FEDERAL COURT OF AUSTRALIA

PT Garuda Indonesia Ltd v Australian Competition and Consumer Commission (Penalty Stay Application) [2019] FCA 1317

ORDERS

THE COURT ORDERS THAT:

1.    The interlocutory application filed on 8 August 2019 be stood over generally.

2.    The Appellant pay the Respondent’s costs of and incidental to the interlocutory hearing on 9 August 2019 on an indemnity basis.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ORDERS

THE COURT ORDERS THAT:

1.    The time and date for compliance with Order 1 made on 30 May 2019 and varied on 12 July 2019 be further varied to 5 pm on 23 August 2019.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

(Revised from transcript)

PERRAM J:

1    On 30 May 2019, I gave judgment on the Australian Competition and Consumer Commission (‘the Commission)’s claim for remedies in this litigation in respect of contraventions of s 45 of the Trade Practices Act 1974 (Cth). One of those orders, order 1, was that PT Garuda Indonesia Ltd (‘Garuda’) pay the Commonwealth of Australia pecuniary penalties of $19 million within 28 days. On 12 July 2019, that order was varied so that the payment had to be made by 4 pm on 9 August 2019, which is today. At the same time, there was engrossed on the varied orders the penal notice as stipulated by r 41.06 of the Federal Court Rules 2011 (Cth).

2    Prior to those variations, on 25 June 2019, Garuda appealed to the Full Court. Yesterday, it filed an interlocutory application in the appeal proceeding (NSD 1011 of 2019) seeking a stay of the order in the original proceeding (NSD 955 of 2009) requiring it to pay the pecuniary penalty by 4 pm today. That application came before the duty judge this morning and before me this afternoon. Following argument, it became clear that the Commission would be content to permit Garuda some time to make good the matters which it was otherwise required to make good this afternoon. Without dwelling on it in too much detail, Garuda sought to advance a case on the stay that, effectively, it was unable to pay the $19 million penalty without significant disruption to its internal affairs.

3    I am minded to vary the previous order I made on 12 July so that another 14 days is provided within which Garuda may pay the penalty. I will make that order in the original proceedings, and order that Garuda’s stay application in the appeal proceeding be stood over generally.

4    Garuda’s application was supported by an affidavit of Mr Fuad Rizal, who is its Director of Finance and Risk Management. That affidavit was sworn on 7 August 2019. There are some ancillary matters I should note. The affidavit of Mr Rizal is, on any view, an extraordinary document. It is couched at a level of generality which, having regard to the seriousness of the situation that Garuda currently confronts (which I would rate as extremely serious), is striking in its lack of detail. For a significant entity, and particularly a significant state-owned entity such as Garuda, to put this kind of material before this Court is not something I have encountered before.

5    Over the next 14 days which have been provided, Garuda may think it appropriate to renew its application for a stay. If that application is to have any prospects of success, it will need to be accompanied by an affidavit which does a good deal more than what Mr Rizal’s affidavit presently does. For example, apart from its generality, another deficiency in Mr Rizal’s affidavit is the absence of any explanation as to why it is that the $19 million cannot be funded by the Republic of Indonesia which, as Garuda has consistently pointed out when it suits it, stands behind Garuda. Then there is the question of why Garuda waited until the last day for payment before seeking a stay when the fact that that moment was coming must have been known for several months.

6    Garuda’s application for a stay raises so many unusual questions that one can only hope that if the application is renewed (in the event that the penalty is not paid), these matters receive the most serious attention within Garuda. In that regard, it is not evident to me from the way the application has been conducted—and I do not mean in saying this any criticism of counsel or his instructing solicitors—that the seriousness of the situation which currently exists has been grasped by the people who are providing their instructions. I will say no more about that.

7    Mr Brennan for Garuda very properly drew my attention to the nature of certain paragraphs of Mr Rizal’s affidavit and sought a non-publication order in respect of them. That application was not supported by any additional affidavit material. Paragraphs 6 and 7 of Mr Rizal’s affidavit might on one view—and there may be other views—tend to suggest that Garuda is insolvent. It may be that that fact, if disclosed in the course of negotiations with Garuda’s creditors, would be helpful, or it may be that it would be unhelpful. It is certainly an unpleasant fact. But there is no evidence before me of what the exact difficulty to Garuda would be if this information were publicly released. It is another one of the mysteries of this case that no such affidavit evidence is before me today.

8    The power to make a non-publication order in respect of a document filed with the Court is conferred by s 37AF(1)(b)(iv) of the Federal Court of Australia Act 1976 (Cth). The grounds upon which such an order may be made are provided for in s 37AG, and include the circumstance pointed to by Mr Brennan, that is to say, where it is necessary to prevent prejudice to the proper administration of justice: s 37AG(1)(a). There are cases where, for example, two trade competitors litigate against each other and one of them is seeking to maintain the confidentiality of a trade secret, where it is appropriate to make a non-publication order because the proceedings would otherwise destroy the very secrecy which is being sought to be vindicated. Although I can see that there could be such arguments available for Garuda, no one here is making them and there is no evidence that any of them arise.

9    The High Court stressed in Hogan v Australian Crime Commission [2010] HCA 21; 240 CLR 651 (‘Hogan’) that the making of an order under s 37AG or its predecessor, on the basis that the administration of justice required it, was not a trifling matter. As the Court there noted, ‘the collocation of necessity to prevent prejudice to the administration of justice … “suggests Parliament was not dealing with trivialities”’: Hogan at 664 [30] per French CJ, Gummow, Hayne, Heydon and Kiefel JJ, citing Australian Broadcasting Corporation v Parish [1980] FCA 40; 29 ALR 228 (‘Parish’) at 234 per Bowen CJ. Their Honours instanced Parish as an example where the protection of national security was said to be on the same level as preventing prejudice to the administration of justice. I have no difficulty in characterising paragraphs 6 and 7 of Mr Rizal’s affidavit as embarrassing and problematic, but I do not think that that is a sufficient basis for me to make an order under s 37AG. In light of the primary objective in deciding whether to make an order being safeguarding the public interest in open justice (s 37AE), I refuse Garuda’s application.

10    Mr Halley, on behalf of the Commission, submitted that it was quite unsatisfactory that we found ourselves having this debate 25 minutes before the time for which the penalty was to be paid, and that the blame for that could not be seen as lying anywhere else than with Garuda. He made that submission in support of a contention that Garuda should again be ordered to pay the Commission’s costs of today on an indemnity basis. I made such an order on 12 July 2019 when I last extended the orders. It will be evident from the remarks I have made that I can see no conceivable basis of not acceding to Mr Halley’s application, so I will order Garuda to pay the costs of the Commission today on an indemnity basis.

Associate:

Dated:    20 August 2019