The recent decision of the NSW Supreme Court in NSW Mobile Fleet Services Pty Limited v Max Mobile & Detailing Pty Limited [2023] NSWSC 140 is a good reminder of the sometimes-forgotten Harman undertaking that applies to legal practitioners and their clients.
Clients often ask whether they can use documents obtained under subpoena or through compulsory court processes for purposes other than the proceedings in which those documents were obtained.
There is an implied undertaking that information disclosed or prepared during legal proceedings will only be used for that purpose.
What is the Harman undertaking?
The Harman undertaking gets its name from Harman v. Secretary of State for the Home Department, a 1983 English Court of Appeal case that stated that documents obtained as a result of the compulsory processes of the court would only be used for the purposes for which they were disclosed and will not be used for a collateral or ulterior purpose.
The principle was summarised by The High Court of Australia in Hearne v Street [2008] HCA 36.
"Where one party to litigation is compelled, either by reason of a rule of court, or by reason of a specific order of the court, or otherwise, to disclose documents or information, the party obtaining the disclosure cannot, without the leave of the court, use it for any purpose other than that for which it was given unless it is received into evidence."
The court reiterated a few essential issues when considering the Harman undertaking. These include:
• The "implied undertaking" is a substantive legal obligation, not merely an undertaking.
• The obligation also binds others to whom documents, and information are given, not just the litigant. For example, any third party, such as witnesses, experts, and litigation funders, who know that the document originated from the legal proceedings (although they need not be aware of the undertaking).
• It applies to all Australian courts and tribunals, including arbitration.
• Breach of the undertaking is a breach of an undertaking to the Court and can have serious consequences.
What is "collateral use"?
In Harman, the court said documents could only be used for the purpose for which they were disclosed and for no collateral or ulterior purpose.
In simple terms, it would mean using it for a purpose that is different to the purpose for which the relevant party possesses the document or information in the first place. In other words, a purpose not connected to the proceedings in which it was obtained.
Examples include:
• Giving information or documents obtained in response to a subpoena (for example) to the media or referring to such documents or information in a media interview.
• Using a document obtained in one set of proceedings to commence a different set of proceedings, for example, defamation proceedings against the author of a document obtained during the first set of proceedings..
• Using a document obtained in one set of proceedings to bring different proceedings between the same parties.
However, it is not always a straightforward matter. In Spalla v St George Motor Finance Ltd [2004] FCA 1014, Ryan J said the following:
"I cannot discern a rational application of the implied undertaking which would make information available to an accused person to assist in the successful defence of a criminal charge yet deny that person the use of the same information to support a later civil claim that the criminal charge had been maliciously brought. In my view, the use of the information for that second purpose is not collateral to, but is directly connected with, the purpose for which it was initially made available."
In Deputy Commissioner of Taxation v Karas [2012] VSC 143, the court also held that the implied undertaking did not apply where affidavits filed on behalf of the taxpayer in relation to freezing orders obtained by the Deputy Commissioner against the taxpayer were used in separate proceedings to enforce the judgement debt. Forrest J explained his reasoning as follows:
"In this case, the freezing order is intimately bound up with the enforcement of the recovery proceeding in this court… Proceedings in the federal jurisdiction (be it in the AAT or any appeal to the Federal Court) relate directly to the income tax assessments, which are also the foundation for the obtaining of the freezing order and the judgement in the recovery proceeding."
So, "collateral purpose" depends on the circumstances of each case and whether there is a sufficient connection.
What is the reasoning behind the Harman obligation?
To fully understand the Harman undertaking, we must understand the rationale behind the undertaking.
In British American Tobacco Australia Services Ltd v Cowell (2003) 8 VR 571, the court said:
"The primary purpose of implying such an undertaking, it seems, is to protect the subject party's privacy and thereby inter alia to encourage full and frank disclosure whenever required for the purposes of the litigation."
In short, the purpose can be set out as follows:
• To encourage full and frank disclosure for proper litigation between parties.
• Acknowledging that the production of the information can violate a party's right to confidentiality.
• Protect the party's right to privacy.
• Striking a balance between the need to protect the party's right to privacy and what is needed for the proper course of justice and the compulsory nature of court proceedings.
• Preventing the use of court processes for an ulterior purpose.
The obligation is to the court, not the other party
This is an aspect often overlooked by parties to litigation. The undertaking or obligation is to the court, not the party who gave you the information. Breaching this obligation can amount to a contempt of court. It also means the relevant documents may be struck out in other proceedings.
Clients need to remember that lawyers are also bound by this obligation to the court. All litigants must be very careful what they do with information "discovered" during court proceedings.
What documents or information are covered?
The obligation applies to many documents and the information derived from these documents or copies of documents, such as:
• Documents delivered during discovery
• Documents produced on subpoena
• Documents produced on direction from an arbitrator
• Documents seized under a search order (Anton Pillar order)
• Documents produced under a court order or direction
• Affidavits and witness statements.
How would you know if the obligation applies?
It's not always apparent at first glance if the undertaking applies to a document or information.
The fundamental question to investigate is: Was the document produced within the compulsory process of the court?
If yes, the undertaking applies, UNLESS it was read or referred to in open court. Information that is in the public domain is not subject to the undertaking. And once the document is read in open court, the obligation does not apply any more.
Whether the undertaking applies can also depend on whether the information is confidential or sensitive. But if obtained through a compulsory court process, tread carefully.
Can a party be released from the obligation?
Yes, if a party wants to rely on the evidence for another purpose, the relevant party may approach the court to which they owe the obligation and apply for a release from the implied undertaking.
Only the court can release a party from its obligation. A release from the undertaking must be sought even if the party to whom the information belongs has consented to its release. While obtaining such consent may assist any application for a release, it is not the sole criteria. The court has discretion, and the party seeking the release must show there are special circumstances justifying a release.
There is not an exhaustive list of factors to establish special circumstances. In Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 110 ALR 685, Wilcox J said:
"For ‘special circumstances’ to exist, it is enough that there is a special feature of the case which affords a reason for modifying or releasing the undertaking and is not usually present. The matter then becomes one of the proper exercises of the court's discretion, many factors being relevant. It is neither possible nor desirable to propound an exhaustive list of those factors. But plainly, they include:
• the nature of the document;
• the circumstances under which it came into existence;
• the attitude of the author of the document and any prejudice the author may sustain, whether the document pre-existed the 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 into the hands of the applicant for leave and, perhaps most important of all;
• the likely contribution of the document to achieving justice in the second proceedings."
If the court finds that granting a release is just and equitable, it can do so. Releasing a party from the obligation is not something that the court will easily do. It will only invade the party's right to privacy if it is necessary to achieve justice and is in the broader public interest.
Of course, once a document is presented as evidence or formally read in an open court, it becomes part of the public domain and the implied undertaking ends unless the court restrains its publication.
Where does the Harman undertaking leave lawyers and their clients?
Clearly, both clients and legal representatives must understand their obligations under the Harman undertaking.
All parties must adhere to the undertaking at all times and ensure that you do not use the documents or information for collateral or ulterior purposes (even though it might be tempting sometimes).
Breach of the obligation is contempt of court and comes with severe consequences. Very importantly, ignorance of the obligation is not a defence. Besides personal sanctions, it can have significant implications for subsequent litigation where the information is used.