Ivan Vladimir Joseph Erceg v Lynette Therese Erceg and Darryl Edward Gregory as Trustees of Acorn Foundation Trust

• Jurisdiction: New Zealand
• Judge: Elias CJ,William Young,Glazebrook,O?Regan JJ
• Judgment Date: 14 October 2016
• Neutral Citation: [2016] NZSC 135
• Docket Number: SC 17/2016
• Court: Supreme Court
• Date: 14 October 2016

Between

Ivan Vladimir Joseph Erceg

Appellant

and

Lynette Therese Erceg And Darryl Edward Gregory As Trustees Of Acorn Foundation Trust

First Respondents

Lynette Therese Erceg And Darryl Edward Gregory As Trustees Of Independent Group Trust

Second Respondents

[2016] NZSC 135

Court:

Elias CJ, William Young, Glazebrook, Arnold and O?Regan JJ

SC 17/2016

IN THE SUPREME COURT OF NEW ZEALAND

Application by the respondents for a non-publication order — the appellant did not oppose the making of the order — the parties were members of a wealthy and well known family who were involved in litigation relating to family trusts — the orders sought would prevent publication of details of the amounts settled on various trusts; the identities of the beneficiaries and the amounts distributed to one of them; the value of the assets received by the appellant — the grounds on which the orders included that the appeal related to private, family matters and to confidential family trusts; publication could create or increase disharmony in the wider family and that contested allegations were unfairly prejudicial and might attract unfair negative publicity — whether the grounds met the high standard for a non-publication order.

Counsel:

C R Carruthers QC and R B Hucker for Appellant

G M Coumbe QC and F C Monteiro for First and Second Respondents

JUDGMENT OF THE COURT

[Non-publication order]

The respondents' application for a non-publication order is dismissed.

REASONS

(Given by Arnold J)

1 The first and second respondents applied for an order preventing publication of certain matters if they were referred to in oral argument in the course of the substantive appeal. Having heard argument on the application at the outset of the hearing, we dismissed it. We now give our reasons for doing so.

Open justice

2 The principle of open justice is fundamental to the common law system of civil and criminal justice. It is a principle of constitutional importance, 1 and has been described as “an almost priceless inheritance”. 2 The principle's underlying rationale is that transparency of court proceedings maintains public confidence in the administration of justice by guarding against arbitrariness or partiality, and suspicion of arbitrariness or partiality, on the part of courts. Open justice “imposes a certain self-discipline on all who are engaged in the adjudicatory process – parties, witnesses, counsel, Court officers and Judges”. 3 The principle means not only that judicial proceedings should be held in open court, accessible by the public, but also that media representatives should be free to provide fair and accurate reports of what occurs in court. 4 Given the reality that few members of the public will be able to attend particular hearings, the media carry an important responsibility in this respect. The courts have confirmed these propositions on many occasions, often in stirring language. 5

3 However, it is well established that there are circumstances in which the interests of justice require that the general rule of open justice be departed from, but only to the extent necessary to serve the ends of justice. So, a court may order that proceedings be heard in camera, either in whole or in part, in the exercise of the

court's inherent power. 6 While the common law recognised very limited exceptions to the principle of open justice, 7 the legislature has seen the need to confer on the courts wider powers to hear evidence in closed court 8 or to prohibit reporting of proceedings or aspects of proceedings, generally to protect those who are seen as vulnerable. Obvious examples relate to the identity of the victims of sexual offending 9 and protection of children in family proceedings. 10

4 There has been some controversy about whether the courts have the power at common law to make non-publication orders binding on the public at large in proceedings heard in open court. In 2004, the Privy Council concluded in Independent Publishing Co Ltd v Attorney General of Trinidad and Tobago that there was no power at common law to make orders effective against the general public which sought to postpone the publication of reports of proceedings in open court –such a power could be conferred only by legislation. 11 The Privy Council did accept, however, that a court could properly order, for example, that a particular witness give evidence under a pseudonym rather than under the witness's proper name; if a member of the public then published the witness's proper name, that person might well commit a contempt of court. 12 This would not be because the person was bound by the court's order but because he or she interfered with the proper administration of justice. 13 In their judgment, the Privy Council considered the decision of the New Zealand Court of Appeal in Taylor v Attorney General, where the Court held that the courts had the inherent power to make non-publication orders in proceedings heard in open court that were effective against the general public. 14 The Privy

Council concluded that the decision was inconsistent with other Commonwealth authorities and was not soundly based. 15

5 These conflicting decisions of the Privy Council and the Court of Appeal were discussed, along with other authorities, by this Court in Siemer v Solicitor-General. 16 In that case, Mr Siemer, who was not involved in the proceedings, had published a judgment dealing with pre-trial matters in a criminal case despite the fact that the Judge had made an order prohibiting publication until after the final disposition of the case in order to protect the accused persons' fair trial rights. All members of the Court agreed that, as far as the common law of New Zealand is concerned, courts have inherent powers to protect the administration of justice and these include the power, where necessary, to make non-publication orders that are binding on third parties. 17 That is, they adopted the analysis of the Court of Appeal in Taylor and in the subsequent case of Broadcasting Corporation of New Zealand v Attorney-General 18 rather than that of the Privy Council in Independent Publishing. 19 The majority, McGrath, William Young and Glazebrook JJ, considered that this power was not excluded by s 138 of the (now repealed) Criminal Justice Act 1985, which dealt with the courts' power to clear the court and forbid reporting of criminal proceedings; 20 the minority, Elias CJ, considered that it was. 21

6 Siemer dealt with the inherent power of a court in a criminal case to make a non-party suppression order to protect a defendant's fair trial rights. However, the Court noted that the courts have exercised non-party suppression powers in civil cases as well. 22 Nothing the Court said raises any doubt about the existence of such powers in civil cases – quite the reverse in fact.

7 The principle accepted in Taylor that the courts have the inherent power to make non-publication orders binding against the public at large has been applied by the Court of Appeal in the civil context, 23 as well as by the High Court on numerous occasions. 24 As noted, this Court in Siemer acknowledged the existence of the power in civil cases. While New Zealand may be something of an outlier in relying on inherent powers in this way, we consider that what has been understood to be the position in New Zealand for more than 35 years is soundly based and should be maintained.

This case

8 The appeal in the present case concerns the operation of two trusts that were settled by the late Michael Erceg, a wealthy businessman. The orders sought would prevent publication of:

• (a) details of the amounts settled by Lynne Erceg, Michael Erceg's wife, on various trusts;

• (b) the identities of the beneficiaries of the Erceg Family Trust and the amounts distributed to one of them;

• (c) the allegation that distributions had been made to some beneficiaries to the exclusion of others;

• (d) the value of the assets received by the appellant, Ivan Erceg, under Michael Erceg's will (Ivan is Michael's brother);

• (e) the range of beneficiaries under the Independent Group Trust;

• (f) Ivan Erceg's views as to the value of the funds of the trusts at issue; and

• (g) Ivan Erceg's suggestion (which the respondents' say is unsupported) that Lynne Erceg had a conflict of interest and/or had benefitted herself through a shareholding in Independent Liquor Ltd.

9 The grounds on which the orders are sought are that:

• (a) the issues in the appeal relate to private, family matters and to confidential family trusts;

• (b) publication could create or increase disharmony in the wider family and undermine confidentiality;

• (c) publication would create concerns for the personal safety of beneficiaries and trustees, including in particular Michael Erceg's mother, Millie Erceg, and Lynne Erceg;

• (d) publication may result in the trustees being unnecessarily burdened with requests for information or explanation from beneficiaries or people believing they might be beneficiaries; and

• (e) the contested allegations referred to in [8](g) above are unfairly prejudicial and may attract unfair negative publicity.

10 For the respondents, Ms Coumbe QC, indicated that additional matters might arise in the course of the hearing which should be suppressed. She suggested that one option for dealing with this would be for the Court to indicate that there was to be no reporting at all until the end of the hearing, when it would be clear what the extent of the suppression order would need to be.

11 For his part, the appellant did not oppose the making of the orders sought.

12 In her submissions in support of the application, Ms Coumbe acknowledged that the starting point must be the fundamental principle that justice should be administered in open court, subject to the full scrutiny of the media. She argued that where non-publication is sought on the ground that...