Financial Markets Authority v A

[2019] NZHC 827

ORDER PROHIBITING PUBLICATION OF NAME OR IDENTIFYING PARTICULARS OF THE INTERESTED PARTY B (SEE PARAGRAPH [14]) .

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-647

[2019] NZHC 827

BETWEEN

FINANCIAL MARKETS AUTHORITY

Plaintiff

AND

A

Fourth Defendant

B

Interested Party

Hearing:

15 April 2019

Appearances:

S Cervin for the Plaintiff

R S Reed QC and N Speir for the Fourth Defendant and B, an Interested Party

Judgment:

15 April 2019

ORAL JUDGMENT OF GAULT J

Solicitors:

Mr N R Williams and Ms S M Cervin, Meredith Connell, Office of the Crown Solicitor, Auckland Ms R S Reed QC, Queens Counsel, Auckland

Mr N A Speir and Ms T R Bellingham, Rice Speir, Auckland

FINANCIAL MARKETS AUTHORITY v A [2019] NZHC 827 [15 April 2019]

[1]    The Financial Markets Authority (FMA) filed its statement of claim in this civil proceeding on 11 April 2019. It alleges breaches of the Financial Markets Conduct Act 2013 by four defendants.

[2]    The same day, the fourth defendant, who I will call “A”, together with his wife who is not a party but named in the statement of claim, who I will call “B”, filed an application seeking interim name suppression until the first case management conference. They sought interim name suppression for themselves and the name of the company, also referred to in the statement of claim.

[3]The grounds for interim name suppression are that:

(a)The statement of claim refers to B as a director and shareholder of the named accounting company and married to A. B is alleged to be involved in a number of the transactions referred to in the statement of claim. As she is not a party, she has no ability to contest or defend the allegations. It is said she and her family will be prejudiced.

(b)B may require separate legal representation and interim name suppression would allow time for this before publicity.

(c)It is said there is no public interest in the publication of B’s name.

(d)Suppression of the company’s name will avoid B’s name being disclosed.

(e)The proceedings have been filed at short notice while the investigation is active. A is a chartered accountant (employed by the accounting company), and the proceeding will have an impact on his livelihood. Interim name suppression will allow arrangements to be made for the benefit of his family.

(f)Further time is needed to take instructions on an application for ongoing name suppression. Publication now will undermine their right to make such an application.

(g)Interim name suppression is necessary and in the interests of justice.

[4]    Ms Reed QC, counsel for A and B, indicated this morning that she is not seeking interim name suppression for A per se, but merely consequent to the application by B to ensure that B is not named.

[5]    This morning the FMA has indicated it opposes the order sought. It intends to release a media statement following service and initial disclosure. That is expected to take place later today. Its intended media release will not name B or the company.

[6]    This Court has inherent jurisdiction to suppress names and identifying particulars of parties and others named in civil proceedings such as this. It is a discretionary jurisdiction, but the starting point is the principle of open justice and the related freedom of expression guaranteed by s 14 of the New Zealand Bill of Rights Act 1990. Together, these create a presumption of disclosure of all aspects of civil court proceedings. They are exemplified by the latter part of the truism that “justice must not only be done, it must be seen to be done”. So, the courts administer justice in public, enabling public scrutiny and thus ensuring public confidence in the administration of justice.1

[7]    As the media are the conduit through which most members of the public receive information about court proceedings, it follows that the principle of open justice is inextricably linked to the freedom of the media to report on court proceedings.2

[8]    A Court will need to have sound reasons for finding that the presumption favouring publication is displaced. But there is no onus on an applicant. Nor is it correct to set any particular threshold.3

[9]    The correct approach requires the Court to strike a balance between open justice considerations and the interests of the party who seeks suppression.4

1      Y v Attorney-General [2016] NZCA 474, (2016) 23 PRNZ 452 at [25]-[26].

2      At [28], citing A v British Broadcasting Corporation [2014] UKSC 25, [2015] AC 588 at [26].

3      At [29]-[30].

4      At [31], citing Hart v Standards Committee (No 1) of the New Zealand Law Society [2012] NZSC 4 at [3].

[10]   The balancing exercise is necessarily case dependent.5 While not attempting a definitive list of possible reasons, the Court of Appeal in Y v Attorney-General has said:6

What can be said is that the more central is the information sought to be suppressed to an understanding of the nature of the proceeding and to what it is that the court must decide, the stronger is the presumption favouring disclosure. A court is unlikely to deliver a judgment so shorn of detail that the public cannot readily understand what the court has decided, and why. Relevant also, in striking the balance, is the timing, nature, extent and duration of the suppression sought – whether it is of the identity of a party or parties, or of the identity of a witness or witnesses, or the suppression of information in the case. Suppression is not all or nothing. Different considerations may apply depending on what is sought to be suppressed. Interim, rather than permanent, suppression is more likely to be granted at an interlocutory stage of a proceeding – at trial, the court will be better placed to assess any need for permanent suppression.

[11]   This is a civil pecuniary penalty proceeding by the FMA, which has a key role in regulating capital markets in New Zealand. The FMA considers that confirming publicly that it has commenced enforcement action is an important part of its function. This is reflected in its Enforcement Policy. I accept that transparency of this regulatory enforcement proceeding has an additional public interest somewhat more akin to criminal proceedings.

[12]   Striking the balance at this interim stage, I consider that B’s name should be suppressed. She is not a party and therefore her role appears not to be central. She may need separate legal representation but, until this morning, confidentiality orders of the FMA meant she could not see the statement of claim. The FMA do not propose to name her in the media release but this application in open court, with media present today, means that would no doubt occur absent name suppression. I accept that mere connection with A does not, of itself, justify suppression, but here the connection is said to be more. She is a director and shareholder of the company of which he is an employee and is said to be involved in the transactions. Rather than suppression until the first case management conference, which would only follow a case management review under r 7.3, I order interim name suppression for a finite period of three weeks

5      Y v Attorney-General [2016] NZCA 474, (2016) 23 PRNZ 452 at [32].

6 At [34].

within which separate advice can be sought and, if appropriate, a further application can be made.

[13]   As indicated, the application is not pursued in relation to A in his own right. He is a party and his status and livelihood as a chartered accountant does not of itself justify name suppression. He has known of the FMA’s investigation for some time. However, Ms Reed submitted that to protect B’s name in the interim it is necessary to extend the identifying particulars to the naming of A because B’s connection with the company will be obvious to anyone who searches his name. I am not satisfied that balancing the interests the suppression needs to go that far.

[14]   The interim name suppression should apply to B and identifying particulars of her which include the name of the company, and any involvement B has with the parties, including A, the company or the subject matter of the proceeding.

[15]   Finally, in these circumstances and considering the same factors, by consent I direct that documents on this file, including the statement of claim, may not be accessed without the permission of a Judge.

Gault J