Norman South Pty Ltd & Anor v da Silva [2012] VSC 477 (18 October 2012): confidential information, confidentiality clause, injunction

October 19, 2012 |

In Norman South Pty Ltd & Anor v da Silva [2012] VSC 477 the Victorian Supreme Court considered the operation of a confidentiality clause and a claim for breach of confidence relying upon the principles set out in Giller v Procopets (misuse of private information).


Dr Geoffrey Edelsten (“Edelsten”), the second plaintiff, and Ms Stacey da Silva (“da Silva”) met on the internet site  They met on line, spoke by phone and met in March this year in Florida, USA [2]. Edelsten through the 1st plaintiff transferred $US5,000 to the defendant.  The plaintiffs claim the money was a loan paid pursuant to an agreement which had a confidentiality clause which provided:

The contents of this Agreement and any dealings including emails, texts or any other form of communication between Ms da Silva and Norman South Pty Ltd, and/or Geoffrey Edelsten, will remain confidential and shall not be divulged unless Norman South Pty Ltd and Geoffrey Edelsten waives this right by provision of a dispensation in writing.

The Defendant initially argued that the money was a gift however after cross examination of de Silva her counsel conceded the existence of an agreement [4]. The issue at final submission was whether the loan agreement contained the confidentiality agreement as alleged.

The plaintiffs pleaded a breach of contract and the equitable claim of a breach of confidence [5].  They sought damages, repayment of the $US5,000, interest, an injunction and a non publication order under section 18(1)(c) of the Supreme Court Act 1986.  His Honour found both Edelsten and da Silva to be unsatisfactory witnesses.  Da Silva was found to have falsified emails [14] and that most of her evidence was “demonstrably false and could not be believed”[15].  Edelsten came off hardly better with much of his evidence being described as “simply unbelievable” and that “..nothing about Dr Edelsten’s appearance in the witness box or any of the evidence in this case led me to conclude that I should accept the evidence given by him … in the face of the more likely true position as disclosed in the emails tendered on his behalf [17].

Da Silva admitted divulging and threatening to divulge an account of her dealings with Edelsten [22].


While his Honour found there was a breach of the confidentiality agreement he found Edelsten did not suffer damage [23]. He found no reason not to grant an injunction on the basis that “..there is no reason why the defendant should not be held to the bargain she struck with the first plaintiff”[26].

His Honour noted that the breach of confidence claim was a subset of the confidentiality clause [29].  This claim was prosecuted by the second plaintiff, Edelsten, for distress and embarrassment relying upon the ratio in Giller v Procopets. The court stated the elements of the cause of action as being:

(i) the information in question must be confidential in character: it must have “the necessary quality of confidence about it”: Saltman Engineering Co Ltd v Campbell Engineering Co Ltd (1948) 65 RPC 203at 215;

(ii) it must have been imparted in circumstances importing an obligation of confidence: Coco v A N Clark (Engineers) Ltd [1969] RPC 41 at 47; Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd [1967] VicRp 7; [1967] VR 37 at 40; and

(iii) there must have been an actual or threatened unauthorised use or disclosure of that information: Smith Kline & French Laboratories (Aust) Ltd v Dept of Community Services and Health [1989] FCA 384; (1990) 22 FCR 73 at 87 and 111–112; Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222.

Interestingly both the second plaintiff and defendant relied upon privacy and misuse of private information cases in support of their respective submissions; the second plaintiff citing Gleeson J’s influential commentary in ABC v Lenah Game Meats [31] and the Defendant the UK High Court decision in Theakston v MGN Limited [33].  The second plaintiff sought to rely upon the nascent (in Australia) misuse of private information equitable claim and the defendant relied upon the more developed UK jurisprudence of the same cause of action.  His Honour effectively declined to proceed down that path stating, at [33]:

While I understand why each party took me to the various extracts in the authorities on which they relied, it must be said that I have not found these references to authority of any great assistance in the present case. The present case turns upon its own facts. Those facts are different from the facts referred to in the judgments each side relied upon. Further, there is no universal answer to be given in each case just because one side or the other can identify one fact out of a number of relevant facts in a particular case, which fact appears to be on all fours with a fact in the case for decision between the parties.

His Honour was far from persuaded that Edelsten imparted confidential information and that the evidence did not disclosre circumstances importing an obligation of confidence in respect of his dealings with da Silva (see [33] – [35]).


The Court adopted a very conservative approach to the breach of confidence claim.  The Court of Appeal in Giller v Procopets expanded the operation of a breach of confidence based on the principles set out in the House of Lords decisions in Campbell v MGN Ltd and Douglas v Hello. The cases relied upon by both the plaintiffs and defendant reflected their reliance upon the principles associated with a privacy related breach of confidence action.  The rationale of the Court not to engage on this point was essentially that the facts here were distinguishable from those in the decisions cited.  While that may be the case (and upon which it is difficult to comment further as the decision refers to very few facts in issue except in the most anodyne terms) the underlying approach in this case differs markedly from the approach the UK courts have taken when dealing with individuals in a private relationship, some involving intimate relationships and others less so (such as McKennitt v Ash).  The formulation of the test for breach of confidence in this proceeding is far more conservative and constrictive than that adopted in the UK authorities when dealing with misuse of private information.  It is more consistent with the commercial breach of confidence elements.  It is interesting to note that opponents of a statutory right to privacy claim that breach of confidence actions are best suited to deal with an interference with privacy.  Such prognostications ignore the conservatism of Australian courts in expanding rights based doctrines. Notwithstanding the latitude Giller v Procopets gave the court and the willingness of the parties to engage on this basis the court was notably reluctant to deal with this matter on that basis here. The Human Rights Act in the UK assisted the courts in developing the tort of misuse of private information.  A statutory right of privacy would provide a firmer structure for the development of privacy protections in Australia.

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