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NSW Crest

Supreme Court
New South Wales

Medium Neutral Citation:
Commonwealth of Australia as represented by the Department of Industry, Innovation, Science, Research and Tertiary Education v Fairfax Media Ltd & Anor [2012] NSWSC 1336
Hearing dates:
24 September, 2 & 3 October 2012
Decision date:
02 November 2012
Jurisdiction:
Equity Division - Duty List
Before:
Slattery J
Decision:

Fairfax Media's application for access to the documents held by the Prothonotary dismissed.

Catchwords:
PROCEDURE - defendant's interlocutory application for access to documents held in Court by the Prothonotary and the subject of an existing interlocutory restraint - documents the subject of Freedom of Information Act 1982 (Cth) review - whether documents should be disclosed to representatives of the first defendant, Fairfax Media, pending final hearing.
Legislation Cited:
Australian Information Commissioner Act 2010 (Cth)
Freedom of Information Act 1982 (Cth)
Cases Cited:
Bropho v Human Rights & Equal Opportunity Commission (2004) 135 FCR 105
Deta Nominees Pty Ltd v Viscount Plastic Products Pty Ltd [1979] VR 167
Johns v Australian Securities Commission (1993) 178 CLR 408
Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533
Royal Women's Hospital v Medical Practitioners Board of Victoria [2006] VSCA 85
The Commonwealth of Australia v John Fairfax & Sons Limited (1980) 147 CLR 39
Wheatley v Bell (1982) 2 NSWLR 544
Category:
Interlocutory applications
Parties:
Plaintiff:- Commonwealth of Australia as represented by the Department of Industry, Innovation, Science, Research and Tertiary Education
First Defendant:- Fairfax Media Ltd
Second Defendant:- GM Holden Pty Ltd
Representation:
Counsel:
Plaintiff:- L. Gyles SC; K. Dawson
First Defendant:- T. Blackburn SC
Second Defendant:- Mr R. P. L. Lancaster SC
Solicitors:
Plaintiff:- Robert Cutler, Clayton Utz
First Defendant:- Leanne Norman, Banki Haddock Fiora
Second Defendant:- Andrew Stewart, Baker McKenzie
File Number(s):
(2012/297370)
Publication restriction:
No

Judgment

1Between 6.15pm and 6.45pm on Friday, 21 September 2012 an officer of the Commonwealth Department of Industry, Innovation, Science, Research and Tertiary Education ("the Department") sent a series of emails with documents attached to Mr Aaron Patrick at Fairfax Media Limited ("Fairfax Media"). The Commonwealth Officer was emailing these documents in response to Mr Patrick's request for an internal departmental review under Freedom of Information Act 1982 (NSW) ("FOI Act"), Pt VI. The result of that internal review was that of the 32 documents the subject of the request, one was released in full, five were fully exempted from release and 26 were released subject to partial redaction. But the Commonwealth Officer mistakenly attached to the emails (1) the documents which were exempted from release, and (2) the un-redacted version of the documents, which were to be released only subject to redaction.

2The same evening the error was discovered and the Commonwealth made requests to Fairfax Media for destruction of soft copies of the documents and the return of hard copies. As a result of discussions between the parties over the weekend of 22 and 23 September 2012, Fairfax Media undertook not to publish the material exempted from production by the internal review decision of 21 September 2012, in advance of the Commonwealth commencing proceedings in the duty list.

3The Commonwealth commenced proceedings in the Equity division duty list on 24 September 2012. After argument between the Commonwealth and Fairfax Media the Court ordered that Fairfax Media be restrained from publishing or dealing with the exempted documents, to deliver up any hard copies of the exempt documents to the Prothonotary of this Court by 4pm on Tuesday, 25 September 2012, and to permanently delete any electronic version of the exempt documents by the same time.

4Fairfax Media carried out those orders but foreshadowed that it would seek access to the exempted documents so delivered to the Prothonotary. That application was heard after 2pm on 2 October 2012. Argument was completed on the morning of 3 October 2012. This judgment decides that application for access. For the reasons explained below, the application for access is declined.

5In addition to the Commonwealth of Australia as plaintiff and Fairfax Media as defendant, there is another party to the proceedings. The exempt documents concern information obtained from, and the business affairs of GM Holden Limited, which became the second defendant in the proceedings on 3 October 2012. Ford Australia also appears as amicus curiae in the proceedings.

6The parties asked the Court to decide the application for access as an interlocutory question prior to hearing the Commonwealth's Summons.

7These interlocutory reasons do not decide any final questions in the proceedings. They merely deal with the question of access. But a decision on the question of access is one which may qualify the way final relief would be given. This relationship is readily illustrated by comparing the final and interlocutory relief sought in the Commonwealth's Summons and Notice of Motion. The Commonwealth's Summons sought declarations: that Fairfax Media was not entitled to access to the exempted documents; that they contain information of private and confidential information and that their status as exempted documents was not effected by their accidental disclosure on 21 September 2012. Consequent upon those declarations the Commonwealth sought orders to the following effect:-

"4.An order that the Defendant, whether by itself, its directors, officers, employees, agents or otherwise, be restrained from publishing, using, copying, disclosing or dealing with the Exempted Documents (and the information contained therein).
5.Within 7 days of the date of this order, the Prothonotary of the Court and the Defendant:
(a)deliver up to the Plaintiff any hard copies of the Exempted Documents (and any hard copy document referring to or containing the information contained in the Exempted Documents) within his or its possession, power or control; and
(b)permanently delete or destroy any electronic version of the Exempted Documents (and any electronic document referring to or containing the information contained in the Exempted Documents) within his or its possession, power or control."

8The Commonwealth sought similar relief in its Motion. It sought an interlocutory restraint on publication and dealing similar to Order 4. The Commonwealth's Motion then sought orders that closely followed the orders that the Court made on 24 September 2012: that hard copies of the exempted documents be delivered to the Prothonotary; and that Fairfax Media permanently delete the soft copies of those documents. After Fairfax Media's compliance with the Court's orders it no longer had any copies of exempted documents. The Prothonotary then held all surviving copies, which was the position during the course of the argument for access.

9Thus, the issues for final hearing in these proceedings are whether the interim restraint on publication and dealing with the exempt documents should be made permanent, and secondly, whether the hard copy documents held by the Prothonotary should be returned to the Commonwealth or destroyed. The interlocutory issue upon Fairfax Media's claim for access to the documents is whether pending final hearing the hard copies of the exempt documents with the Prothonotary should be made available to Fairfax Media or its legal representatives on a restricted basis.

10Although in terms, Fairfax Media brings the current application for access it would not be a correct analysis of the course of this action to regard Fairfax Media as a party applying for the Commonwealth's documents held in sealed form by the Court. Rather, the Court is continuing the process of fashioning a form of interlocutory relief which does justice between the parties prior to final hearing. The Court made orders on the afternoon of 24 September 2012 in a busy duty list and without giving reasons at that time. But those orders included a grant of liberty to apply for orders for access to the exempted documents. This liberty to apply was granted because there was insufficient time on 24 September 2012 to argue questions of whether, pending final hearing, the exempted documents should be held by the Prothonotary or made more widely available for inspection by the legal representatives of Fairfax Media, including their in-house legal representatives, or even more widely to the Editor-in-Chief of the Australian Financial Review ("AFR"), Mr Michael Stutchbury and the journalist who made the original FOI Act request, Mr Aaron Patrick. The argument on 2 and 3 October 2012 allowed these issues to be argued in a fuller way by all parties at a suitable time whilst the Court managed the competing demands of the duty list.

11The application for access to these documents presents important conflicting claims. The Commonwealth in substance contends that the granting of access will prejudice its position at a final hearing and subvert the ordinary process of Fairfax Media's applying for the documents under the FOI Act, a process which is still incomplete. Fairfax Media claims that it may not be able to put all the arguments it wishes to advance at final hearing unless its legal representatives have access to the documents in the interim.

12On 24 September 2012, the Commonwealth demonstrated there was a serious question to be tried in relation to its application for final relief. Considering the balance of convenience and the requirements of justice the Court made the interlocutory orders that it did. But the current application is really concerned with the formulation of the final terms of the Court's interlocutory relief to the end of fixing a course best calculated to achieve justice between the parties, pending resolution of the Commonwealth's claimed final relief: cf Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 per McLellland J at 535.

13The Court has decided not to grant access to the exempt documents with the Prothonotary for the following reasons: (1) Fairfax Media can still exercise its rights under the FOI Act for access to the exempt documents which provides a more convenient avenue for the access of those rights and is available at common law; (2) Fairfax Media will still have an opportunity of arguing for access to the exempt documents during the final hearing or as a condition of final relief; and (3) the granting of access will qualify or restrict the entitlements conferred upon the Commonwealth and GM Holden Limited by statute under the FOI Act to have Fairfax Media's application proceed under that Act without access to the documents, until all remedies under that Act are exhausted.

14It is necessary now to state the factual background and the issues a little more fully.

Factual Background

15Most of the facts that the Commonwealth alleges do not appear to be in serious contest. The Commonwealth makes a compelling case that its officer was not authorised to email, and indeed accidentally emailed FOI Act, Part IV exempted documents to Fairfax Media in the course of a FOI Act, Part VI internal review of a previous decision.

16Fairfax Media's relevant requests under the FOI Act commenced in February this year. On 9 February 2012 Mr Aaron Patrick, the deputy news editor of the AFR made an FOI Act request to the Department for "memos written for industry minister Greg Combet about the car manufacturing industry in Australia". The Department considered and determined that request on 25 May 2012. Under that determination the Department released one document in full, exempted from full release a further 14 documents and partially exempted from release by redaction a further 17 documents. On 8 August 2012 Mr Patrick exercised his right of internal review under FOI Act, Part VI. Mr Patrick advanced a submission for an internal review of the Department's May decision on the basis that, "some of the information that was withheld was within the scope of information the [Freedom of Information] Act deems permissible for me to access". Mr Patrick then gave examples of the material said to have been wrongly withheld. About six weeks later, on 21 September 2012, the internal review procedure was complete and the documents were transmitted earlier that evening.

17The Department's letter of 21 September 2012 signed by the Head of the Manufacturing Division of the Department informed Mr Patrick that he was releasing one document in full, exempting from release a further five documents in full, and partially redacting a further 26 documents in accordance with applicable exemptions and conditional exemptions under the FOI Act. He explained this on page 2 of the letter commenting about his own decision, "as you will see, I have released a limited amount of additional information". In short, some nine documents had been removed from the exempted in full category and placed in the partially redacted category. But the message from the early parts of the letter was clear: the Commonwealth was still claiming full and partial exemptions for 31 of the 32 documents. The 21 September 2012 letter then gave reasons for the decision, as the FOI Act requires, which were detailed over a further four pages of the letter. The reasons for decision identify the basis upon which exemptions were determined: the deletion of irrelevant material (FOI Act, s 22); the expectation of causing damage to the international relations of the Commonwealth (FOI Act, s 33); material relating to cabinet documents (FOI Act, s 34); material obtained in confidence (FOI Act, s 45); trade secrets or commercially valuable information (FOI Act, s 47); material that could reasonably cause harm to Commonwealth/State relations (FOI Act, s 47B). The letter also identified a number of documents which were conditionally exempt and which it was determined that the benefit to the public resulting from disclosure would outweigh the benefit to the public of withholding the information and therefore the relevant documents were determined to be exempt from release, documents relating to, deliberative processes (FOI Act, s 47C), personal affairs (FOI Act, s 47F) and business affairs (FOI Act, s 47G).

18The Department's letter of 21 September 2012 was accompanied by a schedule identifying each of the 32 documents by description, stating the decision and the particular statutory provision said to justify the exemption in respect to that particular document and giving the reasons for the application of those sections. In the schedule the decision identified several statutory bases for the exemptions within each document. The reasons proffered for each exemption were often expressed in generalised statutory language of the FOI Act exemption criteria. Thus the schedule reinforced the effect of the letter, that the 21 September decision had determined there were multiple exempt documents.

19The documents emailed with the 21 September 2012 letter contrasted with the letter's contents: the attachments were 32 complete and un-redacted documents. The Commonwealth's evidence is that the officer concerned, "was not authorised to send un-redacted copies, which were to be retained by the Department and not released to the public consistent with the FOI Act ruling". It took about half an hour to send the documents because the Commonwealth Officer could only attach a few documents at a time to the emails being sent, presumably to allow them to pass through Commonwealth or Fairfax Media electronic firewalls. The Commonwealth's case is its officer telephoned Mr Patrick and requested deletion of the emails so that the correctly redacted documents could be re-sent. Mr Patrick indicated that he would seek legal advice. The general counsel of the Department, Ms Margaret Tregurtha sent a formal request to similar effect at 10.23pm on the 21 September 2012. The Department sought non-publication undertakings by 12 noon on Saturday, 22 September 2012. Ms Tregurtha's email indicated that the documents sent previously that evening were "disclosed to you in error". Mr Tregurtha forecast that the "correctly redacted documents" would shortly be sent, as indeed they were by the following day.

20On Monday, 24 September 2012 the AFR reported on the subject matter of its request without revealing the contents of the documents. The report described the documents as having come in to the AFR's hands "due to a clerical error". The AFR pointed out in an editorial on the same day that the Department "mistakenly emailed uncensored documents to this newspaper on Friday evening". The AFR then pointed out in its editorial "in the internet age that could have easily have resulted in the documents becoming immediately and widely distributed. But the Financial Review's first decision was not to do this while fully considering the matter".

21Even judging by the AFR's editorials and the limited evidence of the subject matter of the FOI Act requests before the Court, they do arguably relate to questions of considerable public and popular interest. Ms Leanne Norman, the solicitor for the AFR has explained in evidence that the FOI Act requests seeks information about government assistance to the major manufacturers in the local automotive manufacturing industry. The background she explains is the lowering of import protection through tariffs and quotas by Australian governments during the 1990's and that those tariffs and quotas have, to a certain extent, been replaced with budget subsidies to automotive companies, including the three major manufacturers in Australia, General Motors Holden, Ford Australia and Toyota Australia. She says, recounting her summary, that the burden of the subsidy has moved from consumers to taxpayers. In past years such subsidies have been the subject of Productivity Commission oversight with the Federal government providing $519 million of direct budget subsidies and tax concessions to the motor vehicle and parts sector in 2011 together with $660 million in net tariff assistance to that sector. But in January 2012 the Federal government announced the $34 million budget transfer to Ford Australia and the Victorian and South Australian governments jointly announced a $275 million assistance package for General Motors Holden local car making operations. The current FOI Act request is seeking information about this 2012 government assistance.

22The Court required the Commonwealth to plead its case in points of claim, in anticipation of Fairfax Media making a claim for access to the documents. The Commonwealth filed points of claim which set out the factual history recounted in these reasons. The Commonwealth pleaded that Fairfax Media knew that the exempted documents had been sent to it in error and that Fairfax Media had no continuing legal right to access to the exempted documents but that the return of the exempted documents had been refused, and that, but for the FOI Act request and the Commonwealth's error, Fairfax Media would not have such documents. The Commonwealth pleaded that Fairfax Media's conscience was bound against the use or publication of the documents because it had obtained them under a FOI Act request and they should not be used but be destroyed or returned.

23The Commonwealth supported its claim for final relief with two kinds of argument in its pleading: (1) retention of the documents would be inimical to the public interest and contrary to the rights of all parties in respect of the exempted documents under the FOI Act, in the case of Fairfax Media to pursue the further review under that Act and in the case of the Commonwealth to retain the documents until that review was complete; and (2) given the circumstances in which the plainly confidential information was received its continued retention would be unconscionable.

24The Commonwealth's right to interlocutory relief restraining publication use and dealing with the exempt documents is not the present issue. There is certainly a serious issue to be tried in respect of the claim for such a negative restraint. Fairfax Media has admitted early awareness of the Commonwealth's error. The prima facie confidentiality of the documents subject to further FOI Act review is readily inferable from the internal review decision of 21 September 2012. The authorities well justify negative restraints in such circumstances binding the conscience of a defendant in possession of such information pending final hearing: Deta Nominees Pty Ltd v Viscount Plastic Products Pty Ltd [1979] VR 167, Wheatley v Bell (1982) 2 NSWLR 544; Johns v Australian Securities Commission (1993) 178 CLR 408 at 459-60. Whether the documents and information in question belong to GM Holden Limited or are the information of the Commonwealth, such general equitable principle is attracted and would found a restraint.

25But the information concerned is information held by the Commonwealth. At common law and under the FOI Act different considerations apply to the grant of relief in respect of such information. This is the foundation of the various ways in which Fairfax Media puts its case on this interlocutory application and no doubt for final relief. Equitable principle in relation to breach of confidence has been fashioned to protect the personal and private interest of the citizen not the different interest of the executive government; when equity protects government information it looks at the matter "through different spectacles" and will determine the government's claim to confidentiality by reference to the public interest: The Commonwealth of Australia v John Fairfax & Sons Limited (1980) 147 CLR 39 at 51-2 per Mason J. Fairfax Media contends its defence of the claim against it will involve questions of freedom of speech - see Bropho v Human Rights & Equal Opportunity Commission (2004) 135 FCR 105 at [72] per French J.

26Fairfax Media argued that if it were not to have access to the exempt documents it would be denied procedural fairness for a number of reasons: it would not be able to challenge the Commonwealth's pleaded claims of unconscionability or that its confidence had been breached. Fairfax Media also contended that it would not be able to mount its public interest defence without access to the documents. Fairfax Media asked how it could argue its case, as outlined, without access to the documents.

27Fairfax Media's case was procedurally persuasive. It was much supported by the balanced way in which Fairfax Media had handled the situation in which it was faced on the evening of 21 September 2012. Fairfax Media paused and did not publish the documents. It negotiated in good faith through experienced solicitors and counsel to provide an interim solution until Monday 24 September 2012. On the evidence presented on this application, its counsel and solicitors, who are highly experienced practitioners in this area have offered to receive and retain the documents themselves for inspection. The Commonwealth rightly offers no criticism of the security of its information in their hands. Nor has any doubt been raised about Mr Stutchbury or Mr Patrick's proper handling of the information during the period in question.

Consideration

28But Fairfax Media's arguments are ultimately not persuasive in my view for a number of reasons.

29First, to allow Fairfax Media access to the documents now would negative the Commonwealth's and GM Holdings Limited entitlements under the FOI Act. This interlocutory decision is not the place for a detailed exposition of the FOI Act. But relevantly, at every stage of review of a decision not to grant access to exempt documents, the Commonwealth has a procedural entitlement to retain the documents, subject to their inspection by the relevant determining authority, until exhaustion of FOI Act remedies against it. Even the Information Commissioner with review functions under the FOI Act, an independent arbitrator of FOI Act requests and a statutory appointment under the Australian Information Commissioner Act 2010 (Cth), may not give access to the documents in question or their contents to an applicant in the course of deciding whether the document is an exempt document generally or a cabinet document: FOI Act, ss 55T and 55U. This procedure has not yet been activated by Fairfax Media. Moreover an agency such as the Department cannot decide to give access to a document, which is business information of a third party such as GM Holden Pty Ltd or Ford Australia, without affording an opportunity to that third party to put submissions in respect of the exemption contention: FOI Act, ss 27(4) and 27A(4).

30Moreover, the rights of third parties to put submissions and be heard before documents are disclosed by the Information Commissioner or by the Administrative Appeals Tribunal are protected by detailed procedural provisions within the FOI Act: with respect the Information Commissioner (FOI Act, ss 54P and 55A) and with respect to the Administrative Appeals Tribunal (s 60AA). These provisions provide layers of external consultation and the discharge of particular Ministerial and agency duties before access may be permitted. The interlocutory relief which is now being sought would cut across this whole process. Unless the Court itself would set up a detailed regime of consultation with the Minister and with all potentially affected third parties, the Commonwealth's entitlement not to provide the documents under these FOI Act procedural arrangements would be entrenched upon, in my view, by giving access to Fairfax Media to these documents.

31Secondly, there is no reason for the Court to re-design an informal access regime when one already exists which has not yet been fully utilised by Fairfax Media. Fairfax Media has begun to make use of a public right of access to government documents conferred upon it by the FOI Act, s 11. Fairfax Media may yet get further access to the documents that it seeks under the FOI Act through application to the Information Commissioner (FOI Act, Part VII) or to the AAT (FOI Act, Part VIIA). Authority suggests that the conferring of that statutory right both recognises and defines the public right of access to the documents that it covers: Royal Women's Hospital v Medical Practitioners Board of Victoria [2006] VSCA 85 at [47]. There are sound discretionary reasons for requiring Fairfax Media to exhaust its statutory rights, so defined, before giving it any access to the documents in question.

32Does to take this course amount to a denial of procedural fairness to Fairfax Media? In my view its procedural fairness argument is of diminished force in circumstances where Fairfax Media can avail itself of its FOI Act statutory remedies and would have a compelling argument to delay the final hearing of this matter, until it did. Even at such a final hearing it can still put its arguments for access to the documents and for dissolution of the interlocutory restraint on a final basis.

Conclusions and Orders

33In the result for the reasons indicated I have found that Fairfax Media's application for access to the documents with the Prothonotary will be dismissed. But the documents will stay with the Prothonotary pending final hearing. The Court's inclination is to reserve costs, because the parties' ultimate rights on this interlocutory application would only be determined on final hearing. If any party wishes to put a contrary costs written submission, it should do so by Friday, 23 November 2012 at 5pm, and I will consider the matter in chambers.

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Decision last updated: 05 November 2012