Case: Harman v Secretary of State for the Home Department [1983] 1 AC 280
Outcome: cited
The applicants seek orders that they be permitted to provide IMF with a copy of the Ericsson parties' discovered documents in these proceedings (excluding category 17 documents to which confidentiality undertakings apply). They seek such an order because of the implied undertaking by solicitors for a party to whom documents are produced on discovery: ... 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 a contempt of court by the solicitor himself. Harman v Secretary of State for the Home Department [1983] 1 AC 280 at 304 (Lord Diplock). 14 The rationale for the implied undertaking has been variously expressed. Lord Keith propounded it thus ( Harman [1983] 1 AC at 308): Discovery constitutes a very serious invasion of the privacy and confidentiality of a litigant's affairs. It forms part of English legal procedure because the public interest in securing that justice is done between parties is considered to outweigh the private and public interest in the maintenance of confidentiality. But the process should not be allowed to place upon the litigant any harsher or more oppressive burden than is strictly required for the purpose of securing that justice is done. In Lord Diplock's reasoning reliance appeared to be placed upon the unfair advantage that a party acquiring documents through the judicial process of discovery would obtain if empowered to use them for purposes unconnected with the proper conduct of the action. 15 The majority in Harman 1 AC 280 applied the limitation even to documents which had been received or read in evidence. On the latter point, Lords Scarman and Simon dissented (at 313). The consideration which divided the dissenters from the majority is not material for present purposes and, in any event, has been overtaken by O 15 r 18 of the Federal Court Rules which provides, inter alia, that the implied undertaking ceases to apply to a document after it has been read to or by the Court or referred to in open court in such terms as to disclose its contents unless the Court otherwise orders. 17 In Crest Homes Plc v Marks [1987] AC 829, which followed the decision of the House of Lords in Harman [1983] 1 AC at 280, Lord Oliver allowed that the undertaking could be modified to authorise use of discovered documents in other proceedings where there were "special circumstances". In Holpitt Pty Ltd v Varimu Pty Ltd (1991) 29 FCR 576, Burchett J commented on that test (at 578): As far as the expression "special circumstances" is concerned, it is 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 ... If all that is required is that, among the great number of cases in the court in which documents have been discovered, this one must evince some special feature which affords a reason for releasing or modifying the undertaking, there will be no difficulty. Circumstances in which there is a legitimate reason why documents discovered in one proceeding should be made available in another will, viewed in this way, be rare. Lockhart J took a like approach in Sweetman v Australian Thoroughbred Pty Ltd [1992] FCA 1059 and both were followed by Wilcox J in Springfield Nominees Pty Limited v Bridgelands Securities Limited (1992) 38 FCR 217 at 223-225. In the latter case Wilcox J said (at 225): 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. 20 IMF is not a legal practitioner. It is in the business of financing litigation for reward. A large international corporation involved in many commercial transactions might well be concerned that the general disclosure of its discovered documents to such an entity could give rise to a risk that information derived from them could be placed on a database and at some time in the future used for other purposes or other proceedings. I do not suggest that this is likely to happen in the present case. However, the generic risk associated with the wider disclosure of the discovered documents is something which the party discovering those documents is entitled to take into account and be concerned about. It is entitled to seek specificity as to the documents to be disclosed and the purpose for which they are to be disclosed. This is particularly so given that the litigation funder, as in this case, does not have an interest in the cause of action nor any right to direct or control the conduct of the proceedings. It has certain rights in relation to their settlement which were referred to in my earlier judgment in relation to the application for a stay. Its limited involvement was a basis upon which its support of these proceedings was found not to be an abuse of process. As Callinan and Heydon JJ said in Campbells Cash and Carry Pty Ltd v Fostif Pty Ltd [2006] HCA 41 ; (2006) 229 ALR 58 at 131 [277] : It is a factor pointing against an abuse of process that the funder of litigation "does not meddle at all" or by its contract is left "very little room to intermeddle". Conversely, the more room to intermeddle, the more likely is it that the litigation is an abuse of process. Their Honours cited the earlier decision in these proceedings: QPSX Ltd v Ericsson Australia Pty Ltd (No 3) (2005) 219 ALR 1 at 16 [61]. The second quotation in the above judgment came from that judgment. To the extent that general disclosure of documents to the funder increases the risk of "intermeddling" by the funder it undermines the basis upon which the proceedings were held not to involve an abuse of process. The rationale for the implied undertaking enunciated in Harman [1983] 1 AC 280, which also informs the "special circumstances" threshold, has relevance in this situation even if, which it is not necessary to decide, special circumstances would not be necessary to justify specific disclosures to the funder.