Should the general rule govern access to the particular confidential documents to be disclosed in these proceedings?
29 The real question for the court is the second question. Have the plaintiffs advanced any proper reason for any greater restriction on access than that provided for under the implied undertaking? As I understood the written submissions, it was on this principle matter that issue was joined.
30 There are a number of factors to be taken into account in relation to this question. At a pragmatic level, I approach the question accepting as correct the grave difficulties imposed upon the legal representative of any party who becomes subject to an undertaking of non-disclosure of information to the client. Toohey J made this point in The Commonwealth v Northern Land Council (1992) 176 CLR 604 at 630:
"Inspection by an applicant's legal representatives, subject to an undertaking of non-disclosure, will often place them in a position of difficulty vis-a-vis their client. It may even tie their hands in the further conduct of the litigation"
[See also the majority judgment at 620]
31 Clearly any attempt to impose a non-disclosure undertaking upon the defendants legal representatives would place those legal representative in the invidious and impossible position of attempting to divorce knowledge which they obtain through access to confidential documents from their otherwise participation in the main proceedings. As I construe the comments by Giles JA at page 16.20 of the transcript of argument during the leave application, his Honour was merely pointing out that a consensual undertaking of non-disclosure constituted a burden which the giving of the undertaking carried with it. Giles JA was there referring to the circumstance that the regime imposed by Young J. if accepted for better or for worse by the defendants, simply resulted in Mr Healey being necessarily bound by his undertaking. Mr Healey remains bound by that undertaking.
32 The plaintiffs assert that in all of the circumstances, the exercise of the court's discretion should deny access to the confidential documents and confidential information being granted to any person involved in the ongoing conduct of the proceedings in any capacity that is to say, whether an employee or officer of the defendants or a solicitor or counsel.
33 The short proposition for which the plaintiffs contend is that the issues raised by the security for costs application are capable of being dealt with by a bifurcated defendants team ["the separate team notion"]. The first part of that team to be given access to the confidential documents and confidential information following the signing of appropriate confidentiality undertakings would comprise nominated employees or officers of the defendants, as well as nominated solicitors or counsel not involved in the ongoing conduct of the proceedings. The second part of that team to be denied that access would comprise employees or officers of the defendants as well as the defendants' solicitors or counsel involved in the ongoing conduct of the proceedings. The plaintiffs' proposition is that issues to be dealt with on the application for security for costs could be dealt with notwithstanding the restrictions imposed upon members of the first part of the team who could not use the confidential documents/information or any part of them other than for the purposes of the security for costs motion. As I understood the plaintiffs submissions, there was no special reason to suggest that members of the first part of the team would need to be able to speak with members of the second part of the team in order to better assess how the confidential documents/information could or should be mobilised in relation to the issues raised on the security for costs application. As I understood the plaintiffs submissions, whilst it was possible that had those inter-team discussions been permitted, the second part of the team might by dint of their extensive knowledge of the main proceedings have been able to point to some materials or information going to the security for costs application which could be taken into account as in some way having a relationship to the confidential documents/information, this was no more than a vague possibility which may well be non-existent.
34 The defendants on the other hand submit that:
"The separate team notion for the security for costs has the disadvantage that the defendant is deprived of all of the knowledge its solicitors, agents and counsel have acquired in the main proceedings when it comes to security for costs. What Mr Dicker is forced to is contending that the defendant is required to [use] separate counsel, separate solicitors and a separate instructing officer from the client who do not have the knowledge from the main proceedings, and yet those persons are expected to run the security for costs motions. That is clearly a significant disadvantage." [Transcript 11357]
35 The defendants further submit that there is no special reason to differentiate the subject security for costs application in these proceedings from any other interlocutory applications made in any proceedings. The defendants contend that there is simply no reported case where the court has approached documents produced during the course of any interlocutory hearing in the proceedings in a manner which obliges the parties to use those documents only for the purposes of that interlocutory hearing and not for the purposes of the proceedings generally. The plaintiffs accept this proposition as correct. The question is however whether the generally accepted practice in this regard should be departed from in relation to what I take to be the sensitive and confidential documents in these particular proceedings.
36 I have given the detailed submissions of both parties very close consideration indeed. In my view, it is particularly important to bear in mind that the exercise of the Court's discretion in terms of the nature and reach of the confidentiality undertakings to be extracted (as the price paid for the Court granting leave to the defendants to inspect the confidential documents) should take into account the very unusual circumstances of this litigation. It is trite to note that every exercise of discretion must take into account the particular circumstances against which that exercise is made. Generalisations are sometimes useful, but by and large the court must step back from issues which may or may not be raised in other proceedings and must focus squarely upon the interests of justice as thrown up by the matrix of circumstance against which the discretion in the particular case requires to be exercised.
37 The parties are committed to litigation of a high order. The proceedings being heard together have already continued for over a calendar year and will clearly continue well into 2003. The lead up to the actual hearing itself involved a period of years, and the issues as pleaded are clearly of the greatest significance to both parties. In terms of volume, the extent of the evidence sought to be mobilised by both parties quite probably outdistances the extent of evidence sought to be mobilised in any other proceedings in this country at any time. The issues are very complicated indeed. The defendants' resources in terms of the team conducting the litigation have previously been described by the court as "massive" ([2001] NSWSC 509 at paragraph 39). As at 1 July 2001, the evidence was that approximately 20 solicitors were working full-time on the case and some six counsel briefed. The plaintiffs' resources have previously been referred to and are of altogether a different order. Having said that, the Court has not been able to discern any overt signs of the plaintiffs being unable to handle the continued litigation, notwithstanding the extent of the hearing nor the need to deal with innumerable issues at an evidentiary level. Disclosure of the confidential documents would require the plaintiffs to disclose their hand in this regard.
38 Having case-managed the proceedings for an extended period prior to the commencement of the final hearing and having now sat through opening addresses, sundry arguments on pleadings and on admissibility of expert evidence and having dealt with the many interlocutory applications now the subject of judgments, I believe that I am in a reasonable position to adjudicate upon the appropriate exercise of the discretion dictated by the interests of justice having due regard to the respective positions of both sets of parties. It seems to me that the proper exercise of the discretion is to hold as I do, that a greater restriction on access than that provided for under the usual implied undertaking should be imposed. The extent of the possible and it seems to me likely, as well as probable, prejudice which would be suffered by the plaintiffs if the defendants' suggested regime for dealing with the confidential documents was accepted, is very great indeed. It extends to the clear possibility that the entirely unexceptional [in terms of compliance with the rule in Harman] forensic use by the defendants of the confidential information could lead to the plaintiffs being forced to abandon the whole of the litigation. On the other hand the extent of the possible prejudice which would be imposed upon the defendants if the plaintiffs' bifurcated or 'separate team' regime was imposed upon the defendants in terms of the confidentiality undertakings, is altogether of another order. Whilst that possible prejudice may indeed exist, it seems to me that it pales into insignificance when compared to the magnitude of the prejudice which the plaintiffs may suffer if the defendants' suggested regime for dealing with the confidential documents was adopted. The nature of the case; the point in time at which the issue is raised; the matters at stake for each party; the obviously enormous sums expended on both sides of the bar table in terms of the nature of and preparation for the procedural issues raised; the conduct of the hearing up to this point in time; and the obviously enormous sums which will be required to be expended by both teams in taking the proceedings up to final argument all provide eloquent testimony to the fact that the parties appear to regard themselves as engaged in what amounts to a war. In those circumstances, it is particularly important for the Court to avoid taking a step which may have the logical consequence of placing a weapon into the hands of the defendants, with the clear capacity of being used to force the plaintiffs to their knees. A further integer in all of this is that the so-called confidential documents have not been shown to be discoverable in relation to issues in the main proceedings and presently, as it seems to me, should be regarded as relevant only to the application for security for costs. For all those reasons, the special facts of this one off litigation to my mind compel an exercise of the Court's discretion by way of requiring that the plaintiffs' regime be adopted.