Voitenko t/as Access Party Hire v Zurich Australian Insurance Limited

(B) The Insurance Dispute

1. A policy of insurance dated 21 May 2010 was issued to the plaintiffs by Zurich ("the Policy"). The plaintiffs allege that Zurich agreed to indemnify them for loss and damage to plant, machinery and all contents of the business by, inter alia, fire to the sum of $1,100,000 ("the sum insured").
2. In the proceedings the plaintiffs' claim may be summarised as follows. On 22 August 2010, during the currency of the Policy, their warehouse was destroyed by fire as a consequence of which they say that they suffered loss and damage including, in particular, the total loss of all plant, machinery and contents within the warehouse.
3. On 30 August 2010, the plaintiffs made a claim on the Policy. In paragraph 10 of the Amended Statement of Claim they state that Zurich made payments under the Policy totalling $248,917. However, following the completion of investigations Zurich informed the plaintiffs that it would not pay any further amounts.
4. The plaintiffs allege that in breach of the Policy, Zurich has neglected and/or refused to pay to the plaintiffs the reinstatement costs of the replacement value of certain equipment as specified in the Amended Statement of Claim.
5. They claim damages for alleged breach of contract in the sum of $786,069 and seek orders for interest and costs.
6. They assert that their total losses amounted to approximately $1,377,000.
7. Zurich has denied liability on the basis that the plaintiffs' claims are fraudulent, in that they knew that when they were making the claim they were dishonestly overstating their actual losses.

(C) Recordings Sought by the Subpoena

1. In the course of a criminal investigation New South Wales Police obtained a warrant made under the Surveillance Devices Act 2007 ("SD Act"). By the use of a surveillance device under the warrant police obtained audio recordings of conversations to which it appears the plaintiffs (or at least one or other of them) was/were a party or parties. As at the date of the hearing of this application (7 December 2015) no criminal charge(s) had been brought against the plaintiffs.
2. As noted above, on 20 November 2014 Zurich issued a subpoena to the Commissioner seeking a number of documents, including audio recordings obtained through the use of any surveillance device pursuant to an authorising warrant. Paragraph 2 of the subpoena is in the following terms: "A copy of the investigations file for the NSW Police ref E41863848 Crime Scene Unit including all photographs exposed by the Crime Scene Unit at premises located at 77 Anderson Rd Mortdale NSW 2223 and all audio recordings of conversations taken by NSW Police during the course of the investigation."
3. The Commissioner objected to production of the recordings on the basis that they are "protected information" within the meaning of s 39(1) of the SD Act.
4. On 16 April 2005, Zurich's solicitors wrote to the Commissioner stating that even if the "audio recordings" were "protected information" the Commissioner could release them if the public interest in releasing them outweighed any privacy intrusion from the release. The solicitors set out a number of factors they claimed supported such public interest.
5. The Commissioner subsequently produced documents in part answer to the subpoena on 12 December 2014, 31 March 2015, 12 June 2015 and 26 June 2015. The Commissioner has throughout maintained that the balance of the subpoena (the audio recordings) capture "protected information" as defined in s 39 of the SD Act and that s 40 makes it a criminal offence if a person "intentionally, knowingly or recklessly uses, communicates or publishes" any protected information.

(D) Evidence on the Application

1. The Commissioner relied upon the affidavit of Samantha Mary Butt, solicitor, sworn 27 August 2015 (filed on behalf of Zurich), a copy of which was contained within the Court Book (Tab 8).
2. The Court Book also contained a copy of the affidavit of Emily Christina Graham, solicitor, sworn 5 August 2015 (filed on behalf of the Commissioner) (Tab 7).
3. Ms Kumar of counsel, on behalf of the Commissioner, tendered at the hearing the following documents: Exhibit 1 - letter from Zurich addressed to the plaintiffs dated 16 December 2011. Exhibit 2 - letter from Zurich to the plaintiffs dated 10 April 2012. Exhibit 3 - letter from Zurich to the plaintiffs dated 7 December 2012.

(E) Submissions for the Commissioner

1. Ms Kumar confirmed that the Commissioner only took issue with the production of the audio recordings. In this respect reliance in particular was placed upon the provisions of ss 40 and 43 of the SD Act. Section 40, it was emphasised, is concerned with the "prohibition on use, communication or publication" of protected information and that ss (1) and (2) of s 40 create separate offences.
2. Ms Kumar also noted that s 43 provides that a person is not entitled to search any protected information in the custody of the court unless the court otherwise orders in the interests of justice. In that respect, Ms Kumar in her oral submissions submitted that s 43 should, by implication, be confined to criminal proceedings (T 7 December 2015 at p 7).
3. The words "uses, communicates or publishes" in s 40(1), Ms Kumar argued, should be given their ordinary and natural meaning. It was noted that the Macquarie English Dictionary defines these words as follows: 1. Use: "to employ for some purpose; put into service; turn to account" 2. Communicate: "to impart knowledge of; make known" 3. Publish: "to make publicly or generally known" (Applicant's Outline of Submissions at [10])
4. Ms Kumar conceded that there was a basis to support that the mere production of the protected information to this Court is not "publishing" or "communicating" the protected information. That, it was submitted, could only occur once an order for access was granted: Applicant's Outline of Submissions at [11]. On the issue as to whether mere production of materials to a court could contravene statutory prohibitions a number of caselaw authorities were cited (discussed below): Applicant's Outline of Submissions at [12]-[14]. Accordingly it was not contended on behalf of the Commissioner that production of the recordings to the Court would constitute a breach of the prohibition under s 40: Oral Submissions at T 8.
5. However, any further disclosure of the protected information to the plaintiffs or their legal representatives, it was contended, would be a use, communication or publication of the protected information in contravention of the SD Act.
6. In support of the contention that the subpoena should be set aside as no purpose could be served by the subpoena remaining on foot, the Commissioner relied upon the provisions of s 40 of the SD Act, and upon the decision in Kizon v Palmer (No 2) (1998) 82 FCR 310. In that case, a subpoena was set aside. It was held that no purpose could have been served by the subpoena remaining on foot as it sought material that was in breach of s 63(2) of the Telecommunications (Interception and Access) Act 1979 (Cth).
7. The submission for the Commissioner was that as it is an abuse of process to serve a subpoena without a legitimate forensic purpose Zurich bore the onus of proving that there was a legitimate forensic purpose for the subpoena served by it on the Commissioner.
8. In summary, it was contended for the Commissioner that the subpoena lacks a legitimate forensic purpose as: 1. The audio recordings cannot be used in the proceedings as to do so would constitute an offence under s 40(1) of the SD Act; and 2. That the audio recordings are privileged pursuant to rule 1.9(3) of the Uniform Civil Procedure Rules.
9. It was submitted for the Commissioner that in accordance with the definitions in the UCPR of "privileged document" and "privileged information" (in the UCPR Dictionary), a "privileged document" means a document that contains privileged information. "Privileged information" includes information the disclosure, production, admission or use of which, in the proceedings, would be contrary to any Act other than the State or Commonwealth Evidence Act 1995, but excludes information the court declares not to be privileged information for the purpose of the proceedings.
10. The contention was that, due to the combined effect of rule 1.9 (3) and (4) of the UCPR, where objection is taken to producing a document or answering a question on the ground that the document is a privileged document or that the answer would disclose privileged information, the person objecting cannot be compelled to produce the document or answer the question unless and until the objection is overruled.
11. It was submitted that the only exception to that position occurs where there is an objection to the production of a document(s) and a court requires them to be produced for the purpose of ruling on the objection.
12. It was argued that the admission into evidence of product (in this case the recordings) obtained from the use of an authorised surveillance device would constitute a privileged document for the purposes of rule 1.9(3) and (4), unless the court declares it not to be privileged for the purposes of the proceedings.
13. Accordingly, so the argument went, as the audio recordings cannot be used by the issuing party, there is no legitimate forensic purpose for the subpoena: Applicant's Outline of Submissions at [23].
14. In this case, Ms Kumar submitted that Zurich needed to identify the legitimate forensic purpose with precision and establish that the material is likely to assist on a relevant issue. However, in that respect it was observed that the provisions of s 40 of the SD Act create an offence and there were no exceptions or discretionary situations under s 40(4) of the SD Act which would permit use, communication or publication of the protected information in this case: Submission 7 December 2015 at T 11.
15. It was submitted that the provisions of s 40 would have the result that if a party accessed records containing "protected information" within the SD Act produced to a court that party could be in breach of the SD Act. The section does not provide any authorisation for that to occur nor for use of the material in court proceedings, in particular the civil proceedings instituted by the plaintiffs in this case. The relevant provisions of the SD Act, it was argued, focus on the use of material in criminal proceedings for the investigation of a particular offence: Submissions 7 December 2015 at T 13.

Zurich's Primary Written Submissions

1. As noted above, in its letter of 16 April 2015 to the Commissioner, Zurich stated that even if the tapes were "protected information", the recordings could be released if the public interest in releasing them outweighed any privacy intrusion from the release. In the letter, it stated: "Zurich considers that it is in the public interest for fraudulent claims to be investigated by insurers and for the Court to have available to it all evidence that may be relevant to determining whether the claim is fraudulent. Undetected fraudulent claims impact on and reduce the amount of funds available to pay claims by pursued by [sic] honest policyholders. In addition, insurers paying out fraudulent claims results in an increase of premiums for all policyholders. As a result, fraudulent claims that go unchallenged are detrimental to the public interest in the form of higher premiums for policyholders and reduced returns for shareholders."
2. The response to that letter was the filing of the Notice of Motion dated 23 June 2015 seeking to set aside that part of the subpoena which seeks the production of the recordings.
3. Zurich submitted that the Amended Notice of Motion filed on behalf of the Commissioner should be dismissed as it is without foundation and ignores the well‑settled approach which courts take to the procedure of having a third party bring documents and materials into court.
4. Reference was placed upon the decision of the Court of Appeal in National Employers' Mutual General Association Ltd v Waind [1978] 1 NSWLR 373 which makes it clear that there are three separate steps to the procedure of having a third party bring subpoenaed material to court pursuant to a subpoena, namely: 1. Obedience to the subpoena by the third party bringing the subpoenaed material to court and handing them to the judge; 2. The decision of the judge concerning the preliminary use of the subpoenaed material including access; and 3. Admission of the subpoenaed material into evidence.
5. Zurich submitted that the fundamental problem with the Commissioner's position on the subpoena is that it elided the difference between these three steps.
6. In relation to the first step, Zurich argued that it appears the Commissioner has conceded in its Written Submissions at [11] that there is no basis to resist production of the recordings to the Court if they are relevant.
7. Zurich contended that there cannot be any serious doubt that the audio recordings have apparent relevance to the issues in dispute in these proceedings as they may include statements made by the plaintiffs about their conduct in connection with the fire. (I note, however, that Zurich's Defence filed 23 April 2015 in terms of its defence of fraud as pleaded in para [12] of the Defence, is limited to issues concerning statements allegedly made overstating actual losses.)
8. Zurich further contended that the submissions for the Commissioner are misguided insofar as they rely upon rule 1.9 of the UCPR as production to this Court of the recordings is not contrary to any Act. Accordingly, it contended that rule 1.9 has no application.
9. As to the second step, Zurich argued that there is no reason for the Court not to permit the parties to inspect (including listening to) the recordings. In this regard, Zurich contended that there would be no breach of s 40(1) or (2) by inspecting the recordings because inspection and/or listening to the recordings produced to the court is not a "use" within s 40(1).
10. Zurich noted that s 43 of the SD Act prohibits persons from searching any protected information in the custody of a court unless the court otherwise orders in the interests of justice. It was observed that it is unclear whether this provision applies to the parties to the litigation or to a "person" who is not a party who seeks access to the protected information. Zurich argued that if this provision applies to the question of access by the parties, the court should permit access as it is in the interests of justice to do so for the reasons given Zurich's abovementioned letter dated 16 April 2015.
11. As to the third step identified in Waind, supra, Zurich's submission was that a determination as to whether the parties may use, communicate or publish the recordings is a matter to be determined by the court after inspection.
12. After inspection, it was said, no party may wish to use, communicate or publish the readings and as such, the issue as to contravention of the SD Act does not arise. In this regard, Zurich argued that this is consistent with the approach of Bergin J (as her Honour then was) in Sydney Water Corporation v PricewaterhouseCoopers [2008] NSWSC 361.
13. Zurich argued that if the court was inclined to consider admissibility issues at this stage rather than after the inspection of the documents, there are two reasons why the records may be admissible.
14. First, if the court was minded to permit access at some later point to a "person" under s 43 of the SD Act, it is then arguable that the recordings have entered the "public domain" within the meaning of the exception found in s 40(3)(a)(ii).
15. Second, the possibility remains that if and when the Commissioner makes a determination under s 40(6) there will be no barrier to the use of the recordings by the parties.

Zurich's Additional Written Submissions

1. On 20 September 2015, Zurich provided additional written submissions. It submitted that whilst it understands the concerns of the Commissioner regarding the possibility of the commission of an offence under s 40(1) by producing the documents to the Court, the concerns are misplaced for three reasons.
2. First, there is nothing in the SD Act which suggests that the legislature intended to limit or impede the powers of the Court to make orders requiring production of documents in accordance with its usual practice. Zurich argued that absent a section expressly providing an immunity in respect of an obligation which might otherwise exist to produce documents to a Court as found in legislation such as s 16(3) of the Income Tax Assessment Act 1936 or s 207 of the Social Security (Administration) Act 1999, the Court would not find the intention of the legislature was to prohibit the inspection of the documents. I note that s 16(3) of that Act was repealed on 16 December 2010.
3. Second, when interpreting a particular section of an Act, regard should be had to the purpose of the statute and the statute read as a whole. In this regard, it was argued there are other sections in the SD Act which tend to suggest that the legislature did not intend that the production of documents would not be subject to the ordinary court processes. In this regard, it was noted that s 3 of the SD Act specifies that the Act is not intended to limit a discretion in a court to admit or exclude evidence in any proceedings; s 42 specifies a circumstance where a person may object to the disclosure of information; and s 43 refers to the protected information being in the custody of a court.
4. Third, the written submissions of the Commissioner suggested an interpretation of s 40 that is too broad as the Commissioner would not be communicating or publishing protected information even if it is required to provide such information to the Court.
5. It was also contended that the Commissioner's reliance on Kizon v Palmer, supra, is misplaced because s 63 of the Telecommunications (Interception and Access) Act 1979 contained an express prohibition on the giving of evidence in a proceeding in respect of such information. Zurich noted that there is no such express prohibition in the SD Act.

(G) Plaintiffs' Submissions

1. The plaintiffs to the District Court proceedings adopted the submissions of the Commissioner in respect of the interpretation and applicability of ss 39 and 40 of the SD Act.
2. They argued that the clear intent of the Act is to regulate the use of surveillance devices by New South Wales Police in the investigation of possible criminal offences and in obtaining evidence to support criminal charges that may be laid against a person or persons the subject of the surveillance.
3. The plaintiffs also contended that there is no legitimate forensic purpose for the subpoena issued by Zurich.
4. The submission was that the subpoena issued at Zurich's request is a "fishing expedition" in that it seeks evidence which it does not already have to support its submission that the claim made by the plaintiffs was made fraudulently.
5. The plaintiffs relied upon three letters received from Zurich dated 16 December 2011, 10 April 2012 and 7 December 2012 in which Zurich's solicitors used expressions when referring to the claims in dispute as "… possibly fraudulent" or "may have been made with the intention to defraud Zurich".
6. In addition, the plaintiffs relied upon a letter from the solicitor for Zurich to the NSW Crown Solicitor's Office dated 16 April 2015 in which the solicitors use similar passive language when stating that "Zurich believes that the audio recordings may contain information which will support…".
7. The plaintiffs submitted that the production of the audio recordings would be a significant breach of the privacy of the plaintiffs, particularly in circumstances where no criminal charges were brought by Police.
8. The production of the audio recordings would, it was argued, in all likelihood, also be a significant breach of the privacy of other individuals whose conversations with the plaintiffs may have been or has been recorded.
9. The plaintiffs further submit that in all likelihood there would be confidential information in the audio recordings which would be of no relevance to Zurich.

(H) The Legislation

1. The SD Act was enacted on 23 November 2007 as the successor to the Listening Devices Act 1984.
2. The central question for determination in these proceedings involves a consideration as to whether, and if so to what extent, prohibitions contained within the SD Act interfere, limit or otherwise affect the exercise of judicial power by a court in respect of what is defined in the Act as "protected information" and the right of "a person", including in particular the right of a party to civil proceedings to access protected information produced under a subpoena.
3. In the examination of that question it is of some assistance to commence by reference to the structure and provisions of the Act and the matters to which they are directed.

(a) Relevant Provisions of the Surveillance Devices Act

1. The SD Act is divided into six Parts as follows: Part 1 - Preliminary (ss 1-6)
2. Section 3(2) - Relationship to other laws and matters - is in the following terms: "This Act is not intended to limit a discretion a court has: (a) to admit or exclude evidence in any proceeding, or (b) to stay criminal proceedings in the interests of justice."

Part 2 - Regulation of installation, use and maintenance of surveillance devices

1. Part 2, inter alia, contains provisions that impose prohibitions on the use of listening devices, optical surveillance devices and other specified devices. These prohibitions safeguard the right to privacy subject only to related provisions of the Act, in particular those authorising warrants for the use of such devices.

Part 3 - Warrants

1. Sections 17-19 of Part 3 are related, inter alia, to applications for, and the issue of, surveillance device warrants.
2. The provisions of s 17 are directed to authorising, on application by a law enforcement officer (or another person on his or her behalf) for a surveillance device warrant. The application must establish the criteria or matters specified in s 17(1)(a), (b) and (c).
3. The terms of s 17(1) provide for the issue of a warrant to law enforcement officer for the investigation of a "relevant offence" (defined in s 4(1)) as meaning: (a) an offence against a law of this jurisdiction or of the Commonwealth or another State or Territory that may be prosecuted on indictment, or (b) an offence against the law of this jurisdiction that is prescribed by the regulations for the purposes of this definition.

Part 5 - Compliance and Monitoring

1. Part 5 contains important provisions that directly relate to the question raised in the present application.
2. Division 1 of Part 5 deals with "protected information". The provisions of s 39 are as follows: In this Division: protected information means: (a) any information obtained from the use of a surveillance device under a warrant, emergency authorisation, corresponding warrant or corresponding emergency authorisation, or (b) any information relating to: (i) an application for, issue of, existence or expiry of, a warrant, emergency authorisation, corresponding warrant or corresponding emergency authorisation, or (ii) an application for approval of powers exercised in an emergency without a warrant under section 31 or under an emergency authorisation, or (iii) an application under a corresponding law for approval of powers exercised under a corresponding emergency authorisation, or (c) any information obtained from use of a surveillance device as referred to in section 7 (4), or (d) any information obtained from the use, in accordance with section 50A, of body-worn video by a police officer.
3. Part 5, importantly in the present application, includes s 40: 40 Prohibition on use, communication or publication of protected information (i) A person is guilty of an offence if: (a) the person intentionally, knowingly or recklessly uses, communicates or publishes any protected information, and (b) the person knows that, or is reckless as to whether, the information is protected information, and (c) the person knows that, or is reckless as to whether, the use, communication or prohibition of information is prohibited by this section. Maximum penalty, Imprisonment for 2 years.
4. Section 40(3) is, so far as is relevant to the present application, in the following terms: Subsections (1) and (2) do not apply to: (a) the use, communication or publication of: (i) any information that has been disclosed in proceedings in open court, or (ii) any information that has entered the public domain, … (b) …

(I) Statutory Protections of the Right of Privacy

1. In general terms, the provisions of the SD Act are directed to the right of privacy, in three areas: 1. Provisions that protect the privacy and confidentiality of citizens. These provisions impose prohibitions upon overhearing or monitoring private conversations or visually recording or observing activities on premises, vehicles etc: ss 7 and 8. 2. Provisions that establish the statutory scheme established by Part 3 of the Act. These, as noted above, deal with the authorisation by warrant of the use of surveillance devices to record private conversations or activities of persons where a law enforcement agency for the purpose of investigating certain suspect criminal offences, satisfies the requirements prescribed by Part 3. 3. Provisions that impose a prohibition against the disclosure of "protected information" obtained by the use of a surveillance device under a warrant: s 40.
2. The present application, of course, relates to the third category.

(J) Consideration

1. A warrant issued under the provisions of s 21 of the SD Act authorises law enforcement officers to undertake activities as specified in the section. These include the use of a surveillance device on/in specified premises or a vehicle, or in/on a specified object or class of objects etc. A considerable range of authorised specific activities are specified in s 21(1), (2) and (3).
2. Plainly the legislation (the SD Act) permitting the authorised use of a surveillance device under a warrant overrides a person's right to privacy in the interests of effective police investigation of a suspected criminal offence having occurred, or that is occurring or is about to be, or is likely to be committed.
3. The provisions of the SD Act, however, also establish important prohibitions upon the use of recordings or the product produced by the use of surveillance devices, in particular upon the use of "protected information" as defined. These, inter alia, seek to limit the use of such information to the sphere of law enforcement investigations and for use in criminal proceedings in the event of a criminal prosecution(s). The prohibition under s 40 in other words evidences a legislative intent to limit the impact of surveillance upon the right to privacy.
4. Protected information, in other words, having been lawfully obtained through the use of a surveillance device under a warrant for specified law enforcement reasons, is not available for use unless it falls within stated exceptions.
5. Division 1 of Part 5 of the Act provides for restrictions on the use, communication and publication of information.
6. As noted above, s 39 defines "protected information"; the terms of s 39 are set out in para [80] above:
7. Section 40 (extracted in [81] above), imposes a prohibition on the publication of "protected information". It does so by making it a criminal offence to use, communicate or publish any such information in circumstances specified in s 40(1)(a), (b) and (c).
8. The exceptions to the operation of the prohibition in s 40(1) are specified, inter alia, in s 40(3)(a)(i) and (ii) (extracted in [82] above).
9. In relation to the prohibition in s 40(1), the reference to "A person" and "the person" does not, in my opinion, include a court. Therefore production of records containing protected information to a court in answer to a subpoena issued in court proceedings does not constitute a use, communication or publication of protected information contrary to s 40 of the SD Act. The relevant caselaw may be summarised as follows: In Osborne v R [2014] NSWCCA 17, Basten JA reviewed the case law on the meaning of the word "person" found in a number of statutory prohibitions. The salient facts in that case were as follows:

• The applicant obtained a subpoena addressed to the Proper Officer, Medicare Australia, requiring the production of documents recording the claims history of certain victims of an alleged criminal offence.
• Section 135A of the National Health Act 1953 (Cth) contained a prohibition upon the divulging or communicating to any person or any information with respect to the affairs of a third person acquired by another officer or officers in the performance of duties or in the exercise or powers or functions under the Act. An application was made to set aside the subpoena.
• A critical question was whether the prohibition requiring that a person not "divulge or communicate to any person" operated to prohibit the Proper Officer from providing information to the Court in response to the subpoena.
• The ordinary meaning of "person", Basten JA observed, does not include a court and has been held not to include a court in similar legislation: at [6]. He stated that that proposition had a long history with respect to statutory provisions in this country. His Honour referred to dicta of the High Court in Canadian Pacific Tobacco Co Ltd v Stapleton [1952] HCA 32; 86 CLR 1 per Dixon CJ and Hilton v Wells [1985] HCA 16; 157 CLR 57, in the latter case involving a statutory prohibition in s 7(4) of the Telecommunications (Interception and Access) Act 1979 (Cth).
• The general proposition to be derived from the authorities to which reference was made is that legislation using similar terminology to s 135A(1) has been construed as not covering communication to a court: Basten JA at [13].
• In Lemery Holdings Pty Ltd v Reliance Financial Services Pty Ltd; School Holdings Pty Ltd v Dayral Pty Ltd [2008] NSWSC 1100, Barrett J, as his Honour then was, observed in relation to similar provisions in the Telecommunications (Interception and Access) Act 1971 (Cth) at [29]: "…I would nevertheless observe that, if the content of the CD is or includes 'information' of the kind with which s 63 of the Act is concerned (and I expressly refrain from expressing any opinion on that), it is by no means clear to me that mere production of the CD to the court in response to a subpoena would contravene, in relation to that 'information', the prohibition expressed by the words 'communicate to another person, make use of, or make a record of'. I am inclined to agree with Mr Walsh that the prohibition would arise for consideration when, after production of the CD to the court, the question of granting access to parties arose."

1. Section 43, Protected information in the custody of a court, is an important provision. It is in the following terms: "A person is not entitled to search any protected information in the custody of a court unless the court otherwise orders in the interests of justice." (emphasis added)
2. These provisions envisage circumstances in which, where the interests of justice require it, a court may permit a person to search protected information in the custody of a court.
3. As discussed above, s 40 reflects a legislative intention to preserve, to an extent, the confidentiality in protected information. Two reasons for the prohibitions against disclosure of protected information under ss 40(1) and (2) may be discerned. First, in order to ensure that the intrusion into the private conversations of citizens recorded by the lawful use of surveillance devices under the SD Act are not to be used, communicated etc beyond the legitimate interests of law enforcement for which a warrant was issued under the Act. Second, in order to secure the integrity of investigations by law enforcement agencies by proscribing any other use, communication etc of protected information which might otherwise impair the efficacy of such investigations.
4. The contravention of the prohibition imposed by s 40(1) is punishable by a maximum penalty for an offence under that subsection of 2 years.
5. The prohibition under s 40(2) relates to the aggravated form of offence. Such an offence is punishable by a maximum penalty of imprisonment for 7 years.
6. The fact that a breach of s 40 under either ss 40(1) or 40(2) is punishable by a term of imprisonment with the above maximum penalties underscores the legislature's intention to secure protected information by the imposition of a substantial punishment in the event of a transgression.
7. The prohibitions under s 40, however, are not absolute. The legislature has made provision for circumstances that may permit the use or publication of protected information in specified circumstances. These include:

• The circumstances specified in s 40(3) which is in the following terms: (40)(3) Subsections (1) and (2) do not apply to: (a) the use, communication or publication of: (i) any information that has been disclosed in proceedings in open court, or (ii) any information that has entered the public domain, or (b) the use or communication of protected information by a person who believes on reasonable grounds that the use or communication is necessary to help prevent or reduce the threat of serious violence to a person or substantial damage to property, or (b1) the use or communication of protected information obtained from the use of a device in this jurisdiction by a person who believes on reasonable grounds that the use or communication is necessary to help prevent or reduce the threat of the commission of a serious narcotics offence, or (c) the communication to the Director-General (within the meaning of the Australian Security Intelligence Organisation Act 1979 of the Commonwealth) of protected information that relates or appears to relate to activities prejudicial to security (within the meaning of that Act), or (d) the use or communication of information referred to in paragraph (c) by an officer of the Australian Security Intelligence Organisation in the performance of his or her official functions, or (e) the use or communication of information to a foreign country or an appropriate authority of a foreign country in accordance with the Mutual Assistance in Criminal Matters Act 1987 of the Commonwealth.
• Where it is necessary to use, publish or communicate protected information. In that respect s 40(4) provides: 40(4) Protected information may be used, published or communicated if it is necessary to do so for any of the following purposes: (a) the investigation of a relevant offence within the meaning of this Act or a relevant offence within the meaning of a corresponding law, (b) the making of a decision whether or not to bring a prosecution for a relevant offence within the meaning of this Act or a relevant offence within the meaning of a corresponding law, (c) a relevant proceeding within the meaning of this Act or a relevant proceeding within the meaning of a corresponding law, (d) an investigation of a complaint against, or the conduct of, a public officer within the meaning of this Act or a public officer within the meaning of a corresponding law and the oversight of such an investigation, (e) the making of a decision in relation to the appointment, re-appointment, term of appointment, promotion or retirement of a person referred to in paragraph (d) or the making of any managerial decision with respect to such a person, (f) the keeping of records and making of reports by: (i) a law enforcement agency in accordance with the obligations imposed by Division 2, or (ii) a law enforcement agency (within the meaning of a corresponding law) in accordance with the obligations imposed by provisions of the corresponding law that correspond to Division 2, (g) an inspection by the Ombudsman under section 48 or an inspection under a provision of a corresponding law that corresponds to section 48, (h) an inquiry or investigation under the Privacy and Personal Information Protection Act 1998 or of the law of a participating jurisdiction or of the Commonwealth concerning the privacy of personal information.

1. In addition to the above exceptions, and as discussed above, the legislature has made separate provision in s 43 of the SD Act for the possible use of protected information where a court orders that a person may search protected information in the custody of a court in the interests of justice.
2. The "interests of justice' of course, includes in particular the public interest in the administration of justice in particular proceedings. Such an interest constitutes a powerful public interest. In certain circumstances it is possible to envisage that protected information may have an important bearing upon the ultimate decision of a court upon a question or an issue arising in legal proceedings. A clear example would be found in a case where material obtained through the use of a surveillance device ("protected information") contains exculpatory material that may be central or critical to the defence by an accused person charged with a serious criminal offence. In civil proceedings, for example, where allegations of fraud or other criminal activity are alleged, protected information may, in some circumstances, be highly probative evidence and hence it may be considered to be critical in the interests of justice for an order to be made under s 43.
3. The provisions of both ss 3(2)(b) and 43 of the SD Act are provisions that ensure that, where the interests of justice require it, justice will be achieved through the ordinary use of judicial power with respect to legal proceedings. They operate to confirm or to preserve the jurisdiction or power of courts in important respects.
4. Section 43 operates with respect to protected information, not in the custody of a law enforcement agency, but which is in the custody of a court. Protected information may come into the custody of a court in a number of ways. These include the production by a law enforcement agency of records containing protected information (eg, a DVD or CD recording of the same) in answer to a subpoena for production of documents.
5. With the provisions of s 43 in mind, I turn to consider the issues raised in the present application as to whether the prohibition in s 40(1) would be contravened by either (or both) the production by the Commissioner to the Court of the protected information in answer to the abovementioned subpoena and/or by a party or the legal representatives of a party having access to and using protected information.

Production of Records of Protected Information by the Commissioner of Police

1. I have earlier referred to the relevant caselaw that has considered the question under similar statutory provisions (s 40(1)) concerning statutory prohibitions on the use or publication of certain classes of records: at [93]. In addition to the analysis in that paragraph there are particular matters concerning the construction of s 40(1) that support the proposition that producing protected information to a court in answer to a subpoena cannot be held to contravene the prohibition in that section.
2. As has been noted, s 40(1)(a) is expressed to prohibit use etc of "protected information". The provisions of the SD Act in a number of parts make the distinction between, on the one hand, "information" (eg, the actual conversations between the parties to them), and the "record" or recording of the information or content of the recorded conversation(s). In that regard, for example, s 41(1)(a) refers to "every record or report obtained by the use of a surveillance warrant device …": see also s 41(2).
3. As discussed above, s 40 is directed to prohibiting "information", namely, "protected information" as defined, from being disclosed by the use, communication or publication. When answering the subpoena in question in the present case, the production of objects or things containing information such as the audio recordings made as a result of the use of a surveillance device does not involve the disclosure, use, communication or publication of the actual information contained in the recording or product of the information to anyone. Unless an access order is made by the court to which the records have been produced and in whose custody they are placed, the recordings remain unused in the custody of the court. Without an order permitting access to the records, there is no use of either the recordings themselves or of any protected information contained within them. The confidentiality in that circumstance remains preserved.
4. The procedure involving a third party to proceedings (in this case the Commissioner) bringing documents to court was discussed in the well-known cases of Commissioner for Railways v Small (1938) SR (NSW) 564 at 574; 55 WN(NSW) 215 and Waind, supra, at 381-2.
5. In the latter case, Moffitt P stated: "As Jordan CJ pointed out in Small's case and, as appears in Burchard's case there are at least two steps in the procedure of having a third party bring documents to court, and in their use thereafter. Indeed, on a correct view, there are three steps. The first is obeying the subpoena, by the witness bringing the documents to the court and handing them to the judge. This step involves the determination of any objections of the witness to the subpoena, or to the production of the documents to the court pursuant to the subpoena. The second step is the decision of the judge concerning the preliminary use of the documents, which includes whether or not permission should be given to a party or parties to inspect the documents. The third step is the admission into evidence of the document in whole or in part; or the use of it in the process of evidence being put before the court by cross-examination or otherwise."
6. A little later the President observed: "The second step is when the documents are produced to the court by the witness, the subpoena not having been set aside, and any other objection to their production, such as on the ground they were privileged, having been rejected. At this point documents are in the control of the court, pursuant to the valid order of the subpoena. As pointed out in Small's case at this time the witness may state he objects to their being handed to the parties for inspection. If he states he does not object to the parties inspecting the documents, or by lack of objection is taken to have no objection, no doubt normally there would be little reason not to permit inspection by either party. However, the documents are under the control of the judge and, even if the witness has not objected, there may be good reason in the elucidation of the truth why the judge may e.g. defer inspection by one party or the other."
7. In discussing the power exercised by the judge once the documents have been produced, Moffitt P in Waind observed in relation to the case of documents produced by a third party: "It is true that, in the exercise of the power in relation to the subpoena, the invasion of the rights of a third party have been jealously guarded. It is accepted that the documents should not go beyond the judge against objection of the owner, unless there is valid reason to do so. It is clear that it can only be legitimate to do so, so far as it is necessary in the proper conduct of the litigation. It is difficult to see why to do that which is 'requisite for the purpose of justice' should be restricted by some arbitrary limit. Of course, the concept of what is requisite for the purpose of justice, and how the compromise between the requirements of justice between litigants and the rights of a stranger should be met, may change and, indeed, be different now from the concepts of last century, just as concepts as to what is appropriate between parties has changed in favour of fuller disclosure of relevant matters."
8. His Honour emphasised that the documents produced in answer to a subpoena are "in the control of the judge": at 384. As such they remain confidential unless access is ordered.
9. It follows, in my opinion, that the production to a court of a recording of conversations made through the use of a surveillance device by way of answer to and in compliance with a subpoena does not, for the above reasons, involve or constitute an intentional, knowing or reckless use etc of "protected information" contrary to s 40(1)(a). The Commissioner in the present case would not be in breach of the provisions of s 40 by simply obeying the Court's subpoena and producing the recording specified in it.

Access to Protected Information by Parties to Proceedings

1. The further matter arising from the submissions of Mr Cavanagh SC for Zurich, and Ms Kumar for the Commissioner, concerns the question as to whether a party (or the legal representatives of a party) who accesses protected information contained within records made by a surveillance device and which are produced under subpoena would commit an offence under s 40 in doing so.
2. In the consideration of that question, the power in the court before which proceedings are conducted to control subpoenaed materials including the power concerning any permitted use of third party records is again fundamental.
3. Section 43, as previously noted, deals with protected information in the custody of a court.
4. By the provisions of s 43 of the SD Act, a person may only be entitled to search records containing protected information where they are produced under a subpoena if the court orders that it is in the interests of justice for the person to search them.
5. That necessarily leads to the question as to the procedure by which a court determines whether, in a particular case, it is in the interests of justice to make an order referred to in s 43, and on what basis such a determination is made.

The Procedure for Determining the "interests of justice" Issue Under s 43

1. In a particular case, in deciding whether an order should be made under s 43 permitting a person to search protected information in the court's custody, the following matters arise for consideration: 1. The procedure whereby the judge, and not a person who seeks access, examines the protected information for the purposes of determining whether it would be in the interests of justice to make an order. 2. The question as to whether the legal representatives of the parties should be permitted to see the records before any determination and order is made under s 43. 3. Where the protected information relates to matters in issue in the proceedings, whether it is necessary in the interests of justice that an order permitting access and searching of the protected information be made. 4. The presence of matters that support the making of an order under s 43 addresses the question as to whether an order under s 43 can be made but not necessarily whether such an order should be made. A judge will still need to consider as a possible countervailing public interest, whether disclosure would undermine or impair the integrity of police investigations or other operations of law enforcement agencies. In other words, the judge retains an important discretion as to whether or not a s 43 order should be made. 5. Generally speaking, in the exercise of the discretion there will be a balancing exercise. In many cases the public interest against disclosure of protected information through the making of an order granting access to records containing such information may need to be weighed against the competing public interest in the proper administration of justice.
2. For an order to be made under s 43, it is obviously necessary for the judge before whom the proceedings are being conducted to examine the records containing the protected information for the purpose of determining whether they are relevant to the issues in the proceedings and if they are, taking into account the matters referred to in the preceding paragraph and determining whether they are of such materiality that the interests of justice in the case require that access to them be granted to a person or a party to the proceedings.
3. Although public interest immunity principles do not directly inform the protection under the statutory scheme established by the SD Act, there nevertheless exists some commonality in rationale with respect to the approach of resolving the two competing public interests in determining disclosure issues.
4. In Sankey v Whitlam (1978) 142 CLR 1 at 43, Gibbs ACJ observed: "I consider that although there is a class of documents whose members are entitled to protection from disclosure irrespective of their contents, the protection is not absolute, and it does not endure for ever. The fundamental and governing principle is that documents in the class may be withheld from production only when this is necessary in the public interest. In a particular case the court must balance the general desirability that documents of that kind should not be disclosed against the need to produce them in the interest of justice. The court will of course examine the question with especial care, giving full weight to the reasons for preserving the secrecy of documents of this class, but it will not treat all such documents as entitled to the same measure of protection - the extent of protection required will depend to some extent on the general subject matter with which the documents are concerned. If a strong case has been made out for the production of the documents, and the court concludes that their disclosure would not really be detrimental to the public interest, an order for production will be made." See also The Commonwealth v Northern Land Council (1992-1993) 176 CLR 604 at 616-617 per Mason CJ, Brennan, Deane, Dawson, Gaudron and McHugh JJ.
5. I turn to the procedural issue involved in the determination as to how "the interest of justice" issue is to be resolved in the present case.
6. It is clear both by reference to the provisions of ss 40 and 43 and to case law authority, that the records containing protected information, once produced by or on behalf of the Commissioner, should, at least in the first instance, only be examined by a judge and not, for example, by the legal representatives of a party or parties to the present proceedings.
7. The approach to be taken in the application of s 43 of the SD Act has not been the subject of any consideration by a court in any earlier case. No doubt the approach to be followed in a particular case will be dictated by the circumstances of the case as well as by the importance of the statutory prohibitions imposed by the provisions of s 40 of the SD Act. As indicated above, there may be cases where the protected information is of such a sensitive nature that it would not be necessary or appropriate to order the production of records containing protected information. That has not been argued or submitted on behalf of the Commissioner in the present case. Accordingly it is not a matter I need to address.
8. The procedure for dealing with the present application concerning protected information may be informed or considered by the approach that has been adopted and followed in cases where public interest immunity has been claimed with respect to confidential material. In that respect, the High Court in The Commonwealth v Northern Land Council (1992-1993) 176 CLR 604 at 619 stated: "It follows that, in our view, it is only in a case where there are quite exceptional circumstances which give rise to a significant likelihood that the public interest in the proper administration of justice outweighs the very high public interest in the confidentiality of documents recording Cabinet deliberations that it will be necessary or appropriate to order production of the documents to the court. Where such exceptional circumstances do exist, the appropriate course to be followed will ordinarily be for the judge personally to inspect the documents for the purpose of deciding whether the relevance of the material to the proceedings in which disclosure is sought is sufficient, even in those exceptional circumstances, to justify disclosure. Having regard to the strength of the claim for immunity, a judge ought not order the disclosure of the contents of documents of that class unless the judge is satisfied that the materials are crucial to the proper determination of the proceedings."
9. In that case, the judge at first instance ordered inspection by the legal representatives for the Land Council of notebooks containing notes made by Cabinet officers of the deliberations of Federal Cabinet along with other notebooks. The High Court disapproved of that course, stating at 620: "There was, therefore, no call for Jenkinson J to order that the documents be produced for inspection. But we would add that, even if there had been, the procedure of ordering production of documents for inspection by the legal representatives of one of the parties, even upon a restricted basis, before the claim for immunity had been decided by the court, was open to serious question. Whatever the safeguards, it represents an encroachment upon the confidentiality claimed for the documents. And in this case, public interest in their immunity from disclosure was of the highest order. If inspection of documents is necessary to determine the question of immunity) and in this case it was not) then it ought to be carried out by the court before ordering production for inspection by a party. No doubt this may in some cases cast a heavy burden on the court, but it is unavoidable if confidentiality is to be maintained until a claim for immunity is determined."
10. Whether exceptional circumstances would require protected information to be produced on a restricted basis to the legal representatives of a party after a judge has examined records containing such information, and before a determination or order is made under s 43, does not arise in the present case and need not be determined. It is sufficient to note that circumstances could conceivably arise where it would be appropriate to do so.
11. In a case involving a claim of public interest immunity in respect of the transcript of a private hearing conducted by a Royal Commission, a question arose as to whether the public interest in securing a person a fair trial outweighed the public interest in maintaining confidentiality. The Court in that case ordered, in the absence of a more convenient arrangement that had its approval, that the transcripts and evidence be produced to the Court. As the judge considered that the accused's legal advisers would know the proper needs of the defence, an inspection by the judge without their assistance would be of little value. An order was therefore made granting leave to counsel for the accused to inspect the documents in question upon the basis that he would not communicate the contents to any other person without leave. The question as to any further use to which the information could be put was reserved.

Conclusions 1. The UCPR, in particular rule 1.9(3) and (4), provides a proper basis for the Commissioner to object to producing the audio recordings unless and until the objection is overruled. Privileged documents are those that contain privileged information. The word "document" is given a broad definition by the Evidence Act 1995. Documents that contain information disclosure of which is statutorily prohibited constitutes "privileged information" for the purposes of the UCPR rules. 2. The basis for the objection in the present application to the production of the audio recordings is wholly based upon the provisions of s 40 of the SD Act. Accordingly, the matters relevant to ss 40 and 43 of the SD Act, discussed above, are directly relevant to any ruling that is made on the question of "privileged documents' raised under UCPR 1.9(3). 3. In the present proceedings, production to this Court of the audio recordings by or on behalf of the Commissioner, could not constitute a breach of the provisions of s 40 of the SD Act. 4. On the production of the audio recordings in answer to the subpoena issued by Zurich, the recordings should not be made the subject to an order for access to any person (including Zurich) or any of the other parties to the proceedings before a determination is made under s 43 of the SD Act. 5. The audio recordings, once produced to this Court, should remain in the custody of the Court for the purposes of an examination by a judge of the Court in order to determine whether, in the interests of justice, an order should be made permitting Zurich (or any other person) to search the audio recordings. 6. Upon a determination being made under s 43, the judge examining the recordings will need to consider whether an order can be made under s 43 and, if so, whether as a matter of discretion, such an order should be made. Decisions on those matters will necessarily have the effect of determining the Commissioner's objection to producing the recordings under UCPR 1.9(3).

1. It follows from the conclusions set out at (1)-(6) above, that it is premature at this stage for the Court to consider whether the Commissioner is entitled to any form of relief setting aside the subpoena as sought in paragraph 1 of the Amended Notice of Motion or in the alternative any relief as sought under paragraph 2 of the Amended Notice of Motion.
2. The question of final relief is necessarily dependent upon there first being a determination of the interests of justice question arising under s 43 of the SD Act. Such a determination will be directly relevant to the issue of the legitimate forensic purpose of the subpoena, the issue raised in the Commissioner's Amended Notice of Motion.
3. The proceedings are accordingly re-listed for mention and further directions on Tuesday, 26 April 2016 at 9:30am.

---

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 24 March 2016