The State of New South Wales v Ryan, Grant

[1998] FCA 1057

FEDERAL COURT OF AUSTRALIA

PRACTICE AND PROCEDURE – discovery – claim of public interest immunity in respect of Cabinet documents – document prepared in department for the sole purpose of being submitted to Cabinet – effect of concession that document was otherwise discoverable – principle that claim of public interest immunity is not absolute, but must be weighed against the competing public interest in the advancement of justice – whether the weighing process can be reduced to a mere assessment of the contents of a Cabinet document as not warranting protection – significance of the view of a responsible representative of government – right of government to intervene and to appeal – significance of the fact that document involved implicit recommendations on matters of current controversy – whether general law in respect of discovery in this area has been amended by virtue of s 130 of the Evidence Act 1995 – whether a case for leave to appeal was made out.

EVIDENCE – discussion of the effect of s 130 of the Evidence Act 1995 on a claim of public interest immunity in relation to discovery procedures.

Evidence Act 1995 (Cth), s 130

Commonwealth of Australia v Northern Land Council (1993) 176 CLR 604, applied
Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397, followed
Lanyon Pty Ltd v The Commonwealth of Australia (1974) 129 CLR 650, applied
Zarro v Australian Securities Commission (1992) 36 FCR 40, referred to
Sankey v Whitlam (1978) 142 CLR 1, applied
Adelaide Steamship Co Ltd v Spalvins (1998) 152 ALR 418, discussed
Conway v Rimmer [1968] AC 910, referred to
Alister v The Queen (1984) 154 CLR 404, cited

THE STATE OF NEW SOUTH WALES v GRANT RYAN

NG 894 of 1998

BURCHETT, HILL AND MADGWICK JJ
SYDNEY
2 SEPTEMBER 1998

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 894 of 1998

BETWEEN:	THE STATE OF NEW SOUTH WALES Appellant
AND:	GRANT RYAN Respondent
JUDGES:		BURCHETT, HILL AND MADGWICK JJ
DATE OF ORDER:		28 AUGUST 1998
WHERE MADE:		SYDNEY

THE COURT ORDERS THAT:

1. Leave be granted to appeal against the orders made on 24 August 1998 and 25 August 1998 in respect of so much of Appendix 3 referred to therein as has not been disclosed to the Applicant in the principal proceeding.

1. The appeal be allowed; order 2 of the orders made on 24 August 1998 be varied to the extent required by the declaration now made by this court; and the orders made 25 August 1998 be set aside.

1. It be declared that the State of New South Wales is not required to produce on discovery so much of the said Appendix 3 as has not been disclosed to the applicant in the principal proceeding.

1. The costs of the application made to the primary judge on 25 August 1998 be costs in the application of 24 August 1998.

1. The Respondent (the applicant in the principal proceeding) pay the costs of the applications for leave to appeal against the orders made on 24 August 1998 and 25 August 1998 and of the appeal in respect thereof.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 894 of 1998

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	THE STATE OF NEW SOUTH WALES Appellant
AND:	GRANT RYAN Respondent

JUDGES:	BURCHETT, HILL AND MADGWICK JJ
DATE:	2 SEPTEMBER 1998
PLACE:	SYDNEY

REASONS FOR JUDGMENT

THE COURT

A judge of the court having made an interlocutory order requiring the State of New South Wales ("the State") to produce on discovery by 4 pm on the same day a document in respect of which the State claimed public interest immunity, it being a cabinet document, an application was made to the duty judge by the State for leave to appeal and for a stay of the order for production.  The application was referred to this full court which, as a trial of the principal action is imminent, heard argument on all aspects, including the substance of the appeal if leave were to be granted, as a matter of urgency.

During the course of the argument, it was made clear that the State, without withdrawing its contentions, had complied with the judge's decision in respect of the greater part of the document in question, and sought to appeal only in respect of a comparatively small number of passages.  The judge had read the document for the purposes of giving his decision, but had not had his attention specifically directed to these passages.  So as to understand the State's contention, it was necessary for the full court also to read the document, the reading of which revealed that, on the face of them, the passages in question did have a character somewhat different from that which the learned judge, in his reasons, ascribed to the bulk of the document.  (We should add that we see no reason at all to differ from his Honour's description, as applied to the bulk of the document, nor did we understand the State to ask us to do so.)  In this situation, there seemed to us to be a risk that the question of the validity of the ground of appeal sought to be raised might be obscured by a rather arid argument about what was implicit in the broad submission, put by the State below, that the whole document was privileged.  We thought it would be fairer to all concerned to allow the State a brief adjournment, so that it could apply to the primary judge for a variation of his order, identifying for his examination the particular passages to which special considerations were said to apply.  We had particularly in mind that the hearing of the action was close, and that interlocutory complications should be minimised, so far as an acknowledgment of the rights of the parties would permit.

The State did apply for a variation of the order, which was denied with costs.  On the resumption of the hearing before this court, leave was sought to appeal from that decision also.

The re-amended statement of claim in the principal proceeding, which is a very lengthy document, contains a number of claims against the State, framed in negligence.  These claims have their origin in an outbreak of illness alleged to have been caused by the consumption of oysters contaminated with hepatitis A virus, that had come from oyster farms in the Wallis Lake region.  The respondent alleges that the State (inter alia) negligently failed to determine quality assurance programmes for shellfish, and to develop and implement suitable programmes for oyster farmers in the Wallis Lake region; that its Environment Protection Authority negligently failed to take steps to ensure that the Great Lakes Council did not pollute the region with sewage, that others did not pollute the region, and to monitor the quality of the water there; and that the State, through the Director-General of the Department of Health and Minister for Health, was negligent in failing to ensure that purification plant operators processing oysters in the region complied with the conditions of their permits, that bacteria or viruses were removed from oysters, and that oysters were not harvested or sold when likely to be unfit for human consumption.  We have not attempted to be exhaustive, but merely to summarise the nature of the claims made.

The pollution of Wallis Lake, with the consequential threat to people and to the oyster industry, was a matter of serious concern to the Government of the State.  The Premier requested the Minister for Health, who was also the Deputy Premier, to report to cabinet on the matter.  A report was written in response to this request, as the affidavit of the Director-General of the Cabinet Office of New South Wales shows, "for the sole purpose of being submitted to the Cabinet to assist the Cabinet in considering matters of high public policy and administration".  The affidavit also shows that two appendices to that report (including the document with which the court is now concerned, Appendix 3) "were written in response to the Premier's request and for the sole purpose of being submitted to the Cabinet to assist the Cabinet in considering matters of high public policy and administration".  Although the affidavit does not state the author of Appendix 3, a clear inference arises from it that this document was produced within the Department of Health.  The report with its appendices was considered by cabinet on 29 April 1998, when deliberations on it were adjourned to a date to be fixed.  As yet, no final decision has been made on the matters raised, or on the recommendations made, in these documents.

Although no subpoena or notice to produce was issued, the respondent sought production of the cabinet documents to which we have referred, and the State sought by motion on notice a decision from the primary judge that it was not required to produce these documents by reason of public interest immunity.  The judge ruled in favour of the State in respect of the Minister's report itself, but made in respect of Appendix 3 the order for peremptory production to which we have already referred.

In his reasons, the judge summarised the nature of Appendix 3 as follows:

"It bears the heading 'An Evaluation of Oyster Industry Safeguards', and opens with a photocopy of an article published in a Sydney newspaper in March 1997.  The document then summarises what it calls 'Weaknesses in Current Safeguards' and refers, over 12 pages, to occurrences of oyster-borne disease overseas and in Australia and the current New South Wales controls on oyster safety.  A large proportion of the analysis is concerned with the laws currently in place, although some reference is also made to current administrative practices and weaknesses.  Reference is made to current action by the Waterways Authority in relation to the control of sewage discharge from vessels."

As we have said, the fairness of this as a general description of Appendix 3 is not challenged.  But it should be stated clearly that every sentence of those portions of Appendix 3 which were in issue upon the motion for variation made to the judge during the adjournment of the application to this court, and were the subject of the application for leave to appeal, contains either an express or an implicit recommendation, with one arguable exception.  Of course, without reading the report itself signed by the Minister, one cannot say whether these recommendations were reflected in precise terms in that report; but inclusion of the Appendix meant that they were put before cabinet.  Accepting that those recommendations which are only implicit are necessarily general, they could well have been the subject of discussion in cabinet, and may yet be, since the whole subject is still awaiting cabinet's decision.

A matter on which the primary judge relied, and which was emphasised both in the respondent's submissions and in the second judgment, by which the motion to vary was dismissed, is the concession made by the State that the report with its appendices is, apart from the question of public interest immunity, a discoverable document.  But this does not mean that every passage in it is of significance, and in particular, it does not mean that the disputed passages are of significance.  In Commonwealth of Australia v Northern Land Council (1993) 176 CLR 604 at 613-614, Mason CJ, Brennan, Deane, Dawson, Gaudron and McHugh JJ, in their joint judgment, said:

"The Commonwealth made discovery of these documents and there is no dispute, therefore, that they were discoverable.  That is to say, it may be assumed that the notebooks contain entries which relate to matters in issue in the action in the sense they would, or would lead to a chain of inquiry which would, either advance the Northern Land Council's case or damage that of the Commonwealth."

This, plainly enough, is the effect of an admission of discoverability, an effect which leaves it an open question whether particular passages in dispute are or include entries of the kind described in the joint judgment.

In the present case, neither the original judgment of the primary judge, nor his second judgment, contains any finding which shows, or from which it can be inferred, that the disputed passages contain material that is of such significance that the interests of justice call for it to be made available to the respondent.  Indeed, having noted that the document is conceded to be discoverable, his Honour, in his second judgment, states that "the only question is whether the doctrine of public interest immunity dictates the suppression of the relevant passages".  He draws attention to the fact that certain of them "are not specific", and then comments:

"They may forensically embarrass the State in the current litigation; although it is not clear to me how the applicant [ie the present respondent] could make much use of those points, except perhaps in the course of cross-examination."

This leaves open a possibility, but does not actually make a finding even of usefulness for the purpose of embarrassing a witness in the course of cross-examination.  The judge comments of another passage that it "is put in the language of surmise and comes from an unidentified author".  The whole tenor of the second judgment is that none of the passages in dispute would carry weight in any consideration of the topics with which they deal.  The State says that his Honour's approach, in this respect, involves a serious error of principle, sufficient to vitiate his decision, and that substantial injustice has been caused thereby, having regard to the importance of the principle conferring public interest immunity on cabinet papers.  On this basis, it is submitted that the case meets the test for a grant of leave to appeal against an interlocutory decision stated in Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397. Cf Zarro v Australian Securities Commission (1992) 36 FCR 40 at 51, per Lockhart J, and 58, per Gummow J.

Authorities binding on this court justify the statement of a number of propositions about what have been called cabinet papers.  There is no doubt that the document with which we are concerned falls within that description as it is used in these authorities.  In Lanyon Pty Limited v The Commonwealth of Australia (1974) 129 CLR 650 at 653, Menzies J, "without examination of the documents", upheld a claim for privilege "for documents of a particular class or classes which may be described as documents brought into existence within government departments and instrumentalities for consideration in formulating a submission to cabinet and recording the decision of cabinet, its committees or sub-committees thereon." His Honour said:

"The basis upon which I do so … is that 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."

This decision was cited by Gibbs ACJ in Sankey v Whitlam (1978) 142 CLR 1 at 39 as authority for the proposition that "papers brought into existence for the purpose of preparing a submission to cabinet" belonged to "a class of documents which in the public interest ought not to be produced, whether or not it would be harmful to disclose the contents of the particular document". Lanyon was also cited in Sankey v Whitlam (at 57) by Stephen J (with whom Aickin J agreed), and (at 95) by Mason J, without any suggestion that Menzies J had given too wide an ambit to the category of cabinet papers. Indeed, Mason J said (at 99):

"To ensure that the protection given to cabinet proceedings is effective, documents and communications passing between a Minister and the head of his department relating to cabinet proceedings and material prepared for cabinet must be protected."

It has been clearly laid down, in Sankey v Whitlam and in Commonwealth v Northern Land Council, that the protection accorded to cabinet documents is not absolute.  As it was put in the latter case (at 616) in the joint majority judgment:

"The claim of public interest immunity must … be weighed against the competing public interest of the proper administration of justice, which may be impaired by the denial to a court of access to relevant and otherwise admissible evidence."

However, the joint judgment sounds (at 617) a specific warning against reducing the weighing of the two competing public interests to a mere assessment of the contents of a document, such as a cabinet document, as not warranting protection.  Their Honours who joined in that judgment cite the statement of Gibbs ACJ in Sankey v Whitlam (at 43):

"If a strong case has been made out for the production of the documents, and the court concludes that their disclosure would not really be detrimental to the public interest, an order for production will be made."

But they are careful to add:

"Gibbs A.C.J. was referring no doubt to the outcome of a balancing process in a case where the detriment to the public interest involved in disclosure was outweighed by the public interest in the advancement of justice.  In a case where a document fell into a class of document the disclosure of which would be injurious to the public interest regardless of the contents, a court could conclude that 'disclosure would not really be detrimental to the public interest' only in circumstances where there was a competing public interest, such as the public interest in the advancement of justice, which outweighed the public interest in the preservation of confidentiality."  (Emphasis added.)

The joint majority judgment makes it clear (at 618-619) that documents recording the actual deliberations of cabinet, as distinct from other cabinet documents, have "a pre-eminent claim to confidentiality".  That means that the weighing process will not often produce the result that the interests of justice require disclosure.  "Indeed", their Honours said, "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."  While this case is not one involving records of that kind, the matter to be emphasised is that, both in the case of documents recording the deliberations of cabinet and in the case of other cabinet documents, the question for the court is "whether the relevance of the material to the proceedings in which disclosure is sought is sufficient … to justify disclosure". 

In a case where the court has to weigh the competing public interests, it is required, in doing so, 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.  In Sankey v Whitlam, Gibbs ACJ said (at 44) that the court is "required to give proper respect to the assertion by the Minister or departmental head that production would be contrary to the public interest", and he reiterated the point, using the expression “[f]ull respect”, at 46. In the same case, Stephen J quoted (at 59-60) a statement by Lord Pearson to similar effect, and Mason J said (at 96) that the court "will give weight to the Minister's opinion that the documents should not be produced". Since the public interest on which the immunity is based is concerned with the protection of the inner workings of government, this proposition is inevitable. For the same reason, Gibbs ACJ in Sankey v Whitlam drew attention (at 43) to the need, in cases in which the government is not a party, to provide it a proper opportunity to intervene before any order for disclosure is made.

Gibbs ACJ continued, after making the point which has just been mentioned:

"Moreover no such order should be enforced until the government concerned has had an opportunity to appeal against it, or test its correctness by some other process, if it wishes to do so (cf. Conway v. Rimmer [1968] A.C., at p. 953)."

In Conway v Rimmer, at the page cited, Lord Reid asserted "it is important that the Minister should have a right to appeal before the document is produced."  Although Sankey v Whitlam was an appeal in an action for declarations, it should be observed that Conway v Rimmer arose out of an interlocutory order in relation to discovery.  See also Alister v The Queen (1984) 154 CLR 404 at 415.

In our opinion, in the present case, an error of principle was involved in the failure of the primary judge to weigh any significance the material in question might have had for the advancement of justice in the litigation against the public interest in the withholding from disclosure of cabinet documents.  As the six High Court judges who wrote the joint majority judgment in Commonwealth v Northern Land Council emphasised, it is not enough to weigh (and find wanting) the importance to the government of disclosure of the particular facts which would be revealed by production of the cabinet material in question.  Only a sufficient demand of justice can outweigh the protection to which cabinet documents are entitled in virtue of their nature, irrespective of those facts.  Furthermore, the authorities also require weight to be given to the government's claim that disclosure of the document would be harmful, and it is simply not correct that disclosure of recommendations couched in broad terms, or which are implicit rather than express, could not justify this claim.  On the contrary, recommendations of any kind contained in a document submitted to cabinet are quite likely to have been involved in the deliberations of cabinet.  In this case, those deliberations were recent, and have not yet been concluded.  The subject is controversial.  As Mason J said in Sankey v Whitlam (at 97), "the efficiency of government would be seriously compromised if Cabinet decisions and papers were disclosed whilst they or the topics to which they relate are still current or controversial". Accordingly, error is demonstrated, and substantial injustice would result to the State if leave were refused to appeal against an erroneous decision denying the privilege claimed.

Before the primary judge, and also on appeal, the respondent argued that the principles to be applied were no longer precisely those stated in the High Court decisions, but were those now to be found set out in s 130 of the Evidence Act 1995. Reference was made to Adelaide Steamship Co Ltd v Spalvins (1998) 152 ALR 418, where a Full Court of this Court held (at 429), in relation to legal professional privilege or client legal privilege, as it has recently come to be called, that "in so far as previously established principles of the common law are now inconsistent with [the Evidence Act 1995] and its purposes, they are to be taken as being modified correspondingly so as to avoid such inconsistency". There was startling inconsistency in respect of that privilege, which the court held overrode both the fact that the Evidence Act does not address processes, including discovery, that are ancillary to a proceeding, and also the fact that the Australian Law Reform Commission did not propose that the Act should apply to such ancillary processes (see the joint judgment in Adelaide Steamship at 427). The court was not asked to reconsider Adelaide Steamship, but it does not follow from that decision that the common law is to be taken as altered, for purposes other than those of the adducing of evidence, by the very different type of provision contained in s 130.

However, we do not need to reach a decision on that question in the present case.  For the reasons of the primary judge do not suggest that he perceived any difference, in relation to a claim of public interest immunity for cabinet papers, between the common law as determined by the High Court in Sankey v Whitlam and Commonwealth v Northern Land Council and the provisions of s 130. Nor do we perceive any relevant difference. In Odgers, Uniform Evidence Law (3^rd ed, 1998), it is pointed out (at 421) that the Australian Law Reform Commission, in the report which led to the Act, announced its intention "to interfere as little as possible with the common law as it has developed with respect to public interest privilege". Certainly, s 130 was not meant to achieve a general setting aside of the exposition of the law in Sankey v Whitlam, for the Commission's report refers specifically (as is noted in Odgers at 427-428) to the question whether the Act should include a provision "to enable an appeal from [a] ruling" on the disclosure of documents relating to matters of state, and concludes that such a provision would be unnecessary "in view of the decision of the High Court in Sankey v Whitlam".

As we have made clear, the present matter does not require a conclusion as to whether some change of the law may be found in s 130. No intention appears from the section to amend the principles which govern this case. Indeed, the principle the importance of which we have held the court must recognise, but the primary judge overlooked, is placed first among the factors to be taken into account under s 130(5): the court "is to take into account … the importance of the information or the document in the proceeding". It was his Honour's virtually exclusive concentration on the contents of the document and on the passages in question as they might affect, not the proceeding, but the interests of government, which - together with his Honour's failure to attribute weight to the sensitivity of cabinet documents, irrespective of the particular statements in them, and to the objection of a responsible representative of government - has led us to hold that the exercise of discretion in this case miscarried.

Having therefore been required to consider the matter for ourselves, we were clearly satisfied that the passages in question did not have any substantial significance for the action, and that such significance as they did have was outweighed by the importance of the protection of cabinet papers of this kind.  Accordingly, we made the orders which were announced on 28 August 1998.

After we had announced our orders, we were asked to reconsider the question of costs. We have done so, but, having regard to the issues and the success of the appellant in respect of the matters argued, we confirm those orders. The respondent should have a costs certificate under s 6(1) of the Federal Proceedings (Costs) Act 1981.

I certify that this and the preceding nine (9) pages are a true copy of the Reasons for Judgment herein of the the Court

Associate:

Dated:             2 September 1998       

Solicitor for the Appellant:	Mr P Singleton of the Crown Solicitor
Counsel for the Respondent:	Mr J B R Beach
Solicitor for the Respondent:	Slater & Gordon
Dates of Hearing:	25, 27 August 1998
Date of Judgment:	2 September 1998