Local start-up Crimson Consulting seeks court help to keep a secret

Crimson Consulting founder Jamie Beaton is worth a cool $40 million.

Education start-up Crimson Consulting will go to the Court of Appeal to try to keep allegations made against it by a former employee a secret.

The company wants its file at the High Court in Auckland totally sealed, so the public will never know why the case was brought - despite a judge ruling that was against the principles of open justice.

It is the second time it has fought media in court over the issue, in a bid to avoid negative publicity and protect what it says is commercially sensitive information.

Initially, Crimson tried to get its name suppressed as well as the details of the case, and lawyers also attempted to get media websites to remove articles about the court action.

Crimson is a $200 million tutoring business founded by 22-year-old millionaire Jamie Beaton, which says it helps students get into Ivy League universities.

The long-running case centred on claims and counter-claims about the purchase of a company named UniTutor from Otago business woman Samantha Berry.

It began when Crimson filed a suit with the Employment Relations Authority last October against Berry, for a breach of her contract. Berry then filed a counter claim, saying, in fact, Crimson still owed her money after buying her out in 2015.

Berry also filed a separate suit against Crimson in the High Court, alleging a repudiation of sale.

Her affidavits across both cases contain an extensive history of what she alleges were the events leading up to the sale of her shares to Crimson, and of the events which occurred when she was its employee.

Those are the details Crimson does not want public.

Previously, Crimson has argued Berry's evidence contained significant irrelevant, commercially sensitive, confidential and disparaging information, hence its application for suppression.

In an Employment Court hearing prompted by applications by the Herald and other media to see the court file, the company said it wished to ensure any published stories reflected positively on Crimson, as its reputation was important.

It argued that therefore the publication of commercially sensitive information and "unfair criticisms" should be prohibited. Not to do so would significantly tarnish relationships with investors and clients, it said.

It said the affidavits included "potentially damaging allegations" about matters that were not relevant, which would require consideration at a substantive hearing.

In the Employment Court, the judge dismissed the application to suppress names. He released some of the files, but with heavy redactions - making it almost impossible to report their contents. It was to be revisited after the substantive hearing.

However, the matter was never heard in court, and instead settled privately in October.

At that point Crimson asked for its file to be sealed, but Justice Matthew Palmer declined to do so.
Subsequently, the Herald and the National Business Review applied to the High Court to see the file.

Palmer granted limited access, with some redactions for commercial sensitivity.

The judge said it was a matter of public interest that the proceedings were brought, and directed the judgment be sent to media.

However, lawyers from Crimson intervened and asked the registry not to send the judgment out because it was going to appeal the decision.

Without deferring to the judge, the registry obliged. The media were not informed their case had been successful until late last week, after Crimson had applied for a stay on the information being released, and were about to file a notice of appeal.

In a memorandum, Crimson said it will appeal the ruling because releasing untested allegations could be "misleading" and again arguing the information is commercially sensitive.

The Herald and NBR will challenge that appeal.