Public Transport Ticketing Corporation v Integrated Transit Solutions & Anor

Public Transport Ticketing Corporation v Integrated Transit Solutions & Anor - [2010] NSWSC 607 - NSWSC 2010 case summary — Zoe

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ii. controlling and managing any funds within the ticketing and fair payment system that represent unused prepaid fees. 4 The first defendant is Integrated Transit Solutions Ltd. The second defendant is ERG Ltd [for convenience only both defendants are generally described as ITSL]. 5 The dispute arises from the plaintiff's decision to terminate a contract for the design, build and installation of an integrated smartcard-based ticketing and fare payment system for public transport in the greater Sydney area. Under the contract works were to be completed in stages and certain milestone events were provided for. 6 The plaintiff's contention is that none of the stages were achieved and that the first defendant's delay was very substantial. 7 The plaintiff has recovered the liquidated damages it was entitled to as a result of the delay, as well as a prepayment it made for the works, from security with which it was provided. 8 By the current proceedings, the plaintiff seeks to recover additional substantial losses which it claims to have suffered from the loss of the contract, consisting of large expenditure made in reliance on the contract which is said to be now wasted, costs that it claims it are continuing to be incurred in dismantling various equipment and other materials installed in connection with the contract which it contends will also be wasted, and the loss of the use of the monies expended that would have been recouped had the contract being performed. 9 The plaintiff also claims to recover those losses from the second defendant, namely the parent company of the first defendant, by virtue of a guarantee and indemnity given by the second defendant, on the same date as the contract was entered into, in respect of the performance by the first defendant of the contract 10 The first defendant has asserted that the plaintiff was not entitled to terminate the contract, that it regarded the plaintiff, by its notice of termination, as having repudiated the contract and has stated that it accepted such an alleged repudiation. The first defendant has also apparently asserted that it had suffered significant losses as a consequence of this alleged repudiation. 11 The defendants have identified the issues likely to arise in the proceedings as including:

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(a) the importance of the information or the document in the proceeding, (b) if the proceeding is a criminal proceeding-whether the party seeking to adduce evidence of have the information or document given or produced to it is a defendant or the prosecutor, (c) the nature of the offence, cause of action or defence to which the information or document relates, and the nature of the subject matter of the proceeding, (d) the likely effect of adducing evidence of giving or producing the information or document, and the means available to limit its publication, (e) whether the substance of the information or document has already been published, (f) if the proceeding is a criminal proceeding and the party seeking to adduce evidence of have the information or document produced to it is a defendant-whether the direction s to be made subject to the condition that the prosecution be stayed. 20 I accept that the text of section 130(1) of the Evidence Act imposes the onus on the party seeking to have the Court exercise its discretion to prevent disclosure of a document, because it is the person seeking to prevent the production of document that must demonstrate the document relates to matters of state and that the balancing test favours non-production. This is consistent with the position under the common law: Cadbury Schweppes Pty Ltd v Amcor Limited [2008] FCA 88 at [25]. The onus is a "heavy burden" requiring the proponent of immunity who is resisting production to "establish a 'real' rather than merely 'some' or 'any' detriment to the public interest from disclosure" of the documents: Somerville v ASC (1995) 60 FCR 319 at 354. 21 I further accept that the first step in the process of resolving an objection to production is to consider whether the relevant document relates to matters of state. As set out above, section 130(4) sets out various matters which, if the production of the document would cause that matter to occur, indicates that the document relates to matters of state. The matters referred to indicate that documents only relate to matters of state if they meet a high threshold and any document sent to or received by government, regardless of its contents, would not lightly be found to relate to matters of state. The various matters include if the inspection would prejudice Australia's national security and defence (section 130(4)(a)), the investigation or prosecution of a criminal or civil offence (section 130(4)(c) and (d)) or disclose the identity of a confidential informer (section 130(4)(e)). Although the State's submissions do not make it clear, the only matter in section 130(4) upon which it could rely would be a submission that the disclosure to ITSL and ERG would prejudice the proper functioning of the government of New South Wales (section 130(4)(f)), although the list is not exhaustive. 22 The following position correctly describes the current position:

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i. If any of the Claim Documents is found by the Court to be a document that relates to matters of state, then the Court will have to weigh up the competing public interests of permitting inspection and secrecy. Emmett J described this task in A3 v Australian Crime Commission [2006] FCA 894 as follows at [19]: The question that falls for decision involves the balancing of a series of public interests. There is a public interest in having before the Court all relevant evidence upon which any party wishes to rely, as long, of course, as the evidence is admissible (the 'Full Evidence Interest'). There is also a public interest in ensuring procedural fairness between the parties to a proceeding, such that each party has knowledge of all of the evidence that has been admitted in the proceeding and is before the Court (the 'Fairness Interest'). Finally, for present purposes, there is a public interest in preserving secrecy or confidentiality in relation to material, the publication of which could be prejudicial to the administration of justice including the investigation and prosecution of criminal offences ('the Secrecy Interest'). ii. The "Full Evidence Interest" and the "Fairness Interest" described by Emmett J are both public interests relevant to the present application. In the present context, the public interest in fairness in litigation arises because it is important that PTTC, having entered into a commercial contract with ITSL, not have an advantage in litigation arising out of that contract by reason that the State, its owner and controller, seeks to prevent certain relevant documents, the Claim Documents, from being inspected by ITSL and ERG. There is a public interest in ensuring that parties that enter into contracts with government which have a commercial nature know that in future litigation the government will not be permitted to hold back documents relevant to the litigation on an assertion of public interest immunity and that the party will have the dispute with the government (particularly a claim for damages brought by the government) resolved by the court with the knowledge of all relevant information and documents, not just the documents that the government chooses to disclose in the evidence that it leads. The purpose of the s 130 of the Evidence Act is to give government entities control over the documents they discover in proceedings such that they obtain a forensic advantage in that litigation.

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v. Further, the State submission that, in "the absence of any demonstration that a document will materially assist the case of the party seeking access even those [documents] entitled to a low level of protection will be protected" misstates that law. First, it seeks to reverse the onus. It is for the State on its motion to prevent inspection of the Claim Documents to demonstrate why the Claim Documents will not assist the case of the defendants and will not assist the Court to resolve the dispute. It cannot be for the defendants, who have not been permitted by the State to inspect the Claim Documents, to seek to demonstrate their relevance. Second, it ignores that the matter that the Court is required to have regard to under section 130(5)(a) of the Evidence Act is not whether the document will "materially assist" the case of the party seeking access but the importance of the document in the proceedings. For example, a document may not materially assist the case of a party, but may be important because it would assist the Court to resolve the issues in dispute or because it contradicts or explains the case of the party's opponent. Third, it ignores the other factors that the Court is required to take into account under section 130(5) of the Evidence Act , such as the nature of the subject matter of the proceeding (section 130(5)(c)), the likely effect of allowing inspection (section 130(5)(d)), whether there are means available to limit publication (section 130(5)(d)) and whether the substance of the information has already been published (section 130(5)(e)). 23 The State makes the submission that the records of cabinet deliberations will generally not be revealed in a civil case, and refers to the decision of the High Court in The Commonwealth of Australia v Northern Land Council (1993) 176 CLR 604. The State puts the position too highly in this submission. This statement in the judgment was qualified. It was said to apply only to cabinet deliberations "which remain current or controversial". Further, the provisions of the Evidence Act mean that factors set out in s 130 (5) must be considered by the Court even if the documents relate to current or controversial Cabinet deliberations before directing that inspection not be permitted. Returning to the background to the proceedings 24 As has already been observed, section 130(5) stipulates that the Court must take into account the nature of the cause of action or defence to which the information the State seeks to protect relates and the importance of the information in these proceedings. In order to do that, it is necessary to set out briefly what are the issues in the proceedings:

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But it has never been doubted that it is in the public interest that the deliberations of Cabinet should remain confidential in order that the members of Cabinet may exchange differing views and at the same time maintain the principle of collective responsibility for any decision which may be made. Although Cabinet deliberations are sometimes disclosed in political memoirs and in unofficial reports on Cabinet meetings, the view has generally been taken that collective responsibility could not survive in practical terms if Cabinet deliberations were not kept confidential. 6 Despite the pressures which modern society places upon the principle of collective responsibility, it remains an important element in our system of government. Moreover, the disclosure of the deliberations of the body responsible for the creation of state policy at the highest level, whether under the Westminster system or otherwise, is liable to subject the members of that body to criticism of a premature, ill-informed or misdirected nature and to divert the process from its proper course. 7 The mere threat of disclosure is likely to be sufficient to impede those deliberations by muting a free and vigorous exchange of views or by encouraging lengthy discourse engaged in with an eye to subsequent public scrutiny. Whilst there is increasing public insistence upon the concept of open government, we do not think that it has yet been suggested that members of Cabinet would not be severely hampered in the performance of the function expected of them if they had constantly to look over their shoulders at those who would seek to criticise and publicise their participation in discussions in the Cabinet room. It is not so much a matter of encouraging candour or frankness as of ensuring that decision-making and policy development by Cabinet is uninhibited. The latter may involve the exploration of more than one controversial path even though only one may, despite differing views, prove to be sufficiently acceptable in the end to lead to a decision which all members must then accept and support. [614 - 616]

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The third matter upon which the Attorney-General relies concerns the need for the party seeking access to documents to demonstrate a legitimate forensic purpose before any balancing exercise between the conflicting aspects of the public interest can be undertaken. I earlier quoted authority for that need: Burmah Oil Co Ltd v Governor and Company of the Bank of England (at 1113-1114, 1129); Alister v The Queen (at 412, 414, 438). The concept of legitimate forensic purpose is not confined to claims of public interest immunity. It arises whenever a party seeks access to documents for which he has issued a subpoena; where objection is taken, a party who is unable to show that it is at least "on the cards" that such documents will assist his case is not entitled to have access to such documents simply to see whether they may do so: R v Saleam (at 17-18). He is not entitled to conduct a fishing expedition. The need to show a legitimate forensic purpose arises even if the claim of public interest immunity fails. It is therefore a prerequisite before the balance required for that claim can be struck."[681] 30 Mr Hastings contended that the proper approach was for the court to examine the documents said to be protected by the claim for immunity. The evidence given by the witnesses called for cross-examination by ITSL The evidence of Mr Miller 31 Mr Miller had made two affidavits, the first on 25 January 2010 and the second on 12 May 2010. 32 In paragraph 10 of his first affidavit he objected to disclosure of documents in categories A to H and M on the grounds of public interest immunity. His evidence that was that he personally was the decision maker who determined to assert the claim to immunity in relation to the documents in those categories. However he had not personally carefully read each of those documents which had been exhibited to his affidavit in detail. 33 His evidence was that he had perused the documents to ensure that they fell within the particular categories and were as described in his affidavit. However he had received a draft affidavit from someone else. 34 His evidence included the following:

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Q. If there are other documents in respect of which a claim was initially made but then abandoned, which expressed the minister's views on a subject, you are not aware of why that is so? A. No. The vital issue 42 Both of the witnesses cross-examined had received drafts of the affidavits for consideration by them and each received documents which had been preselected and placed into categories for them. 43 In those circumstances their evidence amounted to little more than a confirmation that they regarded those documents as falling within the particular categories and appropriate for a claim for Crown immunity. It is however quite clear that there was no evidence of a consistent application of principle for the selection of documents which attracted immunity. 44 When taken in cross-examination to examples of particular documents in respect of which there was originally a claim to Crown immunity which was substantially reduced, the evidence in chief was simply silent as to the change of position and as to any criteria or consideration applied in the abandonment of the claim earlier made. One only example in respect of the cross-examination of Mr Miller concerning category F was that he was no more than the notional decision maker but he only conveyed the instruction after it had been approved by Cabinet and he would not have done so had Cabinet not approve the release of the particular documents. 45 In truth the materials put forward by the State's witnesses fell far short of discharging the requirement that there be some form of transparency in relation to how there had been determined from amongst the many documents discovered those to be reviewed for public interest immunity. 46 It was important for the Court to have before it from the State, evidence upon which the court could rely in order to be in a position to understand what were the criteria by reference to which it came to be contended that particular documents were described as Cabinet minutes. To my mind it became clear from the above-described cross-examination that the proponents had insufficient knowledge of that process [and insufficient knowledge of the issues in the proceedings] to satisfy the court as to what the above-described criteria were. Decision 47 A considerable number of documents have been put before the court by the State for its private consideration in terms of states claim to public interest immunity. 48 In circumstances where the evidence put before the court by the State fell far short of being regarded as transparent in terms of such criteria as may in truth have been mobilised in sifting out documents said to be Cabinet documents or related and therefore to attract 'public interest immunity] it seems entirely inefficient for the court itself to endeavour to spend many hours endeavouring to guess what such criteria might have been. 49 The simple fact is that the State bears the onus of seeking to have the Court exercise its discretion to prevent disclosure of documents. In that regard the State is the person seeking to prevent the production of material documents and must demonstrate that the material documents relate to matters of state and that the balancing test favours non-production. The onus is a heavy burden requiring a proponent of the immunity who is resisting production to "establish a 'real' rather than merely 'some' or 'any detriment to the public interest from disclosure" of the documents: cf: Cadbury Schweppes Pty Ltd v Amcor Limited [2008] FCA 88 at [25]; Somerville v ASC (1995) 60 FCR 319 at 354. 50 In any event even if a considerable number of the documents do relate to matters of State, subject to what is said below, the balancing exercise favours inspection. The defendants in these proceedings face a damages claim brought by the PTTC of $77 million for monies allegedly spent by the PTTC and the NSW Government between 2002 and 2008 supervising the Project in addition to a claim for compound interest. Many of the documents relate to briefings to the Minister or meetings referred to in the PTTC's own evidence in support of its claim. I accept that as a matter of fairness and in the interests of the Court having all relevant evidence put before it, ITSL and ERG should be permitted to inspect the Claim Documents. 51 Having perused a deal of the allegedly confidential documents, in the unusual circumstances which obtain, the principled exercise of the relevant discretion is to withhold from the defendants only those documents which are identified in terms with the words ' Cabinet-In-Confidence'. 52 In the circumstances it is only those documents which are entitled to public interest immunity. 53 Subject to the matters referred to in the last two paragraphs, the amended notice of motion filed by the State of New South Wales on 12 March 2010 is to be dismissed. 54 It follows that in the first instance the documents placed before the court on a confidential basis will require to be returned to the State in order that it may remove only documents identified with the above-described words. Following that exercise all other documents sought by the defendants hitherto marked as confidential-not to be opened or inspected without the approval of a Judge, are to be made available to the defendants. 55 The Court will entertain arguments as to costs of the amended notice of motion filed by the State privately having invited written submissions. *****************

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