FEDERAL COURT OF AUSTRALIA NT Power Generation Pty Ltd v Power & Water Authority [1999] FCA 1185 NT POWER GENERATION PTY LIMITED (ACN 061 314 921) v POWER AND WATER AUTHORITY and GASCO PTY LIMITED (ACN 009 627 801) D5 OF 1999 MANSFIELD J DARWIN 18 AUGUST 1999 IN THE FEDERAL COURT OF AUSTRALIA D5 OF 1999 NORTHERN TERRITORY DISTRICT REGISTRY BETWEEN: NT POWER GENERATION PTY LIMITED (ACN 061 314 921) Applicant AND: POWER AND WATER AUTHORITY First Respondent GASCO PTY LIMITED (ACN 009 627 801) Second Respondent JUDGE: MANSFIELD J DATE: 18 AUGUST 1999 PLACE: DARWIN REASONS FOR DECISION HIS HONOUR: 1 In the course of giving discovery in this matter, the respondents have discovered certain documents but have claimed that they should not be produced on the ground of public interest immunity. That claim is in respect of a range of documents identified in the schedule exhibited to the affidavit of Paul Charles Wilford Tyrrell, sworn on 28 July 1999. It is an extensive list running to thirty-four pages and in excess of four hundred documents. The documents are all described in the schedule. As Mr Tyrrell says in his affidavit, they fall into six categories. Those categories are described in par 7 of his affidavit as follows: (i) Cabinet Submissions and attachments thereto; (ii) Draft Cabinet Submissions; (iii) Cabinet information papers; (iv) Comments on Cabinet Submissions; (v) Cabinet Decisions; and (vi) Miscellaneous documents comprising memoranda, facsimile messages, reports, letters, status reports on Cabinet Decisions, Cabinet Submission schedules, Ministerial correspondence, minutes to the Treasurer and minutes of meetings. 2 Category (vi) of that group is further explained in par 9 of his affidavit. They comprise communications between senior public servants, or between senior public servants and their Ministers, discussing or referring to the content of Cabinet Submissions and Cabinet Decisions. There are six additional documents which are included in category (vi) but do not meet that description. They are: an extract from the minutes of meeting of the Northern Territory Electricity Commission held on 30 April 1990 disclosing a request by the responsible Minister to prepare a Cabinet Submission and indicating the position the Minister proposes to adopt in the submission; a list of the first respondent of Cabinet Submissions prepared between January and March 1996 including details of the Minister's purpose in taking those Submissions to Cabinet; three status reports disclosing the details of Cabinet decisions and the steps taken to implement them prepared by the entity responsible for monitoring their implementation; and a facsimile message from a consultant to the first respondent to the first respondent commenting upon a draft Cabinet Submission as part of the process of refining that Cabinet Submission. 3 As the list shows, the claim for public interest immunity covers an extensive period which upon my examination extends from 1 August 1978 until the most recent document, apparently, of 1 April 1999. 4 Mr Tyrrell is Chief Executive Officer of the Northern Territory Department of the Chief Minister and secretary to Cabinet. He is responsible for the operations of the Cabinet Office including organisation, collation and circulation of Cabinet Submissions and the recording of decisions of Cabinet. I am satisfied that he is a person who is at a level of responsibility appropriate to make the claim for public interest immunity. I accept his evidence that he has perused the documents on the list. 5 Counsel for the applicant, Mr Bannon of senior counsel, sought leave to cross-examine Mr Tyrrell on his affidavit. His purpose was not to explore the contents of the documents in respect of which the claim for public interest immunity was made, but to tease out the significance of certain expressions in his affidavit and the nature of certain general concerns or claims made by him. I declined that application. I did not consider that this was one of those rare cases in which cross‑examination on the affidavit should be permitted: Young v Quinn (1985) 4 FCR 483. I indicated at the time that in my view it was not appropriate to read into the affidavit more than the claim as it was expressed. It were a claim that might have been made more forcefully, or clearly, my view is that I should treat the affidavit as expressing the basis of the claim at its appropriate level and carrying no more force than it is stated to carry. 6 After describing the process by which Cabinet Submissions are prepared and submitted to Cabinet, and how Cabinet decisions are disseminated, Mr Tyrrell describes the basis of the claim. It is that the disclosure of the documents would be injurious to the public interest and that it would adversely affect the processes and functioning of Cabinet. He then identifies, in the following paragraphs of his affidavit, the detailed grounds for those concerns. They are, using perhaps a shorthand and unduly brief description of the matters he refers to, as follows: (1) It is desirable in the public interest to preserve the convention of collective Cabinet responsibility, by not exposing views of individual Ministers or by not exposing circumstances where the views of individual Ministers proposing a recommendation to Cabinet were not accepted by Cabinet. (That concern extends to Cabinet Submissions, Cabinet Minutes, draft Cabinet Submissions and comments on Cabinet Submissions which may disclose the views of particular Ministers or their recommendations in the ultimate decision-making process). (2) It is desirable in the public interest to ensure that Cabinet Submissions not be able to be compared to Cabinet Recommendations or to papers which might disclose a Cabinet Recommendation, because in the course of consideration other matters may have been addressed by Cabinet. The comparison to which Mr Tyrrell refers might not reveal those additional matters. Such comparison may therefore give rise to a skewed or misleading view of the nature or quality of the process of Cabinet deliberations. (3) It is desirable in the public interest not to inhibit Ministers or senior public service officers who are involved in the process of preparing and commenting on proposed Cabinet Submissions, from making candid and blunt assessments about policy options or their implications, or from making comments on a possible range of other matters by the risk of those views being exposed to disclosure beyond their intended readers. In addition, such comments should be able to be made without the risk of them being exposed to persons or entities about whom comments are made, or of them being exposed to those who might be involved in or party to dealings with the Government on the issues which those documents are addressing, for example Commonwealth, State or Local Government bodies. 7 I have no difficulty in accepting that the documents are of the nature described and in various respects that their disclosure to the applicants may have the adverse impact on the public interest in one or more of the ways which Mr Tyrrell has identified. 8 Being satisfied that there is a foundation for the claim is not the end of the matter. The principles upon which I should address the question are now clear enough. They are identified in Sankey v Whitlam (1978) 142 CLR 1 per Gibbs ACJ at 38-39 in the following terms: "The general rule is that the 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. However the public interest has two aspects which may conflict. These were described by Lord Reid in Conway v. Rimmer [1968] A.C., at p.940, as follows: "There is the public interest that harm shall not be done to the nation or the public service by disclosure of certain documents, and there is the public interest that the administration of justice shall not be frustrated by the withholding of documents which must be produced if justice is to be done." It is in all cases the duty of the court, and not the privilege of the executive government, to decide whether a document will be produced or may be withheld. The court must decide which aspect of the public interest predominates, or in other words whether the public interest which requires that the document should not be produced outweighs the public interest that a court of justice in performing its functions should not be denied access to relevant evidence. In some cases, therefore, the court must weigh the one competing aspect of the public interest against the other, and decide where the balance lies." 9 Similar views were expressed by Stephen J at 49 and by Mason J at 95-96. 10 The claim is what is called in some of the cases a "class claim". There is no particular document or documents about which Mr Tyrrell expresses a particularly potential adverse impact on the public interest by reason of its particular content. In the case of a class claim, Gibbs ACJ in Sankey said at 39: "The claim is to withhold the documents because of the class to which they belong. Speaking generally, such a claim will be upheld only if it is really necessary for the proper functioning of the public service to withhold documents of that class from production." 11 However, immediately following that passage his Honour said of "Cabinet documents" (to use that description to encompass the different types of documents identified by Mr Tyrrell): "However it has been repeatedly asserted that there are certain documents which by their nature fall in a class which ought not to be disclosed no matter what the documents individually contain; in other words that the law recognizes that there is a class of documents which in the public interest should be immune from disclosure. The class includes cabinet minutes and minutes of discussions between heads of departments (Conway v. Rimmer [1968] A.C., at pp. 952, 973, 979, 987, 993; Reg. v. Lewes Justices; Ex parte Home Secretary [1973] A.C., at p.412; Australian National Airlines Commission v. The Commonwealth (1975) 132 C.L.R. 582, at p.591), papers brought into existence for the purpose of preparing a submission to cabinet (Lanyon Pty. Ltd. v. The Commonwealth (1974) 129 C.L.R. 650, and indeed any documents which relate to the framing of government policy at a high level (cf. In re Grosvenor Hotel, London [No.2] [1965] Ch. 1210, at pp. 1247, 1255." 12 Steven J at 57 described that class of documents as "pre-eminently one for the application of the privilege". In Australian National Airlines Commission v The Commonwealth (1975) 132 CLR 582 Mason J at 591 also recognised the status that a document of that description enjoyed. 13 In Sankey, Gibbs ACJ at 40ff identified the reasons for those conclusions, including the need to encourage candour and communications concerning public policy and decision making. I note that certain other judges tend to suggest that that particular matter is not of great weight in the balancing deliberations of the courts (for instance per Mason J in Sankey at 97). Gibbs ACJ also identified the desirability of protecting the process of decision making from ill-informed public criticism and the need to give effect to the convention of collective Cabinet responsibility. That last mentioned matter was one upon which Mason J (at 97-98) placed particular significance. 14 Nevertheless, as Gibbs ACJ said (at 41-42): "The fundamental principle is that documents may be withheld from disclosure only if, and to the extent, that the public interest renders it necessary. That principle in my opinion must also apply to state papers. It is impossible to accept that the public interest requires that all state papers should be kept secret for ever, or until they are only of historical interest." 15 His Honour also said (at 43): "The fundamental and governing principle is that documents in the class may be withheld from production only when this is necessary in the public interest. In a particular case the court must balance the general desirability that documents of that kind should not be disclosed against the need to produce them in the interests of justice. The court will of course examine the question with especial care, giving full weight to the reasons for preserving the secrecy of documents of this class, but it will not treat all such documents as entitled to the same measure of protection – the extent of protection required will depend to some extent on the general subject matter with which the documents are concerned. 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. In view of the danger to which the indiscriminate disclosure of documents of this class might give rise, it is desirable that the government concerned, Commonwealth or State, should have an opportunity to intervene and be heard before any order for disclosure is made. 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.)" Documents which may be described as cabinet documents are not outside the general rule. Mason J in Sankey (at 96) gave the example of cases where Cabinet documents are of purely historical significance. It is clear from his Honour's observations (at 98) that it is not only in those cases that access to Cabinet documents should be permitted. As his Honour said, the court can restrict access to the documents by an appropriate order. I also note that the person inspecting documents following their disclosure by discovery is under an implied obligation to the Court not to use that information for any purpose other than the purpose of the particular proceedings. The process does not, therefore, lead to the documents becoming "public" in the sense of them being generally available to be published throughout the community. When and if a discovered document which has been made available for inspection, is sought to be tendered in evidence, at that time the Court can address questions of confidentiality of that evidence further, to ensure that proper considerations in the administration of justice are recognised. 16 Finally on matters of principle, I note that although the Court can and sometimes should examine the documents in question, there is likely to be less need to do so in the case of class documents: see eg. per Gibbs ACJ in Sankey at 46. 17 I turn then to address the balancing process which Gibbs ACJ has described. I have considered the character of the documents. Little more need be said about that, although I will address some of their contents later in these reasons. I have also considered the character of the proceeding. It is alleged by the applicant that from about July 1998 the first respondent has refused access to its infrastructure for the supply of electricity in the Darwin/Katherine area through its electricity grid, so as to prevent the applicant from selling electricity which, by the licence granted on 26 June 1998, it is permitted to generate and sell. It is then alleged that the first respondent's conduct in refusing that access was in breach of s 46 of the Trade Practices Act 1974 ("the Trade Practices Act") and also in breach of an implied term or implied terms of the licence. The respondents' defence, inter alia, is that the first respondent was not obliged to provide that access. Paragraph 23(c) of its defence asserts that the first respondent has deferred any decision in relation to providing to the applicant, or to any person, access to infrastructure, pending compliance by the Northern Territory with its obligations under the Competition Principles Agreement. 18 The applicant also alleges that the second respondent, pursuant to a contractual right with suppliers of the only available supply of gas in the Northern Territory from the Amadeus Basin, has a right of pre-emption which it has refused to waive in circumstances which means those gas producers cannot guarantee by contract with the applicant an uninterrupted supply of gas to the applicant to operate the generator or generators proposed to be used by it to generate electricity. Again, that conduct is alleged to be in breach of the Trade Practices Act. 19 I observe, therefore, that the context of the claim is a civil claim for damages and for injunctive relief. It is not a case, like Sankey, of documents potentially required to be made available to defend a serious criminal prosecution. It concerns matters of private right. On the other hand, as counsel for the applicants pointed out, the claim arises, at least in part, from the roles of the first respondent and the second respondent as government trading entities as distinct from the role of the first respondent as a regulator of the electricity and gas supply facilities in the Northern Territory, although the first respondent in fact also fulfils those roles. Thus the documents are not documents which relate to such matters as defence secrets or diplomatic relations with foreign governments (perhaps the archetypes of Cabinet documents which should be privileged from production). 20 I have had certain of the more recent documents provided to me in case I wished to inspect them for the purposes of the ruling I am asked to make. I have also had access to a document, apparently a draft recommendation or a draft of a Cabinet Submission (which is marked for identification AA1 on this application) concerning the first respondent's implementation of the National Competition Policy agreements in relation to the question of access to its electricity network infrastructure. I have looked only briefly at those documents to confirm, as I suspected, that the matters touched upon are not merely routine commercial matters or documents which relate mainly to commercial decisions; cp. the decision of Pinkus J in Harbours Corporation of Queensland v Vessey Chemicals Pty Ltd (1986) 67 ALR 100. I looked at those documents bearing in mind the observations of the majority in Commonwealth v Northern Land Council (1993) 176 CLR 604 at 617 where Mason CJ, Brennan, Deane, Dawson, Gaudron and McHugh JJ said: "In many so-called "class" cases a court may find it necessary to consider a document, inspecting it if necessary, in order to determine whether it does in truth fall into a class which attracts immunity. The contents of the document may have a bearing on that question as may the topic with which it deals, particularly if it is no longer current or controversial." 21 The documents do not deal only with the claims of the applicant in the present proceedings nor indeed, upon my brief inspection, is the apparent focus of the documents principally directed to the applicant or its claims in this action. They appear to deal substantially with policy options available to the Northern Territory Government in implementing the National Competition Policy agreements. Such considerations are matters of high government policy. The perceived advantages or disadvantages of a particular policy option, and any competing views for and against such options, the economic and social consequences of those policy options and how they might be addressed, are matters which, in my judgment, are sensitive to a high degree. 22 The final policy position has not yet been determined upon in all respects. The evolution of that process is clearly confidential. The disclosure of such matters could or would, in my view, impede in a substantial way the effective working of Cabinet processes. 23 Although I did not examine the documents in detail to determine the extent to which their contents may assist the applicant in these proceedings, the state of mind of the Northern Territory Government in relation to the decisions which are complained of in these proceedings may have been touched upon or disclosed by those documents. I accept that it is likely that a number of the documents do touch upon that topic. The document which is marked for identification AA1 is, I suspect, typical of many of those documents in that regard. 24 I have also had the benefit of the opening of the applicant's case on liability by Mr Barker of senior counsel. He took me carefully through a number of documents, including documents emanating from the respondent or the Northern Territory Government, including Ministerial Statements which he said demonstrate that state of mind. The documents referred to were more than just a few. The case is not one where the applicant will be left without evidentiary resources on that issue if the application based upon public interest immunity succeeds. 25 In Northern Land Council at 617 the majority said: "Documents recording Cabinet deliberations upon current or controversial matters, such as the records in question in this case, are an example [of where a different approach is called for.] Obviously, there are extremely strong considerations of public policy weighing against their production regardless of how significant disclosure of their contents might be to the case of one side or the other in the proceedings in which the claim for immunity is raised." 26 The documents in issue are not only documents which record Cabinet deliberations, but the recent documents are part of a class which comprises the process of informing Cabinet and raising policy options for Cabinet and the consideration of Cabinet progressively on the matters of high public policy. In those circumstances, I am of the view that the public interest in avoiding serious damage to the workings of government at that high level by exposing its deliberations and processes on matters of real and significant and continuing significance should, in the circumstances, prevail over the interests of the applicant seeking to vindicate its private rights. Accordingly, I consider that the claim for public interest immunity should succeed in respect of the documents for which it is claimed and which may touch upon such issues. 27 The Competition Principles Agreement was executed on 11 April 1995 and reflected an agreement about the principles of the competition policy made through the Council of Australian Governments on 25 February 1994. In my view the claim for public interest immunity should apply to documents as claimed from that date, namely 25 February 1994. 28 In the balancing process in selecting that date, I have borne in mind that the applicant was granted the licence to generate and sell electricity under the Electricity Act (NT) and under the Power and Water Authority Act (NT) on 26 June 1998 and that it alleges improper conduct by the respondents only from about that time. Many of the documents so protected by that ruling precede that date, and to that extent they are less likely to add significance to the applicant's case. 29 That leaves for consideration the documents prior to 25 February 1994. 30 Counsel for the applicant did not address in any detail the possible significance of that material to the applicant's case. On the other hand, Mr Foster of senior counsel for the respondent did not seek to establish that they related to any matter current, or relatively current, to the formation of government policy at the present time. It is hard to see that such documents could have any such significance. It is also hard to see what relevance such material may have in the proceedings, although I accept that I am presently not in a position to form any final view to the matter. 31 The Court has not been asked to give directions on what documents should generally be discovered. The parties have largely and sensibly agreed on such matters. The documents, I assume, touch upon the respondents' claim that their action (or, as alleged by the applicant, inaction) are matters which are the subject of "Crown immunity" at present, at least until the Northern Territory Government finally implements the national competition policy during the year 2000, so that they may not be attacked on the basis that the applicant seeks to do so. 32 As those documents apparently touch on that major plank of the respondents' defence, I conclude that they do have some real ongoing significance to the proceedings and that, but for their status, would be of moment to the applicant in addressing that issue. Mr Tyrrell has not explained why those documents, going back to 1978, remain so sensitive. That lapse of time is, in my view, very significant. 33 On that limited material, and bearing in mind the observations of the majority in Northern Land Council at 618 concerning the significance of Cabinet deliberations, in my judgment the appropriate ruling is that those documents, except insofar as they disclose the records of actual Cabinet deliberations as distinct from documents which disclose material prepared for submission to Cabinet, should not be protected by the claim for public interest immunity. As I have noted, there is no evidence that within that material there are documents of particular concern due to their individual content. Mr Tyrrell has not asserted any such matters. 34 I have also given consideration as to whether the cut-off date should be other than 25 February 1994. Any such conclusion, whether going back five or seven or ten years, would be intuitive only. I think it is appropriate to draw the line by reference to the known date of the Council of Australian Governments' agreement in principle, to which I have referred, in the absence of any evidence from Mr Tyrrell to indicate any other possible appropriate date. 35 Accordingly, I order that the claim of the respondents that they not be obliged to produce for inspection the documents in the schedule exhibited to the affidavit of Mr Tyrrell sworn on 28 July 1999 on the ground of public interest immunity be upheld in respect of: (a) all documents on that list dated on or after or brought into existence on or after 25 February 1994, (b) any documents on that list dated or brought into existence prior to 25 February 1994 which record the actual deliberations of Cabinet but that otherwise the claim is not upheld. 36 I assume that the respondents will now proceed to give inspection of the documents to be inspected in accordance with those orders. I will return the folder of the more recent documents which was provided to me by the respondents. 37 I will restrict the persons who may inspect the documents ordered to be made available for inspection by my decision, to solicitors and counsel for the applicant, and to solicitors and counsel for the applicant in matter D8 of 1999. I give the parties liberty to apply to vary or discharge that order. I will also treat it as compliant with that order if, by agreement, further access is extended upon undertakings which the parties think are appropriate. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Decision herein of the Honourable Justice Mansfield. Associate: Dated: 26 August 1999 Counsel for the Applicant: Mr I M Barker QC; Mr A Bannon SC with them Mr A A Henskens Solicitors for the Applicant Colin Biggers & Paisley Counsel for the Respondents: Mr L Foster SC; Mr J V Nicholas and Mr A I Tonking Solicitors for the Respondents: James Noonan Date of Hearing: 5 August 1999 Date of Decision: 18 August 1999