Maliganis Edwards Johnson v P2

1. The plaintiffs are the partners in a law firm practising in the Territory. To avoid confusion with other litigants referred to in this judgment, I will refer to them as the partners. The defendant is also a lawyer. In accordance with pseudonym orders made at the outset of these proceedings, I will refer to him as P2.

2. On 24 February 2025, on the application of the partners, I granted interim injunctions restraining P2 from publishing or disclosing certain information. That application was brought and determined ex parte (that is, without notice to P2 and in his absence). It goes without saying that, in an adversarial system of justice, the power to determine a matter ex parte should be invoked sparingly.

3. On 13 March 2025, P2 applied to have the injunctions discharged on the ground that the partners did not comply with the duty of disclosure of an applicant who invokes the court’s injunctive power ex parte. This judgment determines that application.

Circumstances in which the ex parte application was brought

4. The partners previously employed a solicitor to whom I will refer by the pseudonym P1. His employment came to an end on 15 February 2021 after he was confronted with allegations of having defrauded the partners. P1 subsequently brought proceedings against the partners alleging constructive dismissal due to alleged racism on the part of the partner who confronted him with the fraud allegations (that partner is now deceased). From December 2022, P2 acted for P1 in his claim against the partners. P2 also acted for P1 in [separate proceedings]. He also acted for P1 in proceedings commenced against P1 by the partners in April 2024 to recover the moneys of which they allege they were defrauded by him.

5. During the proceedings brought by P1 against the partners and the [separate proceedings], P2 came into possession of documents and information the partners allege are confidential to them, being internal business records and client files. In the case of [the separate proceedings], information harvested from client files produced [in the separate proceedings] by the partners and inspected by P1 was provided to P2.

6. P2 ceased acting for P1 in July 2024. P1’s proceedings against the partners and their claim against him have since resolved. On 11 December 2024, P1 granted power of attorney to the partners to secure the return or deletion of the confidential information he had provided to P2. In exercise of the power of attorney, the partners demanded that the confidential information be delivered up or destroyed by P2. At the time the partners sought the injunctions ex parte, P2 had not complied with those demands to their satisfaction.

7. The present proceedings were commenced on 24 February 2025 when the partners approached the Court ex parte for urgent injunctive relief seeking orders restraining P2 from publishing or disclosing the confidential documents and information and seeking delivery up of the documents held by him. The cause of action underlying the injunction application was misuse of confidential information. Alternatively, having regard to the circumstances in which P2 came into possession of the documents and information, the partners contended that he was bound not to disclose the contents of that material without leave of the court in accordance with the principles deriving from the decision of the House of Lords in Harman v Secretary of State for the Home Department [1983] 1 AC 280.

8. In light of the alleged urgency of the ex parte application, I heard and determined it that day. At the conclusion of the hearing, I made most of the orders sought (on an interim basis), reserving my reasons. The reasons were published on 27 February 2025: Maliganis Edwards Johnson v P2 [2025] ACTSC 58. For reasons that need not be articulated here, publication of that judgment is presently restricted.

9. The urgency of the ex parte application was said to arise from a combination of circumstances. A central element of the claimed urgency was the partners’ allegation that P2 has previously attempted to blackmail them about certain allegations purportedly based on the confidential documents and information. The alleged attempt to blackmail was made in March 2024. The partners reported it to the AFP and the Law Society in May 2024. From December 2024, after obtaining the power of attorney from P1, the partners pressed P2 for return of the confidential documents and information. On 14 February 2025, the partners were informed by the AFP that the AFP had been in contact with P2 about the blackmail allegation. The very next day, the partners were contacted by a journalist from The Canberra Times seeking to talk to them about the very allegations they understood P2 had previously threatened to make public.

10. The circumstance that suggested the existence of an immediate threat of misuse of confidential information or breach of the Harman undertaking such as to warrant bringing the application ex parte was the fact that a journalist had contacted the partners the day after the AFP informed them that P2 had been confronted with the allegation of blackmail. That, coupled with the allegation of blackmail itself, suggested that it was P2 who had contacted the journalist, possibly in retribution for the partners’ having reported the blackmail allegation to police. In the manner in which the application was brought forward, it was implicit that the contact between the AFP and P2 was recent as at the date of the AFP email, 14 February 2025. The coincidence of that contact and the contact made by the journalist were prominent in the assessment of the risk of misuse of the confidential information and breach of the Harman undertaking.

P2’s application to have the ex parte injunctions discharged

11. P2’s reason for seeking to have the ex parte injunctions discharged is not that he wishes to be allowed to disclose the confidential information. On the contrary, he accepts that he obtained access to the documents and information in circumstances that result in his being bound at least by the Harman undertaking, if not by any separate obligation of confidentiality owed to the partners (he has foreshadowed an argument as to why the Harman undertaking does not prohibit him from making certain kinds of disclosure but it is not necessary to determine that issue at this stage).

12. Indeed, in making the application to have the ex parte injunctions set aside, P2 undertook to adhere to the terms of the interim orders made by me for a further period of time sufficient to permit negotiations between the parties to be undertaken and concluded without the need for any further application to the Court. As events have transpired, agreement has already been reached as to final restraining orders by which P2 consents to be bound.

13. P2 nonetheless contends that the orders first made should be discharged ab initio on the ground that the partners failed to comply with the duty of disclosure to the court on an ex parte application. He further contends that, in circumstances where there had been an exchange of correspondence between him and the partners in which he had foreshadowed giving an undertaking that would be satisfactory to them, and in which their deadline for his response was 25 February 2025, there was no occasion for the partners to move ex parte the day before that deadline.

14. The outcome of the present application will plainly inform the question of costs of the ex parte application but that is not the only interest at stake. A broader question arises as to whether the Court’s ex parte injunctive power was properly invoked. For P2, it is also a question of vindicating him against the allegation of blackmail and the implicit accusation that he was proposing to breach the Harman undertaking by providing the partners’ confidential information to a journalist.

Duty of disclosure on an ex parte application

15. It is uncontroversial that, having determined to move the Court ex parte, the partners were under a duty “to place before the Court all relevant matters including such matters which would have been raised by the respondent in his defence if he had been present”: Town & Country Sport Resorts (Holdings) Pty Ltd v Partnerships Pacific Ltd (1988) 20 FCR 540 at 543 (Davies, Gummow and Lee JJ). As the Federal Court went on to explain in that case, the discharge of an ex parte injunction does not prevent a fresh application being heard and determined in light of all relevant facts, but an ex parte injunction obtained where the applicant has failed to disclose all relevant facts is “properly discharged”. The Court explained: The rationale behind the principle is clear; it is of the utmost importance in the due administration of law that the Courts and the public are able to have confidence that an ex parte order has been made only after the party obtaining it has complied with its duty to disclose all relevant facts.

16. The content of the duty will of course depend on the circumstances. Where, as here, the court’s ex parte jurisdiction is invoked by solicitors, who are officers of the court, there must be punctilious compliance with the duty, without the smallest curation of the narrative. In saying so, I do not mean to qualify or minimise the extent of the duty of disclosure in other cases, but only to emphasise the particular reliance the court places, and is entitled to place, on its officers.

17. P2 relied in this context on the decision of the Federal Court in Walter Rau Neusser Oel Fett AG v Cross Pacific trading Ltd [2005] FCA, where Allsop J said at [38] that the obligation was not discharged by “stating matters obliquely, including documents in voluminous exhibits, and merely not misstating the position”. He continued: It means squarely putting the other side’s case, if there is one, by coherently expressing the known facts in a way such that the court can understand, in the urgent context in which the application is brought forward, what might be said against the making of the orders. It is not for the court to search out, organise and bring together what can be said on the respondent’s behalf. That is the responsibility of the applicant, through its representatives.

18. P2 relied on those remarks to support a submission that the duty of disclosure may, in some circumstances, extend to making proper inquiries about the evidence to be put forward in support of an ex parte application.

Alleged failure to disclose in the present case

19. P2 relied on two matters as to which he contends the partners failed to comply with their duty of disclosure: first, the characterisation of the events of March 2024 as an attempted blackmail and, secondly, the apparently telling coincidence of the email from the AFP dated 14 February 2025 and the approach by a journalist on 15 February 2025.

20. In his written application in proceeding, P2 confined attention to alleged non-disclosures concerning the blackmail allegation. Separately, in a written outline of submissions provided to the partners shortly before the hearing of the discharge application, additional matters were specified concerning the partners’ reliance on the coincidence of the email from the AFP and the contact from a journalist from The Canberra Times the following day. Each of those matters is addressed below.

The blackmail allegation

21. The detail of the blackmail allegation is set out in my previous judgment, publication of which is presently restricted. It is enough for present purposes to explain the competing positions of the parties in broad terms. As at 20 March 2024, the only litigation on foot against the partners that might have been resolved by negotiation was P1’s claim against them for constructive dismissal on the ground of racism. P2 and his employer acted for P1 in those proceedings. However, based on information provided to P2 by P1 and from documents governed by the Harman undertaking, P2 and his employer claim they had identified a basis for making broader allegations against the partners which might in due course give rise to a class action against them. I will refer to those matters as the broader allegations.

22. The evidence relied upon by the partners on the ex parte application was an affidavit affirmed by their solicitor based on information provided to him by the partners. The information concerning the alleged blackmail attempt was provided by one partner in particular, to whom I will refer as the complainant. According to that affidavit, the complainant informed the deponent of the affidavit that “on or about 21 March 2024”, he was approached by a legal practitioner who said he had been asked by P2 to act as an informal intermediary between the two firms (the partners and the firm that employed P2). I will refer to that legal practitioner as the intermediary.

23. The complainant informed the deponent that the intermediary told him P2 had been in contact with him and had made “an extraordinary demand”. The intermediary was in possession of messages exchanged between him and P2 but was not authorised by P2 to give copies of those messages to the complainant. The proposal was that the partners pay a specified sum to resolve not only the proceedings against them brought by P1 but also any future proceedings that might be brought against them based on the broader allegations.

24. The affidavit put before me (which, as already noted, was sworn on information and belief) states: [the complainant] understood the messages from [P2] to be a threat. He understood [P2] to be saying that unless [the partners] paid $5 million, [P2 and the firm for which he worked] would maintain their attempts to bring a class action against [the partners] or alternatively to publicise [the broader allegations].

25. The affidavit stated that, on 15 May 2024, the complainant reported the alleged blackmail attempt to the AFP and that, on 28 May 2024, he reported it to the Law Society. The affidavit annexed a copy of each letter. The letter to the AFP attached a selection of the complainant’s record of what he had been told by the intermediary on behalf of P2. However, as I will explain, that was not a complete record of the complainant’s notes on that issue.

26. As I understood the case put in support of the ex parte application, the vice of the proposal conveyed from P2 to the partners via the intermediary was that it combined a settlement offer in respect of the individual proceedings in which P2 acted for P1 with a proposal, as between the two law firms, to resolve the broader allegations against the partners. It was that aspect of the proposal that gave it the menace with which, according to the affidavit put before me, it was received.

27. The solicitor’s affidavit (affirmed on information and belief) does not specify when the complainant formed the understanding that the messages from P2 amounted to a threat to publicise allegations about the partners. The implication from the way in which the application was brought forward was that it was his immediate response to those messages.

28. P2’s version of those events, in short, is that the reason he put a combined proposal was that he understood from the intermediary that he had been invited by the partners to do so. Until the involvement of the intermediary, P2 and his employer had taken instructions from P1 and made internal enquiries as to the legal costs to date with a view to putting an offer to settle only the proceedings brought by P1 against the partners.

29. P2 disputes the partners’ evidence that he approached the intermediary and asked him to put his proposal to the partners. He says he understood that the intermediary had, in effect, invited him to put a combined proposal to the partners.

30. According to P2’s evidence, the intermediary’s involvement began during a conversation between P2 and the intermediary on 21 March 2024, when the intermediary offered to “go between” P2 and the partner as an informal intermediary. P2 says that call concluded with the intermediary saying he would “get back to” P2.

31. Later that day the intermediary called P2. P2 says that, during that call, which lasted for over 17 minutes, the intermediary told him that he had spoken with the complainant, who had accepted that there would “need to be payment of money, and everything would need to be in a deed”. The intermediary said, “an agreement would have to resolve everything” and referred to P1’s proceedings but also to the broader allegations. P2’s affidavit includes a verbatim account of what the intermediary said as to what a resolution would need to cover.

32. It is clear from those competing versions that there is a hot dispute as to the precise course and content of the communications between P2, the intermediary and the complainant. I accept, as submitted on behalf of the partners, that it is neither possible nor appropriate to attempt to determine that factual dispute on an interlocutory application. Nor is it possible to determine whether or the extent to which the partners were aware of the matters P2 contends they ought to have disclosed. A number of the alleged non-disclosures are “facts” alleged by P2 which the partners contend are simply false. As to others, they contend that P2’s account was not known to the partners at the time of the ex parte application. It is very difficult to judge, on the information before me, including the affidavit relied upon in support of the ex parte application sworn on information and belief, how much the partners knew of P2’s position at the time when the ex parte application was brought.

33. What is clear, however, is that there is a great deal more context to the allegation of attempted blackmail than could readily have been absorbed at the hearing of an urgent ex parte application. A significant concern in that context is the role of the intermediary. According to P2’s evidence, the intermediary offered to assist both parties and insisted that he not be paid. The partners’ version is that it was P2 who asked the intermediary to assist. Either way, it was implicit that, as an informal intermediary, he would endeavour to be impartial as between all parties.

34. The material put before the court by P2 on the present application includes evidence indicating, however, that the intermediary participated in a telephone conference on 22 March 2024 with the complainant and senior counsel during which senior counsel characterised P2’s approach as blackmail and advised the intermediary that he should write to P2 and inform him that he was no longer prepared to act as an intermediary “given the nature of the proposal put by [P2]”. The involvement of senior counsel at that time suggests the possibility that the apprehension of blackmail was informed by his reaction to advice sought. The evidence suggesting that such advice may have been sought in the presence of the supposedly independent intermediary is even more concerning.

35. It is significant in that context that the affidavit affirmed on information and belief does not specify when the complainant formed the understanding that the messages from P2 amounted to a threat to publicise the broader allegations. As already noted, the form in which the partners put those messages before the court (by annexing to the solicitor’s affidavit the complainant’s letter reporting the alleged blackmail to the AFP) constituted an incomplete record of the complainant’s notes of those events.

36. P2’s version is that it was the intermediary who suggested terms of settlement that would resolve not only P1’s claim against the partners but also any future proceedings against the partners arising from the broader allegations. It is tolerably clear from correspondence between P2 and the intermediary that they will give different versions as to who first proposed what to whom. As already noted, it is not possible to resolve that kind of dispute on an interlocutory application.

37. What is significant for the present application is that there is some evidence to suggest that the complainant did not immediately apprehend P2’s messages as blackmail predicated on a threat to publicise the broader allegations about the partners. Part but not all of that evidence was before me on the ex parte application. The solicitor’s affidavit on the ex parte application included an email from the intermediary to P2 dated 22 March 2024 at 4:43 pm in which the intermediary wrote to P2 “I have now passed on the information to [the partner] including your breakdown of the offer. [The partner] will speak to his partners and is seeking advice in relation to the offer and asked me to tell you that he expects to come back to you by Thursday next week”.

38. The additional evidence on that issue put forward by P2 on the present application is a handwritten file note prepared by the complainant in the following terms: I need to ask Brennan. st 1 Q legality of entering into an agreement whereby we are restraining them from commencing a classic action basis… Suspected/potential breach of our pos’n LPA nd 2 Q If there is a deed entered…? His view on any protection we would have the [P’s employers and P1] These terms, Tom, how much protection will the firms give me… income for [P1] $4 million over X years..

39. The file note appears to indicate that the complainant sought legal advice from senior counsel as to the legality of entering into an agreement of the kind he says was proposed by P2. That does not sit comfortably with the impression conveyed by the material put before me on the ex parte application that the proposal for a combined settlement was first put forward by P2 and immediately recognised by the partners as an attempt at blackmail.

40. While I am left with the impression that the evidence put before me on the ex parte application concerning the alleged blackmail attempt was less complete than it might have been, it is very difficult to judge, on the material before me, precisely where that line should have been drawn, particularly as there is no direct evidence from either the complainant or the intermediary. If that were the only matter relied upon by P2 to support the discharge application, I probably would not have discharged the ex parte injunctions.

The AFP and the Canberra Times

41. The second matter raised by P2 in support of the discharge application is the partners’ reliance on the coincidence of the email from the AFP and the approach from the Canberra Times. The partners relied on the fact that the approach by an unnamed journalist occurred in the context of the complainant being informed the day before that P2 had been confronted with the blackmail allocation. As recorded in my earlier judgement at [3], the combination of those events was accepted by me as a matter giving rise to urgency such as to warrant proceeding to determine the application ex parte.

42. As already noted, it was implicit in the juxtaposition of those two events that the court should infer that P2 had been contacted by the AFP shortly before 14 February 2025 and that he reacted by contacting a journalist.

43. P2’s evidence is that, in fact, he was informed of the blackmail allegation by AFP officers on 28 November 2024. There is no evidence that P2 was contacted by the AFP at or around the time of the putative coincidence.

The application to reopen the partners’ case

44. At the conclusion of the hearing of P2’s application on 13 March 2025 to have the ex parte injunctions discharged, I indicated that I would give my decision on 18 March 2025. On the evening of 17 March 2025, the partners filed an application seeking leave to reopen their case to respond to what they perceived to be an issue raised by me during argument and seized upon by P2 only in reply. Accordingly, on 18 March 2025, instead of giving my decision, I heard the application to reopen and reserved my decision on both matters until today.

45. The premise of the application to reopen was that the issue of the coincidence of the AFP email and the approach from the journalist had not been raised by P2 in his application to have the ex parte injunctions discharged. It is correct that the only non-disclosures specified in the written application were concerned with the alleged blackmail attempt. However, P2’s written outline of submissions dated 12 March 2025 outlined his second complaint under the heading “the AFP and the Canberra Times”.

46. I have nonetheless concluded that it is appropriate to receive the additional evidence, if only because it is responsive to an issue raised by me during the hearing of the application to have the ex parte injunctions discharged. The issue raised by me was whether the email dated 14 February 2025 from the AFP informing the complainant that the AFP had been in contact with P2 was sent in response to an enquiry from the complainant. During the hearing, senior counsel for the partners informed me that it was. My question implicitly suggested that the enquiry in response to which the AFP email was sent should have been put before me because it might have informed the inference that should be drawn as to the coincidental timing of the AFP email and the enquiry from the journalist. In other words, if the reason the AFP happened to write to the partners on 14 February 2025 was that they were responding to an email from the partners, the inference that it was P2 who contacted the journalist would less readily be drawn.

47. The additional evidence relied upon by the partners establishes that the enquiry in response to which the AFP wrote to the partners on 14 February 2025 was made much earlier, on 27 November 2024. I have concluded that it is appropriate to grant leave to the partners to reopen their case on the discharge application to establish that fact.

Significance of the further evidence adduced by the partners

48. While the fact that the partners wrote to the AFP much earlier removes any basis for an inference that the timing of the AFP email on 14 February 2025 was informed by the timing of correspondence from the partners, it also removes any basis for an inference that the AFP email was sent soon after the AFP confronted P2 with the blackmail allegation. As already explained, that inference was an essential step in the conclusion that the ex parte application had such urgency as to warrant its being determined in the absence of P2.

49. Indeed, the further evidence establishes that, in the face of apparent reluctance on the part of the AFP to charge P2 with blackmail, the complainant engaged in tendentious correspondence with the AFP urging them to consider the matter further, including by confronting P2 with the allegation (which they had not done at the time the complainant wrote to them).

50. For present purposes, the significance of that correspondence is that, absent further enquiry, the partners did not know when the AFP had confronted P2 with the allegation. That could have occurred on any date between 27 November 2024 and 14 February 2025.

51. Furthermore, so far as the evidence before me reveals, the partners did not know, and did not ask, who provided the journalist from the Canberra Times with the information that prompted that journalist to contact the partners.

52. The partners nonetheless presented an application to the court that invited the court to infer from the coincidence of timing between the AFP email and the approach by the journalist that P2 had contacted the journalist, perhaps by way of retribution after becoming aware that the partners had reported the blackmail allegation to the AFP. Having regard to the broader contextual evidence that is now before me, I am satisfied that it fell within the partners’ duty of disclosure to make further enquiries about those matters before bringing forward an ex parte application the apparent urgency of which was largely premised on that inference. In particular, they ought to have taken steps to find out when the AFP confronted P2 with the blackmail allegation. They also ought to have made enquiries of the journalist as to whether P2 was their source. I accept that the journalist may have refused to identify their source. However, if the source was not P2, the journalist might have been content to confirm that fact.

53. I also consider that the partners should have disclosed the full correspondence between the complainant and the AFP. The blackmail allegation was presented as a stark complaint that was working its way through the ordinary processes of police investigation. The letter dated 27 November 2024 from the complainant to the AFP tendered on the application to reopen reveals the possibility of a more nuanced analysis.

Orders

54. P2’s application concerned orders 6, 7 and 8 made on 24 February 2025. Those orders were as follows: In these orders: Disclosed Documents means documents produced: (a) in Federal Court proceedings ACD 50/2022 pursuant to the Notice to Produce issued by the Applicant in that proceeding on 18 December 2023, a copy of which is at Annexure A to these Orders. (b) in [the separate proceedings], a copy of which is at Annexure B to these Orders; and (c) any information sourced or derived from the original or any copy of any such document/s, including the Spreadsheet. Spreadsheet means the spreadsheet described at paragraph 37 of the affidavit of Ian Ross Adrian affirmed on 24 February 2025, together with any copy or extract of it. (6) Subject to: (a) an order by a court of competent jurisdiction; and (b) order 7 below, until the Return Date, you must not, by yourself or by any servant or agent, or howsoever, use, disclose, copy or distribute in any way, the Disclosed Documents, or the Spreadsheet (the Restraint). (7) On the day following service of these orders and during ordinary business hours you shall: (a) deliver up to the Registrar of the ACT Supreme Court a data storage device containing in native format an electronic copy of each version of the Spreadsheet, including the metadata contained within it, together with a document setting out each password or any other instruction required to open and read each such version; (b) file and serve an affidavit, affirmed or sworn by you, that confirms that: (i) the device so delivered contains true copies of each version of the Spreadsheet in your possession in the electronic format in which it is in your possession; and (ii) the document so delivered contains all of the instructions required to open and read each such version. (8) The Restraint does not apply to any use, disclosure, copying or distribution that is required by law.

55. For the reasons I have given, I am satisfied that, at the time those orders were sought ex parte, the partners failed to comply with their duty of disclosure to the Court. Accordingly, I make the following orders: (1) I grant leave to the plaintiff to reopen its case to read the affidavit of Ian Adrian affirmed 17 March 2025. (2) I discharge orders 6, 7 and 8 made on 24 February 2025. (3) I direct that the plaintiffs are to bear their own costs of the application made that date.

56. It will be necessary to hear the parties as to the remaining costs of the proceedings, which I understand are now otherwise finalised. I certify that the preceding fifty-six [56] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Chief Justice McCallum Associate: Date: