Accredited (Wholesale Tobacco) Distributors Pty Ltd v Griffiths
[2003] VSC 20
•14 February 2003
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
No. 4904 of 1995
| ACCREDITED (WHOLESALE TOBACCO) DISTRIBUTORS PTY LTD (ACN 065 009 949) | Plaintiff/Respondent |
| v | |
| DENZIL GRIFFITHS (in his capacity as COMMISSIONER OF BUSINESS FRANCHISES) | Defendant/Appellant |
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JUDGE: | Balmford J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 18 November 2002 | |
DATE OF JUDGMENT: | 14 February 2003 | |
CASE MAY BE CITED AS: | Accredited (Wholesale Tobacco) Distributors v Griffiths | |
MEDIUM NEUTRAL CITATION: | [2003] VSC 20 | |
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PRACTICE & PROCEDURE – Production of documents for inspection – secrecy provisions under Business Franchise (Tobacco) Act 1974 – privilege – legal professional privilege – dominant purpose – public interest immunity – balance between public interest again administration of justice – lack of evidence to support claims of privilege – Court to inspect the documents for itself
Business Franchise (Tobacco) Act 1974 – ss 2, 2A – 2E, 5
Freedom Of Information Act 1987
Taxation Administration Act 1997 – s 62
Supreme Court (General Civil Procedure) Rules 1996 – rule 77.05(7)
Attorney-General for the Northern Territory v Kearney (1985) 158 CLR 500
Aydin v Australian Iron & Steel [1984] 3 NSWLR 684
Cannon and Rochford v Tasche [2000] VSCA 84
Conway v Rimmer [1968] AC 910
CTC Resources NL v Australian Stock Exchange Ltd (2000) 22 WAR 48
Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49
Data Access Corporation v Powerflex Services Pty Ltd (unreported, decided on 11October 1999)
Esso Australia Resources Ltd v Federal Commissioner of Taxation (1999) 201 CLR 49
Ha v New South Wales (1976) 135 CLR 674
Hong Kong Bank of Australia Ltd v Murphy [1993] 2 VR 419
Murtagh v Federal Commissioner of Taxation (1984) 54 ALR 313
Re Howard and Treasurer of the Commonwealth of Australia (1985) 7 ALD 626
Robinson v State of South Australia (No 2) [1931] AC 704
Ryder v Booth [1985] VR 869
Sankey v Whitlam (1978) 142 CLR 1
Secretary, Department of Premier and Cabinet v Hulls [1999] 3 VR 331
Zarro v Australian Securities Commission (1992) 36 FCR 40
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Dr J Bleechmore | Law Offices of Ellinghaus & Lindner |
| For the Defendant | Mr R Miller | Solicitor for the Commissioner of State Revenue |
HER HONOUR:
Introduction
This is an appeal by the defendant from an order of Master Dowling made on 3 September 2002 on a summons filed by the plaintiff on 5 June 2002. By virtue of Rule 77.05(7) of the Supreme Court (General Civil Procedure) Rules 1996 (“the Rules”) the appeal is by re-hearing de novo of the application to the Master.
On 23 July 2001 Master Wheeler made orders first, for particular discovery by the defendant of certain named classes of documents, and second, that the defendant by 19 August 2001 produce certain named classes of documents to the plaintiff for inspection. It does not appear that any appeal was lodged by the defendant against those orders. The order that the defendant produce documents for inspection is considered further at [17] and following below.
The order of Master Wheeler for particular discovery related to the following classes of documents:
(a)Documents relating to or evidencing links or associations between the Plaintiff, Landmark Pty. Ltd. (“Landmark”) and Ramsay Tobacco Co. Pty. Ltd. (“Ramsay”) or the interpretation or analysis of such links or associations relevant to the question whether those companies were members constituting a group within the meaning of the Business Franchise (Tobacco) Act 1974, (“the Act”) as it stood in March 1995.
(b)Documents relating to or evidencing the trading history of the Plaintiff, Landmark and Ramsay during January and February 1995, or relating to or evidencing analysis or interpretation of such trading history.
(c)Documents relating to or evidencing the calculation, or manner of calculation of –
(i)the sum of $11,763,629.40 being the amount of the Plaintiff’s licence fee for the period 1 March 1995 to 31 March 1995,
and
(ii)the amount of the licence fee of the Plaintiff in respect of the period 1 April 1995 to 30 April 1995.
(d)documents being policy documents and/or advices in respect of problems with the Tobacco Licensing schemes referred to in the Memorandum or File Note dated 29 September 1998 headed “AC – Marco”.
(e)The documents referred to in the list of the documents set forth in paragraph 35 of the affidavit of Brian Hawkes affirmed 14 June 2001.
(f)the documents referred to in paragraph 11-18 of the affidavit of Brian Hawkes affirmed 14 June 2001.
(g)Documents, created between 1 November 1994 and 3 May 1995, relating to or being advices, submissions, memoranda, letters or other communications –
(i)to any Minister of the Crown, or
(ii)to the Commissioner of Business Franchises –
concerning changes or proposed changes to the Tobacco Licensing Scheme of the State of Victoria, in respect of possible State Revenue Office [“SRO”] responses to the activities of the purchasers of Landmark, Ramsay or the Plaintiff, or of Fidele D’Amico.
Prior to the making of those orders by Master Wheeler an affidavit of documents had been sworn on behalf of the defendant on 26 November 1999 by Patricia Philomena Sampathy, a legal officer employed by the Commissioner for State Revenue, (“the Sampathy affidavit”). In response to Master Wheeler’s order for particular discovery, two relevant affidavits of documents were sworn by the defendant, one on 4 February 2002 (“the 4 February affidavit”) and one on 26 February 2002 (“the 26 February affidavit”). Those two affidavits classify the documents there listed against the several classes of documents specified in the order.
The plaintiff by its summons of 5 June 2002 sought an order that the defendant within 7 days produce to the plaintiff for inspection those documents discovered in each of the three affidavits as to which there is a claim of privilege or of statutory prohibition on production, namely:
·The documents set forth in Part Two of Schedule 1 of the Sampathy affidavit;
·The documents set forth in Part Two of Schedule 1 of the 4 February affidavit;
·The documents set forth in Schedule 1 of the 26 February affidavit.
This application was opposed by the defendant.
The summons was heard by Master Dowling on 25 June and 15 August 2002 and on 3 September 2002 he ordered that 81 specified documents (out of approximately 400) be produced by the defendant for inspection by the plaintiff, and that the costs of the application be reserved. I am informed by counsel that Master Dowling did not give reasons for his finding that the 81 documents were not protected from disclosure, save that he found that the secrecy provisions in section 5 of the Act did not apply to them. [1]
[1]Those provisions are considered at [21] and [22] below
The present appeal against the order of Master Dowling was lodged by the defendant on 3 September 2002. The plaintiff did not cross-appeal. Master Dowling had ordered a stay of fourteen days, which was extended on 11 September 2002 by Justice Beach until the hearing and determination of the appeal or further order.
The background to this appeal is set out in the written submissions of counsel for the plaintiff, in terms which it is convenient to reproduce here, with minor additions marked by square brackets. I believe the material contained in the following sub-paragraphs to be common ground, except as otherwise indicated.
(i)The plaintiff was a wholesale tobacco merchant. In March and April 1995, it required a licence to sell tobacco. The licence scheme was contained in the Act. The State of Victoria, and indeed all States, desired to levy excise over the sale of tobacco. The “licence” scheme in the Act was a complex attempt to circumvent the [Commonwealth] Constitution. Under the Constitution, the State of Victoria was unable to levy an excise. To avoid being [found to be levying] an excise, the States believed that they could set up a “licence” scheme in which the fee for the licence bore only a remote relation to the amount of tobacco sold. Under the Act, therefore, the amount of the licence fee was calculated by reference to the amount of tobacco sold [not at the time of application for the licence, but] in the “relevant period” that is to say in the month two months prior to the month of the licence.
[(ii)The defendant (here, “the Commissioner”) between 1992 and 1997 had responsibility for the general administration of the Act. [2] ]
(iii)The Act was subsequently held by the High Court to be in effect unconstitutional: Ha v State of New South Wales & Ors[3] . The imposition of the licence and many other actions taken by [the Commissioner] in support of or in enforcement of the licence scheme, were therefore retroactively held to be unlawful.
(iv)The present plaintiff sought, in 1995, to exploit a loophole in the law: persons behind the plaintiff took over a company that had traded modestly, paid a modest licence fee and then traded in large quantities, ceasing to trade when the licence came up for renewal. The simple concept of the scheme was to take advantage of the two month hiatus or delay in the method of calculation of the licence fee. The [SRO which administered the Act] sought to meet this threat by using the group provisions (sections 2A to [2E]) of the Act. If a trader was a member of a group, then the licence fee was calculated on the aggregate trading figures, or total amount of tobacco sold, by all members of the group (section 10(1)(b)). The Commission[er], in the present case, said that the plaintiff was a member of a group. [The plaintiff maintains that] there was no connection at all between the plaintiff and the other companies in the alleged group in the relevant period.
(v)The plaintiff applied for and was granted a licence for the month of March 1995. It paid a modest licence fee of $12,873.00 and commenced trading. The Commissioner, apprehending what the plaintiff intended to do, issued [on 8 March 1995] a default assessment (section 19A [of the Act]) in the amount of $11,763,629.00, which amount was payable on the same day as the assessment. That default assessment was predicated on the Commissioner’s contention that the plaintiff was a member of a group. Again, on the same day, garnishee notices were served, on inter alios, the tobacco manufacturers, the suppliers of the plaintiff [the section 19BA Notices]. Such suppliers immediately ceased to supply the plaintiff. The plaintiff applied for a licence for the month of April, tendering the appropriate fee. The Commissioner refused to issue the licence and said that the plaintiff was a member of a group.
(vi)The group of which the plaintiff was [said to be] a member included Ramsay Tobacco Pty Ltd and Landmark Pty Ltd.
[2]As to the capacity in which he had that responsibility, see [45] below.
[3](1997) 189 CLR 465.
In March 1995 the provisions of the Act relating to membership of a group were sections 2A to 2E, which then read as follows:
2A. Membership of a group of wholesale tobacco merchants
(1)For the purposes of this Act, a person is a member of a group of wholesale tobacco merchants –
(a)if –
(i)that person is one of the persons that constitute a group for the purposes of this Act;
(ii)one or more of the persons that constitute the group carried on tobacco wholesaling in the relevant period;
(iii)one or more of the persons that constitute the group intend to carry on tobacco wholesaling in the month or part of the month in respect of which an application for a licence is or is intended to be made under this Act; and
(iv)there is not in force a determination by the Commissioner that that person is not a member of the group; or
(b)if that person declares in writing that the organization or control of his business is such that he would have been a member of the group if it had been so organized or controlled during the relevant period and the other members of the group and the Commissioner agreed that this is so.
(2)The Commissioner may in his absolute discretion by writing under his hand determine that a person who would, but for the determination be a member of a group for the purposes of this Act, is not a member of the group of wholesale tobacco merchants if he is satisfied that that person has continuously carried on tobacco wholesaling independently of the group and will continue to carry on tobacco wholesaling independently of the group and is not subject to control by any other member of the group.
(3)The Commissioner may in his absolute discretion by writing under his hand determine that a person who would, but for the determination, be a member of a group, is not a member of any group for the purposes of this Act if he considers that the person is not carrying on and has no intention of carrying on tobacco wholesaling.
(4)The Commissioner may in his absolute discretion at any time revoke a determination made under sub-section (2) or sub-section (3).
(5)A determination made under sub-section (2) or sub-section (3) shall come into force on the making thereof and shall continue in force until it is revoked by the Commissioner.
(6)Notice of a determination under sub-section (2) shall be given by the Commissioner to the person in respect of whom the determination was made and to all the members of the group concerned whom he considers are carrying on tobacco wholesaling.
(7)Notice of a determination under sub-section (3) shall be published in the Government Gazette.
(8)Notice of the revocation of a determination made under sub-section (2) or sub-section (3) shall be given by the Commissioner to the person in respect of whom the determination was made and to all members of the group concerned whom he considers are carrying on tobacco wholesaling.
2B.Grouping of corporations and where employees used in another business
(1)For the purposes of the Business Franchise Act, two corporations constitute a group if they were at any time during the relevant period by reason of section 50 of the Corporations Law related to each other for the purposes of that Act.
(2)For the purposes of the Business Franchise Acts, where at any time during the relevant period –
(a)an employé of an employer, or two or more employés of an employer, performed duties solely or mainly for or in connexion with a business carried on by that employer and another person or other persons or by another person or other persons; or
(b)an employer had, in respect of the employment of, or the performance of duties by, one or more of his employés, an agreement, arrangement or undertaking (whether formal or informal, whether expressed or implied and whether or not the agreement, arrangement or undertaking includes provisions in respect of the supply of goods or services or goods and services) with another person or other persons relating to a business carried on by that other person or those other persons, whether alone or together with another person or other persons –
that employer and –
(c)each such other person; or
(d)both or all of those other persons –
constitute a group.
2C. Grouping of commonly controlled businesses
(1)A reference in this section to two businesses does not include a reference to two businesses both of which are owned by the same person, not being a trustee, or by the trustee or trustees of a trust.
(2) For the purposes of the Business Franchise Acts, where the same person had, or the same persons had together at any time during the relevant period, a controlling interest, as referred to in sub-section (3) of this section, in each of two businesses, the persons who carried on those businesses constitute a group.
(3) For the purposes of sub-section (2) of this section, the same person had, or the same persons had together, a controlling interest in each of two businesses if that person had, or those persons had together, a controlling interest under any of the following paragraphs in one of the businesses and a controlling interest under the same or another of the following paragraphs in the other business –
(a)a person had, or persons had together, a controlling interest in a business, being a business carried on by a corporation, if the directors, or a majority of the directors, or one or more of the directors, being a director or directors who was or were entitled to exercise a majority in voting power at meetings of the directors, of the corporations was or were accustomed or under an obligation, whether formal or informal, to act in accordance with the directions, instructions or wishes of that person or of those persons acting together;
(b)a person had, or persons had together, a controlling interest in a business, being a business carried on by a corporation that had a share capital, if that person or those persons acting together could have (whether directly or indirectly) exercised, controlled the exercise of, or substantially influenced the exercise of, fifty per centum or more of the voting power attached to voting shares issued by the corporation;
(c)a person had, or persons had together, a controlling interest in a business, being a business carried on by a partnership, if that person or those persons –
(i)owned, or owned together (whether beneficially or not) fifty per centum or more of the capital of the partnership; or
(ii)was, or were together, entitled (whether beneficially or not) to fifty per centum or more of the profits of the partnership;
(d)a person had, or persons had together, a controlling interest in a business, being a business carried on under a trust, if that person (whether or not as the trustee of another trust) was the beneficiary, or those persons (whether or not as the trustees of another trust) were together the beneficiaries, in respect of fifty per centum or more of the value of the interests in the trust first mentioned in this paragraph;
(e)a person had a controlling interest in a business if, whether or not he was a trustee of a trust, he was the sole owner of the business, or persons, being two or more trustees of a trust, had a controlling interest in a business if they were the owners of the business.
(4) Where a corporation had a controlling interest under sub-section (3) in a business, it shall be deemed to have had a controlling interest in any other business in which another corporation that is, by reason of section 7 (5) of the Companies (Victoria) Code, to be deemed, for the purposes of that Act, to be related to it had a controlling interest.
(5) Where –
(a)a person had, or persons had together, a controlling interest under sub-section (3) in a business; and
(b)the person or persons who carried on that business had such a controlling interest in another business –
the person or persons referred to in paragraph (a) shall be deemed to have had a controlling interest in the business referred to in paragraph (b).
(6)Where¾
(a)a person was a beneficiary under a trust; or
(b)two or more persons together were beneficiaries under a trust –
in respect of fifty per centum or more of the value of the interests in that trust and the trustee or trustees of that trust had under sub-section (3) a controlling interest in a business, that beneficiary or those beneficiaries shall, for the purposes of sub-section (3), be deemed to have had a controlling interest in that business.
2D. Smaller groups subsumed into larger groups
(1)Notwithstanding any other provisions of the Business Franchise Acts (except sub-section (2)), where a person is, whether or not by virtue of this sub-section, a member of two or more groups (each of which is in sub-section (2) referred to as a smaller group), all of the members of those groups constitute, for the purposes of the Business Franchise Acts, one group.
(2)Except for the purpose of determining whether a group is constituted under sub-section (1), a group which, but for this sub-section, would be a smaller group ceases to be a group if its members are members of a group constituted under sub-section (1).
2E. Beneficiaries under discretionary trusts
A person who, as the result of the exercise of a power of discretion by the trustee of a discretion by the trustee of a discretionary trust of by any other person or by that trustee and other person, may benefit under that trust shall be deemed, for the purposes of the Business Franchise Acts, to be a beneficiary in respect of fifty per centum or more of the value of the interest in that trust.
The preliminary submission of the defendant
It was common ground that the Court would need to inspect for itself the documents in issue, as did Master Dowling, in order to determine whether or not they are immune from production. Mr Miller, for the defendant, submitted at the outset that because the plaintiff had not cross-appealed against the order of Master Dowling, the Court should determine that the only documents in contention were the 81 documents which the Master had directed to be produced for inspection. In his submission the plaintiff was estopped, by its conduct in not cross-appealing, from seeking an examination by the Court of all of the documents considered by the Master.
To rebut that proposition it is necessary only to note that, as stated in [1] above, by virtue of Rule 77.05(7) of the Rules the appeal is by re-hearing de novo of the application to the Master. The Court must therefore consider all of the documents which were the subject of the summons of 5 June 2002, and the submission as to estoppel has no relevance to the matter.
The claim of the plaintiff
The substantive proceeding was commenced by writ on 15 March 1995. In the amended statement of claim filed on 1 October 1998 there is pleaded a cause of action in misfeasance in a public office, which is put in issue by the defence. The claim reads (with minor clarifications added in square brackets):
10.(a) The making of the [default] assessment [on 8 March 1995], and
(b)The making and service of the Notice [of the default assessment], and
(c)The making and service of the Section 19BA notices, and
(d)The failure and refusal of the Defendant to issue a licence to the Plaintiff for the month of April 1995:
were acts which were undertaken by the Defendant not in good faith, alternatively for an improper purpose being the purpose of preventing the Plaintiff from trading, alternatively were acts which did not bona fide relate to the purposes of the Act and were undertaken in a manner which was unreasonable, arbitrary, capricious, contrary to law and an abuse of process, in that:
(i)there was absolutely no basis or foundation for the allegations that the Plaintiff was a member of a group of wholesale tobacco merchants within the meaning of the Act;
(ii)the Plaintiff had traded as a licensed tobacco wholesaler on a wholly independent basis in the relevant period for the determination and assessment of the two licence fees, namely in January and February 1995;
(iii)there were no facts or circumstances which could have provided any foundation for an assessment of the Plaintiff on the basis of a conclusion that it had been trading as a group;
(iv)at a meeting between the solicitor for the Defendant and the solicitor for the Plaintiff at 4 p.m. on the 8th March 1995, the Defendant, through his solicitor, informed the Plaintiff, through its solicitor, that, in relation to the application for the licence, the Plaintiff had failed to make full and true disclosure of all material facts necessary to enable the Defendant to ascertain the licence fee payable by the Plaintiff, but the Plaintiff was not informed that the material facts which were not disclosed pertained to the status of the Plaintiff as a member of a group of wholesale tobacco merchants, and despite a request by the Plaintiff, through its solicitor, the Defendant, through his solicitor refused and declined to provide particulars or information as tot the material facts in respect of which he asserted that full and true disclosure had not been made;
(v)from the 8th March 1995, and, despite requests by the Plaintiff, the defendant failed, neglected and refused to provide particulars of the matters in respect of which full and true disclosure was not made in the application for the licence and particulars of the matters forming the basis for the assessment.
PARTICULARS
The solicitors for the Plaintiff requested the said particulars in letters dated 9th and 10th March respectively. Although the solicitors for the Defendant responded to the letters from the Plaintiff in two letters of the 10th March 1995, the solicitors for the Defendant did not provide the particulars sought;
(vi)the Defendant served the Section 19BA Notices simultaneously with service of the Notice and provided no time for the Plaintiff to consider its position in relation to payment of the amount assessed, and, in particular, Section 19BA Notices were served on suppliers of the Plaintiff effectively preventing from that moment, the Plaintiff trading with its suppliers and providing in connection thereto advance payments to the suppliers.
11.Further, in the alternative, by reason of the matters set forth in paragraph 10 hereof, the Defendant is in breach of the legal duty to treat the Plaintiff fairly and the duty not to use his discretionary powers so as to discriminate unfairly between taxpayers and the duty properly to provide to the taxpayer information and particulars, not only as to his opinion, but as to the facts on which that opinion was based.
12.Further, or in the alternative –
(a)The making of the [default] assessment [on 8 March 1995], and
(b)The making and service of the Notice [of the default assessment], and
(c)The making and service of the Section 19BA notices, and
(d)The failure and refusal of the Defendant to issue a licence to the Plaintiff for the month of April 1995:
were acts which were undertaken by the Defendant –
(i)with malice towards the Plaintiff, or
(ii)with the intention of causing harm to the Plaintiff, or
(iii)in circumstances where the Defendant [knew] or ought to have known the acts were beyond power and involved a foreseeable risk of harm, or
(iv)with reckless indifference as to whether the acts were beyond power or not in circumstances where the acts involved a foreseeable risk of harm.
In Cannon and Rochford v Tasche[4] , after extensive analysis of authority, the Court of Appeal (Winneke P, Charles and Chernov JJA) said:
[4][2000] VSCA 84 at [40]
Thus, for present purposes, it would seem that the necessary components of the tort [of misfeasance in a public office] involve:
(a)The misuse or abuse by the holder of a public office of a relevant power which is an incident of the office.
(b)That such wrongful conduct was actuated by malice in the sense that the power was used, not for the public benefit, but for an ulterior purpose with the intent that harm be caused to the plaintiff (or in reckless disregard of such a likely consequence) or that there was a purported exercise of the power with knowledge that it did not exist (or in reckless disregard as to its existence).
In order to succeed in a claim based on misfeasance in a public office, the plaintiff must also establish that the duty to exercise the relevant power properly was owed to him as a member of the public.
It is not in issue that the defendant was, at the relevant time, the holder of a public office [5] . Dr Bleechmore, for the plaintiff, submitted that, to make out the claim of misfeasance in a public office the plaintiff must, at the very least, establish that there was reckless indifference as to whether the defendant’s actions in respect of the plaintiff were lawful. In order to establish the claim, the plaintiff was dependent upon documents in the possession of the defendant, or formerly in the possession of the defendant.
[5]As to the precise nature of that office, see [45] below.
Mr Miller submitted that in seeking inspection of the documents in question the plaintiff was doing no more than engaging in a fishing expedition. However, Dr Bleechmore submitted in response that in making the orders for particular discovery and for inspection, which were made after extensive argument, Master Wheeler must be taken to have found that the documents the subject of his order related to a question in issue between the parties. I accept that submission, insofar as it relates to those documents the subject of the orders of Master Wheeler, that is, all of the documents sought in this appeal which are described in the 4 February and 26 February affidavits. Thus, in respect of those documents, the issue of whether there is a legitimate forensic purpose for discovery has been decided by Master Wheeler, and does not need to be relitigated. In any case, as has been said, the defendant did not appeal against the orders of Master Wheeler.
As to the Sampathy affidavit, it appears that that affidavit was sworn in response to an order made in the course of the ordinary and routine processes of the Court and no issue arises as to whether the documents there described relate to an issue between the parties.
Master Wheeler’s order that documents be produced for inspection
The documents which Master Wheeler on 23 July 2001 ordered the defendant to produce for the inspection of the plaintiff were described in the Master’s order in the following terms:
(a)any documents containing the legal advice from a solicitor and from counsel referred to in paragraph 28 of the affidavit of Peter Wearne sworn 16 March 1995 and filed in proceeding No 4904 of 1995;
(b)all documents contained in, or constituting the brief or request for advice to the solicitor and counsel;
(c)any documents containing legal advice of counsel or solicitor relied upon, or considered in making –
(i)the assessment of the Delegate for the Commissioner of State Revenue dated 8 March 1995;
(ii)the decision to make and serve section 19BA notices in relation to the plaintiff’s application for a wholesale tobacco merchant’s licence for the months of March and April 1995;
(iii)the decision of the defendant not to issue a licence to the plaintiff for the month of April 1995;
(d)all documents contained in or constituting the brief or request for advice relating to the advice referred to in sub-paragraph (c) hereof;
(e)the documents referred to in paragraph 9 of the affidavit of Brian Hawkes affirmed 14 June 2001.
I was informed by counsel that only two documents had been produced in response to that order, namely a brief to Mr Burnside QC to advise, and the advice of Mr Burnside in response. Mr Miller indicated that the plaintiff had taken out a summons, filed on 15 October 2001, requiring compliance with Master Wheeler’s order, but had later consented to the summons being dismissed without an order as to costs, and that no objection had been taken by the plaintiff to the defendant’s failure to comply with the balance of the order. It appeared that he was submitting that the order had in some way lapsed as a result of these events.
The Court file indicates that the summons in question sought compliance only with Master Wheeler’s order for particular discovery, and did not relate to his order for inspection. In any case, whether the plaintiff has sought to enforce the order for inspection or not, the fact remains that that order is still in existence and the defendant is in default in so far as it has not complied with that order. As has been said, the defendant did not appeal against that order. In these circumstances, it is not for the Court on the present appeal to reconsider the order of Master Wheeler. If any document the subject of this appeal is comprised within the documents in Master Wheeler’s order for inspection, then there is no purpose in the Court revisiting that document; an order for its production for inspection is already in force. It may, of course, not always be apparent on inspection that a particular document falls within one of the classes of documents comprised in the Master’s order, as in some cases the definition will turn on knowledge which would be available only to the defendant or those advising him. Where there is doubt on the matter it will be appropriate for the Court to consider the document in question as though it was not comprised in Master Wheeler’s order.
The claim of the defendant
The defendant claims that most of the documents sought by the plaintiff are protected from production by public interest immunity, some of them by legal professional privilege, and those (but only those) described in the Sampathy affidavit and the 26 February affidavit, by the secrecy provisions in section 5(2) of the Act. As Stephen, Mason and Murphy JJ said in Grant v Downs[6] , “It is for the party claiming privilege to show that the documents for which the claim is made are privileged.”
[6](1976) 135 CLR 674 at 689
Secrecy provisions
It is convenient to deal first with the secrecy provisions. Section 5(2) reads:
5.Secrecy provisions
(2)Except as provided in sub-section (1) or in the Taxation (Reciprocal Powers) Act 1987 a person shall not -
(a)make a record of, divulge or communicate to any person or publish any information or any document or part of a document obtained by him in connexion with the administration or execution of the Business Franchise Acts; or
(b)be required to produce in court any document connected with the administration or execution of the Business Franchise Acts in his custody in the course of his employment or to divulge or communicate to any court any matter or thing coming under his notice in the course of his employment -
unless the production, divulgence, communication or publication is made -
(c)with the consent of the person from whom the information or document was obtained;
(d)in connexion with the administration or execution of the Business Franchise Acts or the regulations; or
(e)for the purpose of any legal proceedings arising out of the Business Franchise Acts or the regulations or of any report of any such proceedings.
Penalty:10 penalty units.
The substantive proceeding in the course of which this appeal arises clearly falls within the description of “legal proceedings arising out of the Business Franchise Acts” and thus is exempted by paragraph 5(2)(e) from the prohibitions in paragraphs 5(2)(a) and (b). Section 5(2) accordingly does not operate to render any of the documents which are sought immune from production in this proceeding.
Legal professional privilege
Since the decision of the High Court in Esso Australia Resources Ltd v Federal Commissioner of Taxation [7] it is clear that, as Gleeson CJ, Gaudron, Gummow and Hayne JJ said in Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [8] :
legal professional privilege is a rule of substantive law which may be availed of by a person to resist the giving of information or the production of documents which would reveal communications between a client and his or her lawyer made for the dominant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings.
[7](1999) 201 CLR 49
[8][2002] HCA 49 at [9]
Mr Ellinghaus, the solicitor for the plaintiff, deposes in his affidavit of 6 June 2002 that a claim of legal professional privilege had been maintained by the defendant in respect of the documents as to which an order for inspection was sought from Master Wheeler. Counsel for the plaintiff argued before Master Wheeler that evidence already on the record indicated that officers of the SRO had taken legal advice on the matters described in the order. He conceded that the documents relating to the requests for and provision of this advice would normally be the subject of legal professional privilege. However, he submitted, in reliance on the decision of Smith J in Hong Kong Bank of Australia Ltd v Murphy[9] , that the documents in question were not covered by legal professional privilege because they went directly to matters in issue [10] and directly affected the rights of the parties and thus had, in his phrase, been “pleaded into relevance”.
[9][1993] 2 VR 419, followed in the Federal Court by Heerey J in Data Access Corporation v Powerflex Services Pty Ltd (unreported, decided on 11 October 1994)
[10]see [12] and [13] above
It appears from the making of the order for inspection that Master Wheeler accepted that submission, and I accept the submission of Dr Bleechmore that in respect of documents which fall within any of the descriptions in that order, if they can be identified, no issue arises as to legal professional privilege, the order for inspection having been made after the making of the submission referred to in the preceding paragraph, and presumably in acceptance of that submission.
In the Hong Kong Bank case, counsel for the plaintiff, which was relying on legal professional privilege which the court found to exist in respect of certain documents, argued that a party could not be said to have waived the privilege simply because the privileged documents might bear evidentially upon the issues referred to and raised in the pleadings by the party claiming privilege. Smith J said [11] :
[11]At 438
The question can be stated broadly in these terms - whether in raising and persisting with issues which concern legal advice it received, Hong Kong Bank should be treated in this case as waiving the privilege in respect of such advices.
On the present pleadings, the communications between Hong Kong Bank and its lawyers are and will be an issue in the case. It is true that there is an element of potential uncertainty, in that Hong Kong Bank could change its pleadings before trial, or could abandon issues which relate to these matters. But the reality is that the issues of which the alleged privileged communications form a part, are central to Hong Kong Bank's claim and defence to counterclaim. I am satisfied that it will maintain the allegations to which the documents relate and will have to do so if it wishes to proceed with its attempt to enforce the rights it claims. It plainly intends to proceed on that basis. The question then to be answered is whether it would be unfair to allow the matter to proceed to trial while denying discovery of such documents.
I am satisfied that there is no reason in principle why the waiver cannot be invoked prior to the trial of the proceeding. . . .
"Trial by ambush" has been condemned for many years. To allow the claim of privilege here would permit such a trial. Further, the communications form part of the circumstances from which the rights and liabilities of the parties arise. They directly affect the rights of the parties . . .
Weighing the importance of the right against the alleged unfairness in its exercise, I am satisfied that the plaintiff should be treated as having impliedly waived the privilege.
Those findings are applicable, mutatis mutandis, to the case before me, where the defendant has joined issue on a claim which can only be established on the basis of documents which are prima facie privileged.
Thus in considering any document in respect of which the defendant claims legal professional privilege, the following matters are to be taken into account:
(i)If the document contains a communication between the defendant and his legal adviser made for the dominant purpose of giving or obtaining legal advice or the provision of legal services, including representation in legal proceedings, then it is prima facie privileged from production. “Legal adviser” in this context includes a salaried lawyer employed in the SRO [12] .
(ii)Any such document which is found to fall within one of the classes in Master Wheeler’s order for production has already been found not to be privileged, on the basis that the defendant must be taken to have waived the privilege on the basis of the passage cited above from the judgment of Smith J in the Hong Kong Bank case.
(iii)In respect of any other document which has been “pleaded into relevance” in terms of the passage from the judgment of Smith J in the Hong Kong Bank case cited in [26], the defendant must be taken to have waived the privilege.
[12]Waterford v The Commonwealth (1987) 163 CLR 54
I note that Ms Sampathy’s affidavit was clearly prepared and sworn before the decision in the Esso Australia case. She claims privilege for certain documents on the ground that they “contain communications made for the sole purpose of giving or obtaining legal advice or for the sole purpose of giving or obtaining information necessary for actual or contemplated litigation”. The Esso Australia decision replaced the “sole purpose” test with the “dominant purpose” test set out in [23] above. Thus, if I find that a document fails the sole purpose test for which privilege is claimed, but is caught by the dominant purpose test, I must find that document to be covered by the privilege. In the 4 February affidavit, sworn after the Esso Australia decision, the defendant claims privilege for certain documents on the ground of the dominant purpose test. No doubt if it had been intended to add documents considered by Ms Sampathy, but in respect of which no claim for privilege was made because she considered that they did not meet the sole purpose test, those documents would have been included in the 4 February or the 26 February affidavit.
I note further that the only evidence before me as to the purpose for which the communications evidenced by the documents were made, which is a question of fact, is contained in the Sampathy affidavit and the 4 February affidavit. Ms Sampathy does not state the source of her knowledge as to that purpose. Rule 43.03(2) of the Rules provides that on an interlocutory application an affidavit may contain a statement of fact based on information and belief if the grounds are set out. As to information, the defendant expressly deposes that his objection to production of the documents is based on “advice which I have received from appropriate personnel of the [SRO]”. Those “appropriate personnel” are not identified. He does not depose to his belief of that advice. So far as his objection deals with matters of fact, it can be given little weight. Accordingly, in determining whether the documents are protected by the privilege, I have relied on what I could glean from the text of the documents themselves and the manner in which they are presented. As has been said, it is for the defendant to satisfy me that the documents are privileged [13] . I would, with respect, adopt the conclusion drawn in the following passage from the judgment of Hodgson J in Aydin v Australian Iron & Steel[14] :
The affidavit of Mr Turner, who since 1976 has been superintendent of the compensation department, asserts that the statement was brought into existence for the purpose of assisting in the conduct of litigation anticipated in respect of the plaintiff's claim, and to obtain legal advice from the defendant's solicitors in respect of that claim, and for no other purpose.
It is clear that this statement is not conclusive as to the existence of the privilege: see Grant v Downs (1976) 135 CLR 674 at 689. The court can consider the contents of the document and the circumstances in which it came into existence in order to decide whether the purpose of submitting the statement to the defendant's solicitors was the sole purpose of it being brought into existence. Furthermore, it does not seem to me that the purpose as perceived by Mr Turner is necessarily crucial. If a document is brought into existence by an individual, then his actual intentions will generally be crucial. In the case of a document brought into existence by a company, however, the actual intention of one employee of the company may not be crucial: in such a case, it seems to me that unless one can attribute the intention or purpose of that employee to the company as a whole, the purpose in question must be something of a construct for [from?] the purposes of any individuals involved and the objective circumstances.
In this case, the evidence is that the obtaining of such a statement from an injured employee is undertaken as a matter of routine, at least in all cases where the injury involved any absence from work. I do not think the evidence enables me to say that Mr Turner's perception of this routine practice is identical with the company's purpose: he is the Superintendent of the relevant department of the defendant, but there is no evidence that the adoption and maintenance of this routine procedure was and is solely his decision made within his area of responsibility. Accordingly, I think I must assess the purpose of this routine procedure (and accordingly of the statement taken in this case pursuant to that procedure) in the light of objective circumstances as well as Mr Turner's perception of the matter.
[13]see [20] above
[14][1984] 3 NSWLR 684 at 686-6
Legal Professional Privilege - Conclusion
Having examined, in the light of the considerations set out above, each of the documents in respect of which the defendant claims legal professional privilege, I have listed in Schedule 1 hereof those documents in respect of which, for the reasons set out in that Schedule, I find the claim of legal professional privilege not to be maintainable. I find that claim to be maintainable in respect of all other documents for which that claim is made.
Public interest immunity
The doctrine of public interest immunity [15] requires that relevant evidence, otherwise admissible, be excluded if its disclosure would be prejudicial or injurious to the public interest. Gibbs ACJ said in Sankey v Whitlam [16] :
. . . the public interest has two aspects which may conflict. They were described by Lord Reid in Conway v Rimmer [1968] AC 910 at 940 as follows:
There is the public interest that harm shall not be done to the nation or the public service by disclosure of certain documents, and there is the public interest that the administration of justice shall not be frustrated by the withholding of documents which must be produced if justice is to be done.
[15]sometimes called ”Crown privilege”, see McNicol, Law of Privilege, 374
[16](1978) 142 CLR 1 at 48
Dawson J said of public interest immunity in Attorney-General for the Northern Territory v Kearney [17] :
Privilege of this kind . . . is based upon the general rule that a court will not order the production of a document, although relevant and otherwise admissible, if it would be injurious to the public interest to disclose it. A document may be privileged upon this ground either because of its particular contents or because it belongs to a class of documents which should, whatever their individual contents, be immune from disclosure. . . . it is for the court to decide whether a document should be disclosed and in doing so it weighs the public interest in withholding disclosure against the public interest in the availability of all relevant evidence in order to facilitate the administration of justice.
[17](1985) 158 CLR 500 at 531
Counsel are in agreement that the claim of the defendant is a contents claim rather than a class claim.
The preliminary submissions of the plaintiff
Dr Bleechmore raised two preliminary issues in this context. First, he submitted that the claims of public interest immunity had not been made by persons of appropriate seniority to make the requisite judgment. The Court should consider whether it should require further affidavit evidence to the effect that a mind of the required seniority or experience had been turned to the issue of whether the documents ought to be withheld in the public interest.
He referred to the judgment of the Privy Council in Robinson v State of South Australia[No. 2][18] where it was held that, where the Crown was a party to the litigation, the privilege “should be claimed under the sanction of an oath, the oath being that of a responsible Minister of State whose mind has been directed to the question” [19] and that “it should have appeared that the Minister had not merely ‘considered’ this mass of documents, but that he had read and considered each of them” [20] . In the present case, the defendant is sued in his official capacity, so that in effect the Crown is the litigant.
[18][1931] AC 704
[19]at 718
[20]at 722
However, Dr Bleechmore conceded that circumstances have changed since 1931, and relied on Sankey v Whitlam[21] where Gibbs ACJ said:
Although an affidavit sworn by a Minister or department head is no longer conclusive, it appears to me to be still highly desirable that the person who swears the affidavit should himself have seen the documents in question. Where the claim is that it would be contrary to the public interest to publish the contents of a particular document, it is obviously essential that the person asserting the claim should himself have seen the documents in question. Even where the claim is that the document belongs to a class which should be withheld, the court is still required to pay proper respect to the assertion by the Minister or department head that production would be contrary to the public interest and the weight that would be given to an affidavit making an assertion of this kind would necessarily be reduced if the person swearing it had not himself seen the document.
It is however clear that the court should prevent the disclosure of a document whose production would be contrary to the public interest even if no claim is made by a Minister or other official that its production should be withheld.
[21](1978) 142 CLR 1 at 44
In Zarro v Australian Securities Commission[22] Lockhart J said:
In these days with large government instrumentalities and agencies involved in time consuming and extensive investigations into possible irregularities and offences, great care is required by the bodies themselves in ensuring both that the correct person within the structure of the organisation (that is, a person who knows the facts, has seen the documents and who is preferably at a high level within the organisation) swears the appropriate affidavit claiming public interest immunity, and that the claim is not made too widely so as to sweep within its net documents that are not legitimately an essential integer in the investigative process. This also calls for vigilance by the courts lest documents are shielded from public scrutiny or inspection by parties to litigation under an unduly broad umbrella of public interest immunity.
[22](1992) 36 FCR 40 at 51
Mr Griffiths, the defendant, deposes in each of the 4 February and 26 February affidavits that he is the Chief Executive Officer of the Government Superannuation Office, and that from 28 April 1992 to 30 May 1997 he held the office of Commissioner of State Revenue which encompassed the position of Commissioner of Business Franchises for the State of Victoria [23] . He further deposes in each affidavit that his objection as to production of the documents in question is based upon advice which he has received from appropriate personnel of the SRO, and that to the extent that documents discovered therein have at one time been in his possession, the possession was constructive only in that actual possession was in the hands of various appropriate officers of the SRO. It is clear, therefore, that he has not read the documents. Ms Sampathy describes herself as “a Legal Officer employed by the Commissioner of State Revenue” and as “authorised to swear this affidavit on behalf of the Defendant”. She does not depose to having read the documents, or as to the source of her knowledge of the facts relevant to her assertion that disclosure of certain of the documents would be contrary to the public interest. Nor is there any evidence as to her level of seniority in the SRO.
[23]but see [60] below
The significance of this situation, should the Court proceed on the basis of the affidavits before it, is twofold, as Dr Bleechmore pointed out in reliance on the passage cited above from Sankey v Whitlam. The defendant will be deprived of the benefit of the weight necessarily to be given to an assertion of the Minister or departmental head that production would be contrary to the public interest. And in the case of the documents described in the affidavits of 4 and 26 February, the defendant will be deprived of the weight to be given to an assertion to that effect by a person who had actually seen the documents. Whether that is so in the case of the documents described in the Sampathy affidavit cannot be determined.
Dr Bleechmore’s second preliminary submission was based on the decision of the Supreme Court of Western Australia in CTC Resources NL v Australian Stock Exchange Ltd[24] in which the Full Court had ordered the filing of a list of the documents in respect of which public interest immunity was claimed, stating whether the claim was made in respect of the entire document or only parts thereof, and in each case setting out fully the grounds for the claim. He submitted that the defendant was making a blanket claim of immunity, and that this was not appropriate; the Court should require a list of the kind ordered in CTC Resources.
[24](2000) 22 WAR 48
The ultimate decision as to whether production of the documents in question would be against the public interest is, in any case, a matter for the Court, even in the absence of any claim for the privilege (as to which see [35] above). It might well be that the defendant’s case would be assisted, and the task of the Court made easier, if orders were to be made for fresh affidavits in accordance with Dr Bleechmore’s submissions. However, the defendant has chosen to present his material in the way that he has done, and no request was made by him for an adjournment to enable the presentation of further affidavit material in response to Dr Bleechmore’s submissions. The substantive proceeding was initiated in 1995. I find myself of the same mind as the Privy Council in Robinson v South Australia [No. 2], where their Lordships, having found [25] that the Court is entitled to prescribe the manner in which the claim of privilege is to be made, directed that that was a proper case for the Supreme Court of South Australia to exercise its power to inspect the documents itself, that course being less likely to cause further delay than an order for a further and better affidavit of documents [26] . In the present case the parties were agreed that the Court should inspect the documents, and having considered the submissions of counsel on the point I find myself satisfied that in all the circumstances it is appropriate that I proceed to do so without calling for further affidavit material.
[25]at 717-8
[26]at 722
The submission of the defendant
The grounds for the claim of the defendant that disclosure of certain of the documents sought would be against the public interest are expressed as follows in the three affidavits:
As to those of the documents which are described in paragraph 3(b) of the Sampathy affidavit:
That those documents were either provided to or contain information provided to the Defendant by third parties in confidence and the disclosure of those documents by the Defendant would be detrimental to the effective operation of the Defendant in the exercise of his statutory duties by limiting or stopping the future flow of relevant information to the Defendant.
As to those of the documents which are described in paragraph 3(c) of the Sampathy affidavit:
That those documents were provided by the Defendant to third parties in confidence and the disclosure of those documents would either limit or stop the frankness and candour of future communications between those persons and the Defendant and or limit or stop the future flow of information between the Defendant and persons whom he relies on for the proper performance of his statutory duties.
As to those of the documents which are described in the 4 February affidavit:
That such documents contain matters that relate to investigative activity or consideration or [27] matters pertaining to high level policy and legislative proposals or considerations the disclosure of which would reveal the inner workings of government and government agencies and inhibit the effective operation of government and its agencies and the free flow of information within government or alternatively are either documents provided to the SRO in confidence or documents referring to information given in confidence the disclosure of which documents or information would either limit or stop the frankness and candour of future communication between third parties and the SRO and limit or stop the future flow of such information and thereby adversely affect the Commissioner of State Revenue for the time being in the proper performance of his statutory duties.
As to those of the documents which are described in the 26 February affidavit:
That such documents contain matters that relate to investigative activity the disclosure of which would reveal the inner workings of government and government agencies and inhibit the effective operation of government and its agencies and the free flow of information within government or alternatively are either documents provided to the SRO in confidence or documents referring to information given in confidence the disclosure of which documents or information would either limit or stop the frankness and candour of future communication between third parties and the SRO and limit or stop the future flow of such information and thereby adversely affect the Commissioner of State Revenue for the time being in the proper performance of his statutory duties.
[27]see [42] below
Those grounds are expressed in a form reminiscent of a nineteenth century conveyance, which does not assist the reader. To enable them to be readily understood, it is not necessary to change or reorganise the wording of the several claims, but merely to set them out in a manner designed to enable comprehension. I note, however, that the word “or” where secondly appearing in the passage cited from the 4 February affidavit appears to be an error for “of” and I have taken the liberty of making that change. The word in question is marked by italics in the places where it appears in the preceding paragraph and the following paragraph.
Here follows the text of the grounds appearing in the several affidavits, set out to enable comprehension:
As to those of the documents which are described in paragraph 3(b) of the Sampathy affidavit:
That those documents were
either provided to
or contain information provided to
the Defendant
by third parties in confidence
and the disclosure of those documents by the Defendant would be detrimental to the effective operation of the Defendant in the exercise of his statutory duties by limiting or stopping the future flow of relevant information to the Defendant.
As to those of the documents which are described in paragraph 3(c) of the Sampathy affidavit:
That those documents were provided by the Defendant to third parties in confidence
and the disclosure of those documents would
either limit or stop the frankness and candour of future communications between those persons and the Defendant
and or limit or stop the future flow of information between the Defendant and persons whom he relies on for the proper performance of his statutory duties.
As to those of the documents which are described in the 4 February affidavit:
That such documents contain matters that relate to
investigative activity
or consideration of matters pertaining to high level policy and legislative proposals or considerations
the disclosure of which would reveal the inner workings of government and government agencies
and inhibit the effective operation of government and its agencies
and the free flow of information within government
or alternatively are
either documents provided to the SRO in confidence
or documents referring to information given in confidence
the disclosure of which documents or information would
either limit or stop the frankness and candour of future communication between third parties and the SRO
and limit or stop the future flow of such information
and thereby adversely affect the Commissioner of State Revenue for the time being in the proper performance of his statutory duties.
As to those of the documents which are described in the 26 February affidavit:
That such documents contain matters that relate to investigative activity the disclosure of which would
reveal the inner workings of government and government agencies
and inhibit the effective operation of government and its agencies
and the free flow of information within government
or alternatively are
either documents provided to the SRO in confidence
or documents referring to information given in confidence
the disclosure of which documents or information would
either limit or stop the frankness and candour of future communication between third parties and the SRO
and limit or stop the future flow of such information
and thereby adversely affect the Commissioner of State Revenue for the time being in the proper performance of his statutory duties.
I have already referred [28] to defects in the affidavit material of the defendant, namely the lack of seniority of one deponent, the fact that at least one, if not both, of the deponents had not read the documents, the absence of any evidence that the other deponent had read them, and the blanket-like and unspecific nature of the defendant’s claims. There are several other things which can be said about these claims.
[28]see [33] to [40] above
When the grounds for the claims of the defendant that disclosure of the documents in question would be against the public interest are set out in the form appearing in [43] above, it becomes apparent that there are four separate grounds put forward.
First, it is said that disclosure of any of the documents described in the 4 February and 26 February affidavits would “reveal the inner workings of government and government agencies”. No explanation is given as to why such revelation would be against the public interest. However, that claim can be considered in the light of the following passage from Conway v Rimmer [29] where Lord Reid said:
I do not doubt that there are certain classes of documents which ought not to be disclosed whatever their content may be. Virtually everyone agrees that Cabinet minutes and the like ought not to be disclosed until such time as they are only of historical interest. But I do not think that many people would give as the reason that premature disclosure would prevent candour in the Cabinet. To my mind the most important reason is that such disclosure would create or fan ill-informed or captious public or political criticism. The business of government is difficult enough as it is, and no government could contemplate with equanimity the inner workings of the government machine being exposed to the gaze of those ready to criticise without adequate knowledge of the background and perhaps with some axe to grind. And that must, in my view, also apply to all documents concerned with policy making within departments including, it may be, minutes and the like by quite junior officials and correspondence with outside bodies. Further it may be that deliberations about a particular case require protection as much as deliberations about policy. I do not think that it is possible to limit such documents by any definition. But there seems to me to be a wide difference between such documents and routine reports. There may be special reasons for withholding some kinds of routine documents, but I think that the proper test to be applied is to ask, in the language of Lord Simon in Duncan’s case [1942] AC 624, 642 whether the withholding of a document because it belongs to a particular class is really “necessary for the proper functioning of the public service”.
[29]at 952
Second, it is said that disclosure of any of the documents described in the 4 February and 26 February affidavits would “inhibit the effective operation of government and its agencies”. No explanation is given as to why the disclosure of the documents would, of itself, inhibit the effective operation of government and its agencies; the claim is not expressed as reliant on either the third or the fourth ground.
I would with respect adopt in this context the comments of Mason J in Sankey v Whitlam [30] :
The Commonwealth submits that, subject to this qualification, the public interest will always on balance be found to favour non-disclosure of cabinet decisions and papers, government policy documents and high level communications passing between Ministers and senior public servants.
To evaluate this submission it is necessary to identify, first, the various elements which sustain the public interest against production of documents of the kind referred to. In identifying these elements I have gained little assistance from the affidavits sworn by Ministers and heads of departments in support of the objection to production. They have sought refuge in the amorphous statement that non-disclosure is necessary for the proper functioning of the Executive Government and of the public service, without saying why disclosure would be detrimental to their functions, except for the reference to want of candour. Perhaps affidavits in this form were acceptable in the days when it was thought that the court should uphold an objection once made by the Crown through its appropriate representative. But they are plainly unacceptable now that the court is to resolve the issue for itself, after an inspection of the documents when that is thought to be appropriate. An affidavit claiming Crown privilege should state with precision the grounds on which it is contended that documents or information should not be disclosed so as to enable the court to evaluate the competing interests. The affidavits in this case fall far short of this standard and I must therefore look beyond them for the considerations which tend to support non-production.
[30]at 96-7
Third, it is said that disclosure of any of the documents described in the 4 February and 26 February affidavits would “inhibit . . . the free flow of information within government”. No doubt if disclosure did lead to inhibition of the free flow of information within government, that inhibition would be against the public interest.
Fourth, it is said that the disclosure of any of the documents in respect of which the immunity is claimed would limit or stop the future flow of information to either the defendant or the SRO, or limit or stop the frankness and candour of future communications between third parties and the defendant or the SRO. No doubt, if information is required by the defendant or by the SRO for the performance of statutory duties, then the limitation or cessation of that information, or the limitation or cessation of the frankness and candour with which that information is communicated, would have an adverse effect on the defendant or the SRO in the performance of those statutory duties, and that adverse effect would be against the public interest.
However, all four grounds, as expressed in the affidavits, are essentially statements purporting to be statements of fact. No evidence has been put before me from which I could find any of those statements to be maintainable, save, as to the first ground, to the extent that it is supported by the passage cited from Conway v Rimmer. Further, there is much authority to the effect that they are not maintainable.
Stephen J said in Sankey v Whitlam [31] :
Those who urge Crown privilege for classes of documents, regardless of particular contents, carry a heavy burden. As Lord Reid said in Rogers v Home Secretary [1973] AC, at p 400 the speeches in Conway v Rimmer [1968] AC 910 have made it clear "that there is a heavy burden of proof" on those who make class claims. Sometimes class claims are supported by reference to the need to encourage candour on the part of public servants in their advice to Ministers, the immunity from subsequent disclosure which privilege affords being said to promote such candour. The affidavits in this case make reference to this aspect. Recent authorities have disposed of this ground as a tenable basis for privilege. Lord Radcliffe in the Glasgow Corporation Case remarked [1976] 2 NSWLR 570 that he would have supposed Crown servants to be "made of sterner stuff", a view shared by Harman LJ in the Grosvenor Hotel Case [1965] Ch, at p 1255: then, in Conway v Rimmer [1968] AC 901, Lord Reid dismissed the "candour" argument but found the true basis for the public interest in secrecy, in the case of cabinet minutes and the like, to lie in the fact that were they to be disclosed this would "create or fan ill-informed or captious public or political criticism ... the inner workings of the government machine being exposed to the gaze of those ready to criticize without adequate knowledge of the background and perhaps with some axe to grind" [1968] AC, at p 952 and see as to the ground of "candour" per Lord Morris [1968] AC, at p 959, Lord Pearce [1968] AC, at pp 987-988 and Lord Upjohn [1968] AC, at pp 933-934. In Rogers v Home Secretary [1973] AC, at p 413, Lord Salmon spoke of the "candour" argument as "the old fallacy".
[31]at 62-3
Similar issues to those raised by the third and fourth grounds have arisen for consideration under the Freedom of Information Act 1987 (“the FOI Act”), and the corresponding Commonwealth legislation, the Freedom of Information Act 1982, and there are numerous relevant decisions of courts and tribunals in both jurisdictions.
Relevant in the context of the third ground is Secretary, Department of Premier and Cabinet v Hulls[32] . In that case, evidence was led from a senior officer of the Victorian Public Service to the effect that the professionalism and accuracy of the advice given by Victorian public servants would not be prejudiced by the possible release of certain documents relating to bids for a casino licence. That evidence was accepted by the Victorian Civil and Administrative Tribunal (“the Tribunal”), as was said [33] by Phillips JA, with whom Tadgell and Batt JJA agreed, as a finding that the Tribunal was not satisfied that the release of the documents would be contrary to the public interest, in terms of paragraph 30(1)(b) of the Act.
[32][1999] 3 VR 331
[33]at 351
In Murtagh v Federal Commissioner of Taxation[34] a taxpayer sought copies of records relating to the assessment of her income tax. The Administrative Appeals Tribunal (“the AAT”), constituted by the President, Davies J, Sir Ernest Coates and Mr R A Sinclair, said [35] :
It was submitted, although not strongly, that candour and frankness in making recommendations and in writing opinions with respect to assessments, objections and requests for reference would be affected if disclosure to the public or to the particular taxpayer of such recommendations took place.
The candour and frankness argument is not new. It achieved pre-eminence at one time but has now been largely limited to high level decision making and to policy making. See Conway v Rimmer [1968] AC 910], Burmah Oil v Governor and Company of the Bank of England [1980] AC 1090 at 1132-3, per Lord Keith; Campbell v Tameside Metropolitan Borough Council [1982] 1 QB 1065 at 1077 per Ackner LJ at 1079 per O’Connor LJ; Science Research Council v Nasse [1980] AC 1028 at 1070 per Lord Salmon, at 1081 per Lord Fraser; Sankey v Whitlam [[1978] 142 CLR 1] at 62-3 per Stephen J, at 97 per Mason J; cp Burmah Oil v Governor and Company of the Bank of England, cited above at 1112 per Lord Wilberforce, at 1145 per Lord Scarman; Sankey v Whitlam, cited above, at 38 per Gibbs J.
. . .
No cogent evidence has been given to this Tribunal either in this review, or, so far as we are aware, in any other, that the enactment of the [Freedom of Information Act 1982] has led to an inappropriate lack of candour between officers of a department or to a deterioration in the quality of the work performed by officers.
[34](1984) 54 ALR 313
[35]at 325-6
In Re Howard and Treasurer of the Commonwealth of Australia[36] Davies J, as President of the AAT, said:
The task reposed upon the Tribunal by section 36 [of the Freedom of Information Act 1982] is not that which arises in the Crown privilege cases of which Conway v Rimmer, supra, and Sankey v Whitlam, supra, are pre-eminent examples, . . . .Yet those authorities throw light upon the elements of the public interest to be considered and the circumstances in which traditionally it has been thought that the reservation of documents from public view should be maintained.
. . .
The [Freedom of Information Act 1982] has been in operation since 1 December 1982. As was said in Re Murtagh and Commissioner of Taxation, supra, Re Chandra and Minister for Immigration and Ethnic Affairs, [(1984, 6 ALN 257] and re Lianos and Secretary to Department of Social Security [decided on 19 February 1985], the [AAT] has not yet received evidence that disclosure under the [Freedom of Information Act 1982] has in fact led to a diminishment in appropriate candour and frankness between officers.
[36](1985) 7 ALD 626 at 634-5
In Ryder v Booth[37] , relevant in the context of the fourth ground, the respondent had applied to the State Superannuation Board under section 35(1)(b) of the FOI Act for the production of confidential medical reports relating to himself, and evidence was called from medical practitioners as to whether the disclosure of those reports would affect the future supply of similar reports to the Board. The Full Court (Young CJ, Gray and King JJ) held, in the context of section 35(1)(b) of the FOI Act, that the question whether the disclosure of the information sought would impair, to more than a trifling or minimal degree, the ability of an agency or Minister to obtain similar information in the future, was a question of fact, and that documents would not be exempt under that paragraph if it was merely shown (as it was in that case) that some persons might be inhibited from providing frank information in the future if the information which they had supplied in the documents was disclosed. The Court found no error in the finding of the County Court Judge, on the evidence before him, that there would be no significant effect upon the supply of information to the Board.
[37][1985] VR 869
It might have been thought, in the face of those authorities, and others to similar effect which I have not cited, that the defendant would have considered it appropriate to call evidence in support of his claims. However, this was not done, nor was it sought to be done, despite the submissions of Dr Bleechmore considered in [33] to [40] above. In the absence of evidence, the Court can be assisted by the authorities to which I have referred.
There are other relevant considerations. While much of the material in the documents could be said to “reveal the inner workings of government and its agencies”, most of them reveal only the detail of routine administration. It cannot be said that the withholding of such documents is “necessary for the proper functioning of the public service” [38] . Many of the documents are ten years old or more, and few are dated more recently than 1995. If it were shown (as it is not) that the disclosure of these documents would have the deleterious effects for which the defendant contends, any such deleterious effects would inevitably be weakened by the passage of time.
[38]see the passage from Conway v Rimmer cited at [46] above and the recognition by Lord Reid that even Cabinet minutes and the like can be disclosed when they have become “only of historical interest”. This passage was adopted by Gibbs ACJ in Sankey v Whitlam (1978) 142 CLR 1 at 41.
The claims relate in part to the likely effect on the “effective operation” or the “proper performance” in the future of the statutory duties of a specified officer. In the Sampathy affidavit, sworn on 26 November 1999, that officer is described as “the Defendant”, who is described in the title to the action as the “Commissioner of Business Franchises”. In the 4 February and 26 February affidavits, sworn in 2002, that officer is described as “the Commissioner of State Revenue”. In the Act as originally assented to on 26 November 1974, section 3 provided that the Comptroller of Stamps appointed under the Stamps Act 1958 should also be the Commissioner of Business Franchises, with responsibility for the general administration of the Act [39] . By the Taxation Administration Act 1997 (“the Administration Act”), which came into operation on 1 July 1997, after the initiation of the substantive proceeding, but before the swearing of any of the three affidavits, section 3 of the Act was repealed and the definition of “Commissioner” in section 2 was amended to read “Commissioner of State Revenue under [the Administration Act]”. The office of Commissioner of State Revenue appears to have been created by section 62 of the Administration Act. I note that the defendant’s statement in his affidavits that from 28 April 1992 to 30 May 1997 he held “the office of Commissioner of State Revenue which encompassed the position of Commissioner of Business Franchises for the State of Victoria” appears to be inconsistent with the statutory position. In his Defence he admits paragraph 2 of the amended Statement of Claim, which reads: “At all material times the Defendant was the Commissioner of Business Franchises pursuant to section 3 of [the Act]”. There was such an officer until 1 July 1997, so that the pleading would seem to be correct. However, at the time of swearing of the Sampathy affidavit, the defendant did not personally hold any position in relation to the administration of the Act, and the office of Commissioner of Business Franchises no longer existed. Thus the specified officer whose statutory duties were there said to be likely to be adversely affected by disclosure of the documents is the Commissioner of State Revenue from time to time, and the references in the Sampathy affidavit to the statutory duties of the defendant as Commissioner of Business Franchises can have no relevance to the question before me.
[39]section 4
No evidence was provided in the affidavits as to the statutory duties of either “the defendant” or the Commissioner of State Revenue. As to the Commissioner of Business Franchises, section 4 of the Act provided until 1 July 1997 that that officer had the general administration of the Business Franchise Acts, defined as including both the Act and the Business Franchise (Petroleum Products) Act 1979. Dr Bleechmore submitted that that officer had no statutory function under the Act since the decision in Ha’s Case [40] which in effect found the Act to be unconstitutional. Although neither of the Business Franchise Acts has been repealed, the scheme which the Act established is no longer in operation and it is to be assumed that there cannot be significant statutory duties remaining to be administered under the Act.
[40]see [8(iii)] above
As to the statutory duties of the Commissioner for State Revenue, Mr Miller said in the course of his submissions:
In any event, the SRO as its name implies is responsible in consultation with Treasury for the formulation and implementation of fiscal policy and the enforcement of the number of Acts to assist the State raise revenue. On the print out that we've had from the web page of the SRO is the Victorian Government's major tax collection agency. It's a service agency of the Victorian agency of Treasury and Finance and it falls within the portfolio responsibilities of the Treasurer of Victoria. It administers a range of taxes and duties, includes payroll tax, land tax, financial institutions duty, debits tax and stamp duty. The collection of these taxes and duties raises more than $6000 million in revenue for the State of Victoria government, so this is a central government department.
Investigation in the Victorian statute book indicates that by virtue of section 63 of the Administration Act the Commissioner of State Revenue “has the general administration of the taxation laws” and also “has the functions conferred on him or her by or under any other Act” . Extensive functions are conferred on that officer by the Debits Tax Act 1990, the Duties Act 2000, the Financial Institutions Duty Act 1982, the Pay-roll Tax Act 1971 and the Land Tax Act 1958. I have already referred to the two Business Franchise Acts. There are no doubt other relevant Acts.
The fourth ground on which the defendant relies, that is, the claim that disclosure of the documents would limit or stop the future flow of information to either the defendant or the SRO, or limit or stop the frankness and candour of future communications between third parties and the SRO, may be taken, since Ha’s case, to relate principally to the responsibilities of the Commissioner of State Revenue under the other Acts administered by that officer. In considering that unsubstantiated claim, it should be borne in mind that not only does section 15 of the Act empower the Commissioner to require information from third parties, and provide that refusal to give such information when required to do so constitutes an offence punishable by a substantial fine or by imprisonment; section 73 of the Administration Act is a similar, although not identical provision relating to the taxation laws listed in the Administration Act which are administered by the Commissioner [41] . Section 5(1) of the Act empowers the Commissioner to communicate any information obtained under the Act to other specified government instrumentalities, as does, in relation to those taxation laws, section 92(e) of the Administration Act. It could be suggested that sections 5(1) and 92(e) respectively would discourage candour and frankness in third parties in their dealings with the Commissioner, but that sections 15 and 73 might well encourage such candour and frankness, to such an extent as to outweigh the effect of any disclosure of the kind contemplated in this proceeding.
[41]the Debits Tax Act 1990, the Duties Act 2000, the Financial Institutions Duty Act 1982, the Pay-roll Tax Act 1971, the Taxation (Reciprocal Powers) Act 1987 and regulations made under those Acts
Very few of the documents disclose that information contained in them which comes from third parties was given in confidence. It may be assumed that the provisions of section 5 must lead to an assumption that this was the case, although the exception for legal proceedings contained in section 5(2)(e) has relevance in this context.
The Court must, of course, be vigilant to exercise its responsibility to “prevent the disclosure of a document whose production would be contrary to the public interest even if no claim is made by a Minister or other official that its production should be withheld” as was said by Gibbs ACJ in Sankey v Whitlam [42] . However, that responsibility is to be exercised in the context of the balancing operation cited in [31] above from the same judgment.
[42]see [35] above
The submission of Dr Bleechmore is [43] that in order to establish its claim of misfeasance in public office, the plaintiff is dependent upon documents in the possession of the defendant, or formerly in the possession of the defendant. It is that submission which must be weighed in the balance against any basis upon which the defendant may establish that disclosure of a particular document would be against the public interest.
[43]See [14] above
Public Interest Immunity - Conclusion
Having examined, in the light of the considerations set out above, each of the documents in respect of which the defendant claims public interest immunity, I have listed in Schedule 2 hereof those documents in respect of which, for the reasons set out in that Schedule, I find the claim of public interest immunity not to be maintainable. I find that claim to be maintainable in respect of all other documents for which that claim is made. As to the documents listed in Schedule 3 hereof, in respect of which no claim for public interest immunity was made, I find, despite the absence of such a claim, that for the reasons set out in that Schedule it would be against the public interest for those documents to be produced.
Decision
There will be a direction that within seven days the defendant produce to the plaintiff for inspection the documents listed in Schedule 4 hereof, being those documents in respect of which I find neither the claim of legal professional privilege nor the claim of public interest immunity nor the claim under the secrecy provisions in section 5(2) of the Act to be maintainable, and in respect of which I do not find that disclosure would be against the public interest. Counsel may wish to make submissions as to the form of the order and as to costs.
Schedule 1
I find in respect of the following documents in respect of which a claim of legal professional privilege is made, that that claim is not maintainable, for the reasons set out.
A. Documents which do not fall within the definition of legal professional privilege set out in [23]
Documents set forth in Part Two of Schedule 1 of the Sampathy affidavit
In file D12Nos 2, 3, 7, 8, 10, 11, 12, 13, 14, 15, 17 and 22
In file D13Nos 1, 2, 5, 6, 7, 8, 10, 11, 14, 15, 16, 19 and 20
In file D14Nos 1 to 46, save that pages 16 to 19 and 39 of No 40, pages 14, 19 and 20 of No 42 and pages 3 to 6 of No 45 do fall within that definition (but see C. below)
Document set forth in the 4 February affidavit
No 188
B. Documents which fall within the definition of legal professional privilege set out in [23], but which also fall within one of the classes of documents described in Master Wheeler’s order for production
Documents set forth in Part Two of Schedule 1 of the Sampathy affidavit
In file D13 Nos 3, 4, 12, 13 and 18
Documents set forth in the 4 February affidavit
Nos 1, 3, 6, 7, 11, 171, 186 and 190
C. Documents which fall within the definition of legal professional privilege set out in [23], but which have been “pleaded into relevance”
Documents set forth in Part Two of Schedule 1 of the Sampathy affidavit
In file D12Nos 4, 5, 6, 9, 18, 19, 20 and 21
In file D13Nos 9 and 17
In file D14Pages 16 to 19 and 39 of No 40, pages 14, 19 and 20 of No 42 and pages 3 to 6 of No 45
Files D15, D17 and D17A, D18 and D18A
Documents set forth in the 4 February affidavit
Nos 10, 13, 185, 187, 189 and 192
Notes to Schedule 1:
1. It was not considered necessary for documents which were found to fall within one of the classes of documents described in Master Wheeler’s order for production to be examined again in order to determine whether they had been “pleaded into relevance”.
2. In the absence of the attachments to documents 4, 5, 6 and 9 in file D12 referred to in the Sampathy affidavit, and to the documents in files described as D15, D16, D17 and D17A and D18 and D18A referred to in the Sampathy affidavit, and to document 7 referred to in the 4 February affidavit, I am not in a position to make any finding as to whether those attachments are privileged, and I do not do so.
3. Parts of documents 39, 40, and 42 in file D14 referred to in the Sampathy affidavit have become confused with each other. It is possible to ascertain which material belongs to which documents, but I have not undertaken any physical rearrangement of the material.
Schedule 2
I find in respect of the following documents in respect of which a claim of public interest immunity is made, that that claim is not maintainable, for the reasons set out.
A. All documents set forth in the Sampathy affidavit for which this claim is made
B. All documents set forth in the 4 February affidavit in respect of which this claim is made save Nos 14 to 25 and 193
C. All documents set forth in the 26 February affidavit
There is no evidence in respect of any of those documents to support any of the factual statements on which the claim rests. Nor is there any other ground, not specified in the claim, on which the Court could find that production of any of those documents would be contrary to the public interest in such a way as to counterbalance the public interest in the availability of evidence to facilitate the administration of justice.
Note to Schedule 2:
As to Nos 14 to 25 and 193 set forth in the 4 February affidavit, the same considerations apply as are set out in Schedule 3 in relation to the documents there described.
Schedule 3
I find that production of the following documents set forth in the 4 February affidavit, in respect of which a claim of public interest immunity is not made, would be against the public interest.
Nos 52, 59, 65 to 67, 102, 106 to 113, 123, 144 to 147, 152 to 154, and 191
Each of those documents relates to consideration of matters pertaining to high level policy and legislative proposals or considerations, and is a document as to which, in my view, the matters raised by Lord Reid in the passage from Conway v Rimmer appearing in [46] above are particularly relevant. None of them has such direct relevance to the matters in issue between the parties as to render the public interest in the availability of evidence to facilitate the administration of justice of such significance as to counterbalance the public interest in not disclosing documents of that kind.
Schedule 4
Documents set forth in Part Two of Schedule 1 of the Sampathy affidavit
In file D12Nos 1-15 and 17-22
In file D13All documents
In file D14All documents
Files D15, D17 and D17A, D18 and D18A
Documents set forth in the 4 February affidavit
Nos 1-13, 26-51, 53-58, 60-64, 68-101, 103-105, 114-122, 124-143, 148-151, 155-168, 170-190 and 192
Documents set forth in the 26 February affidavit
All documents
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