FEDERAL COURT OF AUSTRALIA

Spencer v Commonwealth of Australia [2012] FCAFC 169

THE COURT ORDERS THAT:

1.    The application for leave to appeal be dismissed.

2.    Save and except for the costs in order 3 below, the applicant pay the first respondent’s costs as agreed or taxed.

3.    In respect of the bundle of documents referred to in paragraph 59 of the reasons for judgment and the notice to produce dated 2 November 2012, leave be granted to the first respondent to file and serve written submissions in support of the first respondent’s foreshadowed application for indemnity costs within seven days, the applicant to file and serve its written submissions on the issue of indemnity costs within a further seven days thereafter, and the first respondent to file and serve any written submissions in reply within a further three days.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

the court:

BACKGROUND

1    This is an application for leave to appeal against the order of the primary judge upholding the claim of the first respondent (the Commonwealth of Australia) for public interest immunity in relation to documents identified in the affidavits of Philippa Spence, First Assistant Secretary, Cabinet Division of the Australian Government Department of the Prime Minister and Cabinet (PM&C).

2    In accordance with s 25(2)(e) of the Federal Court of Australia Act 1976 (Cth) (the Federal Court of Australia Act) a single judge of the Court ordered that the application for leave to appeal be heard and determined by a Full Court.

GROUNDS OF APPLICATION

3    The application for leave to appeal identified five grounds in support as follows:

1.    The judge erred in refusing to grant access to the Commonwealth documents the subject of claims for public interest immunity each of which on its face was deficient.

2.    The judge erred in refusing to grant access to the Commonwealth documents the subject of claims for public interest immunity in that his Honour wrongly took into account against Mr Spencer counsel’s decision not to cross examine Dr Watts.

3.    The judge erred in refusing to grant access to the Commonwealth documents the subject of claims for public interest immunity in that his Honour erred in characterising all the documents sought to be protected as records of Cabinet.

4.    The judge erred in refusing to grant access to the Commonwealth documents the subject of claims for public interest immunity in that his Honour failed to distinguish between a class claim and a contents claim for public interest immunity.

5.    The judge erred in not examining sufficiently or at all the reasons given by Dr Watts for refusing to disclose the documents except in the most general terms, and without regard to the arguments advanced by the Applicant.

4    Despite this the submissions for the applicant ranged widely over numerous alleged errors by the primary judge including contentions of error inconsistent with the conduct of the proceeding before the primary judge. The applicant sought to justify this approach on the basis of the proposition that this court was required to address the “issues raised by the whole matter, as it were, in the shoes of the [primary] judge”, citing in support Police Federation of Australia v Nixon (2011) 198 FCR 267; [2011] FCAFC 161 (Police Federation of Australia v Nixon) at [82]. At [82], however, the Full Court (Lander, Gilmour and Gordon JJ) said only that “although the resolution of a public interest immunity claim involves a balancing exercise, an appeal against the determination of such a claim is not an appeal against a discretionary decision. Instead, on appeal the question for the Full Court is whether the balance was struck correctly: see Australian Securities and Investments Commission v P Dawson Nominees (2008) 169 FCR 227 at [16]–[17] where a Full Court of this court applied the decision of the Victorian Court of Appeal in Victoria v Brazel (2008) 19 VR 553”. Their Honours were not addressing and said nothing about the fundamental principle that, generally, an appellate court will not entertain a point not raised in the court below about which evidence could have been given with any possibility of the point being defeated (Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 438).

5    The point being made at [82] in Police Federation of Australia v Nixon is that the balancing exercise involved in what their Honours described as the third stage in resolving a claim for public interest immunity (namely, as stated at [81], “if there are public interests both for and against disclosure, balance the public interest in disclosure against the public interest in non-disclosure, in order to decide whether or not the information should be disclosed”) does not involve the exercise of discretion with the consequence that, on appeal, the principles restricting appellate review of a discretionary decision (House v R (1936) 55 CLR 499 at 504-505) are not engaged. In an appeal under s 24 of the Federal Court of Australia Act the appellate court does not “stand in the shoes” of the primary judge. Such an appeal is by way of rehearing and is not a hearing de novo and, accordingly, error must be shown.

6    Moreover, nothing in Police Federation of Australia v Nixon affects the principles by which applications for leave to appeal are determined. It remains the case that in respect of an application for leave to appeal the tests to be satisfied are whether the decision at first instance is attended with sufficient doubt to warrant it being reconsidered and whether substantial injustice would result if leave were refused, supposing the decision at first instance was wrong (Decor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398 and 399).

CONTEXT OF PRIMARY JUDGE’S DECISION

7    The matter came before the primary judge in the following circumstances.

8    First, in Spencer v Commonwealth (2010) 241 CLR 118; [2010] HCA 28 the High Court allowed an appeal against the summary dismissal of the proceedings on the basis (at [4]) that the proceedings were not appropriate for summary dismissal as the case the applicant seeks to raise:

potentially involves important questions of constitutional law. It also involves questions of fact about the existence of an arrangement between the Commonwealth and the State of New South Wales which may justify the invocation of pre-trial processes such as discovery and interrogatories. The possible significance of those questions of fact has become apparent in the light of this court’s judgment in ICM Agriculture Pty Ltd v Commonwealth [(2009) 240 CLR 140 ; [2009] HCA 51], which had not been delivered when the primary judge and the Full Court delivered their judgments.

9    French CJ and Gummow J considered (at [31]) that the applicant’s pleading:

left open the possibility, requiring factual exploration and possible amendment, of an informal arrangement between the Commonwealth and the State of New South Wales conditioning the relevant Commonwealth funding upon acquisition by the State of Mr Spencer’s property rights on other than just terms. On the face of the pleading before Emmett J and the Full Court that possibility was open, even if not fully formulated or adequately particularised. Given the existence of the Commonwealth Acts and the relevant intergovernmental agreements, it is likely that there are negotiations and communications between the Commonwealth and the State of New South Wales, records of which might flesh out or cast light upon the practical operation of the Commonwealth and State funding arrangements. Documentary and electronic records of such negotiations and communications may be amenable to discovery and ancillary processes in the Federal Court which could be invoked by Mr Spencer.

10    Second, on 14 February 2011, the applicant filed a further amended statement of claim in which the applicant contends, amongst other things, that:

(1)    Intergovernmental agreements between the first and second respondents (the Commonwealth and the State of New South Wales) made on 31 October 1997, 3 November 2000, 17 May 2002 and 18 August 2003 are each unconstitutional in that by their terms the State has expressly or impliedly agreed to make and adopt measures with respect to the acquisition of property of the applicant otherwise than on just terms in consideration for the payment of money by the Commonwealth to the State (para 34).

(2)    Further or alternatively by an informal arrangement before November 1997 and extended or amended in or about 2003 the Commonwealth and the State agreed to acquire property of the applicant other than on just terms, the arrangement being that in return for money paid to the State by the Commonwealth the State would make measures precluding or reducing the exposure of the Commonwealth and/or the State to the Constitutional guarantee in s 51(xxxi) of the Constitution (the acquisition of property on just terms) (para 34A).

(3)    Further or alternatively the intergovernmental agreements and/or the informal arrangement comprised a joint venture between the Commonwealth and the State for the acquisition of property other than on just terms (para 35).

(4)    Pursuant to the intergovernmental agreements and/or the informal arrangement and/or induced by the Commonwealth, the State made legislation, referred to as the State measures, which had the effect or consequence of acquiring the applicant’s property (paras 36, 36A and 36B) and the Commonwealth received a substantial benefit from the passage of the State measures (para 37).

(5)    The benefits obtained by the Commonwealth are property of the applicant acquired by the Commonwealth (para 39) other than on just terms (paras 40-42) and in circumstances where had the Commonwealth made the State measures itself the Constitutional guarantee of the acquisition of property on just terms would have been impaired (para 43), with the consequence that the intergovernmental agreements, the informal arrangement and the joint venture are invalid or invalid to the extent that they provide for or enable the acquisition of the property of the applicant on other than just terms (para 44).

(6)    The Commonwealth has thereby used the applicant’s property for its own benefit and received, retained and used the applicant’s property whereby the Commonwealth has been unjustly enriched (paras 50-55), in respect of which the applicant claims legal or equitable compensation and/or an account of profits (para 56) and/or damages (paras 56A-56D).

11    Third, on 31 May 2011, and by consent of the parties, the primary judge ordered that the Commonwealth discover the following categories of documents:

1.1    documents which relate to pars 34A, 36 and 37 of the Further Amended Statement of Claim filed 14 February 2011 (the FASOC);

1.2.    the intergovernmental agreements referred to in pars 14, 24, 26 and 28 of the FASOC, documents evidencing any amendment to those agreements, and documents regarding implementation and compliance with those agreements by the second respondent insofar as they relate to preserving native vegetation or preventing the clearing of native vegetation on land that includes the property identified in par 1 of the FASOC (whether or not limited to that land);

1.3.    correspondence (including emails and facsimile transmissions) between the Commonwealth and the State of New South Wales which:

1.3.1.    relates to funding or payments from the Commonwealth to the State in relation to or under the agreements referred to in par 1.2 above, or any informal arrangement referred to in par 34A of the FASOC; and

1.3.2.    refers to preserving native vegetation or preventing the clearing of native vegetation on land that includes the property identified in par 1 of the FASOC (whether or not limited to that land).

12    Fourth, in complying with the order for discovery the Commonwealth claimed that certain documents were privileged from production on the grounds of public interest immunity. The Commonwealth subsequently reduced the scope of these claims but the claims remained in contest. The dealings between the applicant and the Commonwealth resulted in the orders of the primary judge of 20 April 2012 (as varied on 8 May 2012) in which order 1 is as follows:

By 18 May 2012, the first respondent file and serve any further evidence on which it wishes to rely to maintain its public interest immunity claim in respect of documents:

a)    660 and 721 in category 1;

b)    604 and 661 in category 2;

c)    704 in category 3; and

d)    603 and 662 in category 4.

13    These orders also record a note in these terms:

THE COURT NOTES THAT:

7.    The parties accept that the Court’s ruling in relation to the documents described in order 1 will be accepted as resolving the dispute as to the public interest immunity class claim.

14    The hearing before the primary judge took place on 20 April and 7 June 2012. It is relevant to note that during the hearing on 20 April 2012 the applicant’s counsel handed up a bundle of documents and sought to take the primary judge to one document in the bundle (document 796). The primary judge queried the reason he was being shown this document but the issue was not explored further on that day due to lack of time. On 7 June 2012 counsel for the Commonwealth referred to the agreed position reflected in the note to the orders of 20 April 2012 (as varied on 8 May 2012) that the Court’s ruling in respect of the seven documents listed in order 1 would be accepted as resolving the dispute as to the public interest immunity class claim. After some hesitation the applicant’s counsel acknowledged that this was the agreed position. The hearing proceeded on that agreed basis. The primary judge delivered judgment on the same day upholding the claim for public interest immunity. After the primary judge delivered his reasons counsel for the applicant again contended that the ruling did not cover all of the documents the subject of the claim. The primary judge responded that he had understood from what had been said that morning that ruling on the seven documents would resolve the claim in respect of all documents and that had been conceded to on the applicant’s behalf but, if the applicant wished to press the issue, it would have to be done on another occasion. Counsel for the applicant said he did not wish to say anything further about it and the issue was not raised again before the primary judge.

15    The reasons given by the primary judge will be addressed in the context of the applicant’s contentions in support of the application for leave to appeal.

APPLICANT’S CONTENTIONS

Documents recording the deliberations of Cabinet compared to other documents

Applicant’s case

16    One of the applicant’s main contentions was that the primary judge erred in principle by applying to the documents over which the Commonwealth claimed public interest immunity as a class, which were not documents recording the deliberations of Cabinet, an approach which the authorities reserved for documents recording the deliberations of Cabinet. In consequence, the primary judge failed to: – (i) subject the claims for public interest immunity and the evidence in support to the scrutiny appropriate to a class as opposed to a contents claim, recognising that the party making a claim based on the class rather than the contents of the documents carries “a heavy burden” (Sankey v Whitlam (1978) 142 CLR 1 at 62 per Stephen J (Sankey v Whitlam) citing Conway v Rimmer [1968] AC 910 (Conway v Rimmer)), and (ii) recognise that it was appropriate in this case to inspect the documents to ensure that they fell within the classes claimed and were otherwise entitled to the asserted immunity.

17    The applicant supported this contention by a number of arguments which were not without ambiguity. According to the applicant the law of public interest immunity had developed so as to draw a distinction between class claims relating to documents recording the deliberations of Cabinet and other documents. These developments, it was said, are apparent from the decisions in Sankey v Whitlam and Commonwealth v Northern Land Council (1993) 176 CLR 604 (Northern Land Council) compared to Lanyon Pty Ltd v Commonwealth (1974) 129 CLR 650 (Lanyon).

18    In Lanyon Menzies J upheld a claim for public interest immunity without inspecting the documents on the basis that (at 653):

the governmental process directed to obtaining a cabinet decision upon a matter of policy and cabinet's decision upon that matter should not, in the public interest, be disclosed by the production of cabinet papers including what I would describe as papers which have been brought into existence within the governmental organization for the purpose of preparing a submission to cabinet. Such papers belong to a class of documents that, in my opinion, are of a nature that ought not to be examined by the Court, except, it may be, in very special circumstances. There are no such circumstances here.

19    According to the applicant this approach of so-called “absolute immunity” was rejected in Sankey v Whitlam. In particular, the applicant submitted that in identifying the applicable principles at 38-43 Gibbs ACJ (as he then was) was rejecting the proposition which had been “repeatedly asserted” that “there are certain documents which by their nature fall in a class which ought not to be disclosed no matter what the documents individually contain; in other words that the law recognizes that there is a class of documents which in the public interest should be immune from disclosure” (at 39). This was said to be apparent in particular from: –

(1)    The phrase “repeatedly asserted” used at 39.

(2)    The observation that considerations of candour do not justify “the grant of a complete immunity from disclosure to documents of this kind” at 40.

(3)    The statement at 40-41 that “[a]lthough it is sometimes categorically stated that documents of this class will not be ordered to be disclosed, at least if proper objection is taken, it has been acknowledged in some authorities that the protection which this class enjoys is not absolute”.

(4)    The conclusion at 41 that the “fundamental principle is that documents may be withheld from disclosure only if, and to the extent, that the public interest renders it necessary”.

(5)    The related conclusion at 42 that the “question is whether the disclosure of the documents would be contrary to the public interest”.

(6)    The conclusion at 43 that:

…although there is a class of documents whose members are entitled to protection from disclosure irrespective of their contents, the protection is not absolute, and it does not endure for ever. The fundamental and governing principle is that documents in the class may be withheld from production only when this is necessary in the public interest. In a particular case the court must balance the general desirability that documents of that kind should not be disclosed against the need to produce them in the interests of justice. The court will of course examine the question with especial care, giving full weight to the reasons for preserving the secrecy of documents of this class, but it will not treat all such documents as entitled to the same measure of protection-the extent of protection required will depend to some extent on the general subject matter with which the documents are concerned. If a strong case has been made out for the production of the documents, and the court concludes that their disclosure would not really be detrimental to the public interest, an order for production will be made.

20    The applicant submitted that the statement of Stephen J at 62 in Sankey v Whitlam, referred to above, that those asserting the privilege over a class of documents regardless of contents “carry a heavy burden” supports the same conclusion, as does his Honour’s observation at 65 that the “prospect of a Court making a private examination of a document in the absence of the parties has long ceased to be regarded either as an impropriety or as a novelty”.

21    The applicant also referred to the judgment of Mason J in Sankey v Whitlam, in particular at 96 where his Honour said:

Cabinet decision and cabinet papers do not stand outside the general rule that requires the court to determine whether on balance the public interest calls for production or nonproduction. They stand fairly and squarely within the area of application of that rule.

22    Mason J also said at 99:

As the range of issues which engage the attention of the Executive Government is infinite and as the manner in which those issues are considered varies from case to case, it is impossible to lay down hard and fast rules which will provide universal answers. Each case here, as elsewhere, depends upon its own circumstances and it is only by a consideration of them that a correct balance will be reached.

23    In respect of Northern Land Council the applicant stressed the statement at 614-615 (per Mason CJ, Brennan, Deane, Dawson, Gaudron and McHugh JJ):

It should be observed at the outset that the documents for which the Commonwealth claims immunity from disclosure are documents which record the actual deliberations of Cabinet or a committee of Cabinet. They are not documents prepared outside Cabinet, such as reports or submissions, for the assistance of Cabinet. Documents of that kind are often referred to as Cabinet documents. When immunity is claimed for Cabinet documents as a class and not in reliance upon the particular contents, it is generally upon the basis that disclosure would discourage candour on the part of public officials in their communications with those responsible for making policy decisions and would for that reason be against the public interest. The discouragement of candour on the part of public officials has been questioned as a sufficient, or even valid, basis upon which to claim immunity.

24    The applicant also emphasised the statement of their Honours at 616 in these terms:

The classification of claims for public interest immunity in relation to documents into “class” claims and “contents” claims has been described as “rough but accepted”. It serves to differentiate those documents the disclosure of which would be injurious to the public interest, whatever the contents, from those documents which ought not to be disclosed because of the particular contents. Both upon principle and authority, it is hardly contestable that documents recording the deliberations of Cabinet fall within a class of documents in respect of which there are strong considerations of public policy militating against disclosure regardless of their contents. But, whatever the position may have been in the past, the immunity from disclosure of documents falling within such a class is not absolute. The claim of public interest immunity must nonetheless be weighed against the competing public interest of the proper administration of justice, which may be impaired by the denial to a court of access to relevant and otherwise admissible evidence.

25    The applicant noted that at 619 their Honours said that “in Sankey v Whitlam the documents which this Court ordered to be produced were not even Cabinet documents, let alone documents disclosing Cabinet deliberations”. According to the applicant, in contrast, their Honours were satisfied that where documents record Cabinet deliberations it would be only in “quite exceptional circumstances which give rise to a significant likelihood that the public interest in the proper administration of justice outweighs the very high public interest in the confidentiality …that it will be necessary or appropriate to order production of the documents to the court” (also at 619) and for such documents (that is, recording Cabinet deliberations) the documents would need not to be merely relevant to the case but crucial to the case in order to potentially qualify as exceptional circumstances (at 620). In a case of exceptional circumstances, it will also be appropriate for the judge to inspect the documents “for the purpose of deciding whether the relevance of the material to the proceedings in which disclosure is sought is sufficient, even in those exceptional circumstances, to justify disclosure” (at 619).

26    The applicant submitted that it followed from this analysis that the documents the subject of the class claims in the present case, which did not record Cabinet deliberations, were not entitled to be treated by the primary judge as if they did record such deliberations. The documents in the present case were mere Cabinet documents or akin to the documents which the Court inspected and required to be produced in Sankey v Whitlam. Given the nature of the documents in the present case as documents not recording Cabinet deliberations it was appropriate for the primary judge to inspect the documents to see whether any actual deliberations of Cabinet would be disclosed by requiring production. If not, then the primary judge should have undertaken the required balancing exercise recognising that the documents do not engage the principles discussed in Northern Land Council that exceptional circumstances are required and the documents must be shown to be crucial to the applicant’s case. Instead, consistent with the observation of Stephen J in Sankey v Whitlam the class claims should be scrutinised recognising the heavy burden that the party claiming the privilege carries, the fundamental principle being that the documents in the class “may be withheld from protection only when this is necessary in the public interest” (Sankey v Whitlam at 43).

Consideration

27    Although it has taken some time to explain the applicant’s submissions on this issue they in fact warrant short shrift. The submissions involve a fundamental misreading of the relevant authorities.

28    The decision of Menzies J in Lanyon does not suggest that so-called Cabinet papers (which his Honour described as including papers brought into existence for the purpose of preparing a submission to Cabinet) are entitled to absolute immunity. Justice Menzies held that such papers belong to a class which ought not be examined by the Court except, perhaps, in very special circumstances, none of which were apparent on the facts of that case. Accordingly, there was no warrant for his Honour to inspect the documents and he upheld the claim for immunity without doing so.

29    Lanyon has never been overruled or called into question. In Sankey v Whitlam and Northern Land Council, the decisions on which the applicant relied to support the proposition that the law had developed beyond Lanyon, Lanyon is in fact referred to with approval (in Sankey v Whitlam at 39, 41, 57 and 95, and in Northern Land Council at 609 and 616). A proper reading of Lanyon, Sankey v Whitlam and Northern Land Council discloses the common application of a unified set of principles to different factual circumstances. The applicant’s reading of the relevant authorities is perverse and involves both construing statements out of context and transforming conclusions of fact about the balance of competing interests in the individual case into statements of principle.

30    The Full Court (Burchett, Hill and Madgwick JJ) summarised the relevant principles in State of New South Wales v Ryan (1998) 101 LGERA 246 (State of New South Wales v Ryan) at 250-251 in these terms:

Authorities binding on this Court justify the statement of a number of propositions about what have been called Cabinet papers. There is no doubt that the document with which we are concerned falls within that description as it is used in these authorities. In Lanyon Pty Ltd v The Commonwealth of Australia (1974) 129 CLR 650 at 653, Menzies J, “without examination of the documents”, upheld a claim for privilege “for documents of a particular class or classes which may be described as documents brought into existence within government departments and instrumentalities for consideration in formulating a submission to cabinet and recording the decision of cabinet, its committees or sub-committees thereon.” His Honour said:

“The basis upon which I do so ... is that the governmental process directed to obtaining a Cabinet decision upon a matter of policy and Cabinet's decision upon that matter should not, in the public interest, be disclosed by the production of Cabinet papers including what I would describe as papers which have been brought into existence within the governmental organisation for the purpose of preparing a submission to Cabinet. Such papers belong to a class of documents that, in my opinion, are of a nature that ought not to be examined by the Court, except, it may be, in very special circumstances.”

This decision was cited by Gibbs ACJ in Sankey v Whitlam (1978) 142 CLR 1 at 39 as authority for the proposition that “papers brought into existence for the purpose of preparing a submission to Cabinet” belonged to “a class of documents which in the public interest ought not to be produced, whether or not it would be harmful to disclose the contents of the particular document”. Lanyon was also cited in Sankey v Whitlam (at 57) by Stephen J (with whom Aickin J agreed), and (at 95) by Mason J, without any suggestion that Menzies J had given too wide an ambit to the category of Cabinet papers. Indeed, Mason J said (at 99):

“To ensure that the protection given to Cabinet proceedings is effective, documents and communications passing between a Minister and the head of his department relating to Cabinet proceedings and material prepared for cabinet must be protected.”

It has been clearly laid down, in Sankey v Whitlam and in Commonwealth v Northern Land Council, that the protection accorded to Cabinet documents is not absolute. As it was put in the latter case (at 616) in the joint majority judgment:

“The claim of public interest immunity must ... be weighed against the competing public interest of the proper administration of justice, which may be impaired by the denial to a court of access to relevant and otherwise admissible evidence.”

However, the joint judgment sounds (at 617) a specific warning against reducing the weighing of the two competing public interests to a mere assessment of the contents of a document, such as a Cabinet document, as not warranting protection. Their Honours who joined in that judgment cite the statement of Gibbs ACJ in Sankey v Whitlam (at 43):

“If a strong case has been made out for the production of the documents, and the court concludes that their disclosure would not really be detrimental to the public interest, an order for production will be made.”

But they are careful to add:

“Gibbs ACJ was referring no doubt to the outcome of a balancing process in a case where the detriment to the public interest involved in disclosure was outweighed by the public interest in the advancement of justice. In a case where a document fell into a class of document the disclosure of which would be injurious to the public interest regardless of the contents, a court could conclude that ‘disclosure would not really be detrimental to the public interest’ only in circumstances where there was a competing public interest, such as the public interest in the advancement of justice, which outweighed the public interest in the preservation of confidentiality.”

The joint majority judgment makes it clear (at 618-619) that documents recording the actual deliberations of Cabinet, as distinct from other Cabinet documents, have “a pre-eminent claim to confidentiality”. That means that the weighing process will not often produce the result that the interests of justice require disclosure. “Indeed”, their Honours said, “for our part we doubt whether the disclosure of the records of Cabinet deliberations upon matters which remain current or controversial would ever be warranted in civil proceedings.” While this case is not one involving records of that kind, the matter to be emphasised is that, both in the case of documents recording the deliberations of Cabinet and in the case of other Cabinet documents, the question for the court is “whether the relevance of the material to the proceedings in which disclosure is sought is sufficient ... to justify disclosure”.

In a case where the court has to weigh the competing public interests, it is required, in doing so, to give weight to the assertion of a responsible representative of government that there is a public interest which would be placed in jeopardy by the production of the document. In Sankey v Whitlam (at 44) Gibbs ACJ said that the court is “required to give proper respect to the assertion by the Minister or departmental head that production would be contrary to the public interest”, and he reiterated the point, using the expression “[f]ull respect”, at 46. In the same case, Stephen J quoted (at 59-60) a statement by Lord Pearson to similar effect, and Mason J said (at 96) that the court “will give weight to the Minister's opinion that the documents should not be produced”. Since the public interest on which the immunity is based is concerned with the protection of the inner workings of government, this proposition is inevitable. For the same reason, Gibbs ACJ in Sankey v Whitlam drew attention (at 43) to the need, in cases in which the government is not a party, to provide it a proper opportunity to intervene before any order for disclosure is made.

Gibbs ACJ continued, after making the point which has just been mentioned:

“Moreover no such order should be enforced until the government concerned has had an opportunity to appeal against it, or test its correctness by some other process, if it wishes to do so (cf, Conway v Rimmer [1968] AC, at p953).”

31    In State of New South Wales v Ryan the Full Court allowed an appeal on the basis that the judge at first instance had erred in not following the principle explained in Northern Land Council that “it is not enough to weigh (and find wanting) the importance to the government of disclosure of the particular facts which would be revealed by production of the cabinet material in question. Only a sufficient demand of justice can outweigh the protection to which Cabinet documents are entitled in virtue of their nature, irrespective of those facts. Furthermore, the authorities also require weight to be given to the government's claim that disclosure of the document would be harmful, and it is simply not correct that disclosure of recommendations couched in broad terms, or which are implicit rather than express, could not justify this claim” (at 252).

32    This summary, which accurately reflects the reasoning in Lanyon, Sankey v Whitlam and Northern Land Council, discloses that the approach advocated by the applicant is fundamentally inconsistent with authority. True it is that documents recording deliberations of Cabinet have “a pre-eminent claim to confidentiality”. But other documents including “papers brought into existence for the purpose of preparing a submission to Cabinet” and “documents and communications passing between a Minister and the head of his department relating to Cabinet proceedings and material prepared for Cabinet” are recognised classes prima facie entitled to protection on the grounds of public interest immunity. And as State of New South Wales v Ryan makes clear, the question in respect of both classes is “whether the relevance of the material to the proceedings in which disclosure is sought is sufficient ... to justify disclosure”.

33    It follows that if there is cogent evidence of the grounds for the making of the claim for immunity of the class of documents, a matter to be assessed giving due “weight to the assertion of a responsible representative of government that there is a public interest which would be placed in jeopardy by the production of the document” and no apparent basis for concluding a “sufficient demand of justice” for disclosure of the document having regard to its importance to the resolution of the proceedings, there will be no warrant for inspection of the documents by the judge resolving the claim; the prima facie position of protection from disclosure will prevail. In such a case it is only if there is a sufficient basis for concluding that documents within these recognised classes are of “such significance that the interests of justice call for” them to be produced (New South Wales v Ryan at 250) that production might be required albeit recognising that, first, it will be difficult if not impossible for the requisite level of significance to be achieved in respect of documents recording the deliberations of Cabinet on any current topic or topic which remains controversial and, second, if the requisite level of significance of the documents to the case is demonstrated having regard to the “degree of protection against disclosure which is called for by the nature of [the] class”, it will then be appropriate for the judge to inspect the documents, not for the purpose the applicant proposed (simply to test the strength of the claim for immunity) but rather to test whether the apparent significance of the documents to the proceedings truly justifies disclosure having regard to the strength of the claim for immunity.

34    The applicant’s reliance on an observation in Attorney-General v Jonathan Cape Ltd [1976] 1 QB 752 at 764D-G as authority to the contrary is misconceived. Lord Chief Justice Widgery was there dealing with a contention by the Attorney-General that the protection from disclosure of Cabinet papers was based on collective responsibility. As the Commonwealth also submitted, the observation of Lord Widgery CJ at 768H that he “would not accept without close investigation that such matters [i.e., Cabinet documents] must, as a matter of course, retain protection after a period of years” has not been followed in Australia (see Whitlam v Australian Consolidated Press Ltd (1985) 73 FLR 414 at 423 and note that in Northern Land Council the documents concerned events that had taken place some 14 years ago).

35    The applicant’s focus on the so-called need to inspect documents which are the subject of a class claim which do not record the deliberations of Cabinet or the propriety of doing so on the facts of this case having regard to the description of the classes claimed is exposed as misconceived on proper analysis of the relevant authorities. Northern Land Council at 617, at which the following statement was made, provides no support for the applicant’s approach:

In many so-called “class” cases a court may find it necessary to consider a document, inspecting it if necessary, in order to determine whether it does in truth fall into a class which attracts immunity.

36    The applicant’s submissions, to the effect that this supported the proposition the primary judge erred by not inspecting the documents, failed to appreciate the context in which this statement appears. The Court was dealing with the observation of Gibbs ACJ in Sankey v Whitlam at 43 (on which the applicant also relied) that “[i]f a strong case has been made out for the production of the documents, and the court concludes that their disclosure would not really be detrimental to the public interest, an order for production will be made” and explaining that this had to be understood as the “outcome of a balancing process in a case where the detriment to the public interest involved in disclosure was outweighed by the public interest in the advancement of justice”. Their Honours also explained that, in respect of a class claim, “to inspect the contents of documents as a matter of course would be to disregard the basis of the immunity for a document falling within the class described”. In this context, their Honours referred to the fact that claims for immunity over documents not based on their contents and which do not fall within a recognised class attracting the privilege may necessitate inspection of the documents by the judge. Their Honours then said that, by way of contrast, where “a document clearly falls within a class which attracts immunity, a different approach is called for”, being the approach described in the preceding paragraph.

37    In the present case, and contrary to the applicant’s assertions, there was no basis for concluding that a strong case had been made out for the production of the documents. Indeed, as the Commonwealth submitted:

Rather than adducing any evidentiary support for, or explanation of, the relevance of the documents to particular issues, and subjecting such evidence to cross-examination, the applicant was content, before the trial judge, to rely upon the general notion of adjectival relevance – that is, the applicant argued that the very fact that the Commonwealth discovered the documents meant that they must be relevant to (or relate to) so-called ‘key issues’, and were therefore ‘important’ to the applicant’s case. The applicant adopts the same approach in his written submissions. It is an inordinately weak answer to a properly founded claim of PII [public interest immunity].

38    The position on inspection of the documents the subject of the claim remains that identified by Bowen CJ in Young v Quin (1985) 4 FCR 483 at 484 as follows, with which the applicant’s submissions are inconsistent:

Where a claim of public interest immunity is made in respect of documents it is for the court to decide whether or not to uphold the objection. The court may ask for a clarification or an amplification of the objection to production, being careful not to impose requirements which could only be met by divulging the very matters to which the objection relates. The court also has power to examine the documents privately. It has been said this power should be sparingly exercised. Indeed, the better view appears to be that the court should not inspect the documents unless it decides that, on balance, the documents probably ought to be produced: Conway v Rimmer [1968] AC 910 at 952, 953 and 971 and see Air Canada v Secretary of State for Trade (No 2)[1983]2 AC 394.

39    The primary judge’s approach was consistent with authority. Contrary to the applicant’s submissions the primary judge did not treat the documents as if they were entitled to absolute immunity. So much is clear from his reasons for judgment at [11], [13], [18], [20], [21] and in particular at [22] where his Honour referred expressly to the three stage process, the third stage being the required balancing exercise. The primary judge’s approach to inspection of the documents was also consistent with authority. Being satisfied on the evidence that the documents as described by Dr Ian Watt, Secretary to the PM&C, fell within the identified classes (at [43]), and that the claims for public interest immunity were supported by cogent evidence of the harm to the public interest from disclosure (at [42]), and not being satisfied that the documents were of other than possible marginal relevance to the applicant’s case (at [45]), there was no justification for the primary judge to examine the documents. In this regard, the applicant’s submissions appear simply to ignore Dr Watt’s evidence that each document, if disclosed, could reveal the deliberations of Cabinet either directly or by enabling reliable inferences to be drawn, thereby giving the documents in each class a “pre-eminent claim to confidentiality”.

40    Accordingly, the circumstances warranting examination of the documents as explained in the authorities – first to identify whether the documents fell within the classes and second to ensure that where the balance appeared to warrant disclosure of the documents to ensure such disclosure is in fact warranted – were not engaged on the evidence and material before the primary judge. So too the proposition that the primary judge failed to distinguish between a class claim and a contents claim for public interest immunity must fail having regard to the terms of the primary judge’s reasons at [11], [17]-[19], [23] and [43].

Other submissions of the applicant

41    Against the background of this discussion it is apparent that the applicant’s submissions that the primary judge erred in principle by treating the documents in question as if they recorded Cabinet deliberations and failed to inspect the documents when he ought to have done so are misconceived. The primary judge identified the principles applicable to the resolution of the claim for public interest immunity in orthodox terms at [11] to [22] of the reasons for judgment.

42    In so doing, contrary to the applicant’s grounds of application and proposed grounds of appeal, the primary judge did not characterise all of the documents “as records of Cabinet” if, by this, the ground is intended to refer to Cabinet notebooks which are a contemporaneous record of discussions within Cabinet. The primary judge identified the four categories in the terms specified in the evidence of Ms Spence and as supported by the evidence of Dr Watt at [23] as follows:

•    Category 1: documents submitted to and considered by Cabinet, including documents that are both identical in all relevant respects to those considered by Cabinet, and precursors of documents submitted to Cabinet;

•    Category 2: documents that reveal the decision and/or deliberations of Cabinet;

•    Category 3: documents prepared by the Department of the Prime Minister and Cabinet to brief the Prime Minister for the chairing of Cabinet meetings; and

•    Category 4: documents brought into existence for the purpose of preparing a submission to Cabinet.

43    Each class is recognised in the authorities as one which may be the subject of a proper claim for public interest immunity. Contrary to the applicant’s contentions the classes are not too broad. Moreover, the applicant did not put before the primary judge or this Court any basis for inferring that the documents did not fall within the classes as described and, indeed, does not raise any such ground in the application or draft notice of appeal. The affidavits of Ms Spence and Dr Watt, which (also contrary to the applicant’s submissions) must be given weight as they contain assertions of responsible representatives of government that there is a public interest which would be jeopardised by the production of the documents, provide no basis for any such inference and, indeed, support the conclusion that the documents fall within the classes as described. From that evidence it is apparent that Ms Spence inspected all of the documents in issue and was satisfied that each fell within the class as described and that the category descriptions were correct.

44    For all of the above reasons it follows that the applicant’s assertion that the basic problem with Dr Watt’s evidence is that it does not address the so-called key issue of why any public servant would now act differently if the documents were disclosed given the different approach Australia has taken to climate change in recent years compared to the position in 2003 is beside the point. Dr Watt’s evidence explains the basis for the claims in respect of various aspects of the public interest including not merely collective Ministerial responsibility but also Ministerial and Departmental frankness and candour.

45    For all of the above reasons also the fact that the primary judge recited in his reasons for judgment the description of the documents given by Dr Watt is immaterial. Dr Watt gave the evidence describing the documents. The primary judge was entitled to rely on that description.

46    To the extent that the applicant tried to make something of the fact that some of the documents had been created by Dr Watt suffice to say: – (i) the same point was not raised before the primary judge, (ii) it was obvious that this was so from Dr Watt’s affidavit, (iii) the primary judge was aware of this fact as [29] of his reasons for judgment shows, and (iv) rightly, the primary judge did not see the fact as in any way material to the resolution of the claims.

47    To the extent the applicant tried to make something of the terms of two documents annexed to the affidavit of Dr Watt sworn on 22 May 2012 six observations may be made.

48    First, the documents contain small parts which have been redacted on the basis of the public interest immunity claims. As to document 603, four to five lines of text are the subject of the claim. Dr Watt’s evidence is that disclosure of those passages, particularly when combined with other pieces of information, would enable reliable inferences to be drawn about the subject matter of Cabinet discussions, the likely timing of such discussions, the urgency of a particular Cabinet deliberation, and the position taken on a particular issue by a Cabinet Minister relating to Australia’s approach to natural resource management which is generally a matter of current sensitivity. As to document 604, a hand-written note of which five words are the subject of the claim, Dr Watt’s evidence is that those words fall within category 2 (documents that reveal the decision and/or deliberations of Cabinet), being a note Dr Watt believes was prepared by an officer of PM&C, which if disclosed would reveal what was considered by Cabinet in a particular month and year. The parts of the documents the subject of the claims as described are clearly within the recognised classes of public interest immunity. The primary judge was right to reject the applicant’s submissions to the contrary in the following terms at [43] of his reasons for judgment:

Mr Spencer, through his counsel, criticises the generality with which the claim for public interest immunity is made. That, however, is the nature of such a claim. A claim in respect of a class will normally be upheld if the class is one that is recognised as being, prima facie, subject to public interest immunity. The documents presently in question all fall within one or other of the classes or categories identified by Dr Watt.

49    Second, the applicant’s criticism of Dr Watt’s evidence as relying on a “mosaic” approach by referring to the capacity for inferences to be drawn about the subject matter of Cabinet discussions and the like, “particularly when combined with other pieces of information”, is unfounded. Apart from the fact that no such ground appears in the application for leave or draft notice of appeal, there is nothing objectionable about the approach Dr Watt took in his affidavit to the issue of the harm to the public interest from disclosure. It is not the case, as the applicant suggested, that Dr Watt was suggesting that only those with specialised knowledge would realise the effect of the disclosures and how they related to subject matter of Cabinet discussions, the likely timing of such discussions, the urgency of a particular Cabinet deliberation, and the position taken on a particular issue by a Cabinet Minister. Indeed, even if the inferences which could be drawn from the documents would be wrong the rationale for the privilege nevertheless applies. The interests as identified by Dr Watt, which were not limited to the doctrine of collective responsibility for governmental decision-making but also embraced the need for circumstances conducive to full candour in governmental advice and decision-making, apply equally to disclosures which may lead to correct or incorrect inferences about the substance of the decisions and how they were made. And as the Commonwealth noted, the reference to “mosaic” is simply a description of the ordinary process by which inferences might be drawn from multiple sources of information and such a process of reasoning is not excluded from application to an assessment of the harm which might result from the disclosure of documents which will enable such inferences to be drawn about governmental advice and decision-making. Indeed, the reasons in Australian Securities and Investments Commission v P Dawson Nominees Pty Ltd (2008) 169 FCR 227; [2008] FCAFC 123 at [41]-[44] and Australian Securities and Investments Commission v P Dawson Nominees Pty Ltd [2009] FCAFC 183 at [63] expressly contemplate precisely that process of reasoning as relevant to the public interest against disclosure.

50    Third, the submissions of the applicant about the potential importance of the parts of the documents over which the claims are made to the applicant’s case do not withstand scrutiny and, moreover, were not apparently put to the primary judge as material to the applicant’s case. The case as pleaded relates to the existence as between the Commonwealth and the State of New South Wales of intergovernmental agreements, informal arrangements and/or a joint venture. The parts of document 603 which are not the subject of any claim relate to the possibility of funding for National Heritage Trust expenditure being brought forward. The parts of document 604 which are not the subject of any claim in which the five words that have been redacted are located relate to “Manildra”. Apart from pure assertion by the applicant at an unhelpful level of generality it is impossible to infer that the redacted parts of these documents, or indeed that any of the other documents the subject of the class claims, have sufficient importance to the applicant’s case to indicate that the public interest in protection from disclosure as explained by Dr Watt might be outweighed by the public interest in the administration of justice. The primary judge properly reached the same conclusion at [45] of his reasons for judgment.

51    Fourth, the mere fact that the Commonwealth discovered the documents does not lend any weight to the proposition that the documents should be seen as having sufficient importance to the applicant’s case to outweigh the public interest in protection from disclosure on the grounds identified by Dr Watt. It is obvious that mere relevance of the kind requiring discovery is insufficient. There would be no occasion for the discovery of any document that did not meet this minimum degree of relevance and thus no occasion for the making of a claim for public interest immunity over such a document but for this degree of relevance. The test of sufficient importance or significance having regard to the strength of the public interest of the class in protection from disclosure assumes this minimum degree of relevance but requires more than this in order that the balance may be said to favour disclosure.

52    Fifth, the notion that the primary judge erred by not considering those parts of document 603 and 604 which were not the subject of a claim for public interest immunity is not only not raised in the grounds of the application or the draft notice of appeal, but is also misconceived. It is plain from the context of the primary judge’s reasons at [44]-[45] that when his Honour said “I have not seen the documents, and have based my assessment simply on the description given to them by Dr Watt” he meant the documents the subject of the claims. No other reading of the sentence on which the applicant relied is reasonably open once the context is considered. Even if this be incorrect, for the reasons given, nothing in the parts of documents 603 and 604 could lead to a conclusion contrary to that which the primary judge reached at [45] that the documents appeared to be of marginal relevance only to paragraphs 34A, 36 and 37 of the further amended statement of claim.

53    Sixth, the complaint, again not raised in the grounds of the application or the draft notice of appeal, that the primary judge erred in considering relevance by reference only to paragraphs 34A, 36 and 37 of the further amended statement of claim is also without substance. The applicant appears to have overlooked the terms of the order for discovery made on 31 May 2011. Apart from the intergovernmental agreements, amendments to those agreements, and documents relating to compliance with those agreements by the State of New South Wales (order 1.2) and correspondence between the Commonwealth and the State of New South Wales, the consent order made on 31 May 2011 required discovery only of documents relating to paragraphs 34A, 36 and 37 of the further amended statement of claim (order 1.1).

54    The applicant’s ground relating to the failure to cross-examine Dr Watt is also without foundation. The fact is that Dr Watt’s evidence was admitted without objection and no application was made to cross-examine on any issue. The primary judge was not critical of the applicant for the decision not to cross-examine but simply noted at [45] and [46] that the consequence of this decision was that Dr Watt’s description of the documents had been accepted in that sense and had to be taken at face value. The applicant’s reliance on Young v Quin as indicating some error by the primary judge in this regard is misconceived. Young v Quin does not preclude the possibility of cross-examination of a deponent such as Dr Watt in an appropriate case. The applicant’s proposition that such an application would have been futile if made is mere speculation. No application was made and thus the applicant was not called upon, as would have been the case, to explain why cross-examination on particular issues should be permitted in the interests of justice. Not having applied to cross-examine the applicant cannot complain that the primary judge took the apparently cogent evidence of Dr Watt at face value.

55    The applicant’s proposition that Dr Watt’s evidence was unsatisfactory because such evidence should have or must be given by a Minister is inconsistent with authority in which evidence from persons in positions similar to that of Dr Watt has been accepted as providing a proper foundation for the claim including Northern Land Council and State of New South Wales v Ryan, to name but two of many cases.

56    The applicant’s complaint about the primary judge’s approach to the currency of the topics to which the documents relate at [42] of his reasons for judgment is also without substance. Again, there is no ground in the application for leave or draft notice of appeal to this effect. The applicant’s case in this regard amounted to nothing more than assertions unsupported by any evidentiary foundation that it was somehow obvious from the date and nature of the classes that the primary judge’s conclusion at [42] was wrong or too general and otherwise unsatisfactory. As the Commonwealth noted, the applicant did not adduce any evidence that suggested the topics were no longer current and controversial. Dr Watt gave evidence that was entitled to due weight to the effect that the topics to which the documents related were current and controversial. Despite the applicant’s apparent objection in submissions to the primary judge’s characterisation of that evidence as cogent, this characterisation was appropriate and the evidence persuasive on its face. Dr Watt in fact said that the damage to the public interest from the disclosure of these documents would be “particularly severe” given the apparent subject matter of Cabinet decisions and deliberations recorded or revealed by the documents, which concern matters that “continue to remain at the forefront of Australian policy development and political debate and Australia’s standing in the international community”.

57    Accordingly, the primary judge made no error in reaching the conclusion he did at [42]. The primary judge’s dealing with this matter was not “perfunctory” if, by that, the applicant meant insufficient or inappropriate. The point was given the treatment it deserved by the primary judge having regard to the state of the evidence. Contrary to the applicant’s submissions, State of New South Wales v Public Transport Ticketing Corp [2011] NSWCA 60 does not adopt a different approach. As the reasons for judgment of Allsop P at [48], [52] and [65] make plain the currency or controversy of the subject with which the documents dealt was seen as the touchstone which is consistent with the approach of the primary judge in the present case.

58    The proposition of the applicant that the production of the documents over which the Commonwealth did not claim public interest immunity meant that the topics or subject-matter of the documents had already been published is unfounded. Apart from mere assertion by the applicant nothing suggests that the documents disclosed are the same as those not disclosed. Such an inference would be contrary to the entire thrust of the evidence before the primary judge. And yet again there is no hint of this ground in the application for leave or the draft notice of appeal. The ground is without merit and nothing more than the reason the primary judge gave at [42] was warranted. The other related proposition raised in oral argument only, of apparent inconsistency between producing part of a document and claiming the public interest immunity over some other part, is also unfounded. There is no inconsistency and the mere circumstance of a partial claim does not in any way undermine its strength.

59    To the extent that the applicant again sought in whole or part to resile from the agreement that resolution of the claims in respect of the seven documents would resolve all of the claims as set out in the note to the orders of 20 April 2012 as varied on 8 May 2012, the position remains as set out in those orders as reflected in the primary judge’s reasons at [9]. The applicant cannot now seek to recast the conduct of his case below. Related to this is the applicant’s further attempt to hand up a bundle of documents which the applicant said had been handed up to the primary judge. This bundle was not in evidence before the primary judge. It was handed up on 20 April 2012 at which time the applicant attempted to take the primary judge to one document in the bundle. Following a query by the primary judge and the adjournment of the hearing the applicant made no attempt to tender this bundle and did not refer to it again. And, as with a number of the other contentions, there is no mention of this bundle in the grounds of the application for leave or draft notice of appeal (and nor, presumably, could there be given that the applicant did not seek to tender the bundle before the primary judge).

60    To the extent that the applicant suggested that the claims for public interest immunity were somehow inconsistent with what the High Court said would be relevant material in Spencer v Commonwealth of Australia (2010) 241 CLR 118; [2010] HCA 28 it is apparent that the reference to possible discovery and interrogatories by the High Court concerned the existence of an arrangement between the Commonwealth and the State of New South Wales. Any such arrangement is evidenced, if evidenced, by dealings between the Commonwealth and the State of New South Wales. It is not apparent how the documents the subject of the claim for public interest immunity could have anything but possible marginal relevance, if at all, to any such arrangement. As the Commonwealth submitted, there is no suggestion of bad faith in the further amended statement of claim, nor is there any pleading which would justify the characterisation of “sharp practice” as it appeared in the applicant’s submissions. The submission that the documents are or might be somehow relevant to the genesis of the alleged informal arrangement is speculation and is not supported by the means by which such an arrangement may come into existence. As the reasoning in In re British Slag Ltd [1963] 1 WLR 727 at 747, on which the applicant relied, makes clear the essence of such an informal arrangement involves the communication of some form of representation between parties (in this case, presumably the Commonwealth and the State of New South Wales) and action induced thereby.

61    The applicant’s complaint that the seven documents did not include any example within category 1 is incorrect. The applicant tried to make the same point on 20 April 2012 but accepted that document 721 was sufficient because it related to categories 1, 2 and 3. Again, the complaint is not reflected in the grounds of the application for leave or draft notice of appeal.

62    For these reasons we can see no error in any aspect of the primary judge’s reasoning. Not only is the primary judge’s decision not attended by sufficient doubt to warrant the grant of leave (to the contrary, we are satisfied the primary judge’s decision was right as a result of which the grant of leave would be futile), in our view it cannot be said that there is a proper basis for concluding that even if the primary judge’s decision were wrong, there would be substantial injustice to the applicant. The reason for this is that apart from mere repeated assertion by the applicant without any evidentiary foundation, there is no basis upon which it could be concluded that these documents are of anything other than at best possible marginal relevance to the applicant’s case.

63    It follows that the application for leave to appeal should be dismissed and the applicant ordered to pay the respondent’s costs of the application as agreed or taxed. As, however, the Commonwealth noted that it wished to seek indemnity costs about two matters (the bundle of documents referred to above and a notice to produce the applicant served requiring production of the documents the subject of the public interest immunity claims) we propose to make orders enabling such an application to be made and resolved.

Associate:

Dated:    26 November 2012