Case: Hearne v Street [2008] HCA 36 ; (2008) 235 CLR 125
Outcome: discussed
there is an issue as to whether the solicitor for the council should be allowed to have access to these documents. She gave evidence that she acts for over 30 other councils, which are considering bringing similar or related claims against Lehman Brothers. The implied obligation or undertaking, as to confidentiality, is an important adjunct to the administration of justice in proceedings. The implied undertaking is a formula by which the law ensures that no harsher or more oppressive burden is placed on litigants or persons who produced documents than is necessary to do justice in the proceedings, at the stage they have reached. Persons who give discovery or produce documents under compulsion can suffer a very serious invasion of the privacy and confidentiality of their affairs: Hearne v Street [2008] HCA 36 ; (2008) 235 CLR 125 , at 158-159 [107] per Hayne, Heydon and Crennan JJ. There is a public interest in preserving the ordinary confidentiality that attaches to production of documents under compulsion by the Court. It is the circumstance that Lehman Brothers is, in fact, a party to this litigation, which attracts the jurisdiction and, ultimately, the exercise of my discretion, to order production of the documents the council has sought. I do not see, at the moment, any reason why the council should be relieved of the constraint, imposed in the implied undertaking to keep confidential and to use the documents only for the purposes of these proceedings and to assist it in determining its position for the adjourned second creditors' meeting. The council's ability to use the information in the documents to be produced extends to include, in my view, informing itself as to how it ought approach voting on any proposals for a deed of company arrangement, or liquidation, of Lehman Brothers, since those matters affect its entitlement to enforce, or may affect its entitlement to enforce, any judgment and the quantification of that judgment. I am of opinion that there is good reason to suppose that if Ms Banton is given access to the documents that I have ordered be produced, she will be placed in an impossible position as a fiduciary with the knowledge that she will gain of their contents in advising or dealing with persons who are her other clients. I think that I should afford the parties an opportunity to discuss and formulate an appropriate order that enables a person who would be bound by the implied undertaking, or may give express undertakings, who can advise the council, but will not be able to be involved in giving advice to or communicate with the other clients of Ms Banton's. Whether that person is independent entirely of the solicitors for the council or a person who, through the use of Chinese walls, can discharge that function, I think I should leave for the parties to discuss in the first instance. Finally, Lehman Brothers has asked that any order I make be stayed for 24 hours to enable it to consider its position as to whether it would wish to seek leave to appeal from my decision. I think that is a reasonable request. The reason I have given my judgment now is because of the urgency and the need, if any party wishes to challenge my decision, that they have some opportunity to do so and I would not wish to frustrate that. I certify that the preceding fifty-two (52) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. Associate: Dated: 21 May 2009 Counsel for the Applicant: M Pembroke SC and T Mehigan Solicitor for the Applicant: Piper Alderman Counsel for the Respondent: B Coles QC and V Whittaker Solicitor for the Respondent: Clayton Utz Dates of Hearing: 19 and 21 May 2009 Date of Judgment: 19 May 2009 Date of making of Orders: 21 May 2009 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2009/532.html