Philip Morris Inc v Adam P Brown Male Fashions Proprietary

-2- Patricia Hosking to Hamersley Iron Pty Ltd dated 14 October 1991." In effect the applicants are seeking to be released from the implied undertaking not to use, or permit to be _ used, documents produced to them in earlier proceedings in this Court, or any knowledge acquired from the inspection of such documents, otherwise than for the purpose of those earlier proceedings. They seek such release to the limited extent of the use of one letter produced in the earlier proceedings, that is, the letter from Mrs Patricia Hosking to Hamersley Iron Pty Ltd dated 14 October 1991, for the purposes of Supreme Court proceedings instituted by them against Mrs

In the Supreme Court proceedings the applicants claim to have been defamed by the publication by Mrs Hosking to Hamersley Iron Pty Ltd of that letter. They learnt of the existence of the letter from the discovery of Hamersley Iron Pty Ltd in the earlier proceedings instituted by them against Hamersley Iron Pty Ltd. Such proceedings were ultimately settled. - In support of the motion to strike out the application, Mr Meadows, counsel for the first respondent, argued that the application does not raise a matter in relation to which the

Court has been invested with original jurisdiction.

In my view the question of the Court's jurisdiction is to be

looked at separately from the issue of whether that

-3- jurisdiction has been appropriately invoked. It is necessary to identify the matter before the Court. As Barwick CJ pointed out in Philip Morris Inc v Adam P Brown Male Fashions Proprietary Limited (1981) 148 CLR 457 at 473 "the identification of the matter is very much a question of substance and not of form." See also section 51 of the Federal Court of Australia Act, 1976 ("the Act"). As mentioned above, in substance what is sought in these proceedings 1s a partial release from an implied undertaking to the Court given in earlier proceedings. As Mr Meadows conceded, no other court or body apart from the Federal Court

could authorise a release from the implied undertaking.

Section 77 of the Constitution enables Parliament, with respect to the matters mentioned in sections 75 and 76 of the Constitution, to make laws defining the jurisdiction of the Federal Court. As was pointed out by a Full Court of the Federal Court in Caboolture Park Shopping Centre Pty Ltd (In liquidation) v White Industries (Qld) Pty Ltd (1993) 45 FCR 224 at p 228 section 5 of the Act is such a law. It has created the Federal Court as a superior court of record and as

In exercising its jurisdiction the Federal Court may apply the common law in Australia as modified by the Constitution and relevant statute law (see s 80 of the Judiciary Act 1903). Further, in exercising its jurisdiction, the Court has the

powers set out in section 22 of the Act. Section 22 is in the

"The Court shall, in every matter before the Court, grant, either absolutely or on such terms and conditions as the Court thinks just, all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly

brought forward by him in the matter, so that, as far as possible, all matters in controversy between the parties may be completely and finally determined and all multiplicity of proceedings concerning any of those matters avoided." The Full Court of the Federal Court stated in McLeish v Faure (1979) 25 ALR 403 at 413 that section 22 "should be construed liberally in order to achieve the object of the Act in attempting to prevent the necessity of a multiplicity of legal

proceedings to be entered into by a party seeking relief."

The jurisdiction of the Federal Court in the proceedings in which the implied undertaking was given is not challenged. It 1s now accepted that the jurisdiction of the Federal Court in respect of matters includes an accrued jurisdiction to deal with claims that are not derived from the express terms of federal legislation but are derived from common law, equity, or State statute law. This jurisdiction is a jurisdiction to the extent necessary for the resolution of the whole matter out of which the relevant controversy arises (s 32 of the Act;

Philip Morris Inc v Adam P Brown Male Fashions (supra);

The controversy presently before the Court arises out of the earlier proceedings in this Court. In my view the issue of

whether the applicants should be released from the implied

• 5- undertaking given by them in those proceedings is part of the same matter as the earlier proceedings. The present application ought properly to have been brought in those proceedings (Holpitt Pty Ltd v Varimu Pty Ltd & Ors (1991) 29 FCR 576). The Court has jurisdiction to deal completely with

that matter, and thus with the issues presently raised.

The motion made by notice of motion dated 24 August 1994 is

Mr Meadows foreshadowed an argument that if the present application were to be made in the original proceedings in this Court, the Court would be functus officio and unable to entertain it. This argument was not developed and it would be inappropriate for me to rule on it. However I draw attention to the definition of "proceeding" contained in section 4 of the Act, and to the consideration by the Full Court of this Court of a similar argument in Caboolture Park v White Industries (supra) at pp 234-236.

If there were no other issue between the parties I would seek an undertaking from the applicants to file a notice of motion in the original proceedings and arrange for the matter to be re-listed for further argument. However there is another issue between the parties: both the first respondent and the second respondent have argued that in the circumstances of this case it would be inappropriate for the Court to release

the applicants from their implied undertaking to the Court in

The applicable principles with respect to this issue are explained by the House of Lords in Crest Homes PLC v Marks {1987] AC 829 and in judgments of this Court by Burchett J in Holpitt Pty Ltd v Varimu Pty Ltd (supra) and by Wilcox J in Springfield Nominees Pty Limited v Bridgelands Securities Limited (1992) 38 FCR 217. The general principle is "that the court will not release or modify the implied undertaking given on discovery save in special circumstances and where the release or modification will not occasion injustice to the person giving discovery." (see Crest Homes v Marks per Lord

It is not here suggested that any release or modification of the implied undertaking will occasion any injustice to the party who gave discovery. This aspect of the general

Burchett J considered the expression "special circumstances" in Holpitt Pty Ltd v Varimu Pty Ltd at 578-579. His Honour

"As far as the expression "special circumstances" is concerned, it 1s an expression which is liable to be misunderstood unless care is taken to ask and answer the question, special in relation to what? "Special" is one of those words which derive almost all their meaning from the context. In relation to animals generally, any man is special; but when you are speaking of poets, he may need to be a Milton +e++. Circumstances in which there is a legitimate reason why documents discovered in one proceeding should be made available in another will, viewed in

ordinary rule should apply, there being no special circumstance to suggest otherwise."

As Wilcox J explained in Springfield Nominees v Bridgelands at p 225 the applicable principles give rise to a two staged test: first do special circumstances exist which would justify a departure from the ordinary rule? Secondly, if they do, would it be appropriate in the exercise of the Court's discretion for a release from the implied undertaking to be

"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. It is neither possible nor desirable to propound an exhaustive list of those factors. 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."

It is plain that the letter in question is crucial to the Supreme Court proceedings instituted by the applicants: unless the applicants obtain the release from, or a modification of, the implied undertaking as to the use of the

letter here sought, the Supreme Court proceedings, I am

-g- informed, will remain permanently stayed. I do not, however, regard that as a "special circumstance" sufficient to justify consideration of a release from, or modification of, the implied undertaking. It is an ordinary consequence of the implied undertaking. It would, of course, be a factor to be taken into account in the exercise of the Court's discretion should the initial hurdle of demonstrating special

Mr Stokes, counsel for the applicants, provided to the Court a detailed examination of factors which the Court might take into account in the exercise of its discretion. He did so by reference to the factors identified by Wilcox J in the passage cited above. He pointed out that Hamersley Iron Pty Ltd would not be prejudiced by the applicants' intended use of the letter, that the letter was allegedly defamatory in nature and did not fall within any special class of confidentiality, that the author of the letter was not a party to the earlier proceedings, that the document had not been wrongfully or surreptitiously obtained and that the courts had not turned their faces firmly against the use of discovered documents in

None of the factors identified by Mr Stokes, however, amounts in my view to "special circumstances" in the sense that that expression has been explained in the authorities. Wilcox J did not suggest that the factors identified by him in

Springfield Nominees v Bridgelands would amount to special

I am not satisfied that it would be appropriate in the circumstances of this case to release the applicants in any way from the implied undertaking given by them in the earlier proceedings. The case, in my view, is an ordinary one without special features not usually present that afford a reason for modifying or releasing the undertaking. The ordinary rule

The application 1s dismissed. I will hear counsel as to costs

on the application and on the motion dated 24 August 1994.

RK preceding pages are a true copy of the Reasons for Judgment of Justice

Solicitors for the Applicants : Butcher, Paull & Calder

Solicitors for the First Respondent: Freehill, Hollingdale & Page

Counsel for the Second Respondents : Mr A V McCarthy