CATCHWORDS

PRACTICE and PROCEDURE - order made granting leave to inspect and use for business purposes of the respondent documents produced on subpoena - whether order should be varied or discharged - access to documents limited to legal representatives only upon production pursuant to subpoena - documents subsequently tendered in evidence - principles discussed.

Federal Court Rules O 15 r 18

Russell v Russell (1976) 134 CLR 495

Scott v Scott [1913] AC 417

Harman v Secretary of State for the Home Department

[1983] AC 280

Springfield Nominees Pty Limited v Bridgelands Securities Limited (1992) 38 FCR 217

Bibby Bulk Carriers Ltd v Cansulex Ltd [1989] 1 QB 155

United States Surgical Corp v Hospital Products International Pty Ltd (S Ct, NSW, McLelland J, 7 May 1982, ED No 2094/81 - reported in NSW Supreme Court Procedure, p 8571)

Eltran Pty Ltd v Westpac Banking Corporation (1990) 25 FCR 322

CHAPMANS LIMITED v

AUSTRALIAN STOCK EXCHANGE

No. NG 20 of 1994

Tamberlin J

Sydney

25 August 1995

IN THE FEDERAL COURT OF AUSTRALIA)

NEW SOUTH WALES DISTRICT REGISTRY)    No. NG 20 of 1994                GENERAL DIVISION                  )

          BETWEEN:                CHAPMANS LIMITED

                                  (ACN 000 012 386)

                                  Applicant

          AND:                    AUSTRALIAN STOCK

                                  EXCHANGE LIMITED

                                  (ACN 008 624 691)

                                  Respondent

CORAM:        TAMBERLIN J

PLACE:        SYDNEY

DATED:        25 AUGUST 1995

                     REASONS FOR JUDGMENT

Before me is a Notice of Motion by Alexanders Securities Limited ("Securities") and Alexanders Discount Pty Limited ("Discount") which seeks an order:

          "That the Order made in the proceedings on 10 July 1995 granting leave to any full time employee of the Respondent to inspect and use for the purposes of business of the Respondent documents supplied by Alexanders Securities Limited and Alexanders Discount Pty Ltd in these proceedings or by the Auditor Mr G Swan, be varied or discharged."

Securities and Discount are related corporations to each other and to the applicant. I am informed that they have common directors.

The present dispute between the parties relates to the order, mentioned above, granting leave to inspect and use documents, made by Beaumont J on 10 July 1995. The issue is whether that order should be varied or discharged.

His Honour suspended the operation of the order for a period of 28 days and in the meantime reserved liberty to Securities and Discount to apply on notice to vary or discharge that order. Liberty was reserved on the footing that it would not create any onus on the moving party.

The documents relating to Securities and Discount were produced pursuant to a subpoena addressed to Mr G Swan, who was the auditor of the applicant, Securities and Discount. When the documents were produced to the Court on 8 May 1995 Beaumont J made an order granting access to legal representatives of the parties only, on the basis that there should be no publication of contents to a third party, without leave of the Court.

The transcript shows that the documents in question became part of Exhibit 1 in the proceedings which comprise a bundle of documents tendered by the respondent on 10 May 1995. His Honour accepted the tender of the bundle subject to objection. Counsel for the applicant later stated that he had no objection to the documents being admitted into evidence and there was no application that any of the tendered documents should be confidential or made available only to legal representatives unless leave was granted by the Court to make them available to other persons.

The transcript also discloses that two of the witnesses, Mr Boris Ganke and Mr Booth were cross-examined on certain parts of some of the documents in the bundle produced by Mr Swan. There was no application for the transcript relating to any of the documents of Securities and Discount so produced and used in cross-examination to be made confidential.

After judgment had been delivered on 10 July 1995, counsel for the respondent referred to O 15 r 18 of the Federal Court Rules and pointed out that the documents of Securities and Discount in the bundle of documents, comprising Exhibit 1, included documents that were produced on subpoena by Mr Swan.  He referred to the order made initially when the documents were produced on subpoena to Mr Swan that access to them be restricted to legal representatives. After judgment counsel sought leave of the Court for the respondent to inspect and use the documents subpoenaed for business purposes of the respondent. His Honour acceded to this request subject to any application being made within 28 days for variation or discharge of the order.

That application has now been made before me.

Order 15 r 18 of the Federal Court Rules reads as follows:

          "18. Any order or undertaking, whether express or implied, not to use a document for any purpose other than those of the proceedings in which it is disclosed shall cease to apply to such a document after it has been read to or by the Court or referred to, in open Court, in such terms as to disclose its contents unless the Court otherwise orders on the application of a party, or of a person to whom the document belongs."

On the present hearing Securities and Discount were represented by a solicitor, Mr Chaffey. He submitted that there should be an adjournment because an application had been made for particulars from the respondent as to the purposes for which it intended to inspect and use the documents subpoenaed from Mr Swan.

The respondent contends that it does not have to furnish such particulars and submits that it would be unduly restrictive on it to have to give particulars which constrained it as to the use which it may seek to make of the documents. I agree with this submission.  The respondent opposed the discharge or any variation of the order made by Beaumont J.

Principles

In my view the underlying principle in the present matter is that stated by Gibbs J in Russell v Russell (1976) 134 CLR 495 at 520:

          "It is the ordinary rule of the Supreme Court, as of the other courts of the nation, that their proceedings shall be conducted "publicly and in open view ... This rule has the virtue that the proceedings of every court are fully exposed to public and professional scrutiny and criticism, without which abuses may flourish undetected. Further, the  public administration of justice tends to maintain confidence in the integrity and independence of the courts. The fact that courts of law are held openly and not in secret is an essential aspect of their character. It distinguishes their activities from those of administrative officials, for "publicity is the authentic hall-mark of judicial as distinct from administrative procedure". .... Of course there are established exceptions to the general rule that judicial proceedings shall be conducted in public; and the category of such exceptions is not closed to the Parliament. The need to maintain secrecy or confidentiality, or the interests of privacy or delicacy, may in some cases be thought to render it desirable for a matter, or part of it, to be held in closed court ..."

A similar principle was adverted to by Lord Shaw in Scott v Scott [1913] AC 417 at 477 where he quoted Jeremy Bentham:

          "Publicity is the very soul of justice. It is the keenest spur to exertion and the surest of all guards against improbity. It keeps the judge himself while trying, under trial".

Order 15 r 18 resulted from the decision of the House of Lords in  Harman v Secretary of State for the Home Department [1983] AC 280.  See Springfield Nominees Pty Limited v Bridgelands Securities Limited (1992) 38 FCR 217 at 220-224 per Wilcox J, and Bibby Bulk Carriers Ltd v Cansulex Ltd [1989] 1 QB 155 at 158-159.

In Harman the House of Lords (3-2) held that a solicitor was guilty of civil contempt in allowing a journalist who had been present during part of the hearing to have access to certain documents that had been read out in open court including confidential documents disclosed by the Home Office. Access to the documents was provided by the solicitor for what was later said to be for the extraneous purpose of allowing the journalist to write a newspaper article. The article was highly critical of Home Office ministers and civil servants.

The majority held that a solicitor who, in the course of discovery in litigation obtained possession of copies of documents belonging to a client's adversary gave an implied undertaking to the court not to use the copies, nor to allow them to be used, for any purpose than the proper conduct of the action on behalf of the client. The fact that such documents were read out in open court at the hearing of the action, whether they were admitted in evidence or not, did not bring that implied undertaking to an end, and breach of it was held to be civil contempt.

In that case the documents in question although read in open court had not been tendered. In the present case the documents were admitted in evidence and read by the Court and no application was made to have either the documents or cross-examination on them made subject to confidentiality.

Harman's Case, as Lord Diplock pointed out at [1983] AC 300, turned on its own particular facts which were "very special".

In the course of the opening speech in the case the subject of the decision in Harman, counsel read all "material parts" (being about 800 pages) of documents that had been compiled by the solicitor against whom the contempt proceedings were brought. The trial judge, Tudor Evans J, ruled that the subject documents were not admissible  in evidence.

Harman's case was considered by McLelland J in United States Surgical Corp v Hospital Products International Pty Ltd (S Ct, NSW, McLelland J, 7 May 1982, ED No. 2094/81 - reported in NSW Supreme Court Procedure, p 8571). The question before his Honour in that case related to documents produced by third parties either in response to subpoenae or included in the defendant's list of documents for discovery in respect of which claims were made that they were confidential and should not be disclosed to the plaintiff.

A number of these documents were tendered and admitted into evidence in open court during the trial.

The question raised was whether the plaintiff and its representatives were able to, or should be given leave to, use copies of such documents in the conduct and for the purpose of other proceedings pending in the United States brought by the plaintiffs against three of the defendants in the proceedings before his Honour.

His Honour pointed out that the copies of the documents in the plaintiff's possession were obtained as a consequence of discovery or the issue of subpoenae. Accordingly, prima facie, the plaintiff should not be permitted to take advantage for collateral purposes of the possession of such documents.

Importantly, for present purposes, his Honour drew a distinction between the proceedings before the House of Lords in Harman's case and the circumstances before him where the documents had been admitted into evidence in open court. He pointed out that the plaintiff in the case before him might have applied for leave to take copies and that, if such leave had been sought in relation to documents admitted into evidence in open court, he considered it would have been granted, possibly subject to some restrictions on use of copies, depending on the nature of the individual documents. He did not consider there would be any restriction which would preclude the use of such documents for the purposes of the proceedings in the United States. He said at 8573:

          "As between the parties such documents have lost their confidentiality by being admitted in evidence in open court in the (at least notional) presence of the public and of the plaintiff, and there is every reason why in such circumstances they should be available for the purpose of the related litigation in the United States." (Emphasis added)

In November 1989 the Federal Court Rules were amended by insertion of Rule 18 into Order 15. This was clearly to abrogate the decision in Harman.

In Eltran Pty Ltd v Westpac Banking Corporation (1990) 25 FCR 322, Pincus J held that when documents are subpoenaed and go into evidence in legal proceedings, they can be used in later legal proceedings unconnected with the earlier proceedings.

In that case the respondent sought orders to strike out parts of a statement of claim as an abuse of process because they had been prepared on information from documents obtained by subpoena in earlier criminal proceedings.  His Honour refused the application.

His Honour distinguished Harman's case on the basis that it involved a situation where documents obtained by compulsory court process were read out in open court but later excluded from evidence. He noted, however, that the speeches of the majority in the House of Lords did not draw any distinction between circumstances in which the documents did not get into evidence and those in which they were admitted. Nevertheless, he considered that it would have been contrary to the fundamental principle of open justice to hold a person in contempt for using documents admitted into evidence in other proceedings, and he referred to Russell's Case (supra).

He also referred to the United States Surgical Corp case and noted the remarks of McLelland J that, as between the parties, such documents lose their confidentiality when they are admitted in evidence in a court. He then concluded that there had been no improper use of the documents in the Eltran Case.

The Present Case

In my opinion O 15 r 18 applies to the present case. Here, the documents in question were admitted into evidence without objection or limitation and although there is no indication that they were read to the Court, they must be taken to have been read by the Court. Such reading by the Court of documents admitted into evidence disclosed the contents of the documents to the Court. In my view the rule does not require that the documents be read orally and aloud so that everyone present in the Court is fully familiar with their contents. Such a reading of the rule would unduly restrict the practical operation of the rule. Once the documents are admitted into evidence in open court without limitation then the contents of the documents must be taken to have been disclosed for the purposes of r 18.

I do not think it is appropriate in the circumstances of the present case to make any order to the contrary of that made by Beaumont J. No grounds have been made out as to why I should do so.

Accordingly, it follows that any order of confidentiality or any implied undertaking as to the use of the subject documents has ceased to apply.  Therefore, unless the Court otherwise orders, the documents may be used for any lawful purpose in addition to their use in the proceedings which were heard before Beaumont J. This being so, the documents can be used by the respondent without leave and I decline to vary or discharge the relevant order made by Beaumont J on 10 July 1995.

The Notice of Motion by Securities and Discount will therefore be dismissed. I will hear the parties on the question of costs.

I certify that this and

the preceding ten (10)

pages are a true copy of the

Reasons for Judgment herein of

his Honour Justice Tamberlin.

Associate:

Date:                         25 August 1995                                       

Solicitor for Applicant:            Mr W Chaffey of Glynn Chaffey Solicitors

Counsel for Respondent:       Mr T D Castle                                              

Solicitors for Respondent:    Allen Allen & Hemsley

Date of Hearing:              14 August 1995                                       

Date Judgment Delivered:            25 August 1995