The Equitable Duty of Confidentiality

A Quick Description of Equity

Certain rules of law based on case law and not statutory law have relevance to surveillance operations. These rules come under the heading of a body of law called Equity. Firstly, a brief introduction. Equity is a case law system akin to common law, but founded on principles of fair play and the upholding of promises. It operates to prevent injustice when common law or statutes would operate unjustly through strict application of their rules. It features specific rules designed largely with this end in mind, one of them being a general duty of confidentiality.

 

Confidentiality

It is well established that an equitable duty of confidentiality exists. It impinges upon the work of a circumstance investigator, or anyone else who takes evidence overtly in interviews, verbal enquiries or document discovery. It restrains the inquirer from passing on information obtained in circumstances that imply confidentiality to any party without the authorisation of those it came from. That of course is only to compel relevant professionals to do exactly what they already do.

 

It operates very differently, however, in regard to surveillance investigators because all of the information they obtain is obtained without consent and where evidence of a wrong is discovered, the revelation of it operates to the subject’s harm. Also, other kinds of operatives such as security guards may, occasionally and inadvertently, come into knowledge of a person’s private affairs or a company’s commercial secrets. These too are subject to natural expectations of confidence that must be upheld. The following paragraphs explain this principle further.

 

This aspect of the law was recognised by the High Court in ABC v Lenah Game Meats. An animal rights group hid cameras overnight inside an abattoir’s premises and took pictures of the processes of possum slaughtering, which were later broadcast on television. The identity of the activists was never made known by the ABC, so it was the ABC alone which was engaged as a defendant. For that reason the issue of trespass was only relevant in support of the lack of consent to be filmed - although it was found there was no unlawful trespass. However, in support of the plaintiff's case, the court described a duty to treat private information with confidentiality where it is either provided in circumstances of trust and confidence or obtained illegally, improperly or surreptitiously. Chief Justice Gleeson stated:

 

... the principle of good faith upon which equity acts to protect information imparted in confidence may also be invoked to ‘restrain the publication of confidential information improperly or surreptitiously obtained’. The nature of the information must be such that it is capable of being regarded as confidential. A photographic image, illegally or improperly or surreptitiously obtained, where what is depicted is private, may constitute confidential information...

If the activities filmed were private, then the law of breach of confidence is adequate to cover the case... There would be an obligation of confidence upon the persons who obtained [images and sounds of private activities], and upon those into whose possession they came, if they knew, or ought to have known, the manner in which they were obtained...[1]

 

What is important to be aware of here is that surreptitiously, though lawfully, obtained imagery of private activities are included as confidential information, even where there is no exercise of trust. This stands clearly in the way of reporting on surveillance and pretext-based enquiries, as long as the report is to go to a party which the subject has not authorised.

 

To elucidate, let us examine some antecedent cases. Considering this principle in the context of sensitive government information concerning military and secret intelligence matters to be published in newspapers, Mason J in the leading case of Commonwealth v John Fairfax & Sons looked into how the release of the given subject matter would damage the aggrieved party (the Federal government), and whether a duty of confidentiality arises from that:

 

The court will not prevent the publication of information which merely throws light on the past workings of government,.. so long as it does not prejudice the community in other respects... 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.

Support for this approach is to be found in Attorney-General v. Jonathan Cape Ltd. (1976) QB 752 [pp770-771], where the Court refused to grant an injunction to restrain publication of the diaries of... [a person. It was said that]: "The Attorney-General must show (a) that such publication would be a breach of confidence; (b) that the public interest requires that the publication be restrained, and (c) that there are no other facts of the public interest contradictory of and more compelling than that relied upon. Moreover, the court, when asked to restrain such a publication, must closely examine the extent to which relief is necessary to ensure that restrictions are not imposed beyond the strict requirement of public need."[2]

 

Other cases recognise a duty to report crimes to the police, but are concerned with journalism rather than reporting to a client.[3] A court should not pose equity against the legal duty to report crimes. A person should be free to report evidence of a crime to the police, no matter how they obtained it. Furthermore if in so much as covert operations reveal evidence pertinent to any civil law matter, or any personal matter of great significance to individuals, then a public interest in allowing communication of findings to key interested parties may be made out.

 

Notwithstanding the above, information as to an individual’s or a small business’ activities and interests can nevertheless be highly damaging to the subject in the certain hands. Any damage arising from the communication of evidence is almost certainly to be seen as sufficiently contrary to the interests of the subject as to be a breach of confidence. That remains even if that damage comes only in the form of a civil law suit with a clear cause of action and solid factual grounds. This in turn invites a conclusion that maintaining confidentiality as a blanket rule can be more in the public interest than the opposite rule.

 

The law, however does not appear to accommodate a blanket rule on this topic. Not only are there good arguments on both sides of the debate, as stated by Mason J above, these matters must be judged on their own merit. It is then for an investigator acting only on information supplied by their client, to determine whether the wrongs in question are of sufficient gravity, the client is sufficiently vulnerable, the client will act fairly with the information, and the subject is sufficiently elusive of invulnerable to them. All of this is an invidious judgment to make for an independent civilian investigator.

 

The Clean Hands Maxim

Equity is undergirded by a number of operating principles called the equitable maxims which are of value in determining how equity will operate in grey areas. A very important maxim is ‘He who comes into equity must come with clean hands,’ which is illustrated in the case of Kettles and Gas Appliances v Anthony Hordern and Sons.[4] The plaintiffs were manufacturing and marketing a kettle with the words ‘Patented. Copyrighted.’ printed prominently on it, and the defendants were innocently passing this off as their own product. There was in fact no patent and no copyright, and the public was being deceived – albeit in a very small way. The court ruled that if an equitable injunction was granted then it would be assisting the plaintiffs in defrauding the public. Therefore an equitable remedy was refused. As noted by Meagher et al, this case is unique in that the uncleanness of hands arose from actions affecting the public at large, and not the defendant.[5] Also of note, there is no law against claiming a patent or copyright that does not exist, and the wrong was of a moral nature only. Therefore the equitable duty of confidentiality does not apply where some form of legal or moral wrong would otherwise be protected. Surveillance investigators need still to be aware that this principle cannot apply where the subject has done no wrong and mere suspicion alone exists. Any waiver of confidentiality rights that the subject has entered into is of prime value in a case where the subject is innocent of wrongdoing.

 

Uncertainty as to Application of the Law

This author has spent extensive time researching this area of law and has found that there is gross uncertainty as to how a court will decide any individual case. This is due to the development of this field having been based far too much on overnight interlocutory decisions over impending mass media publications and broadcasts in which a court must reach a decision before a certain time the next day and cannot – due to the interlocutory nature of the proceeding – place a moratorium on the publication or broadcast. This has resulted in both the judiciary and counsel experiencing pressure to achieve the impossible, that being, proper research of a little-used area of law. Thus, we have a quagmire of decisions relying on conflicting prior decisions and on what appears to be some judge’s own personal reflections as to what is to be considered confidential information and what is to be considered an inexcusable breach of confidence.

In this author’s humble opinion the most legally well-founded and most pragmatic of the various approaches is that which calls upon the principle of reasonableness of confidence and reasonableness of enforcement. Lord Denning in Dunford v Johnson stated that:

‘The court will not enforce a stipulation for confidence if it was not reasonable at the time of making it, nor if afterwards, owing to subsequent happenings, it became unreasonable that it should be enforced...[6]

Reasonableness is a principle which pervades the common law and equity, hence it is in no way alien to judicial thinking if introduced here. That is not to say that it is definite that a matter will be decided based on that argument alone, especially as no-one has used this authority subsequently, only that it is the most sensible. Many other decisions have hinged on very different principles, to the extent that without a very strong argument indeed, a matter could fall either way in spite of the underlying facts.

[1] Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199, [34], [39]. Quote uncited from Lord Ashburton v Pape (1913) 2 Ch 469, 475.

[2] Commonwealth v John Fairfax & Sons ("Defence Papers case") [1980] HCA 44; (1980) 147 CLR 39, [29]-[30].

[3] Francome v Mirror Group Newspapers Ltd [1984] 2 All ER 408

[4] Kettles and Gas Appliances Ltd v Anthony Hordern and Sons Ltd (1934) 35 SR (NSW) 108.

[5] Meagher R, Heydon D & Leeming, M, Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, Fourth Edition, Lexis Nexis Butterworth’s, Sydney, 2002, [3-120].

[6] Dunford & Elliot Ltd v Johnson & Firth Brown Ltd [1976] EWCA Civ J1203-2, [1977] 1 Lloyd’s LR 505, 509.