White v Overland [2001] FCA 1835 | Case summary

THE DECISION OF MR OVERLAND OF 8 JUNE 2001 84 The applicant submits a number of things about this. First and foremost it is stated, as a general proposition, that the taking into account of such considerations as the without prejudice communications must, ipso facto, lead to the vitiation of the decision. It is said that the whole rationale of settlement negotiations, from a public policy point of view, is that they be used in a genuine attempt to avoid costly litigation. What flows, it is said, is that the substance of those negotiations remains sacrosanct and inadmissible to the curial process. The exceptions to such positions which are recognised in the applicant's submissions are where the settlement process is not genuine, where it is relevant as to costs, where questions of deception, fraud and the like arise, and in the other circumstances contemplated by s 131 of the Evidence Act 1995. 85 A further submission is put in the last paragraph of the written submissions of the applicant to the effect that there is an inference open that, because Mr Overland had been advised by lawyers in early March that the process being used concerning substantiation of these allegations was flawed, Mr Overland's invitation to engage in without prejudice settlement negotiations had a purpose other than the attempted settlement of the anticipated proceedings, namely to enable Overland to replace the decision of 23 February (which he knew to be voidable) with another decision that hopefully would be capable of withstanding judicial review. The difficulty with this submission is that it was not put to Mr Overland. I reject this attack on Mr Overland and I do not infer the matters which it is said are open to be inferred about his purpose in having the without prejudice discussions. 86 This leaves the question of the legality of what Mr Overland did. 87 It is undoubted that Mr Overland was invited to reconsider the matter. He was invited to make another decision. That much is plain from paragraph 8 of Mr Purnell's letter of 6 June 2001 (see [62] above). Mr Overland took this up in his letter of 7 June (see [63] above) indicating that he confirmed that he was willing to revisit the matter as urged and taking into account the submissions made by Mr Purnell. He indicated that he would receive any further information from Mr White. Mr Purnell took up this opportunity and forwarded under cover of letter of 7 June 2001 various testimonial material, while making clear that the process was a negotiation on a without prejudice basis. The letter made clear that negotiations and submissions could not be used or referred to in any future proceedings or relied on by either party for forensic support or submission in relation to any proceedings. There was no attempt to obtain an express contract or agreement from Mr Overland that if he made a decision which was unsatisfactory to Mr White then that that decision would not be operative. 88 I do not think that the communications should be viewed as containing both a without prejudice and an open body of communications. It is doubtful if Mr Purnell could have been plainer. There is a necessary tension in trying to settle a dispute or nascent dispute about an administrative decision that is said to be flawed. A decision-maker in such a dispute may, if within power, offer to make a decision X replacing impugned decision Y. That submissions are called for and made in this without prejudice context does not destroy the privileged nature of the communication. 89 The privilege is rooted in public policy - in the encouragement and promotion of settlement of disputes: Cutts v Head [1984] 1 Ch 290, 305-306; Rush and Tompkins v Greater London Council [1988] 3 All ER 737, 739-740. There is a public benefit in, and a private right to, the confidentiality of such negotiations: see generally McNicol The Law of Privilege (1992) p 438. The latter underpinning reflects the tacit acceptance and agreement of the parties as to the confidentiality and limited purpose to which the communications can be used. 90 It is unnecessary to discuss what may be the limits of the privilege. However, whatever they may be, it cannot be the case that having received such communications the decision-maker is unable to make another decision. 91 The protection given to without prejudice communication is a protection from disclosure. The contents of without prejudice communications cannot be put in evidence without the consent of both parties, the privilege being a joint privilege. How then can a decision-maker thereafter act? If the decision-maker wishes to make another decision after without prejudice negotiations, he or she can say to the person the subject of the decision that that person is now invited to put submissions openly if he or she wishes to put anything before the decision-maker at a review of the decision. That of course may lead to an admission by conduct by the decision-maker that the earlier decision, if in contest, was of a kind which needed attention. That formality was not gone through here. This process is undertaken every day by solicitors. Exchanges of a without prejudice nature take place every day. Often one party sees a point at which it wishes to cease the cover of the privilege. Often parties have learnt matters which they wish to translate into advantage in open correspondence. To a limited degree that is possible. The without prejudice communications cannot be disclosed. However, parties can commence new communications which do not reveal the earlier communications but which call for or restate matters communicated under cover of the privilege. A decision-maker is in a somewhat different position. A decision-maker can make a new decision which in its terms does not disclose the prior communications, yet he or she has taken those prior communications into account without the formality of calling for open communications by way of submissions. That is what in effect Mr Overland did here. 92 Mr Overland was cross-examined about this new decision-making process. It was not put to him that he did not make a decision and that he was merely communicating a bargaining position. His affidavit of 27 August and his oral evidence makes plain that he did make a decision having reviewed all the material, including the material put to him by and on behalf of Mr White. In those circumstances it is plain that he made a decision to rescind or dissolve the earlier decision and to replace it with a finding of substantiation on a no fault basis with no further action to be taken and with a lack of impact on Mr White's standing in the AFP. 93 To propound and make public that decision would not directly and necessarily infringe the rule against disclosure of without prejudice communications. The way it was sought to be proved in the affidavit of Mr Overland of 9 August 2001 was inappropriate and inadmissible. This is so because in my view, and I ruled on this at the hearing, the paragraphs and the annexures tended to disclose the earlier communications. However, when asked about the matter by Mr Basten, Mr Overland gave evidence that a decision had been made to rescind the earlier decision. He may also have been asked about the terms of the replacement decision. But he could not have been asked to disclose the without prejudice communication which he had taken into account. It was then up to the applicant to attack the decision if he wished to. Prior to any such attack the without prejudice communications remained sacrosanct. 94 The applicant did attack the decision. The applicant through his counsel tendered the totality of the without prejudice communications. This was done in an attempt to show that they were taken into account in the making of the decision. The privilege in relation to the communications was lost, in point of fact, by reason of the approach of the applicant's counsel, not through the making of the decision by the first respondent, nor through the informing of the court of the making of the decision. 95 Thus, it could be argued, and not without force, that a decision-maker in the position of Mr Overland is not prevented from making a decision taking into account without prejudice communications as long as when publicly disclosing the nature of the decision the decision-maker does not disclose the content of the without prejudice communications. 96 The intersection of without prejudice negotiations and further decision making in such a context has not to my knowledge been the subject of any judicial consideration. Counsel referred me to no authority on the matter. 97 Not without some hesitation, I have come to the view that to allow the decision-maker in the position of Mr Overland to make a decision in circumstances where without prejudice communications are clearly and importantly taken into account would tend to undermine or risk undermining the public policy underpinning the privilege. The way the privilege would tend to be undermined is evident from the facts here. Mr Overland can tell the Court that he has rescinded the earlier and impugned decision and no relief is necessary because he has made another decision and it is this. At that point the person subject of the decision may still have a complaint about the quality of and procedure leading up to the making of this fresh decision. However, in order to vindicate his or her rights, that person may well have to disclose and waive his or her own privilege (held jointly with the decision-maker, though the making and publicising of the decision may impliedly waive the privilege from the decision-maker's perspective). It may not occur in every case, but one can well imagine circumstances where a party puts submissions to the decision-maker on the basis that it was a true negotiation, but would have put further or different submissions to the decision-maker if he or she had known was an open submission for the purposes of a decision which might be made public. In those circumstances, for that person to vindicate his or her complaint about the lack of procedural fairness he or she will have to disclose fully the otherwise confidential communications in order to show that he or she has not had an opportunity to be heard if an open decision was to be made. If parties knew that this could happen, it might tend to chill enthusiasm for without prejudice negotiations. Thus the public policy to encourage such discussions would be undermined. 98 Echoes of this problem can be found here. The complaint includes one of a lack of natural justice being afforded Mr White in relation to the June decision. Having looked at the material put to Mr Overland in June, I doubt whether there would have been any different material put to Mr Overland had Mr Purnell appreciated that what was being undertaken by Mr Overland was a decision which would be disclosed in Court. Certainly, no evidence has been given that had it been clear that an "open" decision would be made the applicant would have placed different material before Mr Overland. 99 In some circumstances it might not be plain that proceeding with what some might think to be merely a further ritual of asking for open submissions after the without prejudice submissions would not have led to any different finding: Stead v The State Government Insurance Commission (1986) 161 CLR 141 at 145-6. 100 In my view, the taking into account by Mr Overland of the submissions in the formation of the decision of 8 June was a legal error in that to take such matters into account was to undermine or tend to undermine or risk undermining the public policy supporting, at least in part, the privilege of without prejudice communications. I do not think that the law should permit that for that reason. The claim of a denial of natural justice is more difficult. No one has said that any different information would have been provided. I have the greatest difficulty in seeing how any difference could have been made or whether there would have been any difference at all to the decision had Mr Overland stepped back and said: 'Now I propose to make a decision which is "open", do you wish to place anything before me?' If nothing further had been placed before him in these circumstances he could have sought to excise the without prejudice communications from his mind (indeed he would probably be obliged to do so) and he would then have been able to revisit the decision on all the other material, about which he had formed a preliminary and ameliorated view (see [59] above). Alternatively, if the material had been repeated he could have then made the decision with the material before him, which he had. 101 One of the reasons that I set out at some length the history of this matter is to reveal the length of time and amount of energy which the matter has consumed. While the decision of Mr Overland of 8 June, wrongly in my view, took into account legally irrelevant considerations it was, in all the circumstances, plainly a decision which was open to him. It is not my province to deal with the merits of the matter. However, in assessing what relief I should give for the legal error which I have identified and in assessing whether or not there has been any material breach of the obligation of procedural fairness I think I am entitled to look at considerations such as the subject matter being dealt with, the nature of the information before Mr Overland prior to June, the nature of the information provided to Mr Overland in June and the terms of the decision made by Mr Overland in June. 102 On balance, I am of the view that while Mr Overland should not have used the without prejudice material in his decision-making process and while the consequence of that is that he took a legally irrelevant consideration into account I do not think that any substantive procedural unfairness was thereby caused. A decision was called for by Mr Purnell, though clearly in a without prejudice context. One was made. Material was provided for that decision. What was lacking was a procedure to enable Mr Overland to sanitise the hitherto without prejudice communications so that they or their equivalents could form the basis of a decision not resting on privileged communications. 103 On balance, while I have considerable reluctance in doing so, I think it appropriate that the protection and integrity of the public policy underlying the without prejudice privilege should be seen to be protected and vindicated by an order setting aside the decision of 8 June 2001, except in so far as it impliedly set aside the decision of 23 February. I do so because I think that the public policy behind without prejudice privilege is sufficiently strong to require its protection in a case such as this even though I do not think any deliberate and conscious wrong was committed by Mr Overland and even though I do not think that any substantive unfairness was caused. 104 No order is sought preventing either Mr Overland or Mr Keelty participating in any fresh decision if one is sought to be made. No basis was made out in any event by Mr White for any such order. 105 This leaves the question of costs. Mr Keelty was joined to the proceedings. Specific allegations were made against him in relation to the withdrawal of the SES position. Those allegations failed. The respondents made clear their view as to the decision of 23 February 2001, but not until 15 August 2001. The decision of 23 February was flawed. The evidence of Mr Overland at the hearing (which was evidence in both proceedings) made it clear there must have been an appreciation of that matter well before 15 August 2001. As to the decision of 8 June 2001, I have indicated that my view is that a legal error occurred. However, I have also indicated my view that no injustice of any significance occurred as a result thereof. Taking into account these matters, not intending any criticism of Mr Keelty and seeking to avoid unnecessary costs in taxation, I propose to order that the first respondent pay half the applicant's costs. This order takes into account the issues concerning the second respondent and his position. 106 I was initially concerned that Mr Overland and his advisers may have deliberately or otherwise sought to keep the decision of 8 June 2001 "in reserve". However, the letter of 12 June of Mr Overland made it clear that he reserved the right to use the letter in court although not in what circumstances and for what purpose. The affidavit of Mr Overland of 9 August, albeit inadmissibly, as I ruled, sought to propound the second decision. It was at that point plain that the first respondent was going to seek to prove the replacement of the 23 February decision with this later decision, or at least the superimposition of this later decision upon the earlier decision. When this matter came on for hearing and this point began to be exposed a measure of surprise was demonstrated from the representatives of the applicant. While paragraphs 27 and 28 of the affidavit of 9 August of Mr Overland and perhaps the letter of 12 June put the applicant on notice of what was coming I took the view that that alone may well not have triggered in the applicant or his advisers the realisation of the need to deal with the further decision of 8 June. The matter had proceeded by way of application and not pleading. These kinds of issues sometimes get lost or overlooked in even the most careful preparation of a case. It is always easy, after the event, to identify a point which was "obvious" and which has been overlooked. This view about what may well have happened was the reason for the comments which I made in paragraph [4] of my reasons of 20 September 2001 (see White v Overland [2001] FCA 1333). What I said in that paragraph was intended as a matter of general principle (or perhaps, more accurately expressed, by way of general practice). The respondents and their advisers apprehended criticism and they filed further affidavits without leave. These were the affidavits of Mr Chilcott of 28 September and Mr Neely of 2 October. Mr Neely has had the carriage of the matter for the respondents. I do not think it would be overstating it to say that Mr Neely felt stung by what I had said in my reasons of 20 September 2001 and sought to put some material before the Court. I should add that I asked Mr Howe for an explanation of the matter on Tuesday 28 August 2001 and I was left with the impression that the respondents relied on no more than the letter of Mr Overland of 12 June as the basis for a proposition that they had clearly apprised Mr White prior to the hearing of the issue of the second decision and the fact that it made the first decision redundant. In the affidavits of Mr Chilcott and Mr Neely there is evidence which, unless contradicted, satisfies me that on or about 9 August there was a telephone conversation between counsel, that is senior counsel for the applicant and counsel for the respondents, in which it was made plain that given that Mr Overland had by then made a further decision which was more favourable it was not seen how the earlier decision had any relevance at all. The applicant and his advisers have indicated that I should not read these affidavits and should not have regard to them. I propose to do so, not as to costs, because the costs order which I propose to make assumes success by the applicant on the 8 June decision issue. Rather, having said what I did in my reasons of 20 September, on one foundation, I should deal with the matter on complete information. If the applicant wishes to contest any facts in Mr Chilcott's or Mr Neely's affidavit I would give liberty to apply to do so. In paragraph 12 of his affidavit of 2 October 2001 Mr Neely stated the following: In reference to the matters of general principle raised by His Honour Justice Allsop in an interlocutory judgment in this matter on 20 September 2000, I respectfully say as follows: (a) I did not pursue a practice of quietly leaving footprints in correspondence or directions hearings concerning the status of the First Respondent's decision of 8 June. I believed that the Respondents' position in that regard had been made plain to the legal representatives of the Applicant by the letter of 14 June 2001; the affidavit of the First Respondent sworn 9 August 2001; and again in the telephone conversation between Mr Basten and Mr Purnell on 9 August. (b) It was not evident to me, and I did not believe, that the Applicant's legal representatives were proceeding on the basis of a misconception as to the status of the First Respondent's decision of 8 June 2001. (c) I did not know, or suspect, that the Applicant or his legal representatives were proceeding with the litigation on any assumption which was false as to the status of the First Respondent's decision of 8 June 2001. (d) I did not intend to keep hidden any relevant issue from the Applicant's legal representatives. I believed that the Respondent's reliance on the decision of 8 June 2001 had been made clear to the Applicant. 107 I accept the evidence of Mr Neely and I should add for the avoidance of any doubt that in the circumstances of what appears in his affidavit and Mr Chilcott's affidavit I make no criticism of the handling of the matter by the representatives of the respondents and I withdraw any criticism which might be seen to be made of them in my reasons of 20 September. I should add that I repeat, as a matter of principle or practice, what I said in paragraph [4] of those reasons. I note that it has since received the approval of the New South Wales Court of Appeal in Nowlan v Marson Transport Pty Ltd [2001] NSWCA 346 at [28] and [46]. 108 No submission was made questioning my power to make orders setting aside any decision which I found otherwise to be flawed. 109 I propose to provide to the parties a period of time in which they can consider the orders I make and put any submissions as to their form. By this I am not calling for any submissions re-agitating the merits of the matter but rather as to whether there is any question of power involved or whether the terms of the order should be framed in a different way so as to reflect my reasons. 110 The orders of the Court will be: 1. A declaration that the decision of the first respondent made on or about 8 June 2001 to the effect that the allegation of improper use of the AFP email system by the applicant was substantiated but on a no fault basis was made taking irrelevant considerations into account. 2. The decision referred to in 1 above be set aside. 3. The first respondent pay one half the applicant's costs. 4. The parties not enter these orders until the earlier of the expiration of 28 days from today or further order. 5. The parties have liberty to apply on 5 days' notice. I certify that the preceding one hundred and ten (110) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop.

White v Overland

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Judgment (11 paragraphs)

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