When less is not more – access to Court files and 'follow–on' litigation

Friday 26 July 2013

Authors: Simon Ladd and Lara Bird

First published in NZ Lawyer / 26 July 2012.

In Schenker AG and Schenker (NZ) Limited v Commerce Commission & Ors [2013] NZCA 114 (17 April 2013), the Court of Appeal recently confirmed the approach to requests for access to High Court's files, rejecting an appeal by the global freight-forwarder, Schenker AG and Schenker NZ Ltd (Schenker), over the High Court's decision refusing access for the purposes of potential 'follow-on' litigation.

In July 2011, Schenker sought access to the High Court's files under Rules 3.7, 3.9 and 3.13 in the Commerce Commission's (the Commission's) "Air Cargo" proceedings. Schenker sought copies of any minute of the Court regarding the issues to be determined, pleadings, affidavits, briefs of evidence, summaries of these documents, the agreed bundles of documents, agreed statement of facts, and the Court transcript. The request was made on the basis that Schenker "may have suffered loss as a result of the alleged conduct in these proceedings," that is, for the purpose of enabling Schenker to consider whether to bring a damages claim, possibly in New Zealand but more likely overseas.

The request was opposed by the airlines, and also by a non-party, DHL Global Forwarding (New Zealand) Ltd (DHL), which had provided confidential information to the Commission to assist with market-definition issues during the first stage of the trial. DHL and Schenker were significant competitors and DHL did not want Schenker to have access to commercially sensitive information it had provided. The Commission opposed Schenker's request in part to protect confidential information that had been provided to it by other non-parties but, consistent with its position as regulator, generally adopted a neutral position.

In the High Court, Schenker asserted that the access regime under the High Court Rules created a 'presumption of accessibility' as a consequence of open justice being the paramount consideration under the (then) new regime. The airlines disagreed, submitting that the Court should consider the range of factors (including open justice) listed in Rule 3.16 and engage in a balancing exercise. The airlines also noted that access would not assist Schenker's stated purpose because the documents sought were largely concerned with matters of market definition under New Zealand law.

Rule 3.16 sets out the matters to be taken into account in determining a request for access:

    "the Judge or Registrar must consider the nature of, and the reasons for, the application or request and take into account each of the following matters that is relevant to the application request, or objection,

  • the orderly and fair administration of justice,

  • the protection of confidentiality, privacy interests (including those of children and other vulnerable members of the community), and any privilege held by, or available to, any person,

  • the principle of open justice, namely, encouraging fair and accurate reporting of, and comment on, court hearings and decisions,

  • the freedom to seek, receive, and impart information,

  • whether a document to which the application or request relates is subject to any restriction under rule 3.12,

  • any other matter that the Judge or Registrar thinks just."

Schenker's argument that open justice is the paramount consideration was supported by reference to statements in the Law Commission's Report, Access to Court Records (NZLC R93, 2006), including the Law Commission's view that "...court record information should be more generally available in accordance with the principles of open justice and freedom of information, unless there are good reasons for withholding the information" (at [6]). Schenker also relied on BNZ Investments Ltd v Commissioner of Inland Revenue [2010] 24 NZTC 23,997, in which the Court had recently concluded that the principle of open justice was paramount.

The airlines, however, noted that in promulgating the new access rules the Rules Committee had considered the Law Commission's views and decided that a presumptive approach to third-party access to court records was inappropriate. On the wording of Rule 3.16, none of the factors listed was given primacy. Open justice – which was expressly linked to reporting and comment on court decisions – was one of six factors to be considered and balanced.

In the High Court, Justice Asher declined the request, concluding that the approach proposed by the airlines was correct. Schenker's reason for access was a vague justification. Principles of open justice were relevant (to situations in which the media sought access) but were not paramount. It was one of a number of non-hierarchal factors to be considered in the balancing exercise. Against that backdrop, the Court was concerned about the breadth of material requested by Schenker and the effects on preparation for a lengthy trial if access was granted. That was an issue going to the orderly and fair administration of justice. The Court was also concerned that its file contained confidential and commercially sensitive information of parties and non-parties, which had been provided to enable the Court to deal efficiently with the earlier trial of market definition through use of an agreed statement of facts process. Providing access to that material now risked discouraging such cooperation in future.

Schenker appealed to the Court of Appeal on six grounds, focusing primarily on the weight given to the factors considered by the High Court, in particular, that open justice had been given insufficient weight and other factors had been given undue weight.

The Court of Appeal began by noting that the High Court had been exercising its discretionary powers. The threshold for a successful appeal was therefore high. Schenker needed to demonstrate that the discretion had been exercised on a flawed basis or that the High Court had been "plainly wrong." The Court of Appeal considered that Schenker did not remotely approach that standard. "In short, on the basis that the alleged conduct of the parties against whom the Commerce Commission was making a claim may have resulted in some loss to it, Schenker considered that it should effectively have access to all the documents which had been before the Judge in the proceeding," the Court of Appeal decision stated at [7].

Although parallel damages proceedings were a purpose for which access to court files could be granted, the broadly cast and vague reason for access given by Schenker was not compelling. There was no further amplification or detail about what Schenker's interest in the court file might be and no adequate link drawn between that interest and the particular material sought. Further, even if parallel proceedings had been contemplated, there would undoubtedly have been relevant limitation periods confronting Schenker both in New Zealand and overseas.

In the Commission's investigation and proceedings, freight forwarders such as DHL and other industry participants had cooperated by providing confidential and commercially sensitive information. The Court of Appeal (as with the High Court) was concerned that the information would not have been provided had they known it could be made public. The administration of justice was best served by ensuring that the Commission would be able to gather evidence and give assurances of confidentiality in appropriate cases. This was one such case.

The Court of Appeal therefore saw no reason to interfere with the High Court's approach or conclusion, and dismissed the appeal.

Bell Gully acted for Air New Zealand in relation to the High Court and Court of Appeal hearings discussed in this article.


Disclaimer

This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.

Related areas of expertise
  • Competition