Open And Shut Cases: Balancing Open Justice And Confidentiality

When will the Court grant a sealing order? What is the difference between a hearing in Court, in Chambers, or in camera; and when are they appropriate? These are questions that the Court has answered in the latest judgment of the Chief Justice in SPhinX Group of Companies (in Official Liquidation) (unrep. 30 January 2017). In short, there is a common law principle of open justice, but it may yield to the paramount principle of doing justice, if the situation requires.

The Court was considering a sanction application by which Scheme Supervisors sought authorization to enter into a settlement agreement with a law firm. The Court also had to decide whether to grant a sealing order in respect of the summons (including its evidence). It was a condition of the settlement agreement that a sealing order be granted; so if not granted, the settlement agreement could not proceed.

The Court looked at the principles under statute and the common law relating to (i) when hearings need not be public; and (ii) when sealing orders may be granted to keep proceedings confidential.

Balance of publicity and confidentiality: principle of open justice subject to overriding principle to do justice

Open justice is a fundamental principle in Cayman Islands legislation. But the "right to a fair and public hearing" and the rights of access to information concerning hearings, under sections 7(1) and 7(9) of the Constitution (i.e. Schedule 2 of the Cayman Islands Constitution Order 2009), relate to inter partes litigation. They do not relate to sanction applications, since such applications do not require the Court to determine rights and obligations of the parties in adversarial legal proceedings. Rather, they require the Court to consider what is in the best interests of the estate and whether the decision of the liquidators for which sanction is sought, is one which the liquidators have taken reasonably in the circumstances.

However, the principle of open justice is also part of the common law. It therefore does apply to sanction applications (and by extension all interlocutory applications in liquidation proceedings). The Chief Justice cited Hodgson v Imperial Tobacco [1998] WLR 1056, 1071 for the propositions that in general the public should have access to court proceedings and access to information about what occurs in such proceedings.

The principle of open justice, though, is not unbounded. At times, this general rule as to publicity must yield to the overriding...