Applicant v Respondents

Harman v Secretary of State for the Home Department [1983] 1 AC 280; Hearne v Street [2008] HCA 36; (2008) 235 CLR 125; Davey v Silverstein [2019] VSC 724; Yap v Lee (No 2) [2024] VSC 730.

PRACTICE AND PROCEDURE - Allegation that confidential documents used in false and misleading way - Where information contained in documents not confidential in relevant sense - Where emails attaching documents set out basis for settlement of proceedings - Where nothing inappropriate or prohibited in such an offer being made - Where content may be matter of dispute but no basis for contempt - Summons dismissed.

1 On 9 December 2024, Ms Grace Mazi ('Applicant') filed a summons in Proceeding No. S ECI 2024 05284 of this Court ('Bygrave Appeal'), charging Spenser Hsiung-Pin Kao and Hung-Hsia Kao (respectively the 'First Respondent' and the 'Second Respondent') with contempt of court ('contempt application'). The Applicant alleges that the First and Second Respondents, or their agents, used documents filed in the Bygrave Appeal in breach of the implied undertaking not to use them for a collateral or ulterior purpose (commonly referred to as the Harman undertaking or obligation)[1] by disclosing those documents and using them in separate proceedings for an impermissible purpose.

2 The Bygrave Appeal was brought by the Applicant pursuant to s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) ('VCAT Act'), and sought to challenge a decision of the Victorian Civil and Administrative Tribunal ('VCAT' or 'the Tribunal') constituted by Member Bygrave ('Bygrave Proceeding'). The hearing of the Bygrave Appeal was conducted by me and is the subject of a separate judgment.

3 In general terms, the Bygrave Proceeding was commenced by the Applicant on 30 December 2023, when she lodged a general application pursuant to s 452(1) of the Residential Tenancies Act 1997 (Vic) ('the Act') with VCAT, seeking an order that the Tribunal set aside a Notice of Proposed Rent Increase issued under s 44 of the Act, and an order for compensation pursuant to s 210(1)(b) in relation to any additional rent collected as a result of the notice of increase.

4 On 23 July 2024, the application was heard and dismissed by Member Bygrave. On 3 October 2024, the Applicant lodged a Notice of Appeal in the Supreme Court seeking leave to appeal the order made by Member Bygrave on 23 July 2024 ('Bygrave Order'), and also seeking leave to appeal the Bygrave Order out of time.

5 The First and Second Respondents[2] are the registered proprietors of the property located at 716/488 Swanston Street, Carlton ('Property'), in which the Applicant currently resides, and which was the subject of the Bygrave Proceeding. On 27 February 2025:[3]

(a) ARG Property Management Pty Ltd ('Third Respondent'), the property manager acting for the First and Second Respondents, was joined as a respondent in the contempt application; and

(b) Lucia Sec Hou ('Ms Hou' or 'Fourth Respondent'), an employee of ARG Property Management Pty Ltd, and the agent managing the Property for the First and Second Respondents, was joined as a respondent in the contempt application.

6 The allegations of contempt concern the actions of Ms Hou, in her capacity as the agent responsible for the day-to-day management of the Property.

7 Ms Hou was employed by the Third Respondent from November 2023 until February 2025. She assumed responsibility for management of the Property in or about late June 2024. At that time, the Bygrave Proceeding had yet to be heard in VCAT and was awaiting hearing.

8 On 20 June 2024, the First and Second Respondents gave the Applicant a notice to vacate the Property.

9 On 30 August 2024, the First and Second Respondents filed applications in both VCAT and the Magistrates' Court seeking orders for possession of the Property, the release of funds held in the rent special account, and permission to obtain a copy of the keys to the Property ('Magistrates' Court Proceeding'). The Fourth Respondent deposed that the proceedings had been commenced in the Magistrates' Court because it was thought that this was the appropriate forum in circumstances where the property owner resided interstate.[4] On the same day, the First and Second Respondents also filed an application in VCAT ('VCAT Proceeding') seeking similar relief, presumably so as to have alternative proceedings on foot in the event that the Magistrates' Court declined jurisdiction. The claim in the Magistrates' Court Proceeding was not ventilated thoroughly in the hearing before me. It is sufficient to say that those proceedings appear to have been misconceived and were disposed of by that Court accordingly.

10 On 11 October 2024, a hearing in the VCAT Proceeding was set down before Senior Member Calabro, but was adjourned until 7 November 2024 to permit determination of the Magistrates' Court Proceeding, before it returned to VCAT. On 18 October 2024, the Magistrates' Court Proceeding was struck out on jurisdictional grounds.[5] On 7 November 2024, the matter returned to VCAT and was heard before Member Elmes ('Elmes Proceeding'), who granted the request for a possession order ('Elmes Order'). Member Elmes published her reasons on 9 December 2024. On 20 November 2024, the Applicant commenced proceedings in this Court challenging the Elmes decision ('Elmes Appeal'). The Elmes Appeal was also heard by me and is the subject of a separate judgment.

11 The hearing of this summons was listed together with the Bygrave Appeal and the Elmes Appeal. The Applicant contended that the allegations of contempt were relevant to the Elmes Appeal. I heard the arguments from all parties in relation to the contempt application before embarking upon the substantive hearings in the Bygrave Appeal, and the Elmes Appeal, in turn. For all intents and purposes, I reached my conclusions on the contempt application before addressing its relevance in the Elmes Appeal.

12 For the reasons that follow, the summons is dismissed.

13 The allegations of contempt stem from two emails sent by Ms Hou on behalf of the First and Second Respondents:

(a) Email to the Magistrates' Court and the Applicant's lawyers dated 18 October 2024, in anticipation of the hearing, and for use in the Magistrates' Court Proceeding; and

(b) Email to VCAT and the Applicant dated 31 October 2024, in anticipation of the hearing, and for use in the Elmes Proceeding.

14 The principal allegations of contempt concern what the Applicant describes as the impermissible disclosure of material in breach of the Harman rule.

15 It is convenient to set out the text of each email, both of which list the documents that were attached.

16 Ms Hou's 18 October 2024 email to the Magistrates' Court and the Applicant's then lawyers stated:

Good morning.

The applicant[6] acknowledges that a Supreme Court Summons has been received by post yesterday, which is contesting the rent increase.

The applicant also understands that the respondent may use this to further extend the hearing, however is open to waive the increased portion of rent, in good faith to reach a resolution and seek closure on existing disputes.

• VCAT ORDER R2024.1652.02 23.07.24 & SUPREME COURT SUMMONS

• Ray White Renter History (51) showing rent is paid to the 22nd February 2023

• ARG Renter History (50) with revised rent of $1,330.00 per month with no rent increase. (This is to be used if disputes can be resolved regarding the rent increase for settlement in good faith) - The renter will owe a total of $22,435.92 on hearing date instead of $36,235.00 with 604 days in arrears.

Please also find attached further documentation for the hearing this morning.

• Residential Rental Agreement Renewal [2022-06-23] 716_488 Swanston St Carlton VIC 3053

• VCAT Order R2022.26135.03 31.08.2023

• VCAT order_189133403502

Kind Regards

Lucia Hou

Senior Property Manager - Team Leader.

17 Ms Hou's email was sent in response to an email from the Applicant's then lawyers on 17 October 2024, which is visible at the bottom of Ms Hou's email. The email was sent in anticipation of a forthcoming hearing in the Magistrates' Court and sets out the position of the First and Second Respondents going into that hearing.

18 Ms Hou's 31 October 2024 email to VCAT and the Applicant stated:

Dear VCAT

As per VCAT order and direction dated 11th October 2024, please find attached Magistrates order that the claim under case no. Q11960498 was struck out under Federal Jurisdiction as owner resides in Victoria. We therefore ask if matter can proceed under VCAT on the 07/11/24 9.30am.

Please also find updated documents and amount seeking rent to be released under section 77(3):

The applicant[7] acknowledges that a Supreme Court Summons has been received by post today, which is contesting the rent increase.

The applicant also understands that the respondent may use this to further extend the hearing, however is open to waive the increased portion of rent, in good faith to reach a resolution and seek closure on existing disputes.

• VCAT ORDER R2024.1652.02 23.07.24 & SUPREME COURT SUMMONS

• Ray White Renter History (51) showing rent is paid to the 22nd February 2023

• ARG Renter History (53) with revised rent of $1,330.00 per month with no rent increase. (This is to be used if disputes can be resolved regarding the rent increase for settlement in good faith)

• The renter will owe a total of $23,194.41 on hearing date with 624 days in arrears.

Kind regards

Lucia Hou

Senior Property Manager - Team Leader.

19 The email was sent in anticipation of the forthcoming hearing in the Elmes Proceeding, in which the Applicant opposed the First and Second Respondents' application for a possession order. The email records the outcome in the Magistrates' Court Proceeding. It sets out the position of the First and Second Respondents going into the hearing in the Elmes Proceeding. The First and Second Respondents seem to have been under the misapprehension that the forthcoming hearing in the Elmes Proceeding would be an opportunity to seek release of funds held in a rent special account.

20 Though inelegantly framed, it is apparent that both emails advanced the same or a similar position on behalf of the First and Second Respondents:

(a) The First and Second Respondents acknowledge that VCAT's decision in relation to the rent increase notice was the subject of an appeal in this Court;

(b) The First and Second Respondents advance a compromise rent of $1,330 per month. The compromise is higher than the then current rent at $1,130 per month, but also significantly lower than the increased amount of $1,738 per month included in the rent increase notice challenged in the Bygrave Proceeding; and

(c) On the basis of those adjusted rates, and given the time at which each email was drafted, the emails set out the total amounts that, it was said, would be owed for the period, on the assumption that the rent is increased in accordance with the proposed compromise rate - in each case, being $22,435.92 at the date of the anticipated Magistrates' Court Proceeding, and $23,194.41 at the date of the anticipated VCAT hearing in the Elmes Proceeding.

21 The emails attach a copy of VCAT's order in the Bygrave Proceeding, and the documents by which the Applicant sought to initiate the Bygrave Appeal, namely:

(a) The Notice of Appeal dated 27 September 2024 and filed on 3 October 2024;

(b) A Summons issued on 7 October 2024, filed on 10 October 2024, and returnable before a judicial registrar in this Court on 13 November 2024;

(c) An affidavit of the Applicant dated 1 October 2024, and filed on 10 October 2024, in support of her application for an extension of time to file an appeal against the Bygrave decision made on 23 July 2024, along with the exhibits to that affidavit; and

(d) Written submissions of the Applicant made in support of her application for an extension of time dated 1 October 2024 and filed on 10 October 2024.

22 Both emails amount to open offers to reduce the amount of the rent increase which the First and Second Respondents sought to impose. Of course, by the time each offer was made, the proposed rent increase was already the subject of an application for leave to appeal out of time in this Court in the Bygrave Appeal.

23 It is not clear, either on the terms of the emails, or as a matter of logic or principle, how an offer to compromise on the amount of the rent would have been relevant to either the Magistrates' Court Proceeding or the Elmes Proceeding in VCAT. The Magistrates' Court Proceeding seems to have been a misguided attempt to obtain access to funds paid into a rent special account, although the detailed basis of those proceedings was not thoroughly ventilated in this Court. The Elmes Proceeding involved an attempt by the First and Second Respondents to obtain vacant possession of the Property, which was vigorously opposed by the Applicant.

24 It is conceivable, if not likely, that the compromise was advanced as an attempt to reach a commercial settlement in respect of various matters in dispute between the Applicant, and the First and Second Respondents. But that, by itself, did not render the contents of the emails relevant to either proceeding.

25 The allegations of contempt made by the Applicant in this proceeding form the basis of a summons directed at disclosure of the documents filed in the Bygrave Appeal, which were attached to the emails sent in the Magistrates' Court Proceeding and to VCAT in the Elmes Proceeding.

26 The Applicant states that disclosure of the documents was not authorised by her; she was not afforded an opportunity to challenge their use; and it led to a breakdown in the relationship with her then lawyers, which left her unrepresented at the VCAT hearing in the Elmes Proceeding, culminating in a possession order being made against her. Additional harms outlined by the Applicant included damage to her reputation, 'the risk of unconscious bias in unrelated proceedings', and emotional distress.[8]

27 On 9 December 2024, the Applicant filed the summons which is the subject of present consideration, charging the following contempt:

1. Unauthorized Disclosure of Court Documents: The Respondents disclosed documents filed in the Supreme Court of Victoria including affidavits and exhibits, to third parties in unrelated proceedings (Magistrates' Court, applicant's solicitor and VCAT) without the leave of this Court, contrary to Rule 28.05 of the Supreme Court (General Civil Procedure) Rules 2015.
2. Breach of the Implied Undertaking of Confidentiality (Harman Obligation): The Respondents used documents obtained through the Supreme Court's processes for collateral and ulterior purposes in unrelated proceedings, in violation of the implied undertaking of confidentiality under the Harman obligation, as articulated in Hearne v Street [2008] HCA 36; (2008) 235 CLR 125.
3. False and Misleading Use of Confidential Documents: The Respondents misrepresented the content of the disclosed documents, alleging non-existent rental arrears and other false claims, with the intention of:

a. Damaging the Applicant's reputation.

1. Pressuring the Applicant to settle the Supreme Court proceedings.
2. Influencing unrelated legal proceedings (Magistrates' Court and VCAT).

28 A threshold question is whether the disclosure of the documents amounts to a breach of the rules of this Court, or the implied undertaking.

29 It is convenient to deal first with r 28.05 of the Supreme Court (General Civil Procedure) Rules 2015, and then with the Harman obligation.

Rule 28.05

30 Rule 28.05 provides for the inspection of documents, and relevantly provides:

(1) Subject to this Rule, when the office of the Court is open, any person, on payment of the proper fee, may inspect and obtain a copy of any document filed in a proceeding.

(2) A person not a party may not inspect or obtain a copy of the following documents without leave of the Court -

(a) affidavits;

(b) exhibits to affidavits;

(c) witness statements;

(d) expert reports, including those filed pursuant to Order 33 or Order 44 of these Rules; and

(e) written submissions, outlines of argument and chronologies.

(3) Paragraph (2) does not apply to a document that has been -

(a) read or relied on in open court; or

(b) relied on in an application determined without a hearing.

(4) No person may inspect or obtain a copy of a document which the Court has ordered remain confidential.

(5) A person not a party may not, without leave of the Court, inspect or obtain a copy of a document which in the opinion of the Prothonotary, or in the case of a document filed in a proceeding in the Court of Appeal, the Registrar of the Court of Appeal, ought to remain confidential to the parties.

31 The inspection of documents on the court file, pursuant to r 28.05, concerns persons that are not a party to the proceeding. The rule permits a non-party to obtain copies of documents on the court file upon payment of a fee. It limits the access of non-parties to a proceeding to certain types of documents filed in court, but which have not yet been read or relied upon. The rule also prohibits any person from obtaining access to documents that are on the court file, but which are subject to an order of the Court requiring that they must remain confidential.

32 The documents in question were not accessed under r 28.05. Ms Hou was the representative of a party to the proceeding in this Court. There is no evidence that she obtained access to the documents in question under r 28.05. It might be reasonably inferred that Ms Hou came into possession of the documents in her capacity as a representative of the First and Second Respondents. None of the documents were the subject of an order of this Court that they remain confidential.

33 It must follow that the Applicant's reliance upon r 28.05 is misconceived. There has been no breach of the rule, because it was not engaged in any way.

34 In Yap v Lee (No 2), Waller J comprehensively set out the principles underpinning the nature and extent of the Harman undertaking, as follows:[9]

1. As is well known, there exists an implied undertaking, identified by the House of Lords in Harman v Secretary of State for Home Department ('Harman'), not to use documents disclosed on discovery in a proceeding for a purpose unconnected with the proceeding.

the solicitor of one party to civil litigation, who in the course of discovery in that litigation has obtained possession of copies of documents belonging to the other party to the litigation, [is] to refrain from using the advantage enjoyed by virtue of such possession for some collateral or ulterior purpose of his own not reasonably necessary for the proper conduct of the action on his client's behalf; ...

1. The Harman undertaking was reformulated by the High Court of Australia in Hearne v Street, where the plurality said:

Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence.

1. Because '[c]ompulsory pre-trial exchange or disclosure of materials, such as witness statements and experts' reports, is now extensive', the undertaking attaches to a wide range of materials, including

documents inspected after discovery, answers to interrogatories, documents produced on subpoena, documents produced for the purposes of taxation of costs, documents produced pursuant to a direction from an arbitrator, documents seized pursuant to an Anton Piller order, witness statements served pursuant to a judicial direction and affidavits.

1. Although frequently described as an implied undertaking, the plurality in Hearne v Street emphasised that in truth it is an obligation of law:

... to call the obligation of the litigant who has received material generated by litigious processes one which arises from an 'implied undertaking' is misleading unless it is understood that in truth it is an obligation of law arising from circumstances in which the material was generated and received.

1. The implied undertaking has been codified in Victoria by s 27 of the Civil Procedure Act 2010 (Vic) ('CP Act'), which protects documents produced under the compulsory disclosure process required by s 26 of that Act.

Protection and use of information and documents disclosed under overarching obligation in section 26

(1) A person who receives any information or documents provided by another person involved in the civil proceeding as a result of disclosure in compliance with the overarching obligation in section 26 is subject to an obligation not to use the information or documents, or permit the information or documents to be used, for a purpose other than in connection with the civil proceeding.

(2) The obligation under subsection (1) is taken to be an obligation to the court, contravention of which constitutes contempt of court.

(3) A person -

(a) may agree in writing to the use of information or documents otherwise protected under subsection (1); or

(b) may be released from the obligation imposed under subsection (1) by leave of the court.

1. There has been some uncertainty as to whether the implied undertaking attaches to affidavits filed and served pursuant to court ordered timetabling orders, or affidavits filed and served pursuant to court rules requiring such affidavits to support a particular application.
2. In R v Silverstein ('Silverstein'), the Court of Appeal considered the application of the Harman undertaking to affidavits filed in support of a summary judgment application and an affidavit filed in support of an application for preliminary discovery. The Court held that although the rules of court required these affidavits to be filed in support of the applications, they did not compel the applications to be made, concluding that '[t]he cases do not support the conclusion that every affidavit filed in compliance with a rule of court is relevantly produced under compulsion'.

35 As Richards J (as her Honour then was) observed in Davey v Silverstein:[10]

One established category of contemptuous conduct is breach of the implied undertaking not to use documents filed in a proceeding other than for the purposes of the proceeding - commonly referred to as the Harman undertaking.

36 Addressing the circumstances in which the undertaking is applied, and the types of material to which it applies, her Honour observed:[11]

In my view, the implied undertaking applies only to documents that are filed or disclosed in a proceeding under compulsion of a court order or a rule of the court. Because that compulsion involves an invasion of a person's privacy, the implied undertaking is a safeguard to ensure that the compulsion is pressed only so far as the course of justice requires. It does not extend to a document - such as an affidavit in support of an interlocutory application - filed at a party's 'initiative and discretion rather than as a consequence of any compulsion'.

37 In the present case, none of the documents disclosed by Ms Hou were of a character which would attract the implied undertaking. The summons and notice of appeal were initiating documents. The Applicant, as the moving party, was obliged by the rules of court to file and serve an affidavit in support of her various applications for leave to appeal, an extension of time, and in support of the substantive appeal. The rules of court did not compel the applications to be made. These were affidavits and documents which, in the words of Richards J (as her Honour then was), were filed at the Applicant's 'initiative and discretion rather than as a consequence of any compulsion'.

Allegations of misuse of confidential information

38 The Applicant alleges that the First and Second Respondents used confidential information in a false and misleading way. First, it must be observed that the information contained in the documents initiating the Bygrave Appeal was not confidential in any relevant sense.

39 The Applicant's true complaint is that submissions were made and material was produced in the Elmes Proceeding which was prejudicial to her, and which the Applicant says was false and misleading. Even if this statement were correct, it would not amount to contempt.

40 In each case, the emails set out a basis for the settlement of proceedings. There is no contempt, and certainly nothing inappropriate per se in a party to litigation putting forward an offer to resolve the proceeding. Neither is there a prohibition on such an offer being made on an open basis. The relevance of the offer to the nature of the contest, the correctness of the factual assumptions underpinning the offer, and the fairness of the offer itself, may well be a matter of dispute. The existence of dispute about those matters does not found contempt. The disputed matters will involve questions of relevance and fact for adjudication in the proceedings in which they are advanced.

41 Accordingly, subject to hearing from the parties as to the final form of order, I will make orders dismissing the summons. I will hear the parties on the question of costs.

[1] Harman v Secretary of State for the Home Department [1983] 1 AC 280.

[2] The respondents in the two appeals brought by the Applicant in this Court.

[3] The Third and Fourth Respondents are parties to the contempt proceeding only.

[4] The Magistrates' Court hears federal jurisdiction proceedings pursuant to Pt 3A of the VCAT Act, as VCAT is prevented from exercising federal jurisdiction. In the context of residential tenancies, federal jurisdiction applies where, inter alia, there are proceedings between residents of different states; and often arises in residential tenancy proceedings where a rental provider resides interstate.

[5] The proceeding was struck out, as the application did not raise, nor was there any doubt as to whether it raised, a controversy involving federal subject matter.

[6] The 'applicant' referred to in the email is a reference to the First and Second Respondents.

[7] The 'applicant' referred to in the email is a reference to the First and Second Respondents.

[8] Affidavit of Grace Mazi filed 9 December 2024, [24]-[25].

[9] [2024] VSC 730, [80]-[88] (footnotes omitted).

[10] [2019] VSC 724, [20].