Hunt v A
[2007] NZCA 332
•6 August 2007
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IN THE COURT OF APPEAL OF NEW ZEALAND
CA114/06
[2007] NZCA 332
| BETWEEN | ANNE HUNT | |
| Appellant | ||
| AND | A | |
| Respondent | ||
| Hearing: | 15 May 2007 | |
| Court: | Glazebrook, Hammond | and Wilson JJ |
| Counsel: | S J Price for Appellant |
H B Rennie QC and G L Turkington for Respondent
Judgment: 6 August 2007 at 11 am
JUDGMENT OF THE COURT
A The appeal is allowed.
BAll the orders made in the High Court are set aside. This order will lie in court for five days.
CThe costs orders in the High Court are set aside. In that Court Ms Hunt will have her disbursements, as fixed by the Registrar.
DIn this Court, Ms Hunt will have costs of $6,000 and usual disbursements.
REASONS OF THE COURT
(Given by Hammond J)
HUNT V A CA CA114/06 [6 August 2007]
Table of Contents
Para No
Introduction [1]
Background [5]
The pleadings: what is now in issue? [11]
Fresh evidence [19]
The book
The general themes of the work [24]
The provenance and writing of the book [30]
The appeal points [43]
Contempt
Introduction: the High Court judgment [45]
The Court Search Rules [46]
Chisholm J's Minute [56]Contempt by a breach of confidence [57]
Breach of confidenceIntroduction: what exactly are the civil claims which are being
advanced? [58]
A primary obligation of confidence between Wand Ms Hunt [64]
Did Ms Hunt breach confidence as a third party recipient
of confidential information?(a) Introduction [67]
(b) Third party breaches of confidence [69](c) Recipient liability in this case [95]
Contempt [103]
Conclusion [105]
Introduction
[1] This is an appeal against a decision of Wild J delivered on 17 May 2006 in HC WN CIV-2003-485-2553.
[2] The Judge held the appellant, Anne Hunt, to be in contempt of court and gave judgment against her for a breach of confidence in publishing a book, which we designate as "B". The Judge fined Ms Hunt $1,000 (to be paid to the Registrar of the High Court); awarded damages of $15,000 against her (in favour of the respondent, "A"); ordered the Registrar to seize and destroy any unsold copies of the book; and enjoined Ms Hunt from "future publication of those parts of her book" which had been found to be in contempt of court.
[3] Ms Hunt now appeals to this Court. The relief she seeks is that the judgment of Wild J "be set aside" and a judgment that "the appellant did not commit contempt
of court or breach of confidence" be substituted. There is no cross-appeal against the consequential relief ordered by the Judge, in the event that the substantive judgment of Wild J is upheld.
[4] We have designated the book as "B" because there is in force an interim order which suppressed the name of the book. We have not heard argument on whether that order should be modified or revoked. We will deal further with this issue in the conclusion of this judgment.
Background
[5] In early 1995 a woman Wild J designated as "W" made a complaint to the police that she had been sexually abused by a male health professional, A, whilst she was his patient.
[6] A was subsequently charged with a number of representative counts. His case went to trial in the High Court. A jury found him not guilty on all the counts proffered against him. The trial Judge made an order suppressing A's name or identifying details. Costs of $60,000 were subsequently ordered in favour of A under the Costs in Criminal Cases Act 1967.
[7] W had also complained to A's professional body about his alleged conduct. That professional body considered there was sufficient evidence to charge A with professional misconduct. It determined that it should conduct a full disciplinary hearing against A. That hearing was adjourned pending the outcome of A's criminal trial. The disciplinary action was terminated when the High Court, upon an application for judicial review by A, quashed the decision of the professional tribunal to proceed against him, on the basis of procedural irregularity. The High Court Judge in that proceeding made the following suppression order:
The names of the plaintiff and of the particular complainant and of their addresses and occupations and any particulars likely to lead to their identification are suppressed pending any further order of the Court, because I was informed that a suppression order had been made in respect of both the plaintiff and the complainant in the criminal trial relating to the identical
charges and also in respect of other civil proceedings between the complainant and the plaintiff.
[8] The civil proceeding referred to in that order was a claim by W against A for exemplary damages. Ultimately that claim was settled in the course of a judicial settlement conference. Both A and W personally signed a hand-written, but entirely legible, note of the settlement reached. For obvious reasons we forbear to mention the terms of that settlement, other than to note that it expressly recorded that "it shall be confidential to the parties". Chisholm J, who presided over the settlement conference, minuted the file that day as follows:
• Until further order of this Court this file is not to be searched without
leave of a Judge.• This Minute has been issued to support the confidential component of
the terms of the conditional settlement.
[9] Ms Hunt's book traversed all of these events, largely as a matter of reportage. There has been some dispute in this proceeding as to how it was that Ms Hunt came to write her book. We will refer to this aspect in greater detail later in this judgment. Undoubtedly the book was written between May 2001 (when the civil claim for exemplary damages was settled) and May 2003 (at which time Ms Hunt published her book). It seems that A first became aware of the existence of the book a month or two later when his wife, having earlier noticed an advertisement for the book in a periodical, located it in a bookshop. She was able to determine by leafing through it that it was indeed a book about the criminal and civil proceedings against A which we have earlier described.
[10] The proceeding which is the subject of this appeal was commenced on 21 November 2003. Orders were made that day suppressing A's identity and the subject matter of the proceeding, followed by orders on 8 December 2003 recalling the book. The fact that there was a settlement was not subject to the interim suppression order, but the details of the settlement were.
The pleadings: what is now in issue?
[11] The argument over the course of this proceeding has ranged very widely. But as routinely happens, a number of things have now fallen away. It is important to be clear at the outset as to what, precisely, is now in issue.
[12] Under the amended statement of claim on which the parties went to trial, A averred (at [3]):
At all material times the plaintiff s [A's] name and particulars leading to his identity have been suppressed by interim and final orders [in the criminal trial]; in ... [the] disciplinary proceedings ... ; or in the Court of Appeal or the Privy Council for the reasons noted in the judgment of the Court of Appeal in Daniels v Thompson [1998] 3 NZLR 22 at page 55 (subsequently referred to as W v W [1999] 2 NZLR 1 in the Privy Council).
[13] As to the settlement conference, at [5] and [6] of the amended statement of claim it is pleaded that:
The settlement conference, which of itself was confidential under the High Court Rules, resulted in a confidential agreement between the plaintiff [A] and the complainant [W] and a closure order made by the Presiding Judge that the file was not to be opened without leave in order to preserve the confidential component of the settlement.
The breaches which are alleged to have been committed by Ms Hunt are that she:
7.1 Breached the suppression orders referred to [in [12] above];
7.2Breached the confidential settlement between the complainant [W]
and the plaintiff [A];7.3 Breached rule 422 of the High Court Rules;
7.4Breached the minute of Justice Chisholm that the file not be
searched without leave, to protect the confidential component of the
settlement;7.5 Breached the confidentiality of information personal to the plaintiff;
7.6Breached the implied undertaking to the Court that material
disclosed in proceedings by the parties before it would not be used
for any collateral purpose.
[15] Ms Hunt represented herself throughout the proceeding in the High Court. She filed a statement of defence which was irregular in that it did not plead explicitly to the averrments in the statement of claim. But there is no doubt that all breaches were denied, as was any contempt of court or breach of confidentiality, however arising.
Ms Hunt also filed and served a counterclaim in which she sought:
[C]ompensation for financial losses incurred as a result of the recall of all copies of my book [B] from retail outlets and storage pending further Court order [and] ... damages of an amount to be fixed by the Court for loss of reputation due to the recall of books in response to a claim totally without merit ....
There was no finding on this counterclaim by Wild J. There did not need to be, given the Judge's findings on liability. There is no cross-appeal on that point either. In the result, on this appeal we are concerned solely with Ms Hunt's liability (if any) to A.
[17] As to that issue, Wild J held that there had not been a breach of any suppression order by Ms Hunt. There is no cross-appeal on that point. Therefore any "liability" under that head is not now in issue.
[18] We will describe the basis on which the Judge did find Ms Hunt to be in contempt of court, and how a breach of confidence is said to have arisen, later in this judgment.
Fresh evidence
[19] A (very late) application was made to file further affidavit evidence for Ms Hunt. That application was made for an unusual reason.
[20] Ms Hunt, appearing in person, was warned a number of times at pre-trial conferences by various High Court Judges that it would be hearsay for her to give evidence of the involvement of Dr Collins QC with this book without calling him. One trial ruling to this effect is at [43] of the judgment of Wild J. We use the term
"involvement" advisedly. We will have occasion to refer in more detail to Ms Hunt's various contacts with Dr Collins, a Wellington barrister, later in this judgment. For present purposes, what is important is that as a result of those warnings and trial rulings Ms Hunt circumscribed her evidence to avoid mention of her discussions with Dr Collins.
[21] Evidential difficulties are often encountered with cases involving litigants in person, and it appears that Ms Hunt and the High Court Judges dealing with this case may have been at cross-purposes. Of course Ms Hunt could not give evidence as to what Dr Collins said for the purpose of establishing the truth of what he might have said. But she could give evidence as to what she understood had been said as going to her state of mind and subsequent conduct. This is an application of the familiar appellate admonition: everything depends on the purpose for which evidence is tendered. See Subramanian v Public Prosecutor [1956] 1 WLR 965 (PC) and R v Howse [2003] 3 NZLR 767 at [20] (CA).
[22] In the result, we think the Judge was inadvertently drawn into error on the ruling he gave in this instance. The proposed evidence went to Ms Hunt's state of mind and why she acted as she did. If she had instructed counsel that person would undoubtedly have been able to make clear the limited (though important) purpose for which the references to Dr Collins were to be made. In the absence of a clear indication as to the limited purpose of the proposed evidence, the cautious approach of the High Court Judge was quite understandable, but it did have the effect of Ms Hunt not leading evidence with regard to Dr Collins for a legitimate purpose.
[23] We give leave for Ms Hunt's affidavits, and the affidavit-in-reply by Dr Collins (which was filed in anticipation, in case this Court should take the view we have taken on this fresh evidence point) to be read. However, in the result, the material thus adduced is not critical to the view we have taken of this case. We have felt it necessary to resort to it only occasionally for assistance on largely uncontested factual matters.
The book
The general themes of the work
[24] The book B centres on the life and experiences of "Annette". Annette is the real-life W, although Annette is not her real name. Annette has a borderline personality disorder. The book sets out to trace the things which produced her mental illness, including: a domineering and violent father; anorexia; attention-seeking behaviour; an unhappy marriage at the age of 18; post-natal depression and alienation from her children; marital rape and resulting depression; and mental health problems including suicidal tendencies.
[25] A major theme running through the book is that Annette has been serially let down by people and institutions she should have been able to trust: her father; the medical authorities; the Accident Compensation Commission; her therapist; and, in various respects, the justice system. Mr Price suggested that the book raises, overall, "a vexed question: can somebody with serious mental health problems obtain justice?"
[26] Within this overall framework there are substantial portions of the work focusing on Annette's allegations against her therapist, who was given the pseudonym "Wayne" in the book. Annette claims Wayne sexually abused her during therapy. She then refers to three sets of legal proceedings: a criminal trial at which Wayne was acquitted; Annette's disciplinary complaint against Wayne which was ultimately not pursued by the professional organisation Wayne belonged to, following a successful challenge by way of judicial review; and her $250,000 civil claim for exemplary damages against Wayne which ultimately ended in a settlement.
[27] We were provided with copies of B. We agree with Mr Price that the book appears to be substantially reportage. It contains very extensive quotations from Annette's diary and correspondence, and extensive extracts from the criminal trial transcript, the police documents, and lawyers' submissions.
[28] The penultimate chapter of the book ("Tenacious Litigation") describes the settlement in the civil claim. It refers to an (unspecified) offer and counter-offer in "without prejudice" correspondence and an agreement which was reached at a settlement conference, after "Justice Chisholm negotiated an outcome". The terms of the settlement are not stated, but the chapter does suggest (in a footnote) that the payout was nowhere near the $250,000 claimed and that it fell within the broad range of awards in exemplary damages cases in New Zealand, which at that time were from $10,000 to $80,000. The last chapter, "A Remarkable Outcome", has Annette saying, "I'd won. He's paid me out".
[29] A is not named anywhere. He is referred to simply as the "therapist" Wayne. A's place of residence is not identified.
The provenance and writing of the book
[30] There was much contention in this proceeding as to the expectations of the persons associated with the book's production; in particular, as to how the book was to be written and how it was in fact written. For our purposes however, only a broad outline is required.
[31] Ms Hunt had written two other books prior to her undertaking B. Dr Collins had some professional association with Ms Hunt with respect to those books.
[32] Dr Collins had also acted for W in the proceedings against A. It appears to be common ground that he introduced W to Ms Hunt. It was agreed Ms Hunt would write the book.
W signed a written authority dated 20 August 2001 which reads as follows:
To whom it may concern
I hereby give Anne-Marie Hunt, a writer and journalist who resides at ... my written informed consent to have access to my medical and other records with authority to publish any information contained in these documents deemed appropriate by Dr David Collins QC.
[Signed by W and dated]
[34] W thereafter gave Ms Hunt access to all her files, including medical, police, and court records. Included in those documents was Chisholm J's minute from the settlement conference, sealing the file "to support the confidential component of the conditional settlement". Ms Hunt accepts that she saw this minute although her position is that she never saw the settlement agreement itself and she did not know which component of it was confidential. Ms Hunt was aware that there were court orders suppressing A's name and occupation. She subsequently disguised his precise occupation and, she thought sufficiently, his whereabouts.
[35] Ms Hunt began work on the book. Thereafter there was some correspondence and faxes between her and Dr Collins about it, the details of which are of no moment to what we have to determine. What is significant is that the relationship between Ms Hunt and W deteriorated. The problem appears to have been that Ms Hunt was endeavouring to write what she thought was an objective account of all that had occurred; at least on Ms Hunt's account W was endeavouring to assert some degree of editorial control ("to make herself look better"). Ultimately these differences were never resolved, although from time to time the two women endeavoured to patch things up between them.
[36] Both women also turned to Dr Collins for help. Quite properly, he made it plain that he could not in the circumstances act for either of them and that he could not in any formal sense approve publication of the book.
[37] It seems that over the latter part of 2002 Ms Hunt was somewhat ambivalent about the whole project. At times she talked of publishing the manuscript herself, and at another extreme, of destroying it. In any event, by early 2003 W had asked Dr Collins if he could help to try and resolve the dispute between Ms Hunt and her and by February 2003 Ms Hunt had given Dr Collins a hard copy of the manuscript. She asked him to read a number of specified chapters. Significantly these were the chapters that were the subject of dispute between W and Ms Hunt. Dr Collins has deposed that he read at least those chapters. He made notations on them which he says he made for his own benefit, to remind him of matters which he wished to discuss with Ms Hunt when he next saw her.
[38] It is common ground that Ms Hunt and Dr Collins met at his chambers on 3 March 2003. There is some disagreement as to what precisely transpired at that meeting. Ms Hunt's position is that she understood the book could not be published "unless he [Dr Collins] assessed it ... [and] he agreed to do so". Dr Collins has deposed that "I explained, and I believed Ms Hunt fully appreciated" that he could not advise either Ms Hunt or W and could not approve the manuscript for publication. However, he was concerned at the way the judicial conference of 9 May 2001 had been portrayed, and he said so. Ms Hunt said she would rewrite that chapter for the next draft. Dr Collins undoubtedly made quite extensive notations on the manuscript (although he says that not all that appear there are his). Those notations included parts that Dr Collins had crossed out. There is a difference as to the closeness with which those notations were examined or discussed at the meeting. At the conclusion of this meeting, Ms Hunt left Dr Collins' chambers with the manuscript, and the quite extensive notations on it.
Dr Collins has deposed that:
At the end of the meeting on 3 March I understood:
• Ms Hunt knew I was not in a position to approve publication of the
manuscript;• Ms Hunt was going to make a further effort to address the dispute
between her and W;• Ms Hunt was going to be rewriting parts of the manuscript, including the chapter relating to a judicial conference;
• At some future time, if the dispute was resolved, my approval would be sought and given before any book was published. This would involve me reading the final version of the manuscript.
[40] Ms Hunt said that she "made all the changes Dr Collins had indicated. After that, I believed that the content was safe, from a legal perspective".
[41] Thereafter the book was in fact published by Ms Hunt herself, not a commercial publisher. As published, it incorporated or addressed all the matters
Dr Collins had noted as needing attention and all the deletions which had been made by Dr Collins were observed.
[42] The print-run seems to have been in the order of 1,000 copies. More than 300 copies had been sold when the book was recalled. About 650 copies are affected by the recall order. They are apparently in storage.
The appeal points
[43] We have noted that a number of matters which were in dispute in the High Court are no longer in contention in this Court. We propose to proceed by addressing only those points which are relevant to the orders made by the Judge, under two heads: contempt and breach of confidence.
[44] However we note, for the assistance of those persons who might have occasion to resort to this judgment, that Wild J specifically held that Ms Hunt had not breached any of the Court suppression orders, and that she did not commit a contempt of court, a breach of confidence, or an infringement of privacy by using materials from the police files that were not used in Court.
Contempt
Introduction: the High Court judgment
[45] The High Court Judge held that Ms Hunt committed a contempt of court in three ways: first, by reproducing parts of the evidence from the criminal trial file without first applying to search the court file; secondly, by breaching Chisholm J's minute; and thirdly, the Judge may have been suggesting there was also a contempt of court by breach of confidence.
The Court Search Rules
[46] This point is of some importance to the administration of justice and media reporting thereon in New Zealand. The Judge's reasoning at [44] - [50] of the judgment under appeal was this. He said that the starting point is that the criminal justice system in New Zealand is, in general, an open process. Anybody can come into court and listen, watch, and tell others what they heard and saw. But the Judge said that in this instance Ms Hunt did not obtain the information for her book by attending A's trial, or by an application under the Criminal Proceedings (Search of Court Records) Rules 1974 (the Search Rules). Instead, she got the material from what was given to her by W. The Judge then reasoned that both the Search Rules and the In-Court Media Coverage Guidelines 2003 "have the common aim of allowing the Court to exert control over its proceedings" (at [46]). He said, "These controls aim to balance the public interest in open criminal justice with the privacy of those involved in it, be it as accused or witnesses" (at [47]). The Judge went on to say that the law draws a distinction between, on the one hand, listening to and watching a criminal proceeding and, on the other hand, the external representation of what has been seen, as by photographing, recording, or making a written record or note of the proceeding. He then stated, "It is only in the latter areas that the court exercises its supervisory functions" (at [48]). The Judge dismissed Ms Hunt's argument that all the court documents she had utilised had come from W. The Judge said, "This argument is as unattractive as it is untenable. Were it correct any person could circumvent the Court's controls and search rules in the same way, thus undermining the Court's supervisory power" (at [49]).
[47] Mr Price argued that the Judge's ruling was wrong both in law and on the facts.
[48] As to the law, Mr Price argued that the ruling itself was bad in principle; without precedent; and in any event, as expressed, was unclear, unreasonable, and unworkable.
[49] As to the facts, Mr Price said that Ms Hunt did not directly access the court files at all and she had no reason to think that she should apply to the Court for
materials that had been handed to her. This was important because, as a matter of general principle, a contempt of court is usually not committed without knowledge that one is doing something against a legal requirement.
[50] Mr Rennie QC argued that Ms Hunt was in contempt for publishing information about the trial because it breached the Search Rules. First, the transcripts and exhibits were documents wholly produced either by the Court or the parties for the criminal trial of the respondent. Secondly, the material was the subject of suppression restrictions and orders which further restricted Ms Hunt's access. Thirdly, he said Ms Hunt declined to approach the Court for leave to use the materials.
[51] We consider that the argument that Ms Hunt was somehow subject to the Search Rules in this instance is misconceived. It proceeds on a premise - enlarged on by Mr Rennie in his oral submissions - that what is going on during a court hearing is somehow entirely the property of the court and under the control of the judge. That is so, up to a point: the judge has the necessary powers to ensure that what is proceeding in his or her court is appropriate for a fair trial and the rule of law itself. But that does not put everything which is advanced in the courtroom under some kind of shroud, so that the only way it may be "accessed" is by being present in person and only then "reporting" the material, or by making an application for access under the Search Rules.
[52] The purpose of the Search Rules is to enable somebody who was not present, and who does not have the information from some other legitimate source, to make an application to search the file. An application may be made under the Search Rules. Under r 2, on payment of a prescribed fee any person is entitled during office hours to search, inspect, and take a copy of certain documents. Some persons - for instance parties to any criminal proceeding or their lawyers - do not have to pay a fee. Under r 2(4) a judge can direct that specified documents may not be searched, inspected, or copied without leave, and in accordance with the direction of the court. The Ministry of Justice has recently published a booklet, Media Guide for Reporting the Courts (2007), which helpfully sets out and discusses these rules for the media.
[53] These rules do not, on their terms, apply to any person who has no need -because they are already in possession of the relevant information - to apply to the court. In short, we do not see how the Search Rules can possibly apply to anybody who, by definition, is not within their ambit.
[54] In the result, this "leg" of the Judge's contempt finding cannot be supported. The Search Rules relate only to the search of records. It was not necessary for Ms Hunt to make an application under the rules before she could resort to the material she had received from W.
[55] As a matter of caution, we record that where a person resorts to in-court material obtained other than by a search application, all suppression orders must still be observed. But here the Judge has found no breach of this kind.
Chisholm J's minute
[56] This minute was cryptic. The notation is more properly seen as a prohibition on search. It is doubtful if it could be considered as a court order. But even if it is so categorised, Ms Hunt did not flout it: she did cover this matter with Dr Collins (who can be assumed to have known what the confidential aspects of the settlement were, since he was counsel for W). Ms Hunt made all the deletions signalled by Dr Collins. It does not matter that Dr Collins was not her counsel. Given his involvement, Ms Hunt cannot be seen to have deliberately breached an order, if such it was.
Contempt by a breach of confidence
[57] If, as the Judge seems to have assumed (at [39]), there can, ipso facto, be a contempt of court by a breach of confidence, such a proposition must be distinctly problematic. We would not wish, without a good deal of further reflection, to be seen as endorsing that proposition. However, even assuming that such a proposition is arguable, whether this possibility could be made out depends, in the first instance,
on whether there has been any breach of this character. We deal with this in the next section of this judgment.
Breach of confidence
Introduction: what exactly are the civil claims which are being advanced?
[58] As far as a civil claim is concerned, the first difficulty for A is to identify a cause of action against Ms Hunt. The possibilities raised by the pleadings are set out in [14] above.
[59] We have noted there was a holding by Wild J, which is unchallenged on appeal, that there were no breaches of suppression orders, as alleged in [7.1] of the respondent's pleadings. So any claim - even if somehow actionable under that head - fails at the outset on the facts.
[60] The claim at [7.2] - that there was a breach of the confidential settlement agreement between A and W - must fail because Ms Hunt was not a party to that agreement. For the same reason, the allegation at [7.6] fails.
[61] As to [7.3], concerning an alleged breach of r 422 of the High Court Rules, r 422 merely empowers the court to dispose of a proceeding when the resolution of a particular question ends the dispute.
[62] As to a breach of Chisholm J's minute, which is the basis of [7.4], quite apart from the difficulties of the language of the minute (we could not state with precision what the non-confidential "component" of the settlement is), Ms Hunt did not in fact search the court file. She did not need to.
[63] As to [7.5], the allegation is that Ms Hunt breached "the confidentiality of information personal to [A]". This could rest on one of two things: a primary duty of confidence as between W and Ms Hunt; or Ms Hunt might have herself (in effect as a third party) breached a duty of confidence as between A and W. We take each of these issues in turn.
A primary obligation of confidence between W and Ms Hunt?
[64] Undoubtedly, New Zealand law recognises the equitable doctrine of breach of confidence (see, eg, A B Consolidated Ltd v Europe Strength Food Co Pty Ltd [1978] 2 NZLR 515 (CA)). The present law relating to that doctrine can be summarised thus. The leading modern judgments have returned to the proposition asserted by the early chancellors: the jurisdiction is based on a broad principle of good faith. "He who has received information in confidence should not take an unfair advantage of it" (Seager v Copydex Ltd [1967] 2 All ER 415 at 417 (CA) per Lord Denning MR; see also Fraser v Evans [1969] 1 All ER 8 at 11 (CA) per Lord Denning MR, "No person is permitted to divulge to the world information which he has received in confidence, unless he has just cause or excuse for doing so"). That doctrine does not depend upon the existence of a contract between the parties or there being "property" in the subject matter of the confidence. Nor does it depend upon the existence of a fiduciary relationship. Breach of confidence is not a tort. The doctrine is a sui generis cause of action.
[65] The doctrine has however been judicially circumscribed in various ways. First, the information must be confidential. That is, it must not be something which is publicly known. Secondly, the information must be imparted in circumstances importing an obligation of confidence. This implies some kind of dealings between the parties (not necessarily resulting in a contract). Thirdly, there must have been an unauthorised use of the information. Fourthly, in some circumstances, there may be just cause for the use or disclosure of the information. The latter qualification can be traced back to the old equitable maxim that "there is no confidence in an iniquity", although it was subsequently broadened in the more modern judgments. (See, eg, Coco v AN Clark (Engineers) Ltd [1969] RPC 41 (Ch)).
[66] The existence of any such duty between W and Ms Hunt in this case fails at the outset: W expressly authorised Ms Hunt to have access to her documentation and to publish. It is true that there was the qualifier (see [33] above) that the publication was limited to "any information contained in these documents deemed appropriate by Dr David Collins QC". But that authority, with whatever import the qualifier might have, was something arising between Ms Hunt and W. Ms Hunt owed no
primary duty of confidentiality to A, who was the plaintiff. To put this another way, W may have been able to claim under this head, but A could not.
Did Ms Hunt breach confidence as a third party recipient of confidential information?
(a) Introduction
[67] The broad proposition here is that A and W were undoubtedly in a confidential relationship as to the information about the settlement and that, as a third party into whose hands the information came, Ms Hunt inappropriately utilised that information.
This general proposition raises a number of issues:
• Does the law of breach of confidence potentially extend to third parties in
this way?• If it does, on what principle is the Court to approach third party or
"recipient" liability?• Was there a breach of confidence in this particular case?
(b) Third party breaches of confidence
[69] This is not at all an easy area of the law. It has given courts and commentators real difficulty. In large part this is because of the unfortunate lingering debate over the juridical basis of an action for breach of confidence.
[70] In the jurisprudence of the British Commonwealth the action for breach of confidence may be described as a civil remedy affording protection against the unauthorised disclosure or use of information which is of a confidential nature and which had been entrusted to a person in circumstances which impose an obligation to
respect its confidentiality. There is no doubt about the principle, but as Professor Gareth Jones noted in his widely cited article, "Restitution of Benefits Obtained in Breach of Another's Confidence" (1970) 86 LQR 463, even a cursory reading of the older authorities reveals features of the law seemingly related to trust, bailments, contract, copyright and patents rather indiscriminately mixed together.
[71] This is largely due to the confusing way in which the case law on breach of confidence evolved through the then separate equity and common law courts. The subject-matter of the earliest cases related to the literary area: the protection of unpublished manuscripts in the 18th century. That original area of application was then extended to other intellectual property rights and processes in the nature of trade secrets, such as patent medicines and the like, and then into the master and servant area. In that latter area it is not surprising that common law courts felt readily able to imply a term as to confidentiality, quite independently of any equitable obligation which might have existed. Thus, to a very real extent, what was originally entirely a doctrine of equity became for a time overshadowed by a steady stream of reported master and servant and other contractual cases, in which common law courts drew on notions which had originated in equity. (See Hammond "The Origins of the Equitable Duty of Confidence" (1979) 8 Anglo-Am L Rev 71).
[72] The turning point came with the judgment of Lord Greene MR in Saltman Engineering Co Ltd v Campbell Engineering Co Ltd (1948) 65 RPC 203 (CA). His Lordship convincingly demonstrated that English courts should throw off the shackles of any "implied term of a contract" theory, reinvigorate the somewhat dormant equity principle, and should treat the notion of a breach of confidence as being capable of application to situations other than those where a contract in the strict sense, or even in a "contract-like" sense, exists. Thereafter, senior English appellate judges further advanced the original chancery concept (as in Fraser v Evans).
[73] The debate then focused on the basis on which a court should exercise this sui generis equitable jurisdiction, culminating in the widely recognised and supported judgment of Megarry J in Coco v AN Clark (Engineers) Ltd. As noted, the
case is authority for at least the first three propositions we have stated in [65] above, which counsel before us accepted as good law in New Zealand.
[74] Thereafter, there was for some years an ongoing (and somewhat arid) debate as to the remedies which are available for a breach of the equitable doctrine. In particular, some Australian commentators (such as Meagher, Gummow & Lehane Equity Doctrines & Remedies (4ed 2002) at [41-135]) took the view that damages could not be awarded for a breach of confidence because it was said to be an exclusively equitable remedy. That notion was conclusively laid to rest in New Zealand in A B Consolidated Ltd v Europe Strength Food Co Pty Ltd (above at [64]). That case rests on the broad proposition, now well-established in New Zealand, that a full range of remedies, whether of equitable or common law origin, should be available where appropriate with respect to this (or for that matter, any) cause of action.
[75] There remained however a major difficulty in this area of the law in that, given the way the equitable doctrine of breach of confidence had evolved, it turned upon the identification of a distinct "relationship" of confidence between A and B (which as we have noted does not necessarily rest on contract, fiduciary, proprietary, or tortious concepts). This left two important problem areas to be faced in the field. One was the deliberate purloining of confidential information (as by industrial espionage) and how that could be reached, if at all, by this doctrine. That issue does not arise in this case, and we say no more about it. The second area is the problem of a party to a confidential relationship who, in some manner, transmits the confidence to a third party, who may or may not know that the information is confidential, with the third party recipient then using it.
[76] The existence of this problem triggered off yet another unfortunate round of debate about the basis of this jurisdiction. Once again proponents of treating "information as property" entered the fray and claimed that property type rules could take care of this problem. Modern day proponents of the application of fiduciary theory re-joined the debate and said that the best way of approaching this problem is either on fiduciary third party principles, or at least by analogy thereto. In short,
everybody agreed that there was a nasty gap in the law which needed to be closed, but the difficulty was as to the legal basis on which this was to be done.
[77] This problem is complicated by the reality that the circumstances in which a person may receive confidential information vary widely. There seem to be four broad categories. The first is the case of direct receipt: that is, where A discloses confidential information to B. Secondly, there are cases of indirect receipt: A discloses confidential information to B who passes it on to C. C may not know that it is confidential at the time or he or she may not discover that factor until much later, by which time C may have incurred expenses or somehow altered his or her position in the belief that he or she was entitled to use the information. C may even have passed the information on to yet another person, D. Thirdly, there are cases of accidental receipt: A obtains information regarded by X as confidential as a result directly or indirectly of accident, carelessness, or mistake on the part of X or his or her institution. Fourthly, there are cases of surreptitious receipt. This is where A obtains confidential information from X as a result of industrial espionage or something of that kind, and passes it to B.
[78] These problems have themselves generated doctrinal debate as to whether each of these categories should, in effect, be governed by their own rules, or whether there is a general principle which can and should be applied to these cases.
[79] We begin with the leading English cases which have wrestled with this problem.
[80] In Attorney-General v Guardian Newspapers (No 2) (Spycatcher) [1990] 1 AC 109 (HL) Lord Goff of Chieveley was of the view (at 281) that:
[A] duty of confidence arises when confidential information comes to the knowledge of a person (the confidant) in circumstances where he has notice, or is held to have agreed, that the information is confidential, with the effect that it would be just in all the circumstances that he should be precluded from disclosing the information to others.
His Lordship added that he used the word "notice" advisedly in order to avoid the problematic question of the extent to which actual knowledge is necessary, although
his Lordship understood knowledge to include circumstances where the confidant has deliberately closed his eyes to the obvious.
[81] His Lordship's caution was prescient. There has been ongoing debate over what constitutes sufficient knowledge for the conscience of a third party to be bound. In some cases, the equitable principle which has been applied is the same as that which applies to accessories for a breach of trust. In Royal Brunei Airlines v Tan [1995] 2 AC 378 the Judicial Committee of the Privy Council re-examined the principles in that area, including the widely cited judgment of Lord Selborne LC in Barnes v Addy (1874) LR 9 Ch App 244. Lord Nicholls of Birkenhead, in delivering the judgment of the Board, was of the view that failure to exercise reasonable diligence was insufficient to establish liability against a third party who procured or assisted in a breach of trust. It was necessary to establish that he or she had failed to observe the standards which would be observed by an honest person placed in his or her circumstances. His Lordship preferred that formulation to one of whether the third party had "knowingly" assisted in a breach of trust because a question in that form led too often to tortuous debates about the sort of knowledge required (see at 391).
[82] More recently, in Thomas v Pearce [2000] FSR 718, the English Court of Appeal emphasised that for a third party to be held liable in equity for a breach of confidence, something more is required than merely careless, naïve, or stupid behaviour. There must be awareness of the fact that the information was confidential or willingness to turn the proverbial blind eye. Thomas v Pearce was a case involving a letting agency which sued a former employee and her new employer (another letting agency) for breach of confidence. When she changed her employment the employee took with her a list of landlord clients of the firm; she then showed it to another employee of the second firm. That employee arranged for letters to be written to some of those on the list to tell them that the new employee had switched firms. The trial Judge had no difficulty finding that the first employee had acted in breach of confidence, but dismissed the claim against the new employer. The Judge's assessment was that the employee who arranged the letters had not acted dishonestly, and although a reasonable estate agent in her position would have made further inquiries, she had not deliberately refrained from asking questions in
case she learned something which she would rather not know. The Court of Appeal upheld the trial judgment.
[83] R v Department of Health ex parte Source Informatics Ltd [2001] QB 424 (CA) stands as one of several cases in the health and pharmaceuticals industry generally, in this instance involving the sale of anonymised prescription information by pharmacists to a data company. The Court suggested that the test is whether the reasonable confidant's conscience ought to be troubled by the use of the information.
[84] Australian Courts have also been cautiously working their way to a clearer resolution of this sub-set of the law relating to breach of confidence (see generally Dean The Law of Trade Secrets and Personal Secrets (2ed 2002) at 257 et seq).
[85] In Director of Public Prosecutions (Commonwealth) v Kane (1997) 140 FLR 468 (NSWSC) Hunt CJ (referring to Johns v Australian Securities Commission (1993) 178 CLR 408) said at 473:
Gaudron J goes on to observe that the law of confidence has yet to develop to the point of identifying in a definitive or comprehensive way the matters which determine whether a duty of confidence has devolved onto third parties.
[86] The most authoritative Australian decision is that of the High Court of Australia in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199. In that case, a majority of that Court supported the protection of confidential information obtained outside the primary relationship of confidence, at least where the recipient knows, or has reason to know, that the information is confidential. The Court was far from unanimous as to the doctrinal basis of this "extension" of the law of confidence, with the diversity of views expressed - ranging from Gleeson CJ (based on a good faith principle) to Callinan J (based on a proprietary approach) - in many ways reflecting the variety of views which have been expressed from time to time as to the conceptual basis of this cause of action.
[87] In New Zealand as well, this issue has not been definitively resolved. Mr Rennie noted that the second limb of the three-fold test in Coco v AN Clark (whether a "reasonable man standing in the shoes of the recipient of the information
would have realised" that the information was given in confidence (at 48)) has been adopted in a "privacy" context. See, Hosking v Runting [2005] 1 NZLR 1 at [26] (CA) per Gault P and Blanchard J. Mr Rennie suggested that test could be applied to third parties, and should be applied in this case against Ms Hunt.
[88] There can be no doubt that common law courts throughout the British Commonwealth have been concerned to "close" what would otherwise be a distinct gap in the law, in relation to third-party recipients of confidential information. As Sir Thomas Bingham MR said in Lancashire Fires Ltd v SA Lyons & Co Ltd [1996] FSR 629 at 676 (CA):
[The equitable] principle would be defeated if a third party to whom the secret information had wrongfully been disclosed could as a matter of course make use of it.
[89] As a leading academic commentator has noted, it is precisely in relation to indirect recipients that "doubts are thickest and doctrinal differences headiest" (Cornish and Llewellyn Intellectual Property: Patents, Copyright, Trade Marks and Allied Rights (5ed 2003) at [8-32]). If an indirect or third-party recipient is to be held liable:
[I]t cannot be because of his own default. It must either be because confidential information has been dignified with the status of 'property', or else the courts intervention is to secure the information against breach of the obligation of good faith originally assumed by the first recipient.
(Cornish and Llewellyn at [8-32]).
[90] The "property" approach is routinely endorsed by the intellectual property bar, for rather obvious reasons. There is a powerful economic and commercial motivation to protect such things as trade secrets by proprietary concepts (which also aids such consequential matters as assignments and charges). But it would be unfortunate if the perceived "needs" of a particular subset of the law of confidentiality (really as to a form of industrial property) were to drive the whole. For instance, "theft" of information then becomes at least a possibility. Such a proposition was rejected by the Supreme Court of Canada in R v Stewart [1988] 1 SCR 963 agreeing with Hammond "Theft of Information" (1984) 100 LQR 252 and see also Hammond "Electronic Crime in Canadian Courts" (1986) 6 Oxford J
Legal Studies 145, and Richardson, "Owning Secrets: 'Property' in Confidential Information?" in Robertson (ed) The Law of Obligations: Connections and Boundaries (2004) at 145.
[91] The short point here is that the equitable doctrine is a broad and flexible one, and it would be unwise to constrain it by the narrower concerns of a particular subset of the law. If "trade secrets" need a more distinct kind of protection, then this could be done by statute. Nearly half of the United States jurisdictions have followed this course in adopting the United States Model Trade Secrets Act evolved by the United States Uniformity Commissioners, and there has been a similar proposal in Canada. (Institute of Law Research and Reform (Edmonton, Alberta) and A Federal Provincial Working Party Trade Secrets (R 46 1986).)
[92] In the current state of the law in New Zealand it appears to us that the most satisfactory principle to proceed on is to determine whether a third party recipient of confidential information has acted unconscionably in relation to the acquisition of the information or in the way it has been employed. As a matter of approach this is consistent with the basis of the underlying equitable doctrine of breach of confidence itself; it avoids a somewhat formalistic incantation of rules derived from other areas of the law; and it has the benefits of simplicity and directness. It should also be recalled that New Zealand does not face the unfortunate doctrinal imbroglios to be found in some other jurisdictions because it has squarely adopted a regime of remedial flexibility: if there is a breach of an obligation, whatever remedy is most appropriate will be employed.
[93] When so approached, the factors to be considered in a given case will include: the nature of the information; the state of knowledge of the acquirer of the confidential information; the extent of any breach; what kind of detriment has or might result to other parties; and the degree of "culpability", as it were, of the third party acquirer and discloser. This is not, of course, a closed list of the considerations which may be appropriate in a given case.
[94] Clearly the most critical factor in the vast majority of cases will be the state of the defendant's knowledge. A third-party recipient with actual knowledge of the
confidence likely faces almost insuperable difficulties; as does somebody acting in "wilful blindness" (as Lord Goff of Chieveley noted in Spy catcher). The much more problematic areas are those of constructive knowledge (which some of the Judges in Lenah would have proscribed), and true "innocence". We do not have those latter sorts of categories before us in this instance and leave them for another day, on specific facts.
(c) Recipient liability in this case
[95] We do not consider that this is an appropriate case for the imposition of recipient liability on Ms Hunt, for the following reasons.
[96] First, to the extent she was in possession of relevant confidential information, Ms Hunt had this information with the express consent of W. Ms Hunt in no way misappropriated or purloined that information; it was handed over to her by a person (W), who was herself in lawful possession of that information.
[97] Secondly, the person who made the information available to her (W) has not complained of a breach of confidence. It is A who is complaining in this case. That should not necessarily be fatal to a claim of this kind (because a party to a settlement might wrongly seek to publicise it by giving material to somebody else), but it is of some significance that the person who gave the information to Ms Hunt has not seen fit to claim a breach of confidence.
[98] Thirdly, and importantly, just what the confidential information (if any) was in this case is distinctly problematic. We rather doubt that the fact that there had been a settlement was confidential - that was recorded in the Court minute itself, and could be seen on the face of the Court record. What might fairly have been regarded as confidential is the notion that some money had changed hands. This has to be the "sting" in the publication, if any. Even then, we use the term "sting" advisedly. A reasonable reader would not necessarily infer from this knowledge an admission of liability. Even a moment's reflection by the reasonable reader would suggest that this may well have been what lawyers sometimes refer to as "nuisance money", such
as routinely changes hands to bring an end to law suits. In any event, what was disclosed by way of information in this case was minimal.
[99] Fourthly, Ms Hunt may not have acted wisely, but she acted in good faith. Rather obviously it would have been better if she had obtained a final legal "vetting" of B. It is doubtful if she could ever have procured a "legal clearance", as she called it. Lawyers have to consider manuscripts from time to time prior to publication with a view to advising on whether there might be matters in them which could be actionable. But no lawyer, and certainly not one as experienced in these matters as Dr Collins, would ever have given an opinion that the work was legally "completely clean". That would amount to a form of legal guarantee, which would be professionally most unwise. That said, Ms Hunt did have the benefit of the quite extensive comments which had been noted by Dr Collins (who was not acting as her lawyer). It appears to be common ground that she endeavoured to bring the work fully into line with those comments.
[100] Fifthly, the book itself goes to very respectable lengths to conceal A's identity. Indeed Wild J expressly found that A was not identified.
[101] Sixthly, this lawsuit represents an attempt by A to "close down" any further public discussion of the various matters covered in the book. It is easy to empathise with A: for some years he had been subject to a harrowing series of experiences which must have resulted in enormous emotional stress, and most likely very substantial legal fees and disruption to his everyday life. In the end he had been found "not guilty". But the law does not say that the fact that he had been found "not guilty" precludes (subject to any appropriate suppression orders or confidentiality provisions) a consideration of those events. What may be written about is both innocence and guilt, or for that matter the "unproven" cases in our courts. This may well be uncomfortable for one party or another, but it is part of the process of open justice and even wider considerations of freedom of expression. At the end of the day the question raised by the book - which is a perfectly legitimate one - was that posed by Mr Price: "Did Annette get justice?" Ultimately, it is for the reader to form his or her own impression of what answer should be given, if any can be had, to that particular question.
[102] We do not consider, in light of these factors, that it was unconscionable for Ms Hunt to use the confidential material in the way in which she in fact did. Her use of the material was (at most) very limited and non-revelatory. A due sense of proportion is required in a case of this kind.
Contempt
[103] Once this view is taken, it must also be fatal to any suggestion that there was a contempt of court by breach of confidence, even if such an argument is sustainable - see, at [57] above. Ms Hunt's conduct did not warrant such a finding.
[104] We should however also add under this head that we agree with Mr Price that, generally speaking, "knowledge" that one is doing wrong is a necessary component of a finding of contempt. In this instance, Ms Hunt thought that she was compliant. But even if that were not the case, the breaches in this case were minimal in that at most it could only be said that what had been revealed was that some money had changed hands.
Conclusion
The appeal is allowed.
[106] We set aside all the orders made by Wild J in the High Court. However, this order will lie in court for five days from the release of this judgment in case either party wishes to make any application in the High Court in relation to B.
[107] As to costs, we set aside the costs orders in the High Court. Ms Hunt represented herself in that Court. She is entitled to her disbursements, if necessary as fixed by the Registrar. In this Court Ms Hunt will have costs of $6,000 and usual disbursements.
[108] We record that Mr Price noted that if the appeal went in favour of his client there might still be questions relating to portions of B, and he rather hoped we might provide guidance about them. It is not the function of this Court to give advisory
opinions, even if those questions were precisely identified (and they have not been). The Court should go no further than the orders we have just made.
If there is any ongoing issue as to the continued suppression of the name of the book, B, counsel can make the appropriate application to Wild J.
Solicitors:
Morrison Kent, Wellington for Appellant
Hollings Fairbairn, Paraparaumu for Respondent
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