HJ (a pseudonym) v IBAC [2021] VSCA 200

Court of Appeal (Vic)|2021-07-21|Before: Adam P, Digby J, Beach JA, Kyrou JA, Kaye JA

PRACTICE AND PROCEDURE - Test for determining when court will release party from undertaking given to court - Whether judge erred in finding that test is what is in interests of justice and that change in circumstances is only an example of when interests of justice may warrant party being released - Leave to appeal granted, appeal dismissed - Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170 applied, Mulvany v Hive & Wellness Australia Pty Ltd [2019] VSCA 122 explained.

* This is an edited version of the judgment that was published to the parties on a confidential basis. This judgment refers to previous judgments and orders in the Trial Division and the Court of Appeal which were published to the parties on a confidential basis and which remain confidential.

HUMAN RIGHTS - Right to privacy in s 13(a) of Charter of Human Rights and Responsibilities Act 2006 - Construction of s 91 of Independent Broad‑Based Anti‑Corruption Commission Act 2011 compatibly with right to privacy in accordance with s 32 of Charter - Whether judge erred in applying Charter - Leave to appeal granted, appeal dismissed - Independent Broad‑Based Anti‑Corruption Commission Act 2011 ss 91, 97, 100, 101 - Charter of Human Rights and Responsibilities Act 2006 ss 3, 4, 7, 13, 32, 38.

PRACTICE AND PROCEDURE - Interlocutory injunction - Whether judge erred in concluding that requirements for granting interlocutory injunction not satisfied - Leave to appeal refused.

1 The respondent ('IBAC') is conducting an own-motion investigation into matters involving HJ. PQ is a person of interest in the investigation.

2 A judge of the Trial Division issued two search warrants pursuant to s 91 of the Independent Broad‑Based Anti‑Corruption Commission Act 2011 ('IBAC Act'): one for execution at HJ's premises and the other for execution at PQ's premises. A day later, IBAC executed both warrants.

3 Later in the same month, HJ commenced a judicial review proceeding in the Trial Division against IBAC.[1] In its originating motion, HJ sought: an order in the nature of certiorari quashing IBAC's decision to conduct the investigation; a declaration that the investigation was beyond IBAC's powers; a final order restraining IBAC from continuing the investigation; and a final order for the delivery of materials seized pursuant to the warrants. The originating motion did not seek an interlocutory injunction. HJ claimed that the investigation was beyond IBAC's powers for a number of reasons.

4 Additionally, HJ filed a summons for an urgent interlocutory injunction restraining IBAC from continuing its investigation until the final determination of the judicial review proceeding. During the hearing of the summons before Digby J, IBAC's legal representative gave undertakings as to how IBAC would deal with the seized documents in relation to HJ's claims for privilege and issues of relevance.[2] Digby J dismissed HJ's application ('Injunction Judgment').

5 IBAC subsequently sought to be released from its undertakings or, alternatively, that its undertakings be varied to apply only to HJ's claims for privilege.

6 On 3 July 2020, Daly AsJ granted an interlocutory injunction restraining IBAC from reviewing the seized documents pending the determination of its application to vary or be released from its undertakings.

7 On 28 August 2020, Kennedy J decided that IBAC's undertakings should be varied to release IBAC insofar as the undertakings related to claims of irrelevance ('Undertakings Judgment') and, on 1 September 2020, she made an order to give effect to her decision.

8 On 7 September 2020, HJ and PQ applied to this Court for leave to appeal from the Undertakings Judgment on 11 grounds.[3] Those grounds may be broadly summarised as follows:

(a) Kennedy J failed to apply the correct test for the release of a party from an undertaking given to the court (grounds 1 and 2).[4]

(b) Kennedy J erred in her construction of s 91 of the IBAC Act and, in particular, she failed to properly examine how the Charter of Human Rights and Responsibilities Act 2006 ('Charter') should be applied to IBAC dealing with the seized documents (grounds 3-7).[5]

(c) Kennedy J erred in refusing to extend the injunction granted by Daly AsJ or otherwise grant an interlocutory injunction restraining IBAC from reviewing the seized documents (grounds 8-11).[6]

9 On 23 September 2020, this Court made the following relevant orders:

That the Applicants be permitted to commence these proceedings without divulging their names and in lieu using the pseudonym 'HJ' and 'PQ' respectively.
That, pursuant to r 28.05(2) of the Supreme Court (General Civil Procedure) Rules 2015, the court file be made confidential and no person may inspect or obtain a copy of any documents on the court file, without further order.
That, pursuant to s 30(1) of the Open Courts Act 2013, the whole of the proceeding be heard in closed court.

10 The applicants also sought a stay of Kennedy J's order dated 1 September 2020. On 5 October 2020, this Court refused that application ('Stay Judgment').

11 For the following reasons: the application for leave to appeal will be granted in respect of grounds 1-7; the application for leave to appeal will be refused in respect of grounds 8-11; and the appeal will be dismissed.

Relevant provisions of the IBAC Act and the Charter

12 Section 8(a) of the IBAC Act states that its objects include to 'provide for the identification, investigation and exposure of ... corrupt conduct'. Pursuant to s 15(2)(a), IBAC's functions include identifying, exposing and investigating 'corrupt conduct'. 'Corrupt conduct' is defined in s 4(1) to include conduct that involves the misuse of information by, or the dishonest performance of the functions of, a public officer or public body.

13 IBAC is empowered to conduct an investigation in accordance with its corrupt conduct investigative functions on its own motion under s 60(1)(c) of the IBAC Act. However, s 60(2) provides that IBAC must not conduct such an investigation unless it suspects on reasonable grounds that the conduct constitutes corrupt conduct.

14 IBAC's investigative powers are set out in pt 4 of the IBAC Act. Division 4 of pt 4 of the IBAC Act (ss 91-97) sets out IBAC's search warrant powers.

15 Pursuant to s 91(1)(a) of the IBAC Act, an authorised officer may, relevantly, apply to a judge of the Supreme Court for a search warrant in relation to particular premises, if the authorised officer believes on reasonable grounds that entry to the premises is necessary for the purpose of an investigation.

16 Section 91(3) of the IBAC Act then relevantly provides as follows:

If a Judge of the Supreme Court ... is satisfied by evidence on oath or by affirmation ... that there are reasonable grounds for the belief under subsection (1)(a) ..., the Judge ... may issue a search warrant authorising any person named in the warrant -

(a) to enter and search the premises ... named or described in the search warrant and inspect any document or thing at those premises ...; and

(b) to make a copy of any document relevant, or that the person reasonably considers may be relevant, to the investigation; and

(c) to take possession of any document or other thing that the person considers relevant to the investigation.

17 Section 94(2) of the IBAC Act relevantly requires IBAC to immediately take all reasonable steps to return a seized document or thing if IBAC is no longer satisfied that its retention is necessary for the purposes of an investigation or a legal proceeding arising out of an investigation.

18 Section 97 of the IBAC Act deals with privilege claims in relation to search warrants. It provides as follows:

97 Privilege claims in relation to search warrants

(1) This section applies if -

(a) a person executing a search warrant (the searcher) wishes to inspect, copy or seize a document or other thing under the search warrant; and

(b) a person who is entitled to claim the privilege (the claimant) claims that the document or other thing is the subject of privilege.

(2) The searcher must consider the claim of privilege and either -

(a) cease exercising the power under the search warrant in relation to the document or other thing over which the claim of privilege is made; or

(b) require the claimant to immediately seal the document or other thing in an envelope, or otherwise secure it if it cannot be sealed in an envelope, and give it to the searcher.

(3) The searcher must not inspect the document or other thing in considering the claim of privilege.

(4) If the searcher requires the claimant to give the document or other thing to the searcher under subsection (2)(b), the searcher must -

(a) notify the [IBAC] Commissioner as soon as practicable; and

(b) immediately give the document or other thing to the proper officer of the Supreme Court to be held in safe custody.

(5) Subject to section 101, a person must not open a sealed envelope or interfere with a document or thing secured otherwise than in an envelope before delivery to the proper officer of the Supreme Court.

19 Division 5 of pt 4 of the IBAC Act (ss 98-101) further deals with claims for privilege. Section 100 provides that IBAC may apply to the Supreme Court to determine whether or not a document sealed pursuant to s 97(2) is the subject of privilege. The claimant is entitled to appear and be heard on such an application. Under s 101, if the Court determines that the document is privileged, it must order that it be returned to the claimant, whereas if it determines that the document is not privileged, it must order that it be given to IBAC.

20 'Privilege' is relevantly defined in s 3(1) of the IBAC Act to mean:

(a) any privilege that a person is entitled to claim in any proceedings before a court or tribunal ... ; and

(b) public interest immunity.[7]

21 There is no specific provision in the IBAC Act dealing with claims that a document that IBAC proposes to seize - or has seized - pursuant to a search warrant is not relevant to IBAC's investigation.

22 Section 16 of the IBAC Act states that 'IBAC has power to do all things that are necessary or convenient to be done for or in connection with, or as incidental to, the achievement of the objects of this Act and the performance of its duties and functions.'

23 Under s 40 of the IBAC Act, current and former IBAC officers are, relevantly, prohibited from making unauthorised disclosures of information acquired by reason of the performance of their functions under the IBAC Act.

24 Section 13 of the Charter sets out a right to privacy in the following terms:

13 Privacy and reputation

A person has the right -

(a) not to have his or her privacy, family, home or correspondence unlawfully or arbitrarily interfered with; and

(b) not to have his or her reputation unlawfully attacked.

25 Section 3(1) of the Charter defines 'person' to mean a human being. Accordingly, the Charter applies to PQ but not to HJ.

26 Section 32(1) of the Charter provides that '[s]o far as it is possible to do so consistently with their purpose, all statutory provisions must be interpreted in a way that is compatible with human rights'. Section 32(3)(a) provides that s 32 'does not affect the validity of ... an Act or provision of an Act that is incompatible with a human right'.

27 Section 7 of the Charter - which is in pt 2 (ss 7-27) - sets out the circumstances in which the human rights protected by the Charter may be limited. It relevantly states as follows:

7 Human rights - what they are and when they may be limited

...

(2) A human right may be subject under law only to such reasonable limits as can be demonstrably justified in a free and democratic society based on human dignity, equality and freedom, and taking into account all relevant factors including -

(a) the nature of the right; and

(b) the importance of the purpose of the limitation; and

(c) the nature and extent of the limitation; and

(d) the relationship between the limitation and its purpose; and

(e) any less restrictive means reasonably available to achieve the purpose that the limitation seeks to achieve.

(3) Nothing in this Charter gives a person, entity or public authority a right to limit (to a greater extent than is provided for in this Charter) or destroy the human rights of any person.

28 Section 38 of the Charter regulates the conduct of public authorities. It relevantly provides as follows:

38 Conduct of public authorities

(1) Subject to this section, it is unlawful for a public authority to act in a way that is incompatible with a human right or, in making a decision, to fail to give proper consideration to a relevant human right.

(2) Subsection (1) does not apply if, as a result of a statutory provision or a provision made by or under an Act of the Commonwealth or otherwise under law, the public authority could not reasonably have acted differently or made a different decision.

Example

Where the public authority is acting to give effect to a statutory provision that is incompatible with a human right.

...

29 It was not in dispute that IBAC is a 'public authority' as defined in s 4 of the Charter.

30 At some point prior to the issue of the two warrants, IBAC commenced investigating matters involving HJ.

31 The warrant for execution at HJ's premises described the '[n]ame and/or description of person, or document or thing' as follows:

Any documents, items or things (including mobile phones, computers or other electronic devices, electronic or magnetic storage devices and related manuals, passwords and equipment) that:

(a) is or has been created or used by [PQ] or [AB]; and

(b) relates to, or contains or may contain information about [certain specified matters].

Any documents, items or things (including mobile phones, computers or other electronic devices, electronic or magnetic storage devices and related manuals, passwords and equipment) relating to, or which contain or may contain information relating to the employment of [BC] by [HJ].
The entire [HJ] electronic user profile and any back up or historical version of the user profile of [BC], including all emails, documents and internet browsing history.

32 The description in the warrant for execution at PQ's premises was substantially similar in relation to paras 1(b) and 2 above, but did not include paras 1(a) or 3.

33 Both warrants described the '[p]urpose for search' as follows:

Entry and search of the premises is necessary for the purpose of an investigation into suspected corrupt conduct being conducted pursuant to section 60(1)(c) of the [IBAC Act].

34 Both warrants stated that certain named officers of IBAC were authorised to enter and search the specified premises:

to inspect any document or thing; and

to make a copy of any document relevant to the investigation; and

to take possession of any document or other thing relevant to the investigation.

35 When IBAC executed the warrants, it seized documentary and electronic materials which included eight mobile phones, two iPads, more than 70 USBs, four laptops, three computers, three hard drives and data from HJ's servers ('seized documents'). The seized documents were taken to IBAC's offices where data was extracted and stored in a secure database controlled by its High Tech Crime unit ('HTC unit'). This database is not accessible by IBAC officers outside of the HTC unit, such as IBAC investigators and in-house lawyers.

36 Following an exchange of correspondence regarding the process by which the applicants might claim privilege over seized documents, IBAC's legal manager sent a letter to the applicants' solicitors the day prior to the hearing before Digby J. That letter set out the process for dealing with the applicants' claims for privilege which it said had been agreed by the applicants' previous solicitors. The final step of that process was that 'where there was no agreement, the process set out in the IBAC Act for dealing with those claims could then be followed'. The letter then stated the following in relation to claims that seized documents were not relevant to IBAC's investigation:

We understand that your clients, or in particular one client [PQ], are now concerned that there may be private and/or sensitive material that has no relevance to the IBAC investigation. We confirm, as discussed during our telephone call of yesterday, that IBAC has no interest in any documents that are not relevant to the investigation.

IBAC now invites you to engage in the same process as set out above, to enable you to clearly identify irrelevant material. It will provide your clients with the comfort they require with respect to any privileged or irrelevant material that has been seized. ...

After the completion of the above process, IBAC would return material to the client(s) or identified legal representative that we accept is either subject to client legal privilege (or other identified privilege) or irrelevant to our investigation.

In the event agreement cannot be reached about an item, it will be sealed and it can be dealt with as part of a court process under the IBAC Act.

37 As we have already stated at [3] and [4] above:

(a) HJ commenced a judicial review proceeding seeking (among other relief) an order quashing IBAC's decision to conduct the investigation;

(b) HJ filed a summons seeking an interlocutory injunction restraining IBAC from continuing the investigation until the final determination of the judicial review proceeding; and

38 At the hearing of the summons before Digby J, HJ was represented by senior and junior counsel and IBAC was represented by one of its principal internal lawyers, CD. During the hearing, the following exchange took place between CD and Digby J as to how IBAC would deal with the seized documents with respect to claims by HJ for privilege or irrelevance:

[CD:] IBAC has already given an undertaking to the solicitors for [HJ] that it will not examine any of the material [it] has seized until [HJ] has had the proper opportunity to make a claim for privilege. And, similarly if [HJ] wishes to raise any issues about what might or might not be relevant, IBAC is willing to hear those matters and have that discussion. I can further give that undertaking to the court that IBAC will not review any of the material. On a practical level, Your Honour, within the IBAC premises, there's a separate unit that deals with electronic devices. That unit is isolated from the rest of IBAC. There are records of access to everything in there. I can give an undertaking that no one will further access the material if that's required.

HIS HONOUR: Until when? Until [HJ] or persons nominated by [HJ] engage in the process of identifying ... privileged and or confidential material.

[CD]: Well, just to be clear, Your Honour, in terms of facilitating that process, someone from the, it's called the High Tech Crime Unit in IBAC, will have to run the software to extract the material to enable [HJ] to look at it. That does not involve them looking at the contents of the material. So, to that extent someone would have to have access to that. But other than that, no one will have access.[8]

39 Digby J dismissed the application in a judgment delivered at the conclusion of the parties' submissions. He found that there was no sufficiently arguable serious issue to be tried in the proceeding which could provide the basis for the injunctive relief sought.[9] He took IBAC's undertakings into account in making this finding and his further finding that the balance of convenience significantly favoured IBAC.[10] However, his references to IBAC's undertakings are not entirely clear. That is because, although at para 76 of his reasons he appears to indicate that IBAC's undertakings extend to not examining seized documents until HJ has had an opportunity to make claims for irrelevance as well as privilege, his summary of IBAC's undertakings at paras 46 and 48 is not to that effect. Paragraphs 46 and 48 of Digby J's reasons are as follows:

[IBAC] also noted that it has already provided the solicitors acting for [HJ] with an undertaking that [IBAC] will refrain from examining any of the seized material until [HJ] has had the opportunity to make claims for privilege, and [IBAC] has stated that it remains open to discuss with [HJ] the relevance of any of the seized material.

...

As to the balance of convenience [IBAC] emphasises that it has undertaken to [HJ] that it will not examine any of the seized material until [HJ] has had a proper opportunity to make a claim for privilege and further [IBAC] offers to undertake that it will not review any of the material until [HJ] has had the opportunity to assert privilege over specific materials.[11]

40 The order made by Digby J recorded IBAC's undertakings in the following terms:

[IBAC] by its Counsel undertakes -

(i) that save for making one copy for the purpose of protecting the integrity of the evidence and one copy for provision to [HJ] to provide it with the opportunity to make any claim for privilege or raise any issue in respect of relevance, there will not be any further copies made of the documents, devices and other materials seized by [IBAC] ... [from HJ's and PQ's premises] until any claim for privilege is made and resolved;

(ii) not to disclose or disseminate the said materials seized pursuant to the search warrants ... except when required for the performance of the duties or exercise of the powers of [IBAC]; and

(iii) where material is subsequently determined or agreed to be either privileged or irrelevant, access to this material by [IBAC's] officers will be limited to officers within [IBAC's] High Tech Crime Unit where such material will be electronically quarantined such that [IBAC's] investigators can only review the balance of the material.[12]

41 On the day of the hearing before Digby J, consent orders were also made that the proceeding be heard in closed court pursuant to s 30(1) of the Open Courts Act 2013 and that disclosure of a report of the proceeding was prohibited pursuant to s 20.

42 The parties subsequently proceeded with the foreshadowed review of the seized documents. The applicants tagged on IBAC's database the seized documents that they claimed were privileged ('tagged privilege documents'). The HTC unit then provided spreadsheets to the applicants that contained the metadata - and, in some cases, the contents - of the tagged privilege documents ('privilege claim spreadsheets'). This information was quarantined by the HTC unit from IBAC investigators. Upon receipt of the privilege claim spreadsheets, the applicants edited the spreadsheets by removing any privileged content and some of the metadata that the applicants said could reveal the privileged information ('edited privilege claim spreadsheets'). The applicants returned the edited privilege claim spreadsheets to IBAC, with the items contained in the spreadsheets representing their privilege claims.

43 In May 2020, an issue arose between the parties as to whether IBAC investigators should be able to examine the metadata of the tagged privilege documents. By email on 22 May 2020, the applicants claimed that such an examination would be a contravention of s 97(3) of the IBAC Act. That was disputed by IBAC; however, it ceased reviewing the edited privilege claim spreadsheets. An issue also arose as to whether IBAC's undertakings prevented it from inspecting seized documents that the applicants claimed were not relevant to IBAC's investigation until the relevance issue was resolved. IBAC denied that the undertakings had this effect. However, in an email dated 28 May 2020, IBAC undertook that it would refrain, until 4:00 pm on 1 June 2020, from inspecting the seized documents that were subject to privilege and irrelevance claims if the applicants issued a summons by that time to restrain IBAC from such inspection. The date was extended by further agreement to 4:00 pm on 4 June 2020.

44 On 4 June 2020, HJ filed a summons, para 1 of which sought leave to file an amended originating motion and para 2 of which sought an order that PQ be added as a second plaintiff. Paragraph 3 of the summons sought an interlocutory injunction restraining IBAC from inspecting the seized documents or any information derived from them ('derived information') until the determination of the judicial review proceeding or further order. The proposed amended originating motion included a new ground 3 which asserted that 'IBAC has acted, and/or is proposing to act, unlawfully in breach of [its] undertakings ..., in breach of the IBAC Act and in breach of the [Charter]'. It also included a new para 5A which sought an order that, until further order, IBAC be enjoined from inspecting the seized documents or any derived information.

45 In opposition to HJ's summons, CD (IBAC's principal internal lawyer who gave the undertakings at the hearing before Digby J) affirmed an affidavit on 22 June 2020 which relevantly stated:

The undertaking given to the Court ... was intended by IBAC to confirm that:

IBAC would meet its obligation to provide [HJ] and [PQ] with a reasonable opportunity to claim privilege over anything that IBAC had seized before IBAC inspected it and that the process by which IBAC determined those claims, and asked the court to determine those claims, would follow the statutory process set out in the IBAC Act; and
IBAC would also take the additional step, which it was not obliged to, and hear and consider relevance issues raised by [HJ] and [PQ].

In response to the amended originating motion received from [HJ], the IBAC Commissioner has told me that in agreeing to hear [PQ] on 'relevance' he did not agree to and did not contemplate that there would be a process by which a third party (as suggested in [HJ's solicitor's] affidavit ... and [HJ's] submissions ...) would determine claims made by [HJ] and [PQ] that particular documents were not relevant to IBAC's investigation.

46 On 1 July 2020, the applicants completed the process of returning the edited privilege claim spreadsheets to IBAC. The items contained on the spreadsheets represented their privilege claims. The parties engaged in additional correspondence to resolve technical issues and reduce the quantum of privilege claims. Revised edited privilege claim spreadsheets were provided to IBAC on 10 July and 13 August 2020.

47 On 3 July 2020, Daly AsJ heard HJ's summons dated 4 June 2020. In the course of the hearing, IBAC indicated that, if Daly AsJ accepted the applicants' broad interpretation of IBAC's undertakings, it proposed to make an application to vary or be released from the undertakings. Daly AsJ made the following relevant orders:

(a) PQ be added as a plaintiff (para 1 of the order).

(b) HJ and PQ have leave to amend the originating motion to include ground 3 - that IBAC had acted, or proposed to act, unlawfully - and para 5A - being a claim to restrain IBAC from inspecting the seized documents or any derived information until further order (para 2 of the order).

(c) IBAC (save for officers of the HTC unit) be restrained from reviewing the seized documents, including the metadata derived from those documents, pending the hearing and determination of IBAC's foreshadowed application for an order to vary or be released from the undertakings it gave to the Court (paras 3 and 5 of the order).

48 In paras C-E of the 'other matters' section of her order, Daly AsJ relevantly stated as follows:

A temporary injunction will be granted to restrain [IBAC] from inspecting the balance of the documents seized pursuant to the warrants ('documents') (that is, the documents not being the subject of privilege claims) pending [IBAC's] foreshadowed application to vary and/or be relieved of the undertakings given by its solicitor to this Court ... ('undertakings'). The sole basis for granting the injunction is that there is a serious question to be tried as to whether [IBAC's] expressed intention to inspect the balance of the documents is a breach of the undertakings.

Whether [IBAC] was obliged to give the undertakings to enable [HJ] to raise issues of the relevance of the documents is beside the point: it did in fact give the undertakings. Having regard to the transcript of the hearing before Digby J ... (see, in particular, T37-41), and his Honour's reasons ... (see, in particular, paragraphs [72] and [76] of his Honour's reasons), it is tolerably clear that the undertakings should not be given the narrow construction contended for by [IBAC], but rather, the parties (and his Honour) envisaged that there would be communications between the parties to enable the private and confidential information of [PQ] in particular to be excluded from the documents to be inspected by [IBAC].

Having found that there is a serious question to be tried as to whether the foreshadowed conduct of [IBAC] would be in breach of the undertakings, the balance of convenience clearly favours [HJ], given that [IBAC] has also foreshadowed an application to vary and/or be released from the undertakings, provided that such an application can be made and listed promptly.

49 Daly AsJ did not otherwise publish any reasons for her orders.

50 By summons dated 8 July 2020, IBAC sought an order that it be released from its undertakings or, alternatively, an order that the undertakings be varied so as to apply only to the applicants' privilege claims.

51 The applicants completed their review of the seized documents for irrelevance and privacy claims on 15 July 2020. They tagged on IBAC's database the documents the subject of such claims ('tagged irrelevance documents'). The tagged irrelevance documents were obtained from eight mobile phones, two iPads and eight computers/servers. IBAC provided the applicants with spreadsheets listing the tagged items from the mobile phones on 28 September 2020.

52 To facilitate the applicants being able to properly make their privilege claims, a further privilege review is to occur in respect of the eight computers/servers. Accordingly, spreadsheets in relation to tagged privilege documents have not been provided for these devices.

Overview of Kennedy J's Undertakings Judgment and grounds of appeal

53 On 20 August 2020, Kennedy J heard IBAC's summons dated 8 July 2020. She delivered judgment on 28 August 2020, granting IBAC a variation of the undertakings. She considered that it was in the interests of justice to vary the undertakings for four reasons. First, there were changed circumstances. Secondly, there was some ambiguity about the scope of the undertakings. Thirdly, the undertakings were given under urgent conditions without contest. Fourthly, continuation of the undertakings was liable to hinder the express powers given to IBAC under the IBAC Act.[13] Kennedy J also found that there was no basis for granting the applicants further injunctive relief.[14] Kennedy J noted that, as at the time of the hearing before her, the applicants had made privilege claims in respect of 90,000 documents and irrelevance claims in respect of 15,200 documents.[15]

54 Kennedy J's reasons are discussed in detail below, under the grounds of appeal to which they relate.

55 On 1 September 2020, Kennedy J made an order refusing the applicants' application for injunctive relief and varying IBAC's undertakings so that they read as follows:

that save for making one copy for the purpose of protecting the integrity of the evidence, and making and providing any necessary copies for the [applicants] and the Court in order for any privilege claims to be determined by the Court, there will not be any further copies made of the documents, devices and other materials seized by [IBAC] ... that are the subject of a claim for privilege received by [IBAC] until any such claim for privilege is resolved;
not to disclose or disseminate the materials seized pursuant to the search warrants ... except when required for the performance of the duties or exercise of the powers of [IBAC]; and
where material is determined or agreed to be privileged, access to this material by [IBAC's] officers will be limited to officers within the [HTC unit] where such material will be electronically quarantined such that [IBAC's] investigators can only review the balance of the material.

56 Kennedy J stated that the variation to the undertakings made it clear that 'there is no generalised prohibition on inspection of material which is not subject to a claim for privilege'.[16]

57 As we have already stated, on 7 September 2020, the applicants applied to this Court for leave to appeal against Kennedy J's decision on 11 grounds. For convenience, we will discuss the grounds in three groups as follows:

Grounds 1 and 2, which deal with Kennedy J's decision to vary IBAC's undertakings.
Grounds 3-7, which deal with Kennedy J's decision on the construction of s 91 of the IBAC Act and the application of ss 7, 13, 32 and 38 of the Charter.
Grounds 8-11, which deal with Kennedy J's decision on the applicants' claim for an interlocutory injunction.

58 For each of the three groups, we will set out relevant parts of Kennedy J's Undertakings Judgment, the applicable grounds of appeal, the parties' submissions and our decision. Where relevant, the discussion of our decision on particular grounds will include a summary of any legal principles that are applicable to those grounds.

Grounds 1 and 2: Variation of IBAC's undertakings

59 Kennedy J held that whether there should be a release of an undertaking requires an exercise of judicial discretion. Citing Australian Securities and Investments Commission v Xiao[17] and Just Group Ltd v Peck,[18] she stated that the essential question is whether it is 'unjust'[19] or in the 'interests of justice'[20] to hold a person to an undertaking, having regard to the individual circumstances of the particular case.[21]

60 Relying upon Deputy Commissioner of Taxation v Karas,[22] Kennedy J stated that she considered it to be relevant, in the interests of justice, to consider whether the undertakings in this case may hinder IBAC in the exercise of its statutory functions. She rejected the applicants' submission that Karas ought to be distinguished because it was concerned with the release of a Harman undertaking.[23]

61 Kennedy J stated that Mulvany v Hive & Wellness Australia Pty Ltd[24] - which we discuss in detail at [90]-[96] below - highlighted the importance of changed facts in releasing a party from an undertaking. However, she distinguished Mulvany from the present case on two 'sign[25]icant features'.25 First, Mulvany concerned an interlocutory order which was made following a contested hearing, and which was based in part on an earlier undertaking, whereas the present case concerned an oral undertaking given in an urgent context rather[26]han a contested order.26 Secondly, the application to vary the relevant order in Mulvany was specifically based on changed circumstances and there was no suggestion that the original interlocutory order should not have been made, or that it should have been set aside or re-argued. Kennedy J stated that this was distinguishable from the present case because IBAC suggested that its undertakings should be revisited as 'they hinder IBAC's functions under the IBAC Act, and are not properly grounded in the terms[27]f the IBAC Act'.27

62 In any event, after stating that the undertakings were material to Digby J's determination,[28] at para 98 of the Undertakings Judgment, Kennedy J found that circumstances had changed since Digby J's determination, for the following reasons:

the claims for privilege have been made, and are now subject to the regime under the IBAC Act;
the [applicants] have been given an extensive opportunity to put forward their claims for relevance;
notwithstanding the effluxion of almost 12 months, and the attempts to 'co-operate,' it appears that there are, at least, some 15,200 claims for irrelevance that have not yet been resolved with the result that the investigation is stalled.[29]

63 Kennedy J was satisfied that it was in the interests of justice that IBAC be released from its undertakings insofar as they related to irrelevance claims. She considered it appropriate to vary the undertakings in the light of the changed circumstances identified above, as well as the following matters:

there is some ambiguity about the scope of the undertakings;
the undertakings were given under urgent conditions without contest; and
continuation of the undertakings is liable to hinder the express powers given to IBAC under the IBAC Act.[30]

The primary judge erred by failing to apply the correct test for the release of a party from an undertaking given to the Court.
In the alternative to ground 1, the primary judge erred in finding at [98] of the [Undertakings Judgment] that if a change of circumstance was necessary to found a release from an undertaking, then the making of the [applicants'] privilege claims, the opportunity afforded for the [applicants] to make their claims for relevance, the effluxion of time and the unresolved relevance claims, constitute the requisite change of circumstances.

65 The applicants submitted that the test for release of a party from an undertaking is that stated in Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc, namely:

A court must remain in control of its interlocutory orders. A further order will be appropriate whenever, inter alia, new facts come into existence or are discovered which render its enforcement unjust. Of course, the changed circumstances must be established by evidence.[31]

66 The applicants contended that Kennedy J did not address Adam P Brown and that, at paras 35 and 36 of the Undertakings Judgment,[32] she erroneously distinguished Mulvany.[33] According to the applicants, this was so for three reasons. First, IBAC's undertakings were given in circumstances that were analogous to the situation addressed in Mulvany.[34] Secondly, the outcome in Mulvany was not confined to the issue of changed circumstances. Rather, after the primary judge in that case rejected Mulvany's submission that there were changed circumstances, Mulvany sought to argue that the undertaking could be varied even without changed circumstances. Thirdly, that the undertakings might hinder IBAC's functions under the IBAC Act, or not be properly grounded in the terms of the IBAC Act, did not provide a proper basis for revisiting them. This was said to be because the undertakings were given freely and without equivocation by IBAC's lawyer (CD) and, by so doing, influenced Digby J in his decision about whether to grant the interlocutory injunction sought by HJ. It was further said that there was nothing in the IBAC Act which prevented IBAC from agreeing to a regime with a person affected by a warrant as to how a determination of relevance may be made.

67 In oral submissions, senior counsel for the applicants argued that IBAC proffered the undertakings to Digby J in a contested hearing to avoid the imposition of interlocutory injunctions. He submitted that the policy against re-litigation of matters which underpins the requirement to show change of circumstances applied with greater force in the present case than in Mulvany. He contended that the undertaking in Mulvany should be treated as effectively ex parte because Mulvany was unrepresented and the undertaking was the 'price' for him to obtain an adjournment.

68 The applicants argued that Kennedy J was wrong, at paras 37 and 38 of the Undertakings Judgment, to decide IBAC's application to vary its undertakings by reference solely to whether it was unjust or in the interests of justice, without any reference to change of circumstances.[35] They submitted that, in Just Group, upon which Kennedy J relied, reference was made to 'a material change in circumstances' before considering the interests of justice.[36] They contended that two additional cases upon which she relied - Xiao[37] and Karas[38] - were distinguishable on the facts. They further contended that Xiao was an inapt authority as it did not refer to Adam P Brown.

69 In oral submissions, senior counsel for the applicants emphasised that Karas related to an application for release from a Harman undertaking. According to him, because a Harman undertaking was imposed by operation of law, different reasoning and policy considerations applied to release from such an undertaking compared to an undertaking proffered by a party in the course of a contested hearing. In response to questions from the Bench, senior counsel conceded that the test that applied to release from a voluntary undertaking is the same as for discharge of an interlocutory injunction. However, he maintained that release from a Harman undertaking was different because a Harman undertaking sought to protect a different interest and did not involve the court re-visiting the issue.

70 In oral submissions, senior counsel for the applicants referred to the observation by the High Court in Adam P Brown that an interlocutory order may be varied 'whenever, inter alia, new facts come into existence or are discovered which render its enforcement unjust'. He argued that the words 'inter alia' contemplated that 'other circumstances which are commonly accepted as qualifying' may warrant a variation or discharge of an undertaking. He stated that mistake or fraud could constitute such circumstances, but the interests of justice could not. He submitted that, although a decision to release a party from an undertaking was discretionary, the court must exercise that discretion judicially and that rules of practice could be adopted to guide the exercise of the discretion.

71 Following discussion with the Bench, senior counsel for the applicants conceded that the existence of factors additional to a change of facts meant that the relevant test had to be framed at a higher level of generality than a change of facts. He offered the following formulation: 'you have to establish circumstances that make it unjust to continue to enforce the undertaking'. Senior counsel contended that the test could not be formulated in terms of whether it was unjust not to vary the undertaking. That was said to be because such a formulation did not set out any qualifying factors - such as mistake, fraud or change of facts - which would render it unjust not to vary the undertaking.

72 Senior counsel for the applicants argued that, even if Kennedy J applied the correct test, there was no basis for her to have found that the continued enforcement of the undertakings was unjust. He submitted that the undertakings were freely given and formed part of the reasoning of Digby J. He further submitted that there was no evidence as to why IBAC gave the undertakings and why it sought to be released from them.

73 The applicants contended that Kennedy J was wrong, at para 100 of the Undertakings Judgment, to conclude that there was some ambiguity about the scope of IBAC's undertakings.[39] This was said to be for four reasons. First, Digby J offered IBAC's lawyer, CD, the opportunity to seek more time before hearing HJ's injunction application, but he declined to do so. Secondly, the undertakings were given as part of a contested hearing. Thirdly, the express powers of IBAC are in general terms and do not preclude the undertakings operating in relation to documents which IBAC was arguably not entitled to seize under the two warrants. Fourthly, in the light of IBAC's letter referred to at [36] above and the transcript of the hearing before Digby J, IBAC showed a clear intention to give an undertaking that it would not inspect the seized documents until after the applicants had an opportunity to make their irrelevance claims and it had considered those claims.

74 The applicants argued that Kennedy J was wrong, at para 98 of the Undertakings Judgment, to find, effectively in the alternative, that there had been a change in circumstances.[40] According to them, she took into account matters which she was not permitted to take into account. They submitted that the making of irrelevance claims by them was not a change in circumstances because making such claims was specifically envisaged by IBAC's undertakings. They further submitted that the making of privilege claims by them was not a basis for releasing IBAC from the undertakings insofar as they concerned irrelevance claims. They contended that it was wrong for Kennedy J to consider the number of irrelevance claims - namely, 15,200 - in isolation from the total number of documents seized.

75 Further, the applicants argued that it was wrong for Kennedy J to rely upon the period that had transpired as a relevant change in circumstances, without making a finding about the reasons for the delay and who was at fault. It was said that, if the delay was substantially caused by IBAC, it should not be permitted to rely upon the delay as a relevant change in circumstances. They submitted that such findings could not be made because there was no evidence as to the length of time required for the determination of the irrelevance claims that was contemplated by either or both of the parties at the time the undertakings were given.

76 IBAC submitted that Kennedy J applied the correct test for the release of a party from an undertaking given to the Court. It contended that, contrary to the applicants' submissions, paras 37 to 38 of the Undertakings Judgment were consistent with the decision of Adam P Brown.[41]

77 IBAC argued that the applicants had failed to explain how their formulation of the test was consistent with the discretionary nature of the court's powers and how it would allow the court to remain in control of its interlocutory orders. According to IBAC, the words 'inter alia' enabled the interests of justice to be taken into account.

78 IBAC submitted that Kennedy J did not err in finding, at para 38 of the Undertakings Judgment, that a consideration relevant to the exercise of her discretion was the fact that a public function would be frustrated unless a statutory office‑holder was relieved of his or her undertaking.[42] IBAC contended that the applicants were incorrect to submit that a court not only has the power, but ought to exercise its discretion, to permit court orders to frustrate a statutory office-holder's performance of statutory functions.

79 IBAC argued that the applicants' construction of the undertaking had the effect of changing the person who was vested with the function of determining whether certain seized documents were relevant to the investigation. According to IBAC, it sought to be released from the undertakings so that it would be the person who determined relevance, in accordance with the IBAC Act.

80 IBAC submitted that Kennedy J did not err in finding, at para 98 of the Undertakings Judgment, that circumstances had changed since Digby J's Injunction Judgment.[43] It was said that, for nearly a year, the applicants had been given the opportunity to raise any issues about relevance.

81 According to IBAC, there was no evidence that its undertakings were given freely and without equivocation. Rather, it contended that the undertakings were offered during a contested hearing and IBAC disputes that they were intended to bind IBAC in the way contended by the applicants.[44]

82 In response to questions from the Bench, counsel for IBAC argued that, to the extent that the undertakings were construed as applying the same regime to relevance as they do to privilege, the undertakings were given by mistake or were ambiguous. Counsel submitted that, if the applicants' framing of the test in Adam P Brown was correct, unjust circumstances were established by that mistake. Alternatively, counsel contended that ambiguity was another head for release of an undertaking captured by the words 'inter alia'.

83 The principles relevant to a variation or discharge of an interlocutory injunction apply equally to an undertaking which is given by a party to the court in lieu of an interlocutory injunction being made against it. For these purposes, a variation includes a change which has the effect of partially releasing a party from its obligations in an interlocutory injunction or undertaking. For convenience, the discussion that follows will focus on undertakings given in lieu of an interlocutory injunction. References to variation of such an undertaking are intended to include a full or partial discharge of the undertaking.

84 An undertaking given in lieu of an interlocutory injunction prohibits the party giving it from engaging in specified conduct pending the hearing and determination of the substantive proceeding between the parties. It is obviously interlocutory, rather than final.

85 The passage from Adam P Brown set out at [65] above, upon which the applicants relied, was preceded by observations which gave the passage context. The entire statement was as follows:

Considerable argument was directed to the question whether a court has power, otherwise than in the case of mistake operative at the time of giving it to release a party from an undertaking, at least in the absence of the consent of the other party. But in our opinion a court undoubtedly has such a power. Just as an interlocutory injunction continues 'until further order', so must an interlocutory order based on an undertaking. A court must remain in control of its interlocutory orders. A further order will be appropriate whenever, inter alia, new facts come into existence or are discovered which render its enforcement unjust. Of course, the changed circumstances must be established by evidence.[45]

86 Four observations may be made about the above statement. First, in order for an undertaking to be varied, there must be evidence before the court which establishes that enforcement of the undertaking, in the terms given, would be unjust. Secondly, enforcement of an undertaking, in the terms given, could be unjust where a mistake was operative at the time it was given, or where new facts come into existence or are discovered. Thirdly, the High Court's reference to mistake, in conjunction with the words 'inter alia', indicate that mistake and change in facts or circumstances are not the only bases upon which enforcement of an undertaking, in the terms given, could be unjust. Fourthly, the High Court's statement that a court must remain in control of its interlocutory orders indicates that the principles to be applied in determining whether to vary an undertaking must be sufficiently flexible to enable the court to ensure that the interests of justice are served in the circumstances of each case.

87 In our opinion, consistently with the above observations, the relevant principle is that a court may vary an undertaking if the party who gave it establishes by evidence that, in the circumstances that prevail at the time the variation is sought, the interests of justice require that the variation be made in order to avoid enforcement of the undertaking being unjust. The primary qualifying circumstance that may engage the principle is a change in facts since the undertaking was given. Other qualifying circumstances that may engage the principle include a change in the law, mistake and fraud.

88 There is no exhaustive list of qualifying circumstances that may engage the principle, and it would not be appropriate for us to propose one. However, we see no reason why the principle could not be engaged where the party who gave the undertaking can establish that its enforcement would be unjust because, in its practical application, a genuine dispute has arisen as to the scope of the undertaking. Such a dispute will usually arise due to an ambiguity in the meaning of the undertaking. A genuine dispute as to the scope of an undertaking can be a qualifying circumstance that may engage the principle because the consequences of a breach of an undertaking can include punishment for contempt of court. It is in the interests of justice for genuine doubts as to the scope of an undertaking to be removed so that its terms are clear and there is certainty about what conduct would constitute a breach.

89 The principle set out at [87] above is consistent with Adam P Brown. It is also broadly consistent with the c[46]es of _Xiao_46 an[47]_Just Group_47 upon which Kennedy J relied in the present case. The principle is also consistent with the constrained approach that the courts adopt to applications to discharge or vary interlocutory orders or undertakings given by a party pending the determination of a proceeding. Whilst such orders or undertakings do not create an estoppel or res judicata, a party cannot seek to vary an undertaking simply because the party has changed its mind or compliance has caused inconvenience. Unless a qualifying circumstance exists, it is in the public interest that there be finality to the disposition of interlocutory [48]oceedings.48

90 We accept that this Court made observations in Mulvany which do not fully reflect the above analysis. However, those observations must be considered in the context of the issues before the Court in that case and the manner in which they were argued by the parties.

91 As this Court stated, the proceeding in Mulvany had 'a complex and tortuous history'.[49] The plaintiffs were Hive & Wellness Australia Pty Ltd ('HWA') and its CEO, and the defendant was Simon Mulvany. HWA produced honey and Mulvany was an operator of social media platforms. On 15 February 2016, the plaintiffs commenced a proceeding in the Supreme Court of New South Wales against Mulvany seeking injunctions to restrain him from posting on his social media platforms damaging allegations against the plaintiffs and HWA's honey products. On 23 February 2016, Campbell J made interlocutory orders by consent which noted undertakings given by Mulvany. The undertakings, among other things, restrained Mulvany from publishing various matters relating to the plaintiffs until the final hearing or further order of the court.

92 The proceeding was listed for trial on 25 May 2017. On that day, Mulvany sought an adjournment. Rothman J granted the adjournment but, at the plaintiffs' requests, made an order restraining Mulvany from publishing certain matters. That order was based in part upon the earlier undertaking given by Mulvany. On 1 September 2017, Mulvany successfully applied to vary one aspect of the restraining order. On 30 May 2018, the proceeding was transferred to the Supreme Court of Victoria.

93 On 3 September 2018, the mainstream media published items concerning the testing of honey for adulteration. On 21 September 2018, Mulvany applied to vary the restraining order of 25 May 2017 - by deleting some of the restraints - on the basis that the mainstream media publicity constituted a change in circumstances. On 9 November 2018, John Dixon J dismissed the application. He held that the mainstream media publicity did not constitute a material change in circumstances. He also held that, whilst Mulvany would be free to engage in public discussion about methods of testing and other safety issues relating to honey, he would continue to be restrained from making the prohibited allegations against the plaintiffs. Mulvany then unsuccessfully sought leave to appeal against that decision.

94 At the hearing of the application for leave to appeal, Mulvany's solicitor advocate appeared to concede that changed circumstances had not occurred. However, he submitted that a change in circumstances was not a 'mandatory requirement' and that there was a higher principle, namely, the interests of justice that entitled Mulvany to fully engage in public debate concerning the safety of honey.[50] It was in the context of addressing that so-called 'higher principle' that the Court made the following observations:

We do not accept that there is a higher principle as submitted by [Mulvany], or if there be such a principle, that it operates in the manner suggested. The authority relied on by [Mulvany's solicitor advocate] was cited by [John Dixon J]:

The relevant principles were not in dispute. In Liu v The Age, McColl JA said:

The constrained approach courts take to permitting interlocutory orders to be revisited reflects the proposition that a court must remain in control of its interlocutory order but, too, that a further order will be appropriate whenever inter alia, new facts come into existence or are discovered which render its enforcement unjust.

This is not authority for the proposition that interlocutory orders may be revisited absent changed facts. If the higher principle is to be understood as a reference to the unjust enforcement of the interlocutory orders, this must, as the paragraph cited confirms, arise out of new facts. Although the cited passage uses the words 'inter alia, new facts' it does not contemplate a situation in which effectively nothing changes. If there is no change then there is no occasion to revisit the interlocutory order.[51]

95 The Court was undoubtedly correct in rejecting the vague and general 'higher principle' that was advanced in Mulvany. The observations the Court made in doing so do not purport to comprehensively state the relevant legal principles and it would be inappropriate to construe them as if they formed part of a statute. As Handley JA said in Donellan v Watson:

[E]very judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but governed and qualified by the particular facts of the case in which such expressions are to be found.[52]

96 It follows that the observations this Court made in Mulvany for the purpose of addressing a particular submission in that case should not be treated as establishing any general principle of law. The principle to be applied is that set out at [87] above.

97 A decision to vary an undertaking is a matter of practice and procedure and thus an appellate court should exercise caution in determining a challenge to such a decision.[53]

98 The judge's reasons set out at [59]-[63] above are broadly consistent with the principles we have outlined. Accordingly, the judge did not fail to apply the correct test for the release of a party from its undertakings. It follows that ground 1 is not made out.

99 In our opinion, the judge was correct to conclude that variation of IBAC's undertakings was warranted. That is because a genuine dispute arose between IBAC and the applicants about the scope of the undertakings which required resolution in order to remove the uncertainty as to their scope. IBAC's position was that the undertakings did not restrain it from inspecting seized documents that were the subject of irrelevance claims, whereas the applicants contended that the undertakings did so.

100 IBAC's contention that the undertakings did not prevent it from inspecting seized documents that were subject to irrelevance claims is supported by the fact that no such restraint is expressly included in the undertakings. Paragraph (i) of the undertakings refers to making copies, para (ii) refers to dissemination and para (iii) refers to who is to have access to the seized documents after they are 'determined or agreed to be either privileged or irrelevant'. Paragraph (iii) is silent on the process by which it will be determined or agreed whether a seized document is either privileged or irrelevant. That silence is explicable in relation to privilege because s 97 of the IBAC Act sets out the procedure for resolving privilege issues, but is not explicable in relation to relevance. This further supports IBAC's contention.

101 On the other hand, the fact that the undertakings refer to both privilege and relevance provides some support for the applicants' contention that the undertakings contemplate that the same process is to be followed to resolve both issues. The fact that s 97 of the IBAC Act is confined to privilege issues does not necessarily undermine this contention. That fact arguably supports the contention because the existence of the statutory regime in relation to privilege would diminish the value of the undertakings if they were construed as being inapplicable to the process of resolving irrelevance claims. The fact that reference was made to both privilege and relevance in the correspondence that preceded the hearing before Digby J and the discussions at the hearing may also add some support to the applicants' contention.

102 In our opinion, on their proper construction, the undertakings in their original form did not prevent IBAC from inspecting seized documents that were subject to irrelevance claims. The undertakings need to be construed objectively by reference to their terms and the circumstances prevailing at the time they were given. The subjective intentions of the parties cannot affect their construction. The objective factors referred to at [100] above strongly support our construction of the undertakings.

103 The factors supporting the applicants' contention that the undertakings prevented IBAC from inspecting seized documents that were subject to irrelevance claims are unpersuasive. In circumstances where the undertakings do not expressly prevent IBAC from inspecting such documents, it is not possible to construe them as if they did so on the basis of those factors. The applicants' construction of the undertakings, in substance, would involve implying a restraint into the undertakings which is not expressly included. In the light of the potentially serious consequences of a breach of an undertaking, implying such a restraint would not be appropriate.

104 Notwithstanding our conclusion at [102] above, the applicants' construction of the undertakings is not fanciful. That construction was sufficient to create a genuine dispute between the parties as to the scope of the undertakings which needed to be resolved.

105 The status of the statements made by CD at the hearing before Digby J, which are set out at [38] above, is unclear. Ordinarily, where undertakings are given orally and are recorded in a court order, the undertakings as recorded in the order are the operative undertakings and supersede anything stated orally. That is so for the obvious reason that the undertakings need to be recorded in precise terms rather than being left to be deciphered from a dynamic exchange between counsel and the bench. In the present case, the statements made by CD are not reflected in Digby J's order. Insofar as the statements used the language of an undertaking, they clearly convey that IBAC had already undertaken not to examine any of the seized documents until HJ had an opportunity to make a claim for privilege. Although the statements also refer to claims of irrelevance, it cannot be said with any degree of confidence that CD undertook on behalf of IBAC that IBAC would not inspect seized documents that HJ claimed were irrelevant until such claims were resolved.

106 The letter from IBAC's legal manager to the applicants' solicitors, which is referred to at [36] above, appears to contain a proposal that IBAC will deal with claims of irrelevance in the same manner as claims of privilege. However, there is no evidence that agreement was reached between the parties on the terms set out in that letter.

107 A consideration of the undertakings set out in Digby J's order in the context of CD's statements and the letter from IBAC's legal manager reinforces our conclusion that a genuine dispute arose between the parties as to the scope of the undertakings which required resolution.

108 The existence of the genuine dispute meant that it was in the interests of justice that the undertakings be varied to avoid the unjust result that would arise if the undertakings were to be enforced otherwise than in accordance with their proper construction. The variation of the undertakings set out in Kennedy J's order dated 1 September 2020 avoids such an unjust result. That is because the variation removes the doubt that had arisen as to whether the undertakings restrained IBAC from inspecting seized documents that were subject to irrelevance claims and enabled them to be enforced in accordance with their proper construction.

109 Even if we are wrong about the construction of the undertakings and it is assumed that they unambiguously restrained IBAC from inspecting seized documents that were subject to irrelevance claims, Kennedy J was correct to vary them. That is because, as found by her, there was a change in circumstances since the undertakings were given, namely, the stalling of IBAC's investigation due to the ongoing dispute over the irrelevance issue.

110 The IBAC Act does not oblige IBAC to refrain from inspecting a document that is claimed to be irrelevant. On the contrary, s 91(3) authorises the person executing a search warrant to form a reasonable view on whether a document is relevant for the purpose of deciding whether to seize it or make a copy of it. Logically, that person may inspect a document to form a view about its relevance unless the nature of the document is such that relevance is apparent without the need for an inspection. To the extent that IBAC restricted its rights of inspection beyond what the IBAC Act required, it did so voluntarily in order to resolve the injunction proceeding and facilitate the progress of its investigation.

111 However, in practice, the voluntary restriction has had the opposite effect of impeding IBAC's investigation. In saying that, we are not attributing any fault to the applicants or calling into question the appropriateness of any action they have taken. We are merely observing that, as a matter of fact, the voluntary restriction has given rise to disputes between the parties which have impeded the timely progress of IBAC's investigation. That situation, which prevailed at the time that IBAC applied to vary the undertakings, was materially different to the situation that prevailed at the time the undertakings were given. The change in circumstances meant that the interests of justice required that the undertakings be varied in order to avoid their enforcement in their original form being unjust.

112 We accept that Digby J relied upon the giving of the undertakings in dismissing HJ's application for an injunction. However, he did so predominantly on the question of the balance of convenience rather than on the question of whether there was a serious issue to be tried. In any event, given that the voluntary restriction went beyond the requirements of the IBAC Act, the fact that Digby J relied upon the undertakings is not an insurmountable impediment to their variation.

113 The applicants' emphasis on whether Kennedy J erred in distinguishing Mulvany from the present case is misplaced. The question is not whether the present case is similar or dissimilar to Mulvany. Rather, it is whether IBAC has established that there was a qualifying factor in the present case such that the interests of justice required that its undertakings be varied in order to avoid their enforcement being unjust. In our opinion, for the reasons set out above, IBAC has done so.

114 It follows from the above discussion that even if, contrary to our conclusion at [87] above, the correct principle is that the only basis upon which a court may vary an undertaking is a change of circumstances, that principle was satisfied in the present case.

115 For the above reasons, we are not satisfied that Kennedy J's exercise of the discretion to vary IBAC's undertakings miscarried in any way.

Grounds 3-7: Application of Charter to construction of s 91 of IBAC Act

117 Kennedy J held that two features were clear from a reading of the ordinary meaning of the words in s 91 of the IBAC Act:[54]

(a) The persons authorised to execute a search warrant are given a broad right to 'inspect' any documents located at the relevant premises, so that they can make the determinations as to 'relevance' provided for in s 91(3)(b) and (c). As IBAC properly accepted, there are limits on its powers to inspect documents which, on no basis, could be relevant to an investigation.[55]

(b) The determination as to relevance in relation to s 91(3)(b) and (c) is that of the persons authorised to execute the warrant, not the subject of the warrant, although that determination could be challenged.[56]

118 Kennedy J found that, although s 91(3)(a) of the IBAC Act required that seized documents must be located 'at those premises', the practicalities involved with voluminous documents mean that inspection of the documents does not necessarily take place at the premises but is an ongoing process.[57] She relied upon the following statement by Mason J in Baker v Campbell:

In approaching the scope of the authority given by the warrant we must keep practical considerations steadily in mind. It is simply impossible for a police officer executing a warrant to make an instant judgment on the admissibility, probative value or privileged status of the documents which he may encounter in his search. Generally speaking, it is in the course of the subsequent investigation following seizure of the documents that informed consideration can be given to the documents and an assessment made of their worth or significance in the respects already mentioned.[58]

119 Kennedy J held that the legislative intention that IBAC inspect documents subject to a 'relevance claim' was strengthened by the terms of s 97 of the IBAC Act, which make express provision for the circumstances which apply to prevent an inspection where a claim of privilege is made. She stated that the failure of the IBAC Act to provide for a prohibition against inspection in relation to 'relevance claims' fortifies a construction that inspection may proceed.[59]

120 Kennedy J accepted that statutory provisions must be interpreted in a way that is compatible with 'human rights', so far as it is possible to do so consistently with their purpose, under s 32(1) of the Charter.[60] She then stated (at para 84 of the Undertakings Judgment) that, 'consistent with established authority, [she] consider[ed] that s 91 [of the IBAC Act] has already struck the relevant balance between the rights to privacy and the need for an effective investigation'. Also at para 84 of the Undertakings Judgment, Kennedy J relied upon the following passage in Smethurst v Commissioner of Police:

[I]n prescribing conditions governing the issue of search warrants the legislature has sought to balance the need for an effective criminal justice system against the need to protect the individual from arbitrary invasion of their privacy. A person's interest in privacy is recognised in all modern bills of rights and it has achieved a status in international human rights law.

It may be accepted that the balance struck by the legislature to a greater extent favours the public interest in the investigation and prosecution of crimes.[61]

121 Kennedy J did not accept the applicants' construction of s 91 of the IBAC Act, namely, that IBAC was prevented from inspecting any seized documents unless and until the subject has agreed that the documents are relevant (or some other unidentified process has determined them to be such).[62] Rather, she considered that - at least where it is not plainly obvious - IBAC is empowered to inspect a document prior to determining whether the document is, or ought, to be copied or retained.[63] She stated that this construction is also consistent with the terms of the two warrants, which empowered the persons authorised to execute them to 'inspect any document or thing' prior to making copies and taking possession of the documents relevant to the investigation.[64]

122 Kennedy J held that, if IBAC's undertakings are read as preventing it from inspecting the documents the subject of 'relevance claims', then this would be contrary to the terms of the powers given to IBAC under the IBAC Act.[65]

123 In para 91 of the Undertakings Judgment, Kennedy J found that IBAC's foreshadowed inspection of the seized documents would not constitute an 'unlawful or arbitrary' interference with PQ's privacy under s 13 of the Charter. That was because the inspection was expressly authorised by both the IBAC Act and the warrants. She reiterated that the High Court had stated in Smethurst that the form of a provision such as s 91 of the IBAC Act already balances and takes into account the need to protect the individual from 'arbitrary' invasion of their privacy rights.

Even if the right is engaged, I am further satisfied that the limitations placed on the privacy right can be justified having regard to the matters contained in s 7(2) of the Charter. Thus, consistent with the overarching purpose contained in the Civil Procedure Act 2010 (Vic), the [applicants] have been given opportunity to make their relevance claims. [PQ's] rights will thereby only be affected where there is disagreement. [PQ] would also retain the right to challenge any determination subject to usual administrative law principles.
The extensive opportunity provided to the [applicants] to make their claims also means that I am unable to be satisfied that there has been any failure to give proper consideration to the privacy right under s 38(1) [of the Charter].
It is therefore unnecessary to consider the exception raised in s 38(2) of the Charter. However, if it is necessary to resolve, I consider that it would be generally unreasonable to expect IBAC to make a decision on a disputed relevance claim absent an inspection, save where it was clearly apparent that it could not be relevant to the investigation.
I am therefore not satisfied that the proposed release of the undertakings would involve a breach of the Charter.[66]

The primary judge erred by misdirecting herself as to, or failing to examine, the meaning of, the right to privacy in s 13 of the Charter, including the meaning of an arbitrary interference with the right.
The primary judge erred by failing to interpret ...s 91 of the [IBAC Act] in a way that is compatible with human rights in accordance with s 32 of the [Charter], including by:

(a) finding at [84] of the [Undertakings Judgment] that s 91 of the IBAC Act 'has already struck the relevant balance between the rights to privacy and the need for an effective investigation'; and

(b) relying on the passage from Smethurst ..., which is extracted at [84] of the [Undertakings Judgment], because the legislation there under consideration was not subject to the requirement of s 32 of the Charter.

The primary judge erred by finding at [95] [of the Undertakings Judgment] that releasing [IBAC] from the undertakings would not involve it breaching the Charter, in particular by:

(a) conflating the terms upon which a warrant may be issued under s 91 of the IBAC Act and the manner in which seized documents are to be dealt with having regard to the requirements of s 38 of the Charter;

(b) finding at [92] of the [Undertakings Judgment] that [PQ's] Charter right to privacy will only be affected in the narrow circumstances of 'where there is disagreement between [PQ] and [IBAC]';

(c) failing to take account of the restriction on authorized searches by reference to the relevance of documents to the subject of investigation identified in the warrant; and

(d) finding at [93] of the [Undertakings Judgment] that because the Applicants have been given an opportunity to raise claims of irrelevance in relation to seized documents, there has not been any failure to give proper consideration by [IBAC] to the right to privacy protected by s 13(a) of the Charter.

The primary judge erred by holding at [91] of the [Undertakings Judgment] that the inspection of the documents complained about by the [applicants] was permissible because s 91 of the IBAC Act has already taken into account the need to protect against arbitrary invasion of the right to privacy.
The primary judge erred by holding at [92] of the [Undertakings Judgment] that the requirements in s 7(2) of the Charter were satisfied, and further, by failing to give any or any adequate reasons for so holding.

126 The applicants submitted that Kennedy J failed to properly carry out the task required by s 32(1) of the Charter by failing to properly construe IBAC's functions and powers, including those set out in ss 15, 16 and 91 to 94 of the IBAC Act, compatibly with the privacy right in s 13 of the Charter. It was said that she ought to have explored all possible interpretations of the provisions in question and adopted the interpretation which least infringed Charter rights.[67]

127 The applicants contended that Kennedy J erred in finding, at para 84 of the Undertakings Judgment, that s 91(3) of the IBAC Act 'already struck the relevant balance between the rights to privacy and the need for an effective investigation'.[68] They argued that s 32(1) of the Charter was a mandatory rule of statutory interpretation that Kennedy J was required to apply at the outset when construing s 91 of the IBAC Act.[69] According to them, Kennedy J's reliance on Smethurst was misplaced because Smethurst was distinguishable on three bases. First, the relevant statute in that case was not subject to any mandatory statutory interpretation rule such as that in s 32 of the Charter. Secondly, the High Court took into account protections afforded by the Evidence Act 1995 (Cth) in court proceedings, which do not apply to IBAC investigations. Thirdly, that case concerned the validity of a warrant, whereas the present case concerned the processing of documents that had been seized pursuant to valid warrants.

128 The applicants submitted that Kennedy J, at para 91 of the Undertakings Judgment, erred by failing to hold that, for the purposes of s 13(a) of the Charter, privacy may be arbitrarily interfered with even if the relevant action is otherwise lawful.[70] According to the applicants, Kennedy J conflated the terms upon which a warrant may be issued under s 91 of the IBAC Act with the manner in which documents seized under the warrant are to be dealt with by IBAC under the Charter. They contended that, despite finding that the inspection of the seized documents was authorised by the IBAC Act and the warrants, Kennedy J erred by failing to separately consider the arbitrariness of the foreshadowed interference with privacy under s 13(a) of the Charter.

129 The applicants argued that s 7(2) of the Charter must be taken into account when assessing whether a public authority is acting compatibly with human rights.[71] They submitted that s 7(2) establishes a proportionality test under which consideration is given to whether there are less restrictive means reasonably available to achieve the purpose that the limitation seeks to achieve. They contended that the test in s 7(2) imposes a stringent standard of justification and IBAC bears a high onus of proof to justify the limitations on PQ's right to privacy.[72] They argued that this case required cogent evidence from IBAC to justify the limitation on PQ's right to privacy and that no such evidence was adduced.[73] It was said that the proper application of the Charter would not frustrate or defeat the purposes of the IBAC Act because s 7 of the Charter operates to reconcile the Act with human rights.

130 According to the applicants, Kennedy J failed to give consideration to whether there were less restrictive means available to achieve the purpose of the warrants. They submitted that Kennedy J dealt with the matter in a single sentence in para 92 of the Undertakings Judgment, in which she merely stated her conclusion and gave no, or no adequate, reasons for the conclusion.[74]

131 The applicants contended that Kennedy J was wrong, at para 92 of the Undertakings Judgment, to find that PQ's rights will only be affected where there is disagreement. They argued that the Charter imposes an obligation on IBAC to act compatibly with PQ's human rights, regardless of whether he asserts a claim to the protection of a right. It was said that the focus of the Charter is on the conduct of the public authority. Further, they submitted that Kennedy J's comment that PQ's privacy rights will only be affected where there is disagreement and that he would have available to him the usual administrative law principles failed to deal with the following five considerations.

132 First, IBAC had not acknowledged any entitlement of the applicants to the process of 'sorting' the seized documents, but had facilitated it as a grudging compliance with the undertakings from which it has now been released.

133 Secondly, IBAC had given no undertaking to refrain from inspecting any disputed documents while the applicants approached the Court for any administrative law challenge of the type to which Kennedy J referred.

134 Thirdly, the inclusion of para 5A in the amended originating motion introduced an administrative law claim[75] in support of which an interlocutory injunction was sought and refused by Kennedy J.[76]

135 Fourthly, once the documents affecting privacy are inspected, privacy is irretrievably lost.

136 Fifthly, if IBAC is not obliged to inform PQ of the outcome of its genuine consideration of his irrelevance claims, he will not know if there is any disagreement.

137 The applicants contended that Kennedy J erred, at para 95 of the Undertakings Judgment, in finding that releasing IBAC from its undertakings would not involve a breach of the Charter.[77]

138 The applicants argued that Kennedy J erred, at para 93 of the Undertakings Judgment, in finding that, because of the extensive opportunity provided to the applicants to make their claims, she was unable to be satisfied that there had been any failure to give proper consideration, under s 38(1) of the Charter, to the privacy right.[78] The applicants submitted that the obligation to give proper consideration to relevant rights is an obligation of considerably more substance and breadth. It was said that the obligation requires a decision‑maker to give real and genuine consideration to human rights when a decision engages a human right.[79] In oral submissions, senior counsel for the applicants contended that the process for making irrelevance claims set out in IBAC's letter referred to at [36] above and its undertakings appropriately addressed PQ's right to privacy in s 13 of the Charter. He argued that it was not reasonable - or in compliance with the Charter - for IBAC to now repudiate that process.

139 The applicants submitted that neither IBAC nor Kennedy J gave the requisite consideration as to how the warrants might be executed in a way that was compatible with rights to privacy under s 13 of the Charter. They contended that Kennedy J erred in her application of s 38 of the Charter in finding, at para 91 of the Undertakings Judgment, that, upon her interpretation of s 91(3) of the IBAC Act, the need to protect the individual from arbitrary invasion of his or her privacy rights had already been accounted for.[80] In oral submissions, senior counsel for the applicants conceded that IBAC had not acted unlawfully in the present case.

140 In oral submissions, senior counsel for the applicants argued that, construed compatibly with s 13(a) of the Charter in accordance with ss 7, 32 and 38 of the Charter, s 91 of the IBAC Act required IBAC to permit PQ to make claims of irrelevance on privacy grounds, to genuinely consider any such claims and to inform PQ of the outcome of that consideration. Senior counsel conceded that the Charter did not necessitate that s 91 be construed as requiring claims of irrelevance to be dealt with in precisely the same manner that the IBAC Act required that privilege claims be dealt with. Senior counsel also conceded that the Charter did not necessitate that s 91 be construed as obliging IBAC to inform PQ of the reasons for rejecting an irrelevance claim.

141 IBAC submitted that Kennedy J did not err by failing to interpret s 91 of the IBAC Act in a way that is compatible with s 32 of the Charter or by finding that releasing it from its undertakings would not involve it breaching the Charter. IBAC relied upon the following passage in this Court's Stay Judgment:

[PQ], while relying on his right to privacy under the Charter, and having referred to the interpretative obligation in s 32 and the requirement for a public authority to act compatibly with human rights in s 38, has failed to say how s 32 requires s 91(3) to be construed or how officers of IBAC are required to conduct themselves when exercising their powers under s 91(3). The suggestion that the Charter at least requires [PQ] (in this case, a person of interest in the investigation) to first review the seized materials and select (out) what is irrelevant to the IBAC investigation before IBAC can exercise the power to inspect the documents is untenable, given the relatively clear terms in which the power is conferred, the purpose of the conferral of the power and the fact that the IBAC officers are best placed to understand what is or is not relevant to the IBAC investigation.[81]

142 According to IBAC, Kennedy J did not misdirect herself as to, or fail to examine the meaning of, the right to privacy in s 13 of the Charter, including the meaning of an arbitrary interference with the right. It contended that, contrary to the applicants' submission, Kennedy J did not find that privacy is not capable of being arbitrarily interfered with if the relevant action is otherwise lawful.

143 IBAC argued that, at the hearing before Kennedy J, the only reason that the applicants submitted that it would be arbitrary for IBAC to inspect any document was if it inspected a document 'regardless of whether it had any apparent relationship to the object(s) of the search warrant'. It was said that Kennedy J's finding at para 91 of the Undertakings Judgment - that IBAC's foreshadowed inspection of the seized documents was neither unlawful nor arbitrary because it was authorised by the IBAC Act and the warrants - did no more than reject the only reason that the applicants had identified for contending that the relevant action was 'unlawful or arbitrary'.[82] IBAC submitted that the mere fact that the finding concerning unlawfulness and the separate finding concerning arbitrariness were explained by the same reason did not mean that Kennedy J conflated the test for unlawfulness and arbitrariness.

144 According to IBAC, Kennedy J did not err by holding, at para 92 of the Undertakings Judgment, that the requirements in s 7(2) of the Charter were satisfied,[83] or by failing to give any or any adequate reasons for so holding, as alleged in ground 7. IBAC contended that this ground ignores the fact that para 92 - which begins with the words 'Even if the right is engaged' - was expressly stated to be obiter dicta. It therefore argued that this ground is misconceived, as the applicants' appeal 'is against the judgment or order, not the reasons for judgment'.[84]

145 In oral submissions, counsel for IBAC acknowledged that it would be disproportionate and unjust not to allow a person who has a claim under the Charter to make the claim. However, counsel submitted that s 13 of the Charter did not give a person whose documents were seized in execution of a valid search warrant any free-standing claim concerning relevance. In any event, counsel contended that the evidence showed that IBAC had given the applicants every opportunity to raise their concerns about the relevance of the seized documents.

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Judgment (368 paragraphs)

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Cases Cited (16)