Breach of Confidence and the Compensatory Jurisdiction
The action for breach of confidence—an action designed, initially at least, to proÂtect ‘non-public’ information communicated in confidence from unauthorised use or disclosure—had its modern genesis in the first half of the nineteenth cenÂtury.
By the end of that century, in cases for the most part involving employers and employees, English courts showed considerable willingness to use the vehicle of implied contract to protect confidential communications. While recognising that equity had its own jurisdiction in the matter, which dated back to early in the century,[754] the attraction to contract was that the remedy of contractual damÂages was added to the relief available for breach of confidence.[755] The confident assumption in all of this—and it was articulated in twentieth-century cases— seems to have been that, statute apart, no compensatory remedy was otherwise available. Contract again was driving equity to the periphery of this body of law (save where an injunction was sought.)[756]Nonetheless, the equitable obligation re-emerged because of the need to protect confidences in the many situations where contract could not feasibly be implied. And in Australia at least, it was founded on ‘an obligation of conscience’.[757] It was in these cases that the explosion in equity cases began—in pre-contract dealings, cases involving third-party recipients of confidential information, industrial espiÂonage, personal relationships, dealings with government, etc.
To the extent that the cases raised the issue of compensation for a purely equiÂtable wrong, the initial assumption in England was that ‘ damages’ could only be awarded under the modern equivalent of Lord Cairns’ Act.[758] Though there were departures (usually unexplained) from this view,[759] it remained the orthodoxy for most of the twentieth century—hence the earlier quoted observations of Lord Goff in Attorney-General v Guardian Newspapers (No 2) regarding ‘a beneficient interpretation of...
Lord Cairns’ Act’.[760]By the mid-1970s though, alternate views were being expressed. In New Zealand, Sir Robin Cooke began to champion the view that compensatory damages were available for breach of equitable obligations generally. By the time of his decision in Aquaculture Corp v NZ Green Mussel Co Ltd in 1990, he could observe—albeit in terms unorthodox in Australia:
There is now a line of judgments in this Court accepting that monetary compensation (which can be labeled damages) may be awarded for breach of a duty of confidence or other duty deriving historically from equity; [citations omitted].. we think that the point should now be taken as settled in New Zealand. Whether the obligation of confiÂdence... should be classified as purely an equitable one is debatable, but we do not think that the question matters for any purpose material to this appeal. For all purposes now material, equity and common law are mingled or merged. The practicality of the matter is that in the circumstances of the dealings between the parties the law imposes a duty of confidence. For its breach a full range of remedies should be available as appropriate, no matter whether they originate in common law, equity or statute.[761]
For my own part, in light of cases such as Seager v Copydex Ltd[762]and Interfirm Comparison (Australia) Pty Ltd v Law Society of New South Wales,[763] each of which directed ‘an inquiry as to damages' for breach of the equitable duty of confidence, I proposed in 1978 that:
If justification be needed for [such cases]. no great violence to principle is wrought if they are regarded as modern developments in the compensatory jurisdiction of Equity which was so forcefully reaffirmed by Viscount Haldane. in Nocton v Ashburton.[764]
This development has come to pass in Australia and Canada. The position in England is less clear in relation to breach of confidence given the more ready acceptance of Lord Cairns' Act claims.
The authors of the second edition of Gurry on Breach of Confidence, published in 2012, for example, cite only one case as ‘suggesting that it is awarding equitable compensation'.[765]While there has been some flirtation with Lord Cairns' Act in Australia,[766] arguably incorrectly,[767] the equitable jurisdiction is now accepted and readily applied.[768] As Gummow J put it, the conferral of equitable jurisdiction on a court ‘ brings with it jurisdiction to grant relief by way of monetary compensation for breach of an equitable obligation, whether trust or confidence'.[769] For Canada, the Supreme Court of Canada put the matter beyond all doubt in Cadbury Schweppes Inc v FBI Food Ltd:[770] financial compensation can be awarded for breach of confidence without the need to show any fiduciary duty.
Given (i) the protean character of information (from the most intimately personal to the most valuable commercial or scientific secrets); (ii) the range of interests that may be affected by the manner, and the circumstances, of a breach of confidence; and (iii) the many tort analogues that, potentially, are suggested by the varying subject matter of breaches of confidence, it is unsurprising that the case law on how compensation is to be assessed in breach of confidence cases has not been reduced to settled and uncontroversial principles.
VII.