Attorney-General (United Kingdom) v Heinemann Publishers Australia Pty Ltd

[1988] HCA 25

HIGH COURT OF AUSTRALIA

Mason C.J., Wilson, Brennan, Deane, Dawson, Toohey and Gaudron JJ.

ATTORNEY-GENERAL (UNITED KINGDOM) v. HEINEMANN PUBLISHERS AUSTRALIA PTY. LTD.

(1988) 165 CLR 30

2 June 1988

International Law

International Law—Enforcement of public laws of foreign State—Confidential information that had been acquired during employment in United Kingdom security service—Injunction to restrain publication—Whether enforcement of public laws of foreign State.

Decisions

MASON C.J., WILSON, DEANE, DAWSON, TOOHEY AND GAUDRON JJ: The appellant commenced an action in the Supreme Court of New South Wales against the respondents seeking an injunction to restrain them from publishing Mr Wright's memoirs, Spycatcher, together with an account of profits and other consequential relief. The appellant alleged that Mr Wright, in writing Spycatcher, had drawn substantially on confidential knowledge and information acquired by him whilst he was an officer of the British Security Service. This allegation seems not to have been disputed by the respondents. The appellant claimed that he was entitled to the relief sought on the footing that the proposed publication of Spycatcher amounted to a breach of fiduciary duty, a breach of the equitable duty of confidence or, alternatively, a breach of a contractual obligation of confidence on Mr Wright's part, the alleged breach in each instance being of a duty or obligation owed by Mr Wright to the United Kingdom Government. The respondents denied that the proposed publication constituted a breach of any obligation or duty owed by Mr Wright to the United Kingdom Government.

2. At first instance Powell J. held that much of the information in the book no longer retained the quality of confidentiality and that the publication of what was confidential would not cause any detriment to the United Kingdom Government or to its Security Service: A.-G. (U.K.) v. Heinemann Publishers Australia (1987) 8 NSWLR 341. As McHugh J.A. observed in his reasons for judgment in the Court of Appeal, Powell J. found that the greater part of Spycatcher dealt with four matters:

(1) technology - mainly methods of electronic surveillance and electronic methods of interception;

(2) operations concerning electronic surveillance and interception involving breaches of civil and international law;

(3) investigations into Soviet penetration of the Service before 1971;

(4) service as personal consultant to the Director General."

Powell J. found that the information disclosed in Spycatcher was at least ten years old and that matters concerning technology and operations carried out by the Service were at least twenty years old. He concluded that the discussion of technology would be of no use to a technician even if the technology had not been superseded, that the discussion of non-technical operations did not record those operations in detail and analyze the success or failure of such operations and that there had been discussion of many of the matters disclosed in Spycatcher in other materials. His Honour went on to find that much of the information in Spycatcher was already available to the public. He also found that it was difficult to see how disclosure of any technology or operations of the Service, in the light of the lapse of time, could detrimentally affect the national security of the United Kingdom.

3. Powell J. dismissed the action with costs and released the respondents from certain undertakings they had given at the commencement of the action. The respondents had then undertaken that they would not disclose or publish:

"(a) any information obtained by the second (respondent) in his capacity as an officer of the British Security Service;

(b) any book concerning the British Security Service written by the second (respondent) or including information provided by him or any copies extracts or excerpts from the said book or manuscript thereof".

The order releasing the respondents was suspended for twenty-eight days.

4. The respondents subsequently continued their undertakings on the appellant lodging an appeal to the Court of Appeal against the orders made by Powell J. The Court of Appeal by majority (Kirby P. and McHugh J.A., Street C.J. dissenting) dismissed the appeal with costs: A.-G. (U.K.) v. Heinemann Publishers Pty Ltd (1987) 10 NSWLR 86. The Court of Appeal ordered that the respondents be released from their undertakings, but suspended the operation of that order to enable the appellant to seek interlocutory relief in this Court pending an application for special leave to appeal.

5. The appellant applied for special leave to appeal. Pending the hearing of that application the appellant sought a stay of proceedings and orders suspending the orders which had been made by the primary judge and the Court of Appeal releasing the respondents from their undertakings. Deane J. refused that application without prejudice to the appellant's right to apply to a Full Court for interlocutory relief: A.-G. (U.K.) v. Heinemann Publishers Australia Pty Ltd (1987) 61 ALJR 612; 75 ALR 461.

6. Subsequently the Full Court granted special leave to appeal, but expressly reserved the right to revoke the grant of special leave. Special leave having been granted, the appellant sought interlocutory injunctions, similar in effect to the undertakings previously given by the respondents. The Court declined to grant the interlocutory relief sought. By that time Spycatcher or Spycatcher material had been widely published in the United States and, following the refusal for interlocutory relief by Deane J., in Australia. Since then Spycatcher has been published in New Zealand following the recent decision of the New Zealand Court of Appeal (unreported, 15 March 1988) affirming the refusal of Davison C.J. at first instance to restrain publication of the book in New Zealand. Litigation concerning the publication of the book is still on foot in the United Kingdom. At first instance Scott J. refused to restrain publication of Spycatcher, his decision being affirmed by the Court of Appeal. An appeal to the House of Lords is pending.

7. In the New South Wales Court of Appeal Kirby P. and McHugh J.A. differed between themselves as to the basis on which the relief sought by the appellant should be refused. Kirby P. considered that the grant of relief would be inconsistent with the principle that Australian courts do not enforce the public law and policy of a foreign state. On the other hand, McHugh J.A. decided that, as there was no contract between the parties, the appellant could only succeed by establishing that the disclosure of the information would be detrimental to the public interest of the United Kingdom and that the courts in this country will not hear an action which requires them to make such a judgment. Street C.J. acknowledged the existence of the principle that Australian courts will not enforce a foreign government's claim deriving from the entitlement of a state to protection against harm to the public interest of that state, the claim sought to be enforced being, in his Honour's opinion, one of this kind. However, his Honour thought that such a foreign government claim should be enforced when it was supported by the Australian Government as being in the Australian public interest. Evidence had been given by Mr Codd, the Secretary of the Department of the Prime Minister and Cabinet, that the public interest in Australia would be served by enforcement of the appellant's claim. Street C.J. concluded that the United Kingdom Government was entitled to an account of profits but considered that, on the claim for an injunction to restrain publication of Spycatcher, the court should receive more up-to-date evidence of the Australian Government's attitude towards publication.

8. Before examining the appellant's arguments in support of the appeal, we need to examine with some precision the nature of the claim which the appellant seeks to enforce in the action and the defences on which the respondents rely.

9. Mr Wright joined the Security Service in September 1955 and remained with the Service until January 1976. He was employed until 1964 as a Senior Principal Scientific Officer providing scientific and technical support for counter-espionage operations. In 1964 he was posted to the counter-espionage branch, occupying a number of senior positions in that branch until he retired. For the last three years of his service he was employed on the personal staff of the Director-General of the British Security Service as a consultant on counter-espionage matters. Sir Robert Armstrong, the Secretary of the Cabinet of the United Kingdom Government, stated in an affidavit that Mr Wright's work:

"involved him in frequent and close liaison with the intelligence and security services of friendly foreign countries and in the exchange of information with those services. It was, and continues to be, essential to the effectiveness of all such liaison and exchanges that they are conducted upon a basis of mutual trust and confidence."

10. The terms of Mr Wright's appointment to the Service in 1955 are set out in letters between the Director of the Personnel Branch and Mr Wright written in July 1955. Mr Wright accepted an offer made by the Director of the Personnel Branch of a temporary appointment "for a period of three years ... terminable at all times by one month's notice on either side". The Director of the Personnel Branch informed him that after the expiration of three years he would be "eligible for appointment to the Established Staff of the Service, with effect from the 1st September, 1955" if it was decided that his position was to be a permanent one.

11. On 1 September 1955 Mr Wright signed a declaration acknowledging that his attention had been drawn to certain provisions of the Official Secrets Act 1911 (U.K.), including the following part of s.2:

"(1) If any person having in his possession or control any ... information ... which has been entrusted in confidence to him by any person holding office under His Majesty or which he has obtained or to which he has had access owing to his position as a person who holds or has held office under His Majesty ...

(a) communicates the ... information to any person, other than a person to whom he is authorised to communicate it, or a person to whom it is in the interest of the State his duty to communicate it, or

(aa) uses the information in his possession for the benefit of any foreign power or in any other manner prejudicial to the safety or interests of the State, or

...

(c) fails to take reasonable care of, or so conducts himself as to endanger the safety of the ... information;

that person shall be guilty of a misdemeanour."

12. In addition, Mr Wright was aware of circulars and security instructions whose effect was that officers in his position were ordered not to discuss their work with members of the public and that circulation of information was to be "strictly limited to individuals who need to know the information for the efficient performance of their duties".

13. On 30 January 1976 Mr Wright signed another declaration. In this document he acknowledged that he understood that the Official Secrets Act applied to him after his resignation and that all information which he acquired or had access to because of his official position was covered by s.2 of that Act unless it had "officially been made public". He also recognized that he was liable to prosecution if he published information not officially made public unless he had obtained "the official sanction in writing" of the Security Service.

14. The appellant's case, to the extent to which it rests on breach of fiduciary duty, is that, by reason of the trust, faith and confidence reposed in Mr Wright, he became subject to and bound by a fiduciary duty not, without authority, to disclose or use any information obtained by him in the course of his service otherwise than for the purposes of the Crown. The publication of Spycatcher was a disclosure and use without authority, otherwise than for the purposes of the Crown, being for Mr Wright's own profit and advantage. Breach of the alleged fiduciary duty, according to the argument, entitles the appellant not only to injunctive relief but also to a declaration that the respondents hold the profits and advantages derived from the breach of duty in trust for the appellant. Although the primary contention is that the duty owed by Mr Wright is not restricted to matter the disclosure or use of which will cause detriment to the United Kingdom Government, the appellant submits that, on the evidence, it has sustained and will continue to sustain detriment by reason of the publication of Spycatcher.

15. The case, so far as it rests on breach of the equitable obligation of confidence, is that the nature and circumstances of the relationship between Mr Wright and the Security Service gave rise to such an obligation. The obligation, according to the appellant, was that Mr Wright would not at any time disclose or use anything learnt by him in the course of his service without the authority of the Security Service. The appellant submits that the mere making of an unauthorized publication by an officer or former officer of the Security Service will cause detriment to the United Kingdom Government, irrespective of the content of what is published, in addition to any detriment arising from disclosure of the content itself. This proposition is based on the assertion that an unauthorized publication will disclose or authenticate the fact that the person disclosing is or was a member of the Security Service. The proposition is also based on the assertion that unauthorized publication will cause friendly security agencies to lose confidence in the Service and be less willing to make confidential information available. For breach of this equitable obligation of confidence the appellant claims to be entitled to an injunction without proof of damage.

16. The contractual basis for the relief sought rests on terms similar to those obligations already expressed as fiduciary and equitable obligations. The appellant submits that, even if the relationship between the Security Service and Mr Wright was not entirely contractual because, for example, the Crown had the right to terminate his appointment at pleasure, Mr Wright's entitlement, if any, to publish was regulated by an implied contract whose terms and operation survives the termination of his appointment. The appellant submits that, as the breach of the alleged term was a breach of an implied negative stipulation, an injunction should be granted without proof of damage.

17. The legal and equitable basis of the appellant's case for relief is expressed in these three ways. However, they all take as their foundation the peculiar relationship between the United Kingdom Government and Mr Wright as an officer of the British Security Service, being a security service engaged in counter-espionage activities. Although the obligation sought to be enforced is personal to Mr Wright, it lies at the core of the relationship that subsists between the United Kingdom Government and the officers of its Security Service, the obligation and its enforcement seemingly being of critical importance to the efficient working of the Security Service having regard to the extraordinary and covert nature of its operations. Those operations are of course carried on with the object of protecting the national security of the United Kingdom. The role of the Security Service is set out in a directive dated 24 September 1952 from the Home Secretary to the Director-General of the Security Service as follows:

"The Security Service is part of the Defence

Forces of the country. Its task is the Defence of the Realm as a whole, from external and internal dangers arising from attempts at espionage and sabotage, or from actions of persons and organisations whether directed from within or without the country, which may be judged to be subversive of the State."

18. It is of some significance that Mr Wright accepted that he was bound by the provisions of s.2 of the Official Secrets Act and that he accepted an obligation of confidence in terms of that provision. The statutory obligation, which is imposed generally on British civil servants in order to protect the efficient working of the United Kingdom Government, is therefore relevant to the claim for relief that is raised in the action. Without exploring the three suggested bases for the obligation of confidence asserted by the appellant, we are prepared to assume, in accordance with the decisions of Scott J. and the English Court of Appeal, that, as a matter of English law and subject to the defences on which the respondents rely, Mr Wright came under an obligation of confidence to the United Kingdom Government.

19. The respondents rely on the following as matters of defence:

(1) the Spycatcher material lacks the quality of confidential material because, by reason of prior publications, it had passed into the public domain;

(2) no detriment to the appellant would result from publication;

(3) publication is in the public interest of the United Kingdom;

(4) publication is in the public interest of Australia;

(5) the action is barred by the rule that Australian courts will not enforce a foreign penal or public law; and

(6) the case involves issues that are non-justiciable.

As the judgments in the Court of Appeal turned on the last two of these defences, it is convenient at this stage to consider them. To some extent they run together.

20. The principle that domestic courts will not enforce a foreign penal or public law is sometimes described as a rule of public international law, and, at other times, as one of private international law. Dicey and Morris, The Conflict of Laws, 11th ed. (1987), vol.1, pp 100-101, state the principle in these terms:

"English courts have no jurisdiction to

entertain an action:

(1) for the enforcement, either directly or indirectly, of a penal, revenue or other public law of a foreign State; ..."

The rule is associated with a related principle of international law, which has long been recognized, namely that, in general, courts will not adjudicate upon the validity of acts and transactions of a foreign sovereign state within that sovereign's own territory. The statement of Fuller C.J. in Underhill v. Hernandez (1897) 168 US 250, at p 252 that:

"... the courts of one country will not sit in judgment on the acts of the government of another done within its own territory"

has been repeated with approval in the House of Lords (Buttes Gas v. Hammer (1982) AC 888, at p 933) and the Supreme Court of the United States (Banco Nacional de Cuba v. Sabbatino (1964) 376 US 398, at p 416). The principle rests partly on international comity and expediency. So, in Oetjen v. Central Leather Co. (1918) 246 US 297 the Supreme Court said (at p 304):

"To permit the validity of the acts of one sovereign State to be re-examined and perhaps condemned by the courts of another would very certainly 'imperil the amicable relations between governments and vex the peace of nations.'"

As Lord Wilberforce observed in Buttes Gas v. Hammer (at pp 931-932), in the context of considering the United States decisions, the principle is one of "judicial restraint or abstention" and is "inherent in the very nature of the judicial process".

21. The associated rule with which we are presently concerned has traditionally been expressed as a bar to jurisdiction, although the rule might now be more correctly described as one rendering a claim unenforceable. The rule had its foundation in the notion "that crimes, including in that term all breaches of public law punishable by pecuniary mulct or otherwise, at the instance of the State Government, or of some one representing the public, are local in this sense, that they are only cognizable and punishable in the country where they were committed": Huntington v. Attrill (1893) AC 150, at p 156, per Lord Watson. His Lordship went on to point out that the rule applied to a civil action which has for its object the enforcement by the state, directly or indirectly, of punishment imposed for such breaches by the lex fori.

22. The jurisdictional origins of the rule are well illustrated by the distinction which underlies the line of cases concerning title to, or possession of, property the subject of confiscation or seizure by a foreign government. The principle denies jurisdiction in a court to determine a claim of title to the property based on the operation of a statute or executive act of the foreign state on that property outside the territory of the foreign state. It is otherwise when the claim of title is based on an exercise of sovereign authority with respect to the property within the territory of the foreign state. See the discussion of the cases by Lord Denning M.R. in A.-G. of New Zealand v. Ortiz (1984) AC 1, at pp 21-24; see also Williams &Humbert v. W. &H. Trade Marks (1986) AC 368, at pp 428-429, 431, 433.

23. Whether the principle extends to proscribe the enforcement of foreign public laws as well as foreign penal laws has been a contentious question. In Ortiz, despite Lord Denning's affirmative answer, Ackner L.J. was inclined against it, though his Lordship concluded that the rule of "public international law" applied because the action was an action by the state "to vindicate the public justice" (at p 33), concerning, as it did, "a public right" rather than "a private right" at the suit of an individual (at pp 33-34). Neither O'Connor L.J., nor the House of Lords on appeal, dealt with the question. Earlier the House of Lords had decided in Government of India v. Taylor (1955) AC 491 that English courts would not enforce the revenue laws of a foreign state. This extension of the principle has not remained immune from criticism: see Carter, "Rejection of Foreign Law: Some Private International Law Inhibitions" (1984) 55 Br. Year Book of Int. Law 111; Mann, "The International Enforcement of Public Rights" (1987) 19 NYU J Int L &ol 603. With the nature of that criticism we are not presently concerned, except to note that it is indicative of the difficulty of identifying the foreign laws or rights that fall within the rule.

24. This difficulty has been evident in the endeavours to explain why the principle applies to actions for the enforcement of public laws other than penal and revenue laws. The expression "public laws" has no accepted meaning in our law. Nevertheless Dr Mann, at p 607 in the article to which we have just referred, appears to equate "public laws" and "public rights", an expression which he treats as synonymous with "prerogative rights". The transition from "laws" to "rights" sits somewhat uncomfortably with the long-standing formulation of the rule in its application to "penal laws". It would be more apt to refer to "public interests" or, even better, "governmental interests" to signify that the rule applies to claims enforcing the interests of a foreign sovereign which arise from the exercise of certain powers peculiar to government.

25. Lord Denning is not the only judge who considers that the rule extends to foreign public laws. In Reg. v. Governor of Pentonville Prison, Ex parte Budlong (1980) 1 WLR 1110; 1 All ER 701 Griffiths J. (at p 1125; pp 714-715 of All ER) considered that the rule prevented the enforcement of foreign public laws as well as foreign penal and revenue laws. In In re State of Norway's Application (1987) 1 QB 433 Kerr L.J. (at p 478) described it as "a principle of general international acceptation". International practice certainly supports this view. Extradition treaties and conventions provide for exceptions from the obligation which they impose in the case of offences against public laws. So do treaties relating to the enforcement of foreign judgments.

26. The argument against this view of the principle is that it is an unnecessary and undesirable limitation on the jurisdiction of the courts of the forum, that it unduly restricts the remedies available to a foreign state and that a limitation on the enforcement of foreign public laws or rights is "of uncertain meaning and of possibly dangerous width": Carter, supra, at pp 121-122. However, if the effect of the rule is merely to prevent enforcement outside the territory of the foreign sovereign of claims based on or related to the exercise of foreign governmental power (cf. (1977) 57(II) Annuaire de l'Institut de Droit International 329), the operation of the rule is neither unsatisfactory nor uncertain.

27. It is instructive to refer to an explanation of the rule given by Learned Hand J. in Moore v. Mitchell (1929) 30 F(2d) 600 which differs from that given by Lord Watson in Huntington v. Attrill. Learned Hand J. said (at p 604):

"To pass upon the provisions for the public order of another state is, or at any rate should be, beyond the powers of a court; it involves the relations between the states themselves, with which courts are incompetent to deal, and which are intrusted to other authorities. It may commit the domestic state to a position which would seriously embarrass its neighbour. ... No court ought to undertake an inquiry which it cannot prosecute without determining whether those laws are consonant with its own notions of what is proper."

28. This explanation of the rule, which calls to mind the explanations given of the companion rule in Underhill v. Fernandez, Oetjen v. Central Leather Co. and Buttes Gas v. Hammer, was taken up by Kingsmill Moore J. in Buchanan, Ltd and Another v. McVey (1954) Ir R 89 (noted at (1955) AC 516). Kingsmill Moore J. considered (at pp 106-107; pp 528-529 of AC) that, just as it was necessary for the domestic court to reserve the right to reject the foreign law on the ground that it conflicted with public policy or affronted the morality of the domestic forum in cases between private persons, so it was also necessary to reserve an option to reject the foreign law when the action sought to enforce "governmental claims". He continued (at p 106; p 529 of AC):

"... if the Courts had contented themselves with an option to refuse such claims, instead of imposing a general rule of exclusion, the task of formulating and applying the principles of selection would have been one, not only of difficulty, but danger, involving inevitably an incursion into political fields with grave risks of embarrassing the executive in its foreign relations and even of provoking international complications."

So he concluded (at p 107; p 529 of AC):

"Safety lies only in universal rejection. Such a principle appears to me to be fundamental and of supreme importance."

29. The explanation of the rule given by Learned Hand J. and Kingsmill Moore J. has been criticized on the ground that it goes too far in denying judicial enforcement of a foreign law even when the validity or the morality of the foreign law is not in issue: Mann, supra, at p 610. True it is that there are some claims to enforce a foreign state's governmental interests that will not involve the risks mentioned by Learned Hand J. and Kingsmill Moore J. But there are some claims in which the very subject-matter of the claims and the issues which they are likely to generate present a risk of embarrassment to the court and of prejudice to the relationship between its sovereign and the foreign sovereign. These risks are particularly acute when the claim which the foreign state seeks to enforce outside its territory is a claim arising out of acts of that state in the exercise of powers peculiar to government in the pursuit of its national security.

30. The most obvious examples of such a claim are those arising out of the relationship between a foreign state and members of its military forces engaged in hostilities against another state in circumstances where this country is not directly involved. It would be a source of potentially vast detriment to Australia's national interests and foreign relations if our courts were under a common law obligation effectively to exercise jurisdiction at the suit of the first state to enforce legal rights against a member of its armed forces to prevent disclosure of information or desertion to the other state.

31. The attempted enforcement by a foreign state of an obligation of confidentiality on the part of a member or former member of its security service is but another, even if slightly less, obvious example of such a claim.

32. No doubt an Australian court in appropriate circumstances will enforce an obligation of confidentiality on the part of a member of the Australian Security Intelligence Organization (ASIO), that organization having been established for the purpose of protecting Australia's security. But even in such a case the court may be called upon to consider whether the Australian public interest in publication overrides the interest in preserving confidentiality: see The Commonwealth of Australia v. John Fairfax &Sons Ltd (1980) 147 CLR 39. Likewise, if an action to enforce an obligation of confidence owed by a member or former member of a foreign state's security service were to lie in the courts of this country, an Australian court could be called upon to determine whether the Australian public interest in disclosure of the relevant information required publication since the public interest in freedom of information and discussion is a material factor to be considered when a restraint on publication is sought. A question would then arise whether the Australian court should inquire into and determine what, if any, damage to the foreign state had been or would be caused by disclosure, including any detriment to its public interest. Such an inquiry might require an Australian court to resolve an issue which it could not appropriately entertain or competently determine, namely, what was, on balance, in the public interest of the foreign state. Moreover, if the Australian court were to decide that disclosure would be detrimental to the public interest of the foreign state but in the public interest of this country, the invidious task would remain of determining whether detriment to the foreign state should be given any, and if so what, weight against the local public interest. Even if one were to ignore questions of damage to, and the public interest of, the foreign state, the Australian court would be required to resolve the question whether the public interest of this country should prevail over the prima facie right of the foreign state to prevent disclosure. A situation in which an Australian court could be called upon to determine whether the prima facie rights of a foreign state should be overriden by a superior Australian public interest in disclosure would inevitably involve a real danger of embarrassment to Australia in its relationship with that state.

33. Spycatcher contains material concerning the operations of the British Security Service which might well sustain a finding that publication is in the Australian public interest. By way of illustration there is material which, if true, indicates that the freedom of Service operations from political control and supervision should be qualified, that the Service has been penetrated by foreign agents and that the Service engages in unlawful activities when the means are thought to justify the ends. These are matters of public interest to Australia because ASIO has a close and co-operative relationship with the British Security Service.

34. The appellant argues that the obligations sought to be enforced here are private, not public, obligations in that they have their source in equitable principle, the fiduciary relationship and the common law of contract. Moreover, it is said that a member of the British Security Service would come under an obligation of confidence regardless of the provisions of the Official Secrets Act. Thus the appellant argues that the imposition of duties and obligations by that Act and the acceptance of them by Mr Wright in the terms of s.2 of that Act do not give the United Kingdom Government's claim the character of a claim to enforce governmental interests. The appellant's arguments to that effect do not, however, withstand close examination.

35. For the purposes of the principle of unenforceability under consideration the action is to be characterized by reference to the substance of the interest sought to be enforced, rather than the form of the action: cf. Buchanan, at pp 104, 107; pp 527, 529 of AC; Williams &Humbert v. W. &H. Trade Marks, at p 439. Thus, to concentrate on the private law character of the causes of action or grounds for relief pleaded by the appellant is to overlook the appellant's central interest in bringing the action. That interest is to ensure the continued secrecy of the operations of the British Security Service by enjoining disclosure of information relating to those operations and by discouraging revelations by others. As a security organization whose charter evidently includes clandestine counter-espionage activities, the Service has a responsibility to protect the national security of the United Kingdom. These days the collection of intelligence is generally considered to be a vital element in the maintenance of national security and the continued co-operation of intelligence sources is an essential feature of the collection of intelligence. Accordingly, the United Kingdom Government has a strong interest in preserving the secrecy of the Service's operations and the appearance of confidentiality. Absent that appearance, potential sources of information might become unco-operative and uncommunicative.

36. Viewed in this light, the action is neither fully nor accurately described as an action to enforce private rights or private interests of a foreign state. It is in truth an action in which the United Kingdom Government seeks to protect the efficiency of its Security Service as "part of the Defence Forces of the country". The claim for relief made by the appellant in the present proceedings arises out of, and is secured by, an exercise of a prerogative of the Crown, that exercise being the maintenance of the national security. Therefore the right or interest asserted in the proceedings is to be classified as a governmental interest. As such, the action falls within the rule of international law which renders the claim unenforceable.

37. It is perhaps tempting to suggest that, because of the close relationship between the United Kingdom and Australia, an exception should be made to enable the United Kingdom to enforce in our courts an obligation of the kind now in question. But what if a less friendly or a hostile state were to resort to our courts for a similar purpose? Our courts are not competent to assess the degree of friendliness or unfriendliness of a foreign state. There are no manageable standards by which courts can resolve such an issue and its determination would inevitably present a risk of embarrassment in Australia's relations with other countries.

38. It is not an acceptable answer to this objection to suggest that the courts might act on an Executive certificate to the effect that a foreign plaintiff is a friendly state. That solution would require the Executive to make invidious comparisons which might well lead to embarrassment in Australia's foreign relations. More to the point, under that proposal, the enforceability of a claim by a foreign state would depend on the discretion of the Executive. Quite apart from the likelihood of international embarrassment, it would be subversive of the role of the courts and of the constitutionally entrenched position of the judicature in this country if the enforceability of a claim were made, by a general rule of the common law, to depend on an Executive decision whether a particular plaintiff should be able to obtain the judicial relief which it seeks.

39. In any event the principle of law renders unenforceable actions of a particular kind. Those actions are actions to enforce the governmental interests of a foreign state. There is nothing in the statement of the principle, nor in the underlying considerations on which it rests, that could justify the making of an exception or qualification for actions by a friendly state. The friendliness or hostility of the foreign state seeking to enforce its claims in the court of the forum has no relevant connection with the principle.

40. Street C.J. was, as we are, conscious that there may be significant consequences for Australian national security interests in bringing an action of the present kind by a friendly state for an injunction or an account of profits within the reach of the principle of international law. His Honour, after taking account of the Australian Government's positive support for the enforcement of the appellant's claims and Mr Codd's evidence that enforcement of the claim would serve the public interest of Australia, concluded that the local sovereign could decide on an ad hoc basis the extent of the assistance to be rendered to the foreign sovereign. The local sovereign could do this "by lifting the jurisdictional fetter on the local courts". There are two answers to this approach. First, the notion that effective access to the courts should depend on a decision of the Executive is as unacceptable as the related notion that the enforceability of a claim should depend on an Executive decision that the claim should be able to succeed. Secondly, the possibility of detriment to Australia's national security interests cannot transmogrify the character of the claims. So far as friendly states are concerned, the remedy, if one is thought to be desirable, is to be found in the introduction of legislation.

41. For the foregoing reasons we would dismiss the appeal.

BRENNAN J: I am in general agreement with the judgment of the majority but I would identify the governing principle in a somewhat different way. The case is unusual and the particular features of the case which call for consideration should be briefly stated. The action is brought on behalf of the Government of the United Kingdom (which is, for the purposes of this litigation, a foreign government) to protect that government's intelligence secrets and to prevent or impede a former officer of its security service from disclosing confidential political information without its consent, the disclosure of intelligence secrets or of any information of the stated kind being allegedly harmful to the discipline of the service and to British security which is the concern of the service. In describing the United Kingdom Government as "foreign", I do not depreciate the historical, institutional and ethnic ties between this country and the United Kingdom. The description of the United Kingdom Government as "foreign" merely makes the point that Australia and the United Kingdom are independent in their internal government and in their conduct of foreign affairs: cf. Lord Denning's description of New Zealand as a "foreign state" in A-G. of New Zealand v. Ortiz (1984) AC 1, at p 20. The threshold problem in this case is whether an Australian Court should enforce an obligation of confidence (a term intended to embrace the several obligations which the appellant seeks to enforce) owed to a foreign government and thereby protect that government's intelligence secrets and confidential political information. I have no doubt that, in the absence of a contrary statutory provision, an Australian Court should refuse to enforce an obligation of confidence in an action brought for the purpose of protecting the intelligence secrets and confidential political information of a foreign government. I would identify this as the governing principle which applies whatever government might invoke the jurisdiction of the Court and whatever be the source of the obligation of confidence which the government seeks to enforce.

2. An obligation of confidence of the kind in issue in this case is likely to arise under the law of the plaintiff foreign State. In this case it was said that the obligation of confidence arose under the law of the United Kingdom, and that may well be so. Although the system of law which gives rise to the obligation of confidence is ultimately immaterial to the application of the governing principle by an Australian Court, the law which determines a domestic Court's approach to the enforcement of obligations arising under foreign law is both consistent with and illustrative of the principle.

3. At the outset, a distinction can be drawn between two bases on which the Court might refuse to enforce such an obligation of confidence though it is an obligation recognized by foreign law. The first basis is that it would be contrary to the public policy of the forum State to enforce the obligation; the second is that the Court denies the capacity in international law of the relevant provision of the foreign law to give rise to the obligation sought to be enforced. The distinction is between a refusal to enforce what is recognized as an existing obligation and a denial of the existence of the obligation sought to be enforced. Sometimes the first basis is expressed as a rule that foreign laws offensive to the policy of the domestic law will not be enforced, domestic public policy prevailing over the offensive foreign law. As Sir Hersch Lauterpacht observed in Netherlands v. Sweden; The Convention of 1902 I.C.J. Reports 1958, p 54 at p 92:

"in the sphere of private international law the exception of ordre public, of public policy, as a reason for the exclusion of foreign law in a articular case is generally - or, rather, universally - recognized."

Where the Court refuses to enforce an obligation on the first basis, the Court accepts the capacity of the foreign law to give rise to a legal obligation but declines to enforce the obligation inconsistently with the public policy of the domestic law. Thus in Dynamit Actien-Gesellschaft v. Rio Tinto Company (1918) AC 292, the House of Lords refused enforcement of a contract relating to trading with the enemy while assuming that German law, as the proper law of the contract, might have held the contract to be enforceable as consistent with German public policy. English public policy prevailed over German law. The question whether the Court should refuse to enforce an obligation arising under foreign law is not answered by reference to any similarity between the relevant provisions of the foreign and domestic laws but by reference to the exigencies of the public policy of the domestic law and the actual effect which application of the foreign law would have. As Professor Kahn-Freund (Selected Writings (London, 1978), p 234) wrote:

"Every legal system which permits or commands its courts to apply foreign law must make reservations, reservations attaching not so much to the recognition or application of foreign institutions or rules in abstracto as to the effect which their application, recognition or enforcement would have in the case before the court."

4. The second basis, unlike the first, denies the capacity of foreign law to govern the transaction which gives rise to the claimed obligation. Examples may be found in cases which refuse recognition of the efficacy of foreign laws which expropriate property situated outside the territory of the foreign country: see the cases reviewed by Lord Denning M.R. in A-G. of New Zealand v. Ortiz.

5. The first basis is material to the present case; the second is not. The problem is not whether the law of the United Kingdom gives rise to an obligation of confidence but whether the effect of applying the law which gives rise to the obligation would be inconsistent with the exigencies of public policy under the law of New South Wales.

6. It is clear that independent countries may have differing interests in matters of security and foreign relations. Therefore, it could be prejudicial to the security of the Australian people and damaging to the foreign relations of this country if Australian Courts were to enforce every claim which might be made on behalf of any foreign government to protect its intelligence secrets and confidential political information. Nobody suggests that the law exposes our nation to such peril. The public policy of the law throughout Australia precludes an Australian Court from enforcing a claim which is damaging to Australian security and foreign relations. To give effect to this public policy, a Court must be able to discriminate between the cases where it would and cases where it would not be damaging to Australian security and foreign relations to protect the intelligence secrets and confidential political information of the foreign government. But a Court does not have the capacity to decide for itself whether Australian security and foreign relations are served by permitting (perhaps encouraging) disclosure of the intelligence secrets and the confidential political information of foreign governments or by prohibiting such disclosure. Nor can the Court devise for itself satisfactory criteria and procedures for determining the circumstances in which disclosure should be permitted or encouraged and the circumstances in which disclosure should be prohibited. Unless, in cases of the present kind, the Court were to enquire into and assess for itself whether Australian security and foreign relations are to be served by permitting or prohibiting disclosure - an enquiry and assessment which a Court is quite unfitted to undertake - the Court is constrained to seek and accept the opinion of the Executive government of the Commonwealth upon the matter. Of course, the Court sometimes takes account of and defers to the views of the Executive on matters which are the peculiar responsibility of that branch of government: see In re Westinghouse Uranium Contract (1978) AC 547, at pp 616-617,650-651. There is no objection to that course, provided the Executive's views are limited to matters within the Executive's area of responsibility - in this case national security and foreign relations - and provided the seeking and expression of the Executive's views are not likely to embarrass the Executive in discharging its responsibilities in connection with those matters. However, if the Court were to adopt a practice of seeking and acting on the expression of an opinion by the Executive in cases of the present kind, the practice would itself be a possible source of embarrassment to the Executive in the discharge of its responsibilities. Whenever proceedings in an Australian Court were in contemplation by a foreign government for the enforcement of an obligation of confidence owed by one of its security agents, an opinion would have to be obtained from the Executive on the question whether Australian security and foreign relations would be damaged by enforcing that obligation. The enquiry might be an embarrassment to the Executive. And if the Executive were to express an opinion, any divergence between the measure of support given by the Executive to the foreign government's claim and the judgment of the Court might be a source of international misunderstanding.

7. In these circumstances and in the absence of legislative direction, the only course which a Court might properly take to ensure that Australian security and foreign relations are not damaged is to refuse to enforce all claims made by a foreign government for the protection of its intelligence secrets and confidential political information. That was the course taken in Buchanan, Ltd. and Another v. McVey (1954) Ir.R.89 (noted in (1955) AC 516) with respect to the revenue claims of a foreign government. Kingsmill Moore J. explained the reason (at p 106; pp 528-529):

" In deciding cases between private persons in which there is present such a foreign element as would ordinarily induce the application of the principles of a foreign law, Courts have always exercised the right to reject such law on the ground that it conflicted with public policy or affronted the accepted morality of the domestic forum. ... If then, in disputes between private citizens, it has been considered necessary to reserve an option to reject foreign law as incompatible with the views of the community, it must have been equally, if not more, necessary, to reserve a similar option where an attempt was made to enforce the governmental claims (including revenue claims) of a foreign State. But if the Courts had contented themselves with an option to refuse such claims, instead of imposing a general rule of exclusion, the task of formulating and applying the principles of selection would have been one, not only of difficulty, but danger, involving inevitably an incursion into political fields with grave risks of embarrassing the executive in its foreign relations and even of provoking international complications."

Observing that taxation might be used for a variety of political purposes, his Lordship concluded (at p 107; p 529):

"So long as these possibilities exist, it would be
equally unwise for Courts to permit the
enforcement of the revenue claims of foreign States or to attempt to discriminate between those claims which they would and those which they would not enforce. Safety lies only in universal rejection. Such a principle appears to me to be fundamental and of supreme importance."

8. If it be unwise and unsafe for a Court to pass upon the compatibility of domestic public interest with the purposes of foreign taxation, how much more unwise and unsafe it is for a Court to pass upon the effect which protection of a foreign government's intelligence secrets and confidential political information would have on Australian security and foreign relations. The public policy which leads a Court to refuse enforcement of revenue claims by a foreign government is no less compelling when the claim is made to protect intelligence secrets or confidential political information.

9. It does not matter whether the obligation of confidence on which the foreign government relies arises under its own laws or under the laws of this country. In the present case, the same result would follow whether the United Kingdom Government had recruited and employed Mr Wright in Sydney under a New South Wales contract or in London under an English contract. The principle is of general application. Public policy requires that Australian security and foreign relations be the overriding consideration to which any obligation of confidence owed to a foreign government is subject and the Court, as a branch of government administering domestic law, ought not to undertake the function of assessing the impact which the enforcement of such an obligation might have on Australian security and foreign relations. It is not for the Court to balance the interests of foreign governments with the interests of our own. It is the duty of the Court to refrain from enforcing an obligation of confidence owed to a foreign government lest Australian security and foreign relations be prejudiced. It hardly needs to be said that no such consideration inhibits the enforcement of obligations of confidence owed to the government of this country.

10. In stating the principle, I have noted the absence of contrary legislative direction. It is for the Parliament, not for the Courts, to say whether Australian security and foreign relations can be served by enforcing obligations of confidence owed to a foreign government with respect to that government's intelligence secrets and confidential political information. It is for the Parliament, not for the Courts, to say whether there are any criteria and procedures which could be employed by the Courts so as to avoid embarrassment to the Executive in discharging its responsibilities with respect to national security and foreign relations. If the Parliament were to enact a law which provided access to Australian Courts for foreign governments seeking to protect their intelligence secrets and confidential political information - a proposition advanced merely as an hypothesis - the considerations presently inhibiting the Courts from giving effect to obligations of confidence owed to foreign governments would no longer be valid. On that hypothesis, responsibility for safeguarding Australian security and foreign relations would be transferred from the Courts to one of the political branches of government. Presumably, it would be necessary to provide for the Executive to certify an opinion on which the Court might act to grant the foreign government the protection it sought. I say "might act", for the Court would necessarily have to determine whether the foreign government had a legal right, under the law governing the transaction, to the protection claimed.

11. In this case, an opinion was expressed in evidence on behalf of the Executive that the interests of Australia would be served by the granting of the protection sought by the United Kingdom Government. This may have been a case - I do not say it was - in which no damage would have been done to Australian security and foreign relations by granting the relief which the appellant sought. But for the reasons stated there is no case in which an Australian Court should enforce an obligation of confidence owing to a foreign government in order to protect its intelligence secrets and confidential political information. If a practice of acting on the Executive's opinion were adopted in this case, on what ground could the Court refuse to act on such an opinion in the next? The case would be a precedent for possible future Executive embarrassment. It would be inappropriate to attempt to answer the question whether it would be contrary to Australian public policy to enforce the obligation allegedly owed to the United Kingdom Government. The appellant's claim for protection (whether injunctive or by way of accounts or damages) ought to have been refused simply on the ground that the Court would not, in the absence of statutory direction, protect the intelligence secrets and confidential political information of the United Kingdom Government.

12. I therefore agree that the appeal should be dismissed.

Orders

Appeal dismissed with costs.