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Breach of confidence

AMI Australia Holdings Pty Ltd & anor v Fairfax Media Publications Pty Ltd & ors [2010] NSWSC 1395. Brereton J. 2.12.10.

19 To establish a case for final relief for breach of confidence, a plaintiff must show,

first, that there is information capable of being identified with some specificity;

secondly that that information has the necessary quality of confidence (which involves that it is not otherwise in the public domain); and

thirdly, that it was received by the defendant in circumstances which imparted an obligation of confidence: Coco v A N Clark (Engineers) Limited [1969] RPC 41, 43; Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434, 443 (Gummow J); Smith Kline & French Laboratories (Australia) Ltd & AlphaPharm Pty Ltd v Department of Community Services (1990) 22 FCR 73, 87 (Gummow J); Worth Recycling Pty Ltd v Waste Recycling & Processing Pty Ltd [2009] NSWCA 354, [24]].

The second and third of these elements are considered further below.

20 The requisite quality of confidence, and the “iniquity” exception. Information may lack the necessary attribute of confidence, not only if it is already in the public domain, but also if its subject matter is the existence, or real likelihood of the existence, of an iniquity – in the sense of a crime, civil wrong or serious misdeed of public importance – and the confidence is relied upon to prevent disclosure to a third party with a real and direct interest in redressing such crime, wrong or misdeed: Corrs Pavey Whiting & Byrne v Collector of Customs (Vic), 445-6 (Gummow J)].

Although it has sometimes been suggested that this is a discretionary exercise, involving the court in balancing the private interest in maintaining a confidence against the public interest in knowing the truth: AG Australia Holdings Ltd v Burton (2002) 58 NSWLR 464, 513; Woodward v Hutchins [1977] 1 WLR 760, 764; David Syme & Co Ltd v General Motors-Holden’s Ltd [1984] 2 NSWLR 294, 305-6 (Hutley AP), 309-10 (Samuels JA); cf Attorney-General (UK) v Heinemann Publishers Australia Pty Ltd (1987) 8 NSWLR 341, 382 (Powell J); see also Westpac Banking Corporation v John Fairfax Group Pty Ltd (1991) 19 IPR 513, to the effect that the rule was that publication of otherwise confidential material might be permitted in cases in which there was shown to have been some impropriety of such a nature that it ought in the public interest be exposed], the better view is that it is a question of principle, not discretion, founded on what conscionable behaviour demands of the confidant in the circumstances, so that the obligation of confidence will yield only where the confidant in conscience could not be expected to maintain the confidence: Smith Kline & French Laboratories (Australia) Ltd & AlphaPharm Pty Ltd v Department of Community Services, 111 (Gummow J); Bacich v Australian Broadcasting Corporation (1992) 29 NSWLR 1, 16 (Brownie J); Sullivan v Sclanders & Goldwell International Pty Ltd (2000) 77 SASR 419, 427].

In A v Hayden (No 2) (1984) 156 CLR 532, the proposition that the public interest in the disclosure to the appropriate authority – or perhaps even the press – of iniquity would always outweigh the public interest in the preservation of private and confidential information was expressly disapproved as “too broad”, unless “iniquity” was confined to mean serious crime [per Gibbs CJ, at 545-6; see also Mason J, at 560].

Before the “iniquity” exception is attracted, a prima facie case of iniquity must be established: AG Australia Holdings Ltd v Burton, 521, [202]].

But as the following cases illustrate, the exception when attracted can at least sometimes justify disclosure to the press, and it can be attracted in relation to “matters medically dangerous to the public”, which has obvious potential relevance in the present context.

21 In Initial Services Ltd v Putterill [1968] 1 QB 396, the plaintiffs claimed an injunction, damages and delivery up of confidential papers allegedly disclosed by the defendant in breach of an implied term of his contract of service; the defendant alleged that the plaintiffs were engaged in illegal price fixing. Lord Denning MR, in holding that there was an arguable defence, said (at 405) that there could be no confidence preventing an employee disclosing proposed or contemplated commission of a crime or civil wrong, and that the exception extended to crimes, frauds and misdeeds actually committed and in contemplation, provided that the disclosure was justified in the public interest.

The basis was said to be that “no private obligations can dispense with that universal one which lies on every member of the society to discover every design which may be formed, contrary to the laws of the society, to destroy the public welfare”, for which reference was made to Annesley v Earl of Anglesea (1743) 17 State Trials 1139.

His Lordship said that the disclosure must be to a person who had a proper interest in receiving the information: thus, in respect of a crime, the police; or, in respect of a breach of the (UK) Restrictive Trade Practices Act 1956 4 & 5 Eliz 2, c 63, the Registrar; but his Lordship added: There may be cases where the misdeed is of such a character that the public interest may demand, or at least excuse, publication on a broad field, even to the press.

22 An authoritative explanation of the exception was given by Ungoed-Thomas J in Beloff v Pressdram Ltd [1973] 1 All ER 241, (at 260) (emphasis added): The defence of public interest clearly covers and, in the authorities does not extend beyond, disclosure, which as Lord Denning MR emphasised must be disclosure justified in the public interest, of matters carried out or contemplated, in breach of the country's security, or in breach of law, including statutory duty, fraud, or otherwise destructive of the country or its people, including matters medically dangerous to the public; and doubtless other misdeeds of similar gravity. Public interest, as a defence in law, operates to override the rights of the individual (including copyright) which would otherwise prevail and which the law is also concerned to protect. Such public interest, as now recognised by the law, does not extend beyond misdeeds of a serious nature and importance to the country and thus, in my view, clearly recognisable as such.

23 In Castrol Australia Pty Ltd v Emtech Associates Pty Ltd (1980) 51 FLR 184, Rath J quoted the above passage, and added (at 213-4): This passage, in my respectful view, expresses no more than a reasonable elaboration of Viscount Finlay's “higher duty” concept, and is an acceptable statement of the law as to the defence of public interest in an action for breach of confidence … What is particularly important in Ungoed-Thomas J's formulation of principle is his emphasis on the gravity of the conduct that may give rise to the defence. If there is to be a defence labelled public interest, some such confinement of its vague boundaries is in my view essential. … In my opinion the court, in considering whether just cause for breaking confidence exists, must have regard to matters of a more weighty and precise kind than a public interest in the truth being told.

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