Inp Consortium Ltd v John Fairfax Holdings Ltd
[1994] FCA 466
•18 JULY 1994
INP CONSORTIUM LIMITED, INDEPENDENT NEWSPAPERS PLC and ANTHONY JOHN FRANCIS
O'REILLY v. JOHN FAIRFAX HOLDINGS LIMITED (formerly TOURANG LIMITED), DESMOND
LIVINGSTONE NICHOLL and KEITH WILLIAM SKINNER, ORD MINNETT SECURITIES LIMITED,
BARING BROTHERS BURROWS AND CO LIMITED and MARK BURROWS
No. NG812 of 1991
FED No. 466/94
Number of pages - 7
Practice And Procedure
COURT
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
SHEPPARD J
CATCHWORDS
Practice And Procedure - public interest immunity - subpoena to produce documents served on Commonwealth instrumentality - claim on behalf of Government that production of documents harmful to public interest - discussion of relevant principles.
HEARING
SYDNEY, 18 July 1994
#DATE 18:7:1994
Counsel for Mr. A.M. Hinton,
the Applicant on the
Notice of Motion: Mr. C.G. Gee, QC
and Mr.G.T. Johnson
Solicitors for Mr. A.M. Hinton,
the Applicant on the
Notice of Motion: Australian Government Solicitor
Counsel for the Applicants,
the Respondents to the
Notice of Motion: Mr. D.M.J. Bennett, QC
and Mr. V.R.W. Gray
Solicitors for the Applicants,
the Respondents to the
Notice of Motion: Landerers
ORDER
THE COURT ORDERS THAT:-
1. The following persons may have access to exhibits AMH1 and 2 to the affidavit of Anthony Maitland Hinton sworn 4 July 1994:-
Robert James Ellicott, QC
David Michael John Bennett, QC
Anthony Joseph Leo Bannon
Ventry Rollo Wakefield Gray
John Landerer
Kenneth John Searle
Teresa Kelleher-Andrews
2. There be no order as to costs of the Notice of Motion filed on behalf of Mr. A.M. Hinton on 5 July 1994.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
SHEPPARD J The matter which is before me concerns a subpoena to produce documents addressed to Mr A.M. Hinton who is the Executive Member of the Foreign Investment Review Board. A notice of motion dated 5 July 1994 has been taken out primarily seeking an order that access to documents in an exhibit to the affidavit marked AMH 1 be denied, upon grounds set out in an affidavit sworn by Mr Hinton on 4 July. Alternatively, there is a claim for an order that access to the documents be granted on certain limited terms and conditions.
The subpoena seeks production of documents received by the Foreign Investment Review Board between 1 December 1990 and 16 December 1991 from all or any of a number of persons, including persons who are parties to this litigation, in relation to any proposal by Tourang Limited to acquire John Fairfax and Sons Limited, documents received by it between the same dates and involving the same parties in relation to a proposal by INP Consortium Limited to acquire Fairfax or Foreign Investment Review Board consideration of any proposal, by that company to acquire Fairfax, and further documents which I need not describe. The documents have been produced but there is an objection to their being inspected by counsel and solicitor for the applicants who have sought access to them.
In the affidavit which he has sworn, Mr Hinton says that the Foreign Investment Review Board is a non-statutory advisory body which, through the Treasurer, advises the Commonwealth Government on foreign investment matters particularly by examining proposals by foreign interests for investment in Australia and making recommendations to the Government regarding those proposals. The matters upon which the Board provides advice include matters falling within the Government's foreign investment policy as well as those arising under the Foreign Acquisitions and Takeovers Act 1975. A general description of the procedures of the Board and the administration of foreign investment policy generally, are contained in a document which is annexed to the affidavit. There is a further document entitled, "Summary of Foreign Investment Procedures", which is in evidence. Board members are appointed by Cabinet on advice from the Treasurer for a term usually of three years. They may come from either the public sector or from the private sector, but in either event are people of considerable experience and stature. Meetings of the Board are conducted in private. Advice and recommendations of the Board are provided on a confidential basis to the Government and are not published.
Portions of the documents which have been produced to the Court have been marked with a yellow highlighter. It is these parts of the documents for which privilege from inspection by any of the parties to this litigation is claimed. The documents, with the highlighted sections omitted, were produced for inspection by the legal representatives of the applicants but subject to certain conditions about their being kept confidential. In relation to the portions of the documents, access to which is objected to, Mr Hinton says that he believes that it would be contrary to the public interest for access to be granted to those portions or for there to be any publication of them.
In several detailed paragraphs of his affidavit, he sets out the reasons why he claims this to be so. Amongst other things he says that it is in the public interest of Australia for it to have the benefit of foreign investment that complies with legislative and policy requirements of the Commonwealth. The Board exists principally to enable supply of expert advice to the Commonwealth Government to ensure that such requirements are in fact met. To perform that task effectively, the Board is largely reliant upon the preparedness of prospective investors to supply commercially sensitive material in candour to the Board and the Treasury. To achieve frankness in disclosure by foreign investors of commercially sensitive material, the Commonwealth has publicly committed itself to treating such information in the utmost confidence and to opposing vigorously any dissemination of such material beyond those whose knowledge is essential to the approval process.
The commitment, so Mr Hinton says, has resulted in various past statements to this effect including the publication, "Australia's Foreign Investment Policy - A Guide for Investors", widely distributed amongst potential foreign investors and endorsed by all governments since the mid 1970s. Page 4 of that document contains the following statement:-
"The Government fully recognises that much of the information which the Board will need in order to assess its attitude to a particular proposal will be sensitive commercial-in-confidence information. The Government will respect this confidential status and will award it appropriate security to ensure that it remains so. In the event that action is taken by third parties to obtain access to confidential information held by the Government, it will not be made available without the permission of the person who first gave the information to the Board, except upon order of a court of competent jurisdiction. In this respect the Government will in the ordinary course pursue the defence of its policy through the courts."
Mr Hinton's affidavit goes on to say:-
"Details of the deliberative processes, recommendations or advice of the Board or Treasury officers in relation to foreign investment proposals will often be as harmful to prospective foreign investors to release, or even more harmful to release, than the primary information supplied in confidence. I believe that if material of this kind is published beyond those immediately involved in the approval process, prospective foreign investors are likely to be less willing to provide commercially sensitive material to the Board or are likely to avoid Australia in favour of other countries when choosing where to place investments. This is because release of deliberative material, recommendations and advice may directly harm the commercial interest of foreign investors (in favor of their competitors), or may embarrass foreign investors by exposing perhaps unfavourable Board comment upon their proposals to publication."
Mr. Hinton also says that it is the risk of unfavourable comment being published rather than the fact that such comment is or is not favourable which is material. He says that the market for foreign investment is highly competitive and that it is in Australia's public interest to ensure that it is not placed at a relative disadvantage by inability to satisfy foreign investors that they may freely and frankly communicate with the Board. The question whether disclosure of exhibit AMH1 would be likely to damage Australia's public interest was not merely a question whether any of the present parties "would suffer revelation of matters confidential to them without their consent." The real difficulty was that prospective investors at large would have "diminished faith" in the preparedness or ability of Australia to protect them from commercial damage or embarrassment if the documents were revealed.
Another matter to which Mr. Hinton refers is the public interest in the Board having members who are sufficiently skilled and experienced in commercial affairs and foreign investment policy to provide Government with the "high level" advice that Government requires upon foreign investment matters. Mr. Hinton says that such persons, particularly those from senior echelons of the private sector, are unlikely to be attracted to the Board, or to continue to serve upon the Board, or to communicate their views so freely, if their personal, commercial or business reputations are put at risk as a result of disclosure of confidential deliberations, recommendations or advice.
Mr Hinton was not cross-examined because much of what he says in his affidavit is understandably argumentative. I have no reason of course not to accept the affidavit at its face value; in other words, there is no question of Mr Hinton's credit and in that sense the evidence he has given should be accepted. Plainly his evidence establishes that those parts of the documents which have been highlighted are properly the subject of a claim for public interest immunity from inspection. There is, however, a question whether the matter is one in which the Court should refuse all access to the documents or whether the public interest which there is in the confidentiality of the documents can be appropriately provided for in some other way.
There is no other evidence to which I need refer. The extract from the Sydney Morning Herald which was tendered on behalf of the applicants who seek inspection of the documents I do not find of great relevance and I have discounted it.
The principles which guide me in this matter are those stated in Sankey v Whitlam (1978) 142 CLR 1. There Gibbs ACJ said (at 43):-
"... I consider that although there is a class of documents whose members are entitled to protection from disclosure irrespective of their contents, the protection is not absolute, and it does not endure for ever. The fundamental and governing principle is that documents in the class may be withheld from production only when this is necessary in the public interest. In a particular case the court must balance the general desirabiity that documents of that kind should not be disclosed against the need to produce them in the interests of justice. The court will of course examine the question with especial care, giving full weight to the reasons for preserving the secrecy of documents of this class, but it will not treat all such documents as entitled to the same measure of protection - the extent of protection required will depend to some extent on the general subject matter with which the documents are concerned. If a strong case has been made out for the production of the documents, and the court concludes that their disclosure would not really be detrimental to the public interest, an order for production will be made. In view of the danger to which the indiscriminate disclosure of documents of this class might give rise, it is desirable that the government concerned, Commonwealth or State, should have an opportunity to intervene and be heard before any order for disclosure is made. Moreover no such order should be enforced until the government concerned has had an opportunity to appeal against it, or test its correctness by some other process, if it wishes to do so."
I refer also to the judgment of Stephen J (at 51-2 and 56) and the judgment of Mason J (as he then was) (at 93 et seq). Reference may also be made to the more recent decision of the High Court in the Commonwealth v Northern Land Council (1993) 176 CLR 604 at 618-620.
One of the matters raised by counsel for Mr Hinton in the run of the argument was the question whether or not the documents, inspection of which is sought, are likely to be relevant to any issue in the case. In this respect, reference needs to be made to paragraph 61(j) of the third further amended statement of claim which was filed on 11 November 1993. There it is alleged that "in fact" Burrows - that is a reference to Mark Burrows, the fifth respondent - and/or Baring Brothers Burrows and Co. Limited, the fourth respondent, and/or the Receivers, who are the second respondents, actively lobbied the Government including Government Ministers "such as" Messrs Hawke, Willis and Kerin in support of the approval of the Tourang bid. Reference needs also to be made to paragraph 111 of the statement of claim which alleges:-
"Further and in the alternative, on various dates after 16 July 1991, each of Burrows, Barings and the Receivers represented to INP, AIN, members of the government and/or members of FIRB and potential investors that Tourang had a valid and enforceable agreement with the Participating Bondholders and/or that there were no facts which supported any other conclusion."
These paragraphs, I am informed by counsel for the applicants, are put in issue by the defences of the various respondents, to whom I have referred. In those circumstances it appears that it is not unlikely that the material which is sought may well throw light on issues which arise for determination in the case.
Counsel for Mr Hinton asked me to inspect the documents for the purpose of making up my own mind about whether it was likely that they would prove of any benefit in the proof of the applicants' case. I have given that submission much thought. There is no doubt that in the Northern Land Council case, to which I referred a moment ago, there is strong discouragement expressed (at 620) of the course which the primary Judge took in that case of inspecting the documents. Of course each case must be looked at in its own circumstances and the fact that it was wrong for inspection to take place in that case, does not mean that it would be wrong for it to take place in others. Each case raises a question of discretion for a judge and the matter must be looked at accordingly. Having reflected on the matter, I have decided that I should not inspect the documents in this case and I have not done so.
Counsel for the applicants made a number of submissions. One of them was connected with relevance and I have said what I wish to about that. Others were for the purpose of satisfying me that the Court could impose conditions on access to the documents which would sufficiently protect them from becoming generally available in the community and would sufficiently protect them against the concerns genuinely held by Mr Hinton about the dangers that may arise if they be produced.
The matter, as the authorities indicate, is one in which I have to balance two public interests. These are the public interest in keeping confidential documents and other material, which it is demonstrated need to be kept confidential in the public interest, and the public interest in the due administration of justice.
I have reached the conclusion that this case is one which can be properly accommodated by the not unusual course of ordering that the documents be kept confidential but made available on a limited basis for inspection by the applicants' legal representatives. That, of course, will be a matter that can be reviewed from time to time, depending on what the needs for particular documents are. If there is any application for any amendment of the terms of the order, the application will not be dealt with except on notice to Mr. Hinton or his legal advisers. At the moment, as I understand it, I am asked by counsel for the applicants to make the documents available for inspection by counsel and a nominated solicitor for the applicants who are prepared to give undertakings, which will be given in writing to the Court, to protect the confidentiality of the documents.
In acting as I propose to do, I am acting, at least in part, pursant to s.50 of the Federal Court of Australia Act 1976, but I have also, in my view, implied powers conferred upon me to make orders of the kind which I propose. Orders of that kind are commonly made by this Court in all sorts of sensitive situations. Sometimes these involve government sensitivity, sometimes they involve commercial sensitivity, and sometimes there are other sorts of cases that the court has to deal with.
I recognise, as counsel for Mr Hinton stressed to me, that once I open it up even in the way that I propose, there is a danger that the documents will get into the wrong hands. I am fully conscious of that. I can only say that I do not think that happens very often. Having made numbers of these orders myself over a long period now, and seen the fate of cases dealt with by other judges who have made similar orders, I have not ever had one brought to my attention in which the procedure has gone wrong. That may simply be because we have not heard about it, but I do not remember ever hearing that documents which should not have been produced for the inspection of particular people, were produced to them.
Another matter that I have taken into account, notwithstanding what counsel for Mr Hinton has said to me, is the length of time that has gone past since the transactions in question were the subject of consideration by the Board. I appreciate that one of Mr Hinton's very genuine concerns is that the very suggestion that these documents can in some way be made available for inspection by even a limited class of people, may inhibit other potential investors from coming to Australia because of the fear that documents which they give the Government in confidence may after all be inspected. I think, however, that if the procedures which I have in mind are put in place, the compromise or the accommodation of the public interest in the confidence which the documents should have and at the same time the public interest in the due administration of justice, is achieved. That is the course which I propose to take. Mr Bennett I would wish you to bring in short minutes of an appropriate order.
(Discussion ensued).
"HIS HONOUR: ... Mr Gee, Sir Harry Gibbs in that dictum that I read ... said that I must give you an opportunity of appealing ...
MR GEE: Yes, your Honour, I have taken instructions on that and given that we have been able to agree - given that your Honour's order involved confidentiality and given that we have been able to agree upon those who should have access I am instructed to seek no stay of any order that might be made by consent today.
HIS HONOUR: Very well."
(Orders made in terms of Short Minutes of Order prepared by the parties and initialled and dated by Sheppard J and placed with papers. No order as to costs).
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