Confidential Information
Cameron Stewart
The obligation
• Saltman Engineering Co Ltd v Campbell
Engineering Co Ltd (1948) 65 RPC 203 at 213:
• If a defendant is proved to have used
confidential information, directly or indirectly
obtained from a plaintiff, without the consent,
express or implied, of the plaintiff, he will be
guilty of an infringement of the plaintiff’s
rights.
What is confidential information?
• the myriad ways obligations of confidence
• The phrase is best viewed as a term that
covers information that is subject to an
obligation of confidentiality.
• What sorts of relationships give rise to
obligations of confidence? Confidences arise
in three sorts of relationships: private
confidences, confidences relating to
government secrets, and commercial
confidences.
The origins of the action for breach of
confidence
• Property origins –
– Franklin v Giddins [1978] Qd R 72
– Krueger Transport Equipment Pt Ltd v Glen Cameron
Storage [2008] FCA 803
– OBG Ltd v Allan [2008] 1 AC 1
• Contract origins –
– Deta Nominees Pty Ltd v Viscount Plastic Products Pty
Ltd [1979] VR 167
– Seager v Copydex Ltd [1967] 2 All ER 415
– Ministry of Defence v Griffin [2008] EWHC 1542
The origins of the action for breach of
confidence
• Tort origins – economic torts or fusion fallacy?
– Campbell v Mirror Group Newspapers Ltd [2004] 2
AC 457
– Mosley v News Group Newspapers Ltd [2008]
EWHC 177
• Human rights?
• Unjust enrichment?
Equitable origins in conscience
• Like most heads of exclusive equitable
jurisdiction, its rational basis does not lie in
proprietary right. It lies in the notion of an
obligation of conscience arising from the
circumstances in or through which the
information was communicated or obtained.
• Moorgate Tobacco Co Ltd v Philip Morris Ltd
(No 2) (1984) 156 CLR 414 at 437–8 per
Deane J
The modern doctrine of breach of
confidence
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Coco v A N Clark (Engineers) Ltd
Coco designed a moped
He approached Clark about manufacturing it
Coco disclosed the design
Negotiations failed
Clark later produced the Scamp which Coco claimed was
part of his design
• Megarry J held that while there may have been a duty of
confidence that there was not evidence to support a
claim that the design was Clark’s or that Clark’s design
was original enough to be confidential
The modern doctrine of breach of
confidence
• Coco v A N Clark (Engineers) Ltd, Megarry J :
In my judgment, three elements are normally
required if, apart from contract, a case of breach of
confidence is to succeed. First, the information itself,
in the words of Lord Greene MR in the Saltman case
on page 215, must ‘have the necessary quality of
confidence about it.’ Secondly, that information must
have been imparted in circumstances importing an
obligation of confidence. Thirdly, there must be an
unauthorised use of that information to the
detriment of the party communicating it.
Information that has a ‘confidential quality’
• Secrecy and the public domain
Lennon v News Group Newspapers Ltd [1978]
FSR 573, John Lennon failed to prevent his
former wife from publishing secrets of their
married life, on the basis that he had himself
published information on the topic.
Information that has a ‘confidential quality’
• Transitory publication - a Chinese pop star was
successful in restraining the publication of an
embarrassing video tape on the Internet, even
after a verbal account of the contents had
been published in a Hong Kong newspaper
Kwok v Thang [1999] NSWSC 1034
• G v Day [1982] 1 NSWLR 24
Australian Football League v Age
Company Ltd (2007) 15 VR 405
• 3 AFL players who had tested positive to drugs were
identified on an internet discussion forum.
• An electronic newspaper article had also named the
players to a limited group of subscribers for about 5
hrs.
• A further publication of one of the player’s names had
occurred when a phone caller named the player on the
‘Fox Footy’ television program.
• Regardless, Kellam J found that the information had
still not yet fully entered the public domain and
remained confidential. A permanent injunction was
ordered on the release of the player’s identities.
Information must be specific
• O'Brien v Komesaroff [1982] HCA 33; (1982)
150 CLR 310
• Komesaroff had created a unit trust deed as a
product to sell with his partner O’Brien
• Later the partnership dissolved and O’Brien
kept using the deed.
• High Court found breach of copyright
(ownership had not passed to the parnership)
but not breach of confidence
Information must be specific
• Mason J:
• Plainly enough, in the light of the findings of the primary judge and the
evidence, there is very little, if anything, in the documents mentioned in
pars. (1) and (2) above that can constitute confidential information.
Generally speaking the contents of the unit trust deeds and the articles of
association were matters of common knowledge. Information may be
categorized as public knowledge though only notorious in a particular
industry or profession...Only those improvements evolved by the
respondent could give rise to a claim for relief for breach of confidence.
...It is at this point that the respondent has consistently failed to identify
the particular contents of the documents which he asserts constitute
information the confidentiality of which he is entitled to protect. The
consequence is that he has failed to formulate a basis on which the court
could grant him relief on the assumption that some part or parts of the
documents constitute confidential information.
Publication does no destroy to right to
sue for the original breach
• Johns v Australian Securities Commission (1993)
178 CLR 408
• John was examined by the ASC in a private and
confidential way about the collapse of the
Tricontinental Group.
• The examination transcript was provided to a
State Royal Commissioner privately, and then
later tended
• Copies were given to the media
• Could Johns get an injunction? No
Publication does no destroy to right to
sue for the original breach
• Gaudron J:
• No matter what the consequences of the tender of the transcripts
in the proceedings of the Royal Commission and no matter
whether
regard is had to the actual consequences of that tender or the
consequences that might have been, it does not follow that the
tender
brought the ASC's obligation of confidence to an end. If the
question
is approached from the perspective of the general law of
confidence,
it seems that publication, no matter how extensive and no matter
whether by third parties or by the person who owes the primary
obligation, does not necessarily extinguish an obligation of
confidence.
Personal information
• Prince Albert v Strange
Personal information
• marital and defacto relations
– Giller v Procopets
• sexual preference and activity
– Stephens v Avery
– A v B (a company) [2002] 2 All ER 545
– Theakston v Mirror Group Newspapers Ltd [2002]
EWHC 137
– Mosley v News Group Newspapers
– A v B plc [2003] QB 195
– Brown v Associated Newspapers Ltd [2008] QB 103
Personal information
• Diaries
– Prince of Wales v Associated Newspapers
– McKennitt v Ash [2008] QB 73
• Medical history
– X v Y [1988] 2 All ER 648
– Campbell v MGN Ltd [2004] UKHL 22.
• Witnesses and informants
– Venables v News Group Newspapers Ltd [2001] 1 All ER 908
– Rogers v TVNZ [2007] NZSC 91
• Cultural and religious information
– Foster v Mountford & Rigby Ltd
– Church of Scientology of California v Kaufman [1973] RPC 635
Legal information -Prince Jefri Bolkiah
v KPMG[1999] 2 AC 222
• KPMG audited the Brunei Investment Agency
(BIA) when it was chaired by B.
• B was later removed from his position
• B had also retained KPMG personally wih
other litigation which gave them access to his
personal financial information
• Later KPMG was asked by BIA to do further
work. KPMG accepted and set up a Chinese
wall
Prince Jefri Bolkiah v KPMG[1999] 2 AC
222
• HofL finds that KPMG should be injuncted
• There was no absolute rule that a solicitor could not act in
litigation against a former client, but that the solicitor might
be prevented from doing so if it were necessary to avoid a
significant risk of disclosure or misuse of the confidential
information of a former client.
• KPMG accepted that an accountant who rendered litigation
support services of the type provided to B fell to be treated in
the same way as a solicitor.
• The court's jurisdiction to intervene on behalf of a former
client was based on the protection of confidential information
and the duty was to keep the information confidential, not
simply to take reasonable steps to do so
Kallinicos v Hunt [2005] NSWSC 1181
• Solicitor had acted for a partnership which
had become dissolved – but no real chance
that solicitor had any confidential information
– should he be restrained?
• Yes – Brereton J
Kallinicos v Hunt [2005] NSWSC 1181
• During the subsistence of a retainer, where the court’s intervention
to restrain a solicitor from acting for another is sought by an
existing client of the solicitor, the foundation of the court’s
jurisdiction is the fiduciary obligation of a solicitor, and the
inescapable conflict of duty which is inherent in the situation of
acting for clients with competing interests [Prince Jefri].
· Once the retainer is at an end, however, the court’s jurisdiction is
not based on any conflict of duty or interest, but on the protection
of the confidences of the former client (unless there is no real risk
of disclosure) [Prince Jefri].
·After termination of the retainer, there is no continuing (equitable
or contractual) duty of loyalty to provide a basis for the court’s
intervention, such duty having come to an end with the retainer
[Prince Jefri; Belan v Casey; Photocure; British American Tobacco;
Asia Pacific Telecommunications; contra Spincode; McVeigh; Sent].
Kallinicos v Hunt [2005] NSWSC 1181
•
· However, the court always has inherent jurisdiction to restrain solicitors from
acting in a particular case, as an incident of its inherent jurisdiction over its officers
and to control its process in aid of the administration of justice [Everingham v
Ontario; Black v Taylor; Grimwade v Meagher; Newman v Phillips Fox; Mitchell v
Pattern Holdings; Spincode; Holborow; Williamson v Nilant; Bowen v Stott; Law
Society v Holt]. Prince Jefri does not address this jurisdiction at all. Belan v Casey
and British American Tobacco are not to be read as supposing that Prince Jefri
excludes it. Asia Pacific Telecommunications appears to acknowledge its continued
existence.
·The test to be applied in this inherent jurisdiction is whether a fair-minded,
reasonably informed member of the public would conclude that the proper
administration of justice requires that a legal practitioner should be prevented
from acting, in the interests of the protection of the integrity of the judicial
process and the due administration of justice, including the appearance of justice
[Everingham v Ontario; Black v Taylor; Grimwade v Meagher; Holborow; Bowen v
Stott; Asia Pacific Telecommunications].
Kallinicos v Hunt [2005] NSWSC 1181
• · The jurisdiction is to be regarded as exceptional and is to be
exercised with caution [Black v Taylor; Grimwade v Meagher;
Bowen v Stott].
· Due weight should be given to the public interest in a litigant
not being deprived of the lawyer of his or her choice without
due cause [Black v Taylor; Grimwade v Meagher; Williamson v
Nilant; Bowen v Stott].
· The timing of the application may be relevant, in that the
cost, inconvenience or impracticality of requiring lawyers to
cease to act may provide a reason for refusing to grant relief
[Black v Taylor; Bowen v Stott].
Commercial information
• Trade secrets or know-how?
• Ansell Rubber Co Pty Ltd v Allied Rubber Industries
Pty Ltd
• (1) the extent to which the information is known
outside of his business; (2) the extent to which it is
known by employees and others involved in his
business; (3) the extent of measures taken by him to
guard the secrecy of the information; (4) the value of
the information to him and to his competitors; (5)
the amount of effort or money expended by him in
developing the information; (6) the ease or difficulty
with which the information could be properly
acquired or duplicated by others.
Commercial information
• Faccenda Chicken Ltd v Fowler
– 1.trivial information, which is publicly available or
so obvious that it cannot be protected;
– 2.information that must be treated confidentially
until the termination of employment, whereupon
it becomes part of the ex-employee’s collective
skill, knowledge and ability; or
– 3.highly confidential trade secrets, which will be
protected by the courts even after the termination
of employment.
Commercial information
• Del Casale v Artedomus (Aust) Pty Limited [2007] NSWCA
172
• . The extent to which the information is known outside the
business.
• 2. The extent to which the trade secret was known by
employees and others involved in the plaintiff’s business.
• 3. The extent of measures taken to guard the secrecy of the
information.
• 4. The value of the information to the plaintiffs and their
competitors.
• 5. The amount of effort or money expended by the
plaintiffs in developing the information.
Commercial information
• 6. The ease or difficulty with which the information could be
properly acquired or duplicated by others.
• 7. Whether it was plainly made known to the employee that the
material was by the employer as confidential.
• 8. The fact that the usages and practices of the industry support the
assertions of confidentiality.
• 9. The fact that the employee has been permitted to share the
information only by reason of his or her seniority or high
responsibility.
• 10. That the owner believes these things to be true and that belief
is reasonable.
• 11. The greater the extent to which the “confidential” material is
habitually handled by an employee, the greater the obligation of
the confidentiality imposed.
• 12. That the information can be readily identified.
Commercial information
• Hodgson JA
• [W]here the confidential information is something that
is ascertainable by enquiry or experiment, albeit
perhaps substantial enquiry or experiment, and the
know-how which the ex-employee is clearly entitled to
use extends to knowledge of the question which the
confidential information answers, it becomes artificial
to treat the confidential information as severable and
distinguishable from that know-how; and in that kind
of case, courts have tended not to grant relief.
Optus Networks Pty Ltd v Telstra
Corporation Ltd [2010] FCAFC 21
• Telstra was alleged to have accessed Optus’ confidential
information regarding its traffic information
• Claim brought in confidence, contract and trade practices
• Clause 16 said:
– Save to the extent that another provision of this agreement expressly
provides for (or expressly excludes or limits) a remedy, a liability or a
form of compensation in relation to an act, omission or event, this
clause 16 shall regulate the liability (whether arising in contract, in
tort, under statute or in any other way and whether due to negligence,
wilful or deliberate breach or any other cause) of a party to each other
party under and in relation to this agreement and in relation to any
act, omission or event relating to or arising out of this agreement.
• Trial judge found that equitable claim failed because the contract
covered the field and excluded equity
Optus Networks Pty Ltd v Telstra
Corporation Ltd [2010] FCAFC 21
• Full Court allowed appeal
• The claims in equity did not cut across the
agreement as the remedies requested (an
account) were allowable under the contract
• The contract could not be taken to have
excluded equity so it was available on election
Government secrets
• Commonwealth v John Fairfax & Sons (1980) 147 CLR
39
• JFS were going to publish a book which contained
government documents on sensitive issue such as the
Indonesian invasion of East Timor, American bases in
Australia, the presence of the Soviets in the South
pacific, the ANZUS treaty and Australia’s support for
the Shah of Iran.
• Extracts were to be published in the Age and the SMH
• The Australian government sought an injunction on
grounds of breach of confidence and breach of
copyright
Government secrets
• Mason J (sitting alone) – found that an injunction could only be granted if
the government proved that publication would harm the public interest:
– The court will not prevent the publication of information which merely throws
light on the past workings of government, even if it be not public property, so
long as it does not prejudice the community in other respects. Then disclosure
will itself serve the public interest in keeping the community informed and in
promoting discussion of public affairs. If, however, it appears that disclosure
will be inimical to the public interest because national security, relations with
foreign countries or the ordinary business of government will be prejudiced,
disclosure will be restrained. There will be cases in which the conflicting
considerations will be finely balanced, where it is difficult to decide whether
the public's interest in knowing and in expressing its opinion, outweighs the
need to protect confidentiality
• Result – not enough evidence of harm to public interest
• NB injunction was granted on copyright grounds
Government secrets
• Commonwealth v John Fairfax & Sons,
Attorney-General (UK) v Heinemann Publishers
Australia Pty Ltd
Government secrets
• Semi-govt? British Steel Corp v Granada
Television Ltd [1981] AC 1096
• Esso Resources Ltd v Plowman (1995) 183 CLR
10 at 32
• Soldiers? ‘R’ v Attorney-General [2003] UKPC
22
• Ministry of Defence v Griffin [2008] EWHC
1542
The duty or obligation of confidence
• Coco v A N Clark (Engineers) Ltd
• Express Obligation
• Implied Obligation
– Hitchcock v TCN Channel Nine Pty Ltd (No 2)
[2000] NSWCA 82.
• Unsolicited communications
• Misappropriation of information
• Eavesdroppers
• Third parties
Establishing a breach
• The test which has found widespread acceptance is
whether or not the information was disclosed for a
limited purpose. If the information was disclosed for
a limited purpose, the confidence crystallises around
that limited purpose. The confidant will be bound by
an obligation the content of which is not to use or
disclose the information for any purpose other than
the limited one for which the information was
imparted. • F Gurry, ‘Breach of Confidence’ in P Finn (ed), Essays
in Equity, 1985.
Establishing a breach
• Smith Kline and French Laboratories (Aust) Ltd v
Secretary, Dept of Community Services & Health
• Whether one adopts the ‘reasonable man’ test
suggested by Megarry J or some other, there can
be no breach of the equitable obligation unless
the court concludes that a confidence reposed
has been abused, that unconscientious use has
been made of the information
Establishing a breach
• R v Department of Health; Ex parte Source
Informatics Ltd
• The Court of Appeal found that the
pharmacists would not breach confidence if
they supplied anonymised information, even
though this went beyond the confider’s
purpose in supplying the information. The
confider’s purpose was said to be irrelevant
when the information was anonymous
Establishing a breach
• Detriment?
Defences
• Public interest
– expose dangers to public safety or health
– Hubbard v Vosper
– W v Edgell
– Lion Laboratories Ltd v Evans
– Woodward v Hutchins
– McKennitt v Ash [2005] EWHC 3003
– Richards v Kadian [2005] NSWCA 328
Defences
• Forced disclosure
• Delay
• Clean hands
– Campbell v Mirror Group Newspapers Ltd
– Australian Football League v Age Company
Ltd (2007) 15 VR 405
– Change of position
Remedies
•
•
•
•
Injunctions
The springboard doctrine
Delivery-Up
Equitable compensation
– Harris v Digital Pulse Pty Ltd
– Giller v Procopets
• Account of profits
– Attorney-General (UK) v Blake
• Constructive trusts
The future — rights to privacy?
• No right of privacy
– Victoria Park Racing & Recreation Grounds Co Ltd
v Taylor
– Australian Consolidated Press Ltd v Ettingshausen
– Kaye v Robertson (1991) FSR 62
Developments in New Zealand and England
• Bradley v Wingnut Films [1993] 1 NZLR 415
• Hosking v Runting [2004] NZCA 34
• Douglas v Hello! Ltd
MAX MOSLEY v NEWS GROUP NEWSPAPERS
LIMITED
SIR ELTON JOHN v ASSOCIATED
NEWSPAPERS LTD
DAVID MURRAY (by his litigation friends NEIL
MURRAY and JOANNE MURRAY)
v BIG PICTURES (UK) LIMITED
Super and Hyper injunctions?
• ETK v News Group Newspapers Ltd [2011] EWCA Civ 439, ETK was a
famous person in the entertainment industry who had had an affair
in the past with a co-worker, X. The affair was known to ETK’s wife
and colleagues, but not his children. Later X was sacked and the
News of the World wished to publish the story of her sacking. The
Court of Appeal found that the information had not entered the
public domain even though it was known by ETK’s colleagues.
Moreover the balancing exercised with Article 10, was in favour of
an injunction, as while there was value in freedom of speech it had
to be weighed against the rights of privacy of ETK, his wife and X,
and the rights of ETK’s children not to be subject to teasing and
ridicule. In the instant case, the Court of Appeal found that the
benefits of free speech were wholly outweighed by the harm that
would be done through the interference with the rights of privacy
of all those affected.
Super and Hyper injunctions?
• OPQ v BJM [2011] EWHC 1059 (QB), an unnamed TV personality
was able to seek an injunction contra mundum (‘against the world’)
to prevent publication of photographs of him/her having sex that
were being used to blackmail him/her.
• Jeremy Clarkson successfully, for a time, gagged his ex-wife’s claims
that they had had an affair after he was remarried: AMM v HXW
[2010] EWHC 2457 (QB).
• In TSE v News Group Newspapers Ltd [2011] EWHC 1308 (QB), an
English professional footballer gagged publication of details of an
extramarital affair.
• In Terry v Persons Unknown [2010] EWHC 119 (QB), Premier League
footballer and English captain John Terry unsuccessfully sought a
super-injunction to prevent publication of allegations that he had a
sexual relationship with the wife of teammate and fellow
international, Wayne Bridge. Tugendhat J held that there was
insufficient evidence of a threat to publish the information.
Super and Hyper injunctions?
• Manchester United’s living legend Ryan Giggs sought a
super-injunction to prevent publication of details of his
affair with model Imogen Thomas, after he alleged that
she asked for money to keep her story quiet . Justice
Eady granted an injunction in CTB v NGN Ltd [2011]
EWHC 1232 (QB). Eady found that Giggs did have an
expectation of privacy given the details were of an
intimate and sexual nature. Eady J found that there was
no public interest in ‘kiss and tell stories’
• Lord Neuberger, Report of the Committee on SuperInjunctions: Super-Injunctions, Anonymised Injunctions
and Open Justice 2011,
http://www.judiciary.gov.uk/Resources/JCO/Document
s/Reports/super-injunction-report-20052011.pdf
Super and Mega injunctions?
Australia?
• Bathurst City Council v Saban
• Kwok v Thang [1999] NSWSC 1034
• Donnelly v Amalgamated Television Services
Pty Limited (1998) 45 NSWLR 570
• Australian Broadcasting Corp v Lenah Game
Meats Pty Ltd