United Kingdom House of Lords Decisions

Die Jovis 1° Novembris 1979

Parliamentary Archives,
HL/PO/JU/4/3/1341

HOUSE OF LORDS

BURMAH OIL COMPANY LIMITED (APPELLANTS)

v.

GOVERNOR AND COMPANY OF THE BANK OF ENGLAND

AND ANOTHER (RESPONDENTS)




Lord Wilberforce
Lord Salmon
Lord Edmund-Davies
Lord Keith of Kinkel
Lord Scarman




Lord Wilberforce

my lords,




In this action the appellant the Burmah Oil Company Ltd. ("Burmah")
is suing the Governor and Company of the Bank of England ("the Bank") for
relief in respect of the sale to the Bank by Burmah in 1975 of 77,817,507
ordinary stock units of £1 each of the British Petroleum Company Ltd.
("B.P.") at a price of approximately £179m. Burmah claims, in brief, that this
price represented a substantial undervalue of the stock and that the bargain
was unconscionable, inequitable and unreasonable. It is important to under-
stand that this action, and these issues, arise exclusively between Burmah and
the Bank.

The present appeal arises out of an application by Burmah for production
of 62 documents listed in the list of documents served by the Bank. The Bank
on the instructions of the Crown have objected to produce these on the ground
that they belong to classes of documents production of which would be in-
jurious to the public interest. They have put forward a certificate dated 18
October 1977 signed by the Chief Secretary to the Treasury supporting this
objection. On the interlocutory hearing of the objection in the High Court
H.M. Attorney General intervened in order to argue the case in support of it,
and it was upheld by Foster J. On appeal by Burmah to the Court of Appeal,
the Attorney General took a similar course, and that Court, by majority,
affirmed the judge. On a further appeal to this House, the Attorney General
was joined as a respondent and as such argued the case against production:
the Bank, as in the High Court and in the Court of Appeal, took no part in the
argument. But, I repeat, the only defendant in the action is the Bank.

My Lords, in an interlocutory matter involving a large element of discretion,
which has been concurrently decided by both courts below, I apprehend that
your Lordships should be reluctant to intervene and indeed should only do so
if of opinion that some different principle of law from that accepted below
ought to be applied. On the view which I take of the case, it is not one for a
different exercise of the court's discretion, indeed I regard it as a straight-
forward one, more so than is usually found in this class of case. I shall deal
with the suggestion that some extension or change in the existing law ought
to be made.

The starting point in the discussion must be the Certificate of the Chief
Secretary. This is a lengthy and detailed document to which justice cannot be
done without setting it out in full. It is perfectly clear that this document
represents the result of careful and responsible consideration: that the Minister
has read and applied his mind to each of the documents: that, to adopt language
used by the courts in other cases, the Minister has not merely repeated a
mechanical formula, that the certificate is not "amorphous" or of a blanket
character, but is specific and motivated. Further, the Minister has not contented
himself with a general assertion that production would be injurious to the
public interest, he has stated very fully the reasons why this would in his
opinion be so: in summary that they concern discussions at a very high level,
as to one category at Ministerial level, and as to another the highest official
level, as to the formulation of Government policy. He has not even contented
himself with a general reference to Government policy. He has specified this as
concerned with (a) the possible effect of a collapse of Burmah upon the £
sterling, upon other British companies with large overseas borrowings, upon



2

the Government's North Sea oil policy, and the future production of North
Sea oil and correspondingly on the expectation which might be aroused on
the part of other private borrowers if Burmah were to receive assistance, (b)
the international and other consequences of a sale of the B.P. stock to the
Bank—which would bring the Government shareholding up to 70 per cent—and
(c) as regards possible further financial support to Burmah after January 1975
having regard to the possible consequences of a financial collapse by Burmah.

It is apparent that these identified matters of policy were of the highest
national and political importance and that they called for formulation of
policy at the highest governmental levels, including the Cabinet, involving
directly several Ministers in the Treasury, the Department of Energy and the
Paymaster General, and, in the first two mentioned departments handled by
the Permanent Under Secretary of State.

Omitting some formal passages, the Certificate is as follows:

"3. I have personally read and carefully considered all the documents
"listed in the Schedule and I have formed the opinion that their production
"would be injurious to the public interest for the reasons hereinafter set
"out.

"4. The documents listed in the Schedule fall within three categories
"described below. There is or are shown in the Schedule against each
"document listed the appropriate category or, where a document falls
"within more than one category, the appropriate categories. The three
"categories are as follows:—

"CATEGORY A

"These consist of communications between, to and from Ministers (in-
"cluding Ministers' Personal Secretaries acting on behalf of Ministers) and
"minutes and briefs for Ministers and memoranda of meetings attended by
"Ministers. All such documents relate to the formulation of the policy
"of the Government—

"(a) in face of the financial difficulties of the Burmah Oil Company
"Limited (hereinafter called 'Burmah') in December 1974 and January
"1975, and having regard especially to:—

"(i) the likely effect of the default of Burmah in respect of a large
"dollar loan upon:—

"(a) The £ Sterling

"(b) Other British companies with large overseas borrowings:

"(ii) the possible effect of a financial collapse by Burmah upon the
"Government's North Sea oil policy and upon the future pro-
duction of North Sea oil;

"(iii) the expectations which would be aroused on the part of other
"private borrowers defaulting on dollar debts if Burmah were
"to receive assistance;

"(b) in consequence of the measures taken in response to Burmah's said
"financial difficulties and in particular as to what was to be done with
"the B.P. stock sold by Burmah to the Bank in January 1975 having
"regard especially to the international consequences of a sale by the
"Bank of that stock;

"(c) in connection with the giving of further support to Burmah after
"January 1975, having regard particularly to the international con-
"sequences of a financial collapse by Burmah and the effect of such
"a collapse on the Government's North Sea oil policy.

"CATEGORY B

"These consist of communications between, to and from senior officials
"of the Department of Energy, of the Treasury and of the Bank including
"memoranda of meetings of and discussions between such officials, and
"drafts prepared by such officials (including drafts of minutes and briefs



3

"comprised in Category A), all such communications and drafts relating
"to the formulation of one or more aspects of the policy described in
"Category A.

"CATEGORY C"

[These documents did not call for separate consideration.]

"5. Many of the documents listed in the Schedule though in the pos-
"session, custody or power of the Bank, were not brought into existence
"by the Bank or addressed to the Bank. The Bank occupies a unique
"position in relation to the Government. Though distinct from the Govern-
"ment, it is the principal banker to the Government and, inter alia, performs
"the function of advising the Government in the field of economic and
"financial affairs. The Bank is frequently consulted by the Government,
"particularly when policy decisions in that field fall to be taken. Through
"the Governor, Deputy Governor and other of its officials it often takes
"part together with officers of the Treasury and other Government depart-
"ments in the process of briefing and advising Ministers. To assist the
"Bank in the performance of its functions it is supplied by the Government
"with many confidential documents. In addition the Bank brings into
"existence and itself receives documents in the course of its participation
"in the process of the formulation of Government policy. These are as
"much a part of the decision-making process as the internal documents of
"Government departments relating to the formulation of policy.

"6. It is, in my opinion, necessary for the proper functioning of the
"public service that the documents in Category A and Category B should
"be withheld from production. They are all documents falling within the
"class of documents relating to the formulation of Government policy.
"Such policy was decided at a very high level, involving as it did matters
"of major economic importance to the United Kingdom. The documents
"in question cannot properly be described as routine documents. Those
"in Category A are all documents passing at a very high level, including
"communications intended for the guidance and recording the views of
"the Prime Minister or recording discussions at a very high level. The
"documents in Category B though passing at a lower level or recording
"discussions at a lower level, nevertheless all relate to the policy decisions
"to be taken at a higher level. Decisions made by Ministers are frequently
"preceded by detailed discussion within and between Government
"departments (and in appropriate cases, of which the present is one.
"within the bank and between the Bank and Government departments)
"and by consideration of the various possibilities open to Ministers. It is
"out of such discussion and consideration that the advice to be tendered
"to Ministers is often formulated (frequently, initially, in the form of
"drafts of documents intended for the consideration and approval of
"Ministers) and the decisions of Ministers are often reflected in depart-
"mental documents passing at a lower level. This is true of the present
"case. More generally, it would, in my view, be against the public interest
"that documents revealing the process of providing for Ministers honest
"and candid advice on matters of high level policy should be subject to
"disclosure. In this connection, I would respectfully agree with the
"reasoning of Lord Reid in Conway v. Rimmer [1968] AC 910, to whose
"remarks (at page 952 of that report) my attention has been drawn, as
"regards the effect on the inner workings of the government machine of
"the public disclosure of documents concerned with policy.

"7. [Omitted as dealing with Category C.]

"It is further, in my opinion, necessary for the proper functioning of the
"public service that the documents in Category C should be withheld
"from production. All the documents in this Category record or other-
"wise refer to commercial or financial information communicated by
"businessmen outside Government (including senior officers of other oil
"companies) in confidence to Ministers or senior officials in Government
"departments or to the Bank in its capacity as adviser to the Government.

4

"Again they cannot be called routine documents. Ft is of very great im-
"portance to the Government that it should receive information from
"those in business which is or tray be relevant to the Government's
"management of the country's financial and economic affairs. The giving
"of such information is facilitated by the knowledge that it will be treated
"by the Government or the Bank, in its said capacity, as entirely con-
"fidential. Sometimes the Government itself takes the initiative in asking
"for the information; at other times the information is volunteered by
"outside sources. There are examples of each in the documents of this
"Category. If the documents in this Category were produced, those
"supplying the information could be seriously embarrassed. In my opinion
"once it was known that what was imparted in confidence might be
"revealed publicly there would be a grave danger that such information
"would cease to be as readily forthcoming as it now is. I have no doubt
"but that this would be detrimental to the public interest.

"8. I understand that oral evidence may be given in these proceedings.
"If oral evidence were sought to be given of the contents of any of the
"documents to the production of which I have in this certificate objected,
"I would wish to object to such evidence on the same grounds as those
"hereinbefore set out in relation to the documents in question."

There followed a Schedule listing 62 documents and specifying into which
category or categories they fell.

The claim to "public interest immunity" in respect of these documents is
clearly what has come under a rough but accepted categorisation to be known
as a "class" claim, not a "contents" claim, the distinction between them being
that with a class claim it is immaterial whether the disclosure of the particular
contents of particular documents would be injurious to the public interest—
the point being that it is the maintenance of the immunity of the class from
disclosure in litigation that is important; whereas in a contents claim the
protection is claimed for particular contents in a particular document. A claim
remains a class claim even though something may be known about the con-
tents: it remains a class claim even if parts of documents are revealed and part
disclosed. The appellant did not, I think, dispute this. And, the claim being a
class claim, I must state with emphasis that there is not the slightest ground for
doubting that the documents in question fall within the class described: indeed
the descriptions themselves and references in disclosed documents make it
clear that they do. So this is not one of those cases, which anyway are excep-
tional, where the court feels it necessary to look at the documents in order
to verify that fact. We start with a strong and well-fortified basis for an immun-
ity claim.

I now deal with the two main arguments used by the appellants. The first is
to seek to make a distinction between a decision to allow the Bank to buy the
B.P. stock and a decision as to price: the first, it is said, may be "policy",
the second is something less than policy. I have to reject this distinction. The
whole course of negotiation of which, as I shall explain, we know a great deal,
shows that these two matters were indissolubly linked as part of one decision.
It is indeed inconceivable that any responsible Minister or civil servant would
regard the only matter of policy to be decided to be the purchase of the stock
in principle and would leave over the matter of price as one merely of "nuts
"and bolts".

The second argument is perhaps more plausible, it is to say that, whatever
may have been the need to protect governmental policy from disclosure at the
time (1975) all is now past history: the decision has been made; the sale has
gone through; Burmah has been saved from collapse. So what is the public
interest in keeping up the protective screen ?

I think that there are several answers to this. The first (and easiest) is that
all is not past history—at least we do not know that it is. Government policy as
to supporting private firms in danger of collapse: as to ownership of B.P. stock:

5

as to the development of North Sea oil is on-going policy; the documents are
not yet for the Record Office. They are not, to use a phrase picked out of Lord
Reid's speech in Conway v. Rimmer of purely historical interest. Secondly the
grounds on which public interest immunity is claimed for this class of document
are, no doubt within limits, independent of time. One such ground is the need
for candour in communication between those concerned with policy making. It
seems now rather fashionable to decry this, but if as a ground it may at one
time have been exaggerated, it has now, in my opinion, received an excessive
dose of cold water. I am certainly not prepared—against the view of the
Minister—to discount the need, in the formation of such very controversial
policy as that with which we are here involved, for frank and uninhibited advice
from the Bank to the Government, from and between civil servants and between
Ministers. It does not require much imagination to suppose that some of those
concerned took different views as to the right policy and expressed them. The
documents indeed show that they did. To remove protection from revelation
in court in this case at least could well deter frank and full expression in similar
cases in the future.

Another such ground is to protect from inspection by possible critics the
inner working of Government while forming important governmental policy.
I do not believe that scepticism has invaded this, or that it is for the courts to
assume the role of advocates for open government. If, as I believe, this is a
valid ground for protection, it must continue to operate beyond the time span
of a particular episode. Concretely, to reveal what advice was then sought and
given and the mechanism for seeking and considering such advice, might well
make the process of government more difficult now. On this point too I am
certainly not prepared to be wiser than the Minister. So I think that the
"time factor" argument must fail.

The basis for an immunity claim, then, having been laid, it is next necessary
to consider whether there is any other element of public interest telling in
favour of production. The interest of the proper and fair administration of
justice falls under this description. It is hardly necessary to state that the mere
fact that the documents are or may be "relevant" to the issues, within the
extended meaning of relevance in relation to discovery, is not material. The
question of privilege or immunity only arises in relation to "relevant" docu-
ments and itself depends on other considerations, viz., whether production of
these documents (admittedly relevant) is necessary for the due administration
of justice. In considering how these two elements are to be weighed one against
the other, the proper starting point must be the decision of this House in
Conway v. Rimmer. That case established the law in line with that thought to
exist in Scotland, and it is also well in line with Commonwealth authority—see
Sankey v. Whitlam (1978) 53 A.L.J.R. 11, and Robinson v. State of South
Australia (No. 2) [1931] AC 704. The latter case—strongly relied on by the
Master of the Rolls—does not in my view lay down any principle diverging
from or extending beyond Conway v. Rimmer and was indeed absorbed in that
case. Of course Conway v. Rimmer as the speeches of their Lordships show,
does not profess to cover every case, nor has it frozen the law, but it does
provide a solid basis for progress as regards the point now under discussion.

It may well be arguable whether, when one is faced with a claim for immunity
from production on "public interest" grounds, and when the relevant public
interest is shown to be of a high, or the highest, level of importance, that fact
is of itself conclusive, and nothing which relates to the interest in the admin-
istration of justice can prevail against it. As Lord Pearce said in Conway v.
Rimmer "obviously production would never be ordered of fairly wide classes
"of documents at a high level" (I.c. p.987 and see Reg. v. Lewes Justices [1973]
A.C. 388, 412 per Lord Salmon). In the words of May J. in Barty-King v.
Ministry of Defence (concerned with internal thinking and policy at a high
civil service level), it is not even necessary to bring out the scales. Mr. Silkin
Q.C. for the Attorney General did not contend for any such rigorous proposi-
tion, i.e., that a high level public interest can never, in any circumstances, be
outweighed. In this I think that he was in line with the middle of the road
position taken by Lord Reid in Conway v. Rimmer and also with the median
views of the members of the High Court of Australia in Sankey v. Whitlam



6

(1978 53 A.L.J.R. 11—see particularly the judgment of Gibbs A.C.J. I am
therefore quite prepared to deal with this case on the basis that the courts may,
in a suitable case, decide that a high level governmental public interest must
give way to the interests of the administration of justice.

But it must be clear what this involves. A claim for public interest immunity
having been made, on manifestly solid grounds, it is necessary for those who
seek to overcome it to demonstrate the existence of a counteracting interest
calling for disclosure of particular documents. When this is demonstrated, but
only then, may the court proceed to a balancing process. In Conway v. Rimmer
itself it was known that there were in existence probationary reports on the
plaintiff as to which an obviously strong argument could be made that their
disclosure was necessary if the plaintiff's claim were to have any hope of
succeeding, (in the end they turned out to be far from helpful to him): so the
court had something very definite to go upon which it could put into the scales
against the (minor) public interest of not revealing routine reports. So, too, in
Sankey v. Whitlam the High Court thought it scarcely credible that the docu-
ments in question would not reveal factual material as to Commonwealth
borrowing. But the present case is quite different. There is not, and I firmly
assert this, the slightest ground, apart from pure speculation, for supposing that
there is any document in existence, among those which it is sought to withhold,
or anything in a document which could outweigh the public interest claim for
immunity. I make this assertion good under two heads.

1. A very full and careful disclosure has been made of all documents
   bearing upon negotiations between Burmah and the Bank leading to the
   sale of the stock. As was said by Templeman L.J. "Very great care has been
   "taken to conceal the minimum and to produce consistently with the public
   "interest every document which is relevant to the action." Thus, disclosure
   has been made of all documents relating to occasions and discussions at which
   representatives of Burmah were present. Disclosure has been made of all
   factual reports of meetings with Burmah and of Burmah's statements to the
   Bank and vice versa. There is a mass of these documents which your Lordships
   have read and carefully considered. What are withheld are documents, or in
   some cases parts of documents, recording discussions either between the
   Bank and the Government or public officials, or internally within the Govern-
   ment or the civil service, when Burmah was not present. Since the proceedings
   are between Burmah and the Bank, there must be a strong argument for
   believing that the dividing line has been correctly drawn; that what is necessary
   to Burmah's case has been disclosed, and that what has not been disclosed
   cannot help Burmah's case. However, I shall explore this further in relation
   to the actual issues.

2. The exact nature of Burmah's claim against the Bank is not very clear,
   but I need not, indeed should not, analyse it for present purposes. I must not
   be taken as holding that there is any support for it in law; or the contrary:
   the claim must at this stage be treated as valid. There are very detailed pleadings
   in which issues of fact and also matters of evidence are stated. The basic claim
   is that the sale of the B.P. stock at the price of £179m. ought to be reopened.
   For this four grounds are stated, namely that the sale—

"(a) was unconscionable, inequitable and unreasonable;

"(b) was procured by the Bank acting in breach of its duty of fair dealing
"and taking an unfair and unconscionable advantage of Burmah;

"(c) wrongfully purported to render nugatory Burmah's right to redeem;

"(d) involved the bank obtaining an improper collateral advantage in
"connection with the taking of security".

In support of these Burmah relies on nine points—

"(1) the inequality of bargaining power of the Bank and Burmah;

"(2) the advantage taken by the Bank of Burmah's temporary financial
"predicament;

7

"(3) the sale of the B.P. stock at an undervalue;

"(4) the absence of profit sharing;

"(5) the delay by the Bank in stating its proposals;

"(6) the failure of the Bank to provide guidelines for sale to third parties;

"(7) the inability of Burmah to seek assistance elsewhere;

"(8) the duty of the Bank referred to in paragraph 4 above (i.e. a 'duty
"of fair dealing');

"(9) the loss of dividend income from the B.P. stock".

Now it is clear from this presentation of the case that the success or failure
of Burmah's claim must rest upon the objective nature of the bargain, the
negotiations between Burmah and the Bank, the relevant circumstances or
bargaining power of the parties and any pressure which the Bank may be
shown to have exercised upon Burmah. As to these matters, much is common
ground and is admitted on the pleadings: the mass of documents disclosed
provides part of what is necessary to make good the remainder: part may
depend upon oral evidence given by representatives of Burmah, representatives
of the Bank and by representatives of the important financial institutions which
were advising Burmah in the negotiations. How then can anything said between
the Bank and the Government or its officials help to resolve these issues?
Whether the Bank acted at the behest of the Government or not, seems to me
(with all respect to some views expressed in the Court of Appeal) irrelevant.
After a lengthy and thorough argument I was only able to perceive two as to
which a case of any kind could be made. The first relates to issue (4) above: the
absence of profit sharing. The fact here was that the Bank, at one time in the
negotiations, had suggested that the sale of the B.P. stock should involve an
agreement that if (as might have seemed likely) the value of the stock were
to rise, Burmah should share in the profit. It is clear already from disclosed
documents (a) that the Bank thought that a profit sharing term would be
fair, (b) that the Bank, and later Burmah itself, so represented to the Govern-
ment, (c) that the Government refused to agree: all this is as plain as can be
from the documents. I cannot see therefore that any document passing between
the Bank and the Government, or recording any discussion between the Bank
and the Government, or internally to the Government could assist Burmah's
case. If any such reference at all were made in any such document to profit
sharing (a matter of pure speculation) why should it be in terms different from
what the Bank had said to Burmah? If it were in the same terms it would add
nothing to this case. The second relates to the general allegation that the sale
was unconscionable. In my opinion establishment of this must depend upon
the objective facts as indicated above. But Burmah submits otherwise. Their
claim is rather remarkable. It is "very likely", to use their own words, that some
of the withheld documents (they specify 18 out of the 62) may record a statement
by a representative of the Bank to the Government, or at some meeting, that
in the opinion of the Bank the sale, on terms fixed by the Government was
"unfair"—even, in forensic hyperbole, "grossly unfair" and that this would
greatly assist Burmah's case.

My Lords, I am willing to leave aside the question whether, on the pleaded
issues, such a statement—made as it would have been in the course of fluid
discussions—would assist Burmah to prove its case which as I have said depends
on objective considerations and on action between Burmah and the Bank.
For, in my opinion, the claim is on its face totally unjustified. The phrase
"very likely" is a pure ipse dixit of Burmah not on oath and unsupported by
any evidence: there is nothing anywhere which affords the slightest support
for it: any finding that such a statement exists is "very likely", "likely" or "not
"unlikely", or as to its possible terms, can not judicially be made. That such
a document may exist, and what it may contain, is the purest speculation.

This brings me to the issue of inspection. For now it is said, "Well, let us
"look at the documents and see—to do so cannot do any harm. If there is
"nothing there no damage will be done: if there is, we can weigh its importance".
As presented (and to be fair to Burmah's very able counsel, such a submission



8

occupied a far from prominent place in their argument) this may appear to
have some attraction. But with all respect to those who think otherwise, I am
firmly of opinion that we should not yield to this siren song. The existing state
of the authorities is against it: and no good case can be made for changing the
law. Indeed, to do so would not in my opinion be progress.

As to authority. Before Conway v. Rimmer, although the court had power to
inspect any document, the question whether to exercise it was treated as one
for the discretion of the judge, who, it was said, should normally accept the
affidavit claiming the immunity (Westminster Airways Ltd. v. Kuwait Oil Co.
Ltd. [1951] 1 K.B. 134). In In re Grosvenor Hotel, London (No. 2) [1965] Ch. 1210
a number of conflicting opinions were expressed both as to the law and the
facts. I think that the Court of Appeal regarded the objection of the Minister
as defective and considered therefore that the documents could be inspected
for the court to form its own opinion as to the public interest. In Conway v.
Rimmer itself it was said that the power should be exercised "sparingly" (per
Lord Morris of Borth-y-Gest, p.971), and then only if there are reasons to
doubt the accuracy of the Certificate or the cogency of the Minister's reasons.
Inspection should be by way of "final check" (ib p.953). Or, as Lord Upjohn
put it, inspection should be made if the judge feels any doubt about the reason
for [the document's] inclusion as a class document (ib. p.995). In Alfred
Crompton Amusement Machines Ltd. v. Customs and Excise Commissioners
[1974] A.C. 405 this House upheld the claim to public interest immunity
without inspecting the documents, although that course had been taken by
the Court of Appeal. In first instance cases, the judges have treated the power
to inspect as an exceptional one, to be rarely used: in two instances they sought
and obtained the Crown's consent to inspect selected documents (Tito v.
Waddell 3 March 1975 (unreported), Barty-King v. Ministry of Defence 10
October 1970 (unreported). This is inconsistent with the recognition of a
general right or duty to inspect.

As to principle, I cannot think that it is desirable that the courts should
assume the task of inspection except in rare instances where a strong positive
case is made out, certainly not upon a bare unsupported assertion by the
party seeking production that something to help him may be found, or upon
some unsupported—viz., speculative—hunch of its own. In the first place it is
necessary to draw a reasonably clear line between the responsibility of Ministers
on the one hand, and those of the courts on the other. Each has its proper
contribution to make towards solution of the problem where the public interest
lies—judicial review is not a "bonum in se" it is a part—and a valuable one—of
democratic government in which other responsibilities coexist. Existing cases,
from Conway v. Rimmer onwards have drawn this line carefully and suitably.
It is for the Minister to define the public interest and the grounds on which he
considers that production would affect it. Similarly, the court, responsible for
the administration of justice, should, before it decides that the Minister's
view must give way, have something positive or identifiable to put into the
scales. To override the Minister's opinion by "amorphous" phrases, or un-
supported contentions, would be to do precisely what the courts will not
countenance in the actions of Ministers. Secondly, decisions on grounds of
public interest privilege fall to be made at first instance, by judges or masters
in chambers. They should be able to make these decisions according to simple
rules: these are provided by the law as it stands. To invite a general procedure of
inspection is to embark the courts on a dangerous course: they have not in
general the time nor the experience, to carry out in every case a careful inspection
of documents and thereafter a weighing process. The results of such a process
may, indeed are likely, to be variable from court to court and from case to case.
This case provides an example of opposite conclusions come to upon identical
materials. (See [1975] 1 W.L.R. 493.) This inevitable uncertainty is not likely
to do credit to the administration of justice and is bound to encourage appeals.

In the end, I regard this as a plain case: of public interest immunity properly
claimed on grounds of high policy on the one hand in terms which cannot be
called in question; of nothing of any substance to put in the scale on the other.
I return to the point that both courts below have refused to exercise a discre-
tionary power to order production of these documents, or to inspect them.

9

Their decision can only be reversed if they erred in law. To say that they erred
in law in not inspecting the documents involves the proposition that there is a
duty, either in all cases or at least in such a case as this, to inspect. In my
opinion it is not the law, and ought not to be the law that there is any such duty.
In saying this and in the previous discussion I have done no more than adopt,
with greater prolixity, the completely convincing judgment of Bridge L.J.
(with whom in substance Foster J. and Templeman L.J. agreed) in the Court
of Appeal.

I would dismiss the appeal.

Lord Salmon

MY LORDS,

In December 1974 the Burmah Oil Company (which I shall refer to as
"Burmah") was facing ruin and needed massive financial assistance to survive.
Burmah had borrowed £54,000,000 on loan stock in England and $650,000,000
loans in the U.S.A. to finance its business. In the normal course, the maturity
date for these loans would have been 1991/6. Towards the end of 1974 there
had been a very serious slump—one of the worst since 1929. Having regard to
factors I need not recite Burmah's creditors could have become entitled to
require immediate repayment of the loans. There was a great risk that unless
somebody came to Burmah's rescue, Burmah would be forced into liquidation
and a receiver and manager would be appointed. This would have put in
jeopardy all Burmah's assets which included their most important interests in
the North Sea oil fields.

When towards the end of December 1974, the Bank of England (which I shall
call "the Bank") and the Government heard of the alarming debacle facing
Burmah, which, unless avoided, could do serious harm to sterling and other
important national interests, it was decided to come to Burmah's rescue.

According to Burmah, it might well have been possible for it to obtain the
necessary financial support from abroad. This support, however, might have
had conditions attached to it which would have seriously prejudiced the national
economy; so the Bank asked Burmah not to look for help abroad until it had
discovered what help the Bank could offer. Between 23rd December 1974 and
23rd January 1975, there were constant negotiations between Burmah, the
Bank, the Treasury and the Department of Energy.

Burmah's most valuable assets were about 78 million stock units in the
British Petroleum Co. Ltd. (which I shall call "B.P."). By the 31st December
1974, outline proposals had been provisionally agreed between Burmah and
the Bank to the effect that the Bank should produce the necessary cash and
guarantees to save Burmah, and Burmah should mortgage its 78 million
stock units in B.P. to the Bank and transfer 51 per cent of its interest in the
North Sea oil fields to the Government for a price to be negotiated later. The
market value of the B.P. stock units had been about £6 per unit in July 1974
but, owing to the slump, had fallen to below £2 towards the end of December
1974.

By the 10th January, 1975 it had become apparent that the position of
Burmah was even more precarious and that even more help was needed to
save it than had previously been anticipated. On about 10th January the Bank
told Burmah that the previously suggested mortgage of Burmah's B.P. stock
would not meet the situation and suggested that Burmah should sell its B.P.
stocks to the Bank at its current market price and that any profit made by the
Bank out of this transaction should be shared between the Bank and Burmah.
At this time, Burmah thought that the B.P. stock units were likely to recover
to the price they had commanded in July 1974.

10

According to Burmah, five days went by before it learned from the Bank that
the Government did not agree to any profit sharing scheme with Burmah.
Seven days later, on the 22nd January, the Governor and the Deputy Governor
of the Bank told Burmah that it was and always had been their view that a
profit sharing scheme between Burmah and the Bank was reasonable and
should be arranged, but that the Government would not agree to any such
scheme. It was made plain to Burmah that the Government was not prepared to
rescue Burmah unless its B.P. stock units were sold to the Bank at £2.30 per
unit, i.e., 38 pence below the then rising market price and without a profit
sharing scheme of any kind between the Bank and Burmah.

Burmah had no choice but to accept these terms. The selling price amounted
to about £179,000,000. By July 1975 the market price per unit had recovered to
about £5.50. Accordingly the stock which had been bought by the Bank only a
few months previously for about £179,000,000 was already again worth about
£480.000.000 in July 1975—and is worth about twice as much today.

In the present action, Burmah claims against the Bank that the purchase of
the B.P. stock at the price of £179,000.000 should be re-opened mainly on the
grounds that the purchase was:

"(a) unconscionable, inequitable and unreasonable; and

"(b) procured by the Bank acting in breach of its duty of fair dealing and
"taking an unfair and unconscionable advantage of Burmah."

My Lords, it has been conceded, but only for the purpose of this appeal, that
Burmah has a good cause of action if it can establish its allegations against the
Bank.

The present appeal is however concerned only with discovery of documents.
The Bank disclosed a very long list of documents but never itself objected to
producing any of them for inspection by Burmah. The Government, however,
objected to the production of 62 of these documents on the ground of public
interest immunity. On the interlocutory hearing at first instance, H.M. Attorney
General successfully intervened to support the objection to the production of
the 62 documents in question. On the unsuccessful appeal by Burmah to the
Court of Appeal the Attorney General took a similar course; and on appeal to
this House the then Attorney General was joined as a respondent and counsel
appearing for him argued the case against production. The Bank, in this House,
as in both the courts below, took no part in the argument.

I am in no way criticising the very full and carefully prepared certificate of
the Chief Secretary to the Treasury clearly explaining why in his view it would
be contrary to the public interest if any part of the classes of documents were
to be produced for inspection which he has listed in his certificate under
categories A, B and C. The Chief Secretary's certificate is set out verbatim in the
speech of my noble and learned friend Lord Wilberforce, and I will not repeat it.
I shall recite only—

''CATEGORY A

"These consist of communications between, to and from Ministers
"(including Ministers' Personal Secretaries acting on behalf of Ministers)
"and minutes and briefs for Ministers and memoranda of meetings
"attended by Ministers. All such documents relate to the formulation of the
"policy of the Government—

"(a) in face of the financial difficulties of the Burmah Oil Company
"Limited (hereinafter called 'Burmah') in December 1974 and January
"1975, and having regard especially to:—

"(i) the likely effect of the default of Burmah in respect of a large
"dollar loan upon:—

"(a) The £ Sterling

11

"(b) Other British companies with large overseas borrowings:

"(ii) the possible effect of a financial collapse by Burmah upon the
"Government's North Sea oil policy and upon the future pro-
duction of North Sea oil;

"(iii) the expectations which would be aroused on the part of other
"private borrowers defaulting on dollar debts if Burmah were to
"receive assistance;

"(b) in consequence of the measures taken in response to Burmah's said
"financial difficulties and in particular as to what was to be done with
"the B.P. stock sold by Burmah to the Bank in January 1975 having
"regard especially to the international consequences of a sale by the
"Bank of that stock;

"(c) in connection with the giving of further support to Burmah after
"January 1975, having regard particularly to the international
"consequences of a financial collapse by Burmah and the effect of
"such a collapse on the Government's North Sea oil policy."

Category B consists of recorded communications between senior officials
relating to the formulation of one or more of the aspects of Government policy
described in Category A.

Category C consists of recorded communications made in confidence by
important companies or businessmen to Ministers or senior officials in relation
to commercial or financial information. In my view, the classes of documents in
Categories A and B should be treated alike. The class of documents in Category
C seems to me to be irrelevant and could, in any event, be protected from
production on the principles laid down in Reg. v. Lewes JJ.[1973] A.C. 388 and
D. v. N.S.P.C.C.[1978] A.C. 171.

In my opinion, this case has nothing whatever to do with whether the Bank
was right or wrong in deciding to rescue Burmah from the disaster which faced
it—still less with the reasons which prompted the Bank to arrive at this decision.
I entirely agree that the reasons for rescuing Burmah were of the highest national
and political importance and that such parts of the documents in Categories A
and B (if any) which dealt with these reasons were immune from production and
irrelevant.

It is common ground that the Bank decided to rescue Burmah. There is no
issue as to why it did so. The only issues of fact are whether the Bank's in-
sistence on buying Burmah's B.P. stock units below the market price and with
no profit sharing scheme of any kind wax "unconscionable, inequitable and
"unreasonable" and whether this transaction was "procured by the Bank
"acting in breach of its duty of fair dealing and taking an unfair and uncon-
"scionable advantage of Burmah".

When the decision was taken that Burmah should be saved, it must have been
obvious to the Bank and to the Government that this rescue operation might
involve the expenditure of a great deal of money. In these circumstances, I find
it difficult to imagine how £179,000,000 would have been paid to Burmah for
their B.P. stock units unless it had been confidently expected that this stock
might well rise to a price yielding a surplus well above £179,000,000 which
would more than cover the expense of the rescue operation. In other words,
apparently the Bank considered that the stock might well rise to a value which
would leave a substantial residue after debiting it with the cost of the rescue
operation. This residue is probably what, in all the circumstances, the Bank
thought it would be fair to share with Burmah, in proportions to be discussed,
and strongly advised the Government to accept this profit sharing as fair. This,
I think, is also the kind of profit sharing which my noble and learned friend
Lord Wilberforce considered might be shown to be fair, objectively, by the
documents already released for inspection.

12

What is not fair is, I suppose, unfair; and there may be a very fine line or a
chasm dividing the fair from the unfair. If the Bank took what they believed
to be an unfair advantage of Burmah, this might point to the chasm rather
than to the fine line. If the chasm exists, this could point to unconscionable
conduct by the Bank for which it would be responsible, even although it may
have been ordered so to behave by the Government, and was incapable of
disobeying such an order. Whether unconscionable conduct of this kind would
carry any legal liability can be decided only at the trial of the action. Whether
the Bank's conduct was unconscionable may well, in the long run, depend upon
objective tests alone. If, however, during the Bank's discussions with the
Government immediately prior to the conclusion of the agreement for the
purchase of the B.P. stock, the Bank had said anything to suggest that in its
view the terms of the purchase insisted on by the Government were uncon-
scionable, this would strongly support Burmah's assertion that those terms were
indeed unconscionable. The known fact that the Bank had already stated, in
effect, that the terms were unfair and unreasonable suggests that it may well
be that they were also unconscionable. If they were, it would be strong evidence
to support Burmah's case on the facts. No one can tell without looking at the
documents referring to the discussions between the Bank and the Government
what was said by the Bank at these discussions. I recognise also that these
documents may not necessarily record everything that was said.

Nevertheless, in the circumstances to which I have referred, I certainly
consider, and I understand that the majority of your Lordships also consider,
that 10 out of the 62 documents which the Attorney General does not wish
to be produced should be examined by your Lordships to see whether they may
contain evidence "necessary for disposing fairly" of the instant action. These
10 documents cover the period from 10th-28th January 1975 and are numbered
16. 20, 21, 22, 24, 34, 26, 32, 35 and 36 in the appellant's case. The Attorney
General contends that these documents belong to a class of documents which
must be immune from inspection because the immunity is "necessary for the
"proper functioning of the public service." There are, no doubt, classes of
documents which are immune from production because their production would
imperil the safety of the State or diplomatic relations, and also classes of
documents such as Cabinet minutes and others whose immunity from pro-
duction is considered necessary for the proper functioning of the public service.

I would agree that the documents disclosed in this case might be included
amongst the latter classes of documents to the extent which they related to the
reasons which persuaded the Government and the Bank, in the national
interest, to rescue Burmah from the debacle with which it was faced in January
1975. In such circumstances, the lapse of time since 1975 upon which Burmah
relies would, in my opinion, in no way affect the immunity.

The instant case, however, as I have already indicated, is in no way concerned
with the reasons for the decision to save Burmah. It is solely concerned with
the question whether the Bank acted unconscionably when it, in effect, made
Burmah sell its B.P. stock units upon the terms dictated by the Government.
If these terms were unconscionable, the fact that the Bank was obliged by the
Government to insist upon them would not, I think, release the Bank from
responsibility for what it did—nor reflect any credit upon the Government.

Had any of the 10 documents which I have mentioned (a) referred to the
reasons why Burmah had been saved from ruin in the national interest, and (b)
contained evidence that the terms upon which Burmah was obliged to sell its
B.P. stock units were unconscionable, then in my opinion the documents should
have been produced for inspection but with everything under (a) completely
covered up.

I entirely agree that the final decision as to whether or not the national
interest made it necessary for Burmah to be saved from ruin was certainly a
most important piece of policy making which probably required many delicate
and secret factors to be considered. The terms upon which Burmah was to be
obliged to sell its B.P. stock units to the Bank, however, seem to me to have



13

little to do with policy making in the ordinary sense of that term but only
with the making of a hard and perhaps questionable business bargain. A very
strong Board of the Privy Council in Robinson v. State of South Australia
(No. 2) [1931] AC 704 said:

"In view of the increasing extension of state activities into the spheres of
"trading business and commerce, and of the claim of privilege in relation
"to liabilities arising therefrom now apparently freely put forward,
"[Turner L.J.'s observations in Wadeer v. East India Co. (1856) 8 De
"G.M. & G. 182 at 189] stand on record to remind the courts that, while
"they must duly safeguard genuine public interests they must see to it that
"the scope of the admitted privilege is not, in such litigation, extended.
"Particularly must it be remembered in this connection that the fact that
"production of the documents might in the particular litigation prejudice
"the Crown's own case or assist that of the other side is no such 'plain
"'overruling principle of public interest' as to justify any claim of privilege.
"The zealous champion of Crown rights may frequently be tempted to
"take the opposite view, particularly in cases where the claim against the
"Crown seems to him to be harsh or unfair. But such an opposite view
"is without justification. In truth the fact that the documents, if produced,
"might have any such effect upon the fortunes of the litigation is of itself
"a compelling reason for their production—one only to be overborne by
"the gravest considerations of state policy or security."

Robinson's case, as Lord Denning M.R. points out at p.487 was commended in
Conway v. Rimmer [1968] AC 910 by my noble and learned friends Lord
Morris of Borth-y-Gest at p.970. Lord Hodson at p.979 and Lord Pearce at
p.970. Robinson's case also laid down that in a case in what used to be called
Crown Privilege but which is now referred to as Public Interest Immunity, the
courts might in a proper case inspect the documents privately and decide
whether or not they should be produced. This was also approved in Conway v.
Rimmer by my noble and learned friends Lord Hodson at p.979 and Lord
Pearce at p.983 where he said:

"The court has always had an inherent power to inspect and order the
"production of a document or classes of documents if in its view the
"documents, to quote Martin B's. words, 'may be made public without
"'prejudice to the public service'".

My Lords, I have privately inspected the 10 documents to which I have
referred. In my opinion, none of them throws much, if any, light on what is
necessary for fairly disposing of this case; and I would accordingly dismiss the
appeal.

Lord Edmund-Davies

MY LORDS,

Whatever doubts may or may not assail one, this House is required to deal
with this interlocutory appeal on the basis (a) that the plaintiffs have a good
cause of action, and (b) that the likelihood or otherwise of their succeeding in
their claim is at present irrelevant.

Expressed in the broadest terms, the action, brought against the Bank of
England alone, is for a declaration and ancillary relief in respect of an agreement
entered into by the parties on 23rd January 1975. Its most important term for
present purpose was that Burmah undertook to sell to the Bank its largest
single asset, consisting of 77,817,507 ordinary stock units of £1 each of the
British Petroleum Company Limited ("B.P. stock") for £178,980,266, this
representing a price of £2.30 for each unit. Burmah seeks to set aside the agree-
ment on several grounds, the chief being that it was unconscionable, inequitable
and unreasonable.

14

The appeal relates solely to the discovery of documents. It is common ground
that the Government played an active part in the negotiations leading up to
and culminating in the agreement, and the documents held by the Bank naturally
include a number which reveal something of the important role played
by the Government. The existence of such documents has been disclosed
in a long list prepared by the Bank, but on the instructions of the Government
they have resisted production of 62 of their number. In his certificate the Chief
Secretary to the Treasury says that he has read and carefully considered all of
them and has formed the opinion that their production would be injurious to
the public interest. He divides them into Categories A, B and C, which he
describes in the following terms:

"CATEGORY A

"These consist of communications between, to and from Ministers (in-
"cluding Ministers' Personal Secretaries acting on behalf of Ministers)
"and minutes and briefs for Ministers and memoranda of meetings
"attended by Ministers. All such documents relate to the formulation of
"the policy of the Government . . ."

[The Minister thereafter sets out various aspects of Government policy
in relation to the financial difficulties of Burmah].

"CATEGORY B

"These consist of communications between, to and from senior officials
"of the Department of Energy, of the Treasury, and of the Bank, including
"memoranda of meetings of and discussions between such officials, and
"drafts prepared by such officials (including drafts of minutes and briefs
"comprised in Category A), all such communications and drafts relating
"to the formulation of one or more aspects of the policy described in
"Category A."

"CATEGORY C

"These consist of memoranda of telephone conversations and meetings
"between senior representatives of major companies and other businessmen,
"on the one hand, and a Minister or senior officials of Government
"departments and of the Bank on the other and memoranda of meetings
"of such officials and briefs for Ministers and drafts of such briefs, all
"recording or otherwise referring to commercial or financial information
"communicated in confidence by such company representatives and
"businessmen."

In explanation of the Government's opposition to the disclosure of documents
falling within these categories, the Chief Secretary stated:

"It is, in my opinion, necessary for the proper functioning of the public
"service that the documents in Category A and Category B should be
"withheld from production. They are all documents falling within the class
"of documents relating to the formulation of Government policy. Such
"policy was decided at a very high level, involving as it did matters of
"major economic importance to the United Kingdom ..."

"It is, further, in my opinion, necessary for the proper functioning of the
"public service that the documents in Category C should be withheld from
"production. All the documents in this category record or otherwise refer
"to commercial or financial information communicated by businessmen
"outside Government (including senior officers of other oil companies)
"in confidence to Ministers or senior officials in Government departments
"or to the Bank in its capacity as adviser to the Government ... If the
"documents in this category were produced, those supplying the inform-
"ation could be seriously embarrassed. In my opinion, once it was known
"that what was imparted in confidence might be revealed publicly there
"would be a grave danger that such information would cease to be as
"readily forthcoming as it now is. I have no doubt that this would be
"detrimental to the public interest."

15

My Lords, let me say at once that, in the light particularly of the decision of this
House in D. v. N.S.P.C.C. [1978], AC. 171, I am not satisfied that the claim made
in respect of Category C documents could be maintained. But, having regard to
the conclusion I have arrived at regarding the outcome of this interlocutory
appeal, the validity of that particular claim need not now be discussed.

The wording of the claim advanced has obviously been chosen in the light of
certain observations of this House in Conway v. Rimmer [1968] A.C.910. It is a
"class" claim, in contradistinction to a "contents" claim. In other words, the
Chief Secretary avers that all 62 documents belong to a class of documents
which by their very nature ought to be withheld, and this regardless of whether
there is any thing in the contents of any or all of them the disclosure of which
would be against public interest. For a class claim may legitimately be ad-
vanced even in respect of documents having no contents which it would pre-
judice the public interest to disclose. A "contents" claim, on the other hand, is
self-explanatory, and in Conway v. Rimmer (ante) Lord Reid said (at p.943):

"It does not appear that any serious difficulties have been or are likely to
"arise with regard to [a 'contents' claim]. However wide the power of the
"court may be held to be, cases would be very rare in which it could be
"proper to question the view of the responsible Minister that it would be
"contrary to the public interest to make public the contents of a particular
"document."

Even then, however, as the noble and learned Lord added, the question might
arise of selecting for disclosure parts of a document the subject of a "contents"
claim.

A party to litigation who seeks, as here, to withhold from disclosure to the
other party documents which, being included in their list or affidavit of docu-
ments, are ex concessis relevant to the litigation has, as this House made clear
in Conway v. Rimmer (ante) and Reg. v. Lewes JJ. [1973] A.C. 388, per Lord
Reid at 400H, a heavy burden of proof. But it is not contended by the plain-
tiff that the Chief Secretary has failed to establish a good prima-facie case for
withholding all the listed documents. Indeed, it does not stop there, for Burmah
(which nevertheless seeks to inspect 18 of them) accepts that it is now for them
in their turn to establish that those 18 documents are "very likely to contain
"evidence which is highly material" to the issues arising in the case. And
they must go further, for the court has no power to order disclosure unless it is
"of opinion that the order is necessary either for disposing fairly of the cause
"or matter or for saving costs." (See R.S.C., Order 24, Rule 13 (1)). By no
means all relevant documents satisfy such a test.

Indeed, many documents may be of merely vestigial importance, and there-
fore not the proper subject-matter of an order for disclosure. But it is by no
means unknown in litigation—and perhaps understandable—to ask for more
documents than one hopes to get. And that, in my view, has happened in this
case. It is not necessary for me to relate the events leading up to the 'December
'Agreement' arrived at between the parties by Burmah's letter to the Bank
dated 3rd January 1975, accepting certain 'Outline Proposals' advanced by the
latter on 31st December. It should be sufficient to state that the agreement
effected an equitable charge to the Bank of Burmah's B.P. stock, that it pro-
vided that in the event of a sale of such stock Burmah would be consulted
beforehand, and that the proceeds of sale would have benefited Burmah by
being applied in full in discharge of its liability to the Bank. But, for the pur-
poses of this interlocutory appeal, based upon the alleged unconscionability
not of the December agreement but of the later agreement concluded on
23rd January 1975, I should have thought that no question of disclosure could
properly arise in relation to any document earlier than about 10th January
1975, and I proceed to deal with the appeal on that basis.

Summarising the later events, Burmah's case is that on 10th January the
Bank expressed the view that the only solution of their financial problems was
for them to sell their B.P. stock to the Bank at the current quoted price and on
terms that Burmah would share in any profit enuring on the Bank's re-sale



16

of the B.P. stock. And, as the appeal proceeded before this House, it became
Burmah's case that not until 15th January did it learn from the Bank that the
Government was opposed to any sharing of profit made on the re-sale, and that
not until 22nd January did the Bank inform Burmah that:—

1. H.M. Government had decided that the price to be paid by the
   Bank for the B.P. stock was a mere £2.30 per Ordinary Stock Unit;

2. H.M. Government was not prepared to accept any profit-sharing
   formula;

3. Subject to (a) and (b), H.M. Government agreed to the Bank buying
   B.P.'s Burmah stock.

Burmah asserts that, despite its protests against the unconscionability of these
terms, they were in due course obliged to accept them, as by that time they had
no other course open to them. In their defence the Bank expressly admit (a)
that on 22nd January their Governor and Deputy Governor told Burmah that
they remained of the view that profit-sharing was reasonable and that they had
done their best to represent this view to the Government, and further (b) that
the quoted price of B.P. Ordinary Stock Units had been rising since 14th Jan-
uary. But they deny the unconscionability which is at the root of the plaintiff's
claim, and the object of the discovery now sought from them is to destroy that
denial.

My Lords, I have already indicated that the plaintiffs have asked for too
much. But it was urged by the Attorney General that, so expansive were the
numerous admissions made in the Bank's defence and so Liberal had the Bank
been in supplying documents that Burmah had all the material necessary for the
presentation of their case. I do not think that is right. In the face of the Bank's
umbrella denial of any inequality of bargaining power, the sale of B.P. stock
at an undervalue, and all other forms of unconscionable conduct on their
part, it could, as I think, prove a valuable reinforcement of Burmah's case if
they could establish by means of some of the withheld documents that the
Bank had itself committed themselves to the view that the terms finally pre-
sented to Burmah were tainted by those unconscionable features of which
Burmah complained.

What are the probabilities of such documentary support being in existence?
Is it merely pure conjecture? If so, applying the plaintiff's own test, production
should be refused. But in my judgment, there is more to it than that. It is, at
the very least, "on the cards" that, in the light of the Bank's known support
and advocacy of profit-sharing, they expressed their unequivocal dislike when
the Government expressed determination to impose its final terms upon Burmah.
It was, I think an over-simplification for the Attorney General to submit that
the only issue is whether the January agreement was in fact inequitable, and
not whether the Bank regarded it as inequitable. For if, faced by Government
obduracy despite its strong representations, the Bank insisted upon the pro-
posed contractual terms, an arguable foundation for the appellants' allegations
of unconscionability against the Bank itself could be laid. Then is all this
merely "on the cards", simply a "fishing expedition"? If that is all there is to
it, discovery should be refused. But in my judgment the existence of such docu-
mentary material is Likely. And that, in my judgment, is sufficient. For although,
as the noble and learned Lord, Lord Wilberforce, has pointed out, it was
known in Conway v. Rimmer (ante) that there were in existence probationary
reports on the plaintiff, positive knowledge of that sort is not, in my view, a
sine qua non before discovery may be ordered. Nevertheless, as I have already
indicated, I think it is very unlikely to have come into existence before 10th
January 1975 and (if it exists at all) it will probably be found in the 10 documents
numbered 16, 20, 21, 22, 24, 34, 26, 32, 35 and 36 in the appellants' case.

And so, as I see it, the position is reached that, on the one hand, the appel-
lants seek disclosure of 10 documents which may well contain material "neces-
"sary ... for disposing fairly of the cause or matter or for saving costs", while,
on the other hand, the Attorney General by his intervention asserts that the
withholding of these 10 documents (2 in Category A and 8 in Category B)

17

is "necessary for the proper functioning of the public service". In these cir-
cumstances, the balancing exercise with which the courts of this country have
become increasingly familiar since Conway v. Rimmer (ante) is called for, and
if the appellants are to succeed the scales must come down decisively in their
favour (see A. Crompton Ltd. v. Customs & Excise [1974] A.C. 405, per Lord
Cross at 434F).

Despite the strong claims advanced by the Chief Secretary, none of the 10
documents belong to those categories (such as Cabinet decisions and papers)
hitherto largely regarded as totally immune from production. And acceptance
of that claim does not necessarily preclude disclosure. For, as Lord Radcliffe
said in Glasgow Corporation v. Central Lands Board 1956 SC (HL) 1 at 18:

"The power reserved to the court is ... a power to order production even
"though the public interest is to some extent affected prejudicially
"The interests of Government, for which the Minister should speak with
"full authority, do not exhaust the public interest. Another aspect of that
"interest is seen in the need that impartial justice should be done in the
"courts of law, not least between citizen and Crown and that a litigant who
"has a case to maintain should not be deprived of the means of its proper
"presentation by anything less than a weighty public reason. It does not
"seem to me unreasonable to expect that the court would be better
"qualified than the Minister to measure the importance of such principles
"in application to the particular case that is before it."

My Lords, it follows, as I think, that the respondents were wrong in sub-
mitting that, if the appellants are to succeed in this interlocutory appeal, they
must establish that the Chief Secretary's certificate is probably inaccurate.
On the contrary, disclosure may well be ordered even though its accuracy is
not impugned, for the Minister's view is one-sided and may be correct as far
as it goes but is yet not to be regarded as decisive of the matter of disclosure.
For, as Lord Reid said in Conway v. Rimmer (ante, at 943B):

"The Minister who withholds production of a 'class' document has no
"duty to consider the degree of public interest involved in a particular
"case by frustrating in that way the due administration of justice. If it is
"in the public interest in his view to withhold documents of that class,
"then it matters not whether the result of withholding a document is
"merely to deprive a litigant of some evidence on a minor issue in a case
"of little importance or, on the other hand, is to make it impossible to do
"justice at all in a case of the greatest importance."

There is a further feature in this case which it would be pusillanimous to
ignore. It consists in the fact that this is not one of those cases where the
complete detachment of the party resisting disclosure is beyond doubt. It is true
that the Government is not a party to these proceedings, but it would be
unrealistic to think that the conduct of Government's servants and advisers
nowise enters into this case. Not only is it the fact that, whereas the defendants,
left to their own devices, would have complied in full with the plaintiffs' request
for discovery, but its only opponent (through the intervention of the Attorney
General) is the Government, whose own role must inevitably and inescapably be
scrutinised and may be subjected to criticism. Accordingly, since not only
justice itself but also the appearance of justice is of considerable importance, the
balancing exercise is bound to be affected to some degree where the party
objecting to discovery is not a wholly detached observer of events in which it
was in no way involved. It cannot realistically be thought that the Government
is wholly devoid of interest in the outcome of these proceedings. On the con-
trary, it has a very real and lively interest, for were the plaintiff to succeed
it could only be on the basis that the Bank behaved unconscionably, and the
evidence indicates that the Bank was acting throughout in accordance with
Government instructions. This fact renders apposite certain observations of
Lord Blanesburgh, who was in Robinson v. State of South Australia (No. 2)
[1931] AC 704, at 715:

"In view of the increasing extension of state activities into the spheres of
"trading business and commerce, and of the claim of privilege in relation



18

"to liabilities arising therefrom now apparently freely put forward, [Turner
"L.J.'s] observations [In Wadeer v. East India Co. (1856) 8 De G.M. & G.
"182 at 189] stand on record to remind the courts that, while they must
"duly safeguard genuine public interests they must see to it that the
"scope of the admitted privilege is not, in such litigation, extended.
"Particularly must it be remembered in this connection that the fact that
"the production of the documents might in the particular litigation
"prejudice the Crown's own case or assist that of the other side is no such
"'plain overruling principle of public interest' as to justify any claim of
"privilege. The zealous champion of Crown rights may frequently be
"tempted to take the opposite view, particularly in cases where the claim
"against the Crown seems to him to be harsh or unfair. But such an
"opposite view is without justification. In truth the fact that the docu-
"ments, if produced, might have any such effect upon the fortunes of the
"litigation is of itself a compelling reason for their production—one only
"to be overborne by the gravest considerations of state policy or security."

My Lords, I should add that, on the state of the available material, I have
difficulty in regarding it as conceivably prejudicial to state policy were it
revealed by such discovery of documents as I have earlier referred to that the
Bank themselves regarded as unconscionable the terms dictated by the Govern-
ment before the January agreement could be concluded. That the Government
might well be considerably embarrassed by the revelation is readily under-
standable, but that is without relevance to this interlocutory appeal.

Yet, when all is said and done and even accepting that the withheld documents
are likely to contain material supportive of the allegation of unconscionability,
this House is at present completely in the dark as to the cogency of such
material. For example, does it clearly and substantially support the allegation,
or only to an insignificant degree? Unless its evidentiary value is clear and
cogent, the balancing exercise may well lead to the conclusion that the public
interest would best be served by upholding the Chief Secretary's objection to
disclosure. On the other hand, if the material provides strong and striking
support of the plaintiffs' claim, the court may conclude that, when this is set
against such prejudice to the public interest as is likely to arise were any
disclosure made in late 1979 regarding even high-policy commercial negotia-
tions conducted in January 1975, the interests of justice demand that disclosure
(complete or partial) should be ordered. A judge conducting the balancing
exercise needs to know (in the words of Lord Pearce in Conway v. Rimmer
(ante, at 987D)):

"... whether the documents in question are of much or little weight in
"the litigation, whether their absence will result in a complete or partial
"denial of justice to one or other of the parties or perhaps to both, and
"what is the importance of the particular litigation to the parties and the
"public. All these are matters which should be considered if the court is to
"decide where the public interest lies."

No judge can profitably embark on such a balancing exercise without
himself seeing the disputed documents. May he take a peep? In Conway v.
Rimmer (ante, at 953A) Lord Reid said:—

"It appears to me that, if the Minister's reasons are such that a judge can
"properly weigh them, he must, on the other hand, consider what is the
"probable importance in the case before him of the documents or other
"evidence sought to be withheld. If he decides that on balance the docu-
"ments ought to be produced, I think that it would generally be best that
"he should see them before ordering production ... I can see nothing
"wrong in the judge seeing documents without their being shown to the
"parties ... If on reading the document he ... thinks that it ought to be
"produced he will order its production.

"But it is important that the Minister should have a right to appeal before
"the document is produced."

19

Lord Upjohn said (at 995E):—

"... if privilege is claimed for a document upon the ground of 'class',
"the judge, if he feels any doubt about the reason for its inclusion as a
"class document, should not hesitate to call for its production for his
"private inspection, and to order its production if he thinks fit."

But it has been suggested that the position is otherwise where the 'class'
claim is not challenged. I see no reason why this should be so, once it is pos-
tulated that the withheld 'class' documents are "likely" to contain material
substantially useful to the party seeking discovery. That qualification is neces-
sary, for what is no more than a 'fishing expedition' ought not to be advanced
by the judge's having a peep to see whether they contain an attractive catch.
But, provided such reservation is rigidly adhered to, a judicial peep seems to be
justifiable in both cases and may, indeed, prove vital in each if the judge is to
be enabled to arrive at a just conclusion in the matter of discovery. Indeed,
though not so intended, the further observations of Lord Upjohn in Conway v.
Rimmer seem to be entirely apposite to both cases. He said (at 995G):—

"There is a lis between A & B; the Crown may be A or B or, as in this case,
"a third party . . . But when the judge demands to see the documents
"for which privilege is claimed he is not considering that lis but quite a
"different lis, that is, whether the public interest in withholding the docu-
"ment outweighs the public interest that all relevant documents not
"otherwise privileged should be disclosed in litigation. The judge's duty
"is to decide that lis; if he decides it in favour of disclosure, cadit quaestio;
"if he decides it in favour of non-disclosure he banishes its contents from
"his mind for the purposes of the main lis."

In my judgment, such material as is presently available leads me to the con-
clusion that this Appellate Committee of your Lordships' House should now
privately inspect the 10 documents earlier referred to. What they contain re-
mains to be seen. All three members of the Court of Appeal themselves in-
spected certain documents and expressed widely varying conclusions as to
their materiality, but your Lordships have no knowledge of which of the 62
listed documents they inspected, and, even if you had, it is still for your Lord-
ships to form your own views regarding the 10 documents earlier specified.
If the conclusion is that they contain nothing of any significance, this appeal
should be dismissed. But if, on the other hand, material evidence comes to
light, your Lordships will be called upon to adjudicate whether, in balancing
the competing public interests, disclosure of any of the 10 documents or any
parts of them should be ordered. The final disposal of this appeal must await
and will depend upon the nature of that adjudication.

My Lords, it was some days after I had completed and passed for typing
the foregoing observations that I privately inspected the 10 documents earlier
referred to. Having done so, in my judgment disclosure of none of them can
be described as "necessary either for disposing fairly of the cause or matter
"or for saving costs". It follows that I would uphold in its entirety the
objection to production advanced by the Chief Secretary to the Treasury and
dismiss this interlocutory appeal.

Lord Keith of Kinkel

MY LORDS,

This appeal is concerned with the legal topic known formerly as Crown
privilege and now as public interest immunity. The topic embraces those
rules of law which are applicable for the purpose of determining whether a
litigant is entitled to the discovery of documents claimed to be relevant to his
case, the production of which is resisted by the Crown on the ground that it
would be detrimental to the public interest, that ground being vouched by
a Ministerial certificate.

20

The matter was last considered comprehensively by this House in Conway v.
Rimmer [1968] AC 910. It was there held, contrary to certain dicta in Duncan v.
Cammell, Laird & Co. [1942] AC 624, that a Minister's certificate was not
conclusive, but that it was a proper function of the court to weigh against each
other the aspect of public interest appearing from the reasons stated in the
certificate and the public interest that the administration of justice should
not be frustrated. This result was regarded as being in line with the law of
Scotland as affirmed in Glasgow Corporation v. Central Land Board 1956 S.C.
(H.L.) 1, and also with that of most Commonwealth countries on the lines
expounded in Robinson v. State of South Australia (No. 2) [1931] AC 704
and that of the United States as appearing from United States v. Reynolds
(1953) 345 U.S. 1.

Having held that the Minister's certificate was not conclusive and laid down
the principle that the decision for or against discovery was to be reached by the
balancing process described, the House had to go on to consider whether
discovery was appropriate in the circumstances of the case before it. The docu-
ments sought to be produced were reports of a routine character relating to the
plaintiff during his period of probation as a police constable, and by their
nature were of extreme importance to the proper disposal of his action for
malicious prosecution against his former superintendent. The House had no
difficulty in deciding that prima facie they ought to be produced, but thought
it proper, before so ordering, to inspect the documents in order to make sure
that there was nothing in their contents the disclosure of which would pre-
judice the public interest. For this purpose it was necessary to enter to some
extent upon a general consideration of the type of circumstances under which
discovery might correctly be ordered despite Crown objection backed by a
Ministerial certificate. But in my opinion no definitive body of binding rules
universally applicable to future cases in the field is to be gathered from the
speeches delivered, and the sound development of the law now requires that
it be examined afresh. As was said by Lord Upjohn (at p.991):—

"... in this field the courts are entitled from time to time to make a re-
"appraisal in relationto particular documents of just what it is that the
"public interest demands in shielding them from production."

It is convenient to start with the points of distinction between what are
commonly called 'class' and 'contents' claims to immunity. In Conway v.
Rimmer (supra) Lord Reid said at p.943:—

"A Minister's certificate may be given on one or other of two grounds:
"either because it would be against the public interest to disclose the
"contents of the particular document or documents in question, or because
"the document belongs to a class of documents which ought to be with-
"held, whether or not there is anything in the particular document in
"question disclosure of which would be against the public interest. It
"does not appear that any serious difficulties have arisen or are likely
"to arise with regard to the first class. However wide the power of the
"court may be held to be, cases would be very rare in which it could be
"proper to question the view of the responsible Minister that it would be
"contrary to the public interest to make public the contents of a particular
"document. A question might arise whether it would be possible to sepa-
"rate those parts of a document of which disclosure would be innocuous
"from those parts which ought not to be made public, but I need not
"pursue that question now. In the present case your Lordships are directly
"concerned with the second class of documents."

Lord Hodson in the same case at p.979 said that he did not regard the
classification which places all documents under the heading either of contents
or class as being wholly satisfactory. I agree with him. What really matters is
the specific ground of public interest upon which the Ministerial objection is
based, and it scarcely needs to be said that the more clearly this ground is
stated the easier will be the task of the court in weighing it against the public
interest in the administration of justice. The weight of a contents claim is
capable of being very readily measured. Obvious instances are documents
relating to defence of the realm or relations with other states. It might be said



21

that such documents constitute a class defined by reference to the nature of their
contents. But I would prefer to regard the claim in regard to such a document
as being in substance a contents claim, in relation to which Lord Upjohn said
in Conway v. Rimmer at p.993:

"A claim made by a Minister on the basis that the disclosure of the con-
"tents would be prejudicial to the public interest must receive the greatest
"weight; but even here I am of opinion that the Minister should go as far
"as he properly can without prejudicing the public interest in saying why
"the contents require protection. In such cases it would be rare indeed for
"the court to overrule the Minister but it has the legal power to do so,
"first inspecting the document itself and then, if he thinks proper to do so,
"ordering its production."

Claims to immunity on class grounds stand in a different category because
the reasons of public interest upon which they are based may appear to some
minds debatable or even nebulous. In Duncan v. Cammell, Laird & Co. (supra)
Lord Simon at p.642 referred to cases "where the practice of keeping a class of
"documents secret is necessary for the proper functioning of the public service".
These words have been seized on as convenient for inclusion in many a Mini-
sterial certificate, including the one under consideration in the present case.
But they inevitably stimulate the query "why is the concealment necessary for
"that purpose?" and unless it is answered there is nothing tangible to put in the
balance against the public interest in the proper administration of justice.

Over a considerable period it was maintained, not without success, that the
prospect of the disclosure in litigation of correspondence or other communica-
tions within government departments would inhibit a desirable degree of
candour in the making of such documents, with results detrimental to the
proper functioning of the public service. As mentioned by Lord Reid in Conway
v. Rimmer (at p.945) the fashion for this was set by Lord Lyndhurst L.C.
through the reasons, possibly oblique, which he gave for refusing production
of communications between the directors of the East India Company and the
Board of Control in Smith v. East India Co. (1841) 1 Ph. p. 50. This contention
must now be treated as having little weight, if any. In Conway v. Rimmer
Lord Morris of Borth-y-Gest (at p.957) referred to it as being of doubtful
validity. Lord Hodson (at p.976) thought it impossible at the present day to
justify the doctrine in its widest term. Lord Pearce (at p.986) considered that a
general blanket protection of wide class led to a complete lack of common
sense. Lord Upjohn (at p.995) expressed himself as finding it difficult to justify
the doctrine "when those in other walks of life which give rise to equally
"important matters of confidence in relation to security and personnel matters
"as in the public service can claim no such privilege." The notion that any
competent and conscientious public servant would be inhibited at all in the
candour of his writings by consideration of the off-chance that they might have
to be produced in a litigation is in my opinion grotesque. To represent that
the possibility of it might significantly impair the public service is even more
so. Nowadays the state in multifarious manifestations impinges closely upon
the lives and activities of individual citizens. Where this has involved a citizen
in litigation with the state or one of its agencies, the candour argument is an
utterly insubstantial ground for denying him access to relevant documents.
I would add that the candour doctrine stands in a different category from that
aspect of public interest which in appropriate circumstances may require
that the sources and nature of information confidentially tendered should be
withheld from disclosure. Reg. v. Lewes JJ. [1973] A.C. 388 and D. v. N.S.P.C.C.
[1978] AC 171 are cases in points on that matter.

I turn to what was clearly regarded in Conway v. Rimmer as the really
important reason for protecting from disclosure certain categories of docu-
ments on a class basis. It was thus expressed by Lord Reid at p.952:—

"I do not doubt that there are certain classes of documents which ought
"not to be disclosed whatever their contents may be. Virtually everyone
"agrees that Cabinet minutes and the like ought not to be disclosed until
"such time as they are only of historical interest. But I do not think that
"many people would give as the reason that premature disclosure would



22

"prevent candour in the Cabinet. To my mind the most important reason
"is that such disclosure would create or fan ill-informed or captious
"public or political criticism. The business of government is difficult
"enough as it is, and no government could contemplate with equanimity
"the inner workings of the government machine being exposed to the
"gaze of those ready to criticise without adequate knowledge of the back-
"ground and perhaps with some axe to grind. And that must, in my view,
"also apply to all documents concerned with policy making within depart-
"ments including, it may be, minutes and the like by quite junior officials
"and correspondence with outside bodies. Further it may be that deli-
"berations about a particular case require protection as much as deli-
"berations about policy. I do not think that it is possible to limit such
"documents by any definition."

Lord Hodson at p. 973 referred to classes of documents which from their
very character ought to be withheld from production, such as Cabinet minutes,
dispatches from ambassadors abroad and minutes of discussions between
heads of departments. Lord Pearce at p. 987 said that obviously production
would never be considered of fairly wide classes of documents of a high level
such as Cabinet correspondence, letters or reports on appointments to office of
importance and the like. Lord Upjohn spoke to similar effect at p. 993, saying
that the reason for the privilege was that it would be wrong and entirely inimical
to the proper functioning of the public service if the public were to learn of
these high level communications, however innocent of prejudice to the state
the actual contents of any particular document might be, and that this was
obvious.

In my opinion, it would be going too far to lay down that no document
in any particular one of the categories mentioned should ever in any circum-
stances be ordered to be produced, and indeed I did not understand counsel for
the Attorney General to pitch his submission that high before this House.
Something must turn upon the nature of the subject-matter, the persons who
dealt with it, and the manner in which they did so. In so far as a matter of
government policy is concerned, it may be relevant to know the extent to which
the policy remains unfulfilled, so that its success might be prejudiced by dis-
closure of the considerations which led to it. In that context the time element
enteres into the equation. Details of an affair which is stale and no longer of
topical significance might be capable of disclosure without risk of damage to
the public interest. The Ministerial certificate should offer all practicable
assistance on these aspects. But the nature of the litigation and the apparent
importance to it of the documents in question may in extreme cases demand
production even of the most sensitive communications at the highest level.
Such a case might fortunately be unlikely to arise in this country, but in cir-
cumstances such as those of Sankey v. Whitlam (1978) 53 A.L.J.R. 11 or Nixon
v. U.S.A. 418 U.S. 683, to which reference is made in the speech of my noble
and learned friend Lord Scarman, I do not doubt that the principles there
expounded would fall to be applied. There can be discerned in modern times a
trend towards more open governmental methods than were prevalent in the
past. No doubt it is for Parliament and not for courts of law to say how far
that trend should go. The courts are, however, concerned with the consideration
that it is in the public interest that justice should be done and should be publicly
recognised as having been done. This may demand, though no doubt only in a
very limited number of cases, that the inner workings of government should
be exposed to public gaze, and there may be some who would regard this as
likely to lead, not to captious or ill-informed criticism, but to criticism cal-
culated to improve the nature of that working as affecting the individual
citizen. I think that considerations of that nature were present in the mind of
Lord Denning M.R. when delivering his dissenting judgment in the Court of
Appeal in this case, and in my opinion they correctly reflect what the trend
of the law should be.

There are cases where a consideration of the terms of the Ministerial certi-
ficate and of the nature of the issues in the case before it as revealed by the
pleadings, taken with the description of the documents sought to be recovered,



23

will make it clear to the court that the balance of public interest lies against
disclosure. In other cases the position will be the reverse. But there may be
situations where grave doubt arises, and the court feels that it cannot properly
decide upon which side the balance falls without privately inspecting the docu-
ments. In my opinion the present is such a case. Those of your Lordships who
have already spoken have set out comprehensively the circumstances of the
case, the nature and the claimed grounds of the cause of action upon which
the appellants found and the terms of the Ministerial certificate. I need not
rehearse these matters. The appellants maintain that the bargain struck be-
tween them and the Bank of England on 23rd January 1975, whereby inter
alia the latter acquired the appellant's holding of B.P. stock at a very low
price, was an unconscionable one, impetrated by abuse of the Bank's superior
bargaining power, and that it should therefore be set aside. The particular
aspect of the bargain which the appellants claim to have been unconscionable
was that it made no provision for them participating in any gain which might
accrue from a future rise in the value of the B.P. stock units. The Bank in
relation to the transaction acted in substance as an agency of the Government
and was able to offer only the terms which the Government required it to offer.
It is common ground that the Governor and Deputy Governor of the Bank
favoured an arrangement whereby the appellants would participate in any
future profit on the B.P. stock units, but that the Government were not pre-
pared to agree to this. Naturally there were meetings and discussions about
this matter between representatives of the Government departments con-
cerned and of the Bank of England. The list of 62 documents discovery of which
was originally sought by the appellants is now reduced to 10. These all relate to
such meeting and discussions between 10th and 22nd January 1975. The Sec-
retary of State for Energy and the Paymaster General were present at one of
these meeting. The Deputy Governor of the Bank of England was present at
all of them. Certain of them constituted a follow-on of meetings for the earlier
part of which representatives of the appellants had been present.

The 10 documents in question are certified by the Minister as relating to the
formulation of the policy of the Government in face of the appellant's financial
difficulties in the light of certain considerations which he sets out. Two of them
involve Ministers, the remainder senior officials of various Government depart-
ments. There are of course a substantial number of documents among the other
52 which are similarly certified. While it must be accepted that the 10 documents
have to do with the formulation of policy, I consider it to be a proper inference
that they are not concerned solely with that. Having regard to the timing and
the context, they must clearly deal to some extent with the application of
policy, with the expression by the Deputy Governor of the Bank of England
of the Bank's views about what would be reasonable terms for any agreement
to be entered into with the appellants, and with the instructions ultimately
given to the Bank by the governmental representatives. It has to be kept in
mind that the court need not order disclosure of the whole terms of any parti-
cular document. Parts of it relating to any politically sensitive aspects of the
formulation of policy may be withheld from disclosure, while disclosing other
parts of clear evidential importance in the litigation. Having carefully
considered all the circumstances, I have come to the conclusion that
a reasonable probability exists of finding the documents in question to
contain a record of the views of the responsible officials of the Bank of England
expressed in such terms as to lend substantial support to the contention that
the bargain eventually concluded with the appellants was unconscionable.
I do not agree that the issue of unconscionability is to be treated entirely
objectively. If it were to be proved, for example, that the Deputy Governor of
the Bank strongly protested that the terms of the bargain were unconscionable
but was overborne by the Government, that would, in my view, be important
evidence in the appellants' favour. There can be no doubt that the court has
power to inspect the documents privately. This was clearly laid down in Conway
v. Rimmer (supra). I do not consider that exercise of such power, in cases
responsibly regarded by the court as doubtful, can be treated as itself detri-
mental to the public interest. Indeed, I am of opinion that it is calculated to
promote the public interest, by adding to public confidence in the administra-
tion of justice. Whatever the merits of the present action, there can be no doubt
that the numerous shareholders of the Burmah Oil Company suffered a grevious






24

blow as a result of the transaction which is the subject of it. Whether they
might have suffered worse had the transaction not been entered into is
neither here nor there. They might not unreasonably feel a sense of grievance
were the court not even to inspect the documents privately to operate the
balancing exercise which it is the court's duty to carry through. Such con-
siderations were in the mind of Walton J. in Tito v. Waddell (unreported—
3rd March 1975) when he asked and obtained the consent of counsel for the
Crown to his inspection of certain documents, lest the Banaban islanders might
feel that they had received less than justice. In my opinion he could and might
appropriately have inspected the documents without any such consent. Appre-
hension has on occasion been expressed lest the power of inspection might
be irresponsibly exercised, perhaps by one of the lower courts. As a safeguard
against this, an appeal should always be available, as indicated in Conway v.
Rimmer (supra) by Lord Reid at p. 993.

For these reasons I am in agreement with the majority of your Lordships
that this is a proper case for the court to require the 10 documents in question
to be made available for private inspection. I do not consider that the discretion
to order or refuse production of the documents was capable of being exercised
soundly and with due regard to principle in the absence of such inspection.
Accordingly I see no difficulty in differing from Foster J. and the majority of
the Court of Appeal.

Having inspected the documents, I agree with the majority of your Lordships,
though with some hesitation, that none of them contains matter of such evi-
dential value as to make an order for their disclosure, in all the circumstances,
necessary for disposing fairly of the case.

It follows that I would dismiss the appeal.

Lord Scarman

MY LORDS,

At the beginning of his long and careful argument on behalf of the Attorney
General, Mr. Silkin Q.C. reminded the House that this is an interlocutory
appeal from a decision of the Court of Appeal refusing (by a majority) to
interfere with decisions reached by Foster J. in the exercise of his discretion.
Of course, he was correct. But it would be wrong to infer either that the appeal
lacks importance because it is interlocutory or that no question of law arises
because upon questions as to discovery of documents the judge exercises his
discretion. The truth is that the appeal raises a question of law of great impor-
tance. Your Lordships are asked to determine the respective spheres of the
executive and the judiciary where the issue is whether documents for which
"public interest immunity" is claimed are to be withheld from disclosure in
litigation to which they are relevant. More specifically, the House has to
decide whether Conway v. Rimmer is definitive of the law, i.e., sets limits
statute-wise to the power of the court, or is an illustration upon its particular
facts of a broader principle of judicial review.

Others of your Lordships have already told the story of Burmah's disaster.
Briefly, Burmah was in appalling financial trouble at the end of 1974. The com-
pany was on the brink of default in respect of £54,627,900, 8 1/2 per cent, un-
secured loan stock. By the trust deed which constituted the stock, Burmah was
liable to repay the whole if the trustees were to declare that the undischarged
borrowings by Burmah and its United Kingdom wholly owned subsidiaries
exceeded the total of their share capital plus capital and revenue reserves.
Such a declaration was believed to be imminent. Some informed observers
believed that the undischarged debt already exceeded Burmah's capital and
reserves. This spectre of insolvency arose from the misfortunes, and perhaps
the mistakes, of 1974. In order to extend its North American operations Burmah
had in January and July 1974 arranged loan facilities up to $650m. with some
30 banks, mostly overseas. Burmah had drawn some $625m. on those facilities.

25

In the event of default under any of the dollar loan agreements, or of any other
indebtedness becoming prematurely due by reason of default (e.g., under the
trust deed, to which I have already referred), Burmah must repay all the dollar
loans. Burmah was also seriously at risk of default under arrangements it had
made for financing the construction or chartering of tankers. The company's
two financial advisers, Flemings and Barings, saw no way out of these diffi-
culties for Burmah, unaided. And aid could only come from the market (in-
cluding the big oil companies and the financial institutions of the City of
London) or the British Government. In any negotiation for financial help
Burmah had two assets of special importance—"the B.P. stock" and a sub-
stantial interest in two North Sea oilfields, "Thistle" and "Ninian". Burmah
owned some 20 per cent, of the ordinary stock of B.P.: but at the end of 1974
the market value of this stock had fallen very low—much lower, in fact, than
its "asset value". The stock was, however, unencumbered. It was, therefore,
a source of confidence to Burmah's unsecured creditors and available to Burmah
in any financial negotiation the company might be advised to undertake. The
two oilfields were assets of great potential value; but in 1974, required heavy
development expenditure.

Clearly much else was at stake besides the loss of shareholders' capital if
Burmah were to be forced by insolvency into liquidation. Failure by a large
British company to meet its dollar obligations and the disruptive effect of the
company's failure upon the exploitation of North Sea oil would be matters of
national importance. Burmah's financial advisers, therefore, approached the
Bank of England ("the Bank"). The Bank immediately informed the Govern-
ment.

The litigation which gives rise to the question which the House now has to
decide is concerned with the negotiations between Burmah, the Bank and the
Government, which began at the very end of December 1974 and ended on the
23rd January 1975, when Burmah agreed to sell the B.P. stock to the Bank at a
price of £2.30 a stock unit. It is Burmah's case that the Bank, under instructions
from the Government, took an unconscionable advantage of Burmah's weak-
ness by insisting on a price which, while reflecting the current market depression,
was a gross undervalue, and without offering Burmah, as the Governor and
Deputy-Governor thought it would have been reasonable to do, a share in
any profit on a re-sale of the stock by the Bank. All expected the market price
to recover: and, indeed, its recovery began in January 1975. By July 1975 the
price had risen appreciably: and by July 1978 it was over £8 a unit.

There were two phases of the negotiation. The first ended with the "December
"agreement" (made the 31st December 1975 and confirmed in writing by
Burmah on the 3rd January 1975). The relevant terms were that the Bank
would guarantee the dollar loans for 12 months and would cover the repayment
of the unsecured loan stock by subscribing in cash at par a new £54m. loan
stock; in consideration of this assistance, Burmah was to transfer to the Bank
by way of security, will full power of sale, the B.P. stock, and agreed to the
transfer, whenever required by the Government, of 51 per cent, of its interest
in the oilfields of the Continental shelf. Burmah also agreed to the appointment
of Peat, Marwick, Mitchell & Co. to report on its finances.

One obvious consequence of the December agreement was that Burmah
lost the power to dispose of the B.P. stock as it thought fit. The stock was
charged to the Bank, who had full powers of sale. The power of disposal of this
vital asset had, therefore, passed from Burmah to the Bank. A not so obvious,
but very serious, consequence was that the agreement did nothing to prevent
default under either the loan stock trust deed or the dollar loan agreements.
The December agreement offered a cure after default: but it was prevention
of default which alone could save Burmah. A third consequence was that the
confidence of Burmah's unsecured creditors was profoundly shaken by the
loss, as they saw it, of the B.P. stock without any compensating benefit being
offered to them.

The second phase of the negotiations began on the 10th January 1975, by
which time Barings had become aware of the dangerous implications of the



26

December agreement for Burmah. Burmah put forward a proposal which would
not commit the company to a sale of the B.P. stock. But the Bank, reflecting
the views of the Government and, in effect, acting upon the instructions of the
Government, rejected it. Cash, which was what Burmah needed to avoid default
on its borrowings, was on offer only for a sale of the stock at a price determined
by the Government; and that price, £2.30 per unit, was very low indeed. Burmah,
having lost the right to dispose of the stock without the Bank's consent and
having no chance of raising money elsewhere in the time available, were in no
position to resist. The Government, in the revealing words of the Attorney
General's written case (paragraph 6, (20)), "had decided that the price to be
"paid for the B.P. stock should be £2.30 per unit; the Government was not
"prepared to accept any profit-sharing formula and, subject thereto, the Govern-
"ment agreed to the Bank purchasing the B.P. stock from Burmah".

Burmah pleaded with the Bank. The Governor and Deputy Governor were
sympathetic: but the Government was adamant and the Bank was not prepared
to commit itself to any terms other than those acceptable to the Government.
At a meeting on the 22nd January 1975 the Governor and Deputy Governor
said that they remained of the view that the suggestion of a profit-sharing
arrangement was reasonable and that they had done what they could to re-
present this view to the Government. Later the same day H.M. Paymaster
General told the representatives of Burmah that it was not possible for the
Government to improve the terms of sale.

On the 23rd January 1975 Burmah accepted the terms proposed by the
Government and the Bank. The acceptance constituted the "January agrec-
"ment" which took the place of the December agreement. Burmah now agreed
with the Bank (so far as relevant) that: —

(i) the Bank would purchase the B.P. stock at £2.30 per unit for a cash
sum of £178.980,266.10;

(ii) the Bank would guarantee Burmah's dollar borrowings up to $650m.:
(iii) the Bank would provide a stand-by facility of £75m.

The B.P. stock was transferred to the Bank on the same day. Shortly afterwards
Barings wrote a letter to the Bank protesting against the terms of sale.

A feature of the negotiations was the participation of the Government.
The Permanent Secretary to the Department of Energy and senior officials of
H.M. Treasury took a prominent part. When at their very end, the 22nd
January 1975 (Burmah then being within eight days of a catastrophic default
on its obligations), Burmah protested at the terms being offered, the Deputy
Governor said the Bank would not object to Burmah having direct discussions
with the Paymaster General who was handling the matter for the Government:
and later on the same day it was the Paymaster General who in answer to
Burmah's representations replied that it was not possible to improve the terms
of the sale. The role of the Bank is clear: whatever the opinion of the Governor
or Deputy Governor as to the fairness of the terms on offer, the Bank was not
prepared to negotiate terms of sale other than those acceptable to the Govern-
ment. The Government's attitude created the pressure (whether reasonable
or not); the Bank exerted it upon Burmah by refusing to modify the Govern-
ment's terms.

By a writ, issued on the 6th October 1976, Burmah claimed against the Bank
an order that it cause 77,817,507 ordinary stock units of £1 each of the British
Petroleum Co. Ltd. (the B.P. stock) to be transferred back to Burmah against
repayment of the purchase price of £178,980,266.10. To succeed, Burmah has
to make good one or more of the allegations contained in paragraph 53 of its
statement of claim. Burmah alleges that the sale of the B.P. stock to the Bank:—

1. was unconscionable, inequitable and unreasonable; or

2. was procured by the Bank acting in breach of its duty of fair dealing
   and taking an unfair and unconscionable advantage of Burmah;

27

3. by its terms, wrongfully purported to render nugatory Burmah's
   right to redeem;

4. involved the Bank in obtaining an improper collateral advantage in
   connection with the taking of security.

Mr. Hoffman Q.C. for Burmah provided a brief but helpful analysis of the
cause of action. He described it as one "not yet fully developed in English
"law". In its narrow formulation his case is based on, or analogous to, the
mortgagor's equity of redemption; the Bank, having a charge on the B.P.
stock, rendered Burmah's right of redemption nugatory, it is said, by forcing
Burmah to sell on unreasonable terms. In its broadest formulation his case
is one of "economic duress", as developed in the case law of the United States
of America. This development is said to spring from equitable principles
established and recognised by the English Courts of Chancery, and to have a
common law, or Admiralty, analogue in the law of salvage at sea. He relies
on United States v. Bethlehem Steel Corporation (1942) 315 U.S. 289, (in parti-
cular the concurring opinion of Murphy J. at p.311 and the discussion of the
English and American case law in the dissenting opinion of Frankfurter J.
beginning at p.325).

Despite its boldness, the cause of action is to be assumed for the purpose
of this appeal to be one recognised by English law. No application has been
made to strike out the statement of claim: nor, in my opinion, could such an
application succeed. Indeed, there are indications in the modern case law that
economic duress in a commercial setting may well constitute a good cause of
action: see The "Siboen" [1976] 1 Lloyd's Rep. 293, (Kerr J.); North Ocean
Shipping Co. Ltd. v. Hyundai Construction Co. Ltd. [1978] 3 All E.R. 1170
(Mocatta J.) and the Privy Council decision, Pao On v. Lau Yin Long now
reported [1979] 3 All ER 65 delivered on the 9th April 1979.

The Bank has pleaded fully to the statement of claim, admitting much but
denying specifically the allegations of unfair pressure, unconscionability and
abuse of its bargaining power. On the 21st December 1977 the Bank served
on Burmah its list of documents. Full discovery was given of all minutes or
notes of meetings at which Burmah was represented. But in Part III of Schedule
1 of the list the Bank described and enumerated 62 documents which it objected
to produce on the ground that they "belong to classes of documents, the pro-
duction of which would be injurious to the public interest". Burmah issued a
summons for production of the 62 documents, which after considering a
certificate of objection given by the Chief Secretary to the Treasury Foster J.
dismissed. On the 19th January 1979 the Court of Appeal (Bridge and
Templeman L.JJ., Lord Denning M.R. dissenting) dismissed Burmah's appeal,
but gave leave to appeal. The judge and the Court of Appeal allowed the
Attorney General to intervene. In your Lordships' House the Attorney General
has been made a party to the appeal. In the event the case against production
of the documents has been argued at all stages by counsel for the Attorney
General, the Bank being content to abide by whatever order is ultimately
made.

In his certificate, dated the 18th October 1977, the Chief Secretary to the
Treasury recognises that the 62 documents, disclosure of which Burmah seeks,
relate to the matters in question in this action. He expresses the opinion that
their production would be injurious to the public interest. The reasons given for
his opinion is that it is necessary for the proper functioning of the public
service that production of the documents should be withheld. His objection is
what has become known as a "class" objection. The Chief Secretary grounds
his opinion not upon the contents but upon the class of the documents. He
places them in three classes: categories A, B and C. The documents in
categories A and B relate to the formulation of Government policy. Category C
is a class of documents which refer to commercial or financial information
communicated by businessmen in confidence to Ministers or senior officials
of the Government or to the Bank in its capacity as advisers to the Government.
None of the 62 documents, he says, can be called "routine". He makes clear



28

that, if it were sought to give oral evidence of the contents of any of the docu-
ments, the Government would object.

The appeal, as it turns out, concerns only categories A and B. In its written
case Burmah concedes that of the 62 listed documents only 18 are likely to
contain evidence highly material to the issues in the action. These 18 documents
are in categories A and B, which relate to the formulation of Government
policy. During argument it became clear that only 10 of the 18 could contain
information likely to assist on the critical issue—the Bank's conduct of the
negotiations of the terms of sale of the B.P. stock in the sensitive areas of price
and a possible profit-sharing formula. The question for the House is, therefore,
whether these 10 documents, which cover discussions and communications
between the Bank and the Government during the second phase of the negotia-
tions, i.e., the negotiation of the January agreement, are to be withheld from
production.

Although in ihe High Court discovery of documents is automatic in most
civil litigation, this is no more than a convenient practice ordered and regulated
by rules of court: see R.S.C., Order 24, and the recent decision of this House in
Nasse v. Science Research Council. Discovery of documents remains, ultimately,
a matter for the discretion of the court. It is a discretion governed by two
general rules of law. The first is that discovery is not to be ordered unless
necessary for fairly disposing of the case or for saving costs: R.S.C., Order 24.

The second is that only documents in a party's possession and control
which relate to the matters in issue are required to be disclosed, but all such
documents, subject to certain exceptions, are to be disclosed, whether or not
admissible in evidence. Public interest immunity is, of course, an exception.
The case law has given an extended meaning to the qualifying clause "which
"relate to the matters in issue". It embraces not only documents directly
relevant but also documents which may well lead to a relevant train of inquiry:
the Peruvian Guano case. This extended meaning is a vital part of the law of
discovery, enabling justice to be done where one party knows the facts and
possesses the documents and the other does not.

Foster J. based his decision on the view which he formed that production of
the documents for which immunity is claimed would not materially assist the
plaintiff's case at trial. He was, I think, right, when faced with the public
interest immunity objection to disclosure, to ask himself whether production
could be said to be necessary for fairly disposing of the case. For, if it be
shown that production was not necessary, it becomes unnecessary to balance
the interest of justice against the interest of the public service to which the
Minister refers in his certificate. But the judge formed his view without himself
inspecting the documents. It is said—and this view commended itself to the
majority of the Court of Appeal—that the Bank has given very full discovery
of the documents directly relevant to the critical issue in the action, namely,
the conduct by the Bank of the negotiations with Burmah: that Burmah knows
as much about this issue as does the Bank: and that it can be fully investigated
and decided upon the documents disclosed and the evidence available to Burmah
without recourse to documents noting or recording the private discussions
between the Bank and the Government. Upon this view, Burmah's attempt
to see these documents is no more than a fishing expedition.

I totally reject this view of the case. First, as a matter of law, the documents
for which immunity is claimed relate to the issues in the action and, according
to the Peruvian Guano formulation, may well assist towards a fair disposal of
the case. It is unthinkable that in the absence of a public immunity objection
and without a judicial inspection of the documents disclosure would have been
refused. Secondly, common sense must be allowed to creep into the picture.
Burmah's case is not merely that the Bank exerted pressure: it is that the Bank
acted unreasonably, abusing its power and taking an unconscionable advantage
of the weakness of Burmah. Upon these questions the withheld documents may
be very revealing. This is not "pure speculation". The Government was creating
the pressure: the Bank was exerting it upon the Government's instructions. Is
a court to assume that such documents will not assist towards an understanding



29

of the nature of the pressure exerted ? The assumption seems to me as unreal
as the proverbial folly of attempting to understand Hamlet without reference
to his position as the Prince of Denmark. I do not understand how a court
could properly reach the judge's conclusion without inspecting the documents:
and this he refused to do. The judge in my opinion wrongly exercised his
discretion when he refused to inspect unless public policy (of which public
interest immunity is a manifestation) required him to refuse.

It becomes necessary, therefore, to analyse closely the public interest immunity
objection made by the Minister and to determine the correct approach of the
court to a situation in which there may be a clash of two interests—that of the
public service and that of justice.

In Conway v. Rimmer [1968] AC 910 this House had to consider two ques-
tions. They were formulated by Lord Reid (p.943) in these terms:—

"... first, whether the court is to have any right to question the finality
"of a Minister's certificate and, secondly, if it has such a right, how and in
"what circumstances that right is to be exercised and made effective".

The House answered the first question, but did not, in my judgment, provide,
nor was it required to provide, a complete answer to the second.

As I read the speeches in Conway v. Rimmer the House answered the first
question by establishing the principle of judicial review. The Minister's certi-
ficate is not final. The immunity is a rule of law: its scope is a question of law:
and its applicability to the facts of a particular case is for the court, not the
Minister, to determine. The statement of Lord Kilmuir L.C. of the 6th June
1956 (all that is relevant is quoted in Conway v. Rimmer at p.922) that:—

"the Minister's certificate on affidavit setting out the ground of the claim
"must in England be accepted by the court"

is no longer a correct statement of the law. Whether Conway v. Rimmer be
seen as a development of or a departure from previous English case law is a
matter of no importance. What is important is that it aligned English law with
the law of Scotland and of the Commonwealth. It is the heir apparent not of
Duncan v. Cammell, Laird & Co. [1942] AC 624 but of Robinson v. State of
South Australia (No. 2) [1931] AC 704 and of Glasgow Corporation v. Central
Land Board [1956] SC (HL) 1.

Having established the principle of judicial review, the House had in Conway
v. Rimmer a simple case on the facts to decide. The question was whether
routine reports, albeit of a confidential character, upon a former probationary
police constable should in the interests of justice be disclosed in an action
brought by him against his former superintendent in which he claimed damages
for alleged malicious prosecution. There was a public interest in the con-
fidentiality of such reports, but the Home Secretary, in his affidavit objecting
to production on the ground of injury to the public interest, did not go so far
as to say that it was necessary for the proper functioning of the public service
to withhold production. On the other hand, the reports might be of critical
importance in the litigation. Granted the existence of judicial review, here was
a justiciable issue of no great difficulty. The House decided itself to inspect the
documents, and, having done so, ordered production.

In reaching its decision the House did indicate what it considered to be the
correct approach to the clash of interests which arises whenever there is a
question of public interest immunity. The approach is to be found stated in
two passages of Lord Reid's speech—p.940 C to F, and p.952 C to G. The
essence of the matter is a weighing, on balance, of the two public interests,
that of the nation or the public service in non-disclosure and that of justice
in the production of the documents. A good working, but not logically perfect,
distinction is recognised between the contents and the classes of documents.
If a Minister of the Crown asserts that to disclose the contents of a document
would, or might, do the nation or the public service a grave injury, the court
will be slow to question his opinion or to allow any interest, even that of justice,

30

to prevail over it. Unless there can be shown to exist some factor suggesting
either a lack of good faith (which is not likely) or an error of judgment or an
error of law on the Minister's part, the court should not (the House held)
even go so far as itself to inspect the document. In this sense, the Minister's
assertion may be said to be conclusive. It is, however, for the judge to determine
whether the Minister's opinion is to be treated as conclusive. I do not under-
stand the House to have denied that even in "contents" cases the court retains
its power to inspect or to balance the injury to the public service against the
risk of injustice, before reaching its decision.

In "class" cases the House clearly considered the Minister's certificate to be
more likely to be open to challenge. Undoubtedly, however, the House thought
that there were certain classes of documents, which ought not to be disclosed
however harmless the disclosure of their contents might be, and however
important their disclosure might be in the interest of justice. Cabinet minutes
were cited as an example. But the point did not arise for decision. For the
documents in Conway v. Rimmer, though confidential, were "routine", in no
way concerned with the inner working of the Government at a high level; and
their production might well be indispensable to the doing of justice in the
litigation.

The point does arise in the present case. The documents are "high level".
They are concerned with the formulation of policy. They are part of the inner
working of the government machine. They contain information which the
court knows does relate to matters in issue in the action, and which may, on
inspection, prove to be highly material. In such circumstances the Minister may
well be right in his view that the public service would be injured by disclosure.
But is the court bound by his view that it is necessary for the proper functioning
of the public service that they be withheld from production? And, if non-
disclosure is necessary for that purpose, is the court bound to hold that the
interest in the proper functioning of the public service is to prevail over the
requirements of justice?

If the answer to these two questions is to be in the affirmative as Lord Reid
appears to suggest in Conway v. Rimmer, \ think the law reverts to the statement
of Lord Kilmuir. A properly-drawn Minister's certificate, which is a bona fide
expression of his opinion, becomes final. But the advance made in the law by
Conway v. Rimmer was that the certificate is not final. I think, therefore, that it
would now be inconsistent with principle to hold that the court may not—even
in a case like the present—review the certificate and balance the public interest
of government to which alone it refers, against the public interest of justice,
which is the concern of the cour .

I do not therefore accept that there are any classes of documents which,
however harmless heir contents and however strong the requirement of
justice, may never be disclosed until they are only of historical interest. In this
respect I think there may well be a difference between a "class" objection and
a "contents" objection—though the residual power to inspect and to order
disclosure must remain in both instances. A Cabinet minute, it is said, must be
withheld from production. Documents relating to the formulation of policy at
a high level are also to be withheld. But is the secrecy of the "inner workings
"of the government machine" so vital a public interest that it must prevail
over even the most imperative demands of justice? If the contents of a document
concern the national safety, affect diplomatic relations or relate to some state
secret of high importance, I can understand an affirmative answer. But if they
do not (and it is not claimed in this case that they do), what is so important
about secret government that it must be protected even at the expense of
injustice in our courts?

The reasons given for protecting the secrecy of government at the level of
policy-making are two. The first is the need for candour in the advice offered
to Ministers: the second is that disclosure "would create or fan ill-informed or
"capricious public or political criticism". Lord Reid (Conway v. Rimmer p.952)
thought the second "the most important reason". Indeed, he was inclined to
discount the candour argument.

31

I think both reasons are factors legitimately to be put into the balance which
has to be struck between the public interest in the proper functioning of the
public service (i.e., the executive arm of government) and the public interest in
the administration of justice. Sometimes the public service reasons will be
decisive of the issue: but they should never prevent the court from weighing
them against the injury which would be suffered in the administration of
justice if the document was not to be disclosed. And the likely injury to the
cause of justice must also be assessed and weighed. Its weight will vary accord-
ing to the nature of the proceedings in which disclosure is sought, the relevance
of the documents, and the degree of likelihood that the document will be of
importance in the litigation. In striking the balance, the court may always, if it
thinks it necessary, itself inspect the documents.

Inspection by the court is, I accept, a power to be exercised only if the court
is in doubt, after considering the certificate, the issues in the case and the
relevance of the documents whose disclosure is sought. Where documents
are relevant (as in this case they are), I would think a pure "class" objection
would by itself seldom quieten judicial doubts—particularly if, as here, a
substantial case can be made for saying that disclosure is needed in the interest
of justice.

I am fortified in the opinion which I have expressed by the trend towards
inspection and disclosure to be found both in the United States and in Com-
monwealth countries. Of course, the United States have a written constitution
and a Bill of Rights. Nevertheless both derive from the common law and
British political philosophy. Mutatis mutandis, I would adopt the principle
accepted by the Supreme Court in Nixon v. U.S.A. 418 U.S. 683 which is
summarised in 41 L Ed 2d at p. 1046:

"Neither the doctrine of separation of powers, nor the need for con-
"fidentiality of high level communications, without more, can sustain
"an absolute unqualified presidential privilege of immunity from judicial
"process under all circumstances; although the President's need for
"complete candor and objectivity from advisers calls for great deference
"from the courts, nevertheless when the privilege depends solely on the
"broad, undifferentiated claim of public interest in the confidentiality
"of such conversations, a confrontation with other values arises; absent
"a claim of need to protect military, diplomatic or sensitive national
"security secrets, it is difficult to accept the argument that even the very
"important interest in confidentiality of Presidential communications is
"significantly diminished by production of such material for in camera
"inspection with all the protection that a United States District Court
"will be obliged to provide."

In Australia the High Court had to consider the problem in a recent case
where the facts were, admittedly, exceptional. In Sankey v. Whitlam (1978)
53 A.L.J.R. 11 the plaintiff sought declarations that certain papers and docu-
ments, to which the magistrate in criminal proceedings instituted by the plaintiff
against the defendants had accorded privilege, should be produced. The
offences alleged against Mr. Whitlam, a former Prime Minister, and others
were serious—conspiracies to act unlawfully in the conduct of official business.
Mr. Justice Gibbs, Acting Chief Justice, dealt with the issue of Crown privilege
as follows:

"For these reasons I consider that although there is a class of documents
"whose members are entitled to protection from disclosure irrespective
"of their contents, the protection is not absolute, and it does not endure
"for ever. The fundamental and governing principle is that documents in
"the class may be withheld from production only when this is necessary in
"the public interest. In a particular case the court must balance the general
"desirability that documents of that kind should not be disclosed against
"the need to produce them in the interests of justice. The court will of
"course examine the question with especial care, giving full weight to the
"reasons for preserving the secrecy of documents of this class, but it will
"not treat all such documents as entitled to the same measure of protection



32

"—the extent of protection required will depend to some extent on the
"general subject matter with which the documents are concerned. If a
"strong case has been made out for the production of the documents,
"and the court concludes that their disclosure would not really be detri-
"mental to the public interest, an order for production will be made.
"In view of the danger to which the indiscriminate disclosure of documents
"of this class might give rise, it is desirable that the government concerned,
"Commonwealth or State, should have an opportunity to intervene and
"be heard before any order for disclosure is made. Moreover no such
"order should be enforced until the government concerned has had an
"opportunity to appeal against it, or test its correctness by some other
"process, if it wishes to do so (cf. Conway v. Rimmer at p.953)."

Both Nixon's case and Sankey v. Whitlam are far closer to the Scottish and
Commonwealth stream of authority than to the English. In the Glasgow
Corporation case at p.ll, supra. Lord Simonds said:

"that there always has been and is now in the law of Scotland an inherent
"power of the court to override the Crown's objection to produce docu-
"ments on the ground that it would injure the public interest to do so".

In Robinson v. Slate of South Australia (No. 2) supra, the Privy Council
reminded the Supreme Court of South Australia of the existence of this power.
The power must be exercised judic-ally, and all due weight must be given to
the objections of the Crown: that is all.

Something was made in argument about the risk to the nation or the public-
service of an error at first instance. Injury to the public interest—perhaps
even very serious injury—could be done by production of documents which
should be immune from disclosure before an appellate court could correct
the error. This risk is inherent in the principle of judicial review. The House in
Conway v. Rimmer recognised its existence, but, nevertheless, established the
principle as part of our law. Mr. Justice Gibbs also mentioned it in Stinkey v.
Whitlam (supra). I would respectfully agree with Lord Reid's observations
on the point in Conway v. Rimmer (p.953):—

"It is important that the Minister should have a right to appeal before the
"document is produced".

In cases where the Crown is not a party—as in the present case --the court
should ensure that the Attorney General has the opportunity to intervene
before disclosure is ordered.

For these reasons I was one of a majority of your Lordships who thought it
necessary to inspect the 10 documents. Having done so, I have no doubt that
they are relevant and, but for the immunity claim, would have to be disclosed,
but their significance is not such as to override the public service objections
to their production. Burmah will not suffer injustice by their non-disclosure,
while their disclosure would be, in the opinion of the responsible Minister,
injurious to the public service. I would, therefore, dismiss the appeal.

By way of tail-piece I mention the strange affair of the edited documents.
The Bank, claiming immunity for part, but not the whole, of certain documents,
covered up the parts to the disclosure of which it objected. Burmah's advisers
were able to penetrate the cover and read their contents. They did not tell
their client what they had seen. Should they now be disclosed, the cover
having been blown? The issue evaporated because it became clear in argument
that Burmah were ultimately fighting to see only the 10 documents, which a
majority of your Lordships has now inspected. But the accident of an insufficient
cover cannot weaken the objection of public interest immunity. Even if the
parties allow discovery, the court must take the objection of its own motion:
and this may have to be done even before the Crown intervenes. There was a
difference of opinion as to the importance of the covered up parts. But in
view of the course taken by the parties in argument in this House the question
does not arise. Burmah's advisers acted with propriety in the handling of the
incident.