oon Ft foam cttw on _- QAA CATCHWORDS DISCOVERY - public interest privilege - cabinet papers - class claim - documents concerning acceptance of tenders - no special confidentiality - whether privileged. Habours Corporation of Queensland v. Vessey Chemicals Pty. Limited \ Qld. G99 of 1985 ' - PINCUS J. BRISBANE [ 10 JULY 1986 e--- rf ue Re Ea ee a teen IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) QLD G99 of 1985 GENERAL DIVISION ) BETWEEN: HARBOURS CORPORATION OF QUEENSLAND Applicant AND: VESSEY CHEMICALS PTY. LIMITED Respondent MINUTES OF ORDER JUDGE MAKING ORDER: PINCUS J. DATE OF ORDER: 10 July 1986 WHERE MADE: BRISBANE THE COURT ORDERS THAT: NOTE: l. It be declared that the documents listed as nos. 1 to 7 in these reasons are not privileged but must be produced for inspection on request subject to: (a) the filing in this Court of an undertaking by Mr. J.M. Snowdon, the solicitor for the respondent, that he will not let any person (other than himself) on behalf of the respondent have access to such documents, unless the Court on application made permits wider access; (b) the sealing of such parts of documents nos. 2 and 4 as are concerned with the taking of legal action, and not concerned with the calling of tenders. The operation of order no. 1 be stayed until 24 July, 1986. The documents mentioned in par.2(c) of the applicant's list of documents be produced for inspection by the respondent's solicitors. The costs of and incidental to the hearing of Monday, 16 June, 1986 be taxed and paid by the applicant to the respondent, such taxation not to take place until further order or until a general order for costs is made in the proceedings. Settlement and entry of orders is dealt with in Order 36 ef the Federal Court Rules. en ~ oe i ae ad Serge IN THE FEDERAL COURT OF AUSTRALTA ) QUEENSLAND DISTRICT REGISTRY ) _ QLD G99 of 1985 GENERAL DIVISION ) BETWEEN: HARBOURS CORPORATION OF QUEENSLAND Applicant AND: VESSEY CHEMICALS PTY. LIMITED Respondent PINCUS J. 10 JULY 1986 REASONS FOR JUDGMENT This 1s an application by the respondent to the principal proceedings (Vessey) for further discovery against the applicant (the corporation). In the principal proceedings, the corporation claims damages under s.52 of the Trade Practices Act 1974 1n respect of a loss, estimated to be $5.6 million, said to have been incurred as a result of use of paints supplied by Vessey inan off-shore coal-loading facility at Abbott Point in this State. The statement of claim says that the corporation called tenders for the supply of paint and that Vessey proposed to supply a product described as "Vepox CC39" making certain representations as to its qualities. The corporation says the paint was not as represented and that the conduct of Vessey was misleading or deceptive, or likely to mislead or deceive. ct ahd i iid The eK " ee ee O 2. The parties have each given discovery to the other and the corporation, which is a Crown instrumentality, has claimed privilege in respect of certain documents being Cabinet minutes, submissions to Cabinet and drafts thereof. Vessey disclaimed any desire to see certain of the documents; those which finally came to be in issue are listed below. Mr. McGill, who appeared for the corporation, suggested that I might inspect the documents subject to the claim, and I did so. I didnot, however, gain any great advantage from that course. Since Mr. McGill has not based his case on the submission that there is anything especially confidential about the documents in question, the cocporation's claim of privilege is what is called, in Sankey v. Whitlam 142 C.L.R. 1, a "class claim". Leaving refinements aside, the claim is based on the view that Cabinet documents are protected unless some strong reason is shown to remove the protection; Mr. McGill says that applies particularly to documents relating to acceptance of tenders. It is argued by Mr. Snowdon, who appeared for Vessey, that an essential part of the corporation's case is to establish that the alleged misleading statements induced it to buy the paint. Since the disputed documents relate, in part, to the decision to do so, Mr. Snowdon argues that they may throw light on the question of what it was that induced the purchase; he says that since no significant disadvantage is claimed to accrue to the Crown from disclosure of the documents, it would be unfair to za Temes ee thee 3. allow the corporation to prevent Vessey from seeing the documents. My inspection of them has not enabled me to form a view as to whether their disclosure to Vessey would be of assistance to it in the case. One reason, perhaps, for counsel's invitation to me to inspect them was that they were thought to be innocuous; that may indeed be so, but it is not possible to infer from inspection of what is only a small fraction of the total of the documents that they will necessarily be of no assistance to Vessey's case. The case then falls for decision in an abstract way: the claim is, as I have said, a "class claim" based merely on the fact that the papers in question are Cabinet documents and it is not possible to say whether or not they will assist Vessey's case. It appears to me that resolution of the matter depends on whether, as Mr. McGill submitted, there is, on the authority of Sankey v. Whitlam 142 C.L.R. 1, a strong presumption in favour of protection of Cabinet documents; if so, then it would seem clear that Vessey has not shown any circumstances sufficient to override such a presumotion. The most recent authority in favour of the view put forward on behalf of the corporation as to the true effect of Sankey v. Whitlam is the judgment of Hutley J.A. 1n Prineas v. Forestry Commission of New South Wales (1984) 53 L.G.R.A. 160. That concerned a claim of privilege in respect of an environmental impact statement presented to the New South Wales Cabinet. After referring to remarks made by Gibbs A.C.J., as he then was, in - ee pee wen wo wrpepne wees ye es bee ese Sankey v. Whitlam, his Honour said at p.165, speaking of Cabinet documents: "Though he did not regard the privilege as absolute, it would be only in very special circumstances (cf. Lanyon Pty. Ltd. v. The Commonwealth (1974) 129 C.L.R. 650 at 653) that this should be departed from." Priestly J.A. disagreed with that, saying at p.168: "In my view there is no special rule of law relating to the privilege of this class of document: in regard to all documents it is a matter for the court, when privilege is claimed, to weigh the competing public interests before deciding whether the documents should be produced to the court and Made available to interested parties ... This seems to me to be a matter of importance in the conduct of litigation generally, namely that when questions of public interest privilege arise in a case in court, they are to be decided by the court, not after taking into account any supposed prima facie rules concerning the status of different classes of documents, but by reference to the facts of the particular policy considerations relevant to the documents in question in that case, in the light of their importance, or lack of it, to the issues in that case." The resolution of the present dispute depends upon whether the view of Hutley J.A.is right. That, in turn, is to be decided by an analysis of what was said in Sankey v. Whitlam (above) and what has been said about that case since. That is so because only a strong presumption in favour of protection of Cabinet documents could justify upholding the privilege here. The documents in question relate to a purchase of goods and performance of works. They are of a kind which any large enterprise, governmental or ose 7 tae 8 Me WPM Pam ew he — OE Se eT re 5. otherwise, would frequently produce. They are routine commercial documents relating to the decision which the corporation says was induced by Vessey's misleading conduct and to rectification work. It is necessary, to keep these reasons to a reasonable length, to attempt to summarize what I think is the effect of Sankey v. Whitlam, rather than set out the relevant passages fully. When Sankey v. Whitlam came before the High Court, authority favoured such a rule as mentioned by Hutley J.A.: see Conway v. Rimmer £1968] A.C. 910 at 952, Lanyon Pty. Ltd. v. The Commonwealth (1974) 129 C.L.R. 650 at 653. Indeed, in the former case Lord Reid favoured giving absolute protection to "all documents concerned with policy-making within departments including, it may be, minutes and the like by quite junior officials and correspondence with outside bodies"; one can understand the attractiveness of that view to those who believe the public should know only what is thought by the government to be of benefit to them. But there was some recent authority to the contrary: Attorney-General v. Johnathan Cape Ltd. [1976] 9Q.B. 752 at 764. Gibbs A.C.J. (as he then was) at p.41, after mentioning x these authorities, expressed himself in favour or the last-mentioned of them, saying that: "The fundamental principle is that documents may be withheld from disclosure only if, and to the extent, that the public interest renders it necessary." - yee w Neopeney 6. While conceding the existence of protection for a class of documents irrespective of contents (see p.43), his Honour said, in effect, that the measure of protection to be accorded would depend upon the subject-matter. Stephen J. referred to the Lanyon case and its like at p.57, but tended to confine those cases to the facts with which they were dealing. His Honour also, at p.62, used expressions which are quite contrary to the notion favoured by Hutley J.A.: "Those who urge Crown privilege for classes of documents, regardless of particular contents, carry a heavy burden. As Lord Reid said in Rogers v. Home Secretary (£19733 A.C. 388 at p.400 the speeches in Conway v. Rimmer £19683 A.C. 910 have made it clear 'that there 1s a heavy burden of proof' on those who make class claims." At p.63, Stephen J. returned to the theme that the cases giving strong protection to Cabinet papers should not be read as if they laid down a code of law. Reading his Honour's judgment as a whole, I take it to be authority for the view that there 1s no absolute protection for Cabinet papers, that they too must be subject to the balancing exercise of which so much was said in Sankey v. Whitlam. I do not read him, however, as having reached @ precise conclusion on the question whether Cabinet papers have the benefit of a strong presumption in favour of privilege. Mason J. emphasised that Cabinet papers must be subject to the balancing process (p.96), but said that special protection ee we wk 7. of Cabinet papers could not apply in respect of matters that are "no longer current". On that view, the papers here in question would have no special protection except, perhaps, those concerned with rectification work. Aickin J. agreed with the reasons of Stephen J., with some additions which it is unnecessary to mention. Two members of the Court considered the effect of Sankey v. Whitlam in the Queen v. Toohey; Ex parte Northern Land Council (1981) 151 C.L.R. 170. Mason J., at p.222, said of the case that Lt: "... Shows that proceedings of the Executive Council and documents relating thereto are not privileged from production unless their non-disclosure is necessary for the protection of the public interest and that public interest outweighs the public interest 1n the proper administration of justice." Aickin J., at p.262, said that "documents of the Crown and for the Crown in Council are prima facie the subject of privilege when claimed", but did not so express himself as to give any support to the idea that that presumption 1s a strong one: see especially at p.265. Lastly, the Court considered Sankey v. Whitlam in Alister v. The Queen 154 C.L.R. 404 at 434, but did not, as I read the judgment, say anything decisive of the present point. To look at the matter more broadly, it would he unfortunate if the law became settled in favour of the rule 8. mentioned by Lord Reid in his reference to junior officials in Conway v. Rimmer, or even that favoured by Hutley J.A. The members of the Cabinet of the United Kingdom government, for example, have by no means always treated its deliberations as secret, as the facts of the Jonathan Cape case (above) illustrate. Apart from wholesale revelations of the sort there in question, there seem, from perusal of the daily newspapers, commonly to be disclosures by governments of Cabinet matters which never find their way into official publications - for example that a particular member of the Cabinet has pressed for a certain view and been successful, or otherwise. I am far from thinking that such disclosures are harmful, but it would be unfortunate if the courts assisted the growth of a system under which only those items of governmental information are revealed which a member, or members, of Cabinet think it politically advantageous that the public should know, disclosure of anything else being tightly guarded, and indeed visited with heavy penalties. Insofar, then, as there is any uncertainty as to what Sankey v. Whitlam dictates should be done with the present case, I confess a leaning against a rule such as that espoused by Lord Reid. Not a great deal 1s to be gained by analysing at length the contents of the affidavit claiming privilege. It does not assert that there is any disadvantage likely to accrue to the Crown from disclosure of the documents, of a kind different from that likely to accrue to any large organisation deciding to buy one type of article rather than another. For example, the point -ye ce eee mes awe Rt wae aro NO mm I a) BD Ne is made that Ministers should be able to put their views before Cabinet about tenders without risk that they be disclosed to tenderers in general, that advice should be able to be given to the Ministers on the subject freely and candidly without concern that it be subject to public scrutiny; these sorts of objections apply, as it seems to me, with equal force to disclosure of, for example, documents associated with a decision by any commercial organisation which regularly invites tenders. The only other point made in the affidavit which should be particularly mentioned is that the deponent says: "Te has always been the view in Queensland that documents in this class are secret and confidential, that such secrecy is necessary for the efficient and effective discharge of the process of government and under the system in operation in the State of Queensland, involving as it does the taking of particular types of decisions by the Executive Council, or the Cabinet, or individual Ministers." Mr. McGill referred me to no authority in favour of the view that the law in Queensland on the subject under discussion differs from that in other States. It seems clear that the matter should be dealt with on the basis that there is no legal rule or factual consideration peculiar to Queensland involved in the case. These reasons assume that the question is a perfectly general one. Mr. McGill also relied upon the apparent approval by Mason J. at p.98 of the report of Sankey v. Whitlam of a view expressed by the Franks Committee that a government "must be able seen "oe Sw Wet 10. to preserve the confidential nature of its internal processes, especially at the highest levels of policy-making". But the policy of the government is, under our system, fully open to examination by Parliament which is, at least legally, at a higher level than Cabinet. It publicly exercises the responsibility of determining whether that policy should be turned into law. There are obviously some Cabinet matters, such as budget discussions and many others, which really need to be kept secret. But, such cases aside, were the matter res integra one might ask why the process of policy discussion in Cabinet should be thought to gain from legally-enforced secrecy, whereas those who debate the same matters in Parliament must accommodate themselves to quite the opposite theory. However that may be, there is not really, in my view, a question here of disclosing Cabinet discussions. The documents in question are the following: 1. The recommendation of the director of the Department of Harbours and Marine to the Minister for submission to Cabinet with respect to the approval of the acceptance by the corporation of the tender from the respondent to supply paint (vide par.4(a) of the affidavit of John Leech). 2. A draft of that recommendation (par.5(a) of the said affidavit). "ee s il. 3. A Cabinet minute relating to the decision to call tenders for the reinstatement of protective coating for the piles on the structure (par.4(b) of the said affidavit). 4. A submission to Cabinet by the then Minister relating thereto (par.4(b) of the said affidavit). 5. A submission to Cabinet of the Minister to accept a tender for the reinstatement works (par 4(d) of the said affidavit). 6. A draft thereof (par.4(d) of the said affidavit). 7. A recommendation of the director of the said department to the Minister for submission to Cabinet (par.4(d) of the said affidavit). As to the third and fourth documents, the decision in question related to two matters, namely calling tenders and taking legal action. Vessey has no right to discovery of the latter and did not seek it. Some covering-up of parts of the relevant documents will be necessary. It should be added that Mr. Snowdon disclaimed any desire to see documents which might disclose secret processes of Cabinet. No such processes are disclosed by any of the documents listed, which appear to be perfectly conventional documents of a commercial type. " a fa RE et a Gewe wP 12. In my view, it would be unfair for the corporation to have whatever advantage may be gained by preventing access to the documents listed above. The suggestion that the public interest may be harmed by their disclosure seems to me rather fanciful, and risk of such harm may be minimised by restricting access, at least at this stage, to Mr. Snowdon, on the basis of an undertaking that the documents and information therein are not to be disclosed to the respondent. It appears to me likely to be unnecessary that such a disclosure take place for the purpose of prosecution of the action, but if Vessey's legal advisers come to forma _ contrary view, they may apply for variation of my order. The operation of the order will be stayed for 14 days, in accordance with the view expressed at p.43 of the report of Sankey v. Whitlam. Vessey's application raised a number of other questions relating to the discovery, which has apparently proved to be a most complex and expensive procedure. The good sense and spirit of co-operation of the parties have, however, solved most of the problems, or are likely to do so. The only question, apart from the matter of privilege just discussed, with which it is necessary to deal ais the corporation's claim to protection for technical reports and associated documents mentioned in par.2(c) of its list of documents. Mr. McGill argued that there 1s a discretion not to require production of those documents, on the ground that' the corporation obtained them pursuant to an undertaking to keep them confidential. He said that the undertaking, while it did not, of course, cover production pursuant to the obligation to make sat eee TY - ee ee ay ware e 13. discovery, implied that the corporation would resist discovery, which it therefore did. In other circumstances such a claim might raise difficult questions, but here it seems clear that a substantial part of the mater1al has already been disclosed to Vessey, presumably through inadvertence. In my view it would be a proper exercise of discretion to require disclosure of the balance. There will therefore be an order that the documents mentioned in par.2(c) of the applicant's list of documents be discovered. While there may have been some misunderstanding between the parties as to the intended scope of the hearing, and the respondent has not had complete success on the issues debated, it seems to me that it has been substantially successful and should have its costs. There will therefore be an order that the costs of and incidental to the hearing on Monday, 16 June 1986, be taxed and paid by the applicant to the respondent, such taxation not to take place until further order or until a general order for costs 1s made in the proceedings. } certify that this and the /@ preceding Pages are a true copy of the reasons for judgment herein of His Honour Mr. Justice Pincus BL Ayore . Dated /O GS nq eee eee