To tell or not to tell – Part 3: Balancing confidentiality and statutory reporting obligations for serious offending 

What you need to know

In New South Wales (unlike every other Australian State and Territory), there is a positive obligation to report serious indictable offences that have a connection to New South Wales, with criminal consequences for failing to do so, found in section 316(1) of the Crimes Act 1900 (NSW).

When it comes to disclosures under that section:

• The public interest in the administration of criminal justice takes primacy over contractual confidentiality obligations or privacy obligations.
• A contractual confidentiality obligation that hinders or prevents the provision of information to the NSW police in accordance with section 316(1) will be contrary to public policy and may be read down or not enforced by the Courts. That includes contractual provisions which impose a burden to report any such information to an employer before disclosure to the authorities.
• Section 316(1) is not just concerned with reporting definitive proof of a serious indictable offence. Information with an arguably low probative value is captured by the section.

Contractual obligations and section 316(1)

In an earlier update, we set out some of the potential risks associated with disclosure of information in the context of section 316(1), and discussed common carve-outs in contracts for compelled disclosures, or disclosures necessary to assist law enforcement, which can mitigate those risks.

The Supreme Court of New South Wales's decision in Wood v Secretary of the Department of Transport [2021] NSWSC 1248 offers some further practical guidance as to the application of section 316(1).

In that case, Mr Wood had gained certain information about the accused while conducting two internal investigations about the accused's conduct at work. Mr Wood's employment contract prohibited disclosure of confidential information obtained during the course of his work, other than to the extent required for the performance of his duties.

Mr Wood saw a news report about the accused being charged with murder. He provided Crimestoppers with information about the accused that he had obtained during the internal investigations, and informed his manager that he had done so. He was later summarily dismissed for misconduct, for divulging confidential personal information relating to a former employee, obtained in the course of his work. Mr Wood sued his employer for unlawfully terminating his employment.

The confidentiality provisions in Mr Wood's employment contract included provisions requiring notification, if possible, to the employer of an intention to disclose the relevant information to a third party so that the employer had a reasonable opportunity to protect confidentiality; and requiring that the third party be notified that the information was confidential. In its decision, the Court rejected arguments by Mr Wood's employer that these provisions empowered it to direct Mr Wood not to make the disclosure; or that the disclosure Mr Wood made was inconsistent with his duties or a breach of contract.

In particular, the Court held:

• (after reiterating the well known concepts that contractual obligations are subject to and overridden by the duty for people and corporations to comply with legislation, and may be read down as unenforceable or illegal and void where they are against public policy), that the public interest in the disclosure of a serious indictable offence will always outweigh the public interest in the preservation of confidential information;
• contractual clauses requiring that information be kept confidential are not capable of providing a reasonable excuse for that information being withheld from police (or other relevant authorities) for the purposes of section 316(1);
• employers and employees cannot contract out of the requirements of section 316, and provisions purporting to do so (or purporting to have that effect) will be contrary to public policy and either read down or not enforced;
• Mr Wood had a legal obligation under section 316 to disclose the information, because he believed that the accused had committed a serious indictable offence and that he had information that may be of material assistance in the conviction of the offender. It was irrelevant that he did not know whether the information established the offence, or that he did not know the existence of the legal elements of section 316. The provisions of his employment contract were not a reasonable excuse to avoid bringing the information to the attention of the police;
• restrictions in the Privacy and Personal Protection Act 1988 (NSW) about disclosure of personal information did not apply in the circumstances (being the lawful disclosure of information about criminal activity to a law enforcement agency);
• there was not a basis to summarily dismiss Mr Wood for disclosure of the information to the police.

The obligation to report applies broadly

The reporting obligations in section 316(1) are broad. The Court's decision in Wood provides further helpful guidance as to the practical application of the section 316(1) requirements:

1. The requisite belief can be arrived at based on a mix of knowledge, suspicion, opinions and conclusions

As articulated in Part 1 of this series, the case law has set a particularly low bar as to the types of circumstances which may enliven the section 316(1) reporting obligations.

In Wood, the Court explained that the requisite "belief" in the context of section 316(1) can be understood as:

"a state of mind which can be reached as the result of a mix of knowledge which an offender has come to possess, as well as
suspicions and opinions which he or she has come to hold and conclusions which he or she has reached".

Practically speaking, someone may be taken to 'believe' a serious indictable offence has been committed and therefore enliven section 316(1), based only on a suspicion or conclusion they have reached, without actual proof.

2. The law does not require that the information reported proves the offence at a trial

Section 316(1) captures information which is tangential to a serious indictable offence. It is not necessary that the information prove or establish the serious indictable offence in question at a criminal trial.

It is enough if that information leads NSW police to relevant lines of enquiry about the serious indictable offence. It is also enough if the information could have been admitted at trial as circumstantial, tendency or coincidence evidence in respect of the serious indictable offence in question.

3. Limits on what constitutes a 'reasonable excuse'

As discussed in one of our earlier updates, there are limited circumstances which may constitute a "reasonable excuse" for not making a disclosure otherwise required by section 316(1).

Wood makes clear that it is not open for people or corporations to withhold information based on:

• second guessing what would happen at a criminal trial with the disclosed information. For example, not reporting under section 316(1) by forming the view that it is unlikely that the information would be admissible at a criminal trial; or
• assessing that a criminal trial of the offender is unlikely.

This further emphasises the low bar for disclosures under section 316(1), by illustrating that disclosure can be required even where the information in question is of a perceived lower quality or probative value.

Author: Rani John, Partner; Belinda Prior, Senior Associate; Tim Hardwick, Senior Associate; and Jacqui Turner, Associate.