Kirby v Centro Properties Limited

The respondents' other documents 29 Another issue has arisen in relation to the initial tranche of documents of which the respondents have already given discovery. The applicant seeks an order that his use and disclosure to other persons of more documents be subject only to the "usual implied undertaking". The respondent, on the other hand, contends that, given the commercial sensitivity of some of the documents, the applicant's solicitors should execute an express undertaking. 30 On 17 December 2008, I ordered, by consent, inter alia, that: '6. The parties agree by 23 January 2009 the categories of documents to be discovered as an initial tranche of discovery ("initial tranche of discovery") and the format of the initial trance of discovery

7. The parties provide an initial tranche of discovery on or before 4pm on 13 February 2009.'

31 In his affidavit affirmed 4 March 2009, Mr Holloway, of the solicitors for the respondents in VID 326 of 2008, has deposed to negotiations which took place between him and solicitors for the applicants. He deposes that the "vast majority" of the documents discovered by the respondents in the initial tranche of discovery concerned dealings between the Centro interests and various financial institutions, about the extension of finance facilities, but did not include, as had apparently first been contemplated, policies of insurance. Those documents included, he deposed, board papers and reports and other internal documents; correspondence; documents relating to finance facilities provided to Centro entities and trusts managed by Centro; and various documents "that provide commercially sensitive information concerning the underlying businesses operated by [the Centro interests]", which includes, for example, rent data and other financial and occupancy information in relation to properties controlled by Centro. 32 That last category of documents has evidently given rise to most of the expressions of concern about confidentiality. Those documents are, Mr Holloway says, "regarded … as being highly commercially sensitive and … their confidentiality should be preserved to the maximum extent possible". 33 To that end, Mr Holloway suggested that the applicant provide an undertaking, essentially, in the form of the implied undertaking articulated in Harman. He suggested another course for IMF, the litigation funder: that the applicant's solicitors should indicate the categories or types of documents which they wished to provide to IMF, and that IMF should then give, in essence, an express Harman undertaking andundertake not to give access to the documents to any class members without the prior written consent of the respondents' solicitors. The applicant's solicitors were prepared to give and procure such an undertaking but that did not dispel the respondents' concern about dissemination of the contents of sensitive documents to group members.

The "usual implied undertaking" 34 The "usual implied undertaking" which is taken to have been given when documents are provided by one party for inspection by another is that they will be used only for the purpose for which access was given, and not otherwise. That rule is often regarded as having been derived from Home Office v Harman [1983] 1 AC 280, where Lord Diplock said, at 304: '[A]n order for production of documents to a solicitor on behalf of a party to civil litigation is made upon the implied undertaking to the court (of which he is an officer) that he himself will not use or allow the documents or copies of them to be used for any collateral or ulterior purpose of his own, his client or anyone else; and any breach of that implied undertaking is contempt of court by the solicitor himself.'

The effect of an express undertaking 35 Effect has consistently been given in Australia to the implied undertaking identified by his Lordship; see, eg, Dale v Veda Advantage Information Services and Solutions Ltd [2007] FCA 1603. Nevertheless, express, rather than implied, undertakings as to the use of discovered documents have frequently come to be extracted in commercial litigation, especially where the documents are particularly sensitive. As Hayne, Heydon and Crennan JJ said in Hearne v Street (2008) 235 CLR 125, at 162 [116]; 'The point of insisting on an express undertaking, commonly employed in relation to documents which it is particularly desired to keep secret, is to bring explicitly home to the minds of those giving it how important it is that the documents only be used for the purpose of proceedings. It does not follow that the obligation in question does not exist in more routine cases without the need for an express undertaking.' 36 The purpose of the express undertaking, then, is merely to "bring home" to those who sign them the seriousness of their obligation to the Court not to use the documents for a collateral purpose.

The express undertaking proposed in this case 37 Here, the respondents' concern centres on cl 14 of the Funding Agreement concluded between the applicant and IMF (Australia) Ltd, the litigation funder. It provides, in relevant part, that: '14.2 Unless specifically prohibited by the terms of a court order or some other professional obligation, the Lawyers will provide to IMF a copy of any document obtained in the Proceedings by way of discovery, subpoena or any other coercive power of the Court, subject to IMF's, its officers and employees, implied undertaking given to the Court.' 38 The respondents, accordingly, have sought an express undertaking from the solicitors for the applicant in substantially the form of Schedule A to these reasons but including a formula to which the solicitors for the applicant objected. The clause to which the main objection is taken on behalf of the applicant was as follows: '2. Subject to paragraph 4 below, I will not disclose, discuss or enable access to the Confidential Documents or any part of them or any information contained in them, either directly or indirectly to any person (including class members or potential class members or any funder of the proceedings, or their servants or agents) without the prior written consent of the Respondents…' (emphasis added) 39 As is evident from its text, the proposed express undertaking does not travel far beyond, if at all, the implied Harman undertaking. Strictly speaking, IMF, the litigation funder, is not a party so the provision of the documents to it would be in breach of the implied undertaking as well as the proposed express undertaking which seeks to deny access to "any funder of the proceedings". Similarly, the group members in a Pt IVA proceedings are no more plaintiffs or applicants, and therefore parties, than group members under Pt 4A of the Supreme Court Act 1986 (Vic) which is the Victorian analogue of Part IVA of the Act; see Mobil Oil Australia Pty Ltd v Victoria (2002) 211 CLR 1 per Gaudron, Gummow and Hayne JJ, at 34. Supplying the documents to group members, would, therefore, probably be sufficiently collateral to the purposes of the class action to constitute a breach of the Harman implied undertaking. 40 Once these features are understood, it becomes clear that the result of the applicant's solicitors signing the proposed express undertaking, with the exception of the prohibition on the provision of documents to IMF, is not as "extraordinary" as Mr Lee for the applicant contends. The fact that the applicant's advisers cannot disclose to group members the contents of confidential documents does not, of course, mean that they cannot provide considered legal advice to group members based on the contents of those documents. Nor does the proposed express undertaking preclude altogether the possibility of disclosure of the contents of the documents. It would remain open, after execution of the proposed express undertaking for the applicant or his advisers to approach the respondents' solicitors for consent to disclose identified documents or parts of them to group members. Should that consent be unreasonably withheld, recourse to the Court will remain available pursuant to the liberty to apply which I propose to reserve.

Disclosure to IMF 41 I can see no difficulty in a prescription which allows the solicitors for the applicant to provide to IMF documents which have been identified as confidential by the solicitors for the applicant, provided that access to such documents is confined to those employees or agents of IMF who are directly concerned in the conduct of the present litigation. Any such recipient of the documents should be required to sign an express undertaking in the form annexed as Schedule A to these reasons. 42 In light of the High Court's decision in Campbells Cash and Carry Pty Ltd v Fostif (2006) 229 CLR 386, IMF's proper role in these proceedings will be limited: see esp, per Callinan and Heydon JJ, at 493. The concerns discussed by French J (as his Honour then was) in QPXS Ltd v Ericsson Australia (No 5) [2007] FCA 244, at [20] then have to be met. Unlike the applicant's solicitors, IMF is involved in these proceedings on a purely commercial basis: it is, relevantly, in the business of funding and profiting from litigation. It is not constrained by the professional or ethical restraints which bind the parties' legal representatives. It is, therefore, without imputing to IMF any tendency to impropriety, right for the respondents to be concerned, as French J said, about "the generic risk associated with the wider disclosure of the discovered documents… [They are] is entitled to seek specificity as to the documents to be disclosed and the purpose for which they are to be disclosed". To require an express undertaking from the relevant officers and agents of IMF is, therefore, not unusual and, in the light of Hearne v Street (supra) is not unreasonable.

Conclusion 43 In the result, I shall order that the applicant's motion on notice dated 24 December 2008 in relation to the insurance policies be refused. In relation to the confidential documents included in the respondents' first tranche of discovery, I shall order that they may be inspected by the plaintiff and his counsel and solicitors directly concerned in the conduct or funding of these proceedings and to any officer or agent of IMF directly concerned in the conduct of these proceedings subject to each such person signing an express undertaking in the form appended as Schedule A to these reasons. The costs of each party of the said motions on notice dated 24 December 2008 will be reserved. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan.

Associate: Dated: 26 June 2009 VID 326 of 2009 Counsel for the Applicant: Mr M B J Lee

Counsel for the Respondents: Mr J Beach QC with Mr N Hopkins

SCHEDULE A CONFIDENTIALITY UNDERTAKING I, ………………………………………… undertake to the respondents in Federal Court proceeding No …………………….. ("the proceeding") in respect of the documents produced by the respondents as an initial tranche of discovery in accordance with the orders made by his Honour Justice Ryan on 17 December 2008 ("the confidential documents") that:

1. I will not use the confidential documents, or any part of them, or any information contained in them other than for the purposes of the proceeding;
2. Subject to paragraph 4 below, I will not disclose, discuss or enable access to the confidential documents or any part of them or any information contained in them, either directly or indirectly to any person (including any class members or potential class members);
3. I will make all reasonable efforts to store the confidential documents and any documents or records which I make arising from my access to the confidential documents (including copies thereof) in such a way that persons other than those entitled to access them cannot obtain access to them. Without in any way limiting the generality of this undertaking, the reference to documents, records or copies shall include records of information stored electronically;
4. The confidential documents may be disclosed by me to: a) the Federal Court of Australia and Judges of the Federal Court of Australia; b) any solicitor who is a member of or employed by Maurice Blackburn, solicitors for the applicant and any counsel retained on behalf of the applicant in the proceeding who has signed an undertaking in this form which has been served on the respondents; c) any officer or agent of IMF (Australia) Ltd authorised in writing by it to receive such disclosure who has signed an undertaking in this form which has been served on the respondents; d) any expert retained on behalf of the applicant in the proceeding who has signed an undertaking in this form which has been served on the respondents.
5. When the proceeding is resolved by way of judgment, settlement or otherwise, I will ensure that any document created by me or given to me recording or containing information contained in the confidential documents given to me is returned to the solicitors for the respondents or destroyed. Signed by: