Department of Internal Affairs v Skycity Casino Management Limited

[2024] NZHC 2780

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2024-404-314

[2024] NZHC 2780

UNDER

The Anti-Money Laundering and Countering Financing of Terrorism Act 2009

BETWEEN

THE DEPARTMENT OF INTERNAL AFFAIRS

Plaintiff

AND

SKYCITY CASINO MANAGEMENT LIMITED

Defendant

On the papers

Counsel/parties:

S McMullan for the plaintiff

B A Keown and A M Boberg for the defendant T Hunter (National Business Review)

Judgment:

26 September 2024

JUDGMENT OF CAMPBELL J

[Disclosure and non-publication orders; access to court documents]

This judgment was delivered by me on 26 September 2024 at 11 am pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

THE DEPARTMENT OF INTERNAL AFFAIRS v SKYCITY CASINO MANAGEMENT LTD [2024] NZHC

2780 [26 September 2024]

Introduction

[1]                  SkyCity Casino Management Ltd (SkyCity) operates casinos in New Zealand. Since 2013, SkyCity has been subject to obligations under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act). The Department of Internal Affairs (the Department) is the supervisor responsible for monitoring and enforcing SkyCity’s compliance with the Act.

[2]                  The Department commenced this civil proceeding against SkyCity on 16 February 2024, alleging breaches of the Act and seeking pecuniary penalties. SkyCity engaged with the Department to resolve the matter. On 21 May 2024, the parties reached a settlement in which SkyCity admitted to five breaches of the Act.

[3]                  As part of the settlement, the parties agreed to jointly approach the Court     to seek the imposition of a pecuniary penalty at an agreed level. The parties agree that SkyCity should be ordered to pay a penalty of $4.16 million in respect of SkyCity’s admitted breaches of the Act. The parties also acknowledge that the amount of any penalty is a matter for the Court to determine.

[4]                  The pecuniary penalty hearing took place on 5 September 2024. I reserved judgment. I expect to deliver that judgment shortly.

[5]                  Meanwhile, some other matters have arisen. Tim Hunter, of the National Business Review, has applied to access documents on the court file. That application has prompted the Department and SkyCity to jointly apply for disclosure and non- publication orders (additional to those that have already been made).

[6]                  This judgment deals with those matters. It will be convenient to deal first with the application by the Department and SkyCity for disclosure and non-publication orders.

Application for disclosure and non-publication orders

Existing orders

[7]By minute dated 28 August 2024 I made the following orders:

(a)An order prohibiting publication of (Non-Publication Order):

(i)the transaction thresholds referred to in the Department’s statement of claim and amended statement of claim above which SkyCity’s transaction monitoring system creates alerts or SkyCity applied additional controls (paragraphs 37 and 43); and

(ii)the names of any SkyCity customers referred to in the Department’s statement of claim and amended statement of claim (the particulars to paragraph 59, and paragraphs 95(a), 101 to 308 (or 309 in the original statement of claim), 326, 327, 337 and 338); and

(b)An order granting leave under s 47(1) of the Act for the Department and SkyCity to disclose information relating to SkyCity’s suspicious activity reports referred to in the amended statement of claim, in this proceeding (Disclosure Order).

[8]                  I  made  the  Non-Publication  Order  because  the  information  in  [7](a)(i)  is commercially sensitive and the information  in [7](a)(ii) is  personal  information in respect of which the customers have a legitimate expectation of confidentiality.

[9]                  The background to the Disclosure Order is that s 47 provides that no person may disclose in any judicial proceeding any information contained in a suspicious activity report unless the Judge is satisfied that disclosure is necessary in the interests of justice.   I was so satisfied, because disclosure of the information was relevant     to understanding one of SkyCity’s admitted breaches under the Act.

Additional disclosure order

[10]              The Department and SkyCity now realise that they are prohibited from disclosing in any judicial proceeding any information contained in a prescribed transaction report, without the Court’s leave.   This prohibition is a consequence of   s 48C of the Act, which applies s 47 to prescribed transactions.

[11]              The  parties  apply  for  leave  under  s  48C.  They  submit  that  disclosure  of information in the prescribed transaction reports is relevant to understanding another of SkyCity’s admitted breaches under the Act.

[12]              I accept that submission. The reason for making the disclosure order in respect of the suspicious activity reports applies with equal force to information in the prescribed transaction reports. I grant leave accordingly.

Additional non-publication order

[13]              The Department and SkyCity apply for an additional non-publication order  in respect of:

(a)any reference to SkyCity having made a suspicious activity report (or to information that is reasonably likely to disclose the existence of     a suspicious activity report) in the Department’s statement of claim and amended statement of claim in respect of any specific activity; and

(b)any reference to SkyCity having made a prescribed transaction report (or to information that is reasonably likely to disclose the existence of a prescribed transaction report) in the Department’s statement of claim and amended statement of claim in respect of any specific activity.

[14]              The parties identify many paragraphs in the claim and amended claim where this information may be found.

[15]The parties rely on ss 46, 47 and 48C of the Act. Relevantly, s 46 provides:

46       Disclosure of information relating to suspicious activity reports

(1)This section and section 47 apply in respect of the following information:

(a)any suspicious activity report:

(b)any information the disclosure of which will identify, or is reasonably likely to identify, any person—

(i)as a person who, in his or her capacity as an officer or employee of a reporting entity, has handled a

transaction in respect of which a suspicious activity report was made; or

(ii)as a person who has prepared a suspicious activity report; or

(iii)as a person who has made a suspicious activity report:

(c)any information that discloses, or is reasonably likely to disclose, the existence of a suspicious activity report.

(2)A reporting entity must not disclose information to which this section relates to any person except—

(a)a Police employee who is authorised by the Commissioner to receive the information; or

(b)the reporting entity’s AML/CFT supervisor; or

(c)an officer or employee of the reporting entity, for any purpose connected with the performance of that person’s duties; or

(d)a lawyer, for the purpose of obtaining legal advice or representation in relation to the matter; or

(e)another member of a designated business group of which the reporting entity is a member, to the extent necessary for the reporting entity to decide whether to make a suspicious activity report.

(3)A Police employee may disclose information to which this section applies only for law enforcement purposes.

(4)An AML/CFT supervisor may disclose information to which this section applies only to the Police for law enforcement purposes.

…

(8)Any other person who has information to which this section applies   may disclose that information only to the Police for law enforcement purposes.

[16]I have already outlined the effect of ss 47 and 48C.

[17]              I consider that ss 46 and 48C prohibit disclosure of information relating       to suspicious activity reports or prescribed transaction reports except to the persons or for the purposes specified. It does not make any difference that I have granted leave under s 47 for that information to be disclosed in this proceeding. That grant of leave does not override the prohibition in ss 46 and 48C.

[18]              Disclosure of the information to the public (or to a media organisation) is not one of the permitted disclosures in ss 46 and 48C. It follows that I am satisfied I should make the additional non-publication order sought.

Access to court documents

[19]              Mr Hunter applies to access the statement of claim, the amended statement  of claim, the Department’s affidavits and submissions and SkyCity’s affidavits and submissions.

[20]              There are no affidavits on the file. The balance of the requested documents go beyond the formal court record. Access to them is therefore governed by rr 12 and 13 of the Senior Courts (Access to Court Documents) Rules 2017.

[21]              The Department and SkyCity say it is premature to grant access to these documents until delivery of my substantive judgment. Following delivery of that judgment, they do not oppose access to the amended statement of claim, SkyCity’s notice of admissions,  and  the  parties’  submissions,  provided  they  are  redacted  to reflect any non-publication orders. They oppose access to the original statement of claim on the basis that SkyCity never filed a defence to that claim, the allegations in it are untested, and the original claim no longer represents the Department’s case against SkyCity.

[22]              I agree with the Department and SkyCity that access to the original statement of claim should not be provided. That document contains allegations that will now never be tested.

[23]              I also agree that the balance of the documents should be redacted before access is provided.

[24]              I need not deal with the question whether Mr Hunter should access the documents before I deliver my substantive judgment. That is because the process of redaction is unlikely to be completed before I deliver that judgment.

Result

[25]              I grant leave to the Department and SkyCity to disclose information relating to SkyCity’s prescribed transaction reports referred to in the statement of claim and amended statement of claim in this proceeding.

[26]              I grant the non-publication order as set out in [13] above, with reference to the paragraphs identified in the joint memorandum dated 20 September 2024.

[27]              I direct the parties to file, by 2 pm on 27 September 2024, copies of the amended statement of claim, notice of admissions, and parties’ submissions, redacted to reflect any non-publication orders.

[28]I grant Mr Hunter access to those redacted copies, once filed.

Campbell J