Financial Markets Authority v Warminger - [2015] NZHC 2306

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
COMMERCIAL LIST

CIV-2015-404-001727 [2015] NZHC 2306

UNDER The Securities Markets Act 1988

BETWEEN

FINANCIAL MARKETS AUTHORITY Plaintiff

AND

MARK WARMINGER Defendant

Hearing: (On the papers)

Judgment:

23 September 2015

JUDGMENT OF VENNING J

This judgment was delivered by me on 23 September 2015 at 11.45 am, pursuant to Rule 11.5 of the
High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors: Meredith Connell, Auckland Cook Morris Quinn, Auckland Bell Gully, Auckland
Chapman Tripp, Auckland

Copy to: J B M Smith QC, Wellington
M Corlett, Auckland
NBR

FINANCIAL MARKETS AUTHORITY v WARMINGER [2015] NZHC 2306 [23 September 2015]

Introduction

[1] The Financial Markets Authority (FMA) has issued civil proceedings seeking pecuniary penalties against Mr Mark Warminger for trading carried out while employed by Milford Asset Management Limited (Milford) between December 2013 and August 2014. The FMA alleges Mr Warminger’s trading amounted to market manipulation in breach of s 11B of the Securities Markets Act 1988.

Application

[2] Mr Hunter from the National Business Review has applied to the Court for access to the Court file being the statements of claim and defence (and supporting documents).

[3] The application was referred to counsel for the FMA and Mr Warminger. The FMA’s position is neutral. It abides the decision of the Court on the application but as a number of third parties are named in the statement of claim who are not parties to the proceeding it advised them of the application. As a result counsel for Milford has advised that Milford is neutral and will abide the decision of the Court. Memoranda has been filed by counsel for two of the third parties referred to in the proceeding. Both seek as a condition of any release to any non-party redactions to the names of any of their specifically named staff, and in one case redactions to its name and the names of any trading firms. They each seek a copy of the redacted statements of claim and defence if released to any other non-party, as at present they have not received copies of the documents.

[4] Other parties have also made similar requests. Counsel for the defendant opposes the application.

[5] The proceedings are at a very preliminary stage. Although a statement of defence has been filed the next appearance in the Commercial List scheduled for 2
October 2015 will be a directions conference.

[6] The Court is required to take into account the nature of and reasons for the application together with the following matters to the extent they are relevant:1

(a) the orderly and fair administration of justice;

(b) the protection of confidentiality and privacy interests; (c) the principle of open justice;
(d) the freedom to seek, receive and impart information; (e) any other relevant matter.

[7] As confirmed by the Court of Appeal in Schenker AG v Commerce Commission2 no one particular factor has primacy. The exercise required to be carried out by the Court is a balancing exercise.

[8]…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2015] NZHC 2306
Decision Date: 23 September 2015

CaseChat Overview and Summary

The Financial Markets Authority (FMA) filed a case against Mark Warminger, who was employed by Milford Asset Management Limited (Milford) between December 2013 and August 2014, seeking pecuniary penalties for alleged market manipulation under Section 11B of the Securities Markets Act 1988. Hunter, a journalist from the National Business Review, applied for access to the court file, including the statements of claim and defence, on the grounds of significant public and commercial interest. The FMA and Milford were neutral on the application, while the defendant opposed it. The court had to balance several factors, including the administration of justice, confidentiality, privacy, open justice, and freedom of information.

The court considered the principles of open justice and public awareness, noting that the FMA had already issued a press release detailing the general nature of the allegations. The court found that disclosing the untested allegations would not advance the understanding of acceptable behaviour and that the orderly and fair administration of justice would not be served by disclosure at that point in time. Additionally, the court considered the confidentiality and privacy interests of third parties named in the proceedings, as well as the potential for disclosure to influence the evidence of non-parties who might become witnesses in the proceeding.

After weighing the purpose of the application and the relevant factors, the court decided not to grant the application for access to the pleadings at that stage of the process. The court declined the application on the grounds that disclosure at that time was not appropriate.

The court may consider making further orders in the future as the case progresses.

Orders