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StuffMe partner keeps its secrets

One party to the big StuffMe media merger is holding something very secret back just in case the High Court blocks the deal.

Fairfax Media NZ and NZME - which between them own virtually all the country's newspapers, two biggest websites and half the commercial radio market - want the court to overturn a comprehensive, unanimous Commerce Commission decision stopping them merging. 

But one party will keep part of its evidence on its future secret, even from its would-be partner, in a rare confidentiality measure. The two companies' shared lawyers will now have to redact parts of one party's evidence before sharing it with the other.

While the StuffMe parties have been publicly united in the rightness of their cause, one company is certainly keeping its options open.

In lead-up hearings, the Commerce Commission had wanted this secrecy, which it had allowed for its own hearings, to end at the High Court so it could mount an open and coherent argument against Fairfax and NZME's appeal.

Justice Robert Dobson said the secret 'Contention' by the company was "how the future of its business would play out if the merger did not proceed." The companies' joint lawyer David Goddard QC said lawyers had been authorised by one of the two applicants to put forward its secret contention "on a confidential basis, including not disclosing [it] to the other applicant".

"I was assured by Mr Goddard that care was still being taken to maintain that confidentiality as between the appellants," the judge said.

Goddard told the court the material from that one company remained highly sensitive commercial information, the "disclosure of which would likely cause substantial harm to the ongoing interests of that appellant".

The Commerce Commission argued this secret claim about the company's future was "inconsistent with public pronouncements about the relevant participant's future in the event the merger does not proceed.

Its lawyer, James Every-Palmer QC, said there would be substantial public interest in the companies' reliance on that evidence - and in the reasons why the Commerce Commission rejected it.

Justice Dobson was sceptical about the prospect of the High Court case being completed without the secret evidence becoming apparent to the other appellant and interested parties who wold follow proceedings. 

But he felt he had to accept the party's request and "respect that party's aspirations".

The Commission might have to approach its case differently given the secrecy around the Contention but the judge believed it could be done.

"I direct that the submissions will not be available for search and are to be retained as confidential by counsel and solicitors for the appellants. 

"It will be for them to redact references to the Contention in taking instructions from the appellant that is not the party that advanced the Contention."

The Commission also failed to stop the two companies introducing new evidence on advertising and newspaper circulation statistics but did persuade the judge to prevent Fairfax and NZME bringing new commentary on journalism awards, scoops by other news organisations, and the extra funding for RNZ approved in the May Budget.

The companies believed these all had "materiality to a reconsideration of the state of competition in the markets" but the judge ruled them out.

Fairfax and NZME should have now filed final financial statements to the High Court, which had been due on August 25, after announcing half-year results to the financial markets.

The full hearing is set for early October.

The Commerce Commission ruled a merger of the two companies would produce detriments to competition and consumer choice in journalism and advertising which would not be outweighed by the benefits suggested by Fairfax and NZME. 

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