Chief Executive Officer of Australian Transaction Reports and Analysis Centre v TAB Limited (No 4) [2017] FCA 1532

FEDERAL COURT OF AUSTRALIA

Chief Executive Officer of Australian Transaction Reports and Analysis Centre v TAB Limited (No 4) [2017] FCA 1532 File number: NSD 852 of 2015

Judge: PERRAM J

Date of judgment: 18 December 2017

Catchwords: PRACTICE AND PROCEDURE – application for suppression and non-publication order – whether order necessary to prevent prejudice to proper administration of justice – consideration of appropriate duration of order

Legislation: Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) Federal Court of Australia Act 1976 (Cth) ss 37AE, 37AF, 37AF(2), 37AG, 37AG(1)(a), 37AG(1)(b), 37AI, 37AJ(2) Federal Court Rules 2011 (Cth) r 2.32

Cases cited: Australian Broadcasting Commission v Parish (1980) 29 ALR 228 Australian Competition and Consumer Commission v Air New Zealand Ltd (No 12) [2013] FCA 533 Australian Competition and Consumer Commission v Valve Corporation (No 5) [2016] FCA 741 Chief Executive Officer of Australian Transaction Reports and Analysis Centre v TAB Limited (No 3) [2017] FCA 1296 Hogan v Australian Crime Commission [2010] HCA 21; (2010) 240 CLR 651 LHRC v Deputy Commissioner of Taxation (No 4) [2015] FCA 70; (2015) 326 ALR 150 Date of hearing: Determined on the papers

Date of last submissions: 8 December 2017

Registry: New South Wales

Division: General Division

National Practice Area: Commercial and Corporations

Sub-area: Economic Regulator, Competition and Access

Category: Catchwords

Number of paragraphs: 21

Counsel for the Respondents: Ms S Mirzabegian

Solicitor for the Respondents: Herbert Smith Freehills

ORDERS NSD 852 of 2015

BETWEEN: CHIEF EXECUTIVE OFFICER OF AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE Applicant

AND: TAB LIMITED First Respondent TABCORP HOLDINGS LIMITED Second Respondent TABCORP WAGERING (VIC) PTY LTD Third Respondent

JUDGE: PERRAM J DATE OF ORDER: 18 DECEMBER 2017

THE COURT ORDERS THAT: 1. Pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth), the information identified in the Schedule (being information contained in the document entitled 'Confidential Annexure 1' to the statement of agreed facts filed on 22 February 2017 (Agreed Facts)) be kept confidential and not be published or otherwise disclosed to any person other than the parties or their legal representatives on the grounds that the order is necessary to prevent prejudice to the proper administration of justice. 2. Order 1 shall operate for a period of 5 years from the date of these orders, being 18 December 2017. 3. Liberty to apply on 3 days' notice. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

PERRAM J:

1. Introduction 1 On 16 March 2017, I made an interim order in this proceeding pursuant to s 37AI of the Federal Court of Australia Act 1976 (Cth) ('FCAA') that certain confidential information received by the Court be kept confidential until the Respondents' interlocutory application dated 14 March 2017 for a final suppression and non-publication order had been determined. 2 In Chief Executive Officer of Australian Transaction Reports and Analysis Centre v TAB Limited (No 3) [2017] FCA 1296 ('(No 3)') which was delivered on 10 November 2017, I gave my preliminary view, at [54], that a lasting order was appropriate and that 3 years would be a reasonable time for it to remain in place. I invited further submissions from the parties on the merits of that view. On 8 December 2017, the Respondents took up that invitation and provided my chambers with an outline of submissions and a short minute of order which had been agreed with the Applicant. That the order is agreed ultimately carries some weight in the disposition of the Respondents' application (see Australian Broadcasting Commission v Parish (1980) 29 ALR 228 at 254 per Deane J; LHRC v Deputy Commissioner of Taxation (No 4) [2015] FCA 70; (2015) 326 ALR 150 at 157 [25] per Perry J) but, of course, is not determinative. In any event, the Respondents submit that 5 years is a more appropriate length for the final suppression and non-publication order and that there should also be liberty to apply. I agree for the reasons which follow.

2. The Confidential Information 3 The material over which confidentiality is claimed was provided to the Court in hard-copy as a confidential annexure to the parties' Statement of Agreed Facts dated 15 February 2017. 4 The Respondents relied upon an affidavit of Ms Armina Antoniou, the AML/CTF Compliance Officer for Tabcorp, in support of its application for the suppression and non-publication order. In it, Ms Antoniou set out the basis for the desired order and the nature of the 'highly confidential' information over which the order would operate. The information can be described, in a general fashion, as the technical details of the 'processes, systems and controls' which the Respondents have implemented in order to meet their AML/CTF reporting obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) ('the Act'). 5 It will be recalled from my reasons in (No 3) that those obligations are substantial. They reflect the Parliament's decision to repose a significant degree of trust in large companies such as the Respondents to give effect to the AML/CTF risk management system created by the Act. This is a decision which is of significance for the present application and to which I shall shortly return. 6 Insofar as the material itself goes, some of the confidential information annexed to the Statement of Agreed Facts related to specific systems which Tabcorp has either designed itself or modified as part of its 'transaction monitoring program' (this allowed it to detect unusual and potentially suspicious transactions which would trigger reporting obligations under the Act). The details included, inter alia, financial thresholds which would trigger those systems and the frequency with which outputs or alerts from those systems were reviewed by Tabcorp's compliance team. 7 Other parts of the confidential information were directed at explaining to the Court the specific processes which Tabcorp had devised for the purpose of detecting and preventing credit card fraud from taking place on its accounts. Again, such processes, it was said, were required to enable the Respondents properly to comply with their stringent reporting obligations under the Act. 8 In total, the confidential material comprised a mere seven subparagraphs within Confidential Annexure 1 to the Statement of Agreed Facts. The material is modest in size but important from the Respondents' perspective.

3. Principles 9 The grounds upon which the Court may make a suppression order or non-publication order are well-known and appear in section 37AG of the FCAA. They include, relevantly, s 37AG(1)(a): '37AG Grounds for making an order '… (a) the order is necessary to prevent prejudice to the proper administration of justice; …' This means what it says. The order must be necessary to prevent prejudice to the administration of justice, and not simply desirable: see Australian Competition and Consumer Commission v Valve Corporation (No 5) [2016] FCA 741 at [8] per Edelman J. I have said elsewhere that mere embarrassment or annoyance to the affected party will not suffice: Australian Competition and Consumer Commission v Air New Zealand Ltd (No 12) [2013] FCA 533 ('Air New Zealand') at [7]. 10 The High Court in Hogan v Australian Crime Commission [2010] HCA 21; (2010) 240 CLR 651 at 666 [39] also approved the following statement made by Jessup J at first instance in that same matter about a previous incarnation of this subsection: '…the question will always be: is an order necessary to prevent prejudice to the administration of justice? Absent an affirmative answer to this question it is, in my view, almost meaningless to propose that documents themselves are, or that the information in them is, inherently confidential to an extent justifying, or assisting in the justification of, the making of an order permanently protecting them from public view'. 11 The order is not lightly to be made. There are other grounds upon which a Court may make such an order. Subsection 37AG(1)(b) of the FCAA, for example, invokes notions of necessity to preserve national or international security. The Respondents did not expressly rely on this provision in their submissions, although it might be observed that the Act is designed to combat the risk posed to national/international security by terrorism financing. On one view, any publication of the confidential information referred to by Ms Antoniou above might make subversive activities such as terrorism financing more likely to avoid detection by the relevant authorities. However, this is by the by because of the view I have ultimately reached that the order is necessary under s 37AG(1)(a). I say no more about it. 12 Other matters worth noting include: (a) section 37AF provides that the Court may make a suppression order or a non-publication order on grounds permitted in the FCAA, including the grounds contained in s 37AG. Here, the Respondents are in effect seeking both of these orders in conjunction. In my opinion, such an order is available under the provision so that, for example, information may not only be suppressed from the view of visitors to the Commonwealth Courts Portal website, but may also be restricted from being published generally or distributed to a non-party making an access to documents request under rule 2.32 of the Federal Court Rules 2011 (Cth); (b) the Court may also make any other orders it thinks appropriate to give effect to such an order: s 37AF(2). This would include the 'liberty to apply' order which the Respondents now seek; and (c) the order, and by necessary implication any other orders giving effect to it, must operate for no longer than is reasonably necessary to achieve the purpose for which it is made: s 37AJ(2). 13 I turn now to the Respondents' submissions.

4. Respondents' Submissions 14 The Respondents submit that, having regard to Ms Antoniou's evidence, an order suppressing the confidential information of at least 5 years' duration is 'reasonably necessary' to achieve the purpose for which it is sought. That purpose, it will be recalled, is to prevent prejudice to the proper administration of justice. 15 It is submitted that the asserted prejudice may arise in the following way. The confidential information identified by Ms Antoniou in her affidavit, and annexed to the Statement of Agreed Facts, consists of information which may: (a) enable customers to identify the types of monitoring applicable to them, such as the types of monitoring conducted depending upon transaction size or account status tier; (b) in some cases, disclose the timing or frequency of steps undertaken by the Respondents to monitor and detect transactions, such as the types of monitoring which occur otherwise than in 'real time'; and (c) expose individuals responsible for or involved in these processes to undue external pressure or influence. 16 In those circumstances, if the confidential information is not protected by a suppression and non-publication order, there is a real risk that certain individuals fortunate enough to obtain the information could attempt to circumvent, avoid or influence the processes and systems which the Respondents have implemented to mitigate the money laundering and terrorism financing risks which attend their industry. Disclosure of the information would have a tendency to undermine the trust reposed in the Respondents by the Parliament in its choice of regulation under the Act; that is, an approach based on risk management rather than one focussed on extensive policing. It is said that this does not merely constitute a 'potential prejudice' to the administration of justice, but rather a real and immediate threat. 17 It is then said that 5 years is a necessary length for the order because, at present, it is not foreseeable when the confidential information will cease to be confidential and sensitive to the Respondents. This is because it is not currently anticipated that the relevant systems and processes put in place by Tabcorp will be substantively changed or decommissioned in the near future. Ms Antoniou's specific evidence was that 'Tabcorp retains its systems for multiple years. While some aspects of a system may be adjusted as necessary (such as where the assessment of ML/TF risk changes or new risks and typologies emerge), the 'baseline' operation of that system remains largely unchanged'. 18 In light of this evidence, it is suggested that in 3 years' time there is a real chance that the Respondents will have to return to Court to seek an extension of any order which the Court might make. Accordingly, an order of at least 5 years' duration is sought, with an additional order that the parties have liberty to apply in case some or all of the confidential information requires protection beyond that period.

5. Consideration 19 I agree that 5 years is an appropriate length for the suppression and non-publication order which I am going to impose, substantially for the reasons provided by the Respondents in their submissions. One consequence of the risk management system approach adopted by the Parliament in the administration of the Act is that industry is responsible for developing systems which will give effect to its purposes. The Respondents have chosen a system which, on the evidence of Ms Antoniou, is unlikely to require technical development for at least the foreseeable future. In my opinion, if the confidential information is accessed by undesirables seeking to further terrorist activities, or those seeking to engage in money laundering or credit card fraud, there is a real chance that the information will assist their efforts to remain hidden. This is clearly apt to stultify the operation and purposes of the Act. Hence it is likely to prejudice the proper administration of justice. 20 In ordering the suppression and non-publication order to have effect for 5 years, I have taken into account the primacy which open justice must be afforded by the Court to safeguard public interest in the administration of justice: s 37AE. No balancing of that public interest against the prejudice which might occur in the absence of an order such as the present is required: Air New Zealand at [21]. The test, as I have explained, is for the Court to ask whether the order is necessary to prevent prejudice to the proper administration of justice. For the reasons I have set out above, I consider such an order to be necessary.

6. Conclusion 21 I will therefore make orders in the form of the short minutes of order provided to chambers by the Respondents. The parties will have liberty to apply on 3 days' notice. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.

Associate: Dated: 18 December 2017

SCHEDULE

Item Paragraph Parts of the Agreed Facts to be kept confidential 1 [116(a)] The words following the words "ACTRAP was an automated system" and to the end of that sub-paragraph. 2 [116(b)] The words following the words "The BANA system is" and to the end of that sub-paragraph. 3 [117(a)] The words following the words "REX is a system that" and to the end of that sub-paragraph. 4 [117(c)] The words following the words "HULC is a system that" and to the end of that sub-paragraph. 5 [118(a)] The whole of the sub-paragraph. 6 [118(b)] The whole of the sub-paragraph. 7 [118(c)] The whole of the sub-paragraph.