The ‘implied undertaking’ which is really a substantive legal obligation

Associate Justice Derham from time to time produces beautifully succinct and thorough summaries of the law, especially laws relating to procedure, in his careful judgments.  Busy practitioners are very grateful.  Here is his most recent such summary, from Fotopoulos v Commonwealth Bank of Australia [2017] VSC 61.  It is a helpful exposition of the substantive legal obligation which is sometimes referred to as an ‘implied undertaking’ or ‘the Harman principle’ after the House of Lords’ decision in Harman v Secretary of State for the Home Department [1983] 1 AC 280.

’32 The principle is that where one party to litigation is compelled, either by reason of a rule of court, or by reason of a 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 it for any purpose other than that for which it was given unless it is received into evidence.[14]  The obligation, or duty, is usually called the implied undertaking to the Court.  The High Court make clear that the implied undertaking is in truth a substantive legal obligation or duty imposed by law on the litigants, their servants or agent (or privies[15]) and others.[16]   The types of material disclosed to which this principle applies include:

(a) documents inspected after discovery;[17]

(b) answers to interrogatories;[18]

(c) documents produced on subpoena;[19]

(d) documents produced for the purposes of taxation of costs;[20]

(e) documents produced pursuant to a direction from an arbitrator;[21]

(f) documents seized pursuant to an Anton Piller order;[22]

(g) witness statements served pursuant to a judicial direction;[23] and

(h) affidavits.[24]

33 The obligation extends not merely to the documents themselves but also to copies of those documents and information derived from these documents.[25]  Accordingly, it attaches to information provided in answers to interrogatories[26] and to the content of witness statements or affidavits delivered in obedience to court order.[27]  It may also attach to other classes of document or their content, with which I am not here concerned.[28]

34 The obligation is binding upon anyone into whose hands the documents come, if they know that the documents were obtained by way of coercive court processes.[29]  In Riddick v Thames Board Mills Ltd,[30] Lord Denning MR said that the courts should not allow the other party – or anyone else – to use the documents for any ulterior or alien purpose.  Otherwise, the courts themselves would be doing injustice.   Whether knowledge of the source of the documents is required is not clear.  There are difficulties in determining to whom and how far the obligation extends. Both questions have caused difficulties in other cases.[31]

[14]               Hearn v Street (2008) 235 CLR 125, [96] (Hayne, Heydon & Crennan JJ, Gleeson CJ agreeing) (‘Hearn’).

[15]               Spalla v St George Motor Finance Ltd (2004) 209 ALR 703, 717 [40] (Ryan J); Hearn [111].

[16]               Hearn [105]-[108].

[17]               Riddick v Thames Board Mills Ltd [1977] QB 881; Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 at 32-33; [1995] HCA 19; Hearn [96].

[18]               Central Queensland Cement Pty Ltd v Hardy [1989] 2 Qd R 509 at 510-511; Ainsworth v Hanrahan (1991) 25 NSWLR 155; Hearn [96].

[19]               Eltran Pty Ltd v Westpac Banking Corporation (1990) 25 FCR 322; Hearn [96].

[20]               Bourns Inc v Raychem Corp [1999] 3 All ER 154 at 169-170; Hearn [96].

[21]               Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10, 33, 39, 46-47 and 48; Hearn [96].

[22]               Cobra Golf Inc v Rata [1996] FSR 819; Hearn [96].

[23]               Central Queensland Cement Pty Ltd v Hardy [1989] 2 Qd R 509; Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217 at 223; State Bank of South Australia v Smoothdale (No 2) Ltd (1995) 64 SASR 224 at 229; Hearn [96].

[24]               Medway v Doublelock Ltd [1978] 1 WLR 710; [1978] 1 All ER 1261; Re Addstone Pty Ltd (in liq); Ex parte Macks (1998) 30 ACSR 156; Hearn [96].

[25]              Crest Homes plc v Marks [1987] 1 AC 829 at 854, approving Sybron Corporation v Barclays Bank plc [1985] 1 Ch 299 at 318, per Scott J; McCabe [15].

[26]              Ainsworth v Hanrahan (1991) 25 NSWLR 155;  McCabe [15].

[27]              Central Queensland Cement Pty Ltd v Hardy [1989] 2 Qd R 509, 510, (McPherson J);  Complete Technology Pty Ltd v Toshiba (Australia) Pty Ltd (1994) 53 FCR 125 at 131-2, (Hill J);  ACCC v Telstra Corporation Limited (2000) 96 FCR 317, 322 (per Lindgren J); McCabe [15].

[28]              See Cross on Evidence, Aust ed [25055].

[29]               Hamersley Iron Pty Ltd v Lovell, (1998) 19 WAR 316 at 334-335; Hearn [111].

[30]               [1977] QB 881 at 896; Hearn [111].

[31]               See the observations of Gleeson CJ in Hearn [4].

[32]               Hearn [107]; See also Esso Australia Resources Limited v Plowman (1995) 183 CLR 10, 37; Barrow v McLernon & Anor [2012] VSC 134 [27] (‘Barrow v McLernon’).

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