HOSPITALS CONTRIBUTION FUND OF AUSTRALIA LIMITED v JOHN FAIRFAX & SONS LIMITED SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL SAMUELS, MCHUGH and CLARKE JJA 20 September 1988, 21 September 1988 [1988] NSWCA 70 KEY WORDS CONTEMPT — CONFIDENTIAL INFORMATION — FAIR ACCURATE REPORT CONFIDENTIAL INFORMATION — summons to restrain breach of confidence — undertaking not to publish pending suit — party bound released from undertaking in order to publish fair and accurate report of court proceedings in which reference made to document sought to be protected — whether such a report would constitute contempt of court on ground that it would frustrate or render nugatory the pending proceedings to restrain publication. CONTEMPT — a fair and accurate report of court proceedings published in good faith is not a contempt of court — Hinch v Attorney General (Vic.) (1987) 61 ALJR 556 discussed and applied. ORDERS Leave to appeal is refused. The summons is dismissed with costs. The injunction is dissolved. Samuels JA The claimant is a medical and hospital benefits fund which deals with over 22000 claims each week and has assets exceeding $110 million. In late 1987 a company called B W Walker Actuarial Services Pty Limited ("Walker") prepared a report for the claimant headed "1986/87 Underwriting Experience" ("the Walker Report"). It is alleged by the claimant that this report contained errors and other material which if published could damage its professional reputation and financial standing. In 1987 the claimant commenced proceedings against Walker and the opponent and sought and obtained orders that all copies of the report be returned to the claimant or otherwise accounted for. On 9 March 1988 Mr Adrian Deamer, the opponent's legal manager, swore an affidavit to the effect that the opponent had no copies of the report in its possession; and on 10 March the opponent was dismissed from the proceedings. However, in July 1988 a reference to the report in an article in the Sydney Morning Herald, which the opponent publishes, revived the claimant's apprehension that the opponent or its employees might have copies of the report. In response to its inquiry the claimant was told that Ms Lampe, a journalist employed by the opponent, had received a copy from an anonymous source and that the Sydney Morning Herald intended to publish an article on the subject. The claimant immediately, on 4 August 1988, filed a summons in the Equity Division seeking various orders against the opponent and Ms Lampe, including orders for delivery up of all copies of the Walker Report which the opponent or Ms Lampe had in their possession. On 8 August 1988 McLelland J accepted undertakings by the opponent and Ms Lampe that pending suit neither would publish any report containing extracts from or containing the effect of the Walker Report or any part thereof or any part of such effect. The claimant sought the relief prayed in its summons on the footing that it had a right to restrain publication by the opponent and Ms Lampe of what was contended to be information confidential to the claimant: see David Syme & Co Ltd v General Motors-Holden's Ltd [1984] 2 NSWLR 294 and generally Meagher Gummow & Lehane - Equity Doctrines & Remedies Chap 41. 2 UNREPORTED JUDGMENTS The claimant also took proceedings of a similar kind against a Mr Brian Toohey who publishes a journal called The Eye, who had evidently obtained a copy of the Walker Report and had published material referring to it. On 8 September that summons came before Powell J who took undertakings from the defendant Mr Toohey and stood the matter over to 15 September. He refused to make an order prohibiting publication of the proceedings which had taken place before him. On 15 September the matter came before Needham J. No application was made to prohibit publication of the evidence, apparently on the ground that it was considered that Needham J, as a matter of judicial comity, would respond to the application, if made, in the same way as Powell J had done. The learned judge made orders requiring Mr Toohey to hand over any copies of the Walker Report in his possession (he denied that he had any but the order was made nonetheless) and granted a perpetual restraint on publication. On 16 September, that is the next day, the Daily Telegraph newspaper published a discreet report of the proceedings before Needham J which did not refer to any details of the Walker Report. On the same day the opponent moved Needham J to release it from the undertakings given to McLelland J. The opponent's solicitor swore an affidavit in which he deposed that the article in The Eye (which as I have said refers to certain conclusions stated in the Walker Report) was read to the Court on the previous day by counsel for Mr Toohey, and that a journalist employed by the opponent was present and had written up a report of the proceedings which was annexed to the affidavit and which the opponent, if released from its undertaking, proposed to publish. I might perhaps mention that the court report attributes the reading of the article to junior counsel for the claimant rather than to counsel for Mr Toohey. That discrepancy might affect the accuracy of the report but is otherwise unimportant. Needham J regarded the matter as involving a conflict between two contending interests which he identified as the claimant's interest in the substantive proceedings which might be fatally prejudiced by publication of part of the material which it was seeking to suppress; and the public interest in the publication of a fair and accurate report of proceedings in court. Noting that the information in Mr Toohey's article was now in the public domain, the learned judge acceded to the application, released the opponent from the undertakings so far as might be necessary to enable it to publish a report of the proceedings on 15 September 1988, and stayed that order until 4 pm on 19 September to enable the claimant to apply to this Court for leave to appeal. He refused an application for suppression of that day's proceedings. A summons for leave to appeal was filed and we heard it yesterday. We suggested, and counsel agreed, that we should treat the application for leave as the appeal, and hear the whole of the argument, so that if it were a proper matter for leave we would be in a position to determine the entirety of the proceedings. Mr Shand QC, Mr Vincent and Mr McNally for the claimant made two principal submissions. First, that it is a contempt of court to publish a fair and accurate report of proceedings in a court if the publisher is aware that the material published will frustrate or render nugatory other pending civil proceedings, it being contended, of course, that the publication of the document which the claimant was endeavouring to prevent would effectively render the pending proceedings ineffective. It follows strictly from this assertion of contempt that the release from the undertakings given did not authorise the opponent to publish what was, undertakings apart, a contempt of court. The claimant's remedy would WROSBPITALS CONTRIBUTION FUND OF AUSTRALIA LIMITED v JOHN FAIRFAX & SONS LIMITED (Samuels JA) not be to revive the application but to restrain the threatened publication on other grounds. However, the corollary asserted was that Needham J's conclusion was wrong, or his exercise of discretion, if that is what it was, miscarried, since what he did was in effect to facilitate the commission of a crime. Secondly, in the alternative, it was wrong and unjust to the claimant to permit the opponent to publish in the guise of a court report the very material (in essence) whose publication the claimant was seeking to prohibit as a breach of its right to preserve the confidential character of its information see Woodward v Hutchins [1977] 1 WLR 760 at 764. In support of the first proposition the claimant relied upon Scott v Scott [1913] AC 417, R v Clement (1821) 4 B & A 218: 106 ER 918 and Attorney General v Leveller Magazine Limited & ors [1979] AC 441. Neither Scott nor Clement in my view assists the argument. Scott dealt with the circumstances in which a court will close its doors to the public. Those circumstances are rare Scott at 437-8 per Viscount Haldane LC quoted by Street CJ in R v Brady (Court of Criminal Appeal, 29 July 1977, unreported) in a passage included in the Chief Justice's judgment in David Syme at 300. Earl Loreburn in Scott at 447 suggested that to publish what has taken place in camera in defiance of an order would if permitted make the order "utterly illusory". I respectfully agree but no such order was ever made in the present case. Clement was the case of successive trials of several defendants charged by the same indictment and Abbott LCJ prohibited the publication of any evidence until all the trials should have been determined. So in that case there was a specific order which the defendant disobeyed. Moreover, as my brother McHugh pointed out during the argument, it being the return of a rule nisi for certiorari the question was the regularity of the order precluding publication. In Leveller Magazine magistrates were hearing committal proceedings under the Official Secrets Act. They ordered that a witness should be referred to as Colonel "B" and his name written down and shown only to the Court, the defendants and their counsel. In the course of his evidence, however, he gave the official name and number of the Army unit to which he belonged and other information - all without objection by the prosecution or the magistrates - which rendered the penetration of his cover an exercise of the greatest simplicity. The magazine duly published his name and the Attorney General proceeded against their publishers for contempt. The House of Lords allowed appeals against the Divisional Court's finding of contempt for reasons which are adequately set out in the head note. It is the first holding and certain dicta upon which the claimant relies. But there again there was a ruling of a kind there was none here. The dicta for example in the speech of Lord Diplock at 451-2, are concerned principally with the difficult question of whether and to what extent a ruling, order or direction made in court can restrict what may be done outside the court by members of the public not engaged in the proceedings as parties, or their legal representatives or witnesses. In short, the conclusion was that since contempt consists of an interference with the due administration of justice it need not involve disobedience to an order binding the alleged contemnor, per Lord Russell of Killowen at 407-8. But those statements do not assist in the resolution of the present question. There was never any order of any kind for the prohibition or delay of publication. It is simply starkly put that since publication of the material of concern to the claimant would prejudice its prospects in the pending proceedings, that publication, by whomever made and even though it satisfied in all respects the 4 UNREPORTED JUDGMENTS requirements of a fair and accurate report, would amount to a contempt of court. I know of no authority for that proposition and none was cited to us. There is, however, authority to the contrary. In Hinch v Attorney General for Victoria (1987) 61 ALJR 556 the High Court expressly adopted as applicable to both criminal and civil proceedings the balancing of the public interest in freedom of discussion and the public interest in protecting the administration of justice as identified in the authorities referred to in the case. There was some discussion at 559 per Mason CJ about the disagreement between the members of the Court as to how that balancing exercise should be performed in Victoria v Australian Building Construction Employees' & Builders' Labourers' Federation (1982) 152 CLR 25, but we need not, however, be concerned with that problem. In my view Hinch authorises two relevant propositions. First, that any conflict between, on the one hand, the integrity of proceedings in a court, and, on the other, the prejudice that might be exerted by a fair and accurate report of court proceedings made in good faith, is not an example of competition between two public interests. It is not a question of balancing the public interest in the due administration of justice against that in freedom of discussion and the transfer of information. What is involved is an adjustment between two aspects of the public interest in the administration of justice: see Hinch at 560 per Mason CJ and at 585 per Gaudron J. As McHugh JA pointed out in Attorney General for New South Wales v John Fairfax & Sons Ltd & Bacon [1986] 6 NSWLR 695 at 714 the due administration of justice requires open justice; that is the public conduct and the fair and accurate reporting of the judicial process. Secondly, as a consequence, a fair and accurate report of court proceedings made in good faith will not be held to be a contempt BLF at 132 per Wilson J Hinch at 559 per Mason CJ, and at 585 per Gaudron J. That is to say for the purpose of any balancing or adjustment of interest or aspects of interests a fair report will be accorded, by operation of law, a superior value. This conclusion is sufficient to rebut the claimant's first proposition. But the submission, with respect, reveals other defects. No question of contempt (in the present circumstances) can arise unless there is a real and definite possibility that the statement impugned may prejudice the administration of justice (Hinch at 569). Such prejudice is ordinarily manifested in the anticipation of procedural unfairness, because, for example, a jury may be influenced by the revelation of an accused's prior convictions. I do not consider that publication of the Walker Report or portions of it (as an element of a fair and accurate report of court proceedings) satisfies that condition. Such a publication, by depositing in the public domain what the claimant seeks to suppress, would no doubt deprive the claimant's principal, perhaps its only, remedy of all force. But I hesitate to regard that as a contempt of court. One might as well argue that a successful plaintiff commits a contempt if, knowing that her opponent's appeal was filed, she executes upon the judgment in the absence of a stay, and liquidates the property which it is the defendant's purpose to preserve. I do not consider therefore that the doctrine of contempt has a relevance to the present situation. The alternative submission challenges the learned judge's exercise of discretion in releasing the opponent from its undertaking. That undertaking was given to hold the line in proceedings in which the claimant sought relief on the footing that the opponent threatened to reveal, to the claimant's prejudice, what the claimant asserted was its confidential information. It does not appear to be suggested that the opponent received the information in confidence. If the opponent's evidence is to be believed, the Walker Report by a happy chance WROSPITALS CONTRIBUTION FUND OF AUSTRALIA LIMITED v JOHN FAIRFAX & SONS LIMITED (McHugh JA) merely grounded on a convenient resting place in the Jones Street premises of the opponent. This is a difficult branch of the law which I need not investigate here. It might be a question whether this information was "improperly or surreptitiously obtained": Lord Ashburton v Pape [1913] 2 Ch 469 at 475 and The Commonwealth of Australia v John Fairfax & Sons Ltd (1980) 147 CLR 39 at 50 per Mason J (as the Chief Justice then was). However that may be, an undertaking not to publish a document where it is alleged that publication would amount to a breach of equitable duty is one thing; but to apply it to the ordinary privilege of a newspaper to report proceedings in court is quite another, notwithstanding that a fair and accurate report would refer to the subject matter of the pending proceedings. In my opinion Needham J correctly weighed up the considerations of which he was to take account. I think he was right. At all events I am not at all satisfied that his discretion miscarried. The real problem in the case can be traced back to Powell J's refusal to make an order prohibiting publication of the evidence. I do not mean to suggest that he was wrong in doing so. I express no view at all about that, or his power to have done so. But an appeal against that refusal - or a similar application to Needham J and an appeal if he had refused, might have raised the question which the claimant wishes to debate more readily than the present proceedings. There being no error of law that I can perceive in the judgment below I would refuse leave to appeal and dismiss the summons with costs. I would dissolve the injunction. McHugh JA The Hospitals Contribution Fund (HCF) seeks leave to appeal against an order made on 16 September 1988 by Needham J. His Honour released John Fairfax and Sons Ltd., from so much of an undertaking given on 8 August 1988 as would prevent that company from publishing a report of proceedings heard by Needham J on 15 September 1988. The first question in the summons is whether the release would permit John Fairfax and Sons Ltd., to commit a contempt of court by publishing a report of the proceedings on 15 September 1988. The second question is whether it was a proper exercise of discretion to release John Fairfax and Sons Ltd., from its undertaking if the practical effect of the release will be to frustrate the purpose of an action brought by HCF against John Fairfax and Sons Limited to restrain the publication of confidential information. In proceedings before McLelland J on 8 August 1988, John Fairfax and Sons Limited and an employee, Anne Lampe, gave undertakings that pending suit they would not publish any report containing extracts of or the effect of a report known as the Walker Report. This is alleged to be a report critical of HCF's financial management and position. It is alleged to have been commissioned by HCF and disclosed in breach of the duty of confidence owed to HCF. HCF has also commenced separate proceedings against Mr Brian Toohey who allegedly had published certain parts of the Walker Report in a publication called "The Eye". Interlocutory proceedings in that matter came before Powell J on 8 September 1988. His Honour refused to prohibit the publication of information relating to that hearing. Further proceedings against Mr Toohey in that matter then came before Needham J on 15 September 1988. In the course of that hearing, it was necessary to read the article in "The Eye" magazine. No application, however, was made to his Honour for an order prohibiting publication of any account of the proceedings. 6 UNREPORTED JUDGMENTS On 16 September 1988 John Fairfax & Sons Limited applied to Needham J to release it from so much of its undertaking as would prevent it from reporting the proceedings in HCF v Toohey. His Honour granted the application. His Honour also refused to suppress publication of the proceedings before him. But he granted a stay of proceedings to enable HCF to appeal to this Court. The first submission of HCF in this Court was that his Honour erred in law in making the order releasing John Fairfax & Sons Limited from its undertaking. The first step in this submission of HCF was the proposition that it is a contempt of court to publish material which is known to be likely to interfere with the administration of justice. The second step in its submission was the proposition that publication of a report of the proceedings against Mr Toohey constitutes an unlawful interference in the administration of justice because it frustrates the rights of HCF in its litigation against John Fairfax & Sons Limited and Mr Toohey. In support of the first proposition, Mr Shand QC for HCF relied on statements in the judgments in Attorney General v Leveller Magazine [1979] AC 440; Scott v Scott [1913] AC 417; R v Clement (1821) 4 B & A 218 and what I said in John Fairfax & Sons Limited v Police Tribunal (1986) 5 NSWLR 465 at 477. But these statements were made in the context of a person interfering with and frustrating the effect of a court order. They cannot be relied on to support the absolute proposition that any deliberate act which interferes with the administration of justice is a contempt. For it is now well established that, independently of statutory authorisation, a person may interfere with the administration of justice and yet not be guilty of contempt. A publication made in the public interest, for example, may not be a contempt even though it causes a criminal trial to abort: Registrar of Court of Appeal v Willesee (1985) 3 NSWLR 650. To constitute a contempt, the publication must be an unlawful interference with the administration of justice. And it will not be an unlawful interference if it is authorised or justified or excused by the principles of the common law or the terms of a statute. The second proposition is also not correct. A fair and accurate report of the proceedings before Needham J made bona fide for the information of the public cannot constitute a contempt of court or, as I prefer to put it, an unlawful interference with the administration of justice. It is now well established that a fair and bona fide report of court proceedings is not a contempt of court even though it may prejudice the fair hearing of pending criminal or civil proceedings: Attorney General v Hinch (1987) 61 ALJR 556 at 559, 585. Such reports do not constitute an unlawful interference with the administration of justice even though in fact they interfere or may tend to interfere with the same or other court proceedings. The rationale of this rule is that fair and accurate reports of court proceedings promote and do not hinder the administration of justice even when they interfere with the same or other proceedings. This is because fair reports of court proceedings enable members of the public, almost all of whom cannot attend the hearings, to see how justice is being administered. They expose the workings of the courts to public scrutiny. They enable the ultimate decisions of judges and juries and the evidence relied on to support those decisions to be debated and criticised. They serve the vital function in a democratic society of constraining the unelected judiciary's exercise of power. By doing these things, fair reports of the proceedings of the courts of WROSPITALS CONTRIBUTION FUND OF AUSTRALIA LIMITED v JOHN FAIRFAX & SONS LIMITED (McHugh JA) justice help to maintain confidence in the administration of justice. They serve the public interest. They do not constitute an unlawful interference with the administration of justice. When Needham J heard the proceedings on Thursday 15 September 1988 which HCF brought against Mr Toohey, he was not asked to and did not make an order prohibiting the publication of those proceedings. Consequently, any person could lawfully publish a fair report of the proceedings even though the result was to publish to the world confidential information the prevention of the publication of which was the very object of the suit before his Honour. Mr Shand QC contended that, if any person published a report of the proceedings brought by HCF against Mr Toohey, it would be a contempt. However, although publication might interfere with - indeed totally frustrate - the proceedings commenced by HCF, any citizen could lawfully publish an account of what had occurred in open court before Needham J. The remedy of HCF was to ask his Honour to close the court or to make a suppression order. If his Honour had refused, HCF could have asked for an adjournment and sought leave to appeal to this Court. HCF did none of these things. This is not meant to infer that an application for a suppression order would have been successful. It merely emphasises that the fate of this summons was sealed when no suppression order was made. Any person who came into the court of Needham J could hear counsel reading the contents of the confidential Walker Report. And what a person might lawfully hear in the Court any person could lawfully publish outside the Court provided she did so fairly and accurately. His Honour would have been in error if he had refused to release John Fairfax & Sons Limited from its undertaking on the ground that publication by that company of a report of the proceedings against Mr Toohey would constitute a contempt of court. The first submission of HCF must be rejected. The second submission of HCF was that, since John Fairfax & Sons Limited had given an undertaking on 8 August 1988, the Court had a discretion to refuse to release it and that his Honour erred in doing so. While it is true that the Court had a discretion, I can see no reason why the circumstances required his Honour to refuse to exercise it against John Fairfax & Sons Limited. Indeed, as a matter of principle, it could even be argued that his Honour was bound to order the release sought. By reason of subsequent events, the width of the undertaking went beyond what was necessary to preserve the rights of HCF against John Fairfax & Sons Limited in respect of the latter's alleged breach of duty. Part of the Walker Report was in the public domain. At least in a case such as the present, a party cannot restrain the publication of information when it has passed into the public domain: O Mustad & Sons v S Adcock & Co Ltd and Dosen [1963] RPC 41; Commonwealth of Australia v John Fairfax & Sons Limited (1980) 147 CLR 39 at 54; Commonwealth of Australia v Walsh & Anor (1980) 147 CLR 61 at 62-63. As the judgment of Deane J in Attorney General (UK) v Heinemann Publishers Australia Pty Ltd (1987) 75 ALR 461 shows, it is proper to refuse an injunction to restrain publication against a person alleged to be in breach of a duty of confidence if it appears that, since the commencement of the litigation, the material has entered the public domain. Moreover, when Needham J came to consider the application by John Fairfax & Sons Limited for a release from its undertaking, he had to bear in mind that it was only by reason of the undertaking that John Fairfax & Sons Limited was prohibited from doing what anyone else in the world, except Mr Toohey and Ms 8 UNREPORTED JUDGMENTS Lampe, could do. The only purpose of the undertaking was to ensure that John Fairfax & Sons Ltd did not publish information allegedly obtained in breach of a duty of confidence owed to HCF. To prohibit John Fairfax & Sons Limited from publishing information which was not the proximate result of its receipt of confidential information was to go beyond the purpose for which the undertaking was given. Since any person except John Fairfax & Sons Ltd, Mr Toohey and Ms Lampe could lawfully publish an account of the Toohey proceedings which might frustrate the purpose of the various actions brought by HCF, it was irrelevant that John Fairfax & Sons Ltd acting lawfully might also by publication frustrate the purpose of those actions. Nothing John Fairfax & Sons Ltd had done in receiving the confidential Walker Report was a ground for depriving it, as a corporate citizen, of the public right to publish a fair report of the proceedings against Mr Toohey. The case for releasing John Fairfax & Sons Ltd from so much of its undertaking as would prevent it from publishing a fair report of the Toohey proceedings was irresistible. Needham J, however, approached the matter upon the basis that he had to balance the interests of HCF in the substantive proceedings against the public interest in having a fair and accurate report of court proceedings concerning information which was now in the public domain. His Honour also weighed against John Fairfax & Sons Limited that it was seeking a concession. In the result he thought that it was proper to release John Fairfax & Sons Limited from its undertaking. His Honour said that, if the public nature of the proceedings brought by HCF against Mr Toohey, affects its substantive case, it was an unfortunate consequence of the requirement that justice should be performed in public. Mr Shand QC argued that his Honour erred in principle because he did not consider whether the administration of justice could still be served by a partial report of the proceedings against Mr Toohey which did not disclose any part of the Walker Report. However, it does not follow that, because his Honour did not mention the matter, he did not consider it and reject it. A judge giving an ex tempore judgment on an interlocutory matter is not bound to recite every matter which he has considered in reaching a decision. In my opinion the approach of his Honour was too favourable to HCF. But in any event HCF has not shown any arguable error on the part of Needham J. Leave to appeal against his order should be refused with costs. I agree with the orders proposed by Samuels JA. Clarke JA I would refuse leave to appeal for the reasons given by Samuels JA and I agree with the other orders proposed. SAMUELS JA: The orders of the court therefore are: leave to appeal is refused. The summons is dismissed with costs. The injunction is dissolved. (Mr Vincent made an application for a stay of this Court's proceedings and a continuation of the orders made by Hope JA - application opposed by Mr Wheelhouse). SAMUELS JA: We refuse to order a stay. COUNSEL: WROSPITALS CONTRIBUTION FUND OF AUSTRALIA LIMITED v JOHN FAIRFAX & SONS LIMITED (Clarke JA) APPELLANT- A B SHAND QC/R A VINCENT/MR McNALLY RESPONDENT- J S WHEELHOUSE SOLICITORS: APPELLANT- J R GIBB & CO RESPONDENT- MALLESONS STEPHEN JAQUES