Justice Morrison seems clearly right to me when he holds in this case that the litigation privilege does not bar a claim for breach of contract when a party allegedly violates the confidentiality provisions of a settlement agreement in various submissions to a court.
Justice Morrison perhaps should also have mentioned that the litigation privilege is also not necessary to protect zealous advocacy in such situations because parties are always free -- regardless of any settlement agreement -- to seek a court order that permits them to disclose information made confidential under any agreement. You can't contract around such an order, as any such attempt would conflict with public policy. So parties that think that disclosure of confidential information is necessary to the proper resolution of an existing litigation are always free to advise the court of that fact and seek permission to disclose the necessary facts. If, instead, they elect simply to violate the conflidentiality agreement without obtaining such an order, absent any similar legal compulsion, they make such disclosures at their peril.