Duties of confidentiality and loyalty and fidelity

Breach of confidence

3.3   The equitable action for breach of confidence may be used to restrict the disclosure of information in certain circumstances. The principle is that the court will ‘restrain the publication of confidential information improperly or surreptitiously obtained or of information imparted in confidence which ought not to be divulged’.^[1]

3.4   An action for breach of confidence may be brought to restrain disclosure by a third party who has received confidential information. The information may have been communicated in breach of a duty of confidence,^[2] or may have come into the hands of the third party by human error.^[3]

3.5   While legal actions for breach of confidence most commonly relate to commercial or technical information held by private individuals and companies, the principles of breach of confidence can be applied to protect government information in some circumstances.^[4] However, different principles apply to restraining the disclosure of government information.

3.6   The leading case in this area is Commonwealth v Fairfax,^[5] in which the Commonwealth sought an injunction to prevent two Australian newspapers from publishing extracts from an upcoming book, Documents on Australian Defence and Foreign Policy 1968–1975.^[6] The extracts included parts of classified government documents concerning international treaties, foreign intelligence services and military bases. Early editions of the newspapers had been distributed before the publishers received notice of the interim injunction restraining publication.

3.7   The High Court held that the disclosure of confidential government information would only be restrained if disclosure would be ‘inimical to the public interest because national security, relations with foreign countries or the ordinary course of business of government will be prejudiced’.^[7] The test set out in Commonwealth v Fairfax involves balancing the public interest in knowing and discussing government actions with the need to protect confidentiality. As noted by Mason J:

it can scarcely be a relevant detriment to the government that publication of material concerning its actions will merely expose it to public discussion and criticism. It is unacceptable in our democratic society that there should be a restraint on the publication of information relating to government when the only vice of that information is that it enables the public to discuss, review and criticize government action.

Accordingly, the court will determine the government’s claim to confidentiality by reference to the public interest. Unless disclosure is likely to injure the public interest, it will not be protected.^[8]

3.8   In Commonwealth v Fairfax, the Court considered that the degree of embarrassment to Australia’s foreign relations that would flow from disclosure was not enough to justify protection of the information. The Court also took account of the fact that sales of the book had already been made, and some extracts already published, which meant that any detriment would not be avoided by the grant of an injunction.^[9]

3.9   The public interest test set out in Commonwealth v Fairfax places the burden on governments to justify the maintenance of the confidentiality of the information. The reason for this is the importance of freedom of communication and public discussion. As McHugh J explained in Attorney‑General (UK) v Heinemann Publishers Australia Pty Ltd:

governments act, or at all events are constitutionally required to act, in the public interest. Information is held, received and imparted by governments, their departments and agencies to further the public interest. Public and not private interest, therefore, must be the criterion by which Equity determines whether it will protect information which a government or governmental body claims is confidential.^[10]

3.10       Balancing the public interests in confidentiality, on the one hand, and freedom of information and discussion on the other, will lead to different results depending on the type of information under consideration. In Victoria v Nine Network, the Supreme Court of Victoria restrained the publication of information contained in documents inadvertently mislaid by the government agency responsible for the state’s prisons. The Court determined the ‘overwhelming public interest’ was to maintain the confidentiality of a patient profile and psychiatric information about a prisoner who had made allegations of sexual misconduct.^[11] However, the Court did not restrain the publication of other documents relating to investigation plans, the reports of investigations and general information about lock-up procedures where there were no questions about privacy or operational sensitivities.^[12]

3.11       A statutory duty of confidentiality may arise where legislation confers power on a person or agency to obtain information. In the case of Johns v Australian Securities Commission, the High Court held that a statute that confers a power to obtain information for a particular purpose limits, expressly or impliedly, the purposes for which that information can then be used or disclosed. As such, the person obtaining information in exercise of a statutory power must treat the information as confidential.^[13] Even though this duty of confidentiality is imposed by statute, the equitable remedy of injunction is available to enforce the duty against a public authority.^[14]

3.12       A duty of confidentiality akin to that which arises in private commercial contracts may also apply where government has a contractual relationship with a private provider of a government service (for example, a provider of an aged care service).^[15] An obligation of confidence may arise because of the circumstances in which the information is imparted or because of an express confidentiality clause in a contract.^[16]

Duty of loyalty and fidelity

3.13       The common law imposes a duty of loyalty and fidelity upon all employees. This duty arises from the contract of employment,^[17] but may also arise from a fiduciary obligation where the employee is in a special position of trust and confidence.^[18] In the context of confidential information, the duty of fidelity requires that an employee must not use information obtained in the course of his or her employment to the detriment of the employer.^[19]

3.14       In his report, Integrity in Government: Official Information, Paul Finn noted that the effect of the duty of fidelity on a public servant is more complicated than in the case of a private sector employee, as public servants have a duty to their employer as well as an overriding duty to the public at large.^[20] Finn noted that the formulation of the duty is necessarily imprecise because of the variety of issues to be considered before using government information, including:

the nature of the information and whether or not it is publicly available; the nature of the office held; the possible effects of allowing its use in the circumstances of its use; the actual or likely consequences of that use; and the public interests which might justify or deny the use.^[21]

3.15       Some years later, in Bennett v President, Human Rights and Equal Opportunity Commission,Finn J made a number of observations about whether a duty not to disclose information could be supported by a public servant’s duty of loyalty and fidelity. Finn J noted that the features of the duty were dependent on the facts in each case, and that public sector employees may have different demands placed upon them by virtue of their position.

The difficulty this creates … is that there is no significant Australian jurisprudence on how the duty is to be adapted to accommodate the distinctive demands of public service employment that result from the ‘special position’ … public servants enjoy. … This is not the place to essay the significance that ought to be given to the precepts of loyalty, neutrality and impartiality which are hallmarks of a public service in a system of responsible government and which have been relied upon in other jurisdictions (most notably Canada) in justifying the imposition of restrictions on public servants in exercising freedom of expression. … My only comment would be that to consider the duty … without regard to such precepts would involve a flight from reality.^[22]

3.16       Finn J referred to Canadian jurisprudence and particularly the conclusion of the Supreme Court of Canada in Fraser v Public Service Staff Relations Board.^[23]Mr Fraser was a public servant who was dismissed after making public comments critical of government policy. In deciding whether the dismissal was justified, the Supreme Court balanced the right of an individual, as a member of the Canadian community, to speak freely on issues of public importance against the duty of that individual, as a public servant, to fulfil his or her functions as an employee of the government.^[24]

3.17       The Court held that some comments by public servants were permitted and would be appropriate in circumstances where:

• the government was engaged in illegal acts;
• the government’s policies jeopardised the life, health or safety of persons; orthe comments had no impact on the ability of the employee to perform his or her duties.^[25]

3.18       However, the right to comment is not unqualified. Restrictions on the right of public servants to comment on government matters may be based on the level of seniority of the public servant, or participation in policy development or managerial decisions.^[26]

3.19       As Finn J noted in Bennett, there is little law on how the duty of fidelity applies to public servants in Australia. Because the Canadian principles have been developed in the context of a Charter of Human Rights that protects freedom of speech, they may not be readily applicable to the Australian context.