New South Wales Supreme Court CITATION : Aarons v Moloney [2005] NSWSC 795 HEARING DATE(S) : 4 August 2005 JUDGMENT DATE : 4 August 2005 JURISDICTION : Equity JUDGMENT OF : Campbell J DECISION : Proceedings summarily dismissed CATCHWORDS : PROCEDURE - inferior courts - examination summons in the Local Court - whether implied obligation to use information obtained through that process only for the purpose of the proceedings - PROCEDURE - Supreme Court procedure - consideration of scope of implied obligation concerning information and documents obtained through compulsory pre-trial procedures - PROFESSIONS AND TRADES - lawyers - whether lawyer to be prevented from acting for a judgment creditor in an examination summons on the basis that information so obtained might be used for other proceedings Local Court (Civil Claims) Rules 1988 LEGISLATION CITED : Supreme Court Rules 1970 Ainsworth v Hanrahan (1992) 25 NSWLR 155 Ampolex Limited v Perpetual Trustee Company (Canberra) Limited (1995) 18 ACSR 218 Brimson v Rocla Concrete Pipes Ltd [1982] 2 NSWLR 937 Central Queensland Cement Pty Ltd v Hardy [1989] 2 QdR 509 Crest Homes PLC v Marks [1987] 1 AC 829 Esso Australia Resources Limited v Plowman (1995) 183 CLR 10 Harman v Secretary of State for the Home Department (1983) 1 AC 280 CASES CITED : Holpitt Pty Ltd v Varimu Pty Ltd (1991) 103 ALR 684 Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217 Sweetman v Australian Thoroughbred Principal Finance Pty Limited (Lockhart J, 23 July 1992, unreported) Television Group Limited v Northern Rivers Television Pty Limited (Bainton J, 4 September 1995, unreported) Wellness Pty Ltd v Hamilton-Bond & Ors [2002] NSWSC 1259 Re Winterbottom; Eurostar Pty Ltd (in liquidation) (receivers and managers appointed) & Ors [2003] NSWSC 633 Woolworths Limited v Lawson [2002] NSWSC 985 John Roland Aarons - Plaintiff PARTIES : Patrick John Moloney - Defendant FILE NUMBER(S) : SC 3728/05 No appearance - Plaintiff COUNSEL : J M Ireland QC - Defendant No appearance - Plaintiff SOLICITORS : Moloney Lawyers - Defendant LOWER COURT JURISDICTION : IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION EQUITY LIST CAMPBELL J THURSDAY 4 AUGUST 2005 3728/05 JOHN ROLAND AARONS v PATRICK JOHN MOLONEY JUDGMENT – Ex Tempore 1 HIS HONOUR: This is the hearing of a Notice of Motion brought by the defendant in proceedings, seeking that the proceedings be dismissed as an abuse of process. In making an order under Part 13 rule 5 Supreme Court Rules 1970, the Court is deciding, in effect, whether it would be an abuse of process for the proceedings to continue: Brimson v Rocla Concrete Pipes Ltd [1982] 2 NSWLR 937 at 944. 2 On 24 February 2005 Dexta Corporation Limited ("Dexta") obtained a judgment debt in the Local Court against the plaintiff in the present proceedings. Dexta is a client of the defendant in these Supreme Court proceedings, Mr Moloney. Mr Moloney is a solicitor. 3 Mr Moloney also acts, in District Court proceedings number 5796 of 2003, for a Mr Mark Bailey. The plaintiff in the present proceedings was also the plaintiff in those District Court proceedings, and Mr Bailey was the defendant in them. 4 On 28 April 2005 Mr Moloney, acting for Dexta, filed an examination summons in the Local Court, which was returnable on 2 June 2005. That lead to an exchange of correspondence between the solicitors who were then acting for the plaintiff, L C Muriniti & Associates, and Mr Moloney. L C Muriniti & Associates invited Mr Moloney to cease acting in the Local Court proceedings. The basis was, broadly, that he may obtain confidential information in the Local Court proceedings which might be improperly used in other proceedings. 5 Mr Moloney sought to ascertain what the confidential information referred to might be, and in what way it was alleged there might be improper use of it, but no great detail on either of those topics was provided to him. 6 The plaintiff commenced the present proceedings on 29 June 2005, by filing a summons in the Registry. The Duty Judge was not approached. That summons was given a return date of 8 August 2005, before the Registrar. 7 On 16 June 2005, the plaintiff had filed a notice of motion in the Local Court, seeking a stay of the examination summons pending an application being made to the Supreme Court to disqualify the defendant from acting. On 30 June 2005 Magistrate Lulham granted the stay which was sought, pending the determination of the present proceedings. 8 On 1 July 2005 the defendant filed the present notice of motion in Court, before the duty Judge, and orders were made granting short service. 9 On 5 July 2005 the matter came before me in the Duty Judge list. On that occasion the plaintiff was represented by counsel. At that time, at the urging of counsel for the plaintiff and with the acquiescence of counsel for the defendant, I utilised an alternative prayer for relief which was contained in the defendant's notice of motion, seeking expedition of the proceedings, and fixed the matter for final hearing on 31 August 2005, and gave some directions for pre-trial preparation. The defendant, cautious about whether the final hearing would actually come to pass on that day, applied to have the notice of motion adjourned to 9.30am on 18 July 2005 for mention. I granted that application. 10 On 18 July 2005, when the matter was before me, there was no appearance for the plaintiff. I was informed that the solicitors for the defendant had been told that L C Muriniti & Associates were no longer acting for the plaintiff. However, no notice of ceasing to act appeared on the court file. On that day, I stood the directions hearing over to 25 July 2005 at 9.30am, and also stood the notice of motion over to the same date. I provided a set of draft pre-trial directions, and directed that the solicitors for the defendant notify the plaintiff of the orders made, and provide him with a copy of the draft pre-trial directions, by 5 pm that day. I directed that the plaintiff be informed that on 25 July 2005 the Court would consider whether directions in accordance with that draft, or in any other form, should be made, and that on that day the defendant may be seeking an earlier hearing of its notice of motion, that is earlier than 31 August 2005. Those direction were duly complied with. 11 On 25 July 2005 the plaintiff once again did not appear in Court. The orders then made were that the defendant's notice of motion be listed for hearing at 10 am on 4 August 2005 (ie, today), that an affidavit of the defendant be permitted to be be filed, and that the defendant notify the plaintiff of the hearing date on 4 August 2005, and in addition notify the plaintiff's solicitors. That direction was complied with the same day, 25 July 2005. 12 Today, the plaintiff has been called, and not appeared. 13 The plaintiff's summons is one which seeks the following orders: "1. An order restraining the defendant from acting from [sic] Dexta Corporation in the Local Court proceedings number 7714 of 2004 between the Plaintiff and Dexta Corporation Limited and/or 2. An order restraining the defendant from acting for Dexta Corporation Limited against the plaintiff in bankruptcy proceedings commenced by Dexta Corporation through the services of the defendant presently being Bankruptcy Notice N1969/05. and/or 3. An order restraining the defendant from acting for Mark Conrad Bailey in District Court proceedings number 5796 of 2003. 4. Such further and other orders as this Honourable Court deems fit. 5. Costs." 14 At the time of service of the summons, a bankruptcy notice had been served on the plaintiff by Dexta. 15 Since the proceedings have commenced, the third prayer for relief has become redundant. On 20 July 2005 her Honour Judge Ainslie-Wallace heard a notice of motion brought by Mr Bailey in those District Court proceedings, and summarily dismissed those proceedings. 16 The only steps which remain to be taken in the Local Court proceedings are the examination summons, and anything else which might be done by way of enforcement of the judgment which has been obtained. 17 The examination summons is one which is provided for by Part 28 of the Local Court (Civil Claims) Rules 1988. Part 28 rule 3 provides that, "An examination under an examination summons may be conducted in open court or in chambers, as the Registrar directs." 18 In those circumstances where the examination summons is conducted in open court, and there is no inhibition imposed by any court order on the use which can be made of information elicited at the examination summons, any member of the public who is present is entitled to take notes of the proceedings if they choose, and make such use of the information ascertained in the course of the proceedings as they will. 19 Sometimes, when information is obtained through compulsory Court processes for the purpose of legal proceedings, there is an implied obligation to use the information which is so obtained only for the purpose of the proceedings, unless the court gives permission otherwise. Such an obligation in relation to documents obtained by discovery is established by Harman v Secretary of State for the Home Department (1983) 1 AC 280, and recognised by Mason CJ in Esso Australia Resources Limited v Plowman (1995) 183 CLR 10 at 32-33. Similar obligations have been held to attach to documents, and information in documents, obtained by other forms of pre-trial process: Ainsworth v Hanrahan (1992) 25 NSWLR 155 (answer to interrogatories); Central Queensland Cement Pty Ltd v Hardy [1989] 2 QdR 509 (witness statement). As to when the Court will give permission otherwise, see Ampolex Limited v Perpetual Trustee Company (Canberra) Limited (1995) 18 ACSR 218 at 221; Crest Homes PLC v Marks [1987] 1 AC 829 at 860; Holpitt Pty Ltd v Varimu Pty Ltd (1991) 103 ALR 684 at 686; Sweetman v Australian Thoroughbred Principal Finance Pty Limited (Lockhart J, 23 July 1992, unreported) at 3; Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217 at 225; Capital Television Group Limited v Northern Rivers Television Pty Limited (Bainton J, 4 September 1995, unreported); Woolworths Limited v Lawson [2002] NSWSC 985; Wellness Pty Ltd v Hamilton-Bond & Ors [2002] NSWSC 1259 at [8]; Re Winterbottom; Eurostar Pty Ltd (in liquidation) (receivers and managers appointed) & Ors [2003] NSWSC 633. 20 The speeches in the House of Lords in Harman v Secretary of State for the Home Department (1983) 1 AC 280 suggested that the inhibition on a party, who had obtained information through discovery, to use that information for any purpose other than the proceedings, continued to apply even if the documents were referred to, or even read or tendered, in open court. In Australia, that inhibition has, in many jurisdictions, been modified by rules of court. Thus, in this Court, Part 23 rule 3 (11) Supreme Court Rules 1970 provides: "No copy document, or information from a document, obtained by party A as a result of discovery by party B shall be disclosed or used otherwise than for the purposes of the conduct of the proceedings, without the leave of the Court, unless the document has been received into evidence in open Court ." (emphasis added) 21 When that sub-rule restricts the use which can be made of a document, or information from a document which has been obtained by discovery, and exempts from that restriction the situation where the document has been received into evidence in open Court, there is no longer any room for the implied obligation, discussed in Harman v Secretary of State for the Home Department (1983) 1 AC 280, to continue to run once the document has been received in evidence in open court. A similar result has been arrived at in the Federal Court, through the operation of its Order 15 Rule 18. That result is in accord with the fundamental principle that, unless there is good reason to order otherwise, proceedings in court should be conducted openly. 22 The rationale of the rule in Harman v Secretary of State for the Home Department (1983) 1 AC 280 is that documents and information obtained through compulsive pre-trial processes of the court ought not be used for a purpose which is outside the purpose of those processes. If one seeks to apply that rationale to the conduct of an examination summons, in the Local Court, the proper scope of the conduct of an examination summons involves the possibility that the proceedings will be heard in open court, and without any inhibition on the use which is made of information obtained in the proceedings. Of course, it is always possible for the Registrar in the Local Court to decide that the proceedings should be heard in chambers, or it may be possible for the Local Court by express order to impose some limitations on the use made of documents or information so ascertained. Absent any such decision, however, the nature of the process is that information gathered in it may be freely used by anyone to whom it might come. In those circumstances, I do not regard it as seriously arguable that the relief which is sought in paragraph 1 of the summons ought be given. 23 If the plaintiff in this case could, without any order of the Local Court, ensure that information revealed in open court on an examination summons was not used for purposes other than those Local Court proceedings it would mean that whenever a reluctant witness gave evidence at a trial only because he had been required to do so by subpoena, that evidence likewise could not be used for any purpose other than the conduct of the proceedings. The judicial officer can, in appropriate cases, make confidentiality orders, but there is no general prohibition on the use of evidence given in open court for purpose other than the proceedings. 24 The relief which the plaintiff seeks in the second paragraph of the summons appears, from the pre-trial correspondence, to be rooted in the same concern, that information ascertained in the Local Court examination summons might be improperly used in connection with the bankruptcy proceedings. 25 For the same reasons as have lead me to summarily dismiss paragraph 1 of the summons, paragraph 2 should likewise be summarily dismissed. 26 As mentioned earlier, paragraph 3 no longer goes to any live issue and so it would be an abuse of process for it to continue. Everything else in the summons is consequential on the first three paragraphs. I am satisfied that continuance of the proceedings would be an abuse of process. Orders 1. Summons is dismissed with costs. 2. Those costs are to include the costs of the notice of motion filed 1 July 2005, and all reserved costs. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.