Reported Decision : 62 NSWLR 653 New South Wales Supreme Court CITATION : Blanch v British American Tobacco Australia Services Ltd [2005] NSWSC 241 HEARING DATE(S) : 21/03/05 JUDGMENT DATE : 21 March 2005 JURISDICTION : Equity Division JUDGMENT OF : Young CJ in Eq DECISION : Summons dismissed with costs. CATCHWORDS : PROCEDURE [748]- Declaratory relief- Onus of proof of facts. Cawood v Green (Hardie JA, 26.6.1974, unreported) Decca v City of Adelaide Council (1982) 52 LGRA 85 Jones v Sutherland Shire Council [1979] 2 NSWLR 206 CASES CITED : Massoud v NRMA Insurance Ltd (M H McLelland CJ in Eq, 5.5.1995, unreported) Radmanovich v Nedeljkovic [2002] NSWSC 212 Re 6, 8, 10 and 12 Elm Avenue, New Milton; Ex parte New Forest District Council [1984] 3 All ER 632; [1984] 1 WLR 1398 Repatriation Commission v Nation (1995) 57 FCR 25 Alan William Blanch, Roderick Stuart Cameron, Glenn Douglas Capel, Robert Geoffrey Horton, Cameron Leslie Leaver, Julius John Markos, Alan Sydney Osburg, Kathryn Margaret Ireland, Peter Wayne Gowers, David Francis Allen, Michael David Hunt and Paul John Hendriks t/as Hicksons (P) PARTIES : British American Tobacco Australia Services Limited (D) FILE NUMBER(S) : SC 6263/04 M T McCulloch SC (P) COUNSEL : S Rushton SC and M Elliott (D) Hicksons (P) SOLICITORS : Corrs Chambers Westgarth (D) LOWER COURT JURISDICTION : IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION YOUNG CJ in EQ Monday 21 March 2005 6263/04 – BLANCH & ORS t/as HICKSONS v BRITISH AMERICAN TOBACCO AUSTRALIA SERVICES LIMITED JUDGMENT 1 HIS HONOUR: This is a summons for a declaration as to the proper construction of orders I made in proceedings 1753 of 2003 between the same parties. The background is that the present plaintiffs, who were defendants in the previous proceedings, acted as solicitors for the present defendant, the plaintiff in the previous proceedings. The scenario developed that the defendant feared the solicitors might benefit another client by confidential information of the defendant in their possession and obtained an injunction against them acting for that client. Apart from that injunction, the Court made order 2, which provided that seven classes of documents were to be delivered up. A further order was made that the solicitors and their servants were to be restrained from publishing, communicating, or otherwise disclosing any of the confidential information. 2 A dispute has arisen between the parties as to the ambit of the orders. In the earlier order there was an informal dispute resolution procedure written in, but that has not proved to be adequate. Accordingly, the solicitors issued this new summons seeking a declaration that orders 2, 3 and 7 made in the other suit, on their true construction, had a restricted operation and did not cover the activity of the solicitors which is now in question. That activity involves the solicitors' paralegals putting on to a database three classes of documents, namely: (1) documents sourced from the Guilford Document Repository maintained by the defendant's associate in the United Kingdom; (2) documents sourced from tobacco document websites; and (3) documents discovered in an electronic format by the defendant in current proceedings in the Dust Diseases Tribunal. 3 What is happening is that various paralegals employed by the solicitors' firm are entering on to the database documents with various codings. The codings include a summary as to what issue or potential issue that document may relate to and its priority. The coding guide for the paralegals says in para 12 headed "Priority: All documents must be coded for priority in relation to usefulness in establishing the substantive issue in the litigation ...". There is then a series of categories, from category "Ball", which is a "knockout" document; a "Hot" document which is very useful on liability; and a "Cold" document, which harms a client's case. There are also categories such as "Warm/Link" which are documents from which an inference of association might be drawn in favour of the client's case. The assessment of the documents, it is put on the evidence of Ms Cessna - who was one of the paralegals working on the project, but is now a solicitor employed by the solicitors' firm - was done by people who had no contact at all with Mr Blanch, the solicitor in the firm who was primarily exposed to the confidential information. 4 The procedure adopted in the instant case is not a usual one, but is one which flows from the judgment of Hardie JA in this Court in Cawood v Green (26 June 1974, unreported). Where there is a bona fide question as to whether conduct does or does not constitute a breach of injunction, the proper procedure is for a declaration rather than moving for attachment. Since 1974 there have been a number of situations where declaratory relief to construe court orders has come before the Court. I mentioned some of them in my note in (1998) 72 ALJ 117 and my judgment in Radmanovich v Nedeljkovic [2002] NSWSC 212. The procedure thus adopted is the accepted procedure, and it is also now accepted that it is usually best for the original judge to hear the declaratory proceedings, even though the judge must keep out of his or her mind what might have been intended and construe only the words that were used in the order. However, if there is ambiguity, as Beaumont J said in Repatriation Commission v Nation (1995) 57 FCR 25 at 33 to 34, extrinsic evidence may be called in aid. 5 However, the problem that has caused me the most worry in this case is questions of evidence and onus. Declaratory proceedings are separate and discrete proceedings, and when a person commences declaratory proceedings that person bears the legal onus of proof, and that is so even though the majority of the facts may be in the opposing camp. 6 The onus is on the plaintiff to establish the ambit of the rights to be declared and to prove all the facts necessary to enable the declaration to be made. See Decca v City of Adelaide Council (1982) 52 LGRA 85 at 95, applying Jones v Sutherland Shire Council [1979] 2 NSWLR 206 at 212. Thus in an application for a declaration that land is not restricted by a covenant, the onus is on the plaintiff to prove that it is not so affected. It is not on the defendant to prove that it is affected: Re 6, 8, 10 and 12 Elm Avenue, New Milton; Ex parte New Forest District Council [1984] 3 All ER 632; [1984] 1 WLR 1398. 7 The whole question of onus was considered by M H McLelland CJ in Eq in Massoud v NRMA Insurance Ltd (5 May 1995, unreported). That was a case where the defendant had cancelled Mr Massoud's policy alleging that he had knowingly made false statements in connection with his claim. Mr Massoud then commenced declaratory proceedings that the defendant's purported avoidance of the plaintiff's policy was wrongful and void. McLelland CJ in Eq held it was up to Mr Massoud to prove that he had not made false statements, notwithstanding the fact that had the matter proceeded in the normal way, the legal or evidentiary onus may have been the other way. His Honour laid down the guiding principles at [12]: "(1) A party who seeks relief has the burden of satisfying the Court of facts which (in the absence of proof of other facts) would justify the grant of that relief; (2) What those facts are depends principally upon: (a) the nature of the relief sought; and, (b) the observation of any relevant presumptions; (3) In the case of relief by way of declaratory order, the precise terms of the declaration assume particular significance in that (subject to any relevant presumption) the party seeking the declaration has the burden of proof of any matter which is a necessary element of the declaration sought (even if in proceedings by that party for relief of another kind, or in proceedings by the other party, that matter would not arise unless raised (and the burden of proof consequently assumed) by the other party)." 8 Trying to work out the facts in this case was rather like trying to conduct a boxing match in an arena surrounded by fog. No-one knows on the evidence before me just how the documents, which were put to the group of paralegals to be coded were selected and whether the person involved in the selection had confidential information or not. Again, because all the documents have been handed over, the plaintiff solicitors say that this is in the defendant's camp, and it would be quite simple for the defendant to identify the alleged documents or confidential information which the plaintiffs may have utilised. The plaintiffs say that the evidentiary onus is thus on the defendant. 9 It seems to me that if there had been a claim that there had been a breach of the injunction, this proposition would be correct. However it is not so in declaratory proceedings of the present nature. 10 The plaintiffs must, if they are to get a declaration in the absolute form which they seek, put forward all the information which enables the Court to be satisfied on the balance of probabilities that no confidential material was used in the selection of documents which are being put on the database. The evidence that I have really only goes to the mechanics of putting together the database after the selections have been made. 11 The position is that if none of the selections were made by a person who had access to the confidential information, then putting the material in para 3 of Ms Cessna's affidavit onto the database would probably not contravene the order. However, if there was some taint by the person making the selection, having some access consciously or subconsciously to that information, then it may well be that the solicitors had used information derived from the documents. 12 I take the view that the word "derived" in order 2 must be read fairly widely. Because the Court was dealing with a situation where it was protecting confidential information from a client to a solicitor, it would be against what one of the counsel referred to in his address as "the spirit of the order" to allow any use to be made of that information to the detriment of the client. 13 I merely make these observations for guidance. 14 However, the order must be that the summons must be dismissed with costs. I regret this in one sense because the plaintiffs have pursued the appropriate way of going about things. The only alternative is to proceed for penalty for breach of the Court's order. That is not something which the Court ever encourages especially where people are trying to do the right thing. Indeed in such cases usually the only orders made in the long run are orders for payment of costs. However, I cannot see how, on the material before me at the moment, I can make a declaratory order. 15 The summons must thus be dismissed with 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.