Re Port Finance Investment Ltd

The court allowed an application by Reorg Research Inc under CPR 5.4C(2) for access to four witness statements filed by the scheme company that had been used and referred to at the convening hearing for a scheme of arrangement. The decision applied the open justice principle as explained in Cape Intermediate Holdings Ltd v Dring [2019] UKSC 38 and the Guardian News and Media authority, performing the fact-specific balancing exercise between the public interest in scrutiny and any risk of harm from disclosure. Important factors favouring disclosure were the special need for public scrutiny in scheme cases, the international reach and specialist role of the applicant, and the scheme company’s failure to assert any confidentiality or harm from disclosure. The court rejected the submission that the applicant’s subscription business model disqualified it from performing a journalistic function and emphasised that a convening hearing is not the forum for determining the merits of a scheme.

Background and parties:

• The application was made by Reorg Research Inc seeking copies of four witness statements filed on behalf of Port Finance Investment Limited (the "Scheme Company") which had been used and referred to at the convening hearing for a scheme of arrangement held on 4, 11 and 17 February 2021.
• Reorg is a paid subscription business intelligence and media organisation focused on restructurings. The Scheme Company opposed disclosure.

Nature of the application: Reorg applied under CPR 5.4C(2) (initially by letter) for permission to obtain from the court records copies of the witness statements; the court directed that a formal application be made under CPR 5.4D and gave the Scheme Company notice under CPR 5.4D(2).

Issues framed by the court:

• Whether disclosure advanced the purposes of the open justice principle and therefore should be permitted.
• Whether disclosure posed any risk of harm to the administration of justice or to legitimate interests such as confidentiality.
• Whether the applicant’s commercial/subscription model undermined its journalistic/public interest purpose.

Court’s reasoning and decision:

• The court applied the Dring framework and the Guardian News and Media approach, conducting the prescribed fact-specific balancing exercise between public scrutiny and potential harm from disclosure.
• The court observed that scheme proceedings involve compulsory alteration of creditors' rights and therefore demand particular openness to public and specialist scrutiny.
• The applicant’s subscription model was not a reason to refuse; media organisations commonly charge for services yet still serve open justice. The applicant’s international specialist audience strengthened the public interest in disclosure.
• The convening hearing was not a forum for deciding the merits of the scheme; the judge had not endorsed the fee arrangement and any substantive objections could be pursued at sanction or by reopening class issues.
• Critically, the Scheme Company did not assert that the witness statements contained confidential information or that disclosure would cause harm; that absence was a substantial factor in favour of disclosure.

Outcome: The court concluded that access should be permitted and ordered disclosure of the four witness statements to Reorg to further the open justice principle.

The application was allowed. The court granted Reorg access to the four witness statements because, applying the open justice principles in Dring and Guardian News and Media, the public interest in enabling scrutiny of scheme proceedings outweighed any risk of harm; the Scheme Company did not claim confidentiality and the applicant’s subscription business model did not disqualify it from performing a legitimate journalistic role. The judge emphasised that the convening hearing is not a determination on the merits and that any substantive objections could be raised at sanction.