Posetti and Comcare
[2002] AATA 773
•4 September 2002
DECISION AND REASONS FOR DECISION [2002] AATA 773
ADMINISTRATIVE APPEALS TRIBUNAL )
) No A2001/357
GENERAL ADMINISTRATIVE DIVISION )
Re JULIE NICOLE POSETTI
Applicant
And COMCARE
Respondent
DECISION
Tribunal Mr M J Sassella, Senior Member
Date4 September 2002
PlaceCanberra
Decision The tribunal directs the respondent to provide to the tribunal, in accordance with s 37(2) of the Administrative Appeals Tribunal Act 1975 ("the Act") a copy of: The advice and attachments provided to Comcare by Sparke Helmore dated 11 November 1998. The Comcare Investigations Management Unit's Application to Conduct an Investigation dated 2 March 2001 to 8 March 2001. The Comcare surveillance videotape with Ms J Posetti as the subject. The surveillance report (Ms J Posetti as subject) by Executive Investigations. The tribunal directs that copies of the Sparke Helmore advice and the Comcare Investigations Unit's application are to be provided to the applicant by close of business on 17 September 2002. The tribunal directs in accordance with s 35(2)(b) of the Act that the videotape and surveillance report relating to Ms J Posetti are to be disclosed only to the respondent and its legal representatives and to the tribunal and tribunal staff in the performance of their duties.
..............................................
Senior Member
ADMINISTRATIVE APPEALS TRIBUNAL )
) No: A2001/357
GENERAL ADMINISTRATIVE DIVISION )Re:JULIE POSETTI
Applicant
And: COMCARE
Respondent
DIRECTION
Tribunal :Michael Sassella, Senior Member
Date: 17 September 2002
Place: Canberra
Direction: The Tribunal:
having received a request ex parte from the respondent's representative, and accepting it is necessary to allow the respondent the opportunity to initiate Federal Court of Australia proceedings, the original purpose of delaying the applicant's access to the relevant documents until 17 September 2002, hereby makes a direction amending its direction dated 4 September 2002:
1.Paragraph 2 of the direction contained in a tribunal decision dated 4 September 2002 is amended to read:
The tribunal directs that copies of the Sparke Helmore advice and the Comcare Investigation Unit's application are to be provided to the applicant by close of business on 24 September 2002.
............................................
Senior Member
Notes
The tribunal was prepared to proceed ex parte in this matter because the substantive rights of the applicant are unaffected by this amendment. The applicant is in no worse position this week than she was last week. The tribunal understands that the respondent received counsel's advice on only 16 September 2002.
CATCHWORDS
PROCEDURE – inspection of documents by parties – client legal privilege – whether client legal privilege applies to legal advice to Commonwealth agency as to exercise of its powers, duties and functions – whether applicant has right to inspect video surveillance evidence – power of tribunal to require provision of additional documents from respondent – orders prohibiting disclosure of documents to a party
Administrative Appeals Tribunal Act 1975 ss 35, 37, 39, 40
Applicant and Deputy Commissioner of Taxation, Re (1995) 41 ALD 683
Australian Postal Commission v Hayes (1989) 18 ALD 135
Australian Postal Corporation v Bessey (2001) 32 AAR 508
McMaugh and Australian Telecommunications Commission, Re (1991) 22 ALD 393
Waterford v The Commonwealth of Australia (1987) 163 CLR 54
REASONS FOR DECISION
3 September 2002 Mr M J Sassella, Senior Member
On 19 July 2002 a District Registrar in the Administrative Appeals Tribunal ("the tribunal") issued a summons in this matter (ex A1) at the request of the Canberra law firm, Pamela Coward & Associates, who were acting for Julie Nicole Posetti ("the applicant"). The summons required Comcare ("the respondent") to produce to the tribunal the following "books, documents or things":
"1All reports, surveillance records, tapes, receipts, correspondence and other documents provided to or obtained from the Executive Security and Investigation in relation to the Applicant during 2001.
2.All reports, surveillance records, tapes, receipts, correspondence and other documents obtained from the Australian Forensic Services in relation to the Applicant during 2001.
3.All opinions, reports, correspondence and other documents provided to or obtained from Sparke Helmore in relation the Applicant between 1998 and 2001."
The documents were produced to the tribunal on 12 August 2002.
RETURN OF SUMMONS HEARINGSOn 19 August 2002 the tribunal convened a hearing in Canberra to consider whether the documents produced by Comcare could be inspected by the applicant's representatives. This was required under s 40(1D) of the Administrative Appeals Tribunal Act 1975 ("the AAT Act"):
Powers of Tribunal etc.
40.(1)…
(1A) Subject to subsection (1B), for the purposes of the hearing of a proceeding before the Tribunal, the member presiding at the hearing, the Registrar, a District Registrar or a Deputy Registrar may summon a person to appear before the Tribunal at that hearing:
(a) to give evidence; or
(b) to give evidence and produce any books, documents or things in the possession, custody or control of the person or persons named in the summons that are mentioned in the summons; or
(c) to produce any books, documents or things in the possession, custody or control of the person or persons named in the summons that are mentioned in the summons.
(1B) A summons under subsection (1A) may require a person to appear at a directions hearing to produce books, documents or things instead of at the hearing before the Tribunal.
(1C) A person (other than a presidential member or a senior member) who, under subsection (1A), may summon a person to appear before the Tribunal must not refuse a request to do so unless the refusal is authorised by a presidential member or a senior member.
(1D) A presidential member or senior member may give a party to a proceeding leave to inspect a document produced under a summons.On 15 August 2002 Mr Maclean from Canberra law firm, Dibbs Barker Gosling, acting for Comcare, wrote to the tribunal (ex R1) opposing the applicant's inspection of the documents produced on the basis of client legal privilege and, failing that, seeking an order under s 35 of the AAT Act restricting access to Comcare and its legal advisers. Mr Maclean was unfortunately unable to attend the hearing on 19 August 2002. At that hearing Mr Redpath from Pamela Coward & Associates argued that the applicant should be permitted to inspect the material as it was not subject to client legal privilege and certain video evidence produced had come into existence before there was any dispute between Comcare and Ms Posetti. Dibbs Barker Gosling's representative performed creditably in the circumstances in responding to this but was hampered by a lack of intimate knowledge of the case. The matter was adjourned to 26 August 2002.
On 26 August 2002 Messrs Redpath and Maclean appeared for the applicant and respondent respectively. Mr Maclean had provided a thorough submission dated 23 August 2002 in support of the respondent's arguments (ex R2). The major points in that submission were:
The surveillance material attracted client legal privilege as having been brought into existence for the dominant purpose of using their contents in anticipated legal proceedings that were reasonably contemplated.
The Sparke Helmore material attracted privilege as legal advice on the manner of exercise of a power of an administrative nature conferred on a decision-maker by law or, in the alternative, legal advice in relation to the conduct of litigation that was reasonably anticipated by Comcare.
The tribunal was inclined to treat the materials produced as follows and made this clear to the parties:
(a)In relation to the video and related surveillance material, mindful of the Federal Court's decisions in Australian Postal Commission v Hayes (1989) 18 ALD 135 and Australian Postal Corporation v Bessey (2001) 32 AAR 508, the tribunal was inclined not to allow inspection by the applicant's representative.
(b)In relation to the Sparke Helmore advice the tribunal was inclined to find that it attracted privilege but to require its provision under s 37(2) of the AAT Act mindful that s 37(3) of the AAT Act permits the overriding of privilege. The tribunal was inclined not to issue a s 35 order to prevent disclosure of that material to the applicant.
Mr Redpath raised two points in relation to the surveillance material. First, the video material in Hayes (above) and Bessey (above) came into existence after the relevant reviewable decisions whereas the video material in the present case came into existence in March-April 2001, before the primary and reviewable decisions on 2 July 2001 and 24 August 2001, respectively. Second, he referred the tribunal to a decision of Mathews J, the then President of the tribunal, in Re Applicant and Deputy Commissioner of Taxation (1995) 41 ALD 683. In that decision Mathews J described the Hayes decision (above) as "the high point for a party who is seeking to have otherwise relevant documents withheld from disclosure to another party" (page 687, paragraph 18).
Mr Redpath produced a copy of material from Comcare's website concerning fraud management in the compensation system (ex A2). Attached was the Privacy Commissioner's guidelines on covert surveillance in Commonwealth Administration (ex A3). This made clear that special approval would have been given for covert surveillance in accordance with the guidelines. Mr Redpath suggested that the applicant may be content to inspect the submission seeking approval of the surveillance and may be content not to press for access to the surveillance results.
The hearing was adjourned for a week in order to allow Mr Maclean to obtain the Comcare surveillance submission and lodge it with the tribunal. This was not yet available at the date of the resumed hearing but became available later in the day on 2 September 2002. On 2 September 2002 Mr Maclean wrote and informed the tribunal (ex R3) that the respondent objected to producing this submission for the applicant on the basis of legal professional privilege. Failing that, he sought a s 35 (of the AAT Act) order to permit access to only the tribunal and the respondent but not to the applicant and her representatives.
At a resumed hearing on 3 September 2002 each party made final submissions and the tribunal undertook to make a decision on access to these various documents promptly and with reasons.
The tribunal was supplied with the following documentary evidence and submissions:
Exhibit A1 - Summons to produce documents dated 19 July 2002.
Exhibit A2 – Comcare document, Fraud Investigation Issues.
Exhibit A3 – Privacy Commissioner, Covert Surveillance in Commonwealth administration: Guidelines.
Exhibit R1 – Letter dated 15 August 2002 from Mr R Maclean to tribunal.
Exhibit R2 – Letter dated 23 August 2002 from Mr R Maclean to tribunal.
Exhibit R3 – Letter dated 2 September 2002 from Mr R Maclean to tribunal.
FINDINGS ON MATERIAL QUESTIONS OF FACT WITH REFERENCE TO THE EVIDENCE AND OTHER MATERIAL IN SUPPORT OF THOSE FINDINGS
At the return of summons hearing on 3 September 2002 Mr Maclean explained why the respondent was claiming privilege over the submission on covert surveillance provided to the tribunal on 2 September 2002. He said that it was produced in an internal Comcare climate where it was probably leading to litigation. In the eyes of certain Comcare officers Ms Posetti had made claims that may have been extravagant or fraudulent and which required examination. A curtailment of Comcare's liability to continue to compensate Ms Posetti was in contention. The material to emerge from the surveillance was expected to be submitted for legal advice. A secondary purpose of the surveillance was for claims management.
In the alternative he argued that, while the tribunal had an interest in having access to the submission, it should issue a s 35 order to prohibit disclosure to the applicant and her representatives. This was because such submissions can contain material about public information received by Comcare suggesting wrongdoing by a claimant and other such confidential information. He argued that this material was similar to video evidence and should not, in accordance with the Hayes (above) and Bessey (above) decisions, be available to an applicant until after the applicant has completed his or her evidence in chief at a hearing.
Mr Redpath responded. He stressed that the applicant was in receipt of compensation payments in respect of incapacity for work, medical expenses and household assistance. The only refusal related to reimbursement for massage costs. There was no litigation as such in contemplation when the surveillance was embarked upon. The dominant purpose for the production of the submission was the prevention of fraud and the proper administration of the Act. The document came into existence because of the Privacy Commissioner's guidelines, not as part of a litigation strategy.
In relation to s 35 orders, Mr Redpath put that s 35 of the AAT Act presumes in favour of the openness of tribunal proceedings. He submitted that there was no special public interest in denying the applicant the benefit of disclosure. There was also a public interest in it being made clear to the public that Comcare observes the Privacy Commissioner's guidelines in these matters. Mr Maclean observed in response that it is the role of the Privacy Commissioner to inquire into these matters and satisfy himself as to them.
Mr Redpath observed that the product from the surveillance did not lead to any curtailment of Ms Posetti's rights under the Act. It was conceivable that the material might contain matter supporting Ms Posetti's claim for massage expenses. Mr Maclean responded that there was no requirement to disclose the video evidence if it did not impugn Ms Posetti or her claims.
The tribunal appreciated the able arguments and written material provided by the parties in this matter. The matters under discussion raise some slightly novel issues. These are best addressed by moving to the tribunal's findings on the documents in contention.
advice by sparke helmore to comcareOn 11 November 1998 Sparke Helmore wrote to Comcare providing two pages of advice and some drafts for consideration by Comcare. The context was a reconsideration Comcare was carrying out relating to a decision not to pay Ms Posetti's massage expenses. This was in respect of a request or claim for such payments made by Ms Posetti not germane to the current tribunal application.
Mr Maclean in ex R2 referred the tribunal to the High Court decision in Waterford v The Commonwealth of Australia (1987) 163 CLR 54 in which a majority of their Honours held that legal advice procured for the purpose of advising a government department as to the nature, extent and the manner of exercise of functions, powers or duties was subject to legal professional privilege (see pages 63-64 and 74-75).
The tribunal finds that client legal privilege attaches to the document from Sparke Helmore on the basis that it contains advice to a Commonwealth agency as to the proper manner of exercise of statutory powers. However, s 37(3) of the AAT Act can be taken to abrogate privilege:
37.(3) This section has effect notwithstanding any rule of law relating to privilege or the public interest in relation to the production of documents.
Section 37 of the AAT Act provides (relevantly):
Lodging of material documents with Tribunal
37. (1AAA) …
(1) Subject to this section, a person who has made a decision that is the subject of an application for a review by the Tribunal must, within 28 days after receiving notice of the application (or within such further period as the Tribunal allows), lodge with the Tribunal 2 copies of:
(a) a statement setting out the findings on material questions of fact, referring to the evidence or other material on which those findings were based and giving the reasons for the decision; and
(b) every other document or part of a document that is in the person's possession or under the person's control and is considered by the person to be relevant to the review of the decision by the Tribunal.…
(1AE) A person who is required under subsection (1) or (1AB) to lodge 2 copies of a statement or other document or part of a document with the Tribunal under this section within a particular period must also give a copy of the statement or other document or part of a document within that period to each other party to the proceeding.
…
(2) Where the Tribunal is of the opinion that particular other documents or that other documents included in a particular class of documents may be relevant to the review of the decision by the Tribunal, the Tribunal may cause to be served on the person a notice in writing stating that the Tribunal is of that opinion and requiring the person to lodge with the Tribunal, within a time specified in the notice, the prescribed number of copies of each of those other documents that is in his or her possession or under his or her control, and a person on whom such a notice is served shall comply with the notice.
…
The scheme in s 37 of the AAT Act is, therefore, that the respondent decision-maker is required to lodge a s 37 statement and copies of relevant documentation with the tribunal within a prescribed time. The respondent is also to provide a copy of this material to an applicant. These requirements have effect even in relation to documents attracting privilege. Re McMaugh and Australian Telecommunications Commission (1991) 22 ALD 393 is an example of a case where the tribunal ordered under s 37(2) that a document subject to privilege was to be provided to the tribunal and to the applicant.
It is of course open to a respondent to provide a document under s 37 to the tribunal but to ask at the same time that a s 35 order be made to preclude provision of a copy to the applicant. Section 35, relevantly, reads:
Hearings to be in public except in special circumstances
35.(1AA) This section does not apply to a proceeding in the Security Appeals Division to which section 39A applies.(1) Subject to this section, the hearing of a proceeding before the Tribunal shall be in public.
(1A) If, at a time a hearing is in public, a person participates in the hearing by a means allowed under section 35A, the Tribunal is to take such steps as are reasonably necessary to ensure that the public nature of the hearing is preserved.(2) Where the Tribunal is satisfied that it is desirable to do so by reason of the confidential nature of any evidence or matter or for any other reason, the Tribunal may, by order:
(a) direct that a hearing or part of a hearing shall take place in private and give directions as to the persons who may be present; and
(aa) give directions prohibiting or restricting the publication of the names and addresses of witnesses appearing before the Tribunal; and
(b) give directions prohibiting or restricting the publication of evidence given before the Tribunal, whether in public or in private, or of matters contained in documents lodged with the Tribunal or received in evidence by the Tribunal; and
(c) give directions prohibiting or restricting the disclosure to some or all of the parties to a proceeding of evidence given before the Tribunal, or of the contents of a document lodged with the Tribunal or received in evidence by the Tribunal, in relation to the proceeding.(3) In considering:
(a) whether the hearing of a proceeding should be held in private; or
(b) whether publication, or disclosure to some or all of the parties, of evidence given before the Tribunal, or of a matter contained in a document lodged with the Tribunal or received in evidence by the Tribunal, should be prohibited or restricted;
the Tribunal shall take as the basis of its consideration the principle that it is desirable that hearings of proceedings before the Tribunal should be held in public and that evidence given before the Tribunal and the contents of documents lodged with the Tribunal or received in evidence by the Tribunal should be made available to the public and to all the parties, but shall pay due regard to any reasons given to the Tribunal why the hearing should be held in private or why publication or disclosure of the evidence or the matter contained in the document should be prohibited or restricted.
The tribunal takes from the McMaugh decision (above) and from Re Applicant (above) that submissions seeking to bar an applicant from access to a document are to be dealt with in each case according to the merits of each case with a view to ensuring that the requirements in s 39 of the AAT Act are met. These are that each party is to be given a reasonable opportunity to present his or her case and, in particular, to inspect any documents to which the tribunal proposes to have regard in reaching a decision in the proceeding and to make submissions in relation to the documents.
The tribunal has inspected the Sparke Helmore advice and has decided that, although it attracts client legal privilege, s 39 of the AAT Act is better served by applying the approach in the McMaugh decision (above) and requiring the formal provision of that material in accordance with s 37(2) of the AAT Act to the tribunal and to the applicant in accordance with s 37(1AE) of the Act. This is on the basis that the material is relevant to the issues in contention in the instant case and there is no particular reason not to provide a copy to the applicant in this case. The tribunal can see no way in which the applicant having access to this material would hamper the presentation of the respondent's case consistent with the respondent's obligation as a Commonwealth agency to be a model litigant. There are not the credibility interests at play here that existed in such cases as Hayes (above) and Bessey (above).
The tribunal decides not to make an order under s 35 of the AAT Act to prevent disclosure of this material to the applicant for similar reasons.
The tribunal appreciates that the respondent may wish to test this decision in the Federal Court and will suspend its decision for 14 days to permit Comcare to take such action if it wishes.
surveillance evidenceThe tribunal has decided that this material should be provided to it in accordance with s 37(2) of the AAT Act, although it is possible that it will contain little or nothing related to Ms Posetti's entitlement to compensation for massage treatment. However, consistent with the Federal Court's decisions in Hayes (above) and Bessey (above), the tribunal is prepared to make an order in accordance with s 35(2)(b) to prevent disclosure of this material to the applicant until the end of her evidence in chief. The tribunal does not consider that the fact that this material predated the decisions adverse to the applicant's compensation position is sufficient to distinguish this case from those earlier cases. The basis of the tribunal's decision is the preservation of the respondent's opportunity to present its case appropriately in accordance with s 39 of the AAT Act. It is not based on any argument of privilege.
The tribunal does see a distinction between this case and Re Applicant (above) where the documents in contention were paper documents relating to the sources of funds used in a tax minimisation scheme. This tribunal member considers that the Federal Court authorities regard surveillance evidence relating to claimants' credibility as attracting a particular approach in relation to disclosure.
This decision will apply to both the videotape and the description of the tape in the written reports from the surveillance company.
surveillance submissionThe tribunal regards this document as similar to the Sparke Helmore advice. The tribunal has perused it and considers that it contains relevant opinion and factual material, although almost all of it is already available in one or other form in the open documents. The tribunal considers that the document might possibly be privileged as an internal document prepared as a first step in an investigation that could lead to administrative/legal action surrounding the denial of benefits and/or referral for prosecution. However, even if that is correct, the tribunal considers that the document should be provided to the tribunal in accordance with s 37(2) of the AAT Act and to the applicant in accordance with s 37(1AE) of the AAT Act.
This particular submission does not suggest that Comcare has received any information from a member of the public who might be compromised if that became known by Ms Posetti. It does not disclose any inherently confidential information about investigative techniques that might compromise other investigations ordered or implemented by Comcare. In another case where such factors are present the tribunal would be prepared to make an order under s 35 of the AAT Act. The tribunal considers that each case has to be looked at on its merits in these respects.
The tribunal will again suspend the operation of its orders in relation to this material to permit the respondent to challenge this decision if it wishes.
CONCLUSIONThe tribunal has decided that the respondent is to provide all of the materials discussed above to the tribunal in accordance with s 37(2) of the Act. The tribunal has also decided that the applicant is, after 14 days, to be furnished with copies of the document provided by Sparke Helmore to Comcare and the Comcare surveillance submission. The tribunal has also decided that the applicant is not to be permitted to see the video evidence and the written reports of that evidence until after she has given any evidence in chief at the tribunal hearing in this matter.
DECISIONThe tribunal directs the respondent to provide to the tribunal, in accordance with s 37(2) of the Administrative Appeals Tribunal Act 1975 ("the Act") a copy of:
The advice and attachments provided to Comcare by Sparke Helmore dated 11 November 1998.
The Comcare Investigations Management Unit's Application to Conduct an Investigation dated 2 March 2001 to 8 March 2001.
The Comcare surveillance videotape with Ms J Posetti as the subject.
The surveillance report (Ms J Posetti as subject) by Executive Investigations.
The tribunal directs that copies of the Sparke Helmore advice and the Comcare Investigations Unit's application are to be provided to the applicant by close of business on 17 September 2002.
The tribunal directs in accordance with s 35(2)(b) of the Act that the videotape and surveillance report relating to Ms J Posetti are to be disclosed only to the respondent and its legal representatives and to the tribunal and tribunal staff in the performance of their duties.
I certify that the 37 preceding paragraphs are a true copy of the reasons for the decision herein of Mr M J Sassella, Senior Member
Signed: .....................................................................................
AssociateDates of Hearing 19 and 26 August 2002, 2 and 3 September 2002
Date of Decision 4 September 2002
Solicitor for the Applicant Mr W Redpath, Pamela Coward & Associates
Solicitor for the Respondent Mr R Maclean, Dibbs Barker Gosling Lawyers
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