C THE RELEVANT LEGAL AND EQUITABLE PRINCIPLES
92 Before coming to the primary judge's reasons for making the Order, it is useful to summarise the relevant legal and equitable principles.
93 Obviously enough, relevant obligations of confidence owed by a third party to a party to litigation may be legal or equitable. The orthodox remedial response to any wrongful disclosure will likely not be compensatory (that is, in the case of a breach of contract, an action for common law damages, or in the case of an equitable obligation of confidence, a suit seeking some form of equitable compensatory order in equity's exclusive jurisdiction - compensatory rights which may, in certain circumstances, co-exist: see the Hon Justice M Leeming, A response to Peter Turner, "Equitable Compensation for Breach of Confidence", Seminar paper, 30 March 2017). Rather, a party responding to actual or anticipated breach will seek to enforce such rights as it has to prevent disclosure. Where there is an express or implied contractual (and hence legal) obligation not to disclose specified information, this will usually mean invoking equity's auxiliary jurisdiction to enjoin breach; alternatively, where the obligations of confidence arise in equity, the exclusive equitable jurisdiction will be invoked to enjoin the use of confidential information, arising from the circumstances in or through which confidential information was obtained or communicated: Seven Network Limited v News Limited [2007] FCA 1062 at [2949].
94 Here, of course, the obligation was legal. A useful starting point, when it is suggested a provision giving rise to a legal obligation of confidence is contrary to public policy because of an interference with the administration of justice, is the dissenting judgment of Gummow J in Corrs Pavey at 452-453, 455-456, although it was not a case about enforcing a legal obligation of confidence.
95 The discussion of Gummow J was in the context of giving consideration as to whether a section of the Freedom of Information Act 1982 (Cth), which conferred exempt status on a document "if its disclosure under [the] act would constitute a breach of confidence", was to have regard to those considerations of public policy which courts take into account in determining whether to grant or withhold remedies for breach of confidence in the exercise of common law or equitable jurisdiction. The majority (Sweeney J at 435 and Jenkinson J at 438) held that the statutory expression "breach of confidence" was not used in its technical sense, so that the sub-section was wide enough to confer:
… exempt status on a document which contains confidential information received under circumstances imposing an obligation of confidence, without regard to those considerations of public policy to which courts have allowed an influence in determining whether to grant or withhold remedies for breach of confidence in its technical sense.
96 Whereas Gummow J found that the term "breach of confidence" was used in its technical sense such that a document was exempt from disclosure only if its disclosure would be actionable at general law: at 447. In the course of his dissent, Gummow J observed that there is not in Australian law any "public interest defence" to actions to restrain breaches of confidence (as suggested by English authorities) but that it was necessary to consider whether the information in question (being information as to the commission of a civil wrong of public importance) would not be protected in equity either because there would be the defence of unclean hands available; and further, or in the alternative, because the information did not have the necessary quality of confidence. In doing so, his Honour examined, in detail, the rule that there is no confidence as to the disclosure of an iniquity as originally formulated by Wood V-C in his seminal ex tempore judgment in Gartside v Outram (1856) 26 LJ Ch (NS) 113 at 114:
The true doctrine is, that there is no confidence as to the disclosure of an iniquity. You cannot make me the confidant of a crime or fraud, and be entitled to close up my lips upon any secret which you have the audacity to disclose to me relating to any fraudulent intention on your part…
97 Gartside was not an exclusive jurisdiction case: an injunction was sought as final relief in aid of contractual rights: see Heydon, J D, Leeming, M J and Turner, P G, Meagher, Gummow & Lehane's Equity Doctrines and Remedies (5th ed, Butterworths, 2015) at [42-160]. As is well known, the principles explained in Gartside have come to be developed in England as an independent "public interest" defence to justify publication of an otherwise confidential publication: see, for example, Initial Services Ltd v Putterill [1968] 1 QB 396 at 405-406; Attorney-General v Guardian Newspapers (No 2) [1990] 1 AC 109 at 268-269. But as Gummow J explained in Corrs Pavey at 455-456:
… if there be some other principle of general application inspired by Gartside v Outram, it is in my view of narrower application than the "public interest defence" expressed in the English cases. … That principle, in my view, is no wider than one that information will lack the necessary attribute of confidence if the subject-matter is the existence or real likelihood of the existence of an iniquity in the sense of a crime, civil wrong or serious misdeed of public importance, and the confidence is relied upon to prevent disclosure to a third party with a real and direct interest in redressing such crime, wrong or misdeed.
98 Both prior to and following on from Corrs Pavey there have been a number of cases where issues similar to the present have been discussed. As the primary judge recognised at J[70], these include A v Hayden (1984) 156 CLR 532; AG Australia Holdings Ltd v Burton [2002] NSWSC 170; (2002) 58 NSWLR 464 (Campbell J); Richards v Kadian [2005] NSWCA 328; (2005) 64 NSWLR 204 (Beazley JA, Hodgson JA and Stein AJA); Johnson v AED Oil Ltd [2011] VSC 94 (Sifris J); (2016) 53 VR 631 and Commonwealth v Sanofi (formerly Sanofi-Aventis) [2017] FCA 382 (Nicholas J).
99 It is necessary to make some observations about the principles that emerge from these cases (I have left to one side for present purposes J Forrest J's decision in AS, which I will deal with in Section F.1 below).
100 It is well established that a contract, or part of a contract, may be held void or unenforceable as contrary to public policy to the extent that it adversely interferes with the administration of justice (see A v Hayden at 545-546 (Gibbs CJ); 557 (Mason J)). The notion of interference with the administration of justice is, however, to be approached with a deal of rigour, given the foundational notion that a contract, or a provision of it, is not to be regarded as being unenforceable at law unless grounds for unenforceability, either under the common law or statute, have been established. As can be seen by the survey of the cases in Heydon on Contract (Thomson Reuters, 2019) at [20.650], the line to be drawn where contractual interference with the administration of justice is established, thus rendering a contract or provision unenforceable, involves an objective assessment or evaluation of the circumstances of individual contracts and their effect. It is, in this sense, a fact dependent task. Moreover, it is important to appreciate the nature of the role the court is performing in this regard.
101 As is evident from A v Hayden, the relevant inquiry at law is whether enforcement of the obligation would be clearly inconsistent with some identified head of public policy. Consideration of public policy is not, however, linear, and the judgment to be formed may involve consideration of a competing head of public policy (see A v Hayden at 559-560 per Mason J; but cf at 576-577 per Wilson and Dawson JJ). In such a case, this will involve weighing public policy considerations, which might appear to point in different directions.
102 But the evaluation called for in reaching a judgment on whether there is, in the circumstances of an individual case, a contractual interference with the administration of justice, is not a discretionary decision. In particular, it is not a task of weighing up all the relevant circumstances to form a view as to whether it is better to override or to allow enforcement of the obligation of confidentiality at law.
103 As Spigelman CJ explained in a different context in Perpetual Trustee Company Ltd v Khoshaba [2006] NSWCA 41; (2006) 14 BPR 26,639, it is sometimes suggested that any decisions involving a value judgment on which reasonable minds may differ is a discretionary judgment, but the distinction between evaluative judgments and a balancing process which involves the exercise of a discretion is important. Of course, this distinction between a 'discretion' strictly so called and an evaluative judgment (where an objective assessment or evaluation of the facts is required and although some balancing may be undertaken, there is in theory only one correct answer, even where rational minds might arrive at different answers) is often seen in the administrative law context: see Edmonds, C, "Appeals from Discretions, Satisfactions and Value Judgments: Reviewing the House Rules" (2017) 41(2) Melbourne University Law Review 647.
104 The nature of any relevant 'balancing' was the subject of attention in the decision of the New South Wales Court of Appeal in Kadian. The leading judgment was written by Beazley JA, with Hodgson JA agreeing substantially, and Stein AJA agreeing. In that case, all the judges of the Court agreed that an obligation of confidentiality will not be enforced, or will be treated as void at law, only if it interferes adversely with the administration of justice, both in criminal and civil cases, provided that some identifiable public interest relevant to the administration of justice, that goes beyond the private civil rights of the parties to the obligation, is affected by such interference: Beazley JA at 216 [46], 220-221 [66], 224-225 [84]; Hodgson JA at 241 [160]; Stein AJA at 243 [172]. In the manner explained above, it was recognised that in making this evaluative judgment, the court may be required to weigh up or balance competing considerations, that is, public interest considerations, which point in different directions. As Beazley JA accepted at 225 [87], there may be a balancing exercise, depending upon the nature of the confidential information, the public interest allegedly affected and any other public interest consideration. Hence the "balancing" is directed to the issue as to whether, having regard to public interest considerations, including competing considerations (such as the desirability of holding people to their bargains, which would be furthered by enforcing the contract), the obligation interferes adversely with the administration of justice. This is to be contrasted with some form of freestanding discretionary judgment (informed by all the circumstances of the case) as to whether the obligation ought to be overridden to achieve an end perceived as being desirable.
105 These evaluative judgments made in different circumstances can be seen in a number of cases. In Kadian, Beazley JA at 222-224 [75]-[83] had regard to a case bearing a close similarity to the present circumstances of a confidentiality agreement preventing a former employee from disclosing information to a solicitor wishing to use it for the purpose of advancing the applicant's case in a class action: AG Australia at 470 [12]; 512 [170] (Campbell J). In that case, Campbell J held that the mere fact that confidential information might be of use to a party in civil litigation was not enough to render the obligation void.
106 Similarly, in Johnson v AED Oil Ltd, some defendants sought declarations that a settlement deed did not prevent them from participating in a pre-trial conference with solicitors acting for another defendant who had been excluded from the settlement, in order to prepare a witness statement. Justice Sifris held that while there would be some disruption to the conduct of the trial, because witnesses bound by a confidentiality obligation would have to give evidence "cold", such an obligation could not be regarded as having an adverse effect on the administration of justice.
107 The argument of Crown on appeal is that by way of contrast with these cases, the decision of J Forrest J in AS took a wrong turn by transforming an inquiry as to contractual validity or enforceability into a discretionary exercise in which the question becomes whether the relevant litigation would run more smoothly if obligations of contractual confidentiality were rendered unenforceable.
108 Before dealing with the merits of this argument, a further point should be made before leaving this review of the applicable principles. In the course of oral submissions, Senior Counsel for Crown submitted that where the relevant obligation of confidence has been found to be enforceable by the application of these established principles, and is an express "contractual obligation, there is no scope then for equity to add a further layer of analysis". This submission should be rejected.
109 Although the argument, as framed by the parties, took place without reference to the settled principles which would inform a determination as to whether obligations, valid at law, would be enforceable in equity, the notion that equitable defences and the discretionary nature of equitable relief in its auxillary jurisdiction cannot have any role in cases where a legal confidentiality obligation is sought to be enforced cannot be right.
110 The foundation for this submission is the contention of Crown below that the rule that "there is no confidence as to the disclosure of iniquity" did not have any relevance in the present circumstances where there is an express obligation of confidentiality: J[101]. For this proposition, Crown relied upon two authorities: Corrs Pavey at 452-453, 455-456 (Gummow J) and AG Australia (Campbell J) at [174]-[176], 512-3, [193]. It is important, however, not to decontextualise what Gummow J and Campbell J were saying in this regard.
111 As Gummow J explained in Corrs Pavey (at 452-453), the principle in Gartside has not been regarded as being restricted to an equitable duty of confidence but may also be understood as applicable where there are "valid legal rights" and an employer, seeking to enforce those rights, may be denied "equitable relief, in accordance with general principles, by reason of unclean hands". This explanation of Gartside has some support in authorities such as: Weld-Blundell v Stephens [1919] I KB 520 at 533-534 (Warrington LJ), 547-548 (Scrutton LJ); Hubbard v Vosper [1972] 2 QB 84 at 99-101 (Megaw LJ); Church of Scientology of California v Kaufman [1973] RPC 635 at 638-639, 658 (Goff J); and finally by Gibbs CJ in A v Hayden at 545. It must be said, however, that whether Gartside rested upon unclean hands as an exception or defence to a suit for breach of confidence, or was more concerned with the extent of an obligation to reveal iniquities in answering interrogatories, is somewhat unclear: see Richardson, M, Bryan, M, Vrankan, M and Barnett, K, Breach of Confidence: Social Origins and Modern Developments (Edward Elgar Publishing, 2012) at 42-43. What presently matters, is that irrespective of how one explains Gartside, the notion that iniquitous conduct could not be relevant in assessing whether a provision is enforceable, is expressed far too broadly.
112 In AG, Campbell J was dealing with a case, like here, in which there was an express term of confidentiality in a contract. His Honour (at 487 [73]-[75]) contrasted this to a situation where the obligation arises at law by an implied term in a contract or where the obligation is recognised in the exclusive jurisdiction of equity. In doing so, his Honour stressed the importance of recognising which of these three types of obligation is alleged because considerations which are relevant to the questions of validity, and means of enforcement of, an obligation of confidentiality can differ, between these three types. As is evident from [76]-[77], the defence in AG was twofold: first, that the confidentiality provision should not be read in accordance with its literal words, but rather should be "read down" so as to not prohibit the relevant communications; and secondly, and only if the first argument failed, that the confidentiality agreement was, in part, void at law, to the extent that it prohibited the relevant communications. It was not a case where any distinct equitable defences to the auxillary equitable relief claimed by the moving party were pleaded and relied upon.
113 It may very well be the case that the legal analysis as to whether a relevant provision was void or enforceable at law would, in a practical sense, determine the logically subsequent question as to whether a party with the benefit of a legal right would be entitled to discretionary equitable relief by way of prohibitory injunction. But this is not to say that this would always or necessarily be the case. The position is that having established the legal right, the equitable remedy of an injunction is prima facie available, subject to any specific countervailing discretionary factors which may exist in the particular circumstances of a case and which are relied upon: see Dalgety Wine Estates Proprietary Limited v Rizzon (1979) 141 CLR 552 at 575-576 (Mason J); and Heydon on Contract at [28.100]. Although it may be said that the notion there is no confidence in an iniquity is not "directly relevant" at the stage of determining whether a contractual provision is valid at law (see J[71]), it cannot be said, that when it comes to discretionary relief in equity, when an equitable defence is pleaded, iniquitous conduct or other matters with a sufficient nexus affecting clean hands are irrelevant or could not "add a further layer of analysis".
114 As noted above, Crown's principal contention is that the law took a wrong turning in AS. I will examine the merits of this proposition, after identifying how the primary judge approached the resolution of the application and the nature of the errors alleged by Crown.