ASIC v Rich

[2002] NSWSC 198

CITATION:	ASIC v RICH [2002] NSWSC 198
CURRENT JURISDICTION:	Equity Division
FILE NUMBER(S):	SC 5934/01
HEARING DATE(S):	18/03/02
JUDGMENT DATE:	18 March 2002
PARTIES :	John Fairfax Publications Pty Limited and Nationwide News Pty Limited - Applicants John David Rich - Respondent Mrs Maxine Rich - by leave
JUDGMENT OF:	Barrett J

COUNSEL :	Mr K.P. Smark - Applicants Mr D.L. Williams - Respondent Mr C. Wood - Mrs Maxine Rich
SOLICITORS:	Richard Coleman - Applicants Ebsworth & Ebsworth - Respondent
CATCHWORDS:	PROCEDURE - access to court file by non-parties - application by media for access to amended statement of claim - one defendant objecting - defences neither filed nor due for filing - defendant proposes to put plaintiff's allegations to vigorous test - access at such point not required by principles of open justice - potential prejudice to defendant - access refused
CASES CITED:	Australian Securities and Investments Commission v Adler (2001) 39 ACSR 216 Australian Securities and Investments Commission v Rich (2001) 51 NSWLR 643 eisa Limited v Brady [2000] NSWSC 929 Hammond v Scheinberg (2001) 52 NSWLR 49 Home Office v Harman [1983] AC 280 Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 769 Stonham v Speaker of the Legislative Assembly of New South Wales (No 1) (1999) 90 IR 325
DECISION:	Application refused

- 9 -

IN THE SUPREME COURT REVISED
OF NEW SOUTH WALES
EQUITY DIVISION

BARRETT J

MONDAY 18 MARCH 2002

5934/01 - AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v JOHN DAVID RICH & ORS

JUDGMENT

1 On 11 March, the plaintiff, Australian Securities and Investments Commission, filed an amended statement of claim in these proceedings. Also on the same day, two journalists, Ms Hepworth and Mr Barry, lodged, through the court’s Public Information Officer, applications for access to that amended statement of claim. An application by another journalist, Mr McDougall, was received by the Public Information Officer the following morning. All three applications were in the form set out in Practice Note 97. Because I had dealt with certain interlocutory aspects of the proceedings in the Corporations List on 11 March, the applications by the journalists were referred to me. The Chief Justice subsequently nominated me as the judge to deal with them, as contemplated by Practice Note 97.

2 After causing notice to be given to the parties to the proceedings and to the three journalist applicants, I directed that the applications to be listed for mention last Thursday, 14 March. Mr Smark of counsel appeared on that occasion for John Fairfax Publications Pty Ltd Limited and Nationwide News Pty Ltd, the employers of the journalist applicants. Those two companies elected to pursue the matter in the place of their employees. The two companies, instead of the individual journalists, have since then been regarded as the applicants.

3 In the course of the mention on 14 March, it became clear that the applications were neither consented to nor opposed by the plaintiff, ASIC, and that one of the defendants, the first defendant, Mr Rich, opposed the grant of the access sought. The other defendants and ASIC were excused from further attendance. When the media companies’ applications came on for hearing this afternoon, leave to be heard was, by consent of the applicants and the first defendant, granted to Mrs Rich, the wife of the first defendant, who is herself a party to related proceedings.

4 There is one other preliminary matter I should mention. The applicants seek access to the amended statement of claim. One of the journalists’ requests for access suggested that access was previously granted by Austin J to the original statement of claim filed on 12 December 2001. That suggestion reflects a misunderstanding. No order granting leave to have access to any part of the content of this court file No. 5934/01 is recorded as having been made at any time. The suggestion to which I have referred very likely relates rather to the occasion in June 2001 when Austin J did grant leave for representatives of the media to have access to certain documents related to an earlier part of this general line of proceedings. His Honour’s decision in that respect is among those referred to by counsel. It will be mentioned further presently.

5 Pt. 65 r. 7 of the Supreme Court Rules demonstrates a clear expectation that the court will control access to documents in court files. It states that, subject to certain exceptions not here relevant:

“A person may not search in a registry for or inspect any document or thing in any proceedings without the leave of the Court.”

6 The considerations to be applied in deciding whether such leave should be granted are, to some extent, reflected in Practice Note 97 (9 March 1998, see (1998) 43 NSWLR 1) and are, in a more general sense, an aspect of the inherent jurisdiction of the court to control and superintend its own proceedings so as to protect and further the due administration of justice. Referring to items access to which is made unavailable by Pt. 65 r. 7 without the leave of the court, Practice Note 97 says, in its para 2:

“Access will normally be granted to non-parties in respect of:
(a) pleadings and judgments in proceedings that have been concluded, except in so far as an order has been made that they or portions of them be kept confidential;
(b) documents that record what was said or done in open court;
(c) material that was admitted into evidence; and
(d) information that would have been heard or seen by any person present in open court,
unless the judge or registrar dealing with the application considers that the material or portions of it should be kept confidential. Access to other material will not be allowed unless a registrar or judge is satisfied that exceptional circumstances exist.”

7 In terms of this specification, the amended statement of claim in this case, being a pleading in proceedings which have not concluded, is “other material” as referred to in the final sentence. The expectation exhibited by the practice note is therefore that some “exceptional” circumstance must be seen to warrant the grant of access.

8 Counsel who have appeared this afternoon - Mr Smark for the applicants, Mr Williams for the first defendant and Mr Wood for Mrs Rich - have referred me to the decided cases of relevance and to the principles emerging from those cases. The cases are Stonham v Speaker of the Legislative Assembly of New South Wales (No 1) (1999) 90 IR 325, Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 769, eisa Limited v Brady [2000] NSWSC 929, Australian Securities and Investments Commission v Rich (2001) 51 NSWLR 643, Australian Securities and Investments Commission v Adler (2001) 39 ACSR 216 and Hammond v Scheinberg (2001) 52 NSWLR 49.

9 The clear message from these cases is that decisions about access to documents in court files are to be determined first and foremost by reference to principles of open justice and the due administration of justice that require an appropriate measure of cooperation by the court with those sections of the media which seek to report proceedings before the court. Those principles focus most sharply on the situation where a trial has taken place or is at least in progress. The proceedings which must be open and to which access in the public interest must be guaranteed are proceedings that actually take place in court. It is in that context that the court has an undoubted and clear role to play in assisting the media to obtain a full and fair understanding of what has transpired so that informed reporting can occur without incomplete appreciation of source materials and in a way which enables the various matters which have come out in court, whether or not actually spoken aloud, to be understood in the full context of the case. The judgment of Hamilton J in Hammond v Scheinberg explains that role in a particularly useful way.

10 When it comes to the content of court files as they exist and develop through the succession of filings in the pre-trial phase, it is much more difficult to point to these undoubted principles of open justice as a basis for warranting access to documents. Pleadings can be and often are amended. The statement of claim in this case has already been amended once. A statement of claim or defence may be the subject of a strike out application. Affidavits may be filed but not ultimately read or relied upon. Parts of affidavits may be objected to as inadmissible and rejected. The court file, as it exists in a developing state after the initiating process is filed and before a hearing has begun, cannot be regarded as the equivalent of what will be presented in open court if and when the proceedings come to trial.

11 The present applications involve access to a court file which, apart from purely formal documents such as notices of appearance, contains only the statement of claim filed on 12 December 2001 and the amended statement of claim filed on 11 March 2002. The context is thus distinguishable immediately from that considered in by Einstein J in Idoport, by Austin J in ASIC v Rich and by Hamilton J in Hammond v Scheinberg. In each of those cases, the question at hand concerned access to documents that had been used and relied upon in a court hearing which had taken place or was in progress. Those cases thus involved in a clear and direct way the principles already mentioned concerning open justice in the course of court hearings.

12 The request here is for access to a pleading and, in particular, what one might call a naked and unadorned pleading in the form of an amended statement of claim containing the plaintiff’s version of relevant matters and the plaintiff’s allegations in an entirely untested and unchallenged form. None of the defendants has yet put on any defence. Nor is there any requirement that that step be taken for several more weeks. Significantly, counsel for the first defendant has made it very clear before me today that, according to his instructions, there will be in due course vigorous testing of the plaintiff’s allegations against his client.

13 None of the decided cases to which I have referred appears to have dealt with an application for access to court documents at an equivalent stage of a proceeding. In three of the cases, as I have already said, the documents sought had been used in a hearing which had concluded or was in progress. In a third case – Stonham – there had been interlocutory hearings and the documents were sought on the basis that, since part of those hearings had been conducted in camera and resultant suppression orders had later been lifted, access would restore the media group concerned to the position it would have occupied had the proceedings been in open court. In the remaining two cases – eisa Limited v Brady and ASIC v Adler - pleadings had been filed by both parties and were so well advanced that the competing positions of the parties were no doubt delineated in a reasonably clear way. This case is not yet even approaching such a point of definition of the competing contentions.

14 The judgment of Santow J in the eisa Limited case contains several observations which I consider to be instructive and of assistance in the present case. At para 18, his Honour said:

“It is at the trial that public and press will ordinarily have full and unfettered opportunity to be present and hear what is said, and where pleadings can be understood in their proper context. It may well then be possible to release a copy of the pleadings without danger of prematurity, though the circumstances need still to be considered.”

This is a reflection of the principle of open justice in relation to proceedings conducted in court to which I have already referred.

15 Later, at para 20, Santow J referred to the particular status, in a defamation context, possessed by documents made available by the court from its files as distinct from those made available by a party to an outsider. He described the basis on which a document filed in court proceedings attracts, in relation to its publication, a common law privilege from a defamation viewpoint which would not otherwise attach. That caused Santow J to say at para 20:

“Clearly if the court were thus to make available to the press prematurely affidavits or pleadings containing damaging allegations not read in court or sufficiently described in open court, this may severely and unfairly prejudice those the subject of these damaging allegations with no necessary redress in defamation.”

16 At para 21 of his judgment, Santow J referred to the principle in Home Office v Harman [1983] AC 280 to the effect that a party to proceedings who gains access to documents pursuant to a pre-trial process comes under an implied undertaking not to use them for a collateral purpose. The relevance of that consideration in a context such as the present was the subject of analysis by the Industrial Commission in Court Session (Wright, Walton and Hungerford JJ) in Stonham. That parties were subject to such an inhibition was taken as an indication that access by a non-party should not be allowed where the motivating purpose was one from which the relevant principles precluded parties themselves. Among these are “a purpose of furthering public debate” or so that the documents concerned may be “made a ground for comments in newspapers”. Publication to the world at large, even though motivated by a very proper desire to place in the public domain matters considered to be of genuine and general public interest, is thus a collateral purpose in which a party to litigation with access in the pre-trial phase to documents to which the Home Office v Harman principles apply may not engage; and so, by analogy, it should be regarded as a purpose which the court should not seek to facilitate or promote in addressing questions of access by non-parties to court files.

17 The approach to which I have just referred by reference to the Home Office v Harman analogy must be regarded as inflexible. The rules by which parties are bound in that area admit of a “special circumstances” exception and I have no doubt that an equivalent exception should be recognized in the analogous situation with which I am now dealing. Indeed, Practice Note 97 may be regarded as recognizing as much through its reference, in the part I have extracted, to “exceptional circumstances”.

18 In this case, it has not been shown that any “exceptional circumstances” exist. The applicants point to the reality that the proceedings involve a major corporate collapse in which many citizens have suffered losses and that questions of stewardship of and accountability for large amounts of public company funds will inevitably be explored. That is, no doubt, a relevant consideration when it comes to facilitation of media coverage but its relevance in that sense does not, in my judgment, make it an “exceptional circumstance” at this early stage of proceedings which are in the course of formation. It will come very much to the fore when the substantive action proceeds to a hearing. I do not see how the fundamental principles of open justice and access by the public to proceedings in this court will be enhanced or promoted by facilitation of media coverage of as yet untested allegations which have not been aired in court and may never be, at least in the form in which they now exist. On the other side of the coin, access by the media to those untested allegations at this point has a clear potential to cause serious prejudice to defendants who intend to put their countervailing contentions on to the record in due course.

19 The principle of prematurity referred to in the cases seems to me to apply here. It is too early for the requested access to be given. A time will no doubt come when it will be appropriate for the court to afford appropriate assistance through the grant of such access to pleadings as the media may reasonably seek. But that time has not yet arrived.

20 The appropriate outcome here in relation to the amended statement of claim is the outcome that emerged in relation to the documents considered in Stonham and eisa Limited v Brady, namely, that access should not be granted. In saying this, I must emphasise that the outcome is not a product of any a priori position. There is no room in cases of this kind for the operation of any presumption either way. Again, an observation of Santow J in eisa Limited v Brady is in point:

“Thus adopting a simple bright-line rule that access should always be allowed – or indeed never – in either case ignores that there are genuinely competing principles to be weighed. There is open justice, its processes made as accessible as possible through a properly informed Press reporting to the wider community and which seek to be contemporaneous. There is the need to avoid injustice and unfair prejudice in the trial from disclosure of serious and as yet untested or incompletely tested allegations, where prematurity of disclosure is at issue and where there is likely to be no redress in defamation, no matter how malicious the pleaded allegation. Neither principle has a priori ascendancy. Both are subordinated to the interests of justice in which the community is vitally concerned as well as the parties. These questions must therefore be tested, case by case, against that overriding purpose of the interests of justice.”

21 The applications ultimately prosecuted by the two companies, John Fairfax Publications Pty Ltd and Nationwide News Pty Ltd, being applications for access to the amended statement of claim filed in these proceedings on 11 March 2002, are dismissed.

[Counsel addressed on costs]

22 I see no reason why the normal rule that costs follow the event should not apply here. The two applicant companies must pay the costs of the first defendant of and incidental to the applications. No order is sought as to Mrs Rich’s costs and none is made.

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Last Modified: 03/20/2002