Disorganized Developments Pty Ltd & Ors v State of South Australia

[2022] HCATrans 149

[2022] HCATrans 149

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Adelaide  No A7 of 2022

B e t w e e n -

DISORGANIZED DEVELOPMENTS PTY LTD

First Applicant

PETER KEITH STACY

Second Applicant

STEPHEN JOHN TAYLOR

Third Applicant

and

STATE OF SOUTH AUSTRALIA

Respondent

Application for special leave to appeal

GAGELER J
GORDON J
GLEESON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA AND BY VIDEO CONNECTION

ON FRIDAY, 9 SEPTEMBER 2022, AT 9.30 AM

Copyright in the High Court of Australia

GAGELER J:   In accordance with the protocol for remote hearings, I will announce the appearances of the parties.

MR W.J.N. WELLS, KC appears for the applicants.  (instructed by Jon Lister Barrister & Solicitor)

MR M.J. WAIT, SC, Solicitor‑General for the State of South Australia, appears with MS C.M. NOLAN for the respondent.  (instructed by Crown Solicitor’s Office (SA))

GAGELER J:   Mr Wait, we would be assisted by hearing from you first in this matter.

MR WAIT:   Thank you, your Honours.  Your Honours, if I can commence with ground 1 of the application, South Australia says that the applicants misstate the reasoning process that was undertaken by the Court of Appeal with respect to this ground.  At paragraph 2 of the applicants’ reply it is submitted that:

the Court of Appeal did not construe text – because of the remarkable feature that there was no relevant text to construe.  Instead, the Court derived an ultimate purpose and converted it into text.

With respect, we say that that is a mischaracterisation of the manner by which the Court of Appeal reasoned.  The Court of Appeal were engaged in an exercise of construing the Cowirra regulations and the first step in the court’s reasoning, which is at paragraph 33 of the judgment that can be found in the application book – I will just find the page reference – we can see “The first step” referred to in paragraph 33 on page 35.  The first step in the reasoning was for the court to note that it is not necessary for the regulation to use the word “declare” in order for the regulation to have the effect of declaring the particular land to be “a prescribed place”.  In other words, whilst the court acknowledged that there needed to be a formal statement in the form of a regulation that declared a particular place to be prescribed, the Governor did not need to use a formula such as, I hereby declare that the Cowirra Land is a prescribed place.

Now, the Court of Appeal in that reasoning accepted that there was a requirement that there be a statement of regulatory intent and some formality in the prescribing of that place.  The applicants then seek to make much of this turn of phrase used by the Court of Appeal and the reference to “regulatory intent”.  We can see, for example, at paragraph 17 of their submissions they suggest that the Court of Appeal found a purpose and then used it:

to construct the required declaration out of “a statement of regulatory intent that land is prescribed” where the text does not purport to declare the land –

We say that is to mischaracterise the Court of Appeal’s process of reasoning because, having made the observation that the word “declaration” is not necessary to give effect to a declaration, the Court of Appeal then proceeded to construe the text of the relevant regulation.  We can see at paragraph 38 of the Court of Appeal’s reasons that the Court of Appeal there set out the text of the operative regulation and, of course, the drafting error that is plainly apparent is that the text refers to the regulation having the operation of varying the consolidated regulation.

GAGELER J:   Mr Wait, one way of characterising the Court of Appeal’s reasoning is that they say, well, look, there is an obvious right way to achieve this result; we know what the result is that is trying to be achieved and therefore we infer that the right way was intended.  Perhaps there is nothing more to it than that; maybe there is.

GLEESON J:   Mr Wait, what else could have been intended, apart from the declaration of the premises as a prescribed place?

MR WAIT:   Nothing, your Honour.  Nothing at all, in our submission.  That is why we say that the Court of Appeal correctly identified the relevant question at paragraph 41, where they say:

The question is not whether the Cowirra regulations can be construed as making a declaration . . . instead of varying the principal regulations.  It is whether they can be so construed in addition to doing so.

GORDON J:   Is that right though, Mr Wait?  I mean, there are three propositions out there.  We are dealing with delegated legislation, so the three questions I think are:  does it comply with its source?

MR WAIT:   Yes.

GORDON J:   As I understand it you accept it on its face, it does not.  In other words, I think the Court of Appeal says it has to be inferred.  There is a whole line of authority which says if you can construe it to fit it, you can, but you cannot do so in a way in relation to delegated legislation that leads to amendment of it.  Is that not what they did here – or at least arguably did here?

MR WAIT:   Your Honour, we say what the regulation does is it does vary the consolidated regulation so as to record that the Cowirra Land is declared.  We say it would be absurd if the regulation did not impliedly declare the Cowirra Land to be a prescribed place but then required an amendment of the consolidated regulation to record that the Cowirra Land was prescribed, when in fact that had not been the effect of the regulation itself.

So, in other words – I think, to Justice Gleeson’s question, the counter of the alternative construction is that the Cowirra regulations – individual regulations – do not have the effect of declaring that land to be prescribed places, in which case, their only effect is to vary a consolidated regulation so that it incorrectly states the legal position.  We just say that that really gives the regulation not only no work to do but mischievous work to do, and it cannot – admittedly, the regulation clearly does not, on its face, say that it declares the land, but, in coming back to answer your Honour Justice Gordon’s question, we do not concede that that means that the regulation does not have the effect, when properly construed, of declaring the land.

In that respect, we would say that it does comply – albeit through a process of implication, but that it does comply with the head of power to make declarations.  It also, of course, complies with the one place rule – which is found in section 83GA(2) – which was that these regulations needed to deal with only one place, and that was part of an oversight scheme that the legislation provides for so the Parliament can then consider the propriety of each declaration; but, I do not understand that to be in issue.

So, your Honours, we say that, albeit that the Court of Appeal was confronted with unfortunate drafting, ultimately they have construed text – they have construed regulation 3, and they have construed it as having the additional function – or, in another portion of the judgment, they refer “in the same breath”, so the regulation is in the same breath varying the consolidated regulation, but also declaring the prescribed place.

Once it is seen that there is text, then the force of the applicants’ special leave point on this ground, we say, falls away, because the point that is made against us is, there is simply no text that is being construed.  We say that in making that submission the applicants go too far.  There is text that is being construed, and the applicants might say that the Court of Appeal has tried too hard to give the text a purpose of construction.  They might disagree with the construction, but at the end of the day, it is a question of construction and we say that does not warrant this Court’s intervention.

GORDON J:   It is also a question of power, though, Mr Wait.  It is a question of whether or not it is in the manner and form within the limits laid down by the legislature.

MR WAIT:   Sorry, your Honour.  There is a sense in which I certainly, with respect, agree with your Honour that we are always looking to ensure that the exercise of delegated legislation is within power, and that really leads to the construction exercise to consider whether or not the delegated legislation did effect a declaration.  That process, having been undertaken, completed by the Court of Appeal, yes, in their conclusion there was a declaration, then we say at the conclusion of that construction exercise no longer a question of absence of power, because the power is a power to declare prescribed places.  If that is the effect of the regulation properly construed, then the question of power is answered favourably.  I might, then – unless your Honours have further questions in relation to ground one – proceed then to address ground two.

Now, one of the principal reasons that the applicant advances in support of special leave on ground 2 is, they say, in paragraph 3 of their submissions, that ground 2:

invites attention to the correct approach to an exercise of power –

providing a factum that triggers a normative provision last addressed by this Court in the Bread Manufacturers’ Case.  This is said to be a proper vehicle to consider that issue.  We have sought to demonstrate in our response that there is no substantive dispute between the parties in relation to this topic.  It is not and was never part of South Australia’s case that if a regulation‑making power can be characterised as a legislative rather than administrative or executive, then it could not or should not be construed as giving rise to procedural fairness obligations, and nor did the Court of Appeal find – or reason – that we start by characterising the nature of the power as a legislative or not, and that that then forms a stepping stone to the reasoning.

In fact, the Court of Appeal really eschewed that approach, and that can be – their reasoning on that commences at paragraph 70 of the judgment, where their Honours paraphrase the principle in Bread Manufacturers, saying:

the nature of the power will often have limited relevance, particularly if to focus on that would come at the expense of consideration of the actual content and effect of the power in question.

That is paragraph 71, at the bottom of page 43 of the book.  They then quote Chief Justice Gibbs’ judgment over the page, on page 44 of the book at the top, and then refer to a number of judgments, including, over the page at paragraph 81, they are referring there to subordinate legislation, where, in some instances, it has been held that procedural fairness attaches, and in other instances it does not.

We did not submit, and the Court of Appeal did not fall into any error in attaching too much weight or being distracted by the question about whether or not the power ought to be characterised as legislative or otherwise.  Accordingly, we say that this does not fall – this is not a good vehicle for the testing or the revisiting of Breadmakers; we say that the parties were on all fours, and the court also did not depart from what is really essential to draw from Breadmakers – sorry, Bread Manufacturers – that the nature of the power ought not be given undue weight and therefore form a distraction to looking to the underlying content of the power in question. 

If I move on, then, to the other aspects of the Court of Appeal’s reasoning that the applicants focus on.  There are really two other aspects.  First, the indeterminacy of the class of participants in criminal organisations who might be affected by an exercise of the power to prescribe places and, secondly, the broad social and policy focus of the offence provision in question.  Before ‑ ‑ ‑ 

GLEESON J:   Mr Wait, can I ask a question in relation to the first of those matters.  Do you accept that a person in the situation of the applicants, if given an opportunity to be heard, might have been able to dissuade the decision‑maker not to make a prescribed place declaration?

MR WAIT:   Your Honour, I cannot put it as high as to say that there is nothing that could conceivably be put by the applicants that could relevantly bear on the decision about whether or not to prescribe a place.  So, I cannot and do not try to rebut that proposition in such a high way.

What our submission to the Court of Appeal, which was accepted, was, however – was that the focus of the provision and the focus of the decision‑making about whether or not to prescribe a place was not on questions of individual affectation or individual justice, as in many other decision‑making powers; the focus was rather on the social policy outcome that the scheme is designed to protect.

There are a number of cases that the Court of Appeal canvasses, and there is one decision of Kawasaki – a Federal Court decision involving questions of customs.  Now, that provides, without needing to go to the details of the decision – but the context of a decision‑making in a customs arena is a good illustration in the sense that a decision made in the regulation of customs may very significantly and directly affect the interests of an importer or an exporter.  That does not mean that the focus of the decision‑making power is upon that individual effect; the focus is on the socio‑political – economic policy, rather than political – economic consequences that follow from such decision‑making.  So ‑ ‑ ‑

GORDON J:   Mr Wait, the facts of Kawasaki and the regulation‑making power there are very different from here, are they not?  I mean, here we have got a locus:  we have a prescribed place, we have a focus which can be identified.

MR WAIT:   Your Honour ‑ ‑ ‑

GORDON J:   Very different territory, are we not, on that first factor relied upon or referred to by the Court of Appeal?

MR WAIT:   Your Honour, when it comes to the prescribing of places, there are, of course, many places that can be prescribed.  So, for example ‑ ‑ ‑

GORDON J:   The difficulty about that is each declaration prescribes one place.  That is the power.

MR WAIT:   Yes, your Honour, but it is not limited to a certificate of title.  The place might be Adelaide Airport, and so there might be hundreds of affected commercial and other interests that might be affected by that.  The effect on participants of criminal organisations could vary from, of course, a place that might be club rooms, where participants might be quite directly affected; through to a business that might be for acquainted‑by participants in criminal organisations, where the interests of, let us say, a publican might be affected; through to much more diffuse types of interest, such as the declaration of Adelaide Airport or Glenelg Beach. 

We can try to multiply examples, but the point is that the diffusion of the kinds of interests and the complexity in discerning who an obligation of procedural fairness might attach to was one factor that the Court of Appeal placed some weight on – one amongst the number.  It was a holistic exercise that was undertaken of detailed – with respect, we say, a careful detailed reasoning of the Court of Appeal that ultimately – it turned on a question of construction of a unique scheme in South Australia which we say does not warrant the Court’s attention.

Your Honours, I might, in the short time I have left, just refer to the extended definitions of participants in criminal organisations.  That is set out at page 29 of the book.  We can the definition set out in the judgment of the Court of Appeal.  We can see there that participants include:

a director or officer of –

criminal organisations:

a person who (whether by words or conduct –

in paragraph (b) here:

or in any other way) asserts, declares or advertises his or her membership –

and, in paragraph (c):

a person who . . . seeks to be a member –

But over the page:

a person who attends more than 1 meeting or gathering –

and paragraph (e):

a person who takes part in the affairs of the organisation –

but not a lawyer.  Now, the problem that the Court of Appeal grappled with – with such very grey and diffuse nature of participation, drawing a boundary about where the obligations to provide procedural fairness end would be a very difficult exercise indeed.

GAGELER J:   Thank you, Mr Wait.  We will retire momentarily to consider the course we will take.

AT 9.52 AM SHORT ADJOURNMENT

UPON RESUMING AT 9.57 AM:

GAGELER J:   We do not need to hear from you, Mr Wells.  There will be a grant of special leave to appeal in this matter on both grounds.  How long would you expect the case to take to argue, Mr Wells?

MR WELLS:   I expect half a day to a day, your Honour.

GAGELER J:   Mr Wait?

MR WAIT:   I would agree with that, your Honour.

GAGELER J:   Yes.  Very well.  Thank you very much.  The Court will now adjourn until 10.30 am.

AT 9.57 AM THE MATTER WAS CONCLUDED