DISTRICT COURT OF QUEENSLAND

1. [1]
   There is a contest between the plaintiff and Westpac, about the extent of Westpac’s disclosure of documents.

2. [2]
   The plaintiff was a Westpac customer. Westpac has disclosed it files relating to 21 other customers, because of their connection with this litigation. However, it has masked those parts of the other customers’ files which would disclose their identity. The plaintiff wishes to see all of the documents, and objects to the masking. Westpac says that it is justified. The court has to decide between those contentions.

The Claims against Westpac

3. [3]
   In 1997 Mr Kuhnert purchased two investment properties in south-east Queensland. He alleges that he was the victim of a marketing scheme designed to defraud property investors. The marketing company, Hanna Corporation Pty Ltd, has been deregistered.

4. [4]
   The amended statement of claim asserts that the scheme was unlawful, as its purpose was to persuade investors (usually from interstate) to purchase investment properties at prices substantially in excess of their fair market value, in the belief that the sale price was their fair market value.

5. [5]
   The nature of that scheme is alleged in para 21 of the amended statement of claim. Paragraph 21(p) refers to Westpac’s role:

“Westpac participated in the scheme by accepting referrals from Hanna, of prospects who were seeking finance to purchase properties marketed by Hanna pursuant to the scheme; and from time to time by its agents acting as financial advisers pursuant to the scheme.  By reason of its participation, Westpac knew of the nature and purpose of the scheme”.

Paragraph 26 alleges that the Hanna representative took Mr Kuhnert to the Springwood branch of Westpac, and introduced him to a Mr Jeff Caulley as Westpac’s branch manager and financial adviser who would look after him. 

6. [6]
   Paragraph 28 goes on to allege that Mr Caulley, in the course of giving advice to Mr Kuhnert, said that any properties purchased in the local area would be a good investment, that those areas were “going ahead” and that he would have no problems in borrowing certain funds from Westpac.

7. [7]
   The pleading alleges a number of complaints about Mr Caulley’s advice. In particular, it is said that there was no reasonable likelihood that the properties were worth the prices being asked for them, that they would not be profitable investments, and the areas were not “go ahead areas”.

8. [8]
   The plaintiff has provided particulars of Westpac’s knowledge, as pleaded in paragraph 21(p):

9. [9]
   The statement of claim goes on to make further allegations about Westpac’s knowledge at para 46:

Westpac’s Disclosure

10. [10]
    Westpac says that it has satisfied its obligations to disclose documents directly relevant to paragraph 21(p), and the above particulars. It has undertaken a search of its archives, in early 2004. The documents disclosed because of that search are in Westpac’s third list of documents served on 25 May 2004.

11. [11]
    The list discloses the files, or parts of the files, relating to 21 other customers at Westpac’s Springwood branch. It must be that Watpac considers that information in the files to be directly relevant to issues in the claims against it.

12. [12]
    Westpac’s solicitors explained the masking of some details, in a letter of 25 May 2004:

“Confidential personal details of customers of our client
 

Having regard to the extent of the confidential personal details of customers of our client set out in the documents referred to in the enclosed list, and the irrelevance of some of those details to the issues in these proceedings, our client considers itself bound to its customers to withhold the irrelevant details from the plaintiff.

This can be done without in any way impeding the comprehensibility of the disclosure.

To this end, we propose to make selectively “masked” copies of documents available for inspection.  If, after inspection, there is any reasonable objection based on lack of comprehensibility, please let us know and we can seek instructions …”

13. [13]
    Some examples of the marked documents are exhibited to Mr Truong’s affidavit. The state where the clients live is revealed. That is admitted to be relevant, because of the allegation that advantage was taken of those without local knowledge of prices in the Brisbane area. Otherwise, personal details such as names, addresses, and real property descriptions (which could identify the registered owner) have been obscured.

14. [14]
    Mr Kuhnert’s solicitors, in a letter of 21 June, complained about the masking. Their letter included these remarks:

“… substantial portions of documents have been masked.  There is no way of knowing, in my view, whether the masking only relates to personal information of other customers.  To that extent, the masking detracts from a proper understanding of the meaning and significance of the admittedly relevant parts and therefore is not justified … even if the masked portions only relate to the identity and otherwise confidential details of other customers, this information is relevant to significant matters in dispute between the parties.   (key to the above pleaded allegations against Westpac summarised).

The names, addresses, account numbers, birth dates and general backgrounds of other customers and how they came to be referred to Westpac (each of whom are potentially relevant witnesses) are clearly relevant to the above dispute …”

The Uniform Civil Procedure Rules

15. [15]
    A party to a proceeding has a duty to disclose each document, in its possession or under its control, which is “directly relevant” to an allegation in issue in the pleadings. See rule 211. The requirement of direct relevance abolishes the previous practice, where any document which could lead to a train of inquiry, or which could indirectly allow a party to advance its own case was discoverable. It has been said that the new test does not make circumstantial evidence irrelevant, as “directly relevant” means something which tends to prove, or disprove, that an allegation is true (Robson v REB Engineering Pty Ltd [1997] 2 Qd R 102 at 105).

16. [16]
    Usually, disclosure is by the delivery of a list of documents, followed by delivery of copies of those documents which are requested. Alternatively, disclosure can be made by the production of documents, followed by copying by the other side. See rules 214 and 217. The court may make orders about disclosure. For example, the court may order that delivery, production or inspection of a document or class of documents be provided, not be provided, or be deferred. Such an order may be made only if there are special circumstances and the interests of justice require it. See rule 223.

17. [17]
    Rule 224 allows the court to order that a party be relieved from a duty to disclose a document. Without limiting that general power, it may have regard to such things as:

1. (a)
   …

2. (b)
   the relative importance of the question to which the documents or classes of documents relate;

3. (c)
   the probable effect on the outcome of the proceeding of disclosing or not disclosing the documents or classes of documents;

4. (d)
   other relevant considerations

18. [18]
    Putting aside questions of privilege, which do not arise here, those rules, like their predecessors and analogues elsewhere, require the disclosure and production or copying of the whole of a disclosed document. If the copying and production is to be limited, it is the duty of the court to consider such a request. In this case, the plaintiff has asked the court for production of the unmasked versions of the discovered documents. Westpac has not made a cross-application. However, as counsel for Westpac made clear, if such an application were necessary, then it should be treated as being made in these proceedings.

19. [19]
    The proper course is to regard these proceedings as Westpac’s application that it be entitled to limit its disclosure by masking certain details.

The Submissions

20. [20]
    The submissions for Westpac in this court can be summarised this way:

1. (a)
   Parts of documents which are in fact irrelevant or privileged may be masked provided that the disclosed portions are not thereby rendered incomprehensible or misleading.

2. (b)
   Here, privilege is not an issue – the issues are relevance and the duty of confidentiality which Westpac owes to its customers.

3. (c)
   The identity of Westpac’s customers cannot tend to prove or disprove the allegations in paragraph 21(p) of the amended statement of claim.  The identity of a customer provides no sufficient reason for its disclosure, as a directly relevant document. 

4. (d)
   This is a fishing expedition. 

5. (e)
   The identification of witnesses is not a reason for giving disclosure about their identity.

21. [21]
    Submissions for Mr Kuhnert were to this effect:

1. (a)
   Under the Uniform Civil Procedure Rules, Westpac cannot mask the documents.

2. (b)
   The documents are relevant.

3. (c)
   The amount of masking leads to the plaintiff being unable to understand the meaning and significance of the various parts of the document.

4. (d)
   The information that may be obtained from the documents and also the individuals referred to in them may throw light on the scheme.

Principles

22. [22]
    It is difficult to see that, in this case, distinctions between previous Queensland rules of court, and the rules of court in other places, are of any importance. It is necessary to keep in mind the essential requirement in this state, that there is a duty to disclose a document which is directly relevant to an allegation in issue in the pleadings. Once that requirement is understood, then the court has substantial powers, reflected in UCPR 223(3) and 224, to control the extent and timing of disclosure and copying.  One control is to permit the sealing up or masking of parts of documents.  The history of that procedure is explained in the decision of the Full Court of Queensland in Curlex Manufacturing Pty Ltd v Carlingford Australia General Insurance Ltd [1987] 2 Qd R 335.  As the headnote puts it:

“There is no rule of law that objection cannot be taken to production of part of the document where another part of the same document dealing with the same subject matter has been discovered.  Discovery of an unprivileged part of a document does not amount to a waiver of the right to refuse to discover a privilege part of the same document.”

There, the part that was lawfully covered up was privileged.  However, it is quite clear from the judgment of Mr Justice McPherson, which was adopted by the court, that the practice of sealing up parts of documents applies to any proper ground for resisting production of that part of the discoverable document.  Once there is a valid objection, then the practice may be adopted.  As he put it:

“The point to be gathered … is that for at least 150 years it has been possible to resist on some proper ground production of parts of discoverable documents, and to do so entirely without reference to the question whether the party in respect of which non-production was claimed was of ‘the same subject matter’ as another part of which production was not resisted.  Of the many cases referred to here, not one … until 1981 … suggests that the right of a party to object to production of parts of a discovered document depends in their being concerned with ‘entirely different subject matters or different incidents’ so as in effect to be capable of division into two separate memoranda.  … the whole history and practice of sealing up parts of documents is against the existence of such a limitation. …”

23. [23]
    A quartet of recent decisions in the Federal Court of Australia illustrates the correct principles to be applied when a party resists disclosure of a document:

1. (a)
   If there is a valid claim for legal professional privilege, then the document does not have to be disclosed.

2. (b)
   Once part of the document is discovered, then all of it should be produced for inspection, unless part of it is privileged, or unless the court has ordered that part not be produced.

3. (c)
   Privilege aside, there is no positive right to resist disclosure on the grounds of confidentiality or irrelevance. 

4. (d)
   The disclosing party might seek relief from the court from its prima facie obligation to allow full inspection of a discovered document.

5. (e)
   In the result, while the general rule is that the whole of the document has to be produced, that does not preclude the court from making orders modifying the general rule having regard to the circumstances of a particular case.  If material is not relevant to the matters in issue, and it is confidential, then that confidentiality should be maintained.

6. (f)
   There is no principle by which documents are protected from discovery by reason of confidentiality alone.  A private right of confidentiality in documents may be taken into account in considering whether to order discovery and inspection, although it is right to say that the fact that the documents have that character is not usually itself a sufficient reason to deny discovery.  When a document is shown to be confidential the courts must balance the effect of its disclosure and of it being withheld from a party to litigation.  In that latter respect much may turn upon what it is necessary for that party to prove.

7. (g)
   The court will be guided by what is necessary to exercise justice between the parties.

(See Index Group of Companies Pty Ltd v Nolan [2002] FCA 608 at 8, Gray v Associated Book Publishers (Aust) Pty Ltd [2002] FCA 1045 at 16, Australian Competition and Consumer Commission v McMahon Services Pty Ltd [2004] FCA 353 and Westfield Management Ltd v Brisbane Airport Corporation Ltd [2004] FCA 611.)

24. [24]
    It is apparent that the court has to exercise discretion in considering Westpac’s application. The discretion may be exercised for various reasons, including to prevent an abuse of process, to prevent the tailoring of evidence, and to maintain surprise, such as using a surveillance video when the plaintiff may give dishonest evidence – see the comprehensive discussion by Judge McGill of this court in Stephen v NRMA Insurance Ltd [2001] QDC 2. 

25. [25]
    To those authorities may be added the decision of McLelland CJ in Eq in Telstra Corp v Australis Media Holdings (unreported) 10 February 1997:

“It has been accepted that for the purpose of discovery it is proper, if physically practicable, to withhold from inspection those parts of a discovered document in respect of which there is a valid claim of privilege … or those parts which are irrelevant … .  This represents a rule of facts which provides, in that sense, a gloss and express requirements imposed by rules or by orders of the court. … exclusion of part of the document on the ground of irrelevance is permitted as a matter of practice, in order to avoid infringement, for no legitimate purpose, of interests of privacy and confidentiality, and thus to avoid injustice.

…

So far as the court’s discretionary power to grant such relief is concerned … the matters requiring consideration would include the following:

1. (a)
   …

2. (b)
   whether the exclusion of that part will, or is likely to, detract from a proper understanding of the meaning and significance of those parts of the document which do contribute to the satisfying of (the criteria for discovery); and

3. (c)
   whether it is apparent that there are, or may be, substantial privacy or confidentiality interests which ought to be given protection. …”

Here, it is accepted that the relationship between banker and customer was one that implied a legal duty on Westpac to keep secret the affairs of its customers.  See Tournier v National Provincial and Union Bank of England [1924] 1 KB 461.

26. [26]
    It was suggested for Mr Kuhnert that the documents were made incomprehensible by the omission of the personal details. However, no illustration of that was given during the hearing. For Westpac, its solicitor said this in her affidavit:

“The documents disclosed in the list of documents served on the plaintiff are Westpac client loan files and were arranged so that each client’s loan documents were grouped together.  I instructed (my staff) that the state contained in the residential address of customers was to be left unmasked … at least some documents in each client file contain unmasked home state information.  The home state of each client is apparent from the way the documents are arranged as a whole.”

27. [27]
    I am not persuaded that there is any difficulty with understanding the documents. If there is a difficulty because of the arrangement, or lack of it, of the documents, then Westpac’s solicitor should be asked to identify each document by a number or letter, such as 1 to 21, to link each document to a particular customer.

28. [28]
    There remains the question of relevance. It was submitted for Westpac that the identity of a particular customer is not relevant to any issue in the pleadings, as knowledge of any scheme is not proved merely by proving the identity of a customer. It was said to be implausible to suggest, that the identity and personal confidential details of a customer could prove Westpac’s knowledge about the scheme.

29. [29]
    These are the matters relevant to the exercise of the discretion:

1. (a)
   The affairs of the customers have already been disclosed.  It is their individual identities that are masked.

2. (b)
   The plaintiff does not seek disclosure because of any improper or collateral purpose.

3. (c)
   While disclosure just to reveal the identity of witnesses is not permitted, disclosure of a relevant document often has the effect of identifying a potential witness.

4. (d)
   In any litigation, the interests of justice are likely to be advanced by the availability of potential witnesses.

5. (e)
   Here, justice between the parties may be advanced if the identity of other Westpac customers who participated in the alleged scheme is known to the plaintiff.

6. (f)
   The facts here seem indistinguishable from those in Gray (above) where the masking of documents was refused by the court.

7. (g)
   If Mr Kuhnert is right, then Westpac only gained those customers (at its Springfield branch) because of their participation in the scheme.

30. [30]
    The discretion should be exercised by refusing Westpac’s application to mask the documents. It can be comforted by the knowledge that it has done all it could do to protect the confidentiality of its customers’ records.

31. [31]
    Subject to any further submissions by counsel, these are the orders:

1. (a)
   Order that the fifth defendant is not entitled to mask parts of those customer records which have been disclosed.

2. (b)
   Order that the fifth defendant pay the plaintiff’s costs of this application to be assessed on the standard basis.