Fielding, J.A. v Vagrand P/L (In provisional liquidation)

[1993] FCA 604

40 4 93

JUDGMENT No. ........ ........ .. I .,,,.,,.,...

IN THh FEDERAL COURT OF AUSTRALIA	1
NEW SOUTI-I WALES DISTRICT REGISTRY	) No NG 385 of 1992
1
GENERAL DIVISION	1

BETWEEN:	JOHN ARTHUR FIELDING &
ANOR  I .

Applicants

m:  VAGRAND PTY LIMITED (IN PROVISIONAL LIQUIDATION) &

r

/ .

Respondents I

Q@l~l: Davies J.

Date:	28 July 1993
Place:	Sydney

- 3 SEP 1993

' EoEmlan!mOF

-

REASONS FOR JUDGMENT

EX TEMPORE

In thls application, the applicants seek disclosure of documents contained in a

instituted by the Australian Securities Commission under the provisions of s.1292 of the	Liquidators Disciplinary Board for the cancellation of the registration of Mr Moffitt as	Corporations Law, for the Commission has applied to the Companies Audltors and
an auditor. I have been informed that the subject matter of those proceedings substantially mirror the subject matter of these current proceedings.

I I

supplementary list of documents given by the defendant, Rlchard Neville Moffitt and his	I !-
!
partner, trading as Thompson Douglas & Co. The documents sought have general	:
relevance for the purpose of the discovery of documents, for these proceedings allege
i ,
i_.
negligence on the part of Mr Moffitt in relation to certain accounts and in relation to a	L

Part A statement which was issued to the public. There are also proceedings on foot [ - ;

The documents, the discovery of which is sought, comprlse the application lodged

by the Commission wth the Companies Audltors and Liquidators Disciplinary Board, the

statement of facts and contentions which the Commission lodged with the Board in accordance with the procedures which the Board has established, and evidence lodged by the Commisslon with the Board in support of that statement of facts and contentions.

Accordingly, the documents all emanated from the Commission and they were supplied

by the Commission to the Board and by the Board to Mr Moffitt.

There are a number of provisions of the Australian Securities Commisslon Act 1989 (Cth) ("the ASC Act") which provide for confidentiality and specify the circumstances in which the Commission may release information in relation to such documents. Sections 127 and 127A deal generally with the subject of confidentiality,

secrecy and disclosure and s.25 empowers the Commission to release to certain persons engaged in the proceedings, copies of the written record of examinations undertaken by the Commisslon. In fact, in the present case, it appears that the statements of witnesses have been released by the Commission to the applicants pursuant to s.25.

The primary document which the applicants now seek to obtaln from discovery

is the report of an expert which, it is claimed, resulted in the making of allegations of

default of duty on the part of Mr Moffitt. The expert has not been examined upon the

report, so that s.25 does not apply. The applicants now seek access to that material, not because it is clalmed that it would provide any material which is admissible as evidence in the current proceedings, but because it would point to avenues of investigation and

might bring to the attention of the applicants matters which may otherwise be overlooked. Moreover, an affidavit by Mr S J Blanks, solicitor for the applicants, states that it is thought that the production for inspection of the subject documents would result In a significant time and cost saving for the applicants in the preparation of their expert's

report.

In my opinion, the material which was conveyed by the Commission to the Board

is covered by s.213(1) of the ASC Act which provides, inter a1ia:-

"rile Disciplinary Board shall lakc all reasonable measures to protect from unauthorised use or

disclosure information given to n m cnnfidcnce or in conneclion with the performance of its

It seems clear to me that the obligation of confidentiality imposed by s.213 covers

material communicated by the Commission to the Board. As a general rule, the

- Act requires that hearings of the Board are to be conducted in private, wlth the

implication that the proceedings before the Board are private, with the further

implication that the material that is given to the Board is given in confidence. That being

the case, the Board itself would have no power to d~sclose the subject material, for it was

passed from the Commission to the Board and to the second respondents in the course

of confidential and private proceedings. It is in that context that the second respondents claim the privilege of public interest immunity, which claim is, of course, available to them.

It seems to me that the main interest wh~ch the public has in relation to this type

of matter is that the confidentiality provisions of the ASC Act should be given their full effect. That means, in my opinion, that s.l27A(2) of the ASC Act should apply in this case. The subject documents are those of the Commission and s.l27(A)(2)(c) provldes that nothing in s.l27(A)(l) will preclude the production of a document or the disclosure of information to any person to whom, in the opinion of the Commission, it is in the public interest that the document be produced or the information be disclosed. The

Commission is thereby empowered to form an opinion and to decide whether or not to

disclose the material on the basis of that opinion.

It was submitted that in this matter the Commission has formed such an opinion, but in my view, the letter sent by the Commission merely stating that it has no objection to the disclosure does not amount to the formation of the relevant opinion. I make no comment with regard to the case should the Commission be subpoenaed to give evidence and should it form the view that it is in the public interest that this report be produced to the applicants. However, it seems to me that these documents were issued in the course of confidential and private proceedings, in respect of which, strict provisions as to confidentiality are applied.

Accordingly, it seems to me that the matter of disclosure ought to be dealt with

in the ordinary process such that if, in the opinion of the Australian Securities

Commission it is in the public interest that the document be disclosed, then the

Commission can disclose it. The Court ought not to interfere in respect of a matter of

which it is possessed of very little information, in order to reach a conclusion as to whether there is an overriding public interest in the disclosure of the material which, at the most, seems to be material the production of wh~ch m~ght save tune or give rise to

lines of inquiry. The subject material does not go to the primary facts and its disclosure

will not el~cit informat~on whlch it is intended ~ 1 1 1 be put into evidence in this Court. In

my opin~on, the matter should be dealt w~th on the basls of the opinions of the experts

who are selected by the parties for the purposes of t h ~ s case.

Having regard to the issue the purpose of this application, I would not be

prepared to find that there was any overriding public interest in the disclosure of the

material whlch is greater than the interest in protecting the confidentiality of the disciplinary proceedings. I should emphasise that nothing that I say is intended to

influence the opinion of the Comm~ssion	should it form the mew that it is in the public
interest that the documents be produced.

For these reasons I am of the view that I should not make an order requiring

disclosure of the documents.

I certiQ that this and the 4 preceding pages

are a true copy of the reasons for judgment hereln of

the Honourable Mr Justice Davies.

Date: 28 July 1993