from the Royal Darwin Hospital. There is also a document from the Northern Territory Police which I have not gone through either. Now, the subpoenas have been issued, the documents are here, the respondent can have access to them. Whether or not that can be used as evidence in the trial is an entirely different matter.

MR. ROBERTS: Yes, I appreciate that.

MR COLEMAN: There is another matter and that is the applicant’s subpoena to the Department of Transport. Some documents were produced to the Court and I appreciate that Mr Roberts does not want access to any of those documents but we have prepared our case on the assumption that those documents would be here and we seek access to them.

MR ROBERTS: Well, we have no objection to that and we likewise seek access to the documents - - -

THE J. REGISTRAR: Very well.

MR ROBERTS: - - - being handed down.”

Although the transcript records, in effect, that the Judicial Registrar and Mr Roberts were speaking contemporaneously, it is plain that Mr Roberts was seeking, and permission was given for, inspection by him and his clients of “the documents being handed down”. Those documents were the medical file, the police records, and other documents produced by third parties on subpoena.

Mr Welfare gave evidence that he was very annoyed on 6 June 1997 that the representatives of Birdon Sands Pty Ltd had been given access to confidential records in the medical file. In an affidavit sworn by him on 9 May 1997 in support of the notice of motion he said that many more people in Darwin than Mr Donnelly are now aware of some aspects of his medical history, and that Mr Byrnes’ actions on 6 June 1997 have severely damaged his employment prospects.

At the close of Mr Welfare’s case, counsel for Mr Byrnes indicated that Mr Byrnes did not dispute that the conversation alleged by Mr Welfare had occurred, but said that it would be contended that what had happened did not constitute a contempt. Mr Byrnes had not filed any affidavit evidence in advance of the hearing. Nor had he been directed to do so as the charge of contempt against him was in the nature of a criminal charge. In any event it would have been difficult for him to do so until Mr Welfare’s proposed amended statement of charge had been ruled on by the Court, and the nature of his case understood. As the hearing had to be adjourned for a day in any event, an opportunity was afforded to Mr Byrnes to file an affidavit in explanation of what occurred on 6 June 1997, if so advised. An affidavit was filed, and when the hearing resumed on 8 June 1997 Mr Byrnes was present in Darwin for cross-examination.

Mr Byrnes’ affidavit is lengthy. In summary he says that it was reported to him in Sydney by Mr Jim Bruce, a fellow director of Birdon Sands Pty Ltd in Darwin, on 6 November 1995 that the company had been ordered by the Department of Transport to cease using its work boats and dredges because a complaint had been made to the Department that the company was working in breach of a direction. Mr Bruce told Mr Byrnes that employees of Birdon Sands Pty Limited had received information from the “Water Police” that the complainant was Mr Welfare, who was known to the police as a “madman” who had been taken into protective custody by police and placed in a hospital or mental institution on an earlier occasion.

Mr Byrnes said that after the proceedings in the Industrial Court were issued, he had a number of discussions with Mr Welfare both in person and by telephone. Mr Welfare seemed to him to be obsessed with a litany of complaints about Birdon Sands Pty Ltd which were unrelated to his unfair dismissal claim. Mr Welfare appeared anxious and agitated. Mr Byrnes formed the view that he was suffering some sort of mental illness. This led him to instruct the solicitors acting for Birdon Sands Pty Ltd to subpoena the Hospital and police records to determine if the information received in November 1995 was true. If so that information could have been relevant to Mr Welfare’s fitness for the job and could have provided a possible reason why Mr Welfare would not carry out his duties as directed by his employer - the alleged reason for his dismissal.

Mr Byrnes came to Darwin from Sydney for the trial in the Industrial Court as it had not been possible to settle the claims. Birdon Sands Pty Ltd was insisting that both claims must settle; it would not settle one without the other. Mr Byrnes believed that it was Mr Welfare who would not settle. During the morning of 6 June 1996 Mr Byrnes had a number of discussions with Mr Roberts, Mr Donnelly and Mr Welfare. His affidavit continues:

“29I felt sorry for Martin Donnelly ... and I told him so. My discussions with all parties at this time was relatively cordial, although the matter was being fully defended.

30I had a number of discussions with Martin Donnelly on that day and I admit that during one of those discussions in the shade outside the Court, I said the following words to Martin, ‘Martin, I am sorry about all this. I wish I could settle with you, but as I have explained to you before, I cannot settle your matter by itself - I can only settle both matters together. I don’t think Robert [Welfare] will ever settle anything. I don’t really think he cares about this case, he’s just totally obsessed to hurt Birdon as much as he can. I think he’s a bit of a nut, which is what I’ve thought since I first met him last year. I have spoken to a number of people in the Government Departments and the Courts and they seem to all be sick of him and also think he’s a bit of a nut.’ ...

31At no time did I disclose any information to Martin Donnelly that I had looked at in respect of the files that I had accessed relating to Welfare. ...

...

41I refer to the Affidavit of Martin John Donnelly ... My knowledge as to Mr Welfare’s mental state and his being in a mental institution came from information given to me by employees of the company who had spoken to the water police, ... At no time did I speak to Mr Donnelly about the contents of any material which was produced to the Court under Subpoena. Mr Donnelly was a party to these proceedings in the sense that proceedings concerning him were being heard together with proceedings concerning Mr Welfare and was given access to this material the subject of the subpoena. The same solicitor, Mr Roberts, appeared for Mr Donnelly and Mr Welfare. Mr Roberts looked at the subpoenaed material during an adjournment and later objected to the use of some of it in the proceedings.”

Mr Welfare embarked on a lengthy cross-examination of Mr Byrnes. Part of the cross-examination constituted an attack upon Mr Byrnes’ credit, and part appeared to be an effort to agitate a number of complaints which Mr Welfare has about the works which Birdon Sands Pty Ltd were carrying out in the Darwin Harbour. These complaints have nothing whatsoever to do with the proceedings and the attempt to raise them constituted an abuse of the process of the Court. Questions to that end were disallowed. In the course of the cross-examination a number of documents which had been subpoenaed by Mr Welfare for the purposes of the Industrial Court proceedings were put to Mr Byrnes. Those documents tended to confirm, not destroy, the reliability of Mr Byrnes’ evidence. The attack upon Mr Byrnes’ credit failed.

I accept the account of events given by Mr Byrnes in his affidavit, save in one respect. In paragraphs 31 and 32 of the affidavit Mr Byrnes deposed to a conversation that he had with Captain Mike Bowman of the Department of Transport when, so Mr Byrnes alleged, Captain Bowman made a number of statements about Mr Welfare. Mr Byrnes’ affidavit did not identify precisely when the conversation occurred. One interpretation of the affidavit was that it occurred before the relevant discussion between Mr Byrnes and Mr Donnelly. On that interpretation, Captain Bowman’s alleged remarks about Mr Welfare would have been relevant as providing one of the bases for Mr Byrnes’ statement to Mr Donnelly that “people in the Government Department ... seem to be sick of him and also think he’s a bit of a nut”. However when Mr Byrnes was cross-examined on these paragraphs his evidence suggested that the conversation with Captain Bowman occurred after the relevant discussion. I then informed the parties that I considered paragraphs 31 and 32 were irrelevant to the proceedings. Had the timing of the conversation been apparent at the outset I would not have admitted those paragraphs into evidence.

At the close of Mr Byrnes’ defence case, Mr Welfare applied to call Captain Bowman in rebuttal. Although he did not have a statement from Captain Bowman, he anticipated that Captain Bowman would deny the content of the conversation deposed to by Mr Byrnes. I allowed Captain Bowman to be called as it was not clear if he could assist in fixing the time of the meeting. Captain Bowman produced his diary which suggested that any discussion that he had at about that time with Mr Byrnes, occurred not on 6 June 1996, but on the following morning. I then ruled that Captain Bowman could not give evidence of the conversation. As the conversation occurred after the events the subject of the charge, Captain Bowman’s evidence could only have the effect of mounting a collateral attack upon the credit of Mr Byrnes.

It is against this background that the charge of contempt must be determined.

It is appropriate at the outset to say something about what happened at the trial before the Judicial Registrar in relation to documents produced by third parties in response to subpoenas. In the well known passage from the judgment of Moffitt P in National Employers’ Mutual General Association Limited v Waind and Hill [1978] 1 NSWLR 372 at 381 the learned President discusses the procedure of having a third party bring documents to court. He said at 381-383:

“As Jordan C.J. pointed out in Small’s case (1938) 38 S.R. (N.S.W.) 564, at p. 574; 55 W.N. 215 and, as appears in Burchard’s case [1891] 2 Q.B. 241, at pp. 247, 248 there are at least two steps in the procedure of having a third party bring documents to court, and in their use thereafter. Indeed, on a correct view, there are three steps. The first is obeying the subpoena, by the witness bringing the documents to the court and handing them to the judge. This step involves the determination of any objections of the witness to the subpoena, or to the production of the documents to the court pursuant to the subpoena. The second step is the decision of the judge concerning the preliminary use of the documents, which includes whether or not permission should be given to a party or parties to inspect the documents. The third step is the admission into evidence of the document in whole or in part; or the use of it in the process of evidence being put before the court by cross-examination or otherwise. It is the third step which alone provides material upon which ultimate decision in the case rests. In these three steps the stranger and the parties have different rights, and the function of the judge differs.

Upon the first step the person to whom the subpoena is addressed may seek to, and have, the subpoena set aside on the ground that it was improperly issued and an abuse of the power to compel the production of documents in any one of a number of ways. ...

The second step is when the documents are produced to the court by the witness, the subpoena not having been set aside, and any other objection to their production, such as on the ground they were privileged, having been rejected. At this point documents are in the control of the court, pursuant to the valid order of the subpoena. As pointed out in Small’s case (1938) 38 S.R. (N.S.W.) 564, at p. 574; at this time the witness may state he objects to their being handed to the parties for inspection. If he states he does not object to the parties inspecting the documents, or by lack of objection is taken to have no objection, no doubt normally there would be little reason not to permit inspection by either party. However, the documents are under the control of the judge and, even if the witness has not objected, there may be good reason in the elucidation of the truth why the judge may e.g. defer inspection by one party or the other. Indeed, no doubt, he will normally defer inspection by a party who has not issued a subpoena until his opponent has an opportunity to use the documents in cross-examination. There may be good reason why he may, or indeed should, refuse inspection of irrelevant material of a private nature, concerning a party to the litigation, or, concerning some other person who is neither a party nor the witness. It may well be that the documents are the property of some institution, but relate to private matters concerning some person and the officers of the institution do not take objection on the basis that the responsibility for disclosure rests with the court. The documents are in its control and are used on its responsibility so far as properly required for the purpose of the proceedings.”

The learned President went on to discuss at pp 384 and 385 the nature of the wide discretion of the judge to permit inspection and, if relevant, the use of the documents in the proceedings. At 385-386 the President said:

The discretion is one concerning the invasion by the subpoena procedure of the rights of a stranger by a party who seeks inspection in aid of the presentation of his case to the court. No right of the opposing party is involved in making an order permitting inspection of a stranger’s documents. It is difficult to see on what basis he can object. His right is to have only admissible evidence adduced. The exercise of the discretion does not involve the determination of an issue between the parties as to the relevance or admissibility of the document. It may well be, however, that the judge may hear, or indeed invite, comment from an opposing party, if the documents are such that elucidation of the truth may best be served by delaying inspection, or because the documents reveal matter private to such party or his associates and is irrelevant to the proceedings. This may well be the case where the documents are produced as earlier indicated by some public authority and contain private matter, but the authority raises no specific objection on the presumed basis that it is the court’s responsibility to permit or refuse inspection. It follows that a party, in this case the plaintiff, has no right to object to the judge allowing the other party, in this case the first defendant, to inspect a stranger’s documents, or to appeal if the judge allows inspection.”

The medical records of Mr Welfare were produced without objection as to their inspection by any party to the proceeding being raised by the Royal Darwin Hospital. Mr Welfare drew to the Court’s attention a document published by the Northern Territory Department of Health and Community Services setting out a policy on confidentiality of clients’ records and privacy, and also to two internal guidelines prepared by that Department concerning the confidentiality and release of medical records. As would be expected, the document states that on the production of a subpoena medical records must be surrendered to the court. The guidelines go on to state:

“Where the patient whose health record has been subpoenaed is not a party to the proceedings before the court, a reasonable attempt should be made by the health facility to notify the patient that the subpoena has been received, and advice given of the place, date and time of the court hearing. This procedure will enable the patient to object to the tendering of the record in open court if he/she wishes.”

In the present case as Mr Welfare was a party to the proceedings, this guideline did not require notice to be given to the patient. The Hospital was entitled to rely upon the Court to supervise the use which would be made of the medical records once they were placed in the custody of the Court.

Medical records of the kind produced on subpoena in the present case are clearly of a confidential nature. Whilst they are the records of the Hospital, they contain personal information relating to the patient which, in the ordinary course, the patient and the public generally, would expect to be treated as private information of a confidential kind. The nature of hospital records, and the confidentiality attached to them, was considered by Lord Denning MR in Davidson v Lloyd Aircraft Services Ltd [1974] 3 All ER 1 at 4. The issue before the Court arose under s 32 of the Administration of Justice Act 1970 (UK) which empowered the court in a claim in respect of personal injuries to a person or in respect of a person’s death to order the production of documents by a person who was not a party to the proceedings. The section was enacted to enable the court to compel a third party to produce records or notes to the court in advance of the trial, to overcome a perceived problem arising from the fact that a subpoena duces tecum could only be used to require the production of documents at the time of trial. Lord Denning, delivering the principal judgment of the Court of Appeal, considered that the power should not be exercised so as to make such documents generally available to the applicant. His Lordship said, at 4:

“It seems to me that as a matter of principle, in the early stages at any rate, the discovery of the medical notes and records should be confined to the medical men who have to conduct an examination and report. The reasons have been adduced in affidavits before the court and have been elaborated before us in argument today. They are these. First, medical notes and records are very difficult for laymen to understand. They may easily misinterpret them. Second, the notes and records may include the medical man’s fears of worse things to come which may disturb the patient greatly if it were known to him. Such as, giving him six months to live; or saying that the doctor suspects a malignant cancer. Third, the record and notes may contain statements made by the patient himself or by relatives which may be embarrassing and distressing if made known. An instance was given in the course of this morning by counsel for the hospitals. A medical note on a girl of 12 said ‘Query pregnancy’. It was completely wrong. It was an idea that passed through the head of the doctor examining. But just think how unfortunate it could be if it were shown to relatives.

These notes and records are confidential documents. The medical man should be able to make them with the utmost frankness and without the fear that they may be disclosed beyond the professor.(sic) They should not be disclosed to other persons except when the interests of justice so require.”

The decision in Davidson v Lloyd Aircraft Services Ltd was later overruled by the House of Lords: McIvor & Another v Southern Health and Social Services Board [1978] 2 All ER 625. The House of Lords placed a different construction upon s 32 of the Administration of Justice Act. However the observations of Lord Denning as to the nature of the confidentiality attaching to medical reports were not disapproved.

Where documents have come into the custody of the Court pursuant to a subpoena for production, the power of the Court to control the use of those documents, and to allow inspection is unfettered. The discretion of the Court must be exercised having regard to the nature of the documents and the information contained in them, and to the proper administration of justice. In Waind’s case, Moffitt P at 383 observed that a judge would normally defer inspection by a party who has not issued a subpoena until his opponent has an opportunity to use the documents in cross-examination. Whether that should occur must depend on the nature of the documents. In the case of medical reports strong reasons may exist for allowing the party to whom the medical reports relate to inspect them ahead of any other party to the proceedings to ascertain what private or confidential information is contained in them. If this course is objected to, it may be necessary for the judge to consider the documents, and to form a view as to what restrictions, if any, should be placed upon the inspection of the documents, at least in the first instance. If there is private information within them that is likely to be regarded as confidential by the person to whom the records relate, and yet, at the same time, the information appears to have relevance to the issues before the Court, it is within the power of the judge to order that the documents in the first instance be examined only by counsel. In the event that counsel forms the view that it is in the interests of his or her client to use the documents, or information disclosed in them, in the course of the litigation, further application can be made to the judge for an order permitting that use. If necessary, permission can be granted subject to an order restricting the publication of the material. Similarly, if counsel considers that it is necessary to disclose the subpoenaed material in whole or in part to the client to obtain instructions, application can be made to the judge for an order permitting that to occur, subject if necessary to undertakings or other conditions designed to protect private or confidential information from publication beyond that which is strictly necessary in the attainment of justice.

In the present case, it is regrettable that the Court did not ascertain the nature of the material in the medical file before unrestricted access was granted to the parties. For example, had inspection been confined initially to counsel for the respondent, it is unlikely that any further use of the medical file would have occurred. As it was, no part of it was put to Mr Welfare in his cross-examination.

Mr Welfare contends that the same rule which limits the use which may be made of discovered documents inspected by a party to proceedings (the discovery rule) applied to those who inspected the subpoenaed documents pursuant to the permission granted by the Judicial Registrar. The discovery rule was referred to in Alterskye v Scott [1948] 1 All ER 469 at 470 by Jenkins J as:

“...the implied undertaking, under which a party obtaining discovery, is not to use documents for any collateral or ulterior purpose.”

Although the discovery rule is often explained in terms of an implied undertaking, it is one imposed independently of the consent of the party gaining access to the discovered documents. In England, it has been said the existence of an undertaking extracted by the court from a litigant and its solicitor to whom the documents are disclosed, is the condition upon which discovery is ordered: Harmon v Secretary of State for the Home Department [1983] 1 AC 280, per Lord Scarman at 313; Riddick v Thames Board Mills Limited [1977] QB 881 per Lord Denning MR at 896. In Australia, although the discovery rule is often explained in terms of an express or implied undertaking, it is one imposed independently of the consent of the party gaining access to the discovered documents. In Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 at 32-33 Mason CJ, with whom Dawson and McHugh JJ agreed, referred to the discovery rule as it operated in the course of discovery in court proceedings as an implied undertaking. However, as the rule operated in the relation to documents compulsorily discovered between parties to an arbitration pursuant to a direction of the arbitrator, the Chief Justice referred to it as an implied obligation. Rules of court now commonly provide for automatic mutual discovery after the close of pleadings. There is no formal order for discovery, upon the application for which an undertaking is given, expressly or by implication. Where discovery occurs in accordance with rules of court, the discovery rule operates as an implied condition imposed by a settled rule of practice.

The obligation imposed by the condition was stated by Bray J, Bray on Discovery, First ed. (1885), p 238 as follows:

“A party who has obtained access to his adversary’s documents under an order for production has no right to make their contents public or communicate them to any stranger to the suit: ... nor to use them or copies of them for any collateral object.”

In Crest Homes Plc v Marks [1987] 1 AC 829, Lord Oliver, delivering the decision of the House of Lords said at 854:

“It has recently been held by Scott J in Sybron Corporation v Barclays Bank Plc [1985] Ch 299 - and this must, in my judgment, clearly be right - that the implied undertaking applies not merely to the documents discovered themselves but also to information derived from those documents whether it be embodied in a copy or stored in the mind. But the implied undertaking is one which is given to the court ordering discovery and it is clear and is not disputed by the appellants that it can, in appropriate circumstances, be released or modified by the court.”

In Central Queensland Cement Pty Ltd v Hardy [1989] 2 Qd 509, McPherson J considered whether the discovery rule also applied to the use of a documentary witness statement required to be filed under the practice of the Supreme Court of Queensland. His Honour said at 510:

“...[counsel] submits that the principle of those decisions ... is confined to discovered documents and should not be applied to witness statements ... However, the underlying principle is in my view plain enough. It is that a document furnished for use for one purpose may not legitimately be used for another ...”

His Honour was of the opinion that the discovery rule would apply with equal force to the answers to interrogatories, as a form of compulsory disclosure, and he considered that the rule should also apply in respect of witness’ statements. His Honour observed at 511:

“One has only to look at the Practice Direction and use the experience that all of us have in trying actions in the commercial causes jurisdiction to realise that these procedures are available and are intended for use only for the purpose of properly conducting the litigation, and for no other.”

The underlying principle that a document furnished for use for one purpose may not legitimately be used for another applies, in my view, with equal force to documents obtained on subpoena where inspection of those documents is permitted by the Court.

In Ainsworth v Hanrahan (1991) 25 NSWLR 155 the Court of Appeal of New South Wales held that the discovery rule also applied to answers to compulsory interrogatories which had been furnished by one party to another in the course of litigation, but had not been made public by their admission into evidence. Kirby P with whose reasons Samuels and Handley JJA, agreed, followed the decision in Central Queensland Cement Pty Ltd v Hardy. Kirby P at 166-167 set out three considerations pointing in favour of the application of the discovery rule to the answers to compulsory interrogatories, and four considerations that pointed the other way.

The first consideration in favour was the historical relationship of the procedures dealing with discovery and interrogatories. The importance of that relationship to the question before the court was emphasised by Handley JA in his judgment at 169-170. Secondly, Kirby P also considered that the general principle governing the fair use of information provided by one person to another is not restricted to the procedure of discovery. Finally, in answer to the suggestion that excessively rigid control of documents is unrealistic and would impede the provision of information useful to the ends of justice, his Honour referred to the powers of the court to release a party from the implied undertaking as to confidentiality and to control the circumstances of the release of information obtained under compulsion.

In the present case, the history of subpoenas duces tecum is quite different from the history of discovery, and the powers of the court to control the use of documents produced on subpoena is different from those in relation to discovery and inspection: Waind per Moffitt P at 383. The close relationship with the procedure of discovery is not present in this case, but the other two considerations favouring the application of the rule apply with equal force. In particular, general privacy considerations are not confined to discovery.

Of the considerations identified by Kirby P pointing against the application of the discovery rule to compulsory interrogatories, that which recognised that interrogatories were answered specifically for the litigation, and after consideration in the knowledge that the answers may be made public in litigation, does not apply in the case of subpoenaed documents. Documents produced by a third party on subpoena are likely to be pre-existing documents that came into existence without any thought that they may later be used in litigation between other parties. That is a factor in favour of applying the discovery rule to parties who are granted permission to inspect subpoenaed documents, unless of course the rule is modified in a particular case by the court granting inspection.

When documents are produced by a third party pursuant to a subpoena, they are produced by a party who has no interest in the proceedings, and whose rights and privacy in the documents are being invaded by court processes with which the stranger is bound to comply: Bank of New South Wales v Withers (1981) 52 FLR 207 at 225. This consideration also favours a rule that restricts the use which may be made of documents and information produced to the court by this process.

In my opinion the policy considerations on which the discovery rule rests also require a similar condition to be implied where inspection is granted of documents which have been delivered into the custody of the court in answer to a subpoena. In the absence of some order which expressly imposes a different condition as to the use which may be made of the documents by the inspecting party, I consider an obligation is imposed on that party not to use the document for any ulterior or collateral purpose. The content of that obligation is the same whether it is described as one arising from an implied undertaking on the part of the party seeking leave to inspect the documents, or as a condition imposed by law on which the permission to inspect is granted. The document will be used for a collateral or ulterior purpose if the content of the document is made known to a stranger to the suit for a purpose unrelated to the litigation.

In the present case I consider Mr Byrnes was under an obligation in these terms when, pursuant to the permission granted by the Judicial Registrar he, as the representative of the respondent to the proceedings, inspected Mr Welfare’s medical file.

Did Mr Byrnes act in breach of this duty? I do not think that he did. Assuming, for the moment, that what Mr Byrnes said to Mr Donnelly amounted to a disclosure of information contained in the medical file, though not a disclosure of the documents themselves, the disclosure was not to a stranger to the suit. The disclosure was to Mr Donnelly who was a party to the proceedings being heard by the Judicial Registrar. He was one of the parties to whom permission had been granted to inspect the medical records, along with other subpoenaed documents. The evidence does not satisfactorily establish whether Mr Donnelly and Mr Roberts (who was also Mr Donnelly’s counsel), or either of them, had actually inspected the records. In my view that is not a relevant consideration. The relevant consideration is that the right to do so had been granted by the Judicial Registrar. Moreover, the disclosure occurred in the course of Mr Byrnes explaining to Mr Donnelly a difficulty he perceived to exist in the respondent’s endeavours to negotiate a settlement of the claims. Whilst the expressions used by Mr Byrnes might be thought to be crude and insensitive, the expression by him of his perception of the respective positions of the parties in negotiation was not unrelated to the litigation.

In my opinion the charge of contempt must fail on the ground that the disclosure by Mr Byrnes, if there were such a disclosure, was not one made in contravention of the condition upon which the respondent was granted leave to inspect the documents.

Mr Welfare contended that professional duties resting on Mr Byrnes, as a solicitor, also required that he not disclose information from the medical file to Mr Donnelly. In my opinion Mr Byrnes was not at the relevant time acting in his capacity as a solicitor. However, even if that conclusion is wrong, I do not consider that any obligation would rest upon Mr Byrnes which differed in content from the duty which I have held is imposed by law upon a party granted leave to inspect subpoenaed documents. Mr Byrnes was not in breach of that duty.

I have so far assumed that the statements made by Mr Byrnes to Mr Donnelly included a disclosure of information from the medical records of Mr Welfare. That assumption is disputed by counsel on behalf of Mr Byrnes. Mr Byrnes did not publish any document from the medical file, nor did he repeat any diagnosis or event described in the records. It is contended that he did no more than express an opinion that he held before the medical records were examined, and which he had at an earlier time already expressed to Mr Roberts. That opinion was based in part upon his understanding of information given to the respondent’s employees by the water police, and partly from his own observations of Mr Welfare in his dealings with him.

If Mr Byrnes had done no more than express his opinion that he considered Mr Welfare to be “a bit of a nut” there would be no basis to hold that the statement constituted a disclosure of information in the medical records. However, the conversation did not stop at that point. Mr Byrnes went on to say “I have looked at some of his records and they seem to confirm what I thought”. It is not disputed that the records referred to were those in the medical file. In my opinion the statement that the records “seemed to confirm what I thought” amounts to an indirect disclosure of information contained in the medical file. However, I add that if I were of the opinion that the disclosure constituted a breach of duty, I would hold that it was a technical breach that did not warrant the imposition of a penalty. This is particularly so as I consider Mr Byrnes acted without intention to interfere in the administration of justice: see Ainsworth v Hanrahan at 168 per Kirby P.

Mr Welfare asserts that by reason of Mr Byrnes’ statement, his medical condition has become a matter of public knowledge, and that his employment prospects have thereby been damaged. The evidence does not bear out his assertion that any impairment of his employment prospects flows from the statement made by Mr Byrnes. That statement was made only to Mr Donnelly. It repeated a view about Mr Welfare that had been stated to the respondent and a significant number of its employees in November 1995 by the water police. After Mr Byrnes’ statement to Mr Donnelly, Mr Donnelly himself enquired as to the position from Mr Welfare who then disclosed in more detail information about his medical condition. There is no suggestion on the evidence that either Mr Byrnes or Mr Donnelly have further broadcast the statement made by Mr Byrnes. If knowledge of Mr Welfare’s medical condition has become more widely known, that is not due to Mr Byrnes’ statement.

In his two affidavits Mr Donnelly expresses amazement and concern that the medical records of a party could be brought to the Court, and become information available for use in the proceedings. His affidavit suggests that it was that concern that influenced him in the course which he then took in relation to the future conduct of the action, not the statement by Mr Byrnes.

For these reasons I consider the charge of contempt brought against Mr Byrnes must be dismissed.

The notice of motion which brought the charge of contempt before the Court was filed by Mr Welfare in the proceedings commenced in the Industrial Relations Court of Australia in respect of his alleged unlawful dismissal. The contempt proceedings are however entirely separate proceedings. They are not proceedings in a matter arising under the Workplace Relations Act 1996: Gregory v Phillip Morris (1987) 74 ALR 300 at 308. This Court is not prevented by s 347 of the Workplace Relations Act 1996 from awarding costs in the proceedings. Costs should follow the event. Rather than award costs to be taxed, I consider that a fixed sum should be awarded in favour of Mr Byrnes. The process of taxation would only prolong and perhaps aggravate, the disputation which has occurred between the parties.

I have had regard to the summaries of costs filed by the parties. I consider that the costs payable by Mr Welfare on the dismissal of his proceedings should be fixed at $7,000.

I certify that this and the preceding 25 pages are a true copy of the Reasons for Judgment of Justice von Doussa

Associate:

Date:

Applicant  :          In person
Counsel for the respondent  :          Mr M Spargo with Mr D Sweet
Solicitors for the respondent  :          Cridlands
Dates of hearing  :          24 & 26 September 1997 and 3
  October 1997
Place of hearing  :          Darwin