FEDERAL COURT OF AUSTRALIA Australian Competition and Consumer Commission v Unique International College (No 5) [2016] FCA 757 File number: NSD 1277 of 2015 Judge: PERRAM J Date of judgment: 16 June 2016 Date of hearing: 16 June 2016 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Category: No Catchwords Number of paragraphs: 19 Counsel for the Applicant: Mr N O'Bryan SC, Mr D Tynan and Ms S Patterson Solicitor for the Applicant: Australian Government Solicitor Counsel for the Respondent: Mr D Pritchard SC and Mr R Davies Solicitor for the Respondent: Minter Ellison ORDERS NSD 1277 of 2015 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: UNIQUE INTERNATIONAL COLLEGE Respondent JUDGE: PERRAM J DATE OF ORDER: 20 JUNE 2016 THE COURT ORDERS THAT: 1. Paragraph 6 of the undertakings provided to the Court by the Applicants, and contained in the order made by Flick J on 7 June 2016, be varied so as to permit disclosure in open Court of the fact and the contents of affidavits provided to the Applicants by each of Manmohan Singh, Amarjit Singh, Baljeet Singh, Mandeep Kang, Jasmeen Kaur and Surinder Kaur pursuant to paragraphs 4 and 5 of the undertakings given by those individuals, subject to any application made by the Respondent or those individuals pursuant to 37AF of the Federal Court of Australia Act 1976 (Cth). Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT PERRAM J: 1 An issue has arisen in respect of the admissibility of evidence the subject of a confidentiality undertaking. During the course of the cross-examination of Ms Kang yesterday, a number of questions were asked of her about transactions involving sums of money and the operation of bank accounts. It has become apparent that the questions which elicited the answers from Ms Kang were asked by senior counsel for the applicants by reference to an affidavit which she had sworn in these proceedings on 14 June 2016. The affidavit was sworn in consequence of, or in relation to, freezing orders which were made by Flick J in these proceedings. 2 After those freezing orders were made there was, as I understand it, a further application to discharge or vary those orders, and that application was compromised between the applicants and the respondent by an agreement. His Honour made orders by consent on 7 June 2016 setting aside subpoenas which had been issued to the Commonwealth Bank and the National Australia Bank, discharging the freezing orders and other orders which he had made on 3 June. But those orders, which were made by consent, were made on the basis of an agreement which was noted by his Honour. 3 The agreement included an obligation on persons associated with the respondent to provide affidavits setting out various financial matters relating to money flows, and also to the return of substantial funds and other matters as well. The consequence of that agreement was anticipated to be, and did become, the service of affidavits by persons associated with the respondent, including Ms Kang, upon the applicants setting out the details of various financial transactions. 4 The applicants, for their part, gave an undertaking which was recorded in paragraph 6 of the notation in the following terms: The Applicants undertake to the Court that any affidavit served on either applicant by Amarjit Singh, Manmohan Singh, Surinder Kaur, Baljeet Singh, Mandeep Kang or Jasmeen Kaur in accordance with the undertakings set out in paragraphs 4 and 5 above will be kept confidential and will not be disclosed or provided to any person or persons other than employees of the Applicants, the Applicants' lawyers, and any expert advisor or witness who is retained by the Applicants in connection with this proceeding. 5 When the hearing resumed this morning, senior counsel for the respondent brought to my attention the contention of his clients that the evidence which had been elicited yesterday by the cross-examination conducted by reference to Ms Kang's affidavit had been in breach of the undertaking which had been proffered in paragraph 6 of the agreement put before Flick J. 6 At that time, no particular relief was sought in relation to that and, as I understood it, it was just provided for my information. At approximately five minutes to 12pm during the hearing, when the cross-examination resumed, senior counsel for the applicants again asked a question based upon the affidavit which had been sworn by Ms Kang, and on this occasion senior counsel for the respondent objected to the receipt of the evidence on the basis that it was being elicited in breach of paragraph 6 of the agreement. 7 There are a number of issues which arise from that, some of which call for resolution. The first is whether, on its proper construction, paragraph 6 operates to prevent the applicants from using Ms Kang's affidavit in the manner in which it was used yesterday and which, if this question is allowed, it would be used today. The debate in that regard turns upon the proper construction of the words 'will be kept confidential and will not be disclosed or provided to any person or persons…' 8 The meaning of the word 'provided' can be put to one side for the moment for it, reasonably obviously, involves the notion of a physical delivery. I was at one time during argument of the view that the answer lay in the proper construction of the word 'disclose', which has about it an ambiguity, at least in this sense. It might mean 'disclose the contents', or it might mean 'disclose the existence. However, I am satisfied it is not necessary to resolve that issue. In my opinion, the words 'will be kept confidential' are sufficiently broad in their ordinary meaning to prevent the revelation of the information in the affidavit in open court in the manner which happened yesterday. 9 The matter may be tested this way: if the information was confidential in the affidavit, can it maintain its confidentiality in circumstances where it has been uttered in open court and appeared in a public transcript? So for that reason I conclude that on its proper construction, paragraph 6 does have the effect of preventing the applicants from cross-examining Ms Kang on the affidavit in a way which reveals what is in the affidavit. It is implicit in that that I reject the applicants' submission that the affidavit may yet remain confidential even if the information which is disclosed within it does not. 10 The next question which arises is what are the consequences of that? It might be necessary, ordinarily, to move to the provisions of the Evidence Act 1995 (Cth), but it is necessary to deal before that with the applicants' application made during the course of argument that the undertaking should be varied to permit use of the affidavit in the way in which it was used yesterday, and in the way which it is proposed to be used today. The undertaking itself has a dual nature. It is both a contract between the parties, in the sense that it is a series of promises given in exchange for each other and, hence, for good consideration, but it is also an undertaking given to the court. 11 It is, therefore, enforceable in two distinct ways: first, as a matter of the law of contract, and secondly, as a matter of the Court's inherent powers to control the processes and procedures before it and, in particular, to enforce promises which the parties make to it in the course of proceedings. The present application to reject the evidence does not, in form, involve an attempt to enforce the contractual nature of the undertaking. However, the nature of that claim I think informs some aspects of the debate. It seems to me that a contract which required a party not to adduce relevant evidence or forbade it from adducing relevant evidence would be a contract which was contrary to public policy. 12 No agreement, so it seems to me, can lawfully prevent evidence which is relevant in terms of the Evidence Act from being adduced in court if a party seeks to do so. A contract by which a party agreed that it would not give evidence would be no answer to a subpoena. It seems to me that such a contract would be void. That, of course, does not directly matter because Mr Pritchard does not seek specific performance of the agreement. Instead, the focus becomes upon whether there should be a variation of the undertaking given, and here questions of contractual enforcement do not directly arise. 13 It seems to me, though, that the public policy consideration to which I have just adverted is of considerable relevance. The form of the undertaking as it presently stands is such that the evidence which is provided by the affidavits cannot be used in these proceedings. There is, of course, a dual nature to these proceedings as well. The first part is the proceedings which were before Flick J and which relate to the freezing orders. If the undertaking is not to be released, it seems to me to follow that the very reason for which the affidavits were provided, namely, to provide the applicants with information in relation to the bank accounts of the various persons associated with the respondents so that the applicants could, if they so desired, seek further orders would be directly frustrated if the undertaking could not be varied. 14 That is one aspect. The second aspect is that for the reasons I have already given, the undertaking as it currently stands has the effect of preventing relevant evidence being used in open court. There are two factors which, so it seems to me, are against what I have just said. The first, as Mr Pritchard correctly emphasised, is that the undertaking was given in the course of a dispute between the parties and reflects a mutuality between them, even if one is of the view that they can have no contractual effect. Or put another way, in the midst of what was no doubt a reasonably heated interlocutory contest between the parties, it is not irrelevant that the price the applicants paid for getting access to the information which they have was a promise on their part to maintain confidentiality. That is a significant matter. 15 It is apparent from the transcript of what happened before Flick J that the source of the concern about confidentiality which found its final expression in paragraph 6 was a view that the information contained within the affidavits might well be confidential in the rather technical sense that is used within the meaning of s 37AF of the Federal Court of Australia Act 1976 (Cth). 16 To the extent that confidentiality remains a concern moving forward, it seems to me that whatever rights the persons associated with the respondent have in that regard can be adequately addressed by the making of an application under section 37AF. I say nothing as to whether such an application has much in the way of prospects. In those circumstances, whilst I take those matters into account, it seems to me that the public interest in having relevant evidence put before the court outweighs whatever other considerations are in place. I should say, for completeness, that at various points in the argument the suggestion was made – and I make no criticism of this fact – that the applicants had made a deliberate decision to act as they had, knowing about the existence of paragraph 6. 17 It certainly seems the case that the applicants were well aware of paragraph 6, but it is equally obvious to me that they had adopted a construction of it which, although not the one which I myself would adopt, is not one which I would describe as unreasonable. For these reasons, I propose to amend the undertaking which was proffered to Flick J in a manner which would permit the applicants to use the affidavits mentioned in notation 5(b) of the orders of Flick J of 7 June in the ordinary course of these proceedings. 18 The reasons I have just given resolve what should happen with the question which is now proposed to be asked and that I will allow. They do not, however, deal with the status of the evidence which was elicited yesterday. Even releasing the applicants from the undertaking from this moment on does not have the consequence that the evidence which was elicited yesterday was not in breach of that undertaking. It was. 19 It seems to me that it would be inappropriate to prevent that evidence being used in the circumstances where the reason I have released the applicants from the undertaking which they gave is because I am satisfied that, as it stood, it prevented the adduction of relevant evidence in this Court. The discretionary matters which attend the decision of whether to recall that evidence are, so it seems to me, the same as the ones which I have dealt with above and, for those reasons, I decline to excise that material from the transcript. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram. Associate: Dated: 27 June 2016