Contempt of Court
Contempt of Court: breach of the implied undertaking
By Nunzio Lucarelli QC* and Benjamin Fitzmaurice**
A party to litigation and its legal representatives are subject to an implied undertaking at common law not to use documents or information obtained from an opposing party pursuant to the compulsory processes of the court for any collateral purpose. The breach of that implied undertaking by a party to the litigation or its legal representatives may constitute a contempt of court. This article identifies the nature and extent of the implied undertaking and discusses the likely consequences of its breach in the form of proceedings for contempt of court. It also highlights the need for legal practitioners to abide the implied undertaking at all times and the need to ensure that their clients adhere to the obligations imposed.
The implied undertaking
The implied undertaking arises by operation of law.[1] In Harman v Secretary of State for the Home Department[2] Lord Diplock stated that:
"...an order for production of documents to a solicitor on behalf of a party to civil litigation is made upon the implied undertaking given by the solicitor personally to the court (of which he is an officer) that he himself will not use or allow the documents or copies of them to be used for any collateral or ulterior purpose of his own, his client or anyone else; and any breach of that implied undertaking is a contempt of court by the solicitor himself." [3]
The implied undertaking is imposed whether it is expressly ordered by the Court or not.[4] The obligation arising from the implied undertaking:
"... is owed to the court for the benefit of the parties, not one which is owed simply to the parties; likewise, it is an obligation which the court has the right to control and can modify or release a party from."[5]
The types of documents which attract the implied undertaking
The types of documents which attract the protection of the implied undertaking include:
- documents discovered in the course of a proceeding;[6]
- documents produced upon subpoena;[7]
- interrogatories
;[8] - witness statements;[9] and
- affidavits.[10]
Release of the implied undertaking
A party that wishes to use a document or information obtained in one proceeding for use in another proceeding or some other collateral purpose can apply to the Court in which the implied undertaking was given for release from the obligation. By way of example, a party may wish to use a document or information discovered in proceedings to plead a cause of action in another proceeding against the same or different parties. To be successful in an application to be released from the implied undertaking the party seeking the relief must show "special circumstances".[11] In Liberty Funding Pty Ltd v Phoenix Capital Ltd,[12] Branson, Sundberg and Allsop JJ, stated:[13]
"The notion of "special circumstances" does not require that some extraordinary factors must bear on the question before the discretion will be exercised. It is sufficient to say that, in all the circumstances, good reason must be shown why, contrary to the usual position, documents produced or information obtained in one piece of litigation should be used for the advantage of a party in another piece of litigation or for other non-litigious purposes. The discretion is a broad one and all the circumstances of the case must be examined. In Springfield Nominees, Wilcox J identified a number of considerations which may, depending upon the circumstances, be relevant to the exercise of the discretion. These were:
- the nature of the document;
- the circumstances under which the document came into existence;
- the attitude of the author of the document and any prejudice the author may sustain;
- whether the document pre-existed litigation or was created for that purpose and therefore expected to enter the public domain;
- the nature of the information in the document (in particular whether it contains personal data or commercially sensitive information);
- the circumstances in which the document came in to the hands of the applicant; and
- most importantly of all, the likely contribution of the document to achieving justice in the other proceeding."
In Citicorp Life Insurance Ltd v Lubransky,[14] Hargrave J considered that an additional category should be added to those set out in Springfield Nominees being:
"The extent to which the information contained in the documents under consideration has entered the "public domain" is a relevant factor."[15]
Contempt of Court - Supreme Court Rules
Regulations 941 and 942 of the Supreme Court Rules 2000 (Tas) set out the procedure for the Court to deal with the determination of contempt. These regulations identify two types of contempt: first, contempt that is in the "face of the Court" (reg. 941 of the Rules); and secondly, contempt which is not (reg. 942 of the Rules). The procedure for dealing with the determination of contempt differs significantly between the two regulations.[16]
Contempt "in the face of the Court" is confined "to the ordinary meaning of the expression, viz in front of the judge or in his sight."[17] Applying this definition to the expression "in the face of the Court" in Registrar of the Court of Appeal v Maniam [No 1],[18] Kirby P held that a doctor who failed to attend Court and give evidence pursuant to a subpoena had committed a contempt which was not in the face of the Court. It was held that the contempt by the doctor had been committed at the various surgeries where he was located when he repeatedly refused to obey the command of the subpoena.[19]
Contempt of Court - some relevant principles
The standard of proof required to prove a charge of contempt of court is the criminal test of "beyond reasonable doubt".[20]
Ignorance is not a valid defence to a charge of contempt of court. In Watkins v A J Wright (Electrical) Ltd & Ors,[21] Blackburne J held that ignorance of the existence of the implied undertaking not to use documents produced by a party on discovery for a collateral or ulterior purpose was no defence to committal proceedings for contempt of court based on a breach of the undertaking.[22] However in determining the appropriate punishment for contempt, His Honour held that ignorance of the implied undertaking was relevant to the mitigation of the sanction to be imposed by the Court.[23] A party does not necessarily need leave to refer to a document in a subsequent proceeding for contempt. In Crest Homes v Marks,[24] Lord Oliver of Aylmerton stated:
"It has been submitted that proceedings for contempt of court are always to be regarded, for the purpose of the implied undertaking on discovery, as "collatera
...My Lords, I find myself quite unable to accept that submission. The proper policing and enforcement or observance of orders made and undertakings given to the court in an action are, in my judgment, as much an integral part of the action as any other step taken by a plaintiff in the proper prosecution of his claim. The normal procedure where the contempt complained of is that of a party to the action is to apply for committal by motion in that action as an incidental step in the action. There is, in my judgment, nothing "collatera
The principles for the purging of contempt are conveniently set out in the judgment of Samuels AP in United Telecasters Sydney v Hardy.[26] The elements of the purging of contempt include:
- an unreserved apology;
- compensation or reparation of damages suffered by a party; and
- the payment of relevant costs on an indemnity basis.[27]
An innocent principal of a firm is not necessarily liable for the omission of an employee solicitor.[28]
Similarly, an innocent client is not necessarily liable for a breach by his/her legal representative of the implied undertaking.[29]
A third party to the proceeding may be guilty of contempt of court if they have a part to play in the offence. In LED Builders Pty Ltd v Eagles Homes Pty Ltd[30] Lindgren J stated:
"It is not necessary to show that a person who has aided and abetted a contempt of court was served with the order breached. It is necessary to show only that the person sought to be made liable knew of the order."[31]
In Seaward v Paterson,[32] the English Court of Appeal held that the Court had undoubted jurisdiction to commit for contempt a person not included in an injunction or a party to the action who, knowing of the injunction, aided and abetted a defendant in committing a breach of it. Lindley LJ stated:
"Now, let us consider what jurisdiction the Court has to make an order against Murray. There is no injunction against him - he is no more bound by the injunction granted against Paterson than any other member of the public. He is bound, like other members of the public, not to interfere with, and not to obstruct, the course of justice; and the case, if any, made against him must be this - not that he has technically infringed the injunction, which was not granted against him in any sense of the word, but that he has been aiding and abetting others in setting the Court at defiance, and deliberately treating the order of the Court as unworthy of notice. If he has so conducted himself, it is perfectly idle to say that there is no jurisdiction to attach to him for contempt as distinguished from a breach of the injunction, which has a technical meaning."[33]
Factors in considering the punishment for contempt
In Principal Registrar of the Supreme Court of New South Wales v Jando,[34] Studdert J referred,[35] with approval, to the ten factors to be considered in assessing the proper punishment of contempt set out by Dunford J in Wood v Staunton (No 5),[36] which include:
- the seriousness of the contempt proved;
- whether the contemnor was aware of the consequences to himself or herself of what he/she did;
- the actual consequences of the contempt on the relevant trial or inquiry;
- whether the contempt was committed in the context of serious crime;
- the reason for the contempt;
- whether the contemnor has received any benefit by indicating an intention to give evidence;
- whether there has been any apology or public expression of contrition;
- the character and antecedents of the contemnor;
- general and personal deterrence; and
- denunciation of the contempt.
In Registrar, Court of Appeal v Maniam [No 2],[37] Kirby P considered that the most serious class of contempt, from the point of view of sanction, is contumacious contempt.[38] Kirby P stated:
"This class of contempt is reserved to cases where the behaviour of the contemnor has been shown to be aimed at the integrity of the courts and designed to degrade the administration of justice, as distinguished from a simple interference with property rights manifested by a court order: cf Root v MacDonald 157 NE 684 (1927) at 688; 54 Am LR 1422 (1927) at 1429. In cases where such a measure of wilfulness is established, the court may proceed to punish the convicted contemnor by the imposition of a custodial sentence or a fine or both. In such a case the elements necessary to establish wilfulness, carrying as they do the potential of penal consequences, must all be proved to the criminal standard: see Consolidated Press Ltd v McRae (1955) 93 CLR 325 at 333."[39]
The implied undertaking and the role of the legal practitioners
Abiding the rigors of the implied undertaking may seem common sense. The discipline for the practitioner however is to maintain the integrity of the undertaking whilst at times operating under enormous pressure to obtain instructions and meet deadlines. In that context there is often competing difficulties in the management of client expectations and the legal processes and safeguards which legal practitioners must ensure are adhered to. Perhaps the position is best summarised by Hamilton J in Evans v Citibank Ltd:
"The case is illustrative of the care and concentration needed to be applied by legal representatives
Realistically, parties to litigation and their legal representatives (whether innocently or otherwise) sometimes use documents obtained in litigation for a collateral or ulterior purpose. Given the potential misuse of documents or information by clients, it may be advisable for legal practitioners to ensure that copies of documents or information obtained pursuant to the compulsory processes of the Court do not remain in the client's possession outside of the practitioner's office. In this way, the legal practitioner and the client may avoid the costly and time consuming process of explaining a breach of the implied undertaking or worse, defending a charge of contempt for that breach.
© Copyright Benjamin Fitzmaurice 2007
Every effort is taken to ensure that the information contained in this article is accurate at the time of publication. The content of this article is not legal advice and should not be relied upon as legal advice. The content is designed as a guide only. If you require legal advice please contact a legal practitioner accordingly.
* Nunzio Lucarelli QC, Barrister-at-La
** Benjamin Fitzmaurice, Barrister-at-La
[1] See Hobhouse J in Prudential Assurance Co Ltd v Fountain Page Ltd & Ors [1991] 3 All ER 878. See also Central Queensland Cement Pty Ltd v Hardy [1989] 2 Qd R 509; Springfield Nominees Pty Ltd & Ors v Bridgelands Securities Limited & Ors (1992) 38 FCR 217; Ampolex Ltd v Perpetual Trustee Company (Canberra) Limited & Ors (1995) 18 ACSR 218; Citicorp Life Insurance Ltd v Lubransky [2005] VSC 101; Blanch & Ors v Deputy Commissioner of Taxation [2004] NSWCA 461.
[2] [1983] AC 280. See also Riddick v Thames Board Mills Ltd [1977] QB 881, 896 (Lord Denning) and Crest Homes plc v Marks [1987] AC 829, 853 (Lord Oliver).
[3] Harman v Secretary of State for the Home Department [1983] AC 280, 304.
[4] Hobhouse J in Prudential Assurance Co Ltd v Fountain Page Ltd & Ors [1991] 3 All ER 878.
[5] Ibid 885. See also Ampolex Ltd v Perpetual Trustee Company (Canberra) Ltd & Ors (1995) 18 ACSR 218, 221.
[6] Harman v Secretary of State for the Home Department; Citicorp Life Insurance Ltd v Lubransky [2005] VSC 101; Ampolex Ltd v Perpetual Trustee Company (Canberra) Ltd & Ors; Blanch & Ors v Deputy Commissioner of Taxation [2004] NSWCA 461 at [5].
[7] Capital Television Group Ltd and Anor v Northern Rivers Television Pty Ltd (1995) NSWSC (4 September 1995); Premier Travel v Satellite Centres of Australia [2004] NSWSC 864.
[8] Central Queensland Cement Pty Ltd v Hardy [1989] 2 Qd R 509.
[9] Ibid.
[10] Evans v Citibank Ltd [2000] NSWSC 1017; Woolworths v Lawson [2002] NSWSC 985.
[11] Springfield Nominees Pty Ltd Bridgelands Securities Ltd (1992) 38 FCR 217.
[12] [2005] FCAFC 3.
[13] Ibid at [31].
[14] [2005] VSC 101.
[15] Ibid at [65]. See also Sybron Corporation v Barclays Bank plc [1985] CH 299.
[16] See generally Reg 941 and Reg 942.
[17] Fraser v The Queen [1984] 3 NSWLR 212, 230 (Kirby P and McHugh JA). Their Honours rejected a broader definition of the expression "in the face of the court" stated by Moffett P in Registrar of the Court of Appeal v Maniam [No 1] (1991) 25 NSWLR 459.
[18] (1991) 25 NSWLR 459.
[19] (1991) 25 NSWLR 459, 462-463 (Kirby J).
[20] Consolidated Press Ltd v McRae (1954-1955) 93 CLR 325, 333 (Dixon CJ, Kitto and Taylor JJ); NCR Australia Pty Ltd v Credit Connection Pty Ltd [2005] NSWSC 1118.
[21] [1996] 3 All ER 31.
[22] Ibid 40 and 41.
[23] Ibid at [42]
[24] [1987] 1 AC 829.
[25] Ibid 860.
[26] (1991) 23 NSWLR 323, 340.
[27] See also ACCC v Showmens Guild of Australia [2005] FCA 1234. The contemnor apologised unreservedly by way of affidavit which was a key factor in determining the appropriate punishment.
[28] Forestview Nominees Pty Ltd & Anor v Perron Investments Pty Ltd & Anor [1999] 162 ALR 482.
[29] Ibid 485.
[30] [1999] FCA 1213.
[31] Ibid at [58].
[32] [1897] 1 Ch 552.
[33] Ibid 554.
[34] (2001) NSWLR 527.
[35] Ibid 532.
[36] (1996) 86 A Crim R 183, 185.
[37] (1992) 26 NSWLR 309.
[38] Ibid 315.
[39] Ibid.
[40] Evans v Citibank Ltd [2000] NSWSC 1017 at [2].