Lindholm, in the matter of Opes Prime Stockbroking Limited (Administrators appointed) (Receivers and Managers appointed) (No 2)
[2008] FCA 1578
•22 October 2008
FEDERAL COURT OF AUSTRALIA
Lindholm, in the matter of Opes Prime Stockbroking Limited (Administrators appointed) (Receivers and Managers appointed) (No 2) [2008] FCA 1578
PRACTICE AND PROCEDURE – names of applicants – whether appropriate to keep confidential – applicable principles
Federal Court of Australia Act 1976 (Cth) s 50
Harmon v Secretary of State for the Home Department [1983] 1 AC 280
Russell v Russell (1976) 134 CLR 495
Scott v Scott [1913] AC 417IN THE MATTER OF OPES PRIME STOCKBROKING LIMITED (Administrators appointed) (Receivers and Managers appointed) and LEVERAGED CAPITAL PTY LTD (Administrators appointed) (Receivers and Managers appointed)
JOHN ROSS LINDHOLM, ADRIAN LAWRENCE BROWN and PETER DAMIEN McCLUSKEY
VID 245 of 2008
FINKELSTEIN J
22 OCTOBER 2008
MELBOURNE
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VID 245 of 2008
IN THE MATTER OF OPES PRIME STOCKBROKING LIMITED (Administrators appointed) (Receivers and Managers appointed) and LEVERAGED CAPITAL PTY LTD (Administrators appointed) (Receivers and Managers appointed)
JOHN ROSS LINDHOLM, ADRIAN LAWRENCE BROWN AND PETER DAMIEN McCLUSKEY
Plaintiffs
JUDGE:
FINKELSTEIN J
DATE OF ORDER:
22 OCTOBER 2008
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1.On or before 4:00 pm on 5 November 2008 Sweeney Commercial file a copy of the document titled List of Current Members of the Class Being Sweeney Clients of Opes Prime with the names of the persons (whether natural or corporate) mentioned in paragraphs 15 and 16 of the affidavit of Geraldine Frances Sweeney sworn on 31 August 2008 redacted.
2.On or before 4:00 pm on 5 November 2008 Sweeney Commercial file a copy of the said affidavit of Geraldine Frances Sweeney with paragraphs 15 – 26 and 28 redacted.
3.The document titled List of Current Members of the Class Being Sweeney Clients of Opes Prime filed on 1 August 2008 and the affidavit of Geraldine Frances Sweeney filed on 1 September 2008 be marked confidential and shall not be available for inspection without leave of the Court.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VID 245 of 2008
IN THE MATTER OF OPES PRIME STOCKBROKING LIMITED (Administrators appointed) (Receivers and Managers appointed) and LEVERAGED CAPITAL PTY LTD (Administrators appointed) (Receivers and Managers appointed)
JOHN ROSS LINDHOLM, ADRIAN LAWRENCE BROWN AND PETER DAMIEN McCLUSKEY
Plaintiff
JUDGE:
FINKELSTEIN J
DATE:
22 OCTOBER 2008
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
Mr Sweeney QC applied on behalf of approximately 80 individuals and companies for leave to intervene in the hearing of an application by the administrators of Opes Prime Stockbrocking Limited (OPS) to resolve certain questions that had arisen in the administration. The questions concerned the rights of OPS’ clients. The persons for whom Mr Sweeney appeared were a number of those clients. Another group of OPS clients, represented by Mr Bennett, also sought leave to intervene.
At the time the leave applications were made there was a request that the names of the clients, which were contained in lists filed in court, be kept confidential. I acceded to the application because it was not opposed and on the basis that, in due course, evidence would be tendered to justify the continuation of the confidentiality order.
When the administrators’ application came on for hearing Mr Sweeney said that he appeared for only one person in his list, namely Dover Gardens Pty Ltd. I was told that the other clients on whose behalf leave had originally been sought no longer pressed their application to be heard. Nonetheless they still wanted their identity to be kept confidential. I temporarily extended the confidentiality order to allow time for an affidavit in support of the application to be filed.
In due course the affidavit was filed. It is sworn by the clients’ solicitor. The affidavit explains the grounds upon which the confidentiality order is sought. Before referring to those grounds, there is one point that should be corrected. In the affidavit the solicitor asserted that the list of the names of her clients “had not passed into evidence or been filed”. It is true that the list had not been tendered as part of the evidence. The names of intervening parties are not usually tendered in evidence. The position is that the list was handed up when leave was sought and it was then placed on the court file and marked “FILED IN COURT ON 1/8/08”. It is, therefore, part of the court record.
Returning to the affidavit, the solicitor deposed that most of her clients “are mum and dad retail sharemarket investors who have been traumatically affected by the collapse of Opes Prime”. She said that one client was so affected that he committed suicide. She noted that others had to sell their home and other investments and that any publicity of their names as OPS clients would cause further pressure on them financially. She claimed that publicity of her clients’ names would also affect their ability to maintain normal banking relationships and that their existing lenders would seek to recall the loans which they currently had. She also said that some of her clients had invested funds on behalf of family members “which has caused them intense grief and [a] sense of guilt”. She deposed to being very concerned about the mental wellbeing of some clients. She put it this way: “[i]t is impossible for me to know exactly the extent to which each client is at risk, the severity of that risk and the degree of individual anxiety which varies greatly in individuals from time to time”. Still, she said that in the case of some clients she held “a deep fear for their wellbeing … having noticed a deterioration in their ability to cope and wild fluctuations”. She deposed that some of her clients appeared to have lost interest in discussing any subject and that they had become depressed, very flat and lacklustre.
The solicitor then provided a good deal of personal information about the clients she regards as being the “most vulnerable”. I do not propose to go into the details of the affairs of each client, for nothing would be served by that course and it would no doubt embarrass many of them. Having considered all the concerns that are set out in the affidavit, I have come to the conclusion that I am justified in withholding only two names.
The starting point is the common law rule that civil actions must be heard in open court. The reason for the rule was explained in Scott v Scott [1913] AC 417 by Lord Shaw at 477:
Publicity is the very soul of justice. It is the keenest spur to exertion and the surest of all guards against improbity. It keeps the judge himself while trying under trial.” (Benthamiana, or Select Extracts from the Works of Jeremy Bentham (1843), p 115).
Although its purpose may have been to discipline the judiciary (or as Lord Diplock put it in Harmon v Secretary of State for the Home Department [1983] 1 AC 280, 303 “to keep the judges themselves up to the mark”) the rule has other equally important objects. Those objects were explained by Gibbs J in Russell v Russell (1976) 134 CLR 495, 520:
It is the ordinary rule of the Supreme Court, as of the other courts of the nation, that their proceedings shall be conducted “publicly and in open view”. This rule has the virtue that the proceedings of every court are fully exposed to public and professional scrutiny and criticism, without which abuses may flourish undetected. Further, the public administration of justice tends to maintain confidence in the integrity and independence of the courts. The fact that courts of law are held openly and not in secret is an essential aspect of their character. It distinguishes their activities from those of administrative officials, for “publicity is the authentic hall-mark of judicial as distinct from administrative procedure”. To require a court invariably to sit in closed court is to alter the nature of the court. (Citations omitted)
The rule is subject to exceptions. The example that is relevant here is found in s 50 of the Federal Court of Australia Act 1976 (Cth). That section provides that an order may be made “forbidding or restricting the publication of particular evidence, or the name of a party or witness, as appears to the Court to be necessary in order to prevent prejudice to the administration of justice or the security of the Commonwealth.”
In my view the interests of justice require the name of the person who committed suicide, as well as any other information in the list that would enable his identity to be discovered, to be kept confidential. I accept that it would be contrary to the interests of justice, and detrimental to the welfare of the members of the deceased’s family which include two young children, were they to read anything about their father and the circumstances of his death. Moreover, no public interest is served by disclosing his identity. The same is true of another client who is under such enormous stress that he is at risk.
As to the other clients, the solicitor makes out a good case for them to be shown sympathy. Many are suffering badly, both financially and otherwise, because of their failed investment in OPS. But that is not a sufficient basis for keeping secret the fact that they have made an application to a court.
The issue that troubles me is not so much whether I should keep their identity secret, but what to do with the affidavit filed in support of confidentiality order. It seems to me that the solicitor filed the affidavit in the mistaken belief that whatever the outcome of the application the contents of the affidavit would be kept confidential. Indeed in the affidavit the solicitor said that “[i]t [the affidavit] contains extremely confidential material and is filed and provided to the administrators, the receivers and the ANZ Bank on the basis that it is not to be disseminated”. Yet the affidavit has been filed and read. Nonetheless, I think, in fairness to all concerned, I should restrict access to those parts of the affidavit that contain specific information about an individual client.
Accordingly, I will make orders that will keep confidential the names of two persons who originally sought leave to appear as interveners and restrict access to certain parts of the affidavit.
I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. Associate:
Dated: 22 October 2008
Counsel for the Plaintiff: C Scerri QC
R D StrongSolicitor for the Plaintiff: Mallesons Stephen Jaques Counsel for the Persons Applying: M L Bennett Solicitor for the Persons Applying: Lavan Legal Counsel for ANZ Bank: P Crutchfield
O BigosSolicitor for ANZ Bank: Minter Ellison Counsel for the Receivers: E Woodward Solicitor for the Receivers: Deacons Counsel for Dover Gardens Pty Ltd: C A Sweeney QC
B A M ConnellSolicitor for Dover Gardens Pty Ltd: Sweeney Commercial
Date of Hearing: 18 August 2008 Date of Judgment: 22 October 2008
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