Arcadia Holdings Pty Ltd & Anor v Commonwealth of Australia

[1998] HCATrans 372

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Perth  No P24 of 1997

B e t w e e n -

ARCADIA HOLDINGS PTY LTD and ALL STATES AUTO IMPORTS PTY LTD

Applicants

and

COMMONWEALTH OF AUSTRALIA

Respondent

Application for special leave to appeal

GAUDRON J
McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT PERTH ON THURSDAY, 22 OCTOBER 1998, AT 10.49 AM

Copyright in the High Court of Australia

MR E.M. HEENAN, QC:   May it please your Honours, I appear with my learned friend, MR P.A. KYLE, for the applicants.  (instructed by Kyle & Company)

MR M.J. McCUSKER, QC:   May it please your Honours, I appear with my learned friend, MR T.J. CAREY, for the respondent.  (instructed by Australian Government Solicitor)

GAUDRON J:   Yes, Mr Heenan.

MR HEENAN:   May it please your Honours, the special leave point and the error of the Full Court below which we submit occurred in this case coincide, namely, the approach taken by the Full Court that if disclosure of the documents for which public interest privilege was claimed tended to, or did, reveal actual discussions in Cabinet, then ipso facto the public interest privilege prevailed regardless of whether or not the content of the documents or those discussions were likely to damage the public interest.  The potential ‑ ‑ ‑

GAUDRON J:   Where did they make that finding?  Where did they proceed on that basis?

MR HEENAN:   Your Honours, the approach taken by the Full Court was at every point that if disclosure of the documents, the Cabinet briefing documents, led to a revelation ‑ ‑ ‑

GAUDRON J:   Of a Cabinet decision?

MR HEENAN:   Well, perhaps a revelation of a discussion, your Honour, because ‑ ‑ ‑

GAUDRON J:   Well, did they not say that for the evidence to be relevant to the matters pleaded it would have to reveal a Cabinet decision and if it did reveal that it would be inadmissible?

MR HEENAN:   Yes, they did say that, your Honour.

GAUDRON J:   Well, what is wrong with that?

MR HEENAN:   The peculiar feature of that was that the Class 2 documents which were permitted for inspection by the Master and which were not the subject of appeal on either side were the documents which recorded the actual decisions of Cabinet as opposed to discussions and it was the apprehension that Cabinet solidarity or colligality would be breached and different positions of Ministers attending Cabinet revealed which would be inimical to the public interest and hence the concentration on discussions of what happened in Cabinet.  Your Honour will recall that the Class 1 documents were the actual transcripts of everything that was said in Cabinet, the notebooks of discussion.

Those notebooks appear to have been identical with the notebooks which were the subject of the litigation in the Northern Land Council Case and they were held by the Master to be covered by the privilege and there was no appeal by my clients from that finding.  The documents which we are concerned with here were documents known as briefing documents which were prepared for or in anticipation.

GAUDRON J:   Yes, but you lost on the basis that they had no relevance, in essence, that they had no relevance.  If they did have relevance then other conclusions would follow, but that is really what the Full Court did.  I mean, I know it is a somewhat original approach to the issue but ‑ ‑ ‑

MR HEENAN:   Can we say two things  about that, your Honour?  First of all, the Full Court approached the question of relevance on the basis of admissibility in the action as tending to prove that a particular decision was made as if it would be the documents which clinched the allegation of the plaintiffs that at a certain time a policy had been established.  Now, that is true when one comes to consider the admissibility of documents in the court itself but that is not the test for whether or not documents should be discovered.  The test, as we all know, is whether the documents relate to any matter in question in the proceedings.  That is the traditional formula found in the Rules of the Supreme Court in Western Australia, Order 26, rule 1 ‑ ‑ ‑

GAUDRON J:   Yes, but was it not said by this Court in the Northern Land Council Case that if one were to get into documents they would have to be highly relevant?

MR HEENAN:   Well, your Honour, in this case the real question is whether, before the alleged representations by the Commonwealth officials in July 1989, there had been a policy decision or a provisional policy decision taken by the Executive Government to introduce an effective barrier to the import of used cars from Japan.  Our case is that under the Motor Vehicle Standards legislation there was a non tariff barrier but that the hidden purpose behind that legislation was to ensure that the standards were such as to deter imports on a sizeable scale, but only when our clients demonstrated that they could satisfy the standards and import in large quantities was the actual tariff barrier erected by the Customs Tariff Act announced at the end of 1991 and introduced by legislation in 1992.  Now, the question is was there an intention, a policy intention by the Executive Government, to erect an effective barrier to importation at some time before July 1989.

Now, we know, without the least shadow of a doubt, that the public policy of the Executive Government underwent a transition because the Customs Tariff Act was amended, the policy was announced before the legislation was brought towards the Parliament and the amended policy and amended legislation meant that there was a $12,000 impost on each car imported, thus rendering the trade uneconomic.  So, the question for us in this case is when did that public and admitted change of policy occur?  Now, if these documents reveal, or tend to reveal, that such a change of policy was under discussion before July 1989 they are, in our respectful submission, very relevant to the case.  They may not be admissible in themselves and none of them may be decisive but they were, nevertheless, material and they are documents which, unless the public interest is harmed by their release, should be disclosed to us.

Now, the question of whether having regard to the fact that this change of policy became public it was announced by the minister that it was enshrined in legislation, that all this happened nine years ago under a different government, and the influence of all that on whether there is still a public interest against disclosure of the documents was not examined by the Full Court and in our respectful submission that was a serious omission in the balancing exercise.  What appears to have occurred, with respect, is that, in accordance with the submission which I was making, the tendency of disclosure of the documents to reveal discussions within Cabinet was ipso facto treated as ‑ ‑ ‑

GAUDRON J:   No, it was balanced against the admissibility or marginal relevancy.  That was really the way in which the court approached it and said, “It would not prove the matter, so they are of marginal relevance, as distinct from of direct relevance, therefore, we balance it this way”.

MR HEENAN:   Your Honour, we are in the difficulty adverted to by the Canadian Court in Carey v Ontario in meeting that suggestion because we do not know what is in the documents and we are unable to consider and respond to suggestions that the documents may not have been of considerable importance, so, to be told by the Full Court that the documents were not relevant is for us an unanswerable proposition without access to the documents or without the court inspecting them and if they had the potential to reveal when this decision for the change of policy had occurred, for example, if the briefing minutes recorded observations to the effect that if the Motor Vehicle Standards legislation is not effective to deliver the desired purpose further legislation will be needed, then, clearly, they may be relevant, but the Full Court was not able to examine that possibility any more than we can, it was simply left unexamined, and an important part of the balancing exercise was not performed.

We say that to treat the matter in the way that the Full Court did is, in effect, to yield to the assertion of the Executive, the unexaminable assertion of the Executive, that disclosure of these particular documents will harm the public interest and, with all respect, we say that that is a detraction from the judicial power that rested in the court to determine this claim for Executive privilege and left it unexamined. 

In all the cases which were relied on the Executive claim was examined and scrutinised.  Perhaps our best case is The Attorney-General v Jonathan Cape Limited, the Crossman Diaries Case where the Attorney-General for Great Britain attempted, as your Honours know, to restrain the publication of very detailed diaries by a late Cabinet Minister, Mr Crossman, of actual discussions within Cabinet but in that case, it being 10 years after the event, the Chief Justice, Lord Widgery thought, having read the documents, that notwithstanding the need to preserve Cabinet confidentiality, notwithstanding the conventions that discussions were not broached outside Cabinet, no harm would come from the release of these documents.

Similar views were taken in Canada in Carey v Ontario.  That is essentially the view that was taken in Sankey v Whitlam.  It was taken in this Court in Alister v The Queen, the Ananda Marga case, and on one view of the Northern Land Council Case it remains.  In the Northern Land Council Case, your Honours, the proposition which was against us, and perhaps put most highly, is at page 618, but when quoting from Acting Chief Justice Gibbs in Sankey v Whitlam there is the acknowledgment that:

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

Then there is the passage cited from Sankey v Whitlam in the judgment of Acting Chief Justice Gibbs and in the middle of the paragraph at the foot of page 616 there is the phrase:

The fundamental and governing principle is that documents in the class may be withheld from production only when this is necessary in the public interest.

And his Honour goes on.  Over the page at page 617 at the conclusion of the quotation there is the sentence:

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

McHUGH J:   That is a general statement.

MR HEENAN:   Yes.

McHUGH J:   But, at 618 six of us said that:

we doubt whether the disclosure of records of Cabinet deliberations upon matters which remain current or controversial would ever be warranted in civil proceedings.

MR HEENAN:   Well, the limit is the phrase, “upon matters which remain current or controversial”.  Here we have a policy which is no longer secret, that has passed into legislation, it has been implemented, a policy announcement has been made and all this happened over nine years ago.  It is not dissimilar to what happened in Jonathon Cape and in Carey but the point is that whether those factors of the implementation of the policy, the disclosure to the public and the delay which has occurred outweigh the other considerations is an exercise which has not been performed by the Full Court.  The mere tendency as accepted is enough and the passage on 618 in the Northern Land Council Case has been treated by the court, with respect, as if the limiting clause upon matters which remain current and controversial did not appear.  That is what we say is the error below.  Now, your Honours ‑ ‑ ‑

GAUDRON J:   But you have to go so far as to say the weighing process cannot be carried out without having regard to the documents, do you not?

MR HEENAN:   Well, in this case it does not appear to have been carried out at all, your Honours, apart from ‑ ‑ ‑

GAUDRON J:   Well, it has, because what has been weighed is the inadmissibility, as it were, against the category of documents.

MR HEENAN:   Yes.  As to that, your Honours, can we simply say that those matters – the preservation of the Cabinet process were not treated as determinative in Carey v Ontario, Sankey v Whitlam or the Burmah Oil Company Case or the Jonathan Cape Case. 

Your Honours, if we were given special leave we might have to modify our grounds of appeal to reduce them in content and we could modify them by reducing them to the propositions which are contained in the application for special leave itself, page 129 of the papers, grounds 2.6(b) and (c), without having to trouble the Court about the other points.

Can I just say, finally, that two points might be made against us as they were by his Honour Justice Ipp in the Full Court.  First, that counsel for the present applicants in the Full Court, according to Justice Ipp, declined an offer for the Full Court to inspect the documents itself.  That is to be found in the application book at page 102 but if one goes to the transcript of argument and the transcript pages begin at application book 102 and run to application book 33, there are several questions in which counsel for the applicant respond to the Bench and, with respect, counsel’s position was that he left open the question of whether or not the court should inspect the documents but his position was that if the court came to that point the correct course would be to remit the case to the Master for reconsideration so that the Master could inspect the documents.  Now, that may or may not have been an appropriate response but it does not appear to be a rejection of the suggestion that the Full Court or that somebody should examine the documents.

GAUDRON J:   But do you go so far as to say in this case that the weighing process could only be carried out by inspection of the documents?  Now, do you say that, because you have to go that far in this case, do you not, to demonstrate error?

MR HEENAN:   We need to know whether disclosure of the documents so as to reveal when the change of policy occurred would harm the public interest and perhaps the answer to your Honour’s questions is “yes”.

GAUDRON J:   But at pages 102 and 103 that was not the position for which you contended.

MR HEENAN:   Well, Mr McIntyre, below, put the proposition that it was open for the court to do this but that if this became necessary it should go to the Master so that there could be further submissions and examination and indeed that course seems to be consistent with views taken in Jonathan Cape and elsewhere, that if the court itself inspects the documents there should be further submissions. 

The second and last point that we wish to make was that it might be pointed out against us that counsel below conceded that the Class 3 documents were essentially of the same character as the Class 1 documents,

the transcripts.  That is in the judgment of Justice Ipp at page 122 but, again, if one turns to the transcript of the case and one goes to pages 104 and 107, in the middle of page 104 at line 25 counsel for the present applicant said:

We are happy to join issue on that –

It was discussed further and then a significant passage appears on page 105 between lines 30 and 55 where, essentially, counsel for the present applicant is saying or submitting that, yes, it is possible that disclosure of the Class 3 documents may reveal indirectly discussions of what occurred within Cabinet and to that extent they resemble the Class 1 documents but, nevertheless, accepted principles mean that the privilege will not protect them.  Now, it may not have been put as clearly as that but, in our respectful submission, that is the position.  May it please your Honours.

GAUDRON J:   Thank you, Mr Heenan.  Yes, Mr McCusker, we do not need to hear you in this matter.

The Court is of the view that given the way in which the argument was conducted in the Full Court in this matter, it is not a suitable vehicle for the elucidation of any further point of general principle relating to privilege.  Accordingly, special leave is refused.

MR McCUSKER:   Your Honour, I ask for costs against the applicant.

GAUDRON J:   What do you say as to costs?

MR HEENAN:   There is no reason why any order for costs should not be made, your Honour.

GAUDRON J:   Yes, thank you.  It is refused with costs.

AT 11.12 AM THE MATTER WAS CONCLUDED