Deripaska v Minister for Foreign Affairs

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FEDERAL COURT OF AUSTRALIA

Deripaska v Minister for Foreign Affairs [2024] FCA 62  

File number: WAD 15 of 2023
Judgment of: KENNETT J
Date of judgment: 8 February 2024
Catchwords:

ADMINISTRATIVE LAW – judicial review of Instruments made by the Minister designating and declaring the applicant pursuant to item 6A(a) of reg 6 of the Autonomous Sanctions Regulations 2011 (Cth) (Regulations) – whether Regulations infringe common law right to be represented by lawyer of one’s own choice – whether use of amending instrument effectively designated and declared applicant for purposes of reg 6 – whether Minister misunderstood nature of power being exercised by failing to appreciate scope of her discretion – whether Minister was aware of discretion – whether Minister aware she had discretion to designate and declare, neither designate nor declare, and designate or declare the applicant – materiality of failure to appreciate scope of discretion – inferences to be drawn from Minister not having been called to give evidence – whether rational foundation for Minister’s state of satisfaction that applicant met criteria in item 6A – application dismissed

CONSTITUTIONAL LAW – judicial power of the Commonwealth – whether regs 14 and 15 have applications that would subvert the exercise of jurisdiction under s 75(v) of the Constitution or s 39B(1) of the Judiciary Act 1903 (Cth) – whether Regulations are invalid by reason of inconsistency with the constitutional entrenchment of that jurisdiction – where s 75(v) introduces an “entrenched minimum provision of judicial review” – whether designation under the Regulations prevents designated persons or entities from obtaining legal representation to challenge decision – whether terms of Regulations can be read down to exclude actions taken for the purpose of challenging designation or other things purportedly done under the Autonomous Sanctions Act 2011 (Cth) in proceedings commenced under s 75(v) or 39B(1)

CONSTITUTIONAL LAW – implied freedom of political communication – where parties agreed that Regulations burdened the implied freedom – where Regulations impede lawyers’ ability to communicate meaningful advice or representations to or on behalf of a designated person or entity – whether nature of such communications is political – whether Regulations serve a legitimate purpose in allowing Australian government to pursue foreign policy objectives through sanctions – whether Regulations proportionate to the achievement of legitimate purpose – Regulations not invalid by reason of infringement of the implied freedom

Legislation:

Constitution ss 7, 24, 75, 76, 77

Acts Interpretation Act 1901 (Cth) ss 2, 15A

Autonomous Sanctions Act 2011 (Cth) ss 3, 4, 6, 10, 11, 12, 13, 14, 16, 17, 28

Judiciary Act 1903 (Cth) s 39B(1)

Legislation Act 2003 (Cth) s 13

Migration Act 1958 (Cth) s 438

Autonomous Sanctions Bill 2010 (Cth)

Autonomous Sanctions (Designated Persons and Entities and Declared Persons – Ukraine) Amendment (No 4) Instrument 2022 (Cth)

Autonomous Sanctions (Designated Persons and Entities and Declared Persons — Russia and Ukraine) Amendment (No 7) Instrument 2022 (Cth)

Autonomous Sanctions (Designated Persons and Entities and Declared Persons – Russia and Ukraine) List 2014

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Details
Case
[2024] FCA 62
Decision Date

CaseChat Overview and Summary

The applicant, Oleg Vladimirovich Deripaska, a prominent Russian businessman, challenged the Minister for Foreign Affairs' decision to designate and declare him pursuant to the Autonomous Sanctions Regulations 2011. The Federal Court was tasked with determining whether the Regulations infringed on Deripaska's common law right to be represented by a lawyer of his choice, whether the Minister misunderstood the scope of her discretion in exercising her powers, and whether the Regulations were consistent with the constitutional entrenchment of judicial review. Additionally, the court had to consider whether the Regulations burdened the implied freedom of political communication and whether they served a legitimate purpose in allowing the Australian government to pursue foreign policy objectives through sanctions.

The court found that the Regulations did not infringe on Deripaska's common law right to legal representation as the right was not absolute and could be subject to reasonable qualifications. The court also concluded that the Regulations did not subvert the exercise of the court's jurisdiction under s 75(v) of the Constitution or s 39B(1) of the Judiciary Act 1903. The Minister's decision to designate and declare Deripaska was found to have a rational foundation, as she was satisfied that he met the criteria for designation and declaration. The court held that the Regulations did not burden the implied freedom of political communication as they served a legitimate purpose and were proportionate to the achievement of that purpose.

The court dismissed Deripaska's application and ordered that he pay the Minister's costs as agreed or assessed.

Orders

Orders of the court

1. The application be dismissed.

2. The applicant pay the respondent’s costs as agreed or assessed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The next section of the Ministerial Submission was headed “Decision Record”. It was evidently prepared for the Minister to sign if she agreed with its contents, so that there would be a record of what the Minister had decided and on what basis (even though the Minister was under no legal obligation to give reasons for her decision). The Decision Record was divided into four parts. Part A was headed “Designation and Direction”. Underneath was a space for the Minister to sign. The text of this section was as follows.I am satisfied that the persons identified in Part C meet the criteria for designation and declaration (if applicable), outlined in Part B below, unless I have initialled the ‘Do Not List’ column in respect of a person. I confirm that I considered the statements of case supporting designation for targeted sanctions and declaration for travel bans in respect of each person in Part D in reaching my decision. Part B was headed “criteria for listing” and set out the relevant text of item 6A of reg 6 (set out at [11] above). Part C was headed “Decision on designation and declaration”. It began with a table listing the name and some other details of the applicant, including the “Do Not List” column referred to in the Recommendation. Under the heading “Context”, there was some further text describing the applicant’s role and interests. There was then a brief reference to the sanctions imposed on the applicant by the United Kingdom, the United States and Canada. Part D was headed “Statements of Case supporting designation and direction” It set out information which it said was, “to the Australian Government’s knowledge, accurate and reliable”. In relation to the applicant, that information was as follows.Name: Oleg Vladimirovich DeripaskaNationality: Russian Federation, Cyprus Oleg Vladimirovich DERIPASKA is a prominent Russian businessman (oligarch) and public reports state he has particularly close personal tied to President Putin.4DERIPASKA is the founder of UC Rusal which has a 20 percent interest in Queensland Alumina.5 On 10 March 2022, Rio Tinto, which owns the remaining 80 percent, announced that it would sever all business links with Russia.6 DERIPASKA has said that he does not separate himself from the Russian state. He has also acknowledged possessing a Russian diplomatic passport and claims to have represented the Russian government in other countries.7 DERIPASKA has been subject to US sanctions since 20188 and Canadian sanctions since 6 March 2022.9 The UK imposed sanctions on DERIPASKA on 10 March 2022.10 In March 2019, DERIPASKA sued the US, alleging that it had overstepped its legal bounds in imposing sanctions on him and made him the “latest victim” in the US probe into Moscow’s election interference. The lawsuit was dismissed in June 2021, as lacking merit.11 DERIPASKA is or has been involved in obtaining benefit from or supporting the Government of Russia, by carrying on business in, and owning or controlling and working as a director or equivalent in businesses in the Russian extractives and energy sectors, sectors of strategic significance to the Government of Russia.12 Given his business interests and close personal ties to Putin, it is open for the Minister to be satisfied that Oleg Vladimirovich DERIPASKA is, or has been, engaging in an activity or performing a function that is of economic or strategic significance to Russia.

Ratio Decidendi

Legal Principle Established

The effect of regs 14 and 15 can be mitigated by the grant of a permit by the Minister under reg 18. Regulation 18(1) authorises (inter alia) the grant of a permit authorising the making available of an asset that would otherwise contravene reg 14, or the use of or dealing with a controlled asset (paras (e), (f)). The regime for granting permits is discussed further below.Designation of persons and entities and declaration of persons in respect of Russia On 19 June 2014 the Minister made an instrument under reg 6 of the Regulations entitled the Autonomous Sanctions (Designated Persons and Entities and Declared Persons – Russia and Ukraine) List 2014 (Cth) (the 2014 Instrument). Section 3A of that Instrument, which was inserted by the Autonomous Sanctions (Designated Persons and Entities and Declared Persons – Ukraine) Amendment (No 4) Instrument 2022 (Cth) (the No 4 Instrument) with effect from 26 February 2022, is as follows.3A Designated persons and entities and declared persons—Russia (1) For the purposes of paragraph 6(a) of the Autonomous Sanctions Regulations 2011, each person or entity mentioned in an item of a table in Schedule 2 is designated as a designated person or entity for Russia. (2) For the purposes of paragraph 6(b) of the Autonomous Sanctions Regulations 2011, each person mentioned in an item of the table in Part 1 of Schedule 2 is declared for the purpose of preventing the person from travelling to, entering or remaining in Australia. Schedule 2 to the 2014 Instrument comprises two tables. The table in Part 1 of the Schedule lists individuals who, as a result of their inclusion, are declared for the purposes of reg 6(b) (by s 3A(2)) and designated for the purposes of reg 6(a) (by s 3A(1)). Part 2 of Schedule 2 lists entities which are designated (by s 3A(1)) but which are not within the scope of reg 6(b). The 2014 Instrument is the Instrument which was amended by the Amending Instrument signed by the Minister on 17 March 2022. The Amending Instrument added the applicant’s name to the table in Part 1 of Schedule 2.THE PRESENT CASE Pursuant to proposed consent orders drawn up by the parties (which were ultimately not made by the Court, but implemented by agreement), the Minister’s solicitors were, subject to any claims for public interest immunity, to file and serve “a book comprising copies of all documents relating to the respondent’s decision in relation to the applicant made on 17 March 2022 that were before the respondent at the time of making that decision”. They filed and served a book of documents in compliance with that proposed order, which is now in evidence. I proceed on the basis (no party having suggested otherwise) that these documents comprise everything relevant to the decision that was before the Minister at the time she made the decision.What the Minister received The Minister was provided with a “Ministerial Submission” prepared by officers in her Department. The submission itself is undated, but other evidence indicates that it was sent to her office on the morning of 16 March 2022 (the day before the Minister made the decision under review). The Ministerial Submission dealt with the applicant and one other person, and the discussion of that other person (which is irrelevant) has been redacted. In what follows I omit references to the other person.