Envy Trading v State of Queensland

[1997] QCA 150

IN THE COURT OF APPEAL	[1997] QCA 150
SUPREME COURT OF QUEENSLAND

Appeal No. 2203 of 1996

Brisbane

[State of Qld & Anor. v. Envy Trading & Ors.]

BETWEEN:

STATE OF QUEENSLAND

(First Defendant)

AND:

PRIMARY INDUSTRIES CORPORATION

(Second Defendant)

Appellants

AND:

ENVY TRADING (a firm)

(First Plaintiff)

AND:

N.V. & E.N. KRIEG

(Second Plaintiffs)

Respondents

Davies J.A.
McPherson J.A.

Mackenzie J.

Judgment delivered 3 June 1997

Joint reasons for judgment of Davies J.A. and Mackenzie J.; McPherson J.A. concurring as to the orders made.

APPEAL ALLOWED IN PART. THE INJUNCTION GRANTED IN PARAGRAPH 2 OF THE JUDGMENT OF THE LEARNED PRIMARY JUDGE IS SET ASIDE AND IN LIEU THE APPELLANTS ARE RESTRAINED FROM REQUIRING PRODUCTION OF CHEQUES OF A SUM GREATER THAN $500 DRAWN ON ANY OF THE ACCOUNTS IDENTIFIED IN A NOTICE DATED 30 JANUARY 1996 OTHER THAN THE TWO CHEQUES SPECIFIED IN PARAGRAPH 3 OF THAT NOTICE.

NO ORDER IS MADE AS TO COSTS.

CATCHWORDS:	INJUNCTIONS - interpretation of s.18 Forestry Act 1959 - meaning of "in the forest officer's opinion" - whether opinion was reasonable. Attorney-General (NSW) v. Quin (1990) 170 C.L.R. 1 Federal Commissioner of Taxation v. Australia and New Zealand Banking Group Limited (1979) 143 C.L.R. 499 Parramatta City Council v. Pestell (1972) 128 C.L.R. 305 Forestry Act 1959 (Qld) ss.18, 53, 78
Counsel:	Mr. M. P. Irwin, with him Ms. D. A. Silvester for the appellants Mr. G. Egan for the respondents
Solicitors:	Crown Solicitor for the appellants Murdochs for the respondents
Hearing Date:	7 April 1997

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 2203 of 1996

Brisbane

Before Davies J.A.
McPherson J.A.
Mackenzie J.

[State of Qld & Anor. v. Envy Trading & Ors.]

BETWEEN:

STATE OF QUEENSLAND

(First Defendant)

AND:

PRIMARY INDUSTRIES CORPORATION

(Second Defendant)

Appellants

AND:

ENVY TRADING (a firm)

(First Plaintiff)

AND:

N.V. & E.N. KRIEG

(Second Plaintiffs)

Respondents

JOINT REASONS FOR JUDGMENT - DAVIES J.A. AND MACKENZIE J.

Judgment delivered 3 June 1997

The State of Queensland and Primary Industries Corporation appeal against that part of a

judgment which restrained them from requiring production of any document pursuant to a notice dated

30 January 1996. The notice which was addressed to the Manager of the National Australia Bank at
Pittsworth, was one requiring production of the following documents:

"1. Specimen signature card bearing a signature by Neil Victor Krieg;

2.        cheques of a sum greater than $500 drawn on any of the following accounts;

3.        cheques for the sum of $2,075 and $2,950 bearing dates prior to 6th of May 1993 and drawn on any of the following accounts.

The accounts relevant to the records and writings listed in 1, 2 and 3 above are any bank account kept in any of the following names:

i	Neil Krieg;
ii	Neil Victor Krieg;
iii	N.V. & E.N. Krieg;
iv	ENVY Trading."

No period is specified in respect of the cheques, the subject of paragraph 2, though the period

relevant to the inquiry is specified as being from 1 January 1991 to 1 November 1995.

It is said earlier in the notice that those "records and writings" are, in the opinion of the forest

officer, material to an inquiry he is making pursuant to the provisions of s.18(1)(c) of the Forestry Act

1959. The inquiry is then described in the notice as being one to ascertain if the provisions of ss.53(1),

53(2) or 78 of the Act have been complied with by Neil Victor Krieg and others with respect to the

destruction of or allowing destruction of sandalwood trees on Crown holdings situated within a distance

of approximately 200 kms from Longreach in Central West Queensland and the transportation, selling

and receiving or other dealing with that sandalwood.

Section 53(1) prohibits the destruction of trees or the getting of forest products on Crown

holdings otherwise than in accordance with a lease licence, agreement or contract granted under one

of several Acts. Section 53(2) prohibits a selector, lessor or holder of a Crown holding from allowing

or permitting acts prohibited under sub-s.(1). And s.78 prohibits a person from receiving any forest

products the getting of which is an offence under the Act, knowing the same to have been so got.

Section 18(1) relevantly provides:

"18(1) Any forest officer, in addition to such other powers and duties as from time

to time devolve upon the forest officer under this Act, may -

...

(b) be accompanied and aided by any person the forest officer may think
competent to assist the forest officer in making any inspection or
examination; and
(c) make such examination and inquiry as may be necessary to ascertain
whether the provisions of this Act have been or are being complied with by
any person or in respect of any State forest, timber reserve, forest
entitlement area, or any forest products or quarry material, the property of
the Crown; and
(d) question, with respect to matters under this Act, the owner or occupier
of any place, every person whom the forest officer finds in any place, and
every person who has been within the preceding 6 months employed in or
on any place to ascertain whether this Act has been or is being complied
with, and require any such person to answer the questions put and to sign
a declaration of the truth of the person's answers; and

(e) require the production of any licence, permit, or other authority granted or agreement or contract made under and for the purposes of this Act and of any book, notice, record, list or writing which by this Act is required to be had or kept or which is in the forest officer's opinion material to any inquiry under paragraph (b), and inspect, examine, and take copies of or extracts from the same;

... ".

The discrepancy between the reference in paragraph (e), which was relied on as authority for

the requirements in the notice, to an inquiry under paragraph (b) and that in the notice to an inquiry

under paragraph (c) may, for the moment, be put on one side. The question, more generally, before

the learned primary Judge and this Court, is whether each of the categories of documents required by

the notice to be produced was, in the forest officer's opinion, material to an inquiry he was making to

determine whether ss.53(1), 53(2) or 78 had been breached by N.V. Krieg, his partnership or firm.

It may be accepted that he was making such an inquiry; he has sworn to it and the contrary was not

asserted.

The argument for the respondents below and in this Court, and the judgment below, concentrated on the second of the categories of documents required to be produced; cheques of a sum greater than $500 drawn on any of the stated accounts. Having held that requirement to be invalid

because, as he put it, it "does not give the bank manager any discretion to exclude from documents and

records required to be produced for inspection such cheques as clearly deal with the personal affairs

of one or other of the plaintiffs not having any connection with their timber business", his Honour held

the notice to be invalid. However the question in this case, unlike that in Federal Commissioner of

Taxation v. Australia and New Zealand Banking Group Limited[1], to which his Honour referred, is not

[1] (1979) 143 C.L.R. 499.

whether a notice in writing complies with a statutory provision permitting certain notices to be given but

whether a requirement complies with a statutory provision that permits the production of certain

documents to be required. Here there were three requirements purportedly made under s.18(1)(e) and

the question must be considered separately in respect of each of them whether it was a requirement

which complied with that provision. It therefore does not follow from the fact that one of the

requirements exceeded what was permitted, that the notice which conveniently contained two others

was wholly invalid.

The application of s.18(1)(e) to the second requirement meant that the forest officer had a

discretion - "in the forest officer's opinion" - as to whether all cheques to a sum greater than $500 drawn

on any one of four named accounts over an unspecified period, or over a specified period of nearly five

years (the period specified as relevant to the inquiry), were material to the inquiry which he was

conducting. But he would not have exercised that discretion according to law if he could not reasonably

have formed the opinion that all such cheques were material to the inquiry.[2]

[2]          Parramatta City Council v. Pestell (1972) 128 C.L.R. 305 at 322-3, 327-8; Attorney-General

Before this injunction was granted a number of cheques had been supplied by the bank to the

appellants pursuant to an earlier notice, in more general terms, the subject of an injunction granted by

the learned primary Judge but not of this appeal. These related to a period between 30 June 1995 and

18 September 1995. There were 40 cheques in all. Of those, the respondent Neil Victor Krieg has

sworn, 23 related to the private and business affairs of N.V. & E.N. Krieg totally unconnected with the

sandalwood industry (they also carry on the business of grazier as well as that of sandalwood exporter);

11 related to the payment of transport costs and wages relating to the processing of sandalwood which,

it is said, in no way could be related to the inquiry; 3 related to the purchase of sandalwood from the

Department of Primary Industry; and 3 related to the purchase of sandalwood from freehold

landholders. In other words none of them, it was sworn, could have been material to the inquiry.

Moreover, it was sworn that, for reasons which it is unnecessary to consider here, the cheques contained commercially sensitive information, the disclosure of which to some officers of the Department

of Primary Industry might harm the respondents' business commercially. The evidence that none of the

cheques during one relevant period of about two and a half months was material to the inquiry is not

relevant, or at least of only marginal relevance, to the question whether a forest officer could reasonably

have formed the opinion that all were. However it points up the absurdity of such an opinion which, in

our view, could not reasonably have been formed.

In their written outline, but not in their oral argument, the appellants sought to overcome this

difficulty by contending that, on its proper construction, the notice required production only of such of

those cheques as were material to the inquiry. It was submitted that this construction should be inferred

from the statement in the notice that the documents required are, in the forest officer's opinion, material

to the inquiry. Merely to state that proposition is to expose its absurdity. To say that specified

documents required to be produced are material to an inquiry is not to say that only such of them as are

so material are required to be produced.

His Honour was therefore plainly right in granting the injunction in respect of the second

requirement. To reach that conclusion it is not necessary to resolve the question whether the reference

in s.18(1)(e) to paragraph (b) should be interpreted as a reference to paragraph (c). However, for

reasons which will appear, it is necessary to resolve that question.

In our opinion it should be so interpreted. Paragraph (c) is the only paragraph, other than

paragraph (e), which uses the word inquiry and, it seems to us, is the only paragraph to which the

reference in paragraph (e) can sensibly relate. In those circumstances, notwithstanding the

opportunities, not taken by the legislature, to correct this error, it is in our view permissible to so
interpret paragraph (e).[3]

[3]          Acts Interpretation Act 1954, s.14A(1); see also Lindner v. Wright (1976) 14 A.L.R. 105

The third requirement was for production of two specific cheques identified as being cheques

for sums of $2,075 and $2,950 respectively and bearing dates prior to 6 May 1993. The forest officer

did not disclose in his affidavit how he identified cheques in this way though it does appear that he

received information from a number of persons who leased Crown land and, on 19 September 1995,

was shown a letter dated 5 May 1993 purporting to be from the respondents referring to payment by

enclosed cheque for timber and he says that he was told that they exist. Moreover these cheques are

sufficiently identified, the forest officer has said that they are relevant to his inquiry and the respondents

have not sworn to whether cheques to those amounts either were or were not drawn on one of the

named accounts. Accordingly it could not be said, in our view, that the forest officer could not

reasonably have formed the opinion that these cheques were material to the inquiry identified in the

notice which was an inquiry of the kind referred to in paragraph (c). Consequently an injunction should

have been refused in respect of the requirement with respect to those cheques.

It was conceded on the respondents' behalf before this Court that if either of the second or

third requirements was valid then so was the first because it would be necessary to compare the

specimen signature of Neil Victor Krieg with any cheques which were produced purportedly signed by

him. Accordingly the injunction should have been refused in respect of that requirement also.

The appeal should therefore be allowed in part. The injunction granted in paragraph 2 of the

judgment of the learned primary Judge should be set aside and in lieu the appellants should be restrained

from requiring production of cheques of a sum greater than $500 drawn on any of the accounts

identified in a notice dated 30 January 1996 other than the two cheques specified in paragraph 3 of that

notice.

Although the appellants have partly succeeded in this appeal they have failed in what appears

from their written outline of argument and their oral argument before this Court to have been their main

contention and the main substance of the injunction granted below. It is not appropriate in our view in

those circumstances to make any costs order on this appeal.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 2203 of 1996

Brisbane

Before Davies J.A.
McPherson J.A.
Mackenzie J.

[State of Qld. & Anor. v. Envy Trading & Ors.]

BETWEEN:

STATE OF QUEENSLAND

(First Defendant)

AND:

PRIMARY INDUSTRIES CORPORATION

(Second Defendant) Appellants

AND:

ENVY TRADING (a firm)

(First Plaintiff)

AND:

N.V. & E. N. KRIEG

(Second Plaintiffs) Respondents

REASONS FOR JUDGMENT - McPHERSON J.A.

Judgment delivered 3 June 1997

I agree with the orders proposed by Davies J.A. and Mackenzie J. for the reasons they have

given.

(NSW) v. Quin (1990) 170 C.L.R. 1 at 36.

at 111; Cooper Brookes (Wollongong) Pty. Ltd. v. Federal Commissioner of Taxation (1981) 147 C.L.R.
297.