Australian Capital Territory v SMEC Australia Pty Ltd
[2018] ACTSC 252
•6 September 2018
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Australian Capital Territory v SMEC Australia Pty Ltd |
Citation: | [2018] ACTSC 252 |
Hearing Date: | 8 May 2018 |
DecisionDate: | 6 September 2018 |
Before: | McWilliam AsJ |
Decision: | See [83] |
Catchwords: | PRACTICE & PROCEDURE – PRIVILEGE – parliamentary privilege – whether documents in proceedings prepared by Auditor-General are protected from production by s 16(2) of the Parliamentary Privileges Act 1987 (Cth) COSTS – where applications in proceedings for provision of documents resolved by consent – whether plaintiff should pay costs of the applications – whether defendants successful on applications |
Legislation Cited: | Auditor-General Act 1996 (ACT) ss 6, 6A, 7, 8, 9A, 9BB, 9BC, 9DA, 10, 17, 19, 20, 24, 35, 37 |
Cases Cited: | British American Tobacco Australia Ltd v Secretary, Department of Health and Ageing [2011] FCAFC 107; 195 FCR 123 |
Parties: | Australian Capital Territory (Plaintiff) SMEC Australia Pty Ltd (First Defendant) C.M. Jewell & Associates Pty Ltd (Second Defendant) Cardno Young Pty Ltd (Third Defendant) |
Representation: | Counsel Mr C Erskine SC with Mr B Katekar (Plaintiff) Mr R Cheney SC with Ms J Wright (First Defendant) Mr D Weinberger with Mr B Kaplan (Second Defendant) Mr A Ounapuu (Third Defendant) |
| Solicitors ACT Government Solicitor (Plaintiff) Clyde + Co (First Defendant) Hall & Willcox (Second Defendant) Maddocks (Third Defendant) | |
File Number: | SC 342 of 2014 |
The parties in these proceedings are involved in a dispute over what has been described as the North Weston Pond Project (Project). This was a development that took place over the period 2008 – 2013 of a particular site in the district of Weston Creek, the boundaries of which were the Cotter Road, the Molonglo River, the Tuggeranong Parkway and the suburbs of Coombs, Wright and Weston.
Nature of the substantive dispute
Since 2014, the Australian Capital Territory (Territory) has been suing a number of private contractors in relation to the Project, with the latest iteration of the pleading, the Further Amended Statement of Claim filed on 20 March 2017, running to 411 paragraphs or 171 pages. By way of broad overview only of the substantive claim, which is sufficient for the purposes of resolving the present interlocutory applications before the Court, the North Weston Pond site was found to have been contaminated with asbestos to a degree much greater than those involved had forecasted. As a consequence, during the carrying out of the development, a number of redesigns of the North Weston Pond and more extensive remediation works were required, which both delayed the project and cost the Territory significantly more than what had been anticipated.
The Territory brought proceedings in negligence and for breach of contractual duties against the first defendant, SMEC Australia Pty Ltd (SMEC), the second defendant, C.M. Jewell & Associates Pty Ltd (Jewell) and the third defendant, Cardno Young Pty Ltd (Cardno).
On 5 September 2018, after the matter had been listed for judgment, the plaintiff advised that the proceeding against SMEC had settled in its entirety, and indicated that there was no longer any dispute as between the plaintiff and the first defendant for determination, interlocutory or otherwise.
The proceedings are continuing against Jewell, in its role as contaminated site auditor, and against Cardno in the engineering design and construction services it provided. There are also claims of proportionate liability between the defendants, and claims of contributory negligence against the Territory, the details of which it is unnecessary to traverse here.
The interlocutory applications
The remaining interlocutory disputes before the Court are of a narrow compass. There are two issues for resolution. The first dispute concerns who should pay the costs of an application in proceedings by the third defendant that has otherwise resolved (the costs dispute). The second dispute concerns the question of whether certain documents sought by the second defendant are protected from production because they attract parliamentary privilege under Article 9 of the Bill of Rights 1688 (UK) and/or s 16(2) of the Parliamentary Privileges Act 1987 (Cth) (the parliamentary privilege dispute).
The costs dispute
The application was filed by Cardno on 22 January 2018, seeking that the Territory produce for inspection “all letters of instruction, briefing letters, correspondence and documents provided by the plaintiff or the plaintiff’s solicitors” to two expert witnesses who have prepared reports in the proceedings, namely Mr Garry Mostyn, a geotechnical engineer, whose report was directed to question of liability, and Mr Ian McIntyre, a civil engineer and consultant who provided an expert report on the quantum of the Territory’s loss.
After much correspondence, which was put before the Court, the parties resolved the subject matter of the application. Cardno now seeks its costs of, and incidental to, the application. The words “and incidental to” are important to the relief sought, because Cardno says that it has been seeking the documents and instructions that were provided to the experts since February 2017. It has finally received those documents, but only through the bringing of the application. Cardno contends that the Territory’s production of the documents amounts to a capitulation.
The Territory, on the other hand, maintains that it acted reasonably in defending the application, due to the breadth of the words used, and that it has negotiated an outcome whereby a more limited form of production was given. Accordingly, there should be no order for costs up to 9 March 2018, which was the date of expiry of an offer made by the Territory dated 2 March 2018, in terms it says were the same as those ultimately accepted by Cardno. The Territory subsequently confirmed its position in an open offer in April 2018. The Territory seeks its costs on an indemnity basis after 9 March 2018, arguing that it was unreasonable for the defendant not to accept the offer it made.
Applicable principles
10. The starting point for the disposition of costs is that they are within the general discretion of the Court, pursuant to r 1721 of the Court Procedures Rules 2006 (ACT) (Rules). The disposition which is ultimately to be made in any case where there are competing considerations will reflect a broad evaluative judgment of what justice requires: Cooper v Singh [2017] ACTCA 21 at [14]- [16], citing Gray v Richards (No 2) [2014] HCA 47; 89 ALJR 113 at [2].
11. It is not disputed that the Court was ultimately not required to determine the outcome of the application, and that consequently, there has been no hearing on the merits of the application. As a result, the oft-cited principles in Re Minister for Immigration & Ethnic Affairs (Cth); Ex Parte Lai Qin (1997) 186 CLR 622 (Lai Qin) per McHugh J, relied on by the Territory, have some relevance, including to costs of an interlocutory proceedings, although the principles there-stated are not necessarily determinative: see Fordyce v Fordham [2006] NSWCA 274; 67 NSWLR 497 at [86]-[87]. The extract relied upon in Lai Qin is at 624-625, as follows (citations omitted, emphasis added):
In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order.When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order.
In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation. …
Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. … But such cases are likely to be rare.
If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settledor its further prosecution became futile,the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases.
12. Here, the Court is concerned with a discrete issue and the reasonableness of the parties’ conduct on the question of whether to disclose the materials and instructions that the Territory provided to each of the two experts.
13. The letters exchanged by the legal representatives reveal that, since 2018, the resistance from the Territory has been to the request for “all correspondence” to the experts to be produced. The Territory’s position was that because of the wide language used, the application sought not only the letters of instruction and list of documents provided to the experts, but draft expert reports and communications concerning those drafts, which were protected by legal professional privilege (or litigation privilege). It also maintained that “all correspondence” would have included all the administrative arrangements between the experts and the plaintiff or its representatives, such as arrangements for meetings and access to a database.
14. However, as stated above, the argument between the parties has a lengthy history and the issue of divergence was broader than the recent definitional debate above suggests. In February 2017, Cardno requested only the letters of instruction to each of the experts, a list of all documents briefed to each expert (if not evidenced in the letter/s of instruction), and copies of any correspondence enclosing a document provided to an expert that was not evidenced in the letter/s of instruction.
15. The Territory claimed litigation privilege over such documents. It said that the expert reports were self-contained and Cardno did not reasonably require the provision of such materials to understand the expert evidence. It relied on cases such as New Cap Reinsurance Corporation Ltd (In Liq) & 1 Or v Renaissance Reinsurance Ltd [2007] NSWSC 258 where White J (as his Honour then was) gave detailed consideration to materials briefing an expert and the circumstances in which the applicable legal privilege existing in such documents might come to be waived.
16. The legal arguments of each party as to maintaining a claim for litigation privilege are reasonable, in that they are each based on established authorities concerning the interaction between ss 119 and 126 of the Evidence Act 2011 (ACT). The resolution of the question would have required consideration of the contents of the individual expert reports, including whether there was sufficient disclosure of the documents relied upon by each expert.
17. Applying the principles in Lai Qin, I accept that the Court would not now try the hypothetical question, and the answer to whether privilege had been waived is not so overwhelming that the Court is in a position to say that either the Territory or Cardno was almost certain to have succeeded on the argument.
18. It is also clear that Cardno filed an application in broader terms than what was initially sought, and ultimately received, and therefore I do not accept that there has been a capitulation at the eleventh hour.
19. However, the broad evaluative judgment inherent in the Court’s discretion to be exercised is not an all or nothing dichotomy. The fact is that the Territory changed its previously stated position in relation to the key documents that had been sought, first in its offer of 2 March 2018 and later openly confirmed in April 2018. The documents over which it offered to waive the privilege it claimed were precisely those documents Cardno had been seeking since February 2017.
20. Further, although the Territory took issue with the breadth of the application due to the use of the words “all correspondence”, because they would catch the drafts and additional correspondence referred to above, the Territory expressly accepted, in its offer of 2 March 2018, that “Cardno [has] never really sought to obtain these documents” describing its concern about the additional correspondence caught by the words as a “non-issue”.
21. It is thus clear that, had the Territory determined to waive any privilege it claimed over the documents when they were sought in February 2017, which is precisely what it ultimately did in March 2018, the necessity to bring the application would not have arisen. Although it cannot be said that there was a complete capitulation, the result comes fairly close and I am satisfied that Cardno may be regarded as having achieved meaningful success on its application. It is entitled to recover a percentage of its costs, taking into account that its success was a product of negotiation, not a hearing on the merits. I consider that 70 per cent of the costs on a party/party basis reflects that outcome.
22. In light of that finding, I do not consider it unreasonable for Cardno to have refused to accept the offer made by the Territory on 2 March 2018, the condition of which was that there be no order as to costs. In any event, before an order for indemnity costs based upon a rejected offer of settlement would be made, the offer itself must actually meet the requirements of a Calderbank offer, as it is commonly known, after the case of the same name: see Calderbank v Calderbank [1975] 3 All ER 333. One of those basic requirements is that the correspondence refers in some way to an intention to rely on the offer to support a future application for indemnity costs. The offer in the present case said nothing about any such intention. It thus falls short of founding any entitlement to apply for costs on an indemnity basis.
The parliamentary privilege dispute
23. By amended application in proceeding filed on 8 February 2018, the second defendant seeks access to a number of documents over which parliamentary privilege has been asserted by the Territory.
24. There are 20 documents sought in the itemised schedule attached to the second defendant’s application (Schedule), to which further reference will be made below.
25. Three things may be noted at the outset. First, all the documents in question have been discovered, and to that extent it may be accepted that they are relevant to the issues in the substantive proceedings.
26. Second, all the documents over which privilege has been claimed relate in some way to a report prepared by the Auditor-General of the Territory and tabled in the Legislative Assembly, specifically dealing with the Project.
27. Third, if the Territory’s arguments on the documents attracting parliamentary privilege are rejected, there is no alternative claim for public interest immunity over the documents made by the Territory. Public interest immunity questions have arisen earlier in the proceedings over certain documents produced in discovery, however those issues were resolved by the parties without the need for a hearing before the Court. I will return to that issue once consideration has been given to whether the documents attract parliamentary privilege.
The source of the privilege
Unlike the privilege associated with public interest immunity, the Evidence Act 2011 (ACT) (Evidence Act) has no role to play on the question of parliamentary privilege, as s 10(1) of that statute expressly states:
This Act does not affect the law relating to the privileges of any Australian Parliament or any House of any Australian Parliament.
The Territory became self-governing in 1989 through the Australian Capital Territory (Self Government) Act 1988 (Cth) (Self Government Act).
Part III of the Self Government Act establishes the Legislative Assembly as the legislature of the Territory.
Part IV deals with the powers of the Legislative Assembly and, within it, s 24 of the Self Government Act provides for the power, privileges and immunities of the Legislative Assembly in the following terms:
Powers, privileges and immunities of Assembly
(1) In this section:
powers includes privileges and immunities, but does not include legislative powers.
(2) Without limiting the generality of section 22, the Assembly may also make laws:
(a) declaring the powers of the Assembly and of its members and committees, but so that the powers so declared do not exceed the powers for the time being of the House of Representatives or of its members or committees; and
(b) providing for the manner in which powers so declared may be exercised or upheld.
(3) Until the Assembly makes a law with respect to its powers, the Assembly and its members and committees have the same powers as the powers for the time being of the House of Representatives and its members and committees.
(4) Nothing in this section empowers the Assembly to imprison or fine a person.
It is not disputed by the parties that the Legislative Assembly has not, thus far, legislated to make a law “with respect to its powers.” Attention therefore turns to the Commonwealth and the powers held by the House of Representatives and its members and committees.
As s 16 of the Parliamentary Privileges Act 1987 (Cth) (Act) is at the heart of the dispute between the parties, it is set out in full, in the following terms:
Parliamentary privilege in court proceedings
(1) For the avoidance of doubt, it is hereby declared and enacted that the provisions of article 9 of the Bill of Rights, 1688 apply in relation to the Parliament of the Commonwealth and, as so applying, are to be taken to have, in addition to any other operation, the effect of the subsequent provisions of this section.
(2) For the purposes of the provisions of article 9 of the Bill of Rights, 1688 as applying in relation to the Parliament, and for the purposes of this section, proceedings in Parliament means all words spoken and acts done in the course of, or for purposes of or incidental to, the transacting of the business of a House or of a committee, and, without limiting the generality of the foregoing, includes:
(a) the giving of evidence before a House or a committee, and evidence so given;
(b) the presentation or submission of a document to a House or a committee;
(c) the preparation of a document for purposes of or incidental to the transacting of any such business; and
(d) the formulation, making or publication of a document, including a report, by or pursuant to an order of a House or a committee and the document so formulated, made or published.
(3) In proceedings in any court or tribunal, it is not lawful for evidence to be tendered or received, questions asked or statements, submissions or comments made, concerning proceedings in Parliament, by way of, or for the purpose of:
(a) questioning or relying on the truth, motive, intention or good faith of anything forming part of those proceedings in Parliament;
(b) otherwise questioning or establishing the credibility, motive, intention or good faith of any person; or
(c) drawing, or inviting the drawing of, inferences or conclusions wholly or partly from anything forming part of those proceedings in Parliament.
(4) A court or tribunal shall not:
(a) require to be produced, or admit into evidence, a document that has been prepared for the purpose of submission, and submitted, to a House or a committee and has been directed by a House or a committee to be treated as evidence taken in camera, or admit evidence relating to such a document; or
(b) admit evidence concerning any oral evidence taken by a House or a committee in camera or require to be produced or admit into evidence a document recording or reporting any such oral evidence;
unless a House or a committee has published, or authorised the publication of, that document or a report of that oral evidence.
(5) In relation to proceedings in a court or tribunal so far as they relate to:
(a) a question arising under section 57 of the Constitution; or
(b) the interpretation of an Act;
neither this section nor the Bill of Rights, 1688 shall be taken to prevent or restrict the admission in evidence of a record of proceedings in Parliament published by or with the authority of a House or a committee or the making of statements, submissions or comments based on that record.
(6) In relation to a prosecution for an offence against this Act or an Act establishing a committee, neither this section nor the Bill of Rights, 1688 shall be taken to prevent or restrict the admission of evidence, the asking of questions, or the making of statements, submissions or comments, in relation to proceedings in Parliament to which the offence relates.
(7) Without prejudice to the effect that article 9 of the Bill of Rights, 1688 had, on its true construction, before the commencement of this Act, this section does not affect proceedings in a court or a tribunal that commenced before the commencement of this Act.
As submitted by the Territory, the mischief to which the above provision is addressed is clearly expressed in the text of s 16(1). It seeks to remove any doubt that Article 9 of the Bill of Rights 1688 (UK) (Article 9) is part of Commonwealth law.
Article 9 is in the following terms:
That the freedom of speech and debates or proceedings in parliament ought not to be impeached or questioned in any court or place out of the parliament.
The object and construction of Article 9 is considered below.
The role of the Auditor-General
37. Relevant to the arguments below, the position of Auditor-General is created by the Auditor-General Act 1996 (ACT) (AG Act), established by s 6 of that statute. Section 6A of the AG Act provides (with emphasis added):
Officer of the Legislative Assembly
(1) The auditor-general is an independent officer of the Legislative Assembly.
(2) The functions, powers, rights, immunities and obligations of the auditor-general are as stated in this Act and any other law in force in the ACT.
Note A law in force in the ACT includes a territory law and a Commonwealth law.
(3)There are no implied functions, powers, rights, immunities or obligations arising from the auditor-general being an independent officer of the Legislative Assembly.
(4)The powers of the Legislative Assembly to act in relation to the auditor-general are as stated in this Act and any other law in force in the ACT.
(5)In subsection (4):
"Legislative Assembly" includes—
(a) the members of the Legislative Assembly; and
(b) the committees of the Legislative Assembly.
(6)There are no implied powers of the Legislative Assembly arising from the auditor-general being an independent officer of the Legislative Assembly.
The functions of the Auditor-General are set out in s 10 of the AG Act:
Functions
(1)In addition to the functions given to the auditor-general by this Act, the auditor-general has the following functions:
(a)to promote public accountability in the public administration of the Territory;
(b) to audit annual financial statements of the Territory, directorates and territory authorities under the Financial Management Act;
(c)to audit the accounts and records in relation to any person, body or thing ascertained in accordance with the regulations;
(d)to conduct performance audits in relation to any person, body or thing ascertained in accordance with the regulations;
(e) any function given to the auditor-general by or under any other law of the Territory;
(f)to do anything incidental or conducive to any of the auditor-general's functions.
Other relevant features and functions of the position include the following:
(a)The Auditor-General is appointed by the Speaker: s 8(1);
(b)The Auditor-General may only be removed (or retired) by the Speaker in very limited circumstances, following a resolution passed by the Assembly: s 9A, 9BB and 9BC;
(c)The Auditor-General has complete discretion in the performance of her (in this case) functions and neither she nor her staff is subject to direction by anyone in the exercise of the statutory functions of the Auditor-General: s 7 and 9DA;
(d)The Auditor-General may “at any time prepare a report for the [Legislative] the Assembly on any matter arising in connection with the exercise of the auditor general’s functions”: s 17(1); and
(e)The Auditor-General is subject to a strategic review, where the terms of reference and reviewer are decided by the Public Accounts Committee: Part 5.
The Territory has drawn attention to extrinsic materials to assist with an understanding of the Auditor-General’s function. Page 1 of the Explanatory Memorandum to the Auditor-General Bill 1996 (ACT), which became the AG Act, explains that the purpose of the legislation is to “ensure that financial reports and performance information provided to the Legislative Assembly are reliable and complete” and to provide reports to the Legislative Assembly “which contain independent evaluation of the legality, efficiency and effectiveness with which public sector activities and resources are managed.” Those explanatory words do broadly reflect the scheme of the legislation as a whole.
Section 37 of the AG Act is also relevant to the arguments of the parties. It provides:
Protection of auditor-general etc from liability
(1) A protected person is not personally liable for conduct done honestly and without recklessness—
(a)in the exercise of a function under this Act or another law; or
(b)in the reasonable belief that the conduct was in the exercise of a function under this Act or another law.
(2)Any liability that would, apart from this section, attach to the protected person attaches instead to the Territory.
Principles applying to parliamentary privilege
It is important to first consider Article 9, which underlies the privilege. In R v Chaytor [2010] UKSC 52; 1 AC 684 (Chaytor), Lord Phillips PSC stated at [47]:
…the principal matter to which art 9 is directed is freedom of speech and debate in the Houses of Parliament and in parliamentary committees. This is where the core or essential business of Parliament takes place. In considering whether actions outside the Houses and committees fall within parliamentary proceedings because of their connection to them, it is necessary to consider the nature of that connection and whether, if such actions do not enjoy privilege, this is likely to impact adversely on the core or essential business of Parliament.
His Lordship went on to state at [61] that that there are good reasons of policy to give Article 9 a narrow ambit, restricting it to the purpose for which it was enacted – for the Parliament to conduct its business without interference from the Crown or the Crown’s judges.
At [73], his Lordship cited an extract from the Joint Committee on Parliamentary Privilege Report of 1999 (HL Paper 43–1, HC 214–1) to the effect that the nearest definition (of the dividing line between privileged and non-privileged activities) is that the areas in which courts ought not intervene extended beyond proceedings in Parliament, but the privileged areas must be so closely and directly connected with proceedings in Parliament that the intervention would be inconsistent with Parliament’s sovereignty as a legislative and deliberative assembly.
That objective and reasoning underlies any consideration of the function and activities of the Auditor-General, who is plainly not a member of the Legislative Assembly, as part of the Court’s consideration of whether the activities of the Auditor-General are incidental to the transaction of the business of the Legislative Assembly, such as to fall within “proceedings of parliament” defined in s 16(2) of the Act, above.
As to the scope of the words of Article 9, “impeached or questioned in any court”, if documents are protected by parliamentary privilege, then ordering production of documents on discovery is a form of ‘impeachment’ of the proceedings of the parliament, because the risk of disclosure through a court process would have a chilling effect on the activities of and incidental to the parliament and would thus impede, hinder or prevent proceedings in parliament. It is therefore contrary to Article 9: Rowley v O’Chee [2000] 1 Qd R 207 (Rowley v O’Chee) at 222, 227.
The reason why an order for production (via subpoena or discovery) is viewed in that light, even though a party may not wish to challenge the contents of the document but merely to read what it said, was explained in Re OPEL Networks (in liq) [2010] NSWSC 142; 77 NSWLR 129 at [118]:
…It seems to me necessarily true, and not dependent upon the evidence of the particular case, that if briefings and draft briefings to Parliamentarians for Question Time and other Parliamentary debate are amenable to subpoenas and other orders for production, the Commonwealth officers whose task it is to prepare those documents will be impeded in their preparation, by the knowledge that the documents may be used in legal proceedings and for investigatory purposes that might well affect the quality of information available to Parliament. To take a step that would have that consequence would, I think, derogate from the force of the Bill of Rights and run contrary to the historical justification for that legislation, so able sketched by McPherson JA (and see Mees v Road Corporation (2003) 128 FCR 418; [2003] FCA 306, at [75]-[79] per Gray J).
A document will be protected by parliamentary privilege when it is created “for purposes of or incidental to…the transacting of the business of a House…” in s 16(2) of the Act. That phrase does not transform every action of a parliamentarian in the pursuit of his or her vocation into proceedings in Parliament: Rowley v O’Chee at 221 per McPherson JA. Nor is it established if a document prepared for a non-parliamentary purpose is later used in Parliament: Carrigan v Cash [2016] FCA 1466 (Carrigan) at [45] referring to In the matter of the Board of Inquiry into Disability Services (sub nom Szwarcbord v Gallop) [2002] ACTSC 28; 167 FLR 262 at [21]-[22] per Crispin J.
The focus is thus on the purpose for which the document was created, or the act was done. That is a question of fact which requires an assessment of the subjective purpose of the actor in question: Carrigan at [44] per White J (confirmed on appeal: see Carrigan v Honourable Senator Cash (in her capacity as Minister for Employment) [2017] FCAFC 86). This subjective element is why the affidavit evidence as to the circumstances in which the document in question came to be created may be critical to whether a claim can be maintained.
Section 16 of the Act does not protect action taken at the request of the Executive for the purposes of the Executive: Stewart v Ronalds [2009] NSWCA 277; 76 NSWLR 99 at [121]-[124] per Hodgson JA (with whom Handley AJA agreed at [129]).
If a document falling within the protection of s 16(2) of the Act is subsequently made public, whether by the Executive or by anybody else, the public copy of the document is not protected: British American Tobacco Australia Ltd v Secretary, Department of Health and Ageing [2011] FCAFC 107; 195 FCR 123 at [50]-[55] per Keane CJ Downes and Besanko JJ.
Consideration of the arguments in the present case
52. The Territory based its argument on the Auditor-General being an emanation or agent of the Legislative Assembly, and on that basis, sought to extend the parliamentary privilege afforded by s 16(2) of the Act to activities of the Auditor-General. In oral submissions, Senior Counsel for the Territory accepted that ‘agent’ was the wrong word but, as I understood it, the point was that the Auditor-General, while independent, was specifically performing a function for the Legislative Assembly.
53. The Territory drew attention to the broad powers and the confidentiality provisions in the AG Act surrounding information provided to the Auditor-General and her choice whether it is in the public interest to disclose it. Examples are at ss 19, 20, 34 and 35 of the AG Act, but it is not necessary to detail them here. It is sufficient to note that they exist.
54. Sub-sections 6A(1) and 6A(3) of the AG Act, the words of which are emphasised at [37] above, prevent that argument from being accepted. The Auditor-General is an independent statutory decision-maker and no implied extension of any privilege enjoyed by the Legislative Assembly is to be extended to the position. Further, although the Auditor-General tables reports in the Legislative Assembly, she is reporting on activities being undertaken by public sector entities (defined in s 13A of the AG Act), which are part of the Executive branch of government (created by s 36 of the Self-Government Act). She is fulfilling a statutory reporting function.
55. It is important not to elide the distinction between the function of the Auditor-General in communicating with the Executive and its employees on the one hand, and whether a particular communication with the Auditor-General had the requisite nexus with proceedings in parliament on the other. Recalling the considerations in Chaytor, discussed above, there is some degree of connection to the ‘business of Parliament’, in that the Legislative Assembly is entitled to scrutinise the conduct of the Executive, acting through public agencies, but it cannot be said as a blanket rule that the activities of the Auditor-General, and confidential communications to her or her office, attract the privilege by mere virtue of the nature of the position.
56. Just as the authorities referred to above indicate that not every confidential communication with a politician will attract the privilege, the fact that the Auditor-General is preparing a report and obtains confidential information in the course of such preparation does not mean that the information is protected from disclosure by parliamentary privilege. There may be other public interest considerations, but that is not the argument before this Court.
57. Indeed, the fact that the AG Act contains detailed provisions for maintaining the confidentiality of information confirms this conclusion. Were the activities of the Auditor-General akin to those of elected members of the Legislative Assembly, who gather information for the purpose of ‘proceedings in Parliament’, such detailed confidentiality provisions in the AG Act would not have been necessary.
58. The focus must be on the purpose for which the documents were created. The parties helpfully dealt with the 20 documents as falling into three categories:
(a)The first category includes documents prepared by officers in relevant agencies in the course of responding to requests for information of the Auditor-General, for the purpose of the Auditor-General writing her report (documents 5 (in part: “Preliminary Comments”), 6-12, 14-17 and 20 of the Schedule).
(b)The second category includes documents prepared for the purposes of advising the Minister on possible questions that might be asked in the Legislative Assembly or one of its Committees, in relation to issues arising from the Auditor-General’s report (documents 1-4 and 5 (in part: Media Questions and Answers) of the Schedule).
(c)The third category is a series of three documents which are generalised briefings to the Minister in relation to issues arising from the Auditor-General’s report (documents 13, 18 and 19 of the Schedule).
59. During the hearing, the Territory confirmed that it no longer claimed privilege over document 6, which was a media release dated 26 May 2011, and document 13, which was described as “Questions and Answers Auditor General’s Report – Performance Audit – North Weston Pond”.
60. In respect of document 20, which was the Report No. 3/11 titled “ACT Auditor General Office – The North Weston Pond Project”, a report otherwise publicly available, the only claim for privilege made was over the original copy tabled in the Legislative Assembly. The issue between the parties on that document thus fell away.
First Category
61. The Territory contends that the first category of documents attract the privilege because the documents were prepared by officers in relevant agencies, responding to requests for information from the Auditor-General. The argument was based on the nature of the position, and the idea that the role of the Auditor-General as discussed above meant that the privilege ought be extended to the Auditor-General. The Territory relied on the fact that the reports of the Auditor-General were prepared by an ‘officer’ of the Legislative Assembly and presented to the Legislative Assembly.
62. Given my reasoning above, the first category of documents does not attract parliamentary privilege on such a basis.
63. Further, there was insufficient affidavit evidence to establish that the communications were for the purpose of any specific proceedings in the Legislative Assembly. The Territory’s submission that the report of the Auditor-General concerned an important matter in which the Legislative Assembly was likely to be interested confirms the insufficiency of the evidence in establishing the connection – the words ‘incidental to’ proceedings in parliament in s 16(2) of the Act do not mean any matter in which the Legislative Assembly might be interested. Accordingly, the documents in the first category should be produced.
Second Category
64. The second category refers to documents (five in number) prepared for the purposes of advising the Minister for Planning on possible questions. Jewell appears to impliedly accept that this category of documents would attract the privilege, however it takes issue with the evidence led in support of the fact that the documents were prepared for such a purpose.
65. The first document in the category is an email chain of correspondence dated 26 May 2011, the subject line of which is “Estimates Questions – In Confidence”. Mr Patrick John Paynter, Senior Manager and Principal Engineer/Planner of the Infrastructure Planning Section within the Planning Policy Division of Environment, Planning and Sustainable Development Directorate deposed to the email chain in question (in which he was involved) covering a period in May 2011 responding to a request relating to a (then) forthcoming hearing of the Select Committee on Estimates.
66. Mr Paynter was not cross-examined and I accept his evidence. I accept that document 1 attracts parliamentary privilege.
67. Document 2 is an email chain of correspondence dated 3 November 2011 between two individuals, Mr Colm Mooney and Ms Jan Pearse, neither of whom gave evidence. The instructing solicitor, Mr Nathan Hancock, deposed to material from which an inference could be drawn that the email related to briefing “the Minister and Senior Officials for the 2010-2011 Annual Report Hearings”. Among other things, the features of the document from which Mr Hancock sought to draw the inference were the title of the document, marked “Annual Report Hearings”, the subject identified in the document as “2011 ACT Treasury – Shared Services”, and the “key points” in the document referring to “Auditor General” and “Audit Report”.
68. Mr Hancock then deposed to the Standing Committee on Public Accounts, appointed by the Legislative Assembly, conducting public hearings on 3, 21, 24 and 29 November and 16 December 2011, with officials from Treasure appearing on Thursday 24 November 2011.
69. Again, Mr Hancock was not cross-examined on any of those matters and I have accepted that they are true.
70. One can well understand Jewell’s complaint that an affidavit from a solicitor, selecting words from the document in question and disclosing only those words in an affidavit, is not the most satisfactory method of establishing that the purpose for which the document was created was one that had sufficient connection to the business of the Legislative Assembly as to attract the privilege. However, in this instance, the words of the document quite clearly permit the inference that the discussions on the email chain were connected to the committee hearings that were taking place at the time. I accept that document 2 is also protected from production due to parliamentary privilege.
71. Documents 3 and 4 are described respectively as “Email from Sarah Bourne to Tony Gill providing Question Time Brief re North Weston Pond – Asbestos/Contamination” and “Questions and Answers – North Weston Ponds, Molonglo”. The evidence as to the purpose and provenance of the documents has been provided by Mr Anthony Gill, a former employee within, what was known at the time, as the Territory and Municipal Services Directorate (TAMS). Mr Gill deposes to the documents being for question time briefs the Minister for Planning in respect of document 3, and for the Chief Minister in respect of document 4.
72. Mr Gill was not cross-examined. I have accepted his evidence and I am satisfied that it is sufficient to establish that the communications are protected from production due to parliamentary privilege.
73. Document 5 is dated 17 March 2011 and described as “Email correspondence between Daniel Walters, Mark Heckenberg, Maria Mangeruca and other re Audit – North Watson including attachment Media Questions and Answers and DECCEw Preliminary Comments – Performance Audit”. I have assumed the reference to Watson should have been Weston. This aspect of the claim for parliamentary privilege relates to one of two attachments to the email, being “Media Questions and Answers”.
74. Mr Mark Heckenberg, previously a contaminated sites officer and now the Manager of Contaminated Sites within the Environmental Quality unit, has deposed to the purpose of the document on the basis of experience, although I note that he was included in the recipients of the email communication. He confirms that the reference to “DECCEw” is to the Department of Environment, Climate Change, Energy and Water and that the persons involved in the email communication were what I would describe as high ranking public servants in the Chief Minister’s department and TAMS.
75. Mr Heckenberg considers that the document was prepared in anticipation of the release of the Audit Report. I have inferred that the document was prepared for the relevant ministers and senior members of their departments or directorates to be properly briefed in order to answer enquiries from the media.
76. However, a document prepared for a minister to deal with questions from the media does not of itself establish a sufficient connection so as to meet the criteria of being “of and incidental to” parliamentary proceedings. There is no suggestion on the evidence before the Court that any particular minister was speaking in the Legislative Assembly about the Project, or an issue relating to it. If anything, the function being performed was likely to be as part of the Executive. Again, the Court is only dealing with parliamentary privilege and, on the evidence, the Territory has not established that it attaches to document 5.
Third Category
77. The only documents over which parliamentary privilege has been claimed by the Territory in the third category are documents 18 and 19, which, according to Mr Gill, are emails attaching drafts of an untitled document named “north Weston pond.doc”. His evidence in respect of document 18 is as follows:
The text of the document was used to create a ministerial brief from myself, to the Minister for Territory and Municipal Services providing advice on “the cost increases for North Weston Ponds and speaking notes when the issue is made public”.
The document was prepared to brief the Minister for Territory and Municipal Services, in advance of the tabling of the Government Submission to the Public Accounts Committee, including for the purposes of media and other questions arising from the tabling of the Government Submission.
78. Mr Gill had earlier referred to the Auditor-General’s Report no 3/2011 being referred for inquiry to the Public Accounts Committee of the Legislative Assembly. Similar evidence is given in relation to document 19.
79. Contrary to the submission of Jewell, I do not read Mr Gill’s evidence as saying that the contents of the attachments were later used in the brief to the Minister. Rather, the purpose of the draft attached to the email (document 18) was for Mr Gill to draft the brief which draft he then attached in document 19, for the purpose of the submission to the Public Accounts Committee. Such drafts do attract parliamentary privilege and are therefore protected from disclosure in these proceedings.
Conclusion
80. The result on the parliamentary privilege dispute is that the Territory has succeeded in establishing its claim for parliamentary privilege in respect of documents 1-4, 18 and 19 of the Schedule. That outcome means that the Territory and Jewell have each had mixed success on the application and I consider it just that each party pay its own costs of that application.
81. Having dealt with the application before the Court, and as raised with the parties at the hearing, I am concerned that one or a number of the documents, where the claim for parliamentary privilege has been rejected above, may in fact have been protected from disclosure because there is a public interest in preserving their confidentiality which outweighs the public interest in disclosure, under s 130 of the Evidence Act. That section applies when admitting a document into evidence, but the operation of the section is extended to pre-trial procedures through the operation of s 131A of the Evidence Act. Importantly, s 130(2) of the Evidence Act permits the Court to act of its own initiative.
82. However, before taking the course of deciding whether s 130 of the Evidence Act in its extended operation applies to any of the said documents, as a matter of procedural fairness, I consider that each of Jewell and the Territory should be permitted an opportunity to file a short further submission on the question. The issue was raised at the hearing, but I do not anticipate that the parties appreciated that the Court could act of its own initiative, when the Territory had objected to production but not expressly made the argument on the grounds of public interest.
83. The orders are as follows:
(1) The plaintiff is to pay 70% of the third defendant’s costs of and incidental to the application filed 22 January 2018.
(2) The plaintiff is required to produce for inspection documents 5 to 17 inclusive of the documents in the Schedule attached to the amended application in proceeding filed by the second defendant on 8 February 2018 (Schedule).
(3) The parties to the application referred to in order 2 are to pay their own costs of the application.
(4) The operation of order 2 is stayed for 21 days to permit the plaintiff and the second defendant to be heard further on whether documents 5 to 17 inclusive of the Schedule ought not be produced, in the public interest.
| I certify that the preceding eighty-three [83] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Associate Justice McWilliam. Associate: Date: |
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