Canwest Global Communications Corporation v Treasurer of the Commonwealth of Australia

[1997] FCA 1602

IN THE FEDERAL COURT OF AUSTRALIA  )
NEW SOUTH WALES & VICTORIA DISTRICT)
REGISTRIES  )
GENERAL DIVISION  )

BETWEEN:No NG 375 of 1997

CANWEST GLOBAL
  COMMUNICATIONS   CORPORATION
  Applicant

No VG 214 of 1997

DONHOLKEN PTY LTD

Applicant

No VG 218 of 1997
  SELLI PTY LTD
  Applicant

AND:TREASURER OF THE COMMONWEALTH OF AUSTRALIA

Respondent

CORAM:  HILL J.
PLACE:  SYDNEY
DATE :  11 JULY 1997

REASONS FOR JUDGMENT

Before the court are motions by Canwest Global Communications Corporation ("Canwest"), Donholken Pty Limited and Selli Pty Limited (with other parties) in three separate proceedings being respectively NG 375 of 1997, VG 214 of 1997 and VG 218 of 1997 to seek inspection of documents which have been discovered by the Treasurer, the respondent to the proceedings.

Each of the applications to which reference has been made seeks to review a decision or decisions of the Treasurer resulting in a divestiture order made by the Treasurer requiring shares in Ten Group Limited, held by Selli Pty Limited, Numeration Pty Limited, Turnand Pty Limited and Dolholken Pty Limited, to be sold.  These orders are said to have been made under the Foreign Acquisitions and Takeovers Act 1975 (Cth) ("the Act").

That Act, inter alia, provides that where shares in a corporation have been acquired and the Treasurer is satisfied in essence that a result of the acquisition is control by foreign persons and that result is contrary to the national interest, the Treasurer may make a divesting order.  The only significance for present purposes of referring to that Act is to note that the test to be applied by the Treasurer before making an order for divestiture is one of national interest.

I ordered, over the strenuous opposition of the Treasurer, discovery.  My order was appealed but confirmed.  In the result, the Treasurer has prepared a list of documents.  The applicants in the proceedings seek inspection of those documents.  Certain of the documents being those listed in section 2 to Part 2 of the list of documents are the subject of a claim by the Treasurer to public interest immunity, sometimes referred to as "Crown privilege".

There is no dispute between the parties as to the applicable law.  There was a time when it was thought that the Crown need only claim immunity from production of documents and that claim would be non-justiciable.  Not only would the court accept without question the matters said to give rise to public interest immunity usually set out in an affidavit, but also the court would not itself peruse the documents or take into account in any way the impact which the claim for immunity might have upon the proceedings in which it was made.

Fortunately, the law no longer proceeds in this way.  This is not the case for a dissertation on the law of public interest immunity.  The relevant law is summarised in two decisions of Full Courts of this Court being that in Zarro v Australian Securities Commission (1992) 36 FCR 40 at 44ff in the judgment of Lockhart J and also in Somerville v Australian Securities Commission (1995) 60 FCR 319 and see the judgment of Lindgren J at 353ff. In addition to those cases to which reference has been made, it has of course been the subject of consideration by the High Court of Australia in Sanky v Whitlam (1978) 142 CLR 1 and Alister v The Queen (1984) 154 CLR 404 and see too the illuminating discussion in Commonwealth v Northern Land Council (1991) 30 FCR 1.

When, as here, a party to litigation seeks the production of documents and objection is taken that it would be against the public interest to produce them, the court is required to consider two conflicting aspects of the public interest. It is required to balance such harm as there may be occasioned by the production of the documents against the public interest in the administration of justice which might well be frustrated or impaired if the documents in question are withheld.

The present law would seem to be that the court is not bound to accept the claim for public interest immunity just because it is said by a public servant that a public interest in the non-production of the documents exists. The court may itself make inferences adverse to such a claim as was the case recently in the Full Court of this court in Rogers v Jacobsen (1995) 61 FCR 57 where the court drew inferences different from those which had been drawn by the person asserting privilege as to whether persons required to complete returns of fishery catches might be less likely to be frank in their returns if public interest immunity were maintained in those returns so they were not available for inspection.

It is clear from the cases and not subject to any controversy before me that in carrying out the balancing task to which reference has already been made, the court may itself inspect the documents to enable it to determine the impact non-production of the documents would have on the proceedings.  In the Northern Land Council case (at 38) to which reference has already been made, six factors are suggested in the judgment of the Full Court of this court (comprising Black CJ, Gummow and French JJ) as being relevant to deciding a public interest immunity claim.

It is clear from the judgment that this is not an exhaustive list and in a particular case, no doubt, other factors may present themselves.  The six factors are as follows:

"1.where the contents of the document are relied upon, the interests affected by their disclosure eg national security, relationships with foreign governments and unfair prejudice to other parties by disclosure of confidential information;  where the impact of disclosure on the public interest is peculiarly within the knowledge of the Executive, its contentions will be given particular weight;

1. where the class of documents is invoked, the public interest which immunity for the class is said to protect eg political conventions and governmental processes;  in this connection the importance of the convention of collective responsibility and the confidentiality required to support it, particularly in areas of current political debate, will be accorded a high degree of respect;

1. the extent to which the interests referred to have become attenuated by the passage of time or the occurrence of intervening events since the matters contained in the documents or the documents themselves came into existence;

1. the seriousness of the issues in relation to which production is sought eg innocence of a criminal charge or governmental misconduct bearing upon the case;

1. the likelihood that production of the documents will affect the outcome of the case;

1. the likelihood of injustice if the documents are not produced."

In support of the claim to immunity, there has been filed an affidavit from Mr Hinton who is the First Assistant Secretary, Investment and Debt Division in the Department of Treasury. He is also an Executive Member of the Foreign Investment Review Board ("FIRB"). I should, at this stage, say something of that body.It has no statutory basis. The determinations required or permitted to be made under the Act are matters for the Treasurer and the Treasurer alone.

However, the Treasurer is entitled to and does seek advice as is usual in the case of a Minister or public official given discretion by an act of Parliament where advice would be given by the relevant department of state with which the matter is concerned. So, for example, in immigration matters, advice is regularly given to the Minister by public servants in the Department of Immigration & Multicultural Affairs (Cth). In the case of the Act, the Treasurer has chosen to obtain advice from a group of persons who are appointed by cabinet on advice from the Treasurer for a term of three to five years. Appointees come both from the public and private sector. They operate in private and the light of public scrutiny is seldom shone upon them. It may be said that given the serious consequences which a determination under the Act may have, it is highly desirable that the Treasurer seek advice from as wide a section of the community as possible.

Hence, the establishment of the FIRB.  The FIRB examines proposals, advises the government on foreign investment matters and, to some extent at least, be concerned with formulation of foreign investment policy through the advice that the board proffers to the Treasurer.  Ultimately, it is the Treasurer who must determine whether to accept that advice or not.  However, in legal theory, the fact that this body exists to proffer advice to the Treasurer, offers that body no greater protection from the scrutiny of the courts than would be the case if advice was given to the Treasurer wholly from public servants.

Mr Hinton says that to perform its task effectively, FIRB is basically dependent upon the preparedness of prospective investors to supply commercially sensitive material in confidence to the FIRB and Treasury. In saying that, he is no doubt referring to the fact that a prospective foreign investor seeking to acquire an interest in an Australian company or Australian business makes application to the FIRB to enable the Treasurer to make a determination in due course under the Act. That application needs be frank and clearly will, almost always, contain commercially sensitive material.

So, Mr Hinton says, the Commonwealth has publicly committed itself to treating such information in the utmost confidence and has vigorously opposed any dissemination of such material beyond "those whose knowledge is essential to the approval process".  He says that it has been government policy to refrain from a wider disclosure.  He points to the stand he personally took in 1994 when faced with the possible application of the powers of the Senate to require him to give evidence to it where he refused under direction of the government and with the support of the government of the day, that is to say the House of Representatives, to disclose information concerning the activities of the board to the Senate which was then inquiring into its activities.  As things turned out, Mr Hinton fortunately was not jailed.

I accept the assurance of his counsel that his narrating that episode was not in any way intended to suggest that he would act in contempt of the court were an order for inspection to be made but merely to show the significance which the confidentiality of the FIRB's activities has.  He says also that it is important to Australia that it preserve the perception which he says exists in the international financial community that Australia will maintain confidentiality.

The great majority of documents in respect of which the claim for Crown immunity is sought, is said to come within the first of the categories discussed in the Northern Land Council case.  That is to say, they involve disclosure of confidential information but in circumstances where national interest at least is involved in ensuring that the material is kept confidential.  I note the comment of the Full Court in Northern Land Council that the contentions made by a public official in claiming public interest immunity will be given particular weight and, indeed, that is appropriate for it is for the executive and not the courts directly to determine national interest.

However, it is somewhat difficult to see what national interest there is in objecting to the production of documents concerning the affairs of the applicant when the only person with an interest in confidentiality of that material is the applicant itself.  The present is not a case as indeed counsel conceded, perhaps with some reluctance, where the FIRB is being asked to produce material lodged in support of an application to it by a person who is a third party to the proceedings before the court.

Accepting, as I do, that great weight must be given to Mr Hinton, there is nothing in his affidavit that in any way makes it clear how Australia's international standing, or for that matter national standing, might in any way be affected by the production under court process of material relating solely to the affairs of a party to the proceedings and containing no material at all relating to the affairs of any other party.  It is hard to resist the conclusion that Mr Hinton is of the view that the work of the FIRB is of such significance that its proceedings should never be revealed at all with the consequence, of course, that any applicant seeking to challenge advice given to the Treasurer as part of the decision‑making process by the Treasurer, would never effectively be able to challenge that advice because it would be unavailable for inspection, having regard to Crown privilege.

I should say that at the last minute it seems it is accepted that a document, C16 on the Schedule, which contains the actual submission to the Treasurer upon which the Treasurer made his decision could be revealed to the applicant and other parties on appropriate undertakings being given.  That concession extended to the document C15 which was merely a few pages from the same document.  It did not extend to other submissions that had been made of earlier times to the Treasurer on the same matter which Mr Hinton sought to keep secret from the applicant on the basis of the claim for public interest immunity.

I should mention also another matter which Mr Hinton pointed to in support of the claim for public interest immunity.  It was said that he believed that there might be difficulty in obtaining appropriate persons to become members of FIRB if records of FIRBss could be made available under compulsory process.  I should say again, while giving full weight to what Mr Hinton says, it is very difficult for me to see how discovery of the material sought in the present case could really affect a decision by a person be that person of the public or private sector to become a member of a board of people whose task it is to advise the Treasurer.  If anything, the public interest in the transparency of the decision-making process might well attract suitable persons to accept appointment.

As I have already said, I have perused the documents the subject of the claim for privilege.  It is, I suppose, possible to categorise the documents in various classes for the purpose off determining the claim.  Some of the documents consist of drafts of letters where it may be assumed ultimately an original was sent.  For example, documents C1 and C2 are drafts of a letter to the Chairman of Canwest. As the documents were never sent, it is difficult to see what use the documents will be in the proceedings before me which concern the decision made by the Treasurer on the advice of the FIRB.

When one adds to that the subject matter of the correspondence which is outside the ambit of the present dispute, I am of the view that C1 and C2 ought to remain confidential.  Though, I must say, it is hard to see how Australia's national interest will in any way be impacted by the drafts not being produced. 
Some documents, and they are perhaps in a similar category, are drafts of press releases.  To the extent that these drafts never came into the hands of the Treasurer and ultimately where it is the original that is of significance, not a draft made on the way, there is no particular reason why the public interest in the litigation should outweigh the claim for public interest immunity although that claim, as I have perhaps already suggested, is certainly very weak.  That disposes of the documents C3 and C4.

There is a category of document which is referred to in Mr Hinton's affidavit as "Internal Government Papers".  An example is C5 which is a note of a conversation between Mr Thorburn, an officer in Treasury with the Australian Broadcasting Authority.  As there are allegations concerning the relationship between FIRB and the Australian Broadcasting Authority, there is some peripheral relevance in document C5 and similar documents and, in my view, that public interest outweighs the public interest claimed to exist by Mr Hinton since none of the material in the note is relevant to anyone other than the applicant in these proceedings, Canwest which is happy for the material to be made available to the other applicants.  That disposes not only of C5 but also C6.

Document C7, though in the same general category as far as Mr Hinton was concerned, differs because it is a note prepared by the Director of the Secondary Industries section of his reaction to the transaction, the subject of ultimately the divestiture order.  Given that material in the possession of FIRB it may be said constructively to be in the possession off the Treasurer, at least for the purposes of the "Wednesbury reasonableness" principle, there is some forensic connection between C7 and the litigation.  Again as I say, the only matters referred to in the document relate to Canwest and I see no reason why that document should in any way be kept from Canwest if it is forensically relevant to the litigation.  Accordingly, I am of the view that C7 should likewise be made available.

There is then a class of documents which are briefing material for the Treasurer, C9 is an example.  These are said to have the absolute protection which Mr Hinton claims presumably because a revelation of them would act as a disincentive to persons providing frank and considered advice.  With respect to Mr Hinton, these materials form part of what was before the Treasurer at the time he made his decision.  Clearly a decision‑maker who has been given a number of briefings before a final briefing document will have taken into account the earlier briefings as well as the later briefings.  The material in question again, as I say, deals only with Canwest.  In my view, the public interest in litigation outweighs the public interest immunity such as it may be and, accordingly, in my view C9 should be produced for inspection.

C8 is irrelevant and in those circumstances need not be produced.  C10 is in the same position as C5 and likewise should be produced.  C10 is in the same position as a briefing paper in that it refers to a discussion Mr Hinton had with the Treasurer concerning the matter and therefore, in my view, should be similarly produced.  C12 is in a perhaps different position.  It is a draft minute to the Treasurer.  It and C13 are drafts of the material which ultimately went to the Treasurer.  The drafts are not precisely the same.  Recommendations are said to differ although it is clear that there is a substantial similarity between these documents on the one hand and document C16 in the form in which it ultimately went to the Treasurer.

The draft was clearly discoverable and in that sense is relevant to the proceedings because it is a document which might tend to detract from the case of the Treasurer or alternatively support the case of the applicant.  Given that there is nothing in the document which in any way could affect the public interest greater than C16 does, it seems to me that these documents should be produced for inspection although I doubt if at the end of the day they will have any substantial impact on the proceedings.

C14 is so irrelevant to the proceedings that on any view of the matter such limited public interest as there may be should prevail over the litigation and therefore need not be produced.  C17 and 18 are in a similar position and need not be produced.  That irrelevancy extends to C19 and C20.  C21 records a briefing to the Treasurer and it is for that reason that its significance to litigation outweighs the public interest such as it may be and consequently should be produced.

C22 is in the same position.  C23 is a draft press release and likewise need not be produced.  C24 and C27 are protected by legal professional privilege and accordingly need not be produced.  C25 is a note of meetings with advisers and in my view has some relevance to litigation which overrides such public interest as there may be in not being produced.  C26 is irrelevant.  C28 has forensic relevance which overrides the public interest in my view and should be produced.

C29 and C30 have now been provided to the parties so the question of public interest immunity does not arise.  C31 is a draft press release which in my view need not be produced.  The remaining two documents, C32 and 33 relate to meetings between the parties and in my view have some peripheral relevance which overrides the public interest.

I would accordingly order production of those documents which I have noted above.  They should be made available for inspection forthwith as the case is to proceed for hearing on Monday 14 July 1997.  I have heard already submissions from the parties on the question of costs and I would reserve the costs accordingly.

I have been reminded that although document 16 was produced to the Treasurer, it was produced with clause 40 whited out.  In that clause, an expression of opinion is given as to national interest.  That expression of opinion is highly relevant to the proceedings and in my view the public interest in non- disclosure of the document which relates solely to the affairs of the applicant is outweighed by its relevance in the proceedings.  Clause 40 should accordingly be disclosed with the document.

I certify that this and the preceding fifteen (15) pages are a true copy of the Reasons for Judgment of the Honourable Justice Hill.

Associate:

Date:

Counsel and Solicitors for      J Griffiths instructed by
the Applicant in               Clayton Utz
NG 375 of 1997

Counsel and Solicitors for      P Tate instructed by
the Applicant in               Arthur Robinson Hedderwicks
VG 214 of 1997

Counsel and Solicitors for      P J Cosgrave instructed by
the Applicant in               Arnold Bloch Leibler
VG 218 of 1997

Counsel and Solicitors for      P Comans instructed by the
the Respondent                 Australian Government Solicitor