Port Finance Investment Ltd, Re

The open justice principle generally favours access by non-parties to documents placed before and referred to by the court. Access is not automatic where permission is required. The applicant must explain how disclosure would advance open justice, and the court must balance that value against any risk of harm to the judicial process or legitimate interests. In scheme cases, public scrutiny is particularly important because the process can alter creditors’ rights without consent. A specialist commercial media organisation may serve a legitimate journalistic function despite operating a subscription business. At a convening hearing, the court ordinarily decides class and jurisdiction issues, not the merits of the scheme. Granting access to evidence does not constitute approval of the scheme or of arrangements considered at that stage.

Reorg Research Inc applied under CPR 5.4C(2) for copies of four witness statements used at the convening hearing of a proposed scheme of arrangement by Port Finance Investment Ltd. Reorg attended the hearing and sought the documents principally to examine an unusual proposed success-fee arrangement involving an adviser to an ad hoc group of creditors and to report on it to its specialist subscribers.

The Scheme Company opposed access, arguing that the relevant information was already adequately captured in the convening judgment and explanatory statement, and that Reorg’s commercial purpose did not advance open justice. The application required the court to apply the open justice principles concerning access to documents and to determine whether disclosure would assist scrutiny and understanding of the court’s decision.

1. Application granted. Reorg was entitled to copies of the four witness statements.
2. The court applied the principles explained by the Supreme Court in Cape Intermediate Holdings Ltd v Dring [2019] UKSC 38. The open justice principle serves both to permit scrutiny of judicial decision-making and to enable the public to understand how the justice system operates and why decisions are taken. It extends, in appropriate cases, to underlying documents placed before and referred to during the hearing.
3. Where permission is required, the applicant has no automatic right of access. The court must conduct a fact-specific balancing exercise between the value of the information in advancing open justice and any risk of harm to the effective judicial process or the legitimate interests of others. The absence of any asserted confidentiality or adverse consequence was a weighty factor supporting disclosure.
4. Those considerations have particular force in scheme cases because a scheme may compulsorily alter the rights of non-assenting creditors. Specialist restructuring media may facilitate meaningful scrutiny, including internationally. The fact that Reorg operated a paid subscription service did not prevent it from performing a legitimate journalistic function.
5. The court treated the approach in Guardian News and Media [2013] QB 618 as establishing a strong default in favour of access where documents were placed before and referred to by the judge, especially where access was sought for a proper journalistic purpose. The witness statements contained additional evidence about the genesis, terms and rationale of the proposed arrangement, enabling observers to relate the decision to the full evidential material.
6. The convening hearing was not a determination of the merits of the scheme. Except for an obvious defect, an inevitable refusal to sanction, or a manifest deficiency in the explanatory statement, its principal issues were class composition and jurisdiction. The court had not endorsed or approved the proposed success-fee arrangements, and creditors could raise relevant matters at the sanction hearing.

First-instance decision. No prior or subsequent appellate decision is stated in the judgment.