Alessi’s Case is a long-running application to set aside a costs agreement commenced in the Legal Profession Tribunal in 2003. The Alessis succeeded in having their solicitor’s costs agreement cancelled and two bills set aside in  VLPT 18. The latest decision —  VCAT 149 is just a little one about an application by the Clients to be released from what used to be known as the Home Office v Harman undertaking, that is, the undertaking by a litigant or other person who has received information through a process of compulsion such as discovery not to use the documents for any purpose other than the prosecution of the matter in which the information is produced.
The solicitor had discovered over 1,000 documents. There were related court proceedings in which the solicitor was suing the Alessis for his fees, in which a company associated with the solicitor was suing on a loan to a company associated with the Alessis, and in which various consultants engaged by the solicitor were suing the Alessis for fees. The Alessis applied for a waiver of the implied undertaking en masse on the basis of their general relevance to one or more of the 6 related proceedings. That application was granted.
Citing from one of the decisions in the Rolah McCabe saga, Mr Howell observed that:
“3 The nature of the undertaking was described in general terms by the Victorian Court of Appeal in British American Tobacco Australia Services Ltd v Cowell (2003) 8 VR 571 @  :
… the party gaining access to the documents is bound to the court by means of the implied undertaking not to use the documents which it has been privileged to see for any ‘collateral or ulterior purpose’ … or at all events not to so use them without the leave of the court.
7 It continues to be the common law in Victoria that tender of a document
produced by a defendant does not release the undertaking, because the
document remains a private document and does not pass into the public
domain: British American Tobacco Australia Services Ltd v Cowell: (2003) 8 VR 571 @  to .”
Mr Howell noted that the reason why the Alessis professed to seek to be released from the undertaking was so as to be able to comply with their obligations to make discovery and produce the discovered documents for inspection in the related proceedings. (Later, however, he talked about the Alessis “using” the documents.) Discovered documents need not be produced for inspection. One discovers privileged documents and does not produce them for inspection, and in professional negligence proceedings, a solicitor need not produce for inspection documents the subject of a lien. I would be very suprised if the law has it that one must produce for inspection documents which you have undertaken to the court not to use for any purpose other than the proceedings in which they were discovered; the English case referred to below says that a person obliged by FOI laws is not required to produce documents which are the subject of the person’s implied undertaking and one would think the statutory compulsion of FOI would be harder to read down than the compulsion of an order for general discovery.There is another curiosity about the professed need to discover the documents. The related proceeding in which the solicitor sued the Alessis for his fees would have required the solicitor to make discovery of all relevant documents anyway. And in the other proceedings, documents from the solicitor’s file (which I assume to have been much of the 1,000 documents discovered by the solicitor) would be prima facie privileged in the hands of the Alessis so as not to be required to be produced for inspection anyway.
Acknowledging that he had to be satisfied that there was something which took the case out of the usual course and made it in the interests of justice to take the extraordinary step of releasing the undertaking, Senior Member Howell found those circumstances to be these:
“17 The six related proceedings arise out of the same events that gave rise to the present proceedings. Mr. & Mrs. Alessi do not seek to use documents in unrelated proceedings, but rather in related proceedings that are further steps in a continuing saga. That is a circumstance that takes this matter out of the ordinary course.
18 To prevent Mr. & Mrs. Alessi from using documents in the related
proceedings might lead to inconsistent decisions on closely related matters,
so to release them from the undertaking would be in the interests of justice.”
It may be doubted whether the second point is truly a special circumstance: if a document obtained in one proceeding is apt to be discovered in another proceeding, it must necessarily be relevant to a matter in issue in that proceeding. If the document is unavailable in that proceeding, it must often be the case that the second proceeding will find differently on the matter in issue which the document tends to prove or disprove.
Senior Member Howell ruled that because the undertaking is described as an undertaking to the court whose compulsion yielded the document (e.g. the tribunal which ordered discovery), the solicitor’s stance that applications should be made to him on a document by document basis was inappropriate, because only the Tribunal, and not the solicitor, could waive the undertaking. No authority is cited, and the conclusion is at odds with both common sense and with E.H. and E.P.H. v The Information Commissioner
where the English High Court said:
“The issue which arises on this appeal in relation to the undertaking given by the Appellant to obtain discovery is whether or not the Commissioner was right in concluding as a matter of law that the disclosure of the documents sought [pursuant to an FOI request] would be a breach of the undertaking given and hence a contempt of Court.
As is clear from the decision of the Commissioner, he based his decision in regard to the undertaking on the basis that it was an express undertaking given to the Court for the purposes of protecting the third parties. He formed the view that the disclosure of the documents would breach that express undertaking and because of that he arrived at the conclusion that a contempt of Court would arise. For the guidance of public bodies he additionally expressed the view, that on the basis that the usual implied undertaking given in relation to discovered documents was for the benefit only of the party giving the discovery, that in his view a contempt of Court in this situation would not arise.
…I have come to the conclusion that notwithstanding the entirely laudable and separate philosophy of disclosure which underpins [English FOI Act], that the Act construed in a manner consistent with the constitution could not be used, so that access to documents under the Act would have the result of robbing an order of a Court or an undertaking given to a Court of the force and effect which the Court in question intended these to have.
Mr. Hogan has submitted that the express undertaking given is no more extensive than the usual implied undertaking. No doubt he makes this submission in the light of the distinction drawn by the Commissioner between an express undertaking and the usual implied undertaking and the view expressed by the Commissioner in relation to the effect of an implied undertaking in the context of Section 22(1)(b).
In my opinion in the context of this case the distinction is not a material one for this reason. The Commissioner was, in my view wrong, in his conclusion that the usual undertaking given in relation to discovery would not give rise to a contempt of Court. Breach of the implied undertaking given in respect of discovered documents is a contempt of Court. Notwithstanding that the undertaking benefits solely the party making discovery, the undertaking is given to the Court and like all undertakings given to a Court, breach of it is a contempt of the Court. Indeed this is abundantly clear from the case of Home Office v Harman (H.L) E (1983) AC 280…
True, in the case of the usual implied undertaking the party for whose benefit it is given i.e. the party making disclosure can waive the undertaking but in the absence of such waiver as in the present case the undertaking continues as an undertaking to the Court with all of the attending consequences of a breach of an undertaking to the Court.
In the light of this conclusion it is unnecessary for me to decide whether or not the undertaking given in this case expressly, was either co-extensive with the usual implied undertaking or more extensive than it.
I have come to the conclusion that where a head of a public body or the Commissioner is aware that there is in existence an undertaking to a Court be it expressed or implied, that disclosure must be refused on the basis of Section 22(1)(b) [which prohibited disclosure where to disclose would be to act in contempt of court].
Undertakings given to a Court can only be discharged either in the case of the usual undertaking in relation to discovery by waiver of the party making discovery or otherwise by the express permission of the Court itself. Having regard to the very important public policy served by these undertakings the Courts are slow to vary or discharge these undertakings. Disclosure under the Act cannot be used as a method of circumventing or robbing these undertakings to a Court of force and effect.”
- More on the Home Office v Harman implied undertaking in relation to litigation documents
- The implied undertaking yields to compulsion; relevance to a second proceeding a powerful ‘special circumstance’
- Release from implied undertaking for information relevant to criminal investigation
- The ‘implied undertaking’ which is really a substantive legal obligation
- Solicitor’s failure to supervise undertaking by firm was unsatisfactory conduct