Federal Court of Australia

R&B Investments Pty Ltd (Trustee) v Blue Sky Alternative Investments Limited (Administrators Appointed) (in liq) (Confidentiality Orders) [2022] FCA 1443

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 37AF(1) of the Federal Court of Australia Act 1976 (Cth) (FCA Act), the publication and disclosure of the redacted material in Annexure “AKB-4” of the Affidavit of Amanda Kim Banton dated 21 November 2022, and paragraph 53(a) and Annexures “CRA-1” and “CRA-2” of the Affidavit of Craig Richard Allsopp dated 21 November 2022 (Allsopp Affidavit), be prohibited to any person or entity except the Court, for a period of two years.

2.    Order 1 is made on the grounds specified in s 37AG(1)(a) of the FCA Act.

3.    Pursuant to s 37AI(1) of the FCA Act, the publication and disclosure of paragraph 36 of the Allsopp Affidavit be prohibited to any person or entity except the Court, on an interim basis.

4.    By 4pm on 25 November 2022, any interested third party provide to the Associate to Justice Lee any submissions in support of a final confidentiality order.

5.    Order 3 is to remain in place subject to the Court’s urgent determination of any application for a final confidentiality order, to be determined on the papers.

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

REASONS FOR JUDGMENT

(Delivered ex tempore, revised from the transcript)

LEE J:

1    Before the Court are three interlocutory applications, filed in two competing securities class actions brought against Blue Sky Alternative Investments Limited (Blue Sky):

(1)    R&B Investments Pty Ltd as trustee for the R&B Pension Fund v Blue Sky Alternative Investments Limited ACN 136 866 236 (Administrators Appointed) (Receivers and Managers Appointed) (in liq) (NSD 665 of 2022) (R&B Proceeding); and

(2)    David Furniss v Blue Sky Alternative Investments Limited ACN 136 866 236 (Administrators Appointed) (Receivers and Managers Appointed) (in liq) (NSD 948 of 2022) (Furniss Proceeding).

2    The applicant in each proceeding (R&B Investments and Mr David Furniss) sought swingeing confidentiality orders under Pt VAA of the Federal Court of Australia Act 1976 (Cth) (FCA Act) over details of the estimated budget of legal costs, the respective litigation funding agreements, and other information concerning the financial positions of the applicants.

3    These proceedings provide a further example of the tendency of parties, at least in commercial litigation, to propose overarching confidentiality orders, notwithstanding the demanding nature of the statutory test involved and the relevant onus being described as “a very heavy one”: Computer Interchange Pty Ltd v Microsoft Corporation [1999] FCA 198; (1999) 88 FCR 438 (at 442–443 [16] per Madgwick J); see also Hogan v Australian Crime Commission [2010] HCA 21; (2010) 240 CLR 651 (at 663–664 [29]–[31] per French CJ, Gummow, Hayne, Heydon and Kiefel JJ). I cautioned against this course in Porter v Dyer [2022] FCAFC 116; (2022) 402 ALR 659 (see, generally, at 688 [168]–[170]), remarking (at 688 [169]):

Practitioners may consider it convenient, reasonable or sensible to eschew descending into the detail of identifying what parts of a document are truly confidential (and what parts are not), but adopting such a course in proposing draft orders is inconsistent with the statutory test.

4    In a similar vein, Thawley J recently remarked that applications of this kind regularly impose a significant burden on the Court and “are becoming increasingly common and increasingly informal”: Deputy Commissioner of Taxation v State Grid International Australia Development Company Limited (Application for Non-Publication Orders No 2) [2022] FCA 719 (at [23]–[24]). His Honour noted that “proper consideration should be given to whether there is a sound basis for the application and whether the application is supported by sufficient evidence”: Deputy Commissioner of Taxation v State Grid (at [24] per Thawley J).

5    At the end of the day, public confidence in the administration of justice is enhanced by open justice. This has particular force in proceedings such as these, which affect the rights of non-parties.

6    Accordingly, I have rejected the application for almost all the confidentiality orders sought by the applicants, save for what might be described as “war chest” information which, if revealed, may give a forensic advantage to the respondents in each proceeding.

7    One aspect remains unresolved: Mr Furniss sought an order restricting details of insurance policies that were received, following an application made to the Supreme Court of Queensland for access to the books and records of Blue Sky. In circumstances where I am told there is an express confidentiality regime in place, I consider it appropriate to make an interim confidentiality order pursuant to s 37AI(1) of the FCA Act.

8    Section 37AI(2) of the FCA Act requires me to determine the application for a final confidentiality order as a matter of urgency. Accordingly, I requested the solicitors for Mr Furniss notify the party with the benefit of the express obligation of confidence of the interim order, and gave them until 12pm today to indicate whether they wished to be heard on the application for a final confidentiality order. Mr Hutton SC appeared for the liquidators of Blue Sky on a direct access brief, and informed the Court that the liquidators sought time to liaise with the insurers such that “they can be seen to have done everything to protect what confidentiality is left in the insurance documents”. In view of s 37AI(2) of the FCA Act, I will make orders allowing any interested third party to provide to my Associate any submissions in support of a final confidentiality order by 4pm on Friday 25 November 2022, with any such application to be determined on the papers.

9    Hopefully, particularly in the context of class actions, the message will eventually get through that the legal test for confidentiality orders is a strict one and parties should not assume that, just because they want material to be suppressed, the Court, acting in accordance with its obligations under Pt VAA of the FCA Act, will accede in making such orders.

Associate:

Dated:    2 December 2022

SCHEDULE OF PARTIES