Federal Court of Australia

International Vehicle Solutions Pty Ltd (Trustee) v RAC Insurance Pty Ltd [2026] FCA 121

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 37AF(1)(b)(iv) of the Federal Court of Australia Act 1976 (Cth), throughout the Commonwealth of Australia, and on the ground that the order is necessary to prevent prejudice to the proper administration of justice, the concise statement filed by the applicant on 29 August 2025 (the concise statement) is not to be disclosed, by publication or otherwise, until 4.00 pm on 2 April 2026.

2.    The disclosure or publication of the concise statement to and between the following persons is expressly permitted:

(a)    the Federal Court judge presiding in the matter;

(b)    essential court staff; and

(c)    the applicant, respondent, and their legal representatives.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

VANDONGEN J:

1    The applicant, International Vehicle Solutions Pty Ltd, which trades as 'Keep Driving' (Keep Driving), hires replacement vehicles to customers who have been involved in motor vehicle accidents. Keep Driving does not charge an upfront fee for replacement vehicles but seeks to recover those fees from the other party in the accident who was at fault or from the at fault party's insurer.

2    The respondent, RAC Insurance Pty Ltd (RAC), is an insurer. It provides motor vehicle insurance coverage to its customers and manages claims made against them.

3    Keep Driving's case is that RAC is required to indemnify several drivers in respect of their liability to pay damages to Keep Driving's customers arising out of a series of car accidents over a period of about three and a half years. Specifically, it is alleged that RAC is liable to pay the costs incurred by Keep Driving's customers in hiring a car while their own cars were unavailable because of damage sustained in the accidents.

4    Keep Driving alleges that RAC owed, and continues to owe, each of its insured drivers an implied obligation to act with utmost good faith. It further alleges that this duty of utmost good faith required RAC to honestly and reasonably assess claims made by third parties and to take reasonable steps to resolve those claims for and on behalf of its insured drivers within a reasonable time. Keep Driving claims that RAC's failure to honestly and reasonably assess certain claims was unlawful, in that it involved a breach of its duty of utmost good faith. Further, Keep Driving says that by engaging in that conduct with the intention of causing economic harm to Keep Driving, RAC prevented and interfered with negotiations between Keep Driving, its customers and the drivers who were insured by RAC, and thereby committed the tort of causing loss by unlawful means.

5    These proceedings were commenced by an originating application filed on 29 August 2025, which was accompanied by a concise statement filed on the same date (unredacted concise statement). RAC contends that the unredacted concise statement contains information that discloses the substance of several of its without prejudice communications with Keep Driving (the relevant information). On that basis, RAC seeks a suppression order under s 37AF(1)(b)(iv) of the Federal Court of Australia Act 1976 (Cth) (FCA Act), prohibiting the disclosure of the relevant information for a period of 10 years or until further order, on the ground that such an order is necessary to prevent prejudice to the proper administration of justice: s 37AG(1)(a) of the FCA Act.

6    Interim orders were made pursuant to s 37AI of the FCA Act, prohibiting the disclosure or publication of the relevant information until final determination of RAC's interlocutory application for a suppression order under s 37AF. Before explaining why I have decided that a suppression order should now be made, but for a limited period only, it is necessary to explain the basis of RAC's application for a suppression order in more detail.

RAC's application for a suppression order

7    The unredacted concise statement sets out the essential facts that Keep Driving says supports its claim, as well as the primary legal grounds for the relief sought, the alleged harm suffered and the relief that is sought. The essential facts on which Keep Driving relies are expanded upon in a schedule to the unredacted concise statement. That schedule sets out, in a table form, details of 43 separate claims Keep Driving says it made to RAC on behalf of customers who were involved in car accidents with drivers who were insured by RAC. The schedule includes the names of the Keep Driving customers, the dates on which the relevant car accidents occurred, the names of the drivers who are alleged to have been at fault in the accident and who were insured by RAC, and the amount claimed by Keep Driving for the cost of providing replacement cars. Importantly, the schedule also includes details of Keep Driving's allegations that RAC failed to honestly and reasonably assess those claims. According to RAC, in all but two cases, those details include the relevant information, which summarises RAC's response to those claims, including summaries of any offers of compromise that were made in full and final satisfaction of Keep Driving's demands.

8    RAC contends that the relevant information is protected by without prejudice privilege.

9    By an interlocutory application filed on 1 October 2025, RAC seeks orders pursuant to s 37AF(1)(b)(iv) of the FCA Act prohibiting the disclosure or publication of the relevant information for a period of 10 years or until further order, subject to certain exceptions that are unnecessary to describe. In support of that application RAC relies on an affidavit of Mr David Mulligan, a solicitor employed by RAC's solicitors, sworn on 26 September 2025.

10    In his affidavit, Mr Mulligan deposes that between December 2021 and May 2025, Keep Driving and RAC engaged in settlement negotiations concerning various claims made by Keep Driving on behalf of its customers for payment of car hire fees. Mr Mulligan also describes, in some detail, the various communications that comprise those negotiations and demonstrates that the relevant information discloses the substance of those communications. According to Mr Mulligan, the communications contain RAC's assessment of the quantum of each of Keep Driving's claims, RAC's offers of settlement, and RAC's grounds for disputing or limiting certain aspects of those claims. Mr Mulligan says that those communications were all expressly made on a without prejudice basis and for the dominant purpose of attempting to resolve the disputes between the parties. He also says that he has been informed by one of RAC's Motor Claims Specialists that RAC has not waived, and does not intend to waive, without prejudice privilege in respect of any of the communications.

11    Mr Mulligan deposes that if the relevant communications were to be made publicly accessible, there is a real and substantial risk that RAC (and the drivers insured by RAC) would suffer prejudice in actual or potential related litigation, including:

(a)    potential future proceedings instituted by Keep Driving, whether as an agent for its customers or in some other capacity, for costs allegedly incurred in respect of the hire of replacement cars from Keep Driving;

(b)    proceedings instituted by Keep Driving's customers or their insurers for costs incurred in relation to the repair or replacement cars; and/or

(c)    proceedings for personal injuries instituted by or against drivers insured by RAC or third party beneficiaries under policies issued by RAC, arising from the car accidents that are the subject of the claims identified in the schedule to the unredacted concise statement.

12    Mr Mulligan also says that he has discovered that proceedings have been instituted in the District Court of Western Australia in relation to one of the car accidents that is the subject of one of Keep Driving's claims. In that context, Mr Mulligan states that he believes that if the relevant information were to be made public, it could be relied upon by parties as admissions or positions adopted by RAC about liability or quantum to undermine or prejudice any defences available to RAC, its insured drivers or third-party beneficiaries in related proceedings, to create or exploit perceived inconsistencies between positions adopted in different proceedings, and to prejudice the prospects of achieving settlement in related matters.

13    Before moving on to identify the legislative framework and the relevant principles within which RAC's application for a suppression order falls to be determined, it is necessary to note that neither RAC nor Keep Driving suggested that the Court should finally determine whether the relevant information is in fact protected by without prejudice privilege. As RAC submitted, whether the relevant information is privileged will need to be determined at a later stage.

Relevant legislative framework and the principles to be applied

14    The statutory provisions that confer power on this Court to make a suppression order are found in Div 2 of Pt VAA of the FCA Act.

15    A suppression order means 'an order that prohibits or restricts the disclosure of information (by publication or otherwise)': s 37AA of the FCA Act. Section 37AE provides, relevantly, that in deciding whether to make a suppression order, the Court 'must take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice'.

16    The power to make a suppression order is conferred by s 37AF, which is in the following terms:

37AF    Power to make orders

(1)    The Court may, by making a suppression order or non-publication order on grounds permitted by this Part, prohibit or restrict the publication or other disclosure of:

(a)    information tending to reveal the identity of or otherwise concerning any party to or witness in a proceeding before the Court or any person who is related to or otherwise associated with any party to or witness in a proceeding before the Court; or

(b)    information that relates to a proceeding before the Court and is:

(i)    information that comprises evidence or information about evidence; or

(ii)    information obtained by the process of discovery; or

(iii)    information produced under a subpoena; or

(iv)    information lodged with or filed in the Court.

(2)    The Court may make such orders as it thinks appropriate to give effect to an order under subsection (1).

17    The grounds for making a suppression order are exhaustively set out in s 37AG:

37AG    Grounds for making an order

(1)    The Court may make a suppression order or non-publication order on one or more of the following grounds:

(a)    the order is necessary to prevent prejudice to the proper administration of justice;

(b)    the order is necessary to prevent prejudice to the interests of the Commonwealth or a State or Territory in relation to national or international security;

(c)    the order is necessary to protect the safety of any person;

(d)    the order is necessary to avoid causing undue distress or embarrassment to a party to or witness in a criminal proceeding involving an offence of a sexual nature (including an act of indecency).

(2)    A suppression order or non-publication order must specify the ground or grounds on which the order is made.

18    RAC relies only on the ground that is the subject of s 37AG(1)(a).

19    In Country Care Group Pty Ltd v Director of Public Prosecutions (Cth) (No 2) [2020] FCAFC 44; (2020) 275 FCR 377 at [8] to [9], the Full Court summarised the well-settled principles to be applied when considering whether to make a suppression order:

Suppression or non-publication orders should only be made in exceptional circumstances. That is both because the operative word in s 37AG(1)(a) is 'necessary' and because the court must take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice. The paramount consideration is the need to do justice; publication can only be avoided where necessity compels departure from the open justice principle.

The critical question is whether the making of a suppression or non-publication order is 'necessary to prevent prejudice to the proper administration of justice'. The word 'necessary' in that context is a 'strong word'. It is nevertheless not to be given an unduly narrow construction. The question whether an order is necessary will depend on the particular circumstances of the case. Once the court is satisfied that an order is necessary, it would be an error not to make it. There is no exercise of discretion or balancing exercise involved.

(citations omitted)

20    To those principles may be added the following:

(a)    Mere embarrassment, inconvenience, annoyance, or unreasonable or groundless fears will not be enough to justify the making of a suppression or non-publication order: Australian Competition and Consumer Commission v Cascade Coal Pty Ltd (No 1) [2015] FCA 607 at [30]; and Australian Competition and Consumer Commission v Air New Zealand Limited (No 12) [2013] FCA 533 at [7].

(b)    It is not enough that the making or continuation of a suppression order or non‑publication order may be convenient, reasonable, or sensible, or that it would serve some notion of the public interest, or that as a result of some balancing exercise an order of that sort appears to have one or more of those characteristics: Hogan v Australian Crime Commission [2010] HCA 21; (2010) 240 CLR 651 at [31].

(c)    The onus on an applicant to persuade a court to make an order under s 37AF has been described as 'a very heavy one': Computer Interchange Pty Ltd v Microsoft Corporation [1999] FCA 198; (1999) 88 FCR 438 at [16]; and Australian Competition and Consumer Commission v Valve Corporation (No 5) [2016] FCA 741 at [8].

(d)    It is necessary to identify the contended prejudice to the proper administration of justice that is said would result if the order sought is not made, and it is critical that a connection be made between the asserted necessity and the prevention of prejudice to the proper administration of justice: Lee v Deputy Commissioner of Taxation [2023] FCAFC 22; (2023) 296 FCR 272 at [90], [93], [95].

The parties' submissions

21    In its written submissions, RAC essentially identified two reasons why it contended that a suppression order prohibiting disclosure of the relevant information is necessary to prevent prejudice to the proper administration of justice. First, disclosure, by publication or otherwise, of the relevant information would 'destroy the privilege' in that information. Second, that disclosure of the relevant information risks prejudicing RAC's position, and the position of the drivers insured by RAC, in both these proceedings and in other proceedings that have been commenced concerning the car accidents that are the subject of Keep Driving's claims.

22    It is unnecessary to say anything further about those reasons other than to note that most of RAC's contentions tended to focus on the likely effect on RAC and its insured drivers if the relevant information were to be disclosed. However, the correct focus is on the question of whether a suppression order is necessary to prevent prejudice to the proper administration of justice.

23    Keep Driving did not oppose RAC's application for a suppression order. However, it submitted that if the Court was minded to make a suppression order, then such an order should only remain in force 'until further order'.

Should a suppression order be made under s 37AF(1)(b)(iv)?

24    There are numerous decisions of this Court where without prejudice communications and the terms of settlement agreements have been the subject of suppression orders: Farrell v Super Retail Group Limited (Application for Leave to Appeal Suppression Orders) [2025] FCA 170 at [42]; citing Rogan v White [2024] FCA 1163; Widjabul Wia-bal v Attorney General of New South Wales (Confidentiality of affidavit material) [2023] FCA 438; Trilogy Funds Management Limited v KPMG (A Firm) [2017] FCA 432; Darwalla Milling Co Pty Ltd v F Hoffmann-La Roche Ltd [2006] FCA 915; Equity Financial Planners Pty Ltd v AMP Financial Planning Pty Ltd [2024] FCA 1036; Energy Beverages LLC v Cantarella Bros Pty Ltd (No 2) [2022] FCA 394; Banerjee, in the matter of City Steel Pty Ltd (in liq) [2024] FCA 481; Pigozzo v Mineral Resources Ltd [2022] FCA 1166; Clime Capital Limited v UGL Pty Limited (No 2) [2020] FCA 257; Hopkins v AECOM Australia Pty Ltd (No 8) [2016] FCA 1096; and Booth on behalf of the Gunaikurnai People Claim Group v State of Victoria (No 3) [2020] FCA 1143. However, it is unnecessary to traverse the details of those cases to resolve RAC's application.

25    In Australian Competition and Consumer Commission v NSW Ports Operations Hold Co Pty Ltd [2020] FCA 1232 (NSW Ports Operations) at [51], Wigney J explained without prejudice privilege in the following way:

'Without prejudice' privilege excludes from evidence 'admissions by words or conduct made by parties in the course of negotiations to settle litigation': Field v Commissioner for Railways for New South Wales (1957) 99 CLR 285 at 291. It applies to 'all negotiations genuinely aimed at settlement': Rush and Tompkins Ltd v Greater London Council [1989] 1 AC 1280 at 1299.

26    The policy of without prejudice privilege is that it encourages parties who are attempting to compromise a dispute to communicate with each other freely, without being burdened by the possibility that their communications might be put into evidence in pending or subsequent litigation: Field v Commissioner for Railways for New South Wales (1957) 99 CLR 285 at 291 to 292 (Dixon CJ, Webb, Kitto and Taylor JJ). That general policy is reflected in s 131 of the Evidence Act 1995 (Cth), which relevantly provides that subject to certain exceptions, evidence is not to be adduced of a communication that is made between persons in dispute, or between one or more persons in dispute and a third party, in connection with an attempt to negotiate a settlement of the dispute.

27    A rationale of without prejudice privilege is founded on the public interest in encouraging full and frank negotiations in connection with the settlement of disputes: see, for example, Pigozzo at [161]. It is obviously in the interests of the administration of justice that parties to disputes are encouraged so far as possible to settle their disputes without resorting to litigation, and they should not be discouraged by the knowledge that anything they may say during such negotiations may be used to their prejudice in litigation between them: Yokogawa Aust Pty Ltd v Alstom Power Ltd [2009] SASC 377 at [70] (Duggan J, Sulan and Kourakis JJ agreeing).

28    It has been recognised that the disclosure of information protected by without prejudice privilege may prejudice the proper administration of justice. As Snaden J explained in Naude v DRA Global Limited [2023] FCA 493 at [25], a case in which a suppression order was sought to prohibit disclosure of facts pleaded in a statement of claim that were claimed to be protected by without prejudice privilege:

The privilege exists to promote the settlement of disputes and, thereby, the public interest in the proper administration of justice (realised, as it inevitably would be, by the freeing up of necessarily limited judicial resources): see, for example, the observations of Rares J in Reynolds v JP Morgan Administrative Services Australia Ltd (No 2) (2011) 193 FCR 507, 514 [30]. The disclosure in a pleading of - and consequent reliance of a party upon - communications to which privilege attaches would, generally speaking, undermine the public interest in the administration of justice because it would essentially amount to '…a party that is prima facie in breach of a duty of confidence [taking] advantage of its own wrong': Pigozzo, [170] (Feutrill J).

(emphasis added)

29    However, the fact that information may be protected by without prejudice privilege is not a sufficient reason, in and of itself, to make a suppression order prohibiting its disclosure. As Snaden J also emphasised in Naude at [26]:

It does not follow, however, that a passage in a pleading that undermines the proper administration of justice (assuming, momentarily, that that is what here confronts the court) should be made the subject of a non-publication order. For present purposes, such an order may be made only if it is necessary to prevent prejudice to the proper administration of justice.

(emphasis added)

30    In Naude, an application for a non-publication order was refused because the only prejudice to the proper administration of justice was found to result from a party's intention to rely on pleaded facts and not from the publication or potential publication of that information. It was said in that case that the position may have been different if there were some aspect of commercial or other sensitivity to the confidence that necessarily attaches to communications that are protected by without prejudice privilege: Naude at [28]. In that regard, his Honour noted, citing Huikeshoven v Secretary, Department of Education, Skills and Employment [2021] FCA 1359 at [57] to [58], that it is accepted some prospective litigants may feel deterred from taking legal action to vindicate their rights because doing so might require disclosure of sensitive information, which can qualify as a form of prejudice to the proper administration of justice.

31    At this stage at least, there is no need for the Court to consider whether the relevant information comprises commercial or other sensitive information the disclosure of which might have a chilling effect on prospective litigants. It is established that the general public policy underpinning without prejudice privilege, which protects genuine negotiations between parties to disputes from being admissible in evidence, also extends to protect documents recording or evidencing those negotiations from being discovered or produced to other parties in multi-party litigation: Commonwealth Director of Public Prosecutions v Citigroup Global Markets Australia Pty Limited (No 3 - privilege claims) [2021] FCA 1208 (Citigroup) at [151]; citing Rush & Tompkins Ltd v Greater London Council [1989] 1 AC 1280 at 1305. More importantly for present purposes, without prejudice privilege may also extend to preclude disclosure and production of such documents to parties who are involved in different disputes, provided there is a sufficient connection between the subject matters of the disputes: Citigroup at [152]; citing Mercantile Mutual Custodians Pty Ltd v Village/Nine Network Restaurants & Bars Pty Ltd [1999] QCA 276; [2001] 1 Qd R 276 at [18] to [20] (Pincus JA, McMurdo P agreeing), [35] (Byrne J, McMurdo P generally agreeing); Yokogawa at [83] to [84] (Duggan J, Sulan and Kourakis JJ agreeing); Dowling v Ultraceuticals Pty Ltd [2016] NSWSC 386; (2016) 93 NSWLR 155 at [28] to [35]; and NSW Ports Operations at [53] to [54]. Accordingly, while without prejudice privilege will restrict the use of settlement negotiations as evidence in proceedings between the parties to those negotiations, it may also extend to offer protection against participants in those negotiations being required to disclose their communications to certain third parties.

32    In this case there is unchallenged evidence that proceedings have already been commenced in the District Court of Western Australia by a driver who was involved in a car accident that is the subject of one of Keep Driving's claims against RAC. It may be reasonably supposed that there are other drivers, who were involved in car accidents that are the subject of Keep Driving's claims, who may also be contemplating taking similar proceedings. If it is ultimately determined that the relevant information is protected by without prejudice privilege, then it may at least be open to RAC to resist disclosing that information to those drivers.

33    However, if a suppression order is not made, a person who is not a party to these proceedings, including a driver involved in a relevant car accident, may inspect and be given a copy of the unredacted concise statement: rr 2.32(2) and 2.32(5) of the Federal Court Rules 2011 (Cth). In that regard I note that concise statements have been treated as falling within the range of documents that may be inspected under r 2.32(2), presumably because they are a 'pleading' for the purposes of r 2.32(2)(b), having regard to the meaning of the word 'pleading' given in the Dictionary that appears in Sch 1 of the Federal Court Rules: see, for example, Patterson v Westpac Banking Corporation [2024] FCA 629; and Commonwealth of Australia v De Pyle [2024] FCAFC 43.

34    If a person who is not a party to these proceedings were to inspect or be given a copy of the unredacted concise statement before the Court has determined whether the relevant information is protected by without prejudice privilege, then any protection that may ultimately be found to be supplied by without prejudice privilege may be rendered nugatory. In those circumstances, and after taking into account that a primary objective of the administration of justice is to safeguard the public interest in open justice, I am of the view that a suppression order is relevantly necessary. A suppression order that prohibits the disclosure of the relevant information, which takes effect immediately and persists until the Court has determined whether, and to what extent, any of the relevant information is protected by without prejudice privilege, is in my view necessary to prevent the Court making potentially futile rulings, and on that basis, is necessary to protect the proper administration of justice.

35    As I have already said, the relevant information is set out in a schedule to the unredacted concise statement. Keep Driving filed a further version of the concise statement on 15 October 2025, in which the relevant information said by RAC to be protected by without prejudice privilege has been redacted (redacted concise statement). In those circumstances, it is appropriate to make a suppression order that prohibits the publication of the unredacted concise statement, leaving the redacted concise statement on the Court file as an unrestricted document.

36    Pleadings are expected to close on 9 March 2026, and a further case management hearing is listed to take place on 2 April 2026. In those circumstances it is appropriate that the suppression order remain in effect until 4.00 pm on 2 April 2026 in the expectation that RAC will file an interlocutory application before that time to have the Court determine the issues concerning without prejudice privilege.

37    I will hear the parties on the question of the appropriate costs order to be made, if any.

Associate:

Dated:    18 February 2026