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Published online by Cambridge University Press: 24 January 2025
Individuals and organisations are frequently required to provide public agencies with information about their affairs which they would not wish disseminated to others. Income tax returns represent one illustration. From time to time attempts are made to compel the recipient public agencies to produce such material as evidence in court proceedings. The agency may resist disclosure on the basis of a statutory secrecy provision and/or a claim to Crown privilege. The court is thus required to resolve a conflict between competing public interests: the public interest in the proper administration of justice, and the public interest in the ability of the agency to maintain the confidentiality of information entrusted to it. Professor Nettheim considers a number of decided cases and concludes that, on the whole, the courts have failed to develop a body of principles adequate to deal with the situation. In particular, established Crown privilege doctrines about waiver and secondary evidence are inappropriate in this context. The author puts forward a suggested model of principles and procedures, and notes that similar issues may arise for adjudication under Freedom of Information legislation, particularly in the form of the “reverse FOIA lawsuit”.
I am grateful to my colleague, Associate Professor Mark Aronson, for his helpful comments, though, in fairness to him, I should point out that he is in substantial disagreement with some of the propositions I put forward.
1 Conway v. Rimmer [1968] A.C. 910, 946 per Lord Reid.
2 Several journal articles have focussed on aspects of the particular area of income tax returns, e.g. McTavish, Casey, “Moving for the Production of Income Tax Return Copies in Civil Litigation” (1955) 41 Iowa Law Review 98Google Scholar; McKee, “Is Production of Copies of Income Tax Returns Governed by the Common Law Rule of Public Policy?” (1958) 32 A.L.J. 178Google Scholar; Carlson, “The Confidentiality of Income Tax Returns during Pre-Trial Discovery” (1973) 62 Illinois Bar Journal 188Google Scholar; Caridi, “The Use of Tax Returns in Non-Tax Prosecutions” (1975) 41 Brooklyn Law Review 580Google Scholar.
3 Rowell v. Pratt [1938] A.C. 101, 113 per Lord Maugham.
4 On the situation in the United Kingdom concerning the Official Secrets Act, 1911 see Williams, Not In The Public Interest (1965)Google Scholar; Report of the Departmental Committee on Section 2 of the Official Secrets Act 1911 (The Franks Report) Cmnd 5104 (1972); Birtles, “Big Brother Knows Best: The Franks Report on Section Two of the Official Secrets Act” [1973] Public Law 100Google Scholar; Jacob, “Some Reflections on Governmental Secrecy” [1974] Public Law 25Google Scholar.
The New Zealand situation is considered in the light of the Franks Report in Wardell, “The Official Secrets Act 1951 and the Unauthorised Disclosure of Information” (1976) 3 Auckland University Law Review 25Google Scholar.
For a survey of Australian federal and State law see Campbell, Whitmore, Freedom in Australia (2nd ed. 1973) Ch. 18CrossRefGoogle Scholar.
5 A list of Commonwealth legislative provisions of this nature appears in the Report of the Royal Commission on Australian Government Administration (1976) Appendix Volume Two, 53-54. A listing of some British provisions can be found in Halsbury's Laws of England (4th ed.) Vol. 13, para. 93. An account of some U.S. provisions is provided in Wallace, “Discovery of Government Documents and the Official Information Privilege” (1976) 76 Columbia Law Review 142, 149-152CrossRefGoogle Scholar.
6 Recent illustrations of “leaks” that have led to litigation are Rogers v. Home Secretary [1973] A.C. 388, 400 and New York Times Co. v. United States (The Pentagon Papers Case) (1971) 403 U.S. 713. D.P.P. v. Withers [1975] A.C. 842 provides an illustration of the acquisition of such information by deception.
7 E.g. The Australian, 24 August 1973, 5 (“Tax laws hinder police. They can't gain access to information on where criminals get their money”); cf. The National Times, 3 February 1978, 9-13.
8 Jacob, “Some Reflections on Governmental Secrecy” [1974] Public Law 25, 32-38Google Scholar citing, especially, Rule, Private Lives and Public Surveillance (1973).
9 The Privacy Act, 5 U.S.C.A. § 552a, enacted by Congress in 1974, was the culmination of intensive consideration of the issues at congressional and departmental levels and in such agencies as the Administrative Conference of the United States. For an account of effects of the new legislation, see Belair, “Agency Implementation of the Privacy Act and the Freedom of Information Act: Impact on the Governments' Collection, Maintenance and Dissemination of Personally Identifiable Information” (1977) 10 John Marshall Journal of Practice and Procedure 465Google Scholar.
On the specific issue of income tax returns, post-Watergate revelations of attempted abuse of Presidential access to income tax records has led to measures to confine use of such returns to tax purposes: Caridi, “The Use of Tax Returns in Non-Tax Prosecutions” (1975) 41 Brooklyn Law Review 580Google Scholar.
10 Alfred Crompton Amusement Machines Ltd v. Customs and Excise Commissioners (No. 2) [1974] A.C. 405.
There have been statutory extensions in some jurisdictions to cover evidence of communications in the course of other “professional” relationships such as doctor–patient, though questions may remain whether evidentiary privilege extends to patient information in the hands of hospitals or public health agencies: Springer, “Professional Standards Review Organization: Some Problems of Confidentiality” (1975) Utah Law Review 361Google Scholar.
11 Cross, Evidence (4th ed. 1974) 264-271Google Scholar.
12 Norwich Pharmacal Co. v. Customs and Excise Commissioners [1974] A.C. 133; Alfred Crompton Amusement Machines Ltd v. Customs and Excise Commissioners (No. 2) [1974] A.C. 405. Lord Denning, however, adheres to his viewpoint: Science Research Council v. Nasse [1978] 3 All E.R. 1196, 1206-1207. This case indicates a relatively new context in which the issues touched on in this article may arise-adjudication of complaints under anti-discrimination legislation.
13 In Robinson v. State of South Australia (No. 2) [1931] A.C. 704, 723 the Privy Council considered that it should be regarded as an evidentiary privilege, at least for the purpose of bringing it within the scope of a rule of court authorising the court to inspect any document for which privilege is claimed. A contrary view was taken, for the same purpose, by the House of Lords in Duncan v. Gammell, Laird & Co. Ltd [1942] A.C. 624, 641-642 (Lord Simon L.C.).
Now that it has been established in most common law jurisdictions that the courts have a residual power to inspect documents for which “Crown privilege” is claimed (Conway v. Rimmer [1968] A.C. 910) the courts have been able to consider the question independently of this consideration. They have tended to support the Duncan view that the “public policy” or “public interest” claim to non-disclosure is distinct: Rogers v. Home Secretary [1973] A.C. 388, 400 (Lord Reid), 406 (Lord Pearson), 406-407 (Lord Simon of Glaisdale), 412 (Lord Salmon); Sankey v. Whitlam (1978) 53 A.L.J.R. 11, 14, 21 (Gibbs A-C.J.), 26 (Stephen J.), 43 (Mason J.).
See generally Halsbury's Laws of England (4th ed.) Vol. 13, paras. 86-91.
14 Rogers v. Home Secretary [1973] A.C. 388; Sankey v. Whitlam (1978) 53 A.L.J.R. 11, 23-24 (Gibbs A-C.J.) 29, 33 (Stephen J.), 45 (Mason J.).
15 It is primarily on the basis of these last two points (the validity of which will be questioned) that Cross deals with the “public policy” issues in a separate chapter: Evidence (4th ed. 1974) Ch. XII.
For recent discussion critical of too stark a dichotomy see D. v. N.S.P.C.C. [1978] A.C. 171, 226 (Lord Hailsham of Marylebone), 233-234 (Lord Simon of Glaisdale).
16 Conway v. Rimmer [1968] A.C. 910, 941 (Lord Reid).
17 Rogers v. Home Secretary [1973] A.C. 388.
18 D. v. N.S.P.C.C. [1978] A.C. 171.
19 [1942] A.C. 624, 635. (Italics supplied.)
20 E.g. Glasgow Corporation v. Central Land Board [1956] S.C. (H.L.) 1, 20(Lord Radcliffe); In re Grosvenor Hotel, London (No. 2) [1965] Ch. 1210, 1255 (Harman L.J.); Conway v. Rimmer [1968] A.C. 910, 952 (Lord Reid), 957 (Lord Morris of Borthy-Gest), 987-988 (Lord Pearce), 993-994 (Lord Upjohn); Rogers v. Home Secretary [1973] A.C. 388, 413 (Lord Salmon); Sankey v. Whitlam (1978) 53 A.L.J.R. 11, 31 (Stephen J.), cf. Gibbs A-C.J. at 22.
Similarly in the United States there was, for a period, a profusion of claims to privilege based on the need for candour of communication within the executive branch. “Since 1954 this newly coined doctrine has mushroomed like the black cloud of an atomic explosion; it has become the favourite bureaucratic gambit to block disclosure”: Berger, Executive Privilege: A Constitutional Myth (1974) 213, also 231-233Google Scholar and, in regard to similar claims asserted against Congress, see Ch. 8. The decision of the Supreme Court in U.S. v. Nixon (1974) 418 U.S. 683 has set some limits to the success of such claims, at least when based on the “separation of powers” claim to executive privilege. But claims expressed simply in terms of official information privilege have been recognised by U.S. courts in interpreting both discovery rules and specific statutory secrecy provisions-the latter will commonly be read narrowly, allowing the court to strike a balance between the competing public interests at stake. Wallace, “Discovery of Government Documents and the Official Information Privilege” (1976) 76 Columbia Law Review 142CrossRefGoogle Scholar.
21 R. v. Lewes Justices; ex parte Home Secretary [1972] 1 Q.B. 232, 242-243 (Widgery L.J.); Rogers v. Home Secretary [1973] A.C. 388, 401 (Lord Reid), 405 (Lord Morris of Borth-y-Gest), 413 (Lord Salmon); D. v. N.S.P.C.C. [1978] A.C. 171, 192 (Lord Denning M.R.), 194, 199 (Scarman L.J.), 217-218 (Lord Diplock), 232 (Lord Simon of Glaisdale); R. v. Home Secretary; ex parte Hosenball [1977] 1 W.L.R. 766, 782 (Lord Denning M.R.), 784 (Geoffrey Lane L.J.); Maloney v. New South Wales National Coursing Association Ltd [1978] 1 N.S.W.L.R. 60.
22 The reference to compulsion is intended to include the situation where information is required from the individual who applies for a benefit (e.g. social security pension, education allowance) but he is under no compulsion to seek such benefit. It can also extend to information acquired by inspectors exercising statutory powers-for a recent attempt to limit disclosure of information so acquired, see the Miscellaneous Acts (Inspectors) Amendment Act 1976 (N.S.W.).
23 Alfred Crompton Amusement Machines Ltd v. Customs and Excise Commissioners (No. 2) [1972] 2 Q.B. 102, 137 (Karminski L.J.).
24 Sankey v. Whitlam (1978) 53 A.L.J.R. 11, 23 (Gibbs A-C.J.), 33 (Stephen J.), 45 (Mason J.).
25 [1964] Ch. 464, 477.
26 Examples of such usage appear in Mobil Oil Australia Pty Ltd v. Commissioner of Taxation (Cth) (1963) 37 A.L.J.R. 182; Huron Steel Fabricators (London) Ltd v. Minister of National Review; Fratschko v. Minister of National Revenue (1973) 31 D.L.R. (3d) 110 and Alfred Crompton Amusement Machines Ltd v. Customs and Excise Commissioners (No. 2) [1974] A.C. 405.
27 This appears to be accepted in United States' courts: Berger, Executive Privilege: A Constitutional Myth (1974) 230. Distillers Co. (Biochemicals) Ltd v. Times Newspapers Ltd [1914] 3 W.L.R. 728 indicates the extent of the powers of an English court to protect material disclosed on discovery.
28 3 Camp. 337, 170 E.R. 1402.
29 Id. 337, 1403. But the witness did not have the book with him, and the plaintiff recovered his verdict on a separate count of the declaration—this was afterwards successfully non-suited: (1813) 1 M. & S. 482, 105 E.R. 180.
The modern view is that something more than an oath of secrecy or confidentiality is required to support a claim to non–disclosure in court: A.–G. v. Jonathan Cape Ltd [1976] Q.B. 752, 766 (Lord Widtgery C.J.); Sankey v. Whitlam (1978) 5 A.L.J.R. 11, 23 (Gibbs A-C.J.), 45 (Mason J.).
30 13 S.A.L.R. 79.
31 Id. 85.
32 E.g. Canadian Pacific Tobacco Co. Ltd v. Stapleton (1952) 86 C.L.R. 1, 6 (Dixon J. (obiter)); Stapleton v. Wilson [1956] Q.W.N. No. 48; Cowan v. Stanhill Estates Pty Ltd [1966] V.R. 604; Ex parte Black; re Morony (No. 1) [1965] N.S.W.R. 932.
33 E.g. Mobil Oil Australia Pty Ltd v. Commissioner of Taxation (Cth) (1963) 37 A.L.J.R. 182, 187 (McTiernan and Taylor JJ.), 191 (Kitto J.); Norwich Pharmacal Co. v. Customs and Excise Commissioners [1974] A.C. 133, 174 (Lord Reid), 198 (Lord Cross of Chelsea).
34 Freeman v. Seligson (1968) 405 F. 2d 1326, 1348 cited in Wallace, “Discovery of Government Documents and the Official Information Privilege” (1976) 76 Columbia Law Review 142, 150CrossRefGoogle Scholar.
35 11 Beav. 380, 50 E.R. 863.
36 Id. 381, 864.
37 Id. 381-382, 864.
38 (1849) 12 Beav. 44, 44-45; 50 E.R. 976, 976-977. How the plaintiff fared subsequently is not revealed in any further published reports of the litigation.
39 [1899] S.A.L.R. 64.
40 Id. 65.
41 [1900] 1 Ch. 347.
42 Id. 350.
43 [1916] s.c. 821.
44 Id. 823.
45 Id. 826-827. This approach seems perfectly reasonable. A similar approach might have been arguable in Re Joseph Hargreaves Ltd on the basis of the liquidator's relationship to the company, and in the partnership dispute in Wilkinson v. Wilkinson infra.
46 1 S.R. (N.S.W.) Eq. 285.
47 (1898) 9 B.C. (N.S.W.) 11.
48 Id. 287. (Italics supplied.)
49 5 S.R. (N.S.W.) 503. Smout v. Walker [1968] Q.W.N. No. 13 is a more recent case in which the decision to order production of the plaintiff's copies of his income tax returns could be supported on the basis of the plaintiff's acquiescence, though this was not the basis of the judge's reasoning.
50 Johnston v. Caledonian Railway Co. (1892) 30 Sc. L.R. 222; Macdonald v. Hedderwick & Sons (1901) 38 Sc. L.R. 455; Wilson's Executors v. The Bank of England [1925] S.L.T. 81.
Several decisions going the other way turn on the facts of the situation rather than the principle: Craig v. North British Railway Co. (1888) 15 R. 808; Gray v. Wyllie (1904) 41 Sc. L.R. 342; Keir v. Outram & Co. Ltd (1913) 51 Sc. L.R. 8; or are unsupported by reasons: Christie v. Craik (1900) 37 Sc. L.R. 503.
Disclosure of deposited income tax returns, as distinct from receipts or other material retained by the taxpayer may be thought to present different issues—the distinction was noted in Henderson v. McGown [1916] S.C. 821.
51 [1914] V.L.R. 77.
52 A different analysis of the decision was offered in Cowan v. Stanhill Estates Pty Ltd [1966] V.R. 604.
Disclosure was ordered in a situation where parties consented and the Minister objected on the basis of Crown privilege alone in Pollock v. Pollock& Grey [1970] N.Z.L.R. 771.
53 [1914] V.L.R. 77, 80-81.
54 Supra p. 337.
55 [1966] V.R. 604. In Re Calliungall Resumption (1911) 5 Q.C.L.L.R. 58 the Queensland Land Appeal Court ruled simply that income tax returns and Federal land tax returns are not privileged documents and must be produced in that Court.
56 [1938] A.C. 101.
57 Italics supplied.
58 28 C.L.R. 283.
59 45 A.L.J.R. 249
60 [1931] A.C. 704.
61 [1968] A.C. 910.
62 [1943] S.A.S.R. 31.
63 (1943) 66 C.L.R. 672 (note).
64 [1943] S.A.S.R. 31, 37-44.
65 Id. 36. A similar conclusion was reached in Queensland courts: Coonan v. Richardson [1947] Q.W.N. No. 19; Bridges v. Bridges [1954] Q.W.N. No. 24; Horne v. Warden [1955] Q.W.N. No. 65. In Smout v. Walker [1968] Q.W.N. No. 13, Hoare J. purported not to follow Bridges v. Bridges and ordered production of the plaintiff's copies of his income tax returns. But the case was one in which the plaintiff consented to production and so, on its facts, is not inconsistent with the reasoning in Bridges v. Bridges or Honeychurch v. Honeychurch.
A contrary conclusion was reached in unreported Victorian cases in which production of taxpayers' copies of income tax returns was ordered: Blake v. Taranto (1950); Noske v. Noske (1951); Rudov v. Rudov (1957) referred to in McKee, “Is Production of Copies of Income Tax Returns Governed by the Common Law Rule of Public Policy?” (1958) 32 A.L.J. 178 and 212Google Scholar, 179-180.
66 [1943] S.A.S.R. 31, 34-35 (Napier C.J.). (Italics supplied.)
67 Id. 37 (Richards J.), 35 (Napier C.J.). To similar effect, Bridges v. Bridges [1954] Q.W.N. No. 24 and, on its facts, Smout v. Walker [1968] Q.W.N. No. 13. See also Nunan v. Gerblich (1974) 10 S.A.S.R. 39.
68 86 C.L.R. 1.
69 Italics supplied.
70 Id. 6-7. McTiernan J. agreed on appeal: id. 10.
71 Id. 6. Followed in Stapleton v. Wilson [1956] Q.W.N. No. 48. Similarly in Ex parte Black; re Morony (No. 1) [1965] N.S.W.R. 932 Maguire J. in the New South Wales Supreme Court read a statutory prohibition on “publishing” official infor-mation as inapt to exclude production to a court.
72 Id. 7.
73 Id. 10.
74 Id. 11.
75 [1962] N.S.W.R. 1047.
76 As noted by Hardie J., id. 1050.
77 Supra n. SO. Smout v. Walker [1968] Q.W.N. No. 13, in which Hoare J. followed Oudman v. Warren, could likewise have been decided on this basis as well as on the basis of the plaintiff's express consent to production.
78 Supra n. 65.
79 [1962) N.S.W.R. 1047, 1050.
80 Id. 1049. See also Re Goretski (1970) 1 A.T.R. 663 in which the South Australian Insolvency Court held thats. 16 does not protect a bankrupt from being compelled to disclose details of his own return when required to do so by the Official Receiver. In Barton v. Csidei; Attorney-General v. Barton (1979, unreported) the New South Wales Court of Appeal held that provisions in the Companies Act dealing with supply and disclosure of notes of examination of officers of companies under investigation did not exempt those persons from being obliged to disclose their own copies of the notes.
81 37 A.L.J.R. 182.
82 Id. 184-185.
83 Id. 186-187.
84 Id. 188-189.
85 Id. 187 (McTiernan and Taylor JJ.), 189-191 (Kitto J.).
86 [1954] 4 D.L.R. 483.
87 Id. 487-488.
88 Id. 493.
89 Id. 499.
90 Id. 494.
91 Id. 498.
92 Id. 499.
93 A similar result was reached in Huron Steel Fabricators (London) Ltd v. Minister of National Revenue (1973) 31 D.L.R. (3d) 110. The company, appealing against income tax assessments, sought discovery of the income tax return of another company, such return having provided a basis on which the appellant company's own liability had been assessed. The Minister claimed privilege on the basis of the need for candour confidentiality in income tax returns. Heald J. held that the public interest in the proper administration of justice far outweighed the public interest in maintaining taxpayer confidentiality. The decision was affirmed by the Federal Court of Appeal (1973) 27 D.T.C. 3347.
Canadian law is discussed in Lederman, “The Crown's Right to Suppress Information Sought in the Litigation Process: The Elusive Public Interest” (1973) 8 University of British Columbia Law Review 272Google Scholar.
94 [1974] A.C. 133.
95 [1968] A.C. 910, 946.
96 [1974] A.C. 133, 140-141. Buckley and Roskill L.JJ. expressed their agreement at 146 and 152 respectively.
97 Id. 198.
98 Id. 175.
99 Id. 175–176.
1 Id. 197–199 (Lord Cross of Chelsea), 206-207 (Lord Kilbrandon).
2 Id. 181–182.
3 Id. 189–190.
4 [1974] A.C. 405.
5 Mobil Oil Australia Pty Ltd v. Commissioner of Taxation (Cth) (1963) 37 A.L.J.R. 182. A Canadian case presenting similar issues is Huron Steel Fabricators (London) Ltd v. Minister of National Revenue (1973) 31 D.L.R. (3d) 110, referred to supra n. 93.
6 Purchase Tax Act 1963, s. 24(6).
7 Alfred Crompton Amusement Machines Ltd v. Customs and Excise Commissioners (No. 2) [1972] 2 Q.B. 102, 132.
8 [1972] 2 Q.B. 102, 108.
9 Id. 116.
10 Id. 134.
11 Sed quaere? When a prosecutor cross-examined on the basis of a statement for which Crown privilege had been successfully claimed the New South Wales Court of Appeal found a denial of natural justice: Ex parte Brown; re Tunstall (1966) 67 S.R. (N.S.W.) 1.
12 [1974] A.C. 405, 433-434. (Italics supplied.)
13 [1978] A.C. 171.
14 [1973] A.C. 388.
15 Children and Young Persons Act 1969, s. 1(1).
16 [1978] A.C. 171, 220-221 (Lord Diplock).
17 [1968] A.C. 910.
17a The Court of Appeal granted leave to appeal to the House of Lords from its decision in Burmah Oil Co. Ltd v. Bank of England [1979] 2 All E.R. 461 upholding a public interest privilege claim in respect, inter alia, of commercial and financial information furnished by businessmen in confidence to the government and the Bank. On 13 November 1979 the House of Lords dismissed the appeal (The Times, 19 November 1979). The decision, however, was concerned mainly with claims to privilege for communications within the government or between the government and the Bank of England.
18 (1974] A.C. 405, 434.
19 [1978] A.C. 171, 234.
20 Ibid. In Burmah Oil Co. Ltd v. Bank of England [1979] 2 All E.R. 461, 469-470 Lord Denning M.R. expressed his view that public interest is subject to waiver generally.
21 [1978] A.C. 171, 184.
22 As in Norwich Pharmacal Co. v. Customs and Excise Commissioners [1974] A.C. 133; D. v. N.S.P.C.C. [1978] A.C. 171.
23 U.S.C.A. 552 (sometimes referred to as section 3 or the Public Information Section of the Administrative Procedures Act) as amended in 1974 by Public Law 93-502. More colloquially, it is frequently referred to as FOIA.
24 The wordin,g of cl. 32 appears to take into account judicial interpretation of U.S. Exemption 4: National Parks & Conservation Association v. Morton (1974) 498 F. 2d 765 (D.C. Cir.).
25 No. 95-1382.
26 Id. 6–7.
27 Id. 1–2.
28 Id. 2. The proposal is developed in pp. 26-31 of the report. The attempts by American courts to find a proper legislative basis for reverse FOIA lawsuits suffered a setback in the Supreme Court's recent decision in Chrysler Corp. v. Brown decided on 18th April 1979, 47 L.W. 4434.
29 See Sankey v. Whitlam (1978) 53 A.L.J.R. 11, 28-32 (Stephen J.).