The Age Company Ltd and Ors v Liu and Anor

[2013] HCATrans 205

[2013] HCATrans 205

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney   No S43 of 2013

B e t w e e n -

THE AGE COMPANY LTD (ACN 004 262 702)

First Applicant

RICHARD BAKER

Second Applicant

PHILLIP DORLING

Third Applicant

NICK MCKENZIE

Fourth Applicant

and

HELEN LIU

First Respondent

ATTORNEY‑GENERAL (NSW)

Second Respondent

Application for special leave to appeal

HAYNE J
BELL J
GAGELER J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 6 SEPTEMBER 2013, AT 10.17 AM

Copyright in the High Court of Australia

____________________

MR T.D. BLACKBURN, SC:   May it please the Court, I appear with my learned friend, MR A.T.S. DAWSON, for the applicants.  (instructed by Minter Ellison Lawyers)

MR B.R. McCLINTOCK, SC:   May it please the Court, I appear with my learned friend, MS G.R. RUBAGOTTI, for the first respondent.  (instructed by Kennedys (Australasia) Pty Ltd)

MR M.G. SEXTON, SC, Solicitor‑General for the State of New South Wales:   If the Court pleases, I appear with my learned friend, MS J.E. DAVIDSON, for the second respondent.  (instructed by the Crown Solicitor (NSW)) 

HAYNE J:   Yes, Mr Blackburn.

MR BLACKBURN:   Your Honours, we have mentioned several times in our submissions Monis.  On reflection last night we thought it might be convenient actually to hand up to the Court some copies of Monis. We have given some copies to our learned friends. Your Honours, the special leave question is set out at page 122 of the book and it is quite simply whether rule 5.2 and perhaps its close equivalents in different States are:

reasonably appropriate and adapted to serve a legitimate end in a manner compatible with the maintenance of a constitutionally prescribed system of government, to the extent that it permits an order requiring disclosure of the identity of a confidential source of political information -.

Your Honours, in order ‑ ‑ ‑

HAYNE J:   For publication by the media – is that an addition to the proposition?

MR BLACKBURN:   No, your Honour, not publication by the media, just simply disclosure of the identity of a source of political information given to a representative of the mass media or the news media.

HAYNE J:   Are you seeking, in effect, to constitutionalise the newspaper rule?  That would be a very, very large proposition, Mr Blackburn.

MR BLACKBURN:   I understand it is a large proposition, your Honour, but may we attempt to make it good on this application.

HAYNE J:   Sorry, the answer is yes, you are trying to constitutionalise the newspaper rule?

MR BLACKBURN:   That would be, I think, probably a fair description, your Honour.

HAYNE J:   Yes.

GAGELER J: The consequence of your argument is that rule 5.2 simply has no valid application whenever one finds a confidential source of information is political.

MR BLACKBURN:   That is so, your Honour, and I appreciate your Honour Justice Hayne’s comment that it is a large proposition.  It is.

HAYNE J:   That is what this Court is for, is it not, Mr Blackburn?

MR BLACKBURN: We will attempt to persuade your Honours on this application and make it good. Your Honours, the first point is this, that in order to answer that question and, in particular, the question of compatibility with the Constitution, an inquiry needs to be undertaken which the Court of Appeal, with respect, did not embark on, a point which has never been argued in this Court and on which this Court has not given a decision, an inquiry needs to be undertaken in conformity with what this Court said in Monis as to – and if I may refer, first of all, to paragraph [281] of Monis and in particular the last sentence of paragraph [281] in the joint judgment of Justices Crennan, Kiefel and your Honour Justice Bell, or perhaps the whole of the paragraph:

Even if the ends and means of the impugned legislation are in proportion, the second limb of the Lange test requires that they each be tested for compatibility with the constitutional imperative of the maintenance of the system of representative government.  It will be a rare case where a conclusion of outright incompatibility will be reached –

I might interpolate there, your Honours, that is a case of direct incompatibility such as where the law says you shall not make a political comment or something of that kind.  Their Honours went on to say:

In most cases –

and I interpolate this case:

the question of incompatibility will involve examining the extent of the effect of the legislative restrictions upon the communications the subject of the implied freedom which supports the maintenance of that system of government.

Your Honours, that was an undertaking or an exercise which has never been carried out by this Court and, with respect, was not carried out by the Court of Appeal, namely the extent of the effect of rule 5.2 on the particular communications that we are concerned with here, that is so say, communications made by confidential sources to representatives of the news media.

May I say this, your Honours, by way of persuading your Honours to our view about the constitutionalising of the newspaper rule, that one can say with confidence by reference to the existing authorities that provisions like rule 5.2 are likely to have and are having a profound effect on the free flow of information on government and political matters.

Now, we say that for these reasons.  It has been acknowledged by this Court and others that the flow of information to the independent news media is valuable, necessary and something that should be encouraged.  It has also been acknowledged in this Court and others that the maintenance of confidentiality of journalists’ sources encourages that free flow of information. 

Those propositions are broadly established by two matters of public interest which find clear reflection in the authorities, in our submission.  The first matter of public interest, and we have referred to them in our written submissions, is that there is a public interest and, indeed, an acute public interest in the free flow of information in the community about government and political matters.  May I refer your Honours to what Justice McHugh said in Stephens v West Australian Newspapers (1994) 182 CLR 211 at 264 where his Honour says this:

In the last decade of the twentieth century, the quality of life and the freedom of the ordinary individual in Australia are highly dependent on the exercise of functions and powers vested in public representatives and officials by a vast legal and bureaucratic apparatus funded by public moneys.  How, when, why and where those functions and powers are or are not exercised are matters that are of real and legitimate interest to every member of the community.  Information concerning the exercise of those functions and powers is of vital concern to the community.  So is the performance of the public representatives and officials who are invested with them.

This Court also said, your Honours, in the passage which we have cited in Aid/Watch in our written submissions that freedom of communication on government and political matters are “an indispensable incident” of our system of representative and responsible government.

GAGELER J:   Your complaint is not about the way in which the power was exercised in this case.  Your complaint is not having regard to the constitutional setting.  There was an inappropriate or unavailable exercise of discretion.  What you are saying is that the rule itself is invalid.

MR BLACKBURN:   That is right, your Honour.  The second matter of public interest that has been recognised for decades in this Court is that there is, again, a very important public interest in maintaining, as far as possible, the confidentiality of the sources of information of that kind.  Sir Owen Dixon, your Honours, said in 1940 in McGuinness’ Case that the foundations of the newspaper rule were based upon what his Honour said the “desirability of protecting those who contribute to” newspaper columns “from the consequences of unnecessary disclosure of their identity”. 

This Court, more recently, in Cojuangco again at paragraph 16 of our written submissions, described the free flow of information of this kind as:

a vital ingredient in the investigative journalism which is such an important feature of our society. 

The Court went on to note that:

Information is more readily supplied to journalists when they undertake to preserve confidentiality in relation to their sources of information. 

The corollary of that, of course, the obvious corollary is that where confidentiality is threatened there will be a tendency – the free flow of information will tend to be reduced. 

Your Honours, in our submission, it simply cannot be doubted that on the authorities the rational foundation for what limited protection there is at the moment for journalists’ sources is the desirability of the free flow of information of this kind to the health of democracy on what is now called “government and political matters” and in the last 15/20 years that foundation has been refined and articulated precisely and given constitutional underpinnings in the series of cases establishing the Lange constitutional freedom.

GAGELER J:   How does that fit with the particular findings of fact by the primary judge at page 54 paragraph 194?  It does not seem to be particularly consistent with the blanket chilling effect that you are suggesting.

MR BLACKBURN:    If your Honour goes to paragraph 195, her Honour said:

Other parts of the correspondence, however, suggest an understanding that the identities of the sources would not be disclosed to the public.  The defendants made some express representations to that effect.  On balance, I am persuaded that the correspondence proceeded largely on that premise.

It was not challenged, your Honour.  The issue your Honour is now raising was not an issue, certainly not in the Court of Appeal and her Honour made the finding she made at page 195.  Has that answered your Honour’s question?

GAGELER J:   Thank you.

MR BLACKBURN: Your Honour, it is, we say, beyond argument that the provisions of rule 5.2 and its equivalents must have, for those reasons, and we would welcome the chance to argue it on appeal, a profound effect on the kinds of communications that the freedom protects and it is the examination of that very question, namely the extent of the effect of rule 5.2 on the communications which is – the inquiry or the examination which this Court has never had the opportunity to carry out and which the Court of Appeal did not carry out.

I should also mention your Honour Justice Hayne’s judgment of Monis at paragraph [145] where your Honour Justice Hayne referred to the same inquiry as needing to be carried out.  The importance of it in conclusion on that point, your Honours, is this, that until that inquiry is carried out, that your Honour Justice Hayne and Justices Crennan, Kiefel and Bell spoke of, until it is carried out one cannot say whether the compatibility test is met. 

That inquiry has never been carried out and it was not carried out by the Court of Appeal. Rather, what the Court of Appeal did was to hold - and this is at pages 110 and 111, paragraph 99 of the judgment, the Court of Appeal, in effect, held that the provision was appropriate and adapted in a manner compatible with the Constitution because (a):

It achieves the objective of protecting persons from false and defamatory statements by unidentified persons when they may otherwise have no redress –

and further that the source himself or herself –

will have the defence of qualified privilege available if he or she meets its requirements. 

With great respect, what the Court of Appeal did not do was to carry out the very examination that Monis requires in the passages I have taken your Honour to, that is, to consider the effect of rule 5.2 on the kinds of communication protected by the Constitution, in this case, communications made by a confidential source to a journalist.

As we sought to show, very cursorily, what the courts have held in relation to the importance of the free flow of information of this kind and health of our democracy indicates that the effect is likely to be profound and serious and it is likely to be profound and serious now because unless sources of information perhaps are vulnerable, weak and powerless, sources of information have an assurance that no matter what happens their identity is not going to be disclosed, it is obviously less likely that they will make the disclosures.  This Court has made those important statements such as Justice McHugh’s statement in Stephens.  Communications of this kind are vital to the health of our democracy. 

The second thing I want to say about the Court of Appeal’s conclusion in paragraph 99 of the judgment is that it overlooks – perhaps I have already made this point, the chilling effect of the possibility that the source’s identity will be exposed.  It is no comfort, your Honours, to perhaps a vulnerable or frightened source of information that he or she will have the benefit of the Lange qualified privilege defence when his or her identity is exposed.

I mean, your Honours, in the real world you might have a source who is vulnerable, frightened and who simply will not divulge the information unless he or she is assured of confidentiality.  The emollient effect of knowing that after you have spent hundreds of thousands of dollars on solicitors and counsel you will have your Lange qualified privilege defence argued out in court must in many cases be very slight, with respect.

GAGELER J: Can I just understand the scope of the invalid operation of rule 5.2 you are contending for? Is it whenever the subject matter of the communication to the journalist is political?

MR BLACKBURN:   Yes.

GAGELER J:   So you do not need the extra layer of confidentiality?

MR BLACKBURN:   No, I am sorry, your Honour, only the extra layer of confidentiality.

GAGELER J:   Do you need an extra layer of vulnerability?

MR BLACKBURN:   No, just a request for confidentiality, your Honour – just an agreement, I should say, for confidentiality.

HAYNE J:   So, is the proposition that the rule is invalid to the extent that it permits the making of an order for pre‑action discovery of the identity of the source of a confidential communication on government or political matters?  Is that your proposition?

MR BLACKBURN:   It is, your Honour. 

GAGELER J:   Irrespective of the identity of that source?

MR BLACKBURN:   Irrespective of the identity of that source, yes, because if the source has agreed with the journalist or the secondary purveyor of the information that the information or the confidence should be respected then you are in the territory of making it much less likely that the communication will be made unless that assurance is given.  We do put it as highly as that, your Honour.

Your Honour, it is put, as we understand it that the compatibility of rule 5.2 with the Constitution flows from the fact that on the authorities an order can only be made when the court is satisfied that it is in the interests of justice to do so. That submission, in our submission, is obviously untenable for this reason. It is true that the courts have said, including this Court, that an order for preliminary discovery will generally only be made when it is required in the interests of justice but that is a shorthand way of saying, on such an application, that the interests of justice are always congruent with the interests of the putative plaintiff or the applicant for the order for the identity of the source in getting somebody that they can sue. In other words, the interests of the administration of justice in a preliminary discovery application are private interests to protect the applicant for the source so that he or she can sue somebody whose identity he or she does not know.

The interests protected by the constitutional freedom could not be more different. It is a public interest in the maintenance of an informed electorate and a public interest in the health of Australian democracy. So, there is a huge, with respect, logical flaw in the proposition that it is conformable with the Constitution because an order will only be made in circumstances where it is in the interests of justice to do so.

The second proposition is this – or the second answer to that proposition is this that if that is correct and that is to say that the fact that an order will only be made when it is in the interests of justice to do so makes it conform or makes it compatible with the Constitution, if that is correct, then despite the fact that the constitutional freedom was discovered in the Constitution after Cojuangco the law has not moved on since Cojuangco in this sense, that Cojuangco requires a court considering a preliminary discovery order to take into account the importance of confidentiality of sources and the importance of the free flow of information. 

It seems that if the interests of justice make rule 5.2 conform to the Constitution then nothing has changed. Despite the fact that this constitutional protection has been discovered, it makes no difference to an application under rule 5.2 and the law has not changed since Cojuangco and that is another point that, in our respectful submission seems doubtful and which is worthy of being ventilated on an appeal in this matter.

GAGELER J:   A difficulty with that is that you do not focus on the content of the interests of justice in your proposed appeal.  It is all about the validity of the rule. 

HAYNE J:   …..a rule which contains a provision requiring regard to the interests of justice is, nonetheless, invalid absolutely to the extent you describe.  It is the absolute nature of this proposition which you advance.

MR BLACKBURN:   It is no difficulty at all, in our submission, to answer your Honour Justice Gageler’s question, yes, if the interests of justice are as we say simply another way of saying the interests, the private interests of the plaintiff in finding someone who he or she can successfully sue, yes, we accept, your Honour, that it is all or nothing and that those interests must give way to the protection of the source. 

But Lange, your Honour, is premised – Lange itself is premised on the lawfulness of the provision of false information.  Qualified privilege is a defence in confession and avoidance.  There is an assumption in the law of defamation that the defamatory meaning conveyed is false.  So Lange itself protects the conveying of false information provided that the defendant acted reasonably. 

So it is no real answer, in our submission, to what we say to say that this will encourage provision of false and malicious communications and so on.  That overlooks the filtering effect that will occur at the stage where the information gets to the newspaper.  I mean, journalists are – a matter conveyed to journalists every day, not all of it gets published.  Lange recognises that there is constitutional protection for the provision of a falsehood.

HAYNE J:   Thank you, Mr Blackburn.  We will not call on you, Mr McClintock or Mr Solicitor.

The applicants allege that Rule 5.2 of the Uniform Civil Procedure Rules 2005 (NSW) is invalid to the extent that it permits the making of an order for preliminary discovery of the identity of the source of a confidential communication on government or political matters. The applicants would have insufficient prospects of establishing this proposition to warrant a grant of special leave. Special leave is refused with costs.

AT 10.38 AM THE MATTER WAS CONCLUDED