Nicholson v Morgan

[2012] WASC 65

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   PAUL DOUGLAS NICHOLSON & ORS -v- MORGAN [2012] WASC 65

CORAM:   CORBOY J

HEARD:   ON THE PAPERS

DELIVERED          :   27 FEBRUARY 2012

FILE NO/S:   CIV 2491 of 2010

BETWEEN:   PAUL DOUGLAS NICHOLSON & ORS

Plaintiffs

AND

MATTHEW CAMPBELL MORGAN
First Defendant

STEFAN OTTO ALTERUTHEMEYER
Second Defendant

MACLMA PTY LTD
Third Defendant

LESLIE ALLAN STEIN
Fourth Defendant

SATTVIC PTY LTD as trustee for The Stein Super Fund
Fifth Defendant

MIRIAM JEANETTA STEIN
Sixth Defendant

NATIONAL AUSTRALIA BANK
Seventh Defendant
 

Catchwords:

Practice and procedure - Application by non-party to inspect document on the court file - Relevant principles

Legislation:

Rules of the Supreme Court 1971 (WA), O 67 r 11

Result:

Non-party allowed to inspect redacted version of statement of claim

Category:    B

Representation:

Counsel:

Plaintiffs:     In person

First Defendant             :     Mr S C R Sudweeks & Mr J C van der Walt

Second Defendant         :     Mr S C R Sudweeks & Mr J C van der Walt

Third Defendant           :     Mr S C R Sudweeks & Mr J C van der Walt

Fourth Defendant          :     Mr S Penglis & Ms C J Wallace

Fifth Defendant            :     Mr S Penglis & Ms C J Wallace

Sixth Defendant            :     Mr S Penglis & Ms C J Wallace

Seventh Defendant        :     Mr M J Deleuil

Mr T Boase:     In person

Solicitors:

Plaintiffs:     In person

First Defendant             :     Jackson McDonald

Second Defendant         :     Jackson McDonald

Third Defendant           :     Jackson McDonald

Fourth Defendant          :     Freehills (until 20 September 2011)

Fifth Defendant            :     Freehills (until 20 September 2011)

Sixth Defendant            :     Freehills (until 20 September 2011)

Seventh Defendant        :     Mallesons Stephen Jaques

Mr T Boase:     In person

Case(s) referred to in judgment(s):

Akins v Abigroup Ltd (1998) 43 NSWLR 539

ASIC v Rich [2002] NSWSC 198

Australian Competition and Consumer Commission v ABB Transmission & Distribution Ltd (No 3) [2002] FCA 609

Dian AO v Davis Frankel & Mead (a firm) [2005] 1 All ER 1074

Dobson v Hastings [1992] Ch 394

eisa Ltd v Brady [2000] NSWSC 929

John Fairfax Publications Pty Ltd v Ryde Local Court (2005) 62 NSWLR 512

Llewellyn v Nine Network Australia Pty Ltd [2006] FCA 836

Loti Tuqiri v Australian Rugby Union Ltd [2009] NSWSC 781

Macquarie Radio Network Pty Ltd v Australian Broadcasting Authority [2002] FCA 1408

Re Universal Music (Australia) Pty Ltd v Sharman Licence Holdings Ltd; Ex parte Merlin BV [2008] FCA 783

Seven Network Ltd v News Ltd (No 9) (2005) 225 ALR 256

Van Stokkum v The Finance Brokers Supervisory Board [2002] WASC 192

CORBOY J: 

The application and the result

1. Mr Timothy Boase and Ms Jenny Lee Boase have commenced proceedings against seven defendants to recover money that they claim was paid for the purchase of shares in Firepower Holdings Group Ltd (FHGL) (CIV 1709 of 2008) (the Boase action). 

2. They allege that they were induced to purchase the shares by representations made by Mr Ward (the third defendant) and a company with which he was associated, Axis International Management Pty Ltd (the first defendant).  They further allege that they paid money into a trust account operated by 'Morgan Alteruthemeyer Commercial Lawyers & Migration Agents' (the seventh defendant), to be applied to the purchase of the shares; that the money was disbursed from the trust account without their permission; that they were subsequently issued with 'bogus' FHGL share certificates and that several of the defendants breached duties owed under the Corporations Act 2001 (Cth) and at common law in advising Mr and Ms Boase and in dealing with their money. FHGL is now in external administration.

3. In this action, 242 plaintiffs seek relief against the defendants in respect of dealings with funds which the plaintiffs allege were also to be applied to the purchase of shares in FHGL.  As in the Boase action, the plaintiffs in this action allege that they paid funds into a trust account (the trust account) associated with Mr Morgan and Mr Alteruthemeyer (I infer from the pleadings in each action that Mr Morgan and Mr Alteruthemeyer were partners in a firm of solicitors known as 'Morgan Alteruthemeyer').  The plaintiffs further allege that the funds were only to be applied to the purchase of shares in FHGL; that the funds were to be paid to FHGL on completion of the transfer or issue of the shares; and that the funds were disbursed from the trust account without the plaintiffs' permission and without the shares in FHGL having been issued or transferred. 

4. Despite the apparent similarity in subject matter, the only common defendants between the two actions are Mr Morgan and Mr Alteruthemeyer.

5. Mr and Ms Boase have, in effect, applied for leave under O 67 r 11 Rules of the Supreme Court 1971 (WA) (RSC) to inspect the statement of claim filed and served in this action.

6. The application was first made by letter dated 18 October 2010 to a Registrar of this court.  The application was subsequently raised at a directions hearing held on 8 February 2011.  Directions were made at that hearing requiring any party that opposed the application by Mr and Ms Boase to file and serve submissions stating the grounds of their opposition.  Subsequent to that direction:

   (a)the first to third defendants filed submissions dated 23 February 2011, 9 March 2011 and submissions by way of reply dated 27 April 2011;

   (b)the fourth to sixth defendants filed submissions dated 9 March 2011;

   (c)the seventh defendant filed submissions dated 14 March 2011.

7. Mr Boase provided responsive submissions by email dated 18 April 2011. 

8. The plaintiffs indicated that they did not oppose the application made by Mr  and Ms Boase.

9. I have concluded that, subject to certain paragraphs being redacted, Mr and Ms Boase should be permitted to inspect the latest version of the statement of claim.

The history of this action

1. The writ of summons in this action was issued on 17 September 2010.  It was not indorsed with the statement of claim.  A statement of claim was separately filed on the same day as the writ was issued.  Amended statements of claim have been filed on 3 November 2010 and on 16 May, 2 August, 23 September and 2 December 2011.

2. I do not know all of the reasons lying behind each amendment to the statement of claim but the plaintiffs' claims raise matters that are legally and factually complex.  Reference has been made during directions hearings to large quantities of documents held by the Australian Securities and Investments Commission that are said to be relevant to the issues arising in the action and arrangements have been made for the parties to access those documents.  The parties are presently reviewing those documents.  Discovery (formal or informal) is yet to be given.

3. It is apparent that for much of last year the legal advisers to the plaintiffs and the seventh defendant conferred over the statement of claim.  Conferral did not produce an agreed position and on 3 November 2011, the seventh defendant issued a summons to strike out paragraphs of the statement of claim by which it was alleged that it knowingly assisted in a breach of trust.  The breach was alleged to have been committed by a person associated with FHGL, Mr Johnston.  That application was heard on 14 February 2012.  The decision has been reserved.

4. The hearing of the seventh defendant's application was the first occasion on which much of the detail of the allegations made by the plaintiffs in their statement of claim was referred to in open court.

The Boase action

1. Mr and Ms Boase allege in the Boase action that:

   (a)They were advised by Mr Ward that he had 10 million shares in FHGL available for purchase by investors.  Various representations were made by Mr Ward concerning the shares and his involvement with FHGL and persons associated with the company, including Mr Johnston.  Those representations included that it was proposed to list FHGL on the alternate investment market in London.

   (b)They dealt with Mr Ward in his capacity as a financial advisor.  He and Axis International engaged in conduct that was misleading or deceptive by making the representations alleged; alternatively, the representations were made negligently.  Shares in FHGL were not listed on any stock exchange and the company is now in liquidation.

   (c)They agreed to purchase a quantity of FHGL shares.  They paid the purchase price for the shares into the 'Morgan Alteruthemeyer trust account' some time prior to 18 August 2006.  The money was to be held in the trust account pending the issue or transfer of share certificates for FHGL. 

   (d)The amount that they paid into the Morgan Alteruthemeyer trust account was transferred on 18 August 2006 to Clariden Bank, Singapore.  Mr and Ms Boase did not authorise or know of the transfer. 

   (e)No FHGL share certificates had been issued or transferred to Mr and Ms Boase at the time that the funds were paid out of the Morgan Alteruthemeyer trust account.  Mr and Ms Boase were issued with 'bogus' share certificates some time later.

   (f)'Morgan Alteruthemeyer' contravened the Legal Practitioners Act 2003 (WA) and the Legal Practice Board Rules 2004 (WA) in disbursing Mr and Ms Boase's funds from their trust account. They acted in a position of conflict.

   (g)Another defendant owed a fiduciary duty to Mr and Ms Boase.  It breached that duty and the Corporations Act by failing to supervise Mr Ward and Axis International Management in their capacity as the holders of a financial services licence.  

   (h)Mr Ward, Axis International Management and Morgan Alteruthemeyer were in a fiduciary relationship with Mr and Ms Boase.  They breached duties imposed as an incident of that relationship.

The allegations made in this action

1. So far as is relevant, it is alleged by the plaintiffs in this action that:

   (a)Some of the plaintiffs deposited funds in the trust account (it was alleged that the trust account was operated by either Mr Morgan and Mr Alteruthemeyer or by a company with which they were associated, Maclma Pty Ltd).  The funds were deposited subject to a purpose trust.  They were to be held pending the issue or transfer to the plaintiffs of shares in FHGL and were to be applied only in payment for the shares.

   (b)The funds were paid out of the trust account in breach of that trust - no share certificates had been issued or transferred to the plaintiffs and in fact, no FHGL shares had been issued or transferred to them and none of the plaintiffs had authorised the payments out of the trust account.

   (c)The payments were made out of the trust account on the instruction of the fourth defendant.  He instructed that the funds be transferred to bank accounts operated in the name of Firepower Investments Pte Ltd (FIPL).  The instruction was conveyed to the operator of the trust account through Mr Ward and another person who was also associated with Axis International Management. 

   (d)The fourth defendant was knowingly involved in or procured the breach of trust by Mr Morgan and Mr Alteruthemeyer or Maclma.

   (e)The seventh defendant opened a bank account in the name of FIPL at the request of Mr Johnston and another person, Ms Darroch.  They were not directors or officers of FIPL and the seventh defendant was not provided with authority from FIPL in relation to the opening or operation of the bank account.  The account was opened in such a way that funds could be transferred electronically from the account by Mr Johnston and Ms Darroch or by other persons who had knowledge of various bank account details.

   (f)Funds were transferred from the trust account to the FIPL bank account held with the seventh defendant on instructions from the fourth defendant or Mr Johnston.  The funds were, to the knowledge of the fourth defendant and Mr Johnston, transferred in breach of trust. 

   (g)The funds transferred to the FIPL account were held on trust by Mr Johnston and Ms Darroch.

   (h)The funds held in the FIPL bank account were withdrawn by Mr Johnston, Ms Darroch or by other persons.  The withdrawals were made in breach of the trust on which the funds were held.

   (i)The seventh defendant knowingly assisted in that breach of trust.

The reasons why leave to inspect was sought

1. In their letter of 18 October 2010, Mr and Ms Boase stated that they sought leave to inspect the statement of claim in this action as the Boase action raised the 'exact same issues'.  Points of connection between the two actions were identified and the letter concluded, 'my wife and I request we be treated as a "party" to [this action] to the degree that we be provided with a copy of the statement of claim … with a view to the future path of "all" proceedings in this Firepower saga'.  It was said that this course would save the time and expense of dual proceedings over the same matters.

The defendants' opposition to the application

1. Each of the defendants in this action opposed Mr and Ms Boase being given leave to inspect the statement of claim.  They each referred in their submissions directly or indirectly to the decisions of Barrett J in ASIC v Rich [2002] NSWSC 198 and McLure J (as her Honour then was) in Van Stokkum v The Finance Brokers Supervisory Board [2002] WASC 192. Reference was also made in the submissions of the first to third defendants to Akins v Abigroup Ltd (1998) 43 NSWLR 539.

2. ASIC v Rich involved an application by journalists for access to the statement of claim filed by the Australian Securities Investments Commission in proceedings in which there had been considerable media interest.  Barrett J referred to several authorities relevant to such applications and then stated:

   The clear message from these cases is that decisions about access to documents in court files are to be determined first and foremost by reference to principles of open justice and the due administration of justice that require an appropriate measure of cooperation by the court with those sections of the media which seek to report proceedings before the court. Those principles focus most sharply on the situation where a trial has taken place or is at least in progress. The proceedings which must be open and to which access in the public interest must be guaranteed are proceedings that actually take place in court. It is in that context that the court has an undoubted and clear role to play in assisting the media to obtain a full and fair understanding of what has transpired so that informed reporting can occur without incomplete appreciation of source materials and in a way which enables the various matters which have come out in court, whether or not actually spoken aloud, to be understood in the full context of the case. …

   When it comes to the content of court files as they exist and develop through the succession of filings in the pre-trial phase, it is much more difficult to point to these undoubted principles of open justice as a basis for warranting access to documents. Pleadings can be and often are amended.  The statement of claim in this case has already been amended once.  A statement of claim or defence may be the subject of a strike out application.  Affidavits may be filed but not ultimately read or relied upon. Parts of affidavits may be objected to as inadmissible and rejected.  The court file, as it exists in a developing state after the initiating process is filed and before a hearing has begun, cannot be regarded as the equivalent of what will be presented in open court if and when the proceedings come to trial.  [9] ‑ [10]

3. In Van Stokkum, a large number of plaintiffs sought an order that 'all persons' have leave to inspect and copy all pleadings and documents filed in the action.  The purpose of the application was to enable the plaintiffs' agent to display copies of all documents in the proceedings on its website as a means of communicating with the plaintiffs on the progress of the action.   It was proposed that access to the agent's website would be unrestricted so that strangers to the litigation and the media could access the material. 

4. McLure J held that:

   Where an application for access under O 67 r 11(1)(b) of the Rules is based on the principle of open justice it is necessary to have regard to the purpose and rationale of that principle and how it informs and affects related legal principles.  Factors relevant to the exercise of the discretion in such circumstances include:

   (a)whether and if so to what extent the document has been referred to in open court;

   (b)the stage reached in the proceedings;

   (c)the contents of the document (to assess the nature and seriousness of any allegations made and whether there is any information on any subject‑matter which has the potential to damage the private or commercial interests of a party);

   (d)the nature of the proceedings;

   (e)whether access to the document is necessary or desirable to facilitate an understanding of the proceedings and thus of the judicial process;

   (f)the purpose for which access is required. [27] (emphasis added)

5. The reference in that passage to 'related legal principles' was to the law of defamation and questions of qualified privilege and to limitations imposed on the use of discovered or court documents.

6. Each of the defendants contended that the application by Mr and Ms Boase ought to be refused as:

   (a)The detail of the allegations made in the various versions of the statement of claim that had been filed had not been referred to in open court.

   (b)The proceedings were at an embryonic stage, with the statement of claim being in a 'developing state'.

   (c)The statement of claim contained serious and untested allegations made against the defendants.  In particular, it was alleged that there had been breaches of trust, acts of dishonesty and knowing assistance in those breaches and acts.  Further, the seventh defendant had intimated that it intended to apply to strike out parts of the statement of claim as disclosing no reasonable cause of action against it.

   (d)There was no basis for contending that it was necessary for Mr and Ms Boase to have access to the statement of claim to understand the proceedings in this action.  Rather, they sought access to the statement of claim for a different and collateral purpose - a purpose that was personal to them in the conduct of their action.  Further, there was no common ground between the issues raised in the Boase action and the allegations made against the fourth to seventh defendants in this action.

The response of Mr and Ms Boase

1. In response to those submissions, Mr and Ms Boase contended that it was necessary for them to be able to inspect the statement of claim:

   (a)so that the process was open;

   (b)to save the time of potential or probable witnesses;

   (c)so that the court could address the possible disadvantage of dual proceedings over the same matters and so as to avoid inconvenience to persons who might be required to produce documents on subpoena or to give evidence;

   (d)so that they could consider whether to make an application for joinder.

2. Mr and Ms Boase also denied that they intended to use the opportunity to inspect the statement of claim for a collateral purpose such as 'improving' their existing statement of claim in the Boase action.  They emphasised that the purpose of the application was to enable them to better identify what they considered to be the common ground between the two actions so that they could determine whether they should apply to have the actions joined. 

Further comments on the relevant principles

1. Most applications to inspect documents held by a court are made by media organisations.  Indeed, in Re Universal Music (Australia) Pty Ltd v Sharman Licence Holdings Ltd; Ex parte Merlin BV [2008] FCA 783 Jacobson J noted that, with one exception, the principles that governed the exercise of the discretion granted by the then equivalent provisions in the Federal Court Rules (Cth) (FCR) (O 46 r 6) were to be found in cases dealing with applications by media organisations.  His Honour commented:

   This is hardly surprising because the principle which informs the exercise of the power is that of open justice, the underlying rationale being the belief that exposure to public scrutiny is the surest safeguard against abuse of power of the courts …  [31]

1. The exception to which Jacobson J referred was an application by the Australian Competition and Consumer Commission in Australian Competition and Consumer Commission v ABB Transmission & Distribution Ltd (No 3) [2002] FCA 609. In that case, Finkelstein J held that the proper approach was that access should be allowed to documents held by the court unless the interests of justice required a different course. His Honour stated that there was a strong presumption in favour of allowing any member of the public who wished to do so to inspect any document or thing that was put into evidence.

2. The proceedings in Re Universal Music involved allegations of breach of copyright.  Merlin BV was a not-for-profit company that had been established as a non‑exclusive licensing agency and with the object of protecting the intellectual property of various independent record labels.  It applied for access to a large number of documents held on the court file for the purpose of obtaining information about possible infringements of its members' copyright in the same period as was covered by the Federal Court proceedings. 

3. It is important to note that there are significant differences between O 67 r 11 RSC and O 46 r 6 FCR. The latter rule permitted a person to inspect a variety of documents held by a Federal Court Registry unless the court or a judge had ordered that a document was confidential. The categories of documents that could be inspected included pleadings. Order 46 r 6(3) provided that other categories of documents could only be inspected with the leave of the court or a judge. Broadly, those categories concerned documents that contained or disclosed the existence of evidence. Consequently, the FCR were significantly more liberal in permitting public access to a court file without leave than the RSC.

4. The documents sought by Merlin BV fell within the categories of documents for which leave to inspect was required; they included affidavits, a tender bundle, appeal books and transcript. Jacobson J characterised the application as raising an important question of principle: 'whether a non-party ought to be given access to a defunct court file in order to gather evidence for a case it…may wish to bring against the respondents [to the action in respect of which access to the court file was sought] in circumstances in which the non-party cannot satisfy the requirements for an order for preliminary discovery' [8]. Accordingly, it was necessary for his Honour to consider the extent to which the principles that had been developed to determine applications to inspect documents by media organisations should be adopted where the applicant sought leave to inspect documents for some purpose other than gaining a better understanding of, and fairly reporting on, what had occurred in open court. Senior counsel for Merlin BV sought to accommodate that difference by contending that the application was based not so much on principles of open justice as principles governing 'access to justice' [6].

5. Jacobson J considered a number of relevant Australian and English authorities in determining the application. It is helpful to summarise the principles that he extracted from those authorities notwithstanding the significant differences between O 67 r 11 RSC and O 46 r 6 FCR:

   (a)O 46 r 6 FCR did not confer a right on a non-party to obtain access to documents admitted into evidence.  Leave from the court was required and open justice was a principle not a 'freestanding right' (his Honour cited John Fairfax Publications Pty Ltd v Ryde Local Court (2005) 62 NSWLR 512 [29] (Spigelman CJ) for that proposition). The guiding principle was that unless the interests of justice required otherwise, the court would ordinarily take the view that a non‑party should have access to all non‑confidential documents and other material admitted into evidence, reference being made to Seven Network Ltd v News Ltd (No 9) (2005) 225 ALR 256.

   (b)The discretion under O 46 r 6 was to be exercised in the interests of justice having regard to all of the circumstances [42].

   (c)Where leave was sought to inspect documents that had not been read in open court, or at least tendered in evidence and considered by the judge as evidence or submission, the rule was that leave will ordinarily be refused to inspect that material [43]. Although O 46 r 6(3) did not distinguish between documents that had been admitted into evidence and those that had not been admitted, there was a risk of serious injustice if untested allegations could be published to the world at large, reference being made to eisa Ltd v Brady [2000] NSWSC 929.

   (d)A court file was not a publicly available register.  It was a file maintained by the court for the proper conduct of the proceedings and access to that file was restricted [45], citing Dobson v Hastings [1992] Ch 394.

   (e)An application for permission to use the court file as a source of potentially useful information to assist in other litigation did not engage the principles of open justice.  Nevertheless, one consequence of the application of the principles of open justice was that persons who were present in court might obtain access to information that they may be able to use to their advantage in other litigation.  But that was merely a consequence of doing justice in public and not one of its primary objects [52], reference being made to Dian AO v Davis Frankel & Mead (a firm) [2005] 1 All ER 1074.

6. The principles identified by Jacobson J reflect a distinction that has been drawn between documents referred to in open court that may be found on a court file and other documents held on the file.  Several matters relevant to that distinction should be noted:

   (a)Documents filed with and held by a court are not covered by privilege for the purpose of the law of defamation: Smith v Harris [1996] 2 VR 335. In first referring to the privilege attaching to reports of court proceedings, his Honour said:

   …the significant reasons underlying the privilege in question are the need for those who administer justice to do so, in the public eye, under a sense of public responsibility.  Citizens should be able to satisfy themselves by observation as to the mode in which this public duty is performed.  The justification, then, for the privilege for publishers is that it is for the public benefit that citizens who cannot be in court to witness the judicial process may be accurately informed as to what took place…This objective is not advanced by publishing documents which may or may not be used in the court process, and which, in any event, have not been so used.  I have already mentioned that affidavits, witness statements and discovered documents may not be used in the proceedings or may be the subject of confidentiality orders.  In the case of pleadings, they may be amended, struck out or simply never used in the judicial process…The argument that would extend privilege to these documents confuses the subject matter of the judicial process with the judicial process itself.  Publicity properly attaches to the latter not to the former unless and until the subject matter bears upon an understanding of the judicial process. (347)

   McLure J in Van Stokkum expressed her agreement with the proposition that 'the principle of open justice concerns the judicial process'. 

   (b)Reference was made in Van Stokkum and eisa to a practice direction of the New South Wales Supreme Court indicating that non‑parties will normally be given access to:

   (i)pleadings and judgments in proceedings that have been concluded (subject to any confidentiality order);

   (ii)documents that record what was said or done in court;

   (iii)material that was admitted into evidence;

   (iv)information that would have been heard or seen by any person present in open court.

   (c)In eisa, Santow J observed that:

   Even when material has been led in open court or is included in pleadings, there may be good reason for refusing access.  Material that has been rejected or not used or struck out as being scandalous, frivolous, vexatious, irrelevant or otherwise, may still be legible.  [5]

   His Honour also considered that the practice direction reflected underlying principles and distinctions made in the case law that had been developed in Australia and the United Kingdom [15].

   (d)In Loti Tuqiri v Australian Rugby Union Ltd [2009] NSWSC 781, Einstein J emphatically affirmed the importance of the public interest in the administration of justice in open court and the role played by the media in facilitating that interest. His Honour noted, among other things, that embarrassment to a party in any proceeding was not one of the common law exceptions to the principle of open administration of justice. Consequently, he disagreed with the reservations expressed by Barrett J in ASIC v Rich and Santow J in eisa about the release of material to the media that contained untested allegations even where those allegations had been aired in open court.  He endorsed the observations of Rares J in Llewellyn v Nine Network Australia Pty Ltd [2006] FCA 836 that the approach taken by Santow J and Barrett J to the release of material relevant to proceedings in court misunderstood the function of fair reporting and the 'availability to all persons of the right to be able to make fair reports of proceedings that have been initiated in courts' [29], [35].

   (e)In Llewellyn, Rares J also observed that, 'ordinary members of the public are well aware of the difference between allegations made in courts and findings made by courts' (at [23]) and that:

   The proposition that untested allegations in civil proceedings are somehow to be shielded from public view merely because they are untested allegations and could not possibly be properly understood in the context of a fully contested hearing is, in my opinion, not one that can sit with the principle of open justice or the right of any one fairly to report proceedings in a court of justice.  [27]

   Llewellyn involved an application to restrain access by the media to pleadings filed in proceedings.  Accordingly, the application was governed by O 46 r 6(1) FCR (which permitted inspection of pleadings unless an order prohibiting access had been made).  Rares J noted the difference between the position under that rule and the approach adopted in the practice direction of the New South Wales Supreme Court.

   (f)In ACCC v ABB Transmission, Finkelstein J observed:

   The question that I must resolve is what principle should be applied when deciding whether to allow inspection in cases where leave is required.  In giving the answer I propose to confine myself to those cases where a non‑party seeks access to material which has been relied upon by the judge.  In such a case I have no doubt that the proper approach is that access should be allowed unless the interests of justice require a different course.  It is only by adopting this approach that, in a practical sense, the principle of open justice will be preserved.  Put differently, in my view there is a strong presumption in favour of allowing any member of the public who wishes to do so to inspect any document or thing that is put into evidence.  Inspection should only be refused in exceptional circumstances.  I think that the position is a fortiori when the material has been read by the judge in private and is not read out in court.  If that material is not made available for inspection then the manner in which the case has been conducted will only be known to the parties.  That is an unacceptable position. [7]

   (g)In Churche v Australian Prudential Regulation Authority (No 3) [2006] FCA 1168, Cowdroy J observed that different rules to those identified by Finkelstein J in ACCC v ABB Transmission might apply when material had not been admitted into evidence.  Reference was made to what was said by Sackville J in Macquarie Radio Network Pty Ltd v Australian Broadcasting Authority [2002] FCA 1408:

   Of course, the position may well be different where leave is sought to inspect affidavits that have not been read in open court.  For example, as Santow J recognised in eisa Ltd v Brady, there is a risk of serious injustice if untested allegations contained in affidavits or pleadings can be published to the world at large without the usual constraints of defamation law applying. [21]

   (h)Order 63 r 4 of the former English Rules of the Supreme Court was in terms that were substantially similar to O 67 r 11 RSC. It was in the context of O 63 r 4 that Sir Donald Nicholls V‑C made the observation in Dobson v Hastings referred to earlier in the reasons.  It was said in the same case:

   The scheme of the rules is that, by being filed, documents do not become available for inspection or copying save to the extent that access to specified documents or classes of documents is granted either generally under the rules or by leave of the court in a particular case. 

   The purpose underlying this restriction presumably is that if and when affidavits and other documents are used in open court, their contents will become generally available, but until then the filing of documents in court, as required by the court rules for the purposes of litigation, shall not of itself render generally available what otherwise would not be.  Many documents filed in court never see the light of day in open court.  For example, when proceedings are disposed of by agreement before trial.  In that event, speaking generally, the parties are permitted to keep from the public gaze documents such as affidavits produced in preparation for a hearing which did not take place.  (401 ‑ 402)

   (i)In Dian AO Moore‑Bick J recognised that seeking material relevant to other proceedings may provide a legitimate reason for granting access to documents held on a court file.

   (j)A party must show exceptional circumstances to be relieved of the implied undertaking not to use documents provided by another party for the purpose of proceedings for a collateral purpose. A non-party should not be placed in a superior position in obtaining access to documents through an application under O 67 r 11 RSC: Akins (Mason P at 549; McLure J expressly agreed with that proposition in Van Stokkum [26]).

7. I draw the following points from that brief survey of some of the relevant authorities for the purpose of determining this application:

   (a)An application under O 67 r 11 is to be determined according to the interests of justice. It is in the interests of justice that justice be administered in the open. Access will ordinarily be granted to non-parties to documents read in court and/or tendered as evidence (but subject to the restriction on the use of discovered and court documents for a collateral purpose).

   (b)The principles of open justice apply where access is sought to documents that were not tendered as evidence or read in court but which were placed before the Judge for the purpose of proceedings in court:  ACCC v ABB Transmission and see Dian AO, where Moore‑Bick J noted that, 'as the use of written rather than oral procedures have become more widespread, the courts have recognised that it is necessary to give the public access to documents that contain material that has been placed before the Judge, but not read out in open court as would once have been the case'. [29]

   (c)The interests of justice involve different considerations where access is sought to documents that have not been referred to in, or used for the purpose of, proceedings in open court.  The principles of open justice are not generally engaged at the time that a document is filed with a court registry but rather, when the document is used in court (in the wide sense referred to in the previous paragraph).  That is for the reason explained by Bryne J in Smith v Harris and see Seven Network Ltd v News Ltd [2005] FCA 1395; 225 ALR 256 [26] (Sackville J); John Fairfax Publications Pty Ltd v Ryde Local Court  [2005] NSWCA 101; (2005) 62 NSWLR 512.

   (d)It is not necessary to decide whether, as Jacobson J thought, there is a presumption against granting access to documents which may only be inspected with leave.  The existence of such a presumption may reflect the much more detailed provisions of O 46 r 6 FCR that drew a distinction between what could and could not be inspected (subject to orders made by the court).  However, my understanding of the reasons for the requirement for leave to inspect most documents to be found on a court file accords with the observations of Sir Donald Nicholls V‑C in Dobson v Hastings reproduced earlier.

   (e)It is also not necessary for the purpose of this application to determine the circumstances in which a court might allow the principles of open justice to be abrogated in respect of access to documents referred to in open court or which were before the judge for the purpose of proceedings in court.  I accept, however, that caution must be exercised in granting access to documents on a court file that have not been 'deployed' or used in open court for the reasons identified by McLure J in Van Stokkum, Barrett J in ASIC v Rich, Santow J in esia and Sir Donald Nicholls V-C in Dobson v Hastings. 

The determination of the application

1. I have concluded that the application by Mr and Ms Boase should be granted for the following reasons:

   (a)Much of the statement of claim was relevant to the seventh defendant's application to strike out.  There was only one part of the statement of claim that was immaterial to the application.  I propose that Mr and Ms Boase should be given access to a version of the statement of claim that has been edited to delete that part. 

   (b)A number of paragraphs of the statement of claim were expressly referred to in open court ‑ indeed, read out and discussed in some detail ‑ in the course of argument on the seventh defendant's application.  The balance of the statement of claim that Mr and Ms Boase shall be allowed to inspect was relevant to a proper understanding of those parts of the statement of claim that were challenged by the seventh defendant and which were expressly referred to in argument.  They were parts of the statement of claim that were before me for the purpose of the seventh defendant's application.  The allegations made in the statement of claim that were outlined earlier in the reasons will inevitably be referred to in the decision to be delivered on the seventh defendant's application.

   (c)Mr and Ms Boase would have learnt much about the statement of claim had they been in court during the hearing of the seventh defendant's application.  I would have acceded to an application for them to be allowed access to that part of the statement of claim that was before the court on the seventh defendant's application had they been present at the hearing. 

2. Leave is granted to Mr and Ms Boase to inspect parts of the statement of claim on the principles of open justice and following reference to those parts being made directly or implicitly in open court during the seventh defendant's application.  Open justice does not require Mr and Ms Boase to await the outcome of the seventh defendant's application before they can inspect an edited version of the statement of claim.

3. However, I am not persuaded that it is in the interests of justice that Mr and Ms Boase be given leave to inspect the whole of the statement of claim having regard to the principles and considerations that apply where access is sought to material that has not been used in open court.  I accept that they have a legitimate interest in the subject matter of this action and that the reasons why they sought access to the statement of claim were broadly concerned with the efficient and economical management of their action.  However, I would not have allowed them to inspect the statement of claim if it had not been referred to in detail in open court having regard to the nature of the allegations made against the defendants, the likelihood that any application for consolidation of the Boase action and this action would be premature, the apparent knowledge that Mr and Ms Boase already possess about this action and the fact that for some time the seventh defendant had indicated that it would apply to strike out parts of the statement of claim if no agreement could be reached with the plaintiffs over the pleading (I note, however, that none of the other defendants have applied to strike out the statement of claim or have expressed any intention to do so). 

1. Accordingly, Mr and Ms Boase will be permitted to inspect a version of the statement of claim that has been edited to delete pars 39 ‑ 55 and 77 ‑ 92.  The deleted paragraphs have not been referred to in detail in open court and were not before the court for the purpose of the seventh defendant's application.