By Dan Star KC
Practice and procedure
Public interest immunity (PII) claims upheld by primary judge – application for leave to appeal on PII
In AIX20 v Director-General of Security [2025] FCAFC 38 (28 March 2025), the Full Court heard an application for leave to appeal concerning claims for public interest immunity (PII). The application also concerned the applicant’s proposal that the Court should order that those documents be disclosed to named, security-cleared counsel, subject to certain undertakings to be given by them, and used only in closed court and subject to suppression and non-publication orders (the Procedure).
In the substantive proceeding, the applicant was seeking declarations and damages arising from negligence of the Director-General of Security (Director-General) alleging that the Director-General had breached the duty to take reasonable care owed by him to the applicant in the exercise of the powers under ss17(1) and 37 of the Australian Security Intelligence Organisation Act 1979 (Cth). This was in relation to adverse security assessments of the applicant, which resulted in the applicant being detained in immigration detention. It was further alleged that the second respondent, the Commonwealth, falsely imprisoned the applicant.
The docket judge ordered the parties to give standard discovery pursuant to r20.14 of the Federal Court Rules 2011 (Cth). The Director-General made some PII claims. The applicant sought leave to appeal from the orders made by the primary judge upholding the Director-General’s PII claims.
The principles applicable to establishing a claim for PII were not in dispute (at [19]). On a proposed first ground, the Full Court rejected the applicant’s argument that the primary judge had erroneously applied an “unqualified rule of deference” to the opinions expressed by the Director-General’s deponent and that this led his Honour to accept uncritically all the reasons given by the Director-General’s deponent as to why the public interest did not favour disclosure. The Full Court further rejected the applicant’s contention that the primary judge failed to have regard to the nature of the proceeding and the “structural context” in which the Director-General’s claims fell to be determined, being that upholding of the claim as made would deny the applicant access to documents which the Director-General himself has determined were “directly relevant” to the issues in dispute (at [23]–[24]).
On a proposed second ground, the Full Court rejected the applicant’s submission that the primary judge erred by failing to consider the Procedure in the balancing exercise as between the competing interests in determining whether the claims for immunity should be upheld and instead dealt with the availability of the Procedure as a matter relevant to an “exercise of discretion” (at [31]–[37]).
Finally, the Full Court rejected a proposed third ground that the primary judge’s order upholding the Director-General’s claim for PII was more generally not the correct decision (at [38]–[44]).
Statutory interpretation
Crown immunity as a general principle of statutory interpretation
In Mayfield Development Corporation Pty Ltd v NSW Ports Operations Hold Co Pty Ltd [2025] FCAFC 43 (3 April 2025), the issues before the Full Court included a defence based on Crown immunity.
The appellant (Mayfield) alleged that it lost the opportunity to develop land at the Port of Newcastle because, in 2013, the State of NSW entered into deeds with the respective operators of Port Botany and Port Kembla. Entry into those deeds – as well as the arrival at an alleged understanding as between the two operators and their parent (together, the NSW Ports) and the State – was alleged by Mayfield to have contravened s45 of the Competition and Consumer Act 2010 (Cth) (CCA). The Australian Competition and Consumer Commission (ACCC) made a claim of that kind in separate Federal Court proceedings brought against the NSW Ports and the State. The ACCC’s claim failed for reasons that included a determination that construing the CCA by applying the principle of construction as to Crown immunity led to the conclusion that s45 of the CCA did not apply to the conduct of the NSW Ports in respect of their entry into the deeds. The Full Court upheld the Crown immunity-based conclusions of the primary judge – see Australian Competition and Consumer Commission v NSW Ports Operations Hold Co Pty Ltd (2023) 296 FCR 364 at [402], [410]–[412] and [427].
In its proceedings, Mayfield maintained its own claim that the CCA had been contravened. The primary judge determined that he was bound to follow the Full Court’s decision in the appeal in the ACCC proceedings as to Crown immunity, so Mayfield’s proceeding was dismissed. Mayfield appealed against the dismissal, submitting that the determination as to derivative Crown immunity was in error. In addition to opposing the appeal, each of the NSW Ports and the State contended that the primary judge erred as to the answers given to certain other questions involving issue estoppel and abuse of process, and the dismissal of the proceedings should be upheld on that basis.
The Full Court noted that since the decision in Bropho v Western Australia (1990) 171 CLR 1, it has been clear that the notion of the Crown’s immunity from the application of a statute does not involve the assertion of some form of prerogative, but rather is a general principle of statutory construction (at [11]–[12]).
Mayfield accepted that, in order for its appeal to succeed as to the application of the principle of statutory construction to the CCA, it had to persuade its Full Court that the decision of the Full Court in the appeal in the ACCC proceedings was “plainly wrong” (at [13]). This principally turned upon a proper understanding of the High Court decision in Australian Competition and Consumer Commission v Baxter Healthcare Pty Limited (2007) 232 CLR 1 (at [14]) (Baxter). The Full Court in Mayfield’s appeal held it cannot be said that Baxter affords compelling reasons why the conclusion of the majority in the appeal in the ACCC proceedings was wrong (at [39]–[47]). Mayfield’s appeal was dismissed.
Civil penalty
Contraventions of ss73J and 73V of the National Disability Insurance Scheme Act 2013 (Cth) (NDIS Act) – civil penalties
In Commissioner of the NDIS Quality and Safeguards Commission v Valmar Support Services Ltd [2025] FCA 11 (22 January 2025), the Court ordered the respondent (Valmar), pursuant to s82(3) of the Regulatory Powers (Standard Provisions) Act 2014 (Cth), read with s73ZK of the NDIS Act, to pay to the Commonwealth a pecuniary penalty of $1,916,250 for contraventions of ss73J and 73V of the NDIS Act that were the subject of six declarations.
Between February 2016 and May 2020, Valmar operated a residential group home in the ACT at which three National Disability Insurance Scheme (NDIS) participants, all men in their mid-40s, resided. Each of the residents had intellectual disabilities and all were known by Valmar to be at risk of choking when they consumed food or drink. Despite this, none of the support workers who attended to their care had any formal training with respect to this risk. On many occasions, Valmar exposed (or increased) the risk that the residents would choke on their food. On 14 May 2020, one of the residents, Mr H, choked and collapsed while eating food that had been prepared for him, and where the management plan meant to ensure his safety was not complied with. He died three days later.
Valmar accepted it was liable for numerous breaches of the NDIS Act. The parties submitted that the contravening conduct constituted 24 contraventions and proposed an agreed single penalty of $1,916,250 (at [50]–[52]).
The Court was concerned with the parties’ approach, which relied on, among other things, an approximate percentage of the maximum penalty (at [70]), for three reasons. First, “care must be taken to not reduce the highly evaluative exercise to a mathematical one” (at [71]–72). Second, the approach appeared “to misapprehend the degree of seriousness” of some contraventions and was not reflected in the proposed penalty (at [73]–[74]). Third, it was problematic “to impose a penalty by reference to a percentage said to be referrable to what is perceived to be percentages accepted by the Court in another case” (at [75]–[76]).
Nonetheless, the Court imposed the proposed penalty of $1,916,250. Raper J explained:
“Ultimately, however, when all … the relevant facts and circumstances (together with all relevant considerations) are weighed in the balance, reluctantly it is my view the agreed penalty is within the range of what could be considered an appropriate penalty, but is at the very lowest possible end of the range. I have … also taken into account the fact that a regulator, in this context, is not disinterested, and it can be assumed that the Commissioner has fashioned the penalty submissions, including the agreed amount, ‘with an overall view to achieving that objective and thus perhaps, if not probably, with one eye to considerations beyond the case at hand’ …” (at [79]).
