Sankey v Whitlam

142 CLR 1
21 ALR 505

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(Judgment by: AICKIN J)

Between: SANKEY
And: WHITLAM

Court:

Judges: Gibbs ACJ.
Stephen J.
Mason J.
Jacobs J.

Aickin J.

Subject References:
Criminal Law
Evidence
Declaration

Judgment date: 9 November 1978

Sydney

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Judgment by:
AICKIN J

In this matter I have had the advantage of reading the reasons for judgment prepared by my brother Stephen, with which I am in general agreement. There are, however, certain observations which I wish to make on some of the questions arising, and I shall also deal with two aspects in respect of which I wish to state in my own words the conclusions which I have formed. Save as to those two aspects, I am in complete agreement with his reasons .

The proceedings before the magistrate at Queanbeyan out of which these actions for declarations in the Supreme Court of New South Wales have arisen were instituted by information lodged by the plaintiff Sankey. The first information charged that the defendants:

"... conspired with each other to effect a purpose that was unlawful under a law of the Commonwealth, that is to say to effect the borrowing by the Commonwealth of Australia from overseas sources a sum in the currency of the United States of America not exceeding the equivalent of $4,000 million in contravention of the Financial Agreement, 1927 as amended, the Constitution Alteration (State Debts) Act, 1928 and the Financial Agreement Act, 1944 as amended."

The second information alleged a common law offence, namely, that the defendants conspired to deceive the Governor-General of Australia in that

"... they being members of the Federal Executive Council and at a meeting of the same agreed with each other to recommend for the approval of the said Governor-General inter alia that the said Honourable Reginald Francis Xavier Connor be authorized to borrow for temporary purposes a sum in the currency of the United States of America not exceeding the equivalent of $4,000 million, notwithstanding that at the time of the said agreement the said proposed borrowing was not for nor intended to be for temporary purposes only and was in contravention of the Financial Agreement, 1927 as amended, the Constitution Alteration (State Debts) Act, 1928 and the Financial Agreement Act, 1944 as amended."

The acts so particularized were alleged to be, as to the first, an offence against s. 86 of the Crimes Act 1914, as amended, and, as to the second, a common law conspiracy to do an unlawful act. Section 86 (1) (c) of the Crimes Act 1914 as amended provides that:

"A person who conspires with another person ...

(c)

to effect a purpose that is unlawful under a law of the Commonwealth;

...

shall be guilty of an indictable offence ."

In respect of the second charge, the unlawful nature at common law of the act alleged depended, in part at least, upon such act being contrary to the Financial Agreement, the Constitution Alteration (State Debts) 1928, and the Financial Agreement Act 1944.

When the proceedings for declarations were instituted by the plaintiff Sankey in the Supreme Court of New South Wales after the magistrate had given certain rulings in relation to the production of documents and the operation of "Crown privilege" in relation thereto, he sought only declarations with respect to Crown privilege as claimed by the persons subpoenaed to give oral evidence or to produce documents. In those proceedings, however, a cross claim was made by the respondent Whitlam seeking declarations which may be summarized as follows:

1.

A declaration that the Financial Agreement 1927 as amended is not a law of the Commonwealth within the meaning of s. 86 (1) (c) of the Crimes Act .

2.

A like declaration in respect of c11. 3(8), 3(15), 4(4) and 6 of the Financial Agreement 1927.

3.

A like declaration that the effecting of a borrowing in contravention of the Financial Agreement 1927 is not the effecting of a purpose unlawful under a law of the Commonwealth within s. 86 (1) (c).

4.

Declarations with respect to certain of the documents that their disclosure and admission in evidence would be contrary to the public interest and contrary to law, notwithstanding that the Commonwealth had not raised any objection to their production. These documents were called the "Group A" documents.

It follows from that brief account of the nature of the proceedings in the Supreme Court, which were removed into this Court, that no questions arise as to the second information, other than those concerning "Crown privilege".

I turn now to the question whether the conspiracy charged in the first information was to do an act which would have been contrary to a law of the Commonwealth within the meaning of s. 86 (1) (c) of the Crimes Act. A preliminary question arises as to the meaning of the expression "law of the Commonwealth" in this context. This point arises in the cross claim for a declaration instituted by the defendant Whitlam.

In relation to this particular issue I agree with what my brother Stephen has said, save that I express a concluded view on a point which he leaves open. I agree that the Constitution itself as originally enacted is not a "law of the Commonwealth" in the relevant sense. I would also agree that the Constitution as it stands from time to time in the light of amendments made to it is also not a "law of the Commonwealth" in the relevant sense. The amendments viewed separately, however, stand in a somewhat different position. The procedure for alteration of the Constitution is prescribed in s. 128 and, in my view, that procedure requires that the Constitution may be amended only by an Act of the Parliament of the Commonwealth which in its ordinary signification is plainly enough a "law of the Commonwealth". It is true that the process of enacting an amendment of the Constitution requires a different procedure for the production of an effective Act of the Parliament than that which is normally required. But this is not the only instance of such a situation. It is, I think, clear that a measure passed under the procedure prescribed in s. 57 of the Constitution for dealing with deadlocks as between the House of Representatives and the Senate is just as much an Act of the Parliament and a law of the Commonwealth when passed in accordance with the procedure prescribed for a joint sitting of the House of Representatives and of the Senate, to which the Royal assent is given, as is a measure approved separately by each of the House of Representatives and the Senate to which the Royal assent is given. It does not appear to me that an amendment to the Constitution under s. 128 stands in any different position. The procedure prescribed by s. 128 does not appear to me to differ materially from the special procedure prescribed by s. 57, which, with the Royal assent, produces that which is in truth an Act of the Commonwealth Parliament, i.e. a law of the Commonwealth. It is this point which my brother Stephen leaves open.

That, however, is not sufficient to dispose of the present point because the essential question remains, namely, whether something done contrary to the Financial Agreement itself has the quality of something done contrary to a law of the Commonwealth, i.e. is contrary to s. 105A as enacted by a law of the Commonwealth.

It has long been established that the Financial Agreement is given paramountcy by s. 105A so that it overrides both Commonwealth and State laws and indeed even the other provisions of the Constitution itself (New South Wales v. The Commonwealth (No. 1) (1932) 46 CLR 155 . However, I agree that the particular statements in that and other cases which were relied upon were directed to issues quite different from the present. There is, however, a long established distinction between, on the one hand , legislation which merely gives validity to a contract and makes its provisions binding on the parties, notwithstanding that their agreement cannot alone produce that result because of some lack of power or some other source of invalidity, and on the other hand, legislation which imposes a statutory obligation on the parties to carry out the terms of the contract, a provision which gives to those terms themselves the force of law. The distinction is a fine one and not perhaps wholly satisfactory, but nonetheless it is well established by decisions, both in England and in this Court. Those cases are cited in the judgment of my brother Stephen and I need not repeat the references or citations here. It is clear enough that s. 105A does not directly give to the provisions of the Financial Agreement the force of law. The obligations under the Financial Agreement derive their binding force from the Agreement itself, notwithstanding that that Agreement derives its binding force from an Act of the Parliament, namely, s. 105A. The terms of the Financial Agreement accordingly derive their force only indirectly from an Act of the Parliament, and fall within the first, rather than the second, category referred to. That conclusion appears to me to make it impossible for the first information to stand. Accordingly, I agree that a declaration in the form referred to in the reasons of my brother Stephen should be made.

The various questions with respect to Crown privilege apply equally in relation to the first and the second information, but in the light of what I have said about the first information, I regard them as live issues only in relation to the second. I am of opinion that the Loan Council papers are relevant to the second information as framed. The second information charges that the relevant persons conspired to deceive the Governor-General that the "proposed borrowing" was for and intended to be for temporary purposes, and was in contravention of the Financial Agreement 1927, as amended, the Constitution Alteration (State Debts) 1928 and the Financial Agreement Act 1944, as amended. For that charge to be made out it would, as I see it, be necessary to establish first the agreement between the parties and that its purpose was to deceive the Governor-General. The unlawful character of the conspiracy might be derived merely from the intention to deceive, but that involves establishing that the borrowing was not for temporary purposes only. The information, however, involves the further allegation that the borrowing was not authorized by the Financial Agreement. It is not desirable to consider now whether or not the latter is an essential element requiring proof. It may be well thought necessary to prove all the elements specified in the information, even if it might be possible to succeed by proof only of the first three. It may be enough to establish a conspiracy for an unlawful purpose within the scope of the common law offence to show that the loan was not for temporary purposes and that the conspiracy was to deceive the Governor-General into thinking that it was. The possibility remains, however, that the borrowing might have been within the limits authorized by the Loan Council and, therefore, lawful. The conspiracy as alleged involves both those elements of unlawfulness, though they may be alternatives. It appears to me, therefore, that the amount authorized by the Loan Council would be relevant to the second information.

So far as the question of "Crown privilege" is concerned the only point with which I wish to deal separately is that concerning the claim for Crown privilege in relation to what were called the "Loan Council documents". The subpoena which was issued in relation to these documents was addressed to the Secretary of the Australian Loan Council and required the production of the following:

"A. Loan Programme or Programmes submitted by or on behalf of the Commonwealth at Loan Council Meetings held during 1974 and prior to 20/5/75.

B. All Loan Programmes approved at any Loan Council Meetings held during 1974 and prior to 20/5/75. C. Minutes of all Loan Council Meetings held between 1/1/74 and 20/5/75."

The affidavit in which privilege was claimed in respect of these documents was sworn by Mr. P. R. Lynch, who was at the date of swearing the affidavit, the Treasurer. After referring to the nature of the Loan Council and its membership and stating that an officer of the Department of the Treasury acts as secretary to the Loan Council, and stating its function under the Constitution and under the agreements approved pursuant to the provisions of s. 105A of the Constitution, he said:

"Meetings of the Australian Loan Council are as a matter of practice held in camera and attendance at such meeting is restricted to persons authorised to attend.

I am informed by Alan Paterson Bailey, Assistant Secretary (Loans and Debt Management Branch) of the Department of the Treasury and verily believe the documents referred to in the said subpoena relate to and record policy deliberations and discussions between Ministers of the Crown representing the Commonwealth of Australia and the constituent States and decisions reached by such persons after such discussions. It is apparent from the nature of the business of the Council that its discussions involve the fiscal policies of the constituent Governments . Discussion of such matters involves both contention and compromise and this upon topics which by their nature are politically sensitive. This discussion has in the past taken place in the belief that it is and will remain secret unless the Council otherwise elects."

There are a number of features of those paragraphs, and corresponding paragraphs in other affidavits, which I find unsatisfactory in relation to the proper mode of claiming "Crown privilege". The deponent does not state that he has himself perused the particular documents. He does not specifically state that the minutes record either in full or in summary form the discussions which took place at those meetings or whether they record merely the decisions arrived at. Different considerations would apply to records of discussions of State and Commonwealth government policy and arguments for and against raising larger or smaller loans and the division thereof among the members, on the one hand, and the mere recording of a decision that the Commonwealth was authorized to borrow X million dollars on its own account. Moreover, the affidavit states merely that in the opinion of the Treasurer the documents "belong to a class of documents which public interest requires should not be disclosed" without indicating what is the class or category into which they are said to fall. It is not, in my opinion, enough simply to say that documents belong to a class which public interest requires should not be disclosed. That itself is not a category which is relevant or helpful. The authorities referred to in other judgments show that there are some categories of documents as to which authority has established that they should either not be disclosed at all or perhaps only in exceptional circumstances, but there is no category or class simply of documents which should not be disclosed. If a new class is to be established which is not to be produced, irrespective of the contents of any particular document, then more information than is here given would be required. Generally it seems to me that the affidavits claiming Crown privilege are cast in a form appropriate to the law as it stood prior to the decision of the House of Lords in Conway v. Rimmer [1968] AC 910 and not the law as it now stands.

In the case of the Loan Council documents, however, the matter is simplified by reason of the fact that, in the course of argument, counsel for the plaintiff Sankey made it clear that it was not all the documents which were mentioned in the subpoena which were in fact required, but only one part of one category of documents. He drew attention to the fact that the Auditor-General publishes the figure for the amount which the Commonwealth is authorized by the Loan Council to borrow for the States. He said that what was required was only the actual figure itself, i.e. the amount which the Commonwealth was authorized by the decisions of the Loan Council to borrow on its own account in the relevant period. This concession, if such it be, was rightly made because there would seem to be no basis upon which any of the documents specified in par.1 of the subpoena could be relevant to the prosecution, nor any basis on which any part of the documents specified in pars. 2 and 3 could be relevant, other than those parts which recorded the decision or decisions as to the amount which the Commonwealth was authorized to borrow, including the division, if any, into amounts to be borrowed in Australia and those to be borrowed overseas.

There is no doubt that the Court may cover up certain material in a document which might be either irrelevant, or contrary to the public interest if it were published, while making other parts of that document available for inspection and use in open court. This appears clearly from the speeches in Conway v. Rimmer, see per Lord Reid [1968] AC, at pp 943-944, 946, 950 and per Lord Pearce [1968] AC, at p 988 . So far as appears the magistrate did not consider this aspect and it is not clear whether or not it was argued before him.

We do not know whether the relevant parts of the documents can be effectively disclosed, while covering up the balance, but it certainly seems highly probable that they could be. I can see no basis upon which it could properly be contended that a figure determined by the Loan Council as being the maximum amount which the Commonwealth might borrow on its own account in a fiscal year now some three years in the past was of so highly confidential a nature that its disclosure would be detrimental to the public interest. No satisfactory explanation as to why such publication would be contrary to the public interest was offered in the affidavit or in argument, and so far as I can see none could exist. Assuming (without deciding) that the minutes of the Loan Council belong to some class of documents (as yet unspecified) such that their disclosure must be refused without examining the contents of the particular document, I do not consider that the same rule can be applied to one part of such a document which records only a decision as to monetary limits of the Commonwealth borrowing. Details of the process of decision-making may stand in a different position, but they are irrelevant to these informations.

In the circumstances it would seem that the proper course is for this Court itself to inspect the documents produced in answer to the subpoena with a view to seeing whether that part of the minutes or record of the decisions of the Loan Council, which records the limit of authorized borrowing by the Commonwealth on its own account, can be inspected, while covering up the remainder so as not to reveal the balance of the document. If on inspection it appears that it can be so inspected then, in my opinion, there can be no reason for rejecting its tender or for treating it as being the subject of Crown privilege. It is, therefore, not necessary for me to consider whether discussions as between the members of the Loan Council with respect to borrowing are of such character that it would be sufficiently contrary to public interest for them to be revealed either at all or after some particular period of time, since they would be irrelevant to either information.

A relevant factor in relation to the Loan Council minutes, as distinct from other Loan Council documents, would be that if the objection taken were well founded, it would never be possible to ascertain whether the Commonwealth had borrowed in excess of an authorized figure whether on its own account or on account of the States in a manner contrary to the Financial Agreement. No reason was advanced why such breaches (if any there be) should remain suppressed forever .

The result of the Court's inspection of the documents appears in a separate statement by the Court.

Accordingly I agree with the order as proposed by my brother Gibbs.

STATEMENT OF THE COURT

The Court has examined the Loan Council documents, and finds nothing in the first nine lines of par. 71 at p. 7602 of the minutes of the 104th meeting of the Loan Council, or in the first ten lines of par. 10 at p. 7954 of the minutes of the 105th meeting of the Loan Council (being, in each case, the lines ending immediately before the words "State of New South Wales"), the disclosure of which would be in any way prejudicial to the public interest, or to the proper functioning of the Loan Council. The Court is of opinion that it is possible to seal up or otherwise deal with the documents so that only the contents of the said parts of par. 71 and par. 10 are disclosed, and that the contents of those parts of the documents should be made available in the proceedings .

ORDER

On the summons of Danny Sankey: - 1. Declare that the documents or portions thereof set out in the Schedule hereto are not privileged from production and that the magistrate was in error in upholding the objections taken by the Commonwealth to their production and disclosure. 2. Order that Edward Gough Whitlam, James Ford Cairns and the Commonwealth of Australia pay Danny Sankey his taxed costs of the summons.

On the cross-claim of Edward Gough Whitlam: - 1. Declare that the information laid on 20th November 1975 against Edward Gough Whitlam, alleging an offence under s. 86 of the Crimes Act 1914, (Cth) as amended, is bad in law. 2. Otherwise dismiss the cross-claim. 3. Order that Danny Sankey pay Edward Gough Whitlam his taxed costs of the cross-claim.

THE SCHEDULE

(a)

Explanatory memorandum and schedule relating to a meeting of the Executive Council held on 7th January 1975.

(b)(i)

a memorandum dated 18th December 1974 from the Acting Frist Assistant Secretary, Department of the Treasury to the Secretary, Department of Minerals and Energy;

(ii)

a memorandum dated 23rd December 1974 from the Deputy Secretary (Supply and General), Department of the Treasury to the Acting Secretary, Department of Minerals and Energy; and

(iii)

a memorandum dated 13th January 1975 from the Acting Secretary, Department of the Treasury to the Acting Secretary, Department of Minerals and Energy enclosing a copy of letters dated 6th and 13th January 1975 from the then Treasurer to the then Minister for Minerals and Energy .

(c)

Note for file in the Department of the Treasury dated 13th December 1974 and headed "Middle East Loan Proposal: Record of Meeting with the Prime Minister at 2 p.m., 13th December 1974".

(d)

Minute paper from Mr. John O. Stone to the Treasurer dated 10th December 1974, being a memorandum or a copy thereof addressed to the Treasurer and/or Department of Minerals and Energy, relating to a proposal for borrowing from Middle East sources.

(e)(i)

The first nine lines of par. 71 at p. 7602 of the minutes of the 104th meeting of the Loan Council; and

(ii)

the first ten lines of par. 10 at p. 7954 of the minutes of the 105th meeting of the Loan Council, (being in each case, the lines ending immediately before the words "State of New South Wales").