Southcorp Ltd v Puttifoot, Mark

[1998] FCA 1703

FEDERAL COURT OF AUSTRALIA

PRACTICE AND PROCEDURE – Application for suppression of evidence and the name of witnesses – Application for an Order that the proceedings be heard in camera – whether it is appropriate to make such orders to prevent public disclosure of an investigation into unlawful conduct harmful to the public

Federal Court Act 1976 (Cth) ss 17 and 50

X v McDermott (1994) 51 FCR 1 - cited
Allied Mills Industries Pty Ltd v Trade Practices Commission (1981) 55 FLR 125 – cited
Scott  v Scott (1913) AC 417 – cited
R v Chief Registrar Friendly Society; Ex Parte New Cross Building Society (1984) 1 QB 227 – cited
SRD v Australian Securities Commission (1994) 123 ALR 730 – cited
Australian Broadcasting Commission v Parish (1980) 43 FLR 129 - cited

SOUTHCORP LTD v MARK PUTTIFOOT

VG 701 of 1998

JUDGE:         MERKEL J
PLACE:         MELBOURNE
DATE:           22 DECEMBER 1998

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VG 701  of  1998

BETWEEN:	SOUTHCORP LTD ACN 007 722 643 APPLICANT
AND:	MARK PUTTIFOOT RESPONDENT
JUDGE:	MERKEL J
DATE OF ORDER:	22 DECEMBER 1998
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

The application of the applicant pursuant to ss 17 and 50 of the Federal Court Act 1976 (Cth) be dismissed.

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	VG 701 of 1998

BETWEEN:	SOUTHCORP LTD ACN 007 722 643 APPLICANT
AND:	MARK PUTTIFOOT RESPONDENT
JUDGE:	MERKEL J
DATE:	22 DECEMBER 1998
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

The applicant (“Southcorp”) has issued a proceeding in the Court seeking an order pursuant to O 15A Rule 3 of the Rules of Court that the respondent (“Puttifoot”), who is a Detective Sergeant in the Victorian Police, be required to attend Court for oral examination in relation to the description of certain persons against whom Southcorp wishes to commence proceedings.  The proceedings which Southcorp wishes to commence relate to the counterfeit reproduction of Penfold Grange wine which is marketed by Southcorp.  Southcorp has applied to the Court pursuant to s 50 of the Federal Court Act 1976 (Cth) (“the Act”) for an order that the evidence in the proceeding together with the names of the witnesses be forbidden to be published.  Southcorp has also applied for an order pursuant to s 17 of the Act for an order that the public be excluded from the hearing of any application in the proceeding without leave of the Court.

The relevant facts may be briefly stated.  It is fair to describe Grange as an icon amongst Australian wines.  It is a wine which is so highly rated both nationally and internationally that, depending on the vintage, it sells for prices which are not exceeded by any other Australian wine.  As a consequence of both the fame and expense of the Grange wine, persons whose identities are presently not known by Southcorp have engaged in an elaborate counterfeit scheme in order to pass off counterfeit Grange wine as original Grange wine marketed by Southcorp.  The counterfeit wine first appeared in March 1998.  Southcorp, upon becoming aware of the endeavours of persons not known to it to market counterfeit Grange wine, decided that it was best to alert the public and the trade to the fact that bottles of counterfeit Grange had been discovered.  It did so notwithstanding advice from Puttifoot, Southcorp’s own private investigator and its solicitor, that the publicity would make it more difficult to ascertain the persons involved in the production and sale of the counterfeit wine.  Southcorp’s view was that it was appropriate to publicise the matter for the protection of retailers and consumers.

Southcorp duly alerted the Victorian Police to the counterfeit operation and the respondent who took charge of police investigations into the matter.  Southcorp  has co-operated with the police investigation which is continuing.

Meanwhile, Southcorp took its own steps to investigate the source of the counterfeit Grange as, notwithstanding the police investigation, it wished to take action on a civil basis against any persons it was able to establish were involved in the counterfeit operation.

Initially, it was believed that the publicity attending the counterfeit operation may have deterred the operators from seeking to further market any Grange wines.  However, that situation altered recently when it was discovered at the beginning of December 1998 that a further endeavour had been made to sell six bottles of counterfeit 1990 Penfold’s Grange wine.  Further investigations were undertaken by Puttifoot and Southcorp in relation to that further endeavour.

As a result of the further endeavour and the absence of any charges, Southcorp wishes to pursue its alternative course of civil proceedings.

Southcorp liaised with the Victorian Police and, in particular, the respondent who indicated that he was prepared to release information in his possession concerning the identity of persons against whom Southcorp may wish to issue proceedings but would only do so if compelled by Court order.  That statement led to the issue of the application by Southcorp pursuant to Order 15A.

Understandably Southcorp views with the utmost seriousness the endeavours to market counterfeit Grange wine.  With some justification it is concerned that the counterfeit wine will diminish consumer confidence in the genuine product and leave many consumers vulnerable to exploitation during a holiday period when retail wine sales are traditionally higher than during other times of the year.

In substance, Southcorp now is confronted with the same dilemma that it had to confront in March 1998.  Its advice at that point of time was that publicity concerning the counterfeit wines may impede the investigation.  Nevertheless it took the step of publicising the issue as it felt it was its duty to do so in order to protect the public from the counterfeit wine.  It now contends that it is necessary, for its investigations to be successful, for the persons involved in the counterfeit wines not to be aware of the steps it is now proposing to take.  Senior counsel on behalf of Southcorp has submitted to the Court that it is appropriate to make the orders sought under ss 17 and 50 of the Act to prevent any publicity of the current proceedings coming to the attention of those involved in the counterfeit operation.  It is said that the publicity will enable any suspects to “cover their tracks” and thereby prevent their detection.  Puttifoot does not oppose Southcorp’s application for confidentiality.

Southcorp has relied on analogous instances where the Court has indicated that the confidentiality of investigative procedures ought to be protected where disclosure will have the consequence of defeating the purposes of the investigation: see X v McDermott (1994) 51 FCR 1 at 2 and Allied Mills Industries Pty Ltd v Trade Practices Commission (1981) 55 FLR 125 at 171. The same kind of principle underlies confidentiality orders that are often made when Anton Piller orders are made by the Court. I have no doubt as to the power of the Court to make the orders sought. However, courts have always approached the question of a hearing in camera and secrecy with the utmost caution because of the fundamental principle of “open justice”: see Scott v Scott (1913) AC 417. The general principle for which Scott has been cited and applied may be stated as follows:

• the general rule that the courts shall conduct proceedings in public is but an aid, albeit a very important aid to the achievement of the paramount object of the courts which is to do justice in accordance with law;

• it is only if, in wholly exceptional circumstances, the presence of the public or public knowledge of the proceedings is likely to defeat that paramount object that the courts are justified in proceeding in camera;

• each application for privacy must be considered on its merits but the applicant must satisfy the court that nothing short of total privacy will enable justice to be done;

• it is not sufficient that a public hearing will create embarrassment for some or all of those concerned - it must be shown that a public hearing is likely to lead directly, or indirectly, to a denial of justice.

See R v Chief Registrar Friendly Society; Ex Parte New Cross Building Society (1984) 1 QB 227 at 235 per Sir John Donaldson MR.

Indeed s 50 of the Act relevantly authorises confidentiality orders only where it appears to the Court to be “necessary in order to prevent prejudice to the administration of justice”: see for example SRD v Australian Securities Commission (1994) 123 ALR 730 at 733-736 per Hill J and Australian Broadcasting Commission v Parish (1980) 43 FLR 129 at 132-133 per Bowen CJ.

In the present case I am not satisfied that the criteria to which I have referred have been met.  Further, I am of the view that it would be inappropriate to exercise the discretion of the Court to make the orders sought.  I will briefly state my reasons.

1. The fact that counterfeit Grange is being marketed and the additional fact that both the police and Southcorp are investigating those involved in the marketing of the counterfeit Grange is, and has since March 1998 been, a public fact of which those involved in the counterfeit operation will have been well aware.  It would hardly come as a surprise to them that the endeavours of the police, but more particularly of Southcorp, to trace the source of the counterfeit wine are continuing.  Thus, the present matter is not a case where disclosure of the subject matter of the proceedings, the material relied upon or the submissions made will defeat the object of the proceedings or be likely to prejudice the administration of justice.

2. There is a further and fundamental difficulty.  The effect of the Court order sought by Southcorp would be a denial to the public of knowledge to which it is entitled, namely that counterfeit Grange is again being marketed at a time when the public is most vulnerable to exploitation in that regard.  I consider that it would be a quite inappropriate exercise of the Court’s discretion for the Court to make any order which directly, or indirectly, might inhibit public knowledge of the activities of those engaged in seeking to sell counterfeit Grange and also the activities of Southcorp itself in seeking to pursue those engaged in that unlawful conduct.  If, and how such matters are publicised is a matter for Southcorp and the relevant police officers.  My concern is that it is inappropriate for the Court to make orders which prevent the public from knowing of the matters to which I have referred.

3. In any event, I am not satisfied that the proceedings or the material that will be disclosed in the course of the application to the Court under Order 15A will disclose information of a kind that is appropriate for a confidentiality order.  The real case for confidentiality is in respect of the identity of the persons against whom Southcorp wishes to proceed.  Insofar as the name or names of such persons appear in the material before the Court those persons have already been identified and have been interviewed by the police.  The fact that there may be civil proceedings taken against any of them would hardly come as a surprise to them.  Insofar as the identity of other persons is sought to be established, that information is not yet public information nor has it been disclosed in the material before the Court.  Indeed it is that information that the proceeding seeks to obtain.  Thus the real gist of any confidentiality order would be in relation to the identification of the persons concerned in the unlawful conduct where identity is not known to Southcorp but will be disclosed if the Court ultimately makes the orders sought by Southcorp under Order 15A.  If an order is made under Order 15A, as is sought, an application for confidentiality may be made in respect of the persons whose identity might be disclosed by Puttifoot as a result of the order.  That however is an altogether different matter from the application presently before the Court.

For the above reasons I decline to make the orders sought by Southcorp pursuant to ss 17 and 50 of the Act.

I certify that this and the preceding four (4) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel

Associate:

Dated:             22 December 1998

Counsel for the Applicant:	Mr J L Sher QC with Ms L K Barker
Solicitor for the Applicant:	Freehill Hollingdale & Page
Counsel for the Respondent:	Mr N Jepson
Solicitor for the Respondent:	Police Major Fraud Squad
Date of Hearing:	22 December 1998
Date of Judgment:	22 December 1998