State of Victoria v Seal Rocks Victoria

Court of Appeal (Vic)|2001-06-15|Before: ORMISTON, PHILLIPS and BUCHANAN, JJ.A.

EVIDENCE - Constitutional law - Public interest immunity - Arbitration - Jurisdiction of Supreme Court to review or make declaratory or injunctive orders as to arbitrator's rulings - Arbitrator making ruling that 163 of 191 documents not subject to immunity claimed by Crown - Whether judge had jurisdiction to consider merits of ruling - Whether "inherent jurisdiction" - Whether jurisdiction under s.47 of Commercial Arbitration Act 1984.

The sole issue raised is the power of the Supreme Court to interfere with the conduct of the arbitration by dealing with the Crown's application, whether one characterises it as by way of appeal, prerogative writ[4], judicial review, injunction, declaratory relief or orders pursuant to specific provisions[5] of the Act. The learned judge in the end was asked to give relief on three bases, namely the power to remit for reconsideration under s.43 of the Act, the power to make interlocutory orders under s.47 and the "inherent jurisdiction" of the Supreme Court. He concluded that on none of these grounds did he have power to intervene so as to review or reconsider the arbitrator's findings or to reach conclusions contrary to those findings in order to give any of the claimed relief. His Honour reserved, however, the question whether the Court could have made orders in similar circumstances if a challenge to the production of subpoenaed documents had been made under s.18 of the Act before the arbitrator ruled on their admissibility.

It is unnecessary to canvass the surrounding facts in other than bare outline, for the parties did not suggest that this Court should examine the arbitrator's detailed and apparently careful reasons or enquire into the validity of the appellant's claims for immunity. It was agreed that the present appeal raised only the Court's jurisdiction and that, if the learned judge was wrong on that point, the Crown's case as to immunity would have to be resolved by him.

The arbitration arose out of disputes relating to a development and concession agreement and lease entered into in 1997 between Seal Rocks and the Minister for Conservation (on behalf of the State of Victoria) for the designing, construction and operation of a tourist facility known as the "Seal Rocks Sea Life Centre" at Point Grant on Philip Island. Various claims and cross-claims raised issues, so it was said, concerning the negotiation and execution of the agreements. Mr Gillard was appointed arbitrator to resolve these claims and during the course of the hearing a document was subpoenaed from a project officer (who had been appointed by the Minister) which was said to be a draft submission to Cabinet. Shortly thereafter, when lists of documents were exchanged pursuant to the arbitrator's direction, the other 190 documents were described in terms likewise suggesting that they were either Cabinet records or other documents prepared for submission to Cabinet or were documents relating to government policy "at a high level", all of which the Crown objected to produce on the ground of public interest immunity (or "privilege", as it was described on a number of occasions). The claims were supported in what may be described as conventional terms in affidavits sworn by appropriate officials.

Each of the objections to production was heard by the learned arbitrator. Counsel for the Crown did not object to that course and agreed that the arbitrator might examine any of the documents for himself. In the course of three rulings he held that all but 28 of the documents were not affected by the claimed immunity and should be produced[6]. Because of the limited issues raised by this appeal, this Court was not asked to examine the rulings in detail, nor was argument addressed to the merits of the issues there discussed. All that was said was that the respondent contended that the arbitrator had acted within jurisdiction, whereas the appellant argued that, to the extent that the arbitrator failed to uphold the immunity and had directed production, he had exceeded his jurisdiction, and the latter issue should have been (and still should be) resolved, so far as necessary, by the judge at first instance.

All the relevant issues were raised before the learned judge of the Trial Division of this Court, but he resolved them by concluding that the Court did not have jurisdiction, in any sense of the term, to entertain the Crown's claims. The appellant had argued that both ss.43 and 47 of the Act enabled the Court to intervene, but that in any event this Court must have "inherent jurisdiction" to resolve the issues raised by its amended originating motion. What was, and is now, called the Court's inherent jurisdiction, of course, is here intended to refer not to those powers which might be implied where a proceeding has been properly and indisputably brought in the Court, but to that power to entertain disputes where jurisdiction is prima facie invested in another tribunal or body. In other words the issue has been whether the present dispute over these documents is "justiciable" by this Court or whether the Court's jurisdiction has been "ousted"[7], in particular because it is implicit from the structure and provisions of the Act that there shall be no review of any finding of an arbitrator unless explicitly authorised by a provision of that Act. The judge held that there was no such authorising provision in the present case, nor was there jurisdiction generally to determine the action.

On appeal to this Court no argument was based on s.43 of the Act, but the Crown contends both that s.47 of the Act enables the Court to make appropriate orders and that there is "inherent jurisdiction", in the sense described, to entertain the dispute the Crown wishes to raise.

Jurisdiction under s.47 of the Act

In the first place it is necessary to examine the terms and operation of s.47 of the Act, which reads:

"The Court shall have the same power of making interlocutory orders for the purposes of and in relation to arbitration proceedings as it has for the purposes of and in relation to proceedings in the Court."

On its face, as the learned judge observed, the section does not confer any appellate jurisdiction on the Court. Nor would its terms seem designed to give jurisdiction to the Court to make incidental rulings as to the admissibility of evidence during the trial of issues in a reference to arbitration, as such rulings scarcely seem to be "interlocutory orders" within the meaning of s.47. Nonetheless, the ruling or order here sought, which would relate to the production for inspection of certain of the appellant's documents, ought to be characterised as an "interlocutory" order for the purpose of the section, if the section was intended to grant jurisdiction to that end.

Section 47, in my opinion, could not support or justify any of the orders sought from the Court. Certainly it ought not to be construed as providing a means of appeal or review of an arbitrator's decisions. I would, with respect, not accept the opinion to the contrary expressed by the majority[8] in South Australian Superannuation

Fund Investment Trust v. Leighton Contractors Pty. Ltd.[9] to the effect that the Act [10] is intended to give wide powers of intervention to the Court at the interlocutory stages of arbitrations and that otherwise the section would have no purpose. In that respect I would prefer the reasoning of the other member of the Court,[11] and would agree with the criticism appearing in and adopted by reference in the judgment of Kirby, P. (with whom Priestley, J.A. concurred) in Commonwealth of Australia v. Cockatoo Dockyard Pty. Ltd.[12] In short, the section is intended only to invest ancillary jurisdiction in the Court so as to enable it to act in aid of the arbitration by making interlocutory orders of a kind which are beyond the powers of the arbitrator, whether the latter are given by the Act or by the parties' agreement. Effectively it gives an auxiliary jurisdiction analogous to the kind which formed part of the jurisdiction of the Court of Chancery, though not confined to the powers then exercised. As was pointed out in the several judgments to which Kirby, P. referred, the section would enable the Court to make orders for injunctive relief[13], the appointment of a receiver, interim protection of property, security for costs and for various kinds of relief against or involving third parties.

As likewise has been held in relation to the inherent jurisdiction of the Court[14], the assumption behind the judgments just referred to is an implication from the terms of the Act that the Court has only limited powers to interfere in an arbitration. In particular, short of finding misconduct and the like pursuant to ss.42 and 44, the Court's powers to review decisions, at least in the form of awards, is circumscribed significantly by ss.38 and 40. The only other general power given to the Court by the Act to consider matters of substance in an arbitration is the very limited power to determine questions of law pursuant to s.39 which requires at the least the consent of the arbitrator or all other parties. These limitations, as well as the widely expressed powers given to arbitrators under sections such as ss.14, 19, 22 and 37, point strongly against the conclusion that provisions such as s.47 give the Court some general right to supervise or otherwise interfere in the interlocutory stages or during the hearing of an arbitration.

It was suggested that s.47 would permit the Court to make interlocutory orders where they had not been sought from the arbitrator. The matters to which I have just adverted make such a conclusion highly unlikely, except where there is doubt as to the arbitrator's own power. It is, however, presently unnecessary to resolve that question, for here the arbitrator sought to resolve the objections to production with the apparent concurrence of both parties and delivered three considered rulings on them. Under s.47 the Court should not countenance, under the guise of making interlocutory orders, an appeal against, or a review of, an arbitrator's decisions. The relevant grounds of appeal dependent on s.47 have not been made out.

The Crown also sought to establish its right to invoke this Court's power to hear its claims by relying on what is conventionally called its inherent jurisdiction. Again the learned judge rejected this basis for attacking the arbitrator's rulings, not by asserting that the Court had no such jurisdiction generally, but by holding that Mr Gillard had acted within his jurisdiction and for that reason his findings could not here be attacked. That conclusion seemed at first, with respect, to follow from the authorities cited.

One should be cautious, however, in reaching conclusions as to the want of jurisdiction of a superior court of record such as the Supreme Court, where that is based on implications drawn from a specific Act of Parliament. It is not here necessary to examine that issue in detail, nor would I wish to suggest that the boundaries identified by the New South Wales Court of Appeal in the Cockatoo Dockyard Case were not correct[15]. Upon the basis that "there is no inherent jurisdiction ... to supervise decisions made by the arbitrator within the arbitration"[16], the question here raised is whether an arbitrator's decision as to public interest immunity, by way of an incidental ruling as to evidence or the production of documents, is properly characterised as a decision "within the arbitration".

No-one would suggest that the learned arbitrator was doing other than what he was asked and required to do for the purpose of carrying out his functions as the appointed arbitrator, nor is it denied by the appellant that as party to the arbitration it asked him to make the three rulings on the issue. It is another matter to hold that the issue of the immunity of the 191 documents in question was referred as such to the arbitrator. Of course many incidental evidentiary and procedural issues arise in the course of an arbitration, which arbitrators are entitled to rule upon. Indeed in general terms s.19 as to evidence gives them the widest possible powers[17], nor would I wish to suggest that those issues fall outside the scope of an arbitration in the ordinary case.

Nevertheless the claims made in the present case were of a quite different kind. It could not fairly be said that the question of a witness's privilege is a rule of evidence by which arbitrators may choose not to be bound by reason of s.19, unless the person entitled to the privilege has agreed expressly or impliedly to the arbitrator's resolving that claim. Naturally it was here argued that the Crown had agreed to the present arbitration, so that, by virtue of s.5, it was "bound by this Act" as a party thereto. So it was contended that the appellant had waived its right to complain about any ruling that the arbitrator might make as to any claim to public interest immunity. Furthermore the respondent argued that the appellant's conduct, in not objecting to the arbitrator's considering the issue on three occasions and allowing him to inspect the documents for that purpose, again amounted to waiver of its right to complain[18].

Whatever might be argued in relation to other claims for privilege by parties, the present claim was of a different order. The right of the Crown or government to assert that cabinet documents and the like are immune from production is a matter of high public policy. It is not the subject of waiver or acquiescence: it cannot, for example, be resolved by decision of the government of the day[19]. It is public policy in the strictest sense which requires that documents of this kind be immune from public disclosure generally or even disclosure for the limited purposes of litigation or arbitration. The rationale behind the immunity has been discussed on a number of occasions in recent years by courts of the highest authority and, more especially by the High Court. It is necessary here, not to examine those cases in detail, but only to mention a few of the leading authorities: Sankey v. Whitlam[20]; Commonwealth v. Northern lands Council[21]; Jacobsen v. Rogers[22]: and see generally Cross on Evidence (loose-leaf Aust ed.) ch. 27 and McNicol_: Law of Privilege (1992) Ch. 7._

In my opinion, therefore, public interest immunity in a document or other communication is a right by way of an immunity or a privilege which enures in the body politic and indeed in the nation (or relevant polity) as a whole, and not merely in the executive, being designed to protect the operation of the instruments of government at the highest level and for the benefit of the public in general, subject only to a court's reaching a conclusion to the contrary on sound grounds that no other public interest, especially in the administration of justice, should prevail in the particular circumstances,. It follows, as has been held on numerous occasions[23], that the making of a claim for this immunity by the Crown, or by any other party to the proceeding for that matter, is not necessary, for it is the Court's duty to consider the possible application of the immunity, whenever it may appear to arise, subject only to satisfying itself, after appropriate argument, that it does apply and that any relevant countervailing factors ought not to deny the immunity[24].

The short point is that a claim to public interest immunity, though ordinarily taken by the Crown, is not a conventional right capable of being waived at will. Nor is it the kind of claim which can itself be referred to arbitration, although there is no reason in the ordinary case why the arbitrator should not attempt to do what a court is required to do. But the resolution of such a claim is not the kind of incident to an arbitration which should be protected from review by this Court by reason of any general policy relating to the law of arbitration or to be implied from any statute relating to that subject. Naturally, if the Act had specifically dealt with the subject, one would have to comply with Parliament's express wishes, for it has the power to restate the relevant public policy. That, however, has not occurred.

The question raised by this appeal is whether the inherent jurisdiction of this Court to resolve an issue of public interest immunity has been taken away expressly or impliedly by the provisions of the Act. It is unnecessary to examine authority in order to assert that that jurisdiction can only be lost if it is shown to be the clear intendment of Parliament. That has not been here demonstrated for the relevant jurisdiction as to this immunity is not to be characterised merely as part of the jurisdiction of the arbitrator to resolve the referred dispute, except to the limited extent necessary to resolve the dispute.[25] But the immunity is not truly part of the dispute referred by the parties to arbitration and it cannot be concluded by any ruling or award of the arbitrator. Our decision in this case answers nothing as to the inherent jurisdiction of the Court to determine other questions arising in the course of an arbitration, whether or not they be issues going to an arbitrator's own jurisdiction. The authorities cited in argument and so carefully analysed by counsel in their submissions need not be examined further for they otherwise provided no answer to the present, very limited issue.

20 There being no other relevant reason put forward why this Court should not exercise its jurisdiction to grant declaratory or injunctive relief[26], I would allow the appeal and remit the matter to the judge of the Trial Division to resolve the specific questions arising in this case as to whether the immunity should apply. I reach this conclusion with some regret, conscious as I am of the further consequent delay and the care shown by the arbitrator in reaching his conclusions. The jurisdiction of this Court on such an important matter cannot, however, be denied.

I agree with Mr. Justice Ormiston. The jurisdiction of this Court to rule authoritatively upon a claim to public interest immunity is not to be denied, either by reference to the provisions of the Commercial Arbitration Act 1984, as it stands, or by reference to the agreement made between the parties under which their dispute was referred to arbitration.

In my opinion the appeal should be allowed for the reasons stated by Ormiston, J.A.

[1] Seal Rocks Victoria (Australia) Pty. Ltd.

[2] A group of documents was also made the subject of claims for immunity as being related to the framing of government policy at a high level.

[3] The appellant abandoned the claim for a further 21 documents at first instance. The precise details of all the remaining documents are not clear, but the appeal (and the case below) was argued on the basis that the detail was not important at this stage.

[4] The claims for prohibition were rightly abandoned at an early stage.

[5] Sections 43 and 47 were originally relied upon, but on appeal only s.47 was called in aid.

[6] Stays on the operation of the directions to produce have been granted in turn by the arbitrator, the trial judge and this Court to enable the rulings to be challenged.

[7] See, e.g., the discussion in Aronson and Dyer: Judicial Review of Administrative Action (2nd ed.) Ch.18, esp. at pp.689-698.

[10] The South Australian statute at the time was somewhat differently expressed, but it was not contended that the differences were relevant for this purpose.

[12] (1995) 36 N.S.W.L.R. 662, esp. at 671-672. The N.S.W. statute is not materially different.

[13] Except as incidental to an award ordering specific performance under s.24.

[15] See esp. 36 N.S.W.L.R. at 674-677 and 684.

[17] Subject to contrary agreement: see subs.(3). There does not appear to have been any such relevant agreement in the present case.

[18] Except possibly in the course of attacking any award pursuant to s.38, but that could hardly be of any practical value in this case.

[19] Not that any such suggestion was here made: any claimed waiver would have arisen only by oversight. See also fn.23.

[23] See, e.g., Sankey at 39-40, 44 and 58-59; see also the cases referred to in Cross at para.[27005].

[24] In certain circumstances, which it is unnecessary to examine here, the authorities (including Sankey) suggest that the attitude of the executive may be a relevant factor.

[25] At one stage it was suggested that the Court ought not to interfere with the arbitrator; rather it should intervene when the respondent sought to enforce the rulings, as it would have to, by orders of the Court. But, issues of this kind ought to be resolved, if possible, before a party is forced to act in defiance of the arbitrator's rulings.

[26] A relevant right is in controversy, there seems to be a proper contradictor and the dispute is otherwise justiciable.

Arbitration Act 1984

At a glance

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Before

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Judgment (50 paragraphs)

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Legislation Cited (2)