Melco Resorts Wins Court Battle to Keep Documents Private

  • Melco Resorts won its case to protect nine legal documents in the NSW Supreme Court
  • Unprecedented inquiry has been launched by the NSW Independent Liquor and Gaming Authority
  • Examining Melco's deal to purchase a 20% stake in Australian casino operator Crown Resorts 
front view of a courthouse
The New South Wales Supreme Court has ruled that Melco Resorts does not have to disclose legally privileged documents as part of an inquiry into its stake in Crown Resorts. [Image: Shutterstock.com]

Big blow for regulatory body

Hong Kong-based casino giant Melco Resorts has been victorious in its legal bid to keep certain legally privileged documents private.

An unprecedented public inquiry is being carried out by the NSW Independent Liquor & Gaming Authority (ILGA) into Melco purchasing a 20% stake in Crown Resorts from James Packer. The regulatory body wanted nine secret documents to be made public.

unprecedented public inquiry is being carried out by the NSW Independent Liquor & Gaming Authority

For the next few months, it will be looking at all aspects of Melco in order to see if the company fits the requirements of being a major partner of Australian casino operator Crown Resorts. This new casino is being built in Sydney and is scheduled to open its doors in the early months of 2021. 

How the decision was made

The basis of this case was in relation to a rule in the Royal Commission Act. This rule states that witnesses cannot utilize legal privilege in order to be excused from providing documents or evidence. This rule is enforceable as part of the Casino Control Act. 

However, Melco’s legal team argued that this casino legislation did not clearly express its aim of abrogating a common law right. 

Justice Christine Adamson said that the wording in the casino legislation was not clear enough. She went on to say that it was not up to the court to allow the parliament to allow the inquiry to “abrogate fundamental privileges and rights of witnesses and persons required to produce documents.”

Appeal on the cards

A spokesperson for the ILGA said that they are now mulling over this decision and contemplating how it could impact the future of the inquiry.

According to a government spokesperson, an appeal could be made by Attorney General Mark Speakman. 

Unprecedented inquiry

Patricia Bergin, a former judge of the NSW Supreme Court, is in charge of this inquiry. It was in May 2019 that Melco Resorts bought a 20% stake in Crown Resorts for AUS$1.76bn (US$1.18bn). This inquiry will be considering if this deal breaks casino licensing rules in Sydney. 

As part of this license, the father of the boss of Melco Resorts, Stanley Ho, and other associates cannot be part of the Sydney casino due to alleged links with organized crime. 

Initially, this inquiry was given the same powers as a royal commission. This means that the investigation team could compel the involved parties to submit certain documents and evidence. However, Melco Resorts appealed these powers to the NSW Supreme Court. The casino company does not want nine documents that are under legal privilege to be disclosed.

The next hearing as part of this inquiry is scheduled for February 24, with further hearings scheduled beyond this date.

Melco makes its stance clear

This story took another twist last week when Lawrence Ho and James Packer decided to tear up their deal to transfer another AU$880m (US$591m) of Crown shares. Melco said the reason behind this decision was that it needs to focus more on its main businesses in Asia. 

Melco said it had no intention of purchasing more than 10% in Crown Resorts and that it would no longer be seeking any board seats.