Guglielmin v Trescowthick (No 4)
[2006] FCA 1036
•10 AUGUST 2006
FEDERAL COURT OF AUSTRALIA
Guglielmin v Trescowthick (No 4) [2006] FCA 1036
PRACTICE AND PROCEDURE - suppression of material - allegation material would affect a party's capacity for fair trial of criminal proceedings - discretionary considerations
HELD - application for suppression orders refused
ELEANOR GUGLIELMIN v ADAM JOHN TRESCOWTHICK, JOHN MAURICE PATTEN, ROSS GRAHAM OAKLEY, ROBERT DAVID MATTINGLY, ROGER ANDREW CURTIS AND MARK CHARLES TRESCOWTHICK
SAD 153 OF 2002
MANSFIELD J
10 AUGUST 2006
ADELAIDE
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
SAD 153 OF 2002
BETWEEN:
ELEANOR GUGLIELMIN
ApplicantAND:
ADAM JOHN TRESCOWTHICK
First RespondentJOHN MAURICE PATTEN
Second RespondentROSS GRAHAM OAKLEY
Third RespondentROBERT DAVID MATTINGLY
Fourth RespondentROGER ANDREW CURTIS
Fifth RespondentMARK CHARLES TRESCOWTHICK
Sixth Respondent
JUDGE:
MANSFIELD J
DATE OF ORDER:
10 AUGUST 2006
WHERE MADE:
ADELAIDE
THE COURT ORDERS THAT:
1.The first respondent’s motion of 1 August 2006 is refused.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
SAD 153 OF 2002
BETWEEN:
ELEANOR GUGLIELMIN
ApplicantAND:
ADAM JOHN TRESCOWTHICK
First RespondentJOHN MAURICE PATTEN
Second RespondentROSS GRAHAM OAKLEY
Third RespondentROBERT DAVID MATTINGLY
Fourth RespondentROGER ANDREW CURTIS
Fifth RespondentMARK CHARLES TRESCOWTHICK
Sixth Respondent
JUDGE:
MANSFIELD J
DATE:
10 AUGUST 2006
PLACE:
ADELAIDE
REASONS FOR JUDGMENT
The first respondent seeks an order pursuant to s 33ZF of the Federal Court of Australia Act 1976 (Cth), or alternatively under the inherent power of the Court, that a letter proposed to be sent by the applicant’s solicitors to group members on 16 August 2006 be treated as confidential by group members and not disclosed to any other person save for the express purposes of obtaining legal or financial advice, or other necessary advice regarding settlement of the proceeding. Additionally, he seeks an order prohibiting the publication by any other person of the proposed letter or the contents of the proposed letter.
The proceeding is a representative proceeding under Pt IV(A) of the Act. The group members were originally defined as all persons or bodies corporate who acquired and held shares in Harris Scarfe Holdings Limited (Holdings) up to and including 3 April 2001. On 31 July 2002, the Court gave directions in relation to the ‘opt out’ procedure required by s 33J of the Act. On 18 April 2006, to identify those group members who had not opted out, and who remained positively interested in making claims, the Court ordered that those persons register with the solicitors for the applicant. Those who did not register would remain group members for the purposes of being bound by any outcome to the proceedings, but would not participate in any distribution of a settlement sum or damages.
The recent application is prompted by the insurer of the respondents, the directors of Holdings from time to time, having made an offer to the applicant to settle the representative proceeding. On the evidence, the offer has been made on a without prejudice basis, and without any admission of liability. The applicant now proposes by letter to inform the group members of her intention to accept the offer on behalf of the whole group, and of the steps which they may take to object to or to remove themselves from the effect of the settlement. I propose to make orders pursuant to ss 33X(5) and 33Y of the Act as to the means by which that notice should be given, and as to certain information required to be included within it.
The first respondent seeks the above orders in respect of the proposed letter, in essence to control the extent to which its contents may be disclosed. He does so on the basis that publication of the terms of the proposed settlement could prejudice a fair trial of criminal proceedings against him.
An application to prohibit the publication of his name or any reference to his former positions in Holdings or material identifying him as a respondent, made at an earlier point in time, was unsuccessful: see Guglielmin v Trescowthick (No 3) [2005] FCA 139. The circumstances relating to the criminal proceedings have now changed.
Criminal charges were laid against the first respondent on 28 May 2003 concerning conduct alleged against him in the management of Holdings, and in the events leading to its collapse. Criminal proceedings were also instituted against two other persons who were officers (but not directors) of Holdings. They are not the same criminal charges. One pleaded guilty to those criminal charges. The other pleaded not guilty. He has not been convicted, and it now appears that the Director of Public Prosecutions has announced that he intends not to proceed with that prosecution.
The criminal proceedings against the first respondent were first listed for hearing on 6 February 2006, but some months beforehand that date was vacated because of separate proceedings against another officer of Holdings. They were re-listed for hearing on 3 July 2006. In circumstances beyond the first respondent’s control, they were subsequently adjourned to 17 July 2006, and now to 7 May 2007, in the event that the Director of Public Prosecutions wishes to proceed with them in the light of further information which has been provided to him.
Senior counsel for the first respondent has pointed to significant media interest in this proceeding, and in the criminal proceeding. The Court’s attention has been drawn to two recent media publications touching on those matters: a report in The Advertiser of 31 May 2006 under the heading ‘Former Shareholders Offered Pay Out’, and a lengthy article in The Herald Sun of 22 July 2006 referring expressly to the first applicant, including his background and the effect upon him of his involvement with Holdings. The Advertiser article does not refer to the first respondent or any of the respondents by name. The evidence does not disclose any other media articles during 2006.
The proposed letter will be sent to some 4000 group members. It summarises the nature of the proceedings, including the respective positions taken by the respondents firmly denying any liability. It is submitted that it is capable of giving rise to certain wrongful inferences which, if it is generally available, might be drawn by potential jurors. I have had regard to the inferences which, it is submitted, might be drawn from the contents of the proposed letter. It is not necessary to repeat them. The proposed letter discloses that the offer has been made by the insurers of the respondents, and not by the respondents or any one of them individually. It records that the respondents have strongly resisted the application to date, and apparently intend to continue to do so. It sets out the amount of the offer, and how it is proposed to be applied. In context, the amount of the offer is unlikely to be seen as any acknowledgment on the part of the respondents of any liability in the proceedings, having regard to the information in the letter, including the estimates of the costs of continuing to conduct the proceedings.
Of course, different minds might reasonably infer different things from the terms of the letter. However, in my view, the proposed letter even if it becomes generally available is quite unlikely to lead any potential juror to the view that any of the respondents, including the first respondent, by themselves are acknowledging liability in these proceedings. More importantly, I do not think there is any real risk that a reasonable person could infer from the fact of settlement (or potential settlement) of this civil proceeding that any of the respondents, but in particular the first respondent, is thereby acknowledging having engaged in criminal conduct.
It is attributing to modern day juries far too unsophisticated a knowledge of the law that they could not distinguish between the resolution of a civil claim for damages on the one hand, from conduct which is alleged to involve criminal behaviour on the other. If there were any risk of such ingenuousness on the part of any juror, an appropriate direction from the trial judge could remove any such potential for confusion. In R v Glennon (1992) 173 CLR 592, Mason CJ and Toohey J said, at 603:
‘The possibility that a juror might acquire irrelevant and prejudicial information is inherent in a criminal trial. The law acknowledges the existence of that possibility but proceeds on the footing that the jury, acting in conformity with the instructions given to them by the trial judge, will render a true verdict in accordance with the evidence. As Toohey J observed in [Hinch v Attorney-General (Vic) (1987) 164 CLR 15], in the past too little weight may have been given to the capacity of jurors to assess critically what they see and hear and their ability to reach their decisions by reference to the evidence before them.’ (See also at 614-5, per Brennan J.)
I have also borne in mind the elapse of time which will occur between the publication of the letter, the hearing of the application to approve the proposed compromise (presently listed on 12 October 2006) and the proposed hearing date of the criminal proceedings: see Re an Application by ‘The Age’; R v Williams [2004] VSC 413 at [23]-[24] and the cases there cited. Whilst it is likely that the proposed letter will receive some media interest, as will any application to approve the proposed compromise, there will be an elapse of some six months or so between any such publicity and the proposed criminal hearing. As the amount of publicity in South Australia during 2006 indicates, the publicity is not likely to be prolonged. There does not appear to be the same interest, in the first respondent in particular, as there is in Victoria.
I have also borne in mind the public interest that justice should be administered in public except where the administration or the interests of justice make it desirable that there be departure from that ordinary principle. There are occasions where prejudice to the administration of justice by evidence or proceedings being generally available balances the scales against the provision of information. Confidential commercial information is an obvious example. Its disclosure might otherwise inhibit parties from seeking access to the justice system. The first respondent’s name and his association with the management of Holdings, with these proceedings, and with the criminal charges, are well known and, in the past, have attracted media publicity.
It would, in my view, be inappropriate for the Court to prohibit from publication the application to approve the proposed compromise, or the fact that the compromise has been approved (if it is). The first respondent’s contentions did not go so far as say that the fact of an order approving the compromise proposed (as distinct from its detailed terms) should be suppressed from publication. If, as the first respondent fears, the terms of settlement might adversely affect his entitlement to a fair trial because of the poisoning of minds of potential jurors, the speculation which might be drawn from the undisclosed terms of any approved settlement would, I suspect, have greater potential for the influence of potential jurors than an awareness of the terms of the proposed settlement.
I therefore do not propose to make the orders sought.
In those circumstances, it is not necessary to address in any detail the contentions that I have the powers to do so under s 33ZF of the Act (see discussion by Wilcox J in McMullin v ICI Australia Operations Pty Ltd (1988) 84 FCR 1 at 4) or under the inherent jurisdiction of the Court (see Llewellyn v Nine Network of Australia Pty Ltd [2006] FCA 836 at [12]).
I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice MANSFIELD. Associate:
Dated: 10 August 2006
Counsel for the Applicant: A Dal Cin with A Forte Solicitor for the Applicant: Duncan Basheer Hannon Counsel for the First Respondent: A Howard QC Solicitor for the First Respondent: Clayton Utz Counsel for the Second, Third, Fourth, Fifth & Sixth Respondents: The Second, Third, Fourth, Fifth & Sixth Respondents did not appear Date of Hearing: 9 August 2006 Date of Judgment: 10 August 2006
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