Spencer v Commonwealth

Case [2012] FCAFC 169

FEDERAL COURT OF AUSTRALIA

Spencer v Commonwealth of Australia [2012] FCAFC 169

Citation: Spencer v Commonwealth of Australia [2012] FCAFC 169
Appeal from: Spencer v Commonwealth of Australia (No 3) [2012] FCA 637
Parties: PETER JAMES SPENCER v COMMONWEALTH OF AUSTRALIA and STATE OF NEW SOUTH WALES
File number: NSD 856 of 2012
Judge: KEANE CJ, DOWSETT AND JAGOT JJ
Date of judgment: 26 November 2012
Catchwords: EVIDENCE – public interest immunity – class claims
Legislation: Federal Court of Australia Act 1976 (Cth)
Cases cited: Attorney-General v Jonathan Cape Ltd [1976] 1 QB 752
Australian Securities and Investments Commission v P Dawson Nominees Pty Ltd (2008) 169 FCR 227; [2008] FCAFC 123
Australian Securities and Investments Commission v P Dawson Nominees Pty Ltd [2009] FCAFC 183
In re British Slag Ltd [1963] 1 WLR 727
Commonwealth v Northern Land Council (1993) 176 CLR 604; [1993] HCA 24
Conway v Rimmer [1968] AC 910
Decor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397
House v R (1936) 55 CLR 499
Lanyon Pty Ltd v Commonwealth (1974) 129 CLR 650
Police Federation of Australia v Nixon (2011) 198 FCR 267; [2011] FCAFC 161
Sankey v Whitlam (1978) 142 CLR 1
Spencer v Commonwealth (2010) 241 CLR 118; [2010] HCA 28
State of New South Wales v Public Transport Ticketing Corp [2011] NSWCA 60
State of New South Wales v Ryan (1998) 101 LGERA 246
Suttor v Gundowda Pty Ltd (1950) 81 CLR 418
Whitlam v Australian Consolidated Press Ltd (1985) 73 FLR 414
Young v Quin (1985) 4 FCR 483
Date of hearing: 12 November 2012
Place: Sydney
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 63
Counsel for the Applicant: Mr P E King and Mr D T Mihalic
Solicitor for the Applicant: McKells Solicitors
Counsel for the First Respondent: Mr T Howe QC with Mr A Berger and Mr C Lenehan
Solicitor for the First Respondent: Australian Government Solicitor
Counsel for the Second Respondent: The second respondent did not appear

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 856 of 2012
ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA
BETWEEN:

PETER JAMES SPENCER
Applicant
AND:

COMMONWEALTH OF AUSTRALIA
First Respondent

STATE OF NEW SOUTH WALES
Second Respondent

JUDGES:

KEANE CJ, DOWSETT AND JAGOT JJ

DATE OF ORDER:

26 NOVEMBER 2012

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The application for leave to appeal be dismissed.

2.Save and except for the costs in order 3 below, the applicant pay the first respondent’s costs as agreed or taxed.

3.In respect of the bundle of documents referred to in paragraph 59 of the reasons for judgment and the notice to produce dated 2 November 2012, leave be granted to the first respondent to file and serve written submissions in support of the first respondent’s foreshadowed application for indemnity costs within seven days, the applicant to file and serve its written submissions on the issue of indemnity costs within a further…

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Spencer v Commonwealth of Australia [2012] FCAFC 169
Case
[2012] FCAFC 169
Decision Date

CaseChat Overview and Summary

In the case of Spencer v Commonwealth, the applicant, Mr Spencer, sought leave to appeal a decision from the Federal Court of Australia. The primary dispute involved claims of unconstitutional intergovernmental agreements and an alleged arrangement between the Commonwealth and the State of New South Wales that led to the acquisition of Mr Spencer's property on terms other than just terms. Mr Spencer sought to challenge the constitutionality of these agreements and arrangements, as well as claim compensation for unjust enrichment by the Commonwealth.

The central legal issues before the court were whether the primary judge correctly exercised his discretion in denying Mr Spencer’s application for public interest immunity and whether the applicant was entitled to leave to appeal the decision. The court had to determine whether the balance struck by the primary judge between the public interest in disclosure and non-disclosure was correct, and if the principles governing appellate review of discretionary decisions applied to the case.

The court held that the primary judge's decision was not subject to the same principles that restrict appellate review of discretionary decisions. Instead, the court focused on whether the balance struck by the primary judge was correct. The court also emphasised that an appellate court does not "stand in the shoes" of the primary judge, and that leave to appeal must be granted if the decision at first instance is attended with sufficient doubt and substantial injustice would result if leave were refused. The court concluded that the primary judge's decision was correct and that the applicant was not entitled to leave to appeal.

Accordingly, the court dismissed the application for leave to appeal and ordered that the applicant pay the first respondent’s costs as agreed or taxed. Additionally, the court granted leave for the first respondent to file and serve written submissions on the issue of indemnity costs in relation to a specific bundle of documents and a notice to produce.

Orders

Orders of the court

1. The application for leave to appeal be dismissed.

2. Save and except for the costs in order 3 below, the applicant pay the first respondent’s costs as agreed or taxed.

3. In respect of the bundle of documents referred to in paragraph 59 of the reasons for judgment and the notice to produce dated 2 November 2012, leave be granted to the first respondent to file and serve written submissions in support of the first respondent’s foreshadowed application for indemnity costs within seven days, the applicant to file and serve its written submissions on the issue of indemnity costs within a further seven days thereafter, and the first respondent to file and serve any written submissions in reply within a further three days.

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

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Moreover, nothing in Police Federation of Australia v Nixon affects the principles by which applications for leave to appeal are determined. It remains the case that in respect of an application for leave to appeal the tests to be satisfied are whether the decision at first instance is attended with sufficient doubt to warrant it being reconsidered and whether substantial injustice would result if leave were refused, supposing the decision at first instance was wrong (Decor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398 and 399). CONTEXT OF PRIMARY JUDGE’S DECISION The matter came before the primary judge in the following circumstances. First, in Spencer v Commonwealth (2010) 241 CLR 118; [2010] HCA 28 the High Court allowed an appeal against the summary dismissal of the proceedings on the basis (at [4]) that the proceedings were not appropriate for summary dismissal as the case the applicant seeks to raise:potentially involves important questions of constitutional law. It also involves questions of fact about the existence of an arrangement between the Commonwealth and the State of New South Wales which may justify the invocation of pre-trial processes such as discovery and interrogatories. The possible significance of those questions of fact has become apparent in the light of this court’s judgment in ICM Agriculture Pty Ltd v Commonwealth [(2009) 240 CLR 140 ; [2009] HCA 51], which had not been delivered when the primary judge and the Full Court delivered their judgments. French CJ and Gummow J considered (at [31]) that the applicant’s pleading:left open the possibility, requiring factual exploration and possible amendment, of an informal arrangement between the Commonwealth and the State of New South Wales conditioning the relevant Commonwealth funding upon acquisition by the State of Mr Spencer’s property rights on other than just terms. On the face of the pleading before Emmett J and the Full Court that possibility was open, even if not fully formulated or adequately particularised. Given the existence of the Commonwealth Acts and the relevant intergovernmental agreements, it is likely that there are negotiations and communications between the Commonwealth and the State of New South Wales, records of which might flesh out or cast light upon the practical operation of the Commonwealth and State funding arrangements. Documentary and electronic records of such negotiations and communications may be amenable to discovery and ancillary processes in the Federal Court which could be invoked by Mr Spencer. Second, on 14 February 2011, the applicant filed a further amended statement of claim in which the applicant contends, amongst other things, that:(1)Intergovernmental agreements between the first and second respondents (the Commonwealth and the State of New South Wales) made on 31 October 1997, 3 November 2000, 17 May 2002 and 18 August 2003 are each unconstitutional in that by their terms the State has expressly or impliedly agreed to make and adopt measures with respect to the acquisition of property of the applicant otherwise than on just terms in consideration for the payment of money by the Commonwealth to the State (para 34).(2)Further or alternatively by an informal arrangement before November 1997 and extended or amended in or about 2003 the Commonwealth and the State agreed to acquire property of the applicant other than on just terms, the arrangement being that in return for money paid to the State by the Commonwealth the State would make measures precluding or reducing the exposure of the Commonwealth and/or the State to the Constitutional guarantee in s 51(xxxi) of the Constitution (the acquisition of property on just terms) (para 34A).(3)Further or alternatively the intergovernmental agreements and/or the informal arrangement comprised a joint venture between the Commonwealth and the State for the acquisition of property other than on just terms (para 35).(4)Pursuant to the intergovernmental agreements and/or the informal arrangement and/or induced by the Commonwealth, the State made legislation, referred to as the State measures, which had the effect or consequence of acquiring the applicant’s property (paras 36, 36A and 36B) and the Commonwealth received a substantial benefit from the passage of the State measures (para 37).(5)The benefits obtained by the Commonwealth are property of the applicant acquired by the Commonwealth (para 39) other than on just terms (paras 40-42) and in circumstances where had the Commonwealth made the State measures itself the Constitutional guarantee of the acquisition of property on just terms would have been impaired (para 43), with the consequence that the intergovernmental agreements, the informal arrangement and the joint venture are invalid or invalid to the extent that they provide for or enable the acquisition of the property of the applicant on other than just terms (para 44).(6)The Commonwealth has thereby used the applicant’s property for its own benefit and received, retained and used the applicant’s property whereby the Commonwealth has been unjustly enriched (paras 50-55), in respect of which the applicant claims legal or equitable compensation and/or an account of profits (para 56) and/or damages (paras 56A-56D).

Ratio Decidendi

Legal Principle Established

Despite this the submissions for the applicant ranged widely over numerous alleged errors by the primary judge including contentions of error inconsistent with the conduct of the proceeding before the primary judge. The applicant sought to justify this approach on the basis of the proposition that this court was required to address the “issues raised by the whole matter, as it were, in the shoes of the [primary] judge”, citing in support Police Federation of Australia v Nixon (2011) 198 FCR 267; [2011] FCAFC 161 (Police Federation of Australia v Nixon) at [82]. At [82], however, the Full Court (Lander, Gilmour and Gordon JJ) said only that “although the resolution of a public interest immunity claim involves a balancing exercise, an appeal against the determination of such a claim is not an appeal against a discretionary decision. Instead, on appeal the question for the Full Court is whether the balance was struck correctly: see Australian Securities and Investments Commission v P Dawson Nominees (2008) 169 FCR 227 at [16]–[17] where a Full Court of this court applied the decision of the Victorian Court of Appeal in Victoria v Brazel (2008) 19 VR 553”. Their Honours were not addressing and said nothing about the fundamental principle that, generally, an appellate court will not entertain a point not raised in the court below about which evidence could have been given with any possibility of the point being defeated (Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 438). The point being made at [82] in Police Federation of Australia v Nixon is that the balancing exercise involved in what their Honours described as the third stage in resolving a claim for public interest immunity (namely, as stated at [81], “if there are public interests both for and against disclosure, balance the public interest in disclosure against the public interest in non-disclosure, in order to decide whether or not the information should be disclosed”) does not involve the exercise of discretion with the consequence that, on appeal, the principles restricting appellate review of a discretionary decision (House v R (1936) 55 CLR 499 at 504-505) are not engaged. In an appeal under s 24 of the Federal Court of Australia Act the appellate court does not “stand in the shoes” of the primary judge. Such an appeal is by way of rehearing and is not a hearing de novo and, accordingly, error must be shown. Moreover, nothing in Police Federation of Australia v Nixon affects the principles by which applications for leave to appeal are determined. It remains the case that in respect of an application for leave to appeal the tests to be satisfied are whether the decision at first instance is attended with sufficient doubt to warrant it being reconsidered and whether substantial injustice would result if leave were refused, supposing the decision at first instance was wrong (Decor Corp Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398 and 399). CONTEXT OF PRIMARY JUDGE’S DECISION