In the matter of OPEL Networks Pty Ltd (in liq) [2010] NSWSC 142 (4 March 2010)

Last Updated: 5 March 2010

NEW SOUTH WALES SUPREME COURT

CITATION:
In the matter of OPEL Networks Pty Ltd (in liq) [2010] NSWSC 142


JURISDICTION:
Equity

FILE NUMBER(S):
2009/00289665

HEARING DATE(S):
16 November, 17 December 2009

JUDGMENT DATE:
4 March 2010

PARTIES:
Steven John Sherman and Bruce James Carter in their capacity as joint and several liquidators of OPEL Networks Pty Ltd (in liq)(Plaintiffs/Applicants)
Commonwealth of Australia as represented by the Department of Broadband Communications and the Digital Economy (Respondent)

JUDGMENT OF:
Austin J

LOWER COURT JURISDICTION:
Not Applicable

LOWER COURT FILE NUMBER(S):
Not Applicable

LOWER COURT JUDICIAL OFFICER:
Not Applicable



COUNSEL:
C A Moore (Plaintiffs/Applicants)
S Habib SC (Respondent)

SOLICITORS:
Baker & McKenzie (Plaintiffs/Applicants)
Clayton Utz (Respondent)


CATCHWORDS:
CONSTITUTIONAL LAW
public interest immunity
whether documents would disclose Cabinet deliberations
whether court should inspect documents
parliamentary privilege
whether draft Question Time briefs are protected
meaning of "impeached"
EVIDENCE
client legal privilege
method of proving privilege

LEGISLATION CITED:
Bill of Rights 1688 (1 Will and Mary Sess 2 c 2)
Evidence Act 1995 (NSW), ss 117, 118, 130
Parliamentary Privileges Act 1987 (Cth), s 16
Uniform Civil Procedure Rules, r 1.9


CASES CITED:
Attorney-General (NSW) v Chidgey [2008] NSWCCA 65; (2008) 182 A Crim R 536
Commonwealth of Australia v Northern Land Council [1993] HCA 24; (1993) 176 CLR 604
Commonwealth v Construction, Forestry, Mining and Energy Union (2000) 98 FCR 31; [2000] FCA 453
Conway v Rimmer [1968] UKHL 2; [1968] AC 910
Egan v Chadwick (1999) 46 NSWLR 563; [1999] NSWCA 176
Lanyon v Commonwealth of Australia [1974] HCA 11; (1974) 129 CLR 650
Mees v Road Corporation (2003) 128 FCR 418; [2003] FCA 306
Penrith Rugby League Club Ltd v Brown [2004] NSWSC 1182
Re Southland Coal Pty Ltd (recrs & mgrs apptd)(in liq) (2006) 59 ACSR 87; [2006] NSWSC 899
Rowley v O’Chee [2000] 1 Qd R 207
Sankey v Whitlam [1978] HCA 43; (1978) 142 CLR 1
Sportsbet Pty Ltd v New South Wales (No 3) [2009] FCA 1283
Watson v AWB Ltd (No 2) [2009] FCA 1047
WorkCover Authority (NSW) v Law Society of NSW (2006) 65 NSWLR 502; [2006] NSWCA 84

TEXTS CITED:


DECISION:
Application for production to be dismissed, subject to Court inspecting three documents



JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST


AUSTIN J

THURSDAY 4 MARCH 2010

2009/000289665 IN THE MATTER OF OPEL NETWORKS PTY LTD (IN LIQ)

JUDGMENT

1 HIS HONOUR: These proceedings began as applications by the liquidators of OPEL Networks Pty Ltd (in liq) ("OPEL") to the issue examination summonses and orders for production, including an order from production dated 16 July 2009 directed to the Department of Broadband Communications and the Digital Economy ("the Department"; I shall refer to the respondent to the application as "the Commonwealth"). The Department objected to the production of certain documents on various privilege grounds. Consequently by an amended notice of motion filed on 6 November 2009, the liquidators seek orders for the production of documents to the Court and for inspection.

Background facts

2 On 21 September 2006, the Commonwealth of Australia (acting through the Department of Communications, Information Technology and the Arts) ("Commonwealth") announced it would implement a new program called the Broadband Connect Infrastructure Program ("BCIP"). Under that program the Commonwealth would provide financial assistance (through a competitive grants process) to support large-scale broadband infrastructure projects, primarily aimed at providing broadband services to underserved premises and areas in Australia.

3 Optus Networks Pty Ltd ("Optus") and Elders Telecommunications Infrastructure Pty Ltd ("Elders") were interested in participating in BCIP. In anticipation of the announcement of the tender process, Optus and Elders announced on 31 August 2006 that they would make a joint bid for funding under the BCIP process.

4 The Commonwealth called for applications for funding offered under the BCIP to be lodged by 30 November 2006 (subsequently extended to 19 December 2006). The tender process was to be conducted pursuant to a set of guidelines, called "Broadband Connect Infrastructure Program Guidelines" ("Guidelines"). The amount of funding available under the Guidelines was stated to be up to $600 million.

5 Optus and Elders formed OPEL, which was registered on 15 December 2006. It has only two members, namely Optus and Elders, with equal shareholdings. On 19 December 2006 OPEL lodged its funding application, under which it proposed to deploy a network of 789 broadband wireless base stations, supplemented by the installation of Digital Subscriber Line Access Multiplexers ("DSLAMs") into 112 Telstra exchanges. The liquidators' solicitor deposes that in preparing its tender proposal, OPEL explicitly outlined its methodology for assessing underserved premises.

6 In about May or June 2007, the Commonwealth identified OPEL as the preferred bidder. OPEL was announced as the successful tenderer under the BCIP on 18 June 2007.

7 Subsequently the Commonwealth decided to allocate additional funding of $358 million to OPEL, beyond the $600 million offered under the Guidelines, to enable increased coverage of the OPEL network. Thus, OPEL was awarded a total of $958 million in funding under the BCIP, in return for which it would deploy a network of 1361 broadband wireless base stations, supplemented by the installation of DSLAMs into 312 Telstra exchanges. OPEL lodged an addendum to its BCIP application on 18 July 2007 setting out the details of the enlarged network.

8 OPEL and the Commonwealth negotiated the terms of the funding agreement in the period from July to September 2007. During mid to late July 2007, the Commonwealth proposed inclusion of minimum coverage requirements in the funding agreement by way of a condition precedent clause, and the terms of those minimum coverage requirements were negotiated extensively. The liquidators allege that during the negotiations, it became apparent that the Commonwealth and OPEL were using different databases which identified different underserved premises, for the purpose of benchmarking the project.

9 The funding agreement between the Commonwealth and OPEL was executed on 7 September 2007. Clause 1A sets out a condition precedent clause, prescribing certain funding conditions. The clause is long and complex, but it should be noted that one of the requirements it imposes is for OPEL to furnish to the Commonwealth for its approval a copy of an implementation plan produced by OPEL's partner entities, namely Optus and Elders. The implementation plan was required, inter alia, to contain detailed network coverage maps. Clause 1A gave the Commonwealth various discretions. Clause 1.2(i) of the agreement provided that wherever a party to the agreement was entitled to exercise a discretion, it was a requirement that the discretion not be exercised in bad faith.

10 Following the execution of the funding agreement, the OPEL partner entities began work on preparing an implementation plan as contemplated by clause 1A of the agreement.

11 On 24 November 2007 the Labor Party won the federal election and a few days later the new Prime Minister announced the formation of a new department, the Department of Broadband, Communications and the Digital Economy ("the Department") and a new Minister, Senator Stephen Conroy. The liquidators endeavoured to read evidence about Senator Conroy's publicly-expressed attitude to the OPEL project prior to the election. When that evidence was objected to, senior counsel for the Commonwealth informed the Court:

"The Commonwealth will accept that Mr Conroy made some critical comments in relation to the OPEL project and did indicate that the Labour Government would honour the OPEL contract."

On the strength of this admission, counsel for the liquidators did not read the evidence to which objection had been taken.

12 The OPEL partner entities lodged their implementation plan with the Department on 9 January 2008. Subsequently there was some correspondence between the Department and the OPEL partner entities. It is unnecessary to go into that correspondence in detail here, but it should be noted that the OPEL partner entities purported to answer questions raised by the Department and (according to the liquidators' evidence) they received no response to several letters. On 1 April 2008 the Department wrote to the chief executives of the OPEL partner entities notifying OPEL under the funding agreement that the funding conditions had not been satisfied and so the agreement was deemed to have been terminated.

13 Subsequently there was correspondence during April and May 2008 and a "debrief" meeting on 17 April 2008. The government maintained its stance that the agreement had been terminated.

14 On 13 March 2009 this Court ordered OPEL to be wound up, on the application of Optus (which was not opposed by Elders). Mr Sherman and Mr Carter were appointed by the Court as liquidators of OPEL. The liquidators are investigating whether the Commonwealth was entitled to issue the notice of termination of the funding agreement dated 1 April 2008. Their solicitor has explained that they need to understand fully the negotiations over the funding conditions and the decision-making process employed by the Commonwealth, in order to assess whether OPEL had satisfied those conditions and to evaluate the Optus/Elders implementation plan. That is said in order to explain the issue of the order for production directed to the Department.

The Commonwealth's objections to the order for production

15 The Commonwealth's grounds for objection are based on:

(a) legal professional privilege;

(b) parliamentary privilege; and/or

(c) public interest immunity.

16 The objections have been made under Pt 1 r 1.9(3) of the Uniform Civil Procedure Rules ("UCPR"). That sub-rule has the effect (inter alia) that, when the Court orders a person to produce a document to the Court, the person may object to producing the document on the ground that the document is a privileged document. By r 1.9(4), a person objecting under sub-rule (3) may not be compelled to produce the document unless and until the objection is overruled.

17 The Dictionary to the UCPR defines "privileged document" to mean a document that contains privileged information. "Privileged information" is defined in the Dictionary to mean any one of a list of categories of information defined by reference to specified divisions or sections of the Evidence Act. One of those categories is "information of which evidence could not, by virtue of the operation of Division 1 of Part 3.10 of the Evidence Act 1995, be adduced in the proceedings over the objection of any person". Division 1 Part 3.10 deals with legal professional privilege (there called "client legal privilege"). Thus, by virtue of these provisions, the claims based on legal professional privilege are to be determined by reference to the relevant provisions of the Evidence Act of New South Wales.

18 Another category of information identified in the definition of "privileged information" is "information that relates to matters of state within the meaning of section 130 of the Evidence Act 1995 (NSW)". Additionally, r 1.9(6) says:

"This rule does not affect any law that authorises or requires a person to withhold a document, or to refuse to answer a question, on the ground that producing the document, or answering the question, would be injurious to the public interest."

Therefore the claim for public interest immunity can be brought in reliance upon s 130 of the Evidence Act of New South Wales or upon r 1.9(6) and the general law. The claim for public interest immunity is to be determined having regard to the provisions of the Parliamentary Privileges Act 1987 (Cth) and the Bill of Rights of 1688.

19 The application has been heard on the basis of affidavit evidence, and some short supplementary evidence by one witness. Evidence was given on behalf of the liquidators by Bruce Hambrett of Baker & McKenzie, their solicitor. Evidence was given on behalf of the Commonwealth by Donald Markus (General Counsel of the Department, who also gave oral evidence), Glenys Beauchamp (Deputy Secretary Governance within the Department of the Prime Minister and Cabinet) and Nicholas Tyacke (a solicitor at the Commonwealth's external law firm, Clayton Utz). There were some objections to the admissibility of Mr Markus' affidavit of 11 November 2009 upon which I reserved my decision, because the objections raised matters going to the issues on the application. I shall state my rulings in the course of this judgment.

20 As appears from the evidence, a large number of the claims for privilege originally made by the Commonwealth have been abandoned, since the filing of the original motion. The remaining area of dispute is relatively modest. The documents are, for the most part, identified in Schedule 1 and Schedule 2 which are annexures to the affidavits of Mr Markus of 11 November 2009 and Ms Beauchamp of 12 November 2009.

21 At the hearing before me, and in subsequent correspondence from their solicitors to my associate, the Commonwealth offered to make available to me the documents over which privilege was claimed. Senior counsel for the Commonwealth encouraged me to look at the documents and he submitted that the authorities indicate that the Court should not be hesitant to do so, especially where (as here) the judge who determines the issue of privilege will not be the trial judge. However, counsel for the liquidators took a different approach. He submitted that the Commonwealth should have elected whether to tender the allegedly privileged documents as part of its evidentiary case, rather than leaving it to the judge to decide whether to inspect the documents (presumably after reaching the conclusion that privilege had not otherwise been established). Counsel also submitted that inspection of the documents would not assist the Court to determine the purpose of the underlying communications. Given the attitude taken on behalf of the liquidators, I decided at the hearing that I would not immediately call for the documents. Now that I have had the opportunity to review the evidence, I have decided, subject to an exception, that there is sufficient evidentiary material before the Court to make determinations without perusing the documents, and so that is what I have done. The exception relates to documents 35, 36 and 37 and is addressed below.

Legal professional privilege

22 The documents over which the Commonwealth continues to maintain its claims to legal professional privilege are identified in Mr Markus' affidavit as documents 1, 9, 10/26, 12/27, 13/28, 14, 15, 17/30, 19, 20, 22/24, 23, and a document headed "OPEL Status and Progress".

23 The Commonwealth's claims are all made on the basis of "legal advice privilege" rather than "litigation privilege", and therefore they fall to be determined under s 118 rather than s 119 of the Evidence Act. Section 118 is as follows:

"Evidence is not to be adduced if, on objection by a client, the court finds that producing the evidence would result in disclosure of:

(a) a confidential communication between the client and a lawyer; or

(b) a confidential communication made between 2 or more lawyers acting for the client; or

(c) the contents of a confidential document (whether delivered or not) prepared by the client, lawyer or another person;

for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client."

24 All of the Commonwealth's claims are put on the basis identified in s 118(a). The Commonwealth contends that the disclosure of the document would disclose the contents of a separate confidential communication made between the client and the lawyer for the dominant purpose of providing legal advice to the client. No reliance is placed on s 118(b) or 118(c).

25 By s 117(1), "confidential communication" is defined to mean a communication made in such circumstances that, when it was made:

(a) the person who made it; or

(b) the person to whom it was made;

was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law.

26 In my view the Commonwealth's objections can only be properly understood if the evidence of Mr Markus, document by document, is considered in some detail. I shall do so, and then seek to apply the law to that evidence having regard to the submissions of the parties.

The evidence of Mr Markus

27 Donald Markus is a legal practitioner and is the General Counsel of the Department. He has had an extensive career as a government lawyer. Mr Markus has made three affidavits, dated respectively 11 November 2009, 18 November 2009 and 16 December 2009, which I shall refer to as his first, second and third affidavits.

28 In his third affidavit Mr Markus said that where he has made a claim to legal professional privilege over the whole of a document, there is no material in the document extraneous to the confidential communication that is the subject of the claim; and where the claim is over redacted parts of documents, there is no material in the redacted parts extraneous to the confidential communications that are the subject of the claim.

Document 1

29 This document was created in November 2008 and is described in Schedule 1 as "Draft Senate Standing Committee - Answers to Estimates Questions on Notice - with handwritten notes to discuss with Don Markus". In his first affidavit, Mr Markus simply asserted that the document was communicated to him on confidential basis by the Secretary of the Department's office, with the handwritten note to the effect that she wanted to discuss it with him. He also asserted that the dominant purpose of the communication was for him to be able to provide the Secretary with legal advice in relation to the contents of the document. In his second affidavit he said the document was contained in his legal files, and he said he was informed by the Secretary of the Department that she communicated the document to him for the sole purpose of his providing her with legal advice on its content.

Document 9

30 According to Schedule 1 the document was created on 17 January 2008 and is described as "Ministerial Minute 2008/0015". It was produced in redacted form on 10 September 2009.

31 In his first affidavit Mr Markus simply asserted that legal professional privilege is claimed over the parts of the document remaining redacted, on the basis that they disclose the substance or effect of a confidential communication made between AGS and the Commonwealth provided for the dominant purpose of providing legal advice to the Commonwealth. In his second affidavit, Mr Markus added that the basis for his evidence that the communication between AGS and the Commonwealth was made to the dominant purpose of providing legal advice is:

(a) his review of the redacted part of the document and the fact that the express terms of that part explicitly disclose legal advice;

(b) the fact that AGS acted as legal advisers to the Commonwealth; and

(c) the fact that AGS was engaged to provide legal advice on the matters the subject of the redacted part of the document by the Legal Group of the Department, which he leads.

Document 10/26

32 The document is listed twice in Schedule 1, as document 10 and as document 26. According to Schedule 1 is dated 29 January 2008. It is first described as "Process and timeline for decision on OPEL issues", and on the second occasion it is described as "Document entitled 'Process for decision on OPEL issues". According to the contention of Clayton Utz summarised in the Schedule, it was produced in redacted form on 10 September 2009 and the redactions were made on the basis of legal professional privilege of some text recording the content of confidential communications by the Department's legal advisers to the Department.

33 In his first affidavit, Mr Markus said legal professional privilege is claimed over the parts of the document remaining redacted on the basis that it discloses the substance or effect of a confidential communication made by him to the Minister provided for the dominant purpose of providing legal advice to the Commonwealth in connection with litigation between Telstra and the Minister in relation to the Opel contract.

Document 12/27

34 Document 27 is relevantly the same as document 12. According to Schedule 1 it was created on 6 February 2008 and is first described as "Draft Ministerial Document 2008/00", and later described as "Department of Broadband Communications and the Digital Economy Minute: M 2008/00". The document was produced in redacted form on 10 September 2009. According to Clayton Utz, the redactions were made of text recording confidential legal advice communicated to the Department by its legal advisers.

35 In his first affidavit, Mr Markus said that legal professional privilege is claimed over the parts remaining redacted on the basis that they disclose the substance or effect of confidential communications between Clayton Utz and the Commonwealth provided for the dominant purpose of providing legal advice to the Commonwealth. In his second affidavit he added that the basis of his evidence that the communication between Clayton Utz and the Commonwealth was made for the dominant purpose of providing legal advice is:

(a) his review of the redacted parts of the document and the fact that the express terms of those parts explicitly disclose legal advice;

(b) the fact that Clayton Utz acted as legal advisers to the Commonwealth;

(c) the fact that Clayton Utz was engaged to provide legal advice on the matters the subject of the redacted part of the document by the Legal Group of the Department, which he leads; and

(d) the fact that the redacted part of the document refers to written advice to the Department from Clayton Utz which was attached to the minute to the Minister of 26 February 2008 (Document 14).

Document 13/28

36 Document 28 is relevantly the same as document 13. According to Schedule 1 it was created on 6 February 2008 and is first described "Ministerial Document 2008/0091", and later described as "Department of Broadband Communications and the Digital Economy Minute: M 2008/0091". The document was produced in redacted form on 10 September 2009. According to Clayton Utz, the redactions were made of text recording confidential legal advice communicated to the Department by its legal advisers.

37 In his first affidavit, Mr Markus said that legal professional privilege is claimed over the parts remaining redacted on the basis that they disclose the substance or effect of confidential communications between Clayton Utz and the Commonwealth and AGS and the Commonwealth provided for the dominant purpose of providing legal advice to the Commonwealth. In his second affidavit he added that the basis of his evidence that the communication between AGS and the Commonwealth and Clayton Utz and the Commonwealth were made for the dominant purpose of providing legal advice is:

(a) his review of the redacted part of the document and the fact that the express terms of that part explicitly disclose legal advice;

(b) the fact that AGS and Clayton Utz both acted as legal advisers to the Commonwealth;

(c) the fact that both Clayton Utz and AGS were engaged to provide legal advice on the matters the subject of the redaction by the Legal Group of the Department, which he leads; and

(d) the fact that the redacted part of the document refers to written advice to the Department from Clayton Utz and from AGS which were attachments to the document.

Document 14

38 According to Schedule 1, document 14 was created on 26 February 2008 and is described as "Ministerial Document 2008/0155". The document was produced in redacted form on 10 September 2009. According to Clayton Utz, the redactions were made of text recording confidential legal advice communicated to the Department by its legal advisers.

39 In his first affidavit, Mr Markus said that legal professional privilege is claimed over the parts remaining redacted on the basis that they disclose the substance or effect of confidential communications between Clayton Utz and the Commonwealth and between AGS and the Commonwealth provided for the dominant purpose of providing legal advice to the Commonwealth. In his second affidavit he added that the basis of his evidence that the communication between AGS and the Commonwealth and Clayton Utz and the Commonwealth were made for the dominant purpose of providing legal advice is:

(a) his review of the redacted parts of the document and the fact that the express terms of those parts explicitly disclose legal advice;

(b) the fact that AGS and Clayton Utz both acted as legal advisers to the Commonwealth;

(c) the fact that both Clayton Utz and AGS were engaged to provide legal advice on the matters the subject of the redactions by the Legal Group of the Department, which he leads; and

(d) the fact that the redacted part of the document refers to written advices to the Department from Clayton Utz and AGS which were attached to the document.

Document 15

40 According to Schedule 1, document 15 was created on 26 March 2008 and is described as "Ministerial Document 2008/0241". The document was produced in redacted form on 10 September 2009. According to Clayton Utz, the redactions were made of text recording confidential legal advice communicated to the Department by its legal advisers.

41 In his first affidavit, Mr Markus said that legal professional privilege is claimed over the parts remaining redacted on the basis that they disclose the substance or effect of confidential communications between Clayton Utz and the Commonwealth and between AGS and the Commonwealth provided for the dominant purpose of providing legal advice to the Commonwealth. In his second affidavit he added that the basis of his evidence that the communications between AGS and the Commonwealth and Clayton Utz and the Commonwealth were made for the dominant purpose of providing legal advice is:

(a) his review of the redacted parts of the document and the fact that the express terms of those parts explicitly disclose legal advice;

(b) the fact that AGS and Clayton Utz both acted as legal advisers to the Commonwealth;

(c) the fact that both Clayton Utz and AGS were engaged to provide legal advice on the matters the subject of the redactions by the Legal Group of the Department, which he leads; and

(d) the fact that the redacted part of the document refers to written advices to the Department from Clayton Utz and AGS which were attached to the document.

Document 17/30

42 Document 30 is relevantly the same as document 17. According to Schedule 1 it was created on 4 April 2008 and is first described " "Ministerial Minute superseded with handwritten notes 2008/0091", and later described as "Department of Broadband Communications and the Digital Economy Minute: M 2008/0091". The document was produced in redacted form on 10 September 2009. According to Clayton Utz, the redactions were made of text recording confidential legal advice communicated to the Department by its legal advisers.

43 In his first affidavit, Mr Markus said that legal professional privilege is claimed over the parts remaining redacted on the basis that they disclose the substance or effect of confidential communications between Clayton Utz and the Commonwealth and AGS and the Commonwealth provided for the dominant purpose of providing legal advice to the Commonwealth. In his second affidavit he added that the basis of his evidence that the communications between AGS and the Commonwealth and Clayton Utz and the Commonwealth were made for the dominant purpose of providing legal advice is:

(a) his review of the redacted part of the document (which is relevantly the same as document 13) and the fact that the express terms of that part explicitly disclose legal advice;

(b) the fact that AGS and Clayton Utz both acted as legal advisers to the Commonwealth;

(c) the fact that both Clayton Utz and AGS were engaged to provide legal advice on the matters the subject of the redaction by the Legal Group of the Department, which he leads; and

(d) the fact that the redacted part of the document refers to written advice to the Department from Clayton Utz and from AGS which were attachments to the document.

Document 19

44 According to Schedule 1, document 19 was created on 26 February 2008 and is described as "Minute to Minister 2008/0155". The document was produced in redacted form on 10 September 2009. According to Clayton Utz, the redactions were made of text recording confidential legal advice communicated to the Department by its legal advisers.

45 In his first affidavit, Mr Markus said that legal professional privilege is claimed over the parts remaining redacted on the basis that they disclose the substance or effect of confidential communications between Clayton Utz and the Commonwealth and between AGS and the Commonwealth provided for the dominant purpose of providing legal advice to the Commonwealth. In his second affidavit he added that the basis of his evidence that the communications between AGS and the Commonwealth and Clayton Utz and the Commonwealth were made for the dominant purpose of providing legal advice is:

(a) his review of the redacted parts of the document (which is relevantly the same as document 14) and the fact that the express terms of those parts explicitly disclose legal advice;

(b) the fact that AGS and Clayton Utz both acted as legal advisers to the Commonwealth;

(c) the fact that both Clayton Utz and AGS were engaged to provide legal advice on the matters the subject of the redactions by the Legal Group of the Department, which he leads; and

(d) the fact that the redacted part of the document refers to written advices to the Department from Clayton Utz and AGS which were attached to the document.

Document 20

46 According to Schedule 1, document 20 was created on 26 March 2008 and is described as "Minute to Minister 2008/0241". The document was produced in redacted form on 10 September 2009. According to Clayton Utz, the redactions were made of text recording confidential legal advice communicated to the Department by its legal advisers.

47 In his first affidavit, Mr Markus said that legal professional privilege is claimed over the parts remaining redacted on the basis that they disclose the substance or effect of confidential communications between Clayton Utz and the Commonwealth and between AGS and the Commonwealth provided for the dominant purpose of providing legal advice to the Commonwealth. In his second affidavit he added that the basis of his evidence that the communications between AGS and the Commonwealth and Clayton Utz and the Commonwealth were made for the dominant purpose of providing legal advice is:

(a) his review of the redacted parts of the document (which is relevantly the same as document 15) and the fact that the express terms of those parts explicitly disclose legal advice;

(b) the fact that AGS and Clayton Utz both acted as legal advisers to the Commonwealth;

(c) the fact that both Clayton Utz and AGS were engaged to provide legal advice on the matters the subject of the redactions by the Legal Group of the Department, which he leads; and

(d) the fact that the redacted part of the document refers to written advices to the Department from Clayton Utz and AGS which were attached to the document.

Document 22/24

48 Document 24 is relevantly the same as document 22. According to Schedule 1 it was "processed" on 6 May 2008 and is first described as "Minute to Minister 2008/315", and later described as "Department of Broadband Communications and the Digital Economy Minute: M 2008/315". The document was produced in redacted form on 10 September 2009. According to Clayton Utz, the redactions were made of text recording confidential legal advice communicated to the Department by its legal advisers.

49 In his first affidavit, Mr Markus said that legal professional privilege is claimed over the part remaining redacted on the basis that it discloses the substance or effect of confidential communications between Clayton Utz and the Commonwealth provided for the dominant purpose of providing legal advice to the Commonwealth. In his second affidavit he added that the basis of his evidence that the communication between Clayton Utz and the Commonwealth was made for the dominant purpose of providing legal advice is:

(a) his review of the redacted part of the document and the fact that the express terms of that part explicitly disclose legal advice;

(b) the fact that Clayton Utz both acted as legal advisers to the Commonwealth;

(c) the fact that Clayton Utz was engaged to provide legal advice on the matters the subject of the redaction by the Legal Group of the Department, which he leads.

Document 23

50 According to Schedule 1, document 23 was created in October 2008 and is described as "Draft letter re Senate Standing Committee evidence - in mark-up and with handwritten notes of Don Markus (General Counsel, DBCDE)". Apparently no part of the document has been produced. According to Clayton Utz, the document is a draft Departmental legal document with comments in mark-up made by legal advisers as well as a handwritten note by Don Markus for the dominant purpose of rendering legal advice.

51 In his first affidavit, Mr Markus said that legal professional privilege is claimed over this document on the basis that it is a draft letter communicated to him by the Department for the purpose of his review as legal counsel on a confidential basis, and upon which he has made handwritten comments for the dominant purpose of communicating confidential legal advice. In his second affidavit he added that the document was contained in his legal files and that he has been informed by the then Secretary of the Department that she caused a document to be communicated to him for the sole purpose of his providing to her legal advice on its content.

OPEL Status and Progress

52 By a letter dated 6 November 2009, Mr Hambrett wrote to Mr Tyacke informing him, inter alia, that the liquidators challenged the Commonwealth's claim to legal professional privilege in respect of the document called "OPEL Status and Progress". In his first affidavit, Mr Markus said that legal professional privilege is claimed over parts of the document remaining redacted on the basis that it discloses the substance or effect of confidential communications made between Clayton Utz and the Commonwealth of the dominant purpose of providing legal advice to the Commonwealth. In his second affidavit he added that the basis of his evidence that the communication between Clayton Utz and the Commonwealth was made for the dominant purpose of providing legal advice is:

(a) his review of the redacted parts of the document and the fact that the express terms of those parts explicitly disclose legal advice;

(b) the fact that Clayton Utz acted as legal advisers to the Commonwealth;

(c) the fact that Clayton Utz was engaged to provide legal advice on the matters the subject of the redaction by the Legal Group of the Department, which he leads; and

(d) the fact that the redacted part of the document refers to written advice to the Department from Clayton Utz which was attached to the document.

Application of s 118 to each document

53 Counsel for both parties cited with approval a decision of mine in Re Southland Coal Pty Ltd (recrs & mgrs apptd) (in liq) (2006) 59 ACSR 87; [2006] NSWSC 899. In that case I considered the documents over which privilege had been claimed, one by one, having particular regard to the evidence of a lawyer who was very familiar with them. I took the view that a lawyer may be in a position to give admissible evidence about the circumstances surrounding the client's communication, which may, together with inferences from the document itself, establish the privilege (at [28]). I shall adopt the general approach I took in that case.

54 There are 13 documents in dispute, and it can be seen from my summary that the evidence of Mr Markus is almost identical for 10 of them. In his first affidavit he used a formula, which asserted that the redacted parts of the document disclosed the substance or effect of a confidential communication made between a named external lawyer (Clayton Utz or AGS) and the Commonwealth, provided for the dominant purpose of providing legal advice to the Commonwealth. In his second affidavit he purported to supplement that formula by using another formula. In the second affidavit he referred to the relevant part of his first affidavit and then purported to set out the basis for his evidence that the communications between the named external lawyer and the Commonwealth were made for the dominant purpose of providing legal advice. That basis was his review of the redacted part of the document which (he said) explicitly disclosed legal advice, the fact that the external adviser was a legal adviser to the Commonwealth, the fact that they had been engaged to provide legal advice on the matters the subject of the redaction by the Legal Group of the Department of which he was leader, and the fact that the redacted part referred to written legal advice provided by the adviser.

55 Counsel for the liquidators strenuously objected to this evidence. First, he submitted that Mr Markus was purporting to give evidence of the purpose of the relevant communication although he was not the person who made the communication. It seems to me permissible for Mr Markus to give this evidence. He was General Counsel in the Department. It was the Legal Group under his leadership who engaged AGS and Clayton Utz to provide the legal advice on the matters identified in the redacted part of the document. He read the advice.

56 Second, counsel for the liquidators submitted that Mr Markus had failed to identify the confidential communication that the document in question was said to disclose. He did not give evidence that he had inspected the actual confidential communication, but only that he had reviewed the redacted part of the document that would, if produced, disclose the confidential information.

57 In my opinion that objection was addressed by the oral evidence given by Mr Markus. He said that in each case he personally received the legal advice from AGS or Clayton Utz that was the confidential communication he was seeking to protect. He said in most cases the legal advice was in writing and addressed to him, though in one case it was oral advice given at a meeting that he attended. He confirmed that he read the written legal advices that constituted the confidential communications. He said his evidence about the dominant purpose of those communications was based on his reading of the letters of advice.

58 In my view the oral evidence of Mr Markus answers another criticism by counsel for the liquidators. Counsel submitted that the fact (if it be so) that the redacted part of the document appears to disclose legal advice does not address the purpose of the original communication: for example, the provision of legal advice might be only one purpose, and not the dominant purpose, of the original communication. But Mr Markus made it plain in the witness box that he had read the original communications, which were for the most part letters of advice from AGS or Clayton Utz, and this was the basis for his evidence that the dominant purpose of those communications was to provide legal advice to the Department.

59 In written submissions prepared before the hearing, counsel for the liquidator criticised Mr Markus' evidence on the ground that the retainers of AGS and Clayton Utz were not in evidence. Senior counsel for the Commonwealth tendered at the hearing two Deeds of Standing Offer that constituted general retainers between the Commonwealth and AGS and Clayton Utz respectively. Counsel for the liquidators pointed out that these instruments did not assist in characterising the dominant purpose of individual communications because they were general retainers to provide legal services. I agree with that submission, though the tender of the deeds has overcome counsel's original objection.

60 Counsel for the liquidators complained that the evidence of Mr Marcos was "formulaic". That is correct, but in my opinion the use of a formula to give evidence in respect of each of multiple documents is not itself objectionable provided that the formula is suitable to each occasion. Indeed, there is some advantage in casting the evidence on each document into the same mould, in terms of assisting the reader to absorb and analyse what is said.

61 Counsel also complains that the evidence of Mr Markus has given no general description, even in broad terms, of the issues to which the asserted legal advice related, and that has made it impossible to assess, from the evidence alone, whether what Mr Markus characterises as legal advice was really that, and not advice of some other kind, such as advice on policy, administrative or commercial matters (citing WorkCover Authority (NSW) v Law Society of NSW (2006) 65 NSWLR 502; [2006] NSWCA 84; at [92]-[95]). I agree that Mr Markus has not given evidence of the content of the legal advice to which the redacted part of each document relates. But I regard it as significant that in his third affidavit, he said there was no material on the redacted parts of the documents extraneous to the confidential communications that were the subject of the claims of legal professional privilege; and in his oral evidence he identified the confidential communications as legal advice, mostly in writing. When that evidence is put together, it amounts to evidence by an experienced general counsel that the confidential communications which were the subject of the claims for privilege were, and were nothing other than, legal advices. I do not regard the description of AGS as "probity advisers" as derogating from that evidence.

62 At the hearing I reserved my ruling on the admissibility of the evidence of Mr Markus as to these matters. For the reasons given above, I have decided that the evidence is admissible. I now turn to consider whether the claim to legal advice privilege has been made out, for each document, in respect of the confidential communications that would be disclosed if the document were produced.

63 It seems to me that of the 13 documents remaining in dispute, 10 documents raise a common issue and can be considered together (documents 9, 12/27, 13/28, 14, 15, 17/30, 19, 20, 22/24 and OPEL Status and Progress), while the other three (documents 1, 10 and 23) raises different issues and should be considered separately.

64 Document 1 is a draft document containing a handwritten request by the Secretary of the Department to the effect that she wanted to discuss it with Mr Markus. Mr Markus said it was communicated to him confidentially, and that tends to be supported by the description of the document - a draft of answers to estimates questions on notice, which one would expect to be confidential. Hence when the document was passed to him from the Secretary's office, there was a confidential communication of the contents of the document from client to lawyer.

65 Mr Markus asserted that the dominant purpose of the communication was for him to be able to provide the Secretary with legal advice in relation to the contents of the document. In my view Mr Markus could not establish the dominant purpose of a communication simply by asserting what it was. Here, however, there is substantially more evidence than a bare assertion by Mr Markus. The document is on its face of a confidential nature and the handwritten notes suggest that it was communicated to Mr Markus for the purpose of Mr Markus providing legal advice; the document was contained in his legal files; and the Secretary of the Department told him she made the communication for the sole purpose of his providing legal advice on the content of the document.

66 In my opinion the evidence of Mr Markus establishes the ingredients of legal advice privilege under s 118 in respect of document 1, and that production of the document would result in disclosure of the confidential information.

67 In the case of document 10, Mr Markus has not only characterised the redacted part as legal advice but he has indicated that it related to litigation between Telstra and the Minister in relation to the OPEL contract, and further, that is outside the scope of the order for production and is irrelevant. It seems to me that he has given a sufficient indication of the content of the redacted part to establish the privilege under s 118, and that production of the redacted part would result in disclosure of the confidential information.

68 The description of document 23 indicates that the draft letter has a legal subject matter, and additionally there are handwritten notes by Mr Markus. It appears from the evidence of Mr Markus that the document was sent to him in draft for him to review it as the Department's General Legal Counsel. The document was in his legal files. These facts together indicate that the document was a confidential communication from client to lawyer before the handwritten notes were added, and those handwritten notes were in the nature of legal advice to the client. They support his general assertion about the dominant purpose of the document. In my view privilege under s 118 is established, and production of the document would result in disclosure of the confidential information.

69 In the case of the other 10 documents, according to the evidence of Mr Markus the redacted parts of the documents relate to legal advice by Clayton Utz or the AGS to the Commonwealth. In each case Mr Markus gave evidence that he had reviewed the redacted parts of the document and that in fact the express terms of the redacted parts explicitly disclose legal advice of either AGS or Clayton Utz. They were legal advisers to the Commonwealth, engaged to provide legal advice by the Legal Group in the Department, of which Mr Markus was leader. His evidence was that the only external lawyers to provide legal advice to the Department in relation to the BCIP, the negotiation of the funding agreement and the termination of the funding agreement, were Clayton Utz and AGS. He said that there is no material in the redacted parts extraneous to the confidential communications that are the subject of the claims of legal professional privilege.

70 Document 9 was received into evidence at the hearing as Ex A2. The redacted part is under the heading "Sensitivities", immediately after a sentence stating that the Department had appointed AGS as probity adviser in relation to the approval process for the implementation plan. It seems obvious that the redacted part is a summary of the advice given by AGS.

71 In my view that evidence is sufficient to establish that s 118 applies in respect of the redacted parts, and production of the redacted parts would result in disclosure of the confidential information.

72 In the result, my opinion is that the evidence of Mr Markus establishes that s 118 would apply to adducing the evidence of documents 1 and 23 and to adducing the evidence of the redacted parts of the other documents. Consequently the Commonwealth's objection to production of these documents or parts of documents under UCPR 1.9(3) was well founded and will not be overruled.

Public interest immunity

73 A claim for public interest immunity in relation to documents that are subject to a compulsory discovery process under court rules seeks to preserve the confidentiality of documents if disclosure would have the potential to harm the public interest. The Evidence Act 1995 (NSW), s 130, recognises that the public interest in admitting into evidence a document relating to matters of state may be outweighed by the public interest in preserving secrecy or confidentiality in relation to the document, and if that is so, the Court is empowered to direct that the document not be adduced as evidence. The statutory "balancing exercise" reflects the general law with respect to public interest privilege, as explained in such cases as Sankey v Whitlam [1978] HCA 43; (1978) 142 CLR 1; see also Penrith Rugby League Club Ltd v Brown [2004] NSWSC 1182 at [27]-[28]. The Court has to balance competing public interests: on the one hand, the public interest in the administration of justice, which could be frustrated or impaired if access to relevant documents were denied; and on the other hand, the public interest that harm should not be done to the nation or government by disclosure of confidential matters: Sankey v Whitlam, at 38-39 per Gibbs ACJ, 60-61 per Stephen J, 95-96 per Mason J.

74 UCPR 1.9(6) excludes from the operation of the compulsory production regime established by r 1.9 any law that authorises or requires a person to withhold a document on the ground that producing the document would be injurious to the public interest.

75 Several matters of principle are relevant to the assessment of the Commonwealth's claim to public interest immunity:

(a) a claim for public interest immunity has no automatic operation; it always remains the function of the Court to determine upon that claim (Sankey v Whitlam, at 58 per Stephen J);

(b) those who urge privilege for classes of documents, regardless of particular contents, carry a heavy burden of proof (Sankey v Whitlam, at 62 per Stephen J);

(c) the character of the proceedings and the issues raised are relevant: where the proceedings are centrally concerned with the government's conduct or a decision it has made, claims for public interest immunity over documents relating to that conduct or decision are less likely to succeed (Sankey v Whitlam, at 56 per Stephen J);

(d) the Court may examine the documents for the purpose of determining claims for public interest immunity (Sankey v Whitlam, at 47-8 per Gibbs ACJ), a step that may be appropriate where it is "on the cards" that the documents contain relevant information (Attorney-General (NSW) v Chidgey [2008] NSWCCA 65; (2008) 182 A Crim R 536 at [58]- [80]; Watson v AWB Ltd (No 2) [2009] FCA 1047 at [58]).

76 In the present case the Court is required to consider the public interest in preserving the confidentiality of the Commonwealth Government's Cabinet process. It is accepted by the parties, and acknowledged in Commonwealth legislation such as the Freedom of Information Act 1982 (Cth) as well as in case law, that the confidentiality of the deliberations of Cabinet is protected by public interest immunity. As Ms Beauchamp said in her first affidavit, the convention of Cabinet confidentiality which is part of the Westminster system of government recognises the necessity for a forum in which full and frank discussion by Ministers can take place, uninhibited by the need to temper debate to meet sectional interests or media pressures, and in which individual opinions may be expressed freely among colleagues without public comment and exposure (see Sankey v Whitlam, at 95 per Mason J).

77 The confidentiality of Cabinet deliberations is important in order to preserve the principle of collective responsibility, which requires that Cabinet decisions, once made, must be supported by all ministers, irrespective of personal views (see Commonwealth of Australia v Northern Land Council [1993] HCA 24; (1993) 176 CLR 604, at 615). Collective Cabinet responsibility is intended to bring about effective and efficient government by facilitating finality in decision-making; whatever the range of private views put by Ministers in the Cabinet, once decisions are arrived at and announced they are expected to be supported by all Ministers.

78 Consistently with this reasoning, important State documents relating to high-level policy decisions, and in particular Cabinet decisions and Cabinet papers, will usually be held to be immune from production: Sankey v Whitlam, at 95 per Mason J. But Cabinet decisions and Cabinet papers do not stand outside the general rule that requires the Court to determine whether, on balance, the public interest calls for production or non-production; rather they stand fairly and squarely within the area of application of that rule: Sankey v Whitlam, at 96 per Mason J. It is well established that the public interest does not call for the non-disclosure of Cabinet documents when their significance is purely historical, but in Sankey v Whitlam (at 98) Mason J, disagreeing with Lord Reid in Conway v Rimmer [1968] UKHL 2; [1968] AC 910 at 952), expressed his preference for the view that the requirements of the administration of justice should prevail once a matter is no longer current, even if the matter has not receded into the category of "purely historical interest".

79 In her first affidavit, Ms Beauchamp identified two categories of documents which, she said, should be protected by public interest immunity because of Cabinet confidentiality. The first category is any document that reveals the decision and/or deliberations of the Cabinet. This category would include documents that have not been considered by the Cabinet, but which record or evidence either what was to be, and ultimately was, considered by the Cabinet or what had been considered and/or decided by the Cabinet.

80 The case law supports Ms Beauchamp's view as to this category, although the courts acknowledge that production may be required in exceptional circumstances. Thus, in Lanyon v Commonwealth of Australia [1974] HCA 11; (1974) 129 CLR 650, Menzies J said (at 653):

"...the governmental process directed to obtaining a cabinet decision upon a matter of policy and cabinet's decision upon that matter should not, in the public interest, be disclosed by the production of cabinet papers including what I would describe as papers which have been brought into existence within the governmental organisation for the purpose of preparing a submission to cabinet. Such papers belong to a class of documents that, in my opinion, are of a nature that ought not to be examined by the Court, except, it may be, in very special circumstances."

81 In Commonwealth of Australia v Northern Land Council [1993] HCA 24; (1993) 176 CLR 604, Mason CJ, Brennan, Deane, Dawson, Gaudron and McHugh JJ said (at 616):

"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."

82 Later their Honours doubted whether the disclosure of records of Cabinet deliberations upon matters remaining current or controversial would ever be warranted in civil proceedings (at 618).

83 Ms Beauchamp's second category of documents consists of advice for briefs prepared for Ministers for use of the Cabinet. This includes documents (including drafts) prepared by Departments prior to a meeting of Cabinet, for briefing purposes. She claimed that confidentiality needs to be maintained for a briefing document if it suggests what was to be, and ultimately was, considered by the Cabinet or if the document suggests the position that various members of Cabinet would be likely to take in relation to issues under consideration.

84 In Egan v Chadwick (1999) 46 NSWLR 563; [1999] NSWCA 176, Priestley JA noted (at [56]) a distinction between documents that disclose the actual deliberations within Cabinet and other "Cabinet documents" in the nature of reports or submissions prepared for the assistance of Cabinet. While the revelation of actual deliberations of Cabinet would be inconsistent with the doctrine of collective responsibility, he remarked (at [57]) that "documents prepared outside Cabinet for submission to Cabinet may, or may not, depending on their content, manifest a similar inconsistency".

85 Egan v Chadwick suggests that Cabinet briefing documents will often not be protected from disclosure. However, a case where public interest immunity was held to be available was Commonwealth v Construction, Forestry, Mining and Energy Union (2000) 98 FCR 31; [2000] FCA 453 (Full Federal Court: Black CJ, Tamberlin and Sundberg JJ). In that case, a letter from a Minister to the Prime Minister seeking agreement to raise certain matters "under the line" in Cabinet relating to high-level government policy, in the nature of a proposal for discussion by Cabinet, was held to be protected from disclosure. The Court observed (at [42]):

"Although the letter does not in terms record actual deliberations at the Cabinet meeting, it was circulated amongst Ministers in the Cabinet room at the meeting, and the matters in it were discussed and considered by those present. In that sense it reveals what would in the ordinary course be discussed at Cabinet. ... Disclosure of the contents of the letter would, in our view, operate to reveal the nature of the matters considered by Cabinet and at least part of the Cabinet's deliberation of those matters."

The evidence of Ms Beauchamp concerning particular documents

86 Public interest immunity is claimed in respect of six documents, about each of which Ms Beauchamp has given evidence. Ms Beauchamp is Deputy Secretary of the Department of the Prime Minister and Cabinet, with responsibility for the Cabinet, Government and Corporate Services Divisions of the Department. Although she did not hold that position at the time of the events in question, in my view she is an appropriate person to swear affidavits in support of the Commonwealth's claim. She has personally inspected and considered each of the documents that is the subject of a claim, for the purpose of preparing her affidavit.

Document 16/29

87 Document 16 (also document 29) is a letter from Senator Conroy (Minister for Broadband, Communications and the Digital Economy) to the Prime Minister dated 1 April 2008. The letter was entitled "Funding Equitable Access to Broadband for most Remote Areas". It was produced to the liquidators in redacted form on 10 September 2009. According to Clayton Utz in Schedule 1, one of the reasons for the redactions was public interest immunity.

88 Ms Beauchamp explained that the third and fourth paragraphs referred to the contents of a Cabinet submission and subsequent Cabinet decision. The sixth and seventh paragraphs referred to a Cabinet decision and outlined a proposal which was later brought forward to the Cabinet. She expressed the opinion that disclosure of those paragraphs could damage the public interest.

89 In her second affidavit made on 16 December 2009, Ms Beauchamp explained the basis for her evidence in the first affidavit that the proposal was later brought forward to the Cabinet. She said that on 2 November 2009 she was informed by Nicole McGuire, an officer from the Cabinet Secretariat in the Department of Prime Minister and Cabinet, that she had reviewed the official Cabinet document records and those records had established that this proposal, and also the proposals referred to in documents 35, 36 and 37 below, had been brought forward to Cabinet.

Document 13/28

90 Document 13 (also document 28) is a Ministerial Minute M 2008/0091 dated 6 February 2008 entitled "Assessment Report on OPEL Networks' Implementation Plan". It was produced in redacted form on 10 September 2009. According to Clayton Utz, the redactions were made partly on the basis of public interest immunity.

91 Ms Beauchamp gave evidence that the following paragraphs refer to Cabinet deliberations and decisions and could damage public interest:

(a) the paragraph under the heading "Timing";

(b) the fourth paragraph under the heading "Issues";

(c) the first and second paragraphs under the heading "Discussion of Issues"; and

(d) the fourth and fifth paragraphs in the draft letter attached to the brief.

Document 19

92 Document 19 is a Ministerial Document M 2008/0155 dated 26 February 2008 entitled "Further Clarification of OPEL Networks' Implementation Plan". It was produced in redacted form on 10 September 2009. According to Clayton Utz, the redactions were made partly on the ground of public interest immunity.

93 Ms Beauchamp gave evidence that the second and third paragraphs under the heading "Sensitivities" referred to Cabinet deliberations and decisions, and disclosure could damage the public interest.

Document 35

94 Document 35 is an e-mail from Sally Taylor (adviser, Prime Minister & Cabinet) to Bridget Gannon (adviser, Prime Minister & Cabinet) dated 22 February 2008. It was produced in redacted form on 10 September 2009. According to Clayton Utz, the redactions to pages 1 and 2 of this document were of text referring to draft recommendations (a working document leading to the development of a Cabinet submission) and were made on the basis of public interest immunity.

95 Ms Beauchamp said the text of the e-mail referred to a proposal which was later brought forward to the Cabinet, and disclosure could damage the public interest.

Document 36

96 Document 36 is an e-mail from Bridget Gannon (adviser, Prime Minister & Cabinet) to Pip Spence (Assistant Secretary, Prime Minister & Cabinet) dated 20 March 2008. Clayton Utz commented that the document contains text that constitutes a working document that lead to the development of a Cabinet submission.

97 Ms Beauchamp said that in the paragraph under the heading "Opel Review" refers to a proposal which was later brought forward to the Cabinet, and so disclosure could damage the public interest.

Document 37

98 Document 37 is an e-mail from Tennant Reed (adviser, Prime Minister & Cabinet) to Bridget Gannon (adviser, Prime Minister & Cabinet) dated 25 March 2008. Clayton Utz commented that the document was produced in redacted form on 10 September 2009. They said text was redacted on pages 1 and 2 that constitutes a working document that lead to the development of a Cabinet submission, on the basis of public interest immunity.

99 Ms Beauchamp said the paragraph under the heading "OPEL Review" refers to a proposal which was later brought forward to the Cabinet at its disclosure could damage the public interest.

Application of public interest immunity to each document

100 Ms Beauchamp gave her evidence about each of the documents that are subject to a public interest immunity claim after having personally considered the document, and having considered whether its public disclosure would or may harm the public interest. She is a senior officer in the Department of Prime Minister and Cabinet whose views are to be given due weight. Her views about harm to the public interest are reinforced, in my view, by the consideration that all of the documents in issue concerned high-level government policy concerning broadband access, an area that remains current and controversial.

101 Counsel for the liquidators submitted that Ms Beauchamp's evidence is not in proper form because she has not identified the basis on which the relevant material in the document has been characterised and in particular, she has not indicated whether the documents on their face refer to Cabinet submissions or decisions. I do not agree that her evidence is not in proper form. In my opinion her evidence about three of the six documents (documents 35, 36 and 37) is too sketchy to permit me to make a decision without inspecting the documents (see below) but her evidence about the other documents is clear enough.

102 None of the documents in question is an actual record of proceedings in Cabinet. However, of the six documents in question, three of them (documents 16/29, 13/28 and 19) are said to disclose Cabinet deliberations, are according to Ms Beauchamp.

103 It seems to me that her evidence regarding documents 13/28 and 19 categorically brings the redacted parts of those documents within the principles stated in the Northern Land Council case; that is, because the redacted parts would disclose the deliberations of Cabinet, those redacted parts are within a class of documents in which there are strong considerations of public policy pointing against disclosure, regardless of their contents. The evidence adduced on behalf of the liquidators shows that there are some prospects of success in what would be, if initiated, major commercial litigation, and that the documents in contest may assist the liquidators' case. But the public interest involved is essentially nothing other than the public interest in the administration of justice, and the Northern Land Council case indicates that that is generally outweighed, and strongly outweighed, by the public interest in protecting the confidentiality of Cabinet deliberations. The fact that one or more of the documents in contest may prove to be particularly relevant to the liquidator's contemplated case does not change that analysis. In my view public interest immunity has been made out in respect of those two documents.

104 Counsel for the liquidators criticised Commonwealth's claims to public interest immunity on the ground that they appear to be class claims, without revealing in any detail the contents of the documents. But in my opinion that is precisely what the majority judgment in the Northern Land Council contemplates, at any rate as regards the class of documents revealing Cabinet deliberations (see at 616).

105 Counsel for the liquidators also contended that no evidence had been adduced that the Cabinet deliberations to which the documents were said to relate remained current, or that they were, even at the time, important policy matters. In my opinion the liquidators' own evidence shows that the issues at stake in the BCIP and tender process, the subsequent negotiation of a funding agreement for an extremely large funding, and the decision to terminate the OPEL arrangements, were all referable in some way or another to matters of high policy concerning Australia's broadband strategy. Even if the termination of the agreement had been based on plain failure to comply with the funding conditions, there would still necessarily be policy issues at stake, including the development of a change of policy to fill the void that would be created by OPEL's removal. It seems to me that the Court can take notice of the fact that government policy on the rollout of broadband services to remote areas remains topical and controversial.

106 Document 16/29 is a little less straightforward. As I understand Ms Beauchamp's evidence, the third and fourth paragraphs referred not only to the contents of a Cabinet submission but also to the Cabinet's subsequent decision, while the sixth and seventh paragraphs referred to a Cabinet decision and outlined a proposal that was later brought forward to the Cabinet. There was a single letter dealing with the general subject of "funding equitable access to broadband for most remote areas". That being so, I infer that the Cabinet decisions, the submission and the proposal to which Ms Beauchamp refers all in the same general subject area, so that disclosure of any of the paragraphs would be likely to disclose something of the Cabinet deliberations on the general subject matter. That being so, the rejection of the four paragraphs from the letter seems to me to fall within the Northern Land Council principle to which I have referred, and public interest immunity has been made out.

107 Once the Court has reached the conclusion that these three documents belong to a class that attracts immunity, the Northern Land Council case indicates that it is appropriate for the Court to rule against production of the documents without inspecting them, unless there are some extremely strong countervailing considerations governing body on the public interest in the administration of justice in commercial litigation. There are no such countervailing considerations and so it is unnecessary for me to inspect those documents.

108 Documents 35, 36 and 37 are said to refer to proposals that were later brought forward to the Cabinet. Very little information is given about these three documents in Ms Beauchamp's affidavit and in Schedule 2. The documents do not fall within a class to which extremely strong public interest considerations attach. The fact that they are proposals that were brought before Cabinet does not necessarily mean that their disclosure would reveal Cabinet deliberations. They appear from the limited information available to be in the category of "Cabinet documents" (including Cabinet submissions) identified by Priestley JA in Egan v Chadwick, which according to his Honour, might or might not be protected depending on their content. That means that I am not in a position to adjudicate on those documents without first inspecting them. I propose to do so and then make a ruling on them in accordance with the principles enunciated in these reasons for judgment.

Parliamentary privilege

109 The Commonwealth claims Parliamentary privilege with respect to documents 1 and 4 of Schedule 1. I have reached the conclusion that legal advice privilege applies to the confidential communication that would be disclosed by document 1. But there is no legal professional privilege claim in relation to document 4, and so it must be produced unless it is protected by Parliamentary privilege.

110 Section 16(1) of the Parliamentary Privileges Act 1987 (Cth) "declares and enacts" that the provisions of article 9 of the Bill of Rights of 1688 apply in relation to the Parliament of the Commonwealth. Article 9 of the Bill of Rights 1888 (1 Will and Mary Sess 2 c 2) states (in modern form):

"That the freedom of speech and debates or proceedings in Parliament ought not to be impeached or questioned in any court or place out of Parliament."

111 By s 16(2) of the Parliamentary Privileges Act, for the purposes of article 9 of the Bill of Rights, "proceedings in Parliament" includes all acts done in the course of, or for the purposes or incidental to, the transacting of the business of a House or of a committee, and includes "(c) the preparation of a document for purposes of or incidental to the transacting of any such business". Mr Markus said in his first affidavit that this provision prevents the acts of preparation of Question Time briefs, Senate Estimate briefs and incidental documents being impeached in a court or tribunal.

112 Document 1 is described in the Schedule as "Draft Senate Standing Committee -Answers to Estimates Questions on Notice - with handwritten notes to discuss with Don Markus (General Counsel, DBCDE)", and dated November 2008. In his first affidavit Mr Marcus said the document was prepared for purposes of and incidental to the transacting of business in the Senate Standing Committee on the Environment, Communications and the Arts. He said it is a draft of an answer to be submitted to the Senate Committee in response to a question on notice arising from a Supplementary Budget Estimates hearing in October 2008. In his third affidavit he explained that the basis of his earlier evidence (his evidence that the document was prepared for the purposes of that Standing Committee) was that the Secretary of the Department told him so, and the document was in the usual form for such answers.

113 Document 4 is described as "e-mail from Pip Spence (Assistant Secretary, PM & C)" to various named people, dated 7 February 2008. In his first affidavit Mr Marcus said the document was in two parts. He said the first part disclosed a Question Time brief containing information for the Minister's use in Question Time in the Senate. He contended that it was a document prepared for purposes of or incidental to the transacting of business in the Senate, and therefore that it is protected by s 16. He said the second part of the document was a Question Time brief prepared by Ms Pip Spence to be used by the Prime Minister in Question Time in the House of Representatives. He contended this was a document prepared for purposes of or incidental to the transacting of business of that House, and therefore that it is protected by s 16. In his third affidavit he explained that the basis of his earlier evidence was that Ms Spence had told him the second part of the document was a Question Time brief used by the Prime Minister in Question Time in the House of Representatives, and his review of the document showed that it was in the usual form for Question Time briefs.

114 Counsel for the liquidators criticised this evidence on the ground that Mr Marcus did not give the source for his assertion that the documents were prepared for use in the Parliament. But in my opinion that objection is overcome by Mr Marcus' third affidavit, which was not available to counsel at the time of preparation of submissions.

115 Senior counsel for the Commonwealth submitted that the preparation of each of the two drafts fell within s 16(2)(c), as the preparation of a document for purposes of or incidental to the transacting of the business of a House. That is clearly correct. Therefore, according to article 9 of the Bill of Rights, the preparation of those draft documents is not to be "impeached".

116 In Rowley v O’Chee [2000] 1 Qd R 207 the Court of Appeal of Queensland (McPherson JA and Moynihan J, Fitzgerald P dissenting) held that article 9 and s 16 had the effect of protecting such documents from compulsory production under a court order, on the ground that a compulsory production order would "impeach" the proceedings of Parliament. McPherson JA (at 222) adopted a dictionary definition for the word "impeach", so that conduct that would impede, hinder or prevent, or hurt detrimentally or prejudicially, or impair (and therefore "impeach") the transaction of the business of a House would impeach the proceedings of the Parliament.

117 As I understand their Honours' reasoning, it is not the inconvenience of having to copy documents and attend to production that causes the Bill of Rights to be attracted; it is that if Parliamentarians can be forced to produce for external purposes the documents they prepare for Parliamentary debate, they will be deterred from preparing such documents in future. After referring to the possibility of attachment or imprisonment for contempt of the court's order, McPherson JA said (at 224):

"Here nothing like that is threatened yet. Nevertheless, requiring Senator O’Chee to produce for inspection documents of the kind listed in section B of his affidavit, for which Parliamentary privilege is claimed, has an obvious potential to deter him and other Parliamentarians from preparing or assembling documentary information for future debates and questions in the House. In correspondence with the Committee of Privileges and the President of the Senate, which forms part of the material before us, Senator O’Chee claimed that threats of proceedings being taken against his informants had the effect of discouraging them from providing further information about Mr Rowley's activities, and so of restricting the Senator's ability to pursue the subject in the House."

118 The facts adumbrated in that passage are rather distant from the present case. Not surprisingly, counsel for the liquidators submitted that the case should be extinguished. There is no specific evidence before me that anyone would be "impeached" (in the sense of impaired or deterred or prejudiced) by producing document 4, nor (apart from the question of legal professional privilege) document 1. Nevertheless, and not without hesitation, I have reached the conclusion that compulsory production of these documents would "impeach" (as explained in Rowley v O’Chee) "proceedings in Parliament" (as extensively defined in s 16(2)(c) of the Parliamentary Privileges Act). It seems to me necessarily true, and not dependent upon the evidence of the particular case, that if briefings and draft briefings to Parliamentarians for Question Time and other Parliamentary debate are amenable to subpoenas and other orders for production, the Commonwealth officers whose task it is to prepare those documents will be impeded in their preparation, by the knowledge that the documents may be used in legal proceedings and for investigatory purposes that might well affect the quality of information available to Parliament. To take a step that would have that consequence would, I think, derogate from the force of the Bill of Rights and run contrary to the historical justification for that legislation, so ably sketched by McPherson JA (and see Mees v Road Corporation (2003) 128 FCR 418; [2003] FCA 306, at [75] -[79] per Gray J).

119 My conclusion as to the scope of Rowley v O’Chee is generally consistent with the judgment Jagot J in Sportsbet Pty Ltd v New South Wales (No 3) [2009] FCA 1283, at [19] and [21], though the issues in that case are rather different from the present case.

120 The consequence is that documents 1 and 4 are protected by Parliamentary privilege.

Conclusions

121 The liquidators' application for production of documents is unsuccessful as regards all disputed documents other than documents 35, 36 and 37 (as to which, judgment is reserved). I shall inspect those documents to determine whether they are protected by public interest immunity. I shall bring the proceedings back before me soon, to give my decision on those documents and make orders on the application.

122 As to costs, I am inclined to order the liquidators to pay the Commonwealth's costs as agreed or assessed, though that might have to be qualified by excluding costs with respect to documents 35, 36 and 37, in the event that I find they are not protected.

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LAST UPDATED:
4 March 2010