Background

Peter Oreb and Ingrid Webber were directors of a group of companies supplying workforce solutions to some of the largest corporations in the world. Four of the companies went into liquidation. Prior to the companies going into liquidation, Peter and Ingrid resigned as directors of those companies.

The Liquidator reported that each of the companies would be unable to pay its unsecured creditors more than 50c in the dollar. Accordingly, the Australian Securities and Investment Commission issued a Section 206 Notice requiring Peter and Ingrid to show cause why they should not be disqualified from managing corporations for a period of up to 5 years.

Subsequently, Peter and Ingrid commenced Proceedings seeking relief which included a declaration that the statutory preconditions to the issuing of the Notice had not been met. After being unsuccessful at first instance, Peter and Ingrid appealed. On 24 March 2017, the Full Federal Court dismissed the appeal.

The purpose of this article is to examine Peter and Ingrid’s application for a non-publication order.

Application for a Non-Publication Order

Incidental to the application in relation to the Section 206 Notice, Peter and Ingrid applied for a non-publication order seeking to suppress their names and the names of the companies in liquidation. Pursuant to section 37AF of the Federal Court of Australia Act, the Court may make an order restricting the publication or disclosure of information tending to reveal the identity of a party or witness, if necessary, to prevent prejudice to the administration of justice.

Peter and Ingrid sought the non-publication order on the basis that an allegation of non-compliance with statutory obligations, especially one made by a regulator such as ASIC, could be used by clients as a reason not to renew contracts and could be used by competitors to persuade customers not to engage them.

Prior to the application for a non-publication order, the Proceedings (including the names of the applicants) had been recorded on the Court list on two occasions. No confidentiality order was sought upon the reading of the applicant’s evidence and a non-publication order was not sought until the final hearing.

General Principles

At first instance, Justice Markovic noted that the process ASIC follows under section 206 is private and that it is only when the process is complete, including after the person on whom a notice is served has had the opportunity to be heard, that the process becomes public. This, combined with Her Honour’s belief that it was not in the interest of the administration of justice that trade competitors should get an advantage, or, that the applicants should be disadvantaged, was sufficient to warrant ordering a non-publication order to take effect for a period of 6 months.

In arriving at Her Honour’s decision, Justice Markovic considered earlier authorities. It is useful to revisit these authorities here.

In Hogan v Australian Crime Commission [2010] 240 CLR 651, the High Court considered that the word “necessary” was a strong word not concerned with trivialities. The Court held that it was insufficient that the making or continuation of a non-publication order appears “convenient, reasonable or sensible, or to serve some notion of the public interest, still less that, as the result of some “balancing exercise”, the order appears to have one or more of those characteristics.”

Justice Perram expanded upon this in ACCC v Air New Zealand Ltd (No 3) [2012] FCA 1430 holding orders of this kind are not to be lightly made, and, that what is involved in assessing whether an order should be made, is not a balancing exercise. Rather, the test is wholly concerned with whether it is necessary to make the order to prevent prejudice to the proper administration of justice.

However, decisions such as the above and the decision in ACCC v Origin Energy Electricity Limited [2015] FCA 278 do support a proposition that commercial sensitivity may be a basis for making a non-publication order. In the Origin Energy decision, Justice Katzmann after finding that the relevant information was not in the public domain and was confidential and commercially sensitive stated:

"it is in the interests of the proper administration of justice that the value of confidential information not be destroyed or diminished. Otherwise, the parties and members of the public might lose confidence in the Court and the Court’s processes “might open the way to abuse."

Interestingly, in Oreb, the information was in the public domain.

The Non-Publication Order was revisited prior to the Appeal

Before the hearing of the appeal, the Full Court considered whether the information falling within the scope of Justice Markovic’s orders should continue to be supressed, having regard to the principles of open justice.

The Full Court unanimously held that the orders were beyond the Court’s jurisdiction to make and should be set aside for the following 3 reasons:

  1. Justice Markovic’s order was too broad binding anyone from disclosing the identities of the directors and any companies with which they were associated.
  2. The fact that the applicants’ names had been publically disclosed in Court lists on at least two occasions and that their evidence had been read in open Court without any confidentiality order was enough to establish that any such orders were not necessary to protect the administration of justice.
  3. A consequence of Peter and Ingrid’s commercial association with companies that had gone into liquidation was that the proceedings were a matter of public record, on which any members of the public, including commercial competitors, could comment.

Suppression and non-publication orders can also be made in the Supreme Court and District Court of NSW under section 7 of the Court Suppression and Non-Publication Orders Act 2010.