Churche v Australian Prudential Regulation Authority (No 2)
[2006] FCA 1054
•15 AUGUST 2006
FEDERAL COURT OF AUSTRALIA
Churche v Australian Prudential Regulation Authority (No 2) [2006] FCA 1054
PRACTICE AND PROCEDURE – leave to appeal – interlocutory judgment – whether sufficient doubt attended decision – whether substantial injustice would be caused if leave were not granted – statutory construction – existence of previous authority – possibility of issue estoppel – leave sought in respect of matter of procedure
Held: Leave to appeal granted.
Federal Court of Australia Act1976 (Cth) s 24(1A)
Churche v Australian Prudential Regulation Authority [2006] FCA 613 referred to
Decor Corporation Pty Ltd and Anor v Dart Industries Inc (1991) 33 FCR 397 applied
Tyco Australia Pty Ltd v Leighton Contractors Pty Ltd (2005) 142 FCR 428 referred toWARWICK JAMES CHURCHE v AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY
NSD 2471 OF 2005COWDROY J
15 AUGUST 2006
SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 2471 OF 2005
BETWEEN:
WARWICK JAMES CHURCHE
ApplicantAND:
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY
Respondent
JUDGE:
COWDROY J
DATE OF ORDER:
15 AUGUST 2006
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.Leave be granted to the applicant to appeal the decision delivered in these proceedings on 26 May 2006.
2.Costs reserved.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NSD 2471 OF 2005
BETWEEN:
WARWICK JAMES CHURCHE
ApplicantAND:
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY
Respondent
JUDGE:
COWDROY J
DATE:
15 AUGUST 2006
PLACE:
SYDNEY
REASONS FOR JUDGMENT
This is an application for leave to appeal from my decision given on 26 May 2006: see Churche v Australian Prudential Regulation Authority [2006] FCA 613 (‘the May decision’). Leave is necessary because the decision was delivered in respect of an interlocutory application: see s 24(1A) of the Federal Court of Australia Act 1976 (Cth).
The facts are set out in the May decision, and I will not repeat them at length here. In summary, the judgment related to an application to set aside two paragraphs of a notice to produce which had been issued on an application for preliminary discovery. The two paragraphs sought production of draft versions of a report produced by the respondent (‘APRA’) under s 60 of the Insurance Act 1973 (Cth). I set aside such paragraphs on two grounds: firstly, that the production of the documents was prohibited under s 56 of the Australian Prudential Regulation Authority Act 1998 (Cth) (‘APRA Act’); and secondly, that the reports were not properly the subject of a notice to produce in an application for preliminary discovery under O 15A r 6 of the Federal Court Rules.
The principles relating to leave to appeal from an interlocutory judgment were discussed in Decor Corporation Pty Ltd and Anor v Dart Industries Inc (1991) 33 FCR 397 at 398-9. The Court there accepted that the major considerations in determining whether leave should be granted are: 1) whether the decision is attended by sufficient doubt to warrant its being reconsidered; and 2) whether substantial injustice would result if leave were to be refused, supposing the decision to be wrong. However, the Court in Decor added (at 399-400):
‘However, there will continue to be cases raising special considerations, and the court should not regard its hands as tied in any case beyond this; that by s 24(1A) the legislature has evinced a policy against the bringing of interlocutory appeals except where the court, acting judicially, finds reason to grant leave. When the court comes to exercise its discretion on a particular application, an important distinction to be observed is that between the common interlocutory decision on a point of practice – concerning which the High Court has given (see Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 177) a strong warning that “a tight rein” should be kept on appeals – and an interlocutory decision determining a substantive right – where leave will more readily be granted.’
The applicant submits that the May decision in respect of the operation of s 56(8) of the APRA Act is attended by sufficient doubt to warrant leave being granted. In the May decision, I held that s 56(8) of the APRA Act prevented disclosure of the draft reports to the Court. The applicant says the doubt arises because the issue is essentially a matter of statutory construction, and there is no other authority dealing with the issue. The applicant submits that the question involves resolving a tension between the apparent prohibition under the APRA Act and the rights of an applicant pursuant to the ADJR Act.
The respondent submits that there is clearly no doubt that the May decision is correct and that s 56(8) evinces a clear legislative intention to prohibit production of these documents. It submits that the purposes of the Insurance Act would be subverted if the documents were produced. It refers to s 125 of the Insurance Act which acknowledges that s 56 of the APRA Act prohibits certain disclosures of information under the Insurance Act.
In the May decision I rejected the applicant’s submission that review of the lawfulness of the exercise of a power bestowed by a prudential regulation framework law is a review for the purposes of a prudential regulation framework law. I accept however that there is no other authority upon this point, and that it raises an important issue relating to the relationship between the APRA Act and the rights of administrative review arising under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (‘ADJR Act’) and s 39B of the Judiciary Act 1903 (Cth). I also acknowledge that the point is not entirely unarguable.
The applicant further submits that, if leave were not granted, and the decision were wrong, the applicant may suffer substantial injustice as a result of my determination of the effect of s 56(8). The applicant submits that the decision may give rise to an issue estoppel in future proceedings, both in the preliminary discovery application and in any future ADJR Act application which is made.
I accept that there is a real prospect that the May decision could give rise to an issue estoppel which would prevent the applicant from obtaining access to the draft or final reports in subsequent proceedings. The May decision also clearly has a bearing upon the outcome of this preliminary discovery application. If my decision were wrong, and leave to appeal were not granted, it would be likely to restrict severely the ability of the applicant to seek judicial review of APRA’s report. In these circumstances, the decision to refuse leave could produce substantial injustice. Accordingly, I consider it to be important that the applicant have the opportunity to challenge my decision in relation to the effect of s 56(8) of the APRA Act. I consider it appropriate for leave to be granted in relation to this issue.
I now turn to the applicant’s submissions in relation to the notice to produce procedure on an application for preliminary discovery. In the May decision, the Court rejected the applicant’s attempt to gain access to the entirety of the draft reports using a notice to produce on an application for preliminary discovery.
In written submissions the applicant said that this is not a case in which the applicant did not possess sufficient factual material to substantiate O 15A r 6(a) of the Federal Court Rules. That rule requires that an applicant seeking preliminary discovery have a reasonable cause to believe that he or she may have the right to obtain relief from a person whose description has been ascertained. However, in oral submissions in reply, the applicant retreated from this position slightly, indicating that there was a possibility that the Court would not agree that it had sufficient information, and the applicant might be prejudiced by the May decision by not having access to the additional material.
The respondent says that, if the applicant has sufficient information to establish its claim under O 15A r 6(a), as he originally submitted, then there could be no substantial prejudice accruing to the applicant from the failure to gain access to the draft reports.
The applicant further submits that there is a factual dispute between the parties relating to whether the applicant was subjected to differential treatment. The reports are sought for the purpose of providing evidence to support the applicant’s claim. The applicant submits that the Full Federal Court decision in Tyco Australia Pty Ltd v Leighton Contractors Pty Ltd (2005) 142 FCR 428 is authority for the proposition that notices to produce may be issued in respect of factual disputes on preliminary discovery applications.
In the May decision, I found that there was no relevant factual dispute between the parties. I remain of the opinion that the ‘factual dispute’ alleged by the applicant is in fact a legal dispute about the effect of facts which are not in dispute, and that the sole purpose of the notice to produce is to elicit further facts on which it can rely and not to resolve any factual disagreement. Nonetheless, I accept that Hill J’s judgment in Tyco does not explicitly address the nature and extent of factual disputes which would allow a notice to produce to be issued on an application for preliminary discovery. To my knowledge, there is no other significant authority on this issue and it is a question which is likely to arise in the future.
I also accept the respondent’s submission that, given the applicant’s submission that it has sufficient information to substantiate O 15A r 6(a), it is difficult to see how the applicant could suffer any prejudice if leave to appeal were not granted with respect to the May decision on this point. Further, I consider that the question raised by the applicant on this point is a matter of procedure, for which leave would usually not be granted.
If leave were being sought upon this point alone, I would decline to grant leave. However, for the reasons expressed above, I consider it to be appropriate that leave be granted in respect of the s 56(8) point. If leave were granted on that point but not in relation to the notice to produce question, it would make the appeal before the Full Court an academic exercise, because the May decision would be ultimately unaffected regardless of the findings of the Full Court.
For this reason I propose to grant leave to appeal on both grounds sought by the applicant.
I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy. Associate:
Dated: 15 August 2006
Counsel for the Applicant: Mr M Cashion SC Solicitor for the Applicant: Henry Davis York Counsel for the Respondent: Mr J Stevenson SC with Ms M Allars Solicitor for the Respondent: Blake Dawson Waldron Date of Hearing: 11 August 2006 Date of Judgment: 15 August 2006
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