FEDERAL COURT OF AUSTRALIA

 

AWB Limited v Honourable Terence Rhoderic Hudson Cole (No 2)

[2006] FCA 913

PRACTICE AND PROCEDURE – whether separate questions should be heard and determined under O 29 r 2 of the Federal Court Rules – relevant legal principles – whether just and convenient to order trial of separate questions – no order under O 29 made

Royal Commissions Act 1902 (Cth)

Royal Commissions Amendment Act 2006 (Cth)

Judiciary Act 1903 (Cth) 

Administrative Decisions (Judicial Review) Act 1977(Cth)

AWB Limited v Cole [2006] FCA 571 referred to

Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 applied

Tepko Pty Ltd v Water Board (2001) 206 CLR 1 cited

Reading Australia Pty Ltd v Australian Mutual Provident Society (1999) 217 ALR 495 considered

Direct Factory Outlets Homebush Pty Ltd v Property Council of Australia [2005] FCA 1002 cited

Souflett Beheer v AWB Limited [2004] FCA 518 cited

Kockums AB v Commonwealth [2002] FCAFC 138 cited

SmithKline Beecham (Aust) Pty Ltd v Chipman [2002] FCA 674 cited

SPI Spirits (Cyprus) Ltd v Diageo Australia Ltd [2006] FCA 14 cited

Save the Ridge Inc v Commonwealth (2005) 147 FCR 97 cited

Rainsford v Victoria (2005) 144 FCR 279 discussed

Director of Fisheries (NT) v Arnhem Land Aboriginal Land Trust (2001) 109 FCR 488 cited

Tallglen Pty Ltd v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130 discussed

Jacobson v Ross [1995] 1 VR 337 considered

CBS Productions Pty Ltd v O’Neill [1985] 1 NSWLR 601 cited

Rocklea Spinning Mills v Anti-Dumping Authority (1995) 56 FCR 406 cited

Novartis Corp Protection Australasia Pty Ltd v Orica Australia Pty Ltd [2001] FCA 1013 cited

Salmar Holdings Pty Ltd v Hornsby Shire Council [1971] 1 NSWLR 192 considered

Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 considered

Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 cited

Regie Nationale Renault v Zhang (2002) 210 CLR 491 cited

Oceanic Sun Line Shipping Company Inc v Fay (1988) 165 CLR 197 cited

Humane Society International Inc v Kyodo Senpaku Caisha Ltd [2006] FCAFC 116 cited

Pyx Granite Co Ltd v Ministry of Housing and Local Government [1960] AC 260 cited

Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 cited

Oil Basins Ltd v Commonwealth (1993) 178 CLR 643 cited

McGowan v Migration Agents Registration Authority (2003) 129 FCR 118 discussed

Edelsten v Minister of Health (1994) 58 FCR 419 discussed

Swan Portland Cement Ltd v Comptroller-General of Customs (1989) 25 FCR 523 cited

Bragg v Secretary of the Department of Employment, Education and Training (1995) 59 FCR 31 cited

Yarmirr v Australian Telecommunications Corporation (1990) 96 ALR 739 cited

Du Pont (Australia) Ltd v Comptroller-General of Customs (1993) 30 ALD 829 cited

Saitta Pty Ltd v Commonwealth (2000) 106 FCR 1 cited

Re Kamha v Australian Prudential Regulation Authority (2005) 85 ALD 346 discussed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AWB LIMITED (ACN 081 890 459) v THE HONOURABLE TERENCE RHODERIC HUDSON COLE AO RFD QC and COMMONWEALTH OF AUSTRALIA

VID 594 of 2006

 

YOUNG J

18 JULY 2006

MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 594 OF 2006

 

BETWEEN:	AWB LIMITED (ACN 081 890 459) APPLICANT
AND:	THE HONOURABLE TERENCE RHODERIC HUDSON COLE AO RFD QC FIRST RESPONDENT   COMMONWEALTH OF AUSTRALIA SECOND RESPONDENT
JUDGE:	YOUNG J
DATE OF ORDER:	18 JULY 2006
WHERE MADE:	MELBOURNE

 

UPON THE APPLICANT BY ITS COUNSEL UNDERTAKING TO THE COURT:

 

(a)        to submit to such order (if any) as the Court may consider to be just for the payment of any compensation, to be assessed by the Court or as it may direct, to any person, whether or not a party, adversely affected by the operation of this order or any continuation (with or without variation) thereof; and

(b)        to pay the compensation referred to in (a) to the person there referred to.

 

THE COURT ORDERS THAT:

 

1.             The Second Respondent’s notice of motion dated 26 June 2006 be dismissed.

2.             The Second Respondent pay the Applicant’s costs of the notice of motion dated 26 June 2006.

3.             The First Respondent be restrained pending the hearing and determination of the proceeding, or further order of the Court, from issuing any further notice under s 2(3A) or any notice under s 6AA(3) of the Royal Commissions Act 1902 (Cth) (as amended by the Royal Commissions Amendment Act 2006 (Cth)) to the Applicant, its officers, employees or former officers or employees to produce documents other than notices that expressly do not require production of documents for which the Applicant claims legal professional privilege.

4.             The costs of the Applicant’s notice of motion dated 19 June 2006 be reserved.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 594 OF 2006

 

BETWEEN:	AWB LIMITED (ACN 081 890 459) APPLICANT
AND:	THE HONOURABLE TERENCE RHODERIC HUDSON COLE AO RFD QC FIRST RESPONDENT   COMMONWEALTH OF AUSTRALIA SECOND RESPONDENT

 

JUDGE:	YOUNG J
DATE:	18 JULY 2006
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1                     In AWB Limited v Cole [2006] FCA 571 (‘AWB v Cole’), I determined a claim for legal professional privilege over a document that AWB Limited (‘AWB’) inadvertently produced to the Commission of Inquiry (‘the Commission’) that is being conducted by the Honourable Terence Rhoderic Hudson Cole AO RFD QC (‘the Commissioner’).  The present proceeding, which was instituted by AWB on 30 May 2006, relates to claims for legal professional privilege over a large number of documents.

2                     I have two notices of motion before me.  Under the first motion, AWB seeks the continuation of an interim injunction (which Kenny J granted on 20 June 2006) until the hearing and determination of the proceeding or further order of the Court.  By the second notice of motion, the Commonwealth seeks to have certain preliminary questions determined pursuant to O 29 r 2 of the Federal Court Rules prior to any trial of the issues of legal professional privilege that are raised by the proceeding.

3                     The Commonwealth has informed the Court that it will consent to the continuation of the injunction pending the final determination of this proceeding if it is unsuccessful on its notice of motion.  The Commonwealth also said that it would consent to the continuation of the injunction pending the determination of its notice of motion.  The Commissioner has indicated that he will abide any order of the Court, save as to costs.  The Commonwealth therefore submitted that there is no present controversy as to the continuation of the injunction until the determination of this proceeding.

4                     In these circumstances, the argument was confined to the Commonwealth’s notice of motion.

5                     Both the Commonwealth and AWB came prepared to argue both the question whether the Court should exercise its discretion under O 29 r 2 to order a trial of the separate questions propounded by the Commonwealth, and the issue of how those questions should be finally determined.  However, after hearing submissions from AWB and the Commonwealth, I directed that argument should be confined in the first instance to the question whether the Court should exercise its discretion under O 29 r 2 to order a separate trial of the questions proposed by the Commonwealth.  These reasons for decision are directed to that matter only.

background

6                     In the course of the Inquiry, the Commissioner has issued numerous notices to produce documents to AWB pursuant to s 2(3A) of the Royal Commissions Act 1902 (Cth) (‘RCA’).  Between 23 November 2005 and 20 March 2006, 12 notices to produce documents were directed to AWB.  In addition, various notices to produce documents were directed to employees of AWB in or about January 2006.  From early 2006, AWB has maintained that numerous documents falling within the scope of these notices are the subject of legal professional privilege.

7                     In this proceeding, AWB seeks a declaration that a large number of documents are protected by legal professional privilege and are not required to be produced to the Commission pursuant to any of the notices that have been issued.  Pursuant to directions made by the Court, AWB has filed a consolidated list identifying the documents over which privilege is claimed (‘the documents’).

8                     On 15 June 2006, the RCA was amended by the Royal Commissions Amendment Act 2006 (Cth) (‘the Amending Act’).  The amendments confer a number of new powers on commissioners appointed under the RCA.

9                     Most significantly, s 6AA(3) empowers a commissioner to serve a written notice requiring a person to produce a document for inspection by a member of the commission (or a person authorised by a member of the commission) for the purpose of the commissioner deciding whether or not to accept or reject a claim of legal professional privilege.  Subsections 6AA(2), (4) and (5) confer power on a commissioner to accept or reject a claim of legal professional privilege.

10                  By letter dated 15 June 2006, the solicitor assisting the Commission advised AWB’s solicitors that the Commissioner intended to exercise the powers conferred upon him by the Amending Act to require the production of documents over which AWB claimed legal professional privilege, and in respect of which AWB was seeking declarations from this Court that the documents were privileged.  The letter stated, inter alia:

‘In exercise of the power conferred upon the Inquiry by the Parliament, the Inquiry intends to serve on Tuesday 20 June 2006 a new notice pursuant to section 2(3A) of the Royal Commissions Act 1902, as amended, requiring production of documents as described in the notice.  It will exclude documents which have been produced to the Inquiry in whole.  Those not produced to the Inquiry to date, or produced in part with portions blanked out as being the subject of claims for legal professional privilege, will be within the purview of the notice.  A draft of the notice intended to be issued is attached.  It will be made returnable by 12 noon on Thursday 22 June 2006.  When that notice is served the Inquiry will inform you that further compliance with existing notices is not required.  That will ensure that AWB Limited is subject to obligations only in respect of one notice.

AWB has, to date, declined to produce to the Inquiry documents for inspection by the Commissioner in order that he may decide whether to accept or reject the claim for privilege.  This new notice requires production of those documents.  In respect of those for which AWB wishes to maintain its claim for legal professional privilege, it is the Inquiry’s intention to issue a notice pursuant to section 6AA(3) requiring that those documents be produced for inspection for the purpose of the Commissioner deciding whether to accept or reject the claim for privilege.  I am advised that the government proposes to recommend the making of regulations prescribing the manner of service of the notice contemplated by section 6AA(3) to the Governor-General-in-Council on 22 June 2006.  If the regulations are made on that date, such a notice will be served on AWB Limited on 23 June 2006.’

11                  By notice of motion dated 19 June 2006, AWB applied to the Court for an interlocutory injunction restraining the Commissioner from:

‘(a)      making a decision under s 6AA of the Royal Commissions Act 1902 (Cth) (as amended by the Royal Commissions Act 2006 (Cth)) whether to accept or reject a claim for legal professional privilege in relation to all or any of the documents for which a claim for legal professional privilege is made by the Applicant in this proceeding (“the Privileged Documents”);

(b)       calling for, inspecting, using or publishing any of the Privileged Documents.’

12                  The application for an interlocutory injunction came on for hearing before Kenny J on 20 June 2006.  In the result, Kenny J adjourned the application to 17 July 2006, and made an interim injunctive order in the following terms:

‘The First Respondent is restrained pending the hearing and determination of the Applicant’s Notice of Motion dated 19 June 2006 or further order of the Court from issuing any further notice under s.2(3A) or any notice under s.6AA(3) of the Royal Commissions Act 1902 (Cth) (as amended by the Royal Commissions Amendments Act 2006 (Cth)) to the Applicant, its officers, employees or former officers or employees to produce documents other than notices that expressly do not require production of documents for which the Applicant claims legal professional privilege.’

13                  Kenny J also granted leave to AWB to amend its application so as to claim, inter alia, declarations that:

(a)           the enactment of the Amending Act is ultra vires the power of the Parliament of the Commonwealth of Australia and hence invalid;

(b)          alternatively to paragraph (a), s 6AA of the RCA should be read down so as not to authorise the Commissioner to call for and inspect any of the documents over which AWB has claimed legal professional privilege in this proceeding; and

(c)           the threatened exercise by the Commissioner of his powers under the Amending Act in respect of the documents over which AWB has claimed legal professional privilege in this proceeding would constitute a contempt of this Court.

14                  On 26 June 2006, the Commonwealth filed a notice of motion seeking orders as follows:

‘1.     That pursuant to Order 29 Rule 2 of the Federal Court Rules, the following questions are to be determined prior to any trial of the issues raised by paragraph 1 of the prayer for relief in the Amended Application:

1.1     whether the Court, in the exercise of its discretion, ought to refuse to grant the declaration sought in paragraph 1 of the prayer for relief in the Amended Application;

1.2     whether the Applicant is entitled to the declarations sought in paragraphs 2, 3 and 4 of the prayer for relief in the Amended Application.

2.       That the question set out in paragraph 1.1 be answered ‘yes’.

3.       That the question set out in paragraph 1.2 be answered ‘no’.

4.       That the proceedings be dismissed under Order 29 Rule 4 of the Federal Court Rules.

5.       That the Applicant pay the Second Respondent’s costs.

6.       Such further or other orders as this Honourable Court sees fit.’

The notice of motion must be read in conjunction with AWB’s amended application.  Paragraph 1 of AWB’s prayer for relief claims a declaration that specified documents are protected from production to the Commissioner by legal professional privilege.  Paragraphs 2 and 3 of the prayer for relief seek declarations in relation to the validity of the Amending Act and construction of the RCA (as amended), and a declaration that the exercise of powers by the Commissioner under the RCA (as amended) in respect of the same documents as those which are the subject of this proceeding would constitute a contempt of Court.  Paragraph 4 seeks an order permanently restraining the Commissioner from exercising its powers in that way.

jurisdiction

15                  This proceeding was instituted before the Amending Act came into force on 15 June 2006.  The essential claim in the proceeding is that the documents are the subject of legal professional privilege and consequently they are protected from production to the Commissioner.  This claim falls squarely within the Court’s jurisdiction under s 39B(1) and (1A)(c) of the Judiciary Act 1903 (Cth). 

16                  The Commonwealth does not suggest that the Amending Act deprives this Court of its jurisdiction to hear and determine AWB’s claims for declaratory and injunctive relief.  On the contrary, the Commonwealth argues that the Court continues to have jurisdiction to determine whether the documents attract legal professional privilege, but it should as a matter of discretion decline to make a declaration that the documents are the subject of legal professional privilege.  The Commonwealth also argues that this discretion should be exercised by the Court at a preliminary stage and without embarking upon any examination of the merits of the claim to legal professional privilege.

17                  The documents which the Commissioner wishes to inspect under s 6AA(3) of the RCA, with a view to making his own determination under ss 6AA (2), (4) and (5) as to whether or not they are the subject of legal professional privilege, are the very same documents as those which are the subject of this proceeding.  AWB wishes to have, and it says that it is entitled to have, its privilege claims determined by this Court, independently of the Commissioner, to establish what its legal rights and obligations are in relation to the production of the documents to the Commissioner. 

the construction of the amending act

18                  The key provisions of the Amending Act are ss 6AA and 6AB which provide:

‘6AA  Legal professional privilege

(1)     It is not a reasonable excuse for the purposes of subsection 3(2B) or (5) for a person to refuse or fail to produce a document that the document is subject to legal professional privilege, unless:

(a)   a court has found the document (or the relevant part of the document) to be subject to legal professional privilege; or

(b)   a claim that the document (or the relevant part of the document) is subject to legal professional privilege has been made, to the member of the Commission who required production of the document:

(i)    within the time that the member of the Commission, in requiring production of the document, allowed for its production; or

(ii)   within such further time as the member of the Commission allows for production of the document.

(2)     If such a claim is made, the member of the Commission who required production of the document may decide whether to accept or reject the claim.

(3)     The member of the Commission may, by written notice served (as prescribed) on a person, require the person to produce the document for inspection (by the member of the Commission or a person authorised by the member of the Commission) for the purpose of deciding whether to accept or reject the claim.

(4)     If the document has been produced for inspection and the member of the Commission decides to accept the claim, the Commission must:

(a)   return the document to the person; and

(b)   disregard, for the purposes of any report or decision that the Commission makes:

(i)    if the claim is accepted in relation to the whole document—the whole document; or

(ii)   if the claim is accepted in relation to a part of the document—that part of the document.

(5)     If the document has been produced for inspection and the member of the Commission decides to reject the claim, the Commission may use the document for the purposes of the inquiry.

(6)     Without limiting subsections (3) and (5), the powers of a member of a Commission, or a Commission, under section 2 apply, by force of this subsection, in relation to deciding whether to accept or reject the claim.

 

6AB   Offences relating to claims for legal professional privilege

(1)     A person commits an offence if:

(a)     the person had refused or failed to produce a document as required by a member of a Commission under section 2; and

(b)     the member of the Commission has decided under subsection 6AA(2) to reject a claim that the document (or the relevant part of the document) is subject to legal professional privilege; and

(c)     the person refuses or fails to produce the document as the member of the Commission requires, after that decision, under section 2.

Penalty:  $1,000 or imprisonment for 6 months.

(2)     A person commits an offence if the person refuses or fails to produce a document that the person was required under subsection 6AA(3) to produce for inspection.

Penalty:  $1,000 or imprisonment for 6 months.

(3)     Subsections (1) and (2) are offences of strict liability.

Note:         For strict liability, see section 6.1 of the Criminal Code.

(4)     Subsections (1) and (2) do not apply if the person has a reasonable excuse.

(5)     It is not a reasonable excuse for the purposes of subsection (4) for a person to refuse or fail to produce a document that the document is subject to legal professional privilege, unless a court has found the document to be subject to legal professional privilege.

(6)     It is a defence to a prosecution for an offence against this section constituted by a refusal or failure to produce a document if the document was not relevant to the matters into which the Commission was inquiring.

Note:   A defendant bears an evidential burden in relation to the matters in subsections (4) and (6) (see subsection 13.3(3) of the Criminal Code).’

19                  The Amending Act also added a new subs (5) to s 2 of the RCA.  It provides:

‘(5)    For the purposes of sections 3, 6AA and 6AB, the power of a member of a Commission under this section to require or summon a person to produce a document includes the power to require or summon the person to produce a document that is subject to legal professional privilege.

Note:      Under section 6AA, legal professional privilege might still be a reasonable excuse for refusing or failing to produce the document.’

20                  The Commonwealth submitted that the Amending Act does not exclude the jurisdiction of the Federal Court; nor does it stipulate that the Commissioner is to be the only first instance decision-maker in respect of legal professional privilege.  Rather, the Commonwealth submitted that, on its proper construction, s 6AA imposes what might loosely be called an ‘onus’ upon the person who asserts the privilege either to make the claim before the Commissioner within the time allowed for production of the document, or alternatively to take steps to obtain a decision form a Court that the document is subject to legal professional privilege. 

21                  Sections 6AA(1)(a) and 6AB(5) use the expression ‘a court has found’.  The Commonwealth submitted that this expression can be read so that it applies where a court subsequently finds that a document is privileged.  It argued that the plainly preferable construction of s 6AA(1)(a) is that it provides that it is a reasonable excuse to refuse or fail to produce a document where the court subsequently determines that it is privileged. 

22                  In its written submissions, the Commonwealth said that this construction is supported by the following considerations:

(a)     When a court declares that a document is subject to legal professional privilege, it does not create new rights, but declares exiting rights as to the relevant time.  In that context, it makes little sense for the Parliament to enact a law which fixes upon the date on which a court delivers judgment upholding a claim, rather than upon the substantive rights declared by the decision.

(b)     It is consistent with a Parliamentary intention to ensure that the immunity against production of communications subject to legal professional privilege is preserved and not abrogated.

(c)     There is nothing in the explanatory memorandum or second reading speech which suggests any legislative intention to abrogate legal professional privilege. 

(d)     It is consistent with the fact that s 6AB(4) and (5) provide that the existence of legal professional privilege is a ‘reasonable excuse’ for the purposes of establishing a defence to a prosecution for refusing or failing to produce a document. 

(e)     It receives further support from the legislative note to s 2(5).

23                  Thus, the Commonwealth submitted that the effect of the Amending Act is that there are now two mechanisms by which legal professional privilege can result in a document being excused from production: one is a finding by a Court that the document is subject to the privilege; the other is the statutory excuse that might arise from a decision of the Commissioner.  The person claiming legal professional privilege can elect between them.

24                  AWB advanced the same primary construction of s 6AA.  Additionally, AWB submitted that any other construction of the Amending Act would lead towards constitutional invalidity.

25                  For the purposes of the notice of motion before me, I do not need to express any firm or definite view about the proper construction of s 6AA.  I am satisfied that the construction advanced by AWB and the Commonwealth is strongly arguable.

relevant legal principles

26                  Order 29 r 2(a) of the Federal Court Rules provides that the Court may make orders for the decision of any question separately from any other question, whether before at or after any trial or further trial in the proceedings. 

27                  The legal principles that govern the exercise of the Court’s discretion under this rule have been discussed in a number of recent cases, and are well established: see Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 (‘Bass’) at 355-359; Tepko Pty Ltd v Water Board (2001) 206 CLR 1 (‘Tepko’) at 55; Reading Australia Pty Ltd v Australian Mutual Provident Society (1999) 217 ALR 495 (‘Reading’) at 497-500 [7]-[11]; Direct Factory Outlets Homebush Pty Ltd v Property Council of Australia [2005] FCA 1002 (‘Direct Factory Outlets’) at [2]-[4]; Souflett Beheer v AWB Limited [2004] FCA 518 (‘Souflett Beheer’) at [19]-[20]; Kockums AB v Commonwealth [2002] FCAFC 138 at [38]-[41]; SmithKline Beecham (Aust) Pty Ltd v Chipman [2002] FCA 674 (‘SmithKline’) at [35]-[39]; SPI Spirits (Cyprus) Ltd v Diageo Australia Ltd [2006] FCA 14 (‘Diageo’) at [22]-[27]; Save the Ridge Inc v Commonwealth (2005) 147 FCR 97 (‘Save the Ridge’) at 103-104 [15]-[17]; Rainsford v Victoria (2005) 144 FCR 279 (‘Rainsford’) at 291-294 36-44; Director of Fisheries (NT) v Arnhem Land Aboriginal Land Trust (2001) 109 FCR 488 (‘Director of Fisheries’) at 521 [139] and 526-527 [163]; and Tallglen Pty Ltd v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130 (‘Tallglen’) at 141-142.

28                  Rather than burden these reasons for decision with lengthy extracts from the authorities, I will summarise the principles which are relevant to the disposition of this application. 

29                  The starting point must be that, as a general rule, all issues of fact and law should be determined at the one time: Reading at 497 [7]; Tallglen at 141-142; and Diageo at [23].

30                  A party seeking the determination of separate questions must satisfy the Court that it is ‘just and convenient’ for the order to be made: Reading at 499-500 [9]-[10].

31                  It would not be appropriate to separate a question if it would not permit or involve a conclusive or final judicial decision that is based on concrete facts, either established or agreed, for the purpose of quelling a controversy between the parties: Bass at 355 [45] and 357 [49]; and Reading at 498 [8].  In Bass, Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ said at 357 [49]:

‘As the answers given by the Full Court and the declaration it made were not based on facts, found or agreed, they were purely hypothetical.  At best, the answers do no more than declare that the law dictates a particular result when certain facts in the material or pleadings are established.  What those facts are is not stated, nor can they be identified with any precision.  They may be all or some only of the facts.  What facts are determinative of the legal issue involved in the question asked is left open. Such a result cannot assist the efficient administration of justice.  It does not finally resolve the dispute or quell the controversy.  Nor does it constitute a step that will in the course of the proceedings necessarily dictate the result of those proceedings.  Since the relevant facts are not identified and the existence of some of them is apparently in dispute, the answers given by the Full Court may be of no use at all to the parties and may even mislead them as to their rights.  Courts have traditionally declined to state - let alone answer - preliminary questions when the answers will neither determine the rights of the parties nor necessarily lead to the final determination of their rights.  The efficient administration of the business of courts is incompatible with answering hypothetical questions which frequently require considerable time and cause considerable expense to the parties, expense which may eventually be seen to be unnecessarily incurred.’

32                  The separate question procedure poses special problems where the preliminary question is one of mixed fact and law: Bass at 358 [53].  In that situation, it is essential that there be precision both in formulating the question and specifying the facts upon which it is to be decided for the reasons given by Brooking J in Jacobson v Ross [1995] 1 VR 337 at 341. 

33                  In Reading at 498 [8], Branson J said that all of the facts that are on any fairly arguable view relevant to the determination of the separate question must be ascertainable, either as facts assumed to be correct for the purposes of the preliminary determination, or as agreed facts or as facts to be judicially determined.  Where the separate question involves the grant or refusal of declaratory relief, the Court must be placed in a position where it can consider all relevant matters before it exercises its discretion to grant or refuse the relief: Reading at 500 [11].

34                  In Bass at 359 [56], the High Court said that it would be contrary to the judicial process and no part of the judicial power to effect a determination of rights by applying the law to facts which are neither agreed nor determined by reference to the evidence in the case.  The Full Federal Court applied this principle in Rainsford at 291 [36] and Director of Fisheries at 526 [163].  In Rainsford at 291 [36], Kenny J said that, in order for a court exercising federal jurisdiction to utilise the separate questions procedure, either the parties must agree on the relevant facts or the court must determine the facts before deciding the question.

35                  The cases indicate that great caution needs to be exercised in formulating a separate question for determination on the basis of assumed facts.  The assumed facts may prove to be incomplete or insufficiently precise: Director of Fisheries at 521 [139] and 526 [163].  The parties may also have different views concerning the effect or duration of the assumptions; for instance, they may consider that they can depart from the assumptions and re-agitate the facts in another part of the case: see SmithKline at [23], [27] and [89].

36                  In CBS Productions Pty Ltd v O’Neill [1985] 1 NSWLR 601 at 606, Kirby P said that a matter is ‘ripe’ for separate and preliminary determination where it is a central issue in contention between the parties, and its resolution will either obviate the necessity of litigation altogether or substantially narrow the field of controversy.  This proposition assumes, of course, that the factual foundation for the determination of the issue has been resolved: see Rocklea Spinning Mills v Anti-Dumping Authority (1995) 56 FCR 406; and SmithKline at [35]-[39].  In Tallglen, Giles CJ in the Commercial Division said at 141-142 that in the ordinary course all issues in proceedings should be decided at the one time, but the separate decision of a question may be appropriate where, for example, the decision of a question is critical to the outcome of the proceedings and (at least if decided in one way) will bring the proceedings to an end.  His Honour added that, in particular circumstances, the separate decision of a question may be appropriate even if it will not bring the proceedings to an end, such as where there is a strong prospect that the parties will agree upon the result when the core of the dispute is decided or where the decision will obviate unnecessary and expensive hearings of other questions. 

37                  On the other hand, an issue will not generally speaking be ‘ripe’ for separate determination if it is simply one of two or more alternative ways in which an applicant frames its case, and its determination would leave other significant issues unresolved: Reading at 498 [8]; and Souflett Beheer at [20].

38                  The courts have repeatedly warned of the dangers that attend the trial of separate or preliminary questions.  In Tepko at 55 [168]-[170], Kirby and Callinan JJ said that the attraction of trials of separate questions are often more chimerical than real; savings in time and expense can prove illusory and the process can generate other problems such as interlocutory appeals and consequent delays.  Their Honours concluded that single issue trials should only be embarked upon when their utility, economy and fairness to the parties are beyond question: at 55 [170].  In Direct Factory Outlets, Sackville J said, quite correctly, that the dangers of separate trials are well illustrated by the numerous cases in which the process has miscarried.  In Save the Ridge at 103 [15], Black CJ and Moore J said that the O 29 procedure is one that should be adopted with caution as it can be fraught with difficulties.  In Tallglen at 141-142, Giles CJ said that the ordering of separate trials must be carefully controlled lest fragmentation of the proceedings (particularly when the exercise of rights of appeal is borne in mind) brings delay, expense and hardship greater than that which the making of the order was intended to avoid.  Similar statements can be found in this Court: see eg Novartis Corp Protection Australasia Pty Ltd v Orica Australia Pty Ltd [2001] FCA 1013 at [7] per Stone J.

39                  In Reading, Branson J at 499 [8] listed factors that have been taken into account by the courts in making or refusing orders for the trial of a separate question.  The relevant factors include the following:

(i)             whether the separate questions will contribute to the saving of time and cost by substantially narrowing the issues for trial or even lead to the disposal of the action;

(ii)           whether they will contribute to the settlement of the litigation;

(iii)          whether they will give rise to significant contested factual issues both at the time of the hearing of the preliminary question and at the time of trial;

(iv)         whether there will be any significant overlap between the evidence adduced on the hearing of the separate question and at trial; and

(v)           whether the questions will prolong rather than shorten the litigation.

40                  In Rainsford, Kenny J pointed out at 292 [39] that there is a clear difference between the separate questions procedure under O 29 r 2 and an application under O 20 r 2 for the summary dismissal of a proceeding or a cause of action: in the latter case, the issue would be whether the claim is so obviously untenable that it cannot possibly succeed: see General Steel Industries Ltd v Commissioner for Railways (1964) 112 CLR 125; and Australian Ocean Line Pty Ltd v West Australian Newspapers Limited (1983) 47 ALR 497 at 499 per Toohey J.

there should be no trial of the proposed separate questions

41                  In my opinion, the application of the foregoing legal principles leads inexorably to the conclusion that the Commonwealth’s application under O 29 r 2 must be dismissed.  I have concluded that it would not be just and convenient to make any of the orders sought by the Commonwealth under O 29 r 2.  Indeed, I am satisfied that it would be inappropriate to do so.

42                  My reasons for so concluding are set forth below.  They address in turn matters which are discretely relevant to questions 1.1 and then 1.2, before canvassing matters which are relevant to both questions.

question 1.1: should the court refuse declaratory relief to awb ?

43                  Paragraph 1.1 of the Commonwealth’s notice of motion poses the question whether the Court should, at a preliminary trial, exercise a discretion to refuse AWB’s claim for a declaration that the documents are the subject of legal professional privilege, that is to say without embarking on any consideration of the merits of AWB’s claims to legal professional privilege. 

44                  It is necessary to consider, first of all, the nature of the discretionary decision that would be sought from the Court under question 1.1, and the arguments that the Commonwealth and AWB intend to advance if that question were to be set down for separate trial. 

45                  It is a common misconception that a declaration is an equitable remedy.  It is not; it is a statutory remedy that is conferred in terms emphasising that its grant or refusal is within the discretion of the Court: see Tito v Waddell (No 2) [1977] Ch 106 at 259; Mayfair Trading Co Pty Ltd v Dreyer [1958] 101 CLR 428 at 454 per Dixon CJ; and Meagher, Gummow and Lehane, Equity Doctrines and Remedies, 4^th ed, Butterworths, 2002, at [19-159].  The discretion is to be exercised according to the facts and circumstances of the individual case, and the considerations that may be relevant to the exercise of the discretion are ‘so numerous that it is not possible to enumerate them: see Salmar Holdings Pty Ltd v Hornsby Shire Council [1971] 1 NSWLR 192 (‘Salmar’) at 203.

46                  While the refusal of declaratory relief on discretionary grounds will always be heavily dependent on the facts of the particular case, the discretion must be exercised within a framework of relevant legal principle.  The cases afford guidance as to the way in which the discretion is to be exercised.  In this sense, the question whether declaratory relief should be refused as a matter of discretion raises questions of fact and law, albeit heavily weighted towards the former.  The separation of such a question poses special problems for the reasons stated by the High Court in Bass at 358 [53] and by Brooking J in Jacobson at 341.

47                  The basal reason that the Commonwealth advances in support of its argument that declaratory relief should be refused is that there is now an alternative procedure for the determination of AWB’s privilege claims.  In essence, if question 1.1 is set down for separate trial, the Commonwealth proposes to argue that the Commissioner is already well placed to determine the privilege claims under s 6AA of the RCA, and to do so efficiently, whereas it contends that the determination of the privilege claims by this Court is likely to prove more complex, time-consuming and costly, and less efficient.

48                  The Commonwealth relies upon Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 (‘Forster’) and Salmar for its contention that the Court might refuse declaratory relief where the issue is one which the Parliament has entrusted to a specialist body or tribunal, or a more convenient or satisfactory remedy otherwise exists.  In Forster, the Court in fact granted declaratory relief, notwithstanding the existence of pending proceedings before the mining warden in which the same issue would arise for decision.  The leading judgment was delivered by Gibbs J, with whom McTiernan, Stephen and Mason JJ relevantly agreed.  Having held that nothing in the provisions of the Mining Act 1906 (NSW) excluded Jododex’s right to apply to the Court for a determination of its legal rights (at 436-437), Gibbs J turned to the Court’s discretion to make a declaration at 438-439:

‘The question whether the Court should make a declaration which would have the effect of deciding a question in issue in pending proceedings may often be of some difficulty.  It is of course important that the proceedings in the present case were not pending in an ordinary court.  However, there were some obvious reasons why a judge should hesitate before intervening when the matter was about to come before the warden.  It was, of course, possible that the warden would give effect to the contention that Jododex held a valid exploration license and would therefore refuse to grant any authority to enter to the appellant.  The warden might have declined to grant the appellant's applications for some other reason.  Moreover, if it were ultimately held that Jododex's contention ought to fail, the proceedings before the warden would have been delayed and the appellant would have been put to additional cost and inconvenience.  On the other hand, to determine the existence of the right which Jododex sought to establish, it was necessary to ascertain the true meaning and effect of a statutory provision and of an instrument in statutory form.  These were pure questions of construction such as would appropriately be decided in the Supreme Court. They were difficult questions, and apparently rights of considerable value depended on the answers to them. When all these conflicting considerations are weighed, it seems to me that it cannot be said that it was not a proper exercise of judicial discretion to proceed to make a declaration in all the circumstances of the case.’

The fact that Jododex was seeking a declaration to forestall a possible contrary decision by the warden was not regarded as an objection to the grant of declaratory relief: per Gibbs J at 437.

49                  The Commonwealth’s argument is principally founded upon statements made by Walsh J in his dissenting judgment at 427, as follows:

‘In my opinion, when a special tribunal is appointed by a statute to deal with matters arising under its provisions and to determine disputes concerning the granting of rights or privileges which are dependent entirely upon the statute, then as a general rule and in the absence of some special reason for intervention, the special procedures laid down by the statute should be allowed to take their course and should not be displaced by the making of declaratory orders concerning the respective rights of the parties under the statute.  In other words, I think that it will ordinarily be a wise exercise by the Supreme Court of the discretion which it has under s. 10 of the Equity Act to decline to undertake the tasks which have been committed by the Parliament to a specialized tribunal.  Whilst I agree with Gibbs J. that s. 10 ought not to be construed as if it contained words excepting from its operation cases arising under the Act, I think that the procedure set out in the Act itself should be regarded as the normal procedure for dealing with such cases.’

Walsh J acknowledged that grounds for judicial intervention might exist if the decisions of the warden were immune from judicial review.

50                  In Salmar at 202-203, Mason JA said:

‘In the context of this case it is, however, important to note that the courts have regarded the availability of another suitable remedy as a matter which is relevant to the exercise of the discretion.  The significance and weight of this consideration becomes the greater if it appears that questions of the kind sought to be determined ordinarily fall within the jurisdiction of a court or tribunal having a special capacity or experience in dealing with questions of that kind.  It is clearly undesirable that there should be a departure from the ordinary and established course of deciding matters in the absence of a discernible advantage to be derived from that departure.

But it may nevertheless appear, as I think it does in this case, that the question for determination is one of general significance readily susceptible of decision by the Equity Court, and that there is advantage in having the question determined by that Court in preference to awaiting the outcome of a decision in accordance with the established procedure.  In this case, so it seems to me, advantage or utility lies with the making of a declaration.  The question is, as I have remarked, one of general significance of a kind which the Equity Court is frequently called upon to decide.’

51                  In its submissions, AWB did not dispute the basic proposition that the existence of another suitable remedy is a matter which would be relevant to the exercise of the Court’s discretion.  However, AWB disputed that the procedures now available under s 6AA constituted another suitable remedy, and that the Commission can be regarded as, or equated with, a specialist tribunal of a kind described in Forster and Salmar.  AWB also said that a judicial determination of the subsistence of legal professional privilege offered it discernible advantages which it is entitled to pursue.

52                  Question 1.1 is framed as a question that turns on the Court’s discretion.  This is understandable as the Commonwealth accepts that this Court is properly seised of jurisdiction to hear and determine AWB’s privilege claims and that this jurisdiction is not impaired by the Amending Act.  Moreover, the Commonwealth accepted that the Amending Act allows a person in AWB’s position the option of having its privilege claims determined by this Court.  AWB has elected to have its claims determined in this Court and submits that there are legitimate juridical advantages for it to do so. 

53                  AWB submits that the advantages it secures by having its privilege claims determined in this Court include the following:

(a)           legal professional privilege is a substantive legal right that depends on the common law and it is appropriate that the subsistence of privilege be determined by this Court;

(b)          a judicial determination that privilege attaches to the documents will be final and binding;

(c)           the Court is independent and impartial;

(d)          a decision by this Court will be based on admissible evidence and the usual standards of procedural fairness that apply in courts of justice. 

In contrast, AWB submits that its position would not be as fully protected if its privilege claims were to be determined by the Commissioner under s 6AA.  Amongst other things, AWB submits that, unlike the Court, the Commissioner is not independent: he is charged with a duty of investigating and reporting whether AWB committed a breach of any law of the Commonwealth, or of a State or Territory, and whether any criminal or other legal proceedings should be taken against AWB.  The Commissioner is not bound by the rules of evidence.  AWB submits that, if and to the extent that the Commissioner may be bound to accord procedural fairness in making a determination of legal professional privilege under s 6AA, AWB could not expect the same standards of procedural fairness as would apply in this Court.  AWB also submits that it would be disadvantaged by reason of the fact that the Commissioner, as a person investigating possible offences by AWB, has been given and intends to use the power to inspect the documents over which privilege is claimed.  Lastly, AWB argued that there is a risk that the Commissioner’s determination of privilege under s 6AA may only be amenable to judicial review or review for jurisdictional or other legal error, rather than merits review.

54                  AWB also relied upon an analogy with the forum non conveniens line of cases to submit that the determination of question 1.1 at a separate trial is likely to raise issues as to the extent to which the Court is duty bound to exercise the jurisdiction that has been invoked by AWB, whether this Court is ‘a not inappropriate forum’ for the resolution of AWB’s privilege claims, and whether the Court should proceed to exercise its jurisdiction in the absence of any suggestion that AWB has acted vexatiously or oppressively in submitting its privilege claims to this Court: see Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 554, 558-559 and 564-565; Regie Nationale Renault v Zhang (2002) 210 CLR 491 at 502-504; Oceanic Sun Line Shipping Company Inc v Fay (1988) 165 CLR 197 at 239; Humane Society International Inc v Kyodo Senpaku Caisha Ltd [2006] FCAFC 116; and Pyx Granite Co Ltd v Ministry of Housing and Local Government [1960] AC 260 at 286-287.

55                  For present purposes, the question is not how the Court might exercise its discretion when it reaches that point.  Rather, the relevant inquiry is what issues, evidence, facts and circumstances might be relevant to the exercise of a discretion to refuse declaratory relief.  That is why the parties canvassed the substantive arguments that would be put if a separate question in terms of question 1.1 were to be set down for trial.  Those matters, and the extent of any dispute concerning them, bear directly on the question whether question 1.1 can be, and ought to be, tried separately. 

56                  In my opinion, the statements of principle by Branson J in Reading (which are summarised above in paragraph 33) are directly applicable.  So too are the principles stated in Bass and Jacobson concerning mixed questions of fact and law.  I am not satisfied that all of the necessary facts have been ascertained, agreed or proven so as to permit the judicial determination of question 1.1 as a separate question.  Further, I am not satisfied that, on a separate trial of question 1.1, the Court would be placed in a position where it can consider all relevant matters before it exercises its discretion to grant or refuse relief.

57                  There is no agreement between AWB and the Commonwealth as to the facts and circumstances which are relevant to the exercise of the Court’s discretion.  The argument before me made it plain that there would be significant factual disputes if I proceeded with an immediate trial of the separate questions, as requested by the Commonwealth.  And there is a real prospect that significant contested factual issues would arise between the parties if question 1.1 were to be set down for preliminary hearing at a future date.  In Reading at 499 [8], Branson J said that a factor which tells against the making of an order under O 29 r 2 is that the question may give rise to significant contested factual issues both at the time of the hearing of the preliminary question and at the time of trial.

58                  The Commonwealth’s argument that s 6AA offers an alternative remedy that would be more efficient and less time-consuming than court proceedings was advanced largely by way of assertion.  It was disputed by AWB, and the Commonwealth’s contention was not made good by placing relevant facts and evidence before the Court. 

59                  The Commonwealth submitted that, by virtue of the extensive investigations that have already been conducted by the Commissioner, the Commissioner and those assisting him are already familiar with the factual background to AWB’s privilege claims.  This was not disputed by AWB.  At this stage, however, it is unclear whether, and to what extent, the resolution of the privilege claims will turn on the evidence that has already been gathered by the Commission.  AWB has not argued these privilege claims in the Commission or adduced any evidence in support of them before the Commission.  Over the past week, pursuant to directions made by this Court, AWB has filed affidavit evidence in support of its privilege claims in this proceeding.  The Commonwealth has not suggested that any of this evidence has previously been considered by the Commissioner.  In the course of its submissions, the Commonwealth asserted that the Commission is already in possession of much of the evidence necessary to determine AWB’s privilege claims.  But, again, this assertion was not supported by evidence.  On the material before me, I am not in a position to form any view as to the extent to which the evidence already possessed by the Commission will be directly relevant to the determination of AWB’s privilege claims.

60                  The Commonwealth submitted that issues of waiver of privilege are likely to arise, and it filed evidence that was said to illustrate AWB’s waiver of privilege over particular documents or categories of documents.  The Commonwealth also referred to the possibility that the fraud or iniquity exception to legal professional privilege might be raised against AWB.  At the same time, however, the Commonwealth submitted that the nature and scope of the issues that will arise in resolving AWB’s privilege claims is uncertain.  In particular, it submitted that in this proceeding the process of defining the nature and extent of the dispute about privilege, identifying and particularising objections to privilege such as waiver, fraud or illegality, and reducing the class of documents that is in dispute, has not been completed.  This is the position at present, but it will not remain so for very long in this Court. 

61                  In my opinion, the presently incomplete definition of the issues that will have to be determined to resolve AWB’s privilege claims hardly assists the Commonwealth in its application for an order setting down separate questions for trial.  Quite the contrary; in my view, it is inappropriate to order a separate trial of question 1.1 when the Court does not have a full and complete picture of the issues of fact and law that will arise for decision in connection with AWB’s privilege claims. 

62                  So far as the definition of the dispute is concerned, there is no reason to think that the Court’s position is very different from that which would confront the Commissioner under s 6AA.  The Commonwealth acknowledged that the nature and extent of the dispute would need to be defined, and objections such as waiver, illegality and fraud would need to be particularised, at least to some extent, if the Commissioner were to embark on the determination of the privilege claims under s 6AA. 

63                  The Commonwealth expressly conceded that this proceeding is neither hypothetical nor abstract, and raises a genuine controversy that constitutes a ‘matter’ appropriate for judicial determination: Bass at 355-356; Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581-582 and 596; and Oil Basins Ltd v Commonwealth (1993) 178 CLR 643 at 649-650.  Nonetheless, the Commonwealth submitted that, because of the presently incomplete definition of the issues that will have to be resolved in this Court, the proceeding is premature.  In my opinion, this submission does not assist the Commonwealth’s application for separate trials.  In any proceeding, the process of joining and defining the issues of fact and law that will fall the decision takes some time, and will ordinarily follow the institution of proceedings.  The issues in this case are still being defined and there are several reasons why that process is incomplete: the Commonwealth wished to pursue its notice of motion for separate questions at this hearing, which the Court had originally set aside as a hearing at which it was anticipated that there would be a trial of all issues; AWB has filed most but not all its evidence in support of its privilege claims; and the Commissioner has, thus far, taken the stance that it would be inappropriate for him as a submitting respondent to assist the Commonwealth, or the Court, to determine the merits or otherwise of AWB’s claims for privilege.

64                  At root, the prematurity argument seems to amount to a contention that the Commissioner should be given the opportunity to determine AWB’s privilege claims before those claims are considered by the Court.  The submission stands in some tension with the Commonwealth’s acknowledgment that the Court’s jurisdiction has been properly invoked.  It tends to beg the question whether, having regard to all relevant discretionary factors, including any discernible advantages that inhere in this proceeding for AWB, it would be appropriate for the Court to exercise a discretion to decline declaratory relief.

65                  The Commonwealth submitted that another reason why there should be a separate trial of question 1.1 is that, if the Court proceeded to determine the issues of legal professional privilege, its findings may relate to matters which are the subject of investigation by the Commission.  This submission seems to invert the normal relationship between the Court and a process of executive investigation and report.  Sections 6AA and 6AB are drafted on the footing that the Commissioner must respect and abide any finding by the Court as to the subsistence of legal professional privilege.  In my opinion, the possibility that the Court’s decision on legal professional privilege may touch matters which are the subject of investigation by the Commission does not strengthen the Commonwealth’s case for separate questions.

66                  The Commonwealth could not refer me to any case in which the Court has made an order under O 29 r 2 for the separate trial of the question whether declaratory relief should be refused as a matter of discretion, prior to any consideration of the merits of the claim for declaratory relief.  It did, however, refer me to McGowan v Migration Agents Registration Authority (2003) 129 FCR 118 (‘McGowan’) which concerned the dismissal of a judicial review application.

67                  In McGowan, the applicant sought judicial review of a decision by the Migration Agents Registration Authority to suspend her registration as a migration agent until she satisfied certain conditions.  The applicant made an application to the Administrative Appeals Tribunal under s 306 of the Migration Act for a merits review of the Authority’s decision to suspend her registration some days before she instituted proceedings in the Federal Court seeking judicial review of the Authority’s decision.  The application was founded principally on the provisions of the Administrative Decisions (Judicial Review) Act 1977 (‘ADJR Act’), but also relied in the alternative on s 39B(1A)(c) of the Judiciary Act.  The relief sought by the applicant included an order pursuant to s 16(1) of the ADJR Act setting aside or quashing the Authority’s decision, and in the alternative, orders by way of prohibition and injunction pursuant to s 39B.

68                  By notice of motion, the Authority applied for orders dismissing the application on the basis that it disclosed no reasonable cause of action or alternatively on the basis that it should be dismissed pursuant to s 10(2)(b)(ii) of the ADJR Act.  The first ground was not pursued.  Section 10(2)(b)(ii) provides that the Court may refuse an application for judicial review on the ground that adequate provision is made by any law other than the ADJR Act under which the applicant is entitled to seek a review of the relevant decision.  Order 54 r 7 of the Federal Court Rules requires that a party who seeks to have an application for review dismissed on the ground set out in s 10(2)(b)(ii) or in the exercise of the Court’s discretion must apply promptly for such dismissal.  This rule is designed to avoid the necessity for a court to consider the whole of the applicant’s case where, even if otherwise the applicant would succeed, it is clear that no order would be made in favour of the applicant: Edelsten v Minister of Health (1994) 58 FCR 419 at 422.

69                  Branson J held that the same principle should be applied where a claim for judicial review is made under the ADJR Act and alternatively under s 39B.  In such a case, Branson J said at 130 [47] that ‘the power of the Court to dismiss the application summarily where it is clear that no order would be made in favour of the applicant if a hearing were conducted, extends to the alternative claim formulated by reference to s 39B of the Judiciary Act’.  Having regard to the fact that the Migration Act provided that the Authority’s decision was amenable to full merits review before the Tribunal, and the fact that the applicant had already commenced proceedings in the Tribunal, Branson J concluded that a more convenient and satisfactory remedy existed before the Tribunal.  Accordingly, she dismissed the application.

70                  McGowan stands for the proposition that, in the context of judicial review, the court has the power to dismiss a judicial review application summarily where it is clear that the court would decline to grant relief at a final hearing.  It does not assist in resolving the present application under O 29 r 2.  It is not in dispute that this Court has power to refuse declaratory relief in the exercise of its discretion.  The only question is whether, in the circumstances of this case, it is appropriate to order that this question be the subject of a separate preliminary trial.  That question turns on the particular facts and circumstances of this case.

71                  McGowan forms part of a line of cases which recognises that the Court has a discretion to decline to embark on the judicial review of an administrative decision if a full merits review of that decision is available before an independent statutory tribunal, and the tribunal’s decision can then be appealed to, or reviewed by, a court: Edelsten at 423-424; Swan Portland Cement Ltd v Comptroller-General of Customs (1989) 25 FCR 523 at 530; Bragg v Secretary of the Department of Employment, Education and Training (1995) 59 FCR 31 (‘Bragg’) at 33; Yarmirr v Australian Telecommunications Corporation (1990) 96 ALR 739 at 750; Du Pont (Australia) Ltd v Comptroller-General of Customs (1993) 30 ALD 829; Saitta Pty Ltd v Commonwealth (2000) 106 FCR 554 at 575 [104]; and Re Kamha v Australian Prudential Regulation Authority (2005) 146 FCR 24 (‘Re Kamha’) at 35 [41] and 36 [46].  In Re Kamha, Gyles J declined to exercise his discretion at a preliminary stage of the case: at 35 [39].  However, after the evidentiary case had been completed and the applicant had completed its submissions, Gyles J determined that it was appropriate to decline judicial review.  In doing so, his Honour emphasised that a full merits review before the Administrative Appeals Tribunal was the appropriate means of reviewing the decision, and that means was likely to provide a more satisfactory remedy than the Court could provide on judicial review: at 35 [41] and 36 [46].  In Bragg at 33, Davies J said that the alternative method of review referred to in s 10(2)(b)(ii) of the ADJR Act is one involving ‘an independent exercise of powers directly affecting the decision reviewed’.  Courts have taken a range of considerations into account in exercising the discretion to decline judicial review, including matters such as whether the alternative form of review will be conclusive of the dispute, whether it is to be undertaken by a specialist tribunal that operates in a technical field, the inability of the court to provide a review on the merits, and whether any hardship or disadvantage will be caused by the applicant being forced to pursue the alternative remedy.

72                  AWB submitted that, by propounding question 1.1 as a separate question, the Commonwealth is in substance making a summary dismissal application based on discretionary grounds.  In practical terms, the difference between the two forms of application is that a summary judgment application would require the Commonwealth to establish that AWB’s claim for declaratory relief is so untenable that it must be refused on discretionary or other grounds.  I do not think that the comparison with summary judgment forecloses the Commonwealth’s application or taints it as some kind of abuse.  AWB disavowed any intention to argue abuse of process.  The comparison does, however, afford a reminder that it would be an exceptional step to order a separate trial of a discretionary question of the kind posed by question 1.1, prior to any consideration of the merits of the privilege claims, and that the application needs to be approached with due caution.

73                  Question 1.1 is not ‘ripe’ for determination in the sense discussed in the authorities.  The core issue in this case is the subsistence of legal professional privilege.  The Court’s discretion to refuse declaratory relief necessitates all relevant facts and circumstances being placed before the Court.  That has not occurred, and it is unlikely to occur in the absence of a trial of all issues.

question 1.2: CONSTITUTIONAL validity and contempt

74                  By its reference to paragraph 2 of the prayer for relief, the first part of question 1.2 raises the constitutional validity of the Amending Act, including in particular s 6AA. 

75                  It is common ground between the Commonwealth and AWB that questions 1.1 and 1.2 are linked: if any order is made for the separate trial of question 1.1, a similar order would have to be made in relation to question 1.2 because the Commonwealth’s case on the discretionary refusal of relief proceeds on the basis that the Amending Act is wholly valid.  Put another way, there would be no point in separating question 1.1 without also separating and determining the questions of constitutional validity that arise under question 1.2.

76                  On the other hand, if the Commonwealth’s application is refused, and the Court proceeds in the ordinary way to hear and determine AWB’s privilege claims by means of a single trial, it may not be necessary for the Court to determine any of the constitutional questions.  There are reasonable prospects that the only issue requiring judicial determination at a single trial would be the subsistence of legal professional privilege.  The existence of an alternative remedy under s 6AA could still be advanced by the Commonwealth at a single trial as a discretionary reason for refusing to grant declaratory relief in respect of the legal professional privilege claims, although I note the Commonwealth’s submission that the point may have less attraction at that stage because the Court would by then have heard detailed evidence and argument concerning the privilege claims.  The Commonwealth also submitted that it may raise other discretionary arguments at a single trial of all issues, including an argument that declaratory relief would have the undesirable consequence of preventing the Commissioner reconsidering the privileged status of particular documents in the event that new and contrary evidence comes to light.  This submission is troubling because it suggests that the Commonwealth wishes to advance some, but not all, of the relevant discretionary considerations at a preliminary trial.  Be that as it may, a single trial of all issues offers the advantage that the Court might be able to deal with discretionary arguments of this kind on the assumption that the Amending Act is constitutionally valid.  The point is that, if the Commonwealth’s application for separate trials is rejected, the Court would only have to determine the constitutional questions if it needs to do so.  But if the Court were to accede to the Commonwealth’s motion for separate trials, it would be committing itself to the hearing and determination of constitutional questions which might not have to be decided if the litigation were to proceed in the ordinary way. 

77                  I do not think that these observations are affected by the other aspects of question 1.2.  Paragraphs 3 and 4 of the prayer for relief seek, in effect, a declaration that it would be a contempt of Court for the Commissioner to proceed under s 6AA while these proceedings are pending, and a permanent injunction restraining the Commissioner from doing so.  I agree with the Commonwealth’s submission that the question of final relief in this form may not arise at trial.  If the steps which the Commissioner has proposed under s 6AA are restrained by interlocutory injunction pending trial, no question of contempt would arise.  As the Commonwealth put it in its written submissions, ‘the question whether certain acts by the Commissioner would constitute a contempt of Court if undertaken prior to the determination of these proceedings can be relevant only to the interlocutory injunction and is otherwise hypothetical’.  Similarly, there may be no need for the Court to consider the grant of a permanent injunction against the Commissioner, as by that point the Court will have determined the question of legal professional privilege and that determination will be binding on the Commissioner, the Commonwealth and the AWB.  In those circumstances, there would be no outstanding issues of legal professional privilege that would be susceptible to determination by the Commissioner under s 6AA.

78                  In these circumstances, I have concluded that it would not be just and convenient to order a separate trial of the questions posed by question 1.2.  To do so would require the Court to decide questions that may not need to be decided if the case takes its ordinary course and all issues of fact and law are determined at the one time.

79                  Furthermore, the separate determination of the constitutional issues would not bring the litigation to an end.  In fact, whichever way the constitutional questions were determined, the Court would still be seised of, and would be required to determine, the central question of legal professional privilege.  Only question 1.1 offers the prospect of bringing the litigation to an end, and then only if the Court determines that it ought to refuse declaratory relief as a matter of discretion.

80                  In short, the questions posed by question 1.2 are not ‘ripe’ for decision because the Court may not need to decide them, and whichever way they were decided they would not of themselves dispose of this litigation.

general considerations

81                  In my opinion, this is not a case in which it can be said that ‘the utility, economy and fairness to the parties’ of hearing and determining the separate questions posed by the Commonwealth is ‘ beyond question’: Tepko at 55 [170].

82                  Nor is this simply a case where there is a risk that the asserted advantages of separate trials will prove to be illusory.  It has not been demonstrated that the proposed separate trial would deliver any savings of time and cost, when compared with a single trial of all issues.  If a separate trial were to be ordered, and if that trial resulted in the dismissal of the proceedings on discretionary grounds, the question whether legal professional privilege attaches to the documents would then be susceptible to determination by the Commissioner under s 6AA.  The process of determination before the Commissioner would, it seems to me, give rise to issues which would be no less complex than those presently before this Court.  In addition, determinations by the Commissioner may not finally resolve the issue of legal professional privilege.  The Commonwealth accepted that those determinations could be directly challenged in this Court under s 39B of the Judiciary Act, as the Commissioner has no authority to make determinations that are wrong in law.  Alternatively, determinations by the Commissioner could be the subject of judicial review proceedings in this Court pursuant to the provisions of the ADJR Act. 

83                  The Commonwealth argued that if this Court refused to make a declaration in favour of AWB on discretionary grounds, and thereby allowed the Commissioner to proceed under s 6AA, this Court in any subsequent proceedings under s 39B or the ADJR Act would have the benefit of the issues having been properly joined and defined in a reasoned decision by the Commissioner.  The Commonwealth added that the Commissioner’s determinations could reduce the number of documents in dispute, either by upholding claims to legal professional privilege or by concluding that particular documents are irrelevant to his inquiries.  However, on the material before me, it is equally arguable that the processes of a separate trial of questions 1.1 and 1.2 in this Court, potentially complex proceedings before the Commissioner pursuant to s 6AA, and then further applications to this Court challenging or seeking to review determinations by the Commissioner, will be productive of greater delay and greater costs than would be incurred if the current proceedings proceed in the ordinary way to a trial of all issues.  The evidence before me does not satisfy me that the multiple processes envisaged by the Commonwealth are likely to prove to be more efficient, less costly and less protracted. 

84                  In my opinion, the order sought by the Commonwealth would also lead to an undesirable fragmentation of the proceedings.  There is at the very least a reasonable prospect that the Court’s decisions on any separate questions would be appealed, and the appeal process could be protracted. 

85                  It should not be supposed that this Court will not resolve all of the issues raised by this litigation in an expeditious and efficient manner.  The present hearing, which commenced yesterday, was originally envisaged as a trial of all issues raised by the case.  While that target was not achieved, the Court will take all reasonable steps, consistent with the proper administration of justice, to achieve the prompt and efficient resolution of this litigation.  It has made, and will continue to make, directions designed to achieve that end.  The Court recognises that there is an important public interest in the Commissioner being able to complete his investigations and report as soon as practicable, and in the early determination of this litigation.

86                  On the whole, I have formed the view that an order for separate trials is likely to bring delay, expense and hardship greater than that which the making of the order seeks to avoid.

conclusion

87                  Legal professional privilege is a substantive legal right that depends on common law rules.  The Court’s jurisdiction has been properly invoked.  Both AWB and the Commonwealth submit that the Court should hear and determine this proceeding.  The issue raised by the Commonwealth’s application under O 29 r 2 is whether the Court should do so by ordering a trial of separate questions, followed if necessary by a final trial of the remaining issues, or by the usual procedure for a single trial of all issues. 

88                  I am not satisfied that the separate trial of the questions proposed by the Commonwealth would be just and convenient.

89                  I will order that the Commonwealth’s notice of motion be dismissed.

I certify that the preceding eighty-nine (89) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Young.

 

 

Associate: 

 

Dated:              18 July 2006

 

 

Counsel for the Applicant:	J Judd QC, P Corbett and K Walker
Solicitor for the Applicant:	Arnold Bloch Leibler
Solicitor for the First Respondent:	S Pryde of Australian Government Solicitor
Counsel for the Second Respondent:	D Bennett QC, Dr M Perry QC and G Kennett
Solicitor for the Second Respondent:	Australian Government Solicitor
Date of Hearing:	17 July 2006
Date of Judgment:	18 July 2006