P Dawson Nominees Pty Ltd v Australian Securities and Investment Commission

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website.

GENERAL DIVISION VID 1380 of 2006

AND: AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION

REASONS FOR JUDGMENT 1 On 25 September 2009 the applicants filed a notice of motion seeking leave to issue a subpoena directed to Mr Stewart Cummins to produce certain documents to the Court. In the notice of motion the applicants sought orders that Mr Cummins be examined on oath by an examiner but that their application for that relief be adjourned until after a call had been made to produce the documents referred to in the subpoena. 2 The subpoena was issued on 22 December 2009 and served on Mr Cummins. It called upon Mr Cummins to produce: "Copy of any witness statement or proof of evidence of Stewart Cummins (whether draft or final and whether signed or unsigned) prepared in connection with the Australian Securities and Investment Commission's investigation into Multiplex Limited (as it then was)." 3 Mr Cummins produced a number of documents to the Court pursuant to the subpoena on 11 February 2010 on which date Finkelstein J ordered that the documents so produced be placed in a sealed envelope on the Court file and inspection not be allowed except by the Australian Securities and Investments Commission ("ASIC"). On the same day Finkelstein J granted leave to a person identified by him as "XX" to intervene in the proceeding. XX had intervened in the proceeding for the purpose of making a similar claim and supporting the claim by ASIC. 4 ASIC indicated that it proposed to file a Notice of Motion seeking a declaration that some parts of the documents produced be privileged from production to the applicants on the ground of public interest immunity. A Notice of Motion was filed by ASIC with a supporting affidavit. 5 Consistently with earlier orders I had made in relation to ASIC's claim that parts of documents produced pursuant to subpoenas served on ASIC and KPMG were privileged from production on the ground of public interest immunity, I ordered that the affidavit filed in support of ASIC's notice of motion be marked "Confidential" and that there be no publication of its contents other than to ASIC, its legal representatives, XX and its legal advisers and Court staff. I also ordered pursuant to s 17(4) of the Federal Court of Australia Act 1976 (Cth) ("the Act") that ASIC's application and XX's application be heard in private and that pursuant to s 50 of the Act there be no publication of the transcript of the proceeding held in private. 6 The process contemplated by ASIC's motion was that ASIC should produce to the Court a copy of the documents produced to the Court on 11 February 2010 redacted and masked in accordance with the confidential affidavit of Louise Anne Macaulay affirmed on 19 February 2010 and that upon such production, the respondent Multiplex parties have leave to inspect those documents and make any claim they wished to make that any of the documents were privileged from production on the ground of legal professional privilege. The procedure then provided for a hearing of any such application and that otherwise the documents redacted and masked in accordance with any order made by me being made available for inspection by the applicants. 7 I heard ASIC's motion in private on 26 February 2010 when submissions were made by ASIC and XX. 8 On 23 July 2009 I published reasons for judgment in relation to ASIC's claim for public interest immunity in relation to the documents produced by it in respect of which the applicants had sought inspection. On 29 July 2009 I ordered that ASIC produce to the Court specified documents or copies thereof redacted and masked in accordance with Confidential Appendix A to that order. In the reasons for judgment published on 23 July 2009 I set out and explained the process of analysis and consideration which I had undertaken in determining ASIC's challenge to the application for production and inspection of documents produced under subpoena by it on the ground of public interest immunity because the documents might tend to disclose the identity of an informer or informers. 9 In considering ASIC's and XX's claim for public interest immunity in respect of the documents produced by Mr Cummins I have adopted the same process of analysis and consideration. 10 With one qualification, I have adopted the same approach and undertaken the same process of reasoning in relation to the documents produced by Mr Cummins as I undertook in relation to the documents produced by ASIC and KPMG. The qualification is that in considering the draft statements which have been produced under the subpoena I have considered and taken into account the extent to which documents produced by ASIC and KPMG pursuant to subpoenas issued by the applicants have been produced for inspection in a redacted or masked form. It is in this context that XX and XX's legal advisers have not had the benefit of participating in the earlier hearings in relation to ASIC's claim that certain documents be privileged from production on the ground of public interest immunity, nor have they had the benefit of seeing the extent to which and the manner in which such documents have been produced to the applicants for inspection albeit in a redacted or masked form. 11 Further, I have kept in the forefront of my consideration of the documents produced under the subpoena the need to be aware of the "mosaic analysis" which can be made of produced subpoenaed documents. 12 I adopt, with respect, the description of "mosaic analysis" given by the Director‑General of the Office of National Assessments accepted by Foster J in Watson v AWB Limited (No 2) (2009) 259 ALR 524 at [32]: "As to this, the Director‑General said: "Mosaic analysis" is a well-established counter-intelligence tool. Mosaic analysis involves combining pieces of information to enable a "picture" to emerge from which inferences can be drawn by targets, or other persons of interest, about matters not otherwise known to them. Some of the pieces of information may appear to be disparate and/or benign; and specific (but important) items of information may only be known by the target(s) or other persons of interest (making it difficult to precisely assess the risk posed by mosaic analysis in any particular scenario). However, in my opinion there is a very high risk that, disclosure of parts of the subpoenaed documents [referring to the 62 reports], in conjunction with other facts already known to relevant persons, would enable them to draw reliable inferences in relation to sources and methods of intelligence collection of Australia's intelligence partners." 13 In order to make it clear how I have approached my consideration of the documents produced by Mr Cummins I will repeat verbatim passages in the reasons for judgment of 23 July 2009 which are relevant to my consideration of the documents produced by Mr Cummins. 14 The first step is to determine whether the documents produced by Mr Cummins disclose the existence of an informer or informers to ASIC. The second step is to determine whether the documents tend to identify an informer or informers to ASIC. If they do, the second step also involves determining whether the documents can be redacted or masked in such a way that, in their masked form, it will not be possible, even by the conveying of "a shrewd idea", to identify the informer or informers. The third step is to undertake a balancing exercise and determine whether, in the circumstances of this case, the documents to the extent to which they are not redacted or masked are of sufficient importance for the applicants' conduct of the proceeding to outweigh the importance of not disclosing the identity of the informer or informers. 15 I must take into account, follow and apply the relevant and binding reasoning and ratio of the Full Court in Australian Securities and Investments Commission v P Dawson Nominees Pty Ltd (2008) 169 FCR 227. I consider that I should apply the following principles and propositions contained in the reasoning of the Full Court whether they be the ratio, or one of the rationes, of the decision or persuasive and considered obiter dicta: (a) In determining a claim for protection of documents from disclosure and inspection on the ground of public interest immunity a Court must undertake a balancing exercise and determine whether the public interest in protecting from disclosure the identity of an informer outweighs the public interest that in a civil proceeding a party should not be denied access to relevant evidence; (b) The partial or limited disclosure of the identity of an informer is not conclusive in determining whether the identity of the informer should be protected from being disclosed in documents sought to be the subject of inspection on the ground of public interest immunity. Immunity from further disclosure is not necessarily lost where there has been a partial limited disclosure of the identity of an informer; (c) The transcripts of the examination of the informer or informers would, both directly and circumstantially, identify the informer or the informers; (d) The appropriate test to apply in determining whether inspection of the relevant documents and transcripts might disclose the identity of an informer or informers is to ask whether there is in the documents any material by which "a shrewd idea" might be conveyed as to the identity of the informer or informers, noting that documents taken together may convey information which each, by itself, could not convey. Further, the benefit of the doubt should be in favour of non‑disclosure. 16 The observations I made in pars [13]‑[20] in my reasons for judgment published on 23 July 2009 apply in relation to ASIC's claim for public interest immunity in respect of the documents produced by Mr Cummins. 17 I have considered the submissions made by ASIC and XX in relation to the documents produced by Mr Cummins and the submissions made by them in relation to the redaction or masking of some of them and XX's submissions that some of the documents should not be produced at all. 18 I set out in the Confidential Appendix "A" to these reasons some of the submissions made by ASIC and XX and the conclusion that I have reached as to whether any, and if so what, documents should only be produced for inspection in a redacted or masked form and whether any of those documents should be privileged from production in toto on the ground of public interest immunity. 19 On 22 February 2010 the solicitors for the applicants sent a letter to my associate in the following terms: "We refer to the hearing of this matter scheduled for 26 February 2009. We understand that both ASIC and XX intend to submit that in the public interest and on the grounds of protecting the identity of an informer or informers to ASIC, the Applicants should be restricted from inspecting the document produced by Stewart Cummins pursuant to subpoena. Consistent with previous practice we apprehend that hearing will be in camera with both the Applicants and the Brookfield Multiplex parties excluded from the court during those submissions. In these circumstances we have recently corresponded with the solicitors for XX regarding XX's duty of full disclosure and candour arising from the ex parte and in camera nature of the hearing. We enclose a copy of that correspondence, the contents of which are self‑explanatory." 20 The enclosed letter was in the following terms: "We refer to the above matter and to the forthcoming ex parte hearing in camera on 26 February 2010. We note that at the forthcoming hearing your firm will represent a person identified as XX. We understand the basis for XX's intervention in this matter to be that they wish to assert that any disclosure to the Applicants of the document produced pursuant to the subpoena to Stewart Cummins would create a real risk of disclosing the identity of, inter alia, your client: see Mr Houghton's submissions Transcript, 11 February 2010 T11/10 at 35. The Applicants are unaware of the identity of XX and on the basis of current materials do not have any "shrewd idea" of his or her identity. This letter is written from an abundance of caution in the unusual circumstances that the Applicants will not be aware of "the material and relevant facts and circumstances" bearing on the determination of XX's application that the document produced under subpoena should not be inspected by the Applicants. It is the Applicants' view that if: (a) XX is an employee of Brookfield Multiplex Ltd or any of its subsidiaries or other related entities; and/or (b) XX's legal costs are being paid for or contributed to by Brookfield Multiplex Ltd or any related entity and/or its insurer; that either such circumstance would be a matter which XX was obliged to disclose to the Court as part of his duty of full disclosure and candour arising from the ex parte and in camera nature of the hearing: see P Dawson Nominees Pty Ltd & Anor v ASIC & Ors (No. 2) (2009) 255 ALR 466 at 502 to 505. We anticipate that as XX's solicitor you will be either unwilling or unable to provide confirmation one way or another whether either of the circumstances referred to in paragraphs (a) and (b) above exist. In these circumstances, we propose to draw this correspondence to the attention of the Court and leave it to you and the Court to determine whether and to what extent any such matter ought properly be disclosed." 21 At the in camera hearing on 26 February 2010 I raised this correspondence with counsel for XX. Counsel responded to the matters raised by the applicants' solicitors and I have taken the correspondence and the response into account in reaching my conclusion as to the extent to which the documents produced by Mr Cummins should be privileged from production or should be redacted or masked before they are made available for inspection by the applicants. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg.