question 1.1: should the court refuse declaratory relief to awb ?
43 Paragraph 1.1 of the Commonwealth's notice of motion poses the question whether the Court should, at a preliminary trial, exercise a discretion to refuse AWB's claim for a declaration that the documents are the subject of legal professional privilege, that is to say without embarking on any consideration of the merits of AWB's claims to legal professional privilege.
44 It is necessary to consider, first of all, the nature of the discretionary decision that would be sought from the Court under question 1.1, and the arguments that the Commonwealth and AWB intend to advance if that question were to be set down for separate trial.
45 It is a common misconception that a declaration is an equitable remedy. It is not; it is a statutory remedy that is conferred in terms emphasising that its grant or refusal is within the discretion of the Court: see Tito v Waddell (No 2) [1977] Ch 106 at 259; Mayfair Trading Co Pty Ltd v Dreyer [1958] 101 CLR 428 at 454 per Dixon CJ; and Meagher, Gummow and Lehane, Equity Doctrines and Remedies, 4th ed, Butterworths, 2002, at [19-159]. The discretion is to be exercised according to the facts and circumstances of the individual case, and the considerations that may be relevant to the exercise of the discretion are 'so numerous that it is not possible to enumerate them: see Salmar Holdings Pty Ltd v Hornsby Shire Council [1971] 1 NSWLR 192 ('Salmar') at 203.
46 While the refusal of declaratory relief on discretionary grounds will always be heavily dependent on the facts of the particular case, the discretion must be exercised within a framework of relevant legal principle. The cases afford guidance as to the way in which the discretion is to be exercised. In this sense, the question whether declaratory relief should be refused as a matter of discretion raises questions of fact and law, albeit heavily weighted towards the former. The separation of such a question poses special problems for the reasons stated by the High Court in Bass at 358 [53] and by Brooking J in Jacobson at 341.
47 The basal reason that the Commonwealth advances in support of its argument that declaratory relief should be refused is that there is now an alternative procedure for the determination of AWB's privilege claims. In essence, if question 1.1 is set down for separate trial, the Commonwealth proposes to argue that the Commissioner is already well placed to determine the privilege claims under s 6AA of the RCA, and to do so efficiently, whereas it contends that the determination of the privilege claims by this Court is likely to prove more complex, time-consuming and costly, and less efficient.
48 The Commonwealth relies upon Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 ('Forster') and Salmar for its contention that the Court might refuse declaratory relief where the issue is one which the Parliament has entrusted to a specialist body or tribunal, or a more convenient or satisfactory remedy otherwise exists. In Forster, the Court in fact granted declaratory relief, notwithstanding the existence of pending proceedings before the mining warden in which the same issue would arise for decision. The leading judgment was delivered by Gibbs J, with whom McTiernan, Stephen and Mason JJ relevantly agreed. Having held that nothing in the provisions of the Mining Act 1906 (NSW) excluded Jododex's right to apply to the Court for a determination of its legal rights (at 436-437), Gibbs J turned to the Court's discretion to make a declaration at 438-439:
'The question whether the Court should make a declaration which would have the effect of deciding a question in issue in pending proceedings may often be of some difficulty. It is of course important that the proceedings in the present case were not pending in an ordinary court. However, there were some obvious reasons why a judge should hesitate before intervening when the matter was about to come before the warden. It was, of course, possible that the warden would give effect to the contention that Jododex held a valid exploration license and would therefore refuse to grant any authority to enter to the appellant. The warden might have declined to grant the appellant's applications for some other reason. Moreover, if it were ultimately held that Jododex's contention ought to fail, the proceedings before the warden would have been delayed and the appellant would have been put to additional cost and inconvenience. On the other hand, to determine the existence of the right which Jododex sought to establish, it was necessary to ascertain the true meaning and effect of a statutory provision and of an instrument in statutory form. These were pure questions of construction such as would appropriately be decided in the Supreme Court. They were difficult questions, and apparently rights of considerable value depended on the answers to them. When all these conflicting considerations are weighed, it seems to me that it cannot be said that it was not a proper exercise of judicial discretion to proceed to make a declaration in all the circumstances of the case.'
The fact that Jododex was seeking a declaration to forestall a possible contrary decision by the warden was not regarded as an objection to the grant of declaratory relief: per Gibbs J at 437.
49 The Commonwealth's argument is principally founded upon statements made by Walsh J in his dissenting judgment at 427, as follows:
'In my opinion, when a special tribunal is appointed by a statute to deal with matters arising under its provisions and to determine disputes concerning the granting of rights or privileges which are dependent entirely upon the statute, then as a general rule and in the absence of some special reason for intervention, the special procedures laid down by the statute should be allowed to take their course and should not be displaced by the making of declaratory orders concerning the respective rights of the parties under the statute. In other words, I think that it will ordinarily be a wise exercise by the Supreme Court of the discretion which it has under s. 10 of the Equity Act to decline to undertake the tasks which have been committed by the Parliament to a specialized tribunal. Whilst I agree with Gibbs J. that s. 10 ought not to be construed as if it contained words excepting from its operation cases arising under the Act, I think that the procedure set out in the Act itself should be regarded as the normal procedure for dealing with such cases.'
Walsh J acknowledged that grounds for judicial intervention might exist if the decisions of the warden were immune from judicial review.
50 In Salmar at 202-203, Mason JA said:
'In the context of this case it is, however, important to note that the courts have regarded the availability of another suitable remedy as a matter which is relevant to the exercise of the discretion. The significance and weight of this consideration becomes the greater if it appears that questions of the kind sought to be determined ordinarily fall within the jurisdiction of a court or tribunal having a special capacity or experience in dealing with questions of that kind. It is clearly undesirable that there should be a departure from the ordinary and established course of deciding matters in the absence of a discernible advantage to be derived from that departure.
But it may nevertheless appear, as I think it does in this case, that the question for determination is one of general significance readily susceptible of decision by the Equity Court, and that there is advantage in having the question determined by that Court in preference to awaiting the outcome of a decision in accordance with the established procedure. In this case, so it seems to me, advantage or utility lies with the making of a declaration. The question is, as I have remarked, one of general significance of a kind which the Equity Court is frequently called upon to decide.'
51 In its submissions, AWB did not dispute the basic proposition that the existence of another suitable remedy is a matter which would be relevant to the exercise of the Court's discretion. However, AWB disputed that the procedures now available under s 6AA constituted another suitable remedy, and that the Commission can be regarded as, or equated with, a specialist tribunal of a kind described in Forster and Salmar. AWB also said that a judicial determination of the subsistence of legal professional privilege offered it discernible advantages which it is entitled to pursue.
52 Question 1.1 is framed as a question that turns on the Court's discretion. This is understandable as the Commonwealth accepts that this Court is properly seised of jurisdiction to hear and determine AWB's privilege claims and that this jurisdiction is not impaired by the Amending Act. Moreover, the Commonwealth accepted that the Amending Act allows a person in AWB's position the option of having its privilege claims determined by this Court. AWB has elected to have its claims determined in this Court and submits that there are legitimate juridical advantages for it to do so.
53 AWB submits that the advantages it secures by having its privilege claims determined in this Court include the following:
(a) legal professional privilege is a substantive legal right that depends on the common law and it is appropriate that the subsistence of privilege be determined by this Court;
(b) a judicial determination that privilege attaches to the documents will be final and binding;
(c) the Court is independent and impartial;
(d) a decision by this Court will be based on admissible evidence and the usual standards of procedural fairness that apply in courts of justice.
In contrast, AWB submits that its position would not be as fully protected if its privilege claims were to be determined by the Commissioner under s 6AA. Amongst other things, AWB submits that, unlike the Court, the Commissioner is not independent: he is charged with a duty of investigating and reporting whether AWB committed a breach of any law of the Commonwealth, or of a State or Territory, and whether any criminal or other legal proceedings should be taken against AWB. The Commissioner is not bound by the rules of evidence. AWB submits that, if and to the extent that the Commissioner may be bound to accord procedural fairness in making a determination of legal professional privilege under s 6AA, AWB could not expect the same standards of procedural fairness as would apply in this Court. AWB also submits that it would be disadvantaged by reason of the fact that the Commissioner, as a person investigating possible offences by AWB, has been given and intends to use the power to inspect the documents over which privilege is claimed. Lastly, AWB argued that there is a risk that the Commissioner's determination of privilege under s 6AA may only be amenable to judicial review or review for jurisdictional or other legal error, rather than merits review.
54 AWB also relied upon an analogy with the forum non conveniens line of cases to submit that the determination of question 1.1 at a separate trial is likely to raise issues as to the extent to which the Court is duty bound to exercise the jurisdiction that has been invoked by AWB, whether this Court is 'a not inappropriate forum' for the resolution of AWB's privilege claims, and whether the Court should proceed to exercise its jurisdiction in the absence of any suggestion that AWB has acted vexatiously or oppressively in submitting its privilege claims to this Court: see Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 554, 558-559 and 564-565; Regie Nationale Renault v Zhang (2002) 210 CLR 491 at 502-504; Oceanic Sun Line Shipping Company Inc v Fay (1988) 165 CLR 197 at 239; Humane Society International Inc v Kyodo Senpaku Caisha Ltd [2006] FCAFC 116; and Pyx Granite Co Ltd v Ministry of Housing and Local Government [1960] AC 260 at 286-287.
55 For present purposes, the question is not how the Court might exercise its discretion when it reaches that point. Rather, the relevant inquiry is what issues, evidence, facts and circumstances might be relevant to the exercise of a discretion to refuse declaratory relief. That is why the parties canvassed the substantive arguments that would be put if a separate question in terms of question 1.1 were to be set down for trial. Those matters, and the extent of any dispute concerning them, bear directly on the question whether question 1.1 can be, and ought to be, tried separately.
56 In my opinion, the statements of principle by Branson J in Reading (which are summarised above in paragraph 33) are directly applicable. So too are the principles stated in Bass and Jacobson concerning mixed questions of fact and law. I am not satisfied that all of the necessary facts have been ascertained, agreed or proven so as to permit the judicial determination of question 1.1 as a separate question. Further, I am not satisfied that, on a separate trial of question 1.1, the Court would be placed in a position where it can consider all relevant matters before it exercises its discretion to grant or refuse relief.
57 There is no agreement between AWB and the Commonwealth as to the facts and circumstances which are relevant to the exercise of the Court's discretion. The argument before me made it plain that there would be significant factual disputes if I proceeded with an immediate trial of the separate questions, as requested by the Commonwealth. And there is a real prospect that significant contested factual issues would arise between the parties if question 1.1 were to be set down for preliminary hearing at a future date. In Reading at 499 [8], Branson J said that a factor which tells against the making of an order under O 29 r 2 is that the question may give rise to significant contested factual issues both at the time of the hearing of the preliminary question and at the time of trial.
58 The Commonwealth's argument that s 6AA offers an alternative remedy that would be more efficient and less time-consuming than court proceedings was advanced largely by way of assertion. It was disputed by AWB, and the Commonwealth's contention was not made good by placing relevant facts and evidence before the Court.
59 The Commonwealth submitted that, by virtue of the extensive investigations that have already been conducted by the Commissioner, the Commissioner and those assisting him are already familiar with the factual background to AWB's privilege claims. This was not disputed by AWB. At this stage, however, it is unclear whether, and to what extent, the resolution of the privilege claims will turn on the evidence that has already been gathered by the Commission. AWB has not argued these privilege claims in the Commission or adduced any evidence in support of them before the Commission. Over the past week, pursuant to directions made by this Court, AWB has filed affidavit evidence in support of its privilege claims in this proceeding. The Commonwealth has not suggested that any of this evidence has previously been considered by the Commissioner. In the course of its submissions, the Commonwealth asserted that the Commission is already in possession of much of the evidence necessary to determine AWB's privilege claims. But, again, this assertion was not supported by evidence. On the material before me, I am not in a position to form any view as to the extent to which the evidence already possessed by the Commission will be directly relevant to the determination of AWB's privilege claims.
60 The Commonwealth submitted that issues of waiver of privilege are likely to arise, and it filed evidence that was said to illustrate AWB's waiver of privilege over particular documents or categories of documents. The Commonwealth also referred to the possibility that the fraud or iniquity exception to legal professional privilege might be raised against AWB. At the same time, however, the Commonwealth submitted that the nature and scope of the issues that will arise in resolving AWB's privilege claims is uncertain. In particular, it submitted that in this proceeding the process of defining the nature and extent of the dispute about privilege, identifying and particularising objections to privilege such as waiver, fraud or illegality, and reducing the class of documents that is in dispute, has not been completed. This is the position at present, but it will not remain so for very long in this Court.
61 In my opinion, the presently incomplete definition of the issues that will have to be determined to resolve AWB's privilege claims hardly assists the Commonwealth in its application for an order setting down separate questions for trial. Quite the contrary; in my view, it is inappropriate to order a separate trial of question 1.1 when the Court does not have a full and complete picture of the issues of fact and law that will arise for decision in connection with AWB's privilege claims.
62 So far as the definition of the dispute is concerned, there is no reason to think that the Court's position is very different from that which would confront the Commissioner under s 6AA. The Commonwealth acknowledged that the nature and extent of the dispute would need to be defined, and objections such as waiver, illegality and fraud would need to be particularised, at least to some extent, if the Commissioner were to embark on the determination of the privilege claims under s 6AA.
63 The Commonwealth expressly conceded that this proceeding is neither hypothetical nor abstract, and raises a genuine controversy that constitutes a 'matter' appropriate for judicial determination: Bass at 355-356; Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581-582 and 596; and Oil Basins Ltd v Commonwealth (1993) 178 CLR 643 at 649-650. Nonetheless, the Commonwealth submitted that, because of the presently incomplete definition of the issues that will have to be resolved in this Court, the proceeding is premature. In my opinion, this submission does not assist the Commonwealth's application for separate trials. In any proceeding, the process of joining and defining the issues of fact and law that will fall the decision takes some time, and will ordinarily follow the institution of proceedings. The issues in this case are still being defined and there are several reasons why that process is incomplete: the Commonwealth wished to pursue its notice of motion for separate questions at this hearing, which the Court had originally set aside as a hearing at which it was anticipated that there would be a trial of all issues; AWB has filed most but not all its evidence in support of its privilege claims; and the Commissioner has, thus far, taken the stance that it would be inappropriate for him as a submitting respondent to assist the Commonwealth, or the Court, to determine the merits or otherwise of AWB's claims for privilege.
64 At root, the prematurity argument seems to amount to a contention that the Commissioner should be given the opportunity to determine AWB's privilege claims before those claims are considered by the Court. The submission stands in some tension with the Commonwealth's acknowledgment that the Court's jurisdiction has been properly invoked. It tends to beg the question whether, having regard to all relevant discretionary factors, including any discernible advantages that inhere in this proceeding for AWB, it would be appropriate for the Court to exercise a discretion to decline declaratory relief.
65 The Commonwealth submitted that another reason why there should be a separate trial of question 1.1 is that, if the Court proceeded to determine the issues of legal professional privilege, its findings may relate to matters which are the subject of investigation by the Commission. This submission seems to invert the normal relationship between the Court and a process of executive investigation and report. Sections 6AA and 6AB are drafted on the footing that the Commissioner must respect and abide any finding by the Court as to the subsistence of legal professional privilege. In my opinion, the possibility that the Court's decision on legal professional privilege may touch matters which are the subject of investigation by the Commission does not strengthen the Commonwealth's case for separate questions.
66 The Commonwealth could not refer me to any case in which the Court has made an order under O 29 r 2 for the separate trial of the question whether declaratory relief should be refused as a matter of discretion, prior to any consideration of the merits of the claim for declaratory relief. It did, however, refer me to McGowan v Migration Agents Registration Authority (2003) 129 FCR 118 ('McGowan') which concerned the dismissal of a judicial review application.
67 In McGowan, the applicant sought judicial review of a decision by the Migration Agents Registration Authority to suspend her registration as a migration agent until she satisfied certain conditions. The applicant made an application to the Administrative Appeals Tribunal under s 306 of the Migration Act for a merits review of the Authority's decision to suspend her registration some days before she instituted proceedings in the Federal Court seeking judicial review of the Authority's decision. The application was founded principally on the provisions of the Administrative Decisions (Judicial Review) Act 1977 ('ADJR Act'), but also relied in the alternative on s 39B(1A)(c) of the Judiciary Act. The relief sought by the applicant included an order pursuant to s 16(1) of the ADJR Act setting aside or quashing the Authority's decision, and in the alternative, orders by way of prohibition and injunction pursuant to s 39B.
68 By notice of motion, the Authority applied for orders dismissing the application on the basis that it disclosed no reasonable cause of action or alternatively on the basis that it should be dismissed pursuant to s 10(2)(b)(ii) of the ADJR Act. The first ground was not pursued. Section 10(2)(b)(ii) provides that the Court may refuse an application for judicial review on the ground that adequate provision is made by any law other than the ADJR Act under which the applicant is entitled to seek a review of the relevant decision. Order 54 r 7 of the Federal Court Rules requires that a party who seeks to have an application for review dismissed on the ground set out in s 10(2)(b)(ii) or in the exercise of the Court's discretion must apply promptly for such dismissal. This rule is designed to avoid the necessity for a court to consider the whole of the applicant's case where, even if otherwise the applicant would succeed, it is clear that no order would be made in favour of the applicant: Edelsten v Minister of Health (1994) 58 FCR 419 at 422.
69 Branson J held that the same principle should be applied where a claim for judicial review is made under the ADJR Act and alternatively under s 39B. In such a case, Branson J said at 130 [47] that 'the power of the Court to dismiss the application summarily where it is clear that no order would be made in favour of the applicant if a hearing were conducted, extends to the alternative claim formulated by reference to s 39B of the Judiciary Act'. Having regard to the fact that the Migration Act provided that the Authority's decision was amenable to full merits review before the Tribunal, and the fact that the applicant had already commenced proceedings in the Tribunal, Branson J concluded that a more convenient and satisfactory remedy existed before the Tribunal. Accordingly, she dismissed the application.
70 McGowan stands for the proposition that, in the context of judicial review, the court has the power to dismiss a judicial review application summarily where it is clear that the court would decline to grant relief at a final hearing. It does not assist in resolving the present application under O 29 r 2. It is not in dispute that this Court has power to refuse declaratory relief in the exercise of its discretion. The only question is whether, in the circumstances of this case, it is appropriate to order that this question be the subject of a separate preliminary trial. That question turns on the particular facts and circumstances of this case.
71 McGowan forms part of a line of cases which recognises that the Court has a discretion to decline to embark on the judicial review of an administrative decision if a full merits review of that decision is available before an independent statutory tribunal, and the tribunal's decision can then be appealed to, or reviewed by, a court: Edelsten at 423-424; Swan Portland Cement Ltd v Comptroller-General of Customs (1989) 25 FCR 523 at 530; Bragg v Secretary of the Department of Employment, Education and Training (1995) 59 FCR 31 ('Bragg') at 33; Yarmirr v Australian Telecommunications Corporation (1990) 96 ALR 739 at 750; Du Pont (Australia) Ltd v Comptroller-General of Customs (1993) 30 ALD 829; Saitta Pty Ltd v Commonwealth (2000) 106 FCR 554 at 575 [104]; and Re Kamha v Australian Prudential Regulation Authority (2005) 146 FCR 24 ('Re Kamha') at 35 [41] and 36 [46]. In Re Kamha, Gyles J declined to exercise his discretion at a preliminary stage of the case: at 35 [39]. However, after the evidentiary case had been completed and the applicant had completed its submissions, Gyles J determined that it was appropriate to decline judicial review. In doing so, his Honour emphasised that a full merits review before the Administrative Appeals Tribunal was the appropriate means of reviewing the decision, and that means was likely to provide a more satisfactory remedy than the Court could provide on judicial review: at 35 [41] and 36 [46]. In Bragg at 33, Davies J said that the alternative method of review referred to in s 10(2)(b)(ii) of the ADJR Act is one involving 'an independent exercise of powers directly affecting the decision reviewed'. Courts have taken a range of considerations into account in exercising the discretion to decline judicial review, including matters such as whether the alternative form of review will be conclusive of the dispute, whether it is to be undertaken by a specialist tribunal that operates in a technical field, the inability of the court to provide a review on the merits, and whether any hardship or disadvantage will be caused by the applicant being forced to pursue the alternative remedy.
72 AWB submitted that, by propounding question 1.1 as a separate question, the Commonwealth is in substance making a summary dismissal application based on discretionary grounds. In practical terms, the difference between the two forms of application is that a summary judgment application would require the Commonwealth to establish that AWB's claim for declaratory relief is so untenable that it must be refused on discretionary or other grounds. I do not think that the comparison with summary judgment forecloses the Commonwealth's application or taints it as some kind of abuse. AWB disavowed any intention to argue abuse of process. The comparison does, however, afford a reminder that it would be an exceptional step to order a separate trial of a discretionary question of the kind posed by question 1.1, prior to any consideration of the merits of the privilege claims, and that the application needs to be approached with due caution.
73 Question 1.1 is not 'ripe' for determination in the sense discussed in the authorities. The core issue in this case is the subsistence of legal professional privilege. The Court's discretion to refuse declaratory relief necessitates all relevant facts and circumstances being placed before the Court. That has not occurred, and it is unlikely to occur in the absence of a trial of all issues.