British American Tobacco Australia Ltd v Peter Gordon & Anor

LEGISLATION CITED : (NSW) Jurisdiction of Courts (Cross Vesting) Act 1987 s 5(2)(b)(iii)

Attorney-General (UK) v Heinemann Publishers Australia Pty Ltd (1987) 8 NSWLR 341 CASES CITED : British American Tobacco Australia Ltd v Peter Gordon & Anor [2007] NSWSC 230 Seagar v Copydex Ltd [1967] 1 WLR 923

British American Tobacco Australia Ltd (plaintiff 5898/06) British American Tobacco Australia Services Ltd (plaintiff 5940/06) Peter Gordon (first defendant 5898/06) PARTIES : Slater & Gordon Pty Ltd (second defendant 5898/06) Roxanne Joy Cowell (third defendant 5898/06) Slater & Gordon Pty Ltd t/a Slater & Gordon Lawyers (first defendant 5940/06) Christopher Antony Dale (second defendant 5940/06) Roxanne Joy Cowell (third defendant 5940/06)

GKJ Rich (plaintiff 5898/06) COUNSEL : R R Stitt QC & MF Wheelahan SC w RS Hollo & MJ O'Meara (plaintiff 5940/06) R Merkel QC w CJ Horan (defendants 5898/06; first & third defendants 5940/06)

Baker McKenzie (plaintiff 5898/06) SOLICITORS : Corrs Chambers Westgarth (plaintiff 5940/06) Arnold Bloch Leibler (defendants 5898/06; first & third defendants 5940/06)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

5898/06 British American Tobacco Australia Limited v Peter Gordon & Ors 5940/06 British American Tobacco Australia Services Limited v Slater & Gordon Pty Ltd t/as Slater & Gordon Lawyers & Ors JUDGMENT (ex tempore) 1 HIS HONOUR: On 16 March 2007 I delivered a judgment [British American Tobacco Australia Ltd v Peter Gordon & Anor [2007] NSWSC 230], in which I directed that the parties lodge draft minutes of the orders they proposed to give effect to that judgment, including directions for the further conduct of the matter. The parties have lodged competing drafts, setting out the various orders and directions for which they respectively contend. Some aspects are uncontroversial; those that require resolution fall into three broad categories: the first is the form of the injunction to be granted on an interim basis against Ms Cowell, the second is the question of production of an advice given by Mr Rush QC, and the third is the costs of the proceedings on 26 and 27 February 2007, with which I will include the costs of today's proceedings. 2 So far as the form of the injunction against Ms Cowell is concerned, I indicated in my previous judgment that I would grant interim relief in the BATAS (as distinct from the BATAL) matter in the terms set out in paragraph 33 of that judgment, unless an undertaking in equivalent terms, or one otherwise acceptable to BATAS, was proffered. Ms Cowell has proffered an undertaking, but it is not in equivalent terms, and it is not otherwise acceptable to BATAS. This is because it would add to the form of injunction I proposed in the previous judgment an additional exception to the prohibited uses of the Relevant Information in the following terms: Using, or publishing or disseminating to her legal representatives or authorised agent, any part of the information which is already in the public domain by reason of its publication in the media, solely for the purpose of making a decision either by herself or by her authorised agent whether or not to institute and prosecute legal proceedings to set aside the judgment the effect of the judgment of the Supreme Court of Victoria delivered on 6 December 2002.

3 By this proposed exception, Ms Cowell seeks to have it made clear that she would not contravene the injunction or undertaking (as the case may be) by using information published in The Age, The Sunday Age or The Australian Financial Review, even though that information might contain some of the information referred to in the schedule to the amended statement of claim, in respect of which the parties have for present purposes proceeded on the basis that there is an arguable case of confidentiality. 4 Although it is true to characterise this as opening a new issue - in the sense it was not agitated in argument on 26 and 27 February, and it was not foreshadowed in the formal order or undertaking thus proposed by either party - if I thought that the proposition were correct for the purpose of interim relief, I would not decline to consider it on that basis. 5 In considering it, it is important to bear in mind that I am dealing only with the question of interim preservation of the position, pending a more detailed interlocutory hearing which will now take place in the Supreme Court of Victoria, in which both parties will have the opportunity to adduce evidence, and there will be a far more detailed investigation of the evidence than there has been at this stage. I also bear in mind, as I indicated in the previous judgment, that in a confidential information case, once a serious question to be tried is established or conceded, the balance of convenience will usually favour preservation of the status quo to the greatest possible extent, since once a breach of confidence is exploited, it cannot later be recaptured. The damage is already done, irretrievably, when confidential information is exploited pending a final hearing. 6 The injunction proposed in paragraph 33 of my previous judgment was limited to the information referred to in the schedule to the amended statement of claim. It may well be that some of that information is in the public domain, but if it is, it is because of the course of events which I describe in the background section of my previous judgment: in particular, it came to a journalist at The Age, and later to a journalist at The Australian Financial Review, through the hands of Mr Rush and Slater & Gordon. Mr Rush was counsel, and Slater & Gordon were solicitors, acting for Ms Cowell in the McCabe proceedings. It cannot be said on the evidence presently available whether Ms Cowell was or was not privy to the decision to pass that information to the press, but the persons who passed the information to the press were her lawyers. So far as the passage of the information to the Attorney-General of Victoria is concerned, a letter, the date of which has not been clarified, from Slater & Gordon to the Victorian Attorney-General providing the information, asserted that the firm wrote on behalf of the family of the late Rolah McCabe. But even if as I am content to assume for present purposes, Ms Cowell was not privy, in the sense of having personal prior knowledge or involvement in any decision to pass the information to the press, there is at least a serious possibility that on an interlocutory hearing it might be established that in passing that information to the press Mr Rush and Messrs Slater & Gordon were acting as her counsel and solicitors. 7 In those circumstances it is at least seriously arguable that equity would regard it as unconscionable for Ms Cowell to be able to use that information for her own benefit, including for the purpose of informing her decision whether or not to commence the Reopening Proceedings, when the only reason she might be able to use it is that it is in the public domain, and the only way in which it got into the public domain was that her counsel or solicitors had put it there. 8 Mr Merkel QC has referred to the judgment of Lord Denning in Seagar v Copydex Ltd [1967] 1 WLR 923, which I cited in my previous judgment, for the distinction between use of information already in the public domain (which a confidee was at liberty to do) and use of information not in the public domain (which a confidee was not). However, Lord Denning was not concerned with a situation in which the information in the public domain had got there wholly and solely because of a breach of confidence or publication by the very person who now sought to use it. 9 In Attorney-General (UK) v Heinemann Publishers Australia Pty Ltd (1987) 8 NSWLR 341, the well-known Spycatcher case, Powell J in this Court said (at 374): Further, while I accept that it is not every publication of otherwise confidential information which robs that information of its confidential quality ( David Syme & Co Ltd v General Motors-Holdens Ltd ), and while I accept that, in at least some of the cases (as, for example, O Mustad & Son v S Allock & Co Ltd and Dosen ) it is the fact of publication by the person to whom the duty of confidentiality has been owed which has been held to rob information of its confidentiality, the views expressed by Mason J, as he then was, in Commonwealth of Australia v John Fairfax & Sons Ltd and Commonwealth of Australia v Walsh would indicate that, providing that the subject information has been sufficiently widely published, that information was properly to be regarded as being in the public domain, and, thus, no longer confidential, even though the publication was neither authorised, or acquiesced in, by the person to whom the duty of confidentiality was owed. Finally, it seems to me that, even if, in order that information might be held to have been robbed of its confidential quality, it must be shown that the publication of that information was authorised or acquiesced in by the person to whom the duty of confidentiality was owed, it can, in this case, be said of a great deal, if not of all, of the information contained in Mr Wright's manuscript, not only, that it has previously been published, but that that prior publication has, at least in one case, been authorised, and, in other cases, has, at least been acquiesced in.

10 Accordingly, the expression of opinion by Powell J to the effect that it might not matter even if the publication had been by the person to whom the information was entrusted in confidence was strictly obiter, his Honour's decision being founded on the view that there had been acquiescence by the person to whom the duty of confidentiality was owed. On the appeal from Powell J's decision, the Court of Appeal did not deal address this issue. The authors of the 4th edition of Meagher Gummow & Lehane, in commenting on the observations of Mason J in Commonwealth v Walsh, to which Powell J had referred, said (at [41-065]): "This comes perilously close to rewarding the miscreant for his past breaches of duty by releasing him from any further restraint after he has been apprehended". 11 I need not and could not resolve the interesting legal question which arises in this respect on an application of this type. Suffice it to say in my view it is seriously arguable that a person who brings about or is involved in confidential material being published in breach of confidence may not be able to rely on that publication as an answer to an application for an injunction to restrain that person from gaining an advantage from that confidential information. 12 It follows that I will not accede to the application to expand the exception in the proposed injunction, and the injunction will be in the terms indicated in my previous judgment. 13 The next question is Mr Rush's advice. Some time after the relevant information was provided to Mr Rush, Slater & Gordon obtained an advice from him. BATAL and BATAS have required production of the advice by notice to produce. 14 There is evidence that Mr Rush's advice has been provided to Mr Marcus Priest, a journalist at The Australian Financial Review, "on the basis that he will not publish any part of it, or the fact of it, without obtaining Mr Rush's consent first". There is also evidence that the advice has been provided by Slater & Gordon to the Victorian Attorney-General in support of an application for a formal inquiry into the conduct of BATAS and its lawyers in relation to the McCabe matter. Obviously, from those publications, an issue arises as to whether any legal professional privilege that otherwise might reside in that advice has been waived. 15 Slater & Gordon seek a further opportunity to consider whether they wish to maintain a claim for privilege or to resist the contention that any such privilege has been waived. BATAL and BATAS point to some four months having elapsed since they first sought production of the advice, and submit that while the existence of difficult issues in connection with any claim for privilege or waiver were foreshadowed on behalf of Slater & Gordon many months ago, they have still not been articulated. 16 Mr Merkel today has referred to at least one basis upon which a claim for privilege might be maintained, namely that the disclosure to Mr Priest was on a confidential basis and for a limited purpose, in addition to which it might be argued that there was some element of common interest between Mr Priest and Slater & Gordon. And likewise, so far as the Victorian Attorney-General is concerned, it might be argued that there is some common interest between Slater & Gordon and the Victorian Attorney-General. It is not for me to resolve those issues at this stage. I am not prepared to say that they are absolutely unarguable. No apparent prejudice is occasioned by allowing Slater & Gordon some further time to consider these issues, and I will therefore adopt the course proposed by Slater & Gordon in relation to Mr Rush's advice, of permitting them a further opportunity to formulate and articulate any claim for privilege. 17 So far as costs are concerned, the costs of the proceedings on 26 and 27 February fall into several categories. Some were the consequences of the disqualification application and motion to set aside the earlier interlocutory injunction, and to the extent that a costs order is made, as I have indicated it will be, in respect of those applications, it will cover the costs of 26 and 27 February to the extent that they are attributable to those applications. 18 The other issues agitated on 26 and 27 February were the transfer application, and the application for interim relief against Ms Cowell. BATAL seeks no special costs order in respect of 26 and 27 February. BATAS proposes that it pay Slater & Gordon's costs of the transfer application, but that Slater & Gordon and Ms Cowell otherwise pay its costs of the proceedings of 26 and 27 February. Slater & Gordon proposes that BATAL and BATAS pay its costs of the transfer application, and that the costs of 26 and 27 February otherwise be costs in the proceedings. 19 It is correct, as Mr Merkel submits, that on the application for interim relief against Ms Cowell it was common ground that there would be some interim relief, and the argument focussed on the precise extent of that interim relief and particularly the "carve-out". To the extent that there was argument BATAS succeeded and Ms Cowell failed. BATAL was not involved in that argument. Although BATAS succeeded in obtaining the wider relief that it sought, there was a substantial amount of common ground, and the ultimate outcome of the application for interlocutory relief, let alone the final proceedings, is far from foreseeable at this stage. It may eventuate that BATAS has no claim for confidentiality at all, whether by reason of iniquity or material already being in the public domain, or any of the other defences raised. 20 So far as the transfer application is concerned, Slater & Gordon and Ms Cowell succeeded, and BATAL and BATAS failed. 21 As I indicated in my previous judgment, when these proceedings were commenced in this court, there were pending the Fairfax proceedings, which were set down for an imminent final hearing date. There was then ample cause to commence the proceedings in this court, as distinct from Victoria. The transfer application has succeeded because the whole forensic landscape changed with the compromise of the Fairfax proceedings. The transfer application was, it seems to me, a necessary step in the proceedings, which it was not unreasonable to oppose. The position might have been quite different had the proceedings been instituted in a plainly inappropriate jurisdiction, as might have been the case had the Fairfax proceedings not been pending at the time. 22 Although I appreciate that this departs somewhat at least from a position which might have appeared accepted between BATAS and Slater & Gordon in respect of the transfer application, it seems to me that it is undesirable to make special costs orders in respect of any part of the proceedings on 26 and 27 February, and for that matter today, and that the costs of the proceedings on those days should be costs in the proceedings ultimately to be resolved in the Supreme Court of Victoria. 23 I make the following orders: 24 In proceedings 5940/2006, the BATAS proceedings, upon the plaintiff by its counsel giving to the court the usual undertaking as to damages: (1) Order that until the hearing and determination of the application for interlocutory relief or further order, Roxanne Joy Cowell be restrained from by herself her servants or agents publishing disseminating or using the information referred to in the schedule to the amended statement of claim filed on 27 February 2007 ("the Information"). (2) Order (1) is not intended to and does not preclude Roxanne Joy Cowell from, for the purpose of defending these proceedings, using the Information or publishing or disseminating it: (a) to such of the lawyers she has retained or who she may retain to act for her in these proceedings who have executed an undertaking to keep the information confidential; or

(b) to such other persons as the plaintiff may in writing agree upon such terms as the plaintiff may stipulate; or

(c) in accordance with such leave of the court as may be granted. (3) Order that until the hearing and determination of the application of interlocutory relief or further order the second defendant Christopher Dale be restrained from by himself his servants or agents publishing disseminating or using the Information. (4) Order (3) is not intended to and does not preclude Christopher Dale from, for the purpose of defending these proceedings, using the information or publishing or disseminating it: (a) to such of the lawyers he has retained or who he may retain to act for him in these proceedings who have executed an undertaking to keep the Information confidential; or

(b) to such other persons as the plaintiff may in writing agree upon such terms as the plaintiff may stipulate; or

(c) in accordance with such leave of the court as may be granted. (5) Order that first defendant's Notice of Motion filed 12 December 2006 be dismissed. (6) Order that first defendant pay the plaintiff's costs of and incidental to the application for disqualification made by the first defendant on 7 December 2006 and heard on 13 and 14 December 2006, and the first defendant's Notice of Motion filed 12 December 2006.

(7) Order that costs of and incidental to the Notice of Motion filed 29 November 2006 including all costs of the proceedings on 26 and 27 February 2007 and of today be costs in the proceedings. (8) Order that the plaintiff's Amended Notice of Motion filed 26 February 2007 and second defendant's Notice of Motion filed 6 March 2007 be stood over to a date to be fixed by the Supreme Court of Victoria.

(9) Direct that by 4pm on 20 April 2007 the first defendant file and serve on the plaintiff a response to the plaintiff's request dated 13 February 2007 for further and better particulars of the first defendant's defence.

(10) Orders in accordance with paras 5 and 6 of the document entitled Order initialled by me, dated this day and placed with the papers (11) Order pursuant to Jurisdiction of Courts (Cross Vesting) Act 1987 s 5(2)(b)(iii) that these proceedings be transferred to the Supreme Court of Victoria.

25 I note that the undertaking as to damages is given by Mr Stitt QC.

26 In proceedings 5898/06: (1) Order that first and second defendants' Notice of Motion filed on 12 December 2006 be dismissed.

(2) Order that first and second defendants pay the plaintiff's costs of and incidental to the first and second defendants' application for disqualification made on 7 December and heard on 13 and 14 December 2006, and including the costs of the first defendant and second defendants' Notice of Motion filed 12 December 2006.

(3) Direct that the plaintiff file and serve a Statement of Claim which names Roxanne Cowell as the third defendant on or before 13 April 2007.

(4) Direct that the defendants file and serve their defences on or before 27 April 2007.

(5) Orders in accordance with paras 5 and 6 of document entitled Order initialled by me, dated this day and placed with the papers.

(6) Order that costs of the proceedings on 26, 27 February 2007 and today including costs of the motion filed 29 November 2006 be costs in the proceedings.

(7) Order pursuant to Jurisdiction of Courts (Cross Vesting) Act 1987 s5(2)(b)(iii) that these proceedings be transferred to the Supreme Court of Victoria.

27 I note that upon the plaintiff by its counsel giving to the Court the usual undertaking as to damages (given by Mr Rich), that the third defendant Roxanne Cowell provides undertakings to the Court in terms of the document entitled "Order B" initialled by me, dated this day and placed with the papers, in substitution for the undertakings noted on 27 February 2006.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.