AWB Limited v Honourable Terence Rhoderic Hudson Cole (No 2)
[2006] FCA 913
PRACTICE AND PROCEDURE – whether separate questions should be heard and determined under O 29 r 2 of the Federal Court Rules – relevant legal principles – whether just and convenient to order trial of separate questions – no order under O 29 made
Re Kamha v Australian Prudential Regulation Authority (2005) 85 ALD 346 discussed
AWB LIMITED (ACN 081 890 459) v THE HONOURABLE TERENCE RHODERIC HUDSON COLE AO RFD QC and COMMONWEALTH OF AUSTRALIA VID 594…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
AWB Ltd v Cole (No 2) [2006] FCA 913
Case
[2006] FCA 913
Decision Date
CaseChat Overview and Summary
In the Federal Court of Australia, the case of AWB Ltd v Cole (No 2) involves AWB Ltd challenging the Royal Commission's authority to compel the production of documents under the amended Royal Commissions Act 1902 (Cth). AWB argues that numerous documents it possesses are protected by legal professional privilege and should not be produced to the Commission. The Commonwealth, represented by the Commissioner, argues that it has the authority to require AWB to produce the documents for inspection to determine if they are subject to privilege. The central issue before the Court was whether to exercise its discretion under Order 29 Rule 2 to order a separate trial of the questions proposed by the Commonwealth, or to proceed with a single trial of all issues.
The Court found that ordering a separate trial would likely result in greater delay, expense, and hardship than a single trial. It concluded that the proposed separate trial would not necessarily lead to savings in time and cost, and could potentially fragment the proceedings. The Court noted that even if the separate trial resulted in the dismissal of the proceedings on discretionary grounds, the question of legal professional privilege would still need to be determined by the Commissioner, potentially leading to further litigation. The Court also considered that the Commissioner's determinations could be challenged in the Federal Court, adding further complexity and potential cost.
Based on these considerations, the Court dismissed the Commonwealth's notice of motion to order a separate trial and restrained the Commissioner from issuing further notices to produce documents unless they expressly excluded those claimed to be privileged. The Court ordered that the costs of the Commonwealth's notice of motion be paid by the Commonwealth, and reserved the costs of AWB's earlier notice of motion for later determination.
Orders
Orders of the court
1. The Second Respondent’s notice of motion dated 26 June 2006 be dismissed.
2. The Second Respondent pay the Applicant’s costs of the notice of motion dated 26 June 2006.
3. The First Respondent be restrained pending the hearing and determination of the proceeding, or further order of the Court, from issuing any further notice under s 2(3A) or any notice under s 6AA(3) of the Royal Commissions Act 1902 (Cth) (as amended by the Royal Commissions Amendment Act 2006 (Cth)) to the Applicant, its officers, employees or former officers or employees to produce documents other than notices that expressly do not require production of documents for which the Applicant claims legal professional privilege.
4. The costs of the Applicant’s notice of motion dated 19 June 2006 be reserved.
Background
Background to the litigation
Both the Commonwealth and AWB came prepared to argue both the question whether the Court should exercise its discretion under O 29 r 2 to order a trial of the separate questions propounded by the Commonwealth, and the issue of how those questions should be finally determined. However, after hearing submissions from AWB and the Commonwealth, I directed that argument should be confined in the first instance to the question whether the Court should exercise its discretion under O 29 r 2 to order a separate trial of the questions proposed by the Commonwealth. These reasons for decision are directed to that matter only.BACKGROUND In the course of the Inquiry, the Commissioner has issued numerous notices to produce documents to AWB pursuant to s 2(3A) of the Royal Commissions Act 1902 (Cth) (‘RCA’). Between 23 November 2005 and 20 March 2006, 12 notices to produce documents were directed to AWB. In addition, various notices to produce documents were directed to employees of AWB in or about January 2006. From early 2006, AWB has maintained that numerous documents falling within the scope of these notices are the subject of legal professional privilege. In this proceeding, AWB seeks a declaration that a large number of documents are protected by legal professional privilege and are not required to be produced to the Commission pursuant to any of the notices that have been issued. Pursuant to directions made by the Court, AWB has filed a consolidated list identifying the documents over which privilege is claimed (‘the documents’). On 15 June 2006, the RCA was amended by the Royal Commissions Amendment Act 2006 (Cth) (‘the Amending Act’). The amendments confer a number of new powers on commissioners appointed under the RCA. Most significantly, s 6AA(3) empowers a commissioner to serve a written notice requiring a person to produce a document for inspection by a member of the commission (or a person authorised by a member of the commission) for the purpose of the commissioner deciding whether or not to accept or reject a claim of legal professional privilege. Subsections 6AA(2), (4) and (5) confer power on a commissioner to accept or reject a claim of legal professional privilege. By letter dated 15 June 2006, the solicitor assisting the Commission advised AWB’s solicitors that the Commissioner intended to exercise the powers conferred upon him by the Amending Act to require the production of documents over which AWB claimed legal professional privilege, and in respect of which AWB was seeking declarations from this Court that the documents were privileged. The letter stated, inter alia:‘In exercise of the power conferred upon the Inquiry by the Parliament, the Inquiry intends to serve on Tuesday 20 June 2006 a new notice pursuant to section 2(3A) of the Royal Commissions Act 1902, as amended, requiring production of documents as described in the notice. It will exclude documents which have been produced to the Inquiry in whole. Those not produced to the Inquiry to date, or produced in part with portions blanked out as being the subject of claims for legal professional privilege, will be within the purview of the notice. A draft of the notice intended to be issued is attached. It will be made returnable by 12 noon on Thursday 22 June 2006. When that notice is served the Inquiry will inform you that further compliance with existing notices is not required. That will ensure that AWB Limited is subject to obligations only in respect of one notice.AWB has, to date, declined to produce to the Inquiry documents for inspection by the Commissioner in order that he may decide whether to accept or reject the claim for privilege. This new notice requires production of those documents. In respect of those for which AWB wishes to maintain its claim for legal professional privilege, it is the Inquiry’s intention to issue a notice pursuant to section 6AA(3) requiring that those documents be produced for inspection for the purpose of the Commissioner deciding whether to accept or reject the claim for privilege. I am advised that the government proposes to recommend the making of regulations prescribing the manner of service of the notice contemplated by section 6AA(3) to the Governor-General-in-Council on 22 June 2006. If the regulations are made on that date, such a notice will be served on AWB Limited on 23 June 2006.’
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
YOUNG J
On the whole, I have formed the view that an order for separate trials is likely to bring delay, expense and hardship greater than that which the making of the order seeks to avoid.CONCLUSION Legal professional privilege is a substantive legal right that depends on common law rules. The Court’s jurisdiction has been properly invoked. Both AWB and the Commonwealth submit that the Court should hear and determine this proceeding. The issue raised by the Commonwealth’s application under O 29 r 2 is whether the Court should do so by ordering a trial of separate questions, followed if necessary by a final trial of the remaining issues, or by the usual procedure for a single trial of all issues. I am not satisfied that the separate trial of the questions proposed by the Commonwealth would be just and convenient. I will order that the Commonwealth’s notice of motion be dismissed.
Ratio Decidendi
Legal Principle Established
Established by:
YOUNG J
In short, the questions posed by question 1.2 are not ‘ripe’ for decision because the Court may not need to decide them, and whichever way they were decided they would not of themselves dispose of this litigation.GENERAL CONSIDERATIONS In my opinion, this is not a case in which it can be said that ‘the utility, economy and fairness to the parties’ of hearing and determining the separate questions posed by the Commonwealth is ‘ beyond question’: Tepko at 55 [170]. Nor is this simply a case where there is a risk that the asserted advantages of separate trials will prove to be illusory. It has not been demonstrated that the proposed separate trial would deliver any savings of time and cost, when compared with a single trial of all issues. If a separate trial were to be ordered, and if that trial resulted in the dismissal of the proceedings on discretionary grounds, the question whether legal professional privilege attaches to the documents would then be susceptible to determination by the Commissioner under s 6AA. The process of determination before the Commissioner would, it seems to me, give rise to issues which would be no less complex than those presently before this Court. In addition, determinations by the Commissioner may not finally resolve the issue of legal professional privilege. The Commonwealth accepted that those determinations could be directly challenged in this Court under s 39B of the Judiciary Act, as the Commissioner has no authority to make determinations that are wrong in law. Alternatively, determinations by the Commissioner could be the subject of judicial review proceedings in this Court pursuant to the provisions of the ADJR Act. The Commonwealth argued that if this Court refused to make a declaration in favour of AWB on discretionary grounds, and thereby allowed the Commissioner to proceed under s 6AA, this Court in any subsequent proceedings under s 39B or the ADJR Act would have the benefit of the issues having been properly joined and defined in a reasoned decision by the Commissioner. The Commonwealth added that the Commissioner’s determinations could reduce the number of documents in dispute, either by upholding claims to legal professional privilege or by concluding that particular documents are irrelevant to his inquiries. However, on the material before me, it is equally arguable that the processes of a separate trial of questions 1.1 and 1.2 in this Court, potentially complex proceedings before the Commissioner pursuant to s 6AA, and then further applications to this Court challenging or seeking to review determinations by the Commissioner, will be productive of greater delay and greater costs than would be incurred if the current proceedings proceed in the ordinary way to a trial of all issues. The evidence before me does not satisfy me that the multiple processes envisaged by the Commonwealth are likely to prove to be more efficient, less costly and less protracted. In my opinion, the order sought by the Commonwealth would also lead to an undesirable fragmentation of the proceedings. There is at the very least a reasonable prospect that the Court’s decisions on any separate questions would be appealed, and the appeal process could be protracted.