Idoport Pty Limited & Anor v National Australia Bank Limited & 8 Ors; Idoport Pty Limited & Market Holdings Pty Limited v Donald Robert Argus; Idoport "JMG" v National Australia Bank Limited & Ors

Supreme Court of NSW|2001-11-14|Before: Einstein J, Mr J

CITATION : Idoport Pty Limited & Anor v National Australia Bank Limited & 8 Ors; Idoport Pty Limited & Market Holdings Pty Limited v Donald Robert Argus; Idoport "JMG" v National Australia Bank Limited & Ors [47] [2001] NSWSC 1024 FILE NUMBER(S) : SC 50113/98; 50026/99; 3991/00 HEARING DATE(S) : 8/11/01 JUDGMENT DATE : 14 November 2001

Idoport Pty Limited (Plaintiff) PARTIES : National Australia Bank Limited (Defendant) Donald Robert Argus (Defendant) JUDGMENT OF : Einstein J

COUNSEL : Mr M Dicker (Plaintiff) Mr J Gleeson (Defendants) SOLICITORS : Withnell Hetherington (Plaintiff) Freehills (Defendants) CATCHWORDS : Practice and procedure - Confidentiality Orders - Principles - Public interest in open justice - Public interest in knowing the essential reasons for a court decision - Interest of litigants in knowing the essential reasons for a court's decision - Extent to which materials the subject of claimed confidentiality were the subject of open submissions and have now passed into the public arena - Extent to which the claimed confidential information was referred to in the open section of the judgment - Not possible for either the parties or the public to fully understand the courts reasons for decision on the security for costs motion without reference to the confidential sections of the judgment - Relevance of recent development where Idoport Pty Limited has failed to comply with the order of the court requiring payment of security for costs leading to MLC proceedings now being stayed - Principle of open justice presently requires that the existing confidentiality regime requires to be lifted. David Syme & Co Ltd v General Motors-Holden Ltd [1984] 2 NSWLR 294 Estates Property Investment Corporation Ltd v Pooley 1975 3 ACLR 256 G v H (1994) 181 CLR 387 Home Office v Harman [1983] 1 AC 280 Housing Commission of NSW v Tatmar Pastoral Co Pty Ltd (1983) 3 NSWLR 378 John Fairfax & Sons Ltd v Police Tribunal of New South Wales (1986) 5 NSWLR 465 John Fairfax Group Pty Ltd (Receivers and Managers Appointed) v Local Court of New South Wales (1991) 26 NSWLR 131 John Fairfax Pty Ltd v Attorney General (NSW) (2000) 181 ALR 694 J v L & A Services Pty Ltd (No.2) [1995] 2 Qd.R 10 CASES CITED : Idoport Pty Limited & Anor v National Australia Bank Limited & 8 Ors [2001] NSWSC 744 Mann v Carnell (2000) 201 CLR 1 National Australia Bank Limited v Market Holdings Pty Limited (in liq) [2001] NSWSC 253; 37 ACSR 629 Public Service Board v Osmond (1986) 159 CLR 656 Raybos Australia Pty Ltd v Jones (1985) 2 NSWLR 47 Scott v Scott [1913] AC 417 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 The Commonwealth v Verwayen (1990) 170 CLR 394 Titelius v Public Service Appeal Board & Ors [1999] WASCA 19 Trade Practices Commission v Arnotts Ltd & Ors (1990) 93 ALR 638 DECISION : Appendix A to the judgment of the Court of 13 September 2001 to be published without restriction and those persons who had previously given undertakings to the Court following confidentiality regime, to be released from those undertakings. Short minutes of order to be brought in.

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION - EQUITY DIVISION Einstein J 14 November 2001 50113/98 IDOPORT PTY LIMITED & ANOR v NATIONAL AUSTRALIA BANK LIMITED & 8 ORS

50026/99 IDOPORT PTY LIMITED & ANOR v DONALD ROBERT ARGUS

3991/00 IDOPORT PTY LIMITED ("JMG") v NATIONAL AUSTRALIA BANK

JUDGMENT - Re Confidentiality Regime Introduction 1 The defendant's, by notice of motion 49, seek the variation of orders made by the Court on 28 August 2001 and consequential orders for the general publication of Appendix A to the judgment of the Court dated 13 September 2001 ([2001] NSWSC 744). The orders made by the Court on 28 August 2001 restricted access to certain documents, which the plaintiff claimed were confidential, to named persons upon the giving of confidentiality undertakings. Those orders also govern access to Appendix A. 2 The plaintiff prepared detailed written submissions of 10 October 2001 in support of the proposition that the existing confidentiality regime should not be departed from. The submissions were supplemented from the bar table. Essentially Mr Dicker submitted that the issue had been carefully dealt with in the 27 August Judgment and that nothing had been shown to have changed since that time to justify a new approach. However he expressly made the point that the plaintiff was not suggesting that circumstances had not changed since that time in relation to funds. [Transcript 15024] 3 The defendants submit that: (a) the principles of open justice dictate that the subject documents, having been tendered in the course of the security for costs motions to the Court, and being of crucial importance to the Court's reasoning in the security for costs judgment, be published unless cogent evidence is advanced establishing their confidentiality. A consideration of the documents themselves and the evidence led by the plaintiff on previous motions fails to establish or justify any such claim for confidentiality; (b) the Court should not accept the plaintiff's assertions as to the sensitivity of the material contained in the allegedly confidential documents in light of the fact that very significant amounts of information in relation to the plaintiff's funding (including quantum of funding and the identity of funders) have been permitted by the plaintiff to enter the public domain and/or be produced to the Court without any claims for confidentiality being made. Such conduct is quite "inconsistent" with what is now being claimed: Mann v Carnell (2000) 201 CLR 1 at 13, para 29; The Commonwealth v Verwayen (1990) 170 CLR 394 at 406 per Mason CJ, 472-473 per Toohey J. This fact has a two-fold significance: first, it undermines the basis of the plaintiff's claim as to the sensitivity of such documents - no evidence has been led by the plaintiff to suggest that the entry of this information into the public domain was as a result of any accident; secondly, it arguably constitutes a waiver of the broad subject matter in respect of which confidentiality has been claimed; (c) in any event, the public interest, not only in open justice but in the question of courts being clogged with essentially foreign-funded litigation as a "speculative investment" to the cost of other "users" of the scarce resources of the judicial system, requires that any residual confidentiality in the documents be subordinated to their public disclosure; (d) the very nature of the documents said to be of "particular" confidentiality precludes their protection as such since, embodying contracts that are contrary to public policy, the Court should hardly protect the confidence in any such documents, especially when they are of the clearest relevance to the security for costs application. 4 It is plain that the 27 August Judgment had laid down an interim regime pending the commencement of the hearing the motion. The judgment on 27 August 2001 was given in the course of the court dealing with an interlocutory regime governing access to documents for the period up until the hearing of the motion in open court. The defendants, at all relevant times reserved their right to further challenge the plaintiff's claims for confidentiality. See, for example T12219.14-12220.33. During the hearing of the application for security for costs and on the occasion when the defendants had sought to tender documents, the defendants made plain that they wished to have the documents made available openly. The approach taken by the court was follows: "I hear that you wish to say that these documents should now be open because we are in open court, but what I prefer to do is to continue to protect the claimed confidentiality, to deliver a judgment which may or may not refer to these documents because they may not be part of the reasons, and then when there is a judgment of the court, we can have an argument with something tangible to focus on which are the Court's reasons and findings to determine whether open justice requires a different regime. " [Transcript 12275] 5 The orders made on 28 August 2001 were adopted as a convenient means of enabling the security for costs application to be heard at the time at which it was set down for hearing, without it being necessary to fully argue the question of confidentiality and with the defendants reserving their position to further argue the question of whether or not the documents themselves were confidential and warranted any confidentiality regime. Now, following the hearing, tender of the documents and delivery of a judgment in which those documents are of central importance, the defendants submit that the restrictions should be lifted. The submission is that apart from considerations of open justice, developed more fully below, it is not fair to continue to hold practitioners who have given undertakings to the Court to those undertakings in circumstances where the underlying claim for confidentiality is not or is no longer sustainable. 6 The defendants have advanced detailed written submissions as to: (a) Appendix A of the judgment 13 September 2001; (b) the confidentiality claimed in respect of those documents produced by the plaintiff (and other entities) that are the subject of the orders of 28 August 2001, in the context of the tender of the subject documents at the hearing of the security for costs applications, and the suggested importance of the existence, nature and content of the funding agreements to the reasons for the judgment delivered on the security for costs applications. The submissions were supplemented from the bar table by Mr Gleeson SC. 7 As many of the defendants' detailed submissions are accepted as of substance, the reasons which follow generally adopt those submissions.

The Claimed Confidential Documents 8 The documents the subject of a claim by the plaintiff for confidentiality were produced in answer to various notices to produce and subpoenas served or issued in the course of the preparation for the hearing of the defendants' security for costs application. [Those notices to produce and subpoenas are identified in paragraphs 4 and 5 of the affidavit of Mr Damian Lovell sworn 28 September 2001 (the "First Lovell Affidavit")]. 9 The circumstances in which the documents were produced are described in paragraphs 6-10 of the First Lovell Affidavit. I accept that in summary, the documents the subject of the claim for confidentiality by the plaintiff fall into 3 broad categories, namely: (a) specific agreements which describe and regulate the funding provided or to be provided by Efficiency Investments BV ("Efficiency");

(b) copies of specific bank statements issued by Bank of Western Australia ("Bank West") in respect of two Idoport Pty Limited ("Idoport") bank accounts with Bank West;

(c) copies of documents setting out the extent of subscriptions for shares in North & South Group SA ("North & South") and subsequent payments made by North & South on behalf of, or at the direction of, Idoport. These documents are collectively referred to as the "Claimed Confidential Documents". 10 The plaintiff, in support of their claim for confidentiality had relied upon an affidavit of Mr Stephen D'Emilio sworn 21 August 2001 (the "D'Emilio Affidavit") together with submissions which were marked MFI P208. 11 The interlocutory regime governing access to the Claimed Confidential Documents both prior to and at the hearing of the defendants' applications for security for costs were the subject of 3 judgments of the Court [see First Lovell Affidavit, paragraphs 19 - 29]. 12 As already stated, the confidentiality regime ultimately adopted by the Court and which governed access to the Claimed Confidential Documents during the course of the hearing of the defendants' security for costs motions was the subject of the 27 August 2001 judgment. Orders reflecting the Court's reasoning were made by the Court on 28 August 2001 [see pages 225-231 of Exhibit "DGL1" to the First Lovell Affidavit]. 13 The Claimed Confidential Documents were tendered on 29 August 2001 during the hearing of the security for costs application in the form of the confidential tender bundle. [The confidential tender bundle was marked Exhibit DX5 - 7]. 14 The Court, in publishing its reasons in respect of the security for costs application on 13 September 2001 ([2001] NSWSC 744) set out in Appendix A those parts of its judgment and reasoning which related to the Claimed Confidential Documents. Much of Appendix A to the judgment in fact refers to non-confidential documents eg. those relating to OAMPS and North & South. 15 Mr Gleeson submitted, as I accept, that standing back from the detail, it is important to recall the context in which the confidentiality regime was put in place. The context was in short as follows: In the course of a security for costs motion, a body of documents were obtained by the defendants on discovery or on subpoena on an open basis and were received into evidence on the motion without confidentiality restriction: · that body of documents related to the plaintiff's funding arrangements and disclosed material relating to four topics: · The identity of the funders - it is known on an open basis that the funders were OAMPS, North & South and Efficiency; · Information concerning amounts of funding-it is known on an open basis that OAMPS provided $1.55 million, North & South provided a figure up to $5 million and Efficiency paid a figure of $7.5 million into an Idoport bank account; · The share of the proceeds which OAMPS and North & South were to take; and · The structure of the funding of OAMPS and that North & South

[All of this material had been received into evidence on an open basis and is presently in the public domain following the material having been made available on discovery or subpoena but more importantly, having been tendered in open court. Indeed every one of the above-described matters except for the $7.5 million figure is to be found in the open judgment. The $7.5 million figure had also been disclosed on an open basis - see transcript 15027]

General principles 16 The plaintiff clearly bears the onus of demonstrating the confidentiality of documents the subject of the claim. If demonstrated to be confidential, the plaintiff then bears the onus of demonstrating that that confidentiality should continue to be protected by the regime for which they contend. 17 Claims for confidentiality are made against the background of the axiomatic principle of open justice, a principle which is one of the most fundamental aspects of the system of justice in Australia. It informs and vitalises numerous specific rules and practices: see John Fairfax Pty Ltd v A-G (NSW) (2000) 181 ALR 694 at 703; see generally Spigelman CJ "Seen to be Done: The Principles of Open Justice" (2000) 74 ALJ 290. 18 The question now raised is whether the principles of open justice compel a judgment of the Supreme Court to be made available to the parties and the public without restriction. 19 I accept that there is substance in the defendants' submissions that it follows that, as a claim for confidentiality amounts to a derogation from this principle, convincing evidence needs to be advanced to sustain any such claim. It also follows that any confidentiality regime imposed must be no more onerous than is absolutely necessary to protect the demonstrated confidential information. 20 I accept that there is substance in the defendants' submissions that this is not a case of the kind in which confidentiality orders would normally be made. There appear to be a limited number of general exceptions to the 'open justice' principle, none of which are the present case, namely: (a) cases where trade secrets, secret documents or communications or secret processes are involved; (b) cases where disclosure in a public trial would defeat the whole object of the action (as in blackmail cases or cases involving police informers); (c) cases involving the need to keep order in court; (d) cases involving (in certain circumstances) national security; (e) cases involving the performance of administrative or other action that may properly be dealt with in chambers; (f) cases where the court sits as parens patriae involving wards of the state or those with mental illness. See Raybos Australia Pty Ltd v Jones (1985) 2 NSWLR 47 at 54 and Scott v Scott [1913] AC 417 at 437; see also Gurry, Breach of Confidence (Clarendon Press, Oxford: 1984), Chapter V. 21 I accept that there is substance in the defendants' submissions that the categories outlined in paragraph 15 above do not admit of an exception for the disclosure of information in circumstances where for instance embarrassing, damaging and even dangerous facts come to light. See, in particular: (a) John Fairfax & Sons Ltd v Police Tribunal of New South Wales (1986) 5 NSWLR 465 at 476-477 per McHugh JA: "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. Accordingly, an order of a court prohibiting the publication of evidence is only valid if it is really necessary to secure the proper administration of justice in proceedings before it . Moreover, an order prohibiting publication of evidence must be clear in its terms and do no more than is necessary to achieve the due administration of justice . The making of the order must also be reasonably necessary; and there must be some material before the court upon which it can reasonably reach the conclusion that it is necessary to make an order prohibiting publication. Mere belief that the order is necessary is insufficient . " (emphasis supplied) (b) John Fairfax Publications Pty Ltd v Attorney General (NSW) 181 ALR 694 at 703 per Spigelman CJ at paragraph 52 : "There can be no doubt that the principle of open justice is one of the most fundamental aspects of the system of justice in Australia. It informs and vitalises numerous specific rules and practices…." (c) John Fairfax Group Pty Ltd (Receivers and Managers Appointed) v Local Court of New South Wales (1991) 26 NSWLR 131 at 142 per Kirby P: "It has often been acknowledged that an unfortunate incident of the open administration of justice is that embarrassing, damaging and even dangerous facts occasionally come to light. Such considerations have never been regarded as a reason for the closure of courts, or the issue of suppression orders in their various alternative forms..." (d) J v L & A Services Pty Ltd (No.2) [1995] 2 Qd.R 10 at 45 per Fitzgerald P and Lee J: "It is common for sensitive issues to be litigated and for information which is extremely personal or confidential to be disclosed. It is of obvious concern that such a paramount principle as the requirement of open justice should not be whittled away on a case by case basis according to individual judges' subjective views of the merits or demerits of the claims to privacy of individual litigants." 22 The rationale for the Courts adopting a narrow and tight approach to claims for confidentiality was stated by Fitzgerald P and Lee J in J v L & A Services Pty Ltd (No.2) [1995] 2 QdR 10 at 45: "Open justice is non-discriminatory, whereas exceptions to the principle of open justice deny equal rights to the disputing litigants and provide a benefit to some litigants which is unavailable to members of the general public. Further, public scrutiny is a strong disincentive to false allegations and a powerful incentive to honest evidence, and publicity may attract the attention of persons with material information who are unaware of the proceeding." 23 In the present context where a judgment has issued, I accept that it is relevant, in considering the plaintiff's claim, to take into account that the interest the public has in knowing the result of a court's work is even greater than the interest it has in observing the actual operation of Courts: David Syme & Co Ltd v General Motors-Holden Ltd [1984] 2 NSWLR 294 at 307 per Hutley AP. This principle generally encompasses orders made by a court and judgments. I accept that there is substance in the defendants' submissions that in this regard the following principles apply: (a) An order of a court is a public document to which any member of the public may have access: Titelius v Public Service Appeal Board & Ors [1999] WASCA 19 at para 96. See also Street CJ's comments in David Syme & Co Ltd v General Motors - Holdens Ltd (1984) 2 NSWLR 294 at 301. (b) A litigant has a right to know the essential reasons for a decision: Trade Practices Commission v Arnotts Ltd & Ors (1990) 93 ALR 638 at 639. (c) The obligation of a court is to publish reasons for its decision, not merely to provide reasons to the parties: Public Service Board v Osmond (1986) 159 CLR 656 at 666-667; Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 273, 277-281; Housing Commission of NSW v Tatmar Pastoral Co Pty Ltd (1983) 3 NSWLR 378 at 385-6 as cited in Spigelman CJ "Seen to be Done: The principles of Open Justice" (2000) 74 ALJ 290 at 294. 24 As the defendants point out, the Home Office v Harman [1983] 1 AC 280 implied undertaking ceases to operate once documents are tendered in evidence.

Appendix A to the security for costs judgment 25 I accept that there is substance in the defendants' submissions that ultimately the plaintiff has failed to demonstrate that the material should now be regarded as confidential. Although material relating to all the funding agreements was collected, for convenience, in Appendix A to the 13 September 2001 judgment and is subject to confidentiality orders, it is now clear that much of this material is by now in fact in the public domain. 26 Appendix A deals with the following key issues, namely: · the relationship between the parties; · an overview of funding arrangements relating to AIIL/OAMPS, North & South and Efficiency; · the significance of the funding arrangements to the issue of delay; and · the forecasted distribution of proceeds. 27 I accept that there is substance in the defendants' submissions that even without any amendment to the confidentiality orders, the information disclosed in Appendix A which relates to funding arrangements relevant to AIIL/OAMPS is in the public domain (such documents being referred to in paragraph 42 below). I accept that there is substance in the defendants' submissions that in these circumstances, paragraphs 3 - 4 and 7 - 15 of Appendix A should no longer be subject to any confidentiality regime. Similarly, I accept that there is substance in the defendants' submissions that certain of the information concerning funding provided by North & South, as referred to in paragraphs 5 and 16 - 19 and the first sentence of paragraph 20 of Appendix A is in the public domain and should not be the subject of any confidentiality regime. 28 I accept that there is substance in the defendants' submissions that further, given paragraphs 44, 63 - 64 and 67 - 70 of Appendix A are of such a general nature, even if the confidentiality regime was to remain unchanged, they should no longer be the subject of confidentiality orders. 29 The reality is that for all the reasons set out in this judgment, the whole of Appendix "A" should now be opened without restriction. 30 There is also substance in the submission by Mr Gleeson that the evidence which had been adduced to support the plaintiff's contention that it would suffer harm from publication had not been improved beyond the evidence of Mr D'Emilio which had been described in paragraph 31 of the 27 August Judgment as "not (presenting) a strong case for confidentiality". Further, there is substance in the defendants' submission that it is highly likely that the three months which have now passed since late August has resulted in aspects of the original claims to confidentiality having now become stale. Reference has already been made to Mr Dicker's careful statement that the plaintiff was not saying that the circumstances may not have changed concerning amounts in bank account and the like. 31 In the present case details of the nature and terms of the documents concerning the Plaintiffs' funding were clearly of vital importance to the reasons for judgment of the Court. In these circumstances and given the nature of the documents (as to which see paragraphs 39 - 41 below) I accept that there is substance in the defendants' submissions that the appropriate course is for Appendix A to be published without restriction. Only in this way will the parties and the general public be able to properly and fully comprehend the reasons of the Court.

The basis of the plaintiff's claim for confidentiality 32 I accept that there is substance in the defendants' submissions that the plaintiff has cited no case to the Court in which, on a considered and reasoned basis, documents of the kind being sought to be protected as confidential have been protected. The plaintiff's arguments as to confidentiality of the subject material are set out in written submissions marked MFI P208. As set out in paragraph 11 of the Court's 27 August 2001 judgment, the basis upon which the plaintiff asserts that the Claimed Confidential Documents are relevantly confidential, is that they go to the question of the plaintiff's resources and lines of resource in terms of the plaintiff being able to fund the continued rollout of the proceedings.

The plaintiff's evidence in support of the claim for confidentiality 33 As the defendants point out, the evidence led by the plaintiff in support of the claim for confidentiality consists of the D'Emilio Affidavit. Mr D'Emilio's evidence discloses the following: (a) he had not undertaken any review of the documents for which confidentiality was claimed himself (T12040-12041); (b) he knows "very little indeed" about the documents referred to in Annexure A to his affidavit (T12061.50-.56); (c) he does not know whether Mr Maconochie reviewed each document (T12043-12045); (d) he has not asked Mr Maconochie whether he reviewed each document (T12043.26-.30); (e) he did not observe Mr Maconochie reviewing each and every document for confidentiality (T12043.31-.33); (f) he does not know Mr Maconochie's understanding of confidentiality (T12045); (g) he did not ask Mr Maconochie about Mr Maconochie's understanding of confidentiality (T12045.30-.33); (h) he did not ask Mr Maconochie why Mr Maconochie said the documents were confidential (T12047.2-.5); (i) he did not, and nor did anyone in his presence, explain to Mr Maconochie what was meant by the word "confidential" (T12045.37-.45); (j) he did not independently verify of Mr Maconochie's claim that the documents were confidential (T12049;12056); (k) he made no attempt to verify Mr Maconochie's claim that the documents were confidential (T12047.6-.11; 12049.4-.11); (l) insofar as certain documents referred to in paragraph 12 of his affidavit were described, on information and belief, as of "particular" confidentiality, Mr Maconochie did not explain to Mr D'Emilio what he meant by that (T12071.5-.25); (m) he did not test Mr Maconochie on that statement (T12071.14 -.15); (n) Mr D'Emilio knows nothing about the Plaintiffs' capacity to raise funds (T12107.30 -.33 & .49 -.51; 12110.50 -.53); (o) Mr D'Emilio agreed "in its literal sense as correct" that any information contained in the agreements about what share of any verdict Efficiency Investments would be entitled to under the agreements did not bear upon the Plaintiffs financial capacity to fund security (T12118.40 -.45). 34 I accept that there is substance in the defendants' submissions that the plaintiff had at least four alternative ways in which evidence could have been given: (a) evidence could have been given by Mr Maconochie himself; (b) evidence could have been given by Mr Hetherington, the solicitor on the record for the Plaintiffs in these proceedings, a senior practitioner of this Court and somebody who is a member, together with certain "funders" or their representatives on the Plaintiffs Litigation Committee ("LOC"). [See 37 ACSR 629 at 633 and Exhibit R3, p.589]; (c) evidence could have been given by Mr D'Emilio based on his own review of the documents claimed to be confidential and his own professional assessment, as a qualified lawyer and solicitor of this Court, as to the confidential nature of the documents; or (d) evidence could have been given by Mr D'Emilio on information and belief from Mr Maconochie in circumstances where Mr D'Emilio had made some effort to verify Mr Maconochie's claims or, at the very least, ascertain Mr Maconochie's "test" or "understanding" of confidentiality and his understanding of "particular" confidentiality [cf. paragraph 12 of the D'Emilio's Affidavit and T12048.22-12049.30]; None of these methods were in fact mobilised. 35 I accept that there is substance in the defendants' submissions that the Plaintiffs' evidence has not discharged the onus of demonstrating the confidentiality of the Claimed Confidential Documents. In this regard, as Brennan and McHugh JJ said in G v H (1994) 181 CLR 387 at 391-392: "But, when a court is deciding whether a party on whom rests the burden of proving an issue on the balance of probabilities has discharged that burden, regard must be had to that party's ability to adduce evidence relevant to the issue and any failure on the part of the other party to adduce available evidence in response." 36 The fact that the plaintiff's confidentiality claims can no longer be regarded as unsustainable is supported by: (a) the fact that the D'Emilio Affidavit contains nothing more than a bare assertion of confidentiality unsupported by reasons as to why the documents should be the subject of a particular confidentiality regime; (b) the claims made, for example, over National Australia Bank Limited bank statements as well as over bank accounts that, on his own indirect evidence, are not the accounts through which funding for the litigation is directed; (c) the fact that the plaintiff initially claimed confidentiality over 2 documents themselves annexed to the D'Emilio Affidavit, as Annexures "B" and "C": see Annexure A, Part D of the D'Emilio Affidavit. When this was pointed out in cross-examination, the plaintiff was forced to abandon the claim [see T12056.25-12057.32]; (d) the initial claim for confidentiality which the plaintiff was constrained to abandon in relation to a large number of documents listed in Annexure A Part E of the D'Emilio Affidavit together with the Bank West statement listed as 1(c) in Annexure A Part C. 37 I accept that there is substance in the defendants' submissions that in light of these considerations, the already extremely slight weight of the information and belief evidence is further undermined in terms of the unreliability and clearly uninformed nature of the assessments as to confidentiality in fact made. The fact that confidentiality orders were made, including in proceedings before Justice Young, does not support the plaintiff's contentions. I accept that there is substance in the defendant's submissions that the only inference that is available to be drawn is that it was convenient to the parties to proceed in that way on that occasion. 38 In these circumstances it is appropriate that the orders made by the Court on 28 August 2001 be varied to the effect that the confidentiality regime and the confidentiality undertakings cease to apply.

The nature of the Claimed Confidential Documents 39 I accept that there is further substance in the defendants' submissions that an examination of the subject documents does not support the Plaintiffs' claim for confidentiality.

Bank accounts 40 In relation to the various bank accounts, the evidence is that only one is presently used to fund the litigation (T12060.32-12061.14; paragraph 10 of the D'Emilio Affidavit). There can thus be no sensitivity attached to the others. As to the "active" account, it simply discloses a cash position of a particular point in time; it says nothing about financial capacity in the sense of other funding agreements or capital raising possibilities. Insofar as disclosure of the Plaintiffs' cash position is concerned, the Court has evidence that the balance is less than the amount sought by the Defendants from Idoport on the application for security for costs (T12109.57 - 12110.15). Further the Plaintiffs' claim for confidentiality is inconsistent with their failure to claim confidentiality over the bank statement for this account for the period 12 September 2000 to 12 December 2000 [see Exhibit "DGL1" to the affidavit of Mr Damian Lovell sworn 28 September 2001 (the "Second Lovell Affidavit") at 108].

Funding agreements 41 I accept that there is substance in the defendants' submissions that there are three particular factors which demonstrate that the funding agreements in the present instance are not relevantly confidential. The defendants' submissions as to these factors which are of substance are: (1) that there is nothing inherently confidential about the way in which a litigant funds proceedings which would ordinarily override the principles of open justice; (2) the funding agreements in the present case do not disclose the plaintiff's ability to enter into further funding agreements, whether with existing or future funders. The evidence before the Court shows that the plaintiff has on three separate occasions in the past sought to and raised additional significant funds. Further, the agreements do not relate to an ongoing business, but rather to the funding of specific proceedings. Accordingly, they lack the necessary commercial confidentiality to warrant the Court's protection and given that the documents have been relied upon and tendered the principle of open justice ought apply and the confidentiality orders lifted; and (3) the only terms of funding which are the subject of a claim for confidentiality are those arrangements with Efficiency. The defendants submit it is a relevant factor that there is no general claim for confidentiality in respect of the plaintiff's funding arrangements, particularly in circumstances where the plaintiff has not identified any specific reason why the agreements with Efficiency are in any different position to the funding arrangements entered into with AIIL and North & South.

Extent of information as to plaintiff's funding in the public domain 42 I accept that there is substance in the defendants' submissions that the manner in which the plaintiff has funded the proceedings has been the subject of much comment in the media (see for instance the press articles at pages 14-27 of Exhibit "DGL1" to the Second Lovell Affidavit). The identities of the 3 corporations who have been a source of funds used to conduct the proceedings have also been disclosed. The plaintiff's claim for confidentiality is profoundly undermined by the extent to which information as to their funding has been produced by them on previous occasions without any claim for confidentiality having been made. The non-confidential evidence before the Court on the security for costs applications was to the effect that the plaintiff has funded the proceedings from money sourced from an Australian publicly listed company, a Jersey company and a Dutch company. The following summary may be noted: (a) In relation to the funding provided to Idoport by Australian International Insurance Limited ("AIIL"): (1) the parties and terms of the Shareholders Agreement between Mr Maconochie, Negubo Pty Ltd ("Negubo") and AIIL are known [see Exhibit "DGL1" to the Second Lovell Affidavit at pages 28 - 45]; (2) the number of shares issued by Idoport to AIIL is known, namely 1 share at $50,000 and 15 shares at $100,000 each [see Exhibit "DGL1" at 47]; (3) the fact that moneys were actually paid by AIIL into Idoport bank account 100 - 004715 - 7 is known as is the date on which various payments totalling $1.55 million were made [see Exhibit "DGL1" at 51 - 55]; (4) the fact that the amount recoverable by AIIL on its investment is $15 million is set out in the Shareholders Agreement (see Exhibit "DGL1" at 32), was the subject of an announcement to the Australian Stock Exchange in August 1999 by AIIL's parent company OAMPS Limited ("OAMPS") [see Exhibit "DGL1" at 76) and was referred to in the latest Annual Report of OAMPS (see Exhibit "DGL1" at 85]. (b) In relation to the funding provided to Idoport by North & South: (1) the parties and terms of the Shareholders Agreement between Mr Maconochie, Negubo, North & South and Idoport are known [see Exhibit "DGL1" at 165 - 169]; (2) the number of shares issued by Idoport to North & South is known, namely 1 share issued at $100,000 with $4.9 million unpaid [see Exhibit "DGL1" at 170 - 174]; (3) the fact that North & South is a British Virgin Islands company is known [see Exhibit "DGL1" at 165]; (4) the fact that the share issued by Idoport is held on trust for North & South by NW Nominees Ltd, a Jersey company, is known (see Exhibit "DGL1" at 172) as are the terms on which the shares are held on trust [see Exhibit "DGL1" at 164]; (5) the amount which North & South will receive from any damages awarded in favour of Idoport in the proceedings are known, namely: (A) 40% of any damages award up to $50 million; (B) 30% of any damages award between $50 million and $200 million; and (C) 10% of any damages award greater than $200 million [see Exhibit "DGL1" at 167 - 168]. (c) In relation to the funding provided to Idoport by Efficiency: (1) Efficiency is a company resident in the Netherlands [T12083.11 -.15]; (2) the judgment of Mr Justice Young of 9 April 2001 in National Australia Bank Limited v Market Holdings Pty Limited (in liq ) [2001] NSWSC 253; 37 ACSR 629 at 663, para 227 reveals that there were 3 stages to the funding process: (A) the original tranche of funding under an Umbrella Agreement where funds were supplied from Efficiency via Idoport not subject to court approval and on a non-recourse basis, save from the proceeds of the litigation; (B) 3 further payments via Idoport; (C) the partnership/participation agreement under which: (i) Efficiency funds Idoport and Market Holdings Pty Limited (in liquidation) ("Market Holdings"); (ii) Efficiency has substantial rights to control the litigation, for example, it has 2 votes out of 4 on the LOC; and (iii) Efficiency receives a large share of the proceeds of the litigation; (3) it is known that $500,000 was transferred by Efficiency on 20 September 2000 (see Exhibit "DGL1" at 109), and that this was deposited into Idoport's account with Bank of Western Australia (account number 100-010357-7) [see Exhibit "DGL1" at 108]; (4) it is known that this payment of $500,000 was a payment under the terms of the Umbrella Agreement [see Exhibit "DGL1" at 107]; (5) it is known or may be readily inferred that Efficiency caused a further $7 million to be transferred to the Idoport account in October 2000 [see Exhibit "DGL1" at 108, 110]; (6) it is known that moneys have been paid from this account to discharge debts arising from the conduct of the litigation (see Exhibit "DGL1" at 111-118) including the payment of legal accounts [see Exhibit "DGL1" at 117]; (7) it is known that the agreements provided for an amount to be provided by way of security for costs [see pages 11-13 of Exhibit "DGL1" to the Second Lovell Affidavit]. 43 In the result it is quite clear that on the argument for the security for costs motion, both sides sought to make ample reference to the funding documents in their submissions in order to advance their respective cases. This was done both openly and in certain instances, taking care to preserve confidentiality. To take one example, the plaintiff made entirely open submissions about the funding documents which are recorded in paragraphs 34, 41, 65, 130 and 131. Hence a number of open submissions about the funding documents, have been made public.

General public interest considerations 44 Even if, against all of the above, it is thought that there is some limited basis for some form of limited confidentiality regime, that is not the end of the matter because the decision to be made needs to take into account not only the private interests of the parties but also the public interest in the open administration of justice. 45 Clearly the judgment made findings relating to the funding arrangements which were not only relevant but in fact vital to the Court's ultimate decision on the motion [open judgment paragraphs 66, 107,117, 121, 123 and 134] 46 It is clear that it is simply not possible for either the parties or the public to fully understand the courts reasons for decision on the motion without reference to the confidential sections of the judgment [see paragraphs 43, 107, 117 and 134]. In paragraph 65 of the open judgment the court recorded three submissions which the plaintiff had put on an open basis: the first being that the order for security would stultify the litigation because the plaintiff in terms of their own assets, would not have the capacity both to pay the security sought, as well as to continue funding the continued litigation up to its conclusion; the second being that there was inexcusable delay by the defendants resulting in a forfeiture of their rights, and the third being that there was a huge imbalance between the resources of parties, such that the plaintiff had been forced to go to outside funders to redress the imbalance 47 I accept that there is substance in the defendants' submissions that the relevant public interest to be served in the open disclosure of documents relating to the funding of this case, in particular who is funding it, in what amount, where they reside, who stands to gain and in what amount arises in the context of the live debate in the community as to the appropriate deployment and allocation of scarce resources for the justice system - see the speech of the Chief Justice of the High Court, Gleeson CJ entitled "Valuing Courts" delivered at the Family Court Conference on 27 July 2001 as an example.

Specific harm identified 48 Mr Gleeson's close submissions summarising and itemising the harm which would follow from the continued confidentiality orders remaining in place were in substance to the following effect: · As already made plain, the public is unable to fully follow what occurred and why it was that the security was ordered · In consequence the public is hampered in full discussion, criticism and debate as to the judgment as it is deprived of the detailed reasons which had been given most particularly in Appendix A · There is a basic unfairness as between the parties. Subject to the orders confining the plaintiff from disclosure, the plaintiffs generally have together with their legal representatives, a full entitlement to follow the reasons in the judgment and to make decisions in the light of that knowledge. The defendants, on the other hand, are severely constrained by the confidentiality regime. Five of the defendants are natural persons who have no right to read the closed reasons for judgment. Each of those personal defendants suffers relevant harm in being unable to obtain advice from legal representatives as to what might flow from that judgment. Additionally the confidentiality regime still results in part of the defendants' legal representatives engaged in these proceedings being simply unable to read and therefore to advise in relation to the judgment. 49 The defendants cited the decision of Holland J. in Estates Property Investment Corporation Ltd v Pooley 1975 3 ACLR 256, where evidence was given a certain confidentiality protection and ultimately Holland J removed that protection, his reasoning in part being that the defendants' legal representatives ought be entitled to consider the material and to determine how, if at all, it might have other uses in the case. 50 The plaintiff's submission put by Mr Dicker at transcript 15037, was that the defendants' motivation was a private one in relation to the revelation of the material, it being in their interest to have total access to the figures in the bank account and funding agreements. No cross-examination along these lines took place. Questions of abuse of process were eschewed by the plaintiff. 51 Matters have progressed considerably since the delivery of the original judgment delivered on 1 July 2001. The principal later developments involve the extent to which substantial detail of the claimed confidential information has passed into the public arena, the extent to which substantial detail of the claimed confidential information was mobilised in open court, the extent to which substantial detail of the claimed confidential information was referred to in the open judgment, the extent to which the claimed confidential information has become an essential integer in the proper understanding of the final judgment and most recently, the circumstances in which the security for costs orders made in the MLC proceedings have not been complied in consequence of which an automatic stay of those proceedings is presently in operation. The last mentioned consideration clearly supports the defendants' submission that as a matter of open justice, the defendants, including the individual defendants, are in the present circumstances, entitled to have advice as to the options open to them. It should not forgotten that each of the individual defendants faces a claim in the proceedings of some 50 billions dollars. The position of the National Australia Bank has been often referred to, in terms of the effect of the claim upon both the Bank and upon its shareholders. 52 Having given the matter careful consideration in all of the circumstances which now obtain it is quite clear to me that principle of open justice requires that the existing confidentiality regime requires to be lifted in respect of the entirety of the materials in the manner sought by the Defendants.

Conclusion 53 For the above reasons, it is appropriate that: (a) Appendix A to the judgment of the Court of 13 September 2001 should be published without restriction; (b) those persons who had previously given relevant confidentiality undertakings to the Court should be formally released from those undertakings.

Short Minutes 54 The parties are to bring in short minutes of order to reflect the above reasons.

I certify that paragraphs 1 - 54 are a true copy of the reasons for judgment herein of the Hon. Justice Einstein given on 14 November 2001

      Susan Piggott
      Associate

Last Modified: 06/13/2002 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.

At a glance

Court

Decision date

Before

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Judgment (26 paragraphs)

Cases Cited (15)

Cited By (7)