Applicant S1174 of 2003 v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCA 139 (7 February 2005)

PRACTICE AND PROCEDURE – stay application – principles applicable in a stay application – whether a concurrent criminal proceeding and the privilege against self-incrimination justify staying of a civil proceeding – public knowledge

Federal Court of Australia Act 1976 (Cth)
Australian Securities and Investment Commission Act 1989 (Cth)
Trade Practices Act 1974 (Cth)
Fair Trading Act 1987 (SA)

Guglielman v Trescowthick [2004] FCA 326
Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16
McMahon v Gould (1982) 7 ACLR 202
Cameron’s Unit Services Pty Ltd v Kevin R Whelpton Associates (Australia) Pty Ltd (1984) 4 FCR 428
Western Australia v Bond Corporation Holdings Pty Ltd (No.2) (1992) 37 FCR 150
Hurley v Commissioner of Taxation (1992) 37 FCR 11
Baker v Commissioner of Federal Police [2000] FCA 1339; (2000) 104 FCR 359
Elliot v Australian Prudential Regulation Authority [2004] FCA 586
Halabi v Westpac Banking Corporation (1989) 17 NSWLR 26
Yuill v Spedley Securities Ltd (In liq)(1992) 8 ACSR 272
Australian Securities Commission v Kavanagh (1993) 12 ACSR 69
Reid v Howard [1995] HCA 40; (1995) 184 CLR 1
Reid v Howard (1993) 31 NSWLR 298
Australian Competition and Consumer Commission v Amcor Printing Papers Group Ltd (1999) 163 ALR 465
Australian Competition and Consumer Commission v FFE Building Services Ltd [2003] FCAFC 132; (2003) 130 FCR 37
Laws v Australian Broadcasting Tribunal [1990] HCA 31; (1990) 170 CLR 70
Jamieson v R [1993] HCA 48; (1993) 177 CLR 574
Refrigerated Express Lines (Australasia) Pty Ltd v Australian Meat & Livestock Corporation (1979) 42 FLR 204
McNamara, ‘Cross-examination of a party on pleadings’, (1989) 5 ABR 176
Yuill v Corporate Affairs Commission of New South Wales (1990) 20 NSWLR 386
In the Matter of Compass Airlines Pty Ltd (1992) 35 FCR 447)
Mark Silbermann v CGU Inusrance Limited (2003) 48 ASCR 231; [2003] NSWSC 1127
King v AG Australia Holdings Ltd [2002] FCA 1560
Williams v FAI Home Security Pty Ltd (No 5) [2001] FCA 399

Australian Broadcasting Commission v Parish (1980) 29 ALR 228
SRD v Australian Securities Commission (1994) 123 ALR 730
John Fairfax Group Pty Ltd v Local Court of New South Wales (1991) 26 NSWLR 131

ELEANOR GUGLIELMIN v ADAM JOHN TRESCOWTHICK, JOHN MAURICE PATTEN, ROSS GRAHAM OAKLEY, ROBERT DAVID MATTINGLY, ROGER ANDREW CURTIS & MARK CHARLES TRESCOWTHICK

S 153 of 2002

MANSFIELD J
25 FEBRUARY 2005
ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	S153 OF 2002

BETWEEN:	ELEANOR GUGLIELMIN APPLICANT
AND:	ADAM JOHN TRESCOWTHICK FIRST RESPONDENT JOHN MAURICE PATTEN SECOND RESPONDENT ROSS GRAHAM OAKLEY THIRD RESPONDENT ROBERT DAVID MATTINGLY FOURTH RESPONDENT ROGER ANDREW CURTIS FIFTH RESPONDENT MARK CHARLES TRESCOWTHICK SIXTH RESPONDENT

1 By notice of motion of 27 May 2004, pursuant to s 23 of the Federal Court of Australia Act 1976 (Cth) (the Act), the first respondent seeks an order that this proceeding be stayed until further order. The motion also sought suppression of the name of the first respondent. None of the second to sixth respondents made submissions or took part in this application.

2 This matter has already seen a significant challenge to the applicant’s statement of claim: see Guglielman v Trescowthick [2004] FCA 326. (By order of 18 May 2004 the title of the proceedings was amended by substituting the name ‘Guglielmin’ as the applicant. This order was made to correct the typographical error of the applicant’s name in earlier documents). Following that decision, an amended statement of claim was filed also on 18 May 2004.

3 On the hearing of the motion, I indicated that I declined to stay the application against the first respondent at this stage of proceedings. I ordered that the stay application be adjourned to a date to be fixed. I also declined to order (as sought) that the name of the first respondent, or any reference to his position as a Director, Chairman, Executive Chairman or officer of Harris Scarfe Holdings Limited (Holdings) or its subsidiaries and related entitles be suppressed. These are my reasons for those decisions.

4 The first respondent sought to stay these proceedings on the basis that he is facing concurrent criminal and civil proceedings arising from alleged acts whilst he was an officer and director of Holdings before its collapse in 2001. Thirty seven counts of alleged breaches of the Corporations Act 2001 (Cth) were laid against the first respondent on 28 May 2003 on the information of the Australian Securities and Investments Commission (ASIC) (the criminal charges). Two other former officers of Holdings, Alan Hodgson and Daniel McLaughlin have also been charged. Neither of them is a respondent to this proceeding. On 21 May 2004 the first respondent pleaded not guilty to each of the criminal charges. The first respondent has sought that this action be stayed in order to prevent him suffering prejudice and harm in the conduct and hearing of the criminal charges.

5 This proceeding has been brought by the applicant, as a representative party, against the respondents for alleged breaches of s 12DA of the Australian Securities and Investment Commission Act 1989 (Cth), s 999 of the Corporations Law (Cth), s 52 of the Trade Practices Act 1974 (Cth), s 56 of the Fair Trading Act 1987 (SA) and the duties imposed at common law and by statute whilst they were officers and/or directors of Holdings.

6 The criminal charges laid against the first respondent can be divided roughly into four groups. The majority of the counts concern the allegation that the first respondent failed to inform the Board of Holdings that management reports contained information he knew to be false. Seven counts relate to allegations that certain half-yearly and yearly company financial reports contained falsely inflated levels of profit. Six counts are connected with an alleged dissemination of false reports to the market through the Australian Stock Exchange. The final count is in regard to an alleged use of false financial information in a prospectus on about 19 May 2000. The alleged circumstances giving rise to this proceeding against the first respondent are largely the same as the alleged circumstances giving rise to the criminal charges.

7 The first respondent’s stay application was based on a number of grounds. Emphasis was placed by senior counsel for the first respondent upon the fact that, as the time for filing and service of defences in this matter is imminent, the issue of whether this proceeding should be stayed against the first respondent ought now be considered and dealt with. It is the first respondent’s main submission that the requirement for the first respondent to file a defence in this proceeding is inconsistent with the criminal law principle that an accused person is not required to disclose his or her defence to criminal charges. To require the filing of a defence is thus said to be contrary to the privilege against self-incrimination. There were a number of further factors advanced as to why the stay order should be made.

8 The Court’s power to grant a stay under s 23 of the Act is discretionary. A useful starting point in a application such as the present is the decision of the Court of Appeal of the Supreme Court of New South Wales in Rochfort v John Fairfax & Sons Ltd [1972] 1 NSWLR 16, where Sugerman ACJ (with whom Holmes and Mason JJA agreed) stated at 19 that there is a:

There may be circumstances where there is a real danger that prejudice or injustice may be caused to a party in proceedings by them continuing, for example, where there are concurrent criminal proceedings against that party. Section 23 recognises that, in certain circumstances, it is just and convenient to stay a proceeding.

9 There is a long line of authority, including the decision of Wootten J in McMahon v Gould (1982) 7 ACLR 202 (McMahon v Gould) at 206 – 207 giving guidance as to how the discretion should be exercised. The guidelines proposed there were later adopted and applied in Cameron’s Unit Services Pty Ltd v Kevin R Whelpton Associates (Australia) Pty Ltd (1984) 4 FCR 428 (Cameron’s Unit Services) at 431 – 432. In Western Australia v Bond Corporation Holdings Pty Ltd (No.2) (1992) 37 FCR 150 at 171 – 172 and more recently in Olbers Co Ltd v Commonwealth of Australia (No 2) [2003] FCA 177 at [19] (Olbers), French J provided a list of criteria relevant to determining whether to stay a civil proceeding where there is a criminal proceeding extant against a party to the civil proceeding and the proceedings arise largely out of common circumstances. In Olbers at [19] his Honour said:

It is trite to note the observation in par 6 of that quotation that each case must be judged on its own merits and in its particular circumstances.

10 In Hurley v Commissioner of Taxation (1992) 37 FCR 11 Hill J at 13, after citing McMahon v Gould considered that the Court must ultimately weigh up the applicant’s right to have their application heard and decided with the danger that prejudice or injustice may be caused to the respondent in the criminal proceedings. His Honour stated that what must be considered is ‘the requirements of justice overall’.

11 Gyles J in Baker v Commissioner of Federal Police [2000] FCA 1339; (2000) 104 FCR 359 (Baker) at 364-365, [27] summarised the McMahon v Gould line of authority as follows:

12 Most recently, Gray J in Elliot v Australian Prudential Regulation Authority [2004] FCA 586 (Elliot) at [15] noted a number of factors that have been considered by judges in exercising (or refusing to exercise) their discretion:

His Honour made it clear that more than just parallel proceedings is required for the Court to stay the civil proceeding.

13 In Halabi v Westpac Banking Corporation (1989) 17 NSWLR 26 at 59 McHugh JA stated that McMahon v Gould is ‘the established direction of the Australian law on this subject’. In Yuill v Spedley Securities Ltd (In liq)(1992) 8 ACSR 272 at 273 – 275 (Yuill) Kirby P referred to McMahon v Gould as ‘the existing law’, although his Honour indicated that one day it may be appropriate for those guidelines to be reconsidered. Kirby P’s reservations about these principles included that they do not take specifically into account the primacy of the administration of criminal justice in our legal system. In Australian Securities Commission v Kavanagh (1993) 12 ACSR 69, Hayne J, after a review of the authorities, stated at 72:

14 Perhaps reflecting the reservation of Kirby P in Yuill referred to above, senior counsel for the first respondent submitted that, although the principles expressed in the McMahon v Gould line of authority are binding upon this Court, the decision of the High Court in Reid v Howard [1995] HCA 40; (1995) 184 CLR 1 (Reid v Howard) concerning the privilege against self-incrimination is of utmost importance and indicates that that factor should weigh heavily in the scales in favour of granting the stay sought.

15 Reid v Howard concerned a chartered accountant who misappropriated money entrusted to him by his clients. As the police were unable to detail from whom the money was taken and the use to which it was put, they were not able to formulate criminal charges against the accountant. The accountant’s clients brought a civil claim in the Equity Division of the Supreme Court of New South Wales. The accountant consented to summary judgment, but resisted the making of interlocutory orders for disclosure by claiming privilege against self-incrimination.

16 Powell J at first instance held the accountant was not entitled to this privilege as he had already made a statement to the police and would not be placed in greater jeopardy by complying with the disclosure orders. The Court of Appeal (Handley JA, Meagher and Sheller JJA agreeing) held that the orders made by Powell J did expose the accountant to greater jeopardy. Their Honours substituted different orders ‘so as to effectively enforce the respondents’ civil rights against the appellant while protecting him against the risk of self-incrimination’: Reid v Howard (1993) 31 NSWLR 298 at 305.

17 The High Court allowed the appeal and set aside the orders of the Court of Appeal. In doing so Deane J stated at 5:

18 In the joint judgment of Toohey, Gaudron, McHugh and Gummow JJ, their Honours stated at 14:

19 In Australian Competition and Consumer Commission v Amcor Printing Papers Group Ltd (1999) 163 ALR 465 (Amcor) Sackville J refused an application by the Australian Consumer and Competition Commission for orders that witness statements be filed in advance of trial on the basis that the requirement of filing statements was not consistent with the rationale underlying the privilege against exposure to penalties, a privilege which his Honour considered is not ‘any narrower’ than the privilege against self-incrimination: see at 469, [16]. This reasoning was followed by the Full Court of this Court in Australian Competition and Consumer Commission v FFE Building Services Ltd [2003] FCAFC 132; (2003) 130 FCR 37.

20 As can be seen, there is a potential conflict between these two lines of authority. On the one hand Reid v Howard stresses the primary importance of the privilege against self-incrimination, while on the other hand McMahon v Gould considers it to be but one of a number of factors to be considered and weighed against others. This apparent contradiction has been discussed by a number of single judges of this Court.

21 In Baker, Gyles J at 366 – 376, [32] – [35] examined McMahon v Gould and its subsequent consideration. His Honour considered that, particularly in the light of Reid v Howard, the submission that McMahon v Gould ought to be reconsidered is meritorious, particularly as to whether McMahon v Gould gives too little weight to the practical as well as legal prejudice to the accused, and to the primacy of criminal proceedings in the justice system. His Honour pointed out though that any such reconsideration would have to be undertaken by a superior court and regarded himself as being bound to follow McMahon v Gould. This approach was also adopted by Gray J in Elliot: see at [16] – [19]. For the reasons which Gyles J and Gray J have given in those two cases, I would adopt the same general approach. As it happens, for reasons which appear below, I do not think the first respondent’s privilege against self-incrimination will be impaired in any real way by declining at present to grant the stay sought. Whether recognition of the privilege against self-incrimination and giving effect to it is given primacy so as necessarily or almost necessarily to outweigh other factors including the entitlement of the applicant to have her claim proceed in the ordinary course is not a matter which arises in the present circumstances.

22 The first respondent accepted that the onus is on him to show that it is just and convenient that the applicant’s rights be interfered with and a stay be granted. Senior counsel for the first respondent identified a number of factors she contended were relevant for the Court to consider in exercising its discretion under s 23 of the Act.

23 I do not consider those factors, individually or collectively, show that the applicant’s right to have her application progress in the normal way but with some modification of the normal procedures is currently outweighed by any prejudice or injustice that may be caused to the respondent in the criminal proceedings as the particular circumstances of the first respondent can be accommodated by specific procedural orders.

24 The first two factors identified in submissions of the first respondent can conveniently be addressed together. They are identified in the submissions as: the right to silence, and disclosure of the defence. They are based upon the fact that (as I have accepted and as senior counsel for the applicant acknowledged) there is a significant factual overlap between the allegations of the applicant in this proceeding and the matters which will require to be addressed in relation to the criminal charges.

25 In the ordinary course, this proceeding would progress by orders for the filing of defences, for discovery and inspection, and then for the exchange of witness statements or affidavits with a view to the matter then proceeding to trial. Senior counsel for the first respondent also referred to the prospect of the first respondent being obliged to answer interrogatories under O 16 of the Federal Court Rules. Interrogatories may be administered only by leave of the Court. Only rarely now is leave to administer interrogatories sought or granted. I think that prospect may be put aside, and addressed if an application is made by the applicant for leave to administer interrogatories to the first respondent; there is no suggestion at present that such an application might be made.

26 Shortly put, the contention is that obliging the first respondent to undertake those steps before resolution of the criminal charges is likely to impinge upon his right to silence and his privilege not to incriminate himself. Alternatively, it is submitted, he may be advised to conduct this proceeding in a manner which is ultimately prejudicial to its proper defence so as to avoid adversely impacting upon his defence to the criminal charges.

27 The applicant through senior counsel acknowledged those matters. She accepted that, for the time being, the first respondent should not be compelled to undertake those procedural steps in this matter in the ordinary way. She submitted the first respondent should be directed to prepare his defence (as if for filing), and provide a copy to the applicant so she can proceed to prepare her case with knowledge of the first respondent’s position. She further submitted that further procedural steps can be addressed from time to time to properly reflect the first respondent’s concerns about his right to silence and his privilege against self-incrimination.

28 I do not propose to adopt that course at present. I am mindful of the submissions of senior counsel for the applicant that the service of a defence does not amount to the making of a statement by the first respondent as to his belief in the truth of the facts pleaded so that he could be cross-examined upon the document (if a copy could be obtained by the prosecuting authorities): Laws v Australian Broadcasting Tribunal [1990] HCA 31; (1990) 170 CLR 70 at 85-86 and 98-99; Jamieson v R [1993] HCA 48; (1993) 177 CLR 574 at 579-581. It was also contended that such a document should not routinely be assumed to expose information which might direct the prosecuting authorities to a level of inquiry helpful to the prosecution: Refrigerated Express Lines (Australasia) Pty Ltd v Australian Meat & Livestock Corporation (1979) 42 FLR 204 at 207. Not all those submissions are accepted by the first respondent. The extent to which cross-examination in one matter may be based upon a version of events pleaded in another matter is discussed in McNamara, ‘Cross-examination of a party on pleadings’, (1989) 5 ABR 176. There is also a dispute about the extent to which, if at all, such a document may preserve client legal privilege (see e.g. Mann v Carnell [1999] HCA 66; (2000) 201 CLR 1) in the facE of s 33 of the Australian Securities and Investment Commission Act 1989 (Cth) (cf Yuill v Corporate Affairs Commission of New South Wales (1990) 20 NSWLR 386; In the Matter of Compass Airlines Pty Ltd (1992) 35 FCR 447). There is a risk that the private provision of a defence may not preserve client legal privilege in the document.

29 However, at least for the time being, I think the applicant will not be much disadvantaged in the conduct of the proceeding if the first respondent does not have to file or serve or give notice of his defence in any formal way. There is available to the applicant information about the first respondent’s position from other records, including a statement of facts submitted to the prosecuting authorities. Although there is a risk that the first respondent may have a special defence not foreseen by the applicant and which would require to be pleaded (see O 11 r 10 of the Rules), it is likely that any such defence would also be available to the other respondents. It would thus be notified to the applicant through the other respondents’ defences.

30 At present, therefore, I do not propose to direct the first respondent to file and serve, or to provide to the applicant notice of, his defence. In that way, his concerns arise from his right to silence and in relation to his privilege against self-incrimination are met. It is not necessary at present to stay the proceeding to give effect to those rights.

31 The first respondent should not be entitled to simply sit back and take no action in relation to this proceeding. When it is appropriate for him to file and serve his defence, he may anticipate that he will be required to do so very promptly. There is no reason why, although not required to file and serve his defence, his defence should not now be prepared in draft form ready for filing and service on short notice.

32 The proceedings against the other respondents can proceed in the ordinary way. They will file and serve defences. They will, to the extent appropriate, give discovery and inspection of documents. There may be notices to admit facts or documents, and responses to such notices. In due course, witness statements and affidavits may be exchanged. The first respondent will be served with those materials. He will be aware of the progress of the matter. Again, there is no reason why his materials on those matters should not be prepared in draft form ready to be filed and served at short notice. Indeed, I do not intend to foreclose the applicant (or other parties) from seeking formally to re-engage the first respondent in the proceedings at any point. The progress of the criminal charges may inform the decision whether to do so. In any event, there may be certain procedural steps which the first respondent may be directed to take in all the circumstances: for instance, depending on what relevant documents he holds and has already acknowledged holding, he may be ordered to give discovery or partial discovery. Orders may be tailored to accommodate his legitimate concerns. Those are matters to be addressed as the circumstances arise.

33 Finally, I do not intend to preclude the applicant from seeking an order at some later point that the first respondent file and serve his defence notwithstanding that the criminal charges have not been finalised. That is a matter for the applicant, in the light of the then current circumstances. I am mindful of what Wilcox J said in in Cameron’s Unit Services at 434:

34 There are, of course, other matters which may be relevant at a later point to whether the proceeding against the first respondent should be stayed. They were referred to in submissions. For instance, the first respondent may wish to obtain proofs of evidence from the other persons with whom he is jointly charged, or from witnesses proposed to give evidence for the prosecution in the criminal charges, but may be unable to (or think it unwise to) do so at present. Any such issues can be later addressed if the present motion, which I propose to adjourn to a date to be fixed with liberty to call it on for further hearing if the first respondent is so advised, is re-listed for further hearing.

35 In reaching the view that the motion should simply be adjourned to a date to be fixed, and that at present the stay order sought should not be made, I have also had regard to the other matters to which senior counsel for the first respondent referred. It is appropriate that I should deal briefly with them.

36 It was submitted that, if this proceeding is allowed generally to continue in the ordinary way, there is a possibility of a miscarriage of justice by the tailoring of evidence by witnesses in the hearing of the criminal charges to fit the evidence to the defence of the first respondent, or to other material he is required to file in this proceeding. The first respondent’s solicitor deposed that there exist a number of different versions of statements made by proposed prosecution witnesses, and that a number of the proposed prosecution witnesses have been given either a reduced sentence or some type of immunity from prosecution for their role in the events allegedly involving the first respondent, on the basis that they will cooperate in the prosecution of the first respondent. These circumstances therefore, it was submitted, potentially provide these witnesses the combination of opportunity and motive to shape their evidence and there is ‘a peculiar opportunity and motive’ for those prospective witnesses to adapt their evidence. As I do not at present propose to require the first respondent to file and serve his defence, or to take other overt steps in the conduct of this proceeding, it is not necessary to address those contentions or to give weight to the possibility of the tailoring of evidence. It may be necessary to further consider this matter at a later point in time.

37 The fourth matter referred to on behalf of the first respondent is the prospect that the criminal charges and this proceeding will be ready for trial at approximately the same time. The first respondent has been given leave to cross-examine a number of prosecution witnesses at the preliminary examination. This preliminary examination on the criminal charges was listed for hearing in the week commencing 15 November 2004. I think it is speculative at present to anticipate that difficulty. Clearly the Court would not list this matter for hearing at the same time as the hearing of the criminal charges. There may be proximity of the two hearings. That too is simply speculative. That would not of itself warrant the staying of the action. In due course, when a hearing date for this proceeding is fixed (if it proceeds to hearing), the parties including the first respondent will have the opportunity to make submissions about the hearing date having regard to the interests of justice both generally and in relation to his particular circumstances.

38 Somewhat allied to that matter is the submission that, by reason of the personal and financial burden on the first respondent, in conjunction with the other matters referred to, the proceeding should be stayed. It was submitted that the concurrent running of this proceeding and the hearing of the criminal charges is placing and will continue to place an undue burden on the first respondent. The first respondent’s solicitor deposed that the prosecution brief in the criminal proceeding comprises approximately 1,300 documents, that her law firm has approximately 10,000 documents relating to Holdings and its group and that the receivers and managers have approximately 70,000 documents. Needless to say there is an enormous amount of material associated with these proceedings that will need processing, and consequentially a considerable amount of time will be required to process it. Furthermore, due to the nature of the two proceedings it was submitted that the first respondent will be required to put in a substantial amount of his personal time to both cases.

39 In Mark Silbermann v CGU Inusrance Limited (2003) 48 ASCR 231; [2003] NSWSC 1127 (Silbermann) Bergin J considered a stay application where the same former directors of One.Tel Limited were faced with the conduct of three parallel proceedings against them. The former directors sought a stay of one of the proceedings on the basis that it would place an extraordinary burden on them and their lawyers in continuing to run all three matters at the same time, particularly as one of them (the ASIC proceeding) had been listed for trial. Her Honour dismissed the stay application, but made orders so that one proceeding (involving CGU Insurance Limited) would be heard after the ASIC proceeding had been heard. The first respondent here has not sought for any such orders.

41 The situation in Silbermann is different from the present situation. In that case a three-month long trial had been listed for hearing and the hearing date (July 2004) was within approximately 7 months of the stay application (heard on 21 November 2003). Here neither matter has been listed for trial, and the first respondent submitted it is likely to be some 12 to 18 months before either matter will be heard.

42 Both this proceeding and the criminal charges involve complex allegations of fact, and require a detailed examination of accounting and financial issues extending over a period of years. The documentary material is clearly vast. It is obvious all the parties have a considerable task to address and master that material. In one sense, given the significant overlap in the factual issues in this proceeding and in the criminal charges, it may be that it is efficient for the first respondent to address the issues in both these proceedings and the criminal charges at the same time. I accept however that the two proceedings are of a different character. Even if it is not desirable for him to do so, the refusal of the stay application will not have the consequence at present that the first respondent will have imposed upon him a strict timetable for the concurrent conduct of this proceeding and the criminal charges. That is because there will not be immediate orders requiring him to take procedural steps in this matter. His primary focus will be upon the criminal charges. That is not to excuse him from preparing over time in draft his proposed defence. It is not to indicate that a request that he provide discovery in some form should not be addressed. The particular additional burden upon him of complying with any such proposed orders can be considered at the time. However, as I have indicated, if and when it is necessary to consider such orders, it will have to be borne in mind that the overlap of issues in the proceedings may mean that, at least in significant ways, the first respondent will be somewhat advanced in his preparation on this matter.

43 The first respondent also contended that the publicity surrounding this proceeding and the nature of the allegations and evidence or proposed evidence and any findings may influence jurors or potential jurors in hearing the criminal charges wrongly to form a view about the first respondent’s guilt, and that risk was itself, or in conjunction with other factors, a reason to grant the stay sought.

44 There has been a high level of public interest and media attention in the collapse of Holdings and the wider Harris Scarfe Group of companies. Exhibited to the affidavit of the first respondent’s solicitor were 48 newspaper and journal articles published in South Australia and nationwide between 21 December 2001 and 26 March 2004. These articles show that the media interest in the first respondent’s civil and criminal proceedings has not lapsed over time. This interest has been particularly strong in South Australia. I accept it is likely to increase as a hearing of this matter, or of the criminal charges, approaches.

45 Senior counsel for the first respondent submitted that interlocutory processes may also increase the publicity. In order to protect the first respondent’s position, he may seek to interrogate group members on their reliance on the alleged misrepresentations in the manner permitted in King v AG Australia Holdings Ltd [2002] FCA 1560 (King). It is also likely that the class of claimants will be closed at some stage, so the applicant knows the size of the group she represents; see Williams v FAI Home Security Pty Ltd (No 5) [2001] FCA 399 at [10], [20] and King at [6], [9] – [10]. There are currently some 3,191 members who have contacted the solicitor for the applicant to register their interest in this proceeding. This number may increase before the matter comes to trial. Some form of public notice, both locally and nationally, is likely to be required. This will create further publicity of this matter, with the risk of keeping in the minds of potential jurors the existence of a large class action with allegations closely connected to the criminal charges.

46 I do not consider that this factor is sufficient either alone, or in conjunction with the other factors referred to, to stay the proceedings. Certainly there is a large amount of media interest in this matter, as there has been for three years. Staying this proceeding now is, however, not likely to reduce that level of interest. The fact of the stay of the proceedings might itself be reported. In any event, the media is likely to keep reporting on the progress of the criminal charges.

47 Overall, assuming in the first respondent’s favour that further publicity about these proceedings may come to the attention of potential jurors hearing the criminal charges and that they will perceive a close relationship between the allegations in these proceedings and in the criminal charges, the possible impact upon potential jurors is insufficient to warrant (alone or with other factors) the stay of this proceeding against the first respondent. It may proceed against the other respondents in any event. The first respondent is not being required to file and serve his defence, so there is no risk it will be seen as his defence to the criminal charges. Any reporting of procedural steps in progressing this proceeding will not itself suggest the guilt of the first respondent in relation to the criminal charges. The hearing of this proceeding is still some distance off, and at present it would be speculative to proceed on the basis that it may be heard before the criminal charges. And finally, or course, there has already been considerable publicity about this and other proceedings concerning the collapse of Holdings, but such publicity has been, and at least for some time will be, remote in time from the ultimate hearing of the criminal charges.

48 In making the assumption referred to above, I do not wish to be taken as accepting in fact that publicity about this proceeding may in reality affect the independent assessment by jurors of the evidence in the hearing of the criminal charges. It should not readily be assumed that a duly selected jury, properly instructed, should be unable to hear and determine the criminal charges purely on the evidence adduced despite any (or even extensive) publicity about the allegations made in civil proceedings such as the present, and the progress of those proceedings at interlocutory stages, where the factual issues to be addressed can be seen to significantly overlap.

49 Finally, it was submitted that there would be little prejudice to the applicant and group members if this proceeding were stayed. This is because the alleged breach is complete and is not continuing and the only relief sought is monetary compensation. Any delay , so it was put, could be compensated for by the provision of interest in calculating the damages. Additionally, the receivers and managers of the Group and the Australia and New Zealand Banking Group Limited have brought a separate action against the former auditors of Holdings. If this action is successful a significant amount of damages could be recovered. After paying creditors, these damages could be used to compensate those shareholders who suffered a loss. The argument is therefore that the shareholders (including the applicant) would still be compensated, even if this proceeding were stayed.

50 The starting point, it must be reinforced, is that an applicant must have the opportunity to have a proceeding tried in the ordinary course of the procedure and business of the court. That entitlement is not itself merely the right to claim compensation, but the right to have the matter brought to trial. The fact that the applicant (and the other group members) may not ultimately be financially worse off by a stay is a factor to consider. On the information provided, the action against the auditors may be listed for trial in late 2005. In the meantime, whilst taking into account the nature of the applicant’s claim in this proceeding, I do not think it should result in the stay sought being granted. There will be cases where delay will or may work greater injustice to an applicant (or to another party) than is apparent in the present matter. The weighing of that factor depends on the particular circumstances. However, the entitlement to have an action proceed in the ordinary way, and if the applicant and group members are entitled to damages the delay in their receipt, are nevertheless factors which weigh in the scales against making the stay order sought.

51 I note that no other respondent sought to be heard on this motion, or to suggest in particular that a stay would or might work injustice to that respondent. I note also that the first respondent has done nothing in this proceeding that would count against him receiving the stay order if otherwise, in the exercise of my discretion, I were inclined to grant it.

52 For those reasons, there will be no order on the motion of the first respondent for a stay in this proceeding at this point. The motion is adjourned to a date to be fixed, with liberty to call it on for further hearing on reasonable notice. In the meantime, I will give directions generally for the further process of this matter to trial, but I will not for the time being direct the first respondent to file and serve his defence.

53 The first respondent also sought an order under s 50 of the Act suppressing publication of his name or any reference to his former positions in Holdings or of any other material identifying him as a respondent to this proceeding. The aim of the suppression order, it is claimed, is to reduce the risk that publicity on this matter might influence potential jurors in relation to the criminal charges.

54 Section 50 permits the Court to make a suppression order ‘as appears to the Court to be necessary in order to prevent prejudice to the administration of justice or the security of the Commonwealth’. In Australian Broadcasting Commission v Parish (1980) 29 ALR 228 (Parish) Deane J at 253 stated:

55 The decision in Parish makes it clear that what must be done in a situation such as the present is to balance the competing public interests of open justice and the desire to avoid prejudice: see for example Bowen CJ at 234; see also Hill J in SRD v Australian Securities Commission (1994) 123 ALR 730 at 734.

56 Embarrassment or damage to a reputation is not enough for a party’s name to be suppressed, as was pointed out by Kirby P in John Fairfax Group Pty Ltd v Local Court of New South Wales (1991) 26 NSWLR 131 at 142:

57 In the present situation I consider the scales are tipped in the favour of the public interest in an open system of justice. The first respondent’s name and association with the collapse of Holdings, with this proceeding and with the criminal charges are well known. That is demonstrated by the large number of media articles presented by the first respondent. Furthermore, there has already been one judgment in this matter which clearly identified the first respondent as being a respondent to this proceeding.

58 Consequently, I do not consider that it is in the interests of the administration of justice that the continued identification of the first respondent as a party to these proceedings, and the nature of the allegations made against him including the office he occupied in Holdings, should be suppressed. Those matters are on the public record, at least through the judgment already given. Nor do I consider that any publicity about the further evolution of this proceeding, at least for the time being, will be such as to involve any real risk of the first respondent not receiving a fair trial. Any further publicity, apart from reporting on already public material, is likely to refer to the further interlocutory steps taken to secure this matter being prepared for trial. It will not, at least as things presently stand, touch directly upon the first respondent because he will not yet be required to file and serve his defence. If any interlocutory orders are sought against him, or for that matter by him, the question whether the order sought on the material in relation to it should be suppressed in the interests of the administration of justice can then be addressed.

59 For those reasons, I decline to make the order sought in par 3 of the first respondent’s notice of motion.

60 Overall, both this proceeding involving the first respondent is too premature a stage for this application to be stayed as against the first respondent. However, as indicated, in order to protect the first respondent from the possibility he will incriminate himself I will not require him to file a defence for the time being. It may become appropriate at a later stage for the first respondent to re-agitate this motion or seek orders concerning the timing of the trials. That, however, is an issue for the first respondent.

61 I indicate that, subject to hearing submissions from counsel for the applicant and the first respondent, I am disposed to order that the costs of the first respondent’s notice of motion of 27 May 2001 should be the applicant’s costs in the cause.

I certify that the preceding sixty-one (61) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield.

Counsel for the Applicant:	WJN Wells QC with AL Dal Cin

Solicitor for the Applicant:	Duncan Basheer Hannon

Counsel for the First Respondent:	MM Gordon SC with LWL Armstrong

Solicitor for the First Respondent:	Clayton Utz

Counsel for the Second, Third, Fourth, Fifth & Sixth Respondents:	The Second, Third, Fourth, Fifth & Sixth Respondents did not appear

Date of Hearing:	8 June 2004

Date of Order:	8 June 2004

Date of Reasons:	25 February 2005

JUDGE:	MANSFIELD J
DATE:	25 FEBRUARY 2005
PLACE:	ADELAIDE