26 April 2012


Lew & Ors v Priester & Ors (No 2) [2012] VSC 153 involves the Victorian Supreme Court's denial of an application by high profile entrepreneur Solomon Lew for a suppression order in a dispute involving a major family trust.

It's a nice pendant to the cascade of litigation involving Gina Rinehart and her family. All unhappy families are the same, to paraphrase Tolstoy, but the very rich have the means to pay for QCs and - if they choose - to invest in media groups. Both disputes are presumably being watched with great interest by the Australian Taxation Office and both have seen intervention by the mass media, along with commentary by academics (for example by myself in Privacy Law Bulletin).

The cogent judgment states at 1-4 that
The plaintiffs have applied for an order restricting publication of this proceeding to the extent that a prohibition on publication would apply under s 121 of the Family Law Act 1975 (Cth) if this proceeding was conducted in the Family Court of Australia. The stated purpose for which the order is sought is to protect the welfare of the grandchildren of the first and second plaintiffs (“Mr and Mrs Lew”). The plaintiffs allege that there has been a great deal of vindictive and deliberate misreporting of this proceeding by the media which has portrayed Mr Lew as “greedy” and seeking to shut his three children (the third, fourth and fifth defendants) (collectively “the Lew children”) out of the Lew Custodian Trust, when the claim brought by the plaintiffs against the Lew children is not concerned with beneficial interests in the Lew Custodian Trust but with the ownership of monies advanced by way of loan to the Trust. This misreporting is said to be causing harm to the grandchildren. Concern has been expressed by Mr and Mrs Lew and the Lew children that there will be a detrimental emotional effect on the grandchildren if there is further publication of this proceeding.
This proceeding is a claim brought by the plaintiffs for declarations that the Lew children have no beneficial interest in loan accounts in their names to which distributions from the Lew Custodian Trust were credited. The plaintiffs allege that Mr Lew, as the person in effective management and control of the trustee of the Lew Custodian Trust (the third plaintiff), caused distributions to be made from the trust to each of the Lew children in anticipation of legislative changes to the tax treatment of undistributed reserves of trusts. The plaintiffs allege that Mr Lew put a proposal to his children that would ensure that the Lew Custodian Trust distributed its reserves before the change in tax law but in such a way as not to diminish Mr Lew’s control over the assets of the trust. It is alleged that Mr Lew proposed to each of his children that he would cause a distribution to be made to them subject to, and conditional upon, them (1) agreeing that they would have no beneficial interest, or beneficial claim, to any part of the amounts distributed to them, (2) that Mr and Mrs Lew had the sole beneficial interest in the amounts distributed, (3) that the whole of the amount distributed would be dealt with subject to, and in accordance with, the wishes and at the direction of Mr Lew and (4) that unless the children agreed, no distribution would be made to them. It is further alleged that each of the children accepted the proposal.
The plaintiffs seek the declarations in the broader context of concurrent matrimonial property disputes in the Family Court. The beneficial entitlement to the loan account in the name of the fourth defendant is an issue in the Family Court proceeding between her and her former husband, the first defendant. The beneficial entitlement to the loan account in the name of the fifth defendant is an issue in the Family Court proceeding between him and his former wife, the second defendant. The plaintiffs seek to have declared as against all the defendants in this proceeding, who include the former spouses, that the monies are owned by Mr and Mrs Lew. The reporting of the Family Court proceedings is restricted by, and under, s 121 of the Family Law Act.
The plaintiffs want their grandchildren to have the same protections from publication of this proceeding as they do in respect of the Family Court proceedings and put their application on the basis that it is not an application for a closed court but rather it is an application for parity between the confidentiality protection in the Family Court and the proceedings in the Supreme Court. Various media interests have intervened to oppose the order that is sought.
In refusing the application Davies J stated that -
 I am not persuaded that the Court’s power under s 18 of the Supreme Court Act or its power to make non-publication orders in its inherent jurisdiction has been enlivened.
1First, the plaintiffs relied on the rights of the grandchildren to be free from public harassment and the duty of the Court to protect the best interests of the children in order to engage the Court’s power to make a non-publication order. It is undoubted that these considerations, in an appropriate case, may bear on the Court’s exercise of power but the power is only enlivened by the plaintiffs showing that the order is necessary in order to prevent prejudice to the administration of justice or to prevent endangering the physical safety of any person (which are the two possible grounds open to the plaintiffs). To put it another way, the jurisdiction of the Court to make orders restricting publication of any proceeding is not founded in the rights of the grandchildren but in s 18 of the Supreme Court Act and the Court’s inherent jurisdiction. Accordingly, asserting the rights of the grandchildren as the basis for the exercise of power amounts to no more than asserting the conclusion that an order should be made, without demonstrating why the exercise of power is justified by reference to the necessity for that order in the administration of justice.
Secondly, the Court’s jurisdiction to make orders restricting publication of any proceeding is not founded in an equivalent provision to s 121 of the Family Law Act. Section 121 of the Family Law Act secures the purpose of protecting the confidentiality and privacy of the matrimonial proceedings because Parliament has legislated that matrimonial proceedings are to be conducted behind closed doors. Section 121 of the Family Court Act has no counterpart in ss 18 and 19 of the Supreme Court Act or at common law. Sections 18 and 19 of the Supreme Court Act and this Court’s inherent jurisdiction govern the making of non-publication orders in this proceeding. Hence there is a need to engage with the principles that apply in this Court. Reasons of comity or parity of rights may explain why the order is desired but those reasons do not address why the non-publication order is necessary within the terms of s 19 of the Supreme Court Act.
Thirdly, the necessity for an order is not made out by the fact that material which is confidential in the matrimonial proceedings is able to be published in this proceeding pursuant to the order of the Family Court made under s 121(9)(g) of the Family Law Act. The appropriate time for seeking a non-publication order to ensure the continued protection of s 121 of the Family Court Act is when, and to the extent that, such material is sought to be relied on in this proceeding so that the application can be considered in light of the particular material which founds the “necessity” for the order and so that the order, if appropriate, will not go further than is necessary to secure the administration of justice.
Fourthly, an order in the terms sought is not justified even if there has been misreporting of this proceeding (about which I express no view). The order, if made, would have the effect of suppressing all reporting, including preventing, or at least restricting, the publication of fair and accurate reports of this proceeding. There can be no justification for any restriction on fair and accurate reporting of this proceeding, as the concern here is to protect the grandchildren against misreporting. If the proceedings have been misreported, the redress against inaccurate or unfair reporting is not a general order that would prevent or restrict all reporting. As McHugh J said in John Fairfax & Sons Ltd v Police Tribunal of New South Wales: "The principle of open justice also requires that nothing should be done to discourage the making of fair and accurate reports of what occurs in the courtroom".
The courts have other powers that can be exercised against the particular journalists/media responsible.
Finally, the application is not supported by probative evidence that further publication of this proceeding will have a detrimental emotional effect on the grandchildren. The concern to that effect expressed by Mr and Mrs Lew and the Lew children is an insufficient basis upon which the Court can reasonably reach the conclusion that it is necessary to make an order restricting publication. Mere belief that the order is necessary is insufficient. It is regrettable that the grandchildren have been subjected to gossip and hurtful comments at school arising from the publication of the proceeding to date which has caused them distress. However, that is not a sufficient reason to make a non-publication order. In Rinehart v Welker Bathurst CJ and McColl JA cited with approval the proposition in R v Legal Aid Board; Ex parte Kaim Todner (a firm) that:
In general ... parties and witnesses have to accept the embarrassment and damage to their reputation and the possible consequential loss which can be inherent in being involved in litigation.