Australian Competition and Consumer Commission v Cascade Coal Pty Ltd (No 4)
[2018] FCA 1243
•20 August 2018
FEDERAL COURT OF AUSTRALIA
Australian Competition and Consumer Commission v Cascade Coal Pty Ltd (No 4) [2018] FCA 1243
File number: NSD 584 of 2015 Judge: FOSTER J Date of judgment: 20 August 2018 Catchwords: PRACTICE AND PROCEDURE – whether the Court should make an order pursuant to ss 37AE, 37AF and 37AG of the Federal Court of Australia Act 1976 (Cth) suppressing part of the Court’s Reasons for Judgment in support of a final order dismissing the whole of the present proceeding on the ground that such an order is necessary to prevent prejudice to the proper administration of justice Legislation: Federal Court of Australia Act 1976 (Cth), ss 37AE, 37AF and 37AG Cases cited: Australian Competition and Consumer Commission v Cascade Coal Pty Ltd (No 3) [2018] FCA 1019
Australian Competition and Consumer Commission v Cascade Coal Pty Ltd (No 1) (2015) 331 ALR 68
Australian Competition and Consumer Commission v Valve Corporation (No 5) [2016] FCA 741
Date of hearing: 10 August 2018 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Economic Regulator, Competition and Access Category: Catchwords Number of paragraphs: 50 Counsel for the Applicant: Mr MJ O’Meara on 13 July 2018 and Mr R Yezerski on 10 August 2018 Solicitor for the Applicant: Australian Government Solicitor Solicitor for the First, Tenth and Eleventh Respondents: Ms A Cameron of HWL Ebsworth Lawyers Solicitor for the Third Respondent: Mr W Reid of Ashurst Australia Solicitor for the Fifth and Ninth Respondents: Mr Torq Murray of Torq Murray Law Counsel for the Seventh Respondent: Mr A Chhabra Solicitor for the Seventh Respondent: Deutsch Partners Solicitor for the Second, Fourth, Sixth and Eighth Respondents: The Second, Fourth, Sixth and Eighth Respondents did not appear ORDERS
NSD 584 of 2015 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
Applicant
AND:
CASCADE COAL PTY LTD (ACN 119 180 620)
First Respondent
MINCORP INVESTMENTS PTY LIMITED (ACN 132 441 868)
Second RespondentLOYAL COAL PTY LTD (ACN 132 497 913) (and others named in the Schedule)
Third Respondent
JUDGE:
FOSTER J
DATE OF ORDER:
20 AUGUST 2018
THE COURT ORDERS THAT:
1.Copy letters from the Director of Public Prosecutions to Hanna Legal dated 23 July 2018 and 31 July 2018 respectively be marked as Exhibit A.
2.The seventh respondent (Moses Obeid) have leave to rely upon an Amended Interlocutory Application in accordance with the draft Amended Interlocutory Application dated 20 July 2018 furnished to the parties as an annexure to Written Submissions dated the same day and filed herein.
3.Any requirement that the said Amended Interlocutory Application be filed and served be dispensed with.
4.The Amended Interlocutory Application be dismissed.
5.There be no orders as to the costs of the Amended Interlocutory Application.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
FOSTER J:
On 6 July 2018, I dismissed the whole of this proceeding and made a costs order in favour of most of the respondents. On the same day, I made available to the parties my Reasons for Judgment for making the orders which I made on that day (see Australian Competition and Consumer Commission v Cascade Coal Pty Ltd (No 3) [2018] FCA 1019) (Reasons).
Immediately after I made available my Reasons to the parties, the legal representative of the seventh respondent (Moses Obeid) made an application that I make an order on an interim basis suppressing the whole of my Reasons in order to allow Moses Obeid and his legal representatives a reasonable opportunity to consider my Reasons with a view to making a decision as to whether Moses Obeid wished to apply for an order suppressing those Reasons, or part thereof, pending the determination of a criminal trial in which he is one of the accused and which is fixed for hearing in May 2019. The point of substance raised before me was that I may have made findings adverse to Mr Obeid which have the potential to prejudice his criminal trial.
Moses Obeid had filed an Interlocutory Application seeking a suppression order on 12 July 2018. That Interlocutory Application was supported by an affidavit sworn by Mr Obeid’s solicitor, Mr Abbas Soukie of Hanna Legal, on 11 July 2018.
When the matter was raised in Court, the legal representative of the Australian Competition and Consumer Commission (ACCC) submitted that, were I minded to make any suppression order, it should be for a short period of time in the first instance because there was a significant public interest in the full disclosure of my Reasons as soon as possible.
The lawyer who appeared on 6 July 2018 for the Cascade respondents did not oppose Moses Obeid’s application for a suppression order on an interim basis. There was no appearance on that day by the other Obeid respondents. The lawyer who appeared for the third respondent (Loyal Coal Pty Ltd) made no submission in respect of Moses Obeid’s application. The solicitor who appeared for the fifth and ninth respondents made no submission in respect of Moses Obeid’s application. Accordingly, I made an interim suppression order in respect of the whole of my Reasons in respect of the period up to and including 13 July 2018. I also made a number of timetabling orders designed to formalise Moses Obeid’s suppression order application and to ready that application for hearing.
When the matter came before me on 13 July 2018, Mr Chhabra of Counsel appeared on behalf of Moses Obeid. Mr O’Meara appeared on behalf of the ACCC. The remaining appearances were the same as they had been on 6 July 2018.
Counsel for the ACCC submitted that I should afford to Moses Obeid a further opportunity to refine the scope of his application because, so the submission went, the scope of the application as filed was too wide and was unlikely to succeed in that form. Counsel for Moses Obeid accepted that the ACCC’s proposal was a good idea. The other legal representatives who appeared on 13 July 2018 did not object to the course proposed by the ACCC.
Accordingly, on 13 July 2018, I made the following orders:
THE COURT ORDERS THAT:
1.Upon the application of the seventh respondent, Moses Edward Obeid, pursuant to s 37AF(1)(a) and s 37AG(1)(a) of the Federal Court of Australia Act 1976 (Cth), up to and including 10 August 2018, the contents of Reasons for Judgment given by Foster J on 6 July 2018 (Australian Competition and Consumer Commission v Cascade Coal Pty Ltd (No 3) [2018] FCA 1019), the contents of the affidavit of Abbas Soukie sworn on 11 July 2018 and filed herein on 12 July 2018 and the contents of any submissions filed and served pursuant to Order 2 below, not be published or disclosed to any person other than the parties to this proceeding and their legal representatives and the NSW Director of Public Prosecutions (DPP), the DPP’s officers, employees and legal representatives, and officers of the Independent Commission Against Corruption (NSW), who are professionally engaged in Matter No 2015/00212910 in the Supreme Court of NSW between the DPP and Moses Edward Obeid.
2.By 5.00 pm on 20 July 2018, the seventh respondent file and serve upon the parties to this proceeding and upon the DPP a Written Submission of no more than six (6) pages in which he sets out his arguments as to why Order 1 above should be extended beyond 10 August 2018 and in which he sets out a draft of the precise Order which he will seek at the hearing of the Interlocutory Application filed by him in this proceeding on 12 July 2018.
3.By 17 July 2018, the seventh respondent serve the DPP with a copy of the said Reasons for Judgment, a copy of the said Interlocutory Application, a copy of the said affidavit and a copy of these Orders.
4.Liberty be granted to all parties and to the DPP to apply on short notice.
5.The said Interlocutory Application be fixed for hearing at 10.15 am on 10 August 2018 before Foster J.
THE COURT NOTES THAT:
6.Order 1 above has been made on the ground that it is necessary to prevent prejudice to the proper administration of justice (as to which, see s 37AG(1)(a) of the Federal Court of Australia Act 1976 (Cth)).
Subsequently, on 20 July 2018, I amended Order 1 made in the Orders which I had made on 13 July 2018 in order to clarify that Counsel briefed for the Crown in the criminal trial of Moses Obeid were also permitted to read and consider my Reasons as well as the terms of Moses Obeid’s Interlocutory Application filed on 12 July 2018 and the contents of his solicitor’s affidavit, the contents of a Written Submission filed on his behalf on 20 July 2018 and the terms of a proposed Amended Interlocutory Application by which he further refined the scope of the suppression order which he was seeking. Attached to Moses Obeid’s Written Submission was a landscape document in which Moses Obeid specified with particularity the particular passages in my Reasons which he wished me to suppress. I have attached that document to these Reasons for Judgment as Attachment A.
On 10 August 2018, I heard oral submissions made on behalf of Mr Obeid in support of the relief which he was by then seeking and reserved my decision at the conclusion of that argument.
The other respondents maintained the position which they had adopted consistently from 6 July 2018.
The ACCC addressed me orally on 10 August 2018 but did not file any Written Submission. The ACCC confined itself to submitting that, because the matter calling for decision involved the exercise of a judicial discretion, the determination of Moses Obeid’s application was a matter for the Court, although the ACCC stressed that I would need to be satisfied that the usual position where Court proceedings are held in public and the Court’s judgments are published to the public ought not to apply in the present case having regard to the application of the relevant tests under ss 37AE, 37AF and 37AG of the Federal Court of Australia Act 1976 (Cth) (FCA Act).
I intend not to grant the relief sought by Moses Obeid in his Amended Interlocutory Application. These are my Reasons for coming to that conclusion.
BACKGROUND
At [1]–[22] of my Reasons, I explained the general structure of this proceeding and the essence of the ACCC’s claims against the various respondents. At those paragraphs, I said:
In the period from the late 1980s until about 2011, Edward Moses Obeid (Eddie Obeid) was a prominent politician in NSW. He was a member of the Legislative Council throughout the period from 1991 to 2011. He was a power broker in the Australian Labor Party who exercised significant influence in that Party at all times during those years.
Eddie Obeid has nine children—five sons and four daughters. Four of Eddie Obeid’s sons feature in the events which are the subject of this proceeding. Two of those sons, Moses Edward Obeid and Paul Edward Obeid, played a significant part in those events. Two other sons, Damien Edward Obeid and Gerard Edward Obeid, were also involved.
Members of the Obeid family conducted numerous business transactions together. Frequently, they deployed the following structure:
(a)A company would be used as the entity that would enter into the particular transaction. The directors and shareholders of that company would be associates of the Obeid family such as a family friend, an accountant, a lawyer or business adviser;
(b)The shareholders of the transacting company would hold the shares in that company on trust for one or more members of the Obeid family or their relatives, or on trust for other companies or trusts, the ultimate controllers and beneficiaries of which were one or more members of the Obeid family, their spouses or their relatives; and
(c)The directors of the transacting company would act on the instructions of one or more members of the Obeid family and for their benefit.
Business structures with the features which I have described at [3] above were used by the Obeid family in and in connection with the transactions which are under scrutiny in the present case.
An important object sought to be achieved by the Obeid family by the use of such structures was to conceal the involvement of the Obeid family in those transactions from all except those who necessarily needed to know of that involvement.
The conduct of Moses Obeid and Paul Obeid in 2008 and 2009 is at the heart of the present case.
In this proceeding, the applicant, the Australian Competition and Consumer Commission (ACCC), claims relief against eleven respondents. The first six named respondents are corporate entities and the remaining five respondents are individuals. The ACCC claims declarations against all respondents, civil penalties against all respondents, disqualification orders against the individual respondents and costs in respect of alleged contraventions of ss 45(2)(a)(i), 45(2)(b)(i) and 44ZZRK (in respect of cartel provisions where the purpose conditions in s 44ZZRD(3)(a)(iii) and in s 44ZZRD(3)(c) are satisfied) of the Competition and Consumer Act 2010 (Cth) (CCA) by the corporate respondents. The individual respondents are all alleged to be liable as accessories to the alleged contraventions by the corporate contraveners.
The alleged contravening conduct took place in early June 2009. For this reason, the Court must apply s 4D and s 45 of the CCA in the form in which those sections then stood. Since 2009, s 45 has been substantially amended and s 4D has been repealed (as to which, see Act No 114 of 2017). In addition, the Court must apply s 44ZZRD and s 44ZZRK in the form in which those sections stood in 2009. Those sections have been renumbered by Act No 114 of 2017. Finally, I note that the joint venture defence provided for in relation to certain contraventions of the CCA has been reformulated by Act No 114 of 2017. The applicable sections in 2009 were ss 4J, 76C and 44ZZRP.
The references to sections of the CCA in these Reasons for Judgment are to the applicable sections in the form in which they stood in June 2009.
These Reasons for Judgment address questions of liability only. That is, by these Reasons for Judgment, I determine whether any declaratory relief should be granted to the ACCC and, if so, the form of that relief. In the event that it is necessary to address the ACCC’s claims for civil penalties and disqualification orders, those claims will be dealt with at a later date.
The corporate respondents are:
1. Cascade Coal Pty Ltd (ACN 119 180 620) (Cascade);
2.Mincorp Investments Pty Limited (ACN 132 441 868) formerly called Voope Pty Limited (Voope);
3. Loyal Coal Pty Ltd (ACN 132 497 913) (Loyal Coal) formerly called Monaro Coal Pty Ltd (ACN 132 497 913) (Monaro Coal);
4. Locaway Pty. Limited (ACN 066 616 484) (Locaway);
5. Coal & Minerals Group Pty Ltd (ACN 144 641 092) (CMG); and
6. Southeast Investment Group Pty Limited (ACN 143 535 620) (Southeast).
The individual respondents are:
7. Moses Edward Obeid;
8. Paul Edward Obeid;
9. Richard Jonathan Poole;
10. John Vern McGuigan; and
11. James William McGuigan.
Relevantly, the alleged contraventions of s 45 of the CCA are based upon the proposition that certain provisions contained in two letter agreements signed on 5 June 2009 (one of which was varied on 6 June 2009) were exclusionary provisions (as to which, see ss 4D, 45(2)(a)(i) and 45(2)(b)(i) of the CCA). The s 44ZZRK contraventions are founded upon the proposition that the same two letter agreements contain cartel provisions (as to which see ss 44ZZRD(1)(a)(ii), 44ZZRD(3)(a)(iii) and 44ZZRD(3)(c)). In particular, the ACCC relies upon s 44ZZRD(3)(a)(iii) which relevantly provided that a provision of a contract, arrangement or understanding is a cartel provision if the provision has the purpose of directly or indirectly preventing, restricting or limiting the supply, or likely supply, of goods or services to persons or classes of persons by any or all of the parties to the contract, arrangement or understanding and if at least two of the parties to the contract, arrangement or understanding are or are likely to be, or, but for any contract, arrangement or understanding, would be or would be likely to be, in competition with each other in relation to the supply of those goods or services. The ACCC also relies upon s 44ZZRD(3)(c) which relevantly provided that the purpose condition in s 44ZZRD(1)(a)(ii) would be satisfied if the alleged cartel provision had the purpose of directly or indirectly ensuring that one of the statutorily stipulated outcomes in the nature of bid rigging was achieved in relation to requests for bids for the supply or acquisition of services. The ACCC alleges that certain of the corporate respondents were parties to the contract, arrangement or understanding which contained the alleged exclusionary provisions and cartel provisions and that all of the corporate respondents gave effect to those provisions. The ACCC alleges that the corporate respondents contravened s 44ZZRK of the CCA by giving effect to the cartel provisions contained in the arrangements made on 5 and 6 June 2009.
One letter agreement (the Buffalo Agreement) concerned the establishment of a coal mining venture in the Mt Penny coal exploration area in NSW. The entities expressly identified in that agreement as parties to the arrangements reflected therein were Cascade and Buffalo Resources Pty Limited (ACN 137 486 385) (Buffalo). The obligations of Buffalo under the arrangement recorded in the letter were expressed, at least in part, as obligations of Buffalo and “… its associates and related parties including Gardner Brook and Loyal Coal Pty Ltd”.
The other letter agreement (the Landowners Agreement) concerned the acquisition by Cascade of three rural properties located more or less above the likely mine site near Mt Penny (Cherrydale Park (Cherrydale), Donola and Coggan Creek). The entities expressly identified in that agreement as parties to the arrangements reflected therein were Cascade, United Pastoral Group Pty Limited (ACN 127 743 453) (UPG), Geble Pty Ltd (ACN 132 441 877) (Geble) and Justin Kennedy Lewis Pty Ltd (ACN 133 940 388) (JKL). As at 5 June 2009, Geble was already the registered proprietor of Donola and JKL was the purchaser under a Contract for the Sale of Coggan Creek which had not yet been completed. As at that date, Locaway, in its capacity as the trustee of the Moona Plains Family Trust, was still the registered proprietor of Cherrydale although steps were under way to replace it on the title to that property with UPG who was, by June 2009, the trustee of that Trust. UPG had changed its name to Rothshire Group Pty Limited on 27 September 2007 but that fact appears to have gone unnoticed by the Obeids when they began to involve UPG in the present matters in 2008.
The two letter agreements were interdependent.
The Buffalo Agreement was amended by a further letter agreement between Cascade and Buffalo on 6 June 2009 (the Buffalo Agreement Variation).
The respondents conveniently fall into four groups. At the commencement of the hearing before me, each of those groups was separately represented. The groups were:
• Cascade, John McGuigan and James McGuigan (the Cascade respondents);
• Locaway, Southeast, Moses Obeid and Paul Obeid (the Obeid respondents);
• Loyal Coal; and
• CMG and Poole (the CMG respondents).
James McGuigan is the son of John McGuigan. At all relevant times, John McGuigan was a director of Cascade.
At all material times, Poole was a director of Cascade and of CMG.
When the hearing commenced, Voope (the second respondent) was unrepresented. It had not filed an Address for Service nor had it ever been represented at any pre-trial directions hearing or case management hearing. It has never filed a Defence. For these reasons, on Day 2 of the hearing, Senior Counsel for the ACCC applied for an order pursuant to r 30.21(1)(b)(i) of the Federal Court Rules 2011 (FCR) that the hearing proceed generally against Voope notwithstanding its absence when this proceeding was called on for trial. I made that order on 5 April 2016. Thereafter, the ACCC’s case against Voope proceeded notwithstanding its absence.
On 29 March 2017, well after the trial had concluded, Deutsch Partners filed a Notice of Acting – Change of Lawyer in respect of Voope and the other Obeid respondents.
In these Reasons, I will generally refer to particular individuals by their surname alone. I mean no disrespect by taking that approach. The exceptions to this general approach are the Obeids and the McGuigans. For obvious reasons, it is necessary to refer to those persons by their Christian name as well as their surname.
Mr Obeid supported his suppression order application by reading and relying upon Mr Soukie’s affidavit. In the succeeding paragraphs, I will summarise the evidence in that affidavit.
On or about 17 July 2015, Moses Obeid, Edward Moses Obeid (Eddie Obeid) and Ian Macdonald were charged with criminal offences in respect of alleged corruption in relation to the grant in 2009 of a coal Exploration Licence (EL) in respect of the Mt Penny coal exploration area.
Moses Obeid was charged with “conspiracy to commit misconduct in public office” referable to his conduct in the period from 1 September 2007 to 9 January 2009. The short particulars specified in the Court Attendance Notice served upon Moses Obeid were as follows:
Between 1 September 2007 and 9 January 2009 at Sydney and elsewhere in the State of New South Wales, Moses Edward Obeid did conspire with Ian Michael Macdonald, Edward Moses Obeid and other persons that the said Ian Michael Macdonald, in the course of and connected to his public office as Minister for Mineral Resources, would wilfully misconduct himself by acting without impartiality and in breach of proper confidentiality in matters associated with the interests of the said Edward Moses Obeid, Moses Edward Obeid, other members of their family and associated interests, with the object of wrongfully enriching that family and those interests.
On 29 May 2017, Eddie Obeid and Moses Obeid were both committed to stand trial in the District Court of NSW on the charges laid against them. On 6 October 2017, the cases against the Obeids and Mr Macdonald were transferred to the Supreme Court of NSW and on that date Eddie Obeid and Moses Obeid were arraigned before that Court.
The trial of Moses Obeid and the other alleged conspirators is fixed to commence on 13 May 2019. The trial is to be a joint trial. As matters stand at present, the trial will be a jury trial although Moses Obeid has indicated an intention to apply for a Judge-only trial. In the event that such an application is successful, Counsel for Moses Obeid conceded before me that no part of my Reasons should be suppressed.
Each of the accused has pleaded not guilty to the offence with which he is charged.
The Crown case against Eddie Obeid and Moses Obeid is circumstantial in nature and relies principally on meetings, telephone call charge records, conversations between the alleged co-conspirators and the Obeids’ alleged access to confidential information. An integral aspect of the Crown case is the allegation that Mr Macdonald misused his official position as Minister for Mineral Resources in order to provide Eddie Obeid and Moses Obeid with confidential information from the Department of Primary Industries. It is also alleged that the Obeids influenced the Expression of Interest (EOI) process in respect of Mt Penny so as to place Eddie Obeid, Moses Obeid and others in the Obeid family in an advantageous position in that EOI process.
At par 14 in his affidavit, Mr Soukie said that he was of the view that certain aspects of my Reasons, including factual findings made by me, will prejudice the preparation and conduct of the upcoming criminal prosecution.
Mr Soukie went on to demonstrate with some specificity that there was some considerable overlap between the case run by the ACCC in front of me, both in terms of the issues and the facts, and the case likely to be run by the prosecution at the criminal trial next year.
In order to make good that general proposition, Mr Soukie annexed a witness statement signed by Mr Brook for use in an inquiry before the NSW Independent Commission Against Corruption (ICAC) dated 20 August 2013. He also annexed a number of the more important documents tendered in evidence before me. Finally, he annexed a copy of the Crown Case Statement prepared by the Crown in respect of the criminal trial.
I do not need to refer to this material in any detail as I readily accept that there is a very considerable overlap between the subject matter of the proceeding before me and the subject matter of the upcoming criminal trial.
When the matter was before me on 13 July 2018, I ordered Moses Obeid to serve upon the Director of Public Prosecution (DPP) a copy of my Reasons, a copy of his Amended Interlocutory Application, a copy of Mr Soukie’s affidavit and a copy of any Written Submission filed by him. I intended that the DPP be apprised of Mr Obeid’s suppression order application and that the DPP be given a fair opportunity to come to Court to make such submissions as he may be advised in respect of that application.
The DPP did not come to Court. However, there was tendered before me a copy of two letters from the DPP to Mr Soukie, one dated 23 July 2018 and the other dated 31 July 2018 in which the solicitor for the DPP stated the DPP’s attitude to the present application.
In the first of those letters, the DPP acknowledged receipt of all of the documents which I had ordered should be served upon him. On p 2 of her letter, the Solicitor for Public Prosecutions said the following:
Crown position
The Crown declines to join in your application, as the trial is many months away and the jury would be given clear and specific directions not to undertake its own research.
On 10 August 2018:
(a)if Foster J asks for this Office’s position on the matter, we expect you to convey that we do not join in the application, and the reasons why, as stated immediately above; and
(b)please inform the Crown of the outcome of the Interlocutory Application so that the Crown can ensure it complies with any orders made.
In the DPP’s second letter, his solicitor said the following (omitting formal parts):
Re:R - v- EDWARD OBEID, MOSES OBEID and IAN MACDONALD (OPERATION JASPER)
Court Nos. 2015/214251, 2015/212851 and 2015/212910
CASES No. 201403264Listed 12 October 2018 for mention at Sydney Supreme Court
I refer to your letters dated 11 July and 31 July 2018 inviting the Crown, as a model litigant, to join in Mr Moses Obeid’s application for suppression and non-publication orders in respect of certain aspects of the recently handed down Reasons for Judgment of Foster J in ACCC v Cascade Coal Pty Ltd (No 3) [2018] FCA 1019.
As a model litigant, the Crown adheres to the principle of open justice wherever possible. The Crown is of the view that, in the prevailing circumstances, there is no significant risk that the integrity of your client’s trial will be compromised in the event that his application is unsuccessful. The pre-trial applications and the trial are many months away, and any jury will be given clear and specific directions not to undertake its own research.
I reiterate the requests in the final paragraph of my letter dated 23 July 2018.
The position of the DPP as made known to me was that there was no significant risk that the integrity of the upcoming criminal trial would be compromised in the event that my Reasons are published in full.
CONSIDERATION
The Relevant Principles
Section 37AE and s 37AF of the FCA Act are in the following terms:
37AE Safeguarding public interest in open justice
In deciding whether to make a suppression order or non‑publication order, the Court must take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice.
37AF Power to make orders
(1)The Court may, by making a suppression order or non‑publication order on grounds permitted by this Part, prohibit or restrict the publication or other disclosure of:
(a)information tending to reveal the identity of or otherwise concerning any party to or witness in a proceeding before the Court or any person who is related to or otherwise associated with any party to or witness in a proceeding before the Court; or
(b) information that relates to a proceeding before the Court and is:
(i)information that comprises evidence or information about evidence; or
(ii)information obtained by the process of discovery; or
(iii)information produced under a subpoena; or
(iv)information lodged with or filed in the Court.
(2)The Court may make such orders as it thinks appropriate to give effect to an order under subsection (1).
In s 37AG, the legislature specified the grounds upon which a suppression order or non-publication order might be made. In s 37AG(1)(a)–(d), four such grounds are set out. In the present case, Moses Obeid relies upon the ground specified in s 37AG(1)(a). That subsection provides that a suppression order or non-publication order may be made if the order is necessary to prevent prejudice to the proper administration of justice.
Section 37AG(2) provides that a suppression order or non-publication order must specify the ground or grounds upon which the order is made.
In Australian Competition and Consumer Commission v Cascade Coal Pty Ltd (No 1) (2015) 331 ALR 68 at 73–74 [28]–[30], I said:
In Hogan v Australian Crime Commission (2010) 240 CLR 651; 267 ALR 12; [2010] HCA 21 at [30] , the High Court said, in respect of the use of the word “necessary” in s 50 of the FCA Act, the predecessor to Pt VAA that it is “a strong word”. The Court observed that the collocation of necessity to prevent prejudice to the administration of justice and the necessity to prevent prejudice to the security of the Commonwealth suggests that the Parliament is not dealing with trivialities. The Court went on to hold that:
“the administration of justice” spoken of in s 50 is that involved in the exercise by the Federal Court of the judicial power of the Commonwealth; this is a more specific discipline than broader notions of the public interest.
The Court continued at [31]–[33] as follows:
It is insufficient that the making or continuation of an order under s 50 appears to the Federal Court to be convenient, reasonable or sensible, or to serve some notion of the public interest, still less that, as the result of some “balancing exercise”, the order appears to have one or more of those characteristics (A statement by Fullerton J to like effect, with respect to the powers of the Supreme Court of New South Wales, was approved by Hodgson JA (Hislop and Latham JJ concurring) in Attorney-General (NSW) v Nationwide News Pty Ltd (2007) 73 NSWLR 635; [2007] NSWCCA 307 at [31]).
If it appears to the Federal Court, on the one hand, to be necessary to make a particular order forbidding or restricting the publication of particular evidence or the name of a party or witness, in order to prevent either species of prejudice identified in s 50, or, on the other hand, that that necessity no longer supports the continuation of such an order, then the power of the Federal Court under s 50 is enlivened. The appearance of the requisite necessity (or supervening cessation of it) having been demonstrated, the Court is to implement its conclusion by making or vacating the order. The expression in s 50 “may … make such order” is to be understood in this sense.
It may tend to distract attention from the particular terms of s 50 to describe the Federal Court as embarking upon the exercise of a “discretion” when entertaining an application under s 50 ( Dwyer v Calco Timbers Pty Ltd (2008) 234 CLR 124; 244 ALR 257; [2008] HCA 13 at [40] ). Once the Court has reached the requisite stage of satisfaction, it would be a misreading of s 50 to treat it as empowering the Court nevertheless to refuse to make the order, or to leave in operation the now impugned order. It would, for example, be an odd construction of s 50 which supported the refusal of an order under s 50 notwithstanding that it appeared to the Court to be necessary to make an order to prevent prejudice to the security of the Commonwealth.
The threshold which a suppression order applicant must satisfy is high. Mere embarrassment, inconvenience, annoyance or unreasonable or groundless fears will not suffice.
In Australian Competition and Consumer Commission v Valve Corporation (No 5) [2016] FCA 741, Edelman J, when sitting as a Judge of this Court and in determining an application pursuant to s 37AF of the FCA Act that certain answers to interrogatories be suppressed, said the following at [8]–[9]:
The onus of persuading the Court to make an order which restricts publication of evidence has been described as “a very heavy one” (see Computer Interchange Pty Ltd v Microsoft Corp [1999] FCA 198; (1999) 88 FCR 438, 442 [16] (Madgwick J)). The order must be necessary to prevent prejudice to the administration of justice, not merely that it is desirable to address a potential prejudice to the administration of justice. In Hogan v Australian Crime Commission (664 [30]) the joint judgment of the High Court emphasised that “‘necessary’ is a strong word”. Justice Perram has explained that “[m]ere embarrassment or annoyance will not suffice”: Australian Competition and Consumer Commission v Air New Zealand Ltd (No 12) [2013] FCA 533 [7].
Valve asserts that there is prejudice to the proper administration of justice due to its claimed confidentiality in relation to the information in each of the categories outlined above. It is important to draw a distinction between information which is not public and information which is truly confidential. The mere fact that information relevant to a proceeding is not in the public domain will rarely be a sufficient basis to suppress its publication. The interest in confidential information can be different if the disclosure of that information could “become a vehicle for advantaging or prejudicing trade rivals”: Australian Competition & Consumer Commission v Origin Energy Electricity Ltd [2015] FCA 278 [148] (Katzmann J); Australian Competition and Consumer Commission v Cement Australia Pty Ltd (No 2) [2010] FCA 1082 [23] (Greenwood J); see also Yara Australia Pty Ltd v Burrup Holdings Limited (No 2) [2010] FCA 1304 [25] (Barker J).
His Honour dismissed the application before him, primarily upon the ground that it had been made prematurely. In support of that conclusion, at [21]–[22], his Honour said:
Even apart from these doubts there is another fundamental obstacle for Valve. Any assessment of any prejudice to the administration of justice will require consideration of the interest in transparency and open justice. Section 37AE of the Federal Court of Australia Act provides that in deciding whether to make a suppression order or non-publication order, the Court must take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice. Each of the matters over which Valve seeks confidentiality orders may be matters which are relevant to the assessment of remedies including pecuniary penalties.
Further, s 37AJ(2) of the Federal Court of Australia Act also requires that the order should operate for no longer than is reasonably necessary to achieve the purpose for which it is made. It might be open to doubt, for instance, whether it is necessary to maintain a suppression of the publication of Valve’s financial information, including in any reasons for decision which are given, even for the year 2015 beyond, say, 2017 or 2018. The extent and importance of each of these matters can only be properly assessed in light of the evidence and written submissions at the remedies hearing.
Decision
As mentioned at [9] above, in his current suppression order application, Moses Obeid seeks a suppression order in relation to the specific paragraphs of my Reasons identified in the landscape annexure to his Written Submission (Attachment A to these Reasons).
It is apparent from Exhibit A in the present application that the DPP does not consider that there is any significant risk of prejudice to Moses Obeid’s upcoming criminal trial.
Moses Obeid submitted otherwise. He submitted that:
(a)All but one of the paragraphs sought to be suppressed contain factual findings made by me. Those findings are the same findings which the Crown will ask the jury to make in the upcoming criminal trial. The one paragraph sought to be suppressed which does not contain factual findings is a positive credibility assessment of Mr Brook. Mr Brook will be a crucial witness in the Crown case against Moses Obeid at his criminal trial. The Obeids are expected to challenge his credibility at that trial.
(b)If the paragraphs which are sought to be suppressed are allowed into the public domain, there is a risk of displacing the jury’s function at the upcoming criminal trial. There is an appreciable risk that members of the jury may simply adopt my conclusions, the substance of which is inevitably going to be reported widely in the media. Any such displacement would amount to an irreparable prejudice to Moses Obeid by depriving him of a fair trial presided over by an independent and impartial jury.
(c)There are four categories of matter which are sought to be suppressed. These are:
(i)Moses Obeid possessed confidential information that belonged to the NSW Department of Primary Industries. He obtained that information by unlawful means. This gave the Obeids an undisclosed advantage in the EOI process for the allocation of a coal EL for the Mt Penny coal exploration area.
(ii)Moses Obeid and members of the Obeid family sought to conceal their involvement in the relevant transactions thus manifesting a consciousness of guilt.
(iii)The purpose for which Moses Obeid met with Mr Brook.
(iv)The relationship between Moses Obeid and Mr Brook and the circumstances in which Mr Brook was encouraged to meet with the Directors of Monaro Mining NL, in particular, in relation to the withdrawal by that corporation from the EOI process for Mt Penny.
(v)My finding that, generally speaking, Mr Brook was a credible witness.
(d)There is a very substantial overlap between the findings made by me in my Reasons and the findings which the Crown will ask the jury to make in order to underpin a verdict of guilty in the criminal trial.
(e)The fact that a Judge has already made the very same findings which the Crown will seek at the criminal trial is likely to influence the members of the jury to accept the Crown case. This creates a real risk of an unfair trial. The only fair remedy, in the circumstances, is to suppress the material from my Reasons identified in Attachment A to these Reasons.
There is no doubt that many of the facts and issues traversed in my Reasons were also covered in ICAC’s report into the relevant events. No part of that report has been suppressed or kept from the public nor has any of the evidentiary material underpinning that report been kept from the public. However, Moses Obeid submitted that there is a significant difference between findings made by ICAC and findings made by this Court.
In addition to reporting on the proceedings at ICAC, several journalists have written pieces in respect of alleged corruption by the Obeids and Mr Macdonald in respect of the award of the coal EL for Mt Penny.
Moses Obeid argued that the scope of the present application is narrow, the extent of the content captured is slight and the order is sought on an interim basis only. It was submitted on his behalf that, for these reasons, the public interest in open justice (see, in particular, s 37AE of the FCA Act) is infringed only to a minimal degree and for a limited period. It was also argued on his behalf that, were the relevant portions temporarily excised from the judgment, it will continue to read sensibly and be comprehensible to the public.
Moses Obeid also contended that the likely prejudice could not be ameliorated by appropriate directions to the jury. He argued that the directions would not be a “panacea”. This proposition was said to be supported by the common practice in criminal matters for judgments on pre-trial applications and on the voir dire and judgments of the NSW Court of Criminal Appeal in relation to the subject matter of a particular trial, not to be made publicly available or to be made available on a restricted basis only.
It seems to me that I am required to commence my consideration of the present application by paying due regard to the terms of s 37AE. That section requires me to take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice. That requirement does not inevitably lead to a rejection of applications of the present kind. Nonetheless, the Court is obliged to take into account that the public interest in open justice is a primary objective of the administration of justice.
Next, the power of the Court to suppress information or to make an order prohibiting publication thereof or to make an order restricting the publication or other disclosure thereof is specified in s 37AF of the FCA Act. That section specifies the subject matter which may be covered by such an order and gives the Court power to make such order as it thinks appropriate in order to give effect to an order under s 37AF(1).
The grounds for making such an order are specified in s 37AG.
As noted at [32] and [34]–[36] above, when a suppression order applicant relies only upon the ground specified in s 37AG(1)(a) of the FCA Act, the Court must be satisfied that the making of the order is “necessary” to prevent prejudice to the proper administration of justice. As indicated at [13] above, I am not satisfied that the making of the order sought is necessary to prevent prejudice to the proper administration of justice.
I have reached that conclusion for the following reasons:
(a)The DPP has expressed the opinion and submitted to me that there is no significant risk that the upcoming trial of Moses Obeid will be prejudiced by the publication of my Reasons with the consequence that there is no significant risk that his trial will be unfair.
(b)The subject matter of my Reasons has been extensively canvassed in the public domain by journalists reporting on both the evidence given before ICAC and the findings made by ICAC and by journalists reporting on the conduct of the Obeids generally in relation to their involvement in the Mt Penny transaction. All of that material came into the public domain some years ago and remains accessible to searches made by members of the public, including members of the jury in due course. That position will not change. No doubt it can be ameliorated to a large extent by the presiding Judge at the criminal trial giving an appropriate direction to the jury.
(c)The criminal trial is still approximately ten months away. Consciousness on the part of members of the public of my Reasons is likely to have dimmed significantly by May 2019, although I accept, as I must, that the Reasons will be available to members of the jury, subject to any appropriate direction being given by the presiding Judge, by searching the Internet.
(d)The particular matters referred to in the submissions made on behalf of Moses Obeid (as to which, see [39]–[43] above) are all matters which explicitly form part of the Crown case at the criminal trial. It may be that the Crown arguments at the trial will be enhanced in some way by the circumstance that a Judge of this Court has made findings substantially in the terms of the findings sought by the Crown in the criminal trial. However, my Reasons are not admissible at the criminal trial to prove the truth of the matters which I have found and the way in which the jury should deal with my Reasons can and should be the subject of a specific direction given to the jury by the presiding Judge at the criminal trial.
(e)In particular, the jury will no doubt be directed to ignore any credibility findings found by me.
(f)My judgment of 6 July 2018 is now under appeal. Irrespective of whether the appeal has been heard and determined at the time of the criminal trial, the fact that there is an appeal under way and the progress made towards hearing and/or determining that appeal may be matters which should be the subject of a specific direction given to the jury.
COSTS
The ACCC did not actively oppose Moses Obeid’s suppression order application. Nor did any of the other respondents. In those circumstances, I do not think that I should make any order for costs in favour of the ACCC or in favour of any of the other respondents in relation to Moses Obeid’s suppression order application.
There will be orders accordingly.
I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster. Associate:
Dated: 20 August 2018
SCHEDULE OF PARTIES
NSD 584 of 2015 Respondents
Fourth Respondent:
LOCAWAY PTY. LIMITED (ACN 066 616 484)
Fifth Respondent:
COAL & MINERALS GROUP PTY LTD (ACN 144 641 092)
Sixth Respondent:
SOUTHEAST INVESTMENT GROUP PTY LIMITED (ACN 143 535 620)
Seventh Respondent:
MOSES EDWARD OBEID
Eighth Respondent:
PAUL EDWARD OBEID
Ninth Respondent:
RICHARD JONATHAN POOLE
Tenth Respondent:
JOHN VERN MCGUIGAN
Eleventh Respondent:
JAMES WILLIAM MCGUIGAN
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