Confidential
Information
Cameron Stewart
The obligation
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Saltman Engineering Co Ltd v Campbell Engineering
Co Ltd (1948) 65 RPC 203 at 213:
If a defendant is proved to have used
confidential information, directly or indirectly
obtained from a plaintiff, without the consent,
express or implied, of the plaintiff, he will be
guilty of an infringement of the plaintiff’s rights.
What is confidential information?
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the myriad ways obligations of confidence
The phrase is best viewed as a term that covers
information that is subject to an obligation of
confidentiality.
What sorts of relationships give rise to
obligations of confidence? Confidences arise in
three sorts of relationships: private confidences,
confidences relating to government secrets, and
commercial confidences.
The origins of the action for breach
of confidence
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Property origins –
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Franklin v Giddins [1978] Qd R 72
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Krueger Transport Equipment Pt Ltd v Glen Cameron Storage
[2008] FCA 803
OBG Ltd v Allan [2008] 1 AC 1
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Contract origins –
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Deta Nominees Pty Ltd v Viscount Plastic Products Pty Ltd
[1979] VR 167
Seager v Copydex Ltd [1967] 2 All ER 415
Ministry of Defence v Griffin [2008] EWHC 1542
The origins of the action for breach
of confidence
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Tort origins – economic torts or fusion fallacy?
Campbell v Mirror Group Newspapers Ltd [2004] 2 AC
457
 Mosley v News Group Newspapers Ltd [2008] EWHC
177
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Human rights?
Unjust enrichment?
Equitable origins in conscience
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Like most heads of exclusive equitable
jurisdiction, its rational basis does not lie in
proprietary right. It lies in the notion of an
obligation of conscience arising from the
circumstances in or through which the
information was communicated or obtained.
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Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2)
(1984) 156 CLR 414 at 437–8 per Deane J
The modern doctrine of breach of
confidence
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Coco v A N Clark (Engineers) Ltd
Coco designed a moped
He approached Clark about manufacturing it
Coco disclosed the design
Negotiations failed
Clark later produced the Scamp which Coco claimed was
part of his design
Megarry J held that while there may have been a duty of
confidence that there was not evidence to support a claim
that the design was Clark’s or that Clark’s design was
original enough to be confidential
The modern doctrine of breach of
confidence
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Coco v A N Clark (Engineers) Ltd, Megarry J :
In my judgment, three elements are normally required
if, apart from contract, a case of breach of confidence is
to succeed. First, the information itself, in the words of
Lord Greene MR in the Saltman case on page 215,
must ‘have the necessary quality of confidence about it.’
Secondly, that information must have been imparted in
circumstances importing an obligation of confidence.
Thirdly, there must be an unauthorised use of that
information to the detriment of the party
communicating it.
Information that has a ‘confidential
quality’
Secrecy and the public domain
Lennon v News Group Newspapers Ltd [1978] FSR
573, John Lennon failed to prevent his former
wife from publishing secrets of their married life,
on the basis that he had himself published
information on the topic.
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Information that has a ‘confidential
quality’
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Transitory publication - a Chinese pop star was
successful in restraining the publication of an
embarrassing video tape on the Internet, even
after a verbal account of the contents had been
published in a Hong Kong newspaper Kwok v
Thang [1999] NSWSC 1034
G v Day [1982] 1 NSWLR 24
Australian Football League v Age
Company Ltd (2007) 15 VR 405
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3 AFL players who had tested positive to drugs were
identified on an internet discussion forum.
An electronic newspaper article had also named the
players to a limited group of subscribers for about 5 hrs.
A further publication of one of the player’s names had
occurred when a phone caller named the player on the
‘Fox Footy’ television program.
Regardless, Kellam J found that the information had still
not yet fully entered the public domain and remained
confidential. A permanent injunction was ordered on the
release of the player’s identities.
Information must be specific
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O'Brien v Komesaroff [1982] HCA 33; (1982) 150
CLR 310
Komesaroff had created a unit trust deed as a
product to sell with his partner O’Brien
Later the partnership dissolved and O’Brien
kept using the deed.
High Court found breach of copyright
(ownership had not passed to the parnership)
but not breach of confidence
Information must be specific
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Mason J:
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Plainly enough, in the light of the findings of the primary judge and the
evidence, there is very little, if anything, in the documents mentioned
in pars. (1) and (2) above that can constitute confidential information.
Generally speaking the contents of the unit trust deeds and the articles
of association were matters of common knowledge. Information may
be categorized as public knowledge though only notorious in a
particular industry or profession...Only those improvements evolved
by the respondent could give rise to a claim for relief for breach of
confidence. ...It is at this point that the respondent has consistently
failed to identify the particular contents of the documents which he
asserts constitute information the confidentiality of which he is entitled
to protect. The consequence is that he has failed to formulate a basis
on which the court could grant him relief on the assumption that some
part or parts of the documents constitute confidential information.
Publication does no destroy to right
to sue for the original breach
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Johns v Australian Securities Commission (1993) 178
CLR 408
John was examined by the ASC in a private and
confidential way about the collapse of the
Tricontinental Group.
The examination transcript was provided to a State
Royal Commissioner privately, and then later
tended
Copies were given to the media
Could Johns get an injunction? No
Publication does no destroy to right
to sue for the original breach
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Gaudron J:
No matter what the consequences of the tender of the transcripts in
the proceedings of the Royal Commission and no matter whether
regard is had to the actual consequences of that tender or the
consequences that might have been, it does not follow that the tender
brought the ASC's obligation of confidence to an end. If the question
is approached from the perspective of the general law of confidence,
it seems that publication, no matter how extensive and no matter
whether by third parties or by the person who owes the primary
obligation, does not necessarily extinguish an obligation of
confidence.
Personal information
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Prince Albert v Strange
Personal information
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marital and defacto relations
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Giller v Procopets
sexual preference and activity
Stephens v Avery
 A v B (a company) [2002] 2 All ER 545
 Theakston v Mirror Group Newspapers Ltd [2002]
EWHC 137
 Mosley v News Group Newspapers
 A v B plc [2003] QB 195
 Brown v Associated Newspapers Ltd [2008] QB 103
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Personal information
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Diaries
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Medical history
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X v Y [1988] 2 All ER 648
Campbell v MGN Ltd [2004] UKHL 22.
Witnesses and informants
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Prince of Wales v Associated Newspapers
McKennitt v Ash [2008] QB 73
Venables v News Group Newspapers Ltd [2001] 1 All ER 908
Rogers v TVNZ [2007] NZSC 91
Cultural and religious information
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Foster v Mountford & Rigby Ltd
Church of Scientology of California v Kaufman [1973] RPC 635
Legal information -Prince Jefri
Bolkiah v KPMG[1999] 2 AC 222
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KPMG audited the Brunei Investment Agency
(BIA) when it was chaired by B.
B was later removed from his position
B had also retained KPMG personally wih other
litigation which gave them access to his personal
financial information
Later KPMG was asked by BIA to do further
work. KPMG accepted and set up a Chinese
wall
Prince Jefri Bolkiah v
KPMG[1999] 2 AC 222
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HofL finds that KPMG should be injuncted
There was no absolute rule that a solicitor could not act in
litigation against a former client, but that the solicitor might be
prevented from doing so if it were necessary to avoid a
significant risk of disclosure or misuse of the confidential
information of a former client.
KPMG accepted that an accountant who rendered litigation
support services of the type provided to B fell to be treated in
the same way as a solicitor.
The court's jurisdiction to intervene on behalf of a former client
was based on the protection of confidential information and the
duty was to keep the information confidential, not simply to take
reasonable steps to do so
Kallinicos v Hunt [2005] NSWSC 1181
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Solicitor had acted for a partnership which had
become dissolved – but no real chance that
solicitor had any confidential information –
should he be restrained?
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Yes – Brereton J
Kallinicos v Hunt [2005] NSWSC 1181
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During the subsistence of a retainer, where the court’s intervention to
restrain a solicitor from acting for another is sought by an existing
client of the solicitor, the foundation of the court’s jurisdiction is the
fiduciary obligation of a solicitor, and the inescapable conflict of duty
which is inherent in the situation of acting for clients with competing
interests [Prince Jefri].
· Once the retainer is at an end, however, the court’s jurisdiction is not
based on any conflict of duty or interest, but on the protection of the
confidences of the former client (unless there is no real risk of
disclosure) [Prince Jefri].
·After termination of the retainer, there is no continuing (equitable or
contractual) duty of loyalty to provide a basis for the court’s
intervention, such duty having come to an end with the retainer [Prince
Jefri; Belan v Casey; Photocure; British American Tobacco; Asia Pacific
Telecommunications; contra Spincode; McVeigh; Sent].
Kallinicos v Hunt [2005] NSWSC 1181
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· However, the court always has inherent jurisdiction to restrain solicitors from acting
in a particular case, as an incident of its inherent jurisdiction over its officers and to
control its process in aid of the administration of justice [Everingham v Ontario; Black v
Taylor; Grimwade v Meagher; Newman v Phillips Fox; Mitchell v Pattern Holdings; Spincode;
Holborow; Williamson v Nilant; Bowen v Stott; Law Society v Holt]. Prince Jefri does not
address this jurisdiction at all. Belan v Casey and British American Tobacco are not to be
read as supposing that Prince Jefri excludes it. Asia Pacific Telecommunications appears to
acknowledge its continued existence.
·The test to be applied in this inherent jurisdiction is whether a fair-minded, reasonably
informed member of the public would conclude that the proper administration of
justice requires that a legal practitioner should be prevented from acting, in the
interests of the protection of the integrity of the judicial process and the due
administration of justice, including the appearance of justice [Everingham v Ontario;
Black v Taylor; Grimwade v Meagher; Holborow; Bowen v Stott; Asia Pacific Telecommunications].
Kallinicos v Hunt [2005] NSWSC 1181
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· The jurisdiction is to be regarded as exceptional and is to be
exercised with caution [Black v Taylor; Grimwade v Meagher; Bowen v
Stott].
· Due weight should be given to the public interest in a litigant
not being deprived of the lawyer of his or her choice without due
cause [Black v Taylor; Grimwade v Meagher; Williamson v Nilant;
Bowen v Stott].
· The timing of the application may be relevant, in that the cost,
inconvenience or impracticality of requiring lawyers to cease to
act may provide a reason for refusing to grant relief [Black v
Taylor; Bowen v Stott].
Commercial information
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Trade secrets or know-how?
Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd
(1) the extent to which the information is known
outside of his business; (2) the extent to which it is
known by employees and others involved in his
business; (3) the extent of measures taken by him to
guard the secrecy of the information; (4) the value of
the information to him and to his competitors; (5) the
amount of effort or money expended by him in
developing the information; (6) the ease or difficulty
with which the information could be properly acquired
or duplicated by others.
Commercial information
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Faccenda Chicken Ltd v Fowler
1.trivial information, which is publicly available or so
obvious that it cannot be protected;
 2.information that must be treated confidentially
until the termination of employment, whereupon it
becomes part of the ex-employee’s collective skill,
knowledge and ability; or
 3.highly confidential trade secrets, which will be
protected by the courts even after the termination of
employment.
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Commercial information
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Del Casale v Artedomus (Aust) Pty Limited [2007] NSWCA
172
. The extent to which the information is known outside
the business.
2. The extent to which the trade secret was known by
employees and others involved in the plaintiff’s business.
3. The extent of measures taken to guard the secrecy of
the information.
4. The value of the information to the plaintiffs and their
competitors.
5. The amount of effort or money expended by the
plaintiffs in developing the information.
Commercial information
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6. The ease or difficulty with which the information could be properly
acquired or duplicated by others.
7. Whether it was plainly made known to the employee that the
material was by the employer as confidential.
8. The fact that the usages and practices of the industry support the
assertions of confidentiality.
9. The fact that the employee has been permitted to share the
information only by reason of his or her seniority or high
responsibility.
10. That the owner believes these things to be true and that belief is
reasonable.
11. The greater the extent to which the “confidential” material is
habitually handled by an employee, the greater the obligation of the
confidentiality imposed.
12. That the information can be readily identified.
Commercial information
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Hodgson JA
[W]here the confidential information is something
that is ascertainable by enquiry or experiment, albeit
perhaps substantial enquiry or experiment, and the
know-how which the ex-employee is clearly entitled
to use extends to knowledge of the question which
the confidential information answers, it becomes
artificial to treat the confidential information as
severable and distinguishable from that know-how;
and in that kind of case, courts have tended not to
grant relief.
Optus Networks Pty Ltd v Telstra
Corporation Ltd [2010] FCAFC 21
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Telstra was alleged to have accessed Optus’ confidential information
regarding its traffic information
Claim brought in confidence, contract and trade practices
Clause 16 said:
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Save to the extent that another provision of this agreement expressly
provides for (or expressly excludes or limits) a remedy, a liability or a
form of compensation in relation to an act, omission or event, this clause
16 shall regulate the liability (whether arising in contract, in tort, under
statute or in any other way and whether due to negligence, wilful or
deliberate breach or any other cause) of a party to each other party under
and in relation to this agreement and in relation to any act, omission or
event relating to or arising out of this agreement.
Trial judge found that equitable claim failed because the contract
covered the field and excluded equity
Optus Networks Pty Ltd v Telstra
Corporation Ltd [2010] FCAFC 21
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Full Court allowed appeal
The claims in equity did not cut across the
agreement as the remedies requested (an
account) were allowable under the contract
The contract could not be taken to have
excluded equity so it was available on election
Government secrets
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Commonwealth v John Fairfax & Sons (1980) 147 CLR 39
JFS were going to publish a book which contained
government documents on sensitive issue such as the
Indonesian invasion of East Timor, American bases in
Australia, the presence of the Soviets in the South pacific,
the ANZUS treaty and Australia’s support for the Shah
of Iran.
Extracts were to be published in the Age and the SMH
The Australian government sought an injunction on
grounds of breach of confidence and breach of copyright
Government secrets
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Mason J (sitting alone) – found that an injunction could only be granted if the
government proved that publication would harm the public interest:
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The court will not prevent the publication of information which merely throws
light on the past workings of government, even if it be not public property, so
long as it does not prejudice the community in other respects. Then disclosure will
itself serve the public interest in keeping the community informed and in
promoting discussion of public affairs. If, however, it appears that disclosure will
be inimical to the public interest because national security, relations with foreign
countries or the ordinary business of government will be prejudiced, disclosure
will be restrained. There will be cases in which the conflicting considerations will
be finely balanced, where it is difficult to decide whether the public's interest in
knowing and in expressing its opinion, outweighs the need to protect
confidentiality
Result – not enough evidence of harm to public interest
NB injunction was granted on copyright grounds
Government secrets
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Commonwealth v John Fairfax & Sons, AttorneyGeneral (UK) v Heinemann Publishers Australia Pty
Ltd
Government secrets
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Semi-govt? British Steel Corp v Granada Television
Ltd [1981] AC 1096
Esso Resources Ltd v Plowman (1995) 183 CLR 10
at 32
Soldiers? ‘R’ v Attorney-General [2003] UKPC 22
Ministry of Defence v Griffin [2008] EWHC 1542
The duty or obligation of confidence
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Coco v A N Clark (Engineers) Ltd
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Express Obligation
Implied Obligation
 Hitchcock v TCN Channel Nine Pty Ltd (No 2)
[2000] NSWCA 82.
Unsolicited communications
Misappropriation of information
Eavesdroppers
Third parties
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Establishing a breach
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The test which has found widespread acceptance is
whether or not the information was disclosed for a
limited purpose. If the information was disclosed for a
limited purpose, the confidence crystallises around that
limited purpose. The confidant will be bound by an
obligation the content of which is not to use or disclose
the information for any purpose other than the limited
one for which the information was imparted. F Gurry, ‘Breach of Confidence’ in P Finn (ed), Essays
in Equity, 1985.
Establishing a breach
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Smith Kline and French Laboratories (Aust) Ltd v
Secretary, Dept of Community Services & Health
Whether one adopts the ‘reasonable man’ test
suggested by Megarry J or some other, there can
be no breach of the equitable obligation unless
the court concludes that a confidence reposed
has been abused, that unconscientious use has
been made of the information
Establishing a breach
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R v Department of Health; Ex parte Source Informatics
Ltd
The Court of Appeal found that the pharmacists
would not breach confidence if they supplied
anonymised information, even though this went
beyond the confider’s purpose in supplying the
information. The confider’s purpose was said to
be irrelevant when the information was
anonymous
Establishing a breach
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Detriment?
Defences
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Public interest
expose dangers to public safety or health
 Hubbard v Vosper
 W v Edgell
 Lion Laboratories Ltd v Evans
 Woodward v Hutchins
 McKennitt v Ash [2005] EWHC 3003
 Richards v Kadian [2005] NSWCA 328
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Defences
Forced disclosure
 Delay
 Clean hands
 Campbell v Mirror Group Newspapers Ltd
 Australian Football League v Age Company
Ltd (2007) 15 VR 405
 Change of position
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Remedies
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Injunctions
The springboard doctrine
Delivery-Up
Equitable compensation
Harris v Digital Pulse Pty Ltd
 Giller v Procopets
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Account of profits
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Attorney-General (UK) v Blake
Constructive trusts
The future — rights to privacy?
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No right of privacy
Victoria Park Racing & Recreation Grounds Co Ltd v
Taylor
 Australian Consolidated Press Ltd v Ettingshausen
 Kaye v Robertson (1991) FSR 62
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Developments in New Zealand and
England
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Bradley v Wingnut Films [1993] 1 NZLR 415
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Hosking v Runting [2004] NZCA 34
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Douglas v Hello! Ltd
MAX MOSLEY v NEWS GROUP
NEWSPAPERS LIMITED
SIR ELTON JOHN v
ASSOCIATED NEWSPAPERS LTD
DAVID MURRAY (by his litigation friends
NEIL MURRAY and JOANNE MURRAY)
v BIG PICTURES (UK) LIMITED
Australia?
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Bathurst City Council v Saban
Kwok v Thang [1999] NSWSC 1034
Donnelly v Amalgamated Television
Services Pty Limited (1998) 45 NSWLR 570
Australian Broadcasting Corp v Lenah
Game Meats Pty Ltd