Sun Capital Pty Ltd v National Australia Bank Limited
[2024] FCA 47
•2 February 2024
FEDERAL COURT OF AUSTRALIA
Sun Capital Pty Ltd v National Australia Bank Limited [2024] FCA 47
File number(s): VID 795 of 2023 Judgment of: WHEELAHAN J Date of judgment: 2 February 2024 Catchwords: PRACTICE AND PROCEDURE — interlocutory application – where the respondent sought a suppression order under ss 37AF and 37AG(1)(a) of the Federal Court of Australia Act 1976 (Cth) over parts of the applicants’ statement of claim and an affidavit in support, and confidentiality orders under r 2.32 of the Federal Court Rules 2011 (Cth) – where the respondent submitted that these orders were necessary to prevent prejudice to the proper administration of justice that would otherwise occur due to the undermining of a legislative scheme – held that the Court needed to be satisfied, on the basis of cogent evidence, that the orders sought were necessary to prevent prejudice to the administration of justice – the respondent did not advance a sufficient basis on which the Court could decide that suppression or non-publication or confidentiality was necessary – interlocutory application dismissed. Legislation: Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), ss 5, 123(1), 123(10), 123(11)
Federal Court of Australia Act 1976 (Cth), ss 37AF, 37AG, 37AG(1)(a)
Federal Court Rules 2011 (Cth), rr 2.28, 2.32, 6.01, 16.21(2)
Access to Documents and Transcripts Practice Note (GPN-ACCS)
Cases cited: Baptist Union of Queensland — Carinity v Roberts [2015] FCA 1068; 241 FCR 135
Chandrasekaran v Commonwealth of Australia (No 3) [2020] FCA 1629
Deputy Commissioner of Taxation v Hawkins [2016] FCA 164; 341 ALR 255
Ferguson v Tasmanian Cricket Association (trading as Cricket Tasmania) [2021] FCA 1507
Hogan v Australian Crime Commission [2010] HCA 21; 240 CLR 651
Huikeshoven v Secretary, Department of Education, Skills and Employment [2021] FCA 1359
Llewellyn v Nine Network Australia Pty Ltd [2006] FCA 836; 154 FCR 293
Oldham v Capgemini Australia Pty Ltd [2015] FCA 1149; 241 FCR 397
Rush v Nationwide News Pty Ltd [2018] FCA 357; 359 ALR 473
Vulcan Energy Resources Ltd v Murray [2021] FCA 1506
Division: General Division Registry: Victoria National Practice Area: Commercial and Corporations Sub-area: Regulator and Consumer Protection Number of paragraphs: 21 Date of hearing: 2 February 2024 Counsel for the Applicants Mr M Hoyne Solicitor for the Applicants Moray & Agnew Counsel for the Respondent Mr K Loxley Solicitor for the Respondent Allens ORDERS
VID 795 of 2023 BETWEEN: SUN CAPITAL PTY LTD
First Applicant
GOLD DEALERS EXCHANGE PTY LTD
Second Applicant
MICHAEL KUKULKA
Third Applicant
AND: NATIONAL AUSTRALIA BANK LIMITED ABN 12 004 044 937
Respondent
ORDER MADE BY:
WHEELAHAN J
DATE OF ORDER:
2 FEBRUARY 2024
THE COURT ORDERS THAT:
1.The respondent’s interlocutory application filed 29 November 2023 is dismissed.
2.With effect from 4.00 pm 9 February 2024, order 3 of the orders made 1 December 2023 by which the statement of claim and pages numbered 19 to 29 of the affidavit of Christopher Jonathan Kerrigan dated 29 November 2023 were ordered to be confidential and not available for public inspection, be set aside.
3.The respondent is to pay the applicants’ costs of the interlocutory application.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
Ex tempore, revisedWHEELAHAN J:
The respondent has filed an interlocutory application seeking a suppression order in relation to much of the applicant’s statement of claim. Those parts of the statement of claim in respect of which suppression is sought are referred to in the interlocutory application and the affidavit in support as “protected information”.
The interlocutory application was made returnable at the first case management hearing on 1 December 2023. Counsel for the respondent’s primary submission at the first return was that the application should be adjourned, because the respondent considered that it was constrained in what it could disclose to the Court by reason of the operation of legislative provisions that prohibited disclosure of information without an exemption from a Commonwealth regulator. Counsel for the respondent submitted that the constraints prevented him from even naming the regulator, or referring to the legislation in question. Without being critical of the legal representatives for the respondent, the submission that the Court should act on submissions concerning legislation and a regulator that could not be identified had the air of a Kafka novel. I expressed some doubt that legislation could have this effect. However, having regard to the considered submissions of counsel for the respondent, I erred on the side of caution and adjourned the hearing of the interlocutory application to today, 2 February 2024. I stated that if on the adjourned hearing the respondent was not in a position to identify the legislation and the regulator, then I was minded to dismiss the application. In order to preserve the status quo, I also made an order that, for the time being, the statement of claim and specified pages of an affidavit that produced the statement of claim not be available for inspection by a person not a party to the proceeding.
The identity of the regulator and the terms of the legislation are now before the Court. By an instrument dated 29 January 2024, a delegate of the Chief Executive Officer of the Australian Transaction Reports and Analysis Centre (AUSTRAC) granted to the respondent a limited exemption from the non-disclosure provisions in s 123(1)(b) of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (the Act). The terms of the limited exemption given to the respondent (referred to in the instrument as “NAB”) are as follows –
(1)NAB and NAB’s legal representatives may only disclose in relation to Sun Capital Pty Ltd & Ors v NAB, that the relevant provision underlying NAB’s suppression application dated 29 November 2023 is paragraph 123(1)(b) of the Act, and that NAB has made an application to AUSTRAC under section 248 of the Act for an exemption from paragraph 123(1)(b) of the Act.
(2)NAB and NAB’s legal representatives must not communicate, or make disclosures of, any other suspicious matter material to any person, except as permitted by the Act.
(3)NAB must, in writing, notify the AUSTRAC CEO within 14 days of any event that may affect its ability to comply with this instrument.
There remains extant an application by the respondent to the regulator for a broader exemption than the limited exemption that was given on 29 January 2024, so as to enable the respondent to plead to the statement of claim, to give discovery, and to tender evidence. Whether this exemption is necessary was disputed by counsel for the applicants.
Subsection 123(1) of the Act provides –
123 Offence of tipping off
Prohibitions
(1)A reporting entity must not disclose to a person other than an AUSTRAC entrusted person:
(a)that the reporting entity has given, or is required to give, a report under subsection 41(2); or
(b)any information from which it could reasonably be inferred that the reporting entity has given, or is required to give, that report.
…
The terms “reporting entity” and “AUSTRAC entrusted person” are defined by s 5. The penalty for contravention of s 123(1) is imprisonment for two years, or 120 penalty units, or both: s 123(11). Another feature of s 123 is subsection (10), which provides –
(10)Except where it is necessary to do so for the purposes of giving effect to this Act or the Financial Transaction Reports Act 1988, a reporting entity is not to be required to disclose to a court or tribunal information mentioned in subsection (1) or (2).
The parties have agreed on directions to progress this proceeding, but the respondent maintains its application for a suppression order, which is sought pursuant to ss 37AF and 37AG(1)(a) of the Federal Court of Australia Act 1976 (Cth). The respondent has also enlarged its application to embrace a further order for confidentiality and restricting public access to the documents in question. The basis for the application is that a suppression or non-publication order is necessary to prevent prejudice to the proper administration of justice. The respondent submitted that publication of the allegations in the statement of claim to the public at large may serve to undermine the Act’s object of restricting the disclosure of information from which it could reasonably be inferred that the respondent was required to give a report to the regulator, for instance if information may have been relevant to the investigation of an offence. The respondent submitted that a suppression or non-publication order should be made to limit, as far as possible, the publication of the information while AUSTRAC is considering the broader exemption application.
As I will identify below, no sufficient basis is advanced on which it could be thought that allegations made by the applicants to this proceeding should be protected. There is no allegation by the respondent, still less any evidence, that the claims have been made by the applicants in breach of any legal obligation attaching to the information underlying the applicants’ claims.
The proceeding was commenced by the applicants on 28 September 2023. On 29 September 2023, the respondent appeared by filing a notice of address for service. By order made 3 October 2023, I fixed the first case management hearing for 1 December 2023. Thereafter, there was correspondence exchanged between the solicitors for the parties concerning a proposal by the respondent to adjourn the first case management hearing. By letter dated 17 October 2023 the solicitors for the respondent stated that their client was subject to a range of regulatory obligations that impeded its ability to defend the proceeding. The solicitors stated that they would not identify the legislative source of the obligations, or the identity of the regulator responsible for enforcing it, claiming that to do so would undermine the purpose of the relevant prohibition. The solicitors for the respondent foreshadowed that they would apply to the unnamed regulator for an exemption so as to permit the respondent to plead to allegations in the statement of claim, give discovery, and tender evidence. They sought an adjournment of the first case management hearing until after the regulator had considered the respondent’s application. In correspondence, the solicitors for the applicants opposed this course.
As I have noted above, the evidence is that the respondent did not make its foreshadowed application to the then‑unnamed regulator until 27 November 2023, which was almost two months after the respondent appeared to this proceeding. There is no explanation in the evidence for this period of delay. The respondent’s solicitor has deposed that the respondent does not know whether, or when, the regulator might grant the broader exemption that has been sought.
Rule 2.32 of the Federal Court Rules 2011 (Cth) provides that a non-party may, without leave, inspect a range of documents in a proceeding in the proper Registry after the first directions hearing. The documents that may be inspected include pleadings. In its practical operation, r 2.32 should be read together with the Court’s Access to Documents and Transcripts Practice Note (GPN-ACCS), dated 10 February 2023.
Rule 2.32 evinces an intention that there is a public interest in the disclosure of particular documents filed with the Court, such as originating process and pleadings. On the other hand, affidavits may not be inspected without leave of the Court, but ordinarily leave should be given if an affidavit has been read to the Court such that it has been received into evidence in open court: Deputy Commissioner of Taxation v Hawkins [2016] FCA 164; 341 ALR 255 at [9] (Pagone J); Baptist Union of Queensland — Carinity v Roberts [2015] FCA 1068; 241 FCR 135 at [33]‑[36] (Rangiah J), and the cases cited therein. In Oldham v Capgemini Australia Pty Ltd [2015] FCA 1149; 241 FCR 397 at [24], Mortimer J described the operation of r 2.32(2) as follows –
... A non-party (and therefore, any member of the public) is entitled to know who the parties to a proceeding in this Court are, and to have an address (through a notice of address for service) for those parties. A member of the public is entitled to see those documents which will enable that person to understand what a proceeding in this Court is about, and how the parties’ respective cases are framed: namely, the originating application and the pleadings. The public is entitled to be able to follow the course of the proceedings through processes such as interlocutory applications, appeals and discontinuances. The public is entitled to be able to see the Court’s reasons for the disposition of a proceeding.
In relation to pleadings specifically, Rares J stated in Llewellyn v Nine Network Australia Pty Ltd [2006] FCA 836; 154 FCR 293 at [29] that the reason that pleadings may be inspected by the public is so that the public “may see what is the controversy brought to the court for resolution by it in its ordinary function as a court constituted under Ch III of the Constitution”. This was cited in Rush v Nationwide News Pty Ltd [2018] FCA 357; 359 ALR 473 at [189] (Wigney J).
Of course, not every document filed with the Court is required to remain on the court file. There is power under r 2.28 to order the removal of documents from a Court file on the Court’s own initiative, or on the application of a party, including an application under r 6.01 or r 16.21(2). Those rules are concerned with documents, including pleadings, containing scandalous, vexatious, or oppressive matter, or which are otherwise an abuse of process of the Court. It follows that there is no necessary public interest in non-party access to such documents. The term “scandalous” for these purposes has a specific, understood meaning that goes beyond allegations that merely raise a scandalous fact, as explained by Wigney J in Chandrasekaran v Commonwealth of Australia (No 3) [2020] FCA 1629 at [104].
The Court may order, for the purposes of r 2.32(1), that any document filed in the proceeding be confidential. A document that is filed that is subject to such an order may not be inspected by a person who is not a party: r 2.32(3). In Rush v Nationwide News at [199] Wigney J stated, and I agree, that it is difficult to see why the principles concerning open justice that apply to ss 37AF and 37AG of the Federal Court of Australia Act, which concern the making of non‑publication and suppression orders, should not apply equally to an order for confidentiality made under r 2.32. Wigney J’s statement in Rush was cited with approval by Colvin J in Vulcan Energy Resources Ltd v Murray [2021] FCA 1506 at [5]. Mortimer J came to a similar view in Ferguson v Tasmanian Cricket Association (trading as Cricket Tasmania) [2021] FCA 1507 at [8].
Here, the respondent seeks an order under ss 37AF and 37AG(1)(a) of the Federal Court of Australia Act that until further order “the Protected Information” in the statement of claim is not to be disclosed or published other than to –
(a)the Court, staff and any other person assisting the Court;
(b)the parties to the proceedings; and
(c)counsel and the solicitors of the parties to these proceedings.
As I mentioned earlier, the respondent also seeks an order under r 2.32 restricting public access to the relevant documents. The orders are sought by the respondent so as to “prevent prejudice to the proper administration of justice”. To make an order on this ground the Court must be satisfied that the order is necessary to prevent prejudice to the administration of justice: s 37AG(1)(a). In Hogan v Australian Crime Commission [2010] HCA 21; 240 CLR 651 at [30], the Court stated in relation to the earlier cognate provisions that the word “necessary” is a strong word, and in a context where the administration of justice that is spoken of is the exercise by the Federal Court of the judicial power of the Commonwealth, the Court stated at [31] –
It is insufficient that the making or continuation of an order under s 50 appears to the Federal Court to be convenient, reasonable or sensible, or to serve some notion of the public interest, still less that, as the result of some “balancing exercise”, the order appears to have one or more of those characteristics.
(Footnote omitted.)
If the Court considers that a suppression or non-publication order is necessary to prevent prejudice to the proper administration of justice, then there is no residual discretion to refuse to make the order: Hogan v Australian Crime Commission at [33]. In deciding whether to make an order, the Court must take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice. It has long been held that the public interest in open justice generally prevails over the private interests of individuals in avoiding embarrassment, and the commercial interests of corporations in avoiding publicity about their affairs.
In Huikeshoven v Secretary, Department of Education, Skills and Employment [2021] FCA 1359, Jackson J stated at [26] –
Cogent evidence is needed and a belief that the orders are necessary will not be sufficient: see Lew v Priester (No 2) [2012] VSC 153; (2012) 35 VR 216 at [14] (Davies J). That is not a matter of mere form but is for the purpose of ensuring that suppression orders are kept for exceptional cases. It is therefore necessary for the court to carefully scrutinise the justification for the proposed orders: PQR v Secretary, Department of Justice and Regulation (No 1) [2017] VSC 513; (2017) 53 VR 45 at [54].
As I foreshadowed at the outset, the respondent has not advanced a sufficient basis on which the Court could decide that suppression of the applicants’ allegations in the statement of claim is necessary to prevent prejudice to the proper administration of justice, still less is there any evidence that would lead the Court to decide that a suppression order should be made. No legal obligation on the applicants to keep the allegations in the statement of claim confidential was advanced. It is self-evident that the subject-matter of the allegations in the statement of claim is already in the public domain. It is also of some significance that the regulator, which has knowledge of this proceeding, has not sought to intervene to advance any public interest in the non-publication of the applicant’s claims.
For the above reasons, the interlocutory application will be dismissed. As the dismissal of the application disposes finally of the issue that has been raised, I will continue the order restricting access to the statement of claim and parts of the affidavit of Christopher Jonathan Kerrigan on the court file by a further seven days to enable any application for leave to appeal to be made, after which the order will be set aside.
I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wheelahan. Associate:
Dated: 2 February 2024
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