Use of Compulsory Documents in Bankruptcy Proceedings Allowed

The Court allowed the use of documents produced under compulsion in bankruptcy proceedings, finding that special circumstances existed and no prejudice was likely to occur to the producer of the documents.

Supreme Court New South Wales

Medium Neutral Citation: [COMPANY] v [NAME] [2018] NSWSC 455 Hearing dates: 6 April 2018 Decision date: 06 April 2018 Jurisdiction: Common Law Before: R A Hulme J Decision: Permit the use of documents by the defendant's [NAME] in other proceedings Catchwords: CIVIL PROCEDURE — implied undertakings – documents produced under compulsion – release from undertaking — special circumstances – whether release would cause prejudice to producer of documents – where defendant's [NAME] sought to use documents in other proceedings – where producer of documents did not provide reasons why consent withheld – where producer of documents did not indicate any apparent prejudice – use of documents permitted Cases Cited: [NAME] v Secretary of State for the Home Department [1983] 1 AC 280 Hearne & [NAME] v [NAME] & Ors (2008) 235 CLR 125; [2008] HCA 36 Category: Principal judgment Parties: [COMPANY] (First plaintiff) [COMPANY] (Second plaintiff) [NAME] (Defendant) [NAME] (Third party) Representation: Counsel:

[redacted] [NAME] (Applicant/Defendant) [NAME] (Third party) File Number(s): 2017/116773

Judgment 1. HIS HONOUR: It is a principle that documents compulsorily produced in the course of litigation will not normally be permitted to be used by a party or a non-party for some ulterior or alien purpose. That principle and its rationale is discussed in the judgment of Hayne, Heydon and Crennan JJ in Hearne & [NAME] v [NAME] & Ors (2008) 235 CLR 125; [2008] HCA 36 at [105]-[114]. This "obligation" not to use such documents for other purposes is one that is owed to the Court rather than to a party. [ADDRESS] has the right to control it and to modify or release a person from its effect if it sees fit. It has been referred to as "an implied undertaking to the Court". It is also sometimes called a "[NAME] undertaking" after [NAME] v Secretary of State for the Home Department [1983] 1 AC 280.

2. The defendant in these proceedings has been declared bankrupt. His [NAME] seeks to use documents produced in the proceedings in the course of proceedings in the Federal Court of Australia relating to that bankruptcy and proceedings that might otherwise arise in relation to that bankruptcy.

3. The documents in question include documents produced in response to correspondence by [COMPANY]. A director of that company has indicated, in a letter of 3 April 2018, that it does not consent to the documents being used by the [NAME] in other proceedings. Otherwise, the plaintiff in the proceedings has notified its consent. The defendant, [NAME], has not been consulted as to his position and I accept from what [NAME], who appears for the applicant [NAME], has told me that that is for understandable reasons.

4. The documents in question also include an affidavit of [NAME], the estranged wife of the defendant, that was filed in Court on 28 March 2018 and relates to certain aspects of her financial situation. [NAME] is represented today and it has been indicated that there is no objection to her affidavit being used by the [NAME], subject to certain conditions which are incorporated in the proposed orders the Court will make which will have the effect of protecting her personal and private information from disclosure.

5.

Accordingly, the only objection to be considered is that raised by [COMPANY].

6. A covering letter which accompanied the documents produced by [COMPANY] dated 14 March 2018 include: "We have provided detailed information to you in this regard confidentially and it is not to be used for any other purpose". The letter of 3 April 2018 refers to that as being the reason why [COMPANY] does not consent.

7. Having regard to the nature of the obligation or undertaking that relates to the use of documents compulsorily produced in the course of litigation not being used for other purposes, it is relevant to have regard to whether there is, or might be, any prejudice to the party that was required to produce the documents. In that regard, I note that the documents do not relate to the affairs of [COMPANY] itself but to the affairs of the defendant who, it would seem, was a client of that company. It is not apparent that the proposed use of the documents by the [NAME] could be prejudicial to [COMPANY] at all.

8. It is relevant to have regard to whether the applicant has a bona fide use of the documents in mind and I am satisfied that the [NAME] does.

9. It is relevant to have regard to the basis upon which any objection is made. In that regard, there is no particularisation of the objection apart from an assertion that the documents were produced with an expectation that they would remain confidential and used only in the primary proceedings.

10. The application is said to be brought for an abundance of caution because most of the documents, that is, those aside from the affidavit of [NAME], have apparently become evidence in the primary proceedings. I readily understand such a cautionary approach being taken having regard to the potential ramifications of breach of the principle in question.

11. Having regard to the nature of the use proposed by the [NAME], the conditional consent by [NAME], which is reasonable, and the lack of any apparent prejudice to [COMPANY] in relation to its documents, I propose to accede to the application.

12. I make the orders set out in the short minutes of order which have the effect of permitting the use of the documents proposed by the defendant's [NAME].

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Amendments 17 April 2018 - Amendment to catchwords DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 17 April 2018