OPEL Status and Progress
52 By a letter dated 6 November 2009, Mr Hambrett wrote to Mr Tyacke informing him, inter alia, that the liquidators challenged the Commonwealth's claim to legal professional privilege in respect of the document called "OPEL Status and Progress". In his first affidavit, Mr Markus said that legal professional privilege is claimed over parts of the document remaining redacted on the basis that it discloses the substance or effect of confidential communications made between Clayton Utz and the Commonwealth of the dominant purpose of providing legal advice to the Commonwealth. In his second affidavit he added that the basis of his evidence that the communication between Clayton Utz and the Commonwealth was made for the dominant purpose of providing legal advice is:
(a) his review of the redacted parts of the document and the fact that the express terms of those parts explicitly disclose legal advice;
(b) the fact that Clayton Utz acted as legal advisers to the Commonwealth;
(c) the fact that Clayton Utz was engaged to provide legal advice on the matters the subject of the redaction by the Legal Group of the Department, which he leads; and
(d) the fact that the redacted part of the document refers to written advice to the Department from Clayton Utz which was attached to the document.
Application of s 118 to each document
53 Counsel for both parties cited with approval a decision of mine in Re Southland Coal Pty Ltd (recrs & mgrs apptd) (in liq) (2006) 59 ACSR 87; [2006] NSWSC 899. In that case I considered the documents over which privilege had been claimed, one by one, having particular regard to the evidence of a lawyer who was very familiar with them. I took the view that a lawyer may be in a position to give admissible evidence about the circumstances surrounding the client's communication, which may, together with inferences from the document itself, establish the privilege (at [28]). I shall adopt the general approach I took in that case.
54 There are 13 documents in dispute, and it can be seen from my summary that the evidence of Mr Markus is almost identical for 10 of them. In his first affidavit he used a formula, which asserted that the redacted parts of the document disclosed the substance or effect of a confidential communication made between a named external lawyer (Clayton Utz or AGS) and the Commonwealth, provided for the dominant purpose of providing legal advice to the Commonwealth. In his second affidavit he purported to supplement that formula by using another formula. In the second affidavit he referred to the relevant part of his first affidavit and then purported to set out the basis for his evidence that the communications between the named external lawyer and the Commonwealth were made for the dominant purpose of providing legal advice. That basis was his review of the redacted part of the document which (he said) explicitly disclosed legal advice, the fact that the external adviser was a legal adviser to the Commonwealth, the fact that they had been engaged to provide legal advice on the matters the subject of the redaction by the Legal Group of the Department of which he was leader, and the fact that the redacted part referred to written legal advice provided by the adviser.
55 Counsel for the liquidators strenuously objected to this evidence. First, he submitted that Mr Markus was purporting to give evidence of the purpose of the relevant communication although he was not the person who made the communication. It seems to me permissible for Mr Markus to give this evidence. He was General Counsel in the Department. It was the Legal Group under his leadership who engaged AGS and Clayton Utz to provide the legal advice on the matters identified in the redacted part of the document. He read the advice.
56 Second, counsel for the liquidators submitted that Mr Markus had failed to identify the confidential communication that the document in question was said to disclose. He did not give evidence that he had inspected the actual confidential communication, but only that he had reviewed the redacted part of the document that would, if produced, disclose the confidential information.
57 In my opinion that objection was addressed by the oral evidence given by Mr Markus. He said that in each case he personally received the legal advice from AGS or Clayton Utz that was the confidential communication he was seeking to protect. He said in most cases the legal advice was in writing and addressed to him, though in one case it was oral advice given at a meeting that he attended. He confirmed that he read the written legal advices that constituted the confidential communications. He said his evidence about the dominant purpose of those communications was based on his reading of the letters of advice.
58 In my view the oral evidence of Mr Markus answers another criticism by counsel for the liquidators. Counsel submitted that the fact (if it be so) that the redacted part of the document appears to disclose legal advice does not address the purpose of the original communication: for example, the provision of legal advice might be only one purpose, and not the dominant purpose, of the original communication. But Mr Markus made it plain in the witness box that he had read the original communications, which were for the most part letters of advice from AGS or Clayton Utz, and this was the basis for his evidence that the dominant purpose of those communications was to provide legal advice to the Department.
59 In written submissions prepared before the hearing, counsel for the liquidator criticised Mr Markus' evidence on the ground that the retainers of AGS and Clayton Utz were not in evidence. Senior counsel for the Commonwealth tendered at the hearing two Deeds of Standing Offer that constituted general retainers between the Commonwealth and AGS and Clayton Utz respectively. Counsel for the liquidators pointed out that these instruments did not assist in characterising the dominant purpose of individual communications because they were general retainers to provide legal services. I agree with that submission, though the tender of the deeds has overcome counsel's original objection.
60 Counsel for the liquidators complained that the evidence of Mr Marcos was "formulaic". That is correct, but in my opinion the use of a formula to give evidence in respect of each of multiple documents is not itself objectionable provided that the formula is suitable to each occasion. Indeed, there is some advantage in casting the evidence on each document into the same mould, in terms of assisting the reader to absorb and analyse what is said.
61 Counsel also complains that the evidence of Mr Markus has given no general description, even in broad terms, of the issues to which the asserted legal advice related, and that has made it impossible to assess, from the evidence alone, whether what Mr Markus characterises as legal advice was really that, and not advice of some other kind, such as advice on policy, administrative or commercial matters (citing WorkCover Authority (NSW) v Law Society of NSW (2006) 65 NSWLR 502; [2006] NSWCA 84; at [92]-[95]). I agree that Mr Markus has not given evidence of the content of the legal advice to which the redacted part of each document relates. But I regard it as significant that in his third affidavit, he said there was no material on the redacted parts of the documents extraneous to the confidential communications that were the subject of the claims of legal professional privilege; and in his oral evidence he identified the confidential communications as legal advice, mostly in writing. When that evidence is put together, it amounts to evidence by an experienced general counsel that the confidential communications which were the subject of the claims for privilege were, and were nothing other than, legal advices. I do not regard the description of AGS as "probity advisers" as derogating from that evidence.
62 At the hearing I reserved my ruling on the admissibility of the evidence of Mr Markus as to these matters. For the reasons given above, I have decided that the evidence is admissible. I now turn to consider whether the claim to legal advice privilege has been made out, for each document, in respect of the confidential communications that would be disclosed if the document were produced.
63 It seems to me that of the 13 documents remaining in dispute, 10 documents raise a common issue and can be considered together (documents 9, 12/27, 13/28, 14, 15, 17/30, 19, 20, 22/24 and OPEL Status and Progress), while the other three (documents 1, 10 and 23) raises different issues and should be considered separately.
64 Document 1 is a draft document containing a handwritten request by the Secretary of the Department to the effect that she wanted to discuss it with Mr Markus. Mr Markus said it was communicated to him confidentially, and that tends to be supported by the description of the document - a draft of answers to estimates questions on notice, which one would expect to be confidential. Hence when the document was passed to him from the Secretary's office, there was a confidential communication of the contents of the document from client to lawyer.
65 Mr Markus asserted that the dominant purpose of the communication was for him to be able to provide the Secretary with legal advice in relation to the contents of the document. In my view Mr Markus could not establish the dominant purpose of a communication simply by asserting what it was. Here, however, there is substantially more evidence than a bare assertion by Mr Markus. The document is on its face of a confidential nature and the handwritten notes suggest that it was communicated to Mr Markus for the purpose of Mr Markus providing legal advice; the document was contained in his legal files; and the Secretary of the Department told him she made the communication for the sole purpose of his providing legal advice on the content of the document.
66 In my opinion the evidence of Mr Markus establishes the ingredients of legal advice privilege under s 118 in respect of document 1, and that production of the document would result in disclosure of the confidential information.
67 In the case of document 10, Mr Markus has not only characterised the redacted part as legal advice but he has indicated that it related to litigation between Telstra and the Minister in relation to the OPEL contract, and further, that is outside the scope of the order for production and is irrelevant. It seems to me that he has given a sufficient indication of the content of the redacted part to establish the privilege under s 118, and that production of the redacted part would result in disclosure of the confidential information.
68 The description of document 23 indicates that the draft letter has a legal subject matter, and additionally there are handwritten notes by Mr Markus. It appears from the evidence of Mr Markus that the document was sent to him in draft for him to review it as the Department's General Legal Counsel. The document was in his legal files. These facts together indicate that the document was a confidential communication from client to lawyer before the handwritten notes were added, and those handwritten notes were in the nature of legal advice to the client. They support his general assertion about the dominant purpose of the document. In my view privilege under s 118 is established, and production of the document would result in disclosure of the confidential information.
69 In the case of the other 10 documents, according to the evidence of Mr Markus the redacted parts of the documents relate to legal advice by Clayton Utz or the AGS to the Commonwealth. In each case Mr Markus gave evidence that he had reviewed the redacted parts of the document and that in fact the express terms of the redacted parts explicitly disclose legal advice of either AGS or Clayton Utz. They were legal advisers to the Commonwealth, engaged to provide legal advice by the Legal Group in the Department, of which Mr Markus was leader. His evidence was that the only external lawyers to provide legal advice to the Department in relation to the BCIP, the negotiation of the funding agreement and the termination of the funding agreement, were Clayton Utz and AGS. He said that there is no material in the redacted parts extraneous to the confidential communications that are the subject of the claims of legal professional privilege.
70 Document 9 was received into evidence at the hearing as Ex A2. The redacted part is under the heading "Sensitivities", immediately after a sentence stating that the Department had appointed AGS as probity adviser in relation to the approval process for the implementation plan. It seems obvious that the redacted part is a summary of the advice given by AGS.
71 In my view that evidence is sufficient to establish that s 118 applies in respect of the redacted parts, and production of the redacted parts would result in disclosure of the confidential information.
72 In the result, my opinion is that the evidence of Mr Markus establishes that s 118 would apply to adducing the evidence of documents 1 and 23 and to adducing the evidence of the redacted parts of the other documents. Consequently the Commonwealth's objection to production of these documents or parts of documents under UCPR 1.9(3) was well founded and will not be overruled.
Public interest immunity
73 A claim for public interest immunity in relation to documents that are subject to a compulsory discovery process under court rules seeks to preserve the confidentiality of documents if disclosure would have the potential to harm the public interest. The Evidence Act 1995 (NSW), s 130, recognises that the public interest in admitting into evidence a document relating to matters of state may be outweighed by the public interest in preserving secrecy or confidentiality in relation to the document, and if that is so, the Court is empowered to direct that the document not be adduced as evidence. The statutory "balancing exercise" reflects the general law with respect to public interest privilege, as explained in such cases as Sankey v Whitlam (1978) 142 CLR 1; see also Penrith Rugby League Club Ltd v Brown [2004] NSWSC 1182 at [27]-[28]. The Court has to balance competing public interests: on the one hand, the public interest in the administration of justice, which could be frustrated or impaired if access to relevant documents were denied; and on the other hand, the public interest that harm should not be done to the nation or government by disclosure of confidential matters: Sankey v Whitlam, at 38-39 per Gibbs ACJ, 60-61 per Stephen J, 95-96 per Mason J.
74 UCPR 1.9(6) excludes from the operation of the compulsory production regime established by r 1.9 any law that authorises or requires a person to withhold a document on the ground that producing the document would be injurious to the public interest.
75 Several matters of principle are relevant to the assessment of the Commonwealth's claim to public interest immunity:
(a) a claim for public interest immunity has no automatic operation; it always remains the function of the Court to determine upon that claim ( Sankey v Whitlam , at 58 per Stephen J);
(b) those who urge privilege for classes of documents, regardless of particular contents, carry a heavy burden of proof ( Sankey v Whitlam , at 62 per Stephen J);
(c) the character of the proceedings and the issues raised are relevant: where the proceedings are centrally concerned with the government's conduct or a decision it has made, claims for public interest immunity over documents relating to that conduct or decision are less likely to succeed ( Sankey v Whitlam , at 56 per Stephen J);
(d) the Court may examine the documents for the purpose of determining claims for public interest immunity ( Sankey v Whitlam , at 47-8 per Gibbs ACJ), a step that may be appropriate where it is "on the cards" that the documents contain relevant information ( Attorney-General (NSW) v Chidgey (2008) 182 A Crim R 536 at [58]-[80]; Watson v AWB Ltd (No 2) [2009] FCA 1047 at [58]).
76 In the present case the Court is required to consider the public interest in preserving the confidentiality of the Commonwealth Government's Cabinet process. It is accepted by the parties, and acknowledged in Commonwealth legislation such as the Freedom of Information Act 1982 (Cth) as well as in case law, that the confidentiality of the deliberations of Cabinet is protected by public interest immunity. As Ms Beauchamp said in her first affidavit, the convention of Cabinet confidentiality which is part of the Westminster system of government recognises the necessity for a forum in which full and frank discussion by Ministers can take place, uninhibited by the need to temper debate to meet sectional interests or media pressures, and in which individual opinions may be expressed freely among colleagues without public comment and exposure (see Sankey v Whitlam, at 95 per Mason J).
77 The confidentiality of Cabinet deliberations is important in order to preserve the principle of collective responsibility, which requires that Cabinet decisions, once made, must be supported by all ministers, irrespective of personal views (see Commonwealth of Australia v Northern Land Council (1993) 176 CLR 604, at 615). Collective Cabinet responsibility is intended to bring about effective and efficient government by facilitating finality in decision-making; whatever the range of private views put by Ministers in the Cabinet, once decisions are arrived at and announced they are expected to be supported by all Ministers.
78 Consistently with this reasoning, important State documents relating to high-level policy decisions, and in particular Cabinet decisions and Cabinet papers, will usually be held to be immune from production: Sankey v Whitlam, at 95 per Mason J. But Cabinet decisions and Cabinet papers do not stand outside the general rule that requires the Court to determine whether, on balance, the public interest calls for production or non-production; rather they stand fairly and squarely within the area of application of that rule: Sankey v Whitlam, at 96 per Mason J. It is well established that the public interest does not call for the non-disclosure of Cabinet documents when their significance is purely historical, but in Sankey v Whitlam (at 98) Mason J, disagreeing with Lord Reid in Conway v Rimmer [1968] AC 910 at 952), expressed his preference for the view that the requirements of the administration of justice should prevail once a matter is no longer current, even if the matter has not receded into the category of "purely historical interest".
79 In her first affidavit, Ms Beauchamp identified two categories of documents which, she said, should be protected by public interest immunity because of Cabinet confidentiality. The first category is any document that reveals the decision and/or deliberations of the Cabinet. This category would include documents that have not been considered by the Cabinet, but which record or evidence either what was to be, and ultimately was, considered by the Cabinet or what had been considered and/or decided by the Cabinet.
80 The case law supports Ms Beauchamp's view as to this category, although the courts acknowledge that production may be required in exceptional circumstances. Thus, in Lanyon v Commonwealth of Australia (1974) 129 CLR 650, Menzies J said (at 653):
"…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 organisation 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."
81 In Commonwealth of Australia v Northern Land Council (1993) 176 CLR 604, Mason CJ, Brennan, Deane, Dawson, Gaudron and McHugh JJ said (at 616):
"Both upon principle and authority, it is hardly contestable that documents recording the deliberations of Cabinet fall within a class of documents in respect of which there are strong considerations of public policy militating against disclosure regardless of their contents. But whatever the position may have been in the past, the immunity from disclosure of documents falling within such a class is not absolute. The claim of public interest immunity must nonetheless 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."
82 Later their Honours doubted whether the disclosure of records of Cabinet deliberations upon matters remaining current or controversial would ever be warranted in civil proceedings (at 618).
83 Ms Beauchamp's second category of documents consists of advice for briefs prepared for Ministers for use of the Cabinet. This includes documents (including drafts) prepared by Departments prior to a meeting of Cabinet, for briefing purposes. She claimed that confidentiality needs to be maintained for a briefing document if it suggests what was to be, and ultimately was, considered by the Cabinet or if the document suggests the position that various members of Cabinet would be likely to take in relation to issues under consideration.
84 In Egan v Chadwick (1999) 46 NSWLR 563; [1999] NSWCA 176, Priestley JA noted (at [56]) a distinction between documents that disclose the actual deliberations within Cabinet and other "Cabinet documents" in the nature of reports or submissions prepared for the assistance of Cabinet. While the revelation of actual deliberations of Cabinet would be inconsistent with the doctrine of collective responsibility, he remarked (at [57]) that "documents prepared outside Cabinet for submission to Cabinet may, or may not, depending on their content, manifest a similar inconsistency".
85 Egan v Chadwick suggests that Cabinet briefing documents will often not be protected from disclosure. However, a case where public interest immunity was held to be available was Commonwealth v Construction, Forestry, Mining and Energy Union (2000) 98 FCR 31; [2000] FCA 453 (Full Federal Court: Black CJ, Tamberlin and Sundberg JJ). In that case, a letter from a Minister to the Prime Minister seeking agreement to raise certain matters "under the line" in Cabinet relating to high-level government policy, in the nature of a proposal for discussion by Cabinet, was held to be protected from disclosure. The Court observed (at [42]):
"Although the letter does not in terms record actual deliberations at the Cabinet meeting, it was circulated amongst Ministers in the Cabinet room at the meeting, and the matters in it were discussed and considered by those present. In that sense it reveals what would in the ordinary course be discussed at Cabinet. … Disclosure of the contents of the letter would, in our view, operate to reveal the nature of the matters considered by Cabinet and at least part of the Cabinet's deliberation of those matters."