Arcadia Investment Holdings Pty Ltd v Environment Protection Authority

Relevant legislative provisions

1. The disclosure obligations of the EPA in connection with the Mouawad Class 5 Proceedings are contained in the Criminal Procedure Act 1986 (NSW) (Criminal Procedure Act) as follows: 247E Notice of prosecution case to be given to defendant (1) The prosecutor is to give to the defendant notice of the prosecution case that includes the following - … (i) a copy of any information, document or other thing provided by authorised officers to the prosecutor, or otherwise in the possession of the prosecutor, that may reasonably be regarded as relevant to the prosecution case or the defence case, and that has not otherwise been disclosed to the defendant, … (k) a copy of any information in the possession of the prosecutor that is relevant to the reliability or credibility of a prosecution witness. 247I Court may order preliminary disclosure in particular case (1) After proceedings have been commenced, the court may make any or all of the following orders, but only if the court is of the opinion that it would be in the interests of justice to do so - (a) order that the prosecutor is to give to the defendant notice in accordance with section 247J, … 247J Prosecution notice - court-ordered preliminary disclosure For the purposes of section 247I (1) (a), the prosecution's notice is to contain the following - (a) the matters required to be included in the notice of the prosecution case under section 247E, (b) a copy of any information, document or other thing in the possession of the prosecutor that would reasonably be regarded as adverse to the credit or credibility of the defendant, (c) a list identifying the affidavits or statements of those witnesses who are proposed to be called at the hearing of the proceedings by the prosecutor. 247O Disclosure requirements are ongoing (1) The obligation to comply with the requirements for preliminary disclosure imposed by or under this Division continues until any of the following happens - (a) the defendant is acquitted of the charges to which the proceedings relate, (b) the prosecution is terminated, (c) the defendant is sentenced for the offence to which the proceedings relate. (2) Accordingly, if any information, document or other thing is obtained or anything else occurs after preliminary disclosure is made by a party to the proceedings that would have affected that preliminary disclosure had the information, document or thing been obtained or the thing occurred before preliminary disclosure was made, the information, document, thing or occurrence is to be disclosed to the other party to the proceedings as soon as practicable.

EPA's submissions

1. The Prosecutorial obligation to disclose material to a Defendant either by statutory obligation or by the general law is not affected by whether the documents would be admissible as evidence at a hearing. The obligation is to disclose.
2. The Mediation Agreement made provision to exclude the obligation of confidentiality in certain stated circumstances: see clauses 2(a) and (b) outlined at [4] above. The EPA, as Prosecutor in the Mouawad Class 5 Proceedings is compelled by law to make the disclosures required by s 247O of the Criminal Procedure Act and as such engages the exception as provided for in the Mediation Agreement.
3. In addition to the statutory disclosure requirement of the Criminal Procedure Act there are also general law requirements that compel a Prosecutor to disclose certain material. As identified by the Court of Appeal in Director of Public Prosecutions (Cth) v Kinghorn; Kinghorn v Director of Public Prosecutions (Cth) (2020) 102 NSWLR 72 at [124]-[128] and [137]-[142] (Kinghorn): 124 In a number of cases the High Court has acknowledged the existence of the so-called prosecutorial duty of disclosure: see Mallard v The Queen (2005) 224 CLR 125; [2005] HCA 68 at [17] (Gummow, Hayne, Callinan and Heydon JJ) and at [64]-[67] (Kirby J); Grey v The Queen (2001) 75 ALJR 1708; [2001] HCA 65 at [18] (Gleeson CJ, Gummow and Callinan JJ) and at [50] and [63] (Kirby J) and at [80] (Hayne J). However, it has not addressed the duty's basis, scope and limits in any detail. 125 In R v Spiteri (2004) 61 NSWLR 369; [2004] NSWCCA 321 at [20] this court endorsed an obiter statement by Hodgson JA in R v Reardon (No 2) (2004) 60 NSWLR 454; [2004] NSWCCA 197 at [54] that the principles stated in two English decisions, R v Keane [1994] 1 WLR 746 and R v Brown (Winston) [1998] AC 367, should be taken as applying in New South Wales. In Reardon at [48]-[49], Hodgson JA described the effect of those decisions as follows: "[48] In R v Keane [1994] 1 WLR 746; [1994] 2 All ER 478, the Court of Appeal held that, subject to the question of public interest, the prosecution must disclose documents which are material; and it said that documents are material if they can be seen, on a sensible appraisal by the prosecution, (a) to be relevant or possibly relevant to an issue in the case, (b) to raise or possibly raise a new issue the existence of which is not apparent from the prosecution case, or (c) to hold out a real (as opposed to a fanciful) prospect of providing a lead on evidence going to either (a) or (b). This view was approved by the House of Lords in R v Brown (Winston) [1998] AC 367 at 376-377, with the comment that 'an issue in the case' must be given a broad interpretation. Category (c) makes it clear that the duty is not limited to matters that would be admissible in evidence. [49] However, in R v Brown it was also held that the duty did not extend to disclosing material relevant only to the credibility of defence (as opposed to prosecution) witnesses." 126 In Marwan v Director of Public Prosecutions [2019] NSWCCA 161 at [29], Leeming JA (with whom RA Hulme and Adamson JJ agreed) described the nature of the "duty" of disclosure as follows: "[29] It is also to be borne in mind that the so-called 'duty' is unusual. So too is what may loosely be described as the 'right' of the accused to disclosure (both illustrate the way in which legal usage commonly departs from Hohfeldian exactness). For it is quite plain that the 'duty' to disclose is not owed directly to an accused, so as to enforce the production of documents as might occur in civil litigation through discovery and interrogatories, or pursuant to freedom of information legislation. To the contrary, an accused person cannot ordinarily obtain an order that the prosecution disclose documents which have been withheld. Rather, the accused is entitled to a fair trial, and can insist that the trial be stayed, permanently or temporarily, if it can be established that that will not occur, absent adherence by the prosecution to that duty." (Emphasis added) … 137 In the end result the debate about the extent to which the prosecutor's duty of disclosure is enforceable reduces to the following four propositions. 138 First, generally the performance of the duty is a matter for the prosecution and the court will not review it or enforce it outside the powers it exercises to control its own processes. 139 Second, a failure to comply with the duty may result in a stay being granted provided it is shown that there is "tangible risk that the trial would be unfair" or that the "trial is likely to be unfair": see Marwan at [24]-[26]. If the duty is not complied with and a conviction ensues then it can be set aside if a miscarriage of justice is demonstrated: Grey; Mallard. 140 Third, if the documents or material the subject of the duty are not disclosed then a subpoena can be issued. Subject to claims for privilege and the like, it is likely that documents that fall within the duty will answer the test for production in response to a subpoena: Gould at [65]-[68]. 141 Fourth, the court can make orders to enforce compliance with the pre-trial disclosure provisions of the CPA which, to a significant degree, are co-extensive with the duty of disclosure. 142 Ultimately, the combined effect of Gould and the pre-trial disclosure provisions of the CPA means that, with trials on indictment in this state, there should only be a relatively narrow scope for debate about compliance by the prosecution with its duty of disclosure and the means of enforcing it. That scope appears to be mostly confined to debates about the extent to which the prosecution must take steps, if any, to obtain information from other sources (as in Marwan) and cases such as this in which the material sought is the subject of claims for privilege or some other competing reason for non-disclosure.
4. Having regard to the opinion formed by the solicitor for the Prosecutor, there is an obligation to disclose the Mediation Material to the Defendant in the Mouawad Class 5 Proceedings either by operation of the disclosure requirements of either, the Criminal Procedure Act, the Prosecutorial duty of disclosure or the concurrent operation of both obligations. Such obligations constitute a compulsion at law within the exceptions to confidentiality contained in the Mediation Agreement. In the alternative, if such obligations do not meet the exceptions in the Mediation Agreement, the terms of the Mediation Agreement must give way to the statutory obligation of disclosure: Australia and New Zealand Banking Group Ltd v Konza (2012) 206 FCR 450 at [30]. In this case, the balancing of the public interest in the retention of confidentiality of a Court ordered mediation in civil proceedings must be outweighed by the public interest in the proper administration of justice in the giving of a fair trial to a person accused of a criminal act.

Arcadia's submissions

1. Arcadia does not consent to the use of the Mediation Material for any purpose including the purpose the subject of this Notice of Motion. Arcadia does not waive any privilege it has with respect to the Mediation Material. Arcadia does not acquiesce in the production of the Mediation Material for any purpose. The principal issue raised by Arcadia was whether the Court had power to determine the subject matter of the Notice of Motion and if so, whether all relevant considerations had been properly addressed by the EPA.
2. If the Court is satisfied that there is a relevant power to determine that the Mediation Material should be provided Arcadia neither consents nor opposes the orders sought in the Notice of Motion.
3. As to power, the EPA's reliance upon s 247E of the Criminal Procedure Act cannot be sustained as the documents, having been prepared for the purposes of mediation, are not capable of having the relevance required by s 247E for the reasons outlined by McDougall J in Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd [2004] NSWSC 1091 at [13]-[14] (Ingot Capital) where he concluded: 13 Accordingly, both based on s 110P of the Supreme Court Act and on s 135 of the Evidence Act, I conclude that the documents in question cannot be deployed for any legitimate or useful purpose. Even if, conceivably, they could be deployed in the way that I have indicated, I would exercise my discretion under s 135 to exclude the evidence, for the reasons just indicated. 14 It seems to me to follow, the documents having no legitimate forensic purpose, that paragraphs 1 and 3 of the notice to produce should be set aside and I so order. I will add that, having regard to the provisions of cl 10(a) of the mediation agreement, it is likely that I would have come to that view regardless of the particular statutory provisions to which I have referred.
4. Based upon the conclusions in Ingot Capital the Mediation Material can have no legitimate forensic purpose and, therefore, cannot fall within the necessary relevance as required by s 247E.
5. Further, the EPA has not satisfied that the disclosure of the Mediation Material falls within any of the exceptions to confidentiality expressly provided for in the Mediation Agreement. The Court would consider the nuanced position relating to the release of confidential information produced for mediation as set out in the decision of Lee J in Crown Resorts Ltd v Zantran Pty Ltd (2020) 276 FCR 477 where he observed at [104]: The nature of any relevant "balancing" was the subject of attention in the decision of the New South Wales Court of Appeal in Kadian. The leading judgment was written by Beazley JA, with Hodgson JA agreeing substantially, and Stein AJA agreeing. In that case, all the judges of the Court agreed that an obligation of confidentiality will not be enforced, or will be treated as void at law, only if it interferes adversely with the administration of justice, both in criminal and civil cases, provided that some identifiable public interest relevant to the administration of justice, that goes beyond the private civil rights of the parties to the obligation, is affected by such interference: Beazley JA at [46], [66], [84]; Hodgson JA at [160]; Stein AJA at [172]. In the manner explained above, it was recognised that in making this evaluative judgment, the court may be required to weigh up or balance competing considerations, that is, public interest considerations, which point in different directions. As Beazley JA accepted at [87], there may be a balancing exercise, depending upon the nature of the confidential information, the public interest allegedly affected and any other public interest consideration. Hence the "balancing" is directed to the issue as to whether, having regard to public interest considerations, including competing considerations (such as the desirability of holding people to their bargains, which would be furthered by enforcing the contract), the obligation interferes adversely with the administration of justice. This is to be contrasted with some form of freestanding discretionary judgment (informed by all the circumstances of the case) as to whether the obligation ought to be overridden to achieve an end perceived as being desirable.
6. There is no inference in the administration of justice that calls for the confidentiality arrangements to be invalidated. The public interest in protecting the confidentiality of Court ordered mediation is a significant factor weighing against the making of orders sought in the Notice of Motion.
7. The Court has no power to make declarations with respect to the Mediation Agreement, including, if necessary, the validity of certain parts of it or of the whole, in the context of the Class 4 Proceedings. The Mediation Material is confidential by the operation of both the Mediation Agreement and s 31 of the Civil Procedure Act.

Determination

1. I accept that the participation and the actions undertaken by Arcadia in connection with the conduct of this Notice of Motion would not constitute the waiver of any relevant privilege nor the acquiescence in the production of the Mediation Material to any third party.
2. As to the question of whether this Court has the power to make any determination relating to the disclosure of any document produced in a mediation having regard to the confidentiality provisions in either the Civil Procedure Act or by operation of the Mediation Agreement I find that the Court has such power. The circumstances of the Class 4 Proceedings include the order made by the Court for mediation pursuant to s 26 of the Civil Procedure Act. The Court is empowered to hear and dispose of the Class 4 Proceedings pursuant to s 20 of the Land and Environment Court Act 1979 (NSW) (LEC Act). Such power includes the discretion to make orders and declarations in connection with such proceedings: s 23 LEC Act. Further, the jurisdiction of the Court includes that conferred by ss 16(1) and (1A) of the LEC Act that provides: 16 Jurisdiction of the Court generally (1) The Court shall have the jurisdiction vested in it by or under this or any other Act. (1A) The Court also has jurisdiction to hear and dispose of any matter not falling within its jurisdiction under any other provision of this Act or under any other Act, being a matter that is ancillary to a matter that falls within its jurisdiction under any other provision of this Act or under any other Act.
3. Section 22 of the LEC Act also provides: 22 Determination of matter completely and finally The Court shall, in every matter before the Court, grant either absolutely or on such terms and conditions as the Court thinks just, all remedies to which any of the parties appears to be entitled in respect of a legal or equitable claim properly brought forward by that party in the matter, so that, as far as possible, all matters in controversy between the parties may be completely and finally determined and all multiplicity of proceedings concerning any of those matters may be avoided.
4. As was observed in GPT RE Ltd v Belmorgan Property Development Pty Ltd (2008) 72 NSWLR 647 at [88]: The jurisdiction of the Land and Environment Court arises under the Land and Environment Court Act, and includes, in its class 4 jurisdiction, proceedings under s 123 of the Environmental Planning and Assessment Act: Land and Environment Court Act, s 20(1)(c). In respect of those, and other proceedings, the Land and Environment Court Act confers power on the Court to make orders of such kinds as it thinks appropriate: s 23. It is also required to grant all remedies as the Court thinks just, to ensure that all matters in controversy between the parties are completely and finally determined: Land and Environment Court Act, s 22. These are broad powers which should be construed as confined by the nature of the particular jurisdiction being exercised and the powers conferred under any other Act.
5. Having regard to the jurisdiction conferred upon this Court by the LEC Act, a dispute as to the consequence or effect of a mediation ordered by the Court pursuant to s 26 of the Civil Procedure Act in proceedings otherwise within the jurisdiction of the Court are matters relating to the hearing and disposal of those proceedings as provided for in ss 16 and 20 of the LEC Act. Further, even if I am wrong and the matters raised are not directly related to the hearing and disposal of the Class 4 Proceedings, they are clearly ancillary to the matters that falls within jurisdiction, in that they arise in the context of those proceedings and relate to issues arising from the making of interlocutory orders relating to the conduct of the proceedings and the consequences of the making of such orders.
6. I further accept the submissions of the EPA that the question of whether the EPA as Prosecutor in the Mouawad Class 5 Proceedings is required to disclose the Mediation Material to the Defendant in those proceedings does not turn on whether the Mediation Material would be admissible as evidence in those proceedings.
7. The decision of Ingot Capital relied upon by Arcadia does not alter this position. In this case the question is, in criminal proceedings, whether either by application of statute or general law there is an obligation to disclose the Mediation Material. Ingot Capital is clearly distinguishable on its own facts. In Ingot Capital the case was a civil claim and the question was whether the material produced at mediation could be the subject of a Notice to Produce. His Honour found that in those circumstance the documents sought could have no legitimate forensic purpose in the proceedings in which the mediation took place as the documents were inadmissible and related purely to an issue of credit. The facts of this case are different in that the duties of disclosure under the Criminal Procedure Act or the Prosecutorial duty of disclosure do not relate to the potential admissibility or use at trial of material. The relevant question is whether the Mediation Material is "material" in the sense that such term was described in Kinghorn at [15] above or "that may reasonably be regarded as relevant to the prosecution case or the defence case" as required by s 247E of the Criminal Procedure Act.
8. At first instance the determination of the relevant question as to the characterisation of the Mediation Material as either "material" or "relevant" is a matter for the determination of the Prosecutor and not the Court. It may be that the reasonableness or appropriateness of such a determination has consequences in other contexts, however, as has been stated, in Kinghorn at [138], the performance of the duty is a matter for the prosecution and the Court will not review it or enforce it outside the powers it exercises to control its own processes. In this case, the consequence is that once Mr Verzosa made the determination as set out in [8] above, the Prosecutor in the Mouawad Class 5 Proceedings was obliged both by operation of the disclosure provisions of the Criminal Procedure Act and the concurrent Prosecutorial duties to disclose the Mediation Material to the Defendant in those proceedings.
9. The determination made by Mr Verzosa is not one that in the present circumstances is able to be questioned or should be questioned. Both parties submitted that the Mediation Material should not be tendered in evidence at the hearing of the Notice of Motion as it was not relevant to the determination of the questions that were required to be determined. Both parties accepted that the determination of Mr Verzosa was one that should be accepted on its face and not looked behind to determine whether his determination was the proper one.
10. On the basis of the determination made by Mr Verzosa the obligation to disclose the Mediation Material to the Defendant is the Mouawad Class 5 Proceedings either by operation of the statutory disclosure requirements or the general law Prosecutorial disclosure duty has been engaged. Accordingly, the Prosecutor must, consistent with those obligations, disclose the Mediation Material to the Defendant. The obligation to disclose the Mediation Material is compelled by law.

Form of relief

1. At the conclusion of submissions in the hearing of the Notice of Motion I raised with the parties that if I accepted the EPA's submissions which would give rise to the findings I have made above, whether the relief sought in the Notice of Motion was in fact necessary or whether a modified declaration that dealt with the obligation to disclose was sufficient. Upon instructions the EPA accepted that if its primary submissions relating to the obligation to disclose were accepted a declaration in the following terms would be sufficient: 1. The Court declares pursuant to s 23 of the Land and Environment Court Act 1979 (NSW) that the disclosure by the Respondent to Mr Paul Mouawad of the Mediation Material (as defined below), for the purposes of NSWLEC proceedings 2018/260536, 2018/260542 and 2018/260553 (Mouawad Class 5 proceedings), is required in accordance with common law principles of prosecutorial disclosure and the Respondent's obligations under s 247O of the Criminal Procedure Act 1986 (NSW) in connection with the Mouawad Class 5 proceedings. In this declaration, "Mediation Material" means the following documents provided by the Applicant to the Respondent: a. two of the three PDF documents attached to an email sent on 25 September 2020 at approximately 8.49am from the Applicant's representatives to the Respondent's representatives, being documents that were 10 and 13 pages respectively; b. the two PDF documents attached to an email sent on 3 December 2020 at approximately 8.40am from the Applicant's representatives to the Respondent's representatives; c. one of the two documents contained in a dropbox folder the link to which was included in an email sent on 13 April 2021 at approximately 10am from the Applicant's representatives to the Respondent's representatives, being the PDF document that is 104 pages.
2. Arcadia indicated that whilst it accepted that a single declaration in such terms was more appropriate than those sought by the EPA in the Notice of Motion it, for appropriate reasons as already outlined, could neither consent nor oppose the making of such a declaration. In such event it did not wish to make any submissions as to the form of the declaration.
3. In light of my findings, which findings are consistent with the EPA's primary submission, that the EPA has a statutory and/or general law obligation to disclose the Mediation Material to the Defendant in the Mouawad Class 5 Proceedings it is unnecessary for me to determine any matter relating to the validity or construction of the Mediation Agreement. Whilst I accept that there is a real dispute between the parties which warrant, in the exercise of the Court's discretion, the making of a declaration, where a single declaration will address the totality of the dispute such further or other declarations not essential to the dispute should not be made.
4. Accordingly, subject to a minor amendment as to the form of the declaration proposed by the EPA (by the deletion of the reference to the power to make the declaration) the declaration as proposed by the EPA should be made and the Notice of Motion otherwise dismissed.
5. The parties agreed that in the event the EPA was successful there should be no order as to the costs of the Notice of Motion. Accordingly, no order as to costs will be made.

Declarations and orders

1. For the reasons outlined above, the Court declares: 1. That the disclosure by the Respondent to Mr Paul Mouawad of the Mediation Material (as defined below), for the purposes of NSWLEC proceedings 2018/260536, 2018/260542 and 2018/260553 (the Mouawad Class 5 Proceedings), is required in accordance with common law principles of Prosecutorial disclosure and the Respondent's obligations under s 247O of the Criminal Procedure Act 1986 (NSW) in connection with the Mouawad Class 5 Proceedings. In this declaration, "Mediation Material" means the following documents provided by the Applicant to the Respondent: 1. Two of the three PDF documents attached to an email sent on 25 September 2020 at approximately 8.49am from the Applicant's representatives to the Respondent's representatives, being documents that were 10 and 13 pages respectively; 2. The two PDF documents attached to an email sent on 3 December 2020 at approximately 8.40am from the Applicant's representatives to the Respondent's representatives; and 3. One of the two documents contained in a dropbox folder the link to which was included in an email sent on 13 April 2021 at approximately 10am from the Applicant's representatives to the Respondent's representatives, being the PDF document that is 104 pages.
2. The Court orders and directs: 1. That the Notice of Motion filed 20 September 2021 is otherwise dismissed; 2. The reasons for judgment be restricted from publication until further order of the Court; and 3. The proceedings are listed for mention before me on Friday, 11 February 2022 at 9am for the parties to advise whether the order restricting publication should be lifted in whole or in part.

Amendments 03 February 2022 - Final orders entered 3 February 2022. Published as restricted lifted. Vacate mention 11 February 2022. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 February 2022