K-Generation Pty Ltd & Anor v Liquor Licensing Court

[2008] HCATrans 365

[2008] HCATrans 365

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Adelaide  No A12 of 2008

B e t w e e n -

K-GENERATION PTY LIMITED

First Appellant

GENARGI KRASNOV

Second Appellant

and

LIQUOR LICENSING COURT

First Respondent

COMMISSIONER OF POLICE

Second Respondent

FRENCH CJ
GUMMOW J
KIRBY J
HAYNE J
HEYDON J
CRENNAN J
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

AT ADELAIDE ON TUESDAY, 4 NOVEMBER 2008, AT 10.21 AM

Copyright in the High Court of Australia

FRENCH CJ:   Because of the logistical difficulties of people coming to the lectern we will take the appearances as they appear on the Court list.  Yes, Dr Churches.

MR S.C. CHURCHES:   If it please the Court, I appear for the appellants.  (instructed by Starke Lawyers)

MR M.J. HINTON, QC:   May it please the Court, I appear with my learned friends, MR S.A. McDONALD and MS T.D. McLEAN, for the respondents.  (instructed by Crown Solicitor’s Office (SA))

MR S.J. GAGELER, SC (Solicitor‑General of the Commonwealth of Australia):   May it please the Court, I appear with my learned friend, MR C.D. BLEBY, intervening on behalf of Attorney‑General of the Commonwealth of Australia.  (instructed by Australian Government Solicitor)

MR R.J. MEADOWS, QC (Solicitor‑General for the State of Western Australia):   May it please the Court, I appear with my learned friend, MR R.M. MITCHELL, SC, intervening on behalf of the Attorney‑General for the State of Western Australia.  (instructed by State Solicitor for Western Australia)

MR. M.G. SEXTON, SC (Solicitor‑General for the State of New South Wales):   May it please the Court, I appear with my learned friend, MS M.L. RABSCH, intervening on behalf of the Attorney‑General for the State of New South Wales.  (instructed by Crown Solicitor for New South Wales)

MS P.M. TATE, SC (Solicitor‑General for the State of Victoria):   May it please the Court, I appear with my learned friend, MR S.P. DONAGHUE, intervening on behalf of the Attorney‑General for the State of Victoria.  (instructed by Victorian Government Solicitor)

MR W. SOFRONOFF, QC (Solicitor‑General of the State of Queensland):   May it please the Court, I appear with my learned friends, MR G.P. SAMMON and MR G.J.D. DEL VILLAR, intervening on behalf of the Attorney‑General of the State of Queensland).  (instructed by Crown Law – Brisbane)

FRENCH CJ:   Yes, Mr Churches, you may proceed.

MR CHURCHES:   If it please the Court, this matter involves the Liquor Licensing Act (SA) and from last Saturday’s Sydney Morning Herald, page 42 I quote:

As we know, the first casualty in liquor licensing debates is sobriety of expression.

The appellants will, of course, contain themselves, but I cannot speak for my numerous learned friends.

KIRBY J:   May I ask a little technical question?  I noted in these footnotes to the Commonwealth submission, I think it is, that there is some disparity between the reasons as expressed in our book and certified and the reasons as published in the reports.  Is it simply paragraphing or is there some other more substantial revision of the reasons?

MR CHURCHES:   I am not aware of any substantial revision, your Honour.  It is I think just a renumbering of paragraphs.  I have adhered to the appeal book because that is where I began and I am determined to stay with that.

KIRBY J:   That is natural, but if we are to publish reasons the reasons would presumably refer to the authorised reports.

MR CHURCHES:   Yes I understand that, your Honour, but I think it is ‑ ‑ ‑

KIRBY J:   That just creates a little bit of confusion.  But I think in due course we will have to go over to the reasons as published in the authorised reports.

MR CHURCHES:   Yes.  The Solicitor‑General of Western Australia has just explained the particular technical problem.  It is only a numeration problem from what had formerly been 50 onwards, so it can be dealt with simply.

KIRBY J:   At some stage if you would just indicate, or Mr Meadows might indicate what the problem was in due course and then we will know what it is.

MR CHURCHES:   Yes, thank you, your Honour.  The question for this Court, the appellants submit, can be condensed to the simple question, can an Australian Parliament order a Chapter III capable court to behave with manifest unfairness while taking evidence going to a final determination?  That is the question arising from the sequelae to Mr Krasnov, the second appellant, applying to the Liquor Licensing Commissioner of this State for a liquor licence in October 2005.  At the hearing in the Liquor Licensing Commission the police provided information to the Liquor Commissioner in the form of criminal intelligence and immediately ‑ ‑ ‑

KIRBY J:   The Solicitor for New South Wales said in his submission that it would normally be the case anyway that on such applications there would be evidence tendered in open court which dealt with issues of suitability for receiving a licence.  Your client, I think, protests that he did not know what the problem was that is revealed in the Commissioner’s communication to the court, but was what the Solicitor for New South Wales said would have been the normal case, namely, that evidence as to suitability would be tendered in open court.  Did that happen in the case of your client?

MR CHURCHES:   The first proposition we would adhere to, that normally evidence is tendered in open court and the applicant, the affected party, knows what is in the material presented by the objector.  The Act, of course, provides for objection.  I will take your Honours through the Act briefly in a moment.  But the very nub of this problem is that the provisions of the Liquor Licensing Act in this State provide for the police to present criminal intelligence which is determined in section 28A of the Act not to be allowed to be shown.

KIRBY J:   We know all that, but what I am asking you, you see, the Solicitor for New South Wales says that ordinarily – quite apart from this criminal intelligence – there would be a submission or evidence tendered in the application by the objector or by the State as to the reputation and suitability or unsuitability of the applicant.  He says that would normally be done and therefore in that sense he says this is not likely generally to be a big issue because normally there will be material on the record.  Now, was there material on the record in your client’s case that suggested he was not a suitable recipient of a liquor licence?

MR CHURCHES:   None that I am aware of, your Honour.  The conviction sheets were in evidence and they are in the appeal book.

KIRBY J:   They are only traffic offences?

MR CHURCHES:   Yes, traffic offences, yes.  So it really boils down to what was in the secret documents that the applicant was not allowed to see and that, of course, occurred both in the Commissioner’s hearing and then of course subsequently in the Liquor Licensing Court.

Your Honours, if I might briefly turn at that point to the relevant definitions.  “Criminal intelligence”, which is the nub of the matter, is defined in section 4 of the Act.  My friend, the Solicitor‑General for South Australia, has kindly produced the definitive version of the Act at the relevant time, which is February of last year, the date of the hearing in the Liquor Licensing Court, so I will hold onto that version of the Act.  I do not think it is any different from the version I was using in the appellants’ materials book, but it is page 7 of the authorised version:

“criminal intelligence” means information relating to actual or suspected criminal activity . . . disclosure of which could reasonably be expected –

and then we have two concepts –

to prejudice criminal investigations, or to enable the discovery of the existence or identity of a confidential source of information relevant to law enforcement –

Then we go from that to the use of the criminal intelligence at section 28A, page 18 of the authorised version.

KIRBY J:   You said “authorised version”, do we know as at what date this is the version of the Liquor Licensing Act (SA)?

MR CHURCHES:   Yes, your Honour, this is a version that pertained from 1 February 2007 until May 2007 and the relevant hearing in the Liquor Court is in February 2007.  So this is our Act as at the relevant date.  Section 28A, “Criminal intelligence”:

No information provided by the Commissioner of Police to the ‑

and that is the Liquor Commissioner ‑

may be disclosed to any person (except the Minister ‑

or a court or other person authorised by the Police Commissioner ‑

if the information is classified by the Commissioner of Police as criminal intelligence.

So straightaway we are confronted with the classification process by the police ‑ or the Commissioner of Police ‑ and there is a closing down of access to that information.

GUMMOW J:   Wait a minute.  It says, “No information may be disclosed”.  Is it creating an offence or changing the rules of evidence?

MR CHURCHES:   It does not provide for any penalty, your Honour, but it would appear to change the rules of evidence.

KIRBY J:   This is directed at a court, and it may be expected that a court of law would obey it, even though it is a duty of imperfect obligation that it would be obeyed by a Crown officer or a court?

MR CHURCHES:   Yes.

FRENCH CJ: Is there a general provision under South Australian criminal law making it an offence to contravene a statutory prohibition? There used to be such a provision, I know, in the Criminal Code of Western Australia at one time.

MR CHURCHES:   Not that I am aware of.

GUMMOW J:   It had better be checked.  It is a starting point really.

MR CHURCHES:   My learned friend is a specialist in the field.  I will confer with him.

GUMMOW J:   It does not say disclosed by whom and a court is usually persons.

MR CHURCHES:   Yes, your Honour.

GUMMOW J:   Is there any statutory provision about that, the court is persons or persons are courts in the interpretation law here?

MR CHURCHES:   I will have to bring answers to that after the break.

GUMMOW J:   We have got to construe this section.  Unless we construe the section, we are not going to get off the ground, I suppose.

MR CHURCHES:   Your Honours, we would submit that the disclosure is plainly intended in the course of 28A to be to either the Liquor Commissioner or the Liquor Licensing Court or subsequently, as we see when we get to subsection (5), including the Supreme Court.  Now, it may be inferred, despite the passive voice, that disclosure is prohibited from those bodies that have legitimately come into possession of the criminal intelligence.  They are the bodies that the Police Commissioner, through his agents, has tendered the evidence to, and we will come to that process of objection shortly.

KIRBY J:   It would include the court staff as well, would it not?

MR CHURCHES:   Indeed, your Honour, yes.  That must embrace all people who have access to the information inside the court, yes.  So that is subsection (1) of 28A.  The other relevant provision is subsection (5):

In any proceedings under this Act, the Commissioner –

that is the Liquor Commissioner –

the Court –

that is, the Liquor Licensing Court –

or the Supreme Court –

(a)must –

and there is the word on which the appellants hang their argument –

must, on the application of the Commissioner of Police, take steps to maintain the confidentiality of information classified by the Commissioner of Police as criminal intelligence –

and then we have an example of the steps –

including steps to receive evidence and hear argument about the information –

that is the criminal intelligence –

in private in the absence of the parties to the proceedings and their representatives –

and it is subsection (5) which the appellants submit is critically at odds with constitutional requirements.

KIRBY J:   What does paragraph (b) do?

MR CHURCHES:   That is only a procedural process, your Honour, for allowing the information to be presented in written form, so affidavit prepared by a senior officer.

KIRBY J:   Is that the only way that the evidence can be placed before the Court, by an affidavit?

MR CHURCHES:   No, the provisions of (b), your Honour, say:

may take evidence consisting of or relating to information classified‑

I would submit to the Court that that is only a permissive, that it might well be possible for oral evidence to be given.

KIEFEL J:   Do you not have to ask, though, what the purpose of (b) is?  What is the purposes of Court receiving evidence?  What sort of decision is the Court going to make about the evidence?

MR CHURCHES:   Subsection (b), in our submission, your Honour, goes to a facultative provision that makes it simpler for the Police Commissioner and it provides a sure avenue for the presentation of what is intended to be regarded as serious information prepared in the course of law enforcement.

KIEFEL J:   Would it not be information about what is said to be classified?

MR CHURCHES:   Do I take your Honour’s question to mean, would it go to the process of how the Commissioner classified the information?

KIEFEL J:   It is evidence relating to the information classified.  What else could it be?  Is it possible that (b) is a process by which the Court assesses the information said to have been classified?

MR CHURCHES:    That is the submission from, I think, both Victoria and Queensland, your Honour, and we ‑ ‑ ‑

KIEFEL J:    What do you say to that?

MR CHURCHES:    No, I am sorry, your Honour, I have that wrong.  It is from the Commonwealth in particular and from the State a little more mutedly.  In response to that, your Honours, we say that this does not go to a jurisdictional fact; that the classification process by the Police Commissioner must be his or her process alone.

KIEFEL J:    No, but what do you say about what the purpose of (b) is?  What evidence is to be put before the Court and what is the Court supposed to do with it?  How do you say (b) is intended to operate? 

MR CHURCHES:    We submit, your Honour, that it would, for example, provide statements from police informers who wished to remain anonymous.  Their statements could be annexed into the affidavit of a senior officer.  It is that sort of information which, we submit, would at least diminish the sense of endless chains of hearsay being presented to the Court if a firsthand statement could be presented in affidavit form.

KIEFEL J:    Well, presumably someone of rank has to provide the evidence to the Court because they are the ones who will understand what the operational importance of the information is.  So what are they likely to be telling the Court?

MR CHURCHES:   In our submission, your Honour, the high rank required only goes to indicate that the draftsperson took this very seriously indeed.  It is not to be presented by junior officers.  The whole process of classification and presentation to the Court is to be by senior police only.  I do not think anything more hangs on it than that.  Your Honours, I will return to a brief overview of the legislation shortly.

FRENCH CJ:   Just going back for a moment to the way it works.  28A(1) is the non‑disclosure provision, if you like.  That is the prohibition on disclosure.  28A(2) assumes a decision by the licensing authority to refuse an application for licence based upon classified information and then immunises the licensing authority from the provision of “grounds or reasons for the decision other than” a general public interest base.

MR CHURCHES:   Yes.

FRENCH CJ:    Then, just going forward to (5)(b), the question I suppose is whether that does more than create a mechanism for the provision of the information in a form that would be regarded as evidence and that applies equally to the Commissioner, the Licensing Court or the Supreme Court.

In other words, does it do more than create a facility for the reception of the criminal intelligence information as evidence?  That would be reflected by it “consisting of” information, or is there some wider function contemplated by the use of the words “evidence relating to information”?  If you look at the words “evidence relating to information”, that seems to be more than is necessary for simply the receipt of information labelled criminal intelligence by the Commissioner and the question is what function does it serve?

CRENNAN J:   It helps, does it not, to look at section 22 and to understand in that context why the evidence is being led?  It is related to the fact that you have a review happening in the nature of a re‑hearing.  That bears surely on what subsection (5) is about? 

MR CHURCHES:   And section 27, your Honour, providing for the Supreme Court to receive an application for appeal from the Liquor Court, and I realise that the Court always strives to find fresh work for each word in a statutory provision, but in our submission the alternative “or relating to” does not take the matter any further than the simple provision to the Liquor Court or the Supreme Court subsequently on appeal of the information which the police have collected.  “Relating to”, for example, I suppose, could be other materials surrounding particular allegations.  Perhaps there is a statement from a witness that he saw an applicant near a crime scene and then there might be further material from the police to explain to the Court what was going on at the particular crime scene and what the events were about. 

HAYNE J:   That simply does not grapple with the content of the definition of “criminal intelligence”, does it?  Criminal intelligence is defined as information relating to actual or suspected criminal activity, but the definition does not stop there.  The definition goes on to further refine the identification of that information by saying that the disclosure of the information “could reasonably be expected”.  At some point you are going to have to come back and grapple with what that word “reasonably” is doing there. 

disclosure of which could reasonably be expected to have one of two consequences. 

The information with which it deals is thus confined, is it not?

MR CHURCHES:   I take your Honour’s point, but it may be that at subsection (5)(b) what the draftsman was particularly aiming at there was not just the provision of the “criminal intelligence” but material relating to that.  So the affidavit, in our submission, would not be exclusively the “criminal intelligence” itself, but the words “relating to” may well, for example, allow for the provision of that additional explanatory material.

HAYNE J:   You accept, do you, that the material contemplated by 28A(5)(b) includes evidence from a deponent of the rank identified directed to establishing the possibility of prejudice or the possibility of discovery of existence or identity of confidential sources of information?

MR CHURCHES:   Yes, your Honour.

HAYNE J:   As I say, at some point in your argument at a point convenient to you you will need therefore to grapple with what significance, if any, attaches to the word “reasonably” in the phrase “could reasonably be expected”.

MR CHURCHES:   Yes, your Honour.  We will come to that shortly.  Your Honours, before that brief analysis of the Liquor Act I was just working through the relevant facts.  At the point where the appellant, Mr Krasnov, was before the Liquor Licensing Commissioner, who was not permitted to inform Mr Krasnov or his then counsel what was in the criminal intelligence ‑ of course, pursuant to the provisions we have just looked at ‑ so that Mr Krasnov and his counsel had no means of knowing what allegations lay in the information and so of course were not in a position to rebut the assumed allegations.

The Liquor Commissioner refused the application for the licence and Mr Krasnov then appealed to the Liquor Licensing Court.  That appeal was heard by Judge Rice in February 2007 and his Honour also viewed the criminal intelligence which, again, pursuant to section 28A, was not permitted to be shown to the applicant.  Judge Rice refused the appeal.

KIRBY J:   Can you tell me whether or not there was a transcript of the proceedings before the Liquor Commissioner?

MR CHURCHES:   No, not before the Commissioner, your Honour, only before the Liquor Court.

KIRBY J:   And that is an appeal by way of rehearing, so it is a completely new proceeding?

MR CHURCHES:   Yes, that is right, and that transcript is in the appeal book.

KIRBY J:   I realise that, but you had better take us to that transcript, if you would not mind, as to when the material was tendered, and whether it was objected to.

MR CHURCHES:   Yes, your Honour.

KIRBY J:   It is a pretty brief transcript so everything must have happened rather quickly?

MR CHURCHES:   Yes, it begins in the appeal book, your Honours, at page 4.  We see the first day.  There were two days before the Liquor Court, 8 February 2007 at page 4 of the appeal book.  Then we see on page 5, at about line 24, 25 his Honour:

So procedurally you suggest that, in effect, I read all the material the Commissioner –

that is, the Liquor Commissioner –

did.

The then counsel said:

I can’t be privy to it, nor can my client so we can’t assist your Honour or make any submissions.  It is a matter of the police putting material before you.

And then a line after that:

It is just that the Star Chamber era that we live in, we just don’t get an opportunity to comment on it or take instructions or put further evidence before you in relation to it.

Really things did not progress any further beyond that, your Honours, because counsel plainly accepted that on his understanding of the legislation he and his client were never going to see the criminal intelligence.  They were frozen out and really all that followed was negotiation over whether there was any point in putting on evidence at all to rebut that which was unknown ‑ , or undisclosed, I should say.

KIRBY J:   Where is the tender of the criminal intelligence to the Court?

MR CHURCHES:   His Honour received, as I understand it, your Honour – his Honour Judge Rice received the criminal intelligence in a file from the Liquor Commissioner.

KIRBY J:   This is being supplied to the Court otherwise than in the public hearing, is it, somehow in chambers?  It sounds pretty irregular, or at least unusual, for an Australian court.

CRENNAN J:   There is a reference to “tender”, page 6 of the appeal book around line 11.

MR CHURCHES:   Yes, the police representative is Mr Jakacic and he says, yes:

there were two files that were tendered as part of the criminal intelligence.

KIRBY J:   That means were tendered before the Commissioner?

MR CHURCHES:   That is correct, your Honour.

KIRBY J:   And presumably that must have been taken as having been tendered again in the rehearing before Judge Rice?

MR CHURCHES:   Yes.

KIEFEL J:   The order of the Commissioner on pages 2 and 3 refer to the receipt of the information.  Can you say whether or not the statutory declarations which are referred to at the foot of page 2 and the top of page 3 form part of that information or do they deal with another topic?

MR CHURCHES:   The short answer is, I do not know, your Honour.  But it is apparent that the criminal intelligence was before Judge Rice.  Whether it was formerly tendered before him or he simply received it in the file sent across from Liquor Commissioner, he certainly had it.  Then counsel knew that the judge had it.  Then counsel formed the view that he and his client were not allowed to see what was in it.

GUMMOW J:   That is not quite right, is it?  If you look at page 5, line 10.  This is counsel, your predecessor talking, is it not?

The review is sought then on this preliminary point, as to whether Mr Krasnov is fit and proper and it occurred to me that the most satisfactory way of dealing with the application would be for that material which was before the Commissioner to be placed before you.

That is how it happened.

MR CHURCHES:   Yes.

FRENCH CJ:   And he regarded that as a sort of threshold and says that it cannot get up in the face of that.  That is what seems to have happened on the next page.

MR CHURCHES:   Yes.

GUMMOW J:   So there is nothing covert going on.

MR CHURCHES:   No.  I did not mean to say there was anything covert about the delivery of the criminal intelligence.  Counsel knew that it was before the judge.

KIRBY J: I am just thinking back to the days when there were court of sessions appeals in New South Wales by way of rehearing after a conviction by a magistrate. The normal way that was done, as I recollect it, was to tender the transcript of the proceedings before the magistrate, which short cut things and got the material that had been before the magistrate before the District Court. But it seems as though this proceeding was not done in that formal way, but it was assumed that the material that had been before the Commissioner was before the District Court judge, Judge Rice, in the Liquor Licensing Court and that in the face of that, if section 28A had the meaning that the Commissioner had accepted, subject to the Constitution, the matter could not proceed successfully on behalf of your client, because he did not know what was being said against him. Anyway, I do not think it is worth wasting any more time. I think the record is sort of telescoped, but that seems to be the way in which it proceeded.

MR CHURCHES:   Yes.  There was certainly a telescoping, but at the end of the day the Liquor Court has seen the criminal intelligence.  Counsel for the then applicant has accepted he is not allowed to see it, and then the Court reached a decision after reading the criminal intelligence.  Then, of course, the matter proceeded on to the Supreme Court, merely on the question of law as to – the issue of constitutional validity was raised at that point and it went off to a Full Court where the challenge was lost by a majority decision. 

The submissions for the appellants rest substantially on the requirements for Chapter III courts to have – that is courts which are Chapter III capable also – State courts – to be seen to have independence from the other branches of government and together with that independence also impartiality between parties.

KIRBY J:   Have you construing these provisions, Mr Churches?

MR CHURCHES:   I am about to come back to other aspects of the Act, your Honour.  I was just doing a brief outline of our argument, but then I want to go back through the machinery of the Act.  It does have some provisions going to the activities of the police that I think are relevant.

GUMMOW J:   No, have you finished construing section 28A and the definition.

MR CHURCHES:   Yes.  I think I have exhausted my ‑ ‑ ‑

GUMMOW J:   You were going to come back and deal with the question Justice Hayne put to you, were you not?

MR CHURCHES:   Yes.  That is the question of reasonableness, yes.

GUMMOW J:   George v Rockett is floating around somewhere in the stratosphere, is it?

MR CHURCHES:   That goes, your Honour, to the question of reviewability of the Police Commissioner’s decision in general terms and, in our submission, that will not get the respondents and interveners off the hook, as it were, because ‑ ‑ ‑

CRENNAN J:   When you are referring to general terms, do you mean objective?

MR CHURCHES:   I am sorry, your Honour?

CRENNAN J:   Do you mean that it is an objective analysis?  You said “general terms”.

MR CHURCHES:   No.  I am sorry, I withdraw that, your Honour.  The definition of “criminal intelligence”, in our submission, is not one which is apt to provide, as the Commonwealth’s submissions urge with some vehemence, is not apt to allow for a challenge before the Liquor Licensing Court going to jurisdictional fact.  These are provisions which allow the Police Commissioner a very wide discretion, indeed, based on his or her determination of various police operations.  This is not the sort of decision which is apt to go to a court to be second‑guessed, in our submission.  In our reply we refer to, for example, the Australian Heritage Commission v Mt Isa Mines Ltd decision.

KIRBY J:   If we look at it logically, “could reasonably be expected to prejudice criminal investigations” could have one of two meanings.  One would be, could reasonably in the opinion of the court be expected to prejudice criminal investigations, or the other would be, could reasonably in the opinion of the Police Commissioner be expected to prejudice criminal investigations.  Then you ask, well, looking at the practicalities of this, who is in the best position to know whether it will prejudice criminal investigations?  That is the Police Commissioner because he is the one who is conducting the criminal investigations.

If the Court is to review it, how is it to do that (a) with its lack of expertise about criminal investigations and what they are and what they contain and (b) without the assistance of the person who is the subject of the criminal investigations because that person, by definition of the section, cannot be given it?  So it is a question of making it work in the context of a section, the purpose of which is to keep the criminal investigation material from the person concerned.

CRENNAN J:   The real question, I think, which Justice Kirby is getting toward, is that you have to imagine the context of section 22.  So you have a review which is a rehearing, you have 28A(b), you have the material going before the court on the rehearing, is the court then able to undertake the exercise of determining whether, objectively speaking, the disclosure could be expected to prejudice criminal investigations or not?

MR CHURCHES:   In our submission, the Liquor Licensing Court is not in a position to make that determination as to reasonableness, that that ought to be a matter that would have to go on challenge to the Supreme Court by way of review.  It would be a Buck v Bavone style review.  Reasonableness is not a matter for the Liquor Licensing Court to attempt to challenge for all the reasons that Justice Kirby just ventilated a moment ago.

HAYNE J:   Leave aside for the moment which court does it, the submission you have just made is, as I understand it, that a court – a court, you say the Supreme Court – could assess the question whether disclosure of identified information could reasonably be expected to have one of the two outcomes identified.  Is that your submission?

MR CHURCHES:   The reasonableness of the Police Commissioner’s determination could be reviewed by, in our submission, the Supreme Court, yes.

HAYNE J:   It would be possible, do you say, for the Court to determine against an objective standard whether disclosure could be expected to prejudice an identified criminal investigation or group of investigations, is that right?

MR CHURCHES:   Your Honour, I do not want to be dragged ‑ ‑ ‑

HAYNE J:   You may not, but I may, Dr Churches.  What is the answer?

MR CHURCHES:   Just as Chief Justice Gibbs noted in Buck v Bavone the questions of determining reasonableness may sometimes face insurmountable hurdles, and in our submission “reasonableness” if it were, for example ‑ an outrageous example – shown to be that the Police Commissioner had a personal vendetta against a particular individual – and it is…..from the Canadian Supreme Court.  That sort of example, it has happened.

Now, a question of “reasonableness” then would arise, along with obviously other judicially reviewable defects in the decision making, but when it comes to assessing “reasonableness” in the light of the particular law enforcement issues raised in the definition, in our submission, that is going to be a bridge too far for a court to be able to get to.

HAYNE J:   Well stand the issue on its head just for a moment, would it not be reasonable to expect – avoid the word “reasonable” – would one not expect as a court that the material advanced in support of a claim took to criminal intelligence status would condescend to telling the court what sorts of investigations are now underway that it is said this information might prejudice.  Maybe not who are the informers whose identity will be revealed; that might be self defeating, but just indicate rather more than a hint and rather more than an assertion of conclusion.  Now, a court confronted with that kind of information might form a judgment.  Do you say that that is not a judgment (a) that is permitted, that the next step (b) that is required by the way in which the statute is structured?

MR CHURCHES:   The appellants in response to that, your Honour, would submit to the Court that perhaps those questions do not matter, that the issue is even if there were a reviewable capacity – and in our submission only in the Supreme Court, not in the Liquor Court, which in our submission just has to take what is presented to it ‑ nonetheless even if there a review capacity, after criminal intelligence has been allowed through the sieve and is accepted as having been reasonably determined, nonetheless in our submission the constitutional defect in section 28A(5) remains on foot.

A determination made by the executive as to the nature of particular evidence, even if it is assessed to be reasonable – and this is the high point, in our submission, of what is against the appellants ‑ even if it were able to be reviewed as to its reasonableness by, we would submit, only the Supreme Court, nonetheless then that material as assessed by a member of the executive is dealt with or must be dealt with by not only the Liquor Court, but then on an appeal under section 27 of the Act all of that material must go up to the Supreme Court where that court ‑ and it must be a Full Court pursuant to section 27(4) – all the judges on the Full Court are then bound to adhere to the terms of section 28A(5).

FRENCH CJ:   Dr Churches, can we just step back for a moment to the constructional question, back to the words of 28A(1).  When one reads the word “classified” which is the designation of what the Commissioner does is one simply saying the Commissioner mouths or writes the word “classified” in front of some information and attaches to it the label “criminal intelligence” or does it import a requirement that the Commissioner is of the opinion that the matter is “criminal intelligence” as defined under the Act?

MR CHURCHES:   I will just return to the definition, your Honour.  I think on a reasonable analysis of the definition of “criminal intelligence” it must involve opinion forming by the Commissioner.

FRENCH CJ:   If the Commissioner is required to form such an opinion and if that is a necessary incident or condition of the effectiveness of the classification, does that not draw in that line of authority in relation to the basis for reasonable belief and opinions and so forth stretching back to cases like WA Pines v Bannerman and earlier eminently reviewable on judicial review grounds, not on the merits?

MR CHURCHES:   Yes.  Only that we would note, your Honours, that the assessment of reasonableness or not must become increasingly difficult.

KIRBY J:   Well, you have to say, do you not, that because of the terms of subsection (5), that in its express language wounds the capacity of the court to perform the reasonable assessment that is potentially contemplated by the definition of “criminal intelligence”, that when you look at the section as a whole, including the classification by the Commissioner, the fact that the Commissioner is the only person who would really be in a position to decide whether or not it would be, in his opinion, confidential?  But if you add to that the inability of the person the subject of it to challenge it, to answer it, to question it, that the performance of the reasonableness by the court is not possible even though the statute talks of reasonableness.

MR CHURCHES:   On what your Honour Justice Kirby has just put to me, the vice that we submit exists in subsection (5) is magnified by the practical impossibility of the affected party being able to mount a judicial review challenge to the reasonableness or otherwise of the classification process by the Police Commissioner.

KIRBY J:   What normally happens in the common law is that there are improvisations.  The common law does not have an absolute rule, but permits courts to modify the rules in such a way that the person still gets a fair opportunity to respond, but this appears to be arguably an absolute embargo subject to reasonableness.  Then you ask yourself, what does reasonableness mean here?  The difficulty is that it cannot be performed by the court with any assistance of the person who may be in the best position to deal with whether it is reasonable or not, namely, the person who is the subject of the intelligence.

MR CHURCHES:   Indeed, your Honour.  Looking at the wording of subsection (5)(a), the vice of command to both the Liquor Court and the Supreme Court is made all the more obvious by the first line – not only “must”, but, “must, on the application of the Commissioner of Police, take steps to maintain”.  So it is not a self‑executing process, although one wonders why the drafters turned it out quite that way because presumably if the Commissioner’s agent forgot to ask or make application, there might be a problem arise.  But nonetheless, it is upon the application of the Commissioner of Police that the process of non‑disclosure commences.  In our submission, it is that which so amplifies the vice of command to the court.

FRENCH CJ:   That is why the word “absolute” is floating around.  You do not say, I take it, having regard to your earlier response to my question, that the classification decision would be a decision in relation to a matter, a subject on which the Commissioner has an absolute discretion for the purposes of section 22(2), that is to say, a matter taken out of the review jurisdiction of the Licensing Court?  I do not know what an absolute discretion means, but it does not seem that there is one here.

MR CHURCHES:   Yes, I think we may be confronting the problem of too many commissioners spoiling the broth in this legislation, your Honour.  At 22(1) it is referring to the Liquor Commissioner.

FRENCH CJ:   My apologies, yes.

MR CHURCHES:   We had this problem below, many commissioners.  In our submission, while as a matter of theory the process of classification of criminal intelligence may be open to judicial review, the practicality of it, in our submission, is just not feasible at all.  Then even if there were to be judicial review of the decision of the Police Commissioner, in our submission, even if some examples of criminal intelligence were tossed out in the review process, any criminal intelligence emerging at all, in our submission, goes to the constitutional defect in section 28A(5).  It leaves the Commissioner with the trigger waiting to be pulled to make command on both the Liquor Court and the Supreme Court that they will, in a hearing into the suitability of an applicant for a licence, not disclose to that person, and indeed they will discuss it with the police objectors with the applicant excluded from the courtroom.  It is that process of exclusion by compulsory measure which was, of course, the reason for the Queensland Court of Appeal deciding as it did in the Re Criminal Proceedings Confiscation Act litigation reported in [2004] 1 Qd R 40.

KIRBY J:   The New South Wales Solicitor doubts the correctness of that decision.  Was any application for special leave made in that case to appeal against that decision?

MR CHURCHES:   My search can only be through your Honour.  It has never shown up in and I assume that there was no application made.  The Queensland Solicitor‑General may know better.  Your Honours, I regret that in the appellants’ appeal book we only reproduced what we thought was the critical page of that Queensland decision and I have full versions for the Court and for my friends.  I have eight copies.

GUMMOW J:   What are we going to get from this case?

MR CHURCHES:   This is the Queensland Court of Appeal decision, your Honour, and it goes off on legislation which makes compulsory the exclusion of an affected party from the courtroom while their property is under discussion and under threat of being taken from them.

GUMMOW J:   Before we go to Queensland, I am still not sure we should leave 28A(5).  The Liquor and Gambling Commissioner, “the Court or the Supreme Court”, it says, “must” do something and the obligation is conditioned firstly on an application by the Commissioner, is that right?

MR CHURCHES:   Yes, your Honour.

GUMMOW J:   And secondly, I suppose – and this is the area of debate, I guess – upon there being information classified by the Commissioner of Police which has within it a potentiality at least of judicial determination as to the reasonableness of the Commissioner’s activity in classifying and that is the threshold before there is the obligation to take steps.

MR CHURCHES:   Our response to that, your Honour, must be, we submit, that even if it is reasonable, it is nonetheless a command which is quite inappropriate.  It is for the Court, in our submission, both the Liquor Court and ‑ ‑ ‑

GUMMOW J:   Courts have to do all sorts of difficult things, Mr Churches.

MR CHURCHES:   In general theory, your Honour, we submit it is for the court ‑ ‑ ‑

GUMMOW J:   They evaluate loss of happiness, do not forget.

MR CHURCHES:   But it is for the courts to determine what material will be removed from the ordinary processes of natural justice.  We have referred to that in our written submissions, paragraphs 44 and 45, referring to cases like Nicopoulos, which I note nearly all my opponents fed back as examples of courts regularly confronted with or perform the function of excluding material from one affected party, so what is wrong with this legislation?  The distinction is a very important one.  In Nicopoulos and other cases like it – ABC v Parish is the other example we gave – in those cases it was for the courts in their inherent jurisdiction to limit the access of one party, an affected party, from the evidence put on by the other, and the court performed that function ‑ ‑ ‑

GUMMOW J:   That is true of R v Davis, is it not, the recent House of Lords’ case you referred to?

MR CHURCHES:   Yes.

GUMMOW J:   It was the court itself shielding witnesses, not legislation?

MR CHURCHES:   Yes. We had put that on only as an example, your Honour, of the general abhorrence of secret witnesses.

HAYNE J:   But it is also a collection of cases that you have just referred to which concerns the operation of the rules of evidence.  What significance is to be attached, if any, to sections 18 and 23 in better understanding 28A(5)?  Section 18 is directed to the Liquor and Gaming Commissioner and 23 is to the Liquor Court but both of them say, “not bound by the rules of evidence”, “may inform” themselves “on any matter as” they think fit. 
So you are in a paradigm that has departed from the curial paradigm of admission of evidence.  Now, section 28A(5) in at least some of its operations may be understood as giving effecting to notions of public interest immunity, may it not?

MR CHURCHES:   The response of the appellants to that suggestion, your Honour, is that public interest immunity goes to removing material from the purview of the court so that the court does not make decision upon the material which is excluded in the public interest.

HAYNE J:   And does not 28A(5) give effect to some procedural steps that a court would take in receiving evidence in which, for example, the names of informers would be disclosed?

MR CHURCHES:   Yes, I think that is very likely.

HAYNE J:   And cannot 28A(5), in at least some of its operations, be seen as connected with the manner of procedure which 18 and 23 require, namely, proceeding without operation of the rules of evidence.  Now, take out the rules of evidence, inform yourself as you may see fit but have you thrown out a baby with the bath water in that way?  Have you denied those bodies the capacity to mould their processes in a way in which a court would when receiving evidence?

MR CHURCHES:   In our submission, your Honour, the baby of natural justice is not thrown out with the bath water of evidence.  In our submission, natural justice remains on foot and it is one thing for the legislature to purport to throw natural justice out from the actions of the Liquor Commissioner.  That is one thing.  In our submission, of course, and the reason we are here today, is it is another thing for the legislature to purport to throw natural justice out at the point of the word “must” perform in certain ways in respect of a Liquor Court and then indeed the Supreme Court.

KIRBY J:   I did not take Justice Hayne’s question to be necessarily antagonistic to the case you are presenting.  The question is whether once you get into the position of replacing the rules of evidence with a command which can be given effect by the Police Commissioner in such a way that the designated decision‑maker, being a court, cannot make the adjustments that a court normally does, then the question is clearly confronted as to whether the statute has gone too far in giving that instruction to a court and empowering an Executive Government person to do that and to give that instruction “must”.  That is the issue, I think.  Once you have removed the ordinary adjustment a court does can you take this step that is taken here?

CRENNAN J:   Your argument is a too far argument, I take it.  In other words, you would accept that of course you can have a statutory modification of the rules in relation to procedural fairness, not an unfamiliar state of affairs.  So, in a sense, your point is a narrow one about this particular modification goes too far, is that right?

MR CHURCHES:   In our submission, this is not a modification, this is a destruction and there is a difference, a very important difference between tinkering with and the obliteration.

CRENNAN J:   Well, you accept the modification that is required in the context of public interest immunity is an acceptable modification?

MR CHURCHES:   Yes, in which case it is a modification upon which the court, having determined modern theory as opposed to the pre‑World War II theory, modern theory that the court determines for itself whether the evidence will be received by the court, the court in public interest immunity having determined that it will not receive the information, does not then make a decision upon that information. 

Here we have a situation in which the Liquor Court and the Supreme Court would apparently travel on with the information before them, quite unlike public interest immunity, towards a decision and, in our submission, there is no analogy with public interest immunity because this is not an exclusion from the purview of the court, this is an exclusion from the purview of the appellant only.

KIEFEL J:   Could I direct your attention to subsection (5)(a) and the words which I do not think have been discussed by you “and hear argument about the information in private”.  Putting to one side your point which you have well made about the exclusion of the appellant from any such argument about the information, could I ask you, what do you say that the argument about the information is there meant to be addressed to?  Is it addressed to the steps to be taken or is the argument in relation to the information put forward under the process provided by (b), which is to say, as to whether the classification is accepted as reasonable?

MR CHURCHES:   Yes, thank you, your Honour, because those are very important words in the operation of paragraph (a) and, in our submission, they are about the police representatives being able to go into private conclave with either the Liquor Court or it would be the Full Court of the Supreme Court, not only to present perhaps by affidavit evidence, not necessarily, but most probably by the affidavits referred to in paragraph (b), and then we take the words to “hear argument about the information in private” to go to the submissions that would be made to whichever court in respect of perhaps taking the judge or judges through the annexures and saying note this, observe that.

KIEFEL J:   But that is not argument.  Argument is directed to an outcome.  What is the outcome that the argument is then put towards?

MR CHURCHES:   Well, in that case, your Honour, the only work that could be given to the words “and hear argument about the information” would be that the whole ‑ ‑ ‑

KIEFEL J:   About the quality of the information perhaps?

MR CHURCHES:   Well, perhaps it also means that the whole process of the hearing proceeds on without the applicant or his representatives present while the application in the light of the criminal intelligence is dealt with.

KIEFEL J:   I accept the question of exclusion, but I am more interested in what it is that this implies that the Commissioner or the court must be satisfied about, because it is supposed to hear argument about there is something to be decided?  What is it?  Is it about the steps to be taken in relation to confidentiality or is it in relation to an acceptance of the classification?

MR CHURCHES:   I take your Honour’s point at which point I would revert to that which Justice Kirby ventilated about 15 minutes ago, which is even if it is only about the acceptability of the criminal intelligence or whether it perhaps has been formed reasonably or not, nonetheless on any analysis the applicant, the affected party, is excluded from that process.  So if there was an argument about whether this is really criminal intelligence or what process was used in getting to the classification of criminal intelligence, if there was an argument about that and it is that important, then the defect, in our submission, remains on foot.  The applicant is not in the room, they are not there, and that is, in our submission, simple unfairness at large.

CRENNAN J:   Do you accept there is a public interest in maintaining confidence in information which could reasonably be expected to prejudice criminal investigations or to enable the discovery of an informant?

MR CHURCHES:   Absolutely, your Honour.

CRENNAN J:   You accept that?

MR CHURCHES:   Absolutely, and it is in the court’s power to guard that.  Courts have always attended to that and, in our submission, it is the work of the court not to be commanded by the legislature to then adhere to a further command from the executive, which is how this operates in subsection (5).  Command builds on command and telling the courts what to do.

KIRBY J:   Well, in Davis, the House of Lords said that the vice was that the courts were being asked to mould a procedure which would exclude persons who were affected from access to the material.  They said, this is a matter for the legislature.  They acknowledged that that would be subject to the European Convention requirements.  In Australia, it would not be subject to those requirements.  It would be subject to the constitutional requirements.  So the question is what those constitutional requirements are.  Can I ask you this; if at common law in a public interest immunity application, could the court hold that proceeding in private with the representatives only of the Crown or the government?

MR CHURCHES:   I have no personal experience, your Honour.  I am not sure what the procedure is at all.  There are many government lawyers here today, perhaps they can answer that question, but I have not been involved in such a case. 

KIRBY J:   Normally, at least in my experience, what happens is that the so‑called leveller expedient is used.  That is to say, it proceeds in the presence of the person affected, but the court moulds its procedure in such a way as not to destroy the confidence which is being asserted, at least until it has ruled one way or the other on the matter and that is done by anonymising, by excluding, by expedients such as putting the names on a piece of paper which is only available to the court and so on.  That was what the House of Lords said should be done in the leveller case.  That is what Lord Scarman said, but I do not know of a power to exclude a party from being actually present.

MR CHURCHES:   Yes.  In our submission, it is the extremity here which plainly highlights the vice.

KIRBY J:   Did you run a search through in private in respect of proceedings to see if there were any precedents for this?  You will remember that originally the Family Court heard matters in private and then this Court had something to say about it and the Parliament changed the law, but I do not know if ‑ ‑ ‑

MR CHURCHES:   In private is one thing, your Honour, but the words that follow in private are the vice in this matter ‑ in private in the absence of the parties.  It is one thing to hold them in private.

FRENCH CJ:   Now, this does not prevent an applicant for a licence faced with the tender of criminal intelligence information, the content of which he or she knows nothing, from putting evidence before the Commissioner or the court of a kind intended to prove that person’s (a) good character, (b) lack of any criminal associations.  In other words, the fields of things that one might expect to be covered by criminal intelligence information.  Now, I appreciate that does not go to the specifics of such information, but there is nothing to prevent that kind of answer being made, is there?

MR CHURCHES:   Your Honour, I have perhaps a very brief advantage over you in knowing that the boot, as it were, is on the other foot for you because you have only just had to refer to what might be called the “good bloke” submission.  My point here is that a person in the applicant, now appellants’ position, is reduced to putting on material to say that he is a good bloke.  He has no idea what he is addressing in particular.

FRENCH CJ:   Yes, I appreciate that.  The answer to my question was “yes” presumably?

MR CHURCHES:   Yes, indeed, your Honour.  He can put on material from his friends, his colleagues, if he had worked in the past in the liquor trade from other publicans or perhaps people he worked for in managing a hotel, yes, he was honest and diligent while he did those things, but the particular police information which is presumably, he was present at such and such a date on such and such a site where criminal acts were performed and we did not arrest him, we did not charge him; there are no charges on that charge sheet, no convictions that are relevant, he has no idea what is alleged against him.  So in our submission ‑ and forgive me for the “good bloke” submission ‑ but that is really what it amounts to.  He cannot put on anything of any cogency.

KIRBY J:   I think you say in your written submissions that the Supreme Court of Canada addressed this issue that the person affected is not – what is the name of that case?

MR CHURCHES:   Charkaoui v Canada [2007] 1 SCR 350.

KIRBY J:   So they said that generalised evidence of good character would not be sufficient to meet the specific evidence which in this case was held by the Commissioner at first instance to be determinative and against the present appellants?

MR CHURCHES:   Yes.  My friends draw much else out of Charkaoui but we only put it on with reference to the paragraphs 63 and 64 where her Ladyship the Chief Justice made two points; that an applicant in our situation who does not know what is said against him cannot respond to it meaningfully and, secondly, the court is in no position to perform a cross‑examination of the witnesses against the applicant because the court does not know enough about – the only person who can assist with an appropriate cross‑examination is, of course, an applicant through their counsel.  The applicant knows whether or not they were on that site on the day alleged by the police informant, that sort of thing.  This is real hard‑edged evidence, not the general he is a good bloke evidence that is the problem here.

Your Honour Justice Kirby raised with me a little while ago the matter of Davis in the House of Lords and I realised that for once, again, the shoe was completely on the other foot.  I am often reminded in this Court that we do not have a Bill of Rights and, looking towards litigation emerging from common law countries that do have Bills of Rights may be a problem.  What your Honour alluded to in respect of the House of Lords decision in Davis of course reflects that.  They are in a position to say this is difficult for us as judges.  The legislature should, in the light of the European Convention on Human Rights, do something about this.  At that point we enter into a completely different constitutional fabric from what pertains in this country.  Nonetheless, we did put on Davis just to show the general abhorrence of the idea of ‑ ‑ ‑

KIRBY J:   You do not have to apologise for putting on Davis.  I regard it as highly relevant.

MR CHURCHES:   Thank you, your Honour.

KIRBY J:   Of course it is relevant also to note that within, I think, three weeks of Davis the Parliament of the United Kingdom enacted legislation to try to overcome Davis, and that is subject to whether that conforms to the European Convention on Human Rights.  They have the European Convention, we have Chapter III of the Constitution of this country.

MR CHURCHES:   Indeed, your Honour.

FRENCH CJ:   Anyway, the question of the scope of operation of section 28A and the way in which it works to enable a court or require a court to consider certain information in the absence of one of the parties, and accepting as you do, it seems to me, that the classification itself is not incontestable, the question that then follows is whether the application of that section to the court renders that court an unfit repository for federal jurisdiction.  Are we finished with the scope of the application of section 28A and its proper construction?

MR CHURCHES:   I would add only in final comment on section 28A, your Honour, that even if – and, in our submission, it is a huge if, going to realistic impossibility for a court to overturn or to review the Police Commissioner’s classification – but even if that were on occasion possible, nonetheless we submit that the defect in the wording of section 28A(5) remains on foot.  No material, once it has been classified and past review by a court, should be able to serve as the trigger for the Police Commissioner to say, “Now I make application and you, the court, will now close the door and eject the applicant”.

FRENCH CJ:   You said at the beginning of your argument that 28A(5)(a) is what you hang your argument on.  That is the problem which generates the unfitness of the Court to receive federal jurisdiction.

MR CHURCHES:   Yes, and that really takes us to the material which is the bulk of our written submissions.  I will not take your Honours through them blow by blow, but it is the ‑ ‑ ‑

KIRBY J:   Justice Duggan in the Full Court said that he agreed with all that Justice Gray had said, except in relation to section 28A.  That is in paragraph 1.

MR CHURCHES:   Yes.

KIRBY J:   So that is the essence of what we have to address.

MR CHURCHES:   Yes.

KIRBY J:   You threw around cases such as the Australian Heritage Commission Case.  I have not read that.  Is there anything in that that touches on the issue of reasonableness that is raised by reference to the definition of “criminal intelligence”?  What does that case say?

MR CHURCHES:   We have provided it in our supplementary materials book which I fear, since we only got it to the Registry last Friday, may not have reached your Honours in transit.  It is page 1 and thereafter of the supplementary materials book.  We also put in the decision of the New South Wales Court of Appeal, a five‑member court, in 2004 and that commences at page 14 of the supplementary book.  They are both cases on jurisdictional fact, your Honour, and I do not know that we need to descend too far into that debate because it is perhaps overhauled by the simple proposition of reasonableness as being open to judicial review.  It has arisen because my friends from the Commonwealth, and also a little more mutedly from the State of South Australia, have suggested that it would be open to the Liquor Licensing Court to overview the determination by the Commissioner of Police as to whether this was ‑ ‑ ‑

KIRBY J:   It would be a pretty wounded inquiry, would one think.

MR CHURCHES:   Yes, indeed.  It would be defective right from the beginning because it would be hearing only one party.

KIRBY J:   And in private.

MR CHURCHES:   Yes, absolutely.

KIRBY J:   And, as you have put it, a conclave between Crown officers and the court, something which at least is very unusual in this country.

MR CHURCHES:   Yes.  One trusts more than merely unusual.  I am not aware of any instances.

KIRBY J:   You had better think about that.  You had better perhaps do a computer search of “in private” and see if that exists in federal or State legislation in this State or anywhere else, because I do not know of any such cases.  They may exist.

MR CHURCHES:   Yes.  Your Honours, the bulk of the appellants’ submissions are to the effect that this form of compulsion and command on either the Liquor Court or the Supreme Court is simply in defiance of the provisions that are inherent in Chapter III.  We are aware that Chapter III on its face does not refer to what I might call the “I” words, independence, impartiality and integrity, but they are the words that appear again and again and again from the analysis in Grollo v Palmer in 1985 and there onwards through Kable.  There are cases perhaps a little to the side, such as Wilson, which dealt with the activities of a Federal Court judge purporting to be persona designata, but we have referred to Wilson on occasion because it does go to the issue of the integrity of the court.

KIRBY J:   But which court is it?  Is it of the District Court of which Judge Rice is a member or is of the Liquor Licensing Court?

MR CHURCHES:   At a further pitch it would be a reflection back on the District Court of which Judge Rice is a member, but we submit that the Liquor Licensing Court itself could take federal jurisdiction.  Some of our friends agree with that and Victoria and Queensland, I think, are opposed to that.  In our submission, that may be a rather futile argument because again section 28A(5) specifically refers to the Supreme Court and the Supreme Court under section 27 has not just a right of judicial review – that is in 28 where there is a question of law might go to the Supreme Court – but in 27 an appeal is provided for and the process of appeal would have to go on on the basis of the criminal intelligence withheld pursuant to 28A.

KIRBY J:   Yes, but let us focus just for the moment on the Liquor Licensing Court of South Australia.  Is there any requirement under the Liquor Act in South Australia that only a resident of South Australia can apply for a liquor licence or could a resident of another State of the Commonwealth apply for a liquor licence in South Australia, thereby activating federal jurisdiction?

MR CHURCHES:   There is no impediment on an interstater.  That, of course, would raise all sorts of other constitutional problems but there is no impediment ‑ ‑ ‑

KIRBY J:   I am thinking of whether it can and does on occasion exercise federal jurisdiction.

MR CHURCHES:   Yes, and perhaps equally possible and perhaps an even easier likelihood is that an objector owns the – or at least the person owning the premises next door is a New South Welsh‑person, for example, and they do not like the idea of the premises being taken up with a liquor licence so they object.  They are an interstate objector.  They go to the court.  They have a right of objection.  They go to the court.

KIRBY J:   Do they become a party to the proceedings?

MR CHURCHES:   Yes, they do.

KIRBY J:   An objector is a party, is it?

MR CHURCHES:   I do not think that the Act actually says that in so many words, but the activities of the police here and the way the police are addressed in the course of the legislation plainly indicates that they do behave as parties.

KIRBY J:   You had better have a look at the Act later, if you would not mind.

MR CHURCHES:   Yes, I think we ought to.

KIRBY J: But if there is no prohibition, and I would not think there could be under the Constitution, upon a human person from interstate applying for a liquor licence in South Australia, then you potentially have the exercise of federal jurisdiction by the Liquor Licensing Court of South Australia and it must be a receptacle to receive that jurisdiction.

MR CHURCHES:   Yes, your Honour.  That is certainly our view.

KIRBY J:   You had better just check that what I have just said is correct.

MR CHURCHES:   Yes, I am not aware of any ‑ I have read through the Act and I am not aware of any impediment to an interstate person applying for a licence.

KIRBY J:   Section 92 might create a problem.

MR CHURCHES:   Indeed, there would be a number of constitutional issues arise if the State purported to attempt that.  Your Honours, I was just referring to the general run of cases since 1995, beginning with Grollo v Palmer.  We have set them out in our submissions and in the reply; that the integrity of the court is a matter which – of courts in general, Chapter III capable courts ‑ is something that this Court comes back to again and again.

The distinguishing features between imperfection regarding Federal Courts as such, as opposed to State Courts which might receive federal jurisdiction, in our submission, does not deflect this Court’s eye from what we allege is the defect here.  Justice Gaudron in Kable’s Case – and this is kindly provided by my friends, the second respondents.  In volume II of their materials, they have set out Kable in full.  It is volume II, page 696.  At the very top of that page – it is page 104 of Kable, 189 CLR ‑ where her Honour addresses what we submit exactly pertains to the problem today, her Honour said:

The limitation on State legislative power is more closely confined and relates to powers or functions imposed on a State court, rather than its judges in their capacity as individuals –

remembering, of course, that this judgment follows immediately on the footsteps of Wilson v Minister for Aboriginal Affairs.  So it is hardly surprising that her Honour was thinking of the distinctions between what went on in Wilson which involved a member of the Federal Court ‑ ‑ ‑

KIRBY J:   Is that right?  I thought Kable was decided before Wilson.  I may be wrong.  It does not matter much.

MR CHURCHES:   I think they were decided within a week of each other, your Honour.  They were argued very far apart.

KIRBY J:   Kable was argued in December 1995, which was before my appointment to this Court.

MR CHURCHES:   That is right, whereas your Honour did sit in Wilson.

KIRBY J:   Yes.

MR CHURCHES:   But I think they came down within a week of each other. 

FRENCH CJ:   Yes, sequential in the report.  Wilson was delivered on 6 September 1996 and Kable on – it looks like 12 December 1996, I think. 

MR CHURCHES:   Sorry, your Honour. 

KIRBY J:   Do not take time on it, Dr Churches.

MR CHURCHES:   Yes.  I am looking at page 643 of volume II of the materials, your Honour.  Kable came down on September 12. Curiously, it seemed ‑ ‑ ‑

KIRBY J:   There were possibly orders made on the 9^th and ‑ ‑ ‑

MR CHURCHES:   Yes, I think that must be right.  Yes, separate orders were made so that they are close together.  So her Honour had in mind the fate of Justice Mathews when she talked about:

rather than on judges in their capacity as individuals ‑

and is concerned – her Honour is talking about the limitation on State legislative power.  She says it:

is concerned with powers or functions that are repugnant to or incompatible with the exercise of the judicial power of the Commonwealth.

In our submission, what has occurred in this particular instance, the instant matter, is that a function is made referrable to both the State Liquor Court and the Supreme Court, a function of being ordered by the legislature and then the Police Commissioner and a function which is repugnant or incompatible with the exercise of Commonwealth judicial power.  In our submission, that paragraph from her Honour is exactly to point.

Then in more particularity, your Honours, we have referred in our submissions to a number of other cases dealing with the importance of natural justice in the operation of courts.  I am aware that there is some perhaps lack of certainty we might say as to how far natural justice is regarded as an absolute criteria for curial nature, we might say, that a court which can take Chapter III jurisdiction is ‑ ‑ ‑

KIRBY J:   I thought you answered Justice Crennan by saying that the State Parliament could amend the common law principles of natural justice?

MR CHURCHES:   Amend but not abolish.  The list of matters on which parliaments may legislate in respect of the work of courts we have referred to at some length drawing from the decision in Nicholas.  In our submission, the appellants’ submissionson page 7, paragraph 25 and thereafter, there is a whole list of matters which are freely accepted as within the capacity of parliaments when they deal with courts.

KIRBY J:   What is the discrimen between amendment and abolition?  When is an amendment so horrible that it becomes an abolition of a fundamental principle of natural justice, or if that is too nebulous to answer, what are the features of this legislation that crosses the boundary?

MR CHURCHES:   In our submission, your Honour, this legislation provides, as it were, a clean shot because we are not simply debating whether or not natural justice has been diminished to nothing, as we say.  Most of my learned friend’s opponents say, ah, the applicant still has a capacity to put on material to show that he is a good fellow and really honest and so forth in general terms so therefore he is not deprived of natural justice, but at that point we turn to the compulsion in subsection (5).  It is that compulsion to abandon natural justice which, in our submission, is the defect in this material.

It would be one thing for the State Parliament to say, as the Commonwealth Parliament said in the National Security legislation under review in Lodhi’s Case ‑ we have referred to that at length in our submissions – I think paragraph 27 and thereabouts.  In December last year the New South Wales Court of Criminal Appeal was confronted with an overview or analysis of the Commonwealth anti‑terror legislation, or some aspects of it and if I could take your Honours to that because it does highlight the difference between what is permissible and what is not permissible.

Lodhi is in the appellants’ materials book beginning at page 53 and the legislation under review is set out at paragraph 14 on page 59 of that materials book. Section 31 of the Act – it is the National Security Information (Criminal and Civil Proceedings) Act 2004, one of many pieces of anti‑terror legislation.

So section 31 is set out at length and it is on page 62 of the materials book, down the bottom of that page we get to section 31(8), provides:

In making its decision –

and what this long section has been about is whether or not information can be disclosed to the person who is the subject of orders – restrictive orders – on their liberty and how far can the material against them be disclosed to them.  So it is germane to our matter today.  Then we get to sub‑paragraph (8) at the bottom of page 62:

In making its decision, the Court must give greatest weight to the matter mentioned in paragraph (7)(a).

And (7)(a) then refers to a certificate from the Attorney‑General that:

there would be a risk of prejudice to national security if –

and of course the “if” is if the interested party gets to see the information.

Now, my point is that this may be an extreme case of what a parliament can do to a court, but in our submission our case lives comfortably with Lodhi because there is not a discretion left to the Liquor Court or the Supreme Court by 28A(5) as there was a discretion left by section 31(8).

While the court was told that it ought to give the greatest weight – and indeed we need to go on and note that on page 63 of the materials book we have paragraphs 41 and 45 which refer to – and this is the decision of Chief Justice Spigelman, with which his two brethren concurred.  The first line at paragraph 41:

Although the ultimate task to be performed is one of balance, s 31(8) does tilt the balance or put a thumb on the scales.

Then at paragraph 45:

This tilting or “thumb on the scales” approach to a balancing exercise does not involve the formulation of a rule which determines the outcome in the process.

While I confess I blanched it “thumb on the scales” nonetheless it does highlight the difference between what was acceptable and that case, in my understanding, has gone for special leave which was refused.

GUMMOW J:   Yes, upon grounds of prematurity.

MR CHURCHES:   Thank you, your Honour. 

KIRBY J:   Was there a provision in the federal legislation under consideration here for the proceedings to go forward in private with only the representatives of the Executive Government there with the court?

MR CHURCHES:   Not that I am aware of, your Honour, but nonetheless there is ‑ ‑ ‑

KIRBY J:   I think you said to me earlier that you relied on that as an offensive feature on the face of legislation?

MR CHURCHES:   The exclusion of the interested party, absolutely.

KIRBY J:   In private?

MR CHURCHES:   Yes.  I need to be careful about “private”, your Honours, because my friends have put on much material about courts acting in private.  Indeed, the South Australian submissions have put on, for example, the Youth Court Act 1993 and they put on the Summary Offences Act of 1920 as examples of courts reaching decision in private.  But when one looks at that legislation one finds, of course, that while the doors may be closed because it is intended that the court not become a circus, particularly for the media to feast upon, those pieces of legislation specifically prescribe that the interested party is to be allowed in the courtroom.  And the summary offences legislation referred to by my friends in their submissions specifically provide for the magistrate to proceed in the absence of the defendant, once it is ensured that the defendant has been served, summonsed and it is his election – his or her election – not to bother to come.

Of course, court proceedings must go on, but there is no question as there is here of the defendant or affected party being frozen out and shown the door; nothing like that at all.  So I need to draw a very careful line between hearings in private, as opposed to hearings in private from which not only the public, but the affected party is thrown out of the courtroom.  That is the important thing, not the privacy.

KIRBY J:   So it is the combination of in private, plus the powers to exclude the knowledge of the person affected of relevant material?

MR CHURCHES:   Yes, it is the exclusion of the affected party, which is the vice, in our submission, yes. 

KIRBY J:   Well, I do not necessarily accept that.  I find – at least at the moment – that in private is very unusual in terms of the combination.  No access and then the unseemliness or apparent unseemliness of the Executive Government meeting in private with a court that must receive federal jurisdiction.

MR CHURCHES:   Yes, there is a paper printed in the Deakin Law Review and I have not put it on as materials.  We are already drowning in paper, but a paper presented by Chief Justice McLoughlin printed in the Deakin Law Review in 2004 exactly on that point.  Her Ladyship opened that paper with the famous quotation from Bentham about how important it was to have courts that were open because without scrutiny by the public the administration of justice would fall away for various reasons.

KIRBY J:   Anyway, do not tarry over it, but I thought I should indicate that at least for me it is an important factor in the legislation.

MR CHURCHES:   Yes, thank you, your Honour.  If I could just conclude on Lodhi that while it may seem to be a case going to a wide legislative power to tell courts what to do, at the end of the day it passed assessment in the Court of Appeal in New South Wales because it didn’t involve ultimate dictation to the court.  It did prescribe how the court ought to view the material – shall we say privileged material before it – but it did not tell it that at the end of the day it had to behave in a certain manner before it.

The vice in the Liquor Licensing Act is that it provides no discretion in a court whatsoever.  It does not make a strong recommendation.  It provides for an absolute closure upon application by the Police Commissioner.

Lodhi, of course I note, is a decision that came down subsequent to the decision of the Full Court in this matter and the other relevant decision that has come down in the intervening year or so is the Full Federal Court decision in Hussain v Minister for Foreign Affairs 169 FCR 241. We refer to that at 27 and 33 of our submissions. That case has been referred to by some of my friends, they think, as supporting their position because it involved the question of whether a Federal Court Judge sitting as a president in the Administrative Appeals Tribunal could be, with constitutional validity, bound to a situation lacking natural justice.

Now, close as it may seem to the present position, in our submission, the difference and the important difference is that Hussain’s Case is dealing with the removal of natural justice from a tribunal, not from that which is labelled by the Parliament as a court, or indeed subsequently on appeal, the Supreme Court about which there is no quibbling permissible.  It is a court.

Their Honours in the Full Federal Court, Justices Weinberg, Bennett and Edmonds J – it is in our materials’ book, your Honour, but my friends have also put it in full length in their materials.  In the appellants’ materials book it is page 68, paragraphs 170 and 171 where the judgement – it is a joint judgment of the court.

They note the existence of the K-Generation decision in the Full Court in South Australia and they note the distinction between that decision going off in respect of a court and their work in dealing with the Administrative Appeals Tribunal.  At 171:

Even if we were satisfied that K‑Generation 99 SASR 58 was wrongly decided, the present case would be readily distinguishable.

And so forth, and it goes on to discuss the difference in respect of administrative hearings.  Now, it may be that Hussain is coming up ‑ ‑ ‑

KIRBY J:   Is there any leave application in Hussain?

MR CHURCHES:   I am not aware, your Honour, and I will not say any more because I just have a feeling it may well be subject of an application.  But my point is merely that again the appellants’ argument can live comfortably with Hussain to one side because Hussain is aimed at the removal of natural justice from a tribunal, not from the court, and that is, of course, the critical discremin.

The other case that we have made much of in our submissions, your Honour, is of course that of Nicholas 193 CLR 173, again set out by my friend’s in full I think in their materials books. At paragraph 37 of the appellants’ submissions where we set out a paragraph of what Justice Gaudron had to say about the essential character of the court, because that is really what the fight is about today, whether it is destructive of the essential character of a court that it not merely have natural justice reduced, we would suggest to submit, to nothing, but that it be ordered by other branches of government to remove natural justice from its process, and it is that destruction of essential character that we are concerned with, and her Honour says at pages 208 and 209, paragraph 74:

In my view, consistency with the essential character of a court and with the nature of judicial power necessitates that a court not be required or authorised to proceed in a manner that does not ensure –

and then there are a series of prescriptions, the second of which is –

impartiality and the appearance of impartiality –

followed by –

the right of a party to meet the case made against him or her –

and, in our submission, 28A(5) falls at both those hurdles because the second one, the right of a party to meet the case against them, is obviously what 28A(5) is meant to do.  Its words are clear.  There is in fact some quibbling by my learned friends as to whether or not 28A(5) really diminishes natural justice.

Well, I think we are all agreed that its words are clear and it has a clear intent.  The purpose is to get to what Justice Crennan has suggested to me in the course of argument, something rather like public interest immunity, so the intent is clear.  But then when we look at the first of those propositions from Justice Gaudron, impartiality and the appearance of impartiality, as a necessary or essential character of a court, in our submission, that also is collapsed by the impact of 28A(5).  Because even if nobody else is aware of it, but the media soon will be aware of it, of course, as they were after the proceedings last year, the public are then confronted with a court, and if the matter went up on appeal, as it did not in this case, but if it went up on appeal to the Supreme Court, we would be confronted with the highest court in the State having to act in a way which can only be concluded as partial. 

It would involve the court, and in a full court, three judges, sitting with the police in a room with the affected party locked out and nothing, in our submission, could be more obviously partial and it is that collapse of an essential character which, in our submission, goes to the defect in this legislation.  And then finally at the end of that paragraph her Honour said:

It means, moreover, that a court cannot be required or authorised to proceed in any manner which involves an abuse of process, which would render its proceedings inefficacious, or which brings or tends to bring the administration of justice into disrepute.

The process of closeting, as we have referred to in our written submissions, which is hitherto unknown in the common law since the abdication of James II over 300 years ago, closeting is just not allowed.  The Executive does not sit in private with the court.

KIRBY J:   Where is that case?  Is that in the materials?  I noticed you referred to it in your submissions.

MR CHURCHES:   Yes.  I did not put on Godden v Hales itself, your Honour, because it is not quite relevant, but I have put on the reference from Professor Anthony Bradley. That is in the materials.  I will find that for your Honour.  I put on an article – it is in the very recent Public Law; I think it came out in May this year ‑ ‑ ‑

KIRBY J:   Did that suggest that historically this was part of the vice that led to the act of settlement with the protection of the independence of the judges?

MR CHURCHES:   Indeed, your Honour.  The process of addressing the necessary independence of judges which flowered on the departure of James II is exactly what Professor Bradley is referring to.  It is in the appellants’ materials book at page 98 and thereafter, your Honour.  At page 99 ‑ ‑ ‑

KIRBY J:   The departure suggests a seemly involuntary removal of the King.  It was his expulsion.  It was a revolution.

MR CHURCHES:   Yes.  Professor Bradley does suggest that there was a cause and effect.

KIRBY J:   Is that Bradley article in our materials?

MR CHURCHES:   Yes, it is at pages 98 and 99 of the appellants materials book, your Honour.  It is published in Public Law this year, 2008.  The heading is “Relations between Executive, Judiciary and Parliament:  an Evolving Saga?”  I have noted also in the appellants’ written submissions that the only occasion I am aware of closeting in the last 300 years was the attempt by the Queensland Parliament in its criminal proceeds confiscation legislation of 2002 which met a sticky end very shortly thereafter.

KIRBY J:   Can I ask, if your resources go so far, to print out the whole of Mr Bradley’s article?

MR CHURCHES:   Yes, your Honour.

KIRBY J:   I would be interested to read it.

MR CHURCHES:   We will have that after lunch, your Honour.  It is not unduly long.  It is only a few pages in length.  I should say that Professor Bradley was the Professor of Public Law at the University of Edinburgh but now practises at the London Bar.

CRENNAN J:   Everyone seems to be relying on an account of Macaulay, that is to say, the Whig historian, in relation to those matters.

MR CHURCHES:   Yes.  Winners are grinners, your Honour.  I guess the Whigs got the better of the argument and they wrote the history.  I do not think there is any doubt though, given the detail which even in that short article Professor Bradley was able to set out, there is no doubt about James having sat down with each judge one at a time to have a chat, because we have accounts of what some of the judges said in response.  Some of them took umbrage, and of course the rest is history because the act of settlement came into being 15 years later. 

So the beginnings of a clear statement of the independence of the judiciary, and then again also in our submissions we have set out the material from 1760, the legislation which Blackstone then picked up in his first volume in 1765, the 1760 Act which confirmed the act of settlement and refers to the uprightness and the independence of the judiciary as necessary to the impartial administration of justice.  That is set out in the materials book.  Then Blackstone built on that, referred to it.

We set that out because, in our submission, it is the history behind the idea of an impartial and independent court that existed, and clearly existed, prior to the work of the founding fathers in setting up the wording of the Constitution in 1900 coming into effect in 1901. All these ideas, though not written on the face of the Constitution itself in Chapter III, nonetheless they are the traditional and historical underpinnings to the idea of judicial independence. “Traditional and historical” are the words used by Justice Jacobs in one of the Quinn’s Cases, which we have also referred to in the appellants’ submissions. 

There is another matter which is raised by my friends which I would like to think is merely a misfortune in their analysis rather than something more insidious, and that is the references throughout many of the submissions to courts regularly and habitually dealing with ex parte applications and that this instance here in 28A is no different from the other ex parte applications of which the warrant applications are the most obvious example.  Grollo v Palmer was, of course, a famous warrant application case. 

My learned friends say courts are used to dealing with warrant applications.  They are ex parte.  That means the affected party is not there.  So what are you complaining about when 28A just causes the applicant to have to step outside while his fate is considered?  What is different about that?  What is different and importantly different is that in the warrant cases there is not a final decision being made as to somebody’s fate.  It is the process of setting in train the warrants which will go towards the criminal investigation process.  It is really at the very beginning of the conveyor belt along which a matter will travel. 

That, in our submission, is totally different from the situation here, where the matter for final determination, whether or not a person is regarded as fit and proper and can therefore obtain their liquor licence, that matter of final determination is at stake here and, in our submission, totally removed from the warrant cases.  While we draw analogies from Grollo v Palmer about incompatibility issues, Grollo v Palmer’s warrant basis is, we submit, on the facts completely removed from where we are today.  This is not just another ex parte application case of which the courts have many instances before them.  This is a matter going to a final determination, and matters going to final determination more than any other obviously need natural justice.  That is the heartland of natural justice.

FRENCH CJ:   You mentioned “fit and proper”, just going back to that for a moment.  Section 56 of the Act makes it a necessary condition of the grant of a licence that an applicant:

satisfy the licensing authority –

(a)that the applicant is a fit and proper person to hold the licence –

When one goes to 53, you have the mandate to refuse the application:

if the licensing authority is satisfied that to grant the application would be contrary to the public interest.

Which covers, of course, a huge range of possibilities.  So there is the fit and proper criterion as a necessary condition for the particular applicant, then there is the grant of the application and whether that is contrary to the public interest.  When one goes back to 28A(2)(b), it says that the licensing authority, if it decides to act upon the information provided by the Commissioner:

not required to provide any grounds or reasons for the decision other than that to grant the application would be contrary to the public interest –

So it is linked to that broader public interest criterion rather than the specifics of whether the applicant is fit and proper.  It may be the former subsumes the latter.

MR CHURCHES:   Yes.  We have not attacked, in particular, 28A(2), your Honour, because ‑ ‑ ‑

HAYNE J:   Well, you cannot understand that until you have understood Division 13, a division to which you have not taken us.  Section 75A is an important provision, is it not?  Section 75A is intervention by the Commissioner, and it treats “fit and proper” as distinct from “contrary to the public interest”.  See paragraph (a), see paragraph (c).

MR CHURCHES:   Yes, although we would submit, your Honour, that a person who failed on the basis of criminal intelligence, failed to receive their application, would be entitled – or at least the public at large would be entitled to infer that that person was either not fit or proper or that it was contrary to the public interest, whatever that might mean, that they have not received their licence.  So in other words, we submit to the Court that there are adverse inferences that plainly flow from a person being refused a liquor licence upon the presentation of criminal intelligence.

HAYNE J:   Is 75A engaged in the present matter?

MR CHURCHES:   To the extent that it provides the power for the Commissioner of Police to actually introduce the evidence into the Liquor Court, yes, your Honour.  It is not referred to at any stage though that I am aware of either in the Liquor Court or in the Supreme Court.

HAYNE J:   Did the Commissioner of Police intervene?

MR CHURCHES:   Yes, he did, your Honour.

HAYNE J:   Intervened on what question?

MR CHURCHES:   He intervened merely to oppose the – if I could take your Honours briefly to the layout in the Act?  Section 51A of the Act provides for applications to the ‑ ‑ ‑

KIRBY J:   Where are you referring to?  Where are you reading from?

MR CHURCHES:   I am sorry, I am reading from the copy of the Liquor Licensing Act provided by the second respondent.  It is the full set of the Act.  It is at page 32 of that Act, section 51A, which provides for a machinery in which the Liquor Licensing Commissioner – this is a section I might say that is replete with different commissioners, but it is the Liquor Licensing Commissioner who informs the Police Commissioner in subsection (2):

(2)The Commissioner –

that is the Liquor Licensing Commissioner –

(a)must give a copy of each application to which this section applies; and

to the Commissioner of Police.

Now, you can assume that subsection (1) is a list of different sorts of licences.  In general terms we can infer that the Commissioner of Police receives a copy of each application that is going to the beginning of that conveyor‑belt process going before the Liquor Commissioner.

FRENCH CJ:   The notice of intervention which appears at page 64 filed on behalf of the Commissioner ‑ this is 64 of the appeal book ‑ raises as the question:

Whether:

It would be contrary to the public interest if –

the applicants –

were to be approved as fit and proper persons.

MR CHURCHES:   Yes.

GUMMOW J:   It is headed section 75A, page 64.

MR CHURCHES:   Yes, page 64’s Notice of Intervention would appear to match the words appropriately of 75A.  It is for the purpose of introducing evidence.  Sergeant Jakacic goes on and says “or make representations” and the Act says, “make submissions” but it is obviously pursuant to 75A that Sergeant Jakacic is acting.

Your Honours, that I hope has given you enough about the workings of the Act.  We have not worked through it in perhaps a coherent manner, and before I sit down I probably ought to take your Honours to what we submit are the relevant provisions beginning after the criminal intelligence definition.  We get to section 13 of the Act on page 13.  “The Court” ‑ and the Court throughout this Act is defined – what is defined as “The Court” is the Liquor Licensing Court.  So the Liquor Licensing Court “is a court of record”.  Then at section 14, it is constituted either by the Liquor Licensing judge or some other District Court judge.

As things are at present in South Australia there is, as I understand, no actual liquor licensing judge, but a panel of four District Court judges sit in rotation.  Judge Rice was one of that panel.  Section 15 headed “Judges”:

The Governor may, by proclamation –

(a)designate a District Court Judge as the Licensing Court Judge;

which has actually occurred here.  Then at section 17 we have the division of responsibilities between the Liquor Commissioner and the Liquor Court.  There is a process before the Liquor Licensing Commissioner of attempting conciliation between the parties and matters, but not all matters, may then go on to the court and that is pursuant to the matters under Division 5 beginning section 23 proceedings before the court.  The process of what I have called the conveyor belt from Liquor Commissioner to Liquor Court to the Supreme Court is an important one because it is not an automatic process of going up the chain, as it were.  Section 27 in fact inhibits a full range of appeal to the Supreme Court which has to be in 27(4) a Full Court because in 27(2):

no appeal lies against –

(a)      an order or decision of the Court –

that is the Liquor Court –

made on a review of a decision of the Commissioner –

Now, that does not alter the fact that there are some matters that fall into the Liquor Court not by way of a review of a decision of the Commissioner.  So it is possible for matters which involved criminal intelligence to go into the Liquor Court and then up to the Supreme Court thereby clearly generating, in our submission, the problem of impacting on what is undeniably a Chapter III capable court.

The other relevant aspects of the Act are under Division 5, the proceedings before the court.  That is the Liquor Court.  It has been noted by a number of your Honours that the Liquor Court is not bound by the rules of evidence but if I could – and I am drawing on memory, but I think it is Justice Evatt in Bott’s Case, probably 70 years ago, noted that just because legislation provides that the strict rules of evidence do not need to be followed, that nonetheless they are not to be discarded willy‑nilly.  I have paraphrased terribly there, but that is the thrust of it, that a mere permission to be not bound by the rules of evidence does not mean that it is Rafferty’s rules.

That, of course, is relevant to the practicality of the process of what either the Liquor Court or the Supreme Court on an appeal would do with evidence which has been presented by the police on what we call the one‑sided basis because the process of weighing up, in our submission, simply becomes impossible at that point.  I did note, just as I was getting the matter up in finality, that in the case of R v Apostilides there is a quote by the Full Court, five members sitting in joint judgment, did refer to a decision of Justice Dawson in Whitehorn.  I have alerted my friends.  If I could hand up eight copies.  It is not of great moment, your Honours.  This is the case of Apostilides 154 CLR 563. There the Court, at page 576, quoted at length from Justice Dawson in Whitehorn’s Case, the previous year, 1983:

“A trial does not involve the pursuit of truth by any means.  The adversary system is the means adopted and the judge’s role in that system is to hold the balance between the contending parties without himself taking part in their disputations.  It is not an inquisitorial role in which he seeks himself to remedy the deficiencies in the case on either side –

While we do not draw on that case in particular to the legislation under review today, nonetheless it illustrates, in our submission, the huge machinery defect in providing for courts in this State to have to act on a one‑sided basis.

FRENCH CJ:   When you say “have to act”, you are talking about the process.  The Court is not required to make an adverse finding on the basis of any criminal intelligence information that is put before it, is that right?

MR CHURCHES:   That is right, your Honour.

FRENCH CJ:   So that it might decide that the information in inherently unreliable or too vague or too dependent upon a chain of hearsay, do you accept that?

MR CHURCHES:   It might, your Honour.

FRENCH CJ:   I am not suggesting that that is an answer to your argument, I am just wanting to find the boundaries of what the court can do and, could the court in making that assessment have regard to the fact that there has been no opportunity for the evidence to be tested or does that undercut the statutory scheme?

MR CHURCHES:   If the Liquor Court, for example, presented with criminal intelligence, it has gone into private conclave with the police representative, there has been discussion of the material, then sits down and writes a decision which says, “Despite the existence of the criminal intelligence I find in favour of the applicant and I am going to grant the licence.”  It is a fair guess that the police would immediately appeal to the Full Court.

FRENCH CJ:   I am not sure that is an answer to the question I put.  I mean, the criminal intelligence information is one factor among a number of factors which the Licensing Court would have to take into account.  The sting in it is if the court simply, on the basis of that information or acting in part on the basis of that information, refuses the application on public interest grounds, so stated.

MR CHURCHES:   I suppose, as a matter of logic, your Honour, my submission in response to that is the same as that to the possibility of review.  That there might be possible safety valves along the way does not alter the fact, in our submission, that once the criminal intelligence is before the court, the constitutional defect is set in train.

FRENCH CJ:   I understand your position.  I just want to understand what the boundaries are.

MR CHURCHES:   Yes, but I take your Honour’s point, that there are possibilities for the Liquor Court or, in turn, the Full Court or the Supreme Court to still, notwithstanding criminal intelligence, find in favour of an applicant.  That is a possibility, but remote or not, we submit that the defect is manifest on the face of 28A(5) ‑ ‑ ‑

KIRBY J:   At page 3, at line 30, the Liquor Gambling Commissioner said:

Accordingly, I refuse the application on the ground that to grant the application would be contrary to the public interest.

So that presumably that was a direct result of the tender to him of the file of criminal intelligence material to which he refers.

MR CHURCHES:   Indeed.  The fact the decisions are made and delivered in terms only of the public interest plainly indicates that they have been made on the basis of the criminal intelligence, that is right.

KIRBY J:    That is the decision that Judge Rice, at page 17, line 20, affirms and says:

to the extent that it is necessary I confirm that I make the same decision.

MR CHURCHES:   Yes. 

GUMMOW J:   Now, the steps that are to be taken in 28A(5)(a), are they linked in any way to what the application of the Commissioner is?  Is it linked to the steps?  May the Commissioner, seeing the way the wind is blowing, qualify the application?  Can the steps be modified in the course of the procedures?  It seems to be assumed that it is rigid.  I do not necessarily see why.

MR CHURCHES:   Your Honour, the appellants read that as ‑ ‑ ‑

GUMMOW J:   But what does the Commissioner apply for? 

MR CHURCHES:   The Police Commissioner?

GUMMOW J:   Yes.  Someone stands up in court and says, “I have got an application”.  The judge says, “For what?  What am I to do?”

MR CHURCHES:    In our submission, your Honour, this goes to the intent of the legislature, the purpose ‑ ‑ ‑

GUMMOW J:   If someone said to me to take steps, I would say, “What steps?”  The whole thing would become very specific.

MR CHURCHES:   Far be it for me to criticise the drafting of South Australian legislation, it suffers the defect that your Honours criticised in Gypsy Jokers.

GUMMOW J:   It may not be a defect.  That is what I am trying to get you to engage with.

CRENNAN J:   The intervention is about introducing evidence and making submissions, 75A.  So that is what the Commissioner is there to do; wishes to introduce the criminal intelligence evidence and make submissions about it perhaps.

MR CHURCHES:   Yes, thank you, Your Honour, because it is that context that we submit 28A(5) has to be seen in the light of the Police Commissioner’s power of pursuing to 75A to be able to introduce evidence.  In this case it is the criminal intelligence sort of evidence.  We would submit that the intent of the legislature in paragraph (5)(a) is plainly the application of the Police Commissioner for confidential treatment.  That is the intent, in our submission.

Now, I am not quite sure whether that is going to involve the reading in of words, and I know your Honours are quite properly very wary of reading in words but I think that the intent carries us there anyway, that the Police Commissioner is applying notionally, in brackets, for confidentiality, the steps for which would include receiving evidence and hearing argument in private and so forth.

FRENCH CJ:   He is not applying for confidentiality, is he, in the sense that the non‑disclosure obligation or the prohibition, if you like, is set up in 28A(1) and it may be that 28A(5)(a) simply provides for procedural measures to be proposed by the Commissioner to make that non‑disclosure protection effective.

It might also be that you may have information which, without prejudice to criminal investigations or whatever, has some conclusions which can be disclosed and that sort of thing might be said, Mr X has associations with A, B and C.  That could be disclosed but the rest must be kept confidential because it tells us how we got that information.  That is in a case where the disclosure of that information itself does not show who the source is.

GUMMOW J:   There is a section in the Federal Court Act about this sort of thing, is there not?  Section 51, is it – section 50 of the Federal Court Act?

MR CHURCHES:   Your Honour has the better of me.

GUMMOW J:   Courts take steps to maintain confidentiality in all sorts of ways.

MR CHURCHES:   Indeed, your Honour, on their own motion.  In our submission, Parish v ABC was exactly the point because Chief Justice Bowen and Justice Deane –

GUMMOW J:   That is why I keep coming back to you.  Who fixes the taking of the content of the steps?  Is that solely as required by the Commissioner of Police?

MR CHURCHES:   The courts variously are ordered to maintain confidentiality and they are to take steps, of which there is then a particular illustration, which is to freeze the applicant out of the room.

CRENNAN J:   Could the court though have a debate with the Commissioner about, well, I do not think that step is appropriate; what about doing it this way and so on.  In other words, the Commissioner may have a proposal about how the confidentiality is to be maintained which exceeds what is necessary, for argument’s sake.  Steps could be taken which do not include receiving information in private and in the absence of the parties.  There are mechanisms, as Justice Gummow pointed out, for maintaining confidentiality without necessarily having a hearing in camera.

MR CHURCHES:   Yes, your Honour.  In our submission, the fact that the legislature has seen fit to specify the words ‑ ‑ ‑

GUMMOW J:   Just get away from the emotional framework of this case.  Take a trade secrets case, it happens all the time.  The courts manage it.

MR CHURCHES:   Absolutely, your Honour, the courts manage it, but the courts in that case ‑ ‑ ‑

GUMMOW J:   That is the question of construction that Justice Crennan and I are trying to get you to grapple with.

MR CHURCHES:   The Federal Court is not under instruction that it will, must, take steps, including.  The problem with Justice Crennan’s suggestion that we might find an ameliorative way out for the Liquor Court or the Supreme Court is that enumerated and set out clearly as one of the steps to be included in the process of maintaining confidentiality is the freezing out of the applicant.  There is no escaping ‑ ‑ ‑

HAYNE J:   There is the problem, you are ‑ ‑ ‑

CRENNAN J:   That may be up one end of the spectrum.

MR CHURCHES:   In our submission, not an end in the spectrum, your Honour.  It is specified as steps including.

GUMMOW J:   You want to talk your client out of some possible room to manoeuvre by assuming the most drastically adverse construction and then saying it is invalid.

HAYNE J:   And you do that by compressing what is a rather more elaborated process.  Take this case, let it be assumed there was one file of information.  You have a police officer in the court who says, I now produce a file which the Commissioner has classified as confidential criminal intelligence.  You look at it.  There has to be some evidence that would show, is there not, some basis for demonstrating why disclosure of the information that there appears could reasonably be expected to have one of the consequences identified in the definition?

That’s an area for debate is it not?  Then let it be assumed that debate runs its course.  Let it be assumed it runs its course to the point of saying, well, there is information in here which is properly classified as criminal intelligence.  What then are the steps that are taken?

MR CHURCHES:   In our submission, your Honour, the problem with that is the wording of paragraph (a) provides for the application of the Commissioner of Police upon that Commissioner’s classification of the information as criminal intelligence.  It does not talk about whether it is being reviewed as reasonable or not.  Once it is classified ‑ ‑ ‑

HAYNE J:   No.  You elided two elements and you have rammed back into one what are two distinct elements in (5)(a), “must, on the application of the Commissioner of Police”, not treat the application of the Commissioner of the Police in private with exclusion of the other parties, but “must, on the application of the Commissioner of Police” do things.  The things are, one, take steps.  Certain instances are given of steps which you say must be taken.  A possible construction is may be taken, but only if you jam it all into a single proposition do you encounter the problem that you set up, do you not?

MR CHURCHES:   Before that, your Honour, we would go back to the word “must” because Justice Gummow’s example of dealing with intellectual property cases, trade marks, whatever, does not involve compulsion ‑ ‑ ‑

GUMMOW J:   Not just those cases, Part IV cases under the Trade Practices Act.  Also, it is of sensitive commercial information is treated under section 50.

MR CHURCHES:   Yes, Chief Justice Bowen in Parish’s Case is very clear on that, that what we have described in our submissions is the corpus of the matter before the court that has to be protected if it is a secret design that has been fought over.  Plainly to have it dragged into court and shown to the other side wrecks the very purpose of the litigation.  But it is for the court to take the protective steps, not for the court to be told that it must take steps, whatever they are.

GUMMOW J:   That is a question of construction, you see.

MR CHURCHES:   I have to confess, your Honour, that I do not have much room ‑ ‑ ‑

GUMMOW J:   What I put to you about an hour and a half ago was that the phrase “on the application of the Commissioner” was a precondition to all of this activity.  So the Commissioner stands up and makes the application.  What happens then?

MR CHURCHES:   The court must take steps.

GUMMOW J:   Yes, what steps?  Who decides the steps?  What are the content to the steps?

MR CHURCHES:   We would submit, your Honour, that the words from a legislature that a court must do anything on the application of a member of the Executive standing up and saying “now”.

GUMMOW J:   Well, you would ordinarily try and find a construction, bearing in mind what happened to King James II, but would not rush to say that that is what is being attempted here.

KIEFEL J:   Are they not the steps to be taken the steps which appear to the court to be appropriate having regard to the evidence which is received and the argument which is heard about the information as appears in the subsequent wording of the subsection of the paragraph?

MR CHURCHES:   Well, in our submission, your Honour, the material from including steps to received evidence and so on is by way of example.

KIRBY J:   You have to say that the adjectival phrase “to maintain the confidentiality of information” governs the steps that can be taken and that the steps are and can only be steps that maintain the confidentiality of the information and that that is the confidentiality which, in the terms of the section, is classified by the Commissioner of Police as criminal intelligence, which of its nature often is, usually is, confidential.

MR CHURCHES:   We do come back to the word “must”, your Honours, because if the word were “may” we would not be here because the discretion would remain in the court.  It would be permissive to the court to take steps but the fact that the court is ordered – “must” is not as “may” is, as we all know in law a very plastic word, capable of being read as mandatory and capable of being read as permissive.  But “must” has no quibbles in it.  “Must” is mandatory.  It is an order.

HAYNE J:   The construction you are urging seems to be a construction of a provision which could have been rendered thus:

In any proceedings under this Act –

et cetera – the Court must receive evidence and hear argument about information classified by the Commissioner of Police as criminal intelligence in private in the absence of parties and their representatives.  That is the construction you are urging upon us, I think.  If it is not, tell me why it is not?

MR CHURCHES:   What your Honour has just put to me is the way we would submit this actually works.  We do not have to go so far in our argument, though, as to say that that  is word by word what we say the Act means.  We say that the vice is in the order – the word “must” at all.

FRENCH CJ:   You do not say that “must” covers those steps which are exemplified?  In other words, there is not a requirement to hear argument in the absence of representatives of the parties?  That is just an example of what can be done in order to comply with the “must”.

MR CHURCHES:   In our submission, your Honour, that point I must connect to what Justice Hayne just put to me.  The bit that I did evade in what he put to me was about “must receive evidence”.  We will put that to one side, but we infer that from section 75A, but when we come to the steps which are actually enumerated and set out by way of example in (5)(a) we say yes, that for a court to look the Police Commissioner’s agent in the eye and say, no, we are not going to hear this in private, would be absolutely defying the intent.

HAYNE J:   Hear what in private?  You say “hear that in private”.  Hear what, the application, hear the evidence, hear argument about the evidence, hear what?

MR CHURCHES:   No, to hear the criminal intelligence, or to deal with it – to deal with the criminal intelligence.  Presumably it is written rather than oral, and submissions about – I am sorry; the exact words, evidence relating to the criminal intelligence.  We submit that the intent of the legislation is very clear in context, purpose, and those critical concepts in statutory interpretation all go to the plain intent of the legislature that are the criminal intelligence be dealt with confidentially.  The vice that we submit is that the legislature has not seen fit to leave the discretion in the court as it did in the Commonwealth anti‑terror legislation.

KIEFEL J:   I am sorry to interrupt you.  Could I just take you back to (a) again, to the “must” part, as Justice Hayne has put to you, you  might be able to say is cast as an obligation.  The “must” steps to receive evidence and hear argument, you would have to concede are procedural steps.  If you are reading the word:

must, on the application . . .  take steps to receive evidence –

go three lines down:

receive evidence and hear argument about the information –

those are procedural steps.  That could be, if they are read as procedural steps, that could be by way of saying that the legislation is intending to focus the court’s mind upon the confidentiality of the information.

MR CHURCHES:   Yes.

KIEFEL J:   Then if you go back to what you say and where the problem appears to arise in part of your argument:

must, on the application . . . take steps to maintain the confidentiality –

and you have not been able to identify what steps they may be.  It could be that those steps should be regarded as different from those appearing below the procedural steps.  The steps spoken of at that point are the ultimate steps to maintain confidentiality and the ultimate steps are those for the decision of the court after having undertaken the mandatory procedural steps.

KIRBY J:   That is why I suggested to you that your argument has to be not only based on “must” but on “maintain”.  The only steps that can be taken are those steps that maintain the confidentiality.  They are not steps that override the confidentiality or refuse the confidentiality.

MR CHURCHES:   Yes.

KIEFEL J:   Some homework over the lunch hour perhaps.

FRENCH CJ:   It goes back to subsection (1), I suppose, does it not?  Again, the confidentiality we are talking about is that effectively mandated by subsection (1).

GUMMOW J:   Subsection (1) is talking about information provided by the Commissioner of Police to the Licensing Commissioner.  There is another section, is there not, that deals with the Commissioner of Police and the Licensing Commissioner, communications between those two at that stage?

MR CHURCHES:   Well, 75A provides for the intervention which goes to introduction of the evidence.

GUMMOW J:   That is talking about evidence.

MR CHURCHES:   The Licensing Commissioner has to inform the Commissioner of Police of the application at 51A.

HAYNE J:   Section 51A(3) is material that the Commissioner must communicate, I think, to the Commissioner, is it not, the Licensing Commissioner?

MR CHURCHES:   Yes, thank you, your Honour.

FRENCH CJ:   I suppose my question is whether the confidentiality to be maintained in 28A(5), assuming – and that may be a wrong assumption – that it is to be read by reference to 28A(1), would exclude disclosure on undertakings of confidentiality to legal representatives of the applicant.  I mean, in the commercial case, the kind to which Justice Gummow referred earlier, it is not unusual to receive evidence under cover of confidentiality disclosed to legal representatives of the parties under their undertakings and there are.....it is a common form of order because a question would be whether that kind of order is precluded by this provision.

MR CHURCHES:   In our submission, your Honour, 28A(1) is a complete blanket against, for example, allowing access by the legal representatives.

KIRBY J:   Indeed, 28(1) takes us back to that phrase classified by the Commissioner, which the Chief Justice referred to at the very beginning of the proceedings this morning and it seems to suggest that the Commissioner of Police has some special power to immunise the information by classifying it as criminal intelligence, and “classified by the Commissioner” is repeated is 28A(5)(a).

MR CHURCHES:   Yes.

GUMMOW J:   I think what I was trying to put to you about section 28A(1) is that what it is talking about is 51A(3), as Justice Hayne reminds me.  It says the Commissioner makes available to the liquor people, and then if that information is classified, then 28A(1) locks in.

MR CHURCHES:   Absolutely, your Honour.

GUMMOW J:   But it is not talking about the evidentiary situation.

HAYNE J:   But the distinction is to be drawn between 28A(1) and (5) in that 28A(1), if we want to talk in terms of absolutes and other constructs, 28A(1) is simple, it may not be disclosed.  Section 28A(5), one should say these days, is more nuanced, I think.

MR CHURCHES:   We would submit in response to that, your Honour, it is nuanced in a way that sets out particular examples of machinery for giving effect to the nuances and it is a pretty heavy nuance to evict an affected party from a courtroom.  I note, your Honour, that 51A(3) is, of course, referring to materials from the Commissioner of Police which are themselves not going to be part of criminal intelligence because paragraph (a), for example, is about criminal convictions.  They are matters on the public record.  We do not have a problem with that.  They are public materials.

What I am getting at is that material, for example, such as criminal convictions, is not the material in 28A(1).  Section 28A(1) has a tail to it, of course, and the tail is that the information referred to there is the criminal intelligence sort of information.

CRENNAN J:   Just before we break, I wanted to ask you this.  It seems from 28A(3)(b) that the applicant is told about the intervention but under (a) does not get a copy of the objection from the Commissioner, so presumably does not, of course, get the criminal intelligence.  On your point about evicting parties from the courtroom, under this sort of process could the applicant be able to turn up on the day, having received the seven‑day notice, and say or submit, “We do not accept the information upon which the Commissioner is relying to assert that the grounds of the application would be contrary to the public interest because we do not accept that it satisfies the definition of criminal intelligence”, that is to say, raising the issue before the court about really the reasonableness issue in relation to the two arms of the criminal intelligence?

MR CHURCHES:   I take your Honour’s point as to the hypothesis.  It is the hypothesis of a man who is not even one‑armed at that point, it is a no‑armed man in contest.

CRENNAN J:   No, but knows that the Commissioner is making this particular application in opposition – is intervening in opposition.  You can tell from the Acts what the Commissioner is doing, presumably.  I mean, the applicant is not excluded from the room when the Commissioner says, “I wish to make an application to tender this evidence and then I wish to make submissions in private”.  So theoretically there could be some debate on that issue.  Admittedly it is a debate where the applicant has nothing to offer apart from the proposition, but is there then an onus on the court to consider whether it is in fact criminal intelligence because, you see, if it is not the “must” under subsection (5) does not really operate.  The “must” all depends on the characterisation of this material as criminal intelligence.

MR CHURCHES:   In response to that, your Honour, I would submit that (5)(a) is not sufficiently nuanced, if I can use that word, to allow for the court, let alone the Liquor Commissioner, to second‑guess the Commissioner of Police at that point.  The words of subsection (5) are quite clear that upon the classification process – and we concede that there might be an attempted review in the Supreme Court as to the reasonableness of classification or not – but according to paragraph (a) upon the classification by the Commissioner of Police and his application to the court, then consequences follow.  The court “must” take steps at that point.

CRENNAN J:   All premised on obtaining the characterisation of being criminal intelligence.  That is the premise on which the “must” is based.

MR CHURCHES:   Yes.  In our submission, the Liquor Court is not in a position to perform that reviewing capacity.  It may be open to the Supreme Court on a judicial review but not to the Liquor Court.

KIEFEL J:   You do not deny that procedurally it could do that under paragraph (a), though.  The “steps to receive evidence and hear argument about the information” could be directed both to determining the question as to whether or not it is capable of classification, having regard to section 4, and also to determine the question of what steps should be taken in relation to the ultimate steps?

MR CHURCHES:   In response to that, your Honour, I would submit that the intent of the legislature appears to be to leave the Police Commissioner with discretion in his or her hands on this matter.  It is information which is dealt with in this legislation as though it is, dare I say, highly combustible.  It is private.  It is secret.  That is the intent.  There is no apparent likelihood that the legislature intended the decision of the Police Commissioner to be realistically reviewed.  Indeed, we do come back to the fact that while the applicant might be able to put their hand up and say, “I object to the Police Commissioner presenting that criminal intelligence and I challenge it”, there is absolutely no wind in their sails from that point on.  None.

FRENCH CJ:   Dr Churches, how much longer do you expect to be?

MR CHURCHES:   I thought I was finishing up about half an hour ago.  I think there are a number of housekeeping matters, if I can put it that way, that I ought to come back to after lunch.  Five minutes.

FRENCH CJ:   Thank you.  The Court will adjourn until 2.15 pm.

AT 12.46 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.10 PM:

FRENCH CJ:   Yes, Dr Churches.

MR CHURCHES:   Your Honours, I have handed up the copy of Professor Bradley’s article that Justice Kirby asked for and my learned friends have a copy now. 

Your Honours, I think we broke for lunch at the point of submissions about how subsection (5)(a) operated.  I think all I can say in conclusion, unless there are further questions from the Bench, is that whatever the steps to be taken by either the Liquor Court or the Supreme Court are, there is nonetheless a mandatory quality in the ordering of either court to take steps with regard to confidentiality, whether they are steps about excluding the applicant.  That would seem to be the imperative necessity to be able to maintain the confidentiality.  We can all see the reasons for the confidentiality.  We do not underestimate the public interest involved, but our issue with the legislation from the appellants’ side is that the process of dealing with that public interest has not been left to the court, either the Liquor Court or the Supreme Court, to deal with appropriately in their discretion. 

In this situation, an order has been issued legislatively and it is brought to execution by a member of the Executive and, in our submission, that is the error, not that we submit the public interest should be thrown away, there are necessities, we understand, in the security of police information, but they are things which courts understand and courts are to be trusted with and not to be ordered in respect of.  I am aware that Justice Kiefel set me some homework, and I managed to forget what it was.

KIEFEL J:   I only meant that in jest.

MR CHURCHES:   I think that, unless there are any further questions, I have nothing to add at this point.

KIRBY J:   I have a few little questions.

MR CHURCHES:   Yes.

KIRBY J:   First of all, have you said everything you want to say or are you reserving to say it in response to the interveners about the proposition that the Liquor Licensing Court is not a court?

MR CHURCHES:   I was proposing to come to that in reply, your Honour, but I should say ‑ ‑ ‑

KIRBY J:   All right, well ‑ ‑ ‑

MR CHURCHES:   No.  It is only fair that I at least address because they have given me the courtesy of putting on their written submissions on that point.  I think it is, from memory, Victoria and Queensland that particularly raise that.

KIRBY J:   Yes.  You do not raise any contest of the rights of non‑parties to raise a matter or an issue relevant to the matter that is outside the matter that the parties raise?

MR CHURCHES:    No, your Honour.  As far as I am concerned, they have the rights of parties and we do not contest that.  As to the question of the status of the Liquor Court ‑ ‑ ‑

KIRBY J: What is the most important decision of this Court? You refer to a number of decisions of the Court of Appeal of New South Wales. What is the clearest decision of this Court on what is a court for the purpose of section 77(iii) of the Constitution? Is there such a decision? If not, there soon will be.

MR CHURCHES:   Yes.  Could I just say that ‑ ‑ ‑

KIRBY J:   Perhaps you can think about that and deal with it in reply.  I do not want to hold things up.

MR CHURCHES:   Yes, and I may come back to that in reply, but could I just say at this point, your Honour, that – and before I address directly what Victoria and Queensland raised – in our submission, it is of no particular ultimate force in the argument before this Court, and we say that because Western Australia, in its submissions, has specifically raised the role of the Supreme Court in section 28A(5).  In our submission, that is very important because we are not only dealing with what we submit to the Court are orders given to the Liquor Court, but also orders given to the Supreme Court in its appellate function. 

Indeed, by way of, I hope not being unduly mischievous, could I raise the spectre of what might happen if an applicant went from the Full Court of the Supreme Court attempting at least to obtain special leave to appeal to this Court, because the South Australian Parliament has, perhaps in its wisdom, I do not know, not attempted to say that the High Court is bound by the restrictions in subsection (5), but they must be open, at least hypothetically ‑ ‑ ‑

KIRBY J:   How could it enact such a provision?

MR CHURCHES:   It could not, but it raises the question, of course, as to the status of the criminal intelligence at the point where a matter goes on appeal even further, but we do not need to go there because the plain fact is, as Western Australia has summed up in its submissions, we have a reference to the Supreme Court, section 27 of the Liquor Act provides for the process of appeal to the Full Court of the Supreme Court, therefore any arguments which we submit to this Court which are successful in terms of submitting that this legislation impugns the integrity of either court, then operates whether or not the Liquor Court is deemed or determined to be a Chapter III court or not. 

Now, we submit on the basis of the New South Wales Court of Appeal decision in Skiwing, which we have set out in our materials, a decision of Chief Justice Spigelman, agreed by his two colleagues.  Chief Justice Spigelman set out a series of indicia by which he would determine whether a body was a tribunal or a court and, in our submission – I will just take your Honours ‑ ‑ ‑

KIRBY J:   Where is this decision?  What is the citation?

MR CHURCHES:   It is page 19 of the appellants’ materials book.  It is Trust Company of Australia Ltd v Skiwing Pty Ltd (2006) 66 NSWLR 77. It is page 20 of the appellants’ material books in particular, your Honour, page 87 of the decision and paragraphs 48 through to 52 on that page give an indication ‑ ‑ ‑

GUMMOW J:   Is there not a recent decision of the Full Federal Court on the Tasmanian Anti‑Discrimination Tribunal?

MR CHURCHES:   It may have passed me by, your Honour.

FRENCH CJ:   It was one of Justice Heerey’s.  I think it is all usefully reviewed in an article that Sir Duncan Kerr wrote who I think appeared in one of those cases. 

GUMMOW J:   Anyhow, we are holding you up.

MR CHURCHES:   That ought to be homework then.  I will attend to that for reply tomorrow.  To address Justice Kirby’s question, we submit, and our principal answer to the submissions from Victoria and Queensland is, that it is not appropriate in the particular legislative words that we are dealing with to become embroiled in the perhaps finetuning over whether the Liquor Court is a court or a tribunal for Chapter III purposes.  We would submit it is plainly a court in the context that Chief Justice Spigelman was dealing with, but there may be fine distinctions as to whether it is a court for the purposes of Chapter III. 

I note that the second respondent and the Commonwealth are quite clear that it is capable of being a Chapter III court.  We also make that submission, but at the end of the day, if the Supreme Court is also caught up in the snare, as we submit to the Court, of being subject to mandatory command by the legislature, then perhaps that fine distinction is not crucial to a decision by this Court.

KIRBY J:   Assuming that it is a court, it is a State court.

MR CHURCHES:   Yes.

KIRBY J:   Have you said everything that you want to say about the suggestion that the Kable principle does not apply or apply with full force to a State court which, within the constitutional powers, is exercising an administrative jurisdiction and the suggestion that this is an administrative decision because of the width of the criteria that is being applied?

MR CHURCHES:   The material I took your Honours to this morning, in Kable, I just took your Honours to that one portion of Justice Gaudron’s decision.   That paragraph, we submit, sums up ‑ ‑ ‑

KIRBY J:   Which paragraph?  There are many paragraphs of many reasons in Kable. 

MR CHURCHES:   I am sorry.  That is volume II of my friend’s material books, page 696, where her Honour was noting that State courts stood in a different stead from federal courts on the issue of incompatibility, but that nonetheless the problem of incompatible or repugnant legislation by a State Parliament impacting on a State court could still go to the problem of inability to exercise judicial power of the Commonwealth.  We do not suggest there is any problem – in fact, of course, our submissions are that there is no problem with this Court being able to determine that State legislation is invalid for forcing an incompatible function on a State court. 

Her Honour was making the point that at a federal level it might well be a question of whether the function of an individual judge is incompatible because of the separation of powers set out in the Commonwealth Constitution but not set out in State Constitutions but that, nonetheless, even though State Constitutions do not embrace a strict separation of powers, there could be incompatible function or power invested or forced onto a State court.

Now, in our submission, whether the State court ‑  in this case the Liquor Court ‑ is performing a so‑called administrative function is not the issue.  The issue is that it is publicly perceived as a court staffed by a judge and it has been commanded by the legislature in what we submit is a quite inappropriate way.  But then if that were to fall away in your Honours’ reasoning we then submit that the same commands fall upon the Supreme Court and we submit that it cannot simply be washed away as a vice by saying, well, the Full Court of the Supreme Court is exercising an administrative function.  Three judges at that level cannot be so easily compartmentalised and pretended that they are not Chapter III capable judges who would be perceived by the public as acting in accordance with a legislative command.

KIRBY J:   In terms of the remedy that you are seeking in this Court, do I understand it correctly that you are suggesting that there would have to be a declaration and some form of severance of section 28A(5)?

MR CHURCHES:   Yes.  We cannot see any way of saving 28A(5).  Section 28A(1) is probably also ‑ ‑ ‑

KIRBY J:   Within the principles of severance have you said everything you want to say or written in your written submissions as to the availability of severance in this case?

MR CHURCHES:   We have not addressed it, although I think all our learned friends have.

KIRBY J:   I think the Commonwealth also makes some submissions about severance?

MR CHURCHES:   Yes.

KIRBY J:   Anyway, I am just flagging that there may be some issue there.

MR CHURCHES:   Yes, if I could save that for reply.

KIRBY J:   And as to the submission that what happens is that if you succeed that the result is simply that the Liquor Licensing Court cannot exercise federal jurisdiction.  That, I think, is suggested as the solution but that is a sort of boot straps argument.  That is at least what you contend, that that cannot be so because then you would never get a Kable issue arising.

MR CHURCHES:   Absolutely.  If my memory serves, the Commonwealth addressed that very firmly and resolutely and said that is not the way to do it.  That is back to front.

KIRBY J:   And do you embrace that submission?

MR CHURCHES:   Yes, absolutely, your Honour..

KIRBY J:   Very well.  Thank you.

MR CHURCHES:   Thank you, your Honour.

FRENCH CJ:   Thank you, Dr Churches.  Mr Solicitor for South Australia?

MR HINTON:   If the Court pleases.  Perhaps if I could start where your Honour Justice Kirby started, and that is, address the difference between the paragraph numbering of the report in the appeal book and that of the reported judgment.  In effect, we lose one paragraph.  That has come about as a consequence of the printer.  It is easiest to demonstrate it by showing the Court that with respect to the appeal book at page 158 you will see the paragraph numbers set out, 48, 49 and then 50 is obscured halfway through the reproduction of section 76.  When we come to consider the report ‑ the authorised report and the South Australian State Reports which appears in volume II of the second respondent’s materials at page 754 ‑ we see that what was broken up into paragraph 49 and 50, section 76, in actual fact becomes one paragraph and we follow the numbering on through there so there is a difference of one paragraph from that point on between the appeal book and the authorised report, if the Court pleases.

KIRBY J:   Yes, thank you for clearing that up.

MR HINTON: In the court below, the second respondent conceded that the Licensing Court is a court of a State within the meaning of section 77(iii) of the Constitution. The second respondent also conceded that as such, it was an institution upon which federal jurisdiction could be conferred and in fact, pursuant to section 39(2) of the Judiciary Act, in effect had been conferred.

In our written submissions we have submitted, conceded, that the Licensing Court in this case exercises judicial power.  I appreciate the submissions of the Solicitor for Victoria.  We do not back away from our concession.  Why is it judicial power?  As your Honours know, the answer depends upon consideration of a number of indicia.  We start, in our submission, with ‑ ‑ ‑

GUMMOW J:   I think the Solicitor for Victoria says this is all about creating rights, which is not ordinarily what courts in the federal sphere do.

MR HINTON:   True.  One of the indicia, if your Honour pleases, but not necessarily a decisive one.

GUMMOW J:   No, more than an indicia.  It is what the Boilermakers’ Case is all about, is it not, and other cases?  That was the vice of the old Court of Conciliation and Arbitration, was it not?  It did not just enforce awards, it made awards.

MR HINTON:   True.  Here, whilst there are no existing rights, in granting a license there is in effect rights created, a charter for future conduct created.  That is still indicative of an exercise of judicial power.

GUMMOW J:   The real question, it seems to me, is does that matter, this being a State court?  It is said against you that it does matter because that is all is does.  It is not like the Supreme Court which has a number of heads of jurisdiction, some of which may not be strictly judicial, some of which probably are.

MR HINTON:   It is not too dissimilar from the position in Thomas v Mowbray where one was considering the control order.  Now, that is not an example of where there is a pre‑existing right, it is a right brought into existence by the order of the court.  In that case it was held to be an exercise of judicial power.  So it is not decisive to say, in my submission, that just because there is no adjudication of a pre‑existing right, you do not necessarily have an exercise of judicial power.

What perhaps is more to the point in this case is what is meant when one looks at the content of the exercise of judicial power, in particular, by section 53(1) of the Licensing Act?  That gives an unqualified discretion.  Potentially an unqualified discretion does not set out any pre‑existing standard against which one would normally expect an exercise of judicial power to be exercised.

FRENCH CJ:   What does the word “unqualified discretion” say that the word “may” would not say?

MR HINTON:   Yes.  It immediately qualifies itself in some respects.  In my submission, it is not an unqualified discretion, but it appears that it is used in contradistinction to the absolute discretion that is mentioned in the Act, an example of which is very hard to find.  But when one considers section 53(1) and whether or not we do have an unqualified discretion, then the answer again provided, in particular by your Honour Justice Gummow I believe in Thomas v Mowbray, is that when one looks at the objects of the Act and the purposes for which the power is to be exercised and the statutory layout of the Act, et cetera, one quickly becomes aware of many factors that will be taken into account as part of the exercise of judicial method that will guide the court in exercising its discretion.  Here the objects of the Act are set in section 3 quite clearly.

We have grounds of objections set out in section 77(5) quite clearly.  We have the question of fitness to plead in section 55(1), we have the question of whether or not the applicant has sufficient knowledge and training to undertake the purposes required by the licence in section 55.  There is then the capacity to comply with mandatory conditions, section 42, examples of discretionary conditions in section 43.  We have compliance required with specific mandatory conditions in section 35 and we have the requirement of the proposed premises to be approved in section 59.  When one refers to each and every one of those factors as required by the Act upon a consideration of an application for a licence, we have, in my submission, sufficient guidance in the exercise of the standard against which an application will be considered.

In my submission, therefore, for similar reasons as those that moved this Court in Thomas v Mowbray to hold that it was an exercise of judicial power, a review of a control order, in this case we do have an exercise of judicial power by the Licensing Court of South Australia.  In some ways, perhaps, it is to invoke the chameleon doctrine in the hands of the Commissioner, the Liquor and Gambling Commissioner.  It is an administrative power, but in the hands of the Court, it is a judicial power.  If the Court pleases, those are my submissions on the reason why the second respondent made the concession that it did and it maintains its concession.  Again, another authority similar is that of Pasini, if the Court pleases.

GUMMOW J:   Do we not have to look at section 16 of the Act amongst other things:

The Court has the jurisdiction conferred on it by this Act or any other Act.

The first question, are there any other Acts that confer jurisdiction on the Court?

MR HINTON:   I stand to be corrected on that, but my answer is no, subject to doubling checking the Gambling Act, or the equivalent of the Gambling Act.

GUMMOW J:   That is what I am wondering.  Secondly, “jurisdiction conferred on it by this Act”, there are penalty provisions in this Act.  Is the Licensing Court involved in those?

MR HINTON:   The Licensing Court has no criminal jurisdiction.  The offences created will be proceeded with in the normal way, although its orders – I think it is section ‑ ‑ ‑

FRENCH CJ:   There is a whole section about disciplinary action, is there not?

MR HINTON:   Yes, which includes the power to suspend or revoke licences, section 121.  There can be the power to impose fines and disqualify a person from holding a licence.

GUMMOW J:   There is also provision for transfer of licences, is there not?

MR HINTON:   There is, your Honour.

GUMMOW J:   Does the Court get involved in disputes about transfer?

MR HINTON:   Yes, your Honour.

GUMMOW J:   Matters of discipline I record at first blush and transfer of licences could well be regarded as judicial activities.

MR HINTON:   True.

GUMMOW J:   So you cannot say, I think, at first blush that this Court is not a court that does nothing other than non‑judicial activities, even construing against you the nature of this creation of rights jurisdiction.

MR HINTON:   I agree with your Honour with respect.  You also, of course, have the implication from the action of the legislature itself, section 12, “The Licensing Court continues”.  Section 13, importantly, “The Court is a court of record” and that is important because that allows an order from the Licensing Court to be prayed in aid of any action taken against an individual for breach of the prohibition against selling alcohol.  If you were prosecuted for one of the offences under the Act for selling alcohol contrary to this Act, you could hold up your licence being an order of the Licensing Court.  That would not be subject to collateral challenge.

If it were, on the other hand, an administrative tribunal, then in the prosecution it can be subject to collateral challenge.  You do not have the same protection, an important point in my submission in determining whether or not we have an exercise of judicial power. 

FRENCH CJ:   Just as a matter of history, the court came into existence after the 1966 Royal Commission, is that right?

MR HINTON:   I can check that.  Your Honour would have me there.

FRENCH CJ:   Before that it was special magistrates, I think, who did these things?

MR HINTON:   Going back I think that was always the case, yes.  Another important aspect to consider on this issue is the appeal right to the Supreme Court that is provided for in section 27.  The reason I draw that to the Court’s attention is that when one considers the right of appeal to the Full Court of the Supreme Court of South Australia, one quickly notices that the nature of appeal as set out in that section is very similar to the nature of a review conducted by the Licensing Court under section 22.  The only real difference is section 27(4) that says:

An appeal under this section must be heard and determined by the Full Court.

as opposed to section 22(4) that says:

A review is in the nature of a rehearing.

Other than that, when one looks ‑ ‑ ‑

KIRBY J:   Where is that review provision that you have just last mentioned?

MR HINTON:   Section 22(4) contrasted with section 27(4) is the only real difference when it comes to contrasting the review with the appeal and no one suggests that the Full Court of the Supreme Court of South Australia on an appeal essentially guided by the same criteria is not exercising judicial power.  Again, explaining the concession made.

KIRBY J:   There is a suggestion in one of the submissions, and I forget which one, that, though called an appeal in section 27, it is in fact misnamed and is in fact a review, but that is hard to reconcile with the specific provision for review in section 22.  The appellants are criticised for calling it an appeal in one of the written submissions, but that is the language that is used by section 27 and that, as I recollect the cases, is one of the indicia that is significant for determining that there is a court and where the appeal lies to the Supreme Court or it picks up that court which is undoubtedly within the protection of the Kable principle.

MR HINTON:   Undoubtedly.  In my submission, it is quite appropriate to refer to it as an appeal.  The only real difference between this appeal – which would be in the nature of a rehearing – and an appeal in the nature of a rehearing – not a hearing de novo but just a rehearing as we would normally expect it – is the powers as provided for in subsection (5) in that they do not necessarily require error to be pointed to.  The Appellate Court has greater power, with respect, to considering the issues that are raised other than that difference.  It, in all respects, looks like an appeal.

KIRBY J:   Where does it say that the appeal is by way of rehearing?

MR HINTON:   If your Honour pleases, it does not say it.  There is a specific rule in the Rules of the Supreme Court of South Australia that says it is an appeal by way of rehearing.  That rule can be provided to the Court, if necessary, rule 292(1) of the Supreme Court Civil Rules 2006.

FRENCH CJ:   That specifically refers to appeals under this section, does it?

MR HINTON:   It does.  Appeals to the Full Court:

An appeal is to be by way of rehearing (unless the law under which the appeal is brought provides to the contrary).

FRENCH CJ:   That is an appeal to the Full Court?

MR HINTON:   Yes, your Honour.

FRENCH CJ:   This has to be “heard and determined by a Full Court”, yes, 27(4).

MR HINTON:   Yes.  Consistent with the practice in South Australia that wherever there is appeal from a judge of the District Court, which in effect the judge in the Licensing Court is, it must go to a court comprised of three.  If your Honour Justice Gummow pleases, Fardon’s Case is another example of there being no existing rights but an exercise of judicial power.  Bail is often given as another example.  So again, it is an indicia but not decisive.  Pasini, again, was the review of extradition.  The magistrate’s decision was administrative.  Subsequently, the review was held to be an exercise of judicial power.

Importantly, in that case it was said that in some respect the review required that there be an error in some respect identified that renders the rights or liabilities of the person to whom it relates other than as set out in the decision.  So whilst perhaps not a specific error needs to be identified, it is demonstrated by the different result.  Again, section 22, the review, is similar in that it concentrates or focuses upon or permits a substituted decision where there is reason to think that the rights or liabilities of the person to whom the original decision relates are other than as set out in that decision.  If the Court pleases, those are the submissions as to why the concession was made and is maintained in this Court.

I turn then at this point in my submissions to deal with the Kable doctrine.  Since Kable this Court has continued to develop the principles derived by implication from Chapter III.

GUMMOW J:   We will need to know at some stage, Mr Solicitor, what you say about construction of the sections before we jump into Kable’s Case.

MR HINTON:   If your Honour pleases, I intended to structure my submissions in terms of dealing with the Kable principle and then go into the construction of the section and then, having done that, coming back and considering whether or not the section offended the Kable principle.  But I can go to the section, if your Honour pleases, immediately.  When one comes to consider section 28A ‑ ‑ ‑

GUMMOW J:   Of the Liquor Licensing Act?

MR HINTON:   Of the Liquor Licensing Act.  I should pause to point out that the Court’s paperwork, for want of a better word, calls it the Liquor Licensing Court.  In actual fact, one will see from section 12 that it is the Licensing Court of South Australia.  But when one comes to consider the operation of section 28A, in my submission, one does need to take into account the context in which it will be enlivened.  Many of the questions this morning from your Honour Justice Kiefel and your Honour Justice Crennan touched upon the context in which section 28A would be enlivened.

It is important, then, to observe section 75A, as we have already touched upon, the power of the Commissioner to intervene.  That is what did occur in this case.  It is important to observe that that power to intervene is limited to three conditions, albeit that they are broad; fitness, public disorder or disturbance in the event that the application is granted and that it would be contrary to the public interest to grant the application.

It is then important to go to section 51A.  As the Court has already observed, all applications for licences are to be provided to the Commissioner.  In that way the Commissioner gets notice and can determine whether or not he chooses to intervene.  Section 51A(3), as the Court has already touched upon, requires the Commissioner of Police to transmit certain evidence to the Liquor and Gambling Commission.

GUMMOW J:   Do you say that provision has to be read with section 28A(1)?

MR HINTON:   Yes, your Honour.  In this case, appeal book page 64, the Police Commissioner intervened on the question of the appellants’ fitness.  Further, a copy of the notice of the intervention was provided to the appellants, appeal book 63 and 28.  That, as your Honour Justice Crennan I think pointed out, was not something that was required.  The actual notice did not have to be served by virtue of the operation of section 28A(3)(a).

KIRBY J:   But is not a clear distinction not drawn to the reference to criminal convictions in section 51A(3)(a), other information in section 51A(3)(b) and criminal intelligence, which has been classified in section 28A(1) and (5)?

MR HINTON:   Yes.

KIRBY J:   So there is a distinction in the statute between the status and what happens to each of those categories of information?

MR HINTON:   There is also a practical distinction.  Your antecedents are not something that is ever going to satisfy the definition of “criminal intelligence”.  You know them, they are in the public domain.

KIRBY J:   They could be in a file of criminal intelligence.

MR HINTON:   They could be, but they are easily excised and provided to you and provided, indeed, to the Commissioner.  So we are really talking, when it comes to criminal intelligence, and in particular section 28A(1), about information that is potentially provided under section 51A(3)(b).

HAYNE J:   Section 28A(1) is a subset of the 51A(3)(b) material, is it not?

MR HINTON:   Yes, your Honour, but not exclusively.  There is nothing about section 28A that suggests that the Police Commissioner could not bypass the Commissioner of Liquor and Gambling and, through his representative before the Licensing Court, still seek to tender criminal intelligence.  To that extent my submission will be ‑ ‑ ‑

HAYNE J:   That is a fairly bold submission, Mr Solicitor, which we may well have to consider, but there we are.

MR HINTON:   I will come to that in dealing specifically with section 28A.  We are at the point, though, where we have the application, we have the notice of intervention, it was served and provided in this case, although that was not required by virtue of the operation of section 28A(3).  Subsection (4) we do not have to concern ourselves with but, interestingly, if your Honour Justice Hayne pleases, Part 8, which is addressed by subsection (4), deals with the question of disciplinary proceedings.  The Commissioner is not involved in disciplinary proceedings before the court, so there is not that same capacity to transfer the information made before the court.  The complaint is laid in the court.

The notice requirement in subsection (3)(b), in my submission, alerts a licence applicant to the Commissioner’s intentions.  Access to the Act provides an applicant – and this is building upon, I think, questions asked by your Honour Justice Crennan about the extent to which you do know what is happening – with notice that the substance of the criminal intelligence generally, of course – and, again, a question that your Honour the Chief Justice raised about, could you give evidence in response?  And the answer was that you could, but again it is at a general level because you do not have access to the material.  So you are alerted to the fact that the Police Commissioner relies or will rely on criminal intelligence.  That leads you to the definition and the scope of it.

The relevance to the review of such material will almost invariably, in my submission, practically relate to the question of fairness.  It is difficult to conceive of a situation where criminal intelligence, minded of the definition, could relate to a disturbance or public disorder in the event that you are granted your licence or the public interest other than the fact that you are not a fit and proper person by virtue of your own antecedents or the associates you keep – and I use “antecedents” in the broadest context there. 

So an applicant confronted by intervention, in my submission, knows of the general nature of the material constituting criminal intelligence, so it is not something that can be compared with an application ex parte, where no one is told.  The notice informs the applicant of the Commissioner’s intent, makes clear the source of the objection and the basis when one refers to the Act and makes clear, importantly, that it is a party independent of the court that has intervened.  It moves not from the court but from the Commissioner of Police. 

At that point I pause to point out that section 28A is inserted into the review proceeding, in my submission, and it is contemplated by doing so, that it will operate in the context of an adversarial proceeding, accepting all that goes with that proceeding, save where it specifically provides otherwise.  Now, immediately section 23 comes to mind, the Licensing Court:

(a)must act without undue formality; and

(b)is not bound by the rules of evidence ‑ ‑ ‑

GUMMOW J:   Are you saying something, Mr Solicitor, to the effect that criminal intelligence situations will arise in licence grant situations, not more broadly?

MR HINTON:   It can arise in license transfer situations.

GUMMOW J:   I am just looking at section 28A(2)(a).  There is a wide range of steps under the Act and it postulates that there may be a decision based upon criminal intelligence right across the structure of the Act.

MR HINTON:   Yes.  No, I was not seeking to restrict it to only grants of licence, no, your Honour.

GUMMOW J:   All right, thank you.

MR HINTON:   Clearly, it applies beyond that.  What I am attempting to do is in the course of dealing with the construction put it into the context of what will happen in the Licensing Court on a review.  My last submission was that it is contemplated that section 28A operates in the context of an adversarial proceeding, minded that section 23 provides that:

the Court –

(a)must act without undue formality; and

(b)is not bound by the rules of evidence –

In my submission, that does not mean that we do not have an adversarial proceeding.  It does not mean that the rules of evidence cannot be brought into play.  It provides a discretion.  There are many authorities where a provision such as this is contained in the legislative instrument that indicate that it is not that you throw the rules of evidence out or you are told not to invoke them, it is that you have or you can bring a relaxed approach to them.

Now, the rules of evidence are terribly valuable in the course of fact‑finding and so they can be brought to bear if required.  One reason to bring them to bear would be the consequence to an applicant of criminal intelligence being used by the Court, and I will come to that point in a moment as to how the rules of evidence can be brought to bear in a situation such as this.

KIRBY J:   I notice that it is 27A that constitutes Division 6 of Part 2 of the Act, so presumably originally there was not a Division 6 dealing with criminal intelligence.  Do we have the second reading speech or ‑ ‑ ‑

MR HINTON:   I believe we have it at the Bar table.  Was it 28 ‑ ‑ ‑

KIRBY J:   ‑ ‑ ‑ how historically this division came into the Act?

MR HINTON:   Division 6, your Honour?

KIRBY J:   Yes.  Was that added after the original Act?

MR HINTON:   Yes, your Honour, inserted – the footnotes in our ‑ ‑ ‑

KIRBY J:   And 28A is the only section of that division dealing with criminal intelligence, and that is the heading both of the division and the section?

MR HINTON:   The whole division was inserted, Division 6, subsequent to the passing of the original Act in 2005, I am told.

KIRBY J:   Is there a second reading speech available to let us understand what the mischief was that led to the introduction of this?

MR HINTON:   We do have it at the Bar table, yes, and copies can be made, yes, your Honour.

KIRBY J:   Well, at some stage I would like to have a look at that.

MR HINTON:   If your Honour pleases.  I will come back to where your Honour Justice Crennan was, and that is, when it comes to the hearing of a review, can the applicant turn up?  The answer is clearly, yes, all parties are in attendance.  It is a rehearing, therefore it proceeds on the information before the Commissioner plus any additional information that may be provided.  Nothing in section 28A – and I will come back to this – requires the Court to admit the criminal intelligence for the purposes of considering the application for a licence.

KIRBY J:   Yes, but that is a little unrealistic, is it not?  The Commissioner of Police, the high officer of the police, comes along with what he says is criminal intelligence which is tendered as relevant to whether or not in the public interest the application should be refused.  It is asking an awful lot of a court in those circumstances to say, well, we are not going to receive it, and in particular when the court cannot hear a contradictor, which is the normal way our court proceedings operate.

MR HINTON:   Well, it may well be that in the vast majority of cases acceptance of it is not denied, but there is still the opportunity to take the point, even though you cannot see it.  Just like on an application for public interest immunity the parties attend.  One party does not have access to the material, does not know what they are arguing about, but they can insist on the applicant jumping through a number of hoops before the order is made potentially that it should not be disclosed.  In this case, you can still take similar steps.

KIRBY J:   It does not sound as though the hoop is very visible.  You do not know what the hoop is.

MR HINTON:   In context, the hoop, the first hoop, would be that your Honour the licensing judge on this application should not consider this material, the criminal intelligence, until such time as you are satisfied that it is the same material that was before the Police Commissioner.

KIRBY J:   But it is the Police Commissioner who is seeking to intervene under 51A.

MR HINTON:   The Police Commissioner, if your Honour pleases, will not attend court.  He can appear through one of his officers.  My point is you can put him to strict proof. 

KIRBY J:   I am not talking about the Police Commissioner personally.  I am talking about the office.  The application is to be given by the Police Commissioner, is it not, under 51A of the Act?

MR HINTON:   You can insist that the court is satisfied that that material was the material in front of the Police Commissioner. 

CRENNAN J:   What about being satisfied that that material can be characterised as criminal intelligence having regard to section 4?

MR HINTON:   I am coming to that, your Honour, with respect.  Once you are satisfied that that was the material before the Police Commissioner, you are then entitled to insist upon the court being satisfied that that was all the material that was before the Police Commissioner, because before you go to the next step, George v Rockett, you need to know what was the material in front of the Police Commissioner.  So you can put to the court, “I have not seen it.  I do not know what they have got, but before you use it, my submission is you should insist upon this”.  The court can also insist upon that step.  Then when you know that it was the material before the Police Commissioner, and you know exactly what he had before him in the course of making his Commissioner – you can then take the step that your Honour Justice Crennan was taking me to.

FRENCH CJ:   I suppose if the applicant turns up in court and gives what Dr Churches might dismiss as “good bloke” evidence, but fairly exhaustive evidence about his personal history, absence of any contacts with persons of any known criminal association or known to him, absence of any involvement in planned or other criminal activity, perhaps supported by character witnesses, the confidentiality provision would really probably have the effect of preventing effective cross‑examination.  In other words, the court would be left with that evidence, effectively uncontested if it is inherently believable, against – and not tested by reference to the criminal intelligence.

MR HINTON:   That is what happened in this case.  Although the Licensing Court judge did not read the transcript, one can see that he is advised that the second appellant gave evidence before the Commissioner.  The Licensing Court judge is astute to ask, did it affect in any way the criminal intelligence?  The parties do not answer.  He is not required on the review.  They say it is enough for the review.  Just read the criminal intelligence.  So he is not asked to go and read the transcript as well.  It is not put before him.  So that position could very well arise.

FRENCH CJ:   It was treated as a kind of threshold question; if that is enough, then we have had it, as it were. 

MR HINTON:   That is what was conceded without knowing what was in the material, but not a necessary concession.  Whilst we are on that point about the evidence that was before the court, not only did the second appellant give evidence in person, but the references at the bottom of appeal book page 2, over onto page 3, the statutory declarations – my instructions are that those statutory declarations were in the nature of character references, all tendered on behalf of the applicant.  So your Honour the Chief Justice is quite right. 

You can get the situation where you have two opposing bodies of evidence and the Police Commissioner is put in the position where he must choose, “Do I decide now to change my classification and cross‑examine and put to the second appellant what is in this material, or do I run the risk that the Licensing Court judge, in the course of deciding how to use the material, will not give it the weight that I would want him or her to give it because it is untested.  Not just that; the applicant has given this evidence that also is untested.”  So there are many things that can be done and so far no one has been excluded from the courtroom.

KIRBY J:   Well, “many” might be overstating it.

MR HINTON:   Sorry.  There are a number of things that can be done and so far no one has been excluded from a courtroom.  You might go so far as to give evidence and say, “Look, I have a fair idea what is in there.  My neighbour is often in the paper, styled as a member of the mob, lucky not to be in prison, regularly at my house, godfather of my eldest son.  But I tell the Court that that is where it finishes.  We have no financial involvement at all.  Here are my financial records.  When I run this business for which I seek a licence, he will not be involved at all.  Here are the shareholders in the corporate entity”.  Then you put the Licensing Court judge in a position, if indeed you have guessed correctly. 

The guess – I appreciate your Honour Justice Kirby’s position – is not the best, but you are not in a position where you do not know anything.  You are not in a position where you are restricted from answering whether or not you are a fit and proper person.  You can put the Licensing Court judge in a very difficult position as to what weight to give to evidence.  Section 28A, whatever else, whatever other construction might be given to it, says nothing about the use that the Licensing Court is to make of the evidence once admitted.  It is entirely up to the judge to decide what weight to give it.

KIRBY J:   Yes.  I just live in the real world, Mr Solicitor.  The judge gets this material from the high Police Commissioner and the person who is most affected is not able to even have a clue as to exactly what it is and cannot answer it.  It is just asking too much, asking too much.  The judge has to somehow solve the problem.  That is not the way our court system operates.

MR HINTON:   I do not back away from the fact that it introduces an element of unfairness where our traditional notions would not permit it.

KIRBY J:   If you read Sir Ninian Stephen’s dissenting opinion, later upheld in the Yugoslavian tribunal in Tadic, you will see what the problem is, that much criminal intelligence, so‑called, is gossip, hearsay and prejudiced and wrong; in that case seriously wrong.

MR HINTON:   There are two responses to that that can be made by the Licensing Court.  Firstly, in my submission, we had the George v Rockett response, the position that your Honour Justice Crennan was taking me to moments ago.  In my submission, the definition of “criminal intelligence” is such that it would permit a judge of the Licensing Court to be satisfied that the factual material before the Commissioner is reasonably capable of supporting the Commissioner’s decision.  I will come to the definition in a moment that permits that.  That is the first antidote.

The second is, in terms of use there is nothing in section 28A that denies the Licensing Court judge a discretion to exclude it.  Again your Honour Justice Kirby might say, well, I am not perhaps in the real world when I make that submission.

KIRBY J:   Do not single me out in this.

MR HINTON:   But one can expect when you are dealing with criminal intelligence, as your Honour Justice Kirby quite rightly said in taking us to Sir Ninian Stephen’s judgment in Tadic, that you will get all kinds of rumour, innuendo, et cetera, but the more tenuous the source, the less weight.  The more tenuous the source, the more likely that a judge will exclude it in the exercise of their discretion.  This evidence not invariably but often will be hearsay and potentially hearsay upon hearsay.

The more you get from the source, the less comfortable anyone would be in giving it weight.  The more you either decide to exclude it or potentially, as is contemplated by section 28A(5), you require the Commissioner to call evidence.  I am not going to rely upon it unless I hear the informant, or something that verifies it and it is contemplated by section 28A(5) that that may well occur.  It is evidence to hear argument about the information.  It is broad.  So the Court can require steps to be taken to at least give it greater comfort.  Your Honour Justice Kirby asked – and I am sorry to single you out – one of the questions you asked in the course of my learned friend Dr Church’s submissions was whether or not a public interest immunity claim can be made in the absence of the other party.

KIRBY J:   No, excluding the other party.

MR HINTON:   Excluding the other party.

KIRBY J:   In private.  When they are there, available, willing, wishing but excluded.

MR HINTON:   So far, in my submissions, we have not got to the point of excluding anybody but in answer to your Honour’s question, you can.  It was provided for, or it was dealt with in the – I think it was the Court of Appeal or the House of Lords in R v Davis and Rowe, an English case about the use ‑ ‑ ‑

KIRBY J:   Yes, but the Court of Appeal was reversed by the House of Lords.

MR HINTON:   I think it was reversed by the ‑ ‑ ‑

KIRBY J:   They said that is not the common law and, with respect, I think there is a lot of force in their Lordships opinions, the majority.

MR HINTON:   Davis and Rowe went to the European Court and when it was there – your Honour is quite right – it was reversed, but the antidote that was subsequently used and developed at common law was to instruct special counsel.  That is an option developed at common law if the judge is uncomfortable about taking a more proactive role, as is possible – not just possible – as indeed perhaps they should.

KIRBY J:   The House of Lords was uncomfortable and declined and they do not have Chapter III.  We do.  I mean, as I conceive this case the issue in the case is whether or not this step taken in this little South Australian statute becomes a step in a direction which Chapter III forbids and which this Court should stop in its tracks.

MR HINTON: That is the issue. I am in the course of attempting to paint for your Honour a picture about how there are along the way a number of safeguards because ultimately the question will be, is the Licensing Court performing this function as part of a review operating in a way that it comprises its institutional integrity such that it is no longer a court within the meaning of section 77(iii) of the Constitution. That is a question of degree. In my submission, that will be that that is a question that involves weighing a number of factors and determining whether or not what we have bears sufficient relation of the words used in Boilermakers’ Case, although in another context, but sufficient relation to what is contemplated in Chapter III as being a court of a State.

We then go, if the Court pleases, to that definition of “criminal intelligence”.  Your Honours Justice Hayne and Justice Crennan and, indeed, Justice Gummow, have in a large part stolen my thunder.  My submission is George v Rockett applies.  When one looks at that definition, there are a number of jurisdictional facts, if you care to call them that, or there is undoubtedly a factual position that has to be established before one can then go the second step which the Police Commissioner is required to do.  That is a review that the Licensing Court at that step can undertake before it accepts the material.

I appreciate that that does not put us on all fours with the position of the Western Australian Supreme Court in the Gypsy Jokers’ Case where section 76(2) permitted a more broad review, but, in my submission, the fact that that review can be conducted means that there is a degree of superintendence by the court.  That ultimately, in my submission, means that the Kable doctrine does not have the effect of rendering this no longer a court of a State for the purposes of Chapter III.

HAYNE J:   Just before you go into that branch of your submission, in order to understand better than I presently do the course of events, particularly in the Liquor Licensing Court, do I understand the relevant material to be revealed, as far as it is, at page 5 of the appeal book where counsel for the then appellant – the present appellant – between lines 9 and 19 identified the question as being whether the material before the Commissioner provided a foundation for finding against Mr Krasnov?  And so far as events before the Commissioner are concerned, am I right to understand that I need to bear in mind, from the record in the Supreme Court, firstly, the affidavit of Assistant Commissioner Glynn at page 93 where she deposes to a conclusion of classification but nothing further and she, in effect, maintains the continuity of documents? 

You get a chain of evidence type affidavit from the Assistant Commissioner and then Mr Jakacic’s affidavit in the Supreme Court, at page 139, particularly paragraphs 10, 11 and 12; 10 requests further and betters from the then applicant, refused; 11, application called on in the Commission.  Again, all you get is, “I tender the files”, the files were admitted, the contents were not disclosed, the Commissioner did not read them and counsel for the applicant did not ask the Commissioner to provide a summary of the hearing.  Is that the sum total of what I have in the appeal book about what happened below?

MR HINTON:   Yes.  That is how it is to be pieced together.  There is no transcript kept of these proceedings.  There may be a tape of the Licensing Court.  I suspect it is like the Magistrates Court in this State where we rely upon the longhand note taken by a clerk and, if a specific request is made, then it is produced.  If no request is made, then we will proceed upon the affidavit of counsel that attended, unless there is a dispute.

KIRBY J:   There is a minority in this Court – I think it was Chief Justice Barwick – said that in the absence of a transcript that is a proper course to take.

MR HINTON:   Thank you, your Honour.

HAYNE J:   What we know from Mr Jakacic’s affidavit at 139 is that the applicant was on notice that there was going to be such material referred to the relevant statutory definition and, at least as I understand your submissions thus far about the construction of 28A, you would say it would have been open to the applicant to have demanded before the Commissioner, if needs be by cross-examining someone, “Do you connect this information with current criminal investigations?  Do not tell me what they are, but is that the basis on which you are acting?  Are you connecting this information with the revelation of confidential sources?  Do not tell me what they are”, et cetera, but in effect conduct a limited cross-examination along those lines.

MR HINTON:   Yes, that can be done.  The notice of intervention at paragraph 64 of the appeal book is actually provided to – just adding to your Honour’s recitation of what occurred – is actually provided.  If one looks at it, it makes it clear; it actually refers to section 28A.

HAYNE J:   Yes.

MR HINTON:   And then when we go to the transcript of the Licensing Court, as your Honour took us to, you will see that counsel for the applicant had put two and two together and works out what it has got to do with his fitness.  I do not know and I cannot help the Court as to what evidence Mr Krasnov gave, but again coming back to what the Chief Justice said, he could have sung his praises, going back to when he was a boy scout and how well he did, et cetera, et cetera, coming right through to the modern day.

KIRBY J:   I did not hear that.  What did you say?

MR HINTON:   He could have given evidence, tracing his history back for a long way.

KIRBY J:   This is the good bloke evidence.  He is really a very good bloke.  “I do not know what nastiness you are revealing about me but I am a very good bloke, so trust me.  Do not trust the Police Commissioner or unexaminable material”.  I mean, really, let us get real.

MR HINTON:   With respect, Justice Kirby, you would not go so far as to say, “Trust me”, but it would be, “Please take this into account, my evidence, weigh it when you are looking at that ‑ ‑ ‑

KIRBY J:   “My evidence, undirected at anything that I know”.  This really, as Lord Steyne says, sounds very much like the trial.

MR HINTON:   “It is directed at my fitness, because when one actually looks at the notice, not just the notice, but when one traces through the steps that can be taken by the Commissioner under the Liquor Licensing Act, it will almost invariably be the case that what is ever in that envelope relates to my fitness.  So, in assessing it, take into account my evidence and if the Commissioner wants to ‑ ‑ ‑

KIRBY J:   Is it not the question, there will always be some evidence that cannot be disclosed simply because it is criminal intelligence or for some other public interest immunity?  The question is whether the way that it has gone about it here and purportedly trusting it to a court, but then effectively taking it away from the court for any real discretionary decision, is permissible within the Australian judicature.  The question is not whether there is some material that cannot be accessed.  The question is whether it can be forbidden any access at the gateway, not by the court, not by order of the court, but by an administrative direction of the Commissioner that effectively prevents the person affected from having even some general hint, some direction, some expedient which is the way we have done it in the past.

MR HINTON:   My submission in answer to that is that the Police Commissioner does not dictate to the extent that the George v Rockett review of the criminal intelligence can be conducted by the Licensing Court and the applicant can insist upon it.  When one looks at the definition of “criminal intelligence”, as your Honour Justice Hayne pointed out, there are a number of factual matters that have to be established before the Police Commissioner goes on to exercise his discretion in determining whether or not this information, the disclosure of it, could reasonably be expected to prejudice criminal investigations.

It must relate to actual or suspected criminal activity, not charged and your Honour Justice Hayne in the limited cross‑examination you just demonstrated can show that that can be put to the Court, insist upon it.  It must be something that relates to criminal activity under investigation or that may be investigated and/or it must be provided to police by a source in circumstances of confidentiality.  There is in the criminal law a number of steps that have to be taken before it is accepted that this is the information of an informant.  Just because someone told a police officer on the street something about your applicant does not make them an informant for the purposes of the criminal law.  It must be evidence or information given in circumstances of confidentiality such that we do have an informant, rather than just a person providing information.

So there are a number of steps that have to be undertaken, factual matters that have to be established, before we then go to the next step.  So, in my submission, it is open to the Licensing Court to review the classification to the extent that it must be satisfied that the factual material was reasonably capable of supporting the Commissioner’s opinion; George v Rockett, if the Court pleases.

KIRBY J:   Now is there not a problem – I think Dr Churches mentioned this – that the George v Rockett inquiry is made normally ex parte at the point of seeking a search warrant or something of that kind.  That is at an earlier stage than this.  This is at the point of actually deciding the substance of the matter where in the nature of things in the preliminary stage the person affected is not and cannot be available.  You cannot ask a person to come along at that stage if it is done ex parte, whereas at this point by definition the person affected is available, is there, is able to respond in whatever limited way is appropriate to the circumstances, but does not get the chance to do so.  Is that not a valid point of distinction?

MR HINTON:   The person is available, can come along, can make submissions, but is inhibited to the extent that they do not get access to the actual information.

KIRBY J:   Or anything?

MR HINTON:   Well, not or anything.

KIRBY J:   Normally the expedience that – I have done it myself in the Court of Appeal quite often where objections were taken and upheld to access as such, but then the way our courts have done it in the past is by using expedience that so far as you can without disclosing the material allows a person to, as it were, confront the substance of the problem that is said to affect their substantive rights at law being determined by a court of justice in our judicature.

MR HINTON:   I would be repeating my submissions to the extent that I have said there is the notice provision, there is the ability to track the notice to the legislation, and from the legislation to be alerted to the issue, invariably fitness.  It is also important to bear in mind that the definition of criminal intelligence is relatively narrow.  It can have no doubt – it can be the defining material, but it is not anything in the possession of the police that has not been revealed publicly, it is a particular type of material.

So you do, with respect, have some knowledge of what this is all about and you do have the capacity to insist upon some steps being taken that protect you despite the fact that you do not have access to it.  The mere fact that you can make those applications to a judge and ask a judge to take on this function for you shows the institutional integrity with which the licensing court itself is vested, if the Court pleases.

I should take a moment to make submissions specifically on the relationship between subsection (1) and subsection (5).  In passing I have dealt with them.  Section 28A(1) is linked to section 51A(3)(b).  Who was in possession of the information?  I think that is a question your Honour Justice Gummow asked.  It is the Commissioner, the command, the Commissioner of Liquor and Gambling is directed to the Commissioner.

Section 28A(1) does not apply to the Licensing Court.  It is section 28A(5) that applies to the Licensing Court, as your Honour Justice Hayne pointed out, upon an application being made.  There is no command until such time as that application is made.

FRENCH CJ:   On that basis could the – I think I asked this earlier of someone, Dr Churches perhaps – could the legal representatives of the applicant as part of a confidentiality regime be given access to the material in proceedings in the Licensing Court if you disconnect (1) and (5)?

MR HINTON:   If you disconnect (1) from (5) the answer is “yes” because you are no longer dependent upon the approval of the Commissioner of Police.  In answer to your Honour Justice Kiefel, including steps to receive evidence and hear argument, are examples, in my submission, of the sort of steps that may be taken, they are not compelled.  Whilst you must on the application take steps, what those steps are is entirely a matter for the court.

Interestingly, in my submission, subsection (5) contemplates that the court will hear evidence and submissions about this material, important, in my submission, when it comes to the question of whether or not you do use it.  If you do use it, what use you are to make of it.  If you are to make any use of it, whether or not you want certain aspects of it verified or want certain portions of it actually the subject of evidence from the informant, for example, or the particular officer in the investigation.

That is all the material that could be given, evidential material that the court could insist upon, and then steps would have to be taken with respect to it.  If you did get that far and you did require evidence from the informant, for example, then you may get to the point where you exclude from the court the applicant and their counsel, but you do not necessarily get there straight away, it is but one possible option depending upon how the court seeks to deal with it.

FRENCH CJ:   But the point is, it is not a necessary option in respect of criminal intelligence that counsel be excluded.

MR HINTON:   If you disengage subsection (1) from subsection (5) your Honour is quite right.

FRENCH CJ:   Well, do you do that?  You do that, I thought.

MR HINTON:   That is my submission, yes.

FRENCH CJ:   Yes.

MR HINTON:   What I have attempted to do is to show the Court how section 28A operates as a rule of procedure and a rule of evidence, leading up to the point where I allude to the many cases that say, the legislature has power undoubtedly to prescribe rules of procedure and rules of evidence that courts must apply.  I also lead up to the point where that power extends to modifications to procedural fairness, as we have here.

KIRBY J:   Did you say as a normal rule of evidence?

MR HINTON:   As a normal rule ‑ no, not a normal rule of evidence; as an exception, but a power, a power to do it nevertheless.  There are examples, many examples, that are given in all the submissions.  I think Tanos was a very early example where on an ex parte hearing there was a declaration of a disorderly house made by Justice Walsh that lasted for four months and you could only respond to it by particular evidence.  That went to the High Court, exceptional, but still an act that is available.

There is the case of  Williamson v Ah‑On back in the days of the White Australia Policy, an immigrant court that did not pass ‑ ‑ ‑

KIRBY J:   We are going back to that now, are we?

MR HINTON:   I see your Honour Justice Kirby roll your eyes.  It is not an authority necessarily in support of the White Australia Policy, but what it does establish is that proof by averment in the complaint is not offensive to the exercise of judicial power provided that there is the opportunity to answer it.  We come forward in time and we get to Nicholas’s Case and where a court is told ‑ we know what this Court said in Ridgeway, you are no longer to take that into account in exercising your discretion; still an exercise of judicial power.  We do not have such an intrusion that it no longer answers the description of a court. 

KIRBY J:   What was the White Australia Case?

MR HINTON:   Williamson v Ah‑On.

KIRBY J:   I shall have to have the pleasure of reading that one.

MR HINTON:   If your Honour pleases.

HAYNE J:   The Court looked at it in connection with averments in whatever the Customs Office is properly now called – Chief Executive Officer of Customs v El Hajje.

MR HINTON:   It is often cited in a number of other cases where challenges to presumptions are made – held the presumption does not exclude a judicial inquiry, judicial power is still exercised and part of, no doubt, a consideration of the Kable doctrine is looking at the impact upon the exercise of judicial power.  So if we have those examples ‑ ‑ ‑

KIRBY J:   But there must be a point at which the Parliament is limited by the true nature of the judicial function, certainly in Federal Courts and possibly under the Kable doctrine ‑ weak though it apparently is ‑ from preventing a court from doing court‑like functions.  That is the whole point of the separation of the judicial power and its protection in Federal Courts and, to the extent that Kable says, in State Courts.

MR HINTON:   Your Honour is quite right.  There must be a point and largely, at the end of the day, this case is about, on the facts of this case, have we passed that point?

KIRBY J:   Quite.

MR HINTON:   I will come to that in discussing the Kable doctrine in a moment, if your Honour pleases.  I just want to finish up on my submissions on section 28A by saying that the position of the Licensing Court is similar to that of the Supreme Court in Gypsy Jokers in that there is that capacity to conduct that review.  If this Court accepts that, then like the legislation, the Corruption and Crime Commission Act, like section 76(2) in that Act, this provision, section 28A(5), is valid.

In the context of the Kable doctrine which I will move to discuss now, the Licensing Court is not reduced to the alter ego of the executive.  It remains independent and impartial.  If I can move then to the Kable doctrine just quickly.

KIRBY J:   Do you accept the correctness of the Court of Appeal of Queensland decision in the criminal corruption legislation case?

MR HINTON:    The Criminal Proceeds Case, no, if your Honour pleases, a misapplication. 

KIRBY J:   So there is only one Kable Case.  The high principle in Kable only applies to Kable, in your submission.  You cannot even conceive of another case, nor can all the learned representatives of governments assembled here today.  Just one case.  It seems very unlikely as a constitutional doctrine.

FRENCH CJ:   I suppose our concern is whether it is this case.

MR HINTON: We are concerned with this case. We are anchored. We are limited to the Constitution we have.

KIRBY J:   Yes, but we have to understand the doctrine in order to apply it to a particular case.  You cannot have ad hocery in constitutional elaboration, at least you should not.

MR HINTON: I agree with your Honour, and so in drawing implications, there are strict requirements that this Court has held in determining whether or not it is necessary from the text of the Constitution and that may well be why there is such a limited application for the Kable doctrine is because we are limited to the text and what is necessarily implicit in it.  Since Kable this Court has continued to develop the principles derived by implication from Chapter III but not too long ago in Forge v Australian Securities and Investments Commission at paragraph 63 your Honours Justices Gummow, Hayne and Crennan referred to the “principle is one which hinges upon maintenance” by the States of institutions exhibiting “the defining characteristics of a State Supreme Court” within the meaning of section 77(iii). The implication, the principle, anchored back to section 77(iii) to the text of the Constitution, as I was just saying.

The Chief Justice at paragraphs 40 to 41 of the same judgment, with whom Justice Callinan agreed, held to similar effect.  In our written submissions we have addressed the Kable doctrine and for the reasons set out at paragraphs 21 to 28 we submit that the approach taken by your Honours Justices Gummow, Hayne and Crennan, focusing on the question whether the State court in question continues despite any impugned function properly to be described as a court of a State with the capacity to administer the common law system of adversarial trial, is the correct approach.  So, the question in this case becomes whether section 28A of the Liquor Licensing Act so compromises the Licensing Court that it no longer answers the description of a court of a State within the meaning of section 77(iii) of the Constitution.

That begs the question that your Honour Justice Kirby was asking, what is a court of a State?  Jurisprudence from this Court has shown that minimum essential requirements include independence and impartiality.  It is a body also that exercises ‑ ‑ ‑

GUMMOW J:   Do you rely on Justice Kenny’s judgment in the recent Tasmanian case in the Federal Court?

MR HINTON:   If your Honour pleases, I have not had the chance to read it.

GUMMOW J:   It is in the materials.

MR HINTON:   I cannot answer your Honour’s question.  I have not had the benefit of reading that judgment.  Those three characteristics, a body that exercises judicial power that is independent and impartial between the parties ‑ ‑ ‑

GUMMOW J: It is in 169 FCR 85 at 138 and it is in volume 1 of your materials.

MR HINTON:   Thank you, your Honour.

GUMMOW J:   Anyhow, do not stay to read it now.

MR HINTON:   Thank you, your Honour.  I was dealing with the question of what is a court of a State.  As indicated, this Court has made clear that it is independent of the other branches of Government, that it operates from a position of impartiality and that it exercises judicial power.  Those three characteristics contribute to the institution of integrity of a court, so we then restate the question; does section 28A of the Liquor Licensing Act so affect the exercise of judicial power by the Licensing Court or the independence of the Licensing Court or the impartiality of the Licensing Court so that it no longer answers the description of a court for the purposes of Chapter III?  That, stated that way, is similar to the way in which your Honours Justices Gummow and Crennan dealt in Thomas v Mowbray with the provisions there impugned. 

Do the provisions, your Honours said, oblige issuing courts to act in a manner inconsistent with the essential character of a court or with the nature of judicial power?  The essential character – “essential” is a word that often features as we look for ‑ coming back to my earlier submission ‑ indicators of sufficient relation.  The answer is one of degree.  It necessitates consideration of the impugned function against the backdrop of the nature of the jurisdiction in the light of the expected constitutional role of a court.  An indicator in Forge, resonating in the judgment of Justice McHugh in Fardon, of whether or not a court exhibits institutional integrity is the bias principle.

FRENCH CJ:   You have made some reference to the adversarial character of the proceedings.  They were adversarial in this case, but they need not be adversarial, need they?  That is an accident of whether they are objectors or an intervention by the Commission.  Otherwise the court still has responsibilities on a review, presumably, to be satisfied of the criteria required for the grant or refusal of the licence, as the case may be.

MR HINTON:   Yes, if your Honour pleases.  In Boilermakers Case, in the context of determining whether a particular function belonged to or was incidental to the judicial power of the Commonwealth or a particular head of power, the Court proposed a test that it was a matter of whether or not the power under question bore sufficient relation to the principle or judicial function or purpose to which it may be thought necessary.  In my submission, when it comes to dealing with the Kable doctrine, minded of history – and your Honour Justice Heydon pointed out in one case that anomalous court that we had here in South Australia at the time of Federation, an appellate court comprised of the Executive, excluding the Attorney-General for some reason, but no judge in sight.  So history we must be mindful of.

We must be mindful that State courts are created by the State legislatures for State purposes, that they are not subject to the same rigors of separation of powers, that there are many mechanisms in Forge, your Honours point out, available for the protection of independence and impartiality and in this case, importantly, the licensing judges’ protection is derived from their status as a District Court Act and the tenure provided under that Act.  We must be minded that the legislature may legislate to modify procedural fairness, to modify rules of evidence, to modify rules of procedure and, again, as pointed out in Forge, there is no template regarding the defining characteristics of a court.  We are then, in the parlance of Boilermakers, looking for sufficient relation.

In my submission, section 28A does not have the effect that the Licensing Court of South Australia no longer bears sufficient relation to a court of the State within the meaning of Chapter III.  In my submission, the effect of section 28A, the power to review it, the exercise of the discretion by the Police Commissioner, the power to determine whether or not to admit the evidence, the power to determine what weight to be given to it, shows, in my submission, that we do not have a tribunal that is no longer impartial, that is no longer independent, that no longer exercises judicial power.

One final test one could invoke, other than the bias principle – and in my submission when one invokes the bias principle it is important to remember that the ordinary person sitting in the back of the court knows the law.  So the ordinary person sitting in the back of the Licensing Court when his Honour Judge Rice dealt with this application, would they consider that he was no longer impartial or independent, in my submission, no.

If a court, the Licensing Court, undertook the steps that I have submitted it could take, would that ordinary person consider that the court was no longer impartial or independent?  In my submission, no.  An alternate test is the personae designata cases that by analogy Grollo v Palmer an ex parte issue of a telephone interception warrant.  Does it so compromise a judge of the Federal Court that they no longer can sit on the Federal Court?  Hussain v Minister for Foreign Affairs, the AAT constituted that members, including a Federal Court Judge, a review of adverse security assessment done in private was so compromised, no. When one takes the position of those Federal Court judges and considers by analogy the position of the Licensing Court, in my submission, you do not have a court of a State that is so compromised that it is no longer capable of answering that description for the purposes of the Constitution.

In conclusion, if section 28A is invalid, what is the remedy?  It is potentially arguable that one has not created a court, but a tribunal and so the remedy is, well, it is a tribunal, leave it alone.  That is not the

submission we make as without concession at the outset the Parliament of South Australia intended to create a court of record.  It intended that that court continue into operation.  It did not intend in giving it to the function of section 28A to alter it such that it could be described as a tribunal.  Accordingly, it is a question of severance if section 28A is invalid.  In my submission, if this Court is against us, then that can be achieved by excising from subsection (5) the words “the Court or the Supreme Court”.  I have copies of the second reading speech, if the Court pleases.  Those are my submissions.

FRENCH CJ:   Thank you, Mr Solicitor.  The Solicitor for the Commonwealth.

MR GAGELER:   Your Honours, largely in response to the submissions for other interveners I need to deal with some fairly macro questions about the nature of a court, the nature of judicial power and the scope and operation of the Kable  principle.  But before I do that and with apologies because it is not my Act, can I start with a question of construction and seek to say in a fairly shorthand way what it is that we put about the construction and legal operation of section 28A.

Your Honours, we have attempted to do that in writing in our written submissions at paragraphs 5 through to 12 with the critical paragraph being paragraph 6 where we explicitly invoke George v Rockett and where we are implicitly invoking the reasoning of the Court in Corporation of the City of Enfield v Development Assessment Commission 199 CLR 135. What we say about construction is this. Section 28A(1) read with section 28A(5) and (6) makes plain, in our submission, that it is the section itself which, by implication, confers a power described in subsection (6) as a function on the Commissioner of Police to classify information as criminal intelligence for the purpose of the Act.

KIRBY J:   What does that verb “classify” do? 

MR GAGELER:   It is the exercise of an administrative power conferred by the section which then has the effect given to it by the section itself; nothing more, nothing less.  But my first point, this point number one, is that it is administrative power conferred by the statute.  Classification is not something that occurs dehors, the statute itself.

GUMMOW J:   Where does the power of classification come from?

MR GAGELER:   Subsection 28A(1) by implication, 28A(5) again by implication referring to information that is classified, but made plain by subsection (6) where ‑ ‑ ‑

FRENCH CJ:   I suppose on one view it is not a power at all.  It is something the Police Commissioner does to which certain consequences attach.  That is why the word function is used.

MR GAGELER:   One can use the words interchangeably for present purposes.  What is being done is something that if it is done validly has certain statutory consequences and it is certainly something that derives from the statute itself because one is looking at a function, it is said in subsection (6), which is capable of delegation, but only within certain limits.

KIRBY J:   In the scheme of the drafting of the legislation in the way these things are done, although it is not spelt out the Commissioner has the power to classify 28A(1), that seems clearly to be implied.  Then that formula, that is to say, the classification by the Commissioner, is picked up in 28A(5)(a) as the reference point to the confidentiality which the Court is instructed if “must” is an instruction to maintain.

MR GAGELER:   Yes, that is exactly right.  What one is concerned with is the exercise of a statutory function which I have described as a statutory power.  That is the first point.  The second point is this.  It would have been possible for that function or power to have been conferred by reference to the state of satisfaction, opinion or belief of the Commissioner, but that has not been done.  It would also have been possible for the exercise of that statutory function or power to be protected by a privilege clause, but no such clause is included.

KIRBY J:   If the court has the statutory instruction to maintain the confidentiality so classified, does that not make empty or impossible any activity on the part of the court that would not maintain the confidentiality so classified?  Does that not then render the court simply the agency of an officer of the Executive Government?

MR GAGELER:   There would be an argument to that effect if subsection (5)(a) were to be read simply as referring to information that is in fact classified or purportedly classified by the Commissioner of Police as criminal intelligence.  In our submission, it is properly to be read as information that is validly classified by the Commissioner of Police as criminal intelligence, that is to say, that the exercise of the power is, in our submission, properly read as being conditioned upon the information in question objectively meeting the definition in section 4.  That is the fundamental point that we seek to make in paragraph 6 of our submissions. 

KIRBY J:   I am not hearing you, Solicitor.  You will have to speak up, I am sorry.  I want to hear every word.

MR GAGELER:   The point that we seek to make, particularly in paragraph 6 of our written submissions is this, that the validity for the exercise of the function or power of classification is conditioned on the information objectively meeting the description in section 4 of “criminal intelligence”.

If that is correct, then while a purported exercise of power will attract a presumption of regulatory or presumption of validity, if an exercise of power is challenged then the question for the court which may arise in the proceedings under section 22 or which may arise separately in proceedings for judicial review is whether the information does objectively meet that description.  If yes, then there is a valid classification by the Commissioner that that information has criminal intelligence.  If no, then the information is not so validly classified and the trigger, whether it be the trigger for subsection (1) or subsection (5)(a) is simply not met.

FRENCH CJ:   Does that mean a valid classification is a correct classification?

MR GAGELER:   Yes.

FRENCH CJ:   Must be a correct classification?

MR GAGELER:   Yes, objectively correct classification.

CRENNAN J:   Which is a higher test on one view than just a reasonable satisfaction test?

MR GAGELER:   Yes.

CRENNAN J:   The distinction in George v Rockett about what a judge has to – a judge does not have to reach the same state of satisfaction but has to be satisfied that it was reasonable for that state of satisfaction to be reached.

MR GAGELER:   A judge faced with the question, which would be the same – the point is that the judge faces the same objective question as the Commissioner, and the Commissioner’s exercise of power is conditioned on the Commissioner being objectively right.  The judge asked to consider whether or not the Commissioner has validly classified will ask himself or herself the same question as the Commissioner asked.

KIRBY J:   Is there not a problem there that the judge is part of the independent judicial branch of government, the judge lacks the enthusiasms, commitments, opinionative discourse, political context of an official, therefore the judge normally operates by, as it were, allowing another person who is affected adversely to be heard in some way, and in this case none of that is done.  That is said to be the vice of this; that the judge writes the order but the hand that directs the writing of the order is outside the court and it is a member of the Executive Government and it is something that they do in private.

MR GAGELER:   Your Honour, I am seeking to address that, and what I am saying is that a judge before whom an issue as to the validity of the classification by the Commissioner of Police is raised will face the objective question of whether the information that has been in fact classified as criminal intelligence objectively meets the description of criminal intelligence in section 4.

The judge will act on evidence in determining that objective question, and in determining that question the judge will ask objectively whether the information is information the disclosure of which could reasonably be expected to have the relevant consequences, and for the judge to be able to make a finding that the information could reasonably be expected to have those consequences the judge would need to be satisfied himself or herself of the existence of facts which are sufficient to induce that state of mind in a reasonable person.  It is as simple as that.

CRENNAN J:   It is a statutory condition?

MR GAGELER:   A statutory pre‑condition, yes.

KIRBY J:   Normally judges act in a different way to the Executive Government, and should act in a different way.

MR GAGELER:   Your Honour, judges ask those sorts of questions all the time, and it is ‑ ‑ ‑

KIRBY J:   Not in final determinations normally.  They may do so in an ex parte search warrant and other such orders, but in final determination of rights they do not normally, they hear the other side, it is pretty fundamental.

MR GAGELER:   Here I am only addressing the question of whether the information has been validly classified, and in that context the question that is asked by a judge in the present case is the same sort of question that is asked by judges in many other cases, your Honour.  So far as section 28A(1) is concerned, the prohibition in the passive voice, in our submission, cannot be read as directed to disclosure by a court for two reasons.  One is there is a general presumption that a general prohibition does not apply to the conduct of a court.  That is a presumption that goes back to Canadian Pacific Tobacco Company v Stapleton 86 CLR 1. Two, there is in any event a specific and limited provision in subsection (5) that deals with disclosure by a court. For those two reasons you simply do not read subsection (1) as saying anything about disclosure by a court.

So when you get to subsection (5) then the first point is that paragraph (a) only applies where information has been validly classified by the Commissioner of Police as criminal intelligence.  If an issue of validity is raised before the court it is for the court itself objectively to determine whether or not the information has been validly classified.

The second point is even where it applies the steps to be taken by the court are left entirely to the court.  The means by which and the degree to which the confidentiality of the information is maintained is left entirely to the discretion of a court, and the court will be assisted in such a case by evidence which is permitted under paragraph (b) and the reference to “evidence consisting of or relating to information”, in our submission, covers evidence that is probative of what the information is, probative of the status of the information as criminal intelligence, and probative of how far the information needs to be kept confidential, that is, relevant to the exercise of the discretion under section 28A(5)(a).

GUMMOW J:   Mr Solicitor, on this definition of criminal intelligence, does it have a problem that it is in the firearms legislation of 2003?  That it does is suggested on page 1131 of the Hansard we were given.

MR GAGELER:   I cannot tell you, your Honour, I can check that.  Your Honours, that is what we wish to say ‑ ‑ ‑

GUMMOW J:   Well, if it does, it is obviously a matter of some national importance.

MR GAGELER:   Yes.  Your Honour, I will have to take that on notice.

GUMMOW J:   Yes.

MR GAGELER:   Your Honours, that is really what we wanted to say about construction.  It is set out in our written submissions, but I thought it useful to reiterate it.  Can I then turn to the macro questions and start with two ‑ ‑ ‑

KIRBY J:   Can I ask, are you aware of any provision in any Federal statute that provides that a court might receive evidence and hear argument in private in the absence of parties?  Is there anything in the latest terrorism legislation that provides something like that?

MR GAGELER:   Your Honour was taken by the appellant to the National Security Information (Criminal and Civil Proceedings) Act of 2004.

KIRBY J:   It did not seem to be analogous.

MR GAGELER: There is a step in the procedure for which that Act applies which requires a hearing to be in camera and gives the court a discretion to exclude a defendant in criminal proceedings. That is section 29(3), but that is just a step in a procedure that is designed to allow the court to exercise a discretion as to whether or not the information should be made available to the defendant. The relevant provisions are sections 26, 27(3), 29 and 31, and section 31 ‑ ‑ ‑

KIRBY J:   Of what statute?

MR GAGELER:   The National Security Information (Criminal and Civil Proceedings) Act 2004, the subject matter of the Lodhi Case that your Honours were taken to this morning.

KIRBY J:   Has that come before any court as to its validity?

MR GAGELER: Yes, section 31, the discretionary exercise at the end of this process, was upheld in the Court of Appeal of New South Wales in Lodhi, the case your Honours were taken to this morning.  The process itself more generally and the closed hearing in particular were challenged before Justice Whealy at first instance in a case of the same name, Lodhi (2006) NSWSC 586 and held to be valid.

Your Honours, can I then come to really the big questions? They are questions that are not fully addressed in our written submissions but they are raised quite starkly by the other interveners and therefore I need to deal with them. The first is what is a court, within the meaning of section 77(iii) of the Constitution, and the second is whether and if so how the principle stated in Kable and restated in Bradley applies to the court of a State other than a Supreme Court.

HAYNE J:   Recognising that these are matters raised by other interveners, what is the relevant realm of discourse here, Mr Solicitor?  Are these matters raised – are you tilting at some point about the construction of the South Australian legislation?  Are you tilting at – which windmill – erected by some party intervening?

MR GAGELER:   The ultimate question is whether section 28A(5) is invalid because of incompatibility with Chapter III in the sense described in Kable and in Bradley.  That is the ultimate question.  The appellant has seen fit to present an argument that is based upon the assumption that this is a State court, that it is or was relevantly exercising judicial power, and that the Kable principle, if it applies, would apply invalidate the provision in question.  The respondent is accepting all of those principles.

GUMMOW J:   Yes, but then the intruders appear.

MR GAGELER:   Well, all these people are coming along.  I do not get a right of reply.  If I am going to deal with it, I have to deal with it now.  If your Honours are telling me I do not have to worry about it at all and tell everybody else they should not say anything, then I will sit down fairly quickly.

GUMMOW J:   There may be a question of principle as to the extent to which this intrusion is permissible into a controversy between the other parties.

MR GAGELER:   I would not wish to say that an intervener cannot –

GUMMOW J:   You may want to do the same yourself, I suppose, at some future date.

MR GAGELER:   One day I may.  So I hesitate to say that an intervener cannot raise a question which would avert a constitutional issue, even if it is a question that itself raises another constitutional issue.

GUMMOW J:   No, change the content of a controversy which comprises the matter in respect of which the section under the Judiciary Act permits intervention as of right.

MR GAGELER:   Your Honours, I am not putting this as a matter that goes to the scope of the argument simply raised by an intervener.

KIRBY J:   You are leaving a very large back door, Mr Solicitor.

MR GAGELER:   For this reason.  These are questions of law.  The Court itself would be entitled to raise questions of law.  The interveners are at least entitled to raise arguments that would allow the Court itself to raise questions of law.

KIEFEL J:   But you were offering yourself as a contradictor in respect of whom the appellant will rely upon.

MR GAGELER:   Yes, I am.  As I have sought to intimate, your Honours may not get to this question at all.  Your Honours may be able to say, and in our respectful submission your Honours could say, and our written submissions are structured on the basis that your Honours ought say, that accepting what is common ground between the parties, the appellant loses.

KIRBY J:   But if we look at it as a matter of general principle, is not the purpose of the Judiciary Act power to intervene and giving that opportunity to the law officers to come along in a particular case and say there is a common assumption on the part of the parties which, on proper legal analysis, is incorrect; that you do not get to the constitutional question, therefore do not deal with it.  It seems to me that that, in a national, final constitutional court, is a useful facility, including in this case.

MR GAGELER:    I think we would accept that.  We would also probably put it a bit more simply.  As interveners, we have the rights of parties and as parties we can raise a new point in an appeal.

HAYNE J:   But the point ultimately is one sourced, is it not, in this case in the construction of the Act, in particular, to identify what jurisdiction the body known as the Licensing Court of South Australia has?  Is that not a starting point? 

MR GAGELER:   It may be a starting point.  One could start at a number of levels.  Where I was thinking that I might have to start is, what is the nature of this body, which is a much more foundational question.  Now, I can accept it as being a court, I can accept it as exercising judicial power and the appellant still loses, but if I need to address those questions, that is what I am about to address. 

KIRBY J:   Do you accept that the Licensing Court of South Australia could, in particular circumstances, be called upon to exercise federal jurisdiction?

MR GAGELER:   More than that.  I accept that it is a ‑ ‑ ‑

GUMMOW J:   You say it already is because it is within the terms of section 39?

MR GAGELER:   I say it already has federal jurisdiction under section 39(2) of the Judiciary Act.  Whether or not it might exercise it very often is another question, but it already has that simply by virtue of it being a court, which is the common assumption of the parties which I am about to address, if the Court pleases. 

KIRBY J: The problem with your relying on the statute to give you the rights of parties is that it begs the question as to whether the Constitution, by defining a matter raised in controversy by the actual initiating parties, provides a constitutional bar to any statutory intrusion for outsiders to redefine the matter.

MR GAGELER: Your Honour, at the very least, the matter is the question of the validity of section 25A(5). The matter is not confined by the arguments that have been raised by the parties today. The question, your Honours, of what is a court within the meaning of section 77(iii) of the Constitution admits of this answer, in our respectful submission. The first part of the answer is that a court within the meaning of section 77(iii) is a court of law of a State which section 79 indicates is to be comprised, at least principally, of judges.

The second point is the determination of whether or not an institution created under the law of a State is a court of a State needs to be determined, in our submission, in the same way as one determines whether an institution created under a law of the Commonwealth is a Federal Court, and that is by examining the legislative intention to be derived from the whole of law establishing that institution.  The language I have drawn from Capital TV and Appliances Pty Limited v Falconer 125 CLR 591 at 603 from the judgment of Justice Menzies, his Honour citing and explaining the actual decision in the Boilermakers’ Case.

Applying that approach, in our submission, it is sufficient to meet the description of a court of a State that an institution is, one, established as a court, two, comprised principally of judges and, three, has vested in it some measure of the judicial power of the State. Those three elements, in our submission, are sufficient for a court established by State law to be a court for the purposes of section 77(iii) subject to compliance with Kable. 

That really brings me to the second question, and that is, how the principle stated in Kable applies to a court of a State other than the Supreme Court and the answer that we give is this. Once you recognise that the power conferred on the Commonwealth Parliament by section 77(iii), when read with section 71, is a power to invest the judicial power of the Commonwealth in any court of a State, then there really cannot be two grades or qualities of courts, just as there cannot be two grades or qualities of justice in the exercise of federal judicial power; one administered by State courts and one administered by federal courts. There cannot be two grades or qualities of State courts; one capable of being invested with the judicial power of the Commonwealth and one not.

So the Parliament of the State, in our submission, can, consistently with Chapter III, establish an institution which it does not intend to be a court and it can validly invest that institution with State judicial power, but it cannot, consistently with Chapter III, establish an institution that it intends to be a court that is comprised of judges, that has vested in it the judicial power of the State and then, by some measure going to its Constitution powers or functions, compromise it in a way that takes it outside Chapter III. Either the measure itself is invalid or the institution is invalidly constituted in its entirety.

It is in that way that, in our respectful submission, Kable applies to State courts other than the Supreme Court, that is, once you have an institution that is either established or intended to be established on the proper construction of the State legislation as a State court, then the direct effect of sections 71 and 73, in our submission, is to require that institution to have and maintain those minimum characteristics of institutional independence and impartiality that are necessary according to Kable and Bradley for it to be able to exercise the judicial power of the Commonwealth.  Your Honours, I see the time. 

FRENCH CJ:   How much longer do you think you will be, Mr Gageler?

MR GAGELER:   I think I can finish in 15 minutes.

FRENCH CJ:   Yes.

MR GAGELER:   I will continue?

FRENCH CJ:   Yes.

MR GAGELER:   Your Honours, for those propositions I will not read from but I will refer to Justice Gaudron’s judgment in Kable itself, 189 CLR 51 at page 103, and your Honour Justice Gummow’s recitation of the same point in Fardon 223 CLR 575 at 617. Your Honours, so far as the basic definition of a court of a State is concerned, we are content with the approach of Chief Justice Spigelman in Skiwing, particularly at paragraph 62 of that judgment, that is where his Honour referred to Kotsis v Kotsis and Hospital Contribution Fund.  We do not see any inconsistency with what Justice Kenny was saying in the  Commonwealth v Anti-Discrimination Tribunal which your Honour Justice Gummow has referred to.

Your Honour, so far as the particular position of the Licensing Court is concerned, it is, in our submission, as the parties have correctly assumed, a court of a State.  It is established by State statute as a court.  It is comprised of judges and it has vested in it some measure of the judicial power of the State.  It, at the very least, exercises judicial power when it imposes a fine for a breach of a condition of a licence.  That is under section 121(1)(c)(ii) which, under section 121(6), takes effect upon registration as a judgment either of the Magistrates Court or of the District Court. 

That was exactly the same mechanism that was held in Brandy 183 CLR 245 to result in an exercise of judicial power. That is unequivocally an exercise of judicial power. Also the power to punish for contempt which necessarily flows from its establishment as a court of record by section 13 is another unequivocally judicial power. Therefore, whether or not its other functions, or any of them, might be administrative, it is a body which exercises some measure of the judicial power of the State.

KIRBY J:   Is that enough that it exercises some judicial power to bring in the requirement that Kable serves?

MR GAGELER:   In our submission, yes.

KIRBY J:   Because some of the things it does seem to be – for example, its regulatory activities do not seem to be the normal judicial function.

MR GAGELER: There is just no doubt, your Honour, that a State can confer non‑judicial powers on a court and a State can confer judicial powers on a body that is not a court but here when one can infer an intention to, or discern an intention to establish a body as a court and to confer judicial power on that body even if it is also conferred with non‑judicial powers then one has an attempt by the State to create a court of a State which is then required by section 77(iii) and section 71 to adhere to certain characteristics. That is the way that we say that it works.

There is an issue raised by Queensland in paragraph 25 of its submissions concerning the power of removal of a judge under section 15(1)(c) of the Act. That is a provision that allows the proclamation effectively appointing a judge to be varied or revoked. The question is whether that is itself inconsistent with the minimum requirement of independence and impartiality that is imposed by section 77(i) and section 77(iii).

In our submission, the answer is that it is so consistent.  The point is really answered in Forge 228 CLR 45 at paragraphs 83 to 84 where it is really pointed out that there is no single model of judicial independence and here, in our submission, there is sufficient independence to pass muster under Chapter III that derives from a number of considerations. The first is that decisions of the Licensing Court are subject to the appellate and supervisory jurisdiction of the Supreme Court. That was a point made in Forge at paragraph 84.

The second is that any purely arbitrary removal by the executive is excluded because the variation or revocation of a proclamation under section 15(1)(c) would itself be an administrative decision capable of being challenged by the person affected for any element of bad faith or improper purpose.  That was a point made in analogous circumstances in Bradley 218 CLR 146 at paragraphs 52 and 59. The third point is that a person who is already a District Court Judge who was appointed under section 15 already has by virtue of that other status security, tenure and remuneration.

GUMMOW J:   It may be just a former District Court Judge, may it not?

MR GAGELER:   I was coming to that, your Honour.  There may be a problem with a former District Court Judge.  There is, in our submission, no problem with a District Court Judge, given the tenure guaranteed by the District Court Act which is effectively active settlement tenure.  There may be a problem with a retired District Court Judge and it would be a problem of almost exactly the same nature as was addressed by the Canadian Supreme Court in Valente which we have given your Honours a copy of.  There it was held that ‑ ‑ ‑

GUMMOW J:   What is the citation of Valente?

MR GAGELER: [1985] 2 SCR 673. We accept that there may be a problem with retired judges. That would be a problem to be addressed if and when a retired judge were appointed to the court.

KIRBY J:   What you are saying that Kable might bite in such a case?

MR GAGELER:   Yes.  Your Honour, I thought, might be interested in that concession.

KIRBY J:   I will bite my tongue and not say what came into my mind.

MR GAGELER:   Your Honours, then there is the issue raised, if I can move really quite quickly, the issue raised by Victoria as to whether the power conferred by section 22 is administrative or judicial and the related question of whether it matters.  In our submission, it is probably judicial but it does not matter.  We were content in our written submissions to assume that it was judicial and can I give you the reasons why we still think that that is correct?

The first point is that there is no reason in principle why the same power cannot when reposed in a Commissioner be administrative and when reposed in the court be judicial.  That was the point made in Pasini 209 CLR 246 at paragraph 12, for example.

FRENCH CJ:   That was a status review, of course, Pasini, was it not, eligibility for extradition?  This is a little different.  It is a creation of rights situation.

MR GAGELER:   That is right.  It was a chameleon.

FRENCH CJ:   It was a chameleon, yes.

MR GAGELER:   The second point is the point that addresses your Honour’s concern.  There is no reason, in principle, why a court cannot in the exercise of judicial power determine conclusively a claim to the creation of a new right, or conversely, to the creation of some new – imposition of some new liability through the exercise of either discretionary judgment or discretion and there are just many, many examples of that.  Cominos v Cominos is a very good one.  We have given your Honours that in our materials.  Thomas v Mowbray, itself, was an example of that in the area of liability.  Bayer Pharma was another case along those lines but the most illuminating discussion of the point is in Sir Owen Dixon’s judgment in Barrett v Opitz 70 CLR 141 at 163 to 168. Basically his Honour said if one started with a clean slate one might not see that as being an exercise of judicial power but it has been done for an awfully long time and it has been continued.

FRENCH CJ:   That is that historical antecedent?

MR GAGELER:   Yes. That puts experience over –

FRENCH CJ:   I think this Court last looked at that in the context of the Service and Execution of Process Act, did it not ?

MR GAGELER:   Probably many times since then, your Honour.  Many times.  It is often referred to as double function legislation.  We recognise the potential problem that arises from the scope of the discretion under section 53(1).  This is where we probably depart from South Australia.  We consider that the discretion said to be an unqualified discretion, is probably too wide to be governed by what some of your Honours in Thomas v Mowbray referred to as ascertainable standards required for an exercise of judicial power, or what Justice Walsh referred to in Cominos v Cominos 127 CLR 588 at 592 as amounting to what the court may do as being left entirely at large.

In those circumstances, if that is the correct construction of section 53, then it is not a power that can be exercised judicially.  But, in our submission, it is a power that is taken outside the scope of review under section 22 by section 22(2), that is, as we read section 22(2), the rehearing that is to be conducted by the court acting judicially does not extend to a reconsideration of any general discretion that may have been sought to be exercised under section 53(1).  If that is the correct construction, then there is no difficulty, in our submission, with the other elements of discretionary judgment required by section 53(1)(a), for example, or section 53(6) falling comfortably within the scope of judicial power. There are judicially ascertainable and manageable standards.

Your Honours, the last question that I will address very quickly is, does it matter?  In our submission, it does not matter at all.  The ultimate question is exactly the same, and that is whether section 28A applies to a judicial function or an administrative function is incompatible with those minimal requirements of independence and impartiality.

GUMMOW J:    Kable proceeds on the proposition that there may be some administrative functions which do not cause any trouble for this doctrine.

MR GAGELER:    Exactly, yes.  There may be some administrative functions that do, but whether it is a judicial function or an administrative function, it is really the same test.

FRENCH CJ:    And the boundary is not necessarily the same as that drawn by Wilson v Chapman, for example.

MR GAGELER:    I would hesitate to say the test for Kable is exactly the same as the test for Wilson, but it is the same ultimate question that was really put quite well by Justice McHugh in Fardon in the passage we have set out in our submissions at paragraph 21, that is, whether the interference with process or the requirement for a particular process to be followed, whatever the nature of the power being exercised, goes so far as to impair the independence or impartiality of the institution. That is really the ultimate question. In principle that must be correct for this reason; that the constitutional implication really should not go any further than the text or structure of the Constitution require.

So far as the actual exercise of federal jurisdiction is concerned, if an issue were to arise in the federal jurisdiction – and that is not this case – as to whether a particular process was inconsistent with the exercise of federal judicial power, that would be something that would be comfortably accommodated and dealt with by section 109 of the Constitution, invalidating the State law in question without need of resorting to the Kable principle.  Your Honours, there is more I could say, but I have said enough.  Thank you.

FRENCH CJ:   Solicitor, can I just ask, perhaps overnight, we have been referred to that firearms legislation which apparently is the product of a COAG agreement and usually where there are interlocking State laws there is usually the Commonwealth law which fits into the adjacent area or something.  I wonder if I might have a look at that.

MR GAGELER:   We will search it out, yes.

FRENCH CJ:   I wonder if I could ask Mr Solicitor for Western Australia whether there is an agreed order of batting tomorrow?

MR MEADOWS:  May it please, your Honour, we have not discussed that as yet, but we may well do now having heard what has happened today.

FRENCH CJ:   Thank you, all right.  The Court will adjourn until 10.15 am tomorrow.

AT 4.32 PM THE MATTER WAS ADJOURNED
UNTIL WEDNESDAY, 5 NOVEMBER 2008