Gedeon v Commissioner of the New South Wale Crime Commission & Ors

[2008] HCATrans 262

[2008] HCATrans 262

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S536 of 2007

B e t w e e n -

GILBERT GEDEON

Applicant

and

COMMISSIONER OF THE NEW SOUTH WALES CRIME COMMISSION

First Respondent

NEW SOUTH WALES CRIME COMMISSION

Second Respondent

ATTORNEY-GENERAL FOR NEW SOUTH WALES

Third Respondent

Office of the Registry
  Sydney  No S544 of 2007

B e t w e e n -

DAVID DARLEY DOWE

Applicant

and

COMMISSIONER OF THE NEW SOUTH WALES CRIME COMMISSION

First Respondent

NEW SOUTH WALES CRIME COMMISSION

Second Respondent

GUMMOW J
KIRBY J
HAYNE J
HEYDON J
CRENNAN J
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 30 JULY 2008, AT 10.56 AM

Copyright in the High Court of Australia

__________________

MR G.O’L. REYNOLDS, SC:  May it please Court, in the first matter, that is the Gedeon matter, I appear for the applicant with my learned friends, MR S.B. LLOYD and MS K.A. STERN.  (instructed by Matouk Joyners Lawyers).

MR A.C. HAESLER, SC:   In the second matter for the applicant, Dowe, I appear with MR M.A. ROBINSON, if it please the Court.  (instructed by Legal Aid Commission of NSW)

GUMMOW J:   There is a submitting appearance in the – they are special leave applications, I should have said.  In the first special leave application there are submitting appearances from the first and third respondents and for the first respondent in the second matter.  Yes, Mr Temby.

MR I.D. TEMBY, QC:   May it please the Court, in each matter I appear for the second respondent and MR J.G. RENWICK and MR P.F. SINGLETON, appear with me.  (instructed by New South Wales Crime Commission – Sydney)

GUMMOW J:   Thank you.  Yes Mr Reynolds.

MR REYNOLDS:   Thank you, your Honour.  Your Honours will have seen from the written submissions that they focus on five principal issues which I will describe as follows.  First of all, the controlled activity issue.

KIRBY J:   I am not hearing you, Mr Reynolds.  I think those of smaller statue have lowered the podium so that your booming voice is not reaching us, certainly not me.

MR REYNOLDS:   I hope I can raise the tone in a number of ways, your Honour.  First off all there is the issue of controlled activity; second of all, what I will call a reasonable excuse issue; third of all the construction of section 7(1)(b) of the LECO Act; fourthly, what I will call the jurisdictional fact issue and finally, what I will describe as the judicial review of the section 7(1)(b) decision.  Now, Mr Haesler and I obviously have very similar interests in these applications and we have divided those five tasks so that Mr Haesler will deal with the reasonable excuse and jurisdictional fact, and I will be dealing with the remainder. 

The first issue then that I will be dealing with is this question of controlled activity and your Honours will have seen, from our written submissions in reply at paragraph 3 that we note that the two authorities which related to my client – that is Mr Gedeon – purported to authorise the supply of cocaine imported into Australia, contrary to Commonwealth law.  I will not take your Honours through all of those references, but that is an important ‑ ‑ ‑

GUMMOW J:   Are they references to agreed facts?

MR REYNOLDS:   They are references to the authorities and the related material supporting ‑ ‑ ‑

GUMMOW J:   Where do we find the actual text of the authorities?

MR REYNOLDS:   The two that relate to my client are in the second appeal book – the B appeal book as it is called.  The first starts at page 57 and the second starts at page 194; they are the two that relate to my client.  If I can also take your Honours, by way of background to the argument, to the bundle of legislative material which has been filed on behalf of Mr Dowe, and in particular to tab 5 of that bundle which contains most of, if not all, of the Law Enforcement (Controlled Operations) Act 1997 (NSW).

Can I draw your Honours’ attention briefly to a few of the key sections, first of all, to section 5 which provides for applications for authority to conduct a controlled operation, which is defined in section 3; I will come back to that.
           Obviously there is some detail about the form of those applications.  Section 6 is also important.  It deals with the determination of the applications and in particular can I draw your Honours attention to subsection (1) which talks about the chief executive officer authorising a law enforcement officer to conduct to operation.  We will be coming  later on to section 7 and I will not go through it now.  I will not go to section 8 which is about the form of the authorities, but one important provision is section 16.

GUMMOW J:   Just looking at section 6 for a minute.  Section 6(3) talks about, “unless the chief executive officer is satisfied as to the following matters”.  Section 6(4) says, “must have regard to” and how is 7 constructed, “must not be granted”?

MR REYNOLDS:   Yes, that is the jurisdictional fact issue, as I have described it, and your Honours will notice the heading “Certain matters not to be authorised”, that in subsection (1) “must not be granted” and, in particular, (b) does not talk about satisfaction, but that is really a matter that my learned friend, Mr Haesler is going to discuss.  It need not, with respect, detain us in respect of the argument I am currently presenting.  Section 16 talks about, paraphrasing it, rendering lawful under State law activities engages in ‑ ‑ ‑

GUMMOW J:   That phrase “Act” is a reference to the New South Wales interpretation legislation, is not it?

MR REYNOLDS:   I do not think there is any dispute about that, your Honour.  Certainly we have submitted to that ‑ ‑ ‑

GUMMOW J:   And the “law”, what does that mean?

MR REYNOLDS:   I was hoping your Honour would not ask me that.  It is obviously capable of extending into what I will describe as the common law of crime so far as it may be regulated by the New South Wales Parliament; put another way, the common law so far as it could be the subject of criminal charges in New South Wales courts; put another way, one would read it probably in accordance, I think, with – I think there is a case in this Court, I do not have the reference to hand, called the Wanganui‑Rangitikei Case which ‑ ‑ ‑

GUMMOW J:   That is about choice of law.

MR REYNOLDS:   It is, but it is also about statutory construction and it says as a rule of construction that you would construe the Act of a State Parliament as regulating only those things which could be regulated by that Parliament.

GUMMOW J:   Anyhow, there could be regulations, could not there?  That would not be an Act?

MR REYNOLDS:   It might also include that, but I had assumed that your Honour was directing me to the more difficult issue.  If I can short circuit things a little bit, I do no think that the precise metes and bounds of that word are going to be in play in this particular case.

GUMMOW J:   Is there a debate as to whether it includes federal law?  Is there a difference between the sides?

MR REYNOLDS:   I do not believe so, your Honour.  I mean, obviously the ‑ ‑ ‑

KIRBY J:   Anyway, it would not be confident for the State Parliament to provide that a federal law would not have operation in some respect.  It is just beyond their powers.

GUMMOW J:   It would not be a section 109 case, it would just be a lack of State competence.

MR REYNOLDS:   That is one way of putting it.  Probably under section 31 of the Interpretation Act, if you even need that.

GUMMOW J:   Yes, okay.

MR REYNOLDS:   Also important is section 13 because it talks about an authority while it is in effect.  The important word there in paragraphs (a) and (b) is “authorises.  So it is clear that this statutory provision is permissive, that is, it authorises, your Honours will notice, certain activities which are described as “controlled activities”.

The fundamental debate on this point of controlled activity is what is comprehended within that definition of “controlled activity” referred to in section 13 and elsewhere, but that phrase is defined in section 3 to mean, “an activity that, but for section 16, would be unlawful”.  In other words, an activity which is rendered lawful by section 16.

HAYNE J:   That may not state it wholly accurately, may it?  Controlled activity hinges about the concept of activity.  It identifies it by reference to the engagement of section 16.  We have agreed thus far that section 16 has a particular effect, but does not have any consequence in respect of federal law.  Is that right?

MR REYNOLDS:   Probably, your Honour.  The only reason that I am putting forward a slight caveat is where we are dealing with activity which is the subject of a Commonwealth authorisation.

HAYNE J:   Just so.  What I am inviting your attention to is whether it is useful and, indeed, whether it is right to see the definition of “controlled activity” as hinged about a concept of lawfulness.  Rather, is it not better, is it not right, to see controlled activity as hinged about people doing things and that is all?  Nothing more complex than that.  The things to which it refers are things of a kind that engage section 16.

MR REYNOLDS:   And are rendered lawful by it.

HAYNE J:   Which section 16 is engaged and has whatever consequences 16 has.  

CRENNAN J:   I do not think there is a danger there, Mr Reynolds.

HAYNE J:   Not yet.

MR REYNOLDS:   No.  I know your Honour is not a Greek, but I am just being cautious, but I do not think there is problem.

HAYNE J:   Sound advocacy, Mr Reynolds.

MR REYNOLDS:   The question then is, what is comprehended by controlled activity.  The view taken by Justice Basten, albeit in dissent, in the Court of Appeal is to be found in the A appeal book at page 299 where his Honour said at about line 15 on the latter view, that is the view propounded on behalf of my client in the Court of Appeal:

the definition of controlled activity in the LECO Act would not be satisfied in relation to conduct which was unlawful under Commonwealth law unless there were a certificate authorising the controlled operation –

which of course there is not here.  His Honour went on to say at paragraph 62 at about line 43:

it is implausible that the State would seek not only to permit, but, where an authority is granted, require, its law enforcement officers to act in contravention of a Commonwealth law.  It cannot immunise them from such unlawful activity and cannot intend deliberately to expose them to civil and criminal liability. 

He goes on to posit a construction over the page: 

If, because of a Commonwealth law, s 16 does not have that effect, and the activity remains unlawful, the definition of “controlled activity” is not engaged. 

Therefore no controlled activity, therefore the authority will be invalid.  I would like just to pause and just flesh out a little this proposition that we have already touched on at page 299 at about line 43.  This is the idea that the State would not be intending to permit a contravention of a Commonwealth law.  Now, your Honours Justices Gummow and Kirby have already raised this with me.  I think your Honour Justice Gummow is saying this is not really a 109 issue and your Honour Justice Kirby is saying it is just a question of power.

Can I give your Honours just a couple of references on the proposition that a State Act is not to be construed so as not to authorise a Commonwealth crime.  The clearest reference that I have found is a case your Honour Justice Kirby I think will remember called Peters v Attorney‑General (1988) 16 NSWLR 24 at page 30 D to F. It is not quite as clear, but there is a similar proposition articulated in this Court where the case was named Love v Attorney‑General (1990) 169 CLR 307 at page 317 at about point 7 on the page.

GUMMOW J:   Love refers to Peters, does it not?

MR REYNOLDS:   They are the same case.  It is just the names are around the – just as this case is now probably going to be called Gedeon but it was called Dowe in the Court of Appeal.  So that is, we submit, underlying what is to some extent an elliptical statement there by Justice Basten but, we submit, a correct one, the bottom line being that, particularly when, if one goes back from that proposition to section 13 of the Act, that is, we submit – and this is a point which really was not much discussed below, although Justice Basten did notice it in argument.  If we go back to section 13, again this word “authorises” picking up the words “controlled activities”, we submit that that is, in the light of the construction principle that I have just talked about, a very good indicator that one, if there was any doubt, would not read controlled activity to include activity which was a Commonwealth crime, at least where there was no Commonwealth authorisation.

HAYNE J:   But does that approach to construction depend upon embracing what is implicit at lines 43 and following on page 299, namely, that the grant of authority under the LECO Act obliges the recipient of the authority to act in accordance with it?

MR REYNOLDS:   Is that line 43, your Honour, picking up the word “require”?

HAYNE J:   Yes.

MR REYNOLDS:   I jibe at that.  I do not embrace that, the reasoning underlying “require”.

HAYNE J:   But if the LECO Act is concerned with granting authority rather than imposing obligations, why does one read the definition of “controlled operation” or the definition of “controlled activity” as hinged about any concept of lawfulness?  Rather, why should one not read both definitions as directed only to particular kinds of conduct?

MR REYNOLDS:   At one level it is, of course, directed to particular kinds of conduct.  It is not possible, I submit, to put to one side the fact that the definition does talk about using the “but for” test whether something is rendered lawful.  The thing about line 43 on page 299, which we do embrace, is the proposition that the State would not be permitting, that is, authorising, something which is forbidden under Commonwealth law.

I do not embrace, and your Honour is obviously well aware of the extra step made by Justice Basten.  I do not embrace the proposition that the authority requires that activity to occur.  What I do submit is that it would not be construed as permitting, that is authorising by State law, what is forbidden by Commonwealth law.

GUMMOW J:   If one goes to the definition of “controlled activity” it says, “an activity that, but for section 16, would be unlawful”.  A contravention of a federal law would be unlawful whether you did or did not have a section 16 approval, so how does this Act, as it were, ever bite, in a way?  Unless you read, “controlled activity means an activity that, but for section 16, would be unlawful under the law of New South Wales, or the non‑federal law enforced in New South Wales”?  What is this notion of unlawfulness, that is what I am trying to get at?  It appears in a number of State statutes.

MR REYNOLDS:   It is a rather enigmatic way of putting it, embracing this “but for” test familiar to your Honours from the area of causation.

HAYNE J:   Why does it not drive you to understand the expression “unlawful” by reference to section 16 and in particular the limits on section 16, and before you answer that can I just indicate some subsequent steps that might be thought to follow so that you can see where the argument goes.  If you read the LECO Act as dealing only with lawfulness – to put it shortly – lawfulness under New South Wales law – and not concerning itself with whether there is or is not contravention of federal law, no question arises of the order or the sequence within which permission is obtained to conduct a controlled operation.

The readings made in the courts below of the LECO Act seem to assume first you must obtain your federal authority, then you may obtain your State authority, but is it not possible to read the State Act as saying, “Well, to the extent we can, we give you authority.  We can’t tell you anything about the federal Act.  If you get federal authority, well, what follows from that may be a matter of criminal operation.”

MR REYNOLDS:   What is authorised, and we submit this is critical, under section 13 is activity, so one looks at the activity which is in the authority and that is authorised to occur.  It is not and this is the way the matter at one level was approached by my friends in the Court of Appeal, just the question of what is rendered lawful.  If this Act stopped at merely rendering lawful what I will call shorthand, as your Honour Justice Hayne did, State crime, then of course this difficulty may well not arise.

GUMMOW J:   I am just thinking how all this fits with 138 of the Evidence Act which talks about – at least the Commonwealth Act, I do not have the State one here - “evidence obtained in contravention of an Australian law” which I think is then sufficiently understood as including a State law, is it not, and a federal law.

MR REYNOLDS:   And the common law which ‑ ‑ ‑

HAYNE J:   It is in the dictionary as a law of the Commonwealth, a State or a Territory.

But here, of course, we have the case of an activity on any view without Commonwealth authorisation.  If “controlled activity” is defined so as to include that, then the effect of section 13 would be that the State was authorising activity to occur, which was a Commonwealth crime without any authorisation.  We say it should not be given that construction and really all I am doing in that regard is fleshing out a little bit the reasoning of Justice Basten, which, with respect, I adopt.

If it is convenient, I may move then to the next issue, which is the construction of section 7(1)(b).  May I take your Honours to that.  That is behind tab 5.  This provision, of course, has the heading we have noticed before, “Certain matters not be authorised”.  It reads:

(1)An authority to conduct a controlled operation must not be granted in relation to a proposed operation that involves any participant in the operation:

 . . . 

(b)engaging in conduct that is likely to seriously endanger the health or safety of that or any other participant, or any other person, or to result in serious loss or damage to property.

Now, the essential issue here, of course, is how that is to be construed and, in particular, whether it is to be construed as Chief Justice Spigelman constructed it.  His construction is to be found in the judgment at paragraphs 45 to 54, which are set out at pages 293 through to 54.  It probably is not unfair to the Chief Justice to focus on paragraph 54 in particular as setting out in substance the definition embraced by him that the words “any other person” should be read ejusdem generis with the reference to participants in the controlled operation so as to be confined to persons proximate to, that is, in the physical vicinity of, the operation upon whom the authorised conduct directly impinges.  Now, on the other hand, paragraphs 78 ‑ ‑ ‑

GUMMOW J:   This has an echo of the old‑fashioned nervous shock cases.

MR REYNOLDS:   It does a bit, and the sort of limitations which have been, at least by accretion, eroded over the years.  We submit that your Honours similarly should not construe the provision in that inhibited way.  The alternative is set out at paragraphs 78 to 85, which I will describe in a loaded way as the natural and ordinary construction adopted by Justice Basten, which would not, in short, limit the construction of the section in the way limited by the Chief Justice.

Now, the issue, of course, is important because there is not any issue between the parties that the health of what I will describe as “end users”, consumers of the cocaine, would have been seriously endangered.  That observation is made by Justice Basten at paragraph 79 on page 306 where he notes that the Chief Justice was content to assume:

that the health of users of the cocaine would be “seriously endangered”.

At paragraph 49 at the bottom of page 295 the Chief Justice notes that:

it was not and –

importantly –

could not be contended -

I interpolate it is not contended now by my friends -

that the health of those users was not ‘seriously endangered’.

The only issue is whether his Honour was correct to confine the scope of the conduct so that it did not ‑ ‑ ‑

GUMMOW J:   Maybe the problem, if there is one, with the Chief Justice’s judgment is this phrase “physical vicinity”.

MR REYNOLDS:   Yes, one might be tempted to say a category of indeterminate reference.

GUMMOW J:   There was certainly a proximity of this getting on the market I would have thought and injuring people.

MR REYNOLDS:   I am sorry, your Honour.

GUMMOW J:   You could say that there was the necessary proximity, could you not, of which you complain?  It is going to get out in the market, it is going to kill people or make them ill.

MR REYNOLDS:   Yes, possibly.  I mean proximity, of course, brings in all of the sorts of difficulties of definition.

GUMMOW J:   The question is these people – these third parties – are not in the physical vicinity of the actual operation, but their wellbeing and health is, one would have thought.

MR REYNOLDS:   In the same way as, for example, ‑ ‑ ‑

GUMMOW J:   Looking at it objectively without any need to think about it in the subjective sense.

MR REYNOLDS:   Yes, we submit that where one is dealing with a section which, from the heading and the use of the words “must not be granted” and “must not be authorised” in relation to a matter of public health and safety first of all, but perhaps more importantly in relation to the authorisation of criminal conduct.  That is a very poor start for my learned friends in suggesting that this particular provision should be read down or confined in the way that the Chief Justice has.

There is a very obvious concern manifest here by the Parliament in this section about the possibility of endangerment to health or safety of any person.  We submit that the sort of thing which the Parliament may well have been concerned about would include things – and I think we used this example in our submissions – such as providing material to terrorists in order to make a bomb, or indeed a bomb which was not armed, to terrorists, knowing there was a real possibility, of course, that they would use it well away from the scene in order to bring certain death to large numbers of people.

Now my friend’s construction – the Chief Justice’s construction – says in effect the legislature was not concerned about that sort of thing, was not concerned about providing dangerous substances to be used away from the scene; guns, weapons, bombs, other dangerous material despite the use of this expression “any other person”.  On that note, we submit that it is reasonably clear from paragraph 54 that a substantial plank in the reasoning of the Chief Justice is the invocation of the ejusdem generis maxim.  Now, if your Honours have to hand our submissions in reply ‑ ‑ ‑

GUMMOW J:   What is the genus said to be?

MR REYNOLDS:   Exactly.  We have said – picking up a submission made by my predecessor and developed by reference to a citation from a judgment of Chief Justice Spigelman – this is paragraph 14 of our submissions, picking up the case of Deputy Commissioner of Taxation v Clark – a short statement that:

unless at least two difference species are identified it is not possible to determine a relevant genus which may be used to read down the general words which follow.

In that paragraph and in paragraph 15 we refer to some authorities.  I have not put it on our list of authorities, but in my reading in relation to the maxim I looked at the case referred to at paragraph 15 at the end there - Mattinson v Multiplo Incubators Pty Ltd [1977] 1 NSWLR 368 and at pages 373 to 377 there is, with respect, a very detailed and learned review of that particular rule, which I will not, as I say, take your Honours to, but I do commend to your Honours’ attention.

Justice Mahoney at one point, I think is saying, well sometimes the legislature when it uses an expression like “or any other person” means “or any other person” and that to seek to read down such a phrase particularly, obviously here, where there are not two different species is difficult and moreover, doubly difficult when one is talking here about activity which potentially of course is a grave threat to the health and safety of people, not only as to their person, but also, your Honours will note, as to their property.  Your Honours know well the authorities on this Court dealing with statutory encroachments on fundamental rights and we submit that the integrity of one’s being and having one’s property free from damage as the result of criminal activity is either a fundamental right or very close thereto. 

KIEFEL J:   Mr Reynolds, having regard to purpose, is the choice in construing section 7(1)(b) between protecting those who are involved directly or indirectly in the activity authorised, or is the purpose the protection of the public because it is in the latter sense, I think, that you are reading it.

MR REYNOLDS:   Or picking up in your Honour’s first definition, some indirect affectation.

KIEFEL J:   Is it possible that one would read down a construction which is to protect the public given that what is authorised are illegal activities in any event?

MR REYNOLDS:   I would submit the fact that what is being authorised is criminal activity is a reason for reading, if anything, this provision somewhat more broadly ‑ ‑ ‑

KIEFEL J:   But just as a matter of common sense, illegal activities may be harmful to the public.  It might be encapsulated within the authorisation, the notion that there may be repercussions.  Could section 7(1)(b) then be seen to be more directed to those who are involved in the activity itself to protect the persons who are to participate and those who might become unknowingly involved in it, which I think is the construction that the Chief Justice really had in mind.

MR REYNOLDS:   Well, it certainly includes that.  Of course, what we are debating is whether it goes any further and I am submitting that there is an obvious concern manifest here about endangerment – that is, mere risk to health and safety of any person from this criminal activity and there is not, put another way, any warrant for needing or wanting to read down this particular provision particularly where the concern by the legislature is so clearly manifest in the heading and in the words in subsection (1) “must not be granted”.  Now, of course, that is an issue which your Honours are going to be looking at with my learned friend, Mr Haesler on the jurisdictional fact issue, but it also, I submit, is part of the material to which your Honours would look on also on this question of construction.

HAYNE J:   Is not it necessary to identify the starting point correctly?  The starting point is that this Act permits an administrative dispensation from criminal law.

MR REYNOLDS:   Quite.

HAYNE J:   Why would one read a statue permitting dispensation from the criminal law as permitting activity that will likely cause harm to third parties, any third party.

MR REYNOLDS:   Exactly.

HAYNE J:   To read it in a fashion that would not permit the authorisation of criminal activity likely causing harm to third parties does not, contrary to what seems implicit in at least some of the submission against you, strip the act of meaning for it would permit the conducting of controlled deliveries of prohibited drugs where the likelihood is that the prohibited drugs will be seized.

MR REYNOLDS:   Exactly, and that is part of, we submit, what the legislature was looking to implicitly, that is to circumscribe the operations involving, using an omnibus phrase “dangerous goods”, so that unless seizure, immediate seizure at the end of the operation is envisaged in the plan of operation then it cannot be authorised.  It can of course be authorised if that is part of the plan and if there is no real possibility of the endangerment resulting.  That can be effectively eliminated in the way your Honour suggests.  The only other matters that the Chief Justice ‑ ‑ ‑

KIRBY J:   By the way, did Justice Glass say anything in this one of Mattinson about the construction question?

MR REYNOLDS:   I did read the judgment quickly with that issue in mind and my recollection is that his Honour did not deal with it at all.  I forget the name of the third judge, but I think it was Justice Mahoney who focused ‑ ‑ ‑

KIRBY J:   How could you forget the third judge?  It was Justice Reynolds.

MR REYNOLDS:   There we are.

KIRBY J:   Another Justice Reynolds.

KIEFEL J:   Mr Reynolds, the plan that is supposed to accompany the application, is that to be found in the appeal books?

MR REYNOLDS:   Yes.  If your Honours take the two references I gave you, the first and second authorities – that is, the B appeal book at page 57 and 195 and backtrack a few pages, about eight or 10 pages – your Honours will see all of what I will call the associated material, that is, the application and the operation plan.

GUMMOW J:   Are the relevant agreed facts sufficiently apparent from uncontroversial documents?

MR REYNOLDS:   I think relevantly, yes, your Honour.  Importantly, the agreed facts noted at 229, at about line 30, that the approval of the supply of 7 kilograms – that is a very large amount of cocaine – was in circumstances in which it was unlikely that the cocaine would be recovered by law enforcement officers.

Now, the only other matters mentioned by the Chief Justice on this issue of construction, other than the ejusdem generis rule, was there is some discussion at paragraph 53 about the possibility of retaliation by criminals.  The Chief Justice concludes at the end of paragraph 53 on page 297 by saying:

Extending s7(1)(b) to such consequential effects would significantly compromise the attainment of the purposes of the legislative scheme -

Now, Justice Basten, at paragraph 85, responded to that argument by saying that retaliatory acts might well be properly said to flow not from the authorised conduct but from a belief of the person targeted that he or she had been betrayed.  In any event, we respectfully cast doubt upon the proposition that a concern about possible retaliation would significantly compromise the legislative scheme.  Often in such a controlled operation there will not be any prospect of retaliation against co‑offenders, either because a co‑offender is not involved in the operation – there may only be law enforcement officers – and there may be any number of reasons why, if there was a co‑offender involved, that he may not be thought to have been in cahoots with the authorities.

The other thing is that, as with the matter your Honour Justice Hayne raised with me a moment ago, it is possible, of course, if there is a risk of retaliation against co‑offenders, to obviate that risk by a variety of means, for example, the witness protection schemes that exist, and we submit that if a view was formed that there was a real likelihood of endangerment to the health or safety of someone involved in this operation, then if that risk cannot be obviated, then that is a very good reason why the activity should not be authorised and should not go ahead.

Likewise, there is reference at paragraph 51 of the judgment by the Chief Justice to the proposition that the decision‑maker would be obliged, on my construction, to consider how criminals would escape from the crime scene and whether there is any likelihood of injury.  Now, at paragraph 84 at the bottom of page 307 Justice Basten responds to that where he says:

It is often helpful to test a proposed construction of a statute by reference to its possible operation in other circumstances.  Nevertheless, there are risks in taking that exercise too far.  The need to consider possible harm which might occur due to criminals seeking to ‘escape from the crime scene’ would also need careful analysis.  It is at least possible that those circumstances would flow from the attempt to arrest the criminals, rather than from some conduct involved in the –

immediate operation.  We also, if the Chief Justice is saying at paragraph 51 of the need to consider the likelihood of injury arising from escape, if it is being suggested there that that need would significantly compromise the scheme, then we respectfully beg to differ because, as a matter of common sense, a proposed operation may well not involve the prospect of any “escape”, particularly in the white collar context, and, in particular, may not involve a violent or hasty escape with any possibility of injury and, again, if there was such a prospect, then there is no reason why, if that is a real likelihood, it could not be neutralised as part of the operation plan, in which case it could go ahead.

The next and final matter that I will be dealing with is what I will call the section 7(1)(b) judicial review argument and that, in effect, is an argument which we press on the basis of the reasoning of Justice Basten at paragraphs 79 to 80 on page 306 where, having construed section 7(1)(b) as I have attempted to construe it, his Honour went on to say that there cannot be any doubt:

that the health of users of the cocaine would be “seriously endangered”.  In issuing the authorities the Commissioner stated, relevantly to s 7(1)(b), that he was satisfied that . . . He did so, it may be inferred, on the basis of a statement contained in the application prepared by a law enforcement officer in the following terms –

which is then set out. 

GUMMOW J:   Where do we find that document quoted at page 306 there?  Where do we see the full document?

MR REYNOLDS:   I will perhaps ask Mr Lloyd to turn that up for me.

GUMMOW J:   It is in volume B somewhere.

MR REYNOLDS:   It is in volume B.  Perhaps while he is turning that up for us, can I just continue on with the ‑ ‑ ‑

HEYDON J:   It is page 58, I think.

MR REYNOLDS:   Page 54 I am told by Mr Lloyd and Mr Temby.

HEYDON J:   Page 58, paragraph (b) is the first passage and the second is page 54.

MR REYNOLDS:   I am indebted to your Honour.  The next step in the reasoning is in paragraph 80 where his Honour says:

It should be inferred on the basis of this material that neither the applicant nor the Commissioner addressed the question of harm to ultimate users of the cocaine which was to be supplied in the course of the operation and which, it was anticipated, was unlikely to be recovered. 

He completes the reasoning process in the following paragraph.

GUMMOW J:   How does this point arise?  If you are right about the construction of section 7, it says shall not be issued.  As an objective matter, this is the consequence.

MR REYNOLDS:   Yes.  I am assuming in presenting this argument that ‑ ‑ ‑

GUMMOW J:   It does not say it is a matter to be taken into account.  It is a matter that compels.

MR REYNOLDS:   My learned friend, Mr Haesler, is going to address your Honours on what we have described as the jurisdictional fact argument.  The argument I am presenting assumes that your Honours reject that argument, but, of course, the logically anterior argument is this question as to whether or not it is a jurisdictional fact.  But assuming that argument is one that we lose, we then pick up this argument ‑ ‑ ‑

GUMMOW J:   It seems to me it goes, if anything, to power.

MR REYNOLDS:   Exactly.

GUMMOW J:   Not to discretion.  Anyhow.

MR REYNOLDS:   I am assuming, as I say, that the argument as to power that my learned friend, Mr Haesler, will put is rejected.  This is a fallback argument.

HEYDON J:   But it is not a question of the satisfaction of the Commissioner, is it?  Is it not just if (b) is satisfied, it shall not be granted?

MR REYNOLDS:   Quite.

HEYDON J:   Your paragraph 63 of your written submissions in‑chief said:

A failure of this kind was both a failure to consider a matter required to be considered –

That seems to be immaterial –

and a misdirection as to the state of satisfaction that the law required ‑

I do not think it is a question of the state of satisfaction.  It is just a non‑compliance with a requirement of the law.

MR REYNOLDS:   Yes.  This is a fallback submission that assumes ‑ ‑ ‑

GUMMOW J:   Where is the up‑front submission in writing?

MR REYNOLDS:   As I say, my learned friend, Mr Haesler, is going to present that. The anterior submission is contained in our submissions on the special leave at appeal book A, pages 333 to 334 at paragraphs 25 to 33.  These are my predecessor’s submissions on the special leave at paragraphs 25 to 33.  Then our submissions in‑chief at paragraphs 48 to 55 and then there are further submissions by us in reply at paragraphs 4 to 12 where ‑ ‑ ‑

GUMMOW J:   Page?

MR REYNOLDS:   This is our submissions in reply, pages 1 to 3, paragraphs 4 to 12 where we set out a whole lot of points on construction, but I accept that, in responding to your Honour Justice Heydon, we have not really made this as clear as we should have in our submissions in‑chief, namely that this point that I am raising by reference to paragraphs 79 and 80 is a fallback argument rather than our first argument.  I apologise for that lack of clarity.

GUMMOW J:   I think in Mr Leeming’s submissions it was in page 334, paragraph 31, subparagraph (3).

MR REYNOLDS:   Yes, we have attempted ‑ ‑ ‑

GUMMOW J:   Qualifying the stroke that may be authorised.

MR REYNOLDS:   We have attempted to develop that a little.  I do not want to trespass on Mr Haesler’s patch, but there has been some development in the case law.  We refer to this in our submissions, particularly in reply at paragraphs 4 to 12.  Chief Justice Spigelman in the Timbarra Case and the case of Woolworths v Pallas Newco has, in, effect, picked up from your Honour’s discussion of this issue in the Enfield Case and pointed to a number of what might be called relevant factors, vis‑à‑vis the construction of a statutory provision of this kind.  We have tried to pick up those references at those paragraphs and develop the argument a little.  This reasoning by Justice Basten is, with respect, a little elliptical in that his Honour, perhaps making the assumption that everyone reading this is as learned in this area of law as he is, does not deal with what might be called the legal basis for this process of reasoning.

We have set out at paragraph 2 of our reply the case law, we submit, implicitly adopted by Justice Basten in ‑ ‑ ‑

KIRBY J:   What is the principle and how does it help you?

MR REYNOLDS:   The principle, as we have said in our submissions, is perhaps most ably and most famously stated by Justice Dixon in the decision, which is on our list, of Avon Downs Pty Ltd v Federal Commissioner of Taxation (1949) 78 CLR 353, in particular, at page 360 at about point 2 on the page that the Commissioner’s decision “is not unexaminable”:

If he does not address himself to the question which the sub‑section formulates, if his conclusion is affected by some mistake of law, if he takes some extraneous reason into consideration or excludes from consideration some factor which should affect his determination, on any of those grounds his conclusion is liable to review.  Moreover, the fact that he has not made known the reasons why he was not satisfied will not prevent the review of his decision.  The conclusion he has reached may, on a full consideration of the material that was before him, be found to be capable of explanation only on the ground of some such misconception.

Those words are important –

If the result appears to be unreasonable on the supposition that he addressed himself to the right question, correctly applied the rules of law and took into account all the relevant considerations and no irrelevant considerations, then it may be a proper inference –

that word appearing in Justice Basten’s judgment –

that it is a false supposition.

He goes on to complete the paragraph.  Now, we submit that is what is happening here in this paragraph.  In effect, his Honour is saying that an inference may be drawn that the Commissioner misconstrued section 7(1)(b), in effect, as adopting the Chief Justice’s construction and thereby addressed the wrong question and put another way, the Commissioner took no account of a relevant consideration, namely, the likelihood of harm to end users of cocaine.

Now, that evidentially the process of inference is expanded – these are in our submissions in‑chief which I will not repeat at paragraphs 63 to 65 where we have, in effect, fleshed out in a little more detail the evidence which would support the inference which we have indicated.  There was no reference at all on the operation plan or in the application to the risks to end users, et cetera, in particular, paragraph (d) at the end of paragraph 64 of our submissions where it could not be considered that the health of those who use cocaine was not seriously endangered by its use.

Now, my learned friends do not take issue with this reasoning of Justice Basten or, for that matter, how we have attempted to flesh it out a little, both as a matter of law and also as a matter of fact.  The only submission which they seem to make in response is a submission which we address at paragraph 2 of our written submissions in reply, that is, that we are putting a submission in this Court for the first time.

We have set out a whole lot of references to previous references to that argument in paragraph 2 of our written submissions which I will not repeat, but my learned friend, Mr Robinson, who appeared at first instance in this case has also drawn my attention to a very clear statement by him in argument in volume B at page 474 where, if I may say with respect, he put it with great clarity, having referred – this is at about line 22 ‑ ‑ ‑

KIRBY J:   This adulation is usually reserved to judges.

MR REYNOLDS:   Well, your Honour, in this case it is an epithet also which Mr Robinson should receive.  When your Honours see it in a moment, he refers to Buck v Bavone at line 22 and then to Eshetu which we quoted in our reply at paragraph 2.

GUMMOW J:   He says I go on excursus.

MR REYNOLDS:   At paragraph 42, line 47 he refers to Wednesbury unreasonableness and then says, “That is not just our case”.  At line 47:

it is not only cast in Wednesbury unreasonableness . . . but also that the first defendant misdirected himself in law and that he failed to consider matters that he was required to consider –

Your Honours, we submit, in the light of that reference and the other references in paragraph 2 of our submissions, there cannot really be any doubt that that particular argument was put below.  If the Court pleases, they ‑ ‑ ‑

HAYNE J:   Just before you sit down, Mr Reynolds, can I understand what relief you would seek in this Court?  If there were to be a grant of leave, what orders would you have the Court make in the appeal?

MR REYNOLDS:   In our submissions in‑chief, paragraph 68, we have adopted the orders sought by my predecessor in his submissions at pages 324 to 325.

HAYNE J:   Those include, do they, declarations?  See particularly line 1 of page 325.

MR REYNOLDS:   Yes.

HAYNE J:   It may be that you are not in a position sufficiently to address this question on your feet.  Why is it appropriate to make any declaration of right as between these parties?  That involves a number of subsidiary questions or subsidiary matters.  The proceedings at first instance went forward on agreed facts, facts that were agreed for the purposes only of the litigation constituted by the application for certiorari or declaration.  It is not immediately apparent to me why those proceedings carried to conclusion should yield a declaration of right.  It is not apparent to me why those proceedings carried to conclusion should necessarily yield issue of certiorari or relief in the nature of certiorari.

Rather, when the issue which underpins your client’s interest in these matters concerns the admissibility of evidence at a criminal trial in circumstances where, at least now, though perhaps not earlier, it is common ground between the parties that the authority, the subject of these proceedings, says nothing about the application of federal law and where, it would seem, section 138 of the Evidence Act was in any event to be engaged, it is far from clear to me why the proceedings should yield the relief which you seek in the notice of appeal.  Now, as I say, there are many perhaps quite large issues that are thus raised and it may be that you either do not wish to or should not embark upon your answer at once.

MR REYNOLDS:   Could your Honour pardon me for a moment just so I can check the relief that we are seeking which, as I review it, essentially is restricted to declaratory relief ‑ ‑ ‑

GUMMOW J:   Would it bind the prosecution, or to be precise, would it bind the DPP, I think it is, who seem to prosecute in the name of the Queen in New South Wales?

MR REYNOLDS:   It may not.  First of all there would be an issue about whether for the purposes of estoppel or res judicata these other respondents here are privies I guess.

GUMMOW J:   You have joined the Attorney‑General, I see.

MR REYNOLDS:    That would be one issue which may turn out to be in our favour.  It may be that we are in a slightly better position because of the presence of the Attorney‑General in our case than Mr Dowe is.

Obviously, for more abundant caution my client would no doubt want me to review very carefully what your Honour Justice Hayne has said and possibly respond to that in writing.  One of the difficulties, of course, is that my learned friends appearing for the respondents have been astute, if that is not an inappropriate word, not to take what I will call the points raised by ‑ ‑ ‑

HAYNE J:   I understand that, but I am concerned to at least look forward at what might have to happen if you were to succeed.  I do not know whether you should succeed in these applications yet at all, of course, but if you were to succeed, what orders would be appropriately made; in particular, should declaration go?  Does the making of a declaration implicitly approve the procedural course which has been taken which, at least to my eye, has some unusual features to it?  That is what is underpinning it, Mr Reynolds, and it may be that on reflection you would say all of these concerns are irrelevant, they are irrelevant because, reasons 1 to 27, do not trouble about them, or it may be that they are issues which do need to be troubled about.

MR REYNOLDS:   I am grateful for that, your Honour.

GUMMOW J:   It has to be approached on two levels, I think.  The first question would be whether there was no jurisdiction to grant the declaration, and Sankey v Whitlam would deny that and say there was, I think.  Then it comes down to questions of discretion.

MR REYNOLDS:   Quite.  It may be I am, at the risk of ‑ ‑ ‑

GUMMOW J:   The problem you have at the moment, although there is not a negative declaration in the Court of Appeal, that is the effect of their reasons and you have a trial coming up.

MR REYNOLDS:   Exactly, and one surmises that a trial judge sitting at first instance would be much affected as a matter of comity and for other reasons.

GUMMOW J:   Of course.

MR REYNOLDS:   At the risk of appearing as if I am not only putting my head further into the lion’s mouth but also tapping his back teeth, I would like to proceed at my risk a little bit, if only for this purpose; to try and identify, at least in my own mind, just a little more closely the issues involved, because your Honour Justice Hayne’s statement encapsulates potentially quite a lot of points.  Again, in an omnibus form and, if I may say so, without disrespect, also a little elliptically in that your Honour is possibly alluding to a number of things.  Can I try and flesh those out and perhaps ascertain what are matters that are of greater concern and those that are of lesser concern. 

One issue is the question of jurisdiction.  That is probably the starting point.  A second related question which your Honour Justice Gummow raised, again a little bit elliptically, on the special leave application was the fact that this is a case in federal jurisdiction.  That also brings with it certain considerations that I need not flesh out on my feet.  It may be that also is a consideration underlining your Honour Justice Hayne’s question and it may ‑ ‑ ‑

GUMMOW J:   But so was Sankey v Whitlam.

MR REYNOLDS:   Quite.  The question of seeking a declaration in federal jurisdiction and possibly the issue of standing may have a slightly different content in that particular context. That is another thing which occurs to me.  Another thing is the more general question of standing.  Another issue I detected, at least implicitly, in what your Honour put to me is the issue of utility of granting declaratory relief.  Another issue again, probably explicit in what your Honour put to me, is what was sometimes called the policy against fragmentation and whether or not the bringing of this case or progressing it all the way to this Court offends that policy. 

I assume that your Honour would also have in mind dealing with that particular issue and, in particular, whether there were any exceptional circumstances in this case which might warrant the Court looking at these issues despite some possible tension between this case and the present ‑ ‑ ‑

HAYNE J:   As to that, the Realpolitik of it all is that the Court of Appeal has expressed a view on the construction of the statute which you contend is wrong and you have a client who faces criminal prosecution under an understanding of the law that presently stands expressed in the Court of Appeal’s reasons.

MR REYNOLDS:   Yes, quite.  I hope your Honour does not mind me doing that, but I just did want to flesh that out a little bit.

HAYNE J:   I understand and, as I say, I put squarely on the table that an answer, perhaps the answer, to all of these issues may be that none of them need be considered because; all of them are irrelevant because.

MR REYNOLDS:   Exactly.

HAYNE J:   But unless I raise them with you, I am left in even deeper ignorance than normal, Mr Reynolds.

MR REYNOLDS:   I am obliged to your Honour for that.

KIRBY J:   Is a practical answer that if you were to persuade us to grant special leave and the Court were with you in the construction arguments, that this Court would grant that leave and set aside at least the declarations made in the Court of Appeal and whether it made its own declaration in the reasons that it gave it would then give guidance to the trial judges who were involved in the conduct at trial?

MR REYNOLDS:   That is a possibility and obviously my client would at least want something of that kind to put him back at least in the position where the Court of Appeal’s slate is wiped clean, if I can put it metaphorically.  If the Court pleases, with perhaps the ‑ ‑ ‑

GUMMOW J:   How long would you need to get that together, Mr Reynolds?

MR REYNOLDS:   If I am allowed to say it, your Honour, I was hoping to have a break after this case, but ‑ ‑ ‑

KIRBY J:   You have Mr Lloyd there.  He is very experienced in these things.

MR REYNOLDS:   I concede he is very learned in this area, as is Ms Stern, and that does impact on the issue.  Perhaps the end of the next week, if that is not asking too much, your Honour?  As the Court pleases.

KIRBY J:   You could have said also Ms Stern.

MR REYNOLDS:   I did.

GUMMOW J:   Yes, thank you, Mr Reynolds.  Yes, Mr Haesler.

MR HAESLER:   Being of short stature – is that clear, your Honours?

KIRBY J:   I hope so.  If it not, I will tell you.

MR HAESLER:   Thank you, your Honours.  If I might pick up some of the points that arose from Justice Hayne just recently.  It is important to note how Mr Dowe got here and what his present predicament is.

GUMMOW J:   He has a pending criminal appeal, does he not?

MR HAESLER:   Yes, he has been convicted subsequent to evidence being led from this controlled operation and the affidavit of my instructing solicitor. Ms Coultas‑Roberts can be found at A 393 and at 394 and 395 are extracts from some of the evidence that was placed before the jury and that material, we say, clearly indicates that the prosecution in Mr Dowe’s trial relied upon the lawfulness of this particular ‑ ‑ ‑

GUMMOW J:   Was there any objection to it?

MR HAESLER:   At that time – at the time of the trial – the Court of Appeal decision was extant and was the law in New South Wales.  So there were no grounds for any objection, the trial judge was bound by what was said by the Court of Appeal as was trial counsel.  So the collateral determination of these issues apart – in a court other than the trial court, a matter which was engaged in for the convenience of all parties given the number of initial authorisations that were sought to be reviewed and a number of other reasons ‑ ‑ ‑

HAYNE J:   If I may say so, Mr Haesler, it is the clearest possible demonstration of the difficulties that are presented by the fragmentation of the criminal trial process by having satellite litigation, but that is the position we are confronted with, we have to deal with what we are confronted with.

MR HAESLER:   When it comes to cases such as Ousley v The Queen where collateral review is discussed by this Court there are some limitations on the trial judge in fact engaging in all of the aspects of review that were engaged in by Justice Hall below.  The jurisdictional fact issue and the determination of those facts were to be a valid issue was not generally one that would be required of a trial judge to place themselves in the position of the decision‑maker.

KIRBY J:   We had a case a little bit like this where a judge of the District Court in the face of a decision of Justice Howie in the Court of Criminal Appeal took a different view of what was required.  It was Cornwell ‑ quite recent.  So it does happen.

MR HAESLER:   It does happen, your Honours, but ‑ ‑ ‑

KIRBY J:   But in my view, it ought not, at least ordinarily to happen, especially when the highest court in the State has said something, trial judges of the Supreme Court, District Court and the Local Court should conform.

MR HAESLER:   It would be a brave judge who would say, “Yes, there is a decision of the Court of Appeal and I intend to ignore it”.

KIRBY J:   Well, it would not only be brave, it would be wrong in principle.

MR HAESLER:   It would be wrong and, to put it bluntly, nor would trial counsel properly make that submission given the decision.  The question of fragmentation arose very early in the proceedings in relation to the committal when ‑ ‑ ‑

GUMMOW J:   Do we have the material at the committal that indicates this fork in the road that then took place?

MR HAESLER:   We can provide that to the Court.

GUMMOW J:   Is there a transcript of the committal?

MR HAESLER:   There is, your Honour, and there are submissions ‑ ‑ ‑

GUMMOW J:   It was not done purely on the papers?

MR HAESLER:   No, there were submissions placed before the Court, and these can be made available over lunch, by Mr Free of the Crown Solicitor’s office.  He was appearing for someone.  Mr Free appeared and I have his submissions which I can make available to the Court, but he suggested to the learned magistrate that ‑ ‑ ‑

GUMMOW J:   You better show it to Mr Temby over lunch so there is no disputation over this.

MR HAESLER:   Yes.  Mr Temby has the transcript of 15 March.  He has not seen the submissions, but they are headed “Submissions for the New South Wales Crime Commission” and they are signed by Stephen Free of the Crown Solicitor’s office. 

GUMMOW J:   All right.

MR HAESLER:   There was also the application by way of a notice of motion once the matter was before Justice Hall put on by the respondents seeking the separate issues to be determined.  So there was a concerted and, at all stages, agreed effort that these proceedings be hived off.

CRENNAN J:   That is right, is it, that the Crown always accepted any procedural steps necessary for that purpose of hiving off these issues?

MR HAESLER:   I will be contradicted if I am wrong, but that is my understanding that the genesis of the hiving off was an objection saying that the magistrate could not determine the appropriate issues that Murphy and Ousley v The Queen were not applicable in this particular case and that the matters sought to be reviewed should be dealt with as collateral proceedings, but dealt with as collateral proceedings using the supervisory powers of the Supreme Court rather than a statutory court, either the magistrate or the trial judge.  The chronology which is attached to our written submissions is a fairly clear statement of how those procedures ‑ ‑ ‑

GUMMOW J:   All right.  We will see the documents after lunch.

MR HAESLER:   Yes.  So in terms of the fragmentation of the matters, while it was initiated in a sense, well, formally by the filing of summonses by Mr Dowe and others, certainly no point was taken below and, with respect to my friend’s submissions before this Court, that it was not an inappropriate procedure, although it did create and does create particular problems when it comes to the nature of the orders adverted to by Justice Hayne.  But what we do say is that we are in a position now of having a judgment of the Court of Appeal of New South Wales.  We have a criminal appeal pending before the Court who would otherwise, as a matter of comity if not anything else, follow that decision. 

If we were refused special leave, there would be support for the decision that the Court of Appeal should remain and is the law of New South Wales by the very fact that this Court did not intervene in the matter.  That particular and, we say, appropriate appeal point given the merits of the case would be denied us in all practical senses.  We were denied the opportunity of raising the 138 point at trial because of the decision of the Court of Appeal, the decision which is presently under review.

In those circumstances, orders in the nature of declarations in relation to the invalidity of the relevant authority is, we say, both appropriate and necessary so that the rights of the applicant in this case can be properly stated.  In Project Blue Sky 194 CLR the concluding orders at 394 are ones that are analogous to what we seek.  Justice Basten at 309 and 310 proposed orders which we say are appropriate as well.  They are the orders essentially that we seek.

GUMMOW J:   All right.  Now, what is the division of argument again between you and Mr Reynolds?

MR HAESLER:   The division of argument was to deal with, firstly, the question that was dealt with by Justice Basten arose in relation to the respondent’s submissions about reasonable excuse.  As I understand the respondent’s submissions – it is in relation to whether section 16 and section 13 controlled operations, relate solely to State laws.  As I understand their submission, it is that the State of New South Wales can only grant authorities which relate to State law and they cannot purport to authorise or give effect to any activity which is in breach of Commonwealth law.

They say that that is a partial solution and that in the absence of an authority issued by the Commonwealth authorities, Part 1AB of the Crimes Act 1914, the present authority is valid to the extent that it covers New South Wales laws and that those who participate in the controlled operations would be protected because by virtue of the State authority they would have a reasonable excuse to any Commonwealth offence committed by them. The risk that that poses to the participants in the operation we say is obvious when one looks at section 13 of the LECO Act, which is at tab 5 in the bundle. The effect of the authority, section 13 says, is to authorise “each law enforcement participant to engage in the controlled activities specified”.

GUMMOW J:   I put this to you, if you are looking it at the level of section 138 and there has been a failure to obtain a Commonwealth approval, there may be then an illegality which 138 operates, but the mere fact that looking at the validity of this activity under the State Act, the fact that there was not a federal concurrent approval is neither here nor there, as regards validity, per se, under the State Act, which is what you are seeking to establish here and that depends on this word “unlawful”.

MR HAESLER:   Yes.  Unless the State Act purports to, as we say it clearly does, authorise the engagement of the participants in activity which is and remains unlawful under a Commonwealth statute.

KIRBY J:   It would not matter if it did purport to, it has not authority to do so.

MR HAESLER:   Yes, but if the State Act is purporting to do something which it has no ‑ ‑ ‑

KIRBY J:   The only way you can get around it is if the federal Act in some way picks up the State Act and treats it as authorising what is done for federal law in federal jurisdiction.

MR HAESLER:   But if the State authority is purporting to allow the engagement of participants in what is and would remain unlawful activity under federal law, that authority goes beyond what the Act could allow and is, we say, because of that, invalid.  In other words, the State Act is purporting to do what it simply cannot, could never have done.  From the participants’ point of view, they have an authority under section 16 which has effect, as in section 13, allowing them to engage in this particular activity.  There is nothing, we say, in the documents to indicate that, “By the way, unless you can come up with a reasonable excuse, you will be liable under federal law, despite everything that is said in this authority”.

GUMMOW J:   How do you read section 16, Mr Haesler:

Despite any other Act or law, an activity –

et cetera?

MR HAESLER:   If that is read as agreed, as State law, it has to be then read with section 13, which is ‑ ‑ ‑

GUMMOW J:   It does not seem to be purporting to immunise the consequences of failures in the federal sphere.  Section 16 does not ‑ ‑ ‑

MR HAESLER:   The trouble is the activity itself in this particular instance, so far as Mr Dowe is concerned, is that supply of a controlled substance under the Customs Act is clearly an offence under Commonwealth law subject to reasonable excuse ‑ ‑ ‑

KIRBY J:   Is there anything in the material that suggests that there is any practical difficulty in getting a mirror federal authorisation?  I mean, just glancing through the document you see, say, on page 66, you have the logos of the Federal Police and the State Police.  They operate in tandem and together and rightly so.  Is there any suggestion anywhere of a practical or operational difficulty?

MR HAESLER:   There would be a practical difficulty in this particular controlled operation given the plan that was put forward by Mr Standen, the second in charge of the Crime Commission at the time, in that there was clearly going to be no control of the drugs after the operation was complete.

KIRBY J:   That is a practical difficulty why they would not get federal authorisation.

MR HAESLER:   That is exactly it.  They would not ‑ ‑ ‑

KIRBY J:   But what I am asking is, if it is a lawful matter under federal law, is there any practical difficulty and what is the practice?  Is that revealed by the evidence of getting mirror authorisations both under the State Act and under federal law?

MR HAESLER:   As I understand the general practice – I cannot answer that question.

KIRBY J:   I do not want to know things that are outside the record, but if there is anything in the record that confirms what I would otherwise, I think, infer, there would be no operational difficulty in getting such authorisation, so long as what was purported to be done under the operation was compliant with federal law.

MR HAESLER:   The practical problem here – I am repeating myself – was that the operation that was sought to be authorised could not have got Crimes Act approval.

KIRBY J:   All the more reason why it should not take place.

MR HAESLER:   Yes, we agree.  It is clear that the Commonwealth Act is designed to pick up concurrent operations with State law enforcement agencies and State laws where those States have them.  It is clear from the documents that there are officers seconded from both the State and federal police involved.  Mr Standen, the second in charge of the Crime Commission – there is material in the documents which indicate that he is a special constable under federal law.

KIRBY J:   Can I ask you bluntly, is there any suggestion here that this was a case where knowing of the difficulty and the more stringent requirements of federal law, there was an endeavour operationally to work through the State system so as to get around and avoid the requirements of federal regulation?

MR HAESLER:   That is the general impression I have, but whether I can point directly to something in the appeal books, Mr Robertson will assist me with.

KIRBY J:   That is what a suspicious mind would begin to think.

MR HAESLER:   With greatest respect, I do not think it requires a suspicious mind in this case.  It is quite clear that in the absence of that authority, it was operationally decided to proceed as a LECO operation and not a federal operation.  The joint task force ‑ your Honours will see reference to a notion of a joint task force ‑I think had the operational name “Gymea”.  As I understand, it was not being a joint task force when this particular series of activities or authorisations were ‑ ‑ ‑

KIRBY J:   Stopped as a consequence of what happened here, or just stopped because there was a way that could avoid the more vigorous requirements of federal law?

MR HAESLER: My understanding is that the federal authorities were not involved at all and did not want to be involved from this point for the simple reason that to involve the federal authorities in this particular operation would have been where they could not have got an authorisation pursuant to Part 1AB.

GUMMOW J: Part 1AB of the federal Act?

MR HAESLER:   That is the Crimes Act.

GUMMOW J:   Yes, of the Crimes Act.  Does that have any comparable provision to section 7(1)(b) about health and safety?  It might be more clearly expressed in the federal statute.

MR HAESLER:   It is 15M.

KIEFEL J:   Section 15M?

MR HAESLER:   It is 15M, your Honours, and this can be found at tab 1 in the bundle, page 98.  It involves something the equivalent of section 7 in regard to inducing persons, that is 15M(c).

HAYNE J:   It is (e) and (f), is it not - (e) keep the drugs under control, (f), the more general proposition, serious endangerment.

MR HAESLER:   So, it picks up - in chronological sequence this provision was introduced ‑ ‑ ‑

GUMMOW J:   The drafting is different because it is expressed in terms of reasonable satisfaction.

MR HAESLER:   Whereas the New South Wales ‑ ‑ ‑

GUMMOW J:   Is expressed in terms of prohibition.

MR HAESLER:   Prohibition and the New South Wales Minister, when introducing the Act, said that this Act has stricter prohibitions than any previous Act.  The Commonwealth provisions were introduced into the Crime Act in 1996.

GUMMOW J:   Yes, thank you.

MR HAESLER:   Section 15I is also relevant to this in (2A).  The subsection does not apply in relation to – this is page 92 of the tabbed - where the informant is believed to have been involved other than for law enforcement purposes in a criminal activity in respect of which the controlled operation was authorised.  Tom could never have been allowed to operate under the Commonwealth legislation.

KIRBY J:   Could you just remind me - I have read all this in the past, but what was the principle?  It was Ridgeway, was it not?  What was the principle in that case that caused this Court to find that such authorisation could not be given administratively?  Was it founded in a constitutional principle or some other principle of federal law?

MR HAESLER:   It was founded, your Honours, in more basic principles.  Justice McHugh in Ridgeway 184 CLR 19 at 84 point 8 said:

It is the function of the State to protect the citizen from the incidence of crime and it is contrary to that function for the State to engage in conduct that increases the incidence of crime in the community.

I can take you to the majority judgment of the Chief Justice, Justice Deane and Justice Dawson on page ‑ ‑ ‑

HEYDON J:   It was just an application of Bunning v Cross.

MR HAESLER:   Yes, but it was held to be utterly fundamental to the operation of the criminal law and the ‑ ‑ ‑

KIRBY J:   Bunning v Cross is an evidentiary rule.  I thought there was something in Ridgeway that was founded in some deeper principle of federal constitution law ‑ ‑ ‑

MR HAESLER:   No, it was ‑ ‑ ‑

CRENNAN J:   His general remark is at page 44, I think, which is what his Honour Justice Kirby is referring to.

MR HAESLER:   Yes, I am indebted to your Honours. 

CRENNAN J:   At the top of the page.

MR HAESLER:   Page 44.  This was the recommendation that flowed ‑ ‑ ‑

CRENNAN J:   Indicators that there needed to be a legislative regime.

MR HAESLER:   There had to be a legislative change and if one goes to the bottom of 42 of the Chief Justice and Justices Deane and Dawson’s last paragraph, it was the Bunning v Cross‑type argument, the grave and calculated police criminality and it was an exclusion point.

The starting point for all of this legislation, Part 1AB of the Crimes Act 1914 and the LECO Act, is the recommendations that flowed from, as I understand, all of the Justices in Ridgeway v The Queen.  Justice Brennan – a passage that is worth taking your Honours to while you have Ridgeway before you  at page 54 at about 4 on the page talks again of this recommendation for the sort of legislation that we are now discussing.  He says:

It is manifest that there will be anomalies, if not corruption, in the conduction of such operations in the absence of adequate supervision.  But provisions of that kind cannot be prescribed by courts; they are appropriate matters for consideration by the Parliament.

The passages in 15M of the Crimes Act 1914 are clearly taking up what was said by his Honour, as he then was, and the other members of the Court in Ridgeway.  To a greater extent, to move on to the jurisdictional fact point ‑ ‑ ‑

GUMMOW J:   What they did do in Ridgeway was reject as a basis the US authorities on entrapment.

MR HAESLER:   Yes, that was a clear principle that entrapment is not a defence in Australian law.  There was some discussion about the issue of whether a stay should issue or some other remedy should issue.  They were the formal rulings of the Court.  Then, there was the recommendation, because the effect of Ridgeway was, of course, that the evidence which related to the ‑ ‑ ‑

KIRBY J:   The reason why legislation was required was because it was in legislation that the prohibitions on importation, distribution and so on existed and you could not just have Executive waiver of that because that would be contrary to the principles of the old Bill of Rights that the Executive was waiving was the statute?

MR HAESLER:   That still remains the basic and fundamental law.  The Executive cannot authorise the commission of a criminal offence.  Parliament can do that.

KIRBY J:   That is the Seven Bishops Case, is it not?  It goes back to ancient constitutional principle.

MR HAESLER:   I am sure it does, your Honour.  Your Honour is more learned in that area than I, but it is a basic and fundamental principle that the Executive cannot authorise.

KIRBY J:   That is what James II tried to do.  He lost his job.

MR HAESLER:   And other things.

GUMMOW J:   Can we have an idea of how we are going for time, Mr Haesler?

MR HAESLER:   Yes, your Honour.  I would hope to finish, if not at 1 o’clock, then shortly thereafter.

GUMMOW J:   We are going to rise fairly soon.  How long do you think you will be taking, Mr Temby?

MR TEMBY:   An hour, more or less would be a fair estimate.

MR HAESLER:   We all wish to finish today.

GUMMOW J:   We will adjourn now and we will resume at 2.15 pm.

AT 12.44 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.13 PM:

GUMMOW J:   Yes, Mr Haesler.  You had better be on your mettle, and you will notice we have been augmented suddenly in our numbers.  We are very happy to have Lord Hoffmann sitting with us this afternoon.

MR HAESLER:   Just when I needed the extra pressure.  It is a pleasure.

GUMMOW J:   His Lordship will leave at some stage, but it will not be an immediate reflection of the substance of counsels’ arguments.

MR HAESLER:   I will try and finish so he can leave while Mr Temby is on his feet.  The applicant’s summary chronology gives some history to how this particular operation affected Mr Dowe.  Justice Kirby asked me just prior to the luncheon break about the nature of the joint operation and how we could ‑ ‑ ‑

KIRBY J:   You suggested that the inference was available, that it was done this way because it could not be done under the federal law ‑ ‑ ‑

MR HAESLER:   Yes, and that is what I planned to take you to now.

KIRBY J:    ‑ ‑ ‑ and I would like to have any references to transcript which tend to bear that out.

MR HAESLER:   There was clearly initially a joint operation involved in the investigation of the importation of large sums of cocaine, principally by a Mr Hatfield.  The agreed facts, at volume B, 228 over to 229, at the bottom of page 228, speak of the joint task force of the New South Wales and Australian Federal Police investigating the information provided by the informant Tom.  At paragraph 7 on page 229 there is reference to a meeting on 2 February 2005 – the middle of that paragraph:  “No one from the AFP was present at the meeting”.  At the following page in the book, B at 230, paragraph 9, there is reference to the members of the joint task force going to the bushland to recover the 7 kilograms or thereabouts of cocaine that Tom had previously left there.

Then you will see in the joint facts, paragraph 11 on page 230, there is 8 February LECO Act authorities.  There was no federal involvement thereafter and evidence of that can be found in exhibits M and N which were before Justice Hall and can be found at B214 and B218.  B214 is an email and in the second paragraph it notes that the second part of the operation depended on the Federal Police agreement to run the controlled operation.  So what we have is Tom is being set up as an informer and he is allowed to run the supply business that he was previously running with what is now the Crime Commission’s cocaine.  There is a second joint operation still proposed which is the larger aim of this operation which was the wholesale importation of even larger amounts by Mr Hatfield and others.  That was to involve a Crime Commission operation.  The plans for that particular operation can be found in the briefing notes at page 43 of volume B.

KIRBY J:   In a sense, it does not matter what the motivation of the officers was.  It is simply an indication of what can happen which ought not happen in the co‑ordination of the State and federal legislation if, under State legislation, you can purport to do things which you could not do under federal legislation. 

MR HAESLER:   Yes.  It is clear from the material which can be found in the briefing notes that – perhaps 44, point seven, is a good indication of what was going on where we have on the previous page various scenarios at page 43 are outlined as part of the joint operation.  Then, on page 44 of a briefing note in capitals at about point seven, line 38 on the page:

THIS IS TO BE THE SUBJECT OF A NEW SOUTH WALES CC CONTROLLED OPERATION.

So this particular series of authorities, of which Mr Dowe’s is one, related to what was solely kept within the province of the New South Wales Crime Commission.  Some of the flavour of what occurred, which is not in the appeal books, can be found in an authority which was placed on our list of authorities from Judge Murrell in the New South Wales District Court, Dowe [2007] NSWDC 92 at paragraph 20. The history is at paragraph 3.

Paragraph 3 speaks again of the meeting I alluded to in the appeal books of the meeting of 2 February:

When senior AFP officers learned of the supply plan, they conveyed the expected view to Mr Standen, ie that the AFP strongly disapproved of an operation which involved sales to end use.

That is the best I can do in terms of giving your Honour some of the flavour for what occurred.

GUMMOW J:   Thank you.

MR HAESLER:   Prior to lunch we indicated we would provide to the Court ‑ ‑ ‑

KIRBY J:   At least one danger of proceeding in the way that happened is that you could potentially get an intersection and an inconsistency between federal crime control activities and State crime control activities.  They could be selling the cocaine to each other. 

MR HAESLER:   They could.

KIRBY J:   I mean, stranger things have happened.

MR HAESLER:   And it is not unheard of for an operative of one agency to be arrested by operatives of another.  That is why – my friend can obviously assist the Court more – we have joint operations and we have joint briefings and one tries not to have operations where one agency goes off on a frolic of its own.  “Frolic” is probably too strong a word. 

What I would hand to the Court are extracts from the committal proceedings and the submissions provided to the learned magistrate in the committal proceedings from the New South Wales Crime Commission.  Pages 4 and 6 are the key passages that relate to the fragmentation issue which we discussed prior to lunch.  I will not take your Honours to those.  They are fairly clear cut.  It is not, as I understand, in dispute.  It is simply providing information to the Court, most of which is summarised in the chronology which is provided with the written submissions of the applicant Dowe.

MR TEMBY:   May I state a position, with respect, which is that we do not oppose that material being tendered on the special leave application, but it should be mentioned that it was not before Justice Hall.

KIRBY J:   We do not want to get into the misuse of material.  That was a source of a problem in Burrell.

MR HAESLER:   Yes.  As I understand, the tender is not to go with any error of law but the disposition of this matter and any discretion that this Court might have in regard to the granting of the orders sought by the applicant Dowe.  While we filed the initial summons which fragmented these proceedings, it was by agreement with all the parties and that has led us to where we are today with to date a judgment of the New South Wales Court of Appeal against us which precludes, we say, as I have said earlier, our appeal in the criminal courts.

The issue of reasonable excuse, which is how Mr Reynolds introduced my participation in this particular part of the argument, is dealt with, we say, fairly comprehensively by Justice Basten in the court below at appeal book A at pages 300 to 303.  His Honour there made it quite clear that if the authority issued under New South Wales law provides only partial protection for participants, that to say that they are fully protected because they can offer a defence of reasonable excuse to Commonwealth offences, particularly those pursuant to section 233B of the Customs Act, will not avail them.

It was the unquestioned premise in Ridgeway v The Queen. We make the point that if it was not available as a defence before section Part 1AB was introduced into the Crimes Act in 1996, it could hardly be a reasonable excuse now.  The Customs Act provisions 233B were amended in 2005, that is after the controlled operation provisions were introduced into the Crimes Act (Cth) One would hardly think that Parliament would have allowed the reasonable excuse knowing that there was a fully operable mechanism for police and law enforcement agencies to engage in such controlled operations.

Without labouring what was said by Justice Basten, I would like to just note the respondent’s submissions at pages 18 to 20.  They give some examples of what might be reasonable excuse.  Reference is made in particular to a decision of the Western Australian Court of Criminal Appeal in R v Medina reported at 84 A Crim R 316.  We say there is a world of difference between what occurred here, which is the delivery or bolstering of Tom’s credibility with his underworld contacts allowing him to effectively continue to sell cocaine by the kilogram, with a case such as Medina where there had been a lawful seizure under the Customs Act and a small quantity of the drugs seized allowed to proceed to the purchaser as part of a controlled delivery, whereupon that person was arrested in possession of some controlled import under the Customs Act.

One can readily conceive of as providing reasonable excuse given the schemes for protection in the Law Enforcement (Controlled Operations) Act but particularly Part 1AB. One cannot conceive of this particular operation providing either Tom or any law enforcement participants with a reasonable excuse, nor was that alluded to in any of the briefing notes that are provided to the Commission. It was an assumption that they could do lawfully and authorise lawfully activity engaged in by their participants specifically as to Standen and the informant Tom. I am reminded that, of course, the end user problem presents itself in matters such as Medina.  The drugs were seized before they got anywhere.  In this case it was clearly the situation that it was unlikely, if at all, that the drugs would be recovered.

This leads me fairly quickly to the matter of construction involving jurisdictional fact.  The need for safeguards in the legislation was made clear by this Court in Ridgeway v The Queen.  It was embraced by the New South Wales Executive when the LECO Act was introduced into Parliament and the relevant Minister boasted of this having more protections and safeguards than any other previous legislation.  In the court below, Chief Justice Spigelman determined this issue of jurisdictional fact, we say, on questions of policy and the appropriateness of a court intervening and the consequences to the law enforcement agency of jurisdictional fact being established.  We urge to the contrary as a strict construction approach focusing on the structure and language of the Act.

GUMMOW J:   Now, what section are you construing?

MR HAESLER:   Section 7(1)(b).  The first step is to go to section 7(1)(b).  We say it sets criteria which mandate a particular outcome.  It is clear and unambiguous.  Were there to be suggested any ambiguity or to reinforce our interpretation, we say it is important to understand the foundational objects of the LECO Act which are not as, we say, the respondent asserts, simply to facilitate controlled operations as defined in section 3 but to balance what is authorised with adequate and complete safeguards to ensure that the agencies cannot commit crimes at will or endanger the public. 

The basis of our submission is not one of advancing any position on behalf of Mr Dowe, as such, but simply requiring compliance by a law enforcement agency engaged at the very cutting edge of criminal activity with the specific requirements that the Act places upon that agency and that if that results in some inconvenience when it comes to matters such as applying section 138 of the Evidence Act at a criminal trial, so be it.  It is clearly a remedy that has to be enforced if there is to be strict compliance with these important provisions. 

We rely specifically when it comes to assessing whether the criteria are jurisdictional facts requiring or allowing for determination in the court independently of the chief executive officer upon what this Court said in City of Enfield 199 CLR 135 – and your Honours, I will not take you to that decision. We have extracted, we say, the relevant principles at pages 11 and 12 of our written submissions. My friend has already taken you to his submissions in relation to City of Enfield and its subsequent application in courts in New South Wales.  The key factors, we say, lead to a conclusion that it is a matter of jurisdictional fact for a court to determine. 

Section 7(1)(b) clearly is not based on the satisfaction or opinion of the decision‑maker.  Those words do not occur as they occur in section 6(3) and in section 7(2).  The subsection expressly forbids an event from occurring.  It stipulates what we say is a precondition in direct terms.  A precondition does not have to be at the very start of the process.  Obviously it is a jurisdictional fact whether there is an application put before the chief executive officer.  The prohibition and the precondition in 7(1)(b), we say,

operates as a stop sign or, as is sometimes seen on the Sydney Harbour Bridge, “Go back.  You are going the wrong way”.  That sign operates perhaps more effectively than the simple stop sign.  “Go back.  You are going the wrong way” enables the chief executive officer to go back to his operatives and say, “Well, come up with a plan that will meet 7(1)(b), that will overcome the prohibition,” and then the approval can be given.  So as long as there is some stop before the authority is issued, some mandated prohibition that has to be obeyed, we say that clearly a question of jurisdictional fact arises and that 7(1)(b), we say, circumscribes the activities of the statutory authority. 

The question here was whether the agency acted within jurisdiction in going beyond that prohibition.  We say they clearly did and that entitles us to our remedy for that point alone, otherwise I adopt what was said by Mr Reynolds in relation to the other grounds.  Those are my submissions.

GUMMOW J:   Thank you.  Yes, Mr Temby.

MR TEMBY:   May it please the Court.  The New South Wales Parliament is a body of limited legislative competence and it flows from that fact that it could not legislate with respect to immunity from federal offences and it should not be imagined that the Parliament thought that it could do so.  What it could do was to legislate with respect to Acts of its own and laws of the State and the LECO Act is not to be understood as evincing any intention on the part of Parliament to do more than that; legislate to the extent of its competence.

Were there doubt as to that matter, then such doubt is, of course, laid to rest by section 31 of the Interpretation Act (NSW) which provides that:

An Act –

including the LECO Act –

or instrument –

including the authorities here in question –

shall be construed as operating to the full extent of, but so as not to exceed, the legislative power of the Parliament. 

Now, it seems to be agreed on all sides by now that the Court is engaged in a process of construing the particular piece of state legislation under which these authorities were issued and in construing that Act and bearing in mind section 31 of the Interpretation Act, we suggest there is no sensible room for the suggestion that the CEO of the relevant law enforcement agency could not issue a valid authority unless the activities in question which were being authorised could not in their nature involve some breach of Commonwealth law.

Apart from anything else, if that was not a sufficient argument, one could easily go on and develop various scenarios which would demonstrate just what inconvenience would arise from a need for the decision‑maker to bear in mind the possibility of federal offences being involved and in that respect it is worth remembering that the Act itself makes provision for urgent applications to be processed and granted.  There will not often ‑ ‑ ‑

KIRBY J:   Which Act are you referring to now?

MR TEMBY:   The LECO Act enables urgent applications to be made and granted, your Honour.

KIRBY J:   Yes, but are there similar or parallel provisions in the federal scheme?  I assume there must be.

MR TEMBY: It may be said generally that there is a broad but no more than a broad similarity between the Commonwealth and State legislative schemes. That may be thought to be undesirable, but there it is, and two differences of significance have, I think, already been mentioned. One is that under the Commonwealth scheme, a certificate, which is the terminology the Commonwealth legislation uses, cannot be granted which is effective to protect a lay participant which can be granted so far as the State Act is concerned and, secondly, the Commonwealth legislation, Part 1AB of the Crimes Act contains a proscription against the grant of a certificate in circumstances where, if it is a drug operation, the drugs will not at the end of the day be recovered.  Now, they are two important differences.

KIRBY J:   I get an impression that the Ridgeway legislation, if I can call that, the federal legislation, was enacted in relatively early days of federal police, State police co‑operation in Australia.  Do not forget the federal police is itself a relevantly recent creature and therefore that maybe with the passing of time some of these differences would be ironed out if there was a will.  It is not such a big deal really.

MR TEMBY:   With respect, the AFP have existed in that name for I do not know how long.

KIRBY J:   Since 1976, I recall.

MR TEMBY:   Not nearly as long as the State police forces of course, and the AFP has got to be a much larger and important operator so far as criminal misconduct is concerned than it was 25 years ago.  That is undoubtedly the case.  It must also be said that co‑operation, whether between State and federal agencies or between various federal agencies, between the AFP and Customs, for example, is always to be desired, always to be lauded when encountered, but no always to be encountered in a practical sense.  Co‑operation is spoken of more frequently than it is encountered in fact on the ground.

GUMMOW J:   What particular proposition are you addressing, Mr Temby?

MR TEMBY:   I am addressing the first argument which Mr Reynolds pursued with respect to the question that the proposition was that there could not be an authority granted under the State Act if the operation would involve the commission of federal offences.

GUMMOW J:   In effect, that you had to have both?

MR TEMBY:   That is right.  In effect, that you had to have both.

KIRBY J:   So you accept that and in this case there was not a federal authorisation?  That is the bottom line.

MR TEMBY:   There was not a federal authorisation.  We say that a State authority can issue, absent a Commonwealth certificate, even if some Commonwealth offence might be committed.

KIRBY J:   Yes, but they will not speak to the federal offences.  The federal offences will be committed and then you have to consider what value the State certificate is in that circumstance.

MR TEMBY:   And the answer, with respect, is as much value as the State Parliament can grant.

KIRBY J:   That may be so, but that may not be much.  It will be nothing in respect of a federal offence.

MR TEMBY:   It will be nothing with respect to a federal offence, that is true.  But the question is, what power does the issuing authority have?  Our submission is, the issuing authority has all the power that the LECO Act gives.  It cannot give more than the State Parliament is empowered to give, but it is to be construed, by reason of section 31 as extending fully to the extent of the legislative competence of the New South Wales Parliament and the authority is to be construed in just the same fashion.  Now, with respect, broadening the argument somewhat ‑ ‑ ‑

KIRBY J:   In the field of drugs which by their nature are imported, that does not seem to go very far. Many federal offences will be committed on the way.

MR TEMBY:   Yes.  The possibility of a prosecution for a federal offence continues to exist, notwithstanding the authorities with which the Court is now concerned.

CRENNAN J:   Notwithstanding section 16.

MR TEMBY:   Notwithstanding section 16, because section 16 is to be understood as dealing with unlawfulness under State law and no further, because the State Parliament cannot go further.  Now, with respect, this is a case which is far distant from Ridgeway.  In particular, there was no involvement by officials, whether State or federal, in the importation of the relevant cocaine, which was a matter of very grave concern and attention in the Ridgeway decision, and it is not the case that such conduct established an element of the offence.  In Ridgeway, federal officials were complicit in an importation of heroin which led to a charge against Ridgeway of him having supplied the imported heroin.

HAYNE J:   Be it so, let it be assumed there are these differences, what follows?  Where are we heading, Mr Temby?

MR TEMBY:   I just want to make the point that there are those important differences that in this case the importation was by a gang of criminals with no knowledge on the part of anybody in any official capacity, and that there was the prospect of continued importations in very large quantities.  It is that which gives rise to a decision to allow a substantial quantity of cocaine to be sold, notwithstanding that it would not – it was anticipated – be recovered following sale.

Now, the legislation requires the decision‑maker to embark upon an exercise – I am looking now at section 6(3) and to satisfy himself as to there being reasonable grounds for suspicion of a criminal activity he must be satisfied as to the “nature and extent of the suspected criminal activity” being “such as to justify the conduct of a controlled operation” and he must be satisfied that the “nature and extent of the proposed controlled activities are appropriate to the suspected criminal activity”.

HAYNE J:   To what issue, raised by the application for special leave, does this go?  I do not see the connection between this branch of the argument and the issues that are raised on the application?

MR TEMBY:   Very well, your Honour, I will say almost nothing more about it.  Can I just say this?  The application which the Court will find at page B48 contains material which demonstrates that there had been earlier importations.  It was anticipated that there would be future applications.  The man Tom, otherwise known as 719, had been working on instructions from Hatfield and selling large quantities of cocaine.  Hatfield had instructed Tom to retrieve 2 kilograms of cocaine and supply it to Gedeon and in case the dates matter, on 7 February the remaining 7 kilograms of cocaine out the 10 kilograms imported in October were retrieved from the very place in Wahroonga and taken off for analysis and then to the Crime Commission premises.

KIRBY J:   I do not know whether this matters, but under the federal legislation, all prohibited imports are forfeited to the Crown in right of the Commonwealth, so all the dealings with the cocaine – if it was cocaine – on assumption that it is imported, which is a proper assumption to make, are dealing with ‑ ‑ ‑

MR TEMBY:   Forfeited goods.

KIRBY J:   ‑ ‑ ‑ material which is, by federal law, forfeited to the Crown.

MR TEMBY:   We acknowledge that.

KIRBY J:   So, what are you doing as State officers messing around with federal property?

MR TEMBY:   Well what we are doing, your Honour, is seeking to ‑ ‑ ‑

KIRBY J:   Lawfully, I mean.

MR TEMBY:   Yes, what we are doing, to answer your question, is seeking to catch criminals by conducting controlled operations which it is hoped at the end of the day will catch those who have been involved in the importation of tonnes of material.

KIRBY J:   I am prepared to accept your motives are pure.

MR TEMBY:   Yes.

KIRBY J:   The question is whether the execution of them, without the federal certificate, is lawful.

MR TEMBY:   Yes, and with respect the real question is whether there could be issued, under the State Act, an authority to conduct certain activities, notwithstanding that those activities would involve the commission of certain federal offences.

We say that as a matter of construction of the State Act, the answer must be yes, calling in aid section 31 of the Interpretation Act, if necessary.  It is a construction question, and that is the correct answer to that question of construction.  If questions of the sort your Honour is raising need consideration then they will be considered, we submit, in a criminal trial at which the submission may be made that there had been an offence or offences committed, and accordingly unlawful conduct which would give rise to section 138 Evidence Act questions, or if not that, then at least the question would arise as to whether there had been impropriety for section 138 questions.

In answer to your Honour Justice Gummow, the State Evidence Act is the same as the federal Evidence Act so far as section 138 is concerned.  So that is the context in which those questions will arise and it may well be that the conclusion will be, yes, there has been unlawfulness or illegality, yes, there has been impropriety and then should the evidence be admitted or should it not.

CRENNAN J:   Were there indemnities given to the participants by the Commonwealth?

MR TEMBY:   There was an indemnity given to Tom, and that is in the agreed facts.  The evidence does not answer that question so far as others are concerned and perhaps I should not, but Tom was indemnified by both State and federal authorities.

KIRBY J:   But that merely meant that Tom could not be prosecuted.  It did not mean that he was not committing an offence – a federal offence.

MR TEMBY:   That must be right.

KIRBY J:   The Executive Governments will not prosecute him but that does not mean that the law does not fall upon him?

MR TEMBY:   It probably does mean the law does not – it means law enforcement will not fall upon him.  It does not mean that the law does not operate in his direction.  It does.  The reference to the indemnities to Tom is at B 240 in paragraph 39, your Honour.

The next question that arises, in terms of the statute, concerns the reach of section 7(1)(b) and in particular whether the statute extends to conduct and its consequences so far as participants and others immediately involved are concerned or whether the statute goes further than that.  I should say that we do not suggest that the test, as was said by Chief Justice Spigelman at appeal book A, page 297, paragraph 54 is confined to participants and “any other person” proximate to, that is, in the physical vicinity of the operation.  The suggestion we make is somewhat different.

The connection, we suggest, is not in terms of physical or geographic proximity, but the consequences that must be taken into account under section 7(1)(b) are limited, in our submission, to the participant in question, to other participants and to any other person who is involved in the operation.  You get to that conclusion, we suggest, in this way.  Section 7(1)(b) takes as its subject conduct and then requires that consideration be given to certain – query – what consequences of that conduct?

So the first question is, what is the conduct which we are concerned with and the answer in the case of the first authority which may be taken to be reasonably representative of the others is to be found at pages 58 and 59 of the B appeal book.  If I can ask your Honours to go to B58.  You will see that so far as Standen, who was the law enforcement participant was concerned, the conduct which was sanctioned was:

Possession and supply of 2 kilograms of cocaine to Informer 719.

So far as that person was concerned, the controlled activities which were permitted by the authority were:

Possession and supply of 2 kilograms of cocaine to Gilbert Gedeon or any agent acting on his behalf in return for payment of $340,000 cash -

and the handing of that sum to, “Hatfield or any agent of his”.  Now, that was the permitted conduct.

KIRBY J:   It was not only that.  On page 58 it has Mr Mark William Standen possessing and supplying “2 kilograms of cocaine” to an informer and that is forfeited federal property.

MR TEMBY:   Yes, and, with respect, I have identified that as being conduct.  There were two participants.

KIRBY J:   That is part of the controlled operation.

MR TEMBY:   Yes, undoubtedly.  I thought I had said that, your Honour.  There were two participants and there was permitted conduct on the part of each of those participants, one a law enforcement participant, the other a civilian participant.

KIRBY J:   You are trying to snip this controlled operation up into two parts, but it is not.  It is a co‑ordinated integrated activity involving forfeited federal property which cannot be done without the authority of federal law.  Can you suggest any reason of a practical kind that would have restrained this operation securing the federal authority under the federal law, except that they did not want to have to go through the more rigorous strictures of the federal system?

MR TEMBY:   The answer to that question is that it had been decided, and this was in the agreed facts, that it was necessary in order to retain Tom’s credibility that he should, on instruction, sell cocaine.

HAYNE J:   That put you outside the realm of possible Commonwealth authority because you could not keep control of the drug.

MR TEMBY:   That is right.

HAYNE J:   Why is that not within 7(1)(b)?  You have identified the conduct.  Why is it not conduct that is likely, et cetera?

MR TEMBY:   Our submission is that having identified the conduct, which is conduct on the part of Standen in supplying cocaine to Tom, in conduct by Tom in supplying cocaine to Gedeon and handling money in a particular way, that is the conduct which is permitted.  The question then is whether that conduct is likely to have serious health effects upon the participant, that participant or any other participant or any other person.  So you look at Standen as a participant.  The question is whether his conduct in handing the cocaine to Tom is likely to seriously endanger the health of Standen or Tom or, in terms of the statute, any other person.  The question is what is comprehended by the expression “any other person”.  Our submission is that it is any other person who is involved in the operation.

HAYNE J:   Why?  Why would you read down the expression “any other person” in this statute?

MR TEMBY:   Because the purpose of the statute is to provide protection to participants in what would otherwise be illegal activity and that purpose is sensibly achieved by limiting the expression “any other person” to those who are involved in the operation because if one goes further than that, then one is involved in an exercising prognostication which it is not practicable to impose upon the person issuing the authority.  That is to say, you just do not know what is going to happen thereafter.  You do not, in the nature of things, know with respect to any particular operation what its consequences might be.  You just have to make your best judgment.

Let me take an example.  Let it be supposed that there is a group of terrorists who are keen to engage themselves in the making and utilisation of explosive devices, bombs, and for the purpose there is a training camp set up in some remote desert place and it is the case that the terrorist cell has been infiltrated by a police officer. 

Now, in deciding the section 7(1)(b) question as to whether an authority should be given for that officer to go and participate in the training exercise in the course of which the operation or plan says that a bomb is going to be let off, consideration will have to be given as to whether that activity is likely to have a deleterious effect upon life or health of that participant, any other participant, if there be any other participant, or any other person, which means those who are involved in the operation.

If, however, the plan is for bomb implements to be provided with a view to a bomb being set off at a railway station or a school or a hospital, then it may be imagined that a different conclusion would be reached as to whether or not the authority should be issued.  But if it was, the question would be whether there was likely to be an effect upon life or health of those who within the operational plan would be affected by what was going to happen.

Now, the operational plan here did not go beyond the supply by Standen to Tom and by Tom to Gedeon and thereafter the matter was beyond the control of this operation.  It was a matter which may have caused harm at some point down the track, depending upon the quantities in which and the circumstances in which cocaine was ingested by end users, which end users would of course have been involving themselves in what might be described as “interposed criminal conduct”.

HAYNE J:   Do you accept that it was likely at the time of the issue of this authority that the cocaine would be sold on to end users?

MR TEMBY:   Yes.  We do accept that and that is in the agreed facts.  There is no dispute so far as that is concerned.

KIRBY J:   Mr Temby, there is very good authority in this Court and the House of Lords - it is actually Lord Hoffmann’s authority in R v Brown which this Court has followed in Agfa‑Gevaert, that when you get a phrase like “any other person” you just do not take your magnifying glass out and look at that in isolation.  You must read it.  The natural way of communication is to read it, at least in its sentence, in its context, in its part.  When you do that in this statue – because we cannot just solve this problem by reference to facts of this controlled operation, we have to look at how this is intended to operate in this statute.  If you do that in this statute, the common sense inference is that this statute is going to be used in controlled operations involving drugs.

It is one of the activities, one of the main activities one would think and if that is so, then you are going to have the problem of the drug on sale or on supply to other persons whose health will be affected.  So why should we read this phrase, which is expressed in its generality, in a statute of this kind for this purpose in a way that is so narrow as you are suggesting.  The context is against you.

MR TEMBY:   Because the subsection with which we are concerned takes as its subject “conduct”.  One identifies the conduct and then works out whether that conduct is likely to have an endangering effect upon a given participant or any other participant or “any other person”, which we suggest means involved in the operation.

KIRBY J:   But the Parliament is here putting a restriction, and it is doing so in two relevant ways.  You cannot get another person to engage in criminal activity and you cannot endanger the health and safety of persons which are very sensible things for Parliament to say “Well, we’re going to allow this, but we’re going to ensure that it’s not done under certain circumstances”.  I just do not see why we should read that as restricted to those, because people’s health and safety that can be deleteriously affected by operations of this kind are not restricted to policemen and their informants.  It is restricted to the general public with whom Parliament would naturally and properly be concerned.

MR TEMBY:   Yes, and with respect, the answer that has been given at first instance and by the majority in the Court of Appeal is that one cannot go beyond the conduct and its immediate consequences because if one is looking at remoter consequences, then they are bound in the nature of things to arise.  Chief Justice Spigelman surely made a telling point when he said that the participation by an informer in an activity of this sort, if it became known, would likely endanger the life or health of the informer.  But it could hardly be intended that that should operate as a restriction upon the granting of authorities under this Act.

KIRBY J:   Well, it is here “any other person”.

MR TEMBY:   Yes.  The submission is that effective operation of this statute in order to enable authorities to be given to pursue serious crime in a sensible, workable fashion requires that an assessment be made with respect to the likely impact in a health sense upon a given participant, any other participant and any other person, which means any other person involved in the operation.

GUMMOW J:   I think we are seized of that.

MR TEMBY:   Yes.  So far as the question of jurisdictional fact is concerned, the question being whether or not section 7(1)(b) gives rise to a question which is for determination by the issuing officer or alternatively gives rise to a question which must be, if challenged, determined by a court on the evidence that is before it, which may, as we know, be evidence different from the material that the CEO had before him.  That is the question that arises so far as jurisdictional fact is concerned.  We have conceded in our submissions that there are certain indicators in either direction, but the submission is that the indicators strongly favour this not being a jurisdictional fact and that is the case in a manner which is generally consistent with the decision both at first instance and unanimously in the Court of Appeal.

The general structure of the Act is that section 5 provides for applications, section 6 deals with their determination and section 7 deals with certain matters which, in the course of the determination of the application, are to be taken into account as, in our submission, strong instructions by Parliament as to how the jurisdiction will be exercised rather than controls by Parliament on the jurisdiction which is being exercised.

As I was saying earlier, section 6(3) requires that account be taken of the grounds to suspect the criminal activities, the nature and extent of them and whether they are such as to justify the conduct of a controlled operation and whether the nature and extent of the proposed controlled operation’s activities are appropriate to the suspected criminal activity.  These are all matters that require a weighing and a judgment to be exercised and, in our submission, are better conducted, and Parliament will have intended that they should be conducted, by the CEO.

As part of that exercise, there are constraints imposed by section 7, but I can say that there are constraints imposed without saying that they are in the nature of jurisdictional facts.  It is submitted that in section 7 there are certain of them that are clearly not jurisdictional facts because, for example, in section 7(3)(a) something must not be authorised unless the CEO is satisfied as to a certain matter, and so it is in section 7(2).

It would be surprising, we submit, if section 7 contained a medley of facts, some of which are jurisdictional in nature and others of which are not, and it is clear, at least in the case of those I have identified, that they are not and cannot be jurisdictional in nature, they depend upon a state of satisfaction. 

So far as those in section 7(1) are concerned, each of them requires the exercise of judgment.  In 7(1)(a) the determination is whether something could or, in terms of the statute, “could not reasonably be expected”.  That has to do with the level of possibility as to whether the conduct would have been engaged in, in any event, that is, the parliamentary instruction with respect to the way the jurisdiction will be exercised in cases where it might be suggested that the person has been induced to become a criminal.  In 7(1)(b) there is likewise a judgment to be exercised which exercise has to do with the likelihood of there being deleterious effects upon health and safety. 

They are matters which it is submitted are best left and are likely to have been left by the Parliament to the issuing authority as an instruction but not by way of jurisdictional requirement.  It is suggested that no other conclusion would be reached unless it is said that the words “must not” in the opening portion of section 7(1) necessarily indicate a jurisdictional fact which is not an available argument in the context of this statute, because just the same expression “must not” is used in both parts of subsection (3) but is coupled in each case with the state of mind, that is to say, satisfaction of the issuing authority.  Apart from that, we rely upon what is in our written submissions.

GUMMOW J:   Is there anything you want to say, Mr Temby, as to the matters Justice Hayne was in particular raising with Mr Reynolds?

MR TEMBY:   There is nothing beyond what I have said and what is in our written submissions.  There are two matters that I now want to deal with and I think there are only two that need further development by me.  Firstly, my learned friend, Mr Reynolds, asked the Court to act upon certain passages in the judgment in dissent of Justice Basten at volume A page 306.  The Court is asked to act upon paragraphs 79 and 80 of what Justice Basten said and to infer that neither the applicant nor the Commissioner addressed the question of harm to ultimate users of the cocaine which was to be supplied. 

My learned friend relies in that respect upon Justice Dixon’s formulation in Avon Downs – he gave you the citation.  At page 360 at about the middle of the page Justice Dixon said that in certain circumstances, which his Honour stated “it may be a proper inference that it is a false supposition” that the decision‑maker has “addressed himself to the right question, correctly applied the rules of law” and so on.

If such an inference is to be drawn, then it is a finding of fact which is being made and on this question Justice Hall received evidence.  Can I take your Honours to page 125 of that same volume, volume A.  His Honour said at paragraph 22 on page 125 that a question:

was whether or not the first defendant (the Commissioner) as the decision‑maker specifically considered the potentially deleterious or harmful effects from the ingestion of cocaine (upon the assumption that he was by law required to do so).  I considered that evidence as to whether or not Mr Bradley did or did not have regard to [those matters] . . . was potentially relevant to the issue arising under s.7(1)(b) . . . 

By reason of the conclusion –

which he had reached as to the reach of 7(1)(b) he did –

not consider that it has been established on the evidence that there was a relevant failure by the first defendant to consider that matter.

He said that he did not need to make findings in that respect at paragraph 54 on pages 136 and 137.  It is suggested against us that the Chief Justice at volume A, page 295 in paragraph 49 was making a finding consistent with what Justice Basten had decided but, in our submission, that is not the case.  The Chief Justice was imply adopting an assumption for the purposes of the hearing before him rather than making a finding as to the question of whether or not consideration had been given.

Finally, and this is the final reference I need to make to the appeal books, there was at least some evidence before Mr Bradley that Mr Bradley had information in this respect.  I take your Honours, if I might, to appeal book B at page 368.  Near the top of the page he was asked whether he had conversations:

with anybody about the effects of cocaine on members of the community?

He answered in the affirmative and he went on to say that he had that discussion with Commissioner Moroney – that is the police commissioner – on 2 February which was in the period immediately preceding the grant of the relevant authorities.  I go through all that simply to say this.  It is submitted that the Court should, if it grants leave as to this aspect of the matter, remit it for further factual decision in the Supreme Court because it is a matter as to which it may be – certainly the matter requires further consideration and factual decision and it is a question upon which it may be that further evidence could be led.

Apart from anything else, if the Court is against us so far as the section 7(1)(b) question is concerned, then the Degenhardt Reports would become admissible and immediately one is in a new area of factual discourse.

KIRBY J:   Would it not be a matter of common knowledge and reasonable judicial notice that if the true construction of any other person is any other person in the general community, that the conduct of supplying cocaine that may get to such persons would endanger their health, at the least?

MR TEMBY:   Well, your Honour, perhaps, but it will depend surely upon the quantities in which and the circumstances in which the cocaine was ingested.

KIRBY J:   This was a lot of it.

MR TEMBY:   There was a substantial quantity, but we do not know what knowledge was enjoyed by the decision‑maker as to whether the habitual conduct of those who are to get it from Gedeon, let us say, was to break it up into very small quantities before distribution or whether there was to be in some sense an uncontrolled distribution.  One just does not know.  The safer course, it is submitted, is not to simply draw a conclusion which seems to have been drawn by Justice Basten but was not drawn by other members of the Court of Appeal and it was not, importantly, drawn by the primary judge who was, of course, the primary decision‑maker.  It would not be prudent for this Court ‑ ‑ ‑

KIRBY J:   That was because of the view he took about the meaning of the statute.

MR TEMBY:   We grant you that, your Honour.

KIRBY J:   So once one takes, if one does, a larger view of the meaning, then I just think whether it is in small packets or big packets or some small and some big, there is going to be an awful lot of them.  There are going to be some people who are susceptible and who will suffer damage to their health, endanger danger to their health.

MR TEMBY:   Yes, but, with respect, the statutory test is seriously in danger and it will no doubt depend upon the circumstances, notwithstanding that there was in total six kilograms which went out, part only of which was recovered.

HAYNE J:   Can I just understand the position of the Crime Commission.  Mr Temby.  Is the position of the Crime Commission in this Court that it wishes to contend that delivery of six kilograms of cocaine to a variety of end users is not likely to seriously endanger the health or safety of any end user?  Is that the position of the Crime Commission?

MR TEMBY:   We submit that it will not necessarily do so.  There is a factual decision to be made in that respect and it is better made back in the Supreme Court.

HAYNE J:   I do not want there to be some misunderstanding, Mr Temby.  It is the position of the Crime Commission, is it, that it wishes to contend that release of six kilograms of cocaine disseminated amongst end users of that illicit drug is not likely to seriously endanger the health or safety of any of those end users?  Is that the position?

MR TEMBY:   It is not, your Honour, and it is not what I just said.  What I just said was that it will not necessarily do so and there is an area of factual decision which is more satisfactorily to be dealt with in the Supreme Court rather than adopted simply as assumption by this Court in circumstances where there is no finding against us and where a statement to that effect has been made by one only of the members of the Court of Appeal as the judges immediately below are to be understood.

Finally, can I say something briefly with respect to relief?  I will keep this brief because there are to be written submissions put in.  Could I just remind the Court that what was done at first instance was to answer certain particular questions and then at the next stage to dismiss the proceedings and before the Court of Appeal the appeal was dismissed.  So the orders that have been made are by way of answers to questions, the most important at that time was the constitutional question which has now gone away, but answers to questions and the dismissal of the appeal.  Our position will be that without any declarations being made and depending upon the decision that this Court reaches, it will be possible to craft appropriate orders.

GUMMOW J:   Where are the relevant answers to questions?

MR TEMBY:   You find them, your Honour, in volume A at page 173.  There is a matching order elsewhere, but they are both the same.

HEYDON J:   Page 157, I think, for our ‑ ‑ ‑

MR TEMBY:   Page 157.

GUMMOW J:   They are answering constitutional questions.

MR TEMBY:   Your Honour, at 173, which is where I happen to be, the first question is a constitutional question not now alive and the second question is what has been called the jurisdictional fact question and the third and fourth questions have to do with admissibility of evidence which depends upon the construction of section 7(1)(b) in terms of the words

“conduct” and “any other person”.  Then the order which dismissed the proceedings is at 177, and there are matching orders in the other sets of proceedings. 

Now, with respect that is just to really remind the Court as to where the matter now stands and what we otherwise need to say will be said in written response to what Mr Reynolds puts forward.  May it please the Court.

GUMMOW J:   Thank you.  Yes Mr Reynolds.  Is there any division of reply between you and Mr Haesler?

MR REYNOLDS:   I do not think so, your Honour.

KIRBY J:  Mr Reynolds, I am just a little concerned by that last comment that the constitutional question is dead. You have issued, you say for greater certainty, a new section 78B notice. For myself I think that might have been a prudent thing to do. I am just now not entirely clear, are you merely using the Constitution for the purpose of saying to the Court, well you construe the legislation on the assumption that it conforms to the Constitution or are you urging a constitutional submission upon the Court in accordance with your new 78B notice? I think we have to pin you down now.

MR REYNOLDS:   Only the former, your Honour, I do not take that principle of construction to be disputed between us.

GUMMOW J:   The earlier constitutional point seems to have been that the State law was invalid by reason of some 109 situation with the federal Customs Act, but that has gone away.

MR REYNOLDS:   No, I am not suggesting that.  It was only, as I put it, on that question of construction, section 31.  I gave your Honours a reference to Love in the Court of Appeal and that is the only principle and I do not take it to be in dispute. 

The next thing is in answer to your Honour Justice Hayne a couple of minutes ago in relation to the 7(1)(b) issue.  My learned friend dug his heels in saying that there would not necessarily be endangerment.  The provision talks about there being a likelihood of endangerment, not there having necessarily to be endangerment.

HEYDON J:   Do you say that is more probably than not, or do you think it is just a possibility that is a real possibility without rising as high as the former standard?

MR REYNOLDS:   Yes.  Obviously either construction is, in theory, possible, as was discussed in this Court in the Boughey Case in 1986 and, of course, there is a Tillmanns Butcheries line of cases, which I am sure your Honour knows very, very well.  We submit a real possibility would be the preferred construction. 

GUMMOW J:   What do you then say about Mr Temby’s follow up point that it has to go back to the Supreme Court in some way?

MR REYNOLDS:   Well, what I wanted to say about that is that if one interprets this section, as it needs must be interpreted, we submit that it is, with respect, difficult to see how this issue could bona fide be in dispute and if that is the case, then there would be no reason why it needed to be remitted to the Supreme Court.  If your Honours do not embrace that proposition, then my learned friend is probably right, it probably would have to go back to the Supreme Court.  But we submit that there could not be any serious doubt picking up the formulation that your Honour Justice Hayne put to my learned friend.

KIRBY J:   In a sense, at least arguably, Parliament has made the judgment on that matter by the very high penalties that attach to involvement in cocaine importation and distribution.  So it would be a bold action on the part of the Court to say there is still a factual question to be determined whether there is a serious danger to the health of persons.

MR REYNOLDS:   Yes.  As we say, on the correct interpretation of this provision, which your Honours will look at first, we say it is not really open to serious doubt.  My learned friend took your Honours to what I will call the Avon Downs point at appeal book A at pages 125 to 126 and sought somehow to gain some comfort from the observations made by Justice Hall there, but all Justice Hall is doing there, particularly, your Honours will see from paragraph 23, is really doing exactly the same thing as Chief Justice Spigelman did, namely, noting that, having rejected my client’s construction of section 7(1)(b), it was therefore unnecessary for him to determine what we have called in this Court the Avon Downs argument.

It is only if, as per Justice Basten, that construction point or that argument in relation to section 7(1)(b) is determined in my client’s favour that this issue becomes live.  Justice Hall did not consider it simply because he rejected our construction, as did Justice Spigelman.

The final matter I wanted to raise is this.  My learned friend, as I said in my submissions, had not on the Avon Downs argument, as we described it, disputed in writing whether we were correct in asserting that Justice Basten was correct about the drawing of the inference and at the heel of the hunt in his oral submissions he has pointed to pages 367 to 368 on the

issue of whether that might rebut the drawing of that inference.  In that it has been raised that late, we would prefer, with the Court’s leave, to respond to that in a written submission, if that is convenient to the Court, rather than to try to deal with that issue now.

GUMMOW J:   What do you understand the issue to be?

MR REYNOLDS:   I do not know altogether, but that somehow this is potentially a factual response to the holding by Justice Basten that the inference should be drawn.  One of the problems with it that one notices immediately is that the applications were made on 7 February and this is talking about a date of 2 February or prior to that date, but it is an important matter for my client ‑ ‑ ‑

GUMMOW J:   You would probably have to look at the transcript quite closely I should imagine.

MR REYNOLDS:   I will.

GUMMOW J:   That can be added to your material.

MR REYNOLDS:   If the Court pleases, those are my submissions in reply.

GUMMOW J:   Yes, Mr Haesler.

MR HAESLER:   Your Honours, the Court is yet to give us the same permission to put on written submissions.  We would certainly seek to supplement anything that Mr Reynolds puts on.

GUMMOW J:   Yes.  You had better look at one another’s material though.

MR HAESLER:   Yes, we will co‑operate and hopefully there will not be very much more for us to say.  We have to date and we will continue to do so.  Just to take up the last point about the seriousness of the supply of large quantities of cocaine, the Drug Misuse and Trafficking Act (NSW) in the Schedule says that one kilogram of cocaine is a large commercial quantity of the drug. Section 33(3) of that Act makes it a maximum penalty of life imprisonment if you supply more than a large commercial quantity. So depending on whether Tom got his weights right, your Honours, he is on the cusp of either 20 years or life for purchasing one kilogram or more of the drug. It would be a bold sentence submission in any court to say that Parliament was not aware of the serious harm ‑ ‑ ‑

KIRBY J:   I think Mr Temby’s argument does not really deny all that.  What he says is there is a residual factual question to be determined which was not determined because of the view that was taken in the court below, by majority in the Court of Appeal, of the meaning of the statutory expression and that at least arguably there would be a possibility that the Supreme Court might determine that in the context of this control operation and of the limited possibility of haemorrhage that there was not in fact a serious danger to the health of any person.  That is the thing we have to bite on.

MR HAESLER:   It is clear we say from the agreed facts and all of the documentation that there was to be haemorrhage the minute that the controlled operation ceased.  The minute that the drugs were supplied by Tom to some other person there was no control over those drugs at all and they were likely, in the extreme, to make their way on to the market.

KIRBY J:   That might be the reason why the federal legislation is more stringent and does not give protections to the citizens, ordinary people.

MR HAESLER:   Yes.  On that point, your Honour, the federal legislation which is in the bundle, tab 1, does provide for controlled operations and authorities under the federal legislation to encompass offences against the law of a State or Territory.  Those provisions can be found at 15G(1), 15H and 15I(1).  There is also provision 15GA stating:

Parliament’s intention that a law of a State or Territory should be able to operate concurrently with this Part –

So, it is envisaged quite clearly that the distribution of controlled substances imported into Australia in breach of the Customs Act can clearly, even if it involves a breach of State law, be covered by a Commonwealth controlled operation.  One other point that was raised by my friend, Mr Temby, related to some of the history of the matter.  I think it is important, so far as Mr Dowe is concerned, that I draw the Court’s attention to the application that was made by Mr Standen in relation to the authority which caught Mr Dowe up in its grip.  That can be found at B73.

Mention was made previously, and it is in the agreed facts, that the whole purpose of these series of authorities was to bolster or maintain Tom’s credibility.  That is B229 in the agreed facts.  The reason given was that there was to be a much bigger shipment of drugs involved.  At B75 at about line 30 there is indication that the information provided by Tom was that a further shipment using the airport method was planned for 18 February.  This did not eventuate and this particular operation or application is signed 23 February and the authority to conduct the controlled operation can be found at B83 and it is clear from pages 84 and 85 that what

was envisaged was the supply of cocaine both by Mr Standen and Tom, the supply of a Customs Act prohibited substance.

Those are the matters I wish to raise, your Honour.  There is just one other brief – Mr Temby took you to B368 and the cross‑examination of the Crime Commissioner, Mr Bradley.  I would simply ask the Court to read a bit further down that page.  It is clear that Mr Bradley had very little information before him as to the direct harm that might be caused ‑ ‑ ‑

GUMMOW J:   Where do we see that exactly?

MR HAESLER:   Page 368 of volume B.  My friend took you, and as Mr Reynolds reminds me, leave has been given to put some of this in writing, but I would draw your attention to line 30.

Q.       Do you remember directing or being told that someone had directed that research be done?
A.       At that time?

Q.       Yeah.
A.       No.

Then he says he does not recall directing research.  Those are my submissions.

GUMMOW J:   Thank you, Mr Haesler.  The further written submissions by each applicant will be filed on or before 8 August and any submissions by the Commission in response will be filed on or before the 15th.  We will reserve our decision and we will adjourn until 10.00 am tomorrow.

AT 3.48 PM THE MATTER WAS ADJOURNED