Case: Johns v Australian Securities Commission [1993] HCA 56 ; (1993) 178 CLR 408
Outcome: cited
In the case, however, of an innocent third party acting bona fide and thus without notice, the circumstances which condition an obligation of conscience are much removed from the commercial intimacy of a bilateral relationship between the originator and primary disclosor and the originator's immediate recipient, importing that obligation. It seems to follow logically in the case of an innocent third party that the court will closely examine the contended circumstances that are said to warrant intervention beyond simply whether the third party has been put on notice and thus identify the 'matters which determine whether a duty of confidence has devolved' upon a third party ( Johns v Australian Securities Commission [1993] HCA 56 ; (1993) 178 CLR 408 at 460, per Gaudron J). The reasons of the primary Judge suggest that his Honour had in mind the notion that since an assessment of the circumstances in which OMI continues to acquire articles of manufacture said to embody RTI's confidential information includes acceptance of the position that OMI acted as an innocent third party for value pursuant to an arms-length contract, the 'relevant circumstances' of the present applicant, properly examined, do not give rise to an obligation of conscience in OMI, rather than a notion of simply applying a derivative proprietary rule that a bona fide third party for value can not be the subject of the court's intervention. 72 In Johns v Australian Securities Commission at 460, Gaudron J recognised that in Foster v Mountford &amp; Rigby Ltd (1976) 29 FLR 233 at p 238, Muirhead J enjoined a publisher on an interlocutory basis from continuing to publish and distribute a book revealing, in breach of an obligation of confidence on the part of the author, sites and objects of deep religious and cultural significance to particular Aboriginal claimant groups, and in Wheatley v Bell [1982] 2 NSWLR 544 at p 550, Helsham CJ (in Equity) enjoined on an interlocutory basis innocent licensees (described as parties who 'have already been licensed or chosen, or engaged, or are either purchasers or potential purchasers') of a promotional business system from using that system notwithstanding that they had apparently paid contracted amounts to a disclosee who had failed to observe an obligation of confidence to the plaintiff disclosor. Gaudron J noted at p 460 that the law had not developed to a point of identifying in a 'definitive or comprehensive way' the matters which would determine whether a duty of confidence might arise in a third party. 74 The decision in Johns v Australian Securities Commission , on this aspect of the matter at least, turned on the basis that the information made available voluntarily to the relevant media organisations had become publicly available and the question of the innocence of the third parties, Australian Broadcasting Corporation and the Herald &amp; Weekly Times Ltd, would require further determinations of questions of fact. The decision in Foster v Mountford arose out of an ex parte application and the commercial arrangements with the publisher were not examined. The decision in Fraser v Evans concerned the disclosure to an English national newspaper of aspects of a confidential report submitted by the plaintiff as a public relations consultant to the Greek Government. The case seemed not to involve acquisition of confidential information pursuant to an arms-length contract. Although the consultant had no standing to agitate a contended obligation on the part of the newspaper, and the information, in any event, was of such a nature that disclosure was in the public interest, the statement of general principle recognises that a third party who has not received confidential information in confidence might be restrained 'once he gets to know that it was originally given in confidence'. The decision in Wheatley v Bell adopted that expression of principle together with the observation of Professor Pettit ( Equity and the Law of Trusts , 3 rd ed (1974)) that a third party who knowingly obtains confidential information in breach of confidence or in any other fraudulent manner will be restrained from use and 'even if a man obtains the confidential information innocently, once he gets to know that it was originally given in confidence, he can be restrained from breaking that confidence', as the foundation for the interlocutory orders against the innocent licensees. 81 There is no doubt that the authorities recognise that an innocent third party thus acting bona fide may come into possession of confidential information of a primary disclosor either by reason of a disclosure in breach of an obligation of confidence by the disclosee owed to the primary disclosor or because an entity dealing with the third party may have a degree of interconnection with the initial recipient such that information has been disclosed to that entity in breach of an obligation of confidence and then disclosed to the third party; and, in principle, 'in some circumstances the restraint of an apprehended or continued breach of confidence may involve enjoining third parties' ( Breen v Williams [1995] HCA 63 ; (1996) 186 CLR 71 per Gummow J at p 129; see also, Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2002) 54 IPR 161 per Gummow and Hayne JJ [137] [2001] HCA 63 ; (2002) 185 ALR 1; and Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3 ; (1997) 188 CLR 501 at 537 and 567; Johns v Australian Securities Commission (supra)). Although Gummow J in Breen v Williams at p 129 was emphasising that the assertion of a right to relief in respect of an obligation of confidence does not rest upon any species of proprietary right, his Honour also notes that the circumstances of disclosure to the third party condition whether such a party will be enjoined.