ASB Bank Ltd v AB HC Auckland CIV 2009-404-5995
[2010] NZHC 1266
•6 July 2010
ORDER PROHIBITING PUBLICATION OF NAMES, ADDRESSES OR IDENTIFYING PARTICULARS OF DEFENDANTS
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2009-404-5995
BETWEEN ASB BANK LTD Plaintiff
AND AB
First Defendant
AND BC
Second Defendant
AND CD
Third Defendant
AND DE
Fourth Defendant
Hearing: 15 June 2010
Appearances: Kyra Vince for Plaintiff
David Jones QC for First, Second and Third Defendants
Bruce Gray QC for APN New Zealand Ltd
Judgment: 6 July 2010
JUDGMENT OF HARRISON J
In accordance with R11.5 I direct that the Registrar endorse this judgment with the delivery time of
3:00 pm on 6 July 2010
SOLICITORS
Bell Gully (Auckland) for Plaintiff
Kidd Tattersfield Maclean (Auckland) for First, Second and Third DefendantsAPN New Zealand Ltd (Auckland)
COUNSEL
DPH Jones QC; BD Gray QC
ASB BANK LTD V AB AND ORS HC AK CIV-2009-404-5995 6 July 2010
Introduction
[1] APN New Zealand Ltd, the publisher of the Herald on Sunday newspaper, applies to set aside an interim order made in this Court on 18 November 2009 prohibiting publication of the names of defendants in a proceeding brought by the ASB Bank Ltd.
Background
[2] The ASB Bank employed Mr Stephen Versalko as an investment advisor from 1997 until August 2009. Mr Versalko later pleaded guilty to defrauding the bank of many millions of dollars. Earlier this year he was convicted and sentenced to a lengthy term of imprisonment.
[3] ASB issued this proceeding in September 2009 against the second defendant and her companies, the first, third and fourth defendants (collectively BC), to recover various payments in excess of $4m. BC is sued for monies had and received. The bank claims that Mr Versalko dishonestly and fraudulently caused this amount to be paid to BC, knowing that he was not entitled to make them; and that it was unconscionable for BC to receive and retain the proceeds. BC denies the claim, alleging that she received all payments from Mr Versalko in good faith, without knowledge of his dishonesty, on the basis that the funds were able to be used as BC saw fit and that the payments were irrevocable.
[4] BC's affirmative defence of change of position is the source of media interest in this proceeding. BC says that:
(1) She was working as an escort at the Pelican Club in Auckland when she met Mr Versalko; and that his payments were made to her for services rendered as an escort there;
(2)A relationship then developed between the two of them outside the club environment, evolving to the point where she agreed to have Mr Versalko as her only client and give priority to him over
everything else in her life, make herself available to him on request, travel with him within New Zealand and overseas at his request and stay with him over weekends or more extended periods, depending on his requirements; and
(3)Mr Versalko led her to believe that he wanted her to become self- sufficient and realise her goal of setting up a massage centre and he placed her in a position whereby he would not have to pay her money for services on an ongoing basis.
[5] BC applied for a confidentiality order. The media was not then represented. Heath J was satisfied that at that stage there were grounds to suppress publication of personal information which affected BC and was irrelevant to issues arising in the proceeding. On 18 November 2009 the Judge made an interim order as follows:
[a]The name and identifying particulars of the second defendant and any relationship between her, the other defendants, directors of those companies and any present or former employee of ASB Bank Ltd is prohibited from publication, pending further order of the Court.
[b]An order prohibiting search, copy or inspection of the Court file, without leave of a Judge of this Court. Any application shall be made on notice to all parties to the present proceeding.
[6] On 17 May 2010 I allowed APN's application to vary these orders to the limited extent of, first, granting leave to search, copy or inspect the Court file in the proceeding, and, second:
[4] … varying para [7][a] of Heath J's orders to the extent of excluding from the prohibition on publication any reference to Mr Stephen Versalko and the defendants; in other words, the media are free to publish any particulars which will identify the relationship between the defendants and Mr Versalko, who is of course a former employee of ASB.
[5] Leave is reserved to the media to apply for further variations of para [7][a] of Heath J's orders at any later stage.
[7] APN has since applied to vary or rescind the substance of the order made by Heath J on 18 November 2009. Its objective is to be able to publish BC's name. Mr David Jones QC, BC's counsel, raises as the primary ground of opposition the risk that publication of her name is likely to be detrimental to the mental or
psychological health and welfare of BC's teenage daughter who does not know of her mother's former occupation or her participation in this proceeding.
Decision
[8] Mr Bruce Gray QC, APN's counsel, responsibly accepts the risk of adverse consequences for the teenage daughter of a woman who has lived off the proceeds of prostitution and whose name is publicised by a national newspaper. However, that factor, he submits, could not justify continuing the confidentiality order. While the principle of open justice is a constant between both criminal and civil jurisdictions, Mr Gray notes that the power to suppress and the reasons for its exercise differ. In criminal proceedings the right to publication often yields to the right of an accused person to a fair trial. For that purpose statutory provisions exist to enforce
suppression rights.[1]
[1] Sections 138 and 140 Criminal Justice Act.
[9] However, in civil proceedings the power to suppress lies in the Court's inherent jurisdiction.[2] The starting point, Mr Gray submits, is that the business of the Court should be open to the public. The media as its surrogates should be free to report. The Court's view, he says, about whether or not information is truly in the public interest is irrelevant (a warning shot fired across the bows of judicial temptation to impose its own values about what information is or is not in the public good).
[2] Scott v Scott [1913] AC 417; Broadcasting Corporation of New Zealand v Attorney-General [1982] 1 NZLR 120.
[10] To this point I accept Mr Gray's argument and its rationale in principle and policy. However, we part company at the next stage. Mr Gray submits that, as a matter of principle, the grounds available for interference with the right to publish are very few, even rare, such as might go to the administration of justice or where publicity might disclose a state or trade secret; that the public interest must always predominate where the applicant for suppression raises a general but not a specific risk; and that that risk must not be of a type which can be reasonably expected. He
says that BC must establish exceptional circumstances to justify suppression of identity.
[11] Mr Gray submits that BC has not discharged that onus. He develops his submission in this case by identifying the practical importance of the right to free speech as humanising a story. He says the cathartic effect of publicity in human interest is enhanced by information being personalised - in this case to BC. The purpose of publication, he says, is to enable the community to enjoy a shared experience where common values are debated in a public forum. He says readers are able to relate to the story when they know the names of the participants.
[12] I do not agree with Mr Gray that BC carries the burden of proving exceptional circumstances to displace the principle of open justice, or with his sophisticated rationale of catharsism in this case. Mr Gray relies principally upon Asher J's observation in Peters v Birnie that "a party seeking to justify a confidentiality order will generally have to show specific adverse circumstances that are exceptional" (apparently accepting a submission by Mr Gray as counsel in that
case).[3] In Peters a defendant sought to suppress publication of financial information
disclosed during a hearing on an application to bring a derivative action under s 165
Companies Act 1993. Asher J was not satisfied that the information was sufficiently confidential to rebut the principle of open reporting.
[3] Peters & Ors v Birnie & Ors HC Auckland CIV-2009-404-8119, 19 March 2010, at [25].
[13] The real ground of complaint in Peters was apparently that reporting would be embarrassing or detrimental to the reputation of a party whose financial affairs were being aired in Court because another party had chosen to sue him.[4] On the facts suppression would have created a significant if not overwhelming departure from the principle of open justice. The circumstances were not exceptional.
[4] Ibid, at [29]-[31].
[14] This case is very different. Asher J referred in Peters to a number of decisions ordering suppression of the names of witnesses and parties in civil cases. With respect, I adopt his observation that they are examples of "exceptions to the
paramount principle of open justice".[5] In other words, there is no onus on an applicant to show exceptional circumstances; the question is simply whether the circumstances justify an exception to the fundamental principle. In this case, while the proceeding is now settled without a trial, the media has been able to inform the public fully about the details of ASB's claim against BC as a result of the orders made on 17 May 2010. The fundamental requirement of open reporting of the Court's business has been satisfied. BC's identity is all that is missing. Contrary to Mr Gray's submission, publication of her name is not necessary to advance public debate from which common values are formed.
[5] Ibid, at [23].
[15] The observations of Lord Widgery in R v Socialist Worker Printers and Publishers Ltd, Ex Parte Attorney-General,[6] approved by our Court of Appeal in Taylor v Attorney-General,[7] while made in a slightly different context, are on point:
When one has an order for trial in camera, all the public and all the press are evicted at one fell swoop and the entire supervision by the public is gone. Where one has a hearing which is open, but where the names of the witnesses are withheld, virtually all the desirable features of having the public present are to be seen. The only thing which is kept from their knowledge is the name of the witness. Very often they have no concern with the name of the witness except a somewhat morbid curiosity. The actual conduct of the trial, the success or otherwise of the defendant, does not turn on this kind of thing.
[6] R v Socialist Worker Printers and Publishers Ltd, Ex Parte Attorney-General [1974] 3 WLR 801 (CA) at 811.
[7] Taylor v Attorney-General [1975] 2 NZLR 675 (CA) per Wild CJ at 678 and Richmond J at 682-683.
[16] Mr Gray accepts that a balancing exercise is required. Publication of BC's name will necessarily focus on her occupation and the extent of her financial benefits derived from Mr Versalko's patronage. It is not unlawful to act as a paid escort, or to participate in what is popularly known as prostitution. But the moral opprobrium and stigma which has always characterised this occupation remains undiminished. Mr Jones has produced expert evidence, if support is needed for the proposition, that disclosure of a mother's identity and occupation in these circumstances might have dramatic and far reaching effects on a teenage girl who is at a vulnerable and impressionable age. I am satisfied that those effects are indeed likely and that BC's
daughter risks becoming a victim by association because of forced disclosure to her social environment - her peers, teachers and local community.
[17] This Court is guided by general principles in exercising its inherent jurisdiction to ensure that its processes are not abused. One is the public interest in protecting those who may suffer real detriment or damage as a consequence of giving nominal priority to another interest which, on analysis, has been largely satisfied. The public interest in knowing a party's name does not predominate in the civil arena; unlike criminal proceedings, there is no element of community protection. That factor is just one of a number.
[18] In my judgment, the marginal public benefit to be derived from publication of BC's name is outweighed by the obvious risk of lasting psychological or emotional harm to a child who would be the innocent victim of publicity.
[19] Moreover, as Mr Jones submits, this proceeding has now been settled. There is no legitimate public interest in disclosing BC's identity. It is information of a private nature in which there is no qualifying public interest. And the proceedings themselves have not, as Mr Jones points out, been directed to details of how Mr Versalko perpetuated his fraud or issues of bank security. That information is already in the public domain as a result of publicity about the criminal proceeding. This privacy interest would separately justify suppression.
[20] APN's application to set aside the confidentiality order is dismissed. APN is ordered to pay BC costs and disbursements on this application according to category
2B.
Rhys Harrison J
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