DCL22 v Sage

COMMONWEALTH OF AUSTRALIA Second Respondent

order made by: ABRAHAM J DATE OF ORDER: 10 October 2022

1. The second respondent's claim of Public Interest Immunity over the redacted portions of the documents produced to the applicant pursuant to a Notice to Produce dated 27 September 2022, the redactions being reflected in the annexures to the affidavit of Jason Leigh Halls dated 5 October 2022, is established. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ABRAHAM J: 1 By a summons dated 18 August 2022 issued pursuant to s 28(1) of the Australian Crime Commission Act 2002 (Cth) (ACC Act), the first respondent, an examiner of the Australian Crime Intelligence Commission (ACIC), required the applicant (DCL22) to attend before an examiner at an examination for the purposes of a special operation pursuant to a determination of the ACIC's Board. A copy of the determination, the Special Australian Criminal Intelligence Commission Investigation Determination (Targeting Criminal Wealth) 2020, which was made on 28 July 2020 pursuant to s 7C of the ACC Act (the Determination), was annexed to the summons, together with a statement of the rights and obligations pursuant to s 29A(3) of the ACC Act, and Explanatory Notes. 2 By an amended originating application for judicial review dated 16 September 2022, DCL22 challenges the validity of the summons on three grounds (ground 1 now having been abandoned). 3 First, the decision to issue the summons, insofar as it requires the applicant to attend the premises of the ACIC for examination, which hearing will occur in unspecified appropriate security and secrecy protocols, is legally unreasonable and/or a denial of procedural fairness. Second, the summons is invalid as no reasons were provided to the applicant for its issue at the time it was served, contrary to s 28(1A) of the ACC Act on its proper construction. Third, the summons is invalid in that: (i) whatever reasons might have been recorded as the reasons for its issue could not have evidenced that the state of satisfaction of the first respondent rose to the level that he was reasonably satisfied that the summons was reasonably necessary; and/or (ii) the decision was based on a misunderstanding of the law, specifically the threshold of "reasonably necessary" in s 28(1) of the ACC Act. 4 On 27 September 2022, the applicant issued the respondents with a notice to produce. The notice sought the production of the first respondent's written reasons, made on 18 August 2022, for having been satisfied of the matters for the issue of the summons. 5 On 30 September 2022, the respondents produced documents in response to the notice. The documents produced were the redacted reasons for the issue of the summons dated 18 August 2022, the redacted application in relation to the summons dated 17 August 2022, and the summons to the applicant. A claim of public interest immunity was made by the second respondent, the Commonwealth of Australia, over the redacted passages. 6 The argument was heard on 7 October 2022, with each party agreeing that orders could be made with the reasons for doing so then being provided at a later stage to enable the matter to progress in a relatively expeditious manner. 7 On 10 October 2022, I made orders upholding the claim of public interest immunity. These are my reasons for doing so.

History of the proceedings 8 This matter came before the duty judge on 14 September 2022, at which time the examination was scheduled to be conducted on 7 October 2022. A timetable for the hearing of the judicial review application was set, with the hearing to take place in the week commencing 3 October 2022. 9 The matter was then listed for 4 October 2022, with the parties filing written submissions and any evidence to be relied on at the hearing in accordance with the timetable. By 4 October 2022, the examination date had been moved to 25 October 2022 (this appears to have been done to accommodate the applicant). 10 It is in that context that the notice to produce was served. On 4 October 2022, the applicant informed the court that it opposed the claims for public interest immunity over the redacted portions of the produced documents. Opportunity was needed to provide evidence in support of the claims. 11 On 7 October 2022, the Court heard the public interest claim. The applicant agreed that the claim be heard and determined at that stage. As noted above, each party agreed that orders could be made resolving the public interest immunity claim, with the reasons for doing so being provided at a later stage when judgment is given resolving the matter. 12 The Court made orders upholding the public interest claim on 10 October 2022. The matter was then listed for a further case management hearing on 14 October 2022 to enable the applicant to consider a constitutional argument flagged by him in relation to s 78B of the Judiciary Act 1903 (Cth) (Judiciary Act). 13 On 14 October 2022, a timetable was set for the filing of notices pursuant to s 78B of the Judiciary Act (s 78B notices) and written submissions, with a hearing date set for 4 November 2022. No issue was raised in respect to the need for reasons in relation to the public interest claim to be delivered at an earlier time. 14 Although the applicant filed the s 78B notices, it did not file any written submissions. On 26 October 2022, the applicant filed an application for leave to appeal. Only after that was a request made for these reasons. It follows that at that time, the applicant did not know what material, apart from the open affidavit, was relied on in deciding the public interest claim. As a consequence of the breach of the orders, a case management hearing was listed for 28 October 2022, at which time, inter alia, the applicant requested reasons for the order made on 10 October 2022. 15 I note that the ACIC has undertaken not to conduct the examination until the resolution of these proceedings.

Statutory scheme 16 Before considering the Commonwealth's application it is appropriate to briefly outline aspects of the ACC Act, to put the application in context. 17 The ACIC, which is established by s 7 of ACC Act, has functions including the collection, correlation, analysis and dissemination of criminal information and intelligence, and undertaking "special operations" relating to "federally relevant criminal activity": ss 7A(a)-(b). 18 In carrying out these functions, examiners appointed under Div 3 of Pt 2 of the ACC Act may require the production of specified information or documents, and examiners or police officers on the staff of the ACIC may obtain and execute search warrants: ss 20-22. An examiner may summon a person to appear before the examiner to give evidence and to produce such documents or other things as are referred to in the summons: s 28. The ACC Act confers express statutory authority for an examiner to conduct a post-charge examination: s 24A(2). The power in s 28 is conditioned on the examiner's satisfaction that issuing the summons is reasonable in all the circumstances: s 28(1)(c); and, in the case of a post-charge or post-confiscation application summons, that, relevantly, it is reasonably necessary for the purposes of the relevant special ACIC investigation even though the person has been charged or the charge is imminent: s 28(1)(d). The summons records the first respondent's satisfaction for the purposes of ss 28(1)(c) and (d). A summons to appear at an examination must be accompanied by a copy of the relevant instrument of the Board recording the determination and authorisation that the investigation is a special ACIC investigation: s 28(2). There is no dispute that this occurred. Section 28(3) requires the examiner to set out, so far as is reasonably practicable, the general nature of the matters in relation to which the person is to be questioned, unless the examiner is satisfied that in the particular circumstances it would prejudice the effectiveness of the special investigation. 19 Section 28(1A) requires the examiner to record in writing the reasons for the issue of the summons, which record is to be made before or at the same time as the issue of the summons. 20 It is an offence for persons summonsed to appear as a witness at an examination not to attend as required, to refuse or fail to take an oath or affirmation as required, to refuse or fail to answer a question that they are required to answer, and to refuse or fail to produce a document or thing which they were required by the summons to produce: s 30.

Legal principles 21 In Roberts-Smith v Fairfax Media Publications Pty Ltd (No 14) [2021] FCA 552 at [10]-[26], I summarised the principles relevant to the consideration of a claim for public interest immunity in relation to documents sought by way of a subpoena, which is relevantly the same as a notice to produce. 22 It is sufficient for present purposes, to summarise those principles as follows. 23 This public interest immunity claim was to be determined according to common law principles because the provisions of the Evidence Act 1995 (Cth) (Evidence Act) do not extend to pre-trial disclosures or the inspection of documents: Esso Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67; (1999) 201 CLR 49 (Esso) at [3], [16]-[17]; and see ZX v Commonwealth [2016] FCA 1013 (ZX) at [12]; DBCT Management Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd and Geosea Australia Pty Ltd Joint Venture [2021] FCA 512 at [74]. Section 130 of the Evidence Act only applies to claims made in relation to adducing evidence. 24 Whether a claim of public interest immunity ought to be upheld requires the Court to consider two conflicting aspects of the public interest: first, whether harm would be done by the disclosure of matters of state; and second, whether the proper administration of justice would be frustrated or impaired if the documents were withheld. If it appears that both aspects of public interest require consideration, the final step is a balancing exercise of those interests. 25 This accords with the approach outlined by Gibbs CJ in Alister v The Queen [1984] HCA 85; (1984) 154 CLR 404 (Alister v The Queen) at 412: … when one party to litigation seeks the production of documents, and objection is taken that it would be against the public interest to produce them, the court is required to consider two conflicting aspects of the public interest, namely whether harm would be done by the production of the documents, and whether the administration of justice would be frustrated or impaired if the documents were withheld, and to decide which of those aspects predominates. The final step in this process - the balancing exercise - can only be taken when it appears that both aspects of the public interest do require consideration - i.e., when it appears, on the one hand, that damage would be done to the public interest by producing the documents sought or documents of that class, and, on the other hand, that there are or are likely to be documents which contain material evidence. The court can then consider the nature of the injury which the nation or the public service would be likely to suffer, and the evidentiary value and importance of the documents in the particular litigation. 26 And see the observations of Gibbs ACJ in Sankey v Whitlam [1978] HCA 43; (1978) 142 CLR 1 (Sankey v Whitlam) at 38-39 as follows: 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, 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. In other cases, however, as Lord Reid said in Conway v. Rimmer, 'the nature of the injury which would or might be done to the nation or the public service is of so grave a character that no other interest, public or private, can be allowed to prevail over it'. In such cases once the court has decided that 'to order production of the document in evidence would put the interest of the state in jeopardy', it must decline to order production. 27 If the claim of public interest immunity is successful: (1) the information in question need not be produced for inspection by any party to the proceedings; (2) the information in question cannot be adduced in evidence by any party; and (3) the substantive proceedings continue, in effect, without regard to the existence of the information over which public interest immunity has been successfully asserted: Church of Scientology Inc v Woodward [1982] HCA 78; (1982) 154 CLR 25 at 61; Gypsy Jokers Motorcycle Club Inc v Commissioner of Police [2008] HCA 4; (2008) 234 CLR 532 (Gypsy Jokers) at [24]; Assistant Commissioner Condon v Pompano Pty Ltd [2013] HCA 7; (2013) 252 CLR 38 at [148]; HT v The Queen [2019] HCA 40; (2019) 278 A Crim R 133 (HT v The Queen) at [29], [32] and [71]-[72]. 28 The applicable test is whether harm to the public interest could arise from disclosure as a matter of real possibility, as opposed to as a matter of probability. This is because "the incurring of the identified risk [of harm] is itself injurious to the public interest": The Australian Statistician v Leighton Contractors Pty Ltd [2008] WASCA 34; (2008) 36 WAR 83 at [46]; see also Conway v Rimmer [1968] AC 910 (Conway v Rimmer) at 940, referred to with approval by Gibbs ACJ in Sankey v Whitlam at 39; Rogers v Home Department State Secretary; Gaming Board for Great Britain v Rogers [1973] AC 388 at 410E-F; Alfred Crompton Amusement Machines Ltd v Customs and Excise Commissioners (No 2) [1974] AC 405 at 434F; Burmah Oil Co. Ltd. v Governor and Company of the Bank of England and Another [1980] AC 1090 at 1143. 29 The balance between competing public interests "may be struck differently in civil and criminal proceedings": HT v The Queen at [33]. The public interest in favour of disclosure is generally stronger in criminal proceedings, where the ultimate issue is the guilt or innocence of a particular individual: Alister v The Queen at 414 and 456. It has been said, by contrast, that in civil proceedings the "interests of a litigant seeking to vindicate private rights" will rarely prevail over an important public interest such as the protection of Cabinet confidentiality or national security: see Commonwealth v Northern Land Council [1993] HCA 24; (1993) 176 CLR 604 at 618. This is so notwithstanding that the consequence of upholding the claim of public interest immunity may be that a party is "handicapped" in the conduct of his or her case, or even that the case is doomed to fail: see Gypsy Jokers at [5] and [24]. 30 Although the categories of public interest immunity are not closed and may alter from time to time, whether by restriction or by extension as social conditions and social legislation develop, there are a number of well recognised categories of public interest immunity: D v National Society for the Prevention of Cruelty to Children [1978] AC 171 at 230; Sankey v Whitlam at 39. Such categories of public interest immunity include: Cabinet documents and other State papers: Sankey v Whitlam at 41-42; national security: SDCV v Director-General of Security[2022] HCA 32; documents of which production would hinder or affect proper policing: Young v Quin (1985) 4 FCR 483 (Young v Quin) at 494 and 495; documents the production of which would hinder ongoing police investigations: Young v Quin at 495; Marinovich v Director of Public Prosecutions & Anor (1987) 14 ALD 315 at 317; Beneficial Finance Corporation Ltd v Commissioner of Australian Federal Police (1991) 52 A Crim R 423 at 436-437; Attorney-General (NSW) v Stuart (1994) 34 NSWLR 667 (Attorney-General v Stuart) at 680-681, 690E; and, the protection of police informers: Cain v Glass (No 2) (1985) 3 NSWLR 230 at 233-234; Attorney-General v Stuart at 679G; Director of Public Prosecutions v Smith (1996) 86 A Crim R 308 at 311-312. 31 Given the claims in this case, it is appropriate to briefly expand on aspects of those categories. 32 Courts have also consistently recognised the protection of sensitive police methodologies, capabilities, policies and procedures to ensure the ongoing supply of relevant information, as a well-established category of public interest immunity: Attorney-General v Stuart at 675, 680-681; Beneficial Finance Corporation Ltd v Commissioner of Australian Federal Police (1991) 31 FCR 523 at 527-528; Conway v Rimmer at 953-954. This is to ensure that crime can be effectively investigated and prosecuted. 33 As Hunt CJ observed in Attorney-General v Stuart at 675: As another part of that broader public interest, it is essential that nothing used by police in their pursuit of criminals should be disclosed which may give any useful information concerning continuing inquiries to those who organise criminal activities: Conway v Rimmer (at 953-954); or which may impede or frustrate the police in that pursuit: ibid (at 972); or which may reveal matters to the prejudice of future police activities: Young v Quin (1985) 4 FCR 483 at 492; 59 ALR 225 at 234; Beneficial Finance Corporation Ltd v Commissioner of Australian Federal Police (1991) 52 A Crim R 423 at 436-437; and on appeal (1991) 31 FCR 523 at 527-528; 103 ALR 167 at 172; 58 A Crim R 1 at 5. 34 The same applies to other investigative bodies, such as the ACIC, which as explained above, has a range of statutory functions. The ACIC investigates serious and organised crime. As observed by Besanko J in ZX at [18], it "may be readily inferred that it collects and has in its possession sensitive information and in some cases highly sensitive information. It may be inferred that disclosing this information would hamper its operations". This is also reflected in the statutory scheme which recognises the need for confidentiality. 35 The application by the Commonwealth is supported by open and closed affidavits setting out the bases for the public interest claims. In determining a claim of public interest immunity, it is permissible for a court to consider confidential evidence: Young v Quin at 488-489; National Crime Authority v Gould (1989) 23 FCR 191 at 198-199; Attorney-General v Stuart at 681; R v Baladjam & Ors (No 29) [2008] NSWSC 1452 at [3] and [58]; Polley v Johnson; Gillard v Johnson; Ward v Higgs [2013] NSWSC 543 at [23], [26]; Gypsy Jokers at [180]. I also note that courts have recognised that "full respect" should be given to the evidence of the deponent who makes an affidavit in support of a claim of public interest immunity: Sankey v Whitlam at 46, and see 43-44, 59-60; and see Alister v The Queen at 435, 455; Young v Quin at 489-490; R v Lodhi [2006] NSWSC 596; 199 FLR 270 at [31]-[32]; Commonwealth v Northern Land Council (1991) 30 FCR 1 at 38. It is relevant that the deponent is a person of seniority: Young v Quin at 489, and that the matters in respect of which the evidence is given are not, or not wholly, within the competence of the Court to evaluate for itself: see, for example, Sankey v Whitlam at 43-44, 46 and 59-60. 36 In most cases where a claim of public interest immunity is made, the claim may be determined without the Court inspecting the documents over which the claim is made, although the Court has the power to inspect the documents "privately" if this is considered necessary to determine the claim: see, for example, Sankey v Whitlam at 46; see also Attorney-General v Stuart at 672, citing Conway v Rimmer at 971, 979 and 995.

Consideration 37 It is appropriate to commence by considering the evidence relied on by the Commonwealth. 38 The Commonwealth relies upon the evidence of Mr Halls, the ACIC's National Manager of Examinations. Mr Halls has sworn an open affidavit dated 5 October 2022 and a confidential affidavit dated 7 October 2022 in support of the claim. I accept the Commonwealth's submission that, given the evidence, he has extensive experience and seniority, which leads to him being well-positioned to give evidence about the realities of the ACIC's investigations and the damage to the public interest that might arise if the redacted material is disclosed. 39 Mr Halls gives evidence in his open affidavit that disclosure of the redacted material would, or would tend to: prejudice the special ACIC investigation, which is ongoing, by disclosing the objectives of that investigation, the targets of that investigation, and the state of the intelligence holdings of the ACIC and other law enforcement agencies in relation to that investigation; undermine the effectiveness of any examinations which may be conducted and the purposes of that investigation; and reveal sensitive law enforcement methodologies. These are recognised bases of a public interest claim. 40 Mr Halls deposes that the effectiveness of the special ACIC investigations is dependent to a large extent on its capability to gather and assess intelligence and to apply safeguards to protect it. He said that this effectiveness would be undermined if the intelligence gathered by ACIC were to be disclosed publicly, particularly during an ongoing investigation. He gave evidence that for the reasons he gave in the open and confidential affidavit, it would be injurious to the public interest for the redacted material to be disclosed because this could be used by persons involved in serious and organised criminal activity to understand the state of ACIC's intelligence holdings and sensitive law enforcement methodologies, as well as to identify sources and targets of past and ongoing investigations by the ACIC. Such disclosure would undermine the ability of the ACIC to exercise its statutory functions. 41 I have also had regard to the Mr Halls' confidential affidavit, which the second respondent refers to in its written submissions as identifying an additional ground. 42 I accept Mr Halls' evidence. 43 I have already referred above to the observations of Hunt CJ in Attorney-General v Stuart. The ACIC refer, in particular, to three other cases, Barnes v Boulton [2004] FCA 1219; (2004) 139 FCR 356 (Barnes v Boulton), National Companies and Securities Commission v News Corporation Ltd [1984] HCA 29; (1984) 156 CLR 296 (National Companies and Securities Commission) and Harper v Costigan (1983) 72 FLR 140) (Harper v Costigan), which make observations to the same effect. 44 In Barnes v Boulton, Finn J observed at [25] that when considering a submission that there is an obligation pursuant to s 28(1A) of the ACC Act to give reasons for issuing a summons, "the Courts have shown an understandable reluctance to occasion the compromise of a criminal investigation by requiring the premature disclosure of information concerning that investigation". In National Companies and Securities Commission at 323-324, Mason, Wilson and Dawson JJ observed: It is of the very nature of an investigation that the investigator proceeds to gather relevant information from as wide a range of sources as possible without the suspect looking over his shoulder all the time to see how the inquiry is going. For an investigator to disclose his hand prematurely will not only alert the suspect to the progress of the investigation but may well close off other sources of inquiry. 45 In Harper v Costigan, Morling J at 154 described as "cogent" the reasons given by Royal Commissioner Costigan for refusing to furnish a statement of reasons for his decisions to issue summonses stating: If law enforcement agencies generally, and Royal Commissions such as mine in particular, are compelled to reveal their knowledge of sophisticated criminal activities point by point as the knowledge is gained, then the investigations into those activities will swiftly founder. The criminals engaged in them will be warned as to the progress of the investigations and will thus be equipped to counter its inquiries by such means, lawful and unlawful, as they choose to adopt. It would be quite contrary to the public interest to compel such disclosure as the investigations proceed. 46 On the other side, the public interest in disclosure is that there may be material in the redacted parts of the documents over which a claim is made which might assist the applicant in his judicial review application. Although that was not expressly articulated by the applicant, I take that to be the position advanced. It was no higher than that. Rather, the applicant's submission was that it is uncontroversial that the scales in an immunity claim may tip differently depending on whether the proceeding is civil or criminal, and so the circumstances in which he is seeking judicial review, being the "enforcement of statutory and constitutional limits of exercise of executive power", should inform the balancing exercise in an analogous way. 47 The applicant drew attention to the fact that between the time that the redacted documents were first provided and the time of Mr Halls' open affidavit attaching the documents over which the claim is made, aspects of the redactions have been retracted. In other words, less material is now claimed to be subject to public interest immunity. The applicant submitted that because of this, the Court should be cautious about accepting Mr Halls' evidence. 48 I note that in reply the Commonwealth submitted that a consideration of the documents reflects that what is no longer claimed is certain identifying evidence relating to the applicant (which is only 15 lines overall). I note also that the initial documents provided were not with an affidavit, and that the only documents over which a claim is made are those attached to Mr Halls' affidavit. 49 I do not consider that in the circumstances, the fact that the claims were reduced over time affects the reliability of Mr Halls' evidence. 50 I accept that there are conflicting aspects of the public interest, and therefore that it is necessary to undertake the balancing exercise referred to by Gibbs CJ in Alister v The Queen. 51 As I have already explained, I accept the evidence of Mr Halls. The ACIC investigates serious and organised crime. It can readily be accepted that, as Mr Halls states, its ability to perform its function is dependent to a large extent on its capability to gather and assess intelligence and to apply safeguards to protect it. It can readily be accepted that if the objects of an investigation, its targets, its intelligence holdings in relation to it (including with other law enforcement agencies), and the methods used, were disclosed, it would not only affect this investigation but would undermine the effectiveness of the ACIC to fulfil its functions. Although there are redactions in the documents provided, there is information provided. Moreover, the documents are structured in such a way that they reflect the topics to which the redactions are addressed. 52 Balancing all of the relevant considerations in this case, I am satisfied that the balance weighs in favour of non-disclosure on the basis of public interest immunity. On the evidence before me, the Commonwealth has established its claim for public interest immunity. 53 As explained above, I have considered the open and confidential affidavit. The confidential affidavit and unredacted material were provided in separate sealed envelopes. In reaching the conclusion that the claim is established I have not accessed the unredacted material. 54 Finally, as referred to above at [23], this claim, relating to material sought by a notice to produce, is determined by the application of common law principles: Esso at [3], [16]-[17]. I note that in response to a question by the Court, although the applicant accepted that, he sought to formally reserve his position, submitting that "Esso means what it does up until a point", but said he could not "concede that it applies in the novel circumstances that are arising". The novelty referred to appears to be that there is a constitutional argument he seeks to advance in the proceedings. The applicant did not advance any submission that the common law principles did not apply. As referred to above, the circumstances were the resolution of a claim for public interest immunity made in respect to documents produced in response to a notice to produce. Moreover, the applicant agreed that the public interest immunity claim be determined at the stage it was. I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Abraham.