The New South Wales (NSW) government is determined to appeal a Supreme Court decision that posed a threat to a public inquiry established to investigate probity and licensing issues connected with James Packer's Crown Resorts and Hong Kong casino group Melco.

Launched by the NSW Independent Liquor and Gaming Authority (ILGA) last year, the inquiry to look into Mr. Packer's sale of a 20% stake in Crown to Melco is without precedent. The revelations made by The Sydney Morning Herald, The Age and 60 Minutes that Crown went into business with figures linked to organized crime and money laundering are also under investigation.

Melco Documents Remain Secret

According to Brisbane Times, the inquiry conducted by former Supreme Court Justice Patricia Bergin, SC, is to commence public hearings on February 24 having the same powers as a royal commission. However, Melco disputed this in court rejecting to deliver nine documents requested as evidence due to their coverage by legal professional privilege. 

Last Tuesday, NSW Supreme Court Justice Christine Adamson ruled in favor of Melco concluding that the wording of the Casino Control Act did not make it clear that Parliament envisioned the legislation to override the right of lawyer-client confidentiality.

Explaining her decision...

...she mentioned "substantial risk" that parliament did not grasp the full extent of all the possible consequences of empowering a gaming regulator inquiry with the powers of a royal commission. She also said that if parliament aimed to make it possible for ILGA inquiries to override the common law right of lawyer-client confidentiality, then "it was obliged to make its intention clear."

Commenting on the verdict, ILGA said it was considering the court judgment and the way “it may impact the running of the inquiry.“ In his turn, the NWS government spokesman stated that NSW Attorney-General Mark Speakman is going to appeal the decision of the court. He added: "Given the matter will return before the court, any further comment at this stage would be inappropriate.“

Meanwhile, counsel assisting Adam Bell, SC, disclosed on the opening day of hearings last month that it had already received 58,000 documents in response to 45 summonses, even though the NSW inquiry's ability to access privileged information is still uncertain. He also confirmed the inquiry is planning to call both Mr. Parker and Melco boss Lawrence Ho to take the stand.

Behind The Scenes

At the moment, Crown Resorts is focused on building a $2.4 billion luxurious casino, hotel, and exclusive apartment tower at Sydney's Barangaroo that is due to open its doors at the beginning of next year.

In May 2019...

...Melco concluded an agreement to buy 20% in Crown in two tranches of shares. The deal attracted the gambling regulator's attention owing to a then-secret clause in Crown's Sydney casino license that prohibits any involvement from Stanley Ho (Melco boss Lawrence Ho's father), as well as a list of associates because of allegations of connections to organized crime.

However, the group broke off its deal for the transfer of the second 10% tranche of Crown shares worth $880 million. According to Melco, the agreement fell apart as a result of certain problems (including coronavirus outbreak), which had a negative effect on their core Asian business. Moving forward, the company doesn’t plan to increase its stake in Crown above the 10% it has already acquired, as well as seek seats on Crown’s board.

Source: “Government to fight for secret Melco documents in Crown casino probe“, Hatch, Patrick, Brisbane Times, February 14, 2020.