Napier v Treasury Wine Estates Ltd
[2020] VSC 765
•17 November 2020
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
GROUP PROCEEDINGS LIST
S ECI 2020 01983
| STEVEN NAPIER | Plaintiff/First Defendant to Counterclaim |
| and | |
| MAURICE BLACKBURN PTY LTD | Second Defendant to Counterclaim |
| v | |
| TREASURY WINE ESTATES LIMITED (ACN 004 373 862) | Defendant/Plaintiff by Counterclaim |
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JUDGE: | Nichols J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 15 May 2020, 3 September 2020 |
DATE OF RULING: | 17 November 2020 |
CASE MAY BE CITED AS: | Napier v Treasury Wine Estates Ltd |
MEDIUM NEUTRAL CITATION: | [2020] VSC 765 |
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PRACTICE AND PROCEDURE – Suppression orders – Confidentiality orders – Parties seeking suppression orders over information inadvertently disclosed in open court – Common law principle of open justice – Whether orders necessary to prevent a real and substantial risk of prejudice to the proper administration of justice – Open Courts Act 2013 (Vic), ss 3, 17, 18, 20.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff/Defendants to Counterclaim | Mr J Sheahan QC Mr G Donnellan Mr R Yezerski | Maurice Blackburn |
| For the Defendant/Plaintiff by Counterclaim | Mr M Garner Mr G Kozminsky | Herbert Smith Freehills |
| For Ms Caulfield and Mr Bolza | Self-represented | |
| For Mr Donnellan | Ms R Francois | Moray & Agnew |
HER HONOUR:
Steven Napier issued a proceeding in May 2020 alleging on behalf of a group of shareholders in the defendant (Treasury), that Treasury had breached obligations imposed on it by s 674(2) of the Corporations Act 2001 (Cth) to make continuous disclosure of certain price-sensitive information, and had engaged in related misleading or deceptive conduct. By orders made in October 2020 Mr Napier’s proceeding was consolidated with an overlapping group proceeding issued by Brett Stallard.[1] I shall refer to the Napier proceeding and the consolidated action as the principal proceeding, in order to distinguish it from a distinct application and claim concerning the use of confidential information in the principal proceeding, with which this ruling is concerned.
[1]Stallard v Treasury Wine Estates Ltd; Napier v Treasury Wine Estates Ltd [2020] VSC 679.
Very shortly after the principal proceeding was commenced by Mr Napier, Treasury sought urgent relief restraining the use by Napier and his lawyers (Maurice Blackburn) of what it said was information confidential to it. The information was said to have been reproduced or described and disclosed in Napier’s statement of claim. In material filed in support of its application Treasury said (in summary) that:
(a) It had released a presentation which had embedded within it Treasury’s confidential information, which Treasury had not intended to disclose;
(b) The information was not visible, apparent or readily accessible on the face of the presentation and was not in the public domain;
(c) The information was inadvertently embedded in the presentation;
(d) Napier and certain of its lawyers became aware of the confidential information and used it in formulating Napier’s statement of claim, in circumstances where they were aware or ought to have been aware that the information was confidential and that Treasury had not intended to disclose it and accordingly, were subject to a duty of confidence in respect of the information. By using and disclosing the information they breached that duty and, unless restrained, would continue to breach it.
By its summons of 13 May 2020 Treasury sought orders striking out parts of the statement of claim and restraining lawyers or experts retained by Napier who had knowledge of the information from continuing to act in the proceeding, for delivery up of the information and, until further order, an injunction restraining Napier and his lawyers and agents from using or disclosing the information (the 13 May Summons).
The issue with which this ruling is concerned is Treasury’s application for suppression orders arising out of the hearing of its summons, which were made initially on an interim basis. It is necessary to set out some parts of the procedural history of the proceeding to provide context for the present issue.
Treasury’s 13 May summons was returned on that day and was opposed. Napier and Maurice Blackburn submitted that the information was not confidential and that they were under no obligation of confidence and as such were entitled to use the information in pleading and prosecuting the claim. After some argument the parties agreed on the terms of orders to be made on an interim basis. Napier and Maurice Blackburn did not concede generally that the information was confidential or imparted in circumstances imposing an obligation of confidence, but conceded that for the purposes of interim relief, there was a serious question to be tried on the issue of confidentiality. I made orders by consent accordingly and put in place a timetable for the matter to return for determination as soon as it could be ready.
A representative of Lawyerly, an online news publication, attended the hearing on 13 May 2020 and later that day Lawyerly published an article authored by Miklos Bolza entitled “Maurice Blackburn ‘stumbled’ on confidential info in Treasury Wine class action” (the Lawyerly Article). The article provided an account of the 13 May hearing, reporting submissions made by senior counsel for each of the parties which identified the source of the allegedly confidential information, and how Maurice Blackburn accessed it. The following day Treasury filed an urgent summons seeking orders requiring Lawyerly to take down the article and to restrain its further publication, on the basis that while the article did not itself disclose the information its contents would enable an interested reader to locate the information and access it. Treasury also sought that the transcript of the 13 May hearing be redacted so as to remove references to statements that identified the source and means of access to the information and an order restraining publication of the information contained in those parts of the transcript.
The hearing of the 14 May summons was conducted on 15 May 2020 in closed court pursuant to s 28(2) of the Open Courts Act 2013 (Vic) (the Open Courts Act). I was satisfied, for reasons given on that day, that in the circumstances the administration of justice required the displacement of the principle of open justice,[2] as hearing the matter in open court posed a significant risk that the substantive relief sought by Treasury would be rendered nugatory, in that it would be necessary for counsel and the Court to discuss the information the subject of the claim and it would be impracticable to do that by attempting to speak in veiled terms.
[2]AMI Australia Holdings Pty Ltd v Fairfax Media Publications Pty Ltd [2009] NSWSC 1290, [4] (Brereton J); see generally, The Chairperson of the Royal Commission into the Management of Police Informants v Chief Commissioner of Victoria Police [2019] VSCA 154, [13] and HT v R (2019) 374 ALR 216, 228-9 [43]-[46] (Kiefel CJ, Bell and Keane JJ) and 239 [85] (Gordon J).
Ms Caulfield, a journalist and editor at Lawyerly, appeared and indicated for Lawyerly that it consented to the orders sought. Lawyerly had, by the time of the hearing, taken down the article, and the only matter in issue (apart from the transcript) was the question of re-publication of the article or relevantly, the offending parts of it. Napier and Maurice Blackburn did not oppose the application on the proviso that the orders were to be made on an interim basis pending the determination of the 13 May summons.
On 15 May 2020, I made orders:
(a) restraining the publication of the information in four paragraphs of the Lawyerly Article, until the determination of the 13 May 2020 summons or until further order;
(b) for the redaction of parts of the transcript of the hearing on 13 May 2020, limited to 21 lines of the transcript, until the determination of the 13 May 2020 summons or until further order;
(c) restraining the publication of the information in the redacted parts of the transcript, until the determination of the 13 May 2020 summons or until further orders,
(the 15 May orders).
I made orders (a) and (c) pursuant to s 20 of the Open Courts Act which permits a court to make a proceeding suppression order on an interim basis without determining the merits of the application under s 18 of the Act.
Treasury submitted that the Open Courts Act had no application to the redaction of a transcript of a court hearing.[3] As I indicated at the hearing, I was satisfied that there was a proper basis on which to make the orders for transcript redaction.
[3]Cargill Australia Ltd v Viterra Malt Pty Ltd (No 23) (2019) 58 VR 611, 619-621 [44]-[56] (Elliott J).
On 18 May 2020, I made orders granting Treasury leave to file a counterclaim with respect to the confidentiality issues, and listing the hearing of the 13 May summons for 16 June 2020. By its counterclaim of 20 May 2020 Treasury sought both interlocutory and final injunctions restraining Napier and Maurice Blackburn from using or disclosing the confidential information (the counterclaim).
The 15 May orders were made in the expectation that Treasury’s substantive claim in respect of confidentiality, which was shortly thereafter made the subject of its counterclaim, would and could be heard as soon as the parties could marshal their material. However, events occurred in the principal proceeding, and in relation to the counterclaim, that practically precluded that course.
On 10 June 2020, Treasury issued a summons seeking to stay the principal proceeding on the grounds of alleged breaches by Maurice Blackburn of the obligation defined in Hearne v Street,[4] arising out of use of material discovered and pleaded in an earlier proceeding issued in the Federal Court against Treasury (Jones v Treasury Wine Estates Limited (the Jones Proceeding)), in which Maurice Blackburn had acted.
[4](2008) 235 CLR 125.
A defence to the counterclaim was filed on 15 June 2020, alleging, among other things, that even if the information was otherwise confidential and received in circumstances imparting an obligation of confidence, confidentiality could not be maintained because the information disclosed the existence of a real likelihood of an iniquity (a civil wrong or misdeed of public importance) namely the alleged contravention by Treasury of s 674(2) of the Corporations Act, and that disclosure was in the public interest. [5] The “iniquity” defence thus raised some of the same substantive factual and legal issues raised in the principal proceeding.
[5]See for example, AG Australia Holdings Ltd v Burton (2002) 58 NSWLR 464, 518-523 [192]-[210] (Campbell J).
On 22 June 2020 Treasury issued a further summons seeking to stay the defences of Napier and Maurice Blackburn, to its counterclaim.
The parties submitted, and I agreed, that the issues raised by that summons necessitated the vacation of the hearing of the 13 May summons until the Hearne v Street stay applications were determined, given that by those applications Treasury sought to stay the entire principal proceeding. Napier and Maurice Blackburn then promptly issued an application for relief in the Federal Court in the Jones Proceeding, by which they sought declarations that no obligation of the kind described in Hearne v Street applied with respect to the relevant information disclosed therein, and in the alternative, orders releasing them from any such obligation and granting them leave to use the information.
On 6 August 2020, Foster J of the Federal Court determined that there had been no breach of such an obligation by Maurice Blackburn and in any event, that they were discharged from any such obligation.[6] That decision is currently the subject of an appeal, yet to be heard by the Full Court of the Federal Court.
[6]Jones v Treasury Wine Estates Ltd (No 4) (2020) 146 ACSR 302, 326 [103]-[104] (Foster J).
Following the ruling in the Jones proceeding the parties endeavoured to resolve the separate confidentiality issue in this proceeding. Napier and Maurice Blackburn agreed (with some presently immaterial exceptions) not to rely upon those parts of the statement of claim that were alleged to be founded upon the confidential information, and to assemble a new legal team whose members were not privy to the impugned information. The parties agreed that Treasury’s 13 May 2020 summons and its counterclaim should be adjourned sine die and determined after the determination of the principal proceeding. I made orders to that effect on 3 September 2020. The interim orders restraining use and disclosure of the confidential information remain in place subject to certain carve-outs, and are intended to so remain, until the conclusion of the substantive proceeding. The partial resolution of this issue in that way was eminently sensible and, among other things, avoided the forensic and procedural complexities, and the prospect of satellite litigation, that were likely to arise had it been necessary to determine the counterclaim and the defence to that claim, raising as it did issues that were also the subject of the principal proceeding.
In the meantime, on 10 August 2020, I heard and later granted an application by Napier and Maurice Blackburn and Brett Stallard, the plaintiff in an overlapping group proceeding and his solicitors, Slater & Gordon, to consolidate those proceedings and allow the law firms to appear jointly on the record.[7] I made related orders for the filing of a consolidated statement of claim by 20 November 2020.
[7]Stallard v Treasury Wine Estates Ltd; Napier v Treasury Wine Estates Ltd [2020] VSC 679.
It is apparent from the history recited above, that the pending substantive application concerning Treasury’s confidential information that was expected to be determined imminently at the time at which the 15 May orders were made, will now not be heard for a considerable period of time.
Where an interim order is made under s 20 of the Open Courts Act it is required that the substantive application be determined as a matter of urgency.[8] That cannot occur in the circumstances described. It is therefore necessary to vacate those orders.
[8]Open Courts Act 2013 (Vic), s 20(4).
The question is therefore whether orders can and should otherwise be made in respect of the material the subject of the 15 May 2020 orders (parts of the Lawyerly Article and parts of the transcript of the hearing on 13 May 2020). Treasury submitted that the material it relied upon in support of the 15 May orders, and materials subsequently filed in support of the 13 May summons and the counterclaim, justified the making of like orders but under s 17 of the Open Courts Act and in the Court’s inherent jurisdiction.
I accept that submission.
The orders that Treasury seek in respect of re-publication of parts of the Lawyerly Article and in respect of publication of parts of the transcript (for which a redaction order is also sought by exercise of the Court’s inherent jurisdiction), are “proceeding suppression orders” within the meaning of s 17 of the Open Courts Act in that they seek to prohibit or restrict the disclosure by publication or otherwise of a report of the whole or any part of a proceeding, or information derived from a proceeding.
A proceeding suppression order may be made if the Court is satisfied that the order is “necessary to prevent a real and substantial risk of prejudice to the proper administration of justice that cannot be prevented by other reasonably available means”.[9] General law principles are applicable to the determination whether a suppression order is necessary for the proper administration of justice.[10] As has been often observed, necessity is a stringent standard. It is not enough that an applicant for an order wishes to avoid scrutiny or maintain confidence, or that the making of a suppression order appears to be reasonable or sensible.[11]
[9]Open Courts Act 2013 (Vic), s 18(1)(a).
[10]Chairperson of the Royal Commission into the Management of Police Informants v Chief Commissioner of Victoria Police [2019] VSCA 154, [102]-[107] (Whelan, Beach and Weinberg JJA).
[11]See Cargill Australia Ltd v Viterra Malt Pty Ltd (No 23) (2019) 58 VR 611, at 623 [68]; see also Hogan v Australian Crime Commission (2010) 240 CLR 651, 664 [31] (French CJ, Gummow, Hayne, Heydon and Kiefel JJ); AA v BB (2013) 296 ALR 353, 388 [180]–[181] (Bell J); John Fairfax & Sons Ltd v Police Tribunal (NSW) (1986) 5 NSWLR 465, 476-7 (McHugh JA, Glass JA agreeing).
In making a suppression order of any kind other than an interim order, including a proceeding suppression order,[12] the Court must be satisfied on the basis of evidence or sufficient credible information that is satisfactory to the court or tribunal, that the grounds for making the order are established.[13] The Open Courts Act requires that the statement of reasons for making a suppression order must set out the reasons for the terms, duration, grounds and scope of the order. Reasons are not required to be stated if they would render the suppression order ineffective.[14]
[12]Section 3 of the Open Courts Act 2013 (Vic) defines “suppression order” as meaning: (a) a proceeding suppression order; (b) an interim order; (c) an order made under s 25 or 26 [of the Act]; or (d) an order “made by the Supreme Court in the exercise of its inherent jurisdiction that prohibits or restricts the publication or other disclosure of information in connection with any proceeding, whether or not the information was derived from the proceeding”.
[13]Open Courts Act 2013 (Vic), s 14(1).
[14]Open Courts Act 2013 (Vic), s 14A.
The form of orders sought, and which I shall make, are annexed to these reasons.
I consider that the order in respect of the publication of parts of the Lawyerly Article (order 3 in the form annexed) is necessary to prevent a real and substantial risk of prejudice to the proper administration of justice that cannot be prevented by any other reasonably available means, because if those parts of the Article or the information contained therein are published, there is a real and substantial risk that the subject matter of the 13 May summons and the counterclaim will be disclosed and the proceeding (the 13 May summons and counterclaim) will be rendered inutile. I have formed that view on the basis of the material before me, which I will not set out in these reasons because of the risk that doing so would render the suppression order ineffective. The questions whether the impugned information is confidential and whether Napier and Maurice Blackburn are subject to obligations of confidence are yet to be determined, but there would be no point in so doing were any confidentiality inhering in the information to be destroyed meanwhile, which is a real risk if the relevant parts of the Lawyerly Article and transcript are disclosed.
At general law, it is well accepted that a suppression order may be necessary to prevent a substantial risk to the administration of justice, in circumstances where “trial publicity might defeat the purpose of the litigation”,[15] or more specifically in respect of disputes concerning allegedly confidential information, where the public nature of proceedings would render the relief sought inutile, or destroy the subject matter of the dispute (ie the confidential nature of the information).[16] As Kirby P said in John Fairfax Group v Local Court of NSW:
the open administration of justice serves the interests of society and is not an absolute end in itself. If the very openness of court proceedings would destroy the attainment of justice in the particular case … or would derogate from even more urgent considerations of public interest … the rule of openness must be modified to meet the exigencies of the particular case.[17]
[15]News Digital Media Pty Ltd v Mokbel (2010) 30 VR 248, 259 [35] (Warren CJ and Byrne AJA).
[16]Australian Broadcasting Commission v Parish (1980) 43 FLR 129, 132-4 (Bowen CJ).
[17]John Fairfax Group Pty Ltd (Receivers and Managers Appointed) v Local Court of NSW (1991) 26 NSWLR 131, 141 (Kirby P).
In relation to disputes where “confidential information is the subject matter of the proceedings”, Bowen CJ of the Federal Court said the following in Australian Broadcasting Commission v Parish:
[i]t is in the interests of the administration of justice that the very proceedings before the court should not be permitted to destroy or seriously depreciate the value of such confidential information. If it were otherwise, not only might the parties and members of the public consider the court was not paying proper regard to confidentiality but also it might open the way to abuse.[18]
[18]Australian Broadcasting Commission v Parish (1980) 43 FLR 129, 134 (Bowen CJ).
These principles were more recently applied by Pembroke J of the New South Wales Supreme Court in X v Twitter Inc, in circumstances broadly analogous to the present facts, in that the information made the subject of a suppression order (which was not itself confidential) was such that its publication would likely have enabled a third party to discover the allegedly confidential information.[19]
[19]X v Twitter Inc [2017] NSWSC 1300 (Pembroke J).
I consider that the terms of the orders sufficiently identify the information to which they apply, and are as limited in scope as possible, traversing only particular paragraphs of the Lawyerly Article. As a matter of practical reality it is most unlikely that re-publication of the Article would serve any useful purpose but be that as it may, the remaining parts of the Article would enable a reader to understand what occurred at the hearing. The duration of the order is necessitated by the sequence in which the principal proceeding and the 13 May summons and counterclaim will be determined, which is an appropriate course having regard to case management considerations and the requirements of ss 7 to 9 of the Civil Procedure Act 2010 (Vic).
As to the order for redaction of certain parts of the transcript of the hearing on 13 May 2020, on the basis of the reasoning of Elliott J in Cargill (No 23)[20] an order for redaction of transcript is not itself a suppression order within the meaning of the Open Courts Act. It is unnecessary to further consider the statutory construction point for the purposes of these reasons. As Elliott J explained in Cargill (No 23), a confidentiality order made in the exercise of the Court’s inherent jurisdiction may restrict access to a transcript of a hearing or require that parts of a transcript be redacted.[21] The order restraining publication of those parts of the transcript does meet the description of a proceeding suppression order in s 17 of the Open Courts Act.
[20]Cargill Australia Ltd v Viterra Malt Pty Ltd (No 23) (2019) 58 VR 611, 619-621 [44]-[56] (Elliott J).
[21]Cargill Australia Ltd v Viterra Malt Pty Ltd (No 23) (2019) 58 VR 611, 623 [65]; see, for example, the authorities cited therein: SPKB v Minister for Immigration and Multicultural & Indigenous Affairs [2003] FCAFC 296, [18] (Carr, Finn and Sundberg JJ); and Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (No 2) [2015] FCA 1274, [8] (Edelman J).
The reasoning set out above in respect of the Lawyerly Article applies with equal force to the transcript of the hearing on 13 May 2020 (both in respect of the redactions made in the exercise of the inherent jurisdiction and the non-publication order made under s 17 of the Open Courts Act) and is the basis on which I consider that orders 1 and 2 annexed, are properly founded. As to the scope of the orders, only a very small portion of the transcript is redacted. The reasons for the duration of the orders are as described in relation to the Lawyerly Article.
ANNEXURE
THE COURT ORDERS THAT:
Subject to order 4, until the determination of the counterclaim of the defendant/plaintiff by counterclaim as amended on 3 July 2020, or until further order, the following parts of the transcript of the hearing conducted on 13 May 2020 be redacted:
(a) page 9, lines 14-22;
(b) page 20, lines 22-29;
(c) page 62, line 30;
(d) page 63, lines 6, 7 and the first three words of line 8
(the Redacted Parts of the Transcript).
Subject to order 4, until the determination of the counterclaim of the defendant/plaintiff by counterclaim as amended on 3 July 2020, or until further order, publication of the information contained in the Redacted Parts of the Transcript or any part of that information be prohibited.
Subject to order 4, until the determination of the counterclaim of the defendant/plaintiff by counterclaim as amended on 3 July 2020, or until further order, publication of any material whatsoever containing the information in:
(a) paragraph 1 of the article concerning the defendant and published by Lawyerly on Wednesday 13 May 2020 (the Article), a copy of which is exhibited as “Confidential AM-7” to the confidential affidavit of Alan Mitchell affirmed 14 May 2020 (Confidential Mitchell Affidavit), save that this order shall not prevent the publication of that part of paragraph 1 of the Article which stated: “A leading class actions lawyer from Maurice Blackburn ‘stumbled across’ allegedly confidential information of Treasury Wine Estates…and used it in the law firm’s class action pleadings, a court has heard”;
(b) paragraphs 6 and 7 of the Article;
(c) paragraph 8 of the Article, save that this order shall not prevent the publication of that part of paragraph 8 of the Article which stated: “Steven Finch SC, representing the class action lead applicant Steven Napier, denied that Maurice Blackburn had misused the information”;
be prohibited.
Orders 1, 2 and 3 will expire on the date that is three years from the making of this order, unless sooner revoked.
Orders 2, 3 and 4 of the orders made in this proceeding on 15 May 2020 are vacated.
Costs reserved.
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