On 6 August 2008, the High Court of Australia handed down its decision in the matter of Hearne v Street [2008] HCA 36. The case explores:
Luna Park: just for fun?
The historic Luna Park is located on the north side of Sydney Harbour. The amusement park was originally opened in 1935 and has closed down a number if times. Its most recent reopening was in April 2004.
On its reopening in 2004, residents became dissatisfied with various types of noise including music, loudspeaker announcements and mechanical noise and the screams and shrieks of patrons using the rides.
On 5 April 2005, the residents commenced proceedings in the Equity Division of the Supreme Court of New South Wales by filing a summons and 15 affidavits in support. The proceedings were based on the tort of nuisance arising from the noise and the entitlement to quiet enjoyment.
The residents sought restraining orders against the operation of Luna Park. They were initially successful.
“NUMBY”: Not Under My Balcony
On 18 April 2005, the Daily Telegraph published an article under the headline “The Numby files”. The term “numby” referred to “not under my balcony”. Numby was said to be the city cousin of nimby, “not in my backyard”.
The article referred to the dissatisfaction of the residents citing some of their complaints as being:
“Disrupted violin lessons, entrapped Chinese herbal medicine fumes and smoking daughters have been sighted by residents as reasons why Luna Park should shut down rides.
The Daily Telegraph has seen several affidavits filed in the Supreme Court by Milsons Point residents against the amusement park, which reopened in April last year.
Here is a summary of the residents’ affidavits, which make interesting reading.”
The article went on to refer “in fairly disparaging terms, to allegations made by local residents about the noise from Luna Park and how it interfered with their lives” (Ipp JA’s comment in the Court of Appeal).
The undertaking
On 19 April 2005, solicitors for the residents complained that Luna Park had released affidavits filed on behalf of the residents to the Daily Telegraph and requested an undertaking not to release any unread affidavits to the media or any other person not properly connected to the proceedings. The undertakings were provided by Luna Park Sydney and another related corporate defendant.
Further evidence was filed in the proceedings including the report of an acoustic expert and an affidavit dated 30 June 2005 sworn by Mrs Hesse.
The further disclosures
Two key communications took place on 25 July 2005. One was a request from Mr Hearne to the Minister of Tourism, Sport and Recreation (Minister for Tourism) to consider legislation which would amend the Luna Park Site Act 1990 (NSW) so as to ensure the operations of Luna Park would be protected against the complaints which were the subject of the noise nuisance proceedings. The other was an email from Mr Hearne to a person in the office of the Minister for Tourism which provided details of:
- more spurious noise complaints;
- a copy of the article in the Telegraph;
- a copy of an affidavit of one of the plaintiffs;
- the acoustic report commenting on the reduction of the mechanical noise of the Range Rider
This was extracted from Mrs Hesse’s affidavit.
On 11 October 2005, the New South Wales State Government announced it would be introducing the Luna Park Site Amendment (Noise Control) Bill.
On 13 October 2005, Mr Tierney sent an email including attachments to the office of the Minister for Tourism which included the 25 July 2005 email with a note that it could be “used as good rhetorical or debating material in the Legislative Assembly”. He went on to say that it included some key lines from the affidavit of one of the residents but that it could not be quoted as it would be in contempt of court.
On 20 October 2005, the hearing date was vacated in light of the new legislation.
On 14 December 2005, the Court ordered Luna Park to answer interrogatories about the dealings between the company and the State Government. The application sought orders regarding costs thrown away by reason of what they saw as the tardiness with which dealings between Luna Park Sydney Pty Limited and the State Government were revealed to them, i.e. only in press releases and the government legislation. The interrogatories were directed to the 25 July email and other matters.
It was revealed that extracts from Dr Tonin’s expert report and Mrs Hesse’s affidavit had been emailed to the Minister for Tourism and was “in breach of the implied undertaking not to use them for any purpose not directly connected with the conduct of the proceedings and a contempt of court”. Mr Tierney contended that he and Mr Hearne were under the impression that only the public dissemination of affidavits would amount to contempt.
The residents instructed their solicitors to proceed against Mr Hearne and Mr Tierney despite an apology from their solicitors on behalf of Luna Park Sydney Pty Limited. It was agreed that when Mrs Hesse’s and Dr Tonin’s reports were transmitted by Mr Hearne to the Minister on 25 July 2005 and by Mr Tierney to the minister on 13 October 2005, that their actions were a breach of the implied undertaking and moreover caused Luna Park Pty Limited to be in breach of the implied undertaking to the Court not to use the materials other than for the purposes of the proceedings.
It was also undisputed that both Mr Hearne and Mr Tierney knew that the affidavit and the report had been produced in the course of the noise nuisance proceedings.
The primary hearing
The primary judge held that this forwarding by Mr Hearne of part of Mrs Hesse’s affidavit on 25 July was a breach of an implied undertaking given by Luna Park Pty Limited but held that the charge against Mr Hearne and Mr Tierney that they had given an undertaking to the Court or had given an implied undertaking was not satisfied.
Court of appeal
The matter was then referred to the Court of Appeal. The first issue to consider was whether the implied undertaking was binding on Mr Hearne and Mr Tierney. Ipp JA held that it was an obligation imposed by law in particular circumstances and that the obligation applies to all persons to whose hands the documents to which it applies come, if they know they were obtained by way of discovery or other compulsory court process. The residents:
“only had to prove knowledge of the facts that gave rise to the obligation imposed on Mr Hearne and Mr Tierney by law”.
The second issue was whether an appeal against a dismissal of contempt charges was competent. This arose in terms of section 101(5) and (6) of the Supreme Court Act 1970 (NSW). Ipp JA held that the residents’ allegations of a breach of an implied undertaking were civil in nature and accordingly the Court had competent jurisdiction.
High Court
The question of whether an implied undertaking is an obligation of substantive rule was examined by the High Court.
The appellants contended that the undertaking was provided by Luna Park Pty Limited not Tierney or Hearne.
Tierney and Hearne’s counsel argued that the obligation was on the person who gave the undertaking, being the entity of Luna Park Pty Limited and that its servants or agents were only liable if they knowingly assisted the entity bound by the breach and further that it would be necessary to establish that the servant/agent had knowledge of all material facts going to make up the contempt.
This was contrary to the Court of Appeal’s finding that the implied undertaking reflected an obligation imposed by general law in particular circumstances and that the residents did not have to prove that the respondents knew of the implied undertaking, only that they knew of the facts that generated the obligation.
The High Court acknowledged that the primary person bound by the relevant obligation was the litigant who received the documents or the information from the other side pursuant to the litigious process. However, the implied undertaking also bound others to whom documents and information were given. For example, expert witnesses, who are not parties, commonly receive documents and information and are bound by the obligation. It was also noted that the obligation would be of very limited protection if it were only personal to the litigant, which is why it is often extended to litigants’ solicitors, barristers and third parties such as shorthand writers or court officers and, for that reason, the authorities recognised a broader principle by which persons who, knowing that material was generated in legal proceedings, used it for purposes other than those proceedings, are in contempt of court.
The Court held that there was nothing voluntary about the “undertaking” and that the expression “implied undertaking” is merely a formula through which the law ensures that there is not placed upon litigants, who in giving discovery are suffering a “very serious invasion of the privacy and confidentiality of their affairs, any burden which is harsher or more oppressive than is strictly required for the purpose of securing that justice is done”.
The actions of Hearne and Tierney were deliberate. They engaged in political lobbying, leading 0to statute law which effectively defeated the residents’ complaints. Hearne and Tierney’s actions were calculated to achieve the outcome which was obtained – but their actions abused the access to documents by using them for a purpose outside the legal proceedings, and to which corporate undertakings had been given.
The High Court decision gives no guidance as to the next step. However, given the appeal was dismissed, the Court of Appeal orders are relevant. The orders of that court include a referral back to the trial judge to determine what penalty ought to be imposed, personally, on Mr Hearne and Mr Tierney.
The decision highlights the need for litigants and persons in possession of confidential information only to use that information for the purpose of the litigation itself and not for any secondary or ulterior purpose.
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