Tracing the origins: the importance of being aware of your obligations under implied undertakings

When documents are compulsorily produced in legal proceedings, for example under subpoena or discovery, they cannot be used for an unrelated purpose or proceeding either by parties to the proceeding, or third parties aware of their origin. Anyone doing so would be open to a contempt finding.

The extent of this rule – and the way it can be accidentally breached – was demonstrated in the recent case Re Ramsay Health Care Australia Pty Ltd [2022] VSC 226, where documents subpoenaed in a defamation proceeding were later improperly used to issue a show cause notice in a separate dispute. As the defamation proceeding had settled, the applicant filed an originating motion in the Supreme Court of Victoria, seeking a hearing to apologise for improperly using the subpoenaed documents, and a discharge from punishment for any contempt.

Restriction on using documents compulsorily disclosed in proceedings

Arising from case law and often referred to as the "Harman" or "implied" undertaking, the obligation is also supported by various court rules.  For example, the obligation appears in the discovery context in rule 21.7 of the Uniform Civil Procedure Rules 2005 (NSW), and underpins the rules limiting third party access to documents on court files. Exceptions exist, including where the court grants leave for another use, or the (open) court has received the documents into evidence.

When documents land in new hands

In defamation proceedings between two surgeons, documents were produced by subpoena which not only included defamatory remarks but also evidenced a breach of confidentiality and other internal hospital rules by a third surgeon.

The documents were provided to the CEO of the hospital where the surgeons worked by the wife of one of the surgeons involved in the defamation proceedings (itself contrary to the disclosure restriction), who subsequently provided them to a member of the legal team of the hospital's managing company. They were subsequently used to issue a notice to the third surgeon to show cause why his accreditation at the hospital should not be terminated. It was only when correspondence from that surgeon's lawyers arrived that the hospital became unquestionably aware of the documents' origin.

The hospital CEO gave evidence that her practice was to review emails through a local computer folder which only displayed attachments and did not show email subject lines. She did not read the first email referring to documents having been subpoenaed (which also appeared to attach duplicate documents), and without seeing the "STRICTLY CONFIDENTIAL" included in the subject lines of the emails, she accepted the documents at face value, was "flabbergasted" by their content, and utilised them for a collateral purpose.

The issue arose in the context of the exhausting workload of the hospital's CEO and in-house lawyers during the first wave of the COVID-19 pandemic. The in-house lawyer dealing with the issue did not seek to verify the source of the emails with the hospital's CEO, instead assuming they were part of the statement of claim in the defamation proceeding. The fact the email referring to the documents being subpoenaed was overlooked by the hospital's CEO was unintended, but resulted in the subpoena reference not coming to in-house counsel's attention. The court was sympathetic, accepting that workload contributed to the oversight, observing that during the coronavirus pandemic, those working in health administration were "working under very difficult conditions to meet enormous demands".

Contempt or not?

To establish contempt, the knowledge element, as to the origin of documents, must be proven beyond reasonable doubt. The court held that, in the circumstances, the managing company and hospital did not have actual knowledge that the documents had been originally obtained through compulsion when they issued the show cause notice. Consequently, there was no contempt.  

Avoiding punishment for contempt

The court went further, finding that, if there was contempt, then the managing company would have been discharged from any punishment. The court accepted the managing company's sincere apology (including personal apologies from the hospital CEO and in-house solicitor), and noted the immediate proactive steps taken by the managing company to acknowledge the mistake, and with the aim of avoiding future document mishaps. Those steps included:

• the preparation and distribution of a fact sheet outlining the 'Harman undertaking' to be distributed to all staff who may be in decision making roles in disciplinary processes; and
• incorporating the fact sheet into induction and training sessions for senior staff, to be repeated bi-annually.

The court also referred to the significant financial cost of the error to the managing company, including bringing the proceeding in the absence of a prosecuting third party.