Findex Group Ltd v iiNet Ltd

Supreme Court of NSW|2019-06-24|Before: Ward CJ, Robb J

Background

The history to the making of the present applications is summarised briefly below.
The plaintiffs (Findex Group Ltd (Findex), its managing director, and two of its senior officers) commenced proceedings in this Court on an ex parte basis in September 2016 (2016/00271090) seeking preliminary discovery; in essence, to ascertain the identity of the publisher of various allegedly defamatory publications. The plaintiffs obtained orders for preliminary discovery from McDougall J on 13 September 2016, as a result of which they ascertained that, as they had suspected, it was Mr McKay who had anonymously published those matters (using a false name). Mr McKay is a former (and obviously, by reference to his communications the subject of the present application, disgruntled) employee of Findex.
The plaintiffs then sought (and on 16 September 2016 obtained), again on an ex parte basis, search orders pursuant to which documents were seized from Mr McKay. Mr McKay objected to access being obtained by the plaintiffs to various of the documents that had been obtained under the search orders (both on the basis of confidentiality and, in respect of some of the seized documents, that they did not fall within the terms of the search orders); and filed a notice of motion on 31 October 2016 seeking relief in that regard.
In relation to those documents in respect of which there was no objection by Mr McKay to production, the documents were provided to the plaintiffs' solicitors in November 2016. In respect of the balance of the documents, orders were made by consent by Slattery J on 3 November 2016, restraining production or inspection of the documents until Mr McKay's 31 October 2016 motion was determined or until further order of the Court.
In late November 2016, the Australian Securities and Investments Commission (ASIC) sought and obtained leave to intervene in the proceedings in order to bring a public interest immunity application in relation to certain of the documents.
On 16 December 2016, McDougall J made orders, by consent, in effect putting in place an agreed confidentiality regime, namely for the provision to the plaintiffs' solicitors, on a confidential basis, of electronic copies of documents, other than those over which Mr McKay claimed litigation or client legal privilege, and those over which ASIC claimed public interest immunity (see Orders 3 and 4). This was for the stated purpose of "assisting the parties to ascertain the real areas of dispute". McDougall J also ordered that, until further order of the Court, the documents provided pursuant to Order 3 were not to be provided or shown to any of the plaintiffs or any of their officers or employees (save for Mr Doucas - the Head of Risk Management at Findex; and, in Mr Doucas' case, subject to an undertaking by Mr Doucas: not to provide or show them, or disclose their contents, to any of the plaintiffs or any of their officers or employees; to keep them confidential; and only to use them for the purposes of giving instructions in these proceedings, until otherwise ordered). The said documents were provided to the plaintiffs' solicitors on about 21 December 2016. (Thus, the plaintiffs' solicitors and Mr Doucas have been aware for quite some time of the contents of much of the material that had been seized pursuant to the search orders made in September 2016.)

Summary

For the reasons that follow, I have concluded that: the Harman undertaking is applicable; the plaintiffs should be released from the Harman undertaking for the limited purpose of use, in the Cross-Vested Proceedings or the Defamation Proceedings, of the documents (to which I will refer as the Annexed Documents) copies of which are annexed to an affidavit affirmed 7 June 2019 of the plaintiffs' solicitor, Ms Amy Siyi Zhang, but not the documents listed in Schedules A and B to the proposed amended statement of claim in the Cross-Vested Proceedings; the plaintiffs should be released from the Harman undertaking for the limited purpose of use, in the Defamation Proceedings of the document which is Annexure A to the 17 June 2019 affidavit of Ms Zhang; otherwise, leave to be released from the Harman undertaking should be refused; and Order 3(iii) of the orders made on 19 October 2018 should not be varied other than now to put in place (in the absence of agreement between the parties in this regard) an appropriate regime for the return/deletion of the said documents.

The plaintiffs' application

In support of their two notices of motion, the plaintiffs rely on evidence of a solicitor, Ms Amy Siyi Zhang, who has responsibility (under the supervision of the solicitor on the record in these proceedings) for the daily conduct of this matter on the plaintiffs' behalf. Ms Zhang has affirmed numerous affidavits in these proceedings (including a number of confidential affidavits).
In Ms Zhang's most recent affidavits (her affidavit affirmed on 7 June 2019 - the 7 June Zhang Affidavit; and her confidential affidavit affirmed 17 June 2019 - the 17 June Zhang Affidavit), Ms Zhang has identified the specific documents in respect of which release from the Harman undertaking (if necessary) is sought (referred to by her as the Identified Undisputed Documents) (see [8] of the 7 June Zhang Affidavit) and two other specific documents (see the 17 June Zhang Affidavit), to which I will refer as the Annexure A document (an email chain said to be seriously defamatory of one of the individual plaintiffs, the second plaintiff) and the Annexure C document (Mr McKay's personal notebook). (I do not here adopt the definitions used by the plaintiffs in their submissions of these documents, which, at least in respect of the Annexure A document, simply perpetuate the matter here complained of.)
At the outset, I also note that the use of the description "Identified Undisputed Documents" is apt to mislead. Those documents are so described on the basis that it is said these are documents over which no objection is taken by Mr McKay (see [8] of the 7 June Zhang Affidavit). That, however, relates to a lack of objection taken by him at earlier stages of this proceeding; there is certainly an objection now taken by Mr McKay to any release from the Harman undertaking in respect of any of the subject documents.
It is submitted by the plaintiffs (see T 14.6-13) that reference has been made to each of the documents which are the subject of the present application in the particular set of proposals in the statement of claim; that detailed attention has been given as to how the plaintiffs would wish to use each of the documents; and that this is not a case where the plaintiffs are "asking for permission to use an unarticulated class of documents from which we would subsequently go and make a selection".
In summary, there are three categories of documents identified as the subject of the present application (in addition to the two additional documents - the Annexure A document and the Annexure C document).
First, documents in their content identical to documents already referred to in the existing statement of claim in the Cross-Vested Proceedings (to which I have referred as the Annexed Documents) (there being 39 of these); second, the documents itemised in Schedule A to the proposed amended statement of claim in the Cross-Vested Proceedings (some 126 documents, with multiple attachments), which are particularised at [106] of the proposed amended statement of claim as evidencing the alleged sustained and concerned campaign by Mr McKay of disparagement and vilification against the plaintiffs; third, the documents itemised in Schedule B to the proposed amended statement of claim in the Cross-Vested Proceedings (a further list of numerous documents with attachments) which are particularised at [109] of the proposed amended statement of claim as evidencing an intention on the part of Mr McKay, unless restrained by Court order, to continue the said campaign.
Leave is sought to use those documents, in the manner identified in the proposed amended statement of claim in the Cross-Vested Proceedings, in support of the allegations made in those proceedings; and in other proceedings that the plaintiffs have now filed pursuant to the orders made on 15 July 2019 (the Defamation Proceedings, being proceedings 2019/00067900). The plaintiffs argue that they are seeking to use the Identified Undisputed Documents in relation to the same, or substantially analogous, causes of action that were foreshadowed when the search order was sought, and on the basis of which the search order was granted; i.e., to use those documents "for the very purpose for which the Search Order was granted" (see the plaintiffs' submissions in relation to the Harman release application at [5]).

Issues

The plaintiffs identified the questions here to be determined in their written submissions filed 21 June 2019 as being whether: 6.1 A Harman release ought to be granted to the plaintiffs to use specific identified documents identified in the 7 June Zhang Affidavit in the Anticipated Proceedings [i.e., the now Cross-Vested Proceedings] - in relation to the same or substantially analogous causes of action that were foreshadowed when the Search Order was sought, and on the basis of which the Search Order was granted - in circumstances where the defendant has not objected to the plaintiffs obtaining access to the specific identified documents, and in circumstances where the specific identified documents clearly fall within the terms of the Search Order? (See 2B b. of the plaintiffs' amended notice of motion filed 4 July 2018.) 6.2 A Harman release ought to be granted to the plaintiffs to use the document identified as annexure A to the 17 June Zhang Affidavit in the Anticipated Proceedings […], in circumstances where that document was obtained by them in the execution of the Search Order - and in relation to the same or substantially analogous causes of action that were foreshadowed when the Search Order was sought, and on the basis of which the Search Order was granted - in circumstances where the document clearly falls within the terms of the Search Order but the defendant nonetheless objects to the document being provided to the plaintiffs albeit that his objection was expressly rejected by Rein J on 23 September 2016? (See 2 and 5 of the plaintiffs' 17 June 2019 Motion.) 6.3 A Harman release ought to be granted to the plaintiffs to use the document identified as annexure C to the 17 June Zhang Affidavit in the Anticipated Proceedings […] in circumstances where that document was obtained by them in the execution of the Search Order - and in relation to the same or substantially analogous causes of action that were foreshadowed when the Search Order was sought, and on the basis of which the Search Order was granted - and in circumstances where the plaintiffs cannot establish that the document falls within the terms of the Search Order, and in circumstances where, in the absence of a variation of Order 3(ii) made on 19 October 2018, that document is required to be returned to the defendant. [footnotes omitted]
An additional question for determination relates to the regime for the return or deletion of documents that was to be put in place pursuant to Order 3 of the orders made on 19 October 2018. Mr McKay's submissions on that question were filed on 27 May 2019; the plaintiffs' submissions on that issue were included as part of its submissions on the Harman release application.

Relevant principles

In Hearne v Street (2008) 235 CLR 125; [2008] HCA 36 (Hearne v Street), Hayne, Heydon and Crennan JJ said at [96] that: 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. The types of material disclosed to which this principle applies include 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 … [footnotes omitted]
The implied Harman undertaking has been characterised variously as an obligation; a duty; a formula; a rule; or a principle (see, for example, Alterskye v Scott [1948] 1 All ER 469 at 470-471 per Jenkins J; Prudential Assurance Co Ltd v Fountain Page Ltd [1991] 1 WLR 756 at 764; [1991] 3 All ER 878 at 885; and Harman v Secretary of State for the Home Department [1983] 1 AC 280 at 308). In Harman, Lord Keith described the implied undertaking (at 308) as being: … independent of any obligation existing under the general law relating to confidentiality. It affords a particular protection accorded in the interests of the proper administration of justice. It is owed not to the owner of the documents but to the court, and the function of the court in seeing that the obligation is observed is directed to the maintenance of those interests, and not to the enforcement of the law relating to confidentiality.
The purpose of the undertaking is to protect the privacy of the person disclosing (under compulsion) the relevant document(s) and thereby to encourage full and frank disclosure during litigation (see British American Tobacco Australia Services Ltd v Cowell (No 2) (2003) 8 VR 571; [2003] VSCA 43 at [20]; and Riddick v Thames Board Mills Ltd [1977] QB 881). The implied undertaking applies not only to the documents as utilised in legal proceedings, but also to the information contained in or derived from those documents "whether it be embodied in a copy or stored in the mind" (Crest Homes Plc v Marks [1987] AC 829 at 854). It no longer applies once the document(s) in question is or are in the public domain (such as, for example, when a document is read in open court in the course of proceedings).
Insofar as the implied undertaking is not to use the document(s) for an "ulterior" or "collateral" purpose, such a purpose in this context has been described in the case law interchangeably as: a purpose outside of the proceedings; a purpose other than the proceedings; an extraneous purpose; and an alien purpose.
In Zuckerman on Australian Civil Procedure (Adrian Zuckerman et al., (LexisNexis Butterworths Australia, 2018)) (Zuckerman), the process of establishing the relevant purpose of obtaining and using the documents is referred to as the 'purpose of proceedings test'. According to the authors of Zuckerman, the 'purpose of proceedings test' allows "not only use in the very proceedings in which discovery is granted, but also uses that can legitimately be regarded as flowing from the purpose of the original proceedings" (my emphasis) (at [15.188]). Further, the authors of Zuckerman say that the test is flexible, permitting the use of disclosed documents "for a variety of purposes that go beyond, but are closely connected to, the proceedings in which the relevant disclosure was made" (at [15.190]); and argue that it may "be expanded to a test that says that documents obtained in discovery may be used for the purpose for which the order was made, namely the purposes of that litigation then before the court between those parties" (at [15.189]).
In Gavan v FSS Trustee, I had cause to consider whether, in the circumstances of that case, use by the insurer of certain documents produced under a notice to produce (or under any earlier subpoena issued in the proceedings), (broadly speaking, those documents being Facebook entries or posts) in order for the insurer to consider and make a determination as to the plaintiff's claim to a total and permanent disablement benefit, would infringe the Harman undertaking. I concluded there that it would not because it was not use for a purpose unconnected with the litigation in the course of which the documents had been required to be produced. I considered that in that case there were two (interconnected) processes "at play" (one being determination by the insurer of the plaintiff's claim and the other, if that claim be refused, determination by the Court of the claim), in a context where documents in relation to the one would be capable of informing the other.
I noted in Gavan v FSS Trustee (and followed) the obiter dicta of Chesterman JA in Northbuild Constructions Pty Ltd v Discovery Beach Project Pty Ltd (No 4) [2011] 1 Qd R 145; [2009] QCA 345 (Northbuild), where his Honour (having concluded that: in order to determine whether a proposed use of protected documents is unconnected with, unrelated to or not for a purpose reasonably necessary for, the conduct of the litigation, it is necessary to analyse the litigation not in a manner constrained by "any narrow or technical approach" (at [47]); and that the scope of the Hearne v Street obligation is that documents produced under compulsive curial process may only be used for a purpose connected with or related to the determination of the dispute in which the parties are engaged and to assist in the resolution of the dispute in which the documents were required) said (at [50]) that: The scope of the undertaking may be better expressed by saying that documents produced on discovery or other compulsive process may only be used for a purpose connected with or related to the determination of the dispute in which the parties are engaged and to assist in the resolution of which the documents were required. Such a formulation extends to the determination of disputed rights other than by trial.
(See also Deputy Commissioner of Taxation v Karas [2012] VSC 143, where Forrest J similarly considered the approach of Chesterman JA to be "persuasive", there in the context of the proposed use, in other proceedings concerning the taxpayer, of documents obtained in the course of freezing order proceedings.)
As to whether, in any particular case where the Harman undertaking applies, leave to permit use in one set of proceedings of documents obtained under compulsion extends to another set of proceedings (i.e., for a purpose other than the purpose of the proceedings in which the documents were obtained), in Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217 (Springfield Nominees), Wilcox J considered the factors to be taken into account and said at 225: For "special circumstances" to exist it is enough that there is a special feature of the case which affords a reason for modifying or releasing the undertaking and is not usually present. The matter then becomes one of the proper exercise of the court's discretion, many factors being relevant. ... But plainly they include the nature of the document, the circumstances under which it came into existence, the attitude of the author of the document and any prejudice the author may sustain, whether the document pre-existed litigation or was created for that purpose and therefore expected to enter the public domain, the nature of the information in the document (in particular whether it contains personal data or commercially sensitive information), the circumstances in which the document came into the hands of the applicant for leave and, perhaps most important of all, the likely contribution of the document to achieving justice in the second proceeding.
In Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3; (2005) 218 ALR 283 (Liberty Funding), the Full Court of the Federal Court (Branson, Sundberg and Allsop JJ, as his Honour then was) made reference, with approval, to the above passage, endorsing both the factors identified as relevant to the exercise of the Court's discretion and that the notion of "special circumstances" does not require that some extraordinary factors must bear on the question before the discretion will be exercised.

Plaintiffs' submissions

The plaintiffs submit that, by parity of reasoning with the decision in Gavan v FSS Trustee, the use of the Identified Undisputed Documents (and of the additional Annexure A and Annexure C documents) in the Cross-Vested Proceedings or in the Defamation Proceedings will not infringe the Harman undertaking because it is not use for a purpose unconnected with the litigation in the course of which the documents have been required to be produced. However, if that is not accepted, they argue that, in the circumstances of this case, there are good reasons for the plaintiffs to be released from the implied Harman undertaking and that it is in the interests of justice, and the just, quick and cheap resolution of all outstanding issues between the parties, that such a release be granted.
As to the factors referred to in Liberty Funding, the plaintiffs say as follows.
First, as to the circumstances in which the documents came into the hands of the plaintiffs, it is said that this was as a result of a search order which was "duly made by this Court as a result of a campaign by [Mr McKay] which was held to have been waged in 'a clandestine, anonymous [and] at least on the face of things ... dishonest way'", that search order having been made, it is said, "for the very purpose of enabling the plaintiffs to 'obtain information as to whether or not [the respondent] has communicated in similar terms to other persons'" (the plaintiffs there quoting in part from the reasons of Rein J when his Honour made the ex parte search order).
Pausing here, this seems to me to involve a conflation (of the kind to which I adverted in my last reasons in this matter) between the preliminary discovery application (which was first commenced in order to ascertain who had anonymously published the publications of which complaint was then made) and the subsequent (though admittedly close in time) application for search orders. It must be borne in mind that the purpose of each of those separate court processes is distinct - the former permits information to be obtained for the purpose of enabling a decision to be made as to whether there is a cause of action; the latter is to preserve evidence, albeit that, as made clear by Flick J in Metso Minerals (Australia) Ltd v Kalra (No 3) [2008] FCA 1201 (Metso Minerals) at [28]: … in identifying those documents which should be preserved pending the final hearing and determination of a proceeding: (d) the search is not limited to those documents directly related to the precise cause of action then known: cf Aristocrat Technologies Australia Pty Ltd v Global Gaming Pty Ltd [2006] FCA 862 at [6]-[7] per Allsop J; Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd [2006] FCA 1707 at [4] per Jacobson J.
In Metso Minerals, Flick J went on (at [28]) to add: There may well be other reasons for granting leave to an applicant to inspect seized documents. All of the purposes identified, however, have one thing in common - they allow the documents which have been seized to be inspected in order to ensure that the search order has been complied with and to ensure that only evidence which should be preserved is in fact preserved pending the final determination of a proceeding.
What is clear is that the purpose of search orders is not to engage in some free-ranging discovery process. The plaintiffs, however, submit that the purpose of the search order in this case was not simply to ascertain whether (as anticipated) Mr McKay had communicated in similar terms to other persons in addition to the communications deposed to in Mr Doucas' affidavit of 7 September 2016; rather, they say, its "whole purpose" was to enable the plaintiffs to defend themselves against Mr McKay by instituting action against him "in respect of all such publications".
That submission seems to me to trespass into the arena of discovery. If what is there meant is that the purpose of the search order was to preserve material that might (legitimately, through the course of disclosure or the like) later come into the plaintiffs' hands in the course of proceedings relating to the publications then known and in respect of which complaint was then made, so as to enable the plaintiffs to defend themselves in relation to those (as yet unknown) publications, that would be one thing. However, if what is suggested is that the whole purpose of the search order was to find out what other (allegedly defamatory, disparaging, misleading or deceptive or otherwise complaint-worthy) publications there might have been, then that is not, in my opinion, the proper purpose of a search order under the UCPR (even though it might be the practical outcome of a search order in a particular case).
In a similar vein, the plaintiffs say that the 2016 search order was not needed for the completed causes of action of which the plaintiffs were aware as at the date that the search order was obtained (since all of the documents needed for those causes of action were already in the possession of the plaintiffs; and they were all annexed to Mr Doucas' affidavit which formed the basis of the plaintiffs' application for the search order); rather, they say, the application was expressly not confined to those specific publications. If so, and it was truly not necessary for the plaintiffs to preserve the evidence sought under the search orders in the first place, then it is difficult to see a legitimate need for the search order (and their application cannot have been put in those terms when the order was sought on an ex parte basis since one might well doubt that if it had been so put the order would have been made). The plaintiffs say that, when seeking the search order, it was expressly submitted for the plaintiffs that "unless the Search Orders are made, the Plaintiffs may never learn how many doors have in fact been closed to them as a result of the Respondent". Again, however, that last proposition speaks to me as to what might be the practical outcome of an unsuccessful search order application, not to the proper purpose of such an application in the first place; and it is seemingly adverting to the damage that might have been sustained as a result of known publications not whether there had been other defamatory or disparaging publications at all.
As to the second of the factors referred to in Liberty Funding, the plaintiffs maintain that the present is "[n]ot the usual case of a party that has fortuitously obtained documents in one piece of litigation seeking opportunistically to use those documents in another piece of litigation"; rather, they say that the plaintiffs are here seeking to use the documents for the very purpose for which they were obtained (i.e., for the specific purpose of using them in the Cross-Vested Proceedings). By reference to Gavan v FSS Trustee, it is submitted that, in the circumstances of the present case, use of the Identified Undisputed Documents (and the additional documents) for the purposes of the Cross-Vested Proceedings in the manner stated in the proposed amended statement of claim annexed to the 7 June Zhang affidavit will not infringe the underlying purpose of the Harman undertaking because it is not use for a purpose unconnected with the litigation in the course of which the documents have been required to be produced; rather, it is said that the documents were required to be produced for that very purpose.
Pausing here, I would cavil with the proposition that the plaintiffs have not "fortuitously obtained" at least some of the documents here in question. The Annexure A document, for example, is a publication: about which the plaintiffs had no knowledge prior to execution of the search order; which they could surely not have anticipated would have been in existence (given the content about which the plaintiffs here complain); and which gives rise to a proposed claim in defamation which was never in contemplation at the time of the ex parte application which led to its discovery. What was contemplated at that time involved claims in defamation relating to the disparaging statements that had been made about Findex and its operations (not as to the identification of anyone within the organisation having or playing the kind of role suggested by the label that the plaintiffs now attach to the Annexure A document by reference to part of its contents). An even clearer example is the Annexure C document, which the plaintiffs now concede (at least in oral submissions though not in the terms in which they have identified the issues here for argument) should never have been seized under the terms of the search order (and which should by now have been returned following the orders made last year, even accepting that there was a dispute as to the regime for the return or deletion of electronic documents, since it is a hard copy document).
The plaintiffs seek to make use of the fact that, on 16 September 2016, when it was apparently suggested by them that the search order proceedings should "morph" into the then anticipated proceedings, Rein J was "disinclined" to allow that to happen; in that they say that, had the search order proceedings simply "morphed" into the then anticipated proceedings (for example by obtaining leave to file a statement of claim in the current proceedings) then a Harman release would not have been required (and it would not be a case of a party that has fortuitously obtained documents in one piece of litigation seeking opportunistically to use those documents in another piece of litigation). Thus, it is submitted that it would be a "victory of form over substance" if a Harman release were not only required in the present circumstances but also not granted "simply because of the fact that, as a matter of procedure, the plaintiffs have instituted the [Cross-Vested Proceedings] under a different case number". (That, to my mind, simply begs the question as to whether leave should be granted for a release of the Harman undertaking. The decision by Rein J not to make orders of the kind that had apparently been suggested, in colloquial terms, to allow the search order proceedings to "morph" into other proceedings is not here the issue.)
As to the submission that the Cross-Vested Proceedings relate to the same or substantially analogous causes of action that were foreshadowed when the search order was sought, and on the basis of which the search order was granted, it is said that the reason that those proceedings were not instituted earlier was explained during the hearing of the proceedings on 6 September 2018 when Senior Counsel appearing for the plaintiffs stated that "[i]t is a perfectly legitimate forensic position to postpone the commencement of proceedings until the plaintiffs have seen all of the material" (T 30.43).
The plaintiffs say that the causes of action pleaded in the Cross-Vested Proceedings in relation to Mr McKay's alleged breaches of s 18 of the Australian Consumer Law are "identical to the causes of action that were foreshadowed when the Search Order was obtained" (and that the suggestion for Mr McKay that the cause of action that was there described was limited to the Moore Stephens acquisition is incorrect). The plaintiffs say that some of the publications attached to Mr Doucas' affidavit filed in support of the application for a search order were "not even directed to any representative of Moore Stephens". (That said, it cannot be gainsaid that the cause of action then foreshadowed was presented as one that had the potential for damage articulated or illustrated by reference to the example of the then impending Moore Stephens acquisition; the imminence of that transaction presumably lending weight to the making of orders when the balance of convenience was addressed.)
As to the causes of action in defamation that the plaintiffs accept they indicated they wished to pursue at the time the search order was obtained (arising out of the publications attached to Mr Doucas' affidavit), it is acknowledged that they cannot pursue such causes of action (as they are now time-barred). However, the plaintiffs say that they have pleaded substantially analogous causes of action arising out of those publications (on the basis that those publications constitute actionable breaches by Mr McKay of his non-disparagement obligations pursuant to his employment contract). They point to the fact that they seek, among other things, damages for the damage that they have suffered to their corporate and personal reputations as a result of the defamatory publications made by Mr McKay in breach of his contractual non-disparagement obligations to them and that those claims are based upon the same factual matrix as the defamation claims that had earlier been identified.
Third, as to the nature of the Identified Undisputed Documents, it is submitted that they do not contain personal data or commercially sensitive information; that none of the documents is privileged; and that "virtually all of the documents evince an intention on the part of the defendant to harm the plaintiffs".
A close review of the Identified Undisputed Documents (particularly those in Schedules A and B to the proposed amended statement of claim) does not, in my opinion, wholly bear out those claims. Without purporting to be exhaustive in my review of the documents (and noting that neither was I taken through them document by document nor was it suggested that it was incumbent on me so to review them), they appear to include material that on its face might well be privileged (see for example the request for advice or reference to advice at items 1 and 2 of Schedule B - MCN.001.001.0838 and MCN.001.001.2431); some material that might be commercially sensitive data pertaining to Findex' own business; and some of which might be characterised (charitably) as self-promotion or touting. Some of it, if not already in the public domain, will be by the time the hearing commences, being annexed to the existing pleading in either substantially the same iteration or as a separate document but containing seemingly the same information. There is a considerable amount of duplication of material in the documents in respect of which release from the Harman undertaking is sought.
As to the two additional documents the subject of the second notice of motion (the document comprising the email chain annexed as Annexure A to the 17 June Zhang affidavit; and the document annexed as Annexure C to the 17 June Zhang affidavit being the notebook obtained under the search order), while the obtaining of the first was clearly authorised under the terms of the search order, it is accepted that the second (the notebook) was not a document the seizure of which was authorised by the search order.
As to the Annexure A document, the plaintiffs say that Mr McKay's objection to providing documents of this kind to the plaintiffs was expressly rejected by Rein J on 24 September 2016. They characterise this document as "extremely important", particularly when considered together with all of the other documents relied upon by the plaintiffs; in that they say that not only does it support the allegations made at [106]-[109] of the proposed amended statement of claim but also that it gives rise to "extremely serious defamatory imputations" of and concerning the second plaintiff.
The plaintiffs say that the second plaintiff wishes to seek leave to pursue defamation proceedings in relation to "seriously defamatory publications that he has not yet seen". It is submitted that it would be contrary to the interests of justice if the second plaintiff is prevented from applying for such leave simply because Mr McKay "wrongfully objected to the production of this document - notwithstanding the clear decision of Rein J that documents of this kind were required to be produced".
As to the Annexure C document, as noted above, the plaintiffs now accept that this document falls within the terms of Order 3(ii) made on 19 October 2019 (see T 25.18). However, they seek a variation of that order in light of what they say are changed circumstances (being the filing of the statement of claim in the Cross-Vested Proceedings, and the proposed amendments to those proceedings) (here, seemingly adopting what emanated from Basten JA in the Court of Appeal judgment at [28] - see below); and further, they say, in light of the fact that the notebook "evinces a clear intent on the part of Mr McKay to destroy the first plaintiff" (the plaintiffs referring to certain words appearing on the third page of the notebook), particularly when considered together with all of the other documents referred to in the proposed amended statement of claim. Thus, they seek to use the Annexure C document in support of the allegations made at [106]-[109] of the proposed amended statement of claim in the Cross-Vested Proceedings.
Finally, as to the likely contribution of the document(s) to achieving justice in the other proceedings (i.e., the Cross-Vested Proceedings or the now commenced Defamation Proceedings), it is submitted that the search order would have had no utility ("indeed it would have been a costly exercise in futility") if the plaintiffs are not now permitted to use in the Cross-Vested Proceedings the documents seized in the execution of the search order. It is said that there was no need for the search order in relation to the publications of which the plaintiffs were aware when they sought and obtained the search order and that "the legitimate purpose of the application was to ascertain what else the defendant had published". (In this regard, I repeat the observations made earlier in relation to the similar submission as to the purpose or "whole purpose" now said to have been underlying the making of the search order applications.) It is submitted that, as a matter of justice, there is no reason why the plaintiffs should be limited to the causes of action of which they were aware at the date of the search order.
The plaintiffs argue that in the present case "for good and proper reasons" the plaintiffs sought and obtained a search order rather than preliminary discovery. They say that it was appropriate in the circumstances for the plaintiffs to assume the "far greater and more onerous burden" of establishing their right to a search order under r 25.20 of the UCPR, rather than seeking to meet the "far lighter burden" of establishing a right to preliminary discovery under r 5.3(1) of the UCPR. It is submitted that, given that they discharged the "formidable" onus proving an entitlement to a search order, the plaintiffs would a fortiori easily have discharged the "lesser and easier onus" of proving an entitlement to preliminary discovery. The plaintiffs argue that it would be surprising if the plaintiffs would have had the right to deploy the documents now in issue in the current application had they applied for "preliminary discovery", but were not now to have the rights to do so because they assumed the "far greater and more onerous" burden of proving an entitlement to a search order; and that such a result would not accord with modern notions of litigation.
That submission to my mind ignores the fact that the plaintiffs did indeed commence with a preliminary discovery application. It can be assumed that the decision then made to seek search orders was made with the purpose of such applications (as set out in the UCPR) being squarely at the forefront of the plaintiffs' (or at least their legal representatives') minds; and it might also be inferred that, had it been thought that such material could have been obtained on a preliminary discovery application, such an application would have been made (since it does not appear that any expense has been spared in pursuing interlocutory applications in this matter to date).
The plaintiffs argue, as adverted to at the outset, that, in the circumstances of this case, there are good reasons for the plaintiffs to be released from the implied Harman undertaking (if such release be necessary) and that it is in the interests of justice, and the just, quick and cheap resolution of all outstanding issues between the parties, that such release be granted.

Mr McKay's submissions

Mr McKay, as already noted, resists the present application. He proceeds on the basis that the Harman undertaking applies, and emphasises that the special circumstances assessment must be undertaken in relation to the specific documents in respect of which the release is sought (referring in this regard to Gavan v FSS Trustee at [125]; and Australian Securities and Investments Commission (ASIC) v Marshall Bell Hawkins Ltd [2003] FCA 833 (ASIC v Marshall Bell Hawkins) at [12]). Reliance is placed in particular on the observation by Merkel J in ASIC v Marshall Bell Hawkins at [13] that: The requirements of specificity in respect of the documents to be used and the purpose for which they are to be used is appropriate because the implied undertaking should only be modified or released to the extent that it is in the interests of the administration of justice or in the public interest to do so: see Springfield Nominees at 225 and Moage Ltd (in liq) v Jagelman (2002) 43 ACSR 173 ("Moage") at 176. Thus, the modification or release should be no greater than is necessary or appropriate to meet the interests of the administration of justice or the public interest. Further, in determining whether to exercise its discretion to grant the modification or release sought, it will usually be necessary for the Court to identify with precision the documents to be released and the purpose of that release.
It is said that there are 516 documents listed in the schedule exhibited behind Tab 2 of Exhibit A in these proceedings; whereas reference is made only to 40 of those documents in the proposed amended statement of claim. It is noted that, in addition, there are 126 documents listed in Schedule A (referred to in the particulars to the proposed amended statement of claim at [106]) and 58 documents listed in Schedule B (referred to in the particulars to the proposed amended statement of claim at [109]); and it is thus submitted that the plaintiffs are seeking to be released from the Harman undertaking in relation to at least some 292 documents which are not referred to in either the body of or Schedules to the proposed amended statement of claim; and that no explanation is given for this discrepancy in the affidavit filed in support by the plaintiffs "despite the reference to documents in the [proposed amended statement of claim] seeming to be the only basis upon which the application is pressed".
Pausing here, it became apparent in the course of oral argument that the calculation of numbers of documents was complicated by the fact that, where documents included attachments, each attachment was separately itemised (as part of what was described as the "punctilious" approach of the plaintiffs' legal representatives). Therefore, some of the complaint made by Mr McKay as to the inclusion of particular documents is difficult to assess - for example, documents containing a reference to the Findex office "experiencing some turmoil" or to Findex charging "unnecessary fees" might appear in a chain of attached documents not all of which, in isolation, would be described as disparaging. Moreover (as adverted to above), there is extensive duplication because attachments and emails were on a number of occasions sent or copied to multiple recipients.
That said, Mr McKay raises the following "further difficulties" with the documents that are identified in the proposed amended statement of claim.
First, he notes that each document referred to in Schedule A is said to provide particulars of "disparagement and vilification" on his part but by way of example notes that at least one such document (Item 99 - MCN 001.002.2229) is an email in which he says there does not appear to be any operative "disparagement or vilification". A similar submission was made in relation to the document at item 106 of Schedule A (an advice dated 6 May 2014), which appears to be an attachment to the item 104.
Second, he says that, while each document referred to in Schedule B is said in the proposed amended statement of claim to evince an intention on the part of Mr McKay to "continue to pursue his campaign of disparagement and vilification" against the plaintiffs, the documents are nearly three or more years' old. It is said that the plaintiffs have adduced no current evidence demonstrating any intention on his part to "continue to pursue" such a campaign (pointing by way of example to one such document, being the email at Item 3 - MCN 001.001.2069). It is thus said that there is no evidence of an intention on the part of Mr McKay to "continue a campaign of vilification".
Pausing here, I make two observations. First, and most pertinently, the function of a pleading is not to adduce evidence. The fact that the plaintiffs propose to particularise their pleading by reference to documents or a series of documents itemised in the Schedules thereto and/or annexed to the pleading says nothing as to the evidence that might ultimately be adduced in support of their claim. Second, in light of the history of the matter to date, one would have to think that Mr McKay would by now have been well advised (if he had not been before) to desist from any conduct that might be thought to amount to, or be perceived as, a breach of, inter alia, contractual non-disparagement obligations (and to that extent the present litigious campaign seemingly being waged against him might be thought likely already to have achieved its desired result). Be that as it may, the fact that there may be no evidence of the asserted intention on his part (or that it might in due course be argued that there can be no inference reasonably able to be drawn from the documents the subject of the present application) does not mean that the documents could not, as a whole, be incapable of evidencing some form of campaign of disparagement or vilification.
Moreover, for the purpose of determining whether there should be a release of the Harman undertaking, the question whether Mr McKay might ultimately be able to resist the argument as to a concerted campaign or intention to continue such a campaign is not the issue. In this regard, the plaintiffs emphasise what was said in Sybron Corporation v Barclays Bank Plc [1985] Ch 299 at 326-327; [1984] 3 WLR 1055: … However, I do not think it can be right, on an application such as the present, for the court to undertake an examination of the strength of the proposed action in which it is sought to use the documents. I accept that it must be open to the respondent to resist leave on the ground that the proposed action would represent an abuse of process or for one reason or another was bound to fail or ought to be struck out. The court would always I think refuse leave if persuaded that the proposed action was of that character. But that apart, I feel great doubt whether it could ever be appropriate to try to gauge the strength of the proposed action in order to decide whether or not to give leave to use discovered documents for the purposes of that action. If a proposed action is not shown to be an abuse of process or obviously unsustainable then prima facie a plaintiff is entitled to prosecute it. Whether leave to use discovered documents for the purposes of such an action should be granted should depend in my view on the nature of the first action, the circumstances in which discovery was given and the nature of the proposed new action. There may be some cases in which for the purposes of an application for leave; to use discovered documents some assessment of the strength of the case should be attempted, but where, as here, the case is of complexity I do not think it represents the right approach.
What is more pertinent to the current application, in my opinion, is that the plaintiffs have sought the release from the Harman undertaking in respect of large swathes of documents sought to be referred to in a collective and generalised way in support of the proposed pleading - not (apart from the Annexure A document and the Annexure C document) with any real specificity. There is force to the submission made for Mr McKay that caution is required before accepting "generalised assertions on the part of the plaintiffs that groups of documents can be treated in a uniform manner for present purposes" (and see T 3.07ff).
As to whether "special circumstances" for the release of the undertaking are present, Mr McKay submits that the most relevant to the current application, of the considerations identified in Springfield Nominees is that of "the circumstances in which the document came into the hands of the applicants", submitting (as referred to above) that on a comparison between the claims foreshadowed when the search order was made and those contained in the Cross-Vested Proceedings, the former have not been pursued (or, I might suggest, at least have not been pursued as foreshadowed). It is submitted that, to the extent that the proceedings commenced in 2019 comprise different claims to those identified to Rein J when the search orders were obtained in 2016, this is an important factor counting against a finding of "special circumstances" (because the only reason the plaintiffs have the documents in their possession is through a search order they obtained on the basis of the causes of action that they have not prosecuted and do not intend to prosecute). It is noted that the purpose of search orders, as made clear in the authorities cited earlier, is the preservation of evidence in relation to an identified anticipated proceeding.
Mr McKay emphasises that, as at September 2016 when the search order was obtained, this was put on the basis that there was a strong prima facie case on accrued causes of action in: misleading or deceptive conduct for losses arising from anticipated delays in completion of an acquisition transaction with Moore Stephens; and defamation.
Mr McKay says that the foreshadowed claim for misleading or deceptive conduct under s 18 of the Australian Consumer Law was only said to extend to the first plaintiff (by reference to the plaintiffs' submissions dated 16 September 2016 at [10]-[12]), the potential damage being said to be a concern that the publications may contribute to delay in completion of an acquisition with Moore Stephens (see Mr Doucas' affidavit of 7 September 2016 at [31]-[33]); and that the only claims then foreshadowed on behalf of the second to fourth plaintiffs were claims in defamation (plaintiffs' submissions dated 16 September 2016 at [13]). It is noted that it was said at that time that the plaintiffs intended to commence proceedings once the "identity of the person involved" was known and that, until that was known, the plaintiffs did not have "sufficient certainty to commence proceedings" (see Mr Doucas' affidavit at [34]). Mr McKay emphasises that, despite establishing on 14 and 15 September 2018 (see Ms Zhang's affidavit affirmed 24 January 2018 at [10]-[11]) that Mr McKay was the publisher of the material, the plaintiffs did not at any time commence, and have not commenced, proceedings bringing the claims against him that provided the basis for the making of the search order.
In that regard, it is again pointed out that the Moore Stephens acquisition concluded some three weeks after the affidavit of Mr Doucas of 7 September 2016 was sworn; that Mr Doucas has never filed any further or updating evidence to the effect that there was any other potential damage to the first plaintiff other than that arising from the possibility of delay in completion referenced at [33] of that affidavit; and that it has been conceded that the second to fourth plaintiffs do not intend to bring defamation proceedings in relation to the publications that provided the basis for the making of the search order.
In these circumstances, it is submitted that the conclusion reached in the October 2018 judgment (at [109]) (i.e., that no proceedings in relation to the causes of action in respect of which the documents were originally preserved "are now contemplated" and as a consequence (at [132]) that the search order "has now been spent") remains correct.
Mr McKay notes (as is not disputed) that there is no claim in the Cross-Vested Proceedings in defamation, nor is there any claim seeking relief for misleading or deceptive conduct causing damage arising out of delay in completion of the Moore Stephens acquisition. Mr McKay thus submits that the basis for the search order has fallen away (given that the plaintiffs do not seek to bring proceedings in relation to the causes of action which the Court determined on 16 September 2016 amounted to "a strong prima facie case on an accrued cause of action" pursuant to r 25.20(a) of the UCPR); and says that the causes of action contained within the statement of claim in the Cross-Vested Proceedings are "strained" (including alleged breach of contract claims brought by individuals and entities that were not parties to the contract in question, claims akin to corporate defamation claims and claims of a defamatory character for breaches of the Australian Consumer Law by individuals "designed to resurrect claims that otherwise would be statute barred if brought in defamation") and that would unlikely have provided a basis for the making of a search order had they been foreshadowed at the time the search order was sought.
In this regard, it is said that: the contractual "disparagement" cause of action requires the plaintiffs to overcome difficult privity issues (among other matters), which issues were (for obvious reasons) not identified at the time the search order was made; each claim in misleading or deceptive conduct requires that the specific conduct was in trade or commerce and that the loss claimed was caused by the conduct (and that the fact that the plaintiffs were able to identify an existing issue in September 2016 in relation to the Moore Stephens acquisition cannot be extrapolated to the different claims set out in the Cross-Vested Proceedings);and, despite having this information for over three years, there has been no attempt to quantify any damages said to have arisen in either disparagement or misleading or deceptive conduct (complaint being made that the particulars of damage are "manifestly deficient" in this respect). Insofar as damages are sought by the personal plaintiffs for mental distress, it is noted that there is no evidence of such distress (and it is submitted that their failure to prosecute their defamation causes of action would count against that); and that, in any event, there are "likely to be significant hurdles with obtaining damages for breach of a provision of a contract to which the individuals were not parties".
It is submitted that the differences in the claims now brought from those foreshadowed are such that, if the plaintiffs were to contend that the Cross-Vested Proceedings does in fact represent the pleading of the claims upon which the search order was obtained, this would give rise to the potential for a finding that the Court was misled on the ex parte application for a search order. It is contended that if a contractual claim in disparagement and the other claims contained in the Cross-Vested Proceedings had truly been anticipated, then the plaintiffs had an obligation to put this before Rein J in specific terms so that an evaluation could have been undertaken as to whether those claims amounted to a "strong prima facie case on an accrued cause of action".
Pausing here, I do not understand the plaintiffs' submissions to be that the causes of action now pleaded are precisely the same as those foreshadowed; rather, the argument, as I understand it, is that they are causes of action substantially analogous to the claims foreshadowed (in the case of the disparagement claims now brought) or otherwise falling within the general ambit of that which had been foreshadowed (the misleading or deceptive conduct claims) and are claims arising out of the same, or at least some of the same, material that was relied upon to obtain the search orders in the first place.
Insofar as the first plaintiff claims any losses allegedly arising from diversion of client revenue, it is noted that such claims have already been the subject of a hearing in the Federal Court in March 2019 before Stewart J (albeit that it seems this hearing was confined to a s 500(2) leave application - see his Honour's reasons in Findex Australia Pty Limited v McKay [2019] FCA 335); and that such a claim would give rise to double recovery (and, along with the claims for breach of the employment agreement, would be amenable to being struck out on the basis that they reasonably ought to have been agitated in those proceedings). As adverted to above, it is submitted that if the plaintiffs tried now to obtain an ex parte search order based on the claims in the Cross-Vested Proceedings it is very unlikely that it would be found that they have a "strong prima facie case on an accrued cause of action" as required by r 25.20 of the UCPR.
Thus, it is submitted by Mr McKay that, when considering "the manner in which the documents came to be in possession of the plaintiffs" for the purposes of assessing whether special circumstances are present, the fact that the plaintiffs would not have possession of the documents absent the search order (which was based on strong prima facie causes of action that they have elected not to pursue) must be taken into account.
Mr McKay contends that if the plaintiffs were now to be permitted to have the benefit of the search order to use documents so obtained in order to prosecute more tenuous claims against him, and are only in a position to seek to do so because of the steps taken on the causes of action that are not being pursued, this would amount to a misuse of the search order process. In that regard, Mr McKay invokes the reasoning set out in the October 2018 judgment at [112]-[132]; in particular that at [123]-[124] (see below at [119]).
On that basis, Mr McKay submits that the fact that the plaintiffs only have the documents in their possession via a search order which is now spent, and which was granted in relation to causes of action which they have not prosecuted, should count heavily against the grant of the relief here sought.
As to the other considerations identified in Springfield Nominees (and reiterated in Liberty Finding and Gavan v FSS Trustee), Mr McKay submits as follows.
First, as to the nature of the documents, that they principally comprise email communications (said to be private to Mr McKay and intended only for the recipient) - a matter that would count against a finding of special circumstances, Mr McKay pointing to what was said by Flick J in Metso Minerals at [38], namely that: ... The convenience of the position being advocated by the Applicants may well be understandable, but it is not a sufficient reason to depart from the importance accorded by the common law to an individual's right to preserve the privacy and confidentiality of his own documents. ...
Second, as to the circumstances under which the document came into existence, that the documents were prepared after a time when Mr McKay's employment with Findex had been terminated and the parties were in dispute (this being said also to count against a finding of special circumstances; though I have some difficulty in seeing why this would be so).
Third, as to the attitude of the author of the document and any prejudice the author may sustain, that he (Mr McKay) remains "unreservedly and categorically opposed'' to the release of material seized to the plaintiffs (referring to the affidavit of his solicitor, Mr Bede Webster, affirmed 14 June 2019 at [7]). It is again here submitted that if the present application is permitted, Mr McKay would be being sued on documents that the plaintiffs would not otherwise have known about absent the search order; and that this is highly prejudicial and a strong factor against a finding of special circumstances.
Fourth, as to whether the document pre-existed litigation or was created for that purpose and therefore expected to enter the public domain, it is noted that the documents all pre-existed litigation (and therefore were not created for that purpose) and it is submitted that the documents were not expected to be in the public domain (said again to count against a finding of special circumstances).
Fifth, as to the nature of the information in the document (in particular whether it contains personal data or commercially sensitive information), that (while this would need to be considered on a document by document basis) the documents largely appear to comprise personal communications of Mr McKay which would be expected to remain private (again said to count against a finding of special circumstances).
Sixth, whether it would appear that most if not all of the documents contain information that is publicly available; that the material is not otherwise publicly available and would result in the use of private material (again counting against a finding of special circumstances).
Finally, as to the likely contribution of the document to achieving justice in the other proceeding, it is submitted that the documents are not needed to achieve justice in the other proceeding. It is said that if the causes of action upon which the search order was obtained had been prosecuted, those causes of action would have been determined on their merits; that the plaintiffs are free to bring whatever proceedings they wish based on the material in their possession at the time the search order was obtained; and that Mr McKay will be subject to relevant discovery and other forensic processes in the course of those proceedings. In this regard, it is submitted that the fact that the plaintiffs are not precluded from utilising the ordinary forensic processes available in prosecuting the new proceeding counts against the present application (particularly in circumstances where Mr McKay had offered an undertaking not to destroy any documents whilst the proceeding remained on foot, which offer was not accepted by the plaintiffs) (see the affidavit of his solicitor, Mr Bede Webster, affirmed 14 June 2019 at [8]-[13]). It is submitted again that this counts against a finding of special circumstances.
In addition to the above, Mr McKay emphasises that: first, the 2016 proceedings were only brought by the first, fourth, fifth and sixth plaintiffs joined in the Cross-Vested Proceedings; there is no motion presently before the Court to join the second and third plaintiffs in the Cross-Vested Proceedings to these proceedings; and to grant access to the seized material for use in the Cross-Vested Proceedings would be to extend the use of the material to parties not interested in the orders made in September 2016; second, that the documents in question have been labelled as "undisputed" by the plaintiffs but that this relates simply to the fact that no specific objection was taken by Mr McKay in respect of the penal order to which he was allegedly subject; whereas all documents were produced under protest and that protest is maintained; that, third, that the plaintiffs have consented to the transfer of the Cross-Vested Proceedings to the ACT Supreme Court, where the Court Procedure Rules 2005 (ACT) permit a party to conduct discovery.
As to the Annexure A document, it is submitted that the evidence in support of the application in relation to this document is "entirely deficient, even on an interlocutory application"; that the conversation (at [11] of the 17 June Zhang affidavit) is second-hand hearsay, inadmissible and of very limited utility in assessing an application such as the present (noting that evidence has previously been given on behalf of the second plaintiff when the search order was obtained to the effect that he intended to prosecute defamation proceedings and then elected, for unexplained reasons not to do so). (As to the complaint here made, hearsay evidence on an interlocutory application of the present kind is admissible (though of course the absence of evidence from the second plaintiff himself might be relevant) but in the present case the complaint as to the quality of that evidence must be balanced against the fact that the second plaintiff presently does not know the content of the Annexure A document and hence there is an obvious difficulty (albeit as Basten JA suggested in the Court of Appeal judgment that this may have been due to a self-inflicted wound) for the plaintiffs' legal representatives in seeking informed instructions in that regard.)
In any event, it is emphasised by Mr McKay that this document would not have been in the plaintiffs' possession absent the search order which was based on "strong causes of action" which the plaintiffs did not prosecute; and it is submitted that if a search order were now sought on the basis of this document "it would almost inevitably be refused", particularly given that the limitation period for bringing defamation proceedings has long expired (and, it is said, no evidence has been given that would "remotely" approach the difficult standard required to be met for an extension of the limitation period).
As to the Annexure C document (the personal notebook belonging to Mr McKay), it is said that (and the plaintiffs now appear to accept) this clearly has not been sent to anyone and falls outside the terms of the search order; that there is no basis upon which it should be in the plaintiffs' possession at all; and that it should have been returned after delivery of the October 2018 judgment (it being noted that the reason it has not been returned is the dispute about the steps required to be taken on the part of the plaintiffs to return or destroy documents in their possession or control that were obtained pursuant to the search order).
Complaint is made by Mr McKay that the plaintiffs have made no attempt to explain "why they have evidently been revisiting the contents of documents that were not sent and which they have been ordered to return". It is said (and I consider that this has some force) that the present application for leave to use the Annexure C document is demonstrative of the need to be satisfied that the plaintiffs and their legal advisers no longer retain possession of documents obtained under the search order which have been ordered to be returned (that being the next issue here to be dealt with).
As to the plaintiffs' reliance on the filing of their statement of claim in March 2019 (in the Cross-Vested Proceedings) to warrant a variation of the orders in relation to the Annexure C document, Mr McKay argues that this does not amount to "special circumstances" justifying a different approach to this document, particularly given that the new pleading does not bring the claims in defamation and misleading or deceptive conduct which constituted the "strong prima facie case on an accrued cause of action" providing the foundation for the search order in the first place and given that, if the plaintiffs had complied with the orders made in October 2018, they would not now have a copy of this document in their possession. It is submitted that the filing of the pleading should not result in a finding that a document that should never have been seized under a search order in the first place should now be permitted to be used in other proceedings. Again, it is submitted that the other criteria identified in Springfield Nominees weigh against permitting the use of this private document by the plaintiffs. (Pausing here, the emphasis on changed circumstances by the plaintiffs is, as I apprehend it, at least partly in adoption or reflection of the observations made by Basten JA in the Court of Appeal judgment in relation to the ground of appeal relating to Order 3(ii) of the orders made in October 2018, namely that the filing of a statement of claim might amount to a change in circumstances to support revisiting the interlocutory order (see at [28]).)

Determination

As to the first issue, i.e., whether the Harman undertaking applies at all in the particular circumstances of the present case, the issue that was considered in Gavan v FSS Trustee was as to whether the undertaking applied to the use of the documents in connection with the one set of proceedings, albeit one in respect of which there were two parallel processes involved. As noted earlier, I considered that use of the relevant documents as there proposed would not infringe the Harman undertaking because it was not use for a purpose unconnected with the litigation in the course of which the documents had been required to be produced. I considered that the parallel processes at play in that case were connected in the sense that the documents sought would inform and be relevant to the same primary issue (i.e., that the administrative process of the insurer determining whether to its satisfaction the relevant definition in the policies of total and permanent disablement had been met in that case was not divorced from the claim to be determined by the Court if the insurer's determination were not to be to in favour of the plaintiff; and the same material had the capacity to inform both processes).
The same conclusion cannot in my opinion be drawn in the present case. I accept that there may have been sufficient interconnectedness between, on the one hand, the bringing of the preliminary discovery application (and subsequent application in those proceedings for search orders to preserve evidence) necessary to ascertain the publisher of the allegedly misleading or deceptive and/or defamatory publications and, on the other hand, proceedings subsequently instituted to prosecute the very claims that had been foreshadowed in relation to the publications on which reliance was there placed. However, that is not what has here occurred. Rather, the plaintiffs now seek to use material obtained under the search order process for the purposes of prosecuting other claims that (albeit having the same conceptual basis or relying on a similar factual basis) are not those in respect of which it was accepted that there was a strong prima facie case at the time. I do not consider it to be to the point to argue, as the plaintiffs do, that had a different forensic decision been taken at an earlier time or had a different view been taken of the steps then to be taken in the preliminary discovery proceedings, the claims now made might have been able to be brought in the same set of proceedings.
I accept that the Moore Stephens acquisition was the instance of perceived damage relied upon in support of the prima facie case argued for misleading or deceptive conduct when the search order was sought; and that it does not necessarily represent the limit or ambit of what was contemplated might be the subject of a misleading or deceptive conduct claim. However, to my mind, that points to the difficulty in establishing that there is a sufficient interconnectedness between the claims then contemplated (for the preservation of evidence in relation to which the search order was sought) and the claims now brought.
To the extent that the plaintiffs were aware (and in possession at the time) of disparaging publications that they contended were misleading or deceptive and gave rise to a complete cause of action at that point, it is difficult to see the need for any orders for preservation of that evidence at all; and they certainly cannot have contemplated other disparaging communications of the kind that have been discovered through the search order process (though they certainly contemplated that there might be other such communications - insofar as they made clear that they did not know what other defamatory publications may have been made). All this is redolent of a discovery exercise, not a document preservation exercise.
I thus find that the Harman undertaking does continue to apply.
Turning then to whether, as a matter of discretion, there should be a release from that undertaking, I adhere to the views expressed in the October 2018 judgment (reiterated above) as to the purpose of search orders and the manner in which that informs the use that can be made of documents so seized. As I there noted, the purpose of search (or Anton Piller) orders is to secure or preserve evidence so that it may be available at trial (see UCPR r 25.19 and Practice Note SC Gen 13) (not to ascertain what documents might be available to support a case). Such orders are not to be used as a mechanism by which a party may gain authorisation to attend on a "fishing expedition" in order to find out what claims it may have against its opponent (see Hytrac Conveyors Ltd v Conveyors International Ltd [1982] 3 All ER 415 at 416-417).
The "extraordinary" nature of relief pursuant to UCPR r 25.19 is expressly recognised in Practice Note SC Gen 13 and has long been recognised by courts (see Long v Specifier Publications Pty Ltd (1998) 44 NSWLR 545 Powell JA; Microsoft Corp v Goodview Electronics Pty Ltd [1999] FCA 754; (1999) 46 IPR 159 (Microsoft v Goodview Electronics) per Branson J). (See also in this regard, Metso Minerals at [24]-[27]; Universal Music Australia Pty Ltd v Sharman License Holdings Ltd [2004] FCA 183; (2004) 205 ALR 319 at [53]-[58]; Brilliant Digital Entertainment Pty Ltd v Universal Music Australia Pty Ltd [2004] FCAFC 270; (2004) 63 IPR 373; Thermax Ltd v Schott Industrial Glass Ltd [1981] FSR 289 at 291; and Bugaj v Bates [2004] FCA 1260 (Bugaj v Bates) at [13] per Stone J). The power to grant a search order is based on the need to protect the Court's ability to do justice between the parties (Anton Piller KG v Manufacturing Processes Ltd [1976] Ch 55; [1976] 1 All ER 779).
In Metso Minerals, Flick J stated (at [36]) that access to documents seized pursuant to a search order "should be confined to the purpose for which that power was conferred". The submissions for the plaintiffs on the present application again to my mind conflate the purpose of the search order with the function of discovery. In Metso Minerals (at [34]), Flick J warned that construing search order provisions as extending to such a purpose would erode the importance attached by the common law to protecting the privacy of individuals and the constraints otherwise imposed by the rules governing the discovery process.
At [123]-[124] of the October 2018 judgment, I said: The plaintiffs maintain (see T 11.15) that the purpose of the search order was that of "obtaining documents for use in anticipated proceedings including, but not limited to, the proceedings of the kind that were identified at the time" and that this purpose will not be fulfilled "until the plaintiffs have looked at the documents". That, to my mind, conflates the purpose of preserving evidence (for use in anticipated proceedings) and the function of inspection of that material (as to which it is clear there is no absolute right). It is not a purpose or object of search order provisions to facilitate discovery processes otherwise authorised by rules or to facilitate the provision of further particulars. … … [I]t is not a purpose or object of search order provisions to permit a plaintiff who believes that there has been an vindictive campaign made against it, him or her, the luxury of trawling through a mass of documentation that would not otherwise have been available to it, him or her at this stage, whether that be to see what else was said about it, him or her that might be defamatory or might otherwise support some other potential cause of action.
That reasoning was noted with approval by Basten JA (Sackville AJA and Emmett AJA agreeing) at [26] of the Court of Appeal judgment, his Honour going on to say that: There was an additional problem with this aspect of the application: as the primary judge correctly accepted, the purpose of a search order pursuant to r 25.19 is to secure or preserve evidence, not to provide discovery, whether at a preliminary stage or in the course of proceedings. Counsel for the applicants was at pains to avoid reference for this purpose to the terms of r 25.19. It provided, he submitted, no guidance as to what was to be done with the documents once seized in terms of access and inspection. That is only true to the extent that one finds no assistance from the express identification of the purpose of a search order. Having regard to that purpose provides an implied constraint on the use which is to be made of the seized documents. The present application appeared to be an opportunistic form of fishing expedition, seen to be available because the documents to be reviewed were available. ...
That, to my mind, is exactly what has here occurred. The plaintiffs' legal representatives have trawled for some time (punctiliously, in their Counsel's own words, and no doubt at not inconsiderable expense) through the documents in order to marshal evidence which is now sought to be used to support claims against Mr McKay of whatever description can be accommodated to meet that evidence - so much was evident from the evidence on the last occasion the matter was before me when consideration was given to over two dozen potential categories of claims based on the seized documents. That exercise has been carried out with the benefit of documents obtained under the (well-recognised as draconian) search order regime (the execution of which process has been demonstrated to be flawed at least insofar as a volume of material is conceded to have been seized that is irrelevant and, significantly that includes the Annexure C document, not within the terms of the search order at all). As to those documents, they were required to be returned and have not been returned for reasons apparently due to a failure of the parties to reach agreement on the terms of their return or destruction. That there was a failure on the part of the parties co-operatively to reach agreement is not an invitation to the plaintiffs to seek now to use documents that should never have been seized in the first place.
The submissions made for the plaintiffs on the present application (particularly in relation to the Annexure C document) seek in my opinion improperly to use the relief authorised by r 25.19 of the UCPR to become an investigatory tool (Metso Minerals at [36], [43], [49]; Re Lamond (No 4) [2017] FCA 820 at [20]; Microsoft Corp v Goodview Electronics at [26]; Bugaj v Bates at [13]).
Relevantly, the reliance sought to be made of the Schedule A documents is as particulars of the allegation at [106] of the proposed amended statement of claim in the Cross-Vested Proceedings that: During the period from at least March 2014 until a Search Order was executed against McKay at his home on or about 20 September 2016, McKay engaged in a sustained and concerted campaign of disparagement and vilification against the plaintiffs.
That "campaign of disparagement and vilification" is alleged to be in trade and commerce ([107] of the proposed amended statement of claim), notwithstanding cl 12 of his employment contract and deceptive or misleading in contravention of s 18 of the Australian Consumer Law.
The reliance sought to be made of the Schedule B documents is as particulars of the allegation at [109] (more aptly described in my opinion as a submission) that, if not permanently restrained by order of the Court, it is reasonable to infer that Mr McKay will continue to pursue his campaign of disparagement and vilification against the plaintiffs (those Schedule B documents to be read together with the Schedule A documents).
Turning to the factors enunciated in Springfield Nominees and approved in Liberty Funding, I have already noted the parties' respective submissions in that regard. I address each of the factors, briefly, as follows.
As to the nature of the documents, this to my mind is clear: they are, on the whole, private email communications from Mr McKay to one or more recipients. They do include, however, communications by Mr McKay as to complaints made to ASIC (which are less capable of being described as private communications - since, presumably, Mr McKay intended the complaint(s) to be acted upon) and they also include the Annexure C document which was not sent to anyone and is more akin to a personal diary. For the bulk of these documents (other than perhaps the ASIC complaints and the Annexure C document), I would accept that this factor tends against a finding of special circumstances warranting a release from the Harman undertaking.
As to the circumstances in which the documents came into existence, I do not see any relevance in the fact that they were brought into existence after Mr McKay's employment ceased (other than insofar as this means they were in existence before the commencement of the litigation between the parties - that being a separate factor to be considered). While the cessation of Mr McKay's employment might well explain the dissatisfaction evident in a number of the communications, it does not in my opinion relevantly inform the present enquiry.
As to the attitude of the author, this is clear. He is implacably opposed to the use of the documents (no doubt for obvious reasons) and is demanding their return. As to the prejudice he may sustain from the release of the undertaking, this is obviously his exposure to further litigation and costs (although he is already exposed to this); it is not suggested that there is any other prejudice (such as exposure to criminal sanctions or the like). I regard these factors as largely balancing each other out.
As to whether the documents existed pre-litigation, as already noted they clearly did. As to whether it was expected, or might reasonably have been expected, that they might enter the public domain, to some extent it might be thought that complaint documents or the like (or the information contained in them) would in some fashion enter the public domain (since presumably the objective of making a complaint was to initiate some sort of investigatory process that might well have ended up in the public domain) but I accept that the bulk of the documents would not fall in that category (and this is particularly so in the case of the Annexure C document). Personal notebooks or diaries (unless used for journalistic or literary purposes or contained in a readily accessible social media format - such as a Facebook entry or blog) would in my opinion surely not ordinarily be expected to fall into the public domain.
As to the content of the documents, some contain what might be said to be commercially sensitive material (though since this material relates largely to Findex or its operations, and Findex is the party seeking to use the material, I would discount this as a factor); but much appears to contain personal opinions and the like (and to be self-serving and self-promotional in content). I am inclined to the view that this factor is largely neutral in relation to any finding of special circumstances warranting a release from the Harman undertaking.
As to the circumstances in which the documents came into the plaintiffs' hands, I consider that this is a factor which strongly tends against a finding of special circumstances. These documents are only in the plaintiffs' solicitors' hands because of the search orders that have been made (and, in the case of the Annexure C document, should never have been seized). I have already made clear my views (supported by reference to the authorities on this point) as to the proper purposes of a search order of this kind. I am concerned at the time and expense that has been incurred in the course of this litigation - particularly, in circumstances where a release from the Harman undertaking was foreshadowed and then not pressed (on the basis that it was necessary for the plaintiffs' solicitors first to obtain instructions from their clients in relation to the documents) and only then quite some time later revived. The long drawn out nature of the litigation in this case (particularly having regard to the recognition in the authorities as to delay in litigation, to the stress imposed on those who are participants in the litigious process) is hardly to be encouraged.
As to the likely contribution of the documents to achieving justice in the Cross-Vested Proceedings (or the Defamation Proceedings), I see a distinction between the various documents.
As to the Identified Undisputed Documents referred to at [10] of the 17 June Zhang affidavit (leaving aside for the moment the Schedule A and Schedule B documents), those documents in one form or another are already part of annexures to the existing pleading (though not yet strictly in the public domain as the pleading is not publicly accessible to third parties without leave). Once the proceedings come to the point of a contested hearing (if not before) those pleadings and the documents annexed thereto will be in the public domain (absent some form of suppression or non-disclosure order). Two things may here be said: first, that given that they are in substance already annexed to the statement of claim, it is difficult to see how further copies are necessary to achieve justice in the proceedings; second, that, by the same token, it is difficult to see how, in circumstances where the same or similar documents will already be in the public domain sooner or later, prejudice will be suffered by the release of the Harman undertaking in respect of those documents.
Balancing the above factors, insofar as the Identified Undisputed Documents are in substantially the same terms as documents currently forming parts of annexures to the statement of claim in the Cross-Vested Proceedings (see [11] of the 7 June Zhang affidavit), although it is difficult to see how it can be said to be in the interests of justice that the plaintiffs be permitted to rely upon such documents in circumstances where it appears they have been perfectly capable of pleading a claim without reference to such documents, I would grant a release of the Harman undertaking to permit their use in the Cross-Vested Proceedings and/or the Defamation Proceedings (since it is difficult to see any real prejudice that will be caused by their use in those proceedings in addition to documents already capable of use in those proceedings).
The documents in Schedules A and B are in a different category. They are a mixture of documents; not identified by reference to specific categories or with specificity as to their use. To some extent they seem to be mirrored in the Annexed Documents; at least some (a few) may be privileged (see items 1 and 2, Schedule B); others seem wholly irrelevant to any pleaded issue (see items 74 and 77, Schedule A). It is not incumbent on the Court (nor was it suggested that I do so - unless I so wished) to trawl through each of the documents in order to ascertain whether use of one or more of the documents would be necessary to achieve justice in the proceedings; and the submissions of the plaintiffs appear to focus on the collective documents rather than individual documents in any event. As it is, I have read through three volumes of the documents printed (at my request by the plaintiffs' solicitors) from the USB provided to me at the time of the hearing. My review of those documents is what has informed the characterisation of them as set out above. I have concluded that there is insufficient material in those documents (taken as a whole) to warrant a conclusion that it is in the interests of justice that there be a release from the Harman undertaking in relation to those documents; and I am not persuaded that the necessity to make use of each of those documents has been sufficiently explained to lead to the conclusion that special circumstances have been established for the release of the Harman undertaking.
Insofar as the Annexure A document is concerned, I would give leave for the use of that document. The reason for this is that, unlike the balance of the documents, access to and use of this document is essential to the prosecution of any defamation claim arising out of its publication. While I say nothing (nor would it be appropriate here to do so) as to the merits of any such claim, I am not prepared to shut the second plaintiff out of such a claim at this stage; nor do I consider it to be in the interests of justice here to do so.
Insofar as the Annexure C document is concerned, I refuse leave for the use of that document. It should not have been seized in the first place (and should have been returned well before now). The attempt to make use of it is no more than an opportunistic attempt to make use of material that should not have been in the plaintiffs' possession at all. I do not consider that the fact that a pleading has now been filed in the Cross-Vested Proceedings is a sufficient change in circumstances to warrant revisiting my conclusion that the document should be returned but, in any event, I have reviewed the position in light of the so-called changed circumstances and I am not persuaded that leave to use that document should be granted (hence, it should now be returned). Particularly in circumstances where it is a hard copy document, I fail to see how difficult it would be for the document now promptly to be returned and any copies of it deleted or destroyed (though I accept there may be more issues with the electronic deletion of any copies made electronically of that document).

Orders sought regarding the return of documents

Turning then to the final issue presently in dispute, as to the orders made for the return of documents, I note that Order 3 made in October 2018 was as follows: 3. Direct that all electronic and hard copies of the following documents held by the plaintiffs, any of their legal advisers, the independent solicitor and/or the independent computer expert obtained pursuant to the search order made on 16 September 2016 by Rein J be returned to the fourth defendant within 7 days in accordance with a mechanism to be agreed between the parties (or, failing agreement, to be determined by the Court following brief submissions by the parties in relation thereto): (i) all documents which the plaintiffs admitted in the course of the hearing of the respective notices of motion were of no relevance; (ii) all documents identified by the fourth defendant in the annexures to his affidavit of 31 October 2016 as being documents not "sent or forwarded or otherwise provided" by him to any other person and therefore not authorised by the said search order.

Mr McKay's submissions

As noted earlier, Mr McKay emphasises that the search executed pursuant to the search order was under protest (as noted by Rein J on 22 September 2016) and that in his 31 October 2016 notice of motion about 75% of the documents seized were identified as being in dispute. It is noted that a strict confidentiality regime was put in place to allow the plaintiffs and their advisers reasonable access to the documents while the dispute regarding the documents was determined.
In these circumstances, it is submitted that it is entirely reasonable to expect that the plaintiffs and their legal representatives should have dealt very carefully with the material subject to the confidentiality orders. Hence, it is said that (although acknowledging that the proposed regime for return of the documents proposed by the fourth defendant is demanding "in some respects"), the regime could easily have been implemented had the plaintiffs and their legal advisers employed reasonable data protection techniques in the first place. Mr McKay says that he has had no control over the use of his documents in the hands of the plaintiffs and their legal representatives and that any failure of the internal processes on the part of the plaintiffs is not his issue. It is said that the need for appropriate handling of the documents in question was clear to the plaintiffs and their legal advisers from the outset and that it was incumbent on them to ensure that their handling of the documentation obtained under compulsion "in highly contentious circumstances" could later be altered by Court order. Mr McKay seeks, so far as reasonably possible, to have the documents completely removed from the plaintiffs' (and their lawyers') computer systems so that the chance of recovery of deleted documents is practically impossible (arguing that the threat of recovery of deleted documents is "real, tangible and well understood"). Mr McKay thus seeks orders for the return of the documents in the form proposed in his submissions dated 9 November 2018 (see below).
Mr McKay submits that there is no justification for the plaintiffs not fully to comply with Order 3 of the orders made last year, regardless of how onerous such compliance may be claimed to be.
The orders proposed by Mr McKay are as follows: 1. The plaintiffs are to collate and serve on the fourth defendant within 7 days (i) a list of all persons (Recipients) to whom copies of documents seized pursuant to the search order made 16 September 2016 were given by or on behalf of the plaintiffs; (ii) a list of all documents subject to Order 3 of the court made 9 October 2018 (Subject Documents); (iii) the proposed software to be used to permanently [sic] erase electronic copies of Subject Documents; and 2. Within 14 days of compliance with Order 1 above, the plaintiffs are to: (i) Return to the fourth defendant any Subject Document being an original hardcopy document; (ii) Collate a list of all physical copies of any Subject Documents; and (iii) Conduct a search of all electronic media, including removable storage devices, servers, computer hard disks, cloud storage, email accounts, smart phones, tablets, backup media, compact disks and DVDs (Electronic Media) accessible by or used by each Recipient for each Subject Document. 3. All physical copies of any Subject Documents are to be destroyed by shredding. 4. To the extent possible, any copy of any Subject Document found is to be erased in a manner that removes permanently the actual contents of the document from the media on which it is stored. 5. To the extent that it is not possible to permanently [sic] remove the actual contents of a document from any electronic media containing a Subject Document, the electronic media is to be destroyed. 6. Within 21 days of compliance with Order 1 above, each Recipient is to execute an acknowledgement stating: (i) that they have identified all Electronic Media to which they have had access since 16 December 2016 on which Subject Documents may be stored; (ii) that if any copies of Subject Documents are discovered at a later time, the Electronic Media on which the Subject Documents are found is to be provided to the plaintiffs for the purposes of compliance with Orders 3 and 4 above; (iii) that the Subject Documents remain confidential and are not to be used for any purpose. 7. The plaintiffs are to keep records of each copy of each Subject Document found, the Electronic Media it was found on (if relevant), and the manner in which the Subject Document was erased or destroyed or the Electronic Media destroyed. 8. Within 28 days of compliance with Order 1, the plaintiffs are to serve on the fourth defendant copies of: (i) The acknowledgements referred to in Order 6 above; and (ii) The records referred to in Order 7 above. 9. For the purposes of these orders, the plaintiff is to make due enquiries of: (i) their own officers, employees and contractors; (ii) the officers or principals, employees and contractors of Harmers Workplace Lawyers; (iii) any external contractors used to copy or reproduce any Subject Documents or parts thereof; iv) any barristers and their support staff to whom access to Subject Documents was given; (v) the Independent Solicitor, including any other members of the Independent Solicitor's firm who may have had access to the Subject Documents; (vi) the Independent Computer Expert, including any other members of the Independent Solicitor's firm who may have had access to the Subject Documents. 10. To the extent that the plaintiffs are not able to fulfil the terms of orders 1 to 8 above in respect of any potential recipients as listed in Order 9, the plaintiffs are to provide a list of those recipients to the fourth defendant. 11. Within 42 days of the date of these orders, the plaintiff's solicitor on the record is to file and serve an affidavit setting out particulars of compliance with each of the Orders 1 to 10 above.

Plaintiffs' submissions

The plaintiffs submit that the regime proposed by Mr McKay in his submissions dated 9 November 2018 is excessive, unduly oppressive and unreasonable in the circumstances, and so ought not be made. The plaintiffs submit that it would be most consistent with s 56 of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act) for the regime proposed by the plaintiffs to be adopted. That regime is as follows: 1. In so far as it relates to the hard copies of the documents that are to be returned pursuant to Order 3 (Subject Documents): (a) the actual physical documents seized on the night of the search order that are in the possession of the independent solicitor (IS) or the independent computer expert (ICE) will be returned to the fourth defendant's solicitors; (b) any other hard copy of the Subject Documents (that is, any hard copy of any physical document seized, including any hard copy of any such document generated by computer) which remain in the possession of the IS, the ICE or Michael Doucas of the plaintiffs will be returned or destroyed; (c) save for any Subject Documents: (i) which have been printed as an attachment to emails either sent or received by Harmers Workplace Lawyers (Harmers), solicitor for the plaintiffs, for the purposes of Harmers' physical file; and (ii) that have been printed and currently appear as an exhibit or annexure to any affidavit filed in this matter or is part of a tender bundle; Harmers will return or destroy all other hard copies made of the Subject Documents (including copies provided to Counsel) in the possession, custody or control of the plaintiffs' legal representatives. To the extent that the Subject Documents identified in (A) and (B) will be retained by Harmers, these copies will be securely and confidentially stored. 2. In so far as it relates to the soft (or electronic) copies of the Subject Documents: (i) any storage devices seized on the night of the search order that are in the possession of the IS or ICE be returned to the fourth defendant's solicitors; (ii) any other soft copy of the Subject Documents which remain in the possession of the IS or the ICE will be deleted to the extent it is reasonably feasible or practicable to do so; (iii) any other soft copy of the Subject Documents which remain in the possession of Mr Doucas of the plaintiffs will be deleted to the extent it is reasonably feasible or practicable to do so; and (iv) any other soft copy of the Subject Documents which remain in the possession of Harmers will be deleted to the extent it is reasonably feasible or practicable to do so (except for any soft copies that are part of any exhibits or annexures to any affidavits filed in this proceeding). To the extent that any documents cannot be deleted, they will be stored securely and confidentially.
The plaintiffs seek two weeks after the relevant orders are made to implement the return and deletion regime. It is submitted that it will take considerable time to locate and delete or return the "Subject Documents" given the volume of documents involved and the fact that the matter has been on foot since 2016, with many litigation steps since 2016 involving the consideration or use of the Subject Documents.
The plaintiffs say, by way of explanation, that: some of the Subject Documents appear in hard and soft copy as exhibits to affidavits filed in this proceeding and, if documents were removed from the exhibits, the plaintiffs would not have a complete record of the affidavits and exhibits filed and served in this proceeding (and that this may be problematic for the legal representatives of the plaintiffs, who require retention of such records for costs and professional indemnity purposes); in respect to soft copies of the Subject Documents, there will be some documents which may not be feasible or practicable to delete (for example, some of the documents are attachments to emails and such emails are stored on Harmers Workplace Lawyers' (Harmers) (the plaintiffs' solicitors) electronic file) and again a copy of the emails will be required to be retained for costs or professional indemnity purposes; to the extent that it is not feasible or practicable to delete soft copies of the Subject Documents, Harmers will ensure that such soft copies in the possession of Harmers will be secured, with access being provided only to IT personnel, those solicitors with daily carriage of this proceeding, and only such other administrative staff as are necessary for the maintenance of the electronic file.
The plaintiffs submit that the above regime is the most efficient regime for the return or deletion of the Subject Documents and also strikes the appropriate balance in addressing any practical difficulties arising from deletion or return of the Subject Documents. Further, it is submitted that any Subject Documents retained by Harmers would be subject to the existing confidentiality regime and the implied Harman undertaking, so the confidentiality of the documents would continue to be protected.
In determining what is fair, reasonable and appropriate in relation to the return or destruction of the Subject Documents, the plaintiffs submit that: the Subject Documents were obtained in good faith as a result of a Search Order duly obtained by reason of what was held to be the "clandestine, anonymous [and] at least on the face of things ... dishonest" way Mr McKay published "very damaging comments about the plaintiffs … to a number of different people" to enable the plaintiffs to "obtain information as to whether or not [Mr McKay] has communicated in similar terms to other persons"; the Subject Documents are not commercially sensitive or privileged (nor are they personal or private documents in any conventional sense), rather (apart from the irrelevant documents that are of no moment) as anticipated when the Search Order was obtained, the documents are in similar terms to the documents which gave rise to the search order, and are relevant to matters in the Cross-Vested Proceedings for deceptive and misleading conduct, and for disparagement in breach inter alia of contractual obligations. It is submitted that, subject to any Harman application in due course, the Subject Documents will be discoverable in the Cross-Vested Proceedings (other than those conceded to be irrelevant "which are manifestly not documents of any moment").
It is said that Mr McKay is in fact in possession of a "copy of each and every one" of the Subject Documents; and that it has not been contended, and nor could it be contended, that Mr McKay is suffering any prejudice in any relevant sense by reason of the non-return or non-deletion of any of the Subject Documents. Thus, it is submitted that there will not be any prejudice to Mr McKay in any relevant sense if the regime proposed by the plaintiffs is adopted.
The plaintiffs argue that the regime proposed by Mr McKay is overly complex and unnecessary; and goes beyond the scope of what was intended by Order 3 in respect to the return of documents.
Complaint is made as to the requirement for a list of all persons to whom copies of documents seized pursuant to the search order were given by or on behalf of the plaintiffs, which it is said goes beyond the intended scope of Order 3. It is submitted that this list would include those persons who were provided with search order documents that are not Subject Documents, including persons who have had access to search order documents over which there is no dispute or restrictions in respect of access but who have not had access to the Subject Documents; and that there is no reason why such a list is necessary.
Insofar as Mr McKay seeks that a specific software be used to permanently erase electronic copies of Subject Documents, it is said that this requirement is onerous, overly restrictive and unnecessary in the circumstances. It is said that it is possible permanently to delete soft copy documents (other than potentially email attachments) from the Harmers' electronic file manually without the need for specific software. The plaintiffs submit that there is no reason to suggest that the plaintiffs (or their lawyers, the independent solicitor or the independent computer expert) would seek to recover the Subject Documents once deleted, unless permitted to do so and that the plaintiffs should not be put to the expense of using certain software to delete the relevant documents in the circumstances.
It is said that retention of any soft copies of Subject Documents in any 'backups' is not of concern since the Harmers back-up system refreshes every two weeks (meaning that if all Subject Documents are deleted from the Harmers electronic system, after two weeks, they will not be able to be retrieved from any back-ups).
It is asserted that the suggestion that the Electronic Media (as defined) be destroyed if it is not possible permanently to remove the actual contents of a Subject Document would result in the destruction of the entire Harmers electronic system, containing hundreds of thousands of client matters, and cause significant detriment to thousands of Harmers' clients, who are not parties to this litigation, who would not be able to have their matters progressed either at all or for some time due to the deletion of their files; and that the destruction of the Harmers' electronic system could also cause "millions of dollars of damage". Similar complaint is made as to the impact on the plaintiffs' Counsel, the independent solicitor and the independent computer expert. It is said that such a regime is entirely unnecessary; manifestly inappropriate; and inconsistent with the overriding purpose of the Civil Procedure Act and the UCPR. It is submitted that the costs would be absurdly disproportionate to any potential legitimate benefit to any person.
In respect to the proposal that each recipient execute an acknowledgement, it is noted that a number of lawyers who have had access to the Subject Documents whilst employed at Harmers have since left the employ of Harmers. It is said that it would be going beyond what is reasonably necessary to seek that each of those persons identify the Electronic Media to which they have had access and to execute an acknowledgement in the terms proposed; and that the independent solicitor and the independent computer expert may also have similar issues and may wish to be heard on some of those issues. Again, it is submitted that such a regime is entirely unnecessary and would be manifestly inappropriate.
It is noted that the orders made on 17 July 2017 by consent in relation to the deletion of soft copies of a document the subject of public interest immunity that was accidentally provided to Mr Doucas and the lawyers for the plaintiffs (that in respect to any copies of the relevant document that are in soft or electronic copy and cannot be returned, "such copies of those documents are to be deleted, to the extent that it is reasonably feasible and practicable to do so") would here be appropriate. It is submitted that, given the willingness of ASIC (as accepted by the Court) to deal with return and deletion on that basis in respect to a document subject to public interest immunity, a more onerous regime than that applied in relation to the public interest immunity document should not be imposed.
It is submitted that the Subject Documents are not documents of a similar calibre as documents held to be subject to public interest immunity; that the Subject Documents are primarily communications from Mr McKay to others about one or more of the plaintiffs, documents of or about one or more of the plaintiffs, or are otherwise draft documents "or documents that are not of much consequence". It is said that the Subject Documents are not privileged or commercially sensitive documents, and there is no reason to impose a regime that would be more onerous than that imposed for a document found to be the subject of public interest immunity.
The plaintiffs contend that their legal representatives and Mr Doucas did keep the Subject Documents confidential; and that, to the extent that the Subject Documents were kept on an electronic file on the Harmers computer system, access to the electronic file was restricted to maintain confidentiality. It is noted that the relevant confidentiality orders restricted disclosure of the Subject Documents to the plaintiffs (other than Mr Doucas), but did not restrict the manner in which the legal representatives of the plaintiffs ought to have maintained the Subject Documents, or provided the Subject Documents to Counsel, Mr Doucas or the Court.
It is further noted that, since the commencement of the proceedings in 2016, there have been a significant number of litigation steps which have involved the Subject Documents in some way, including: the Subject Documents were required to be reviewed following receipt of some for the purpose of ascertaining the real issues in dispute; the Subject Documents formed part of the evidence filed in relation to ASIC's public interest immunity claim; the Subject Documents formed part of the evidence in respect to the plaintiffs' application for a variation of the interim confidentiality order; and the Subject Documents have been reviewed for the purpose of the plaintiffs' Harman application.
The plaintiffs maintain that it was necessary, from time to time, to isolate specific documents and send the same by email for the purpose of progressing the preparation of evidence and obtaining instructions and that it would not have been reasonable or efficient for the plaintiffs' solicitors to have provided specific Subject Documents to Counsel or Mr Doucas (who resides interstate) on USB on each relevant occasion, as contended by Mr McKay. It is said that such an approach, particularly in the circumstances of this case, would not have been consistent with the overriding purpose of the Civil Procedure Act and the UCPR.

Determination

As to the regime proposed for the return/destruction of documents, it is difficult to resist the conclusion that part of the motivation underlying Mr McKay's desire to cross every "T" and dot every "I" in this regard arises from the circumstances in which this litigious saga has unfolded; and I accept that the plaintiffs' belated application to make use of the Annexure C document can only have reinforced that. However, I also consider that there is force to the submission made for the plaintiffs that the regime now proposed is unduly complex and onerous (however necessary it might be if one were to have one hundred percent confidence that no document was retained anywhere in any shape or form by any of the plaintiffs' representatives or persons involved in these long drawn-out proceedings to date).
I am therefore not prepared to impose the regime sought by Mr McKay but nor do I consider that Mr McKay should be required in effect to accept the protestations of the plaintiffs as to compliance with orders for return/destruction of the copies (particularly in light of what has transpired in relation to the Annexure C document). I consider that a further independent computer expert should be appointed, at the plaintiffs' cost, to verify the deletion of all electronic copies of the documents and that suitable undertakings or certification should be received from the plaintiffs' legal representatives as to their non-retention (which will give Mr McKay comfort as to their non-use in the future) of any hard or electronic copies of the documents now to be returned.
Insofar as the plaintiffs' lawyers have maintained that it is necessary for there to be a complete record of the entirety of the court documents and files (including a copy of the information required to be deleted or returned) that would seem to me to defeat the purpose of requiring the return or deletion of the documents and does not take into account the reliance here sought to be placed on documents (or at least the Annexure C document) that in my opinion should already have been returned. It seems to me (with the qualification that I add below) that this concern would adequately be dealt with so far as any record of the proceedings so maintained by the plaintiffs' legal representatives is redacted to remove the content of the documents in question. So, for example, it would be clear from an affidavit retained by the plaintiffs' representatives that there were, say, 100 pages of documents annexed thereto but the description and content of those documents should be purged from the record. The independent computer expert now to be appointed could verify this (or an independent solicitor could be appointed at the plaintiffs' cost to do so).
The qualification I add to this is that I consider that Mr McKay's legal representatives should retain a complete record of the material served or filed in the Court proceedings at least for the duration of the respective sets of proceedings now on foot (such that, if necessary, access could be made to that in the future whether for costs assessment purposes or otherwise). An undertaking to that effect (in relation to the Annexure C document) was proffered by the solicitors and I consider that such an undertaking is acceptable (though I will require an extension of the undertaking to cover not just the Cross-Vested Proceedings but also the Defamation Proceedings now on foot).
Therefore, since the parties have been unable co-operatively to agree a regime for the return/destruction of the documents the subject of Order 3(ii) of my previous orders, I will make directions to put in place a regime that I consider adequately addresses both sides' concerns (though no doubt will be less than each side desired).
Finally, as to costs, I consider that the appropriate order to be made is that the plaintiffs should pay 80% of the fourth defendant's costs of the plaintiffs' notices of motion (since I have concluded that it was necessary for the plaintiffs to obtain leave for the release of the Harman undertaking and since they were unsuccessful in obtaining that leave in respect of the bulk of the documents) and that each party should bear his or its own costs of Mr McKay's notice of motion (since the need for that application was ultimately a result of the inability of the parties to reach agreement on the regime for the return or destruction of the documents in question and both sides bear a portion of responsibility for that failure).

Orders

For the reasons set out above, I make the following orders: 1. Grant leave to the plaintiffs to use those documents obtained pursuant to the search orders dated 16 September 2016 copies of which are annexures B1, B2, E1, E2, E3, E4, E5, E6, E7, E8, E9, E10, E12, E13, E14, E15, E16, E17, F1, G1, G2, J1, J2, J3, J4, J5, J6, J7, J8, J9, J10, J11, J12, J13, J14, J15, L1, and M1 to the proposed amended statement of claim exhibited behind Tab 4 of Exhibit ASZ-17 to the affidavit affirmed 7 June 2019 of Amy Siyi Zhang (the Annexed Documents as defined in these reasons) for the purposes of proceedings 2019/00067900 (being the proceedings have been cross-vested to the Supreme Court of the Australian Capital Territory by order made by Robb J on 20 June 2019) (the Cross-Vested Proceedings), and for the purposes of the proceedings that have now been commenced in this Court by leave granted on 15 July 2019 (the Defamation Proceedings). 2. Grant leave to the plaintiffs to use the document comprising the email chain annexed as Annexure A to the affidavit affirmed 17 June 2019 of Amy Siyi Zhang for the purposes of the Defamation Proceedings. 3. Otherwise dismiss each of the amended notice of motion filed 4 July 2018 and the notice of motion filed 17 June 2019 by the plaintiffs in these proceedings. 4. Confirm Order 3(ii) made on 19 October 2018 as to the classes of documents required to be returned and/or destroyed (including, for the avoidance of doubt, the document annexed as Annexure C to the affidavit affirmed 17 June 2019 of Amy Siyi Zhang); extend that order to cover all documents seized pursuant to the search orders made in September 2016 other than documents for which leave to use the documents is here given; and otherwise dismiss the notice of motion filed on 31 October 2018 (and amended on 19 February 2019) by the fourth defendant. 5. Order that the return and/or destruction of the documents referred to in Order 4 above (the Subject Documents) be implemented in accordance with the following regime: 1. Within 14 days, the plaintiffs are to cause the return to the fourth defendant's solicitors of the actual physical documents seized on the night of the search order that are in the possession of the independent solicitor or the independent computer expert. 2. Within 14 days, the plaintiffs are to cause the return to the fourth defendant's solicitors or the destruction by shredding of all hard copies of the Subject Documents (that is, any hard copy of any physical document seized, including any hard copy of any such document generated by computer) which are in the possession of the independent solicitor; the independent computer expert, Mr Michael Doucas of the plaintiffs, or otherwise within the care, custody or control of any of the plaintiffs or the plaintiffs' legal representatives or other advisers or consultants of the plaintiffs. 3. Within seven days, the parties are to agree the identity of an independent computer expert (or, failing agreement, the plaintiffs and the fourth defendant are to provide to my Associate within the said period the names of three proposed independent computer experts (with their respective curriculum vitae)) to be appointed at the plaintiffs' cost to supervise the destruction of all electronic copies of the Subject Documents. 4. The nominated independent computer expert is to be retained jointly by the parties, at the plaintiffs' expense, to take the following steps (each to be completed within 28 days): (i) advise as to the appropriate software to effect the permanent destruction of all electronic copies of the Subject Documents in the possession, custody or control of any one or more of the independent expert, the independent computer expert initially appointed at the time the documents were seized, Mr Doucas, the plaintiffs, the plaintiffs' legal representatives and any other advisers or consultants of the plaintiffs; (ii) prepare a protocol for, and supervise the operation of the said software to implement that protocol in order to effect, the permanent destruction of all such electronic copies of the Subject Documents; (iii) certify the permanent destruction of all electronic copies of the Subject Documents. 5. Within 21 days the plaintiffs are to file and serve an affidavit: deposing to the steps which have been taken to effect the return or destruction of the documents referred to in [1] and [2] above; annexing certification from each person to whom any hard copy of the Subject Documents has been provided to the effect that all hard copies of the Subject Documents held by that person have been returned or destroyed (specifying in each case whether the documents have been returned or destroyed); and, if it is not possible to obtain certification from any such person, deposing to the reasons why that is not possible and to what steps have been taken to ensure that that person is aware of the requirement for the return or deletion of the Subject Documents. 6. Within 35 days the plaintiffs are to file and serve an affidavit: deposing to the steps which have been taken to comply with [3] and [4] above in relation to all electronic copies of the Subject Documents; annexing certification from the independent computer expert retained pursuant to [4] above as to the permanent destruction of all electronic copies of the Subject Documents; and, to the extent that it has not been possible to effect the permanent destruction of all electronic copies of the Subject Documents, explaining why that is the case. 7. Within 14 days the fourth defendant is to file and serve a written undertaking by the fourth defendant's solicitors to the plaintiffs to the effect that the fourth defendants' solicitors will retain a complete copy of all documents filed and served in these proceedings and of the Subject Documents (including the original of the personal notebook defined as the Annexure C document in the Court's reasons for judgment of today's date) until the final disposition of the Cross-Vested Proceedings and the Defamation Proceedings, and any appeal(s) therefrom. 8. To the extent not covered by the above, any storage devices seized on the night of the search order that are in the possession of the independent solicitor or independent computer expert be returned to the fourth defendant's solicitors within 28 days. 1. Order the plaintiffs to pay 80% of the fourth defendant's costs of the plaintiffs' notices of motion and that each party should bear his or its own costs of the fourth defendant's notice of motion filed on 31 October 2016.
I will make any further necessary directions for the conduct of the Defamation Proceedings or otherwise when this judgment is published.

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. Decision last updated: 11 September 2019

Court Procedure Rules 2005(ACT)

CIVIL PROCEDURE - Interim preservation - Search orders - regime for return/destruction of documents seized Legislation Cited: Civil Procedure Act 2005 (NSW), s 56 Competition and Consumer Act (Cth), Sch 2 - Australian Consumer Law, s 18 Corporations Act 2001 (Cth), ss 182, 183 Court Procedure Rules 2005 (ACT) Uniform Civil Procedure Rules 2005 (NSW), rr 5.3, 13.4, 25.19, 25.20 Cases Cited: Alterskye v Scott [1948] 1 All ER 469 Anton Piller KG v Manufacturing Processes Ltd [1976] Ch 55; [1976] 1 All ER 779 Australian Securities and Investments Commission (ASIC) v Marshall Bell Hawkins Ltd [2003] FCA 833 Brilliant Digital Entertainment Pty Ltd v Universal Music Australia Pty Ltd [2004] FCAFC 270; (2004) 63 IPR 373 British American Tobacco Australia Services Ltd v Cowell (No 2) (2003) 8 VR 571; [2003] VSCA 43 Bugaj v Bates [2004] FCA 1260 Crest Homes Plc v Marks [1987] AC 829 Deputy Commissioner of Taxation v Karas [2012] VSC 143 Findex Australia Pty Limited v McKay [2019] FCA 335 Findex Group Ltd v iiNet Ltd (Application by ASIC) (No 2) [2017] NSWSC 1048 Findex Group Ltd v iiNet Ltd (Application by ASIC) [2017] NSWSC 853 Findex Group Ltd v iiNet Ltd [2018] NSWSC 1567 Findex Group Ltd v McKay [2019] NSWCA 93 Gavan v FSS Trustee Corporation [2019] NSWSC 667 Harman v Secretary of State for the Home Department [1983] 1 AC 280 Hearne v Street (2008) 235 CLR 125; [2008] HCA 36 Hytrac Conveyors Ltd v Conveyors International Ltd [1982] 3 All ER 415 Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3; (2005) 218 ALR 283 Long v Specifier Publications (1998) 44 NSWLR 545 Metso Minerals (Australia) Ltd v Kalra (No 3) [2008] FCA 1201 Microsoft Corp v Goodview Electronics [1999] FCA 754; (1999) 46 IPR 159 Northbuild Constructions Pty Ltd v Discovery Beach Project Pty Ltd (No 4) [2011] 1 Qd R 145; [2009] QCA 345 Prudential Assurance Co Ltd v Fountain Page Ltd [1991] 1 WLR 756 at 764; [1991] 3 All ER 878 Re Lamond (No 4) [2017] FCA 820 Riddick v Thames Board Mills Ltd [1977] QB 881 Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217 Sybron Corporation v Barclays Bank Plc [1981] Ch 299; [1984] 3 WLR 1055 Thermax Ltd v Schott Industrial Glass Ltd [1981] FSR 289 Universal Music Australia Pty Ltd v Sharman License Holdings Ltd [2004] FCA 183; (2004) 205 ALR 319 Texts Cited: A Zuckerman, Zuckerman on Australian Civil Procedure (LexisNexis Butterworths Australia, 2018) Supreme Court Practice Note SC Gen 13 Category: Procedural and other rulings Parties: Findex Group Ltd (First Plaintiff) Spiro Paule (Second Plaintiff) Danielle Ludbey (Third Plaintiff) Phillip Hart (Fourth Plaintiff) iiNet Ltd (First Defendant) iiNet (Ozemail) Pty Ltd (Second Defendant) LinkedIn Australia Pty Ltd (Third Defendant) David Keith McKay (Fourth Defendant) Representation: Counsel: I M Neil SC with M A Friedgut (Plaintiffs) M Karam with T Arnold (Fourth Defendant)

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