Murdesk Investments Pty Ltd v the Secretary To the Department of Business and Innovation
[2011] VSC 436
•7 SEPTEMBER 2011
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
| AT MELBOURNE COMMON LAW DIVISION |
VALUATION, COMPENSATION & PLANNING LIST
PRACTICE COURT
No. 6927 of 2010
| MURDESK INVESTMENTS PTY LTD | Plaintiff |
| v | |
| THE SECRETARY TO THE DEPARTMENT OF BUSINESS AND INNOVATION | Defendant |
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JUDGE: | DIXON J | |
WHERE HELD: | MELBOURNE | |
DATE OF HEARING: | 3 JUNE 2011 | |
DATE OF JUDGMENT: | 7 SEPTEMBER 2011 | |
CASE MAY BE CITED AS: | MURDESK INVESTMENTS PTY LTD v THE SECRETARY TO THE DEPARTMENT OF BUSINESS AND INNOVATION | |
MEDIUM NEUTRAL CITATION: | [2011] VSC 436 | |
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Practice and Procedure – Preliminary discovery – Whether sufficient information to enable plaintiff to decide whether to commence proceedings – Whether reasonable grounds to believe that plaintiff may have right to obtain relief against defendant – Where relevant document that the plaintiff would inspect is privileged from inspection under the principles of state interest immunity – Discretionary considerations - Supreme Court (General Civil Procedure) Rules 2005 (Vic) r 32.05.
Evidence - State interest immunity – Document prepared for and considered by committee of Cabinet – Business case for major State project – Whether document disclosing, or enabling to be ascertained, the existence or identity of confidential information relating to the administration of a law of a State, or disclosure which may prejudice the proper functioning of the government - Evidence Act 2008 (Vic) ss 130, 131A.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr C Porter | Norton Rose |
| For the Defendant | Mr J Delany SC with Mr P Liondas | Victorian Government Solicitor |
HIS HONOUR:
By originating motion, the plaintiff sought, and obtained, discovery from a prospective defendant, pursuant to r 32.05 of the Supreme Court (General Civil Procedure) Rules2005 (Vic). That order is now challenged, essentially on two grounds. The first ground is that on a rehearing of the application, the plaintiff is not entitled to the relief it seeks. The second ground is that the document that the plaintiff seeks, now that it has been clearly identified, is immune from inspection under s 130 of the Evidence Act 2008 (Vic) (state interest immunity).
Background
In February 2000, the plaintiff purchased land with the intention of developing it for industrial purposes. The land was a regular, rectangular parcel of approximately 74 hectares, consisting of two lots numbered 4 and 5 on PS8359 Parish of Wollert, known as 335–413 Cooper Street, Epping. On 11 February 2002, about 16 hectares of lot 4, basically the western half of that lot, was acquired by the Roads Corporation for a freeway. The compensation payable on the Roads Corporation acquisition was disputed.[1] I will refer to the land remaining after the Roads Corporation acquisition, some 55 hectares comprising the eastern half of lots 4 and 5, as the Murdesk land.
[1]Murdesk Investments Pty Ltd v Roads Corporation [2006] VSC 363 (5 October 2006) (Osborn J).
The defendant compulsorily acquired the Murdesk land on 28 October 2005 to relocate the Melbourne wholesale markets (the project). The assessment of compensation for this acquisition is also disputed. The dispute was referred to this Court in August 2006 and will shortly come on for trial (the compensation proceeding).
The following indicative site plan shows land to the east of the Murdesk land, also acquired on 5 May 2005, for the purpose of the project: the Haberfield (McKee Estate) land. The indicative site plan suggests that, to date, the whole of the acquired Murdesk land has not been used for the project.
Figure 1: Melbourne Wholesale Markets Indicative Site Masterplan – May 2011
The surplus Murdesk land is the object of the plaintiff’s interest. What has particularly ignited the plaintiff’s interest in the prospect of a cause of action against the defendant is a suggestion the surplus land may be sold. Letters dated 25 August 2010, sent by CB Richard Ellis to property developers inviting expressions of interest for purchase of the surplus land, were obtained on subpoena. The material part is:
We are pleased to offer you a limited opportunity to participate in an off market expression of interest process for the pre-offering of the surplus land held by the State Government of Victoria for the relocation of the wholesale markets from Footscray. I'm sure you are aware a significant parcel of land was compulsorily acquired for the new market site. Post-design and planning of the market, there is a portion of the land that is not required and thus the State Government operated by the Department of Innovation, Industry and Regional Development (DIIRD) are considering their options with regard to the disposal or development of the land. CBRE having been working with DIIRD and Major Projects (division of the State Government and DIIRD), to evaluate demand in the area, activity from certain sectors of the market, assessment of the highest and best use and review of local transactions. As part of this process and in line with one of the possible strategies (to divest the remaining land as an englobo parcel) CBRE have been requested to approach key operators in this sector …
The plaintiff contends the surplus Murdesk land forms part of the englobo parcel, which is predominately the Haberfield acquisition.
The plaintiff contends that it may be entitled to a declaration challenging the validity of the decision to acquire the Murdesk land on two grounds. First, the gazettal notices were a nullity. Second, the defendant acted beyond its power, and for an improper purpose, to the extent that it acquired an undefined part of the Murdesk land for the purpose of on-selling the land at a profit to assist in defraying the costs of the project. The plaintiff contends that it cannot determine whether its causes of action are good without inspecting the documents in the defendant’s possession that relate to the project.
The form of the application before the Associate Justice is relevant. The application was for orders that the defendant make discovery of any document:
(a)relating to the question whether the plaintiff has the right to obtain relief from the court, namely a declaration that the notice of acquisition dated 28 October 2005 given for and on behalf of the Secretary to the Department of Infrastructure, purporting to compulsorily acquire the [interest of Murdesk Investments Pty Ltd and all other interests in the Murdesk land] published in the Government Gazette numbered S203 dated 28 October 2005 is null and void and of no effect.
(b)the inspection of which would assist the plaintiff to make the decision whether to seek such relief from the court in a proceeding brought by it against the defendant.
Before the Associate Justice, the defendant raised a preliminary objection that the application impermissibly imposed on the defendant the burden of determining what documents the plaintiff might require to decide whether to bring a proceeding. Looking at the form of the originating motion, it is clear that this is so. The rule requires that the plaintiff identify what documents or class of documents are required, to determine whether to institute proceedings against a named defendant based on the potential causes of action identified.[2] In argument before the Associate Justice, the scope of the application was narrowed to:
(a)documents relating to the question whether the defendant proposes to sell that part of the subject land not required for the market’s development; and
(b)in particular, the business case document referred to in the April 2005 memo.
[2]Compare the circumstances in Clime Investment Holdings Ltd v Pilley (Unreported, Supreme Court of Victoria, Vincent J, 26 May 1998).
In a reasoned decision, the Associate Justice ordered:
The defendant is to file and serve an affidavit of documents on or before 13 June 2011 listing –
(a)All documents which record or evidence the decision-making process of the decision-maker(s) with regard to the decision to acquire the Cooper Street land by notice of acquisition published in the Government Gazette S203 dated 28 October 2005.
(b)All documents which record or evidence any decision to sell any part of the Cooper Street land surplus to the market development.
Before me, it was not suggested that the form of order made by the Associate Justice was susceptible to a like criticism and the plaintiff was not pressing for relief in terms of the originating motion. The plaintiff sought to defend the order made in its favour and, in particular, sought access to a particular document. Although the practical issues in relation to the form of the application are easily managed, applications under this rule should identify particular documents or classes of documents to be discovered. This obligation is implicit from the language of sub-paragraph (c) of the rule. The obligation to identify what documents might be required to be discovered cannot be imposed on the party making discovery. The objection had merit but is no longer relevant.
When the plaintiff clarified and narrowed the nature of the discovery being sought on the hearing of the application before the Associate Justice, it became clear that the plaintiff specifically sought to inspect a document conveniently described as the ‘Business Case’. Since the order below, investigations by the Victorian Government Solicitor have revealed that the ‘Business Case’ is the document entitled ‘Major Projects Victoria, Melbourne Wholesale Markets Redevelopment: Business Case’, dated September 2004. It was commissioned and prepared for the sole purpose of being provided, and was provided, to a Committee of the Cabinet of the State of Victoria. The defendant now contends that this document cannot be inspected, being subject to state interest immunity, and is not discoverable under the rule.
However, the evidence in support of this claim was not before the Associate Justice and special leave is required[3] by the defendant to rely on three further affidavits sworn by Michael John Hilton Bowles, Barbara Ann Poland and Janine Margaret Hebiton on 2 June 2011, to substantiate this claim for state interest immunity as a ground to resist the application.
[3]See Supreme Court (General Civil Procedure) Rules 2005(Vic) r 77.06(7).
Issues
The issues arising for determination on this appeal are these:
(a)should the defendant have special leave to rely on further affidavits?
(b)is the ‘Business Case’ document subject to state interest immunity?
(c)is there reasonable cause to believe that the plaintiff has or may have the right to obtain the relief foreshadowed?
(d)has the plaintiff sufficient information to enable it to decide whether to commence its proceeding?
(e)is there reasonable cause to believe that the defendant has in its possession any relevant document, which the plaintiff would be entitled to inspect if the relevant documents are immune from inspection under the principles of state interest immunity?
(f)if the Court is otherwise satisfied that the requirements of the rule have been met and that its discretion is enlivened, should relief be refused in the exercise of discretion?
Leave to rely on further affidavits
The discretion to grant special leave is commonly exercised by reference to whether an unreasonable advantage would be taken, if further affidavits are permitted, of the fact that the appeal is by rehearing de novo.[4] Section 8 of the Civil Procedure Act2010 (Vic) now requires that the Court give effect to the overarching purpose of the Act in the exercise of any of its powers or any interpretation of those powers. I consider it appropriate to grant special leave to the defendant in this case to rely on the further affidavits to facilitate the just, efficient, timely and cost effective resolution of the preliminary discovery application.
[4]Octagon Inc v Hewitt (No 2) [2011] VSC 373 (10 August 2011) [18]–[19].
Two considerations warrant particular discussion. The first is, as I have already set out, that the plaintiff’s application was framed in impermissibly broad terms. The precise scope of the discovery being sought from the defendant was unclear until the hearing before the Associate Justice. As the obligation to identify what documents might be required to be discovered cannot be imposed on the party making discovery, permitting the defendant to adduce further evidence directed towards the scope of the plaintiff’s application, now properly stated, is not, in my opinion, taking an unreasonable advantage of the process. The second issue is that r 32.05(b) of the Rules, while empowering the Court to order discovery, is essentially concerned with the question of whether inspection of discovered documents will assist the applicant. The just and efficient resolution of the application is not enhanced if the Associate Justice’s order for discovery is rendered futile by a subsequent application upholding a claim that the documents are privileged from inspection.
Accordingly, leave is granted to rely on the affidavits of Bowles, Poland and Hebiton, each sworn 2 June 2011.
Is the ‘Business Case’ protected from inspection by state interest immunity?
If discovery is ordered, the defendant will claim that the ‘Business Case’ and all drafts of it are subject to state interest immunity. This question must be resolved before considering the further issue of whether ordering preliminary discovery would be futile.
At common law the rule is that the court will not compel or permit the disclosure in evidence to a court of information where to do so would be injurious to the public interest.[5] Such issues are now governed by s 130 of the Evidence Act. The section also governs the question as it arises in this proceeding by reason of s 131A of the Act.
[5]Sankey v Whitlam (1978) 142 CLR 1, 38, 48.
130.Exclusion of evidence of matters of state
(1)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.
(2)The court may give such a direction either on its own initiative or on the application of any person (whether or not the person is a party).
(3)In deciding whether to give such a direction, the court may inform itself in any way it thinks fit.
(4)Without limiting the circumstances in which information or a document may be taken for the purposes of subsection (1) to relate to matters of state, the information or document is taken for the purposes of that subsection to relate to matters of state if adducing it as evidence would-
(a)prejudice the security, defence or international relations of Australia; or
(b)damage relations between the Commonwealth and a State or between 2 or more States; or
(c)prejudice the prevention, investigation or prosecution of an offence; or
(d)prejudice the prevention or investigation of, or the conduct of proceedings for recovery of civil penalties brought with respect to, other contraventions of the law; or
(e)disclose, or enable a person to ascertain, the existence or identity of a confidential source of information relating to the enforcement or administration of a law of the Commonwealth or a State; or
(f)prejudice the proper functioning of the government of the Commonwealth or a State.
(5)Without limiting the matters that the court may take into account for the purposes of subsection (1), it is to take into account the following matters-
(a)the importance of the information or the document in the proceeding;
(b)if the proceeding is a criminal proceeding-whether the party seeking to adduce evidence of the information or document is an accused or the prosecutor;
(c)the nature of the offence, cause of action or defence to which the information or document relates, and the nature of the subject matter of the proceeding;
(d)the likely effect of adducing evidence of the information or document, and the means available to limit its publication;
(e)whether the substance of the information or document has already been published;
(f)if the proceeding is a criminal proceeding and the party seeking to adduce evidence of the information or document is an accused - whether the direction is to be made subject to the condition that the prosecution be stayed.
The task under the Act is to balance two competing interests of the State. The proper administration of justice calls for disclosure of relevant material to litigants.[6] That is a matter of public interest: admitting into evidence information or a document that relates to matters of state but which is relevant to the issues before the court. Another matter of public interest may be best protected by non‑disclosure: by the preservation of secrecy or the confidentiality of such information or document. The latter aspect of public interest can raise concerns of excessive government secrecy. State interest in this contest, broadly speaking and limited to a civil context, can refer to disclosing information that would be injurious to national security, national defence or good diplomatic relations between nations or between Australian States, or disclosure of information that would be injurious to some other State interest. It is the latter context that is here applicable: disclosing or enabling to be ascertained the existence or identity of confidential information relating to the administration of a State law or disclosure that may prejudice the proper functioning of the government. The section does not limit the circumstances in which information or a document may be taken to relate to matters of state.
[6]Ibid 38, 49.
The ‘Business Case’ is characterised as a Cabinet document. It matters not that it was considered by a committee of Cabinet.[7] In relation to the production of Cabinet documents, the learned author of Cross on Evidence,[8] has summarised the principles stated in the cases:
The production to the court of documents recording Cabinet deliberations should only be ordered in exceptional circumstances which give rise to a significant likelihood that the public interest in the administration of justice outweighed the very high public interest in the confidentiality of documents; it is doubtful whether civil proceedings would ever warrant the production of documents recording Cabinet deliberations upon a matter which remained current or controversial … Similar principles apply to documents which would reveal the internal deliberations of Cabinet and which were involved in them. Where exceptional circumstances exist which prima facie suggest that documents recording Cabinet deliberations ought to be produced the appropriate course would ordinarily be for the judge to inspect the documents for the purpose of deciding whether the relevance of the material to the proceedings in which disclosure is sought is sufficient, even in those exceptional circumstances to justify disclosure. Having regard to the strength of the claim for immunity, a judge ought not to order disclosure unless satisfied that the materials are crucial for the proper determination of the proceedings. (Citations omitted)
These observations are pertinent when applying the statutory test in the context of the ‘Business Case’. Although s 130 closely resembles the common law doctrine of public interest immunity, there are subtle differences. Public interest may be a wider concept that State interest, which may not cover communication at lower levels of government, but such questions need not be here considered.
[7]Victoria v Seal Rocks Victoria (Australia) Pty Ltd (No 2) [2001] VSC 249 (27 July 2001) [21]; Sportsbet Pty Ltd v Harness Racing Victoria (No 4) [2011] FCA 196 (8 March 2011) [9].
[8]John D Heydon, Cross on Evidence (LexisNexis Butterworths, 8th ed, 2010) [27065].
Some of the matters that the Court may take into account in balancing competing considerations of public interest are set out in s.s (5). The statutory list of possible matters for consideration is not intended to limit what matters the Court may take into account. From that list, the following matters appear relevant here:
·The importance of the information or the document in the proceeding;
·The cause of action to which the information or document relates and the nature of the subject matter of the proceeding;
·The likely effect of permitting inspection of the information or document and the means available to limit its publication; and
·Whether the substance of the information or document has already been published.
As to other considerations which may be relevant, the statute plainly operates in the context of well established principles of public interest immunity at common law: see Sankey v Whitlam,[9] Alister v The Queen,[10] and Commonwealth v Northern Land Council.[11] Drawing on these authorities, McClellan J conveniently summarised the applicable principles in Murrumbidgee Ground-Water Preservation Association v Minister for Natural Resources,[12] and I will, with respect, adopt that summary.
[9](1978) 142 CLR 1.
[10](1984) 154 CLR 404.
[11](1993) 176 CLR 604.
[12][2003] NSWLEC 322 (28 November 2003) [19].
1.There is no absolute immunity from production and inspection of cabinet documents: Sankey at 43, 58-59, 95-96; Northern Land Council at 616. In this context ‘cabinet documents’ extends to:
(a)Cabinet minutes or other records of Cabinet discussions and records of discussions between heads of departments;
(b) papers prepared as submissions to Cabinet;
(c)any documents which relate to the framing of government policy at a high level Sankey at p 39.
2.The general rule is that a court will not order the production of a document although relevant and otherwise admissible if it would be injurious to the public interest to disclose it.
3.The public interest has two aspects: the protection of government from the harm which may be caused by disclosure and the interest in ensuring that justice can be effectively administered: Sankey at 38, Conway v Rimmer [1968] UKHL 2; (1968) AC 910 at 940.
4.The court must weigh the competing elements of the public interest: Sankey at 43, 60-64, 98-99.
5.A claim for immunity for a class of documents as opposed to a claim in relation to individual documents will be upheld only if it is really necessary in the public interest or the proper functioning of the public service: Sankey at 39.
6.The court has power to inspect the documents in order to determine any claim. However, there remains some controversy as to the circumstances in which that power should be exercised. If the documents clearly fall into a class which attracts immunity they should not be inspected: Northern Land Council at p 617.
7.Documents recording the actual deliberations of cabinet are more likely to attract immunity than documents prepared outside Cabinet such as reports or submissions for the assistance of Cabinet: Northern Land Council at 614-615.
8.Documents relating to a topic which is current or controversial will attract a high level of confidentiality: Northern Land Council at 617-618.
9.Documents in relation to a matter which has passed into history attract a lesser level of confidentiality, as do documents which may have been already published.
10.The intended use of documents, particularly if required to found a defence to a criminal charge, is a relevant consideration. Where a person’s liberty is at stake production is more likely to be ordered: Sankey at 42 and 61-62.
11.(a) It is unlikely that disclosure of the records of Cabinet deliberations upon current matters would be appropriate in civil proceedings: Northern Land Council at 618.
(b)Documents and communications passing between a Minister and the head of his department relating to cabinet proceedings and material prepared for Cabinet are likely to be protected: at Sankey 99.
(c)Reports relating to important matters of policy between public servants and Ministers or between senior public servants also warrant a high level of protection: at Sankey 99.
Other relevant considerations in balancing competing interests of state, beyond those enumerated in s.s (5), can be drawn from the cases and a number of relevant matters can be conveniently collated:[13]
·Whether the objection to disclosure is a class claim or a content claim;
·Whether a representative of government has supported non‑disclosure of the information or document;
·The subject matter of the information or document, for example, whether it relates to national security or, on the other hand, commercial matters;
·Whether the information or document relates to Cabinet deliberations or lower levels of government;
·Whether the information or document has contemporary importance or is only of historical interest; and
·Whether the information or document was required on the basis that it would be kept confidential.
[13]Stephen Odgers, Uniform Evidence Law in Victoria (Law Book Co, 9th ed, 2010) [1.3.13580].
The evidence of the State’s confidentiality interest
Barbara Anne Poland, the Director of the Cabinet Secretariat in the Department of Premier and Cabinet, has deposed that she inspected a document entitled ‘Major Projects Victoria, Melbourne Wholesale Markets Redevelopment: Business Case’. Ms Poland states that the document is stamped on the front with the words ‘Cabinet in confidence’, is marked as ‘Version 3.1’ and is dated September 2004.
Ms Poland explained the functions and responsibilities of the Cabinet Secretariat, the processes and procedures in relation to Cabinet documents (including documents attached to submissions to Cabinet and Cabinet committees) and the processes of Cabinet and its committees in relation to managing and retaining such documents. I am satisfied that Ms Poland is able to speak with authority on the matters of fact and policy involved in the identification of the ‘Business Case’ document, its provenance and its consideration by a Cabinet committee.[14]
[14]Special Minister for State v Quin (1984) 3 FCR 293, 295.
The document was attached to a Cabinet committee submission that was considered by a committee of Cabinet on 16 December 2004.
Michael John Hilton Bowles is the principal of Biruu Australia Pty Ltd. Biruu is a commercial, advisory, and transaction management practice that specialises in the analysis, advisory, funding, procurement, and management of a wide range of commercial opportunities and projects. Biruu was appointed as the consultant project manager for the Melbourne Markets Redevelopment Project in July 2002. Mr Bowles was the person responsible for preparing the ‘Business Case’. He deposed that he prepared the document, which includes reports from sub‑consultant technical experts for whose appointment and co‑ordination he was responsible, and that he did so for the purpose of its use by a committee of Cabinet. I accept as appropriate the basis, as explained by Mr Bowles, for his expressed expectation and understanding that the ‘Business Case’ was a document for consideration by a Cabinet committee. Mr Bowles stated that detailed reports such as the ‘Business Case’ are routinely prepared for major State projects. The purpose of a business case is to provide Cabinet, and in particular the then-named Expenditure Review Committee within Cabinet, with information necessary for an informed decision regarding costs, benefits and risks of a particular project. The ‘Business Case’ then forms the basis of funding decisions in relation to the project.
Janine Margaret Hebiton, a managing principal solicitor with the Victorian Government Solicitor, has also sworn an affidavit. Ms Hebiton’s affidavit is made with the authority of the defendant. Ms Hebiton has specifically inspected and reviewed the document identified as having been considered by the Expenditure Review Committee of Cabinet, entitled ‘Major Projects Victoria, Melbourne Wholesale Markets Redevelopment: Business Case’, stamped on the front with the words ‘Cabinet in Confidence’ and dated September 2004. The defendant instructed Ms Hebiton that there are a number of drafts of the ‘Business Case’, some of which pre‑date the version that went to Cabinet and some of which post-date that version. All versions of the ‘Business Case’ contain similar information and release of any version of the document subsequent to the one that went to the Committee of Cabinet would disclose the material that was before the Committee.
Ms Hebiton deposes that the Victorian Government Solicitor was not the solicitor on record for the defendant at the time of the hearing before the Associate Justice. Additionally, Ms Hebiton deposes that there was no claim for state interest immunity specifically raised in that hearing because, at that time, the defendant was not in a position to determine whether the document had been submitted to Cabinet and whether state interest immunity was claimed.
Ms Hebiton also deposes to instructions received from John Neve, Senior Project Manager within the Department of Business and Innovation, that:
·Substantial, ongoing work continues at the site.
·An up-to-date plan, prepared by the Department of Innovation, shows that all the land acquired from Murdesk for the project is designated to be directly used for the completed Melbourne Wholesale Market, save for two identified parcels. Parcel 1 has been benched for future use and Parcel 2 is being used for site offices, parking and a lay-down area. The boundaries of the completed Melbourne Wholesale Markets have not yet been precisely determined and there has been no decision as to how these two parcels might be used.
·As at the end of May 2011, no decision had been made to sell any part of the Murdesk land.
·The process involving CB Richard Ellis was intended to assist the defendant to inform itself in relation to development options in the area. It has been made clear to all parties that no decision has been made to offer any land for sale.
Ms Hebiton expresses an opinion, which she asserts is based upon her review of drafts of the ‘Business Case’ and her instructions from Mr Neve, that the ‘Business Case’ contains a substantial amount of commercially sensitive information that is entirely unconnected with acquiring the site for the project. This commercially sensitive information includes, but is not limited to, information about the potentially significant legal and financial risks to the State that are associated with the project and the potential impact of the project upon the existing commercial interests of ‘key market stakeholders’. I cannot objectively assess this ipse dixit statement.
These affidavits evidence a number of relevant considerations. One matter, explained by Ms Hebiton, is that there is ongoing work on the Murdesk land and as at the present date, no decision has been taken to sell any part of the land, notwithstanding the inference contended by the plaintiff from the Richard Ellis’ correspondence. I do not consider this explanation to be inconsistent with that correspondence.
I am satisfied there is a significant public interest in non‑disclosure of the business case, having regard to Mr Bowles’ evidence as to the purpose and intent of the creation of the document, Ms Poland’s evidence that the ‘Business Case’ has been considered by the Expenditure Review Committee of Cabinet, and Ms Hebiton’s evidence that the Melbourne Wholesale Markets is an ongoing incomplete project,. Non‑disclosure of the ‘Business Case’ is supported by a representative of government at an appropriate level. Although the document deals with matters of a commercial type, rather than national security, it was used in Cabinet deliberations, not deliberations at lower levels of government. The information in the document was probably provided on the expectation that it would be kept confidential and, as the project is ongoing, retains contemporary importance, not historical interest. It is impractical to conclusively assess, but it may reasonably be supposed, that the ‘Business Case’ contains frank advice involving substantive matters of major project planning and funding, expressed in an environment of confidential communication. The fact remains that the government activity being protected is essentially a commercial type of activity and the Court needs to exercise particular care in accepting, in this context, the existence of a genuine public interest warranting protection.
Public interest from a litigant’s perspective
Maintaining secrecy could have a devastating effect on the substantive rights of a proposed litigant. The balancing exercise to be undertaken requires that I focus on the importance of the information in the document to the proposed cause of action, and the nature of the subject matter of the proposed proceeding. In this context, the inquiry overlaps with an issue to be determined in deciding whether to order preliminary discovery, namely the third issue I have identified of whether there is reasonable cause to believe that the plaintiff has or may have the right to obtain the relief foreshadowed.
I was informed that in the proposed proceeding, the plaintiff would seek a declaration of invalidity of the acquisition on the assumption that a declaration would be all that would be required to achieve the return of the Murdesk land to the plaintiff. However, the plaintiff may also seek an injunction forbidding disposal of the surplus land other than to it. The plaintiff would seek such relief on one or more of the grounds identified: invalidity of notices or improper purpose. I was taken to various documents that the plaintiff contended provided an evidentiary basis for its assertion that more land than was needed had in fact been acquired. The plaintiff submitted, by reference to authority,[15] that if it be the case that more land than was needed had been acquired, the acquisition would be beyond power.
[15]MC Sydney v Campbell [1925] AC 930 (sic); Werribee v Kerr (1928) 42 CLR 1; Thompson v Council of Randwick (1950) 81 CLR 87; Howarth v McMahon (1951) 82 CLR 442; Minister for Public Works v Duggan (1951) 83 CLR 424; Baiada v Baulkham Hills Shire Council (1951) 83 CLR 34.
The plaintiff contended that the significance of the Richard Ellis letters was twofold. They identified, firstly, that the land used for the project was substantially less than the Murdesk land and, secondly, they suggested that the defendant was considering selling the unwanted land. Each of these matters assisted the two bases on which the plaintiff might proceed but the letters were not sufficient to enable the plaintiff to form a reasonable belief that it may have the right to obtain relief against the defendant. The Richard Ellis letters do suggest that more land than was needed may have been acquired, but the plaintiff wants to draw from them a reasonably-based belief that the area of land acquired was determined by a purpose other than one authorised by the empowering legislation. The plaintiff suggests a purpose that may be improper: that the defendant is, in a sense, acting as a developer and seeking to fund the project through the profits achieved from the resale of the surplus land. The plaintiff contends the natural expectation is that the defendant would have a record of its decisions and the basis for them, which would enable it to determine whether there is available to it sufficient evidence to determine whether to commence a proceeding contesting the validity of the acquisition.
The plaintiff submitted that the first ground was based upon examination of the various notices and gazettals issued prior to and during the process of compulsory acquisition. The plaintiff contends that the wholesale markets site acquisition project, as declared in the Government Gazette on 4 November 2004 under s 9 of the Project Development and Construction Management Act 1994 (Vic) and also gazetted on other occasions pursuant to provisions of the Planning and Environment Act 1987 (Vic), was not a ‘development’ as defined in s 3 of the Project Development and Construction Management Act or s 3 of the Planning and Environment Act. As the procedure relating to the gazettal of the project was defective, the notice of acquisition was invalid, a contention based on the proper construction of the empowering legislation, the Project Development and Construction Management Act. Section 20 permits the responsible minister to acquire an interest in land by compulsory process for the purposes of a nominated project. By publication in the Government Gazette, a development or proposed development may be declared a project to which the Act applies; that declaration process is governed by Part 2 of the Act. The plaintiff contended that the gazettal identified no more than an acquisition project. The plaintiff proposes to develop an argument that what occurred within the processes of declaration and gazettal concerning the Murdesk land did not comply with enabling legislation, producing the consequence of invalidity in the acquisition procedure. Therefore, the purported notices were a nullity.
Whether the gazettal notices were invalid will be, ultimately, a question of construction of the relevant statutory provisions and the notices. As this ground is presently articulated, I am not persuaded that preliminary discovery can provide any assistance to the plaintiff or that the plaintiff lacks sufficient information to enable it to decide whether to commence a proceeding on that ground. There are unlikely to be any documents in the defendant’s possession that touch upon such issues.
The real focus of the application is directed towards the second basis for the declaration: that the defendant acted beyond its power, and for an improper purpose, to the extent that it acquired an undefined part of the Murdesk land for the purpose of on-selling the land at a profit to assist in defraying the costs of the market’s development. The plaintiff contends it is necessary to identify what was proposed as the project’s requirement in terms of the area of land needed, to effectively advance the second contention, in terms of the enabling statutes, concerning the propriety of the purpose of the acquisition. The plaintiff contended what it cannot ascertain is how much land the defendant determined was required for the project, although it seemed to me that what the plaintiff could not ascertain was whether the defendant was exercising statutory power for improper motive, a wider inquiry.
In the potential proceeding for which the plaintiff seeks preliminary discovery, the relief sought is declaratory or, possibly, injunctive. The defendant submitted that on careful analysis of this aspect of the application, the plaintiff’s claim must fail. No relief ‘of substance’ is or could be claimed by the plaintiff.
The Court’s power to grant declaratory relief is discretionary.[16] A plaintiff seeking declaratory relief must have a ‘real interest’ and relief will not be granted if the Court’s declaration will produce no foreseeable consequence for the parties.[17] Several matters were put in support of the defendant’s contention. The first point was that the relevant acquiring authority, the Secretary to the Department of Infrastructure, no longer exists. All property acquired by it has been transferred to the Secretary to the Department of Business and Innovation. I have insufficient information to determine whether there is any substance in this point and I say nothing further of it.
[16]Ainsworth v Criminal Justice Commission (1992) 175 CLR 564, 581-2, 595-7.
[17]Gardner v Dairy Industry Authority of NSW (1977) 18 ALR 55 (22 December 1977), 60; Wilcox v Kogorah Golf Club Limited (1995) 14 ACLC 421 (23 November 1995), 424.
Next, the defendant contended it was unclear whether the plaintiff is contemplating instituting proceedings to unwind the acquisition of the subject land or to recover title to that land or any part of it. Even if the decision‑making process leading to the compulsory acquisition was affected by error, the defendant’s registered title is indefeasible.
In Love v Roads Corporation,[18] the plaintiff alleged that the compulsory acquisition of his land was ‘legally invalid’ and, among other things, sought a declaration to this effect. An issue which arose, and with which Cavanough J did not need to deal, was whether Love ought be denied the declaration he sought because registered title in the acquired land had passed to the defendant. In City of Canada Bay Council v F & D Bonaccorso Pty Ltd,[19] the council sold two lots of land and the purchaser became registered on title. The land was ‘community land’ within the meaning of the Local Government Act 1993 (NSW). Consequently, the council lacked the power to sell, exchange or otherwise dispose of that land. The New South Wales Court of Appeal held the transferees to be without power but that the transferees, upon registration, gained the benefit of indefeasibility of title. It was acknowledged that until registration there was the opportunity to set the transaction aside and prevent registration; an in personam right, lost upon registration. In Palais Parking Station Pty Ltd v Shea (No 3),[20] the Director‑General of Medical Services wrongfully purported to exercise powers of compulsory acquisition of certain land and became registered as the proprietor of it. The Full Court held, by majority, that notwithstanding that the purported acquisition of the land was unlawful and void, upon registration the Director‑General of Medical Services acquired and held an indefeasible title to the land, free of any adverse claim by the previous owner of the land.
[18][2009] VSC 215 (23 June 2009).
[19][2007] 71 NSWLR 424.
[20](1980) 24 SASR 425.
It is not clear to me that these decisions will have direct application to the plaintiff’s foreshadowed claims. The defendant did not submit that I must find that the plaintiff’s proposed proceeding is futile by recourse to indefeasibility principles. Plainly, I am not in a position to do so on this application. Rather, the defendant contended that on both a consideration of the merits of the proposed claim and in the exercise of my discretion, whether in relation to the claim of state interest privilege or the application for preliminary discovery, the plaintiff faces factual difficulties problems of proof and, but conceptual legal difficulties. That the defendant may have indefeasible title is one example.
The plaintiff suggested it might seek an injunction to restrain the defendant from disposing of the surplus Murdesk land other than to the plaintiff but did not develop any submission as to how an injunction might be framed or on what basis such relief might be granted by a court at trial.
Declaratory or injunctive relief may be refused for delay. Here, there may have been significant delay by the plaintiff. The position of the parties since the acquisition has materially and substantially altered. The basis for the claim that the notices are invalid has been discoverable since their gazettal. The acquisition was effected on 28 October 2005. Any action brought by the plaintiff challenging the validity of the acquisition will be brought just before the expiry of the limitation period. Any proceeding proposed for judicial review of the decision to acquire will be substantially out of time.[21]
[21]See Supreme Court (General Civil Procedure) Rules2005 (Vic) r 56.02.
The following matters may prove relevant:
· The prospect of a challenge to the acquisition on the basis of improper purpose and the acquisition of surplus land had apparently been under consideration by the plaintiff since July 2005.
· The specific documents on which the plaintiff relies to assert a potential entitlement to relief, in relation to the validity of the acquisition of the subject land, are all either public documents or documents of which the plaintiff has been aware for a substantial period.
· On 2 November 2005, the plaintiff claimed and received an advance of compensation in the sum of $14.1 million, in respect of the compulsory acquisition of the subject land.
· The compensation proceeding was referred to the Supreme Court on 10 August 2006.
· There have been 12 directions hearings in the compensation proceeding prior to the filing of the originating motion in this proceeding.
· The trial of the compensation proceeding is imminent.
· Apart from the questions of indefeasibility of title, to which I have adverted, there could not now be restitution if the acquisition was struck down.
· The interests of others may be affected. It is clear from Ms Hebiton’s evidence that since the acquisition, and in particular over the past 12 to 18 months, millions of dollars have been expended on engineering and construction works on the Murdesk land. Multimillion dollar contractual arrangements have been entered into with third parties, in particular, for development of the site.
I consider that in any proposed proceeding, when contemplating declaratory or injunctive relief, the issue of delay and consequent prejudicial change of position is likely to be important. Again, it is not a matter upon which it is appropriate for me to make any finding. Any perception that the proposed claims of the plaintiff are strong claims is not helped by such considerations.
The defendant also questions the plaintiff’s motives. Discovery of the ‘Business Case’ was sought and refused in the compensation proceeding. Almost immediately, this application was foreshadowed and on the explicit basis that preliminary discovery of the ‘Business Case’ was justified because discovery of it in the compensation proceeding had been denied. I was invited to draw an inference from these circumstances and from the substantial prior delay, that the plaintiff may be seeking access to the ‘Business Case’ for a collateral purpose, namely its use in the compensation proceeding. I am not disposed to accept that invitation.
The proposed improper purpose claim appears to be based on the proposition that an acquiring authority cannot take more land than it needs for an authorised purpose. The defendant, contesting that the acquisition would be beyond power if it had acquired more land than was needed, referred to two matters. First, the relevant legislation contemplates than an acquiring authority may sell land which it has acquired.[22] Secondly, the defendant submitted that even absent express power to acquire land for the purpose of resale, it is within an acquiring authority’s power to acquire land on the basis that it may not need all of the land, and then sell off surplus land. In Estates Development Co Pty Ltd v Western Australia,[23] the High Court stated:
Again, the fact that the Commission’s decision to acquire at once a larger area than was needed for immediate use sprang from a desire to forestall anticipated increases in land values shows only that its purpose was to perform its statutory duty with a minimum outlay. That is quite different from a purpose of re-selling at a profit so as to offset the cost.
It may not be possible for the plaintiff to succeed on its proposed improper purpose claim, unless it grasps the obligation to establish a vitiating collateral purpose. Such a purpose will not be lightly inferred.
[22]See Project Development and Construction Management Act (Vic) s 22; Land Acquisition and Compensation Act 1986 (Vic) s 109.
[23](1952) 87 CLR 126, 139-140.
Taking all of these matters into consideration, I have formed the view that when exercising my discretion, I can regard the plaintiff’s claim as being both factually and legally complex, facing significant difficulty. The plaintiff appears to be contemplating a weak case. Although the ‘Business Case’ is clearly a Cabinet document and cogent evidence has been presented as to its nature, provenance and use, and as to the ongoing, incomplete, status of the project, I decided to inspect the ‘Business Case’ for the purpose of determining whether its relevance to the proposed claims is sufficient to justify disclosure in these exceptional circumstances. Having regard to the strength of the claim for immunity, a judge ought not order disclosure unless satisfied that the document is crucial to properly determine whether inspection of the document by the plaintiff would assist it to decide whether to commence a proceeding. It might be that the complexities and difficulties the plaintiff faces would be ameliorated to some extent on inspection of the ‘Business Case’.
Plaintiff’s submissions concerning state interest immunity
The plaintiff submitted that the ‘Business Case’ should not be the subject of state interest immunity because the evidence, in particular Ms Poland’s affidavit, is not sufficient to warrant the immunity claim for the document as a whole. Citing the judgment of Spigelman CJ in Egan v Chadwick,[24] the plaintiff contended that the immunity of the document must depend upon assessing not whether it is a document for Cabinet but whether it reveals deliberations or decisions of Cabinet.
[24][1999] 46 NSWLR 563, 576.
In Egan v Chadwick, the New South Wales Court of Appeal was considering public interest immunity in circumstances different to those before me. There, the plaintiff, a member of the Legislative Assembly, by statement of claim sought relief from having to produce State papers to the Legislative Council on the grounds of public interest immunity. The evidence in that case was that documents, which the Legislative Council sought, included documents that revealed the internal deliberations of the Cabinet. The Chief Justice observed that the test in these circumstances was whether disclosure is inconsistent with the principles of responsible government.
Where the public interest is said to lie in protecting the legitimate interest of the State to confidentiality in commercial activities, caution is called for in assessing whether the plea for immunity will protect a genuine public interest. Use of the catch-phrase ‘commercial-in-confidence’ is pervasive in modern times. In part, the plaintiff contends that I should inspect the ‘Business Case’ document myself, for purposes including evaluating the defendant’s evidence in relation to it. I did not understand the plaintiff to be contending that I assess, on such inspection, how to limit the extent of non-disclosure to no more than is necessary to protect the public interest in maintaining confidentiality. A submission that the immunity claim should not extend to the whole document was not developed. It was not put that I might consider redaction of the document, a practical way of limiting non-disclosure to no more than is necessary, as a condition for release of a copy for inspection; no authority for redaction as a tool in state interest claims was put to me. Redaction could be a complex issue. It conceivably might be an applicable tool to fairly balance competing interests. It is neither the function of the Court, nor is the Court appropriately equipped, to consider redacting the ‘Business Case’. I do not accept the plaintiff’s submission concerning the adequacy of the defendant’s evidence.
Inspection of the ‘Business Case’
The defendant’s solicitors made available to the Court version 1.7 of the ‘Business Case’. I have inspected the document. I find it to be consistent with the descriptions given of it in the three affidavits to which I have referred. It is neither necessary nor desirable that I say any more about its contents. Inspection confirms that the Court is not able to properly exercise a discretion to balance competing interests by redaction of the document.
Resolution of the state immunity claim
To complete the balancing exercise required by s 130 of the Evidence Act requires me to form a view as to whether disclosing the ‘Business Case’ is necessary in the interests of the administration of justice, to secure a fair opportunity for the plaintiff to determine whether to pursue a possible cause of action against the defendant for a declaration that the notice of acquisition is null and void and of no effect.
The evidence before the Court, suggesting an inference that the defendant has exercised the power of compulsory acquisition for an improper purpose, is faint. I do not accept the plaintiff’s submission that the Richard Ellis letters, even when read beneficially, provide a sufficient evidentiary basis for the plaintiff’s current enquiries. Notwithstanding that the defendant has sought to inform itself of market conditions by the enquiry made on its behalf by Richard Ellis, the defendant’s explanation, that the project is incomplete and final decisions as to the use of remaining parcels of land are yet to be made, is not implausible. The letters do not suggest that the ‘Business Case’ is a relevant source of evidence of improper purpose. The plaintiff also relies upon two memoranda from the Executive Director, Major Projects Victoria to the Minister for Major Projects: the first dated 24 November 2004 and the second dated 26 April 2005. I will not set out the substance of these memoranda in these reasons. These documents appear consistent with the defendant’s evidence of the nature, use and purpose of the ‘Business Case’.
While it is inappropriate on this application to consider whether an allegation of improper purpose can be made out, I am not satisfied that there are definite, concrete or reasonable grounds to believe that the ‘Business Case’ would materially or substantially assist the plaintiff’s proposed proceeding. At best, the plaintiff entertains a suspicion. I am not satisfied that the public interest in preserving secrecy or confidentiality in relation to Cabinet documents concerning a current and continuing project is outweighed by the public interest in permitting the plaintiff inspection of those documents for the purposes of r 32.05 in connection with a civil proceeding. I consider the document entitled ‘Major Projects Victoria, Melbourne Wholesale Markets Redevelopment: Business Case’ dated September 2004 (and stamped on the front with the words ‘Cabinet in Confidence’) and all drafts and copies thereof are immune from production for inspection on the ground of state interest immunity pursuant to s 130 of the Evidence Act 2008 (Vic).
What remains for resolution is the appeal against the order of the Associate Justice for preliminary discovery, for the order made was wider than one that merely required production of the ‘Business Case’ for inspection.
Applicable principles on applications under r 32.05
The principles governing these applications are well settled and were not in dispute.[25] The rule provides:
[25]It is convenient to note the discussion of the authorities by the Chief Justice in Australian Football League v Stadium Operations Ltd [2009] VSC 264 (25 June 2009).
32.05 Discovery from prospective defendant
Where—
(a)there is reasonable cause to believe that the applicant has or may have the right to obtain relief in the court from a person whose description the applicant has ascertained;
(b)after making all reasonable inquiries, the applicant has not sufficient information to enable the applicant to decide whether to commence a proceeding in the court to obtain that relief; and
(c)there is reasonable cause to believe that that person has or is likely to have or has had or is likely to have had in that person's possession any document relating to the question whether the applicant has the right to obtain the relief and that inspection of the document by the applicant would assist the applicant to make the decision—
the court may order that that person shall make discovery to the applicant of any document of the kind described in paragraph (c).
The grant of relief is discretionary.[26] Ordinarily, the Court exercises its discretion where it is satisfied there may be a real benefit in making the order. As the Chief Justice has noted,[27] the prime object of r 32.05 is to enable a person to determine whether he or she has a cause of action against an identified prospective defendant by allowing access to the relevant documents that the defendant has in its possession. The rule is construed benevolently.
[26]Glowatzky v Insultech Group Pty Ltd (1997) 39 IPR 215, 220; Australian Football League v Stadium Operations Ltd [2009] VSC 264 (25 June 2009) [5].
[27]In Australian Football League v Stadium Operations Ltd [2009] VSC 264 (25 June 2009) [64].
Consideration of the remaining issues – relief under r 32.05
Since discovery in the compensation proceeding, the plaintiff has been in possession of the two memoranda to which I have already referred. Each of these memoranda refers to the ‘Business Case’. In the compensation proceeding, Emerton J refused discovery of the ‘Business Case’, a matter relied on to justify this application. The plaintiff’s reasonable inquiries are found in its analysis of the formal gazettal documents, the two memoranda and the Richard Ellis letters. In the context of the claim to state interest immunity, I have already discussed how the plaintiff believes there is reasonable cause to expect it would be assisted in deciding whether to commence the proposed proceeding if it were permitted to inspect all documents recording or evidencing the decision-making process used to acquire the Murdesk land by the gazetted notice of acquisition, and all documents recording or evidencing any decision to sell any part of the Murdesk land surplus to the market development. For the reasons I have stated, I am not satisfied that the plaintiff will be so assisted in its deliberations.
The defendant contended there were four grounds upon which the plaintiff’s application should be dismissed. First, objectively assessed, since 23 December 2008, the plaintiff has had sufficient information to enable it to decide whether to commence its proceeding. Second, there is no reasonable cause to believe that the plaintiff has or may have the right to obtain the relief foreshadowed. Third, there is no reasonable cause to believe that the defendant has in its possession any relevant document that the plaintiff would be entitled to inspect, the relevant documents being privileged from inspection under the principles of public interest immunity. Fourth, if the Court is otherwise satisfied that the requirements of the rule have been met and that its discretion is enlivened, relief should be refused in the exercise of discretion on grounds, including:
·the lack of utility in ordering discovery because the contemplated proceedings cannot serve any purpose;
·the fact that the preliminary discovery sought by the plaintiff is subject to public interest immunity; and
·substantial delay on the part of the plaintiff.
Does the plaintiff have a right to obtain the foreshadowed relief?
I have already discussed the nature of the right to obtain the relief identified by the plaintiff. I am not persuaded that the plaintiff ought to have an order for preliminary discovery to assess the statutory invalidity claim. The plaintiff may, at least on the basis of statutory invalidity, have an arguable right to pursue relief in the proposed proceeding. If the plaintiff can establish that the defendant was exercising statutory power for improper motive, the plaintiff may have a further basis to pursue relief in the proposed proceeding. Either way, the discretionary considerations may apply to weaken the claim to such relief. It is neither possible nor appropriate to express any concluded view on the defendant’s submissions concerning the futility of the relief sought in the proposed proceeding and the probability that it would be refused on discretionary considerations.
Does the plaintiff have sufficient information?
In determining whether an applicant has sufficient information to assess its proposed claim, the Court should apply a test of ‘reasonable sufficiency’. As the Chief Justice explained in Australian Football League v Stadium Operations Ltd,[28] the Court
examines whether it is reasonable for an applicant to be required to make a decision without having the information that would become available from the document or documents of which discovery is sought. Lindgren J [in Alphapharm Pty Ltd v Eli Lilly Australia Pty Ltd [1996] FCA 391, considering the equivalent rule in the Federal Court Rules] observed that this question is to be answered in light of the nature of the cause of action contemplated and the range of information potentially available in respect of a cause of action of that kind.
[28][2009] VSC 264 (25 June 2009) [66].
There is already ample material for the plaintiff to assess whether to commence a proceeding on the first basis proposed: the invalidity of the acquisition notice proceeding. On that cause of action, the application of the reasonable sufficiency test favours the defendant. The defendant submitted it is inappropriate to order preliminary discovery for the improper purpose claim for two reasons. The document which the plaintiff seeks, and which would apparently be produced in response to the order were it to stand, is the ‘Business Case’. Being adjudged to be protected by state interest immunity, it is not available for inspection.
Further, the defendant contends currently available documents are more than sufficient for Murdesk to determine whether to commence the proceeding. There is weight in the view that the contents of the two memoranda, from the Executive Director, Major Projects Victoria to the Minister for Major Projects, inspected by the plaintiff through discovery in the compensation proceeding, have provided the plaintiff with relevant documents in the possession, custody or power of the defendant that are reasonably sufficient for the relevant assessment other than the ‘Business Case’. However, I am not persuaded by the defendants on this ground of opposition to the application. It is easy for a defendant to assert that the plaintiff has sufficient information to make a decision. Having regard to the difficulty and the complexity of the proposed claim, taking a cautious and conservative approach to assessing what information is needed to make a decision to commence a proceeding may be consistent with the policy underlying the rule.[29]
[29]United Energy Limited v Energy Risk Management Pty Ltd [1998] VSC 133 (13 November 1998) [103]; FAI Home Security Pty Ltd v Price [1999] VSC 274 (20 August 1999) [50]; Australian Football League v Stadium Operations Limited [2009] VSC 264 (25 June 2009) [61].
The question posed by sub-paragraph (b) of the Rule is whether the applicant, as an objective fact, has sufficient information to make a decision whether to commence proceedings.[30] Considering the nature of an allegation of improper purpose cause and the range of information potentially available in respect of it, the distinction will always be a fine one between the test of reasonable sufficiency: whether it is reasonable for an applicant to be required to make a decision without having further information, and considerations of the subjective sufficiency, whether the applicant seeks material to verify a cause of action which it already knows it has or to otherwise ascertain the strength of its proposed claim. On this ground alone, I might have been persuaded to order preliminary discovery.
[30]Beston Parks Management Pty Ltd v Sexton [2008] VSC 392 (6 October 2008) [55]; Australian Football League v Stadium Operations Limited [2009] VSC 264 (25 June 2009) [65].
Are there any further documents to be inspected?
However, the claim for state interest immunity has not been argued before me as a class claim. It has been a contents claim directed by both parties at the ‘Business Case’ only. In argument, neither counsel addressed any submission to the existence or relevance of any other document or class of document that might fall within the scope of the order of the Associate Justice. It was not an issue that any other documents beyond the ‘Business Case’ were being sought by the plaintiff or that the defendant’s claim of state interest immunity affected any other documents. Having regard to the obligations now resting on litigants under the Civil Procedure Act, it would not be appropriate for the plaintiff to raise afresh a suggestion there are possibly other documents falling within the scope of the order of the Associate Justice, which ought now be produced for inspection, when such documents might attract state interest immunity. Equally, it would not be appropriate for the defendant to have reserved any fresh claim of state interest immunity arising out of the order under appeal for later agitation if this appeal failed. Having accepted that the ‘Business Case’ is not a document that the plaintiff is entitled to inspect, there is no reasonable cause to believe that the defendant has other relevant documents that might assist the plaintiff in its deliberations.
This conclusion is sufficient to dispose of the appeal, for the right to preliminary discovery turns on whether inspection of documents by the plaintiff would assist its decision whether it may have the right to obtain relief in the court. There will not be inspection of the ‘Business case’ by the plaintiff.
Discretionary considerations
I accept the defendant’s submission that I should regard the proposed improper purpose claim as a weak claim. The Court of Appeal in Schmidt v Won,[31] stated that r 32.05 should be construed benevolently because it is intended to assist an applicant who does not have sufficient precise information to commence a proceeding, and to prevent the bringing of speculative suits. For this reason, the fact that the plaintiff’s claims may be weak or difficult to prove while it is an important consideration in balancing the competing considerations that determine the state interest immunity claim, needs to be differently weighed on exercise of the discretion to order preliminary discovery.
[31][1998] 3 VR 435, 445.
My conclusion, that the plaintiff does not appear to have a strong case on the improper purpose claim, remains relevant to discretionary considerations on the application for preliminary discovery. The discretion will not be exercised as of right, especially in circumstances where the applicant does not have a strong case.[32] Notwithstanding this observation, as the Full Federal Court observed in Optiver Australia Pty Ltd v Tibra Trading Pty Ltd,[33] because the remedy provided by the rule is beneficial, there will normally be little scope for refusal of relief where the requirements of the rule have been met; relief should not be declined, save for good cause. Although I have decided that the requirements of the rule are not met, I would otherwise consider this application to be one in which the Court ought to decline the relief sought. I do not accept the plaintiff’s contention that inspection of the ‘Business Case’, to discover precisely how much land was envisaged as necessary for the project, will enable it to evaluate its prospects on the claim of improper purpose. It is neither practical, nor appropriate, that I undertake an assessment of the merits of the proposed claims but on any view of it, the issue of improper purpose is a far wider inquiry than the original decision about the precise area of land needed.
[32]Glowatzky v Insultech Group Pty Ltd (1997) 39 IPR 215 (2 October 1997) [14]; Australian Football League v Stadium Operations Limited [2009] VSC 264 (25 June 2009) [76].
[33](2008) 169 FCR 435, 443 [36].
While the Court has a duty to apply its scarce resources with care and discourage plaintiffs from bringing speculative suits through the beneficial assistance of the rule, in the circumstances of this application I see no reason to permit the Associate Justice’s order to stand. In so concluding, I am influenced primarily by the views I have reached in relation to the immunity claim, the lack of utility in the discovery sought, the significant delay, the strength of the proposed claim for the relief postulated, and on the issues under sub-paragraphs (b) and (c) of the rule.
I consider that the particular circumstances of this application justify refusing the relief sought. The orders I will make are as follows:
1.The appeal is allowed and the order of the Associate Justice made 13 May 2011 is set aside.
2.The plaintiff’s application by originating motion filed 21 December 2010, is dismissed.
I will hear the parties further on the question of costs.
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