Tatts Group Ltd v Victoria
[2013] VSC 301
•13 June 2013
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
COMMERCIAL COURT
No. S CI 2012 4689
BETWEEN
| TATTS GROUP LIMITED (ACN 108 686 040) | Plaintiff |
| and | |
| STATE OF VICTORIA | Defendant |
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JUDGE: | SIFRIS J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 5 June 2013 | |
DATE OF JUDGMENT: | 13 June 2013 | |
CASE MAY BE CITED AS: | Tatts Group Limited v State of Victoria | |
MEDIUM NEUTRAL CITATION: | [2013] VSC 301 | |
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EVIDENCE – Discovery of documents – Public interest immunity – Claim of immunity over Cabinet documents – What constitutes Cabinet documents – Balancing exercise between interest in non-disclosure and interest in access for litigation – Relevant factors – Documents not sufficiently relevant and do not have important bearing on issues in the case – Evidence Act 2008 (Vic) s 130.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | N.J. Young QC and R.L. Kaye | Clayton Utz |
| For the Defendant | S.B. McNicol SC and K Loxley | Johnson Winter & Slattery |
HIS HONOUR:
A. Introduction
By summons dated 21 May 2013 the plaintiff, Tatts Group Limited (“Tatts”), seeks orders requiring the defendant, the State of Victoria (“the State”), to:
(a)produce to Tatts for inspection each of the documents referred to in paragraph 3 of its list of documents dated 21 March 2013 which are subject to claims of public interest immunity; and
(b)make discovery of all documents in its possession, custody or power in relation to the preparation and introduction of the amendments made in 2009 to the Gambling Regulation Act 2003 (Vic) (“GRA”) via the Gambling Regulation Amendment (Licensing) Act 2009 (Vic) (“Amendment Act”).
Tatts requires production for inspection of the following documents, namely:
(a)production in full of 1006 documents discovered by the State which are subject to a claim of public interest immunity and not subject to a claim of legal professional privilege; and
(b)production in part of 174 documents discovered by the State which are subject to a claim of public interest immunity and subject to a partial claim of legal professional privilege
(together, “the Challenged Documents”).
The State opposes the production for inspection of the Challenged Documents. The Challenged Documents are sourced from the records of three government departments: the Department of Justice (“DOJ”); the Department of Treasury and Finance (“DTF”); and the Department of Premier and Cabinet (“DPC”). The State’s opposition to Tatts’ application is supported by affidavits of three departmental officers who have inspected each document sourced from their respective department over which a claim for public interest immunity has been made:
(a)an affidavit of Catherine Mary Carr, from the DOJ, affirmed 28 May 2013 (“Carr affidavit”) and a further affidavit from Carr affirmed 4 June 2013 (“Further Carr Affidavit”);
(b)an affidavit of Penelope Jane McKay, from the DTF, sworn 28 May 2013 (“McKay affidavit”); and
(c)an affidavit of Jonathan Alexander Spear, from the DPC, sworn 28 May 2013 (“Spear affidavit”).
Exhibited to each of the Carr, McKay and Spear affidavits is a table identifying the documents within each of the DOJ, DTF and DPC which are the subject of the State’s claims for public interest immunity. The State’s claims are made on the basis that it would be injurious to the public interest for the documents to be disclosed due to either their class (“the Class Claim”) or their contents (“the Contents Claim”).
The tables exhibited to the Carr, McKay and Spear affidavits specify the nature of each claim for public interest immunity. The tables were provided to Tatts as a schedule to a letter dated 15 May 2013, in response to a request from Tatts for further information about documents the subject of claims for public interest immunity that had been provided in the List of Documents discovered by the State on 21 March 2013.
In paragraph 3 of its List of Documents dated 21 March 2013, the State claims public interest immunity on the basis that it would be injurious to the public interest for the documents to be disclosed. The State makes its claim in respect of:
(a)a class of documents described as ”Cabinet Documents“, being documents:
(i)submitted to and considered by Cabinet or a committee of Cabinet (and precursors of such documents);
(ii)that reveal the decisions or deliberations of Cabinet or a committee of Cabinet;
(iii)that were prepared by a department of the State or its officers including the DPC, DOJ and the DTF for the purpose of assisting in the deliberations of Cabinet or a committee of Cabinet or to brief the Premier or a Minister for participation in a meeting of Cabinet or a committee of Cabinet;
(iv)brought into existence for the purpose of preparing a submission to Cabinet or a committee of Cabinet; or
(v)which record the proceedings of Cabinet or a committee of Cabinet; and
(b)specific documents, including documents relating to the formulation of government policy at senior levels of a State department or its officers, including the DPC, DOJ and DTF including sensitive and high level advice between senior public servants and between senior public servants and Ministers regarding the formulation of government policy and/or the preparation of briefings and submissions to Ministers or Cabinet or a committee of Cabinet.
B. The Substantive Proceeding and Relevant Background
The claims made by Tatts against the State are for breach of an implied term of good faith, breach of an implied term of co-operation, breach of the obligations of the State under clause 8 of an agreement entered into on or about 17 November 1995 between the State and Tatts (“the 1995 Agreement”),[1] unconscionable conduct and estoppel. Underlying Tatts’ claims is the issue of whether the State has engaged in a stratagem to undermine or circumvent the rights of Tatts under clause 7 of the 1995 Agreement.
[1]The agreement was entered into before the incorporation of the plaintiff. At the time the business of Tatts was conducted by the Trustees of the Will and Estate of the late George Adams. The Trustees entered into the Agreement.
At the time the 1995 Agreement was executed Tatts held a gaming operator’s licence in the State of Victoria. The main aim of the 1995 Agreement was to regulate the business operations of Tatts under the gaming operator’s licence
on terms substantially as favourable as the terms regulating the gaming machine business operated by Tabcorp Holdings Limited or its operator and is to otherwise have the benefit of the terms of the Agreement. [Recital D].
Clause 3 of the 1995 Agreement required Tatts to pay certain amounts to the State.
Clause 7 of the 1995 Agreement deals with Compensation. Clauses 7.1 and 7.2 are in the following terms:
7.1 If the Gaming Operator’s Licence expires without a new gaming operator’s licence having issued to the Trustees, the Trustees shall be entitled to be paid, by the State of Victoria, an amount of money as compensation for the investment in infrastructure lost. This amount will be equal to the Licence Value of the Gaming Operator’s Licence or the premium payment by the new licensee, whichever is the lesser.
7.2 No amount will be payable pursuant to sub-clause 7.1 if a new gaming operator’s licence is not issued to any person, or is issued to the Trustees or a related entity of the Trustees.
Clause 8 of the 1995 Agreement deals with Draft Legislation. Clauses 8.1.1 and 8.1.2 are in the following terms:
8.1 The Minister will cause to be drafted and will use his best endeavours to procure that the Parliament of Victoria enacts legislation which:
8.1.1includes the Trustees’ obligation to pay the Minister in accordance with clause 3 of this Agreement;
8.1.2includes the obligation of the State of Victoria to pay the Licence Value to the Trustees in accordance with the provisions of clause 7 of this Agreement;
Legislation that was introduced in 2009,[2] after much discussion and review of the gaming industry, did not provide for any new gaming operator’s licence and licences were not issued to Tatts or a related entity of Tatts. Accordingly the State contends that under clause 7.2 of the 1995 Agreement no compensation is payable to Tatts.
[2]Gambling Regulation Amendment (Licensing) Act 2009 (Vic). This Act amended the Gambling Regulation Act 2003 (Vic).
Tatts’ primary case is that as a matter of construction and interpretation of the legislation and the 1995 Agreement, compensation is payable. This is essentially because the new licensing regime, which provided for venue operator licences and gaming machine entitlements, was in substance and effect the granting of new gaming operator’s licences.[3]
[3]This is an oversimplification of the new regime but sufficient for the purpose of this application.
A further or alternative cause of action is pleaded in paragraph 42 of the Statement of Claim as follows:
42. Further or alternatively, by creating and allocating gaming machine entitlements under Part 4A of the GRA, instead of issuing new gaming operator’s licences under Part 4 of the GRA, the defendant has:
(a)attempted to circumvent the rights of the plaintiff to compensation under clause 7.1 of the 1995 Agreement in breach of the implied term of good faith;
(b)failed to consult with the plaintiff in relation to changes to the GRA in breach of clause 8 of the 1995 Agreement; and/or
(c)failed do all such things as are necessary on its part to enable the plaintiff to have the benefit of the 1995 Agreement in breach of the implied term of co-operation.
The defence to paragraph 42 is in the following terms:
42. As to the allegations contained in paragraph 42, the State:
(a)admits that it has created and allocated gaming machine entitlements under Part 4A of the GRA and has not issued (and was incapable of issuing) a new gaming operator’s licence to anyone under the GRA:
….
(c)says that if (which is not admitted) the 1995 Agreement contained any implied term of good faith:
(i)such a term would only operate to the extent that it was not inconsistent with the express terms of the 1995 Agreement;
(ii)the express terms of the 1995 Agreement included the statement in the letter from the Treasurer to the Trustees which formed Schedule 2 to the 1995 Agreement referred to in paragraph 20(c) above; and
(iii)in the premises, on its proper construction, any such term did not preclude either the Parliament of the State from introducing the current section 3.4.3 of the GRA or the State from creating and allocating gaming machine entitlements;
(d)says further that an implied term of either kind relied upon by the plaintiff could not, and did not on its proper construction purport to, fetter by contract:
(i)the Executive of the State in the exercise of its powers and discretions in taking and implementing policy decisions which it considered to be in the best interests of the people of Victoria; and/or
(ii)in the exercise by the Parliament of the State of the legislative power vested in it by sections 15 and 16 of the Constitution Act 1975 (Vic)
and to the extent that any such implied term purported to fetter the Executive or the Parliament in relation to any of those matters, the alleged implied term was void and unenforceable;
(e)says further that clause 8.2 of the 1995 Agreement provided no obligation to consult with the Trustees (or their successors, the plaintiff) in relation to any subsequent amendments to the legislation contemplated by clause 8.1 after the original legislation had been enacted;
(f)denies breaching the 1995 Agreement as alleged or at all; and
(g)otherwise denies the allegations contained in the paragraph.
Tatts contends that the Challenged Documents are relevant to this further or alternative cause of action and in particular in relation to breach. The State disagrees.
The background to this issue, and the State’s decision that no compensation would be payable to Tatts, goes back to 2008 and possibly earlier.
On 10 April 2008, the Premier of Victoria issued a media release announcing the decision to implement new regulatory arrangements for gaming machines on the expiry of the licences held by Tatts and Tabcorp Holdings Limited (“Tabcorp”). The media release said (among other things):
Mr Brumby said the Victorian Government had decided to move to a new structure for the industry, which removes the need for separate gaming machine operators — Tattersall’s and Tabcorp — with venues set to own, operate and maintain electronic gaming machines.
. . .
Under the post-2012 structure, venues will bid directly for 10-year gaming machine entitlements.
. . .
The Government will enforce a cap on ownership, ensuring that no one venue operator can own more than 35 per cent of machines available to hotels.
. . .
The Government’s decision represents an entirely new regulatory model for the operation of wagering, gaming and keno in Victoria after the expiration of the current licences in 2012, and the Government has formed the view that neither Tattersall’s nor Tabcorp are entitled to compensation.[4]
[4]Department of Premier and Cabinet (Vic), ‘New Structure for Gaming in Victoria Beyond 2012’ (Medial Release, 10 April 2008) (emphasis added).
On 6 May 2008, the government released its 2008–2009 budget papers. Chapter 7 of budget paper number 4 dealt with, among other things, gambling licences. The following entry appears in the section dealing with non-quantifiable contingent liabilities:
On 10 April 2008, the government announced a new regulatory model for the post-2012 licences. The main changes include:
•separating the wagering and gaming licence to instead license wagering on a standalone basis; and
•transitioning from the current gaming operator duopoly to a system where venue operators are licensed to own and operate gaming machines in their own right.
After considering the end of licence arrangements in the Gambling Regulation Act 2003, the government has formed the view that neither Tatts Group nor TABCORP will be entitled to compensation after the expiration of their current licences.
The government does not intend to alter or amend the provisions in the Gambling Regulation Act 2003 that deal specifically with the end of licence arrangements for Tatts Group and TABCORP.[5]
[5]Department of Treasury and Finance, 2008-09 Budget Paper No 4 – Statement of Finances, Chapter 7 – Contingent Assets and Contingent Liabilities, 237.
In a letter dated 9 May 2008 from Tatts to the Premier, Tatts referred to the media release and budget paper referred to above and said that having given these statements careful consideration, in light of the relevant provisions of the GRA and the 1995 Agreement it ”remains perplexed and extremely concerned about the position adopted by the government“. Tatts asked:
(a)what were the reasons for the government forming the view that the compensation provisions are “predicated on the current licensing arrangements being rolled over for a further period beyond 2012”?
(b)what did the government consider when considering the end of licence arrangements which led it to form this view?
(c)what are the reasons relied on by the government for its view that Tatts will not be entitled to compensation after the expiration of its current gaming operator's licence?
In response, in its letter dated 20 June 2008 the Victorian Government Solicitor's Office said:
The Premier announced on 10 April 2008 that the Government will implement a new regulatory structure for the Victorian gaming industry after 2012. The Government has formed the view that Tatts Group will not be entitled to the payment of any amount referrable to the non-renewal of its current licence, after it expires in 2012.
The Government does not propose to enter into lengthy correspondence concerning these matters, particularly having regard to the threat of legal action contained in your letter and the fact that the legislative and other arrangements to give effect to the new industry structure are not yet complete.
C. Legal Principles
Section 130 of the Evidence Act 2008 (Vic) governs Tatts’ application.[6]
[6]The immunity applies to pre-trial discovery: Evidence Act 2008 (Vic) s 131A.
Section 130(1) of the Evidence Act enshrines the common law test of balancing competing public interests and provides:
If the public interest in admitting into evidence information or a document that relates to matters of state is outweighed by the public interest in preserving secrecy or confidentiality in relation to the information or document, the court may direct that the information or document not be adduced as evidence.
Section 130(4) of the Evidence Act provides a non-exhaustive list of circumstances which are taken to relate to “matters of state” including the adducing of evidence that would “prejudice the proper functioning of the government of the Commonwealth or a State.”[7]
[7]Ibid s 130(4)(f).
Section 130(5) of the Evidence Act provides that, without limiting the matters the Court may take into account when weighing the competing interests, the Court must take into account the following:
(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 a defendant 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 a defendant — whether the direction is to be made subject to the condition that the prosecution be stayed.
The content and operation of s 130 of the Evidence Act is informed by the common law.[8] The common law recognises a “rough, but acceptable” division of public interest immunity claims into “class” and “contents” claims.[9] Documents can be immune from disclosure on the basis of their class because their disclosure would injure the public interest, irrespective of the actual contents of the documents.[10] Documents that do not belong to such a class may still be immune from disclosure, on the basis that their contents, if disclosed, would injure the public interest.[11]
[8]Eastman v The Queen (1997) 76 FCR 9, 63 (von Doussa, O’Loughlin and Cooper JJ).
[9]Commonwealth v Northern Land Council (1993) 176 CLR 604, 616 (Mason CJ, Brennan, Deane, Dawson, Gaudron, McHugh JJ) (Northern Land Council’).
[10]Sankey v Whitlam & Ors (1978) 142 CLR 1, 43 (Gibbs ACJ) (‘Sankey’).
[11]Northern Land Council (1993) 176 CLR 604, 616 (Mason CJ, Brennan, Deane, Dawson, Gaudron, McHugh JJ).
A claim in respect of a class of documents is, by its nature, general and that claim will normally be upheld if the class is one that is recognised as being, prima facie, subject to public interest immunity.[12]
[12]Spencer v Commonwealth (No 3) [2012] FCA 637, [43] (Emmett J) (‘Spencer No 3’).
It is well recognised that the proper working of government relies on ministers and other senior servants of the Crown being able to engage in policy development and decision-making on the basis that their deliberations are kept confidential and that the convention of collective responsibility for government decisions is maintained.[13] Documents that could disclose such deliberations fall within a class that attracts the public interest immunity.
[13]Sankey (1978) 142 CLR 1, 39 (Gibbs ACJ), 98 (Mason J); Northern Land Council (1993) 176 CLR 604, 615–616; Spencer No 3 [2012] FCA 637, [11]–[16].
However, immunity from disclosure is not automatically accorded to documents falling within such a class claim. The court must still weigh the public interest in the proper functioning of government with the public interest in the proper administration of justice whereby all relevant documents are available to a party seeking to litigate a claim.[14]
[14]Northern Land Council (1993) 176 CLR 604, 616-620; Betfair v Racing NSW (2009) 181 FCR 66, [24] (‘Betfair’).
In civil cases it will only be in exceptional circumstances that disclosure of Cabinet documents is ordered.[15] In applying Northern Land Council in Spencer No 3, Emmett J observed:
It is only in a case in which quite exceptional circumstances give rise to a significant likelihood that the public interest in the proper administration of justice outweighs the very high public interest in the confidentiality of documents recording Cabinet deliberations that it would be necessary or appropriate to order production of the documents to the court. Where such exceptional circumstances do exist, the appropriate course to be followed will ordinarily be for the judge personally 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. The judge ought not to order the disclosure of the contents of documents recording Cabinet deliberations unless the judge is satisfied that the material is crucial to the proper determination of the relevant proceeding. Even though years may have passed since a relevant document was brought into existence, and government may have changed, it does not follow that the matters that are the subject of such documents have ceased to be current or controversial.[16]
[15]Northern Land Council (1993) 176 CLR 604, 619–620.
[16]Spencer No 3 [2012] FCA 637, [21] (citations excluded).
In Commonwealth vNorthern Land Council, the Full Federal Court distilled the following six principles (which were not questioned by the High Court on appeal and were cited with approval by Jagot J in Betfair[17]):
(1) where the contents of the documents are relied upon, the interests affected by their disclosure eg national security, relationships with foreign governments and unfair prejudice to other parties by disclosure of confidential information; where the impact of disclosure on the public interest is peculiarly within the knowledge of the Executive, its contentions will be given particular weight;
(2) where the class of documents is invoked, the public interest which immunity for the class is said to protect, eg political conventions and governmental processes; in this connection the importance of the convention of collective responsibility and the confidentiality required to support it, particularly in areas of current political debate, will be accorded a high degree of respect;
(3) the extent to which the interests referred to have become attenuated by the passage of time or the occurrence of intervening events since the matters contained in the documents or the documents themselves came into existence;
(4) the seriousness of the issues in relation to which production is sought, eg innocence of a criminal charge or governmental misconduct bearing upon the case;
(5) the likelihood that production of the documents will affect the outcome of the case;
(6) the likelihood of injustice if the documents are not produced. [18]
[17](2009) 181 FCR 66, [33].
[18](1991) 30 FCR 1, 38 (Black CJ, Gummow and French JJ).
In Betfair, Jagot J also adopted the following convenient summary of the general principles formulated by McClellan J in Murrumbidgee Ground-Water Preservation Association v Minister for Natural Resources:[19]
[19][2003] NSWLEC 322, [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) 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 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 at 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: Sankey at 99.[20]
[20]Betfair (2009) 181 FCR 66, [5].
In order for the public interest in the administration of justice to arise in the balancing process, the documents must contain “material evidence.”[21] Relevance to the proceedings is of itself insufficient. In Krew v Federal Commissioner of Taxation, [22] the High Court stated that the documents must have “an important bearing upon the ultimate decision on the relevant questions”. This creates a presumption in favour of immunity and puts the onus on the party seeking disclosure to establish that the circumstances of the case are exceptional. In Northern Land Council, the majority said:
…where it is established that a document belongs to a class which attracts immunity, a court will lean initially against ordering disclosure. Whether the circumstances of a particular case will be sufficient to displace the considerations which favour immunity depends to a large extent upon the nature of the class. In the case of documents recording the actual deliberations of Cabinet, only considerations which are indeed exceptional would be sufficient to overcome the public interest in their immunity from disclosure, they being documents with a pre-eminent claim to confidentiality … the degree of protection against disclosure which is called for by the nature of that class will dictate the paramountcy of the claim for immunity in all but quite exceptional situations.
Indeed, for our part we doubt whether the disclosure of the records of Cabinet deliberations upon matters which remain current or controversial would ever be warranted in civil proceedings.[23]
[21]Alister v The Queen (1984) 154 CLR 404, 412 (Gibbs CJ).
[22](1971) 2 ATR 230, 232 (emphasis added).
[23]Northern Land Council (1993) 176 CLR 604, 618 (Mason CJ, Brennan, Deane, Dawson, Gaudron, McHugh JJ).
In relation to restricting publication of a document Mason J in Sankey, noted that a court can diminish the risk of injury to the public interest by restricting access to the documents over which public interest immunity is claimed.[24] In the context of discovery, the implied undertaking as to the use of the document will operate as a matter of course to address, at least in part, this issue.[25]
[24]Sankey (1978) 142 CLR 1, 98.
[25]Sportsbet Pty Ltd v Harness Racing Victoria (No 4) [2011] FCA 196, [4] (‘Sportsbet No 4’).
In relation to previous publication of a document, in Sankey, Gibbs ACJ (with whom Stephen J agreed) observed that “once a document has been published to the world at large, there no longer exists any reason to deny to the court access to that document, if it provides evidence that is relevant and otherwise admissible”.[26] Gibbs ACJ went on to hold that it may be that “if one document forming part of a series of Cabinet papers has been published, but others have not, it would be unfair and unjust to produce one document without the rest” and that “where one such document has been published it becomes necessary for the court to consider whether that circumstance strengthens the case for the disclosure of the connected documents”.[27]
[26]Sankey (1978) 142 CLR 1, 45 (Gibbs ACJ), 64 (Stephen J).
[27]Sankey (1978) 142 CLR 1, 45.
In weighing the competing public interests under s 130 of the Evidence Act, the Court is required to give weight to the assertion of a responsible representative of government that there is a public interest which would be placed in jeopardy by the production of the document.[28]
[28] New South Wales v Ryan (1998) 101 LGERA 246, 250-251 (Burchett, Hill and Madgwick JJ) (‘Ryan’); Sankey (1978) 142 CLR 1, 44 (Gibbs ACJ), 59–60 (Stephen J), 96 (Mason J).
D. The Class Claim – Cabinet documents
The Class
The first question is the extent of the class. The State contends that each of the five categories fall within the class of Cabinet Documents permitted by the authorities.
Tatts contends that the class is more limited and should not (if the Court was minded to accept the State’s claim) extend beyond categories 2 and 5.
Documents subject to a Cabinet class claim generally comprise Cabinet minutes or other records of Cabinet discussions (the reference to Cabinet including committees of Cabinet) and may include other documents relating to the framing of government policy at a high level.[29] The documents may include:
(a)papers prepared as submissions to Cabinet; and
(b)documents which relate to the framing of government policy at a high level.
[29]Sankey (1978) 142 CLR 1, 39; Northern Land Council (1993) 176 CLR 604, 616–619; Sportsbet No 4 [2011] FCA 196, [9] (Mansfield J); Spencer No 3 [2012] FCA 637, [11].
Recently in Spencer v Commonwealth & Anor, the Full Federal Court rejected an argument that the “exceptional circumstances” principle in Northern Land Council only applies to documents recording the actual deliberations of Cabinet. Keane CJ, Dowsett and Jagot JJ said:
True it is that documents recording deliberations of cabinet have “a pre-eminent claim to confidentiality”. But other documents including “papers brought into existence for the purpose of preparing a submission to Cabinet” and “documents and communications passing between a Minister and the head of his department relating to Cabinet proceedings and material prepared for Cabinet” are recognised classes prima facie entitled to protection on the grounds of public interest immunity. [30]
[30](2012) 206 FCR 309, 320 [32] (‘Spencer’).
The Court also approved the judgment of Menzies J in Lanyon Pty Ltd v Commonwealth, where his Honour said:
… the governmental process directed to obtaining a cabinet decision upon a matter of policy and cabinet’s decision upon that matter should not, in the public interest, be disclosed by the production of cabinet papers including what I would describe as papers which have been brought into existence within the governmental organization for the purpose of preparing a submission to cabinet. Such papers belong to a class of documents that, in my opinion, are of a nature that ought not to be examined by the Court, except, it may be, in very special circumstances. There are no such circumstances here.[31]
In Spencer, the Court held that this principle had not been overruled or called into question.[32]
[31](1974) 129 CLR 650, 653 (Menzies J).
[32]Spencer (2012) 206 FCR 309, 318 [29] (Keane CJ, Dowsett and Jago JJ).
In State of Victoria v Seal Rocks Victoria (Authority) Pty Ltd & Anor,[33] Byrne J referred to Northern Land Council and held that in addition to documents falling within categories 2 and 5, documents falling within categories 1 and 3 (and perhaps 4) fell within the Cabinet Class.
[33][2001] VSC 249.
In my opinion, although categories 2 and 5 have a pre-eminent claim when it comes to balancing the respective interests of the parties, all of the categories (namely 1–5) properly fall within the class of Cabinet documents that are ”prima facie entitled to protection, on the grounds of public interest immunity”.
Each side has an interest
The Cabinet Documents are clearly matters of State.
I will assume for the purpose of this decision, that there is a public interest in permitting Tatts to inspect those parts of the Cabinet Documents that are relevant to its case. However for reasons that follow, I am by no means satisfied that this is the case.
Balancing the interests of the parties
Tatts submitted that in balancing the interests of the parties it should be favoured for a number of reasons. Eight reasons were given:
(a)The documents are important to central issues in the case and there is a real likelihood they may affect the outcome.
(b)The claims of bad faith and unconscionability go to the highest levels of decision making within Cabinet.
(c)The documents relate to commercial activities rather than traditional government activities.
(d)The commercial character of the issues raises an issue of public importance, namely the extent to which dealings with the State are subject to sovereign risk.
(e)The documents represent the culmination of an agreement in which numerous Cabinet and high level policy documents have previously been discovered.
(f)The subject matter of the documents are no longer current and controversial.
(g)The inconsistent approach by the State in relation to some documents released via freedom of information requests.
(h)Only limited disclosure is being sought.
The State submitted that none of the reasons, whether individually or collectively, were compelling and none outweighed the need in this case to preserve the confidentiality and integrity of documents that related to policy development, deliberations and decision making within government.
Tatts is required to show special or exceptional circumstances. It is very rare that Cabinet documents are required to be produced for inspection particularly documents falling within categories 2 and 5. However, it is necessary, so far as each category is concerned, to engage in the balancing exercise having regard to the matters set out in s 130(5) Evidence Act and any other relevant matter. It follows however that categories within the Cabinet class may be treated differently.
In my opinion Tatts has failed to establish exceptional or special circumstances in relation to any of the five categories comprising the class. The balance in my view clearly favours retention of the immunity.[34]
[34]To the extent that exceptional circumstances may not be required for categories 1, 3, and 4, I consider that special circumstances are required. There are no special circumstances. Even if these categories only required a balancing act to be undertaken, the balance clearly favours the State.
The main reason that compels the conclusion I have reached is the relevance of the documents. To my mind this is the most important factor in this case. I am not satisfied that any of the five categories comprising the Cabinet Class are sufficiently relevant to the issues in the case. Whatever minor or tangential relevance there may be is not outweighed by the prima facie position.
The documents are not sufficiently relevant, if relevant at all, to the primary case pleaded by Tatts which concerns the construction and interpretation of legislation and the 1995 Agreement.
However it is contended that the Cabinet Class is relevant to the alternative and further case pleaded by Tatts, as referred to in paragraphs 14 and 15 above. It is not entirely clear how and to what extent the Cabinet Documents are relevant to these issues.
The case put forward by Tatts is that in devising its preferred regulatory arrangements the State formed the view that those new arrangements should result in Tatts not being entitled to a payment referable to the expiry of its licence and then set about to draft and introduce legislation which would ensure that this was the case. Amongst other things, the State decided not to alter the provisions in the GRA that deal specifically with the end of licence arrangements for Tatts and Tabcorp. Tatts referred to an undated document discovered by the State titled “End of Licence Arrangements for the Gaming Operator and Linked Gaming and Wagering Licences” which contains the following reference:
The Gambling Regulation Act never intended for Tatts or Tabcorp to have access to repayment of premiums if an entirely new licence structure was introduced. The change to a venue model is a fundamental re-shaping of the gaming industry for the future.
The new arrangements for wagering and gaming machines mean that the end of licence arrangements will not be triggered for either Tatts or Tabcorp.
The new regulatory arrangements - with the decoupling of the wagering licence from the gaming licence and with gaming machines to be provided under a venue model, rather than a gaming operator duopoly - are very different arrangements for these industries post 2012.
For the avoidance of any doubt or uncertainty, the Government will be introducing in a Bill to Parliament statutory provisions that will make the consequences of the Government’s decisions for Tatts and Tabcorp clear and certain.
Tatts contends that the State has acted in bad faith and unconscionably. It was open to the State to devise its preferred regulatory arrangements and then take reasonable steps to ensure that the legislation which implemented those arrangements did not subvert or curtail the rights of Tatts on the expiry of its licence. Instead, the State made a decision to deny payment to Tatts and then set about to attempt to ensure that the legislation was drafted so as to side-step the rights of Tatts without being seen to quash or avoid those rights. An example of this, it was submitted, was the introduction of the new section 3.4.3, which now plays a prominent part in the State's defence (see paragraph 42 of the defence). Section 3.4.3 provides as follows:
3.4.3 Application of Part—gaming operator’s licences
This Part applies only with respect to the gaming operator’s licence that was issued on 14 April 1992 and does not authorise the grant of any further gaming operator’s licence.
It was submitted that the documents sought are directly relevant to the claims made by Tatts for breach of a contractual obligation of good faith, breach of the implied term of co-operation, breach of the obligations of the State under clause 8 of the 1995 Agreement, unconscionable conduct and estoppel. In addition, they go to the heart of the defence raised by the State that the obligations sought to be relied upon by Tatts are an invalid restraint or fetter on the exercise by the Executive and Parliament of the State of its powers and discretions.
Tatts contends that there was no fetter on the State so far as the introduction of legislation was concerned and that the relevant pleaded implied terms and contractual obligation in paragraph 8 are not void and unenforceable. It was submitted that the Challenged Documents were relevant to this point, namely that there was no relevant fetter. It was further submitted that the Challenged Documents may provide an evidential foundation for the allegation that the State could have propounded and introduced legislation that would have preserved the entitlement of Tatts to the payment referred to in clause 7.2 of the 1995 Agreement but deliberately chose not to do so.
In my opinion the Challenged Documents are not sufficiently relevant and I am not persuaded that they have a sufficiently important bearing or would affect the outcome of the issues in the case so as to displace the prima facie position. There is no injustice if they are not produced.
It is self-evident and obvious that the State could have proposed legislation that preserved the benefit that Tatts had under the 1995 Agreement but chose not to do so. The factual basis of the alleged breaches, the conscious and deliberate decision to do it one way and not the other is self-evident from the legislation itself and the existing discovered documentation. The media release, budget papers and correspondence referred to in paragraphs 18–21 all took place between April and June 2008. The amending Act was assented to on 23 June 2009 and came into operation on 24 June 2009. The State’s position was well known and legislation followed. It is not apparent why any further documents are relevant and would have an important bearing on this issue.
Further, although this is not a strike out application, and without wishing to foreclose in any way on the decision of the trial judge and for the limited purpose of the application and the issue of the relevance of the documents, I cannot ignore the current state of the law in Victoria. The suggested implied terms and duties and other obligations under clause 8 of the 1995 Agreement are, at the point that the legislation was passed, void and unenforceable.[35] It is no answer to say that the obligations remain enforceable because there was no fetter in circumstances where the State could have propounded and introduced legislation in accordance with such obligations. However it did not wish to and requiring it to do so is to fetter its discretion. In the case of Port of Portland the position was very different. In that case the State did intend to perform its contractual obligations but was mistaken as to what needed to be done. There was no positive decision not to implement certain agreed amendments. In this case there was such a positive decision. However as pointed out the main relevant point is that the Cabinet Documents cannot possibly take the matter any further. They are simply not necessary or relevant to show that different legislation could have been passed.
[35]Port of Portland Pty Ltd v Victoria (2009) 27 VR 366, 368–369 (Maxwell P), 376– 377 (Buchanan JA) (Nettle JA dissenting) (‘Port of Portland’).
Finally, there is in my view sufficient documents in any event that evidence the conduct of the State throughout the relevant period in relation to the formation, execution and implementation of its policy.
Having found that the Challenged Documents are not important or material to central issues in the case and that the likelihood that they may affect the outcome of the case is extremely remote, given the fact of the specific legislation and numerous available relevant documents that relate to the issue, it is not strictly necessary to go further.
Issues associated with sovereign risk do not in my opinion arise. Either there is a case against the State or there is not. This is a legal matter and either the documents are relevant — in a material sense — or they are not. Political and economic issues concerning sovereign risk are not relevant.
I accept that in relation to the aspects of the Cabinet Documents with which this application is concerned, the issue is “no longer current or controversial (except in this proceeding) and all relevant legislative amendments were passed four years ago” and that “only limited disclosure in the context of discovery of the documents is being sought” and that the “usual undertakings” and “protective orders” could protect any confidentiality. I also accept that there has been some inconsistency in the approach taken by the State in relation to FOI documents and that there has been disclosure of documents that the State contends falls with the Cabinet Class. It may also be accepted that making the documents available for inspection is unlikely to impede to any relevant extent future discussions and debate. Finally it may also be accepted that the relevant aspects of the documents are commercial in nature. However, these factors are not sufficient to tilt the balance in favour of Tatts.
E. The Contents Claim
Paragraph 26(b) of the Carr Affidavit sets out five categories of documents comprising the Contents Claim. The categories are wide and do not refer to specific documents. It is rightly a class claim masquerading as a content claim as suggested by senior counsel for Tatts. I will treat it as a class claim.
The application to inspect these documents is dismissed for substantially the same reasons as the reasons that relate to the Cabinet Documents.
To the extent that the categories of documents overlap with the Cabinet Documents the result is the same. To the extent that the documents fall outside the Cabinet Documents and are therefore more amenable to disclosure, the pre-eminent and prima facie position of Cabinet documents not being applicable, it is not apparent to me, and for the reasons given I am not persuaded, that the documents are relevant and that inspection is necessary. The immunity remains.
F. Disposition
Tatts has also sought discovery of documents relating to the 2009 amendments to the GRA. After some confusion it appears that these documents have in fact been discovered and claims for public interest immunity and/or privilege have been made. The affidavit by Pravin Visvanathan Aathreya sworn 28 May 2013 adequately explains the approach taken and is sufficient to dispose of the application.
The claim that the Challenged Documents are subject to public interest immunity is a good one and the summons filed 21 May 2013 will be dismissed.
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