Consideration
16 The relevant principles in relation to the implied undertaking are well understood. In the leading Australian authority of Hearne, Hayne, Heydon and Crennan JJ described the implied undertaking as follows:
96 Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence. The types of material disclosed to which this principle applies include documents inspected after discovery, answers to interrogatories, documents produced on subpoena, documents produced for the purposes of taxation of costs, documents produced pursuant to a direction from an arbitrator, documents seized pursuant to an Anton Piller order, witness statements served pursuant to a judicial direction and affidavits…
97 It is common to speak of the relevant obligation as flowing from an "implied undertaking".
…
106 The fact that the role of the word "undertaking" is merely to indicate the way in which an "obligation" which is "imposed by law" as a "condition" of discovery binds the disclosee highlights the substantive nature of the obligation. There is nothing voluntary about the "undertaking".
"The implied undertaking not to make collateral use of documents disclosed on discovery arises automatically as an incident of the discovery process. It is in no sense implied as a result of dealings between the parties. The discloser may well not have thought of the implications of giving discovery and the disclosee may well not have turned his mind to the matter of what use he can make of the documents outside the action. Had he thought of it, he might well have wanted full freedom to do what he liked with the material, particularly if his own discovery is non-existent or very limited. So the obligation is not to be likened to a term implied in a contract between the parties to the litigation. On the contrary, it is an obligation to the court, not the other party, which is implied. It is for that reason that its breach is treated as contempt. The obligation is imposed as a matter of law."
[Emphasis added. Footnotes omitted]
17 The Plaintiff submits that the implied undertaking does not arise in the present circumstances because the proposed use of the documents produced on subpoena and affidavits is not for a collateral or improper purpose. In this respect, the Plaintiff also refers to a recent decision of the Court of Appeal in Victoria in Hazell-Wright v 32 Domain Pty Ltd [2020] VSCA 129, in which the Court (Tate, McLeish and Hargrave JJA) observed at [19]:
In our view, these cases provide support for a general proposition that there is a class of subsequent cases between the same parties, or their privies, where the connection between the two cases has the result that the Harman undertaking in the earlier case does not prevent use of documents or information subject to that undertaking in the subsequent proceeding…
18 Having regard to these principles, the Plaintiff contends that the purpose for which the documents are sought to be used is the very purpose for which they were obtained under the compulsory process of the Court: see, eg, an analogous context in LCM Operations Pty Ltd, in the matter of 316 Group Pty Ltd (In Liquidation) [2021] FCA 324 at [17]-[27] (Stewart J). Accordingly, the Plaintiff submits that the implied undertaking does not prevent the proposed use of the documents because the purpose of the public examinations is inextricably intertwined with the claims made in this proceeding and its outcome.
19 More specifically, the Plaintiff submits that the following matters are integral to both this proceeding and the issues to be explored in public examinations:
(1) the governance and management of Royal Express;
(2) the involvement of various individuals in its affairs; and
(3) the nature and purpose of various transactions entered into or invoices issued.
20 I agree that the proposed use is not for a purpose unconnected with, or collateral to, the litigation in the course of which the documents were created or produced: see Gavan v FSS Trustee Corporation [2019] NSWSC 667 at [91] (Ward CJ). To the contrary, this proceeding and the foreshadowed public examinations ought to be viewed as symbiotic, in the sense that the public examinations are intended to investigate the examinable affairs of Royal Express, including potential contraventions of the Corporations Act, which are at the heart of the principal allegations in the Plaintiff's Statement of Claim.
21 On that basis, leave is strictly not required and it would be sufficient to make a declaration that the implied undertaking does not preclude the proposed use of the documents. However, out of an abundance of caution, I have considered whether leave should be granted for the Plaintiff to be relieved from the implied undertaking.
22 In order to be released from the implied undertaking, the party concerned must demonstrate "special circumstances": Springfield Nominees Pty Ltd v Bridgelands Securities Ltd [1992] FCA 720; 38 FCR 217 at [17], [22]-[23], [26] (Wilcox J); Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3; 218 ALR 283 at [31]-[32] (Branson, Sundberg and Allsop JJ). This test was recently endorsed by the Full Court in Glencore Coal Pty Limited v Franks [2021] FCAFC 61 at [20] (Reeves, Perry and Abraham JJ).
23 As the Full Court observed in Liberty Funding at [31] (Branson, Sundberg and Allsop JJ):
… The notion of "special circumstances" does not require that some extraordinary factors must bear on the question before the discretion will be exercised. It is sufficient to say that, in all the circumstances, good reason must be shown why, contrary to the usual position, documents produced or information obtained in one piece of litigation should be used for the advantage of a party in another piece of litigation or for other non‑litigious purposes. The discretion is a broad one and all the circumstances of the case must be examined. In Springfield Nominees, Wilcox J identified a number of considerations which may, depending upon the circumstances, be relevant to the exercise of the discretion. These were:
• the nature of the document;
• the circumstances under which the document 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 in to the hands of the applicant; and
• most importantly of all, the likely contribution of the document to achieving justice in the other proceeding.
[Emphasis added]
24 It is significant that, in the present circumstances, the documents produced in response to subpoenas and affidavits filed or served in this proceeding came into existence for the purpose of preliminary investigations by the Receiver into the corporate affairs of Royal Express. For the reasons I have explained, the proposed use of those materials in public examinations will involve overlapping issues with the proceeding on foot and a commonality of parties. Plainly, the materials sought to be relied on are relevant to the examinable affairs of Royal Express: see ss 9 and 53 of the Corporations Act and Re Last Lap Pty Ltd (in liq) (No 3) [2020] FCA 1289 at [54]-[61] (Anderson J). Further, the materials will assist in ensuring the public examinations are conducted in the interests of justice, including in a manner that is efficient and minimises cost and delay, consistent with the overarching purpose in s 37M of the Federal Court of Australia Act 1976 (Cth). That is a significant factor relevant to my discretion, as identified in analogous circumstances in Re Endeavour Securities (Australia) Ltd (in liq) [2020] FCA 1773 at [14]-[15] (Derrington J).
25 Accordingly, to the extent necessary, I grant leave for the Receivers to use the documents in the foreshadowed public examinations.