4. Exam notes copy - StudentVIP

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LAW3111

EQUITY

SEMESTER 1, 2019

2. BREACH OF CONFIDENCE 2.1 INTRODUCTION

Breach of confidence is a doctrine developed by equity in its exclusive jurisdiction that recognises certain rights of confidentiality and protects unauthorised use of confidential information. N.B other regimes for protecting such rights exist, such as contract, employment and intellectual property law.

A breach of confidence claim might be used to protect personal information, or trade secrets or commercially valuable information that cannot otherwise be protected by patent, trademark or copyright law. It may extend to oral confidences, drawings, written documents, photographs, works of art, electronic documents and recordings, prototypes etc.

It can be used to protect any kind of information on the basis that the following elements are satisfied.

2.2 ELEMENTS

A successful claim to breach of confidence requires that the following four elements be made out:

(a) Information must be specifically identified: O’Brien ; Ocular Sciences (b) Information must have the necessary quality of confidence: Coco (c) Information must have been received by the defendant in circumstances

that import an obligation of confidence: Coco

(d) There must be actual or threated misuse of the information (to the detriment of the plaintiff): Coco

(a) INFORMATION MUST BE SPECIFIC

The information claimed to be confidential must be defined with sufficient precision, not merely expressed in global terms: O’Brien ; Ocular Sciences This is to prevent an abuse of process, whereby a defendant may use a breach of confidence action to harass or oppress competitors or ex-employees:

Ocular Sciences

The requirement of specificity also ensures that an injunction is of a certain scope and thereby easily enforceable: Ocular Sciences

‘O’Brien fork’: a ‘catch-22’ between elements (a) and (b)

• When P tried to satisfy specificity, he failed confidence because the information was public;

• When P tried to satisfy confidence, he failed specificity because he was describing the scheme too generally.

O’Brien [AUTHORITY]

O’Brien v Komesaroff (1982) 150 CLR 310 FACTS:

• Komesaroff was a solicitor who created a unit trust deed which was unique in its format.

• O’Brien was an accountant who obtained a set of documents from Komesaroff and prepared unit trust deeds for his clients on the basis of the Komesaroff documents.

• Komesaroff alleged breach of copyright and breach of confidence.

DECISION:

• The information claimed to be confidential must be defined with sufficient precision

• Komesaroff’s claim of breach of confidence failed because he was unable to specify the information that he claimed was confidential.

• Relying upon the unit trust deed itself as a definition of the confidential information was not sufficient. In any case, the content of the unit trust deed is common knowledge: they are standard in the legal profession and are, by definition, public (policy: rule of law).

• Minority judgment (not super important): equity shouldn’t be used for an antisocial purpose like tax avoidance.

Ocular Sciences [SEE FOR POLICY]

Ocular Sciences Ltd v Aspect Vision Care Ltd [1997] RPC 289, 359–60 FACTS:

• P claimed D used information including contact lens designs, equipment designs, software designs, operating and testing procedures etc.

• Information specified as confidential was “more or less everything”.

DECISION – Laddie J:

• Failure to give proper particulars may result in an abuse of process i.e. in such cases, it might be inferred that the breach of confidence action is being used as a means to oppress and harass competitors or ex-employees rather than for a legitimate equitable purpose.

• The duty is on the plaintiff to ensure that the defendant knows what specific information is in issue. This is for two reasons:

o Without specificity, an injunction restricting the use of the confidential information would be of uncertain scope and difficult to enforce.

o The defendant’s ability to defend themselves might be compromised if they don’t know what they have to meet.

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(b) QUALITY OF CONFIDENCE

In order to have the requisite quality of confidence, information must both be sufficiently "secret" and valuable. This is an objective assessment.

N.B Information with the requisite quality of confidence may take any form i.e.

a document, a photograph, a concept, a name.

SECRECY

Equity does not protect information which is in the public domain or is common knowledge. It must be sufficiently secret, private or confidential in order to have the requisite quality of confidence.

However, the mere fact that information is not common knowledge, or is a record of events that occurred on private property, does not automatically entail that it has the necessary quality of confidence: ABC v Lenah

ABC v Lenah

Australian Broadcasting Corporation Ltd v Lenah Game Meats Pty Ltd (2001) 208 CLR 199

FACTS:

• The ABC came into possession of a film of Lenah’s operations at a brush tail possum processing facility. The film was made surreptitiously and unlawfully, and was given to the ABC with the evident purpose that the ABC would broadcast it.

• ABC probably realized, when it received the film, that it had been made in a clandestine manner. It certainly knew that by the time the

application for an injunction was heard.

• Lenah sought an injunction to prevent the broadcasting of the film.

DECISION:

• Information was not secret or confidential:

o Despite it being private property, the abattoir is, no doubt, regularly visited by inspectors, and seen by other visitors who come to the premises for business or private reasons.

o The fact that the operations are required to be, and are, licensed by a public authority, suggests that information about the nature of those operations is not confidential.

o Lenah had never taken any steps to keep their practices confidential.

• ‘It is conceded that information about the nature of the processing is not confidential, and was not imparted in confidence. But it is argued, all information obtained as the result of trespass ought to be treated in the same way as confidential information.’

In certain circumstances, information can be published and retain the quality of confidence (in other words, publication may not entail entry into the public domain). Important factors:

• Accessibility of information: if the information is disclosed to a limited audience only, and not generally or widely accessible then it may still retain the quality of confidence: AFL v Age (the secrecy of the

information withstood publication of the broadcast to Fox Footy as it was only accessible to Foxtel subscribers watching late at night)

• Authority of disbursement (especially online): if the information is disseminated by an unauthorized or anonymous source, or in a way which is merely speculative then it may still retain the quality of confidence: AFL v Age (the secrecy of the information withstood publication of the information on online footy message boards as these were merely speculative and posted by anonymous sources) AB v CD (the fact that there had yet been no official disclosure of the information meant that the information was still secret)

• Relationship of the audience to the plaintiff (especially in respect of personal information): if the information is disclosed to the plaintiff’s trusted circle (‘circle of secrecy’), or to police, then it may still retain the quality of confidence: Jane Doe v ABC (the secrecy of the information withstood disclosure to the plaintiff’s friends and family, as a person has a right to share confidential information with their trusted circle)

If statute makes the publication of the information illegal, this strengthens the argument that the information is private and has the necessary quality of confidence: Jane Doe v ABC

(N.B As this is a preview, a number of case summaries have been removed)

VALUE

Equity does not protect information which is banal or trivial. The information must have sufficient value in order to warrant equity’s protection. This is an objective assessment.

Commercial information

The fact that the information is publicly available or common knowledge is no impediment it being confidential, provided that the maker has added a

‘commercial twist’ or used “skill and ingenuity” to bring the

document/proposition into being which enhances the commercial value of the information: Coco ; Talbot ; Link 2 v Ezystay ; Franklin v Giddins

(N.B As this is a preview, a number of case summaries have been removed)

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Non-commercial information

Equity will protect non-commercial information if it is so fundamental to the maintenance of social order as to be valuable and worthy of protection: Foster v Mountford (sacred and restricted Aboriginal knowledge)

Equity will protect non-commercial information if disclosure or observation of the information or conduct would be highly offensive to a reasonable person of ordinary sensibilities: ABC v Lenah

Equity will protect information about sexual activity as it is intimately personal:

Giller v Procopets ; Wilson v Ferguson

Equity is more likely to protect which the plaintiff had taken steps to protect:

ABC v Lenah ; Douglas v Hello!

Foster v Mountford

Foster v Mountford and Rigby Ltd (1976) 14 ALR 71 Supreme Court of the Northern Territory

FACTS:

• Dr Mountford, an anthropologist, conducted an exploratory field trip through the lands of the Pitjantjara. During the course of his stay, the people of this area showed him and explained to him sacred sites and objects, paintings and rock engravings, and he recorded their myths and totemic geography by Aboriginal drawings, the camera, and notebook.

• This was a remote area, and had not been subject to ‘white man influences’.

• The anthropologist subsequently published that knowledge in a book with a caveat that read, "… this book should be used only after consultation with local male religious leaders…’

• The clan sought an injunction on the publication of the book.

DECISION:

• The information had the quality of confidence.

• While detriment to the plaintiff is not of substantial concern in Australia, this decision highlighted that a consideration of the detriment incurred is relevant to determining whether information is confidential. In this case, the disclosure of this information would undermine the social and religious stability of their people, and could potentially lead to damage and dislocation of the Pitjantjara. However, this consideration might be particular to the (very strong) policy of preserving Indigenous culture.

Giller v Procopets

Giller v Procopets [2004] VSC 113 FACTS:

• Giller and Procopets were in a relationship of affectionate friendship and carried on a sexual relationship.

• Procopets surreptitiously filmed them having sex, on three counts without her consent and twice with her consent. Procopets shows the films to Giller’s friends, family and employer.

• Giller claims invasions of privacy, intentional infliction of emotional distress and breach of confidence, seeking damages for the distress caused.

DECISION:

• Breach of confidence established: (affirmed on appeal: [2008] VSCA 236)

o ‘Persons indulging in a sexual activity in the privacy of their own home create a confidential relationship’

o ‘What the parties do in the course of their sexual activities was a metter for them and them alone and not to be disclosed to others. On any view they were private matters.’

• Damages not awarded (see below at 4.4) (reconsidered on appeal:

[2008] VSCA 236)

Wilson v Ferguson

Wilson v Ferguson [2015] WASC 15, [17]–[59]

FACTS:

• Wilson and Ferguson shared intimate sexual photographs and videos of themselves with each other.

• Wilson asked Ferguson to make sure that nobody else saw the videos, to which he agreed at the time.

• Later, however, Ferguson later posted the content to Facebook. The content was available to 300 of Ferguson’s friends and the pair’s mutual work colleagues. Ferguson removed the content within a few hours at the behest of the plaintiff.

DECISION:

• Intimate photographs and videos taken in private and shared between two lovers would ordinarily bear a confidential character.

• Notably, the court recognised that equitable damages could be awarded to compensate the plaintiff’s distress.

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‘Private’ information

• Equity will only protect ‘private’ information where it has commercial value: Douglas v Hello! Per Lord Hoffman

• Equity should not be extended to protect ‘private’ information, even if it has commercial value; the quality of confidence should depend on the nature of the information, not on its market value: Douglas v Hello! Per Lord Walker

Douglas v Hello!

Douglas v Hello! Ltd [2008] 1 AC 1 FACTS:

• OK! Magazine had entered into a contract with the Douglases for the exclusive right to publish photographs of their wedding, and paid L1 million for the right. The Douglases would choose the photos and ensure that no one else would take any photos.

• A freelance photographer infiltrated the wedding, took photos and sold them to Hello! Magazine, who published them in national daily

newspapers.

DECISION:

• The information (being the discrete photographs approved by the Douglases and supplied to OK! Magazine for publication) was

confidential. The images of the wedding were considered to be a ‘trade secret’, which OK! Had paid L1 for.

• The information was considered confidential not because it was

‘private’ but because it had commercial value – Lord Hoffman

• The confidentiality of any infomraiton must depend on its nature, not on its market value – Lord Walker

• ‘assignment of rights’, information is not property and therefore you have nothing to assign – therefore, no proprietary remedies (Lord Walker is good law in AUs)

(c) OBLIGATION OF CONFIDENCE

The information must be imparted in circumstances importing an obligation of confidence. Equity will restrain the publication of confidential information in circumstances where the information has been: Pape

i. improperly or surreptitiously obtained; or [TAKING CASES]

ii. imparted in confidence which ought not to be divulged. [GIVING CASES]

A person may have an obligation of confidence where the information is directly imparted in confidence, and the person knew of restrictions on its use or ought to have known of restrictions on its use (objective test):

E.g.:

• A person who obtains commercial information on a businesslike basis and with some avowed common object in mind, such as a joint venture or the manufacture of articles by one party for the other is generally considered to be under an obligation of confidence: Coco

• A person who obtains images or sounds of a private act is generally considered to be under an obligation of confidence: ABC v Lenah ; Giller v Procopets ; Wilson v Ferguson

• A person who is in a recognised relationship of confidence (married couple, doctor/patient, lawyer/client) is considered to be under an obligation of confidence.

A person may have an obligation of confidence if the information is improperly or surreptitiously obtained, and the person knew or ought to have known of restrictions on its use (objective test): Pape

E.g.:

• A person who obtains/steals information by trespass is still considered to be under an obligation of confidence: Franklin v Giddins

• A person who obtains images or sounds of a private act by trespass or telephoto lens is still considered to be under an obligation of confidence:

ABC v Lenah ; Hellewell ; Giller v Procopets ; Wilson v Ferguson ; Douglas v Hello

A person may have an obligation of confidence even if the information is acquired by chance (i.e. ‘wafting’), and the person knew or ought to have known of restrictions on its use (objective test): A-G v Guardian (‘Spycatcher Case’)

Consider: does obtaining the information by chance constitute a ‘blurting out in public’ or is it just extending the ‘circle of confidence’ by one person?

Where the confidential information is passed onto a third-party, the third-party is treated as above.

GIVING CASESTAKING CASESCHANCE CASES

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Coco

Coco v AN Clark (Engineers) Ltd (1968) 1A IPR 587 FACTS:

• Coco was developing a moped and entered into negotiations with AN Clark to develop the moped and provided information to A.N. Clark about his moped.

• After some time, A.N. Clark elected to not further develop the Coco moped and instead began to develop its own moped along the lines of Coco’s moped.

• Coco applies for an injunction to stop A.N. Clark making or sell any moped using his confidential information.

DECISION:

• ‘if the circumstances are such that any reasonable man standing in the shoes of the recipient would have realized that upon reasonable grounds the information was being given to him in confidence, this should suffice to impose upon him the equitable obligation of confidence’

*A-G v Guardian (‘Spycatcher Case’)

Attorney-General v Guardian Newspapers Ltd (No 2) [1990] 1 AC 109, 280- 282 (Lord Goff)

FACTS:

• Peter Wright worked for MI5. After retiring in Tasmania, he wrote a book called Spycatcher, describing his work. The publication of the book in the UK would in breach of the Official Secrets Act 1911, so he sought to publish it in Australia and the US.

• In England, two newspapers (including Guardian) published article which outlined book’s allegations. Interlocutory injunction granted against newspapers until trial.

DECISION:

• An obligation of confidence exists where ‘where an obviously confidential document is wafted by an electric fan out of a window into a crowded street, or where an obviously confidential

document, such as a private diary, is dropped in a public place, and is then picked up by a passer-by.’ – Lord Goff

• ‘although the basis of the law's protection of confidence is that there is a public interest that confidences should be preserved and protected by the law, nevertheless that public interest may be outweighed by some other countervailing public interest which favours disclosure.’ – Lord Goff

(d) UNAUTHORISED USE OF INFORMATION

Actual or threatened/apprehended unauthorised use of the information (i.e. use without consent) will breach the equitable obligation.

General

Where information is given, the plaintiff may stipulate a complete restriction on the use of information, or they may consent to use for a limited purpose. If the use of information is consented to for a limited purpose, the plaintiff must show that the use fell outside the permitted scope in order to make out unauthorised use: Castrol

Where the use of information is consented to for a limited purpose, the defendant must be made aware (or it must be reasonably apparent) that the information has only been authorised for a specific use, and that all other uses are unauthorised: Smith Kline

Public authorities

Where information has been given compulsorily to a public authority, use of that information in the course of fulfilling its statutory obligation (even if this use falls outside the permitted scope) will not amount to unauthorised use: Smith Kline

Where information has been given voluntarily to a public authority, use of that information for some other purpose than the purpose it was given for will likely amount to unauthorised use: Castrol

Where information is taken, any use will be unauthorised: Franklin v Giddins

Where information analogous to the claimed confidential information is discovered through the defendant’s own endeavours or independent re- discovery/reverse engineering, there can be no misuse of the information.

Similarity, prima facie, does not amount to misuse: Coco (there are not many different ways you can design a moped engine, because by its nature all engines are going to be similar.)

There is probably no need to show that the use of the information is detrimental to the plaintiff: Smith Kline (however, you could argue that Gummow J’s judgment on this point is not binding, but merely obiter.)

GIVING CASESTAKING CASES

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Castrol

Castrol Australia Ltd v EmTech Associates Pty Ltd (1980) 33 ALR 31 FACTS:

• Emtech conducted tests on Castrol’s new oils to determine how much more efficient their oil is to form marketing claims. A report of the results was submitted to the Trade Practices Commission (TPC) by Castrol in order to determine whether their advertising campaign would comply with consumer protection legislation.

• The Trade Practices Commission (TPC) subsequently sought to prosecute Castrol for other offences and used the documents Castrol had supplied EmTech as evidence.

• Castrol claimed this was an unauthorized use of information and sought injunction for breach of confidence.

DECISION: (Rath J)

• The information was given clearly for the limited purposes of ascertaining whether their advertising campaign was compliant with specific advertising provisions of the TPA; the information was not provided for investigating other breaches of the TPA.

• Accordingly, the use was outside the intended scope/purpose of providing the information.

Smith Kline

Smith Kline v Dept of Community Services (1991) 28 FCR 291 FACTS:

• Smith Kline submitted an application to the Dept of Community services to market a new drug, included in which was extensive data and information concerning the drug. Marketing approval was obtained.

• Alphapharm wanted to sell a generic brand of the same drug (with slightly different formulation) and also submitted a marketing application to the Department.

• The Department used Smith Kline’s documentation to compare and review Alphapharm’s drug.

• Smith Kline sought an injunction to prevent the Department from using the documentation, arguing that it provided it for a limited purpose only - to approve its own application.

DECISION:

• Gummow J refused injunction; no misuse of information made out.

• While the Department had a clear obligation of confidence not to disclose information to competitors, it cannot be implied that their obligation of confidence extended to using the information for its own internal purposes in the course of conducting its statutory duty.

• Moreover, SK hadn’t informed the Department of their intention that the information was only confided to be used for a certain purpose; a reasonable person in department’s position would not realise purpose was limited with respect to this .

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2.3 DEFENCES

EQUITABLE DEFENCES See 4. EQUITABLE ‘DEFENCES’

PUBLIC INTEREST DEFENCE

A breach of confidence can be defended in the UK by showing an overriding public interest in disclosure. Australian courts have traditionally taken a more restrictive view of such a defence, criticising it on the basis that:

The so-called "public interest" defence in England is not so much a rule of law as an invitation to judicial idiosyncrasy by deciding each case on an ad hoc basis as to whether, on the facts overall, it is better to respect or to override the obligation of confidence; equitable principles are best developed by reference to what conscionable behaviour demands of the defendant not by "balancing" and then overriding those demands by reference to matters of social or political opinion. Smith Kline per Gummow J

The Australian position is that information which is in the public interest cannot bear the quality of confidence with the consequence that there is no duty of confidence in the first place: Smith Kline.

However, if the public interest defence is relied upon, the matter needs to be a

‘serious matter in the public interest’, as opposed to ‘of interest to the public’:

AFL v Age

INIQUITY DEFENCE

There can be no confidence in iniquity; a breach of confidence can be defended by proving that the information reveals an iniquity of public importance.

In order to rely on the iniquity defence, the defendant must show that: *AFL v Age (per Kellam J)

i. the proposed disclosure reveals the existence of, or real likelihood of, an iniquity that is a crime, civil wrong or serious misdeed;

ii. the iniquity to be disclosed is of a character of public importance, in the sense that what is to be disclosed affects the community as a whole, or affects the public welfare; and

iii. the proposed disclosure is to a third party with a real and direct interest in redressing the alleged crime, wrong or misdeed.

The defence cannot be relied upon by someone who themselves has committed the iniquity *Kumar

2.4 REMEDIES

See 5. PERSONAL REMEDIES

Certain personal remedies are available:

• To restrain (further) use and/or disclosure of information:

o Injunction *see Talbot ; AFL v Age ; Foster o Delivery up *see Franklin

• Where information has already been used or disclosed:

o Compensation (or Lord Cairns’ Act damages);

o Aggravated damages *see Giller v Procopets o Account of profits.

Courts have been flexible in applying remedies so as to take account of commercial realities, such as the potential for commercial confidential

information to become public knowledge and for procedures and processes to be legitimately developed or reverse engineered.

Recent English and Australian decisions pertaining to the misuse of personal information have also shown that the courts are prepared to award monetary compensation for non-financial harm and distress suffered by plaintiffs.

N.B Proprietary remedies are not available as the courts have refused to accept a proprietary interest in information.

2.5 SHOULD THERE BE A TORT OF PRIVACY?

In Australia, there is currently no cause of action for invasion of privacy.

Furthermore, statutory causes of action for invasion of privacy are limited by piecemeal legislation. The ALRC has recommended that Federal legislation be enacted to provide a ‘statutory cause of action for serious breach of privacy’.

The UK approach has been to expand existing causes of actions, such as breach of confidence, to provide greater legal protection for privacy interests.

ABC v Lenah exemplifies that Australia seems to be following this approach.

Thus, breach of confidence in equity tends to be quite a popular cause of action to remedy invasions of privacy.

However, a tort of invasion of privacy has been recognised in New Zealand

*Hosking v Runting. The NZ Court of Appeal has rejected the UK/Australian approach of expanding the duty of confidence on the basis that

privacy and confidence are separate concepts.

See: Giller v Procopets ; ABC v Lenah; Jane Doe v ABC; Douglas v Hello!

4. Exam notes copy - StudentVIP

LAW3111

EQUITY

SEMESTER 1, 2019

TABLE OF CONTENTS

2. BREACH OF CONFIDENCE 2.1 INTRODUCTION

2.2 ELEMENTS

2.3 DEFENCES

2.4 REMEDIES

2.5 SHOULD THERE BE A TORT OF PRIVACY?