WA Supreme Court on release of implied undertaking not to use discovered or subpoenaed documents in other proceedings

implied undertaking

In this case the plaintiff in the WA Supreme Court sought a limited release from its implied undertaking in respect of certain documents obtained under subpoena, for their use in proceedings before the Supreme Court of Victoria (in which it was also the plaintiff), in order to impugn the credibility of witnesses in the other proceeding.  The case is Bedshed Franchising Pty Ltd v Battersby [No 2] [2015] WASC 281 (28 July 2015) per Beech J.

Legal principles

The relevant legal principles were helpfully collected by Justice Beech at [14] to [25] and are reproduced below (without citations):

1.     Where one party to litigation is compelled, by reason of a rule or specific order of the court or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use the documents or information for any purpose other than that for which they are given, unless they are received into evidence. This principle applies to a range of material, including discovered documents, answers to interrogatories and documents produced on subpoena.

2.     Traditionally, the obligation not to disclose has been described as an implied undertaking. Properly understood, however, it is an obligation of substantive law.

3.     Discovery is an invasion of the privacy and confidentiality of a litigant’s affairs. The rationale for the imposition of the obligation in relation to discovered documents is to ensure that privacy and confidentiality are not invaded more than is necessary for the purpose of doing justice.

4.     The same rationale applies with equal force in the context of the production of documents on subpoena, as this is also an invasion of the privacy and confidentiality of the affairs of the subpoena recipient.

5.     The power to dispense with or modify the implied undertaking is not freely exercised, but will be exercised if there are special circumstances which make it just to do so.

6.     The implied undertaking should be modified or released only to the extent that it is in the interests of the administration of justice or in the public interest to do so.

7.     In a passage in Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3 that has been cited with approval many times, the Full Court of the Federal Court said as follows:

The notion of ‘special circumstances’ does not require that some extraordinary factors must bear on the question before the discretion will be exercised. It is sufficient to say that, in all the circumstances, good reason must be shown why, contrary to the usual position, documents produced or information obtained in one piece of litigation should be used for the advantage of a party in another piece of litigation or for other non‑litigious purposes. The discretion is a broad one and all the circumstances of the case must be examined.

8.     Among the considerations that may be relevant to the exercise of the discretion are:

          (a)  the nature of the document;

          (b)  the circumstances under which the document came into existence;

          (c)  the attitude of the author of the document and any prejudice the author may sustain;

          (d)  whether the document existed before the litigation, or was created for that purpose and therefore expected to enter the public domain;

          (e)  the nature of the information in the document, in particular whether it contains personal data or commercially sensitive information;

          (f)  the circumstances in which the document came into the hands of the applicant; and

          (g)  the likely contribution of the document to achieving justice in another proceeding.

9.     The last of these considerations has been recognised as being the most important. There is a public interest in ensuring that all relevant material is before a court to enable it to discharge its function. It has been said that special circumstances will fairly be found where it is established that the use of documents discovered in proceedings is reasonably required for the purpose of doing justice between the parties in other proceedings.

10.     In the context of documents produced on discovery, it has been observed that, in weighing up the competing public interests, the importance of the public interest in the preservation of the confidentiality of discovered documents must be kept squarely in mind. Similarly, in this case the private and public interest in protecting the confidentiality of a person’s private documents produced under compulsion to a court must be kept in mind.

11.     Use of documents produced or discovered in one proceeding to impugn the credibility of a witness in other proceedings may, depending on the circumstances, sustain the release of the implied undertaking.

12.     In applying for a release of the implied undertaking it is necessary, as a first step, to identify the documents in respect of which the release is sought. That involves more than identifying categories of documents. The next step is to identify the purpose for which the documents are said to be required.

The plaintiff submitted, and his Honour accepted, that the credibility of the defendants’ witnesses in the Victorian proceeding was likely to be highly material to the determination of that proceeding. However his Honour considered that the real question was the extent of the likely contribution of the subpoenaed documents to the assessment of the credibility of those witnesses in the Victorian proceeding (at [26]).

The decision turned on its own facts. His Honour dismissed the plaintiff’s application because he was not satisfied that the subpoenaed documents would bear in a significant way on the Supreme Court of Victoria’s assessment of the credibility of the witnesses in that proceeding, such as to justify the release or modification of the implied undertaking. His Honour was also not satisfied that the use of the subpoenaed documents was reasonably required for the purpose of doing justice in the Victorian proceeding (at [28] – [29]).