Peter A Clarke

The Federal Court, per Perram J, recently considered an application by non parties to affidavit material filed with the court in Dallas Buyers Club, LLC v iiNet Limited (No 1).  It is a useful, and well written, exposition on the principles of open justice and, interestingly, the competing issues in non parties seeking access to affidavit material.   His Honour specifically foreshadowed that there will need to be consideration of the Australian Privacy Principles (the APPs) as privacy concerns have been raised by the Respondent.

FACTS

The Applicant (“Dallas”) is making application for preliminary discovery from the Respondent (“iiNet”) under Rule 7.22 of the Federal Court Rules.  Dallas obtained [4] and identified the IP addresses of persons it claims have been involved in file sharing of the film, The Dallas Buyers Club [3].  The IP address identifies the Internet Service Provider (the ISP) but not the customers themselves.  The argument is that if Dallas obtains the names of the customers it will be able to bring an action against those customers for breach of copyright. The Respondent (“iiNet”) is the subject of the preliminary discovery application because it has, or at least may have, data which can link the IP address to the customer’s name.

Dallas filed affidavits and an experts report which have not been used in open court or been perused by his Honour [2].

Under Rule 2.32.4 four third parties,  including the ABC and CBS Interactive, have applied to inspect documents which are not normally available to the public.  They seek access to the affidavits, the expert’s report, the notice to produce and unrestricted documents such as the originating application [12]. Dallas  objected to access  to the affidavits or the expert report.  iiNet only objected to access to Exhibit DM1 which allegedly contained a large number of IP addresses.  That objection is grounded in privacy concerns.

DECISION

Rule 7.22 has generated friction when persons have sought to use it against journalists to identify their sources [6].  His Honour said there was “a frisson” here between the copyright owner’s right to enforce its monopoly and an ISPs desire not to release  customer information which it would expect not to be made public.  In support of the latter position his Honour referred to the Privacy Act and APP 6 when he stated, at [7]:

Support for that expectation may be found in Australian Privacy Principle 6 of the Privacy Act 1988 (Cth) which, in broad terms, prevents disclosure of private information.  On the other hand, Principle 6.2(b) makes clear that it provides no excuse for not complying with a Court order (see also Telecommunications Act 1997 (Cth) ss 276 and 280).  In any event, all of this lies in the future.

 (Emphasis added)

His Honour said that the starting point is for the administration of justice to be conducted in public “where it can be seen warts and all.”[8]. The exceptions include:

1. where it is necessary to protect the identity of an informer who might suffer retribution if identified in open court;
2. a trade secret the revelation of which might destroy a legitimate business advantage; and
3. matters of national security.

Where the exceptions apply they are accomodated but strictly to the minimum extent necessary [8].

Access to court documents is dealt with by Rule 2.32.  Under the Rule third parties should generally automatically have access to the formal acts of the parties or the Court because those matters are presumed to be in the public domain.  They are, at [9]:

..the originating processes, pleadings, applications, certain but not all notices, agreed statements of fact, reasons for judgment and the transcript of any proceedings heard in open court.

In this case evidence filed by Dallas does not fall within the above category.  It includes material which identifies the mechanism by which Dallas collected the IP addresses of downloaders which his Honour pithily noted, at [11]:

No doubt, many people will be interested to understand the mysteries of this process, perhaps not all from a position of disinterest.

In relation to restricted documents the Court’s usual practice is to release material which has been :

1. used in open court
2. otherwise used by a judge [14]

Here however the evidence has not been utilised.  As such the notions of open justice do not require the release of material because there has not been and may never be a public hearing [15].  In this event the Court will seek the views of the parties and if there is no objection will normally allow access under Rule 2.32.4 [16].  Given there were objections raised his Honour refused the applications except for an affidavit used for the purpose of the directions hearing and A notice to Produce, which attracted no objection [19].

The court noted that when the application is heard on 17-18 February 2015 and the evidence is used it is likely to be released under Rule 2.32.4 howevr may still be the subject to restrictions as to the public release of IP addresses [18].

ISSUE

The Federal Court has an enlightened policy regarding on line access to court documents and progress of litigation, as well as media releases, speeches and practice directions (see explanation found here).  This decision is a very useful exposition of preliminary discovery application in the context of third party access to material.  The objection by iiNet to the release of material on privacy grounds, specifically APP 6 – Use or disclosure of personal information, is a clever argument based on clear principles set out in APP 6.  It relevantly applies:

6.1 If an APP entity holds personal information about an individual that was collected for a particular purpose (the primary purpose), the entity must not use or disclose the information for another purpose (the secondary purpose) unless:

1. the individual has consented to the use or disclosure of the information; or
2. subclause 6.2 or 6.3 applies in relation to the use or disclosure of the information.

Note: Australian Privacy Principle 8 sets out requirements for the disclosure of personal information to a person who is not in Australia or an external Territory.

6.2 This subclause applies in relation to the use or disclosure of personal information about an individual if:

1. the individual would reasonably expect the APP entity to use or disclose the information for the secondary purpose and the secondary purpose is:
   1. if the information is sensitive information — directly related to the primary purpose; or
   2. if the information is not sensitive information — related to the primary purpose; or
2. the use or disclosure of the information is required or authorised by or under an Australian law or a court/tribunal order; or
3. a permitted general situation exists in relation to the use or disclosure of the information by the APP entity; or
4. the APP entity is an organisation and a permitted health situation exists in relation to the use or disclosure of the information by the entity; or
5. the APP entity reasonably believes that the use or disclosure of the information is reasonably necessary for one or more enforcement related activities conducted by, or on behalf of, an enforcement body.

Note: For permitted general situation, see section 16A. For permitted health situation, see section 16B.

………

6.4 If:

1. the APP entity is an organisation; and
2. subsection 16B(2) applied in relation to the collection of the personal information by the entity;

the entity must take such steps as are reasonable in the circumstances to ensure that the information is de-identified before the entity discloses it in accordance with subclause 6.1 or 6.2.

The Court is being asked to consider the principles associated with preliminary discovery in the context of statutory obligations an  iiNet.  It is an interesting application of the Privacy Act. While use and disclosure may be permitted when permitted by law or pursuant to a Court order under APP 6.2 the Court may have to consider the operation of APP 6 generally before making, or not, such an order.  The considerations of APP 6 may militate against the making of such an order in the context of an application under Rule 7.22.  Or at least that may be the argument.  It may be a very significant case both for the purpose of framing the operation of the preliminary discovery when respondents have privacy obligations as well as judicial consideration of the overall operation of the Privacy Act and the APP 6 in particular.  Given the relatively quiet approach taken by the Privacy Commissioner in bringing action in the Federal Court this is important.  There is little judicial consideration of the Act generally, and none in relation to the amendments which took effect in March 2014.

Preliminary discovery is a long established interlocutory process with a considerable body of law on its application in Federal and State jurisdictions.  There has been relatively little consideration of the Privacy Act implications associated with the process.  I was junior counsel in the last reported decision in this area in Fisher v Houston  [2013] FCA 1026.  The decision ultimately related to costs because most of the other substantial issues had been otherwise resolved.  The decision does show that there is scope for legitimate use of the Privacy Act by litigants without the requirement of having the Privacy Commissioner involved.