XY v UV

This was an appeal from a decision that s 5 Commercial Arbitration Act 2013 (“CAA”) did not displace the Supreme Court’s inherent jurisdiction to determine claims of parliamentary privilege and public interest immunity in an arbitration. The appellant also appealed the primary judge’s decision to exercise his discretion to leave those claims to the arbitrator, and the appellant argued that the Supreme Court was duty-bound to determine those claims. In rejecting those arguments, the Court of Appeal held that the primary judge’s conclusion that the Court’s inherent jurisdiction was not displaced by s 5 was correct because the protection of the proper working of government by upholding a party’s claims of PP and PII is not one of the matters governed by the CAA. Further, the Court of Appeal also found no error in the primary judge’s exercise of discretion, and held that the Supreme Court is not duty-bound to exercise the discretion to determine those claims. Accordingly, the appeal was dismissed and the appellant was ordered to pay the respondent’s costs of the appeal.

Mullins P, Boddice JA and Martin SJA

3 December 2024

Background

The appellant and respondent are parties to an arbitration conducted pursuant to the Commercial Arbitration Act 2013 (“CAA”). In the arbitration, the respondent sought certain documents to be disclosed by the appellant and the appellant objected. Following a decision of the arbitrator directing the appellant to produce the identified documents, the appellant withheld disclosure of a number of documents in whole or in part on the basis that the documents were subject to either parliamentary privilege (“PP”) or public interest immunity (“PII”). The arbitrator ruled that he had jurisdiction to determine the appellant’s objections. [1]–[3].

The appellant subsequently filed proceedings in the Trial Division of the Supreme Court of Queensland seeking relief from production to the arbitrator and to the respondent of the sought-after documents on the basis of PP and PII. The respondent argued that the Supreme Court did not have jurisdiction to rule on the PP and PII claims raised in the arbitration because s 5 CAA has displaced the Court’s jurisdiction to determine those claims, and to do so would therefore amount to the Court impermissibly intervening in the arbitration. Alternatively, the respondent argued that as s 5 had not displaced the Court’s jurisdiction, the Court should exercise its discretion to decline to rule on the claims because they are currently before the arbitrator for determination. The primary judge dismissed the appellant’s application: [2024] QSC 262.

Section 5 CAA provides:

“In matters governed by this Act, no court must intervene except where so provided by this Act.”

In the present proceedings, the appellant appeals against that decision on two grounds:

(a)The primary judge erred in failing to determine that the appellant was relieved from producing the documents over which the appellant claimed PP and PII.

(b)The primary judge erred in disposing of the appellant’s application as a question of the exercise of discretion. [5]–[7].

The primary judge’s reasons

In dismissing the application, the primary judge analysed decisions on the construction of s 5 CAA. In particular, the primary judge noted the construction of s 5 CAA adopted by the Western Australian Court of Appeal in Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd (2020) 55 WAR 435 (“Hancock Prospecting”). The essence of the Court’s observations in that case was that the CAA confers upon courts a variety of powers and functions in relation to which the Court may intervene in the arbitral process, and the CAA is intended to be a code in relation to those matters. The primary judge noted that that construction is supported by the commentary in the “Explanatory Note by the UNCITRAL secretariat on the 1985 Model Law on International Commercial Arbitration as amended in 2006”, where it is relevantly stated:

“… [Section 5] thus guarantees that all instances of possible court intervention are found in the piece of legislation enacting the Model Law, except for matters not regulated by it …”

The primary judge concluded from the analysis of s 5 CAA in Hancock Prospecting “that it is only matters which come within the phrase ‘matters governed by this Act’ in s 5 which come within the scope” of the code prescribed by the CAA, and that if a matter falls outside that description and is not regulated by the provisions of the CAA, the prohibition in s 5 on court intervention will not apply. [14]–[17].

The primary judge concluded that s 5 CAA had not displaced the Court’s inherent jurisdiction to determine the appellant’s claims of PP and PII because the absence of any statutory mechanism under the CAA that confers upon the Court the function of determining the PP and PII claims made by the appellant in the arbitration means that such determination by the Court is not a matter governed by the CAA and the prohibition on court intervention in s 5 therefore does not apply to the determination of those claims. [19].

With respect to the exercise of discretion that the appellant sought in its favour in the proceedings below, the primary judge considered a number of factors and concluded on balance that the discretion should not be exercised in the appellant’s favour and that given the stage the arbitration had reached, it was appropriate to leave those claims to be determined by the arbitrator. [20]–[21].

Did s 5 CAA displace the Supreme Court’s jurisdiction to determine the PP and PII claims?

The Court of Appeal held that there was no error in the primary judge’s reasons or conclusions. The Court held that the construction of s 5 in Hancock Prospecting reflects the intention of Art 5 of the Model Law, and that because Hancock Prospecting was the decision of another intermediate appellate court in a matter of statutory interpretation of uniform national legislation, the Court was therefore bound to follow that decision unless persuaded it was plainly wrong: R v Falzon (2018) 264 CLR 361, 380–381 [49]. [28].

The Court reasoned that contrary to the appellant’s argument, the protection of the proper working of government by upholding a party’s claims of PP and PII is not one of the matters governed by the CAA. It considered that the ruling on such claims by an arbitrator that may be incidental to a dispute over discovery of documents in the arbitration is concerned with discovery and may raise the same issues, but is a separate “matter” (in the sense used in s 5) from the public interest in the operation of government that is protected when the Supreme Court upholds claims of PP and PII. There was therefore no error in the primary judge’s conclusion that the prohibition in s 5 did not displace the Court’s inherent jurisdiction to determine the claims of PP and PII. [29].

Was the Supreme Court bound to exercise the jurisdiction to protect the appellant’s claims of PP and PII?

The appellant argued that the primary judge was duty-bound to determine the claims of PP and PII in circumstances where the primary judge had determined that the Supreme Court’s jurisdiction to determine those claims had not been displaced. [30]. In rejecting that argument, the Court of Appeal held that the relief sought by the appellant in reliance on the Court’s inherent jurisdiction did not deprive the Court of the discretion to determine whether it was appropriate to grant that relief. The effect of the relief that the appellant was seeking was that to resist production of the sought-after documents to at least the arbitrator, and the primary judge’s decision to exercise the discretion to leave the claims of PP and PII to be determined by the arbitrator meant that the arbitrator could deal with those claims as contemplated in a procedural order he issued. [34].

The Court of Appeal found that there was no error in the factors which the primary judge considered in exercising the discretion, relevantly including the stage at which the arbitration was at (with a hearing scheduled for February 2025). The Court rejected the appellant’s contention that the primary judge was duty-bound to exercise the discretion in its favour as taking “no account of the discretion that remains in the Court as to whether it should exercise its inherent jurisdiction or power where that applies.” [35]–[36].

Disposition

The appeal was dismissed, and the respondent was ordered to pay the appellant’s costs of the appeal. [37].

A Lukacs