Are confidentiality clauses worth the paper they are written on?
Between parties of good will they are unnecessary. Between parties of ill will their enforcement is usually fraught. The genie secret can escape the confidentiality bottle too easily and, once loose, can seldom be ordered by any court entirely back into that bottle.
Dr Geoffrey Edelsten was reminded of this last week when he scored a dubious victory in Norman South Pty Ltd and Geoffrey Edelsten v da Silva  VSC 477.
Australia’s most famous struck off GP ‘met’ the young, female defendant, Ms da Silva, at www.sugardaddyforme.com . (Go on — have a peek at a very strange world which promotes itself as “a dating site that promises you the man – and the bank account – of your dreams!”) Our star-crossed litigants then met in person, in Florida, one weekend in March this year.
Money subsequently changed hands. On the Edelsten version, that money was a $5000 loan from his company (the first plaintiff) to the defendant. He said the loan was governed by a written agreement which included a wide-reaching confidentiality clause.
Ms da Silva admitted receiving the $5000 but initially told the court it was a gift. Later in the trial she characterised the payment as a loan without any confidentiality obligations attaching to it. She said certain emails in evidence that appeared to contradict her were forgeries.
In a contest between two extremely unimpressive witnesses Edelsten was preferred to Ms da Silva.
What else transpired between the pair? We will probably never know because Ms da Silva is now injuncted from, among other things, persisting with the disclosures she had started making to a Herald Sun reporter.
It was those disclosures which apparently prompted Edelsten to seek a cocktail of orders against da Silva including for repayment of the $5000 loan, damages, injunctions to prevent further disclosures and a non-publication order under s 18(1)(c) of the Supreme Court Act in respect of the entire proceeding.
Edelsten succeeded on the loan claim and the injunctions (because of the confidentiality clause rather than breach of confidence principles) he failed to get damages and he got only a partial non-publication order.
Most successful litigants enjoy public vindication but Edelsten would probably have appreciated private vindication more.
Instead Justice David Beach suppressed “information derived from the proceeding that would disclose or further disclose the substance of any dealings” between the two main players but expressly exempted his 14 page judgment from that order.
Hence the judge’s scathing assessment of the main witnesses’ testimony can be shared with the world. Here (minus the footnotes) are some highlights from a stinging judgment:
1 A little over 23 years ago, Brooking J commenced a judgment with the statement “Titus Oates was the greatest perjurer that ever lived”. Self-evidently, his Honour was not the trial judge in the present proceeding.
9 …. one of the problems with this proceeding was that in respect of a significant number of the emails, each side had different versions of the relevant email. Each side accused the other of fraud. Specifically, each party made accusations that various emails passing between them had been fraudulently altered.
15 ….most of the evidence given by the defendant was demonstrably false and could not be believed.
16 However, Dr Edelsten was no more an impressive witness than Ms da Silva. The evidence disclosed that in his dealings with Ms da Silva he lied to her on a number of occasions. Further, much of Dr Edelsten’s evidence was simply unbelievable when one had regard to the whole of the evidence. Specifically, Dr Edelsten’s evidence as to being largely (if not wholly) motivated by altruism or charity in his dealings with the … defendant must be rejected. Additionally, much of Dr Edelsten’s evidence (and particularly the evidence I have referred to in this paragraph) is inherently unlikely when one looks at the written record of the communications passing between him and the defendant.
17 While, in some circumstances, and depending upon the demeanour of the particular witness (or other relevant matters), inherently unlikely evidence might nevertheless be accepted, 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 (and to which I have referred) in the face of the more likely true position as disclosed in the emails tendered on his behalf. Specifically, the way in which Dr Edelsten gave evidence was unsatisfactory. On a number of occasions, there were inappropriately long pauses before an answer was given to a straightforward question that should have been capable of a ready answer. From time to time, Dr Edelsten appeared to be contemplating which of a selection of answers might prove least embarrassing or least destructive to his case. Further, Dr Edelsten’s willingness to deny seeing the contents of some attachments to a particular email from the defendant did not assist his credibility. Finally, in respect of too many matters in cross-examination, Dr Edelsten was content, all too readily, to say that he could not recall the matter inquired of, before having to, somewhat grudgingly, acknowledge its existence when taken to a specific email.
18 In summary, I found both Dr Edelsten and Ms da Silva to be unsatisfactory witnesses. Both were prepared to mislead me in respect of any matter that they thought they could get away with. Each was prepared to be truthful only if it did not otherwise embarrass them or harm their case. The one piece of evidence that could confidently be accepted from each of them is when each of them said that, in respect of certain matters, the other was being untruthful. That said, there was the occasional vignette of truth. Further, in fairness to Dr Edelsten and in the context of this case, it might be said that it was at least to his credit that he did not falsify any of the relevant documents.
40 In my view, it is necessary, so as not to prejudice the administration of justice, to make a non-publication order prohibiting the publication of any part of this proceeding that would disclose or further disclose the substance of the dealings to date between the second plaintiff and the defendant, including any emails, text messages or any other form of communication passing between them. However, I should say for the sake of completeness that such a non-publication order does not prevent the publication of this judgment.