In the matter of Timor Sea Oil and Gas Australia Pty Ltd (in liq)

[2020] NSWSC 1832

Supreme Court

New South Wales

Medium Neutral Citation:

In the matter of Timor Sea Oil & Gas Australia Pty Ltd (in liq) [2020] NSWSC 1832

Hearing dates:

14 December 2020

Date of orders:

14 December 2020

Decision date:

15 December 2020

Jurisdiction:

Equity - Corporations List

Before:

Leeming JA

Decision:

1. Order under ss 7 and 8 of the Court Suppression and Non-publication Orders Act 2010 (NSW), relying on s 8(1)(e) (“it is otherwise necessary in the public interest for the order to be made and that public interest significantly outweighs the public interest in open justice”) that paragraphs 30 to 34 of the affidavit of Ms Leonie McGregor of 10 December 2020 may be read but on the basis that the access given to the plaintiff be confined to access by Mr Ian Jackman SC and Ms Colleen Platford personally.

2. Order 1 will be in place for the period of 12 months from today pursuant to s 12 of the Act.

Catchwords:

EVIDENCE – public interest immunity – Cabinet document – application for evidence sought to be adduced in support of claim to be received confidentially without being disclosed to the other side – absence of any “usual practice” in such cases – whether a case had been made out for significant departure from principles of procedural fairness

Legislation Cited:

Court Suppression and Non-publication Orders Act 2010 (NSW), ss 6, 9, 12

Evidence Act 1995 (NSW), ss 130, 131A

Judiciary Act 1903 (Cth), s 79

Supreme Court (Corporations) Rules 1999) (NSW), r 2.2

Cases Cited:

Assistant Commissioner Condon v Pompano Pty Ltd (2013) 252 CLR 38; [2013] HCA 7

Commonwealth v Northern Land Council (1993) 176 CLR 604; [1993] HCA 24

Franklin v Commissioner of Police [2018] NSWSC 310

Lawrence v State of New South Wales [2020] NSWCA 248

Masson v Parsons (2019) 266 CLR 534; [2019] HCA 21

Meissner v R (1994) 76 A Crim R 81

R v Arthur Stanley Smith (1996) 86 A Crim R 308

Rizeq v Western Australia (2017) 262 CLR 1; [2017] HCA 23

State of New South Wales v Public Transport Ticketing Corporation (No 3) (2011) 81 NSWLR 394; [2011] NSWCA 200

Wainohu v New South Wales (2011) 243 CLR 181; [2011] HCA 24

Category:

Procedural and other rulings

Parties:

Castleton Commodities Merchant Asia Co Pte Ltd (Plaintiff/Respondent)
Commonwealth of Australia (First Defendant/Applicant)
Timor Sea Oil & Gas Australia Pty Ltd (in liq) (Second Defendant)
Northern Oil & Gas Australia Pty Ltd (in liq) (Third Defendant)

Representation:

Counsel:
I M Jackman SC (Plaintiff/Respondent)
G Kennett SC, N Kirby (First Defendant/Applicant)

Solicitors:
Gilbert + Tobin (Plaintiff/Respondent)
Clayton Utz (First Defendant/Applicant)

File Number(s):

2020/335251

Publication restriction:

Nil

Judgment

1. These are my reasons for rejecting the Commonwealth’s application, late yesterday afternoon, that paragraphs 30-34 of the affidavit of Ms Leonie McGregor, First Assistant Secretary, Cabinet Division, be read in support of its claim of public interest immunity without being provided in any form or subject to any terms as to confidentiality to any of the lawyers for the plaintiff.

2. I gave a short summary of my reasons for making an order pursuant to the Court Suppression and Non-publication Orders Act 2010 (NSW) limiting access to those paragraphs to Mr Ian Jackman of Senior Counsel and Ms Colleen Platford, partner of the firm retained by the plaintiff, but reserved giving formal reasons. I took that course because the ruling was made at around 4.20pm, because I was conscious of the possibility of an urgent application for leave to appeal and because it was inevitable given how the Commonwealth’s claim for public interest immunity had been advanced that the hearing could not in any event be completed on the afternoon.

3. I said (T 32.11-29):

“There is minimal confidentiality in paragraph 30 of Ms McGregor’s affidavit, while paragraphs 31, 32 and 33, which is to say three sentences, merely describe a process in relation to the role of the documents and the determinations of Cabinet and/or a Committee of Cabinet. Paragraph 34 is an opinion which, on the face of it, Ms McGregor is entitled to express.

Those matters give on its face a basis for this document to be given a relatively high degree of protection but, bearing in mind that this ruling is not on the substantive determination of public interest immunity but merely access, I am entirely unpersuaded that those paragraphs should be relied upon by the Commonwealth without anyone on behalf of the plaintiff having access to them.

So to do is basally consistent with the principle of open justice and reflects the fact that there has been no substantial articulation of any basis why the high degree of confidentiality that I have proposed, namely, access being given to Ms Platford and Mr Jackman and no one else and confined to the purposes of this application, cannot adequately deal with the Commonwealth’s interest in confidentiality over those paragraphs.”

4. Listed before me was the Commonwealth’s notice of motion (which I treated as an interlocutory process conformably with r 2.2(1) of the Supreme Court (Corporations) Rules 1999) to set aside the plaintiff’s notice to produce dated 30 November 2020. The notice seeks production of a single document:

“the decommissioning scoping study report prepared by Woodside for the Commonwealth of Australia in relation to the Northern Endeavour Floating Production Storage and Offtake facility and/or for the Laminaria-Corallina oil field.”

5. Everyone accepts the document exists, and everyone has referred to it as the “Woodside Report”. The commissioning of the report, and the subject matter of the advice, have been disclosed in a meeting of the Senate Economics Legislation Committee on 29 October 2020. The Commonwealth maintains that the Woodside Report attracts public interest immunity, and need not be produced despite the plaintiff’s notice.

6. I have not yet ruled on the claim. These reasons concern the terms on which the Court has received evidence which the Commonwealth has very recently served and read in support of its claim.

7. An unredacted version of Ms McGregor’s affidavit (and another affidavit) was provided by hand to my chambers last Friday afternoon, under cover of a letter from the Commonwealth’s solicitors saying that “The plaintiff has been provided with redacted copies of those affidavits, together with a copy of this letter”. I appreciate that, in circumstances where the hearing on Monday was to proceed by audio-visual link, it was sensible that a copy of the unredacted affidavits be physically available to the Court. A disadvantage of the course proposed was the documents supplied to my chambers did not disclose which paragraphs had been made available to the plaintiff and which had been redacted. I now know that the plaintiff was told the previous day that the Commonwealth proposed to take that course, and if there was objection to that course, it has not been made known to me.

8. My tipstaff wrote to the parties at 8.12am on Monday morning explaining the approach that would be taken:

“Dear Practitioners,

I refer to the affidavits of Ms McGregor and Ms Gillies provided to chambers on Friday afternoon under cover of Clayton Utz’s letter, which states that the plaintiff has received redacted copies of those affidavits.

His Honour does not propose to read any document which has not been provided to the other side without the issue first being raised in open court. If you wish to supply a redacted copy of the affidavits, we expect to be in court 7E for much of the morning (when chambers on level 11 will not be attended).”

Redacted copies of the affidavit were supplied later that morning.

9. The hearing before me commenced shortly after 2pm, by audio-visual link, with the participation of both sides. By email sent at 1.59pm, the Commonwealth emailed a redacted form of its submissions to my Associate. That document included an application (in paragraphs 36-40) that the Commonwealth’s application be heard in closed Court. I do not understand that application to have been presaged when the matter had been before the Corporations List Judge on 7 December or earlier in the day. The fact that such an application was to be made was first made apparent during the hearing.

10. The version of the written submissions which had been emailed was provided to me shortly after the hearing commenced. Some of the paragraphs were redacted. Shortly afterwards, a copy of that document was provided to me sitting in court, which included material not supplied to the plaintiff. I put the latter document to one side.

11. The Commonwealth’s submission in support of keeping the redacted paragraphs of Ms McGregor’s affidavit confidential from the plaintiff were put as follows:

“KENNETT: The confidential paragraphs of McGregor and also paragraphs 6 to 8 of Gillies make the link between the document and the Cabinet processes that is necessary for that claim to be advanced.

HIS HONOUR: Is that a claim that cannot be advanced without telling the other side from whom you want to keep this document its basis?

KENNETT: What putting this evidence in the public domain would do would be itself to reveal processes of Cabinet which have not yet been the subject of any announcement or made public in any other way. So it is not a case where I can’t advance the argument without disclosing the very thing in respect of which immunity is sought, but it is a case in which disclosing the circumstances that make the link would result in a further disclosure of that which has occurred in and in relation to Cabinet and which has not yet been the subject of any announcement.”

12. The Commonwealth maintained that the redacted material was essential to its application. There was the following exchange:

“KENNETT: Your Honour, without the material we seek to have confidential your Honour would only have my assertions from the Bar table that Woodside have anything at all to do with Cabinet.

HIS HONOUR: Okay. One follow up question. You say confidential, but what you really mean is no provision of any of that information on any terms to anyone against whom you are seeking this order.

KENNETT: That is so, your Honour, yes.”

13. The Commonwealth’s (unredacted) written and oral submissions also relied on what had been said in Franklin v Commissioner of Police [2018] NSWSC 310 at [68]-[69] to the effect that “the ‘usual practice’ is for the confidential material in support of the public interest immunity claim to not be available to the other side”.

14. The plaintiff opposed this course:

“JACKMAN: Our position is it would be a fundamental breach of procedural fairness for my learned friend to be able to rely upon what are simply redacted paragraphs without any knowledge on our part. Your Honour is aware that we have proffered appropriate undertakings.”

15. Mr Jackman rejected the contention that there was any “usual practice” which permitted a claim for public interest immunity to be established on the basis of material not made available to the other side. I substantially agree.

16. First, whether or not a document attracts public interest immunity will ordinarily involve establishing certain matters of fact. In the present case, where it is said that the Woodside Report is a “Cabinet document” – a term which is not free from ambiguity, as is plain from Commonwealth v Northern Land Council (1993) 176 CLR 604 at 614-15; [1993] HCA 24 – that will involve establishing its connection with the processes of Cabinet.

17. Secondly, there may be cases where in order to establish those matters of fact, it is appropriate for the Court to inform itself other than by way of evidence. Section 130(1) of the Evidence Act 1995 (NSW), on which the Commonwealth relied, proceeds on the premise that that may be appropriate. It 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.”

18. Section 130(1) applies to pre-trial applications such as the present: s 131A. However, before the power to make a direction under s 130(1) is exercised, it remains necessary to establish the competing public interests in that section and form the view that the latter outweighs the former. In some cases that may be obvious, or it may be susceptible to judicial notice; in others, a case will have to be made out by evidence and submission in the usual way in litigation.

19. Thirdly, the application by the Commonwealth to proceed in closed Court, and its application to read paragraphs 30-34 of Ms McGregor’s affidavit whilst preserving their confidentiality, infringe basic notions of procedural fairness. Put simply, the Commonwealth seeks to obtain a court order in its interests without the plaintiff seeing let alone testing or being heard as to the evidence on which the Commonwealth relies. This is contrary to a defining characteristic of a court. The application of procedural fairness and adherence, as a general rule, to the open court principles have been said to be a defining or essential characteristic of a court: Wainohu v New South Wales (2011) 243 CLR 181; [2011] HCA 24 at [44]; Lawrence v State of New South Wales [2020] NSWCA 248 at [76]. There are, as mentioned in argument, instances where such a course may be appropriate, a point recognised by the qualification given by French CJ and Kiefel J to adherence “as a general rule” to the open court principles. In Assistant Commissioner Condon v Pompano Pty Ltd (2013) 252 CLR 38; [2013] HCA 7 at [68], French CJ indicated that public interest considerations might qualify those defining or essential characteristics of courts. But it may be expected that a court will be astute to determine whether some less unfair procedure may be adopted whilst still preserving the confidentiality underlying the claim of privilege.

20. By way of example, these considerations were at the forefront of the consideration given by the Court of Appeal in State of New South Wales v Public Transport Ticketing Corporation (No 3) (2011) 81 NSWLR 394; [2011] NSWCA 200 at [19]:

“There are a number of circumstances in which the courts have been faced with a handicap or a difficulty in efficiently or justly resolving an aspect of a dispute where one party cannot see the material upon, or in respect of which, the court must adjudicate. Fairness may be compromised because the nature of the right or privilege asserted or claimed is one that excludes the other party from an examination of relevant material, but to disclose it to the other party for the purpose of resolving the claim of right would destroy that very right (if legitimately claimed). Further, fairness may be compromised by the court examining the material without a contradictor. This is, in part, alleviated by the recognition that the hearing without the substantive participation of the other party will have features of an ex parte application, thereby requiring appropriate disclosure from the party claiming the right. Nevertheless, it is easily seen how the other party may feel less than fully satisfied with the decision of the court, the foundation of which it cannot know or understand. Further, efficiency, to a degree, is impeded. A court, without a contradictor, must seek to understand the litigious context of the claim of right and assess it with only one side assisting. Here, the time of three judges on appeal was taken examining material without the assistance of a contradictor.”

21. The solution adopted in that litigation – the appointment of two “special counsel” to inspect the documents for which a claim of public interest immunity was maintained – illustrates the desirability of crafting a procedural regime ameliorating the compromise of fairness inherent in the course sought by the Commonwealth.

22. Fourthly, those considerations are reinforced by statute. The Court Suppression and Non-publication Orders Act mandates consideration of the public interest in open justice. Section 6 provides:

“In deciding whether to make a suppression order or non-publication order, a court must take into account that a primary objective of the administration of justice is to safeguard the public interest in open justice.”

23. Any order made “must specify the information to which the order applies with sufficient particularity to ensure that the order is limited to achieving the purpose for which the order is made”: s 9(5). The order must specify a period during which it operates (s 12(1)) and “the court is to ensure that the order operates for no longer than is reasonably necessary to achieve the purpose for which it is made”: s 12(2).

24. This Court is exercising federal jurisdiction (noting that the Commonwealth is a party). In accordance with was said in Rizeq v Western Australia (2017) 262 CLR 1; [2017] HCA 23 at [15]-[16], [32], [90] and [103] and Masson v Parsons (2019) 266 CLR 534; [2019] HCA 21 at [30], s 79 of the Judiciary Act 1903 (Cth) makes the commands in State laws applicable to courts exercising federal jurisdiction. The Commonwealth did not contend that there was anything in federal law displacing the operation of the Court Suppression and Non-publication Orders Act.

25. I do not accept that there is a “usual practice” in any case in which a claim of public interest immunity is made for the Court to proceed on the basis of material not disclosed to the other side. I do accept that there will be individual cases where that course may be appropriate. There may also be general classes of cases where that course is appropriate. By way of example, I have in mind evidence concerning the identity of police informers or undercover operatives, as explained by Gleeson CJ, Clarke and Sheller JJA in R v Arthur Stanley Smith (1996) 86 A Crim R 308 at 311-312.

26. It seems to me, on a fair reading of what was said in Franklin v Commissioner of Police at [68]-[69], noting the nature of the subpoenas issued by Mr Franklin and the reference by Johnson J to Meissner v R (1994) 76 A Crim R 81, that this is what the “usual practice” related to. I do not accept that there is any usual practice whereby a claim that a document is a Cabinet document is to be made out by reference to evidence which is to be kept entirely secret from the side seeking production.

27. Consistently with the obligations upon the Court to proceed in a way which was procedurally fair, I invited the parties to read the entirety of the evidence which was not the subject of any application for non-publication, and to make all submissions that could be made based on that material in open Court. I then invited Mr Kennett SC to take me to the parts of his affidavits which had not been provided to the plaintiff, and to address me on them, by reference to paragraph number and sentence number, without disclosing their contents, and while the plaintiff’s legal representatives continued to participate in the audio-visual hearing. There was no objection to that course. The entirety of the hearing took place without the Commonwealth renewing its application for the Court to be closed.

28. The Commonwealth’s primary basis for asserting public interest immunity is a “class” claim, based on the status of the Woodside Report as a “Cabinet document”. It maintained in correspondence prior to the hearing that “[t]he basis for the public interest immunity claim is clear from the face of the open affidavits”. Mr Kennett candidly and properly conceded that that was not so.

29. I formed the view that paragraphs 30-34 of Ms McGregor’s affidavit did not warrant the intrusion into the basal rights of a party to a fair hearing so as to accede to the order sought by the Commonwealth, namely, that it not be published or provided to any person including any of the plaintiffs’ legal representatives. The paragraphs comprise two sentences explaining the basis on which Ms McGregor made the statements in paragraphs 31-34, and the four sentences relating to the creation and use of the Woodside Report and its connection with Cabinet processes. It is the sort of evidence one might expect would be adduced in support of a claim for public interest immunity. But I could see no sound basis for proceeding to determine the Commonwealth’s motion without that information being provided on a strictly confidential basis to nominated legal representatives of the plaintiff. I did not understand the Commonwealth to articulate any such basis when I invited it to do so.

23. My view was informed by the Commonwealth’s earlier attempt to read redacted paragraphs of the other affidavit, made by a less senior public servant within the Department of Industry, Science, Energy and Resources. These were far from self-evidently so confidential that they could not be shown to at least some lawyers bound by confidential undertakings. That led to my saying the following for the benefit of those providing instructions on behalf of the Commonwealth:

“[Y]ou have retained senior counsel who’s very experienced in these matters. You will have seen the difficulties he had in seeking to explain to me the basic issue which arises on any application where you wish to rely upon evidence and not give it to the other side; that is, why is it so secret? I have now read paragraphs 9 to 12. I’m happy to have submissions made to me saying why this is so secret because I’m very conscious that sometimes the essence of what is confidential is not apparent on its face. But I do not see it and I do not understand your senior counsel to be able to articulate anything. I’m not being critical of him for a moment.”

31. The result was an acceptance by the Commonwealth of those paragraphs being read on the basis that at least two lawyers retained by the plaintiff might see them on a confidential basis (T27.34-37).

32. Taking a cautious approach, I made an order permitting senior counsel and the partner of the law firm instructing him to have access to paragraphs 30-34 of Ms McGregor’s affidavit, and that otherwise there be no publication of those paragraphs. I also made procedural orders permitting the parties to be further heard in relation to those paragraphs by way of written submissions to be supplied later this week, so as to resolve the balance of the dispute.

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Decision last updated: 15 December 2020