Supreme Court of WA|2002-08-09|Before: Mr J, Ms J, Lure J

Bernardus Hubertus Van Stokkum and The People Named In Schedule A & Ors v The Finance Brokers Supervisory Board [2002] WASC 192 (9 August 2002)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : BERNARDUS HUBERTUS VAN STOKKUM AND THE PEOPLE NAMED IN SCHEDULE A & ORS -v- THE FINANCE BROKERS SUPERVISORY BOARD [2002] WASC 192

BETWEEN : BERNARDUS HUBERTUS VAN STOKKUM AND THE PEOPLE NAMED IN SCHEDULE A

JOHN HENRY CARTLEDGE AND THE PEOPLE NAMED IN SCHEDULE B

GEOFFREY HAROLD PALMER AND THE PEOPLE NAMED IN SCHEDULE C

JOHN ROBERT LYNN AND THE PEOPLE NAMED IN SCHEDULE D

ARNOLD DOUGLAS FROST AND THE PEOPLE NAMED IN SCHEDULE F

NEVILLE THOMAS HORN AND THE PEOPLE NAMED IN SCHEDULE G

BRIAN PATRICK DEVERALL AND THE PEOPLE NAMED IN SCHEDULE H

DONALD GEORGE FORBES AND THE PEOPLE NAMED IN SCHEDULE I

SECILE MILLIE BOLTON AND THE PEOPLE NAMED IN SCHEDULE K

CLARENCE ROBERT BENNIER AND THE PEOPLE NAMED IN SCHEDULE L

ISABELLA McKAY MACDONALD AND THE PEOPLE NAMED IN SCHEDULE O

Practice and procedure - Plaintiffs' application under O 67 r 11(1)(d) for an order that all persons have leave to inspect and copy documents filed in the registry of the Supreme Court - Relevant principles guiding discretion - Principle of open justice

Rules of the Supreme Court 1970 (NSW), Pt 65 r 7

Eleventh Plaintiffs : Mr D H Solomon & Mr J C Giles

Esso Australia Resources Ltd v Plowman (Minister for Energy & Minerals) (1995) 183 CLR 10

Gashell & Chambers Ltd v Hudson Dodworth & Company [1936] 2 KB 595

Re The Bell Group Ltd (in liq) (ACN 008 666 993); Ex parte West Australian Newspapers Ltd [2000] WASC 94

1 McLURE J: The plaintiffs are investors who claim to have suffered loss and damage as a result of dealings with finance brokers licensed under the Finance Brokers Control Act 1975 (WA). The number of plaintiffs in the action currently exceeds 2,000. They claim against the defendant, the Finance Brokers Supervisory Board, for alleged misfeasance in public office and negligence.

2 By letter dated 1 May 2002 the plaintiffs' solicitors foreshadowed an intention to apply at a directions hearing on 2 May 2002 for an order in the following terms:

"Pursuant to Order 67 rule 11(1)(d), all persons have leave to inspect and copy all pleadings and documents filed in this matter, unless otherwise ordered with respect to any documents."

3 The plaintiffs' solicitors advised that the purpose of the order was "to enable our clients' agent to display copies of all documents in the proceedings on its website as an effective means of communication". It is proposed that access to the agent's website be unrestricted. In particular, the website could be accessed by strangers to the litigation and by the media. The plaintiffs' counsel informed the court that the plaintiffs' agent on whose website the court documents would be posted is Insolvency Management Fund ("IMF") which is funding the litigation on a commercial basis.

4 The application was adjourned to 13 May 2002. By that stage the action had not progressed beyond the filing of an amended writ of summons. The hearing was further adjourned to enable the plaintiffs to consider whether they wished to raise or pursue an argument which required them to give notice to Attorneys-General under s 78B of the Judiciary Act 1903 (Cth). The Court was informed at a reconvened hearing on 25 July 2002 that the plaintiffs did not wish to raise any issue requiring a s 78B notice and that they had no further submission to make by way of reply.

5 At the adjourned hearing on 13 May 2002, the plaintiffs confined the ambit of their application to inspection of pleadings, particulars of pleadings, interlocutory applications and affidavits in support thereof, outlines of submissions and the transcript of court proceedings, on payment of the requisite fee. The plaintiffs' application was not supported by affidavit evidence. It was opposed by the defendant.

6 Order 67 r 11(1) and (3) of the Supreme Court Rules ("Rules") provide:

"(1) Any person shall, on payment of the prescribed fee, be entitled during office hours to search for, inspect and take a copy of any of the following documents filed in the Central Office, namely -

(a) the copy of any writ, and the statement of claim (if any) indorsed thereon under Order 6 Rule 3;

(b) the copy of any petition under the Companies Act 1961;

(c) any judgment or order given or made in court or the copy of any such judgment or order; and

(d) with the leave of the Court or a Registrar, any other document other than an agreement lodged with or registered by the Commissioner of Workplace Agreements.

(3) Nothing contained in this Rule shall be construed as preventing any party to a cause or matter searching for, inspecting, and taking or bespeaking a copy of any affidavit or other document filed in the Central Office in that cause or matter or filed therein before the commencement of that cause or matter, but made with a view to its commencement."

7 It was held by the Full Court in Titelius v Public Service Appeal Board [1999] WASCA 19; (1999) 21 WAR 201 that members of the public have a common law right to inspect, but not take a copy of, court orders made in open court and that the common law was extended by O 67 r 11(1)(a) of the Rules to provide an entitlement to inspect and take a copy of the writ and any statement of claim endorsed thereon. Both Malcolm CJ and Ipp J in Titelius (at 220 and 223 respectively) noted that, unless used in open court, other documents filed in the court registry are not ordinarily available for public inspection.

8 Order 67 r 11(1)(d) of the Rules gives the court a discretion to permit inspection and copying of court documents which cannot be inspected as of right. It has been held in relation to the closely analogous s 43A(d) of the Non-contentious Probate Rules 1967 (WA) that a member of the public would need to show very cogent reasons to justify the grant of leave: De Hass v Murcia and Associates, unreported; SCt of WA; Library No 980633; 14 September 1998.

9 The plaintiffs rely on the court's discretion in O 67 r 11(1)(d) of the Rules. The application was presented on the basis that unrestricted access to the IMF website by strangers to the litigation was an incidental, albeit desirable, consequence of the need to communicate effectively and cost efficiently with the plaintiffs.

10 I am not satisfied that the need is proven. There are, theoretically at least, a number of options for communicating electronically with the plaintiffs without giving unrestricted access to the world at large. Material could be sent to an e-mail address or if the plaintiffs do not have an e-mail address, the material could be made available on a secure access section of the relevant website. There are a variety of options, none of which were addressed in evidence.

11 The plaintiffs also submit that inspection by the world at large is desirable because it facilitates and promotes the fundamental principle that, generally, court proceedings must be conducted publicly and in open view: Titelius per Ipp J at 223. I do not understand the plaintiffs to go so far as to say that the fundamental principle of open justice mandates the grant of leave, a submission which is wrong in principle and contrary to the authorities.

12 The plaintiffs rely on three New South Wales decisions in which the principle of open justice was a weighty discretionary factor in granting access to court documents. In Australian Securities & Investments Commission v Rich [2001] NSWSC 496; (2001) 51 NSWLR 643 the plaintiff made an ex parte application in which Austin J made an interim order restraining some of the defendants from dealing with their assets and from leaving the country. Late in the night of the same day on which the interim order was made the defendants applied for and obtained a variation of the order enabling one of the defendants to exchange contracts for the sale of property. On the return date of the originating process, undertakings were given by some defendants and the proceedings were dismissed by consent. During the course of that proceeding, counsel appearing on behalf of publishers John Fairfax & Sons Ltd and Nationwide News Ltd made an application under Pt 65 r 7 of the New South Wales Supreme Court Rules for leave for his clients as non-parties to have access to parts of the court file, in particular the originating process, the transcript of evidence of various parts of the proceedings and the affidavits in support of the ex parte application.

13 Part 65, r 7(1) of the New South Wales Rules states that a person "may not search in a registry for or inspect any document or thing in any proceedings except with the leave of the Court".

14 In New South Wales the exercise of the discretion is amplified in the Chief Justice's Practice Note No 97. Paragraphs 2, 3 and 4 are of interest in this context. They provide:

"2. Access [to documents filed in the registry] 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 has 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 exists.

3. It should not be assumed that material held by the Court comes within paragraph 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 ...

4. If access to material is given prior to the conclusion of the 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."

15 No objection was taken to the release of the originating process or the transcript. Following detailed consideration of the contents of the affidavits and the exhibits, Austin J ordered access to the affidavits save for specified parts thereof and the exhibits.

16 Austin J regarded par 2 of the Practice Note as consistent with and a reflection of the principle of open justice. As to which see John Fairfax & Sons Ltd v Police Tribunal of New South Wales (1986) 5 NSWLR 465 at 476-477 per McHugh JA; R v Davis [1995] FCA 1321; (1995) 57 FCR 512 at 514.

17 In Re HIH Insurance Ltd (in prov liq); Australian Securities & Investments Commission v Adler [2001] NSWSC 777; 39 ACSR 216 Santow J considered an application by the publisher of the Sydney Morning Herald for access to the defences filed by the five defendants in the proceedings. Only one of the five defendants objected to the application. The third defendant, who opposed the application, acknowledged that there was no prejudice to a fair trial in granting the application. Further, the defence was verified. The Court said:

"I am satisfied that, in all the circumstances, the stricture in para 4 of the practice statement which, in any event, should not be treated as some rigid constraint, does not apply in the present circumstances.

I am satisfied, therefore, that the third defendant's defence should, in the interests of open justice, where no countervailing prejudice to a fair trial has been identified, be made available to the applicant, along with other defences.

I should also say, for the future, that it may be that further pleadings or affidavits will be filed. It would assist the court and its public information officer if the person or entity filing such material would indicate to the court at the same time by covering letter to my associate:

(a) that the filing has taken place with a copy to my associate;

(b) whether there is any objection to access being made available to the press if sought; and

(c) if objection to access is foreshadowed, the ground of such objection.

In taking this step, I am aware that there is considerable public interest in these particular proceedings and I wish to make sure, not only that there is no inadvertent provision of access but, also, that access is not unreasonably impeded. While, in one sense, it is true that the applicant has the onus of establishing grounds for that access particularly where this is sought prior to the completion of the trial, in a very real sense, the court must be the custodian of a responsibility to ensure that its processes are transparent and that justice occurs in a public way."

18 The plaintiffs submit that the procedure adopted by Santow J would be an acceptable alternative to the amended order the subject of the application. The approach taken by Santow J in this case is (at least) different in emphasis from the more cautious approach he took in eisa Ltd v Brady & Ors [2000] NSWSC 929 which was cited with approval by Hamilton J in Hammond v Scheinberg [2001] NSWSC 568; (2001) 52 NSWLR 49.

19 The starting point for dealing with the plaintiffs' submission based on the principle of open justice is a consideration of the scope and rationale of that principle. Regard must also be had to the need for consistency with related legal principles.

20 A consequence of a document being a public document available for public inspection is that the publication of a report of its contents is the subject of qualified privilege for the purposes of the law of defamation: Titelius at 220 per Malcolm CJ. Further, the common law qualified privilege attaching to reports of proceedings in court is confined to proceedings conducted in open court and does not protect the publication of documents filed in the court registry (unless it is a public document available for public inspection): Gobbart v West Australian Newspapers [1968] WAR 113; Smith v Harris [1996] VicRp 70; [1996] 2 VR 335; cf Hill v Church of Scientology of Toronto [1995] 2 SCR 1130.

21 In rejecting a submission that the defence of qualified privilege applies to all documents filed in a court registry (regardless of whether they are public documents or have been referred to in open court) Byrne J in Smith v Harris said (at 347):

"The decisions adverse to the privilege have, for the most part, involved a consideration of the bounds of the principle that it is essential that the judicial process be conducted in the public arena; that judicial hearings be conducted in open court. A number of reasons have been given for this, each raising a policy whose importance is said to be greater than the interest of the person defamed. For present purposes, the significant reasons underlying the privilege in question are the need for those who administer justice to do so, in the public eye, under a sense of public responsibility. Citizens should be able to satisfy themselves by observation as to the mode in which this public duty is performed. The justification, then, for the privilege for publishers is that it is for the public benefit that citizens who cannot be in court to witness the judicial process may be accurately informed as to what took place: ... This objective is not advanced by publishing documents which may or may not be used in the court process, and which, in any event, have not yet been so used. I have already mentioned that affidavits, witness statements and discovered documents may not be used in the proceeding or may be the subject of confidentiality orders. In the case of pleadings, they may be amended, struck out or simply never used in the judicial process: ... The argument which would extend privilege to these documents confuses the subject matter of the judicial process with the judicial process itself. Publicity properly attaches to the latter not to the former unless and until the subject matter bears upon an understanding of the judicial process."

22 I respectfully agree with the statement that the principle of open justice concerns the judicial process. It seems that Santow J in Re HIH takes a different view of the scope of the principle.

23 Another intersecting legal principle is that concerning the implied undertaking of parties to litigation not to use discovered documents and court documents for an improper or collateral purpose. This principle is sometimes referred to as the Harman principle, based on the decision of the House of Lords in Harman v Secretary of State, Home Department [1983] 1 AC 280 at 306. The Full Court in Hamersley Iron Pty Ltd v Lovell (1998) 19 WAR 316 considered the scope of the implied undertaking in so far as it applied to discovered documents. In that context the Court held that:

"The content of the implied undertaking is that the party will not (i) make the contents of discovered documents public, (ii) communicate the contents of such documents to any stranger to the suit or (iii) use the documents or copies of them for any collateral purpose; that is, a purpose collateral to the purpose which production of the documents is intended to serve:..."

24 Thus, a party is obliged not to use a discovered document for any purpose other than in relation to the litigation in which it is disclosed. The implied undertaking binds anyone into whose hands the documents come if that person knows they were obtained by way of discovery and also extends to material of secondary character derived from discovered documents. One member of the court (Anderson J) was of the view that the House of Lords in Harman was correct in concluding that the implied undertaking did not terminate upon the documents being read in open court. The two other members of the court (Pidgeon and Ipp JJ) reserved their position on that question. The reasons of the majority in Harman on this point are difficult to reconcile with the scope of and weight given to the principle of open access to justice in the New South Wales authorities.

25 There is authority in other jurisdictions that the implied undertaking applies to answers to interrogatories, witness statements and other court documents including pleadings: Central Queensland Cement Pty Ltd v Hardy [1989] 2 Qd R 509; Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217 at 223 per Wilcox J; Ainsworth v Hanrahan (1991) 25 NSWLR 155; Bell Group Ltd (in liq) v Westpac Banking Corporation [1998] FCA 849; (1998) 86 FCR 215; Akins & Ors v Abigroup Ltd (1998) 43 NSWLR 539 at 548-549. However, it is unnecessary for the purposes of disposing of this application to determine the scope of the implied undertaking

26 The Court of Appeal in Akins v Abigroup Ltd also makes the point (at 549), that a stranger to proceedings should not be in a position superior to that of a party who must show exceptional circumstances before leave would be given permitting the collateral use of documents the subject of a Harman implied undertaking. I respectfully agree with that conclusion.

27 Where an application for access under O 67 r 11(1)(d) of the Rules is based on the principle of open justice it is necessary to have regard to the purpose and rationale of that principle and how it informs and affects related legal principles. Factors relevant to the exercise of the discretion in such circumstances include:

(a) whether and if so to what extent the document has been referred to in open court;

(c) the contents of the document (to assess the nature and seriousness of any allegations made and whether there is any information on any subject matter which has the potential to damage the private or commercial interests of a party);

(e) whether access to the document is necessary or desirable to facilitate an understanding of the proceedings and thus of the judicial process;

28 However in my view the discretion in O 67 r 11(1)(d) is not enlivened by the plaintiffs' application which is misconceived. On its proper construction, O 67 r 11 deals with the rights of persons who are not parties to the litigation to inspect and take a copy of documents filed in the central office of the Supreme Court. Sub-rule (3) makes it clear that a party's right to search, inspect and take copies of documents filed in the central office is not governed by O 67 r 11. No order of the court is required to permit the plaintiffs' agent to provide to parties to the action copies of court documents filed on behalf of the plaintiffs and on behalf of the defendant. In this case, no application is made by persons who are not parties to the action to inspect or copy any of the court documents. The plaintiffs do not have standing or authority to apply on behalf of unnamed non-parties for leave under O 67 r 11(1)(d).

29 Although the plaintiffs' application is in form under O 67 r 11 of the Rules, it is in substance an application by the plaintiffs for them (by their agent) to publish the documents to the world at large. Order 67 r 11 does not give the court the power to authorise the plaintiffs to publish court documents to the world at large. Although the proposed purpose or use for which inspection and copying of court documents is a relevant consideration in the exercise of the discretion under O 67 r 11(1)(d) and the grant of leave may (without deciding) impliedly authorise the use and thus protect the user, the power is confined to the court (not a party) providing access to documents in its possession to a person who has no legal entitlement to them.

30 There is also a question as to whether the court has power under O 67 r 11 to make an order "quia timet", that is, in advance of the documents being filed. Even if I have the power to do so (which I doubt having regard to the express terms of the order which presuppose the existence of a document on the court file) and if, contrary to my opinion, the court's discretion under O 67 r 11(1)(d) is enlivened, I would not at this stage of the proceedings exercise the discretion in favour of publication to the world at large without considering all relevant factors including the contents of the documents the subject of the application. The application is premature.

31 Thus, in the event I am wrong in the construction of O 67 r 11, I would not in any event in the exercise of my discretion grant leave in the terms sought. For these reasons the application will be dismissed.

Brokers Control Act 1975

Bernardus Hubertus Van Stokkum and The People Named In Schedule A & Ors v The Finance Brokers Supervisory Board [2002] WASC 192

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Judgment (69 paragraphs)

Bernardus Hubertus Van Stokkum and The People Named In Schedule A & Ors v The Finance Brokers Supervisory Board [2002] WASC 192 (9 August 2002)

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Legislation Cited (2)

Cases Cited (11)