Commonwealth of Australia v Victorian College of English (International) Pty Ltd [1993] FCA 329 (15 July 1993)

FEDERAL COURT OF AUSTRALIA

COMMONWEALTH OF AUSTRALIA v. VICTORIAN COLLEGE OF ENGLISH (INTERNATIONAL) PTY
LTD
No. NG724 of 1992
FED No. 478
Number of pages - 6
Practice and Procedure

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Olney J(1)

CATCHWORDS

Practice and Procedure - discovery and inspection of documents - claim for immunity from disclosure on grounds of public interest - Cabinet documents - documents recording deliberations of Cabinet - documents revealing the views of Ministers in relation to Cabinet deliberations - documents which reveal the contents of other documents which attract immunity from disclosure.

Trade Practices Act 1974, sections 45, 46, 52

Commonwealth v Northern Land Council [1993] HCA 24; 67 ALJR 405

HEARING

MELBOURNE, 9 July 1993
15:7:1993

Mr T. Ginnane (instructed by the Australian Government Solicitor) appeared for the applicant.

The respondent (by leave) was represented by Dr A. Molnar a director of the company.

ORDER

The Court orders that:
1. The documents identified in paragraphs 8, 10 and 13 of the

affidavit of Michael Stockton Keating affirmed 1 July 1993 and
filed herein are privileged on the ground of public interest
immunity;
2. The costs of the hearing on 9 July 1993 be paid by the
respondent.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

DECISION

OLNEY J The matter at present before the Court has to do with a question arising in the process of discovery and inspection of documents, and more particularly it raises questions relating to what is commonly called public interest immunity.

2. In order to understand the context in which the matter of contention has arisen an abbreviated summary of the pleadings to date is set out below.

3. The applicant seeks payment from the respondent of certain moneys said to be due pursuant to a number of contracts for the provision of education in Australia made between the respondent and potential students of the respondent from the People's Republic of China (the contracts) the benefit of which is said to have been assigned by the respective students to the applicant.

4. The statement of claim (as amended) raises issues relating to the alleged breach of the contracts by the respondent and to the proper construction of the contracts and of the assignments. The applicant also says that money paid by the students to the respondent under the contracts is held on trust for the students and is recoverable by the applicant pursuant to the assignments and further that the contracts having been frustrated, moneys paid under them are repayable to the applicant as assignee of the respective students. The applicant (as assignee of the students) also claims damages pursuant to the Trade Practices Act 1974 (TPA).

5. The single event which has given rise to the claimed liability of the respondent is the failure of each student to obtain the necessary visa to enable the student to travel to Australia for the purpose of undertaking the course contemplated by the relevant contract.

6. In its defence the respondent has denied many of the facts pleaded in support of the claim. Thus far there is nothing extraordinary about either the claim or the defence to it. The respondent has however filed a counterclaim, the general thrust of which is as follows: In 1989 the respondent and others were encouraged by the applicant to recruit overseas students for courses offered in Australia. At the time the applicant was, and continues to be, in a position to control and manipulate the market and the schools within the meaning of section 46 of the TPA and to be involved in the provision of courses for students. Further, at the relevant time, it could reasonably be expected that less than 10% of student visa applicants would be rejected. After the respondent had recruited many overseas students, collected fees and incurred substantial costs in preparing to provide courses for such students the applicant changed the rules under which student visas were issued and as a result the rate of refusal of student visa applications rose to about 60% to 65%. As a result the respondent was obliged to refund approximately $1.5 million in prepaid fees, has suffered loss and damage and has been driven out of business. It is said that in the premises the applicant has engaged in conduct which is misleading or deceptive or likely to mislead or deceive within the meaning of section 52 of the TPA and further that the applicant has entered into an arrangement or understanding in restraint of trade or commerce within the meaning of section 45 of the TPA, and has damaged and/or eliminated competition or a competitor within the meaning of section 46 of the TPA. The respondent seeks damages.

7. In its defence to the counterclaim the applicant has denied all of the facts pleaded and says that the counterclaim does not disclose a cause of action against the applicant and ought to be struck out. (No action to strike out the counterclaim has been taken.)

8. The applicant has given discovery of a number of documents for which it claims privilege on the basis of public interest immunity. The claim for immunity is detailed in an affidavit of Michael Stockton Keating, the Secretary to the Department of the Prime Minister and Cabinet of the Commonwealth and Secretary to the Cabinet, in which the principles of Cabinet confidentiality and collective responsibility are discussed. In the affidavit, Mr Keating classifies the documents into 3 categories, and as the number is not great, details are set out below. (In the affidavit the documents are more precisely identified by reference to details contained in the applicant's list of documents):

1. Documents or parts of documents that have been considered by
Cabinet, or documents that appear identical in all relevant
respects to, and precursors of, documents that have been
considered by Cabinet and documents which record the matters
agreed or noted by Cabinet:
(a) Part of a document comprising a draft Cabinet submission
which is in all relevant respects identical to a submission
which was considered by Cabinet.
(b) A memorandum addressed to the Secretary, Department of
Immigration, Local Government and Ethnic Affairs from Paul
Hickey, Deputy Secretary, Department of Employment,
Education and Training, dated June 1989, providing
co-ordination comments which were included in a Cabinet
submission considered by Cabinet.
(c) A minute to the Secretary, Department of Foreign Affairs and
Trade from Paul Hickey, Deputy Secretary, dated 3 July 1989
providing co-ordination comments on a Cabinet submission
considered by Cabinet.
(d) A memorandum addressed to the Secretary, Department of
Immigration, Local Government and Ethnic Affairs from Paul
Hickey, Deputy Secretary, Department of Employment,
Education and Training, dated 10 July 1989, providing
co-ordination comments and an extract of an attachment to a
Cabinet submission, both of which were included in a
submission which was considered by Cabinet.
(e) A draft of a Cabinet submission which is in all relevant
respects identical to a submission which was considered by
Cabinet.
(f) A Cabinet minute which formally records a decision made by
Cabinet.
(g) Part of a document comprising a copy of an attachment to a
Cabinet submission which was considered by Cabinet.
(h) A Cabinet memorandum and attachments which were considered
by Cabinet.
(i) A Cabinet memorandum and attachments which were considered
by Cabinet.
(j) Three separate Cabinet submissions and attachments which
were considered by Cabinet.
2. A document which reveals what Ministers would have been expected
to say in the course of Cabinet discussion about a particular
matter namely, a file note by Yvette Devlin dated 25 October 1989
which refers to matters agreed to by Cabinet and in dealing with
matters to be raised in Cabinet sets out the views of Ministers'
officers.
3. Documents which refer to the content of documents which were
considered by Cabinet, or are preparatory to, and contain material
included in, Cabinet submissions or other documents (including the
Ministers' views) and not already mentioned:
(a) Part of a document comprising a draft briefing (with an
attachment) addressed to Mr Dawkins from Roger Peacock,
Acting First Assistant Secretary, International Division
regarding Cabinet submissions that have been considered by
Cabinet, and a minute from the Department of Immigration,
Local Government and Ethnic Affairs to the Cabinet Liaison
Officer, Department of Employment, Education and Training
signed Lesley Daw 5 July 1989.
(b) A minute addressed to Mr Dawkins from Roger Peacock, Acting
First Assistant Secretary, International Division, dated
June 1989, outlining issues to be included in a Cabinet
submission.
(c) Part of a document being a paper on "Options to Address PRC
Overstay Rate". Summarising co-ordination comments in a
Cabinet submission.
(d) A draft replacement for recommendations including a Cabinet
submission.
(e) Part of a document comprising draft attachments to a Cabinet
memorandum, which were considered by Cabinet. (These folios
are early drafts and are not identical to documents
considered by Cabinet but reveal matters which were
considered by Cabinet.)
(f) Two recommendations in a draft minute to Mr Dawkins from
Paul Hickey, Deputy Secretary which refer to matters agreed
to by Cabinet and suggest an approach to be taken in
Cabinet.
(g) The number of a Cabinet submission which appears in an
attachment to a minute to Mr Dawkins from Paul Hickey,
Deputy Secretary, Department of Employment, Education and
Training, dated 13 October 1989, regarding Inter-Departmental
discussions and covering matters in Cabinet decisions.
(h) A paper titled "Processing of Students in China: Agreement
between DEET and DILGEA" which covers matters to be included
in a Cabinet submission.
(i) A paper (no author, no addressee) which provides detailed
briefing on part of a Cabinet submission which has been
considered by Cabinet.
(j) A minute to the Minister for Finance from G. Moffat, Acting
First Assistant Secretary, Education and Employment
Division, dated 4 December 1989 which outlines previous
Cabinet decisions.
(k) A paper titled "Proposed Agreement on Student Refunds" which
refers to Cabinet decisions.
(l) A minute to Mr Dawkins from Alan Ruby, First Assistant
Secretary, International Division, dated 11 August 1989
which provides briefing for discussion of a Cabinet
memorandum which has been considered by Cabinet.
(m) A minute to Mr Dawkins from R. Peacock, Acting First
Assistant Secretary, International Division, dated 27
November 1989 and attachments which provides briefing on
matters included in a Cabinet memorandum which has been
considered by Cabinet.
(n) Part of a minute to various addressees from John Crosswell,
Foreign Affairs Branch, dated 8 June 1990 referring to
Cabinet decisions and proposals considered by Cabinet.
(o) Part of briefing papers for the Minister for Foreign Affairs
and Trade on a Cabinet memorandum which was considered by
Cabinet.
(p) Draft attachments to a Cabinet memorandum which were
considered by Cabinet.
(q) A Ministerial submission from Darren Gribble, Acting Deputy
Secretary, dated 12 July 1989, which provides briefing on a
Cabinet submission which has been considered by Cabinet.

9. The most recent authoritative statement on the law relating to the immunity from disclosure of Cabinet papers is to be found in Commonwealth v Northern Land Council [1993] HCA 24; 67 ALJR 405. I do not propose to rehearse in detail the principles that form the basis for the High Court's conclusions in that case. Sufficient for present purposes I quote two passages from the reasons of the majority (Mason CJ, Brennan, Deane, Dawson, Gaudron and McHugh JJ). First at pp 406-7:
It should be observed at the outset that the documents for which the Commonwealth claims immunity from disclosure are documents which record the actual deliberations of Cabinet or a committee of Cabinet. They are not documents prepared outside Cabinet, such as reports or submissions, for the assistance of Cabinet. Documents of that kind are often referred to as Cabinet documents. When immunity is claimed for Cabinet documents as a class and not in reliance upon the particular contents, it is generally upon the basis that disclosure would discourage candour on the part of public officials in their communications with those responsible for making policy decisions and would for that reason be against the public interest. The discouragement of candour on the part of public officials has been questioned as a sufficient, or even valid, basis upon which to claim immunity. On the other hand, Lord Wilberforce has expressed the view that, in recent years, this consideration has "received an excessive dose of cold water". (Burmah Oil Co Ltd v Bank of England [1979] UKHL 4; (1980) AC 1090 at 1112.)
But it has never been doubted that it is in the public interest that the deliberations of Cabinet should remain confidential in order that the members of Cabinet may exchange differing views and at the same time maintain the principle of collective responsibility for any decision which may be made. Although Cabinet deliberations are sometimes disclosed in political memoirs and in unofficial reports on Cabinet meetings, the view has generally been taken that collective responsibility could not survive in practical terms if Cabinet deliberations were not kept confidential. Despite the pressures which modern society places upon the principle of collective responsibility, it remains an important element in our system of government. Moreover, the disclosure of the deliberations of the body responsible for the creation of state policy at the highest level, whether under the Westminster system or otherwise, is liable to subject the members of that body to criticism of a premature, ill-informed or misdirected nature and to divert the process from its proper course. The mere threat of disclosure is likely to be sufficient to impede those deliberations by muting a free and vigorous exchange of views or by encouraging lengthy discourse engaged in with an eye to subsequent public scrutiny. Whilst there is increasing public insistence upon the concept of open government, we do not think that it has yet been suggested that members of Cabinet would not be severely hampered in the performance of the function expected of them if they had constantly to look over their shoulders at those who would seek to criticise and publicise their participation in discussions in the Cabinet room. It is not so much a matter of encouraging candour or frankness as of ensuring that decision-making and policy development by Cabinet is uninhibited. The latter may involve the exploration of more than one controversial path even though only one may, despite differing views, prove to be sufficiently acceptable in the end to lead to a decision which all members must then accept and support.
The classification of claims for public interest immunity in relation to documents into "class" claims and "contents" claims has been described as "rough but accepted". It serves to differentiate those documents the disclosure of which would be injurious to the public interest, whatever the contents, from those documents which ought not to be disclosed because of the particular contents. Both upon principle and authority, it is hardly contestable that documents recording the deliberations of Cabinet fall within a class of documents in respect of which there are strong considerations of public policy militating against disclosure regardless of their contents. But, whatever the position may have been in the past, the immunity from disclosure of documents falling within such a class is not absolute. The claim of public interest immunity must nonetheless be weighed against the competing public interest of the proper administration of justice, which may be impaired by the denial to a court of access to relevant and otherwise admissible evidence.

10. Then at pp 408-9:
However, as we have said, the immunity which membership of the class confers is not absolute and that is so even if, as in the case of records of Cabinet deliberations, the highest degree of protection against disclosure is warranted. Nevertheless, where it is established that a document belongs to a class which attracts immunity, a court will lean initially against ordering disclosure. Whether the circumstances of a particular case will be sufficient to displace the considerations which favour immunity depends to a large extent upon the nature of the class. In the case of documents recording the actual deliberations of Cabinet, only considerations which are indeed exceptional would be sufficient to overcome the public interest in their immunity from disclosure, they being documents with a pre-eminent claim to confidentiality. The process of determining whether an order for disclosure of documents in that class should be made remains one of weighing the public interest in the maintenance of confidentiality against the public interest in the due administration of justice, but the degree of protection against disclosure which is called for by the nature of that class will dictate the paramountcy of the claim for immunity in all but quite exceptional situations.
Indeed, for our part we doubt whether the disclosure of the records of Cabinet deliberations upon matters which remain current or controversial would ever be warranted in civil proceedings. The public interest in avoiding serious damage to the proper working of government at the highest level must prevail over the interests of a litigant seeking to vindicate private rights. In criminal proceedings the position may be different. Thus, the necessary exceptional circumstances may exist in cases involving allegations of serious misconduct on the part of a Cabinet minister. Sankey v Whitlam was such a case. ... ...
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.

11. The documents in question are all, by their respective descriptions, capable of being classified either as documents which record the deliberations of Cabinet, documents which reveal the views of Ministers in relation to Cabinet deliberations, or documents which reveal the contents of documents which themselves ordinarily attract immunity from disclosure. All of such documents are in my opinion encompassed by the principles upon which the decision in Commonwealth v NLC is based.

12. The present proceedings are civil and not criminal. The pleadings as they stand do not raise issues impugning the conduct of any Minister or public official. The fact that the documents in question have been discovered by the applicant indicates in a general way that they are or might be thought to be relevant to the proceedings but there is nothing about the documents as described, the issues raised by the pleadings or the submissions made on behalf of the respondent which suggests exceptional circumstances exist which give rise to a significant likelihood that the public interest in the proper administration of justice outweighs the public interest in maintaining the confidentiality of documents recording Cabinet deliberations. In the circumstances I have found it unnecessary to personally inspect the documents.

13. The applicant's claim to immunity from disclosure of the documents identified above is upheld.

14. A claim by the applicant for immunity from disclosure of parts of certain documents referred to in an affidavit Richard Campbell Smith, Deputy Secretary of the Department of Foreign Affairs and Trade, was conceded by the respondent.