ASIC v Rich

Supreme Court of NSW|2001-06-13|Before: Austin J

Reported Decision : (2001) 38 ACSR 251 51 NSWLR 643

CITATION : ASIC v Rich [2001] NSWSC 496 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 3028/01 HEARING DATE(S) : 13 June 2001 JUDGMENT DATE : 14 June 2001

Australian Securities & Investments Commission (P) John David Rich (D1) Maxine Nicole Rich (D2) Nicolet Joanne Long (D3) Tasman Pacific Pty Ltd (D4) Geravale Holdings Pty Ltd (D5) PARTIES : Beaulieu Holdings Pty Ltd (D6) Rooair Pty Ltd (D7) Lifecell Pty Ltd (D8) Paedove Pty Ltd (D9) Bradley Keeling (D10) Truegrip Pty Ltd (D11) Bradley Keeling Management Pty Ltd (D12) Mark Alan Silbermann (D13) JUDGMENT OF : Austin J

M A Pembroke SC, D R Stack, M Wigney (P) B W Walker SC, I M Jackson (D1, D4, D5, D7, D8) D J Hammerschlag SC, E Frizell (D2, D9) COUNSEL : D L Williams (D3) N Carson (D6) A Meagher SC, T Game SC, R McHugh (D10, D11, D12) J C Kelly SC (D13) Jan Redfern for Australian Securities & Investments Commission (P) SOLICITORS : Thompson Eslick (D3) Blake Dawson Waldron (D6) Piper Alderman (D13) CATCHWORDS : PRACTICE & PROCEDURE - application by non-party for access to material on court file - affidavits relied upon in successful ex parte application in open court for ex parte orders - access granted LEGISLATION CITED : Supreme Court Rules Pt 65 r 7 ASIC v Adler [2001] NSWSC 451 Corporate Affairs Commission (NSW) v Walker (1987)5 ACLC 991 Corporate Affairs Commission v ASC Timber Pty Ltd (1992) 10 ACSR 525 CASES CITED : eisa Ltd v Brady [2000] NSWSC 929 John Fairfax & Sons Ltd v Police Tribunal (NSW) (1986) 5 NSWLR 465 R v Davis (1995) 57 FCR 512 Stonham v Speaker of the Legislative Assembly of New South Wales (No 1) (1999) 90 IR 325 DECISION : Leave granted for media to have access to affidavits, excluding certain parts

THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

3028/2001 - AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION v JOHN DAVID RICH & ORS

JUDGMENT (Ex tempore; revised 14 June 2001) 1 HIS HONOUR: At about 3.00pm on Friday 8 June 2001, an application was made to me for orders for abridgment of service and ex parte orders in respect of the matter which became matter number 3028 of 2001. Counsel moved for that relief on the basis of four affidavits, namely the affidavit of Lachlan Keith Murdoch made on 7 June 2001, the affidavit of Peter James Connor made on 8 June 2001, the affidavit of Peter Walker made on 8 June 2001 and the affidavit of James Alfred Thomas made on 8 June 2001. 2 In seeking to explain the basis of the application counsel read those four affidavits in the formal sense of relying on them as evidence to support his application and also read substantial portions of each of the four affidavits in open court. 3 It was suggested in argument yesterday that the procedure for reading the whole or substantial portions of an affidavit in an ex parte application of the kind that I considered last Friday is an unusual procedure. That is not so, at any rate in my court. It is true that when an application is made of a relatively routine kind to the duty judge such as, for example, an application for extension of a caveat or an application to terminate a winding up recently made, it is often not necessary for counsel to do more than summarise the evidence in the affidavits upon which he or she relies. However, where the application is made, not only for abridgment of service but also for immediate ex parte orders in extremely urgent circumstances, and the case is less than routine or usual, it is very helpful to the judge for counsel to refer to the evidence in open court in some detail. That is what happened on this occasion. 4 I made some of the orders sought by the plaintiff and declined the application in respect of some others. Specifically I was not prepared to order the appointment of a receiver on an ex parte basis in the circumstances before me and I was not prepared to direct the defendants to file affidavits of assets in the ex parte circumstances. I did, however, make orders under s 1323 of the Corporations Law having the effect, broadly speaking, of restraining some of the defendants from dealing with their assets until 5.00pm yesterday, and restraining them from leaving the country until that time. The full text of the orders that I made has been released pursuant to Pt 65 r 7 and it is obvious that what I have just said is a very broad and brief summary of the orders. 5 At about 10.30pm, or perhaps a little earlier, on the same evening my associate contacted me. She had, in turn, been contacted by the security officer of the court. She told me that an application was to be made for variation of the ex parte orders that I had made. I made contact with the equity duty judge and we decided that, since I had made the orders in the afternoon, it would be best if I heard any such application. As is well known, the equity duty judge is available in the case of highly urgent applications outside court hours. 6 I then had a telephone discussion with a solicitor acting for the first to ninth defendants. When it became obvious that the case could not be dealt with by any other means since it was necessary for oral evidence to be adduced, I agreed to return to the court and so a hearing took place beginning after 11.00pm and lasting until about 1am. 7 As a result of that hearing and consideration of the evidence in it, I made orders varying the orders previously made so as to permit the exchange of contracts for sale of the property owned by one of the defendants, Paedove, for a large amount of money in circumstances where, but for the variation of the orders, the exchange of contracts would have been prohibited by my previous order. As I took the view that it was not feasible for court transcription services to be available (a view which may well have been wrong), I arranged for the solicitor to whom I spoke to have the proceedings recorded and for him to prepare a transcript. That has since happened. 8 Yesterday, the return date for the originating process, undertakings were given to the court by various defendants and, in the case of some others, the proceedings were dismissed. All of this happened by consent without any hearing and therefore without the taking of further evidence. 9 However, during the course of yesterday morning, Mr Smark of counsel sought leave to appear on behalf of John Fairfax & Sons Ltd and Nationwide News Ltd, to make an application under Part 65 r 7 for leave to be granted for his clients as non-parties in the proceedings to have access to parts of the court's file. Mr Smark's application was resisted by counsel for the first, fourth, fifth, seventh, eighth and ninth defendants (to whom I shall refer compendiously as the interests of Mr Rich), counsel for the second defendant (Mrs Rich), counsel for the tenth, eleventh and twelfth defendants (the Keeling interests), and counsel for the thirteenth defendant (Mr Silbermann). I heard full argument on Mr Smark's application in the course of the day. These reasons for judgment relate to that application. 10 Mr Smark identified three categories of documents on the file to which his clients sought access. The first was the originating process and orders made by the court, including the undertakings attached to the orders. It emerged that there was no dispute with respect to that part of the application, and consequently I made orders yesterday releasing that information. 11 The second category was the transcript of evidence of various parts of the proceedings. As I understand the position, there is no objection from any of the parties who have chosen to make objection in other respects, to the release of the transcript for the first and second hearings on Friday 8 June 2001. There is also a brief judgment which I gave in the first hearing on the 8 June and that is a matter which is necessarily available for public inspection and no order is needed in respect of it. 12 I therefore propose to make an order now with respect to the release of the transcript for the two hearings on Friday 8 June. I should note that the statement in the first transcript that Mr Hammerschlag appeared for the first and second defendants is incorrect. It is my clear recollection that the application was made ex parte and, while Mr Hammerschlag was present in court for some time, he withdrew before orders were made. I should also note as previously explained, that the 'transcript' for the second hearing is the transcription of a tape recording of the hearing transcribed in the office of solicitor for the first to ninth defendants. 13 I therefore grant leave pursuant to Pt 65 r 7 to make available, to those journalists and other media representatives who inquire of the Public Information Officer of the Court, the transcripts which I now initial and date for identification. 14 Does anyone have any submission to make as to the form of that order? I make that order. 15 TRANSCRIPT HANDED TO INFORMATION OFFICER 16 The third category of documents are the affidavits contained in the court file. 17 In addition to the four affidavits to which I have referred, an affidavit was filed in court yesterday, the deponent being Gordon Thomas Grieve. It was relied upon on the question of costs. My reasons will extend to that affidavit as well. 18 Part 65 r 7(1) states that a person: 'may not search in the registry for or inspect any document or thing in any proceedings except with the leave of the court.'

The exercise of the discretion referred to in the rule is amplified in the Chief Justice's Practice Note number 97 dated 9 March 1998, the text of which is as follows: PRACTICE NOTE NO 97

Access to Court files by non-parties : 1. Access to material in any proceedings is restricted by Pt 65 r 7 of the Supreme Court Rules 1970 to parties, except with the leave of the Court. 2. Access will normally be granted to non-parties in respect of: (a) pleadings and judgments in proceedings that have been concluded, except in so far as an order had been made that they or portions of them be kept confidential; (b) documents that record what was said or done in open court; (c) material that was admitted into evidence; and (d) information that would have been heard or seen by any person present in open court; unless the judge or registrar dealing with the application considers that the material or portions of it should be kept confidential. Access to other material will not be allowed unless a registrar or judge is satisfied that exceptional circumstances exist. 3. It should not be assumed that material held by the Court comes within par 2. Affidavits, and witness statements, that are filed in proceedings are often never read in open court. This can occur because they contain matter that is objected to and rejected on any one of a number of grounds or because the proceedings have settled before coming on for hearing. Affidavits, statements, exhibits and pleadings may contain matter that is scandalous, frivolous, vexatious, irrelevant or otherwise oppressive. Part 65, r 5 allows the Court to order this type of matter to be struck out of a document. 4. If access to material is given prior to the conclusion of proceedings to which it relates, material that is ultimately not read in open court or admitted into evidence would be seen. Thus, access will not normally be allowed prior to the conclusion of the proceedings. 5. Even where material has been read in open court or is included in pleadings, there may be good reason for refusing access. Material that has been rejected or not used or struck out as being scandalous, frivolous, vexatious, irrelevant or otherwise oppressive, may still be legible. Where access to material would be otherwise unobjectionable, it may contain matters that are required to be kept confidential by statute (for example, the Criminal Records Act 1991) or by public interest immunity considerations (for example, applications to authorise listening devices, affidavits in support of suppression orders). 6. Application by a person, who is not a party to proceedings, for access to material held by the Court in the proceedings shall be made in the attached form [not attached here] to the registrar of the appropriate Division, who will refer doubtful cases to the Chief Justice or to a judge nominated by the Chief Justice. The registrar or judge may notify interested parties before dealing with the application. The applicant must demonstrate that access should be granted in respect of the particular documents the subject of the application and state why the applicant desires access. Inquiries may be made to the Court's Public Information Officer. 7. The person to whom access to material is granted normally may copy or take extracts from the material and the registry may assist with copying. [At the hearing of the matter on 13 June 2001 Austin J stated that the Chief Justice had nominated him to deal with applications under Pt 65 r 7 in these proceedings, and indicated that he would exercise his discretion to allow the present application to be made orally rather than by means of the prescribed form.] 19 It will be seen that paragraph 4 of the Practice Note sets up as a general proposition that access will not normally be allowed prior to the conclusion of the proceedings. However, paragraph 2 says that access will normally be granted to non-parties in respect of certain matters including: '(b) documents that record what was said or done in open court. (c) material that was admitted into evidence. (d) information that would have been heard or seen by any person present in open court'

unless in each case the judge dealing with the application considers that the material, or portions of it, should be kept confidential. Paragraph 2 therefore sets up as a general proposition that access is granted to the material which it designates. 20 In my opinion, that proposition is of fundamental importance to the administration of justice in this State. It reflects, in my view, the principle of open justice described by the present Chief Justice in his keynote address to the 31st Australian Legal Convention (see (2000) 74 ALJ at 290 and 378). The Chief Justice said this (at 292): 'The principle that justice must be seen to be done - to which I will refer as the principle of open justice - is one of the most pervasive axioms of the administration of justice in our legal system. It informs and energises the most fundamental aspects of our procedure and is the origin, in whole or in part, of numerous substantive rules. It operates subject only to the overriding obligation of the Court to deliver justice according to law.' 21 The principle is reflected in access to the rules about information contained in court files and with respect to court proceedings. Thus, in John Fairfax & Sons Ltd v Police Tribunal (NSW) (1986) 5 NSWLR 465 at 476-7, McHugh JA, as his Honour then was, said: 'The fundamental rule of the common law is that the administration of justice must take place in open court. A court can only depart from this rule when its observance would frustrate the administration of justice or some other public interest for whose protection Parliament has modified the open justice rule. The principle of open justice also requires that nothing should be done to discourage the making of fair and accurate reports of what occurs in the courtroom.' 22 The implications of justice being administered in open court are further explained by the Full Federal Court in R v Davis (1995) 57 FCR 512 at 514: 'Whatever [the media's] motives in reporting, their opportunity to do so arises out of a principle that is fundamental to our society and method of government: except in extraordinary circumstances, the courts of the land are open to the public. This principle arises out of the belief that exposure to public scrutiny is the surest safeguard against any risk of the courts abusing their considerable powers. As few members of the public have the time or even the inclination to attend courts in person, in a practical sense this principle demands that the media be free to report what goes on in them.' 23 Of course, free access by the media to the contents of a court file is not, in absolute terms, a proposition flowing from the principle of open justice. There must be some limits to the extent to which any non-party is entitled to have access to material, especially where the material has not been the subject of evidence in open court. In eisa Ltd v Brady [2000] NSWSC 929, Santow J recognised the fundamental importance of the principle of open justice which, he said, entailed that justice must be visible and its processes transparent (at paragraph 16). However, he acknowledged that the application of the principle in cases where specific material is sought from the court file involves an exercise of balancing the fundamental principle against other principles of justice which are there to protect the interests of parties to litigation. He summarised the problem in this way (at paragraph 36): 'Thus adopting a single bright line rule that access should always be allowed - or indeed never - in either case ignores that here there are genuinely competing principles to be weighed. There is open justice, its processes made as accessible as possible through a properly informed press reporting to the wider community and which seek to be contemporaneous. There is the need to avoid injustice and unfair prejudice in the trial from disclosure of serious and as yet untested or incompletely tested allegations, where prematurity of disclosure is at issue and where there is likely to be no redress in defamation, no matter how malicious the pleaded allegation. Neither principle has a priori ascendancy. Both are subordinated to the interests of justice in which the community is vitally concerned as well as the parties. These questions must therefore be tested, case by case, against that overriding purpose of the interests of justice.' 24 It is the articulation of the qualifications to the principle of open justice that was most at stake in yesterday's hearing. Reviewing the submissions last night I concluded that there were some eight qualifying principles advanced. They were advanced in the first place as principles which should lead the Court to refuse access to any part of any of the affidavits (although I note that by the end of the hearing, counsel for the various defendants seemed to be quite keen that certain specific pieces of evidence should be released, that evidence obviously being favourable to their clients.) The qualifying principles were also advanced to persuade me, if I were not prepared to exclude the contents of the affidavits absolutely, that certain key paragraphs in the affidavits should not be released. I shall briefly describe the qualifying principles.

Prematurity 25 This is the idea that in the ex parte circumstances that obtained last Friday it would be unfair to the defendants to release the evidence upon which the plaintiff relied. The ex parte circumstances meant that none of the defendants had the opportunity to say anything in court about the evidence in question; none of them had the opportunity to reply, by affidavits or otherwise, to that evidence; nor did they have the opportunity, had it been allowed, to cross-examine the deponents. In those circumstances it is said that the Court should, in effect, never release to non-parties affidavits relied upon in a purely ex parte hearing, even where the hearing is in open court, the evidence is adduced for the purposes of ex parte relief and the contents of the affidavits are freely referred to in open court, even read out wholly or in part. 26 It appears to me that the principle of prematurity, though a valid and weighty consideration, especially where evidence has been filed but not used for any purpose, is displaced in circumstances such as those existing last Friday. The principle of open justice entails, in my view, that when the Court makes quite significant orders on an ex parte application, the basis for the making of those orders must be available so that the court is accountable for what it has done after it has considered the information provided to it. In my view, that is so important a consideration that, unless there is some specific or obvious prejudice of another kind, the mere consideration of prematurity, in the sense that the plaintiff's evidence has not been tested or answered, is insufficient to prevent the Court from making available to outsiders, including in particular the media, the affidavits relied upon in ex parte circumstances leading to significant relief.

Trial By Media 27 The principle relied upon by the defendants is said to emerge from the judgment of the Full Bench of the Industrial Relations Commission of New South Wales in Court Session in Stonham v Speaker of the Legislative Assembly of New South Wales (No 1) (1999) 90 IR 325. In that case the Full Bench said (at 333): 'It may reasonably be expected that the court's file presently contains material of a contentious nature as between the parties and which will no doubt be subject to objection and vigorous testing in the substantive proceedings. That process, we hasten to add, will occur in open court during public proceedings. But to give access to the material pre-trial would, we are satisfied, raise the concern earlier expressed as to trial of such material in the media. No useful utility in allowing such a situation to occur has in our view been established here by the ABC.' 28 I accept that 'trial by the media' is a discretionary consideration that may in some cases have some weight. However, I do not give it much weight here, compared with the importance of protecting the principle of open justice. In the present case, it is likely that there will be an ongoing investigation by the plaintiff into the affairs of the One.Tel Group of companies, and no doubt information will be made available to and published by the media from time to time. No doubt as well, media commentators will seek to allocate blame for the collapse of the corporate group to one quarter or another. That is a process somewhat different from trial by media of the specific issues raised in particular proceedings. I am sceptical that the release of the information sought to be released by the applicant would lead to the kind of trial by media envisaged by the court in the Stonham case, as opposed to a more general media exploration of the facts relating to the corporate collapse and the allocation of responsibility for them.

Abuse of the 'Absolute Privilege' Protecting a Party from Liability for Defamation 29 Section 24 of the Defamation Act 1974 (NSW) says that there is a defence for the publication of a fair protected report. A 'protected report' is defined to include report of proceedings in a court. 30 Counsel for the defendants submitted that if the Court allows the media to have access to the affidavits relied upon in these proceedings, the media will be at liberty to publish the contents of the affidavits without any risk of liability for defamation, because of the 'absolute privilege' conferred by s 2 (see also eisa v Brady at paragraph 19). I note, however, that the defence is confined to the publication of a 'fair' protected report. To that extent the privilege is not absolute. 31 In my opinion it is relevant to the exercise of the Court's discretion for it to consider that if an order is made granting access to the media, the subsequent publication of the content of an affidavit is unlikely to have much greater protection from liability for defamation than if the same content were published directly by the media in circumstances where the publication is not the publication of a protected report. In other words, there will be cases where, notwithstanding the principle of open justice, it is right to refuse access to material such as an affidavit because the deponent should be left to make an unprotected statement subject to full exposure under the law of defamation, given the contents of the statement concerned. 32 That is a consideration urged upon me particularly in respect of Mr Murdoch's affidavit. It was said that Mr Murdoch was in a position to ensure publication, through his role as chairman of News Ltd, of any of the contents of his affidavit. In the circumstances, therefore, it was submitted that to allow the media to have access to his affidavit would simply be to clothe him with the protection of privilege to which he was not entitled. 33 While I accept that this submission has some weight, I must engage in the balancing exercise to which Santow J referred in the eisa case. The fact of the matter is that Mr Murdoch's affidavit was one of the principal items of evidence upon which I relied in making my decision to grant ex parte relief. I believe it is important for that evidence to be made available because of the role it played in my decision.

'Prurience' 34 It was submitted that some of the information in the affidavits, particularly relating to the financial circumstances of various defendants, should not be released because there can be no legitimate public interest in it. In those circumstances, release of the relevant information can only appeal to and satisfy urges of 'prurience', to use the word adopted by senior counsel. 35 Again, I can see that in some cases this will be a valid consideration. In the present case, however, what was at stake in the application last Friday was whether there was a sufficient risk of dissipation of assets to satisfy the Court that the relief provided for in s l323 should be granted on an interim basis. Risk of dissipation of assets is a fundamental consideration when an application is made under s 1323 (see ASIC v Adler [2001] NSWSC 451; Corporate Affairs Commission (NSW) v Walker (1987)5 ACLC 991; Corporate Affairs Commission v ASC Timber Pty Ltd (1992) 10 ACSR 525.) 36 In my view the principle of open justice therefore requires that the evidence for the cause of apprehension which I found to exist be made available unless there are specific and compelling reasons for suppressing it. In my opinion, the general argument about appeal to prurience is not sufficiently compelling to prevent the publication of the information in this case.

Surprise or Ambush 37 It was submitted, particularly by counsel for the Keeling interests, that the application for release of the information was made only after a negotiated arrangement had been entered into, reflected in undertakings to the Court which were designed to preserve the status quo pending a later hearing of the matter. It was said, in effect, that to grant the application for access would undermine the negotiated position that had been reached. 38 I disagree with this submission on the facts. When the matter came before me yesterday I indicated, before making orders which accepted and noted undertakings by various defendants, that the media had sought access to the file on the previous day and that I had therefore given certain instructions to the Registrar's staff as to access. In my view, the subsequent application on behalf of media interests for release of the affidavit material was entirely predictable, given those events. The fact that all or some of the defendants may have taken a different view had they anticipated the application and its outcome seems to me not to be a consideration to which I should give weight in this application.

Risk of misleading reporting 39 A number of submissions were made to the effect that the media cannot be trusted to report, or even understand, the refined distinctions upon which it is said the law is required to operate. Thus it was confidently asserted that the media would not report in such a manner as to reflect the distinction between grounds for suspicion arising during the course of an investigation, and allegations made by the plaintiff after the investigatory process had been completed. It was also said that the media would not report in such a way as to reflect the distinction between direct evidence and hearsay and, in particular, second-hand and even later versions of hearsay. 40 In my opinion, considerations of that kind could be relevant at the margins in certain cases. However, the present application relates to information concerning a corporate collapse, principally of interest to the financial media. Journalists in the financial media are likely to have significant experience of reporting investigations by the Commission and in dealing with matters of a commercial evidentiary character. There is a protection available to any person whose reputation is affected by media reports, to the extent that the report is not a fair protected report within s 24. Beyond all of that, I simply do not accept that the media, as a whole, will fail to understand and report relevant distinctions, set forth in the affidavit material, allowance being made for the limitations of time and space. I therefore do not regard this consideration as having substantial weight.

Hearsay 41 What I have just said is also applicable to the argument that some of the material, particularly in Mr Murdoch's affidavit, is hearsay. Mr Murdoch gives an account of a conversation with Mr James Packer about matters concerning the One.Tel Group which appears to be designed to prove the truth of the content of the conversation, or at least of the states of mind of the conversants. It may well be inadmissible unless tendered for a more limited purpose at the final hearing. The contention is that if the evidence had been challenged it would not have been regarded as admissible and, in those circumstances, the evidence should not be released now. 42 It seems to me likely, however, that if the application last Friday had been a contested application, I would have allowed evidence of the conversation between Mr Murdoch and Mr Packer to be admitted into evidence in the interlocutory circumstances then obtaining. Moreover, the fact is that this evidence was relied upon and indeed, according to my recollection, it was referred to specifically in open court. In the circumstances, the fact that that evidence is hearsay should not in my view dissuade me from making it available.

Commercial Confidentiality 43 Finally, it was submitted that some of the information in the affidavits should be regarded as confidential in a commercial sense and therefore likely to prejudice not only the defendants, but the creditors and contributories of the One.Tel Group, and to interfere with the effective work of the voluntary administrators. Unfortunately, the voluntary administrators were not represented at yesterday's hearing of the application. However, it does seem to me that certain matters in the affidavits are likely to have the character of confidential financial information capable of prejudicing the due administration of the affairs of the One.Tel Group and therefore the interests of creditors and contributories. Moreover, information in that category was, on the whole, not information upon which I relied in coming to my conclusions last Friday. In those circumstances I intend to exclude from my orders for access certain material which I regard as coming within that category.

Application of these Principles to the Affidavits 44 I have said enough to indicate that in my view none of the eight qualifying principles that I have discussed is separately sufficient to justify my refusing access to the affidavits in absolute terms. Nor, in my opinion, do they have that effect in combination. Anticipating that I may reach that conclusion, I invited counsel yesterday to work through each of the affidavits, paragraph by paragraph, so that I could identify what specific objections were made in a more detailed manner. My conclusions, as a result of that assistance from counsel, will now be set out.

Mr Murdoch's Affidavit 45 Objection was taken to those parts of the affidavit and the exhibits to it which relate to board papers of the meetings of directors of One.Tel Ltd and board minutes recording the outcome of those meetings. Having reviewed that material I am persuaded that some of it has the character of commercial confidentiality to which I have referred. It is difficult for me to form any final view because, as I have said, I did not have the benefit of submissions from the voluntary administrators. However, my view is that those parts of Mr Murdoch's exhibits which relate to board papers and board minutes of meetings prior to 17 May 2001, should not be made available because they contain at least some confidential information and they did not figure in any significant way in my decision to grant ex parte relief. 46 The board minutes of the meeting of 17 May 2001 (LKM 6), are in a different category. They were specifically referred to by counsel in the ex parte application and specifically considered by me. One of the issues for me to consider last Friday was the nature of the case against the first to the ninth defendants, and whether it was sufficiently arguable to justify ex parte intervention. That necessarily led me to have regard to allegations that Mr Rich and others had made misleading statements to directors and to the market. 47 In my view, the minutes of the meeting of 17 May were of particular significance in my assessment of those matters. While, therefore, there may be some matters of commercial confidentiality contained in those minutes (though in my judgment probably not as much in those minutes as in others), I think the principle of open justice should be applied to make that information available. It was, as I said, referred to amply in open court and therefore falls literally within paragraph 2 of the Practice Note. 48 Once the 'crisis' had emerged in One.Tel after 17 May 2001, there were meetings and reports directed specifically to issues of assessment of the Group's solvency. There were matters upon which I relied in coming to my conclusions on Friday which are contained in, inter alia, exhibit LKM 9 which is a minute of a board meeting held on 28 May 2001, exhibit LKM 10 which is an agenda for a board meeting of 29 May 2001, and exhibit LKM 11 which is a 'financial position review report' prepared by Ernst & Young and dated 28 May 2001. The basic contents of that evidence were so obviously and closely relevant to my decision that they should be made available. 49 However, I am less sure about the annexures to exhibit LKM 9 and exhibit LKM 11. Those annexures are tables of financial information, the release of which could, for all I know, give a competitive advantage to the other operators in the telecommunications market. Since I did not specifically rely on that evidence, caution dictates that I should not release it. 50 I have already explained my attitude to the hearsay evidence of the conversation between Mr Murdoch and Mr Packer. Exhibit LKM 8 is a document prepared by the chief general counsel of News Ltd which is headed 'privileged strictly private and confidential' but which Mr Murdoch, who is chairman of News Ltd, has chosen to exhibit to his affidavit. Again that is a document to which I had regard in reaching my solution and I do not identify any information in it of sufficient confidentiality to warrant its suppression. In the circumstances, therefore, that will be part of the material released. 51 Finally in relation to Mr Murdoch, there are several paragraphs in his affidavit in which he expresses his beliefs about the financial position of the One.Tel Group at various times, and states his conclusion that he was profoundly misled as to the true financial position of One.Tel from at least 30 March 2001, if not earlier. That, it is said, is information which the interests associated with Mr Rich will vigorously challenge when given the opportunity. Their challenge will not simply be on the question whether there were reasonable grounds for Mr Murdoch to form the beliefs to which he deposes, but (I gather) whether he in fact formed those beliefs at all. 52 It seems to me, however, that the mere fact that this evidence is controversial and will be challenged at an appropriate time is not sufficient to require that that evidence be suppressed, in circumstances where the evidence was adduced and relied upon in the ex parte application and taken into account by the Court in making its decision to grant ex parte relief. It was important for me to consider on Friday, as I said, whether the plaintiff had an arguable case for the claims which it proposed to make in the proceedings. Mr Murdoch's evidence of his own beliefs was a significant component of my conclusion on that point. 53 Consequently, my decision is that the whole of the text of Mr Murdoch's affidavit and exhibits LKM 6 to 13, excluding the annexures to exhibits LKM 9 and 11, should be made available.

Affidavit of Peter James Connor 54 This is the affidavit of a senior investigator with the plaintiff, who deposes to the circumstances of the investigation undertaken by the plaintiff and exhibits searches and various statements made to the Australian Stock Exchange by the company. At paragraphs 11 to 18 the deponent sets out, obviously selectively, statements attributed to the first defendant of a positive kind, about the business and financial circumstances of the One.Tel Group. At paragraphs 20 to 24 the deponent says that at this stage in the investigation, certain aspects of the facts specified by the deponent have been given close consideration, including parts of the content of the affidavit of Mr Murdoch, and that, based on the facts and material that had been reviewed, the plaintiff suspects that 'the Defendants' as executive directors of One.Tel may have engaged in certain specified conduct; and that therefore the plaintiff is currently investigating whether 'the Defendants' have contravened one or more of certain specified provisions of the Corporations Law. The defendants object to the release of this part of the affidavit. 55 I should say at once that the references to 'the Defendants' are obviously inaccurate and even sloppy, although no doubt this affidavit was prepared in urgent circumstances. It seems to me that in their context the words 'the Defendants' are intended to refer only to the first, tenth and thirteenth defendants (since, in particular, they are described as 'executive directors of One.Tel') and should be read accordingly. I believe that is a reasonable construction of the text of the affidavit. That is how I read the affidavit last Friday. 56 On that basis it seems to me that the whole of this affidavit should be made available. The affidavit makes it plain that the plaintiff has not yet proceeded to the point of reaching any firm conclusions, or making any specific allegations but merely that it has conducted investigations and has formed suspicions which may lead to it seeking substantive relief. The fact that the investigations are under way is sufficient to attract the Court's jurisdiction under s 1323 even if, given the content of the affidavit, the originating process cannot be described as a civil proceeding already commenced for the purposes of this section. I have already dealt with the criticisms of that affidavit and in my view, given that it was one of the affidavits upon which I relied, there is no good reason for not releasing it.

Affidavit of James Alfred Thomas 57 Mr Thomas is an investigator with the plaintiff who has conducted various searches and partly on the basis of those searches, and presumably on the basis of other investigations, deposes to information about the assets of the first, second, tenth and thirteenth defendants. 58 Information about the assets of the first, second and third defendants was centrally significant to the application last Friday. As I have said, an important ingredient of an application under s 1323 is apprehension of dissipation of assets. Mr Thomas' affidavit, having identified certain assets and corporate positions, deposes to recent changes which are the basis for the apprehension which led the plaintiff to come to the Court and the Court to make the orders. Making available information going to the basis of the Court's decision, in accordance with the principle of open justice, is a consideration outweighing the submissions that the information concerned would only appeal to prurience and that it should be treated as private information. 59 Counsel referred me specifically to the Road Transport (Vehicle Registration) Act 1997 (NSW), s 15(8), according to which information privacy principles applied to information requested by search of the Motor Vehicles Register. 60 I accept that in normal circumstances considerations of privacy should protect not only that information but other information relating to the assets of parties to this litigation. However, to the extent that the information relates to those defendants against whom I made ex parte orders, my view is that it should be made available for reasons I have given. 61 The annexures to Mr Thomas' affidavit include a letter from Landerer & Company to the chairman of the plaintiff dated 8 June 2001 enclosing a financial agreement under s 90C of the Family Law Act 1975 (Cth) between the first and second defendants. Counsel for the first defendant made it specifically clear that he had no objection to that financial agreement being made available. Indeed, the covering letter by Landerer & Company says that the agreement was not entered into secretly and all the documents have been lodged with relevant public registers. However, counsel submitted that two schedules to the document setting out the assets of the first and second plaintiffs can only appeal to prurient interest and should not be made available. 62 I do not accept that submission for this reason. The financial agreement, including its schedules, was sent by Landerer & Company to the chairman of the plaintiff under cover of a letter which proclaimed that there was no secrecy about it. It would have been open to the first and second defendants to seek to protect their privacy with respect to schedules 1 and 2 of the agreement at that stage, but it appears from the evidence before me that they did not seek to do so. I see no reason why I should intervene at this stage. 63 My conclusion is that, so far as it relates to the assets of the first, second and third defendants and their associated companies - that is to say as regards paragraphs 1 to 27 inclusive and relevant annexures - Mr Thomas' affidavit should be made available. However, since no application for ex parte relief was sought against the Keeling interests and the Silbermann interests and, therefore, I did not base my decision on Friday on information regarding their assets, it appears to me that principles of privacy can be taken into account and there is no good reason for making that information available. Therefore, paragraphs 28 to 45 should not be made available.

Affidavit of Peter Walker 64 Mr Walker is one of the two voluntary administrators of companies in the One.Tel Group. When his affidavit was read and relied upon by the plaintiff last Friday I was asked to make an order treating it as confidential to the parties and their legal advisers and I did so. I was subsequently asked to amend that order by limiting the confidentiality of the affidavit to two small parts of it, and so I vacated the previous order and made the more restricted order sought by the plaintiff. I infer that in making its applications concerning confidentiality, the plaintiff was in touch with Mr Walker. There is certainly evidence of a degree of co-operation between the voluntary administrators and the plaintiff with respect to the affairs of the One.Tel Group. 65 It therefore seems to me that the issue of suppression of information in Mr Walker's affidavit has been dealt with by the plaintiff in those applications. I was informed from the bar table that the Keeling interests had been informed that Mr Walker did not wish to have his affidavit released to the media. In the circumstances it does not seem to me to be appropriate for me to rely on information communicated from the bar table in that way, given that it appears on its face to be inconsistent with the basis upon which the plaintiff's applications concerning confidentiality were made. It was open to Mr Walker to appear with respect to the application under Pt 65 r 7. If he had anything to say to the Keeling interests or their legal advisers it must have been on the basis that he was aware that the application was being made, and yet he did not appear. I therefore intend to make the whole of the affidavit and its annexures available except for the material protected by the confidentiality order. This was, I note, information upon which I relied in making my orders last Friday because it goes to the insolvency of the companies concerned. 66 I should make specific mention of annexure F to Mr Walker's affidavit, which relates to the response of the general counsel for News Ltd to the first defendant's proposal concerning a contribution to meet corporate obligations to employees and others. 67 Counsel for the relevant defendants were very happy to have released the offers made by the tenth defendant and the first defendant to make payments on certain conditions out of bonuses they had received from the company, but counsel for the first defendant submitted that I should not allow to be released the response by the general counsel of News Ltd. This is because one of the assertions made in that response is said to be prejudicial and arguably would be defamatory if not protected by s 24 of the Defamation Act. It was said that if Mr Murdoch and others wished to make such a statement they were perfectly at liberty to do so without the protection of s 24. 68 It appears to me that the letter in question should be released as part of the bundle of correspondence in which offers were made, because it explains the fate of one of the offers. It was a matter put before me last Friday and it had some influence in the application because it bore indirectly on the question of risk of dissipation of assets.

Affidavit of Gordon Thomas Grieve 69 This affidavit annexes some information explaining the position of Mr Silbermann and was filed and read by counsel for that defendant. As I understand it, there is no opposition to the contents of that affidavit being made available.

Conclusions 70 My conclusions, therefore, are that I should make an order on the application of Mr Smark's clients granting leave under Pt 65 r 7 to permit any journalist or other media representative, on application to the Court's Public Information Officer, to have access to the following affidavit material:

The affidavit of Mr Murdoch made on 7 June 2001 and the exhibits to it, except for exhibits LKM 1 to 5 inclusive and the annexures to exhibits LKM 9 and LKM 11. 2. The whole of the affidavit of Mr Connor made on 8 June 2001. 3. Paragraphs 1 to 27 and annexures A to D of the affidavit of Mr Thomas made on 8 June 2001. 4. The whole of the affidavit of Mr Walker made on 8 June 2001, except for those parts protected by my previous confidentiality order. 5. The whole of the affidavit of Mr Grieve made on 12 June 2001. * * * * * * * * *

Last Modified: 06/18/2001 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

Defamation Act 1974(NSW)

Road Transport (Vehicle Registration) Act 1997(NSW)

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