ANZ Bank New Zealand Limited v Blum [2014] NZHC 640 (15 May 2014)

Last Updated: 27 September 2014

_{ORDER PROHIBITING PUBLICATION EXCEPT IN REDACTED FORM}

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-3174 [2014] NZHC 640

BETWEEN	ANZ BANK NEW ZEALAND LIMITED Plaintiff
AND	MARKUS LEOPOLD BLUM First Defendant GLOBAL PRESTIGE BRANDS LIMITED Second Defendant

Hearing:	10 March 2014
Appearances:	P Jagose and R Dixon for the Plaintiff R B Stewart QC for the defendnant
Judgment:	15 May 2014

RESERVED JUDGMENT OF THOMAS J Redacted version

This judgment was delivered by me on Thursday 15 May 2014 at 2.00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date:...............................

Counsel/Solicitors:

P Jagose, Chapman Tripp, Auckland

R Dixon, Chapman Tripp, Auckland

R B Stewart QC, Barrister, Auckland

ANZ BANK NEW ZEALAND LIMITED v BLUM GLOBAL PRESTIGE BRANDS LIMITED [2014] NZHC

640 [15 May 2014]

Background facts

[1] The first defendant, Mr Blum, is the sole director and shareholder of the second defendant, Global Prestige Brands Limited (GPB). GPB is a customer of ANZ Bank New Zealand Limited (the Bank). At the relevant time, GPB was indebted to the Bank in the sum of approximately $566,000.

[2] On April 2012, the Bank sent an email to the defendants providing information about GPB’s financial position, extracted from an internal report. Inadvertently, the entire report was attached to the email. The report contained confidential information [Redacted material].

[3] The Bank’s investigations established that, between early September 2011 and late March 2012, it had sent another five emails to GPB, similarly embedding a recent version of the report. [Redacted].

[4] On 6 June 2013, Mr Blum met with Mr Bullivant, a Bank Senior Manager, to discuss GPB’s debt. Mr Bullivant informed Mr Blum that the Bank was issuing a final demand for the debt. Mr Blum told Mr Bullivant that the defendants were in possession of the report. Mr Blum gave Mr Bullivant [Redacted].

[5] On 13 June 2013, the Bank sent a letter to Mr Blum demanding the destruction of the confidential information in his possession by midday on Monday,

17 June 2013. The Bank also sought assurance that Mr Blum had not disclosed the confidential information to any third party and would not use the information for any purpose. The defendants sought an extension of time within which to consider the demand. On 17 June 2013, the Bank obtained interim orders prohibiting use of the information and requiring the defendants to confirm by affidavit the return and deletion of the information in their control.

Statement of claim

[6] The Bank claims that:

(a) The defendants knew, or ought to have known, that the report was the Bank’s confidential information and was inadvertently disclosed to them.

(b) At the meeting of 6 June 2013, Mr Blum misused, and threatened to further misuse, the confidential information. Mr Blum’s words were intended by the defendants and/or reasonably taken by the Bank to convey that:

(i) The defendants would work with the Bank to keep the report confidential in exchange for favourable treatment by the Bank of GPB’s debt.

(ii) If the Bank failed to provide such favourable treatment, the defendants may disclose more broadly the Bank’s inadvertent release of the confidential information and/or a version of the report.

(c) The defendants have committed a breach of confidence and the Bank reasonably believes that they may further disclose the confidential information. This would:

(i) Damage the Bank’s reputation and potentially cause the Bank to be in breach of [Redacted] and other duties owed to [Redacted]; and

(ii) Harm [Redacted] by publishing confidential and sensitive information about [Redacted].

[7] The Bank seeks orders that the defendants are:

(a) Immediately restrained from using confidential information for any purpose;

(b) Required to immediately return to the Bank all hard copies of the report and other Bank confidential information in their possession or control;

(c) Required to immediately and irretrievably delete all electronic copies of the report and other Bank confidential information in their possession or control and file an affidavit with the Court confirming that such deletions have been made;

[8] The Bank also seeks such orders as the Court sees fit and costs.

Suppression orders

[9] The Bank also sought orders suppressing all publication of: (a) The Bank’s disclosure of the report; and

(b) The contents of the report;

otherwise than by the parties and their witnesses and counsel directly in relation to conduct of the proceeding pending final judgement. The defendants did not oppose such orders and accordingly they were made by consent.

Statement of defence

[10] The defendants admit the Bank’s allegations save that:

(a) The defendants deny the Bank’s allegations regarding the meeting on

6 June 2013. They maintain that Mr Blum intended to convey to the Bank that it “had a much bigger and more immediate problem” with [Redacted] than with the defendants’ facilities and that the defendants “were willing and able to assist the Bank with its problem on terms to be discussed”.

(b) With respect to the potential damage to the Bank, the defendants maintain that:

(i) They have no intention of disclosing [Redacted] contained in the report; and

(ii) The Bank is not entitled to have the fact of its release of the information (apart from [Redacted]) suppressed.

Affirmative defence

[11] The defendants plead an affirmative defence of public interest. They state that the Bank is a public institution and therefore the release of the report to [Redacted] constituted:

(a) A breach of the [Redacted];

(b) A breach of the Code of Banking Practice;

(c) A breach of contract between the Bank and [Redacted]; and

(d) A breach of the Bank’s duty of care owed to [Redacted].

[12] The defendants submit that the public has a proper and legitimate interest in receiving the details of the Bank’s report [Redacted]. They maintain that:

(a) All the Bank’s current customers have a legitimate interest in disclosure “so they can take steps to protect their own position”; and

(b) The Bank’s potential customers have such an interest “so they can make a fully informed decision as to whether [to] bank with the Bank in the circumstances”.

[13] Therefore, it is in the public interest, and not a breach of confidence, that the defendants be permitted to disclose:

(a) [Redacted];

(b) To the public: the report [Redacted].

[14] The plaintiff denies that this affirmative defence is open to the defendants.

The evidence

_{[15] The confidential information consisted of a report [Redacted]:}

[Redacted]. [Redacted]. [Redacted]. [Redacted].

_[Redacted].

[16] The report concerned [Redacted].

[17] The report had been sent to Mr Blum at the same time as providing him with

details of GPB’s loan account. [Redacted].

[18] The Bank’s investigations uncovered that [Redacted]. Mr Blum has subsequently advised the Bank of another incident in November 2011.

[19] The Bank is satisfied that the staff member concerned had no intention of sending Mr Blum any report that contained [Redacted]. The staff member understood the confidential nature of the information in the report. The Bank is satisfied that no other staff member sent information in a way which would have incorporated the report.

[20] [Redacted]. [21] [Redacted]. [22] [Redacted].

[23] The evidence of the Bank, which I accept, is that the Bank considers the information highly confidential as between the Bank and [Redacted]. It is the kind of information the Bank would not knowingly release to [Redacted] or any member of the public. There would be harm both to the Bank and to [Redacted] if the report were published. The Bank’s concerns relate not only to breach of its confidentiality arrangements with [Redacted] but also to the damage to its reputation.

Breach of confidence: substantive law and analysis

[24] A claim for breach of confidence is historically derived from equity.¹ The leading case on breach of confidence is Coco v A N Clark (Engineers) Ltd.² The action has three elements:³

(a) The information must have the necessary quality of confidence about it;

(b) The information must have been imparted in circumstances importing an obligation of confidence;

(c) There must be unauthorised use of that information (whether this use must be to the detriment of the party communicating it is unsettled).

[25] Subsequent cases have endorsed this approach and described it as “the conventional starting point for considering the nature and scope of the duty of confidentiality”.⁴

a) Confidential information

[26] In considering whether the information has the requisite quality of confidence, it is necessary to look at the nature of the information that the plaintiff

¹ Aquaculture Corporation v New Zealand Green Mussel Co Ltd [1990] 3 NZLR 299 (CA) at

_301.

² _{Coco v A N Clark (Engineers) Ltd [1969] RPC 41 (Ch), [1968] FSR 415}

³ At 47. These were recently adopted by the Court of Appeal in Skids Programme Management

_{Ltd v McNeill [2012] NZCA 314, [2013] 1 NZLR 1.}

⁴ Skids Programme Management Ltd v McNeill. The quote in respect of the conventional starting point comes from R v Department of Health Ex parte Source Informatics Ltd [2001] QB 424 (CA) at [14].

seeks to protect.⁵ At a minimum, the information must be “the product of thought and work”.⁶ Confidence will also be indicated by its commercial value, its owner’s view of its confidentiality and the steps taken to preserve its confidentiality.⁷

(b) Imparted in circumstances importing an obligation of confidence

[27] The common law test is whether the circumstances are such that a reasonable individual, standing in the shoes of the recipient of the information, would have realised that, upon reasonable grounds, the information was being given in confidence.⁸

[28] Alternatively, as the Court of Appeal recently put it:9

...the basic principle in the civil law is now... that information of a requisite character will be protected as confidential where the complainant has a reasonable expectation of confidentiality or privacy and the defendant has agreed to keep the information confidential or has notice of its confidentiality.

(c) Unauthorised use of information

[29] In Coco v A N Clark (Engineers) Ltd, the Court doubted that detriment to the party claiming confidence was necessary, stating:¹⁰

At first sight, it seems that detriment ought to be present if equity is to be induced to intervene; but I can conceive of cases where a plaintiff might have substantial motives for seeking the aid of equity and yet suffer nothing which could fairly be called detriment to him, as when the confidential information shows him in a favourable light but gravely injures some relation or friend of his whom he wishes to protect. The point does not arise for decision in this case, for detriment to the plaintiff plainly exists. I need therefore say no more than that although for the purposes of this case I have stated the proposition in the stricter form, I wish to keep open the possibility of the true proposition being that in the wider form.

⁵ _{Skids Programme Management Ltd v McNeill, above n 3, at [78].}

⁶ _{At [80].}

⁷ _{At [80].}

⁸ _{Coco v A N Clark (Engineers) Ltd, above n 2, at 420-421.}

⁹ _{R v X (CA553/2009)[2009] NZCA 531, [2010] 2 NZLR 181 at [45]}

¹⁰ Coco v A N Clark (Engineers) Ltd, above n 2, at 421.

[30] The authors of Laws of New Zealand: Confidential Information consider that,¹¹ if disclosure of confidential information occurs in the commercial context, then detriment is likely to be presumed. However, in the context of confidential product information and companies competing to develop products, the Court of Appeal stated in Norbrook Laboratories Ltd v Bomac Laboratories Ltd that: ¹²

... the fact that a person is aware, when receiving information from an independent source, that it conforms with the confidential information, does not in itself give rise to misuse.

[31] The Court of Appeal has recently suggested that, where third party recipients are involved, this “misuse” element and the previous “obligation of confidence” element are best dealt with by a composite enquiry, which asks whether the recipient “has acted unconscionably in relation to the acquisition of the information or in the way it has been employed.”¹³ The Court noted that this approach is consistent with the equitable basis of the doctrine of breach of confidence and has the benefits of simplicity and directness.¹⁴

Issues

[32] There is a range of potential disclosures in this case.

[33] At one end is disclosure of the report itself and the information in it. There is no dispute that disclosure to this extent should not occur. At the other end is disclosure of the fact only that the Bank inadvertently released confidential information to Mr Blum. The Bank accepts that Mr Blum cannot be constrained from disclosing this fact. The third possible extent of disclosure and the real issue in the case lies in the middle, being disclosure of the fact that the Bank inadvertently released confidential information regarding [Redacted]. This is what Mr Blum seeks to disclose to the public generally. He also seeks to approach [Redacted] and inform

_{them of the Bank’s mistake.}

11. Campbell Clark Laws of New Zealand “Intellectual Property: Fair Trading: Confidentiality information” at [10].

¹² _{Norbrook Laboratories Ltd v Bomac Laboratories Ltd [2004] NZCA 56; [2004] 3 NZLR 49 (CA) at [35].}

¹³ _{Hunt v A [2007] NZCA 332, [2008] 1 NZLR 368 at [92].}

¹⁴ At [92].

Disclosure of the report itself and the information contained in it

[34] The defendants accept they are under an obligation of confidence with respect to the information in the report. I will briefly set out the reasons why this is so.

a) Confidential information

[35] The report contained [Redacted]. It is clearly of a confidential nature. The defendants have withdrawn their suggestion that, [Redacted] then the information would not be confidential.

b) Imparted in circumstances importing an obligation of confidence

[36] Again, it is non-contentious that this element is satisfied. A reasonable individual in the defendants’ shoes would have realised that the information contained in the report was given in confidence.

[37] When Mr Blum received the report he would have appreciated, and did appreciate, the confidential nature of the information in it. [Redacted].

[38] Furthermore, Mr Blum was given notice of the confidential nature of the report by the Bank on 13 June 2013. He received the report in circumstances which imparted an obligation on him not to disclosure the information he had received.

Unauthorised use of the information

[39] Given the confidential nature of the report and the circumstances in which it was released, any disclosure of the information [Redacted] in the report would be “unconscionable” and would constitute unauthorised use.¹⁵

[40] The Bank claims that Mr Blum has already misused or threatened to misuse the information by his words at the meeting of 6 June 2013. In my assessment there

_{is no need to make a finding as to Mr Blum’s intentions in this regard. All that needs}

¹⁵ Hunt v A, above n 13, at [92].

to be said is that the Bank feared disclosure and apprehended, because of the way in which Mr Blum raised the issue, that he intended to disclose the information.

Disclosure of the fact that the Bank inadvertently released confidential information to the defendants.

[41] The Bank acknowledges that it cannot prevent disclosure of the fact that there was an inadvertent disclosure by the Bank of confidential information by email to the defendants.

[42] The fact that the Bank inadvertently disclosed information is not a “product of thought and work”. It is the product of a mistake on the Bank’s part. Normally, some skill and effort needs to have been involved in the creation of the information over which protection is sought.¹⁶ The information at issue under this heading does not fall into this category.

[43] In determining whether information has the necessary air of confidence, courts will look at how the information came into being and the effects of declining to impose an obligation of confidence.¹⁷ Here, the information came into being because [Redacted]. The effect of declining to impose an obligation of confidence as to the fact of the Bank’s mistake would not damage the Bank’s customers. The most it would do is harm the Bank’s reputation.

[44] The fact of the Bank’s inadvertent release of confidential information to the defendants is therefore not confidential information.

Disclosure of the fact that the Bank inadvertently released confidential information regarding [Redacted].

[45] Given the concessions made by both parties, this was the issue to which the bulk of their submissions were directed. This issue relates to the extent to which Mr

¹⁶ House of Spring Gardens Ltd v Point Blank Ltd [1985] FSR 327 (Irish Supreme Court) cited in James Every-Palmer “Breach of Confidence” in Andrew Butler (ed) Equity and Trusts in New Zealand (2^nd ed, Thomson Reuters, Wellington, 2009) at [20.2.1](1).

¹⁷ James Every-Palmer “Breach of Confidence” at [20.2.1](5).

Blum may disclose information about the Bank’s inadvertent release of confidential

information.

Plaintiff ’s submissions

[46] The Bank’s position is that anything beyond the fact of the Bank’s mistake, for example, reference to the scope of the information, or [Redacted], or purpose of the report, is using confidential information created by the report. Counsel for the Bank, Mr Jagose, relied on Skids Programme Management Ltd v McNeill¹⁸ to support his contention that confidence can attach to the nature of the information in the report because it was contained in what he described as “an otherwise inaccessible vessel”.

[47] There is no dispute that the content of the report is the subject of the banker’s duty of confidence and that the bank owes a duty of confidentiality to its customers.¹⁹ In Mr Jagose’s submissions, everything about the report is subject to the banker’s duty of confidence, including the fact that [Redacted].

[48] Mr Jagose submitted that the claimed confidence was fashioned to protect personal, private and proprietary interests and the proposed release would harm the Bank and its customers through exposure. This includes disclosure of the mechanics of the inadvertent release because [Redacted].

Defendant’s submissions

[49] Counsel for the defendants, Mr Stewart QC, submitted that the restraint sought by the Bank would, amongst other things, constitute an unjustified limitation on Mr Blum’s freedom of expression and would create a dangerous precedent allowing corporate mistakes to be covered up with the cloak of confidentiality.

[50] Mr Stewart accepted that the content of the report is confidential [Redacted]

and possibly the format of the report and any analytical content is confidential to the

_{Bank. He submitted that not every use of confidential information is prohibited. It}

¹⁸ _{Skids Programme Management Ltd v McNeill, above n 3.}

¹⁹ Tournier v National Provincial (1924) 1 KB 461.

is necessary, in each case, to determine the scope of any obligation of confidence by reference to the interest being protected and the conscience of the recipient. Mr Stewart relied on R v Department of Health Ex parte Source Informatics Ltd.²⁰

[51] The defendants said that the Bank breached [Redacted] and referred to the fact that [Redacted]. In the defence case [Redacted] and the public generally, including [Redacted] and potential customers, have a legitimate interest in being made aware of the mistake so they can take their own steps to assess the risk of [Redacted].

[52] The Bank pleaded that disclosure would potentially cause the Bank to be in breach of [Redacted]. The breach, in Mr Stewart’s submission, was caused by the Bank when it mistakenly disclosed [Redacted].

Analysis

[53] What makes this intended disclosure different from disclosure of the mere fact of the Bank’s mistake is that it involves the use of information contained within the report.

[54] The defendants placed considerable weight on the case of R v Department of Health Ex parte Source Infomatics Ltd.²¹ That case concerned an alleged breach of confidence where the applicants operated a scheme whereby information was obtained from general practitioners and pharmacists about drugs prescribed for patients, using information from prescription forms. The anonymised information was sold by the applicants to pharmaceutical companies who used it for marketing purposes. The issue was whether disclosure of the information would be in breach of confidence. The Court of Appeal of England and Wales held that a patient had no

proprietorial claim to the prescription form or the information and no right to control the way it was used provided that privacy was not put at risk. Disclosure was not a breach of confidence.

_{[55] At paragraph [34] the Court said:}

²⁰ _{R v Department of Health Ex parte Source Informatics Ltd, above n 4.}

²¹ R v Department of Health Ex parte Source Informatics Ltd, above n 4.

... The concern of the law here is to protect the confider’s personal privacy. That and that alone is the right at issue in this case. The patient has no proprietorial claim to the prescription form or to the information it contains.

[56] In this case the Bank does have a proprietorial claim to the report and the information contained therein.

[57] Source Infomatics Ltd would be analogous to the case before the Court if a bank customer sought to prevent the Bank providing to a third party information regarding [Redacted]. In other words where the information at issue was to be released at the request of the owner of it, the Bank. In this case, however, the defendants have no ownership of the confidential information at issue. The information is not Mr Blum’s [Redacted].

[58] The Bank inadvertently revealed [Redacted]. Mr Blum could only know that because he had read confidential information, that is, the report. By disclosing these details he would effectively be disclosing parts of the information contained in the report, which is confidential. Although neither:

(a) the fact he received confidential information inadvertently released by the Bank; nor

(b) [Redacted];

is confidential information, the fact that an inadvertent release of confidential information regarding [Redacted] did actually occur is information of which Mr Blum is aware only because he read the report. That is, Mr Blum is not simply proposing to make a disclosure about two facts which are not confidential. The fact the Bank’s mistake involved information concerning [Redacted] is confidential information.

[59] What Mr Blum is entitled to disclose, however, is what he requested from the Bank, presumably [Redacted]. When he received those he also received the mistaken release of confidential information. That may well lead to an inference that the mistaken release concerned similar details about [Redacted].

[60] As I understand the position, the fact that [Redacted] was something that came to light during the discovery process. The defendants would never have known of [Redacted] but for the discovery in these proceedings which took place on a confidential basis. As a consequence the defendants cannot use the fact that [Redacted]. The same must apply to the fact that [Redacted]. Mr Blum was made aware of that only as a result of confidential discovery in these court proceedings. He is therefore prevented from disclosing that information.

Can Mr Blum approach [Redacted] and advise them of the Bank’s mistake?

[61] The defence seeks the ability for Mr Blum to approach [Redacted] to advise them of the breach. Mr Stewart submitted that there would be no breach of confidence in doing so because it would simply be a disclosure of [Redacted] and it is common ground that [Redacted]. In his submission [Redacted] have a particular interest in being appraised of the Bank’s error. Mr Stewart emphasised that, as the information is [Redacted] and they already know it, it cannot be suggested that the information is confidential to the Bank and there would be no prejudice to [Redacted]. It was [Redacted] which was infringed by the disclosure and [Redacted] would not be infringed by the proposed communication to them by Mr Blum.

[62] The defendants say that the Bank is seeking to protect its reputation at the potential expense of [Redacted] interests by concealing from [Redacted] the inadvertent disclosure of [Redacted].

Analysis

[63] Mr Blum received what was obviously confidential information. He chose to read that confidential information. He was not entitled to. He knows [Redacted] only because he read confidential information. He is not entitled to make use of the confidential information.

[64] It is for the Bank to decide how to deal with [Redacted]. It might be considered prudent for the Bank to reveal the truth to [Redacted] and pre-empt any concern they may feel when Mr Blum publicises the fact of the Bank’s mistake. That, however, is a matter for the Bank. [Redacted]. I agree with the defence that

that could by no means be considered a representative number. Again, however, it is a matter for the Bank.

[65] The disclosure which Mr Blum is entitled to make - the fact of the Bank’s mistake and that the confidential information came to him by email when he was sent details of GPB’s [Redacted] - might well be sufficient to put [Redacted] on enquiry. How the Bank deals with this is the Bank’s business.

Affirmative, “public interest” defence. Should disclosure nevertheless be permitted on the basis that public interest in disclosure outweighs public interest in protecting the confidential information?

[66] The defendants submitted that the public interest in maintaining confidence is outweighed by a public interest in favour of disclosure. Current and potential customers of the Bank should be made aware of [Redacted] in order to make their own assessment as to whether the Bank can be trusted with [Redacted]. Mr Stewart submitted that ANZ was seeking to protect its reputation whereas matters of reputation are the concern of the law of defamation.

[67] The Bank does not accept that there is any public interest in the disclosure, pointing out that the defendants have not identified what that public interest might be. On that basis, relying on European Pacific Banking Corporation v Television New Zealand Ltd,²² the Bank is prima facie entitled to protection of its confidential information.

[68] Mr Jagose drew a distinction with many other of the cases referred to in that, in this case, the information has been contained.

²² European Pacific Banking Corporation v Television New Zealand Ltd HC Auckland CP768/93,

3 February 1984.

Analysis

[69] The House of Lords decision of Attorney-General v Guardian Newspapers (No 2), also known as the “Spycatcher” case, involved a consideration of the limiting principles to the scope of the duty of confidence.²³ The House of Lords identified three principles. The first is that the principle of confidentiality only applies to information to the extent that it is confidential. Once the information has entered the public domain it cannot be regarded as confidential. The second limiting principle is

that the duty applies neither to useless information nor to trivia. On the third limiting principle the House of Lords said:²⁴

The third limiting principle is of far greater importance. It is that, 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. This limitation may apply, as the learned judge pointed out, to all types of confidential information. It is this limiting principle which may require a court to carry out a balancing operation, weighing the public interest in maintaining confidence against a countervailing public interest favouring disclosure.

[70] A distinction must be drawn between what is in the public interest and what is interesting to the public.²⁵ The defence of public interest will not depend solely on proof that the information disclosed misconduct on the part of the plaintiff. The Court has to weigh the competing issues of public interest in maintaining the secrecy of confidential information and in being informed on matters which are of real public concern.²⁶ The disclosure of confidential information on this basis demands more than a claim that it is in the public interest that the truth be told.²⁷

[71] Many of the cases in this area relate to matters of national security and the

_{workings of government. In those cases the court “will look at the matter through}

²³ _{Attorney-General v Guardian Newspapers (No 2) [1990] 1 AC 109 (HL) at 282.}

²⁴ _{At 282.}

²⁵ _{Lion Laboratories Ltd v Evans [1985] QB 526, [1984] 2 All ER 417 (CA) at 423.}

²⁶ _{At 422.}

²⁷ Castrol Australia Pty Ltd v EmTech Associates Pty Ltd (1980) 33 ALR 31, 51 FLR 184.

different spectacles” from those appropriate when the plaintiff is a private individual

or entity.²⁸

[72] The explanation as to why different considerations apply was given by Mason J in Commonwealth of Australia v John Fairfax & Sons Ltd when he analysed the purpose of an action in breach of confidence, saying it was: ²⁹

... to protect the personal, private and proprietary interests of the citizen, not to protect the very different interests of the executive government. It acts, or is supposed to act, not according to the standards of the private interest, but the public interest. This is not to say that equity will not protect information in the hands of the government, but it is to say that when equity protects government information it will look at the matter through different spectacles.

[73] In Earthquake Commission v Krieger,³⁰ the issue before the High Court was whether Mr Krieger had disclosed information in circumstances that constituted a breach of confidence. The plaintiff was the Earthquake Commission (EQC), a statutory body established by the Earthquake Commission Act 1993 to administer insurance against damage caused by natural disasters. Whether inadvertently or deliberately, a spreadsheet containing details of individual claims and the EQC’s analysis of their value had come into the hands of Mr Krieger, the author of a website, who published instructions on the website as to how EQC claimants could access information contained in the spreadsheet.

[74] The Court found that while the EQC was not a government department it was nevertheless an integral part of New Zealand’s central government³¹ and that the information at issue was genuinely commercial information which needed to be kept confidential to enable the EQC to discharge its responsibilities as an insurer. The Judge concluded that the EQC did not have the onus of establishing that restraint of publication was in the public interest because it related to genuine commercial and

_{private information. In assessing whether Mr Krieger had a public interest defence}

²⁸ Commonwealth of Australia v John Fairfax & Sons Ltd [1980] HCA 44; (1980) 147 CLR 39 at 51-52 per Mason

J, cited with approval by the House of Lords in Attorney-General v Observer Ltd [1990] 1 AC

_{109 (HL) at 258 per Lord Keith, at 270 per Lord Griffiths and at 283 per Lord Goff.}

²⁹ _{Commonwealth of Australia v John Fairfax & Sons Ltd, above n 28, at 51.}

³⁰ _{Earthquake Commission v Krieger [2013] NZHC 3140.}

³¹ At [67].

the Court considered whether Mr Krieger could show that the public interest in disclosing the information in the spreadsheet outweighed the interests of the EQC or the public generally in keeping it confidential. Collins J decided that the information fell far short of information in which there was a legitimate public interest and that disclosure might arouse the prurient interest of neighbours but was not information that promoted public understanding or discussion of government activities. He found therefore that the real public interest was in preserving private information.

[75] In HRH Prince of Wales v Associated Newspapers Ltd where an employee under a contractual undertaking of confidence supplied the defendant newspaper with typed copies from the plaintiff’s journals, the Court of Appeal of England and Wales said:³²

the test to be applied when considering whether it is necessary to restrict freedom of expression in order to prevent disclosure of information received in confidence is not simply whether the information is a matter of public interest but whether, in all the circumstances, it is in the public interest that the duty of confidence should be breached. The court will need to consider whether, having regard to the nature of the information and all the relevant circumstances, it is legitimate for the owner of the information to seek to keep it confidential or whether it is in the public interest that the information should be made public.

[76] The Federal Court of Australia in Smith Kline v Secretary to the Department of Community Services and Health observed that:³³

We would add that, in our opinion, courts exercising equitable jurisdiction should not be too ready to import an equitable obligation of confidence in a marginal case. There is the distinction between use of confidential information in a way of which many people might disapprove, on the one hand, and illegal use on the other. Not only the administration of business and government, but ordinary communication between people, might be unduly obstructed by use of too narrow a test, such as that which the appellants put forward here.

[77] That caution is appropriate in this case. It may be that others would disapprove of Mr Blum’s intended publication of the Bank’s error and the type of information involved. Others may not seek to do the same. In this case [Redacted].

_{There is a difference, however, between a moral duty and a legal one.}

³² _{HRH Prince of Wales v Associated Newspapers Ltd, [2008] Ch 57, at [68].}

33. Smith Kline v Secretary to the Department of Community Services and Health [1991] FCR 291 at 305.

[78] The Bank is not part of New Zealand’s government either nationally or locally. While it is a public company and one of New Zealand’s largest banks, it is not a body answerable to or representative of the public. The Bank does not therefore have the onus of establishing that restraint of publicity is in the public interest. The onus is on the defendant to satisfy the Court that it is in the public interest that confidential information should be disclosed.

[79] The Bank has, [Redacted], secured all inadvertent disclosures. The wider public may well have an interest in the fact of the Bank’s mistake but there is no public interest in knowing that the Bank’s mistake involved [Redacted]. Any public interest there might be is outweighed by the public interest in confidentiality. In making my decision I have been conscious of the need not to impose too stringent a test. In all the circumstances, the onus on the defendants has not been discharged.

Are the orders sought by the Bank an unreasonable restriction on Mr Blum’s

freedom of expression?

[80] The defence submitted was that the orders sought by the Bank would be an unreasonable restriction on Mr Blum’s right to freedom of expression under s 14 of the New Zealand Bill of Rights Act 1990. It relied on the Krieger decision³⁴ in disputing that the relief sought could be justified in the context of a limitation on the right to freedom of expression.

[81] In the Krieger case the Court noted that any limitation on Mr Krieger’s right to freedom of expression had to be demonstrably justified in a free and democratic society in light of s 5 of the New Zealand Bill of Rights Act 1990. Collins J noted the comments of the Court of Appeal of England and Wales where a similar question

arose in HRH Prince of Wales v Associated Newspapers Ltd: ³⁵

Today [post the enactment of the Human Rights Act 1998 (UK)] the test is different. It is whether a fetter of the right of freedom of expression is, in the particular circumstances, “necessary in a democratic society”. It is a test of proportionality. But a significant element to be weighed in the balance is the importance in a democratic society of upholding duties of confidence that are created between individuals. It is not enough to justify publication that the

³⁴ _{Earthquake Commission v Krieger, above n 30.}

³⁵ HRH Prince of Wales v Associated Newspapers Ltd, above n 34, at [67]

information in question is a matter of public interest.

[82] The issue is whether in the circumstances a restriction on an individual’s freedom of expression is justified to protect other values considered important in a democratic society, in this case protecting confidential information. Any limits on an individual’s freedom of expression must be proportionate to the interests served by the orders sought.³⁶

[83] I am satisfied that limiting Mr Blum’s ability to publicise the details of the mistake and the circumstances in which he received the confidential information is a proportionate limit on his freedom of expression.

Conclusion

[84] The report and the information contained in it is confidential. Mr Blum is not entitled to disclose anything which would reveal the contents of the report or which is based on his knowledge of the report which he acquired by opening and reading the report in circumstances where the report was clearly confidential.

[85] Disclosure of the confidential information is not in the public interest. The

orders made are a justified restriction on the defendants’ freedom of expression.

[86] I therefore make the following orders:

(a) Mr Blum is entitled to disclose the following facts only: that he requested from the Bank details of [Redacted] (whichever is the case) and when he received those by email he also received inadvertent disclosure of confidential information.

(b) The defendants are otherwise immediately restrained from using the confidential information for any purpose;

³⁶ R v X (CA553/2009), above n 9.

(c) The defendants must immediately return to the Bank all hard copies of the report and other Bank confidential information in their possession or control;

(d) The defendants must immediately and irretrievably delete all electronic copies of the report and other Bank confidential information in their possession or control and within three working days of these orders file an affidavit with the Court confirming that such deletions have been made;

[87] Leave is given to refer to me any issue as to costs which the parties are unable to resolve. A memorandum is to be filed by the plaintiff within 28 days of this decision with the defendants’ response seven days thereafter.

Addendum

I refer to the order set out in paragraph [86](a). The judgment makes it clear that Mr Blum is entitled to disclose what it was he requested from the Bank and the details regarding the defendants’ banking arrangements provided by the Bank in response. In fact, Mr Blum requested details of the second defendant’s Trade Finance Loans. The Bank provided that information. The order set out at para [86](a) is therefore substituted by the following order:

(a) Mr Blum is entitled to disclose the following facts only: that he requested from the Bank details of GPB’s Trade Finance Loans and when he received those by email he also received

_{inadvertent disclosure of confidential information.}

Thomas J