Silveroaks Group Limited v Westpac Banking Corporation

[2014] NZHC 392

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-1099 [2014] NZHC 392

BETWEEN  SILVEROAKS GROUP LIMITED First Plaintiff

SILVER OAKS PROPERTY No.1

LIMITED Second Plaintiff

ANDWESTPAC BANKING CORPORATION First Defendant

WESTPAC NEW ZEALAND LIMITED Second Defendant

Hearing:                   On the papers

Appearances:           J Turner/C Eric for First and Second Plaintiffs

M V Robinson/D J Tillett for First and Second Defendants
R Stock of Fairfax Media

Judgment:                7 March 2014

JUDGMENT OF ASSOCIATE JUDGE R M BELL

This judgment was delivered by me on 7 March 2014 at .12:00md

pursuant to Rule 11.5 of the High Court Rules.

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Registrar/Deputy Registrar

Solicitors:

Glaister Ennor, Auckland, for First and Second Plaintiffs
Simpson Grierson, Auckland, for First and Second Defendants

Copy for:

John W Turner, Barrister, Auckland, for Plaintiffs

Rob Stock, Sunday Star*Times, Fairfax Media, Auckland (Applicant)

SILVEROAKS GROUP LIMITED v WESTPAC BANKING CORPORATION [2014] NZHC 392 [7 March

2014]

[1]      Mr Rob Stock of Fairfax Media has applied to inspect the file.  In particular he wishes to see the statements of claim and defence (if filed).  He says that there is significant public interest in the case, as it involves claims for damages as a result of alleged misrepresentation of interest rate swaps. This proceeding has not reached the substantive hearing stage and accordingly his application for access is considered under rr 3.13 and 3.16 of the High Court Rules.

[2]      The plaintiffs abide the decision.   The defendants (collectively “Westpac”) oppose the access request.   I am dealing with this matter on the papers, in the interests of addressing the access request promptly.

[3]      The plaintiffs are suing Westpac for losses they allege they incurred as a result of entering into interest swap transactions.

[4]      Westpac’s grounds for opposing Mr Stock’s request are: (a)    The pleadings are incomplete.

(b)      The pleadings contain private information.

(c)       Documents on the court file contain information that is confidential to the parties and commercially sensitive.

(d)      On  certain  interlocutory  applications,  the  court  file  is  presently imbalanced.

(e)       An interlocutory application is shortly to be heard.

(f)       The matter is essentially a private dispute between the parties.

[5]      Because I have decided not to allow the request, I describe matters in general terms  and  do  not  go  into  details  so  as  to  avoid  disclosing  matters  that  would otherwise be available only by inspecting the court file.

The nature and reasons for the request

[6]      Mr  Stock’s  request  is  a  conventional  application  by  the  media.     The proceeding is a matter of legitimate public interest.  It concerns a dispute between a bank and its customers as to the marketing, implementation and effects of interest swap agreements.  The media have an important role in conveying information to the public which might not otherwise be easily accessible.   The subject matter is newsworthy.  Unusual financing transactions such as interest swap arrangements and any difficulties arising out of such arrangements are proper matters on which the media may wish to report.  Doing so may increase the public’s awareness of these transactions and their benefits and pitfalls.  Legal proceedings arising out of disputes about interest swaps may highlight difficulties that may come up.   Access to the court file will allow the media to be more informed about the dispute.

The factors under r 3.16

(a)      The orderly and fair administration of justice

[7]      The issue here is whether scrutiny of the court file by outsiders will have an adverse effect on the orderly and fair administration of justice.  The requirements for the orderly and fair administration of justice vary according to the stage reached in a proceeding.  Once the case has reached the substantive hearing stage, when there is a presumption in favour of access, the administration of justice is broadly consonant with media having access, because the case will be heard and decided in open court. Those considerations do not count at earlier stages.

[8]      Although litigation is adversarial, it is in part a co-operative process.  While each side tries to advance its own interests, it does so within the structure of the rules and practice of the court, which require the parties to co-operate in bringing a case to a hearing.  The proper preparation of a case will be enhanced without scrutiny by outside parties.  As an example, discovery requires parties to set out in an affidavit filed in court the documents in their control that relate to the matters in issue.  Often the information on those files is confidential or commercially sensitive, but is protected by confidentiality undertakings and court rules against improper use of the documents.   Parties can be encouraged to make proper discovery, if they can be assured that the confidentiality of discovery will be maintained.  Their trust in the

process may be weakened if the court were to allow outsiders to go through their discovery  affidavits.    Similarly,  interlocutory  applications  are  held  in  chambers unless a judge orders otherwise.1    The general public (including the media) are not admitted to a hearing in chambers, except with leave of the judge.2

[9]      The period up to the hearing also provides the parties with the opportunity to look for settlement of a proceeding.   An agreed settlement of a dispute, without requiring a court determination, is one aspect of the fair and orderly administration of justice.  Parties are better able to negotiate a resolution of their differences if they are not under the public gaze.   Court files often contain documents referring to negotiations   going  on   between  the  parties   (although   the  contents   of  those negotiations are rarely, if ever, disclosed).

[10]     In summary, the orderly and fair administration of justice may require that outsiders not have access to a court file in the early stages of a proceeding.

[11]     Under this head Westpac relevantly points out that the pleadings are not yet complete, which may give an unbalanced view of the issues between the parties. Discovery by the parties contains confidential information and affidavits for interlocutory  applications  contain  similar  confidential  information.    There  is  a pending interlocutory application, which will be heard in chambers.

(b)      The protection of confidentiality, private interests (including those of children  and  vulnerable  members  of  the  community),  and  any privilege held by, or available to, any person

[12]     The confidentiality to be protected is in information in affidavits for the pending  interlocutory  application  and  the  contents  of  the  parties’  discovery affidavits.  That confidentiality interest coincides with the need to ensure the orderly and fair administration of justice at the early stage of a proceeding.

[13]     Westpac also pushes the point that there are relevant privacy interests, but I

reject that.   The privacy interests Westpac holds up lie in the identity of the individuals who took part in the swap transactions.  The plaintiffs do not object to

1 High Court Rules, r 7.34(1).

2 High Court Rules, r 1.3 – definition of “hearing in chambers”.

the individuals on their side being identified.  Westpac wants to protect the identity of its own staff.  I do not regard that as a proper privacy interest requiring protection. The fact that the actions of bank staff have come under scrutiny and are the subject of legal proceedings does not require that the identity of those bank officers be concealed.

[14]     I also reject Westpac’s contention that the nature of the proceeding, “only a private dispute”, counts against access.  While it is a civil proceeding that does not involve public authorities, the case involves matters that are worth reporting to the wider community.   A commercial dispute as to the way a trading bank carries on business does not by itself generate a need to  protect privacy interests.   While Westpac has not said that this is the basis for refusing access, the Court needs to be on guard against arguments as to privacy being used to shield a litigant from unwelcome reporting of its legal proceedings.   That cannot be a proper basis for restricting the reporting of this proceeding.

[15]     For completeness, I also add that Westpac is not a vulnerable member of the community and cannot claim privilege against reporting.

(c)       The principle of open justice, namely, encouraging fair and accurate reporting of, and commenting on, court hearings and decisions

[16]     This interest comes into play at the substantive hearing stage – that is, once there are court hearings and decisions.  While a proceeding might be the subject of legitimate media interest before the substantive hearing stage, the principle of open justice does not press so strongly.

(d)       The freedom to seek, receive and impart information

[17]     Aside from the principles of open justice, the media have a legitimate role in seeking, receiving and imparting information as a surrogate of the general public.

(e)       Whether  a  document  to  which  the  application  request  relates  is subject to any restriction under r 3.12

[18]     This consideration does not arise.

(f)        Any other matter that the Judge or Registrar thinks fit

[19]     This consideration does not arise.

Assessment

[20]     While Mr Stock’s request for access to the court file is for good reasons, it is premature.  That is because this proceeding is in its early stages and has not been set down for hearing.   Pleadings are not yet complete.   A report of the pleadings at present would not give a balanced view of the positions of the parties.  There are pending interlocutory applications, where the evidence is not yet complete.  Some of the information on the affidavits for those applications is confidential. The discovery affidavits also contain confidential information that should not be disclosed.   The case is still at a stage where the parties should have the opportunity to explore settlement away from the public gaze.   These aspects of the fair and orderly administration of justice prevail over the legitimate interests of the media in having access to the court file.  It is too early for the media to have access to this court file.

[21]     Notwithstanding that, as the case moves on Mr Stock may wish to renew his request.  In particular, he may ask the court whether the case has been given a close of pleadings date and a hearing date.  The court should advise him of the close of pleadings date.  By that date, the interlocutory stage will be over.  The pleadings will be in their final form and will be complete. The parties will have had time in which to explore settlement out of court.  Those matters that count against access now will no longer apply. A fresh request for access at or after the close of pleadings date may result in access not being opposed.  After the close of pleadings date, matters which might be the subject of an access request include the parties’ final pleadings and any decisions made on interlocutory applications.

……………………………

Associate Judge R M Bell