Aversa v Transport for New South Wales

[2022] NSWSC 277

Supreme Court

New South Wales

Medium Neutral Citation:

Aversa v Transport for New South Wales [2022] NSWSC 277

Hearing dates:

25 February 2022

Date of orders:

16 March 2022

Decision date:

16 March 2022

Jurisdiction:

Equity

Before:

Parker J

Decision:

See [113]-[114]

Catchwords:

CIVIL PROCEDURE – notice to produce – subterranean land compulsorily subdivided off and resumed for toll road tunnel – subdivision allegedly procured by fraud – use of land allegedly a trespass – measure of damages – relevance of advice to government on sale of toll road to private consortium

CIVIL PROCEDURE – public interest immunity – cabinet submissions – documents annexed to cabinet submissions – public interest in production – public interest in secrecy – immunity claim upheld – costs

Legislation Cited:

Conveyancing Act 1919, s 195C

Evidence Act 1995, ss 130, 131A

Land Acquisition (Just Terms Compensation) Act 1991, s 62

Real Property Act1900, ss 120, 129

Roads Act 1993, ss 9, 52

Uniform Civil Procedure Rules 2005, r 33.11

Cases Cited:

Aversa v Roads and Maritime Services [2021] NSWSC 1047

Bulli Coal Mining Co v Osborne [1899] AC 351

Cappello v Roads and Maritime Services (2019) 100 NSWLR 259

Commonwealth v Construction, Forestry, Mining and Energy Union (2000) 98 FCR 3

Commonwealth v Northern Land Council (1993) 176 CLR 604

Deposit & Investment Co Ltd (Receivers Appointed) v Peat Marwick Mitchell & Co (1996) 39 NSWLR 267

Egan v Chadwick (1996) 46 NSWLR 563

Foyster v Foyster Holdings [2003] NSWSC 881

Jegon v Vivian (1871) LR 6 Ch App 742

Ku-ring-gaiCouncil v West (2017) 95 NSWLR 1

Livingstone v Rawyards Coal Co (1880) 5 App Cas 25

LJP Investments Pty Ltd v Howard Chia Investments Pty Ltd (1989) 24 NSWLR 490

Sankey v Whitlam (1978) 142 CLR 1

State of New South Wales v Public Transport Ticketing Corporation [2011] NSWCA 60

Category:

Procedural rulings

Parties:

Motion filed 11 October 2021
Transport for New South Wales (Applicant/First Defendant)
Rosario Aversa (First Respondent/Plaintiff)
Antonia Aversa (Second Respondent/Plaintiff)

Motion filed 11 October 2021 (amended motion filed 3 December 2021)
Secretary of New South Wales Treasury (Applicant)
Rosario Aversa (First Respondent/Plaintiff)
Antonia Aversa (Second Respondent/Plaintiff)

Representation:

Motion filed 11 October 2021
Counsel:
P Herzfeld SC/J Wherrett (Applicant)
S Prince SC (Respondents)

Solicitors:
Crown Solicitor for NSW (Applicant)
Stacks Collins Thompson (Respondents)

Motion filed 11 October 2021 (amended motion filed 3 December 2021)
Counsel:
P Herzfeld SC/J Wherrett (Applicant)
S Prince SC (Respondents)

Solicitors:
Crown Solicitor for NSW (Applicant)
Stacks Collins Thompson (Respondents)

File Number(s):

2019/314755

Publication restriction:

Nil

Judgment

1. Before the Court are two applications on behalf of the State Government resisting the disclosure of documents the subject of a notice to produce issued by the plaintiffs in these proceedings. Each application is made by way of notice of motion.

2. The applicant in the first motion is the Secretary of the New South Wales Treasury. The motion resists the production of certain documents on the ground of public interest immunity. The documents in question are said to be cabinet documents. Apparently, the Secretary (who is not a party to the proceedings) was seen as the (or an) appropriate person to put this contention before the Court. No point was taken about this by counsel for the plaintiffs.

3. The applicant in the second motion is Transport for New South Wales (“TfNSW”). It is the first defendant in the proceedings and the party to whom the plaintiffs’ notice of motion was issued. TfNSW resists the production of certain documents on the ground of legal professional privilege.

4. TfNSW is a statutory corporation which is relevantly responsible for roads. In that capacity it is the successor of an earlier statutory corporation, Roads and Maritime Services (“RMS”). The first defendant in the proceedings was formerly named as RMS but is now named as TfNSW. For convenience I will, where it is necessary to refer to RMS, refer to it as TfNSW.

5. The other party to the proceedings is the Registrar General, who is the second defendant. The Registrar General took no part in the applications the subject of this judgment.

6. The two applications were run together with the applicants being represented by a common team of counsel. I will refer to them for convenience as “counsel for the State”. Counsel for the plaintiffs also appeared and made submissions.

Background and procedural history

7. The plaintiffs in the proceedings, and the respondents to the motions, are Rosario and Antonia Aversa, a couple who own two residential properties at Haberfield. Subterranean areas of their land have been acquired by TfNSW for the purpose of a motorway tunnel as part of the State Government’s WestConnex project. The Aversas allege that the acquisition process was unlawful.

8. The WestConnex project was announced in 2012. It is a 33 kilometre motorway which will link western and south-western Sydney with the airport and Port Botany. It is being constructed in several stages. Construction began in 2015.

9. From the outset it was contemplated that WestConnex would be a tollway. Previous tollways had been built and operated with private sector involvement in accordance with what was described in the evidence as a “traditional procurement model”. In accordance with this model, the State put the project in the hands of the private sector concessionaire. The concessionaire was responsible for financing and building the road, and for operating it for a fixed period of time. During that period the concessionaire was to receive the toll revenue. At the end of the period, control and operation of the road was to revert to the State.

10. The State Government decided to adopt a modified version of this procurement model for the purpose of the WestConnex project. Initially the project was carried out and financed by the State itself (with assistance from Federal funding). The idea was that at a suitable point the State would sell its interest in the project, or part of that interest, to the private sector.

11. The vehicle for establishing, and initially financing, the project was a statutory corporation which was initially wholly owned by the State. It is called Sydney Motorway Corporation (“SMC”) and was established in 2014. Wholly owned subsidiaries of SMC were set up to hold the toll concession rights for each of the stages of the project.

12. In September 2016, the State Government began work on the sale of a 51 percent interest in SMC to the private sector. This was known as “Project Giant”. In order to guide the sale process, the State commissioned a report from Goldman Sachs Australia Pty Limited (“Goldman Sachs”) which was referred to in the evidence as the “scoping study” for Project Giant.

13. Project Giant was completed in September 2018. The sell-down was made to a private sector consortium called Sydney Transport Partners (“STP”) for $9.26 billion. Following the sale, the State’s residual interest in the project was retained in a wholly owned proprietary company called Roads Retained Interest Pty Limited (“RRIPL”).

14. In March 2020, the then Treasurer announced the proposed sell-down of the State’s remaining 49 percent interest in the project. The sell-down was known as “Project Pearl”. It was controlled by a steering committee consisting of senior representatives of the Treasury, the Department of Premier and Cabinet, and TfNSW. As with Project Giant, there was a scoping study prepared by external investment banking consultants, in this case, jointly by Citigroup Global Markets Australia Pty Limited and the Capital Markets division of the Royal Bank of Canada (“RBC”). The sale was completed in October 2021.

15. The transactions which concern the plaintiffs’ land, and which are the subject of these proceedings, took place in 2019. Purporting to act in accordance with its statutory powers under the Roads Act, TfNSW lodged an application with the Registrar General to effect a vertical subdivision of the plaintiffs’ land. The subdivision divided the land into surface and subterranean lots. The subterranean lots were to be used for the WestConnex tunnel and associated works. The plans were registered by the Registrar General in March and April 2019. Then, in the exercise of TfNSW’s compulsory acquisition powers, it resumed the subterranean lots. The resumption took place in November.

16. The use of this procedure is explained by s 62(2) of the Land Acquisition (Just Terms Compensation) Act 1991. It provides that where subterranean land is resumed for the purpose of a tunnel, no compensation is payable except where the tunnelling affects the surface land (or existing mines or workings). It is not suggested that the Aversas’ land has been, or will be, affected by the tunnelling works for WestConnex. Thus, they are not entitled to compensation for the resumption of their subterranean lots.

17. TfNSW remains the registered proprietor of the subterranean lots under the land retained by the Aversas, but the construction of the tunnel and the future operation of the tollway through those subterranean lots will be undertaken by SMC. Apparently, the lots are leased to SMC or one of its subsidiaries for the duration of the tollway concession. The evidence did not, however, describe the precise nature of the leasehold arrangements.

18. Nor did the evidence explain how SMC had obtained a leasehold interest over the subterranean lots when TfNSW, as lessor, only actually became the registered proprietor of the lots after the sell-down of the State’s 51 percent interest in SMC to STP had already taken place. Presumably, the sell-down arrangements must have contained provisions dealing with the after-acquisition of land needed for the construction and operation of the project.

19. The notice to produce which resulted in the applications now before the Court was the subject of an interlocutory judgment by Lindsay J in September last year: Aversa v Roads & Maritime Services [2021] NSWSC 1047. I will refer to this judgment as “J1”.

20. The proceedings came before Lindsay J on an application by TfNSW to set parts of the notice aside. His Honour refused the application. He concluded that the notice was issued for a legitimate forensic purpose (J1 [116]-[121]). It did not involve “fishing” (J1 [129]-[132]) nor was it oppressive (J1 [133]-[137]). His Honour did, however, acknowledge that some of the documents caught by the notice might be the subject of claims for public interest immunity or legal professional privilege, and directions were made which eventually resulted in the present applications coming before the Court (see J1 [144]-[145]).

21. The claims by the Aversas are legally complex and to some extent novel. Numerous defences have been pleaded or foreshadowed. Based on the way in which the parties’ cases were articulated before him, Lindsay J identified a list of issues, or potential issues, at J1 [102]. His Honour also quoted at J1 [103] a statement of the Aversas’ case in submissions by their counsel.

22. Lindsay J recorded at J1 [11] that the Aversas’ statement of claim needed to be recast to bring it into line with the way the claim had been articulated in argument before him. This has not yet occurred. For the purposes of this judgment I will briefly outline what I think are the key elements of the case.

23. The Aversas’ claim fastens on the subdivision of their land which preceded its compulsory acquisition (see generally J1 [44]-[54]). The contention is that TfNSW’s power to effect the subdivision depended upon the land in question being dedicated as a “public road” (Roads Act 1993, s 9). As required by s 9 and the Conveyancing Act 1919, s 195C(1)(d), the plan lodged by TfNSW with the Registrar General contained a statement that the subdivided subterranean land was required for a “freeway”.

24. A freeway is a type of “public road” under the definition of that term in the Roads Act. But WestConnex is a tollway which is not a “public road” (Roads Act, s 52(2)).

25. In Cappello v Roads and Maritime Services (2019) 100 NSWLR 259, another case involving the compulsory acquisition of subterranean land at Haberfield for the purposes of WestConnex, the Court of Appeal held that the compulsory acquisition of the land was valid even though the acquisition was carried out for the purposes of constructing and operating a “tollway” rather than a “public road”. But this was because the power of acquisition was limited only by the “purposes of” the Roads Act. Those purposes went beyond the construction of public roads and included the construction of tollways. The decision is not necessarily a barrier to the Aversas’ claim in these proceedings, which attacks a prior stage of the compulsory acquisition process: see J1 [62].

26. TfNSW accepts that the statement made in the application to the Registrar General about the purpose of the subdivision was in fact wrong, but says that it was a mistake. The plaintiffs say to the contrary. They say TfNSW must have known that the statement was false. The plaintiffs characterise TfNSW’s conduct in making the statement and lodging it with the Registrar General as fraudulent.

27. The Aversas put their claim in three ways. The first is for compensation under the Real Property Act1900. Such compensation is available for loss and damage arising from fraud, or as a result of deprivation of an interest in land as a consequence of fraud (see ss 120, 129).

28. The Aversas also contend that the resumption of their subterranean land was ineffective because of TfNSW’s prior “fraud”. They claim damages in trespass for the unauthorised use of what remains, on their case, their land.

29. Alternatively, the Aversas seek equitable relief. They contend that if the resumption of their subterranean land was legally effective, the consequence of TfNSW’s “fraud” is that the land is held by TfNSW on trust for them. They seek an account of profits from TfNSW.

30. The aim of the notice to produce was, relevantly for the purposes of the applications before me, to obtain evidence bearing on the quantification of the judgment to which the plaintiffs might be entitled if they succeed in their claim. The relevant paragraphs of the notice to produce were:

2.   Copies of all due diligence, feasibility studies and financial modelling which refer to or include the calculation of the sale price of the NSW Government's interest in WestConnex or the proposed sale of the remainder of the NSW Government's interest in WestConnex.

…

11.   Copies of all plans, feasibility studies and financial reports prepared by or for RMS (and TfNSW), the Registrar General, or Transurban detailing the actual or projected financial returns of the WestConnex tunnel including proceeds or estimated proceeds from past or potential future transactions that were relied upon in setting or determining the sale price of the NSW Government's interest in WestConnex.

Public interest immunity

31. The Secretary’s application was for an order excusing TfNSW from producing, by way of response to the notice to produce, documents subject to public interest immunity. Initially, the number of documents said to be subject to public interest immunity was greater, but the notice of motion was later amended so as to limit the claim to seven documents (in the case of the seventh document, the claim was limited to specified parts only of the document).

32. In support of the application, evidence was given by affidavit from Mr Philip Gardner. Mr Gardner is a Deputy Secretary in the New South Wales Treasury who has personal knowledge of, and involvement with, the WestConnex project in general and the selling down of the State’s interest in the project in particular. He also has direct knowledge and experience of cabinet procedures. There was no objection to his evidence.

33. Counsel for the Aversas did not formally oppose the application. Counsel emphasised that he had not seen the relevant documents. He made submissions on issues of principle, drawing to my attention authorities which he submitted qualified some of the arguments being made by counsel for the State in support of the immunity claim. Counsel also answered questions from me about the scope of the plaintiffs’ claim in the proceedings and the possible relevance of documents which were the subject of that claim.

34. I now summarise the documents which are the subject of the immunity claim. As I will explain in more detail below, I did not myself consider it necessary to look at the documents. The following descriptions come from Mr Gardner’s affidavit. I have used the document numbering used in the notice of motion, and by Mr Gardner, but I will summarise them in chronological order.

35. I start with document 6. It is a draft dated 3 July 2013 of a paper, the final version of which was part of an attachment to a cabinet submission in July 2013. The cabinet submission itself does not appear to have been produced. Document 6 is a draft of a chapter in a document titled “WestConnex Business Case” which was apparently prepared for the purposes of the submission.

36. Document 3 is a cabinet submission. It is dated 28 September 2015 and was presented at a meeting of the cabinet committee on infrastructure which took place on 8 October 2015. It is titled “WestConnex Stage 3 and Southern Connector Definition and Delivery Report”.

37. Document 4 is another cabinet submission. It is dated the following day, 29 September 2015. It was presented at a meeting of the Expenditure Review Committee (“ERC”) on 7 October 2015. It is titled “WestConnex Updated Business Case”.

38. Document 2 is the Project Giant Scoping Study prepared by Goldman Sachs (see [12] above). It is dated 17 February 2017. It was one of the attachments to a cabinet submission dated 19 April 2017 which was presented to the ERC on that date. The submission itself is document 5.

39. Document 7 is a briefing report prepared for the Chief Executive of TfNSW. It bears the dates 8 and 15 August 2018. Only parts of the document are claimed to be the subject of public interest immunity. These are parts which disclose the content of prior submissions to, and decisions by, the ERC about the WestConnex project.

40. Finally, there is document 1, which is the scoping study for Project Pearl prepared by Citibank and RBC (see [14] above). It is dated 8 and 16 October 2020. It was prepared for the Project Pearl Steering Committee with a view to submission to the ERC and was in due course attached to a submission to the ERC. Again the submission itself has not apparently been produced.

41. In his affidavit, Mr Gardner pointed out that there is some financial information about the WestConnex project already in the public domain. In particular, in June 2021, the NSW Audit Office released a report on the project. The purpose of the report was to examine whether TfNSW and Infrastructure NSW effectively assessed and justified major scope changes to the project which took place after 2014. The report included details of the costs of building the motorways and related works.

42. Details of the distributions received by the State via RRIPL following the sell-down of the State’s initial interest in September 2018 (see [13] above) were also published in annual reports by Treasury. In addition, the lead party in the STP consortium has published investor presentations on the acquisitions of the initial 51 percent interest and the remaining 49 percent interest. Those presentations give figures for the total amounts paid to the State for the acquisition of the State’s interest in SMC.

43. As well as information publicly available, the documents caught by the notice to produce include the actual transaction documents for the sale of the State’s interest in SMC to the STP consortium. No claim for public interest immunity is made for those documents, which may therefore be used by the Aversas, their lawyers and experts for the purposes of preparing their case (subject of course to confidentiality restrictions).

31. Mr Gardner’s affidavit described the general system of lodgement of submissions with cabinet and the principle of collective responsibility for cabinet decisions. He asserted that disclosure of the documents in question would be detrimental to the public interest. But counsel for the State did not contend that these assertions (which can ultimately only be matters of opinion) were binding on me. Instead they were really presented as submissions and I have, in considering the application, treated them in that way.

32. The claim for immunity derives from s 130(1) of the Evidence Act 1995. That provides:

If the public interest in admitting into evidence information or a document that relates to matters of state is outweighed by the public interest in preserving secrecy or confidentiality in relation to the information or document, the court may direct that the information or document not be adduced as evidence.

46. In its terms s 130(1) applies only to the admission of evidence in court proceedings. But s 131A of the Evidence Act extends its operations to pre-trial disclosure procedures such as the present.

47. There was no debate before me as to the principles which I should apply. Although the task is ultimately a matter of statutory interpretation, the previous common law principles of public interest immunity remain a valuable guide. I must decide whether there is a public interest in the documents in question remaining secret, and if so, whether that outweighs the public interest in their production for the purposes of the proceedings. See Ku-ring-gaiCouncil v West (2017) 95 NSWLR 1 at [84]-[85].

Public interest in production

48. Although the claim for public interest immunity was described as a “class” claim, that term would be misleading if it were understood to suggest that there are some documents which, by their nature, are beyond scrutiny. It is always a question of weighing the competing public interests in the particular circumstances of the case. It is convenient first to identify the public interest in production for the purposes of these proceedings.

49. The paradigm application of the doctrine of public interest immunity is in the tender of evidence. In such cases the balance between public interests is acutely poised. A refusal to admit evidence may lead to palpable injustice in the form of a decision which is incorrect. But here there is a different public interest involved (as noted by Basten JA in Ku-ring-gai Council v West at [78]). It is the public interest in the party conducting a case having the full panoply of potentially relevant documents available.

50. That is an important public interest but its relationship with potential injustice is not as direct. Denying access to documents may lead to relevant evidence not coming before the court but it will not necessarily do so.

51. Counsel for the Aversas acknowledged that, as he had not seen the documents in question, he was unable to make any specific submissions about their relevance to the issues in the proceedings. But counsel pointed out that documents did not need to be relevant in order to be the subject of disclosure by means of a notice to produce. Counsel submitted that the documents might help the Aversas’ experts in quantifying the amount of the damages or compensation for, or the State’s profit from, the Aversas’ subterranean land. Counsel submitted in particular that the Aversas and their experts needed to know what the State had “made” out of WestConnex.

52. Counsel later conceded, however, that the Aversas have access to the transaction documents for the sell-down of the WestConnex project (see [43] above). In that sense they know exactly what the State “made” out of WestConnex. Counsel ultimately accepted that for the purposes of the Aversas’ claim for an account of profits nothing more was required. Counsel nevertheless maintained that the documents caught by the notice to produce were potentially relevant to quantifying the judgment the Aversas might obtain for statutory compensation or damages for trespass.

53. These claims by the Aversas give rise to significant liability issues. There are further questions about whether, if such claims are maintainable, compensation or damages should be calculated in the manner for which the plaintiffs contend.

54. The significance of this, for present purposes, is that if the legal questions as to liability, and as to the proper basis for assessment of compensation or damages, were dealt with separately, quantum could be deferred until later. There would be no need at this point for the Aversas to pursue access to the documents covered by the notice to produce. Depending on the Court’s conclusions on the legal issues, it might never be necessary to do so.

55. Lindsay J, however, recorded at J1 [16] that the parties agreed that all issues would be determined together at the trial. I must say that it does not seem to me to be in anyone’s interests, least of all those of the Aversas, to have a very expensive expert debate which may ultimately prove to be irrelevant. But it was not suggested before me that the parties’ position had changed. I have therefore proceeded on the basis that there will be a trial on all issues and access to documents bearing on quantum is now, or shortly will be, required.

56. The Aversas put their case on quantum in two ways. The first is that they are entitled to a “notional licence fee” for the use of their subterranean land. This contention relies on authorities on the measure of damage in cases of mining trespass involving wrongful extraction of coal. I will consider those authorities in a moment. The alternative is that the Aversas are entitled to compensation or damages calculated by reference to the “commercial benefit” obtained by means of “misappropriation” of their land. This contention relies on the decision of Hodgson J in LJP Investments Pty Ltd v Howard Chia Investments Pty Ltd (1989) 24 NSWLR 490 where the trespass involved a crane making use of the airspace above the plaintiff’s land for the purpose of constructing a development on the defendant’s adjoining land.

57. The second way of formulating the claim may be put to one side immediately for present purposes. As with the claim for an account of profits, it looks to the actual benefit achieved by the State from the use of the land in question. The Aversas concede that they have all of the documents necessary to work that out.

58. I now return to the first way in which the Aversas formulated the claim, by analogy with the mining trespass cases. In those cases, coal was wrongfully removed from under the plaintiff’s land by a colliery operator working from a pit on neighbouring land. There were two recognised methods of assessing damages.

59. One, which operated more harshly against the defendant trespasser, derived from the principle that, once severed, the coal taken from an owner’s land belonged to the owner as a chattel. The plaintiff was permitted to claim the value of the coal in extracted form. The defendant would thus receive no credit for the cost of extraction.

60. The alternative, milder, rule treated the plaintiff’s loss as a loss of the coal in situ. On this approach there had to be some allowance for the fact that the plaintiff had not had to incur the costs of extracting the coal.

61. At common law, the harsher rule was applied where the defendant’s trespass was deliberate. In cases where the defendant had acted mistakenly (or merely negligently) the milder rule prevailed. Equity followed the law, applying the milder rule unless there was a sufficient reason (such as deliberate violation of the plaintiff’s rights) to apply the harsher one: see the judgment of Lord Hatherley LC, sitting on appeal from the Master of the Rolls, in Jegon v Vivian (1871) LR 6 Ch App 742.

62. In the outline of the Aversas’ case quoted by Lindsay J at J1 [103], counsel for the Aversas relied, in support of the claim for “notional licence fee”, on the decision of the Privy Council in Bulli Coal Mining Co v Osborne [1899] AC 351. That was a case of deliberate (indeed, concealed) trespass. The decree directed an enquiry into the value at the defendant’s pit’s mouth of the coal removed from the plaintiffs’ land: see at page 358.

63. This may be contrasted with the form of the decree in Jegon where the defendants had removed the plaintiff’s coal in the belief that they were entitled to continue to do so under the terms of a lease previously granted over the plaintiff’s land. It was later found after much litigation that they were not so entitled. The decree was for an account in which the defendants were to be charged with the fair value of the coal extracted on the basis of what they would have had to pay “at the fair market value of the district”. The defendants had also used the workings under the plaintiff’s land to bring through coal from other workings of theirs. An enquiry was also decreed into “what ought to be paid by way of way-leave” for the passage of that coal.

64. The reference to valuing the plaintiff’s coal at the “fair market value of the district” was apparently a valuation based on what the plaintiff would have received by way of royalty per ton for permitting the coal to be mined. This was confirmed by the House of Lords in Livingstone v Rawyards Coal Co (1880) 5 App Cas 25 (the decision is famous for Lord Blackburn’s statement of the measure of damages generally applicable in tort; Lord Hatherley, who had by then been replaced as Lord Chancellor, also sat).

65. At first instance in Livingstone, damages had been assessed by taking the market value of the plaintiff’s coal in extracted form and making an adjustment of a certain amount per tonne to reflect extraction costs. This method of assessment was rejected as necessarily inferior, as a measure of the value of the removed coal in situ, to a market-based extraction royalty: see per Lord Blackburn at 40-41.

66. It is significant for present purposes that, in the coal mining trespass cases, the unlawful trespass had ceased. A royalty was only a convenient method of valuing the coal removed from the land. It was not in itself a head of damage.

67. In the present case, the Aversas’ claim clearly proceeds on the basis that the deprivation of their subterranean land is permanent and ongoing. Even if they succeed in establishing that the use of the land as a tollway is a trespass, they are not seeking an injunction. Accordingly, their damages (at least for the future) will be assessed as a lump sum on a once-and-for-all basis. It would not be possible for the Court to award an ongoing royalty payment for use of the land.

68. Furthermore, in the present case any spoil removed from the Aversas’ subterranean land has, or will have, no value. No question of awarding damages by reference to the value of what has been, or will be, removed from the Aversas’ land, or how such a valuation should be carried out, can arise.

69. It therefore seems that only the way-leave inquiry in Jegon could have any relevance for present purposes. The report of that decision does not indicate anything more about how what “ought to have been paid” was to be determined (an attempt to raise a way-leave claim in the House of Lords in Livingstone failed because it had not been raised in the intermediate appellate court). But presumably, way-leaves were sufficiently well-known in the coal industry to allow for some sort of market valuation (the Jegon decision also refers to air-leaves and water-leaves for ventilation and drainage).

70. This points up another important difference between the coal trespass cases and this case. In the coal cases there was an established commercial market between landowners and colliery operators for the use of land for mining purposes. Nothing comparable exists in the present case. In New South Wales, as elsewhere, the acquisition of land for road-building is a statutory process, and the revenue which might be derived from the road, if relevant at all, is only one of the factors in the decision to construct it.

71. Counsel for the Aversas pointed out that Lindsay J had already decided that they were entitled to the documents specified in the notice to produce. That is true, but this application is concerned with a less abstract question. The issue before his Honour was whether a class of documents, as defined by the wording of the notice to produce, was sufficiently likely to be relevant to justify disclosure as a class. I am concerned with the concrete question of the potential materiality of certain identified documents falling within that class.

72. In this context I think it is significant that no evidence was led on the Aversas’ behalf in this application. This is particularly important given that the Aversas’ experts will have access to financial information about WestConnex, both in the public domain and through these proceedings. The Aversas’ valuers might have stated how they propose to determine the value of a “reasonable royalty”, how the particular documents the subject of the claim might potentially be relevant to that process, and why the material to which they already have access is inadequate. So far as the evidence before me goes, the Aversas’ experts may not even have embarked on considering those questions.

73. In their submissions, counsel for the State described the relevance of the subject documents to the Aversas’ claim as “obscure”. For the reasons I have already given, I think that was a generous assessment. And there is yet another point.

74. The documents the subject of the application were generated for the purposes of the Government’s deliberations about selling down its interest in the WestConnex project. But if the Court does find itself able to fix a “reasonable” royalty, or a “reasonable” figure for lump sum compensation, it will do so on an objective basis. The question will be what the economic value of the Aversas’ subterranean land actually was, not what the State or its advisors thought it might have been. I suppose that in theory the subject documents might incidentally refer to objective information bearing on the actual value of the land resumed for the project, and which is not available anywhere else, but there was nothing in the evidence to show that this is a concrete possibility.

75. For these reasons, the case for production of the documents the subject of the application is hardly compelling. All I have is the generalised assertion that, in some undefined way, they could possibly be relevant to the Aversas’ case on quantum.

Public interest in secrecy

76. As already mentioned, counsel for the State propounded the claim for public interest immunity on the basis that the documents in question were all “cabinet documents”, as that term has been understood in the authorities. The documents in question relate to meetings of cabinet committees rather than meetings of the full cabinet, but no-one suggested this made any difference.

77. Counsel for the Aversas pointed out that public interest immunity is not absolute, even for cabinet documents. Counsel submitted that the immunity claim in the present case needed to be carefully scrutinised. If I was in any doubt about the claim I ought to inspect the documents myself. Counsel also suggested that I could address secrecy concerns by allowing production but limiting access, at least in the first instance, to the Aversas’ legal representatives.

78. The paradigm case of a cabinet document is a record of the deliberations of cabinet, in the form of a minute taken of the discussion at a cabinet meeting. At least two rationales for the secrecy of such a record have been identified. One is that secrecy is essential to (or at least highly desirable for) frankness and freedom of discussion in high-level political decision-making: Sankey v Whitlam (1978) 142 CLR 1 at 40 (Gibbs ACJ). Another is that the principle of collective responsibility for cabinet decisions cannot survive if cabinet deliberations are disclosed.

79. In Commonwealth v Northern Land Council (1993) 176 CLR 604 the High Court (Mason CJ, Brennan, Deane, Dawson, Gaudron and McHugh JJ) confirmed the existence of both rationales. The Court explained the second rationale in the following way (at 615-616, emphasis added):

... the disclosure of the deliberations of the body responsible for the creation of state policy at the highest level, whether under the Westminster system or otherwise, is liable to subject the members of that body to criticism of a premature, ill-informed or misdirected nature and to divert the process from its proper course. The mere threat of disclosure is likely to be sufficient to impede those deliberations by muting a free and vigorous exchange of views or by encouraging lengthy discourse engaged in with an eye to subsequent public scrutiny. Whilst there is increasing public insistence upon the concept of open government, we do not think that it has yet been suggested that members of Cabinet would not be severely hampered in the performance of the function expected of them if they had constantly to look over their shoulders at those who would seek to criticize and publicize their participation in discussions in the Cabinet room. It is not so much a matter of encouraging candour or frankness as of ensuring that decision-making and policy development by Cabinet is uninhibited. The latter may involve the exploration of more than one controversial path even though only one may, despite differing views, prove to be sufficiently acceptable in the end to lead to a decision which all members must then accept and support.

80. The Court went on to say (at 618) that the public interest in the secrecy of such documents was paramount unless the circumstances were quite exceptional, and it was doubtful whether disclosure for the purposes of civil proceedings would ever be warranted. Furthermore, inspection of the documents was not warranted unless there was some doubt about the claim, and in that event the inspection should be carried out by the court; inspection by a party before determination of the claim by the court, even on a restricted basis, was not a proper course (at 620).

81. But, as counsel for the Aversas pointed out, the documents in the Northern Land Council case were minutes of cabinet meetings. None of the documents the subject of this application is a record of cabinet deliberations in that sense.

82. The claim over document 7 is in part because it includes a summary of decisions made by cabinet. Documents 3, 4, and 5 are submissions made to cabinet. The other basis for the claim over document 7 is that it includes a summary of a cabinet submission. Documents 2 and 1 (the scoping studies) are documents which were attached to cabinet submissions. Document 6 (a draft chapter in the WestConnex business case) is a draft of part of such a document.

83. The first rationale for immunity of cabinet documents, based on the need to foster frankness and freedom in policy development, applies just as much to cabinet submissions and other high-level advice as it does to the records of cabinet deliberations themselves. That appears in terms from the passage from Sankey v Whitlam to which I have referred. It was not in issue in this application. There is however room for argument about the second rationale, based on the principle of the collective responsibility of cabinet.

84. In Egan v Chadwick (1996) 46 NSWLR 563, the Court of Appeal considered public interest immunity as it applies to cabinet documents in the context of a resolution by the Legislative Council attempting to require the production of such documents. Spigelman CJ, who gave the judgment of the Court, emphasised that the principle of cabinet collective responsibility was an aspect of responsible government and therefore constrained even a request by parliament for the production of documents held by the executive. His Honour said (at [57], citations omitted):

The documents in issue in [Northern Land Council] were in fact documents which recorded the actual deliberations of Cabinet. The revelation of such material is inconsistent with the doctrine of collective responsibility. Documents prepared outside Cabinet for submission to Cabinet may, or may not, depending on their content, manifest a similar inconsistency.

85. In Commonwealth v Construction, Forestry, Mining and Energy Union (2000) 98 FCR 31, the Full Federal Court upheld a claim for public interest immunity over a letter to the Prime Minister from a cabinet minister which, although not a formal cabinet submission, raised in an equivalent way an issue for discussion by cabinet. The Full Court applied the “exceptional circumstances” test from the Northern Land Council case and upheld the claim for immunity.

86. The Court reasoned (at [42]-[43]):

… Although the letter does not in terms record actual deliberations at a Cabinet meeting, it was circulated amongst Ministers in the Cabinet room at the meeting, and the matters in it were discussed and considered by those present. In that sense it reveals what would in the ordinary course be discussed by Cabinet. Some possible contingencies might be imagined whereby the letter was not in fact considered at the meeting, such as a last-minute withdrawal or an adjournment, but the evidence is that the matters in it were discussed.

Disclosure of the contents of the letter would, in our view, operate to reveal the nature of the matters considered by Cabinet and at least part of the Cabinet's deliberation of those matters. On the evidence it can reasonably be assumed, in the circumstances of this case, that the Minister would have attended the meeting and put before Cabinet the position and arguments as set out in the letter. Disclosure of the contents of the letter would therefore disclose the position of the Minister, the arguments he wished to advance, and the topic which in all probability was discussed at the meeting. … The position taken by the Minister in Cabinet is part of the Cabinet's deliberations. Disclosure of the Minister's position in this context would not only be contrary to the convention of the collective responsibility of Cabinet, because it identifies a particular Minister's views, but would also be contrary to the objective of ensuring that decision-making and policy development by Cabinet is uninhibited, because members of Cabinet could be hampered in the performance of their functions to candidly and comprehensively consider Cabinet proposals if subjected to publication of the details of discussions within the Cabinet room: see Northern Land Council at 615-616.

87. In State of NSW v Public Transport Ticketing Corporation [2011] NSWCA 60 (“PTTC”), the Court of Appeal accepted (at [50]) that a minute circulated to cabinet (what I have called a cabinet submission: see [83]) could attract the same level of public interest immunity protection as a record of the actual deliberations of cabinet. The Court cited the CFMEU decision, as well as Egan v Chadwick, in support of that proposition.

88. In Ku-ring-gai, the Court of Appeal considered a claim for public interest immunity over a report prepared by an external consultant which had been submitted to cabinet. By majority (Basten JA, with whom Macfarlan JA agreed), the claim was overruled.

89. Basten JA acknowledged that a document submitted to cabinet (as the consultant’s report had been) was capable of attracting public interest immunity on the ground that its disclosure would prejudice the proper functioning of government. This was because of the general desirability of ensuring that advice to cabinet would be full and frank. But his Honour noted that the report in question was prepared by an external consultant and considered it fanciful to think that the consultant would necessarily expect that the report, or parts of it, would never be released. See at [80], [91].

90. The context for the immunity application was critical. The proceedings involved a challenge to a decision to recommend the amalgamation of two local councils. The relevant legislation required such a proposal to be put forward by the Minister and provided to the Departmental Chief Executive and the Boundaries Commission, for purposes which included enquiry and report. The Minister’s proposal quoted a figure for savings taken from the consultant’s report but immunity was being claimed for the report itself, which explained the basis on which those savings had been calculated. See at [19]-21], [35]-[36]. In these circumstances, his Honour considered that the generalised desirability of encouraging full and frank advice did not outweigh the public interest in disclosure for the purpose of proceedings in which the content of the report would be directly relevant. See at [90], [94].

91. Counsel for the Aversas invited me to consider Ku-ring-gai carefully, which I took as an implicit invitation to take the same approach in this case. But there are significant differences.

92. In the first place, documents 3, 4, 5 and 7 (in part) are cabinet submissions or records of cabinet submissions. I use the term “cabinet submission” to mean a written submission recommending a particular course of action which is presented to the cabinet for discussion. This is not the same thing as a document prepared outside cabinet which is presented to, or comes before, cabinet, whether as an attachment to a cabinet submission or otherwise.

93. As the Full Court stated in the CFMEU case, a cabinet submission in the sense in which I have defined the term discloses (or may be inferred to disclose) the opinion of the minister putting the submission forward. In that sense, it is part of the deliberations of cabinet. A separate document submitted to cabinet, whether as an annexure to a cabinet submission or otherwise, such as that under consideration in Ku-ring-gai, does not necessarily do so. On its own, it does not convey what the minister may have said about it.

94. The cabinet submissions which are the subject of the present claim for immunity are directly covered by the decision in the CFMEU case. They engage an additional, and more significant, public interest than the need to encourage frank advice. That interest is the preservation of the principle of collective responsibility as a basis for cabinet government.

95. In my view, the Aversas have fallen far short of demonstrating the existence of the sort of exceptional circumstances which would require individualised scrutiny of the claim for immunity over these cabinet submissions. As there is no need for me to inspect the documents, I should not do so. I think that the other parts of document 7 the subject of the claim, which record decisions of the cabinet, are effectively in the same position. I uphold the immunity claims for documents 3, 4, and 5 and the relevant parts of document 7.

96. Documents 2, 6 and 1 are all documents (or, in the case of document 6, a draft of a part of a document) which were attached to a cabinet submission. For reasons which I have given, their disclosure would not necessarily disclose a position the relevant minister took in cabinet, although, depending on their content and the surrounding circumstances they might indirectly do so as a matter of inference. But to reach that conclusion would, I think, require inspection of the documents, or at least more specific evidence.

97. To this extent, documents 2, 6 and 1 are similar to the report which was the subject of the claim in Ku-ring-gai. But I think it is clear from the evidence that they were generated for the purpose of providing advice and recommendations to cabinet and for no other purpose. Contrary to the submission of counsel for the Aversas, they were not concerned only with operational matters (cf PTTC at [54]-[55]). And there is no statutory context requiring the documents, or information in them, to be provided to someone else for the purpose of performing a statutory function, as there was in Ku-ring-gai.

98. It is true that I could address the uncertainty about the relevance of the documents by ordering production but limiting access in the first instance to the Aversas’ legal representatives. But I could just as readily uphold the claim at this point, leaving it to the Aversas to renew their application for production if it becomes clear that the documents are necessary for them to prosecute their claim. In my view, the choice between these two alternatives is a matter for judgment which involves case management considerations as well as the balancing of the competing public interests, so far as they can currently be discerned.

99. As already stated, I think it is sufficiently clear on the evidence that documents 2, 6 and 1 were prepared for submission to cabinet. That is sufficient to attract the first rationale for public interest immunity, namely the fostering of frankness in the giving of advice.

100. As the Ku-ring-gai case shows, that rationale, although it has some weight, may not always prevail. But the report in Ku-ring-gai had a concrete importance for the outcome of those proceedings. In the present case I think that the argument for relevance of the documents is so weak, on the material which has been put before me, that the public interest in production is outweighed by the generalised public interest in the secrecy of high-level government policy development.

101. In these circumstances, I think it is unnecessary, and therefore unwarranted, that I should inspect the documents myself. Nor do I propose to order production for the purpose of access by the Aversas’ legal representatives. I uphold the claim to public interest immunity for documents 2, 6 and 1.

Costs

102. Counsel for the State sought an order that the Aversas pay the Secretary’s costs of the public interest immunity motion. This was resisted by counsel for the Aversas. Counsel pointed out that he did not formally oppose the application.

103. It is true that the motion arose out of a claim for public interest immunity which had to be put forward on behalf of the State. But it appears to be accepted that it was appropriate for the Secretary, as a non-party, to advance the claim, rather than leaving it to TfNSW as the defendant.

104. In my view there is an analogy with costs to which a subpoenaed recipient may be entitled as a result of compliance with a subpoena (UCPR, r 33.11). In the first instance, the subpoena recipient is entitled to costs associated with compliance, and as between the subpoena recipient and the issuing party issuing the subpoena, the costs must be paid by the issuing party (Foyster v Foyster Holdings [2003] NSWSC 881 at [12]). But in due course, if successful in the proceedings, the issuing party may be able to claim those costs from the unsuccessful party as part of the issuing party’s costs of the proceedings: Deposit & Investment Co Ltd (Receivers Appointed) v Peat Marwick Mitchell & Co (1996) 39 NSWLR 267 at 282D.

105. I propose to make an analogous costs order in this case. I will order that the Aversas pay the Secretary’s costs of the motion. But as between the Aversas and the defendants in the proceedings, I will reserve the incidence of those costs for later determination.

Legal professional privilege

106. In support of the application, two affidavits were read from officials of TfNSW identifying specific parts of the documents the subject of the notice to produce as constituting or recording legal advice to TfNSW concerning the WestConnex project. The documents in question were an appendix to document 2 and some parts of document 7. There was some, but not complete, overlap between the legal professional privilege claim and the public interest immunity claim. The legal professional privilege claim over the appendix to document 2 fell entirely within the public interest immunity claim, but the legal professional privilege claim over parts of document 7 did not.

107. In their written submissions, counsel for the State contended that the documents in question attracted legal professional privilege. They also canvassed the possibility of waiver, but argued that disclosure of the documents to other State Government entities did not amount to any waiver of the privilege.

108. There was no response to this evidence, and these submissions, from counsel for the Aversas. At the hearing, counsel acknowledged that the evidence established that the documents were privileged, and did not contend that there had been any waiver. Accordingly, the privilege claim succeeds.

109. Again, counsel for the State sought an order for costs. But in this case the position is, I think, different.

110. The privilege was said to be TfNSW’s, and TfNSW is a party. In the ordinary course, a list of documents for which privilege is claimed would be identified and it would then be up to the opposing party to decide whether to put the party claiming privilege to proof of that claim, or to raise an issue of waiver. If the maintainability of the claim is put in issue it may well be appropriate for costs to be awarded against the opposing party.

111. But no such procedure took place here. Instead, the process was telescoped together, and in the end there was no challenge to the claim for privilege.

112. In the circumstances, I propose to reserve the costs of the motion. This will allow the parties, if they wish, to reagitate the question in the light of later developments in the proceedings.

Orders

113. The orders of the Court on the Secretary’s notice of motion are:

1. Excuse the first defendant from producing the following in response to the notice to produce served on it on 8 March 2021 on the basis of public interest immunity:

(i)   A Scoping Study prepared in respect of the WestConnex tollway dated 8 October 2020 (Vol 2) and 16 October 2020 (Vol 1).

(ii)   A Scoping Study (including its Appendix) prepared in respect of the WestConnex tollway dated 17 February 2017.

(iii)   A Cabinet submission titled "WestConnex Stage 3 and Southern Connector Definition and Delivery Report" dated 28 September       2015 and its attachments, being:

(a)   A document titled "Attachment A - M4-M5 Link Reference Design Map".

(b)   A document titled "Attachment B - Southern Connector Reference Design Map".

(c)   A document titled "Attachment C - Stage 3 Traffic Summary".

(d)   A document titled "Attachment D - Financing Summary".

(e)   A document being Attachment E to the Cabinet Submission and titled "WestConnex Stage 3 M4-M5 Link and Southern Extension Project Definition and Delivery Report" dated August 2015.

(f)   A document being Attachment F to the Cabinet Submission and titled "Appendix F: Urban Amenities Improvement Program (UAIP)".

(g)   A document being Attachment G to the Cabinet Submission and titled "Gateway Review Report".

(iv)   A Cabinet submission titled "WestConnex Updated Business Case"    dated 29 September 2015 and the following attachments, being:

(a)   A document appended to Attachment A to the Cabinet Submission and titled "Appendix A Assumptions Book".

(b)   A document appended to Attachment A to the Cabinet Submission and titled "Appendix B Capital Cost Estimates and Cash Flows".

(c)   A document appended to Attachment A to the Cabinet Submission and titled "Appendix G Risk Register Extract".

(d)   A document being one of two documents comprising Attachment B to the Cabinet Submission and titled "Gateway Review Report".

(e)   A document being one of two documents comprising Attachment B to the Cabinet Submission and titled "Sydney Motorway Corporation and Roads and Maritime Services Management response to Gateway recommendations WestConnex Strategic Business Case Update".

(f)   A document being Attachment C to the Cabinet Submission and titled "Cabinet in Confidence FINAL WestConnex Costs and Financing".

(g)   A document titled "Attachment D High-level breakdown of WestConnex Cost Estimate (WCX project definition)".

(h)   A document being Attachment E to the Cabinet Submission and titled "Consultation".

(v)   A Cabinet submission titled "WCX Stage 3: Funding & Financing Strategy" dated 19 April 2017 and its attachments, being:

(a)   A document titled "Attachment B: Equity Sale Transaction Objectives", "Attachment C: Equity Sale Preparation", "Attachment D - Total WestConnex (WCX) Estimate, WCX Stage 3", "Attachment E - Total Financial Implications Tables".

(vi)   A draft attachment to a Cabinet Submission titled “Chapter 9: Financial Analysis”.

(vii)   The parts of a document headed "Briefing for Chief Executive For approval" and titled "Approval to execute key documents to support the sale of Sydney Motorway Corporation signed on 8 August 2018 and 15 August 2018", and its attachments, marked in blue in Confidential Exhibit PG-1 to the Affidavit of Philip Gardner affirmed 22 November 2021.

2. Order that the respondent/plaintiff pay the applicant’s costs of the motion.

3. Reserve the incidence as between the plaintiff and the defendants of the costs the subject of order (2).

114. The order of the Court on TfNSW’s motion are:

1. Excuse the first defendant from producing the following in response to the notice to produce served on it on 8 March 2021, on the basis of legal professional privilege:

1. Pages 251-314 of “5.2 2017.02.17 Project Giant_Scoping Study Appendix copy.pdf”, being the Appendices to a Scoping Study prepared in respect of the WestConnex tollway dated 17 February 2017.

2. Pages 101, 149, 116-125, 126-142, 148-158 and 159-167 of “CE18_0684 - Approval to execute key documents to support the sale of Syd.._(002).pdf”, being a document titled “Briefing for Chief Executive Approval to execute key documents to support the sale of Sydney Motorway Corporation” dated 15 August 2018 (including Attachments).

2. Reserve the costs of the motion.

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Decision last updated: 16 March 2022