3 Whether under the third element detriment is required, is open to question, though Mason J in Commonwealth v John Fairfax & Sons Ltd (1980) 147 CLR 30 at 50-57 concluded that it was an essential ingredient; per contra R P Meagher, W M C Gummow and J R F Lehane "Equity: Doctrines and Remedies 3rd ed (1992) para 4110. Here I am satisfied the disclosure has sufficient potential to cause detriment, either in jeopardising legal privilege or potentially in seeking advantage in the litigation; see 12 below.
4 I have concluded that the orders that I made yesterday on an ex parte basis should be continued until further order, subject to all of the parties being permitted to apply to the Court on not less than two court day's notice, it being understood that such application in the case of the Defendants may be to seek a variation of the relevant orders. I have contemplated qualifying order 3(c) (restraint of the Defendants against disclosure of the legally privileged advice to officers and employees of the Plaintiffs) by a shorter period such as the two court hours embodied in the original inter partes undertakings. But I conclude that the parties would not be assisted, nor court schedules, by a precipitate application in a matter where those familiar with the relevant issues would need to be available if they are to be properly canvassed.
5 I make these orders against a background where a final hearing should not involve additional evidence so far at least as the Plaintiffs are concerned and where, with co-operation between the parties and their legal advisers, an early final hearing should be achievable, assuming that the matter is considered to warrant urgency.
6 I should briefly deal with one preliminary matter. It was contended by the Defendants that the Plaintiffs were unjustified in proceeding on an ex parte basis when an agreed interlocutory regime was in place based on undertakings inter partes. Furthermore that the Plaintiffs failed to disclose all material matters which should have been before the Court when dealing with the matter ex parte such that my interim orders should be discharged. In particular, it was contended by the Defendants that the Plaintiffs should have disclosed to the Court that there was an allegation by the Defendants' solicitors that the proceedings brought to prevent disclosure of relevant legal advice originally by Summons dated 4 August 1999 constituted an abuse of process. As I understand the contention, it was that the proceedings had the collateral purpose of preventing Mr Garnsey, QC from continuing to represent the Defendants.
7 A number of matters were put by the Plaintiffs in response including that they have at no stage sought to preclude Mr Garnsey, QC representing the Defendants. However, the Defendants press that even if that were an adequate answer, the existence of that issue, in proceedings which of their nature could not resolve that matter in any final way, was nonetheless a matter of sufficient materiality to require disclosure. This was so even though the application was for orders of a twenty-four hour duration.
8 In my view, the case for discharging an ex parte interim injunction based on non-disclosure of that matter is not such as to lead me to take that course. It is well settled that the Court places great importance on the obligation to make full and frank disclosure of all material circumstances and especially in ex parte matters (see, for example, Kavia Holdings Pty Limited v Werncog Pty Limited [1999] NSWSC 839 (Santow J, 18 August 1999, unreported) and Frigo v Culhaci (NSWCA, 17 July 1998, unreported)). Nonetheless, there is no automatic discharge in the event of non-disclosure even of matter which was material or arguably material; see most recently in the UK Court of Appeal Marc Rich & Co Holdings GmbH v Krasner (15 January 1999, unreported) and the discussion in "Disclosure Duty of Applicant for Interim Injunction", in (1999) 18 CJQ 193 at 195. The position is not materially different in New South Wales. I would myself place the non-disclosure of the matter to which I have referred as in the arguably material category and consider that on balance it would have been better it had been disclosed. But as the article earlier cited observes, "the borderline between material facts and non-material ones may be a somewhat uncertain one, particularly in heavy commercial cases". Nor should the courts encourage the discharge of otherwise meritorious applications on the grounds of relatively trifling errors; per Timothy Walker J in the English case of Worldcom International v Home Communications (Timothy Walker J, 16 September 1998, unreported) I am therefore satisfied that, considered in context, the non-disclosure is not such as to warrant discharge of my ex parte orders.
9 The other matter of non-disclosure is a letter from Mr Armbruster, the Chief Operating Officer of the Second Plaintiff to Mr Maconochie, of 14 September 1999. A reading of the letter however does not in my view render that letter of sufficient materiality in the circumstances. Essentially the Defendants' argument is that the letter points to a context in which discussions on the business plan must necessarily deal with the legal advice the subject of the present litigation. However, all the letter does is seeks to explain the delay in making contact by reference to the current dispute about the legal advice. Moreover in the letter's description of what occurred in relation to the meeting in August 1998 at which the legal advice arose, closely tracks what Mr Maconochie had earlier said in affidavit evidence; the word "procured" in the letter hardly carries the degree of significance attributed to it by the Defendants.
10 I am satisfied the interim orders should continue, having regard to a number of the concerns raised by the Plaintiffs. First, it is clear that the present inter partes regime carries no court sanction whatsoever. It has certainly not inhibited the two reports in the "Australian" of 16 September 1999 and 17 September 1999 under the heading "Margin Call", where a journalist, Mr Michael West, professes to state the effect of the legal advice. I say "professes" because I am not cognisant of the precise advice given and do not wish it to be understood that I am concluding that the report is an accurate one or not.
11 Then there is the Plaintiffs' privilege in relation to legal advice and its property in confidential information which that advice constitutes. The latter is an independant right capable of protection as Hunt CJ at CL in Director of Public Prosecutions (Commonwealth) v Kane and Others (1997) 140 FLR 468. I am satisfied that it is inadequately protected by the inter partes regime currently in place. In reaching that conclusion I make no finding, having heard the evidence of Mr Maconochie, that he was responsible for making available to the journalist the content of the legal advice, though he did provide the journalist with a copy of the original Summons that initiated this phase of the parties' litigation. Such contact as occurred does carry the risk of a hint, at least, as to the nature of the advice. The Defendants must now be aware of the serious sanctions for contempt, as should publishers who connive at any breach, more especially as they must know of the opinion's confidentiality to the Plaintiffs.
12 For the Defendants to seek to communicate the purport of the legal advice to officers at any level of the Plaintiffs, when that communication is for a purpose or has an effect which risks that legal advice coming into the public domain, is itself sufficient reason for an injunctive regime. This is more particularly when the Plaintiffs have, through their legal advisers and directly, gone to considerable steps to attempt to keep its circulation to the minimum number of people. I also conclude that to use the legal advice as the Defendants have done for the purpose of attempting to persuade officers of the Plaintiffs to take a different approach to that of their employer, which has the property in the advice and in whom resides any legal privilege, is itself further reason for an express injunction which leaves no room for that to occur.
13 So far as confidentiality is concerned, it is for the Defendants to demonstrate their use is proper and they have failed to do that. Thus in the Supreme Court of Canada in LAC Minerals Ltd v International Corona Resources Ltd (1989) 16 IPR 27 at 36 La Forest J said:
"In establishing a breach of a duty of confidence, the relevant question to be asked is what is the confidee entitled to do with the information, and not to what use he is prohibited from putting it. Any use other than a permitted use is prohibited and amounts to a breach of duty. When information is provided in confidence, the obligation is on the confidee to show that the use to which he put the information is not a prohibited use. In Coco v A N Clark (Engineers) Ltd, supra , at 48, Megarry J said this in regard to the burden on the confidee to repel a suggestion of confidence: 'In particular, where information of commercial or industrial value is given on a business-like basis and with some avowed common object in mind, such as a joint venture or the manufacture of articles by one party, for the other, I would regard the recipient as carrying a heavy burden if he seeks to repel a contention that he was bound by an obligation of confidence.' In my view, the same burden applies where it is shown that confidential information has been used and the user is called upon to show that such use was permitted."