Case: Moage Limited (in liq) v Jagelman (2002) 43 ACSR 173
Outcome: applied
recently, in Moage Limited (in liq) v Jagelman (2002) 43 ACSR 173, Gzell J stated at [10]: 'It is the duty of a party to civil litigation who, in the course of discovery has obtained possession of copies of documents belonging to the other party, to refrain from using the advantage enjoyed by virtue of such possession for some collateral or ulterior purpose not reasonably necessary for the proper conduct of the action: Home Office v Harman [1983] 1 AC 280 at 302; [1982] 1 All ER 532 at 536. As Lee J points out in Bailey v Australian Broadcasting Corp [1995] 1 Qd R 476 at 484 while the basis of a party's obligation to limit the use of discovered documents is expressed in terms of an implied undertaking to the court, its underlying rationale can be traced to broader notions of public policy. In Riddick v Thames Board Mills Ltd [1977] QB 881 at 895; [1977] 3 All ER 677 at 687 Lord Denning MR noted that the reason for compelling discovery lies in the public interest in discovering the truth so that justice may be done between the parties. That public interest is to be put into the scales against the public interest in preserving privacy and protecting confidential information. The balance comes down in the ordinary way in favour of the public interest of discovering the truth that is in making full disclosure. The implied undertaking extends beyond documents produced on discovery to other court documents: see eg Ainsworth v Hanrahan (1991) 25 NSWLR 155 at 166-8, 169-70. The undertaking has been held to apply to witness statements and affidavits: Central Queensland Cement Pty Ltd v Hardy [1989] 2 Qd R 509] .' That conclusion is, with respect, a corollary of the proposition that a court will not release or modify the implied undertaking save in special circumstances and where the release or modification will not occasion injustice to the person providing the documents or information in question: see Crest Homes plc v Marks [ 1987] AC 829 at 860 per Lord Oliver and the authorities referred to by Gzell J in Moage at [15]. The conclusion referred to in [22] supra also informs the obligation of a party applying for a modification or release of the undertaking to specify the documents in respect of which the modification or release is sought. In Australian Securities and Investment Commission v Marshall Bell Hawkins Limited [2003] FCA 833 at [13] , Merkel J stated in this regard: 'The requirements of specificity in respect of the documents to be used and the purpose for which they are to be used is appropriate because the implied undertaking should only be modified or released to the extent that it is in the interests of the administration of justice or in the public interest to do so: see Springfield Nominees at 225 and Moage Ltd (in liq) v Jagelman (2002) 43 ACSR 173 at 176. Thus, the modification or release should be no greater than is necessary or appropriate to meet the interests of the administration of justice or the public interest. Further, in determining whether to exercise its discretion to grant the modification or release sought, it will usually be necessary for the Court to identify with precision the documents to be released and the purpose of that release.' There are no other special circumstances, or at least none which have been identified, which would warrant a grant of leave. There are, however, other reasons which impel one to a conclusion as to why leave should not be granted: 1. The documents "IAM4" to "IAM7" were produced in response to the compulsory processes of the Court; the maintenance of any implied undertaking is all the more stronger in such circumstances: Moage , supra, at 176 per Gzell J. 2. The claim of public interest or policy, [27] supra, is fully answered by what Santow J said in Wilson Marketing Research , supra, at [11]: 'The public interest in bringing insolvent companies to winding up can be pursued by others, in particular, the Australian Securities Commission: see s 459P(1)(f) (and note also s 459P (1)(g)).' 3 . The alternative remedies available to Mr Loughnan to recover his debt other than by recourse to a winding up of ThoughtWeb Systems cannot be ignored. In the circumstances, the motion must be dismissed. While it forms no part of the reasons underlying my conclusion on the issues raised by the motion, at the time of the hearing I formed the preliminary view that the motion was brought as a strategy which, if it succeeded by having ThoughtWeb Systems wound-up, would enable Mr Loughnan to exert greater influence over the ultimate outcome of the mainstream proceedings by way of settlement, compromise or otherwise than he could possibly exert by recourse to the means otherwise available to him. Because I initially thought this might impact on my conclusion, I decided to put consideration of the motion to one side and revisit it at a later date. I have to say that this has not helped; I have not changed the preliminary view I formed at the time of the hearing although, as my conclusion in no way depends on this preliminary view, the delay it has occasioned is to be regretted. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edmonds. Associate: Dated: 21 April 2006 Counsel for the Applicant: Mr M Condon Solicitor for the Applicant: Dibbs Abbott Stillman Counsel for the Respondent: Mr J T Johnson Solicitor for the Respondent: Norman Waterhouse Dates of Hearing: 26 October 2005, 1 November 2005 Date of Judgment: 21 April 2006 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2006/432.html