REASONS FOR JUDGMENT
Introduction
1 In proceedings commenced on 3 August 2007 Telstra Corporation Limited (Telstra) sought orders against the Minister for Communications, Information Technology and the Arts (the Minister) for the pre-suit discovery of documents relating to the award of government funding for the provision of new and enhanced broadband services in regional and other parts of Australia. Telstra had applied for funding under the Broadband Connect Infrastructure Program (the Program) to provide such services but was unsuccessful. The successful applicant was OPEL Networks Pty Ltd (OPEL).
2 Telstra subsequently claimed that it made its application under guidelines published by the government on the basis that the maximum funding available under the Program was $600 million. The successful applicant entered into an agreement with the Minister under which it would be funded to the extent of up to $958 million. Telstra complained that the basis upon which the Minister awarded the project to OPEL was not the basis upon which applications had been invited and the basis upon which it made its application. It sought preliminary discovery under O 15A of the Federal Court Rules against the former Minister to assist it in deciding whether to commence proceedings to set aside the relevant decisions and the agreement made with OPEL.
3 The application for preliminary discovery was refused by Graham J and Telstra sought leave to appeal against his Honour's decision: Telstra Corporation Limited v Minister for Communications, Information Technology and the Arts (No 3) [2007] FCA 1567. At the commencement of the hearing before the Full Court, and upon, it must be said, very short notice to the Court that this was contemplated, proposed consent orders were tendered providing for leave to appeal to be granted, the appeal to be allowed and preliminary discovery to be given on the basis sought by Telstra.
4 In considering the proposed orders the Court has considered the conditions for the exercise of its appellate power by consent and the conditions attaching to the exercise of its power to order preliminary discovery. For the reasons that follow the Court is of the view that the orders can be made and that it is appropriate that they be made.
Factual and procedural background
5 On 21 September 2006 the Department of Communications, Information Technology and the Arts (DCITA) released a document entitled 'Broadband Connect Infrastructure Program Guidelines' (the Guidelines). Part 1 of the document comprised an 'Overview' of the policy and program background leading to the publication of the Guidelines.
6 According to the Overview, the Guidelines were designed to implement the Program. Under the Program the government would consider providing financial assistance for a small number of major projects of significant scale and service coverage. Its intention was to provide sustainable wholesale broadband services as widely as possible in order to provide broadband access to under-served areas and premises.
7 The Guidelines stated that funding under the Program would be provided to support the capital cost of establishing new broadband infrastructure including upgrades to existing infrastructure and said (at [1.4]):
Up to $600 million may be available for this purpose, providing funding support for large scale broadband infrastructure projects. Only one funding round will be held. Depending on the nature of the applications received, the Australian Government may not allocate any or all available funds.
8 Applications were to be subject to a two stage assessment process. Stage 1 would involve initial screening and benchmark assessments. All applications would be screened to ensure that they were compliant with the requirements set out in the Guidelines and associated documentation and that they provided sufficient information to be effectively assessed. Applications would then be assessed against benchmark criteria relating to essential deliverables. Those that did not meet the benchmark standard and which therefore did not provide sufficient value-for-money to warrant further assessment, would be excluded at that point. During Stage 2 the remaining applications would be comparatively assessed. Criteria for comparative assessment were set out in [4.2]. Proposals that were not competitive against other proposals covering the same target coverage areas could be rejected at that point at least in relation to their uncompetitive parts.
9 The Guidelines provided that during Stage 2 applicants could be requested to revise and resubmit applications. Any reshaping requests would be subject to rules and processes to ensure fair and equal treatment of all affected applicants. A funding agreement between a successful applicant and the Australian Government would have a minimum term of ten years to ensure that the agreed wholesale broadband services continued to be provided for that period.
10 Part 2 of the Guidelines identified 'Program Deliverables'. Part 3 set out what was described as 'Application Assessment Strategy'. Part 4 identified 'Assessment Criteria'. Part 5 specified information that would be required. Part 6 was entitled 'Matters Concerning Applications'. It is helpful to summarise the important elements of Pt 6.
11 Paragraph 6.1 headed 'General' stated that the Australian Government reserved the right not to fund any projects under the Program, to allocate a lesser amount than that requested, to seek changes to a proposed project and to vary, amend or terminate the funding process at any time. The application and assessment process described in the Guidelines was not an offer by the government to contract. Paragraph 6.2 under the heading 'Confidentiality' began with a statement that the Australian Government would own applications. Applicants were to provide details of any information they would require DCITA to treat as confidential. Under [6.3] 'Variation of these guidelines', the government reserved the right to vary the Guidelines. It would notify all potential applicants (by means of a media release and an appropriate notice on the DCITA website), or all applicants where the time for submission of applications had closed, of any changes to the Guidelines.
12 On 27 September 2006, Telstra met with DCITA officers for a briefing and subsequently sought clarification on outstanding issues. On 31 October 2006, DCITA advised that the deadline for Program applications had been extended to 18 December 2006. The Minister also issued a clarification stating that the DCITA would offer 'up to $600 million …'. In a clarification issued by DCITA on 3 November 2006 it was stated, inter alia:
In response to queries from potential applicants, we provide the following advice on the GST in relation to funding:
. The amount of funding available under the Broadband Connect Infrastructure Program is up to approximately $600 million (GST exclusive), or approximately $660 million (GST inclusive).
. The funding paid to successful applicants will be GST inclusive.
. Applicants should ensure that they specify their funding requirements inclusive of GST.
…
13 On 18 December 2006, Telstra lodged an application under the Program. A competing application was lodged by OPEL on the same date. Both Telstra and OPEL's applications were assessed and passed the first screening stage on 23 January 2007. Telstra lodged a revised proposal on 31 January 2007 following its decision to upgrade infrastructure in one area which was originally to be covered under its initial proposal. On 8 February 2007 Telstra sent an email to DCITA asking whether the Department required any clarification of its revised bid. A departmental officer replied on the same date saying:
Thank you for your revised information. We do not require any additional clarification at this stage.
The steps that followed were described in part in a letter later sent to Telstra by Clayton Utz on behalf of the Minister.
14 On 14 February 2007 an Assessment Panel set up by DCITA recommended that Telstra's application be excluded following benchmarking and the OPEL application permitted to proceed. OPEL was assessed as the preferred applicant by the Assessment Panel in March 2007. DCITA reported the Assessment Panel's view to the Minister and was authorised to commence discussions with OPEL on 3 March 2007. An invitation to OPEL to commence discussions followed on 7 March 2007 and discussions ensued between 9 March and 2 April 2007. It appears that departmental discussions with OPEL considered revisions to its original proposal and an additional proposal with further funding. On 2 April 2007 OPEL submitted its first additional proposal to achieve extended coverage using further funding. Telstra and other tenderers were not invited to revise their proposals or to expand them in the light of further funding. On 10 April 2007 the Minister agreed to OPEL's revised proposal for funding of $600 million. This was not communicated to Telstra or other tenderers. Between 10 April 2007 and 31 May 2007 further discussions took place between OPEL and DCITA covering, inter alia, how the OPEL bid would vary if an additional $358 million were made available.
15 On 29 May 2007 Telstra sent DCITA an email asking whether it had any comment on media reports that an additional $300 million would be granted and whether there would be a further request for submissions relating to the allocation of the additional $300 million. DCITA replied that it was unable to comment on media reports.
16 On 31 May 2007 OPEL submitted a revised additional proposal to extend OPEL coverage for an additional $358 million. The Minister then agreed, on 5 June 2007, to OPEL's amended proposal at a cost of $958 million.
17 On 18 June 2007 the Minister made an announcement which included the following statement:
The new national high speed network will be rolled out by OPEL, a joint venture between Optus and rural group Elders, which has been awarded a total of $958 million in funding from the Broadband Connect infrastructure program, and an additional funding allocation. OPEL has agreed to make its own commercial contribution of over $900 million to significantly upscale this new network.
Media releases to like effect were made by the Deputy Prime Minister and by OPEL on the same day.
18 On 18 June 2007 DCITA sent a letter to Telstra advising that its application under the Program had been unsuccessful. Telstra wrote to the Minister on 19 July 2007 pointing out that the Guidelines had stated that applications were sought for 'up to $600 million' of funding and that 'only one funding round will be held'. They also stated that the basic principles underlying the selection process were to ensure that all applicants were treated in a fair and equitable manner and that the government would notify all applicants of any change to the Guidelines. Telstra said that in reliance on those statements it submitted its application seeking a total of $600 million worth of funding. The announcement that OPEL was to be granted $958 million indicated that it had been provided with an opportunity to make an application identifying additional infrastructure that could be developed with up to an additional $358 million. That opportunity, it was said, was not afforded to Telstra. Telstra expressed its concern that in breach of the Guidelines, the government had failed to treat all applicants in a 'fair and equitable manner' and to notify all applicants of any changes to the Guidelines.
19 Telstra set out a number of questions for the Minister about the award process. It requested answers to the questions and copies of documents relevant to the decision by 4pm on Thursday, 26 July 2007. It said:
If the Government fails to provide those answers or documents, or if the answers and documents provided do not satisfactorily address Telstra's concerns, Telstra proposes, on an urgent basis, to apply to the Federal Court of Australia for preliminary discovery of documents that will enable it to form a view whether to commence proceedings in that Court against the Minister and the Commonwealth seeking appropriate relief.
20 On 26 July 2007 Clayton Utz, on behalf of the Commonwealth and the DCITA responded to Telstra. It asserted that all applications had been assessed strictly in accordance with the Guidelines including the eight essential deliverables set out in [2.1] Applications were required to achieve each of those essential deliverables to a satisfactory level to pass the benchmarking step in the assessment process. OPEL's application had not sought funding greater than $600 million. After it was determined by the Assessment Panel to be the preferred applicant, OPEL was invited by DCITA to enter into discussions. They focussed on enhancing the value-for-money to the government in respect of the $600 million funding sought by OPEL. The discussions had explored additional options to extend coverage of the OPEL solution to a greater number of under-served premises should the government decide to provide additional funding for that purpose. Following its discussions with OPEL the government decided to make additional funding available to obtain extended coverage. The solicitors made the point that the Guidelines did not state that funding could not be sought beyond $600 million.
21 The letter outlined the assessment process undertaken. Much of that history has already been set out. The letter included the following information (at [24]):
(j) Between 9 March 2007 and 2 April 2007, DCITA and OPEL discussed OPEL's proposal as originally submitted with a view to achieving improved value for money for the Government in relation to certain aspects of the proposal; and
(k) During those discussions (ie not until after OPEL's selection as preferred applicant), DCITA and OPEL also explored options to extend coverage of the OPEL solution to a greater number of under-served premises if additional funding was to be provided. OPEL was requested to provide a separate proposal in relation to the relevant additional benefits and coverage.
22 DCITA's solicitors also said that Telstra had no entitlement to the documents which it sought. They continued:
Moreover, in any event, there can be no suggestion that Telstra has any cause of action against the Commonwealth with respect to the application process for the Program. In this regard, we refer in particular to section 6.1 of the Guidelines which in DCITA's view precludes any possibility of the existence of a cause of action as impliedly asserted in your letter. Even if, notwithstanding section 6.1 of the Guidelines, anything done or not done by DCITA in relation to the conduct of the funding application process for the Program could conceivably give any potential applicant a cause of action against the Commonwealth, the facts recited above negate the existence of any such cause of action.
DCITA remained prepared to arrange for a debriefing session should Telstra elect to take up that offer. The solicitors for DCITA concluded:
In light of the above, DCITA does not believe that Telstra has any proper basis for seeking any orders under Order 15A rule 6 of the Federal Court Rules and DCITA will oppose any application for such orders. We have instructions to accept service of any such application.
23 Telstra met with DCITA for a debrief in relation to its proposal on 2 August 2007. It put questions about the amount of funding available, the funding process and its bid. It questioned the basis upon which its bid was excluded. DCITA representatives stated at the meeting that no further information would be provided in relation to the additional funding allocated to OPEL other than what was set out in the Clayton Utz letter. On 3 August 2007 Telstra filed an application in this Court seeking preliminary discovery against the Minister. On 9 September 2007 the Minister issued a media release announcing that a funding agreement had been signed between the government and OPEL.
24 The application for preliminary discovery came on for hearing before Graham J and was heard over five days between 13 and 19 September 2007. His Honour delivered judgment on 11 October 2007 dismissing the application and ordering that Telstra pay the Minister's costs.
25 On 17 October 2007 Telstra filed a motion seeking leave to appeal against his Honour's decision and annexing a draft notice of appeal. The matter came on for hearing before this Full Court on 11 February 2008. Full written submissions contesting the issues in the application for leave to appeal and the appeal were filed by both sides. However, on the day of the hearing proposed consent orders were submitted to the Court. They proposed the substitution of the Commonwealth of Australia and the Minister for Broadband, Communications and the Digital Economy as respondents in lieu of the former Minister. An amended draft notice of appeal was also proposed. Under the proposed orders leave to appeal from the judgment of Graham J would be granted, the appeal would be allowed, the judgment and orders of Graham J set aside and the respondents required to make preliminary discovery in terms set out in the applicant's second further amended application. Orders for production of the documents and their inspection were also proposed by consent.
26 The Court required argument on whether the proposed consent orders, other than those providing for the substitution of the respondents and the amendment of the draft notice of appeal were within power and appropriate.
27 Before turning to the decision of the primary judge it is useful to set out the relevant statutory framework.
Statutory framework - Federal Court of Australia Act 1976 (Cth)
28 The appellate jurisdiction of the Federal Court is conferred upon it by s 24 of the Federal Court of Australia Act 1976 (Cth) (the Act). Section 25(2B) of the Act provides:
A single Judge or a Full Court may:
…
(b) make an order by consent disposing of an appeal to the Court (including an order for costs); or
(ba) make an order that an appeal to the Court be dismissed for want of prosecution; or
(bb) make an order that an appeal to the Court be dismissed for:
(i) failure to comply with a direction of the Court; or
(ii) failure of the appellant to attend a hearing relating to the appeal;
…
29 Section 27 provides:
In an appeal, the Court shall have regard to the evidence given in the proceedings out of which the appeal arose, and has power to draw inferences of fact and, in its discretion, to receive further evidence, which evidence may be taken:
(a) on affidavit; or
(b) by video link, audio link or other appropriate means in accordance with another provision of this Act or another law of the Commonwealth; or
(c) by oral examination before the Court or a Judge; or
(d) otherwise in accordance with section 46.
30 Section 28 of the Act provides:
(1) Subject to any other Act, the Court may, in the exercise of its appellate jurisdiction -
(a) affirm, reserve or vary the judgment appealed from;
(b) give such judgment, or make such order, as, in all the circumstances, it thinks fit, or refuse to make an order;
(c) set aside the judgment appealed from, in whole or in part, and remit the proceeding to the court from which the appeal was brought for further hearing and determination, subject to such directions as the Court thinks fit;
…
Statutory framework - Federal Court Rules 1979 (Cth)O15A
31 Order 15A of the Federal Court Rules 1979 (Cth) (the Rules) was inserted in those rules in 1988. Order 15A r 6 provides:
Where -
(a) there is reasonable cause to believe that the applicant has or may have the right to obtain relief in the Court from a person whose description has been ascertained;
(b) after making all reasonable inquiries, the applicant has not sufficient information to enable a decision to be made whether to commence a proceeding in the Court to obtain that relief; and
(c) there is reasonable cause to believe that that person has or is likely to have or has had or is likely to have had possession of any document relating to the question whether the applicant has the right to obtain the relief and that inspection of the document by the applicant would assist in making the decision -
the Court may order that that person shall make discovery to the applicant of any document of the kind described in paragraph (c).
Primary judge's reasoning
32 It is not necessary for present purposes to review comprehensively the lengthy reasons for judgment of the learned primary judge. His Honour concluded first that Telstra had not shown the requisite 'reasonable cause to believe' under O 15A r 6(a) of the Rules. He found that the relevant expenditure by the government was in fulfilment of its policy to fund, by way of grant, infrastructure development that would take metro-comparable broadband to under-served areas in rural and regional Australia where, without such funding, it would not be commercially viable to establish the necessary infrastructure. He was unable to discern '… any shackle on such policy which would limit the amount of funding that could be made available in fulfilment of the relevant policy.' His Honour also rejected the contention that there was reasonable cause to believe that Telstra had, or might have, the right to obtain relief against the Minister in respect of a denial of procedural fairness relating to the additional funding.
33 His Honour found that:
. the Telstra bid in its draft form as at 26 October 2006 was, and was known by Telstra to be non-compliant;
. the Department considered Telstra's application as lodged and amended to be non-compliant in respect of three out of the eight essential deliverables and Telstra did not, according to the evidence, object to that judgment;
. the officers within Telstra who compiled the draft internal memorandum of 26 June 2007 headed 'Broadband Connect - Legal Options' were of the opinion 'that Telstra lodged a non-compliant bid'.
Accordingly, his Honour found it to have been inevitable that Telstra's application would be excluded from further consideration at Stage 1 of the assessment process. In the circumstances it lacked a sufficient special interest to seek relief for a denial of procedural fairness in respect of the provision of additional funding under the infrastructure Program.
34 His Honour held that the case which Telstra sought to advance could not be expected to succeed given the reservation by the Australian Government under [6.1] of the Guidelines of its right to seek changes to proposed projects in the context of negotiating an agreement for funding and to vary or amend the funding process at any time.
35 His Honour placed some emphasis on the fact that Telstra's only evidence about the information available to it to enable a decision to be made whether to commence a proceeding against the Minister was that of its officer, Mr Smith, supported by various documents that were tendered. His standing in the Telstra hierarchy was '… well down the ladder'. No evidence was called about information available to Telstra from Mr Smith's superiors. No evidence was tendered of discussions, if any, at board level concerning the information available to Telstra and any consideration by the board of the question whether or not to commence a proceeding against the Minister in the Court. His Honour said (at [121]):
In my opinion, there is insufficient evidence to enable the Court to conclude that after making all reasonable enquiries, Telstra does not have sufficient information to enable a decision to be made whether to commence a proceeding in the Court against the Minister to obtain the foreshadowed relief.
36 His Honour referred to an internal memorandum from Telstra in which it was stated:
… we are taking the view that so long as we have claims that are arguable and will not be "laughed out of court", we should run them, even if prospects of success are not great …
He concluded that given Telstra's predisposition to 'sue regardless' the subjective aspect of the r 6(b) requirement could not be satisfied.
37 On the matter of discretion, no question of delay arose. It was reasonable for Telstra to await Clayton Utz's response of 26 July 2007. His Honour concluded (at [127]-[128]):
However, I consider that the evidence of Telstra's 'sue regardless' disposition in respect of the award of $958 million of funding to OPEL Networks Pty Ltd is a matter properly taken into account in considering the proper exercise of the Court's discretion, as is the further observation contained in the internal draft memorandum, namely:
'If we are successful in getting documents this way, there will be limits on how they are used (eg only for litigation purposes, not in the media), but the hearing itself will be public and would presumably of itself be of media interest.'
It is certainly arguable that part of Telstra's motivation for bringing the current application is to achieve some measure of publicity for its cause and its criticism of what has been referred to as foreign aid for Singapore, as the corollary of a grant pursuant to the Infrastructure Program to Optus or an Optus related entity.
Having so said his Honour would not characterise Telstra's application as an abuse of process. Nevertheless its legitimacy in terms of its necessity was in doubt given the matters to which he had referred.
The proposed orders
38 The proposed consent orders in the application for leave to appeal are as follows:
- The following parties be added as Respondents in the proceedings:
(a) Minister for Broadband, Communications and the Digital Economy;
(b) Commonwealth of Australia.
2. Subsequent to order 1, the Minister for Communications, Information Technology and the Arts be removed as a Respondent to the proceedings.
3. The parties in the proceedings below be amended in accordance with orders 1 and 2.
4. Leave to Appeal from the orders of Justice Graham dated 11 October 2007 in Proceedings No NSD 1515 of 2007 be granted to the Applicant.
5. The Appeal be allowed and the Judgment and the orders of Graham J dated 11 October 2007 be set aside.
6. The Respondents make preliminary discovery by filing and serving verified List(s) of Documents in accordance with Order 15 rule 2(2) and rule 6 (including Form 22) of the Federal Court Rules enumerating documents falling within paragraphs (a)1-5 of the Applicant's Second Further Amended Application, on or before 10 March 2008.
7. The Respondents:
(a) produce to the Applicant for inspection all documents discovered in accordance with paragraph 6, and for which no claim for privilege and/or confidentiality is made on or before 10 March 2008;
(b) file and serve, on or before 10 March 2008, any notice of motion and affidavit in support for any claim by the Respondents for privilege and/or confidentiality.
8. Matter be listed before the Registrar on 17 March 2008 for further directions including with respect to any application in relation to any claim by the Respondents for privilege and/or confidentiality.
9. Each party to bear its own costs of the appeal and of the proceedings at first instance.
The documents sought by the applicant
39 The documents sought by the applicant as identified in (a)[1] to [5] of Pt A of the Second Further Amended Application are as follows:
1. All documents (including but not limited to, correspondence and notes of any discussions between the Respondent or any officer, servant or agent of the Department of Communications, Information Technology and the Arts (the Department) and OPEL Networks Pty Limited (OPEL)) relating to the possibility of any applicant for funding under the Broadband Connect Infrastructure Program (the Program) being able to submit an application seeking more than $600 million of funding, or being provided with funding in excess of $600 million, either under the Program or in addition to funding available under the Program.
2. All applications made by OPEL for funding under the Program and for any additional funding for its proposed infrastructure projects as described in the media release entitled "Australia Connected: Fast affordable broadband for all Australians" issued by the Respondent on 18 June 2007.
3. All documents relating to advice received from any probity or process adviser to the Respondent or any officer, servant or agent of the Department concerning:
(a) the amount of funding to be made available under the Program or in addition to that funding; and
(b) the advice to be provided to potential applicants concerning the amount of funding to be made available under the Program or in addition to that funding.
4. All documents relating to any assessment by the Respondent or any officer, servant or agent of the Department of the applications submitted by OPEL and the Applicant for funding under the Program or, in the case of OPEL, any additional funding, including all documents relating to the decision to award $958 million to OPEL which were prepared:
(a) by or on behalf of the Respondent; or
(b) by or on behalf of any officer, servant or agent of the Department who was wholly or partly responsible for the assessment of the applications.
5. All documents recording or implementing the decision to award funding under the Program to OPEL including the signed funding agreement with OPEL.
Consent orders allowing appeals - general principles
40 Section 27 of the Act requires the Court on an appeal to '… have regard to the evidence given in the proceedings out of which the appeal arose'. The language of s 27 has led to characterisation of an appeal from a single judge to a Full Court as an appeal by way of rehearing: Minister for Immigration & Multicultural Affairs v Jia Legeng (2001) 205 CLR 507 at 533 (Gleeson CJ and Gummow J, Hayne J agreeing in separate reasons at 561).
41 On an appeal by way of rehearing 'the powers of the appellate court are exerciseable only where the appellant can demonstrate that, having regard to all the evidence now before the appellate court, the order that is the subject of the appeal is the result of some legal, factual or discretionary error …': Allesch v Maunz (2000) 203 CLR 172 at [23]; CDJ v VAJ (1998) 197 CLR 172 at [111]. That limitation on the power of an appeal court in an appeal by way of rehearing may be affected by '… some statutory provision which indicates that the powers may be exercised whether or not there was error at first instance': Allesch 203 CLR at 180 citing Re Coldham; Ex parte Brideson (No 2) (1990) 170 CLR 267. In that connection an appeal may be allowed on the basis of further evidence admitted pursuant to s 27. In such a case the appeal may be allowed consistently with a correct approach and correct findings by the primary judge on the basis of evidence at trial. Nevertheless, the further evidence may demonstrate error in the outcome.
42 On an appeal de novo, as distinct from an appeal by way of rehearing, the powers of the appellate court may be exercised regardless of error: Allesch 203 CLR at 180. In an appeal by way of rehearing the appellate court can substitute its own decision based on the facts and law as they stand, whereas in an appeal in the strict sense the appellate court can only remit the matter to the trial judge or give the decision which should have been given in the first place: Allesch 203 CLR at 181.
43 In making any consent order the Court must be satisfied that the order is within power and appropriate. The question is whether, before it can make an order allowing an appeal by consent of the parties, the Court must be satisfied that there was a legal or factual error or an error in the exercise of a discretion by the primary judge.
44 Section 25(2B)(b) of the Act authorises a single judge or a Full Court to 'make an order by consent disposing of an appeal to the Court (including an order for costs)'. The appeal so 'disposed of', whether by allowing it or dismissing it, is an appeal by way of rehearing, that is an appeal of the kind described by the High Court in Jia Legeng 205 CLR 507 and Allesch 203 CLR 172. It seems that the question whether an appeal can be allowed under s 25 without first instance error has not been directly considered previously by this Court.
45 Counsel for Telstra referred to the decision of the Full Court in VTAG v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 141 FCR 291. In that case the appellant had sought judicial review, before a single judge of the Court, of a decision of the Refugee Review Tribunal affirming the refusal of the minister's delegate to grant him a protection visa. The application for judicial review was dismissed by a single judge of the Court. The appellant then appealed against that decision. Through misunderstanding his barrister signed a minute of a consent order dismissing the appeal. The consent order was made by a single judge acting pursuant to s 25(2B)(b). The appellant then sought an order in the Full Court that the consent order be set aside. Subject to the question of jurisdiction, the Minister consented to the proposed order. The Court set aside the consent order dismissing the appeal. It is important to observe that it did not do so in an appeal from the decision of the judge who, himself exercising appellate jurisdiction, made that order. The basis upon which a court may allow an appeal by consent was therefore not before the Full Court.
46 The issue which the Full Court had to consider was whether a consent order made under s 25(2B)(b) could be varied or set aside. It was in that context that their Honours observed, in a passage relied upon by Telstra, that (at [23]):
Section 25(2B)(b) itself is concerned with consent orders which dispose of an appeal; that is to say, it empowers the making of consent orders which allow appeals and set aside orders of single judges, as well as orders which dismiss appeals. An order allowing an appeal (whether by consent or otherwise) is a formal statement to the world by the Court that the primary judge fell into error. If the parties subsequently agree that the allowing of the appeal by consent was itself an error, the public would think it strange if the Court was compelled to perpetuate the formal but erroneous record. People might suspect that legalistic formalism had triumphed over common sense.
Their Honours also said in that context (at [26]):
There are characteristics of consent orders which strongly suggest that Parliament would not have intended that such an order, once made and entered, could never be set aside or varied. With a consent order, leaving aside the exceptional case of approval of compromises involving litigants under a disability, the Court does not inquire into the merits of the order proposed. It does not decide questions of fact or law. With a consent order there is not the possibility of error of fact or law which could found an appeal either from a single judge to the Full Court or from the Full Court to the High Court.
47 The above observations do not mean that the Court is relieved of the obligation to ensure that a proposed consent order is both within power and appropriate. There is long established authority that the Court cannot be given power, by consent of the parties, to make an order that it would not have the power to make without their consent: Thomson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150 at 163. That limitation and the requirement that the order be 'appropriate' do not mandate close scrutiny of the merits of the proposed order by the Court. There is a principle of judicial restraint in the scrutiny of settlements between legally represented parties of full capacity which applies to consent orders: Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc (1999) 161 ALR 79.
48 The Court was also referred, by counsel for Telstra, to the decision of the Full Court in Minister for Immigration and Multicultural and Indigenous Affairs v Kwan [2002] FCAFC 380. That was a case in which an order was made by consent allowing an appeal because another decision of the Full Court, made after the decision of the primary judge, meant the primary judge's decision could not stand consistently with it. That is to say error was identified before the consent order allowing the appeal was made.
49 The most recent consideration of the function of the Full Court in deciding whether to make an order allowing an appeal by consent was in Moses v Western Australia (2007) 160 FCR 148, also relied upon by Telstra. The question in that case was whether the Full Court could make an order under s 25(2B)(b) disposing of an appeal in part while the balance of the appeal was pending. The Court was not satisfied that it could apply s 25(2B)(b) in that way prior to the final determination of the appeal. Nevertheless, in the final disposition of the appeal some of the grounds could be dealt with by consent. In discussing the question whether in that case consent orders should be made, their Honours said (at [111] - [112]):
The right of appeal from the judgment of the primary judge lies under s 24(1)(a) of the FCA Act. Section 28 sets out the Court's powers in the exercise of its appellate jurisdiction, and s 25(2B)(b) empowers a single judge or a Full Court to exercise that jurisdiction to make an order by consent disposing of an appeal. Section 28(1)(b) and (c) refer to the Court making such orders on appeal as it thinks fit, and s 28(1)(f) permits an order for a new trial "on any ground upon which it is appropriate" to do so. Those references may suggest that the Court should not make a consent order on an appeal without being satisfied that it is appropriate to do so. It is at least clear that the parties by consent cannot confer on the Court power to make orders which the Court lacks power to make: Thomson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150 at 163. On the other hand, it is common ground that, in making orders by consent, the Court is not called upon to consider the substantive merits of the matter to the same extent that it would do so in the normal course. InVTAG v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 141 FCR 291 the Full Court (Heerey, Finkelstein and Lander JJ) said at [23] that an order allowing an appeal is "a formal statement to the world by the Court that the primary judge fell into error", but their Honours went on to say in that case at [26] that, in the making of a consent order, usually "the Court does not enquire into the merits of the order proposed".
In this matter, the parties have assumed the burden of satisfying the Court that it is appropriate to make the consent orders sought, so we do not have to consider whether it was necessary for them to have done so.
50 Their Honours satisfied themselves that the consent order proposed was appropriate on the basis of what appeared to have been accepted by the parties as an error by the primary judge in relation to the extinguishing effects on native title of certain pastoral leases [113]. Their Honours considered whether the error identified and agreed upon by the parties was appropriately agreed (at [113]):
as noted above, the parties are agreed that the leases did not in fact have any further extinguishing effect than any pre-existing pastoral leases, and that, contrary to his Honour's findings, the grants of each of the leases were not past acts nor previous exclusive possession acts. In accordance with the principle established in Ward (HC) 213 CLR 1, we consider that the parties' position in that regard is appropriate. Nothing has been identified to us which might indicate that those five pastoral leases should have any greater extinguishing affect than the other pastoral leases which affected parts of the claim area.
51 In our opinion none of the preceding authorities relieves this Court of the duty to be satisfied, as a condition of the exercise of its power to allow an appeal by consent, that there was an appellable error.
Whether appellable error was identified in the present case
52 The parties were asked by the Court to indicate whether there was any agreement as to the existence of an appellable error in the judgment of the learned primary judge. Subsequently the Court was informed that the parties were agreed that an arguable appellable error had been identified in Schedule 1 to the proposed amended notice of appeal. That was in the following terms:
1. The trial judge erred in failing to find an arguable breach of the Guidelines issued by the Commonwealth on 21 September 2006 (Guidelines) with respect to the Broadband Connect Infrastructure Program (Program) arising out of the conduct by the Department of Communications, Information Technology and the Arts (Department) at a briefing session held on 24 November 2006, in telling one potential applicant that the Government may commit further funds in excess of $600 million if it believed additional funding was justified and would bring significant benefits (allegedly being a general statement, not specific to the Program).
2. The trial judge erred in failing to find, based on the second affidavit of Mr Smith sworn 4 September 2007, that it was arguable that if Telstra had been informed prior to lodgement of its bid that the Government may commit funds additional to $600 million, Telstra would have developed a proposal which was additional to and different to the proposals actually lodged by Telstra, and in particular which would have covered more under-served areas and premises.
3. By reason of the error in 2, the trial judge erred in failing to find that it was arguable that there was a real possibility that the internal exclusion of Telstra under the Program on 14 February 2007 might have been different had Telstra been given the opportunity to lodge a different bid from the outset, and that this was sufficient to establish an arguable case for denial of procedural fairness for the purposes of O15A r6(a) of the Federal Court Rules.
It must be said that when the parties were asked by the Court to identify the error or errors to justify allowing this appeal, no immediate response was forthcoming. The matter was adjourned briefly to allow counsel to obtain instructions after which an agreed position as to the existence of 'arguable error' was reached and communicated to the Court.
53 His Honour went extensively into the merits of the existence of a possible cause of action which Telstra might bring against the Minister. In so doing it might be said he went further than was necessary in the context of an application for preliminary discovery under O 15A. It was not necessary for him to form any concluded view about the legal merits of the Telstra claim. That might well have to be assessed in the light of a range of facts including the context in which the decision to allocate funding to OPEL was made. There was no evidence before his Honour or before us of any Appropriation Act under which the necessary funding could have been provided. This raises a question about the status of the ministerial decision and the extent to which it could be amenable to judicial review. Related to that is the status of the funding agreement.
54 In our opinion and without descending into the merits of the appeal, there is sufficient basis for the existence of error by his Honour to enliven the power of the Court to allow this appeal. Essentially the error related to the absence of certain findings of fact said to bear upon a determination of the merits of any cause of action by Telstra against the Minister. This is relevant to his Honour's extensive consideration of the legal merits of Telstra's posited cause of action which would, at trial, be considered in a more detailed factual context. The Court acknowledges, in reaching the conclusion that it does, that there was no contradictor before it.
55 Elements of the procedural fairness case foreshadowed by Telstra would require detailed consideration of factual issues. The alleged failure by his Honour to make findings of fact relevant to that issue were directly related to his decision to dispose of the application on a basis related to the existence of a possible cause of action.
The power to make orders for preliminary discovery
56 Having accepted that the Court can and should grant leave to appeal (if it be necessary), allow the appeal and set aside the decision of the learned primary judge, the next question is whether the Court should accede to the proposed consent order for preliminary discovery. It is necessary first to have regard to the principles upon which such orders are made and in particular the conditions to be satisfied before the power to make them is enlivened.
57 Order 15A r 6 confers a discretion on the Court to order discovery from a prospective respondent to potential proceedings. The three paragraphs of r 6 define the three necessary conditions of the exercise of the power conferred by the rule. Once enlivened the exercise of the power is discretionary.
58 Under the first condition in [(a)] an applicant must show that there is 'reasonable cause to believe that the applicant has or may have the right to obtain relief in the Court from a person whose description has been ascertained'. The criterion as framed does not require that any person actually hold the requisite belief. Its objective character requires the Court to be satisfied that a reasonable person could form a belief on the basis of the material before the Court that the applicant 'has or may have the right to obtain relief'. The word 'may' indicates that the putative belief does not have to amount to a firm view that there is a right to relief: East Grace Corporation v Xing (No 2) [2005] FCA 1266 at [36]. However, mere assertion of a case against a prospective respondent is not enough: Hooper v Kirella Pty Ltd (1999) 96 FCR 1 at 11-12. On the other hand a prima facie case for relief does not have to be demonstrated. As Emmett J said in Austrac Operations Pty Ltd v New South Wales (2003) ATPR 41-960 at [10]:
The words, 'where there is reasonable cause to believe that the applicant has or may have the right to obtain relief' are not satisfied by mere assertion. The belief requires more than mere suspicion or conjecture. On the other hand, it is not necessary for an applicant to establish even a prima facie case. It is necessary, however, for the applicant to show objectively that there is reasonable cause for the relevant belief. It is not necessary to demonstrate whether or not the applicant has the belief.
In Glencore International AG v Selwyn Mines Ltd (recs and mgrs apptd) (2005) 223 ALR 238, Lindgren J said (at [16]):
… while the notion of "reasonable cause to believe that the applicant … may have the right to obtain relief" … may be seen to set the threshold "at quite a low level" …, there must be some tangible support that takes the existence of the alleged right beyond mere "belief" or "assertion" by the applicant…
We would add that satisfaction of the first criterion does require identification of the nature of the relief the subject of the hypothesised belief.
59 The second condition upon the exercise of the power is that the applicant has made all reasonable inquiries and yet has not sufficient information to enable a decision to be made whether to commence a proceeding to obtain that relief. The question of what constitutes all reasonable inquiries is evaluative, albeit objective. The question whether the applicant has sufficient information to enable a decision to be made whether to commence the proceeding also necessarily involves evaluative, albeit objective, considerations. There is some tension in the cases about the generosity of the criteria by which sufficiency is to be assessed. Absent a contradictor this case is not a vehicle for resolving that tension. We would simply observe that if the criteria are too generously interpreted, preliminary discovery could be available in advance of the commencement of virtually any proceeding. What is 'sufficient' must be read by reference to O 15A r 6(c) which directs the application of the rule to documents relating to the question whether the applicant 'has the right to obtain the relief'. In the ordinary course it would be expected that such documents would go to issues of liability. Even within that limitation [(b)] does not enliven the power to order preliminary discovery so that the applicant may acquire all documents in a prospective respondent's possession which are relevant to its prospective cause of action.
60 The boundaries of the sufficiency criterion have been discussed in various cases. In Alphapharm Pty Ltd v Eli Lilly Australia Pty Ltd [1996] FCA 391, Lindgren J held that r 6 was not necessarily rendered unavailable by the fact that the applicant already had available evidence establishing a prima facie case for the granting of relief. There might be matters of defence which could defeat a prima facie case. In C7 Pty Ltd v Foxtel Management Pty Ltd [2001] FCA 1864, Gyles J took the view, for the purposes of O 15A r 6(b), that a party was entitled to have more than a 'bare pleadable case' before deciding whether to undertake lengthy and expensive litigation of the kind contemplated in that case. Tamberlin J appears to have misstated this aspect of the reasons of Gyles J in Optiver Australia Pty Ltd v Tibra Trading Pty Ltd [2007] FCA 2065 when he suggested that O 15A r 6 was 'no longer appropriate' when an applicant had enough information to meet the threshold of a bare pleadable case. However, as his Honour said, the purpose of preliminary discovery is not to procure documents that would strengthen an applicant's decision to commence proceedings but rather to furnish it with information which is reasonably necessary to enable that decision to be made. In that connection he referred to his earlier decision in Matrix Film Investment One Pty Limited v Alameda Films LLC [2006] FCA 591.
61 It is not necessary to resolve such tensions as there are in the decided cases in order to accept that on existing authority an applicant for preliminary discovery may be entitled to discovery in order to determine what defences are available to a respondent and their possible strengths or to determine the extent of the respondent's breach and the likely quantum of any damages award: St George Bank Ltd v Rabo Australia Ltd (2004) 211 ALR 147.
62 The third criterion in [(c)] requires demonstration of an objective basis for a belief that the prospective respondent has, has had, or is likely to have or have had, possession of any document relating to the question whether the applicant has the right to obtain the relief. Moreover in respect of such documents it must be demonstrated that their inspection by the applicant will assist in making the decision whether to commence proceedings.
63 When all the conditions set out in [(a)], [(b)] and [(c)] are satisfied then the Court has the power, subject to discretion, to order preliminary discovery.
Whether the consent order for preliminary discovery should be made
64 As with the order allowing the appeal, the Court must be satisfied, before making an order by consent under O 15A, that the proposed order is within power and appropriate. The power to make such orders depends upon satisfaction of the criteria in [(a)], [(b)] and [(c)] of O 15A r 6.
65 The first criterion is that there is reasonable cause to believe that the applicant has or may have the right to obtain relief in the Court from a person whose description has been ascertained. The relevant relief was identified by Telstra in its outline of submissions before the learned primary judge. The proposed relief related to the following decisions of the then Minister:
(a) the decision by the Minister on 10 April 2007 to approve OPEL's revised proposal for funding of $600 million;
(b) the decision by the Minister to approve OPEL's proposal for extra funding of $358 million;
(c) the decision by the Minister to enter into a funding contract with OPEL in connection with the approvals in (a) and (b).
The relief which it is said Telstra has, or may have, the right to obtain in its potential action against the Minister would comprise:
(a) declarations that each of the decisions by the Minister is invalid, void or unlawful;
(b) orders of certiorari setting aside the decisions;
(c) orders of prohibition against the Minister from taking any steps to implement the decisions;
(d) in the alternative to (b) and (c), an injunction restraining the Minister from taking any steps in implementing any of the decisions.
66 There are no doubt legal and factual considerations surrounding the question whether the relief proposed could be obtained. The availability of judicial review in relation to decisions affecting allocation of funds in the exercise of executive power under no statutory authority other than that of an Appropriation Act, is often debatable. In this case counsel were unable to point even to the existence of a relevant Appropriation Act. In Barnett v Minister of Housing and Aged Care (1991) 31 FCR 400 an applicant sought judicial review under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act) of a decision by the Department of Community Services and Health that he was not eligible for a government program under which assistance was provided to small nursing homes. There was no statute establishing the program. Criteria for eligibility were set out in a departmental circular. The statutory authority for the program was in appropriation legislation. Heerey J found that the relief was not available under the ADJR Act as the decision complained of was not made 'under an enactment'. The applicant also sought mandamus under s 39B of the Judiciary Act 1903 (Cth). Heerey J observed that (at 403):
A writ of mandamus does not issue except to command the fulfilment of some duty of a public nature which remains unperformed …
His Honour held it was 'a matter entirely within the discretion of the Minister' whether to establish the program or to modify or revoke it. The departmental circular did not have the force of law and as his Honour observed (at 403):
Ministers cannot make law unless in the exercise of a power conferred by statute.
This, of course, does not determine whether, and to what extent, judicial review is available in relation to exercises of prerogative or executive power under s 61 of the Constitution. It is merely indicative of the uncertainties associated with such proceedings. See also: Ex-Christmas Islanders Assn Inc v Attorney-General (Cth) (2005) 149 FCR 170.
67 Some elements of this case, so far as it relates to procedural fairness, are redolent of Century Metals and Mining NL v Yeomans (1989) 40 FCR 564, although in that case the relevant decision was made under a Commonwealth Ordinance applicable to the Christmas Island Territory.
68 In our opinion it is sufficient to say, having regard to the factual background and the legal principles referred to earlier, and having regard to the consent of legally represented parties, that the Court can be satisfied that there is reasonable cause to believe that Telstra may have the right to obtain relief in the Court from the Minister and/or the Commonwealth.
69 The second criterion to be satisfied is that after making all reasonable inquiries, Telstra has not sufficient information to enable a decision to be made whether to commence a proceeding in the Court to obtain the relief to which it referred. There was evidence that Telstra had made inquiries and had received a negative response from the Minister's solicitors. The proposition that such inquiries were reasonable can be accepted having regard to the consent of the parties to the proposed order. Of course the consent of the Commonwealth to the proposed orders suggests that, if the inquiries were to be made afresh, the response might be more forthcoming. The Court, however, is dealing with the proposed order on the basis of the materials that were before the primary judge. The Commonwealth has not offered to volunteer the documents outside the framework of the proposed orders. The Court will not therefore speculate on whether a further request would elicit a different answer.
70 The question whether Telstra has not sufficient information to enable a decision to be made whether to commence a proceeding raises evaluative considerations. The Court, in the exercise of that judicial restraint which is appropriate when dealing with a consent order, will not go behind an evaluation which is arguably open on the materials before it and which the parties have agreed upon. It is important nevertheless to stress that the Court is not to be taken as accepting an expansive approach to the application of O 15A. It has been said in a number of cases that O 15A is to be construed beneficially, Hooper 96 FCR 1 at 11. However it is not to be construed so beneficially that it becomes available as a routine precursor to the commencement of litigation. The litigation process provides well established mechanisms through discovery, the use of subpoenas, the obtaining of particulars and the issue of notices to produce and to admit facts to allow a party to reshape its case and narrow its focus through permitted amendments to pleadings. There is also the possibility in appropriate cases involving governments, of a request under Freedom of Informationlegislation. In our opinion the present case is marginal. Nevertheless, having regard to the agreement of the parties and the evaluative elements in [(b)], the Court accepts that the condition in [(b)] is satisfied for the purpose of enlivening its power to make the orders proposed.
71 As to [(c)], the factual background already referred to suggests that there are likely to be in the possession of DCITA and thereby in the possession of the Commonwealth and the current Minister, documents relating to the question whether Telstra has the right to obtain any relief which might assist it in making its decision whether or not to commence proceedings.
72 For the preceding reasons we are prepared to make the orders for preliminary discovery which are sought by consent. Telstra has offered certain undertakings in relation to the time within which any proceedings would be commenced and the return of documents obtained pursuant to preliminary discovery in the event that such proceedings are not commenced within that time. Those undertakings inform the terms of additional elements of the proposed orders which we will make. Those additional elements allow the Court to revisit the sufficiency of documents provided pursuant to the principal orders even though some matters of public interest immunity and third party objections stand unresolved.
Conclusion
73 For the preceding reasons the Court is prepared to make the consent orders proposed by the parties.
I certify that the preceding seventy-three (73) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices French, Weinberg and Greenwood.