New South Wales Supreme Court CITATION : HIH Insurance Ltd (In Liquidation) v General Re Insurance Australia Ltd & OrsFAI Insurance Ltd (In Liquidation) & Ors v Guy Carpenter & Co Pty Ltd [2006] NSWSC 128 HEARING DATE(S) : 03/03/06 JUDGMENT DATE : 10 March 2006 JUDGMENT OF : Hoeben J at 1 DECISION : In each matter the application for access to documents is refused. In each case the applicant is to pay the costs of the respondent. CATCHWORDS : Non-party access to court file - significance of Supreme Court Practice Note - limitations on "principle of open justice" - need for non-party seeking access to demonstrate that access should be granted. Australian Securities and Investments Commission v Rich & Ors (2001) 51 NSWLR 643 CASES CITED : John Fairfax Publications Pty Limited v Ryde Local Court (2005) 62 NSWLR 512 Seven Network Limited v News Limited (No 9) [2005] FCA 1394 HIH Insurance Ltd (In Liq) & Anor - Plaintiffs PARTIES : General Reinsurance Australia Limited - Defendant FAI Insurance Ltd (In Liquidation) & Ors - Plaintiffs Guy Carpenter & Co Pty Ltd & Ors - Defendants FILE NUMBER(S) : SC 20300/04; 20033/04 Mr JK Kirk - plaintiff HIH DS Weinberger - General Re COUNSEL : Ms EA Collins - plaintiff FAI Mr M Pembroke SC/T Faulkner - Guy Carpenter Blake Dawson Waldron - HIH Insurance Ltd (In Liq) SOLICITORS : Clayton Utz - FAI Insurance Ltd (In Liq) Allens Arthur Robinson - General Re Ebsworth & Ebsworth - Guy Carpenter IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION HOEBEN J Friday, 10 March, 2006 20300/04 – HIH INSURANCE LTD (IN LIQUIDATION) & Anor v GENERAL REINSURANCE AUSTRALIA LTD & Ors 20033/04 – FAI INSURANCE LTD (IN LIQUIDATION) & Ors v GUY CARPENTER & CO PTY LTD & Ors JUDGMENT 1 HIS HONOUR: Nature of claim Two of the proposed defendants in the above matters, General Reinsurance Australia Limited and Kolnische Ruckversicherungs-Gesellschaft Aktiengesellschaft (General Re) and Guy Carpenter and Company Pty Limited (Guy Carpenter) (the applicants) seek access to the following documents on the court file: (i) Any notice of motion relating to any application for the extension of time for service of the originating process which has been filed in the proceedings. (ii) Any affidavit in support relating to any application for the extension of time for service of originating process which has been filed and/or read in the proceedings. (iii) Any orders of the Court relating to the extension of time for service of originating process. (iv) The transcript of any hearing before the Court at which an application for an extension of time for service of originating process was made. 2 These applications are opposed by the principal plaintiffs, HIH Insurance Limited (in liquidation) (HIH) and FAI Insurances Limited (in liquidation) (FAI) (the respondents). Factual background 3 On 25 August 2004 a statement of claim was filed by HIH and FAI in each matter. The statements of claim were not served. On 28 September 2004 amended statements of claim were filed. These documents were also not served. It is common ground that General Re is one of the defendants in the originating process filed on behalf of HIH, and that Guy Carpenter is one of the defendants in the originating process filed by FAI. Accordingly, these applications are made by two potential but not actual parties to the originating process. The applicants appear to be aware of the contents of the statements of claim. 4 On 24 June 2005 an ex parte application was made on behalf of HIH and FAI before the Duty Registrar for an extension of time for service of the two statements of claim. That application was successful and orders were made extending time for service. At least one affidavit was relied upon in each matter, but it is not clear whether that affidavit was read in open court, either in whole or in part. 5 On 7 October 2005 a status conference took place before a registrar. Nothing of particular significance appears to have occurred at the status conference. 6 Applications have been made on behalf of General Re for access to the documents on two occasions – 29 August 2005 and 12 October 2005. The Duty Registrar declined to grant access to the documents in respect of the first application and the second application was not proceeded with. 7 By letters dated 1 December 2005, 19 December 2005 and 18 January 2006 the solicitors for General Re requested that HIH consent to them having access to the documents, the subject of this application. The basis for that request is best set out in the letter from Allens Arthur Robinson to Blake Dawson Waldron of 1 December 2005 as follows: "As you will be aware, the claims have not been served upon our client. However, we understand that on 7 October 2005 the liquidators, on behalf of the relevant companies, obtained an order from the Supreme Court of NSW (the Court) extending time for service of the claims to 30 June 2006. It is therefore clear that the liquidators are still considering bringing the Claims against our client. It is in this context that we write this letter. Our clients reserve their rights in relation to the applications by the liquidators for the extensions of time and in relation to the orders made. Please provide us with copies of all documents, applications and affidavits produced in respect of the 7 October court applications and any previous applications made for extensions of time on behalf of HIH and FAI. Our clients are concerned that, if the liquidators have acted, and continue to act, in respect of the claims, they may be acting in breach of their fiduciary duties and to the detriment of our clients. The breaches are likely to arise in at least two ways." Thereafter the letter explained the basis for the alleged breach of fiduciary duty and requested an undertaking that the statements of claim would not be served without giving fourteen days' prior notice. The reference to an extension of time having been obtained on 7 October 2005 is probably incorrect. The only order for an extension of time was that of 24 June 2005. 8 By letter dated 23 February 2006 Blake Dawson Waldron responded to Allens Arthur Robinson as follows: "We note that your clients propose to apply to the Court next week for access to material relating to the extension of time for service of the originating process in these proceedings. In circumstances where a claim has been filed but not served, such an application is clearly premature. Our clients have agreed previously in writing to afford your clients 14 days' notice of their intention to serve the claim upon your clients and to review at that time their position in relation to your clients' access to the material sought. This is an entirely reasonable position which affords your clients more than adequate protection of their interests. No explanation has been forthcoming from your clients as to why they seek to involve themselves at this point before service of the originating process particularly in the light of our clients' agreement. …" 9 In the principal affidavit in support of the application, that of John Edmond of 28 February 2006, the reason for allowing access to documents was articulated as follows: "23. So far as I am aware, there is no prejudice to the plaintiffs in providing General Re with access to the documents sought. I am not aware of any reason why the documents sought should not be provided. … The affidavit then referred to para 7 of Practice Note SC Gen 2 and indicated how the documents requested were of the type described in that paragraph. Submissions 10 Both the applicants and the respondents base their submissions on Practice Note SC Gen 2 as though the practice note was a rule of court. This, it seems to me, misunderstands the function of a practice note. Practice notes are issued with the authority of the court, by the Rule Committee, usually under the signature of the Chief Justice. Practice notes are clearly important in influencing the practice and procedures of the court, but they are not rules of court. In my opinion, their principal function is to provide guidance to the Profession as to how the broad discretion conferred on the court in relation to access to court files is exercised. 11 The particular paragraphs in practice note SC Gen 2 upon which reliance was placed were: "Introduction . 4. The purpose of this Practice Note is to prescribe the procedure surrounding the provision of access to court files. Search 5. A person may not search in a registry for or inspect any document or thing in any proceeding except with the leave of the court. Access 6. Access to material in any proceedings is restricted to parties, except with the leave of the court. 7. Access will normally be granted to non-parties in respect of: · 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; · documents that record what was said or done in open court; · material that was admitted into evidence; and · 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. 17. 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 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. …" 12 In the form provided for "Application by a Non-party for access to material held by the Court" there are two headings which require a response: "My reason for requesting leave is … I submit that access to the documents should be granted because (state grounds) …" 13 As indicated, the practice note offers authoritative guidance as to how the discretion which resides in the Court would ordinarily be exercised. In formulating the Practice Note no doubt regard was had to the underlying principles and distinctions made in the case law which has developed over recent years in Australia. It is by recourse to those underlying principles that the Practice Note provides guidance though without preordaining the outcome. The context and circumstances in which the application is made will also significantly influence the way in which the Court exercises the discretion. 14 It was submitted on behalf of the applicants that the last three dot points in para 7 of the Practice Note applied, ie that the documents being sought recorded what was said or done in open court, comprised material that was admitted into evidence and information that would have been heard or seen by any person present in open court. As such access should be granted unless the respondents could demonstrate some good reason (such as prejudice) as to why that should not occur. This had not been done. Reliance was placed on Australian Securities and Investments Commission v Rich & Ors (2001) 51 NSWLR 643. 15 In addition the applicants relied upon the principle of open justice and submitted that the respondents had not identified any of the disentitling matters referred to in the authorities as applying to this application. In particular, it was submitted, there should be access to the transcript of what happened before the Registrar on 24 June 2005, since what transpired on that occasion occurred in open court and would have been obvious to anyone present at the time. Reliance was placed on the "media access" cases such as Seven Network Limited v News Limited (No 9) [2005] FCA 1394. 16 No reason was put forward by the applicants as to why access was sought. While accepting that a reason must be stated, the applicants submitted that the principle of open justice required that access be granted unless there were exceptional circumstances as to why it should not be granted. They pointed out that the proposed litigation had a high profile, would involve extremely large sums of money and would be litigation on the "largest scale". The threat of this litigation had been present since 2004. If it had not been for the extension of time granted ex parte in June 2005, the statements of claim would be statute barred. In that regard the applicants wished to consider what options were open to them to set aside the order extending time for service. 17 On behalf of the respondents it was submitted that since the originating process had not been served, no issue had yet been joined. Accordingly as non-parties, it was incumbent upon the applicants to demonstrate that access should be granted in respect of the particular documents and to state why they desired access (para 17 of the Practice Note). Other than pointing out that the respondents would not suffer prejudice if access were granted to the documents, no reason had been offered by the applicants as to why access should be granted at this time. 18 The respondents submitted that the applicants had not suffered any prejudice by not being given access to the documents relating to the application for extension of time for service made in June 2005. If the applicants are served with the statements of claim and thus become parties, they could apply to set aside the decision of the Court to extend time for service pursuant to UCPR r 12(11)(1)(e). In addition the respondents had agreed to fourteen days notice prior to the service of the originating process. 19 The respondents submitted that the application for access to the documents at this time was premature. If the statements of claim were ultimately served, then the applicants would obtain access to all of the documents as of right. The respondents did not concede that no prejudice would be suffered. (The respondents were not, however, prepared to identify any particular prejudice.) 20 The respondents submitted that in the absence of any reason being offered by the applicants as to why access should be granted to the documents, the inference ought be drawn against them that they wished to intermeddle in the proceedings and stir up controversy. This, it was submitted, was to be inferred from that part of the correspondence from Allens Arthur Robinson which suggested an alleged conflict in the liquidators' position viz a viz the various estates. Consideration 21 As a start point I do not accept the proposition put forward by the applicants that the principle of open justice requires that access be granted unless there are exceptional circumstances why it should not be granted. This matter was considered in John Fairfax Publications Pty Limited v Ryde Local Court (2005) 62 NSWLR 512 at [29] where Spigelman CJ said: "Neither the claimant, nor the public at large, have a right of access to court documents. The "principle of open justice" is a principle, it is not a freestanding right. It does not create some form of freedom of information Act applicable to courts. As a principle, it is of significance in guiding the court in determining a range of matters including, relevantly, when an application for access should be granted pursuant to an express or implied power to grant access. However, it remains a principle and not a right." In that judgment the Court noted that there was no common law right to obtain access to a document filed in proceedings and held as part of a court record. 22 To the extent that the practice note provides guidance on this issue, it does not assist the applicants in the absence of the applicants putting forward a proper reason for why they should have access to the documents sought at this time. 23 As I read the practice note, access to court documents by non-parties is restricted except with leave of the court. When one reads para 7 with para 17 of the practice note although access will "normally" be granted to non-parties in respect of certain classes of documents, it is still necessary for the non-party making an application to demonstrate that access should be granted in respect of particular documents and to state why the applicant desires access. The onus of establishing an entitlement to access remains on the applicant. 24 As would be expected the practice note accords with the approach at common law. The onus of establishing a right of access is to be discharged by the applicants for access. As the Chief Justice indicated in the Ryde Local Court case the principle of open justice does not confer a freestanding right. Accordingly, under the common law non-party applicants for access to documents still carry the burden of establishing that the order which they seek ought to be made. 25 I appreciate that the documents to which access is sought have not merely been filed but have actually been used in court. Although what occurred before the registrar on 24 June 2005 is not known, it can be inferred that the affidavit or affidavits which were filed in support of the application for extension of time were considered by the registrar when the order was made. 26 It seems to me, however, that regard should be had to how and in what context the documents were used. The documents were not used in a final sense. By this I mean that although an order for extension of time for service was obtained ex parte, that order is subject to being set aside by the applicants pursuant to UCPR r 12(11)(1)(e) if the statements of claim are ultimately served. It is also not without significance that until service of the statements of claim there is in fact no dispute between the parties and issue has not been joined. 27 It also seems to me that the question of prematurity is relevant to this application. It may be that these statements of claim, at least in their present form, are never served. In that regard the documents relating to the application for extension of time in June 2005 have not been tested in any court proceedings beyond the limited purpose of the ex parte application. Accordingly, there remains a possibility (but only a possibility) of unfair prejudice in the context of the premature release of those documents. 28 I propose to refuse the applications. The applicants have not only failed to provide adequate reason for granting access to the documents, but they have failed to provide any reason. They carry that onus. Such reason as has been proffered, ie that the respondents would not be prejudiced if access were granted, is not in my opinion an adequate basis for granting access. Issue has not yet been joined between the applicants and the respondents and this application is premature. In this case the principle of open justice does not require that access be given to the documents at this time. 29 The matter proceeded as a full contest. I am therefore of the opinion that costs should follow the event and thus the respondents should receive their costs from the applicants. 30 The orders which I make are as follows: 1. In each matter the application for access to documents is refused. 2. In each application the applicant is to pay the costs of the respondent. ********** 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.