Samad & Ors v District Court NSW

[2002] HCATrans 73

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S189 of 2001

B e t w e e n -

ABDUS SAMAD, MARY SAMAD and BARBARA STREET CLINIC

Appellants

and

DISTRICT COURT OF NEW SOUTH WALES

First Respondent

DIRECTOR-GENERAL OF THE NEW SOUTH WALES DEPARTMENT OF HEALTH

Second Respondent

GLEESON CJ
GAUDRON J
McHUGH J
GUMMOW J
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 8 MARCH 2002, AT 10.16 AM

Copyright in the High Court of Australia

MR A. ROBERTSON, SC:   May it please the Court, I appear with my learned friend, MR G.L. TURNER, for the appellants.  (instructed by Yandell Wright Stell)

MR J. BASTEN, QC:   I appear with MR R.P.L. LANCASTER for the second respondent, your Honours.  (instructed by Phillips Fox)

GLEESON CJ:   There is a certificate from the Deputy Registrar to the effect that she has been informed by the solicitor for the first respondent that the first respondent does not wish to be represented at the hearing and will submit to any order of the Court save as to costs.  Yes, Mr Robertson.

MR ROBERTSON:   Thank you, your Honour.  Your Honours, the appeal concerns a question of statutory construction and, in particular, of clause 149 of the Poisons and Therapeutic Goods Regulation which is conveniently set out at page 69 of the appeal book in the judgment of the Court of Appeal.  It is also annexed to the appellants’ submissions at tab 2, page 83 of the reprint.  The opening words of clause 149 are that:

The Director-General may suspend or cancel a licence or authority on any one or more of the following grounds –

and there are number of grounds which are then set out.

McHUGH J:   If the argument against you is right, there is a discretion not to cancel, there is a discretion not to suspend, but according to the respondent, there is no discretion not to refuse to cancel or suspend.

MR ROBERTSON:   Exactly so, your Honour, and that is the issue.  The issue is whether, as the Court of Appeal held, that is the extent of the discretion, that is to the choice of remedy, or whether the discretion, as the appellants would contend, extends to whether or not to do either of those things.

GLEESON CJ:   That would apply to paragraph (b) as well?

MR ROBERTSON:   149(b)?

GLEESON CJ:   Yes.

MR ROBERTSON:   Yes, your Honour.

GLEESON CJ:   What if there was a trivial breach of the condition?

MR ROBERTSON:   On the construction favoured by the Court of Appeal, in any breach ‑ as we understand what the Court of Appeal said, any breach would require, as Justice McHugh points out, either suspension or cancellation.

McHUGH J:   Including if your annual fee is paid a day late?

MR ROBERTSON:   Of course, yes.  If I could give your Honours an indication of the sorts of conditions that your Honour the Chief Justice was asking about:  some of them, any way, are conveniently set out at pages 12 and 13 of the appeal book.  These were conditions imposed at or about the time that it was proposed by the Director‑General to cancel the licence.  Do your Honours have a letter which begins at page 11, a letter of 8 December 1998?

GLEESON CJ:   Yes.  Condition 2 is that:

No more than 300 clients shall be dosed –

I did not know “dosed” was a transitive verb, but that is the condition.

MR ROBERTSON:   That is a condition.

GLEESON CJ:   So if they dosed 305 clients, there would be no discretion.

MR ROBERTSON:   You would have to be suspended or cancelled.

McHUGH J:   Or if you stayed open until 8.05?

MR ROBERTSON:   8.05 in the evening, similarly, one would think.  It may be one could talk about de minimus if it was 8.01 but certainly 8.15 or indeed 6.15 in the morning.  Perhaps some of the conditions are more diffuse, like 5:

take active steps to ensure that patients whose behaviour is disruptive to the local community are identified and managed –

7  Barbara Street Clinic Pty Ltd shall ensure the administration of doses to Clinic Clients in police cells whenever necessary.

While your Honours have that page 13 may I make this point that condition 2:

No more than 300 clients in total shall be dosed from the premises –

that was the first occasion, that is shortly before the cancellation of the licence, that any maximum number of clients at the premises had been fixed by condition by the Director‑General.

Indeed, the District Court judge observed at page 41 of the appeal book – if I could ask your Honours to turn to page 41 line 21.  This, in our submission, was a matter that the District Court judge held he could not take into account.  Dr Samad, if your Honours have that, gave evidence, that is line 21:

He explained that the numbers attending the clinic were very much determined by the Department of Health itself.  In particular the pharmaceutical section had to approve, in effect, of a new patient attending the clinic, in the sense that they had to approve of methadone being provided for them.

Now, the relevance of that, when I come back to it, is that – and I am dealing now with a question of construction – amongst the powers available to the Director‑General under the Poisons and Therapeutic Goods Regulation is clause 145, which is on page 82 of the print annexed to the appellants’ submissions, that is that:

(1)  A licence is subject to such conditions as the Director‑General may endorse on the licence and to such further conditions as the Director‑General may from time to time impose ‑ ‑ ‑

GLEESON CJ:   Was the decision against you founded on a conclusion about the meaning of the word “may” in regulation 149, or was it founded upon a view that if ground (f) were made out, the scope or an exercise of the discretion other than by way of suspension or cancellation in practical terms, is limited or non‑existent?

MR ROBERTSON:   The Court of Appeal seems to have held the former.  The second respondent contends, as we understand him, to contend for the latter but there is, of course, an unresolved issue about the second way your Honour the Chief Justice puts it, which is that if (f) means that in every case once (f) is made out there is no discretion then it is really a different way of saying the first proposition.

GLEESON CJ:   Except that it may provide an answer to your arguments about paragraph (b).  I do not know the way Mr Basten will put it precisely but a possible point of view is that the possibility of a trivial or purely technical contravention of (b) is one thing, but if there was a disruption to the amenity of the area it is difficult or, perhaps, impossible to see that a proper exercise of the discretion would not require either suspension or cancellation of the licence.

MR ROBERTSON:   Your Honour, we will have to leave the second respondent to put the submission, but the effect of the latter construction in relation to (f) is that the decision‑maker, which is, of course, the Director‑General at first instance and on appeal the judge of the District Court, may not look at or evaluate the conduct or event or the degree of disruption or its causes or effects or what the impact is on those who are attending the clinic or, indeed, what we would contend would be the public interest in maintaining the supply of methadone, which, as your Honours would know, is tendered as an alternative to the supply of other drugs of addiction.

GLEESON CJ:   What about paragraph (d)?  Suppose the holder is no longer a fit and proper person.  What would be the discretionary considerations that might properly lead to a conclusion that, nevertheless, the licence should not be cancelled or suspended?

MR ROBERTSON:   Can I answer that in two ways, your Honour?  First of all, if one goes back to the question of the grant of a licence where this matter of a fit and proper person is considered - that is in clause 143 - the Court of Appeal held that in terms of the discretion to grant a licence, clause 143(1A) was a clearly discretionary matter.  The Court of Appeal said that at the foot of page 84 of the appeal book.  So that, the Court of Appeal contemplated - I will just read the sentence, if I may:

Only two matters are prescribed ‑

this is in relation to the grant of a licence ‑

and the first is clearly discretionary - that the Director‑General “may refuse an application if of the opinion that the applicant is not a fit and proper person to hold the licence”.

So, in a sense, there is a disconformity there on ‑ ‑ ‑

GUMMOW J:   Well, (1A) is exegetical of (1), that is to say, may or may not and, in particular, may not in these circumstances.

MR ROBERTSON:   Quite so, your Honour, yes, and I have taken it that what your Honour has just said was perhaps implicit in what the Court of Appeal had said, so we have no quarrel with that.  If I can come back to it, it does tend to cast some light on, perhaps, the issue that your Honour the Chief Justice was asking me about.

GLEESON CJ:   What would be a practical example of the sort of circumstances in which the Director‑General would grant the application even if of opinion that the applicant was not a fit and proper person to hold the licence?

MR ROBERTSON:   Can I answer your Honour’s question this way and perhaps the most recent time – I am not sure about that – but a recent time in which the phrase “no longer a fit and proper person” has been before this Court was in the decision Australian Broadcasting Tribunal v Bond.  If I can perhaps take some of the facts from that case to a case such as the present.  Say if one had a corporate applicant for a licence under clause 142 being considered under clause 143, one of the directors, and perhaps the controlling director, even if not convicted, had been found to be financially dishonest in some way relevant to the holding of the licence, but if I can add another possibility, that there was a great demand in the area for the supply of drugs of addiction ‑ when I say the area, some area in New South Wales – and there were no others ‑ ‑ ‑

GLEESON CJ:   No fit people willing to do it.

MR ROBERTSON:   No fit people, as your Honour puts it.  In those circumstances, particularly perhaps having regard to the Director‑General’s power to impose conditions, the Director‑General might think that the public benefit in the supply of the drugs of addiction might well outweigh the character defects and so on in the director and that with suitable conditions, or maybe without, that the licence should be granted or, indeed, that if the lack of fitness had arisen subsequently that the licence was not required to be revoked or suspended.  So there may be factors, circumstances, not fanciful we would submit, where that is a possibility.

We would also answer your Honour the Chief Justice’s question in this way, by reliance on authority, that is that there are cases in the New South Wales Court of Appeal, at least, and in this Court, as well, I think, where, in relation to commercial inquiry agents, for one – I think, doctors, for another – even though there have been grounds such as lack of good fame and character, lack of fitness and so on, the courts have held that, nevertheless, the discretion to cancel – I withdraw that – the power to cancel is discretionary. 

One of those decisions is the decision that is discussed in the judgment in the Court of Appeal, Derisi v Vaughan [1983] 3 NSWLR 17. I will not take your Honours to it now. Another, where there is a passing remark to a similar effect, is Hoile v Medical Board of South Australia 104 CLR 157 at 161 to 162, and Commissioner of Police v Tanos 98 CLR 383 at 390 to 391 is not a dissimilar case. That was a disorderly houses case but where there were circumstances, I think, where the owner of the house was a criminal or reputed criminal. Now, of course, that is not a licence case as such. It is a disorderly house case.

McHUGH J:   But this Court did not deal with that aspect of it.  It was just simply on a natural justice point. 

MR ROBERTSON:   No, your Honour.  I think this Court did deal with it.  Perhaps I could take your Honours to it.  It is volume 98 of the Commonwealth Law Reports.  Certainly, the case is referred to almost invariably on the natural justice point, as your Honour Justice McHugh points out, but if I could take your Honours to the report at 383, which is where it begins.  In the joint judgment of the Chief Justice and Justice Webb, the facts are set out.  Then at page 390, at about point 7 of the page, first of all, their Honours refer to the decision of Justice Cussen in Ex parte Gleeson, and then say, the power: 

is contained in s.3, sub-s.(1) of which begins with the words “Upon the affidavit of a Superintendent or Inspector of Police showing reasonable grounds for suspecting that all or any of the following conditions obtain”.  Then follow four lettered paragraphs setting out certain respective conditions or states of affairs.  At the conclusion of the four paragraphs the sub-section ends with the words conferring the power, viz. “any judge of the Supreme Court may declare such premises to be a disorderly house”.  It is scarcely necessary to say that the word “may” confers upon the judge an authority which may be exercised or not at discretion –

and their Honours referred ‑ ‑ ‑

McHUGH J:   Yes, and, in fact, that power has been exercised by Supreme Court judges.  You will find a case in the reports called Rose Holdings Pty Ltd in which I appeared and one of the grounds for suspension was that they had been convicted of having a common gaming house on the premises, but Justice Isaacs held that in the exercise of his discretion, he would not declare it a disorderly house, notwithstanding that the condition had been ‑ ‑ ‑

MR ROBERTSON:   Had been met.  Well, that would be ‑ ‑ ‑

McHUGH J:    ‑ ‑ ‑ had been met, but it did have a bit of a gloss on it because they had pleaded guilty in circumstances where they, in fact, were not guilty, but nevertheless, they had been convicted in accordance with the ‑ ‑ ‑

MR ROBERTSON:   Your Honour, with respect, I am not familiar with the case but what your Honour has just told me about the case bears out, in our respectful submission, how it is important to have the power or discretion to look behind the formal satisfaction of a particular ground and if one can translate that to clause 149 ‑ ‑ ‑

McHUGH J:   Ziems’ Case is perhaps a good illustration.  Ziems got a conviction for manslaughter.  The question was whether he was a fit and proper person.  Justice Kitto would not even have suspended him.

MR ROBERTSON:   Yes, but that was in the sense ‑ that is not so much going behind the fit and proper element.  He was going behind the conviction to see whether that required that result.

McHUGH J:   Yes, one of the grounds here is a conviction for a serious offence, is it not?

MR ROBERTSON:   No, one of the grounds here is conviction of any offence.

McHUGH J:   Of any offence, yes.

MR ROBERTSON:   So that would again, we would say, exemplify a circumstance where the offence might be trivial or it might be serious, but the circumstances of the offence, on examination, would show that it did not or might not relevantly impact on the holder of the licence or whether or not the licence should be cancelled.

McHUGH J:   Mr Robertson, my mention of “serious offence” reminds me to ask you this question:  Supposing you succeeded in making out that the Court of Appeal got it wrong, is it an answer to your claim for the prerogative relief that it would be futile to send the matter back because the regulations have been now amended and the Director-General must cancel if there is a disruption of the ‑ ‑ ‑

MR ROBERTSON:   Your Honour, could I deal with that this way:  do your Honours have the amended regulation which is appended to our submissions? 

McHUGH J:   I have an amended regulation.

MR ROBERTSON:   Your Honour has it?

McHUGH J:   Yes.

MR ROBERTSON:   There is perhaps two broad answers to what your Honour Justice McHugh puts to me.  One is there is a new transitional provision inserted, clause 162, which, as we construe it, means that the amendment does not apply to my clients  ‑ ‑ ‑

McHUGH J:   I see, there is an “unless” clause.

MR ROBERTSON:    ‑ ‑ ‑ because the written notice was served beforehand and this was a matter raised, of course, on the special leave application.

GAUDRON J:   In any event, a significant adverse impact ‑ ‑ ‑

MR ROBERTSON:   Of course, my second answer is that the language has changed.  In a sense, I was going to say the Parliament, but I will say the legislature, anyway, has not adopted what the Court of Appeal said was the proper construction as amended the regulation.  The regulation is at the tab numbered 3 in the folder of submissions, if your Honour the Chief Justice, I am not sure, has found it.

GLEESON CJ:   I am looking at annexures.  You say there is a folder.  Is it an annexure?

MR ROBERTSON:   Yes, it is, your Honour.

GLEESON CJ:   Which annexure?

McHUGH J:   Annexure C.

MR ROBERTSON:   Annexure C.

GLEESON CJ:   Annexure C, thank you.

MR ROBERTSON:   Does your Honour have that?  It begins “Poisons and Therapeutic Goods Amendment (Suspension and Cancellation of Licences and Authorities) Regulation 2001”.

GLEESON CJ:   Yes.  Well, the explanatory note explains it.

MR ROBERTSON:   And what her Honour Justice Gaudron was pointing out is that what is now clause 149(1)(d) – and this is, perhaps, the second answer to what your Honour Justice McHugh was putting to me – has different language.  It now has:

the Director‑General forms the opinion –

which is new, I think –

that the supply of methadone has a significant adverse effect on the amenity –

as opposed to causing disruption to.

GUMMOW J:   Now, that formation of opinion would give rise to questions on review.

MR ROBERTSON:   Yes.

GUMMOW J:   It has to be formed reasonably.

MR ROBERTSON:   Yes, but ‑ ‑ ‑

McHUGH J:   Except it is a new hearing in the District Court by ‑ ‑ ‑

MR ROBERTSON:   Well, quite so, so the judge – I am sorry, your Honour.

McHUGH J:   Yes, it is the judge.

MR ROBERTSON:   Yes, so that on merits review, if I can use that expression, the opinion would be the judge’s opinion.

McHUGH J:   Yes, but I think the point Justice Gummow may be making is that it would be harder to get prerogative relief against a judge with that sort of discretion, if it is the judge who has to form the opinion.

MR ROBERTSON:   I am sorry, yes.  Well, that must be so on ordinary principles and, indeed, harder if it was the Director‑General, of course, the question ‑ ‑ ‑

McHUGH J:   The other point about futility is that Judge Herron seems to have said if he had a discretion he would exercise it adversely to you, but you might find some assistance in a passage in this Court in a case called Wade v Burns 115 CLR 537 in a passage in the Chief Justice’s judgement at 555 where his Honour said:

It was sought to be said that the grant of a mandamus was futile because the warden in delivering his reasons for the course he took said that had he a general discretion to refuse the application he would do so.  It is sufficient to say that this statement by the warden as to what he would do if he had a power which, according to his own view, he did not have has no weight, in my opinion, when the court is considering whether –

to issue mandamus.

MR ROBERTSON:   And, if I might say so, your Honour, Justice Menzies at 563 said something similar, but what your Honour says to me suggests that your Honour does not have our submissions in reply because we draw attention to that.

McHUGH J:   No, I think we have them.

MR ROBERTSON:   I was a bit concerned that your Honour may not have them but on page 4 in paragraph 9 of the submissions in reply we make the point that that passage in the District Court judge’s reasons is expressed in conditional terms and then we make the submission that it “has no weight”, which picks up the language of Chief Justice Barwick in Wade v Burns.  Does your Honour have that, that paragraph 9?

McHUGH J:   Yes.

MR ROBERTSON:   Yes, and, of course, we make the point that it immediately follows two of the four express statements by his Honour the District Court judge that he had no discretion and, indeed, as a further point, what his Honour the District Court judge refers to is not the width of the discretion conferred.  I have got a bit ‑ ‑ ‑

GLEESON CJ:   Your proposition, as I understand it, is that when you look at some of the grounds in regulation 149, it is obvious that they might be made out in circumstances that would not warrant either suspension or cancellation.

MR ROBERTSON:    Yes.

GLEESON CJ:   And we would look at all of the grounds.  There are some circumstances that might come within each and every one of them.

MR ROBERTSON:    Quite so.

GLEESON CJ:   That might lead to a favourable exercise of discretion, if it exists.

MR ROBERTSON:    Quite so, and that list, as it were, is to be distinguished from, if it is a list, the list that the Court of Appeal relied upon from Justice Windeyer’s judgment in Finance Facilities, which was quite a different case and involves, in any event, rights or entitlements or benefits to a taxpayer.  In other words, it was not a case of a licence.  Of course under these regulations the licence is not a yearly licence.  It is a permanent licence subject to cancellation.

GUMMOW J:   Mr Robertson, could you assist me by explaining how the new transitional clause 162 works, on page 4 of annexure C ‑ ‑ ‑

MR ROBERTSON:   I can attempt it, your Honour.  The new clause 149 applies not only prospectively but to some extent retrospectively, that is to any causes of a suspension or cancellation, even though they took place before the date of the amendment which was 13 July 2001, unless ‑ and this is perhaps taking something out from that extension ‑ the Director‑General has before that commencement, that is before 13 July 2001, caused written notice to be served on a holder of a licence in accordance with clause 150.

GUMMOW J:   Is that the old clause 150?

MR ROBERTSON:    Clause 150 is unamended.

GUMMOW J:   It is unchanged.

MR ROBERTSON:    And the written notice in the present case is at pages 7 and 8 of the appeal book.  If one goes to pages 7 or 8 one will see there a notice ‑ I am not sure whether it is said to be under clause 150, but it clearly – yes, it does express itself to be under clause 150, and it is dated 4 September 1988, which is obviously clearly before July 2001.  Now, whether there is any other notices of that vintage which are excepted from the extension in clause 162, that does not really matter.  That is the way we would see it working ‑ ‑ ‑

GUMMOW J:   So the net result is what, clause 149 does not apply to you because ‑ ‑ ‑?

MR ROBERTSON:    The new clause 149 as we see it – our learned friends put it in – say “it may be doubtful” in one paragraph of their submissions ‑ ‑ ‑

GUMMOW J:   You say you got the notice on the relevant date.

MR ROBERTSON:    We got the notice in September 1998, and as things stand that falls within the “unless”.

GUMMOW J:   Yes.  So there is no problem with the transitional provision.

MR ROBERTSON:   But, in any event ‑ ‑ ‑

GUMMOW J:   To put it shortly, they would have to start again.

MR ROBERTSON:   They would have to start again and the evidence would have to be the evidence as at whenever it was, 2002.

GUMMOW J:   Yes.

McHUGH J:   What is happening with this clinic?  Is it still operating or has it stopped or ‑ ‑ ‑

MR ROBERTSON:   There is an order of the Court of Appeal staying the Court of Appeal’s decision – if I can turn it up – until a date two months after the decision of this Court and a basis of the agreement between the parties for a stay – and this agreement I think was in effect before the Court of Appeal decision and indeed as at the time of the District Court decision and Judge Herron refers to it – is that although the conditions that I have taken your Honours to some of are the relevant conditions, nevertheless, the number of people, the number of clients is agreed to be limited to 200.  So, as I understand it, since some time in, I think – so, since 2000, or maybe even 1999, the number of clients has been limited by virtue of that agreement to 200, as a maximum.

McHUGH J:   So 200 is the economically viable bottom line, is it?

MR ROBERTSON:   The extent to which it is economically viable may be in issue but certainly it is surviving, as I understand it.  I had, I think, been dealing with things somewhat ‑ ‑ ‑

GUMMOW J:   Where do we find the consensual arrangement that varies condition 2, that is the 300 clients?  Do we find the text of this ‑ ‑ ‑

MR ROBERTSON:   You will not see the text of it, your Honour.  It is not ‑ ‑ ‑

GUMMOW J:   It was mentioned in the special leave transcript at page 5, line 175.

MR ROBERTSON:   I rather think, your Honour, it is mentioned in the District Court judge’s decision.

McHUGH J:   At page 96 of the book, in the first place, it was:

cancelled with effect from four months from Tuesday 28 November 2000.

MR ROBERTSON:   Yes.  Can I take your Honours to page 16 of the appeal book.  It is about as far as I think I can take it.  His Honour Judge Herron sets out some litigation, which is line 11 or so, and talks about an appeal to the Court of Appeal and then at line 26 his Honour says:

some arrangement was made between the appellants and the Director‑General, that the number of their patients would be limited to two hundred.

Does your Honour Justice Gummow have that?

GUMMOW J:   Yes, thank you.

MR ROBERTSON:   Could I hand to your Honours, because I mentioned it, the decision in extracts from rather than the whole of the relevant pages in Australian Broadcasting Tribunal v Bond where your Honours can see the statutory language.  The statutory language is set out at the top of 323 of the report, that is:

the Tribunal is satisfied that the licensee (i) is no longer a fit and proper person –

and then Chief Justice Mason at 354.  The argument there was, as I recall, that because the event of the defamation settlement had occurred before the grant of the licence then the subsequent discovery of some facts about it did not answer the description or could not be taken into account in assessing with the licensee was no longer a fit and proper person.  The Chief Justice rejected that argument at 354, about point 7 or point 8.  Justice Brennan at 365 agreed with the Chief Justice.  Justice Deane at 369 agreed with the Chief Justice and Justice Toohey and your Honour Justice Gaudron looked that issue at 380, which is the last page of this extract.  Your Honours say at about point 4 of the page:

The words “no longer” thus import a requirement that there should have been some change in the circumstances or revelation of some event bearing upon its fitness and propriety –

and the other point I wanted to make about fitness and propriety is, of course, the breadth of the discretion and how wide it is and one gets that, of course, from the section 92 cases like Hughes and Vale [No 2].  Another decision of this Court which I referred to, although I did not take your Honours to it, and, of course, we cannot take it too far in terms of the fitness and propriety argument, but your Honours may recall the decision in Hoile v The Medical Board 104 CLR 157. The issue there was – which the Court did not ultimately decide – whether there had been infamous conduct in a professional respect, that is at the foot of page 161. There was an argument that the power in the court to remove the name from the register was a power that had to be exercised if that ground was made out. That argument is reflected in the last sentence on 161:

It conferred a power which it became incumbent upon the Court to exercise.

At the top of 162 their Honours said:

Whether this view is tenable is a question which on the facts of the case we need not decide. But the observation should be made that it is a view which seems to be antagonistic to s. 34 of the Acts Interpretation Act 1915-1957 (S.A.) and in any case one which in the absence of that provision would not necessarily be justified in principle.

At the end of the paragraph their Honours say:

It seems probable that there exists in the Court a discretion but if so it is a discretion to remove the name from the register or not to do so.

There was an argument that maybe some other powers were available and their Honours said it is either remove the name or not but it appears that there may still be a discretion.  So that is another example.

GLEESON CJ:   Yes.  Now, have you taken us to all the authorities you wanted to take us to?

MR ROBERTSON:   I think I have, your Honour.  I have not taken your Honours to either the judgment of the Court of Appeal or the ‑ ‑ ‑

GLEESON CJ:   No, we have read those, thank you.

MR ROBERTSON:   Could I make, perhaps, three or four short points about the Court of Appeal’s decision, your Honours?

GLEESON CJ:   You could probably just make them in a summary form.

MR ROBERTSON:   Yes, if I may, your Honour?  That is, that the Court of Appeal’s decision seemed to turn, perhaps, on three or four concepts or ideas.  One is that, on four or five occasions, their Honours referred to “strict control” and derived from both the Act and the regulations that the supply of drugs of addiction were the subject of strict control and, as we read it, as if their were an antithesis or a tension between strict control, on the one hand, and a discretion in the decision‑maker, on the other.  In our submission, there is no such antithesis or tension.  Control is equally amenable to a discretion as to no discretion.

Secondly ‑ and I have touched on this before ‑ the Court of Appeal proceeded on the basis that because there was a list of factors in clause 149 of the regulation, that meant that there was no discretion and their Honours identified that in paragraph 78 on page 87 of the appeal book as:

the most significant factor which points to the power in cl 149 being one which must be exercised ‑

Now, I have taken your Honours to Tanos concerning the Disorderly Houses Act and, of course, the earlier decisions in the Court of Appeal or concerned cases where there was a list of circumstances where the remedy might follow, whether it was declaring the disorderly house or revoking the commercial or inquiry agent’s licence.  So, in our respectful submission, it is not correct to say that a list of grounds means that they must be exercised and Justice Windeyer and the Court in Finance Facilities ‑ ‑ ‑

GLEESON CJ:   Finance Facilities is quite a different case.

MR ROBERTSON:   Was quite a different case ‑ ‑ ‑

GLEESON CJ:   The Commissioner was trying to disallow a claim for a deduction or rebate, I forget which, on the basis that somebody had entered into a tax avoidance scheme.  What he was trying to do was use a discretion to supplement the revenue.

MR ROBERTSON:   Quite so, your Honour, and, in particular, one of the grounds was that, having regard to all the circumstances, it would be reasonable to allow the further rebate and having found that it would be reasonable, the Commissioner yet said, “I still have a discretion because”, as your Honour the Chief Justice said, “there is a scheme of some sort”.  The Court pointed out that, certainly as to that paragraph, there was no room for any residual discretion ‑ ‑ ‑

GUMMOW J:   I think we can march finance facilities off. 

MR ROBERTSON:   Well, I will not spend any time on it then, if your Honour please. 

GUMMOW J:   What was the third point? 

MR ROBERTSON:   The third point that their Honours relied upon was the nature of the regulation-making power.  Their Honours pointed to and relied upon a section of the Act under which the regulations were made, the Poisons and Therapeutic Goods Act, where section 24, which dealt with the purpose of preventing the improper use of drugs of addiction, listed various paragraphs and then said in section 24(2): 

Regulations shall be made under this Division making provision for or with respect to –

a number of matters.  Their Honours at paragraphs 79 and 80 construed that as reflecting: 

the legislature’s intention that the implementation of measures controlling the supply of drugs of addiction not be left to executive discretion. 

GUMMOW J:   Why? 

MR ROBERTSON:   We would submit, it is a non ‑ ‑ ‑

GUMMOW J:   It is a non sequitur. 

MR ROBERTSON:   ‑ ‑ ‑ sequitur, and, in any event, it is not at all clear that the relevant ‑ ‑ ‑

GUMMOW J:   You seem to be saying that on the construction you put the regulations would be beyond power. 

MR ROBERTSON:   Well, there are two points about the power.  One is that 24(2)(e) in fact only says regulations with respect to “the withdrawal and suspension” and for some reason does not refer to cancellation, although elsewhere in the Act cancellation is referred to.  We would put the point perhaps this way, that if there is no discretion in relation to clause 149(f), that is, if there is a disruption to the amenity, then the licence must be cancelled, then takes the regulation away from matters to do with public health and the control of the supply of drugs, because that would exclude all those factors, and the relevant power would then be required to be exercised on an environmental or town planning consideration and that ‑ ‑ ‑

GUMMOW J:   What is the fourth point?  

MR ROBERTSON:   I am sorry, your Honour.  I am going too slowly. 

GUMMOW J:   Well, you were going through summary form, were you not? 

MR ROBERTSON:   I am sorry, your Honour. 

McHUGH J:   There is always a danger you may talk yourself out of it ‑ ‑ ‑

MR ROBERTSON:   Yes.  I will limit myself to those three points, if I may, your Honour.  They emerge from the paragraphs that we have identified.  Your Honours, I have not gone at all to the District Court judge’s reasons, but we have set out in our written submissions the four occasions on which the District Court judge said he had no discretion.  We also point out that his closing paragraph on this aspect only looked at the disruptive activities and the disruption of the amenity of the area.  Although our learned friends point to mention of the clients, we would – and we have not made this point before and perhaps I will sit down after I have made it ‑ that on page 42, line 40 – this going to the point that the judge was really not looking at the discretion which we say existed, that is, to take account the interests of the client, the interests of the public, and so on – at lines 40 and 41 his Honour says: 

I bear in mind the problems that Sabrina might well have when this clinic is closed –

which is not a matter of discretion.  Your Honours, may I do one last thing and it has arisen in this untidy way because the contention that the District Court judge had exercised the discretion that he said he did not have arises only in my learned friend’s submissions being a point abandoned in the Court of Appeal, but could I hand to your Honours extracts from three of the affidavits that were before the District Court judge and the Court of Appeal dealing with, in particular, the public interest in which there is an affidavit of Dr Wodak, the public interest in the continued supply of methadone as a public health ‑ ‑ ‑

CALLINAN J:   It is very unconvincing to say that the discretion was exercised when it has been held that there is no discretion.  I find that very, very unlikely.

MR ROBERTSON:   We would so submit, your Honour.

CALLINAN J:   And also very unconvincing.  How can the discretion be properly exercised when the judge has said he does not have it?  One sees it from time to time.  It is never very convincing.

MR ROBERTSON:   With respect we would agree with what your Honour Justice Callinan says and not only is it said, “I have no discretion” but nowhere can one see any of the weighing or, indeed, any setting out of the material that was put before the judge as relevant to the discretion.  That is the point, if I may, of handing up these ‑ ‑ ‑

GLEESON CJ:   Your point is that he said he had no discretion and he did not act as though he thought he did.

MR ROBERTSON:   Yes, in short, and did not do it.  Yes, which was another way of putting what your Honour the Chief Justice puts to me.  Can I, perhaps, hand them all up at once?

GLEESON CJ:   Thank you.

MR ROBERTSON:   I will not take your Honours to it, but it sets out that material, that quality, in our respectful submission. 

GLEESON CJ:   Thank you.

MR ROBERTSON:   Those are the submissions of the appellants.

GLEESON CJ:   Thank you, Mr Robertson.  Yes, Mr Basten.

MR BASTEN:   Your Honours, might I go back to the question that your Honour the Chief Justice posed to my learned friend at the beginning because it encapsulates what we were seeking to do in paragraph 5.5 to 5.9 of the written submissions.  In other words, this case does not turn on the meaning of “may” and no one believes that these cases do and there is plenty of authority for that proposition and we have given your Honours a copy of an extract from Wade and Forsyth and Aronson and Dyer, which I may come to in a moment, but which make the same point.

The question is whether there is practical room for the exercise of any discretion that might otherwise exist in a particular context and when – I will take your Honours in a moment to what we say that the learned trial judge did do in this case and it is not a Wade v Burns point nor is it a question of exercising a discretion which he said he did not have.

The question was rather, “To what extent did he have a discretion?” and, in the terms used by Aronson and Dyer at page 9 of the bundle and 588 of the book, is it a case where a permissible reason for not exercising a power, which would indeed be a discretionary situation, has effectively run out?  That is the way they put it at the bottom of page 588 at page 9 of the bundle and as the authors say:

That is not to convert a “may” into a “must”.  It is simply to recognise that in public law, no repository of a discretionary power can exercise or decline to exercise it on arbitrary or otherwise impermissible grounds.

That, with respect, your Honour, brings one back if I might - and I know your Honours say that Finance Facilities has no bearing on the outcome of this case, and we would respectfully agree, but might I just briefly take your Honours, in 127 CLR to pages 134 to 135, where Justice Windeyer sets out the principle, which is now well known, and in a passage which I do not wish to take your Honours through in detail.  It begins at about point 3 on 134.  The point I seek to make is merely this, that at the end of the day, at page 135 in the paragraph commencing at about point 6, his Honour sets out a test.  He says:

The Commissioner’s contention, that he can in his discretion refuse a further rebate notwithstanding that he is satisfied that the conditions for allowing it exist, leads on to a consideration of the grounds on which he claims he might legitimately do so.

That is the test which, taken from the point of view of a decision‑maker or a trial judge, will precede the conclusion that one particular matter may mandate a particular result in a particular case and the crux of our case is this, in relation to the way Judge Herron dealt with it.  May I take your Honours to the appeal book at page 14 ‑ ‑ ‑

GLEESON CJ:   Just before you leave Finance Facilities, can I direct your attention to the sentence beginning on the bottom of 133 and the first sentence on 134?  That is really the foundation of the decision, is it not?

MR BASTEN:   Yes.

GLEESON CJ:   That a taxpayer, on the true construction of the Act, had a right to a rebate, when facts were made out.

MR BASTEN:   Yes, indeed.

GLEESON CJ:   And the Commissioner had no discretion to deprive the taxpayer of that right because the Commissioner thought that the taxpayer’s conduct was unsporting.

MR BASTEN:   Yes, indeed.  We accept that, your Honour.  Might I say two things about that case?  One is that it allows for such a non‑discretionary exercise of power even though the criterion, which may be no more than reasonableness, is one which itself requires an evaluative judgment.  The second point we seek to make is that it is one of the category of cases which, in effect, deals with powers in relation to private rights.  It is not, therefore, relevant in this case.

I wanted to come back in a moment, if I might, to Pyrenees Shire Council for the proposition that there is a quite separate category of circumstance in which Bishop of Oxford type reasoning applies and that is where one has a power conferred on a public authority for the protection of the public or a sector of the public, particularly in circumstances where, at the end of the day, one can say that the public have no other means of protecting themselves from the social consequences in question.

GLEESON CJ:   Just before you pass away from Aronson and Dyer, can I take you back to the passage you showed us here?

MR BASTEN:   Yes.

GLEESON CJ:   What the authors are saying is that there are circumstances where a discretion is conferred, but there is no permissible reason why the discretion should not be exercised in a particular way.

MR BASTEN:   Yes.

GLEESON CJ:   In the present case, is it your argument that once it is found that there is an interference with the amenity of the neighbourhood, there is no imaginable discretionary consideration that could justify a decision neither to suspend nor cancel the licence?

MR BASTEN:   Your Honour, that is a broad proposition.  Certainly, his Honour dealt with it in the context of the material before him.  His Honour considered certain matters and said that they could not possibly in the circumstances before him provide a reason for not exercising the power.

McHUGH J:   Yes, but you are avoiding the construction of the section by going to the facts of the case.

GUMMOW J:   Exactly and, if I may say so, by twisting material that goes to mandamus.

MR BASTEN:   What I was going to do ‑ ‑ ‑

GUMMOW J:   In some circumstances mandamus goes in peremptory terms.  There is what has been – Ipec-Air was one of them.

MR BASTEN:   Indeed and ‑ ‑ ‑

GUMMOW J:   But that is not what we are talking about here.  We are at the earlier stage, we are construing the statute itself.

MR BASTEN:   I understand that, your Honour.  All I am saying is that the case put against us is on a construction basis, in effect adopting a label, namely that a power coupled with a duty must be exercised and that is not this case, as if one can simply look at a power and say, is it coupled with a duty or not in the abstract?  Now, it may be necessary to look at the power and determine whether the discretionary factors which might exist do in fact exist in relation to that exercise of power.  It may be appropriate, and I will come to this in a moment, if I may, to distinguish between the heads of power which are being exercised, albeit within one regulation.  But what we say at the end of the day is that this was a case where the trial judge was entitled to come to the view that he had, in effect, no discretion, but only after dealing with those factors which might otherwise have been and were raised as the basis for the exercise of discretion.

GUMMOW J:   You are abandoning the Court of Appeal, are you?

MR BASTEN:   I am not sure that ‑ ‑ ‑

GUMMOW J:   I am looking at paragraph 81 of the Court of Appeal judgment.

MR BASTEN:   Yes.  Your Honours, there is a passage ‑ ‑ ‑

GUMMOW J:   If you are, you should not own up.  Start again.

MR BASTEN:   Can I say this, I think in our written submissions we do not seek to two aspects of the Court of Appeal’s reasoning. 

GUMMOW J:   You do not seem to be supporting paragraph 81 which is their crunch point.  That is what is led up to by these other matters that ‑ ‑ ‑

MR BASTEN:   Yes, I was going to come to them, if I may, your Honour, because 81 is purely in conclusory form and it seems to follow from the reasoning in paragraphs – I am so sorry?

GAUDRON J:   Do you have a notice of contention?

MR BASTEN:   Not in relation to this aspect of it, your Honour, because I do not think it is – well, we thought about it, I did not think it was necessary and perhaps if I am wrong, I can be told that.  But can I develop the argument in order to explain why.  It is not paragraph 81 which we ultimately depart from.  What we do accept, though, is that paragraphs 78 to 81, and in particular the first sentence of paragraph 80, is not in its terms convincing.  In other words, the nature of the regulation‑making power does not take the Court in itself to the conclusion in 81.

McHUGH J:   You would almost be forced to say that otherwise the new clause 149(2) would be invalid.

MR BASTEN:   That is so and to be honest I cannot assist your Honours particularly with what that particular stage in the reasoning in the court is intended to mean because it is, frankly, not clear to me.  I accept entirely that one simply could not approach that regulation‑making power in 24(2) to reach a conclusion that one sort of regulation would be beyond power in the way that your Honour puts.

McHUGH J:   But, Mr Basten, you are making a valiant effort to drop this case from the general to the very particular, but if you look at what Judge Herron said at pages 19, line 35 over to line 20, can there be the slightest doubt that his Honour was saying he had had no discretion because of the terms of the regulation?  He was not concerned with the facts of the case.  If you start at page 19, line 35 and read through to line 3 on page 20.

MR BASTEN:   Yes.  If might just indicate the structure of what we understand his Honour to have been doing.  At the outset on page 14 around lines 15 to 25 he states his conclusion and said he had “some reservations” for three reasons.  One was the “interests” of the patients, the other was:

the need for the clinic in the area –

and the third was:

the interest of the appellants –

Then he sets out some background material, including the grounds.  He notes at the top of page 17 that the:

need for a methadone clinic in the Fairfield area –

was never disputed.  Then at the bottom of page 18 he identifies, in substance, what one might describe as the jurisdictional fact which he needed to address and which of course was not simply a matter of opinion but his conclusions on that fact were not challenged in the Court of Appeal.  Then he turns at page 19, line 35, at your Honour notes, to the fact that he was pressed with the argument that the need for the clinic should be weighed against “the attribute” presumably the “disruption of the amenity” and his Honour says at line 45:

It seems to me, however, that once I found that the supply of methadone by the clinic was “causing a disruption . . . I would have to confirm the cancellation.  Any discretion given by the regulation “must be exercised having regard to the policy and purpose” of the regulations which confer the authority –

and in that context he refers to Justice Windeyer in Finance Facilities, and so on.  Then at line 25, he says:

From the discussion there it can be said that an apparent discretion to act can be rendered obligatory, according to the circumstances of the case, and I think that this is the position with regard to regulation 149.  But in any event I think that if the interests of the clinic and its users were to be weighed, as against the interests of the members of the community . . . scales, I feel, would have to tip in favour of the members of the community.

GLEESON CJ:   Now, that is a considerable contrast with the way the Director‑General approached the matter on page 11, line 35.

MR BASTEN:   Yes.  He certainly expresses it in different terms, your Honour, but I wonder if at the end of the day, and I really put this in terms which are not meant to suggest that he is exercising some broad weighing function:  what he is saying, in substance, is that these other matters cannot tip the balance against my finding of disruption of the amenity and although he says that with regard to regulation 149 it would seem that he only addresses, and correctly only addresses, attention to paragraph (f) and we would wish to say something about that.

Your Honours, when he then goes on to consider the evidence, which he does in some detail, he does refer to the evidence which relates to the other factors.  It seems that Mr Turner did not press the position of the appellants as an interest to be regarded particularly, and that may be because they were subject to some difficulty in terms of their own position.  At page 40 at lines 5 to 20 they were really saying that the reduction in numbers to either two or three hundred, which had been imposed upon them, presumably, as a means of, on an interim basis, seeking to ameliorate the disruption of the amenity, left the clinic in a non‑viable economic position, and that appears at line 15.

GUMMOW J:   Mr Basten, what was going on in the Court of Appeal?  What was the nature of the proceeding?

MR BASTEN:   The nature of the proceeding, your Honour ‑ ‑ ‑

GUMMOW J:   The order at 97, of the Court of Appeal, talks about dismissing an appeal.

MR BASTEN:   I know ‑ ‑ ‑

GUMMOW J:   The relief that was sought appears at page 47.  It has nothing to do with an appeal.

MR BASTEN:   No, it is nothing to do with an appeal. It is an application based on section 69 of the Supreme Court Act.  The ground which appears to have been argued was error of law on the face of the record and, pursuant to 69(3) and (4), the record includes the reasons for judgment of the District Court judge.

GLEESON CJ:   I am looking at page 51.  Do you mean that the argument in the Court of Appeal was limited to paragraph (a) on 51?

MR BASTEN:   I think, and (b), your Honour.  I am sorry, no, I withdraw that.  The argument relevant to this Court was so limited, the Court of Appeal dealt with other arguments which include questions of evidence and an issue as to whether his Honour addressed the timing correctly, namely, whether he addressed the facts as they existed at the time of the appeal.  That appears at page 90, the second issue, and questions of his application or otherwise of the Evidence Act appear at page 92.  Now, whether they are appropriate ‑ ‑ ‑

GAUDRON J:   It was an application for prohibition.  I mean, I see there is reference to declarations sought, but it would seem that the proper remedy was prohibition, certiorari and then mandamus to reconsider the appeal.

MR BASTEN:   Yes, but taking, as it were, the lowest position most favourable to the claimant in the Court of Appeal, because if he could establish error of law on the face of the record, he could set aside the decision.

GUMMOW J:   What do we do about these orders at page 97?  They are meaningless.  They do not speak to the jurisdiction that was being exercised.

MR BASTEN:   No, that is right.

GAUDRON J:   To that extent, the appeal would have to be allowed whether your arguments are right or wrong.

MR BASTEN:   Yes.  Well, that was where I wondered if we should have cross‑appealed, your Honour, because the correct orders to be made in the court would have been to dismiss the summons.

GUMMOW J:   We should not have to attend to these matters, really.

MR BASTEN:   I appreciate that.

GLEESON CJ:   What about order No 2, an order that “The licence . . . be cancelled”?  What was the jurisdiction that the Court of Appeal was exercising there, to cancel the licence?

MR BASTEN:   I think what that was intended to be, your Honour, was a variation of the date upon which the cancellation should take effect.  They explain ‑ ‑ ‑

GLEESON CJ:   What was the power they were exercising there?

MR BASTEN:   There is an issue about that, your Honour.  If they were to dismiss the summons, the basis on which they could interfere with the order of the trial judge is, perhaps, problematic.  As I understand it, what, in effect, they were doing was to lift the stay by setting a date in the future.  There was a stay in effect on the order of the trial judge and that, no doubt, is an order which is open to the court in its interlocutory jurisdiction to preserve the subject matter of the summons, possibly.  What they must have been doing, in effect, was terminating the stay but as at a future date.

GAUDRON J:   That itself raises very, very interesting questions which I am sure you do not want to argue today.

MR BASTEN:   Your Honour, it raises interesting questions but it is perhaps not necessary for us to argue them today.

GLEESON CJ:   On this appeal we are only concerned with paragraph (a) on page 51, are we?

MR BASTEN:   Yes.  May I just say this in answer to your Honour Justice Gaudron, that there is no consequence from the respondents point of view in the precise form of the orders.

GLEESON CJ:   Do I understand your argument to be that your answer to paragraph (a) on page 51 is that his Honour did not so construe the words?

MR BASTEN:   Yes.

GLEESON CJ:   That is the issue before us?

MR BASTEN:   In substance, yes, because we say that what his Honour did was to adopt the second approach which your Honour raised, mainly, that if the jurisdictional fact in paragraph (f) of the clause was made out there was no practical room for the exercise of the discretion.  That is why I was taking your Honours to that passage to which Justice McHugh took me at page 19 and so on, because that appears to have been the approach adopted.

McHUGH J:   That would be wrong.  Even if it is made out, why are you not entitled to take into account the interest of clients on methadone?  Where are the people, the doctors and others who prescribe these matters?  The effect of the cancellation on the licensee and on its staff, why are they not all matters?  Why is the judge not entitled to say, “I found that there is a disruption but given the public interest in having these people treated it is insufficient to exercise the discretion”?

MR BASTEN:   Well, that raises the question, your Honour, as to how widely the discretion is open and I accept that that is an argument which must be addressed but my friends say we do not get to that.

McHUGH J:   I know, because you say there is no discretion under the regulation.  I am sorry, I am not quite sure about it.  I think you have been valiantly trying to say that this judge exercised a discretion on the facts of this case and not on the regulation, but everything he said seems to me to indicate that he thought he had no discretion under the regulation because of its term.

MR BASTEN:   Yes, can I say two ‑ ‑ ‑

McHUGH J:   Now, what is your submission?

MR BASTEN:   What we understand him to have done was to assess the nature of the power conferred under paragraph (f) and then to say that once the jurisdictional fact was established, the other factors were simply insignificant.  They may not have been ‑ ‑ ‑

McHUGH J:   Insignificant or irrelevant?

MR BASTEN:   Well, it may not matter, your Honour, because, unless these are matters to which such weight must be given that they are capable of overriding the jurisdictional fact, then it does not matter whether they are given no weight as irrelevant or so little weight as to be immaterial because there is no error.  That is the point we seek to make.

McHUGH J:   Your first submission would come to this, would it not, that if the judge had said on the evidence, “All of these clients would have to travel 50 to 60 miles to get methadone and in the circumstances I refuse to exercise a discretion to cancel the licence.  The judge erred in law.”  You would have to say that.

MR BASTEN:   Yes.

McHUGH J:   Yes.

MR BASTEN:   It may be that I am trying to make two separate points ‑ ‑ ‑

McHUGH J:   Or, in fact, your own client misconstrued the law at page 11 of his letter when he said that he taken into account:

the interests of clients presently on the methadone program at the Barbara Street Clinic; and the effect that cancellation of the licence will have upon the livelihood of the directors of the licensee, persons employed at the Clinic and prescribers who have patients dosed at the Clinic.

So, he misconstrued the regulation.

MR BASTEN:   No, with respect.  It is hard to compare two sets of reasons which come to the same conclusion.  Each addresses the same factors but they use different language and that is why we say, at the end of the day, that if he is simply saying that where this disruption is established – and both of them are really saying, “These are the factors which we accept are made out in factual terms” cannot achieve a different result.

Now, there must be an error of law in reaching that conclusion because it is clear that his Honour spent some time in relation to that matter.  He accepted, for example, the common ground that there was a need for the clinic in the area.  He did not say there was not and he accepted the evidence and appears to have taken it into account.  Why else does he recount it at page 43 that steps would be taken to meet the needs of “the clinic if it were closed”.  That is at line 15 on page 43 and my friend seeks to say at 42, line 40 that he had already made his mind up about the fate of the patients because he says “when this clinic is closed” not “if”.

McHUGH J:   Supposing Dr Samad had said in evidence, “Having heard this evidence now, I realise there is a problem which I did not know of before, and no one had brought it to my attention.  I will now take steps to eliminate it.”  Could the judge have a discretion in that situation? 

MR BASTEN:   No, not if he was convinced that the disruption was occurring. 

McHUGH J:   Well, I know. 

MR BASTEN:   It is really the same problem ‑ ‑ ‑

McHUGH J:   Yes, I know. 

MR BASTEN:   ‑ ‑ ‑ that arises in relation to the futility of the application.  I mean, what happens next, after all this time?  One goes back and assesses the facts as they currently exist, and the similar ‑ ‑ ‑

GAUDRON J:   But that cannot be so, really, can it?  As a matter of practical commonsense, the minute a licence of this kind is granted for particular premises, there is going to be disruption of the amenity.  On your argument, whoever it is, your client would be cancelling them every day.  These are the facts of life. 

GLEESON CJ:   What kind of an area would not have its amenity disturbed by a methadone clinic?

McHUGH J:   It would have to be a real industrial area.  Down on Botany Bay, somewhere down there in the industrial ‑ ‑ ‑

GAUDRON J:   I think it is a bit trendy, now. 

McHUGH J:   It is trendy. 

CALLINAN J:   Nothing is immune to gentrification. 

McHUGH J:   Not in Sydney, anyway. 

MR BASTEN:   Your Honours, there may be issues about that.  They are not really issues which ‑ ‑ ‑

GAUDRON J:   But it does really show that it is a discretion, does it not?  The fact that, as a matter of commonsense, there is going to be disruption of the amenity the minute one of these opens.  It does show that there is a discretion and it does show that these are the grounds upon which the discretion may be exercised, but that the decision-maker is to have regard to the objects and purposes of the Act generally, or of the regulations, which I would have thought would include providing methadone treatment for the people who require it or need it, as the case may be. 

MR BASTEN:   Your Honour, I want to come back, if I may, to regulation 149 and why I have been focusing on paragraph (f) for another reason, but if one goes to clause 143 of the regulation, it imposes two, no doubt, exegetically, circumstances in which the licence may appropriately be refused.  Regulation 143(2) says: 

A licence may not be issued unless the Director-General is satisfied that the premises to which the application relates are appropriate –

for, relevantly:

the supply of drugs of addiction.

Now, “appropriate” is, no doubt, a term of broad connotation, but in considering it, one would think that the Director-General would be certainly entitled, if not required, to take account, when dealing with premises for supply, that a ground of cancellation is disruption of the amenity of the area, so that if he were not positively satisfied that there would be no disruption of the amenity of the area, 143(2) would suggest that he cannot grant a licence. 

GAUDRON J:   In that case, I am surprised that any licences have been granted in any area in Sydney where there are residential dwellings.

MR BASTEN:   Your Honour, part of the answer to that actually comes in the way that the ‑ ‑ ‑

GAUDRON J:   All commercial ones and perhaps industrial ones and certainly not within five kilometres of a school or church, as they usually say in relation to houses of ill repute.

MR BASTEN:   Your Honours, the question was dealt with in terms by the District Court judge who had to consider what was involved with the concept of disruption of the amenity and without putting the factual circumstances too precisely, the argument that was raised against the Director on the facts was that the problem arose because you had 500 people coming to these premises virtually every day and if you reduce the number to 300 or even 200, you did not disrupt the amenity of the area.  Now ‑ ‑ ‑

GLEESON CJ:   The very concept – and they argue about this sort of thing in the Land and Environment Court every day of the week – of disruption of the amenity of a neighbourhood involves discretionary considerations, does it not?

MR BASTEN:   Yes, your Honour, it undoubtedly involves evaluative judgments, discretionary in that sense which I think the Court in Coal v Allied wanted to distinguish, and that is one of the points I made about Finance Facilities.  There was an evaluative judgment to be made by the Tax Commissioner in that case.  The fact that there is an evaluative judgment to be made does not mean that there may not be an obligation to act once that judgment is made and the satisfaction is reached.  All I am seeking to say ‑ ‑ ‑

GAUDRON J:   Now, where does this obligation come from?  There can only be an obligation in the terms you there used if the matters that your client took into account in the decision-making process matters are irrelevant.

MR BASTEN:   In order to determine whether they are irrelevant or at least, we would say, and it is sufficient to say of such little weight that they can properly be disregarded.

GAUDRON J:   How could they be of such little weight?

MR BASTEN:   In order to test that, one needs to look at the policy of the regulation.

GAUDRON J:   One needs to work on the assumption, does one not, that all matters are relevant unless inconsistent with the policy or all matters may be relevant unless inconsistent.  That is to say the only limits ‑ is this not 2HD, the only limits that are important are those limits which can be found by reference to the policy and object of the legislation.

MR BASTEN:   But, with respect, your Honour, this the other side of the coin.  What has to be said in this case is that these considerations are mandatorily relevant and ‑ ‑ ‑

GAUDRON J:   No, it is not.  No, it is not; not at all. 

MR BASTEN:   Well, they can be disregarded under Peko-Wallsend.

GAUDRON J:   No they cannot, no, no.  If somebody asks the decision‑maker to have regard to matters which are not in the exercise of a general discretion, then he or she must have regard to them unless they are excluded from his/her consideration by the objects or policy of the legislation.

MR BASTEN:   It would not be error to have regard to them, but it would not be error to fail to have regard to them unless ‑ ‑ ‑

GAUDRON J:   Why not?

MR BASTEN:   Because it is only reviewable error to fail to take into account things which one must.

GAUDRON J:   No, it is not. Where does that come from, section 69 of the ‑ ‑ ‑

MR BASTEN:   No, Peko‑Wallsend, your Honour.

GAUDRON J:   What jurisdiction was being exercised there?

McHUGH J:   AD(JR), was it not?

MR BASTEN:   Well, it was, but I do not understand its being thought that the exegesis of the common law principles in Justice Mason’s judgment in 162 CLR 39 and following were limited to the operation of the AD(JR) Act and, indeed, he, with respect, rather suggests the contrary, I think.  In particular, at pages 40 through to 41, where his Honour - perhaps I should start at 39 at point 5, paragraph (a):

The ground of failure to take into account a relevant consideration can only be made out if a decision‑maker fails to take into account a consideration which he is bound to take into account in making that decision: Sean Investments  ‑ ‑ ‑

GAUDRON J:   What does “bound” mean?  His Honour, there, says “bound” by implication.  For my part, I would have thought, in the area of certiorari that would not necessarily be correct.  If, I would have thought – when, indeed, for mandamus and prohibition, if a decision‑maker says, “I am not bound but they are not relevant”, that you would be right in the heart of constructive failure to exercise jurisdiction and also error of law on the face of the record.

MR BASTEN:   Well, that gives rise to a question as to whether it is the circumstances of the particular case which is giving rise to the ‑ ‑ ‑

GUMMOW J:   His Honour refers to 2HD over on page 40.

MR BASTEN:   He does, yes.

GAUDRON J:   So you are not bound to take something into account if it is not relied on, but I do not know what the ‑ ‑ ‑

GUMMOW J:   It was not the top of page 40  ‑ ‑ ‑

MR BASTEN:   I thought he was referring there to the concern that factors were taken into account which might not properly have been taken into account.

McHUGH J:   Yes, but your argument is twisting on its head what was put to you earlier, namely, if Judge Herron had taken matters into account such as the interests of the clients on methadone, and so on, and the interests on the directors and staff of the clinic, you have to say that is an error of law and Peko‑Wallsend would say it is not an error of law because, generally, it is for the decision‑maker and not the court to determine the appropriate weight to be given to matters to be taken into account.

MR BASTEN:   Well, his Honour gave consideration to them for the purpose of determining whether, in the circumstances of paragraph (f) power, these were factors which could weigh against what otherwise appeared to him to be an obligation to act and he was entitled - nobody suggested he was not entitled to take them into account in that way, I do not think.  My friend does not.  He wants to go further.

McHUGH J:   Does your argument lead to the conclusion that there was no power to suspend?

MR BASTEN:   No.

McHUGH J:   So even if he had found that it was causing disruption, nevertheless, he could suspend?

MR BASTEN:   Yes, and, indeed, that might be a good way to deal with the circumstances if it were thought that changes could be made to the operation of the clinic which would prevent the disruption.  I think there is a passage in which his Honour expressly adverted to that it – or maybe it was the Director‑General, I have now forgotten – and thought that there were no changes which could properly be made.

McHUGH J:   Yes, the Director‑General said he thought that ‑ ‑ ‑

MR BASTEN:   Yes, but that seems to be consistent with what was put to his Honour, namely that unless you had more than 200 or 300 people this was non‑viable, so that there is no error in that.

GLEESON CJ:   Mr Basten, your argument that Judge Herron did not really reason to the same effect as appears in the Court of Appeal at paragraph 81 has a problem, does it not?  On page 20 of the appeal book there is a smoking gun and it consists of the three references in bold type.  If you look at the passage in Pearce and Geddes “Statutory Interpretation” that he refers to, that passage also relates to what had been said by Chief Justice Jervis in Julius.

“the word ‘may’ is merely used to confer the authority:  And the authority must be exercised, if the circumstances are such as to call for its exercise”.

So it is that line of country that treats the word “may” as facultative rather than as conferring a discretion that is the subject of Finance Facilities and Julius v the Bishop of Oxford and the passage in Pearce and Geddes.  That was Judge Herron’s answer to the argument that he recorded on page 19 at line 36.

MR BASTEN:   Your Honour, we take the reference to Finance Facilities to be a reference, perhaps particularly to the passage in the middle of page 134 in Justice Windeyer’s judgment, where his Honour says at about point 4:

Still less is the question answered by saying that “may” here means “shall”.  While Parliament uses the English language the word “may” is a statute means may . . . If the scope of the permission be not circumscribed by context or circumstances it enables the doing, or abstaining from doing, at discretion, of the thing so authorized.  But the discretion must be exercised bona fide, having regard to the policy and purpose of the statute –

and that is the phrase his Honour picks up.

GLEESON CJ:   Judge Herron was rejecting the argument that he records on page 19 at line 36.

MR BASTEN:   Yes.

GLEESON CJ:   Do you invite us also to reject that argument?

MR BASTEN:   Yes, because once one takes account of the policy and purpose of the statute that is a proper construction of the power, we would say.

GAUDRON J:   What does that mean, in the circumstances, once one takes account of the policy and purposes of what, the statute or the regulation?

MR BASTEN:   In fact, in this case, it is the regulation, in substance.

GAUDRON J:   Now what is the policy and purpose of the statute and how does it operate to direct that conclusion?

MR BASTEN:   Your Honour, if one goes to clause 149 ‑ ‑ ‑

GAUDRON J:   That is of “a regulation”.  I am prepared to think you might find it in the purpose and policy of the regulations.  You, however, would say in the Act.

MR BASTEN:   I was quoting from Justice Windeyer as dealing with an Act, your Honour.

GAUDRON J:   Yes, well, I would like to go to where I am to find this policy and purpose that you rely on and then I would like you to tell me what you say the policy and purpose is and then I would like you to tell me how you say it directs the conclusion that Judge Herron reached.

MR BASTEN:   Your Honour, the Act provides no more than a structure for dealing with drugs of addiction.  It does so in Part 4 and it does so in sections 23 through, effectively, to 28.  It makes in Division 2 - particularly in section 28 – it provides restrictions on prescribing drugs of addiction and it requires approval to be given for those.  It says in 29 that the:

Director‑General may authorise prescription or supply of drugs of addition –

and it provides expressly in section 24 for the making of regulations with respect to various mechanisms for supplying drugs of addiction.  It is therefore necessary to go to regulations because the substance of the matter is dealt with there.  If one starts with subdivision 5 in Part 4 of the regulation at clause 102 one finds a prohibition on manufacture or relevantly supply a drug of addition, absent authority or a licence.

GAUDRON J:   So, the policy of the Act and regulations is to regulate and exercise a degree of administrative control over the supply of drugs of addiction.  Do you say it is any more than that?

MR BASTEN:   In form it works by the imposition of a prohibition subject to a permission, and that may be important.

GAUDRON J:   Yes, but is the policy any more than to regulate and provide for administrative control over the supply of drugs of addiction where such supply is permitted?

MR BASTEN:   I think we would put it with a slightly different emphasis, your Honour, that it demonstrates a policy of prohibiting supply absent a licence, relevantly, granted in accordance with the provisions.  Then if one turns to clause ‑ ‑ ‑

GAUDRON J:   So, yes.

MR BASTEN:   One needs to read all of the provisions in order to understand how much ‑ ‑ ‑

GAUDRON J:   Yes, but do you not have to take it a little bit further than that, except in accordance with the licence.  Now, you have to find that “something” about the licensing.

MR BASTEN:   Yes.  I accept that, your Honour.

GAUDRON J:   Does it go beyond administrative control, the policy go beyond administrate control?

MR BASTEN:   I am not sure whether if a prohibition with a criminal penalty in support is a form of administrative control, no, but that is the mechanism for administrative control.  The mechanism for excusing or permitting or authorising activity absent that penalty is to be found in the grant of a licence under clause 143.  Clause 143, in effect, deals specifically with only two circumstances.  One is to do with the applicant, the other is to do with the premises.

Now, the Court of Appeal said, as my friend noted, that in relation to 1(A) and when one comes to the refusal of a licence, that is, as the court put it, discretionary.  We do not accept that.  We understand that to be an example of a circumstance, and there is an obligation.  We do not read 143(1A) as conferring some broad discretion.  Once the Director‑General is positively satisfied that the person is not fit and proper, that application should not be granted.  It is clearer when one comes to (2), because it says:

unless the Director‑General is satisfied that the premises to which the application relates are appropriate –

again, the licence may not be issued.

So that when one comes to 149 one finds there are two clauses which reflect those two requirements, namely (d) and (f), and one would say of those that there is an ‑ ‑ ‑

GAUDRON J:   That is not true.  That is not an accurate statement, Mr Basten.

MR BASTEN:   Can I – I did go through ‑ ‑ ‑

GAUDRON J:   (f):  suitable premises and disruption of amenity are not the same concepts.

MR BASTEN:   No, but ‑ ‑ ‑

GAUDRON J:   The emphasis on the premises is related to some – I do not know, but presumably you have to have toilets or hand basins, chairs for people to sit on while they are waiting, and the other sort of things that you have in a doctor’s surgery.

McHUGH J:   And it is made plain by the fact that one limb is that the premises must be appropriate for the manufacture.

MR BASTEN:   I think the point I was seeking to make when I referred to these earlier was that appropriate premises was a wider concept than the point raised in (f) which, as your Honour ‑ ‑ ‑

GAUDRON J:   I would have thought they were different.

MR BASTEN:   What I was seeking to put was that (f) provided a sub‑class of inappropriate premises, and that one needs to read 143 and 149 together because they are addressed to the same circumstances.

GAUDRON J:   If one takes the other view of that, what happens to your argument? 

MR BASTEN:   It is weakened, your Honour, because it is clear from 143 that a positive satisfaction is a form of mandatory requirement.  But it does not mean that, I suppose – putting the case against me in a simple way – if there was no reference in 143 to the nature of premises, it does not mean that the argument in relation to the obligation to revoke in paragraph (f) ‑ ‑ ‑

GAUDRON J:   The discretion.  We have already agreed on the discretion, have we not? 

McHUGH J:   Mr Basten, even if you accept your argument about 143, the fact is that these licences go on for years, and when one grants a licence, one knows that the surrounding areas may change, the amenity may change ‑ ‑ ‑

MR BASTEN:   Indeed. 

McHUGH J:    ‑ ‑ ‑ but one knows that.  So, in effect, you are sending this missile into the community and at some stage, because of changes in circumstances, it may have quite a disruptive effect.  But why should not the court and the Director have a discretion to say, “Well, true it is, it now disrupts the amenity, but it is still performing a very valuable public service”? 

MR BASTEN:   Your Honour, obviously, that would be, in policy terms, an acceptable position for the government to take.  It might equally have been thought appropriate that because methadone clinics were so unpopular, one had to have a much tighter control over them, and that if that is reflected in the regulation, that is what is reflected.  The disruption of the amenity of the area does envisage the possibility of changed circumstances of the area after the date of the grant of the licence. 

McHUGH J:   But there are two public interests – two competing public interests – here.  One is the protection of the amenity of the neighbourhood where the premises are situated; the other is the public interest in providing these drugs of addiction to these particular persons. 

MR BASTEN:   Yes, and there is nothing in the cancellation provision relating to a discontinuance of need, as it were.  The need is the underlying policy which everyone accepts, but it does not follow that because there is a need, somebody who is convicted of importing heroin and is therefore no longer fit and proper should be allowed to continue to operate the premises. 

GAUDRON J:   Well, neither the Act nor the regulations says that they should be.  If it says anything in that area, it says, “maybe”. 

MR BASTEN:   Well, I put an argument to the contrary and I do not want to repeat it, but ‑ ‑ ‑

GAUDRON J:   Then I do not understand that argument.  I thought when you started off you accepted that “may” means “may”.

MR BASTEN:   It does mean “may”, but the question is whether ‑ ‑ ‑

GAUDRON J:   Clearly enough, the scope of the things or the weight that might be given to countervailing considerations may vary, according to different grounds, but it does not follow that there are no countervailing considerations for any of them, does it?

MR BASTEN:   No, it certainly does not.

GAUDRON J:   You accept that there may be a countervailing consideration for (f)?

MR BASTEN:   Yes.  His Honour accepted that there might be, that there were.

GAUDRON J:   But it does not include what his Honour said ‑ ‑ ‑

MR BASTEN:   No, with respect, it includes all the things to which his Honour referred.  The question is not whether there may be countervailing considerations and excellent policy reasons for a contrary conclusion.  The question is whether the Parliament, or in this case the regulation maker, has already dealt with those matters in a way which does not leave it open to the court to weigh those factors.  One of the points I was seeking to make was that the need to which his Honour Justice McHugh was referring is a consideration which, it would seem, has been assumed by the Parliament because there is no suggestion that the need will dissipate and, therefore, the licence might be withdrawn on that ground.

GLEESON CJ:   Mr Basten, the fact that brings (f) into play is the operation of the clinic is causing disruption.  Is not the most obvious countervailing consideration that might be taken into account a consideration of whether some measures might be taken to minimise the disruption?

MR BASTEN:   Yes.

GLEESON CJ:   Precisely the factor that your client is seen taking into account on page 11.  So the fact that there is disruption occurring does not produce the consequence that there are no ways by which that disruption can be eliminated or minimised without suspension or cancellation.

MR BASTEN:   It does not follow, your Honour, but it does not mean that the licence is not required to be suspended whilst those measures are put in place.

GUMMOW J:   When you say “is required”, do you mean, what, the Director‑General could be mandamused to do it?

MR BASTEN:   Yes.  If the Director‑General said, “I am satisfied that this clinic is causing disruption to the amenity of the area, but because I can put into place variations of the licence which, over a period of three months, will abolish that disruption, or diminish it sufficiently so that it would no longer be described as disruption of the amenity, therefore, I will not suspend or cancel the licence”, we would say he would be obliged to suspend the licence for the period during which he wanted to put those ‑ ‑ ‑

GLEESON CJ:   That is a very artificial conclusion.  Let us suppose he came to the view that he could eliminate or sufficiently reduce the disruption by altering the conditions of the licence so that the hours of operation of the clinic were substantially reduced.  Do you mean he would have to suspend the licence for what period?

MR BASTEN:   Your Honours, looking at it in the abstract, for a sufficient period for that change of condition to be put into operation and, I am sorry, I cannot tell your Honour whether there is power to change immediately so that people are thrown out on the street and decisions ‑ ‑ ‑

McHUGH J:   This seems a very odd result having regard to the terms of clause 150 because before suspending or cancelling, even though the Director is convinced that there is a disruption, he is required to “give the holder of the licence or authority a reasonable opportunity to make representations” and then he has to take those representations into consideration.  So, a considerable time may elapse before the Director can act under 149, even though all the conditions are fulfilled.  So why should you say that the moment he has considered the matters under 150 he then has to forthwith cancel or suspend and he cannot allow the matter to go on with some conditions.

MR BASTEN:   Simply because that is not – obviously, one is arguing about whether or not the regulation reflects a flexible or inflexible governmental policy.

McHUGH J:   I know that, but because “may” can confer a discretionary power or act or it may confer a power to act that has to be exercised when a duty to act arises.  You have to go so far as to say that this case is in the second category, that the moment you find a court or the Director finds that the supply of methadone is causing disruption of the amenity, then there is a duty to act and, therefore, the power conferred by 149 comes into existence.  Now, it must be a duty that only arises after he hears the 150 representations.

MR BASTEN:   The duty to act would only arise in that circumstance and no doubt – I mean, the question of the disruption of the amenity, as appears from the discussion in Judge Herron’s judgment, is a matter about evaluation of circumstances, for example, what happens in the street outside the clinic about which the holder of the licence might well have things to say?

McHUGH J:   The judge’s reasons seem to me, anyway, to make a very persuasive case that there is a disruption of the amenity; but, that said, what about all the other factors that one would think ought to be taken into account before you cancel or suspend a licence?

MR BASTEN:   I suppose I was working on a more limited basis that I needed to explain a justification for providing some form of procedural fairness to the holder of the licence which might be satisfied without going to the extent of suggesting that that provision in clause 150 implied that there were other matters which needed to be taken into account, like whether the holder would suffer hardship or otherwise.  Those factors might yet relate to the jurisdictional fact of causing disruption and he might say, “These people who are causing disruption in the street according to the complaints you have told me about have nothing to do with my clinic.  They come from the Social Security office opposite.” which is exactly what he did say in part.

McHUGH J:   Why does not clause 145 operate in this context about conditions of licence?  Instead of cancelling or suspending why, having received representations under 150, is not the Director entitled to, instead of cancelling or suspending, imposing some condition which will meet the problem?

MR BASTEN:   If there were conditions which would meet the problem, depending on – if it is an (f) problem, still –there is a question about whether they will operate immediately.  I mean, if they will not, then one is satisfied in the present tense and it is only in the future that the amelioration occurs.  If they occur immediately then when the time comes to cancel or not the present tense is no longer satisfied.

McHUGH J:   Yes, but what I am putting to you is that supposing the Director, or for that matter the District Court, comes to that conclusion that there is a breach of paragraph (f) but says, “Well, the way to get around it is to impose a further condition, so, we will not suspend, we will not cancel, we will impose the condition”.

MR BASTEN:   Assuming it were the Director‑General, because he has the power to vary the conditions.  Your Honour, in a sense, that happened in this case and that there was an attempt to ameliorate the conditions whilst all these proceedings had been going on for three years, but ‑ ‑ ‑

McHUGH J:   Do you say the District Court, on appeal under 152 does not have that power?

MR BASTEN:   Yes.

GLEESON CJ:   Take a simple example:  suppose the disruption to the amenity of the neighbourhood resulted from a lot of needles being left lying around on the ground and the Director‑General said, “Well, I am not going to suspend or cancel the licence, I am going to impose a condition that they provide bins and they supervise people and make sure that they put all their used needles in bins.  Is not that a simple example of a situation in which, although (f) is made out, a proper exercise of discretion would not require either suspension or cancellation?

MR BASTEN:   Yes, your Honour, if the conditions were varied in that form because, I mean, one is looking at a temporal element only, I suppose.  What the Director‑General is really saying is that – I mean, what in practical terms he would say would be, “I am satisfied that there is a disruption.  I am going to deal with it.  I will write to the licence holder under section 150 and ask him to show cause and I might even suggest to him that this change might ameliorate the situation and see what he has to say about it and whether he would accept the condition, in those terms.  He might not, in which cancellation will be the only choice”.

But, obviously, where there is a possibility of variation of a licence that is a course open to the Director‑General, but it simply was not the case that arose in the present circumstances on the facts as found by either the Director‑General who gave it express consideration or, it would appear, the District Court judge who thought that the real solution was to reduce the numbers and that was going to be non‑viable so he left it a that.

GLEESON CJ:   But the example just given is a fairly short answer to paragraph 81 of the Court of Appeal, is it not?

MR BASTEN:   Not in the context of the case, your Honour, because in the circumstances in which this case was being dealt with their Honours’ conclusion, though stated in absolute terms in clause 81, was correct.  One cannot read paragraph 81 absent a consideration of the material that goes before it.

McHUGH J:   Do you support paragraph 81.  I was not quite sure.

MR BASTEN:   I would not have drafted it that way, myself, probably, your Honour, but I mean, the conclusion that their Honours come to ‑ ‑ ‑

McHUGH J:   What about late payment of the fee, if I pay the fee on 1 October instead of 30 September?

MR BASTEN:   Your Honour, the argument that applies in relation to “fit and proper” and “disruption of the amenity” does not necessarily follow for all of the other provisions of the clause.  One is entitled, with respect, to take them separately.  In Derisi ‑ ‑ ‑

McHUGH J:   I understand that, and that is the obvious answer that I would expect from you given your major premise, but paragraph 81 is not consistent with that view.

MR BASTEN:   If Your Honour reads paragraph 81 as going so broadly, it goes well beyond what was necessary to decide the case and I do not seek to support it.

McHUGH J:   The court said:

which must be exercised if one or more of the matters in the clause are established.

MR BASTEN:   I do not – yes, if the clause refers to the whole of 149, I do not seek to support it.

GUMMOW J:   What is the citation of Derisi?

MR BASTEN:   Derisi [1983] 3 NSWLR 17. I was going to that to distinguish it on one point. If one goes to page 22C, one finds that their Honours concluded that whereas the power to cancel might have been thought to be mandatory, as they put it on one view, because the power to disqualify was, for various reasons they dealt with, clearly discretionary, it would obviously be theoretically possible but unlikely that Parliament intended that dichotomy. We are not suggesting that dichotomy.

What we do suggest, however, is that some of the grounds may be dealt with differently.  There is a reason why one needs to deal with the grounds differently.  For example, I think reference was made, perhaps by your Honour the Chief Justice, to paragraph (b) in clause 149 which referred to the holder contravening any condition of the licence, and there might be circumstances in which that could be seen to be not de minimis but a very small contravention.  One has to take into account, however, that clause 145(3) says:

A licence is ineffective unless its conditions are complied with.

Now, what that might mean in a particular circumstance of course requires consideration, but if it is ineffective, then presumably the penalty prohibition in clause 102 will apply in the circumstances.  So that there are other factors and other construction points which may arise in relation to other clauses.  It does not matter we would think for present purposes, but in relation to the non‑payment of a fee, if the Director were satisfied that the fee would be duly paid in due course, no doubt he could appropriately suspend until it were paid.  But I do not seek to go so far as to justify paragraph 81 in its broadest terms.

Might I go back to complete one point I raised earlier by reference to Pyrenees Shire Council v Day 192 CLR 330, which of course is a case in a very different context. The purpose for going there is to justify the proposition that whereas Finance Facilities represents one category of case in which the room for discretion may soon run out, the public protection cases represent another.  It was precisely in that ‑ ‑ ‑

GLEESON CJ:   Just before you continue.  Finance Facilities was not a case in which the room for discretion may soon run out.

MR BASTEN:   No.

GLEESON CJ:   It was a case in which there was no room for discretion.

MR BASTEN:   There was no other permissible consideration which could – that is so, I accept that.  In particular in Chief Justice Brennan’s judgment, in a passage which really commences at paragraph 20, referring to Lutz’s Case, and a qualification which is imposed after reference to Stovin v Wise in paragraph 21.  At paragraph 22 his Honour says:

I respectfully agree that if a decision not to exercise a statutory power is a rational decision, there can be no duty imposed by the common law to exercise the power.  I further agreed that if it be contrary to the policy of the statute to confer a private right to compensation –

and that, ultimately, was the question in this case, and so on.  Then, at paragraph 23, his Honour says:

But the existence of a discretion to exercise a power is not necessarily inconsistent with a duty to exercise it.

And refers to Julius and Padfield.  It is in relation to Padfield that we provided your Honours with an extract from Wade and Forsyth in that bundle I provided this morning, where Wade and Forsyth also deal with Padfield and treat Julius and Padfield as the leading examples of abuse of discretion.  That is how Padfield dealt with the matter itself, as appears from a passage from Lord Reid, at page 346 in Pyrenees Shire Council and by reference to the passage from Royal Insurance which follows that.  A similar approach was adopted by Justice McHugh in Pyrenees Shire Council where at paragraph 110 on page 371, your Honour said:

Accordingly, I do not think that it is correct to say that the doctrine of general reliance is a fiction . . . There is nothing novel in the proposition that, despite the conferment of a discretionary power, particular circumstances may require the power to be exercised.

Then your Honour goes onto the next point in the case.  At paragraph 119 your Honour accepts Chief Justice Brennan’s approach in part:

I fully accept that the circumstances may require a power such as that conferred by a s 695(1A) to be exercised and that the failure to exercise the power may give rise to a breach of duty under the statute –

and not relevantly for present purposes:

to an action for damages at common law –

and of course, the sorts of powers which were being considered in this case, as noted by both your Honour and Chief Justice Mason, where the powers which have been discussed by Chief Justice Mason in Sutherland Shire Council in a passage set out at paragraph 18 at the end of the quotation relating to:

The control of air traffic, the safety inspection of aircraft and the fighting of a fire in a building ‑ ‑ ‑

GLEESON CJ:   Is this in aid of an argument on your part that in the circumstances of this case there was no other proper exercise of discretion reasonably open to Judge Herron?

MR BASTEN:   Yes, because the power being conferred, initially on the Director‑General, was a power of a similar kind, namely, to provide for the protection of the amenity of the area by revoking the licence in circumstances where only he could achieve that result and that it was a similar social purpose to the those identified by Chief Justice Mason in Sutherland Shire Council.  Therefore, there is a category of cases into which this falls.

GAUDRON J:   So, your client would have been liable in negligence to anybody whose property values declined if he did not act immediately?  You would go so far as to expose your client to liability in negligence?

MR BASTEN:   No, your Honour.  Pyrenees Shire Council, it is only the Chief Justice and Justice McHugh who adopted that approach, and there is a separate question, as I noted, as to whether a breach of statutory duty gives rise to any claim in damages.  That is an entirely separate issue, which was addressed by the majority in that case in a different way.

GLEESON CJ:   But if you have failed to persuade us that Judge Herron regarded the case as one calling for the exercise of a discretion and exercised his discretion against the appellant, then the argument that you are now putting goes to the question of futility, does it? 

MR BASTEN:   Well, it may go to the question of futility, your Honour. 

GLEESON CJ:   In other words, if we concluded that Judge Herron made the error of law attributed to him in the ground in paragraph (a) of the application to the Court of Appeal and if we conclude that the Court of Appeal made an error of law, then you must be seeking to persuade us that, even so, it would be futile to interfere with the decision of the Court of Appeal. 

MR BASTEN:   Yes, and ‑ ‑ ‑

GLEESON CJ:   Is that not a notice of contention point? 

MR BASTEN:   Well, not really, because it arises at the earlier stage, your Honour.  What I commenced by seeking to do was to say that there is such a category of cases involving protection of the public, and what both Judge Herron and, one would think, the Court of Appeal, in its careful analysis of the statutory provisions – which only miscarried at particular stages – were seeking to do was to establish whether or not this was such a statutory context. 

Now, I need to go further, perhaps, than the Court of Appeal in this sense, that their Honours – although, I think, referring to the passage in Pyrenees from your Honour Justice McHugh’s judgment – appear at some stages to rely, as his Honour did, on the Finance Facilities-type approach.  Now, obviously, Finance Facilities is a different case.  What I am seeking to say is that there is another category of case which was relevant and into which this case fell, if one properly understands the analysis of the statutory provisions, namely, the social protection case in which the community depends upon the Director-General as the only person who can effectively provide protection from disruption of the amenity of the area in which they reside or work. 

GUMMOW J:   I think you are setting up a category of false reference, it seems to me.  There will be some cases where, undoubtedly, there is a discretion but the particular circumstances of the case, or, as it was in Ipec, I think, the requirements of 92 of the Constitution will require the discretion to be exercised only in one way, in that particular circumstance. That is not a matter of statutory construction. You have found a discretion. That is a question of whether the mandamus is to determine according to law, or to proceed forthwith to grant or revoke the right in question. That is a question that has to be decided in a particular case. I think you are saying this was such a case and there would have been mandamus to cancel.

MR BASTEN:   Yes, but I say it in ‑ ‑ ‑

GUMMOW J:   That is not the way it was put in the Court of Appeal. 

MR BASTEN:   Well, it does not need to be put in that way, perhaps, if one is ‑ ‑ ‑

GUMMOW J:   Well, it does.  Otherwise, you are seeking to erect another false category, a false category of statutory construction. 

MR BASTEN:   But the answer is, in part, your Honour, that if mandamus would ‑ and perhaps this is the point that the Chief Justice is seeking to make to me and I was, in part, answering his Honour in making the statement I just did ‑ flow then certiorari would only be available on the basis of some error of law which was immaterial at the end of the day.  Obviously, a properly determined judgment that the exercise of duty was obligatory could not be set aside by certiorari.  It would be inconsistent.  There may be a ground for certiorari but it will ultimately achieve no useful result if the argument is correct.  I do not put it ‑ ‑ ‑

CALLINAN J:   Mr Basten, if the appellants were to succeed - I am looking at pages 102 and 103, the orders sought - what do you say the appropriate orders would be?

MR BASTEN:   I think we should have said in our submissions, “Summons dismissed with costs”.

GAUDRON J:   If they were seen to succeed.

MR BASTEN:   Yes.

CALLINAN J:   Not you, if the appellants were to succeed.

MR BASTEN:   I am so sorry ‑ ‑ ‑

CALLINAN J:   There are a number of orders sought at pages 102 and 103.

MR BASTEN:   I am sorry, I apologise.  Well, your Honour, that gives rise to a practical issue.  Obviously, if the appeal were allowed, the orders of the Court of Appeal would be set aside but there is a real question, though, as to whether it is appropriate to remit this case to the District Court on the basis that there was an error in that court because, if as is common ground, I think, the matter must be determined as the facts emerge at the date of decision, then three years after the original decision was made by the Director‑General, or four years by the time it gets back to that stage, no doubt, it might be inappropriate to ask the District Court to reconsider and it may be a matter which has to go back to the Director‑General to see if he is still of the view ‑ ‑ ‑

McHUGH J:   But the appellant is a person agreeing and they ask for certiorari to quash.  If their argument is accepted, there is in existence a record which, on its face, contains an error of law and which they are entitled to have quashed.  That means that their appeal is still on foot in the District Court, so it has to be continued.

MR BASTEN:   Yes, I suppose if there is still a matter on foot one can quash it without ordering that it be remitted to the District Court because it may be that the matter ‑ ‑ ‑

McHUGH J:   We could do it, but the fact is that the order having been quashed, they are entitled to have their appeal heard.

MR BASTEN:   Yes.

McHUGH J:   The District Court would be obliged to hear their appeal under clause 152.

MR BASTEN:   Yes, but it would presumably be open to the Director‑General in resisting the appeal to say that “I no longer rely upon the notice”, rather than litigate the whole matter on fresh evidence which is what would have to happen, as it ‑ ‑ ‑

McHUGH J:   I suppose, that is ‑ ‑ ‑

GAUDRON J:   But he has already cancelled.

McHUGH J:   The question is, having cancelled it, is there anything to cancel?  He cannot give another notice, I would have thought, because he has already cancelled the licence, so ‑ ‑ ‑

MR BASTEN:   He cannot while that cancellation remains on foot, I accept that.

McHUGH J:   No.

MR BASTEN:   No, I understand the point your Honour is making.

McHUGH J:   Yes.  So although it probably is not obligatory on us to make an order in terms of 11(vi), it seems to me that the proper orders, if the appeal succeeds, would to make orders in terms of 11(iii), 11(vi), 11(vii), and ‑ ‑ ‑

MR BASTEN:   Could I say something about 11(vii), your Honour, because we would say it is a matter for the District Court.  We were successful in the District Court but his Honour made no order as to costs.  The basis upon which that ‑ obviously his Honour’s decision as to costs will be set aside with the rest of his Honour’s order, but we would suggest that it is a matter which could be left to the Court to determine.

McHUGH J:   Yes, yes.

MR BASTEN:   Your Honours, I do not think there is anything further I can add.

GLEESON CJ:   Thank you, Mr Basten.  Yes, Mr Robertson.

MR ROBERTSON:   I will deal with half a dozen short matters, your Honours.  First, my learned friend relies on a passage in the District Court Judge’s reasons for judgment, page 14, to show that he has taken those matters into account.  We would submit that read as written, it is an indication that in fact his Honour has not taken those matters into account and he is expressing his reservations because he regards himself as having no discretion, despite those matters.

Secondly, your Honours, may I give you a reference in relation to taking into account the interests of the licensees to FAI Insurances v Winneke 151 CLR 342 at 360 in Justice Mason’s judgment where his Honour says:

It is now authoritatively established that the exercise of a power revoking a licence will attract the rules of natural justice, certainly when the revocation results in the loss of a right to earn a livelihood or to carry on a financial rewarding activity ‑ ‑ ‑

GUMMOW J:   It is in the regulations, anyway.

MR ROBERTSON:   Certainly, your Honour.  I am really turning that proposition the other way round, that is, those interests require natural justice in a case of revocation of a licence and that is an indication that those interests are relevant to a revocation.

Thirdly, your Honours, my learned friend said that the case was run in the Court of Appeal on the basis of error of law on the face of the record.  Perhaps it does not matter but it was also run on the basis of jurisdictional error but the Director‑General in the Court of Appeal said he took no issue because if there was an error then that would be sufficient, whatever its nature was.  That leads me, your Honour, to a matter that your Honour the Chief Justice has raised about page 51 of the appeal book.

Your Honour has referred to ground (a) on page 51.  Ground (a) and (b) were argued to be relevant to this issue in the Court of Appeal.  That is, in a sense, testing the statutory construction question by reference to what was left out of consideration.  Next, I think your Honour Justice McHugh raised the question – again, going to the discretion – about what it was that one of the appellants may have done in the face of the finding, or proposed finding, that the amenity had been disrupted.

In the two affidavits of Dr Samad that I handed up to your Honours there is a list of things that Dr Samad had done and proposed to do in relation to trying to deal with the disruption to the amenity.  Your Honours will recall that he and Mrs Samad had recently taken control of the company.

McHUGH J:   Yes, there had been a dispute between shareholders.

MR ROBERTSON:   There had been a dispute between directors or shareholders, and, having taken control of the company, in that affidavit material he sets out various things that he had done to affect the question of amenity and various things that he had proposed to do and, of course, none of those matters, or the matters in Dr Wodak’s affidavit, appear in the judgment of the District Court judge.

Lastly, although it is said by my learned friends that the District Court judge did take into account the public interest, it is quite plain, in our respectful submission, that he did not.  All that he looked at were questions of amenity, that is, that he refers to, at best ‑ ‑ ‑

McHUGH J:   There are some curious references to Sabrina and people like that.

MR ROBERTSON:   Yes.

McHUGH J:   So, the effect on those but it just seemed to be in passing reference ‑ ‑ ‑

MR ROBERTSON:   But there are, perhaps, two things I should say, your Honour.  On page 20, at about lines 34 to 35, one of the references is:

if the interests of the clinic and its users were to be weighed, as against the interests of the members of the community –

and members of the community –

including visitors to the area –

are people going to the amenity issue.  They do not go to the public interest in the orderly supply of methadone so as to keep people off ‑ ‑ ‑

CALLINAN J:   It is your ground 8, I think, is it not, or ground 9 of your appeal?

MR ROBERTSON:   Yes, I think that is so, your Honour.  In relation to the futility point, last developed by my learned friend, could I remind your Honours of the decision of the New South Wales Court of Appeal which sets the test, in our respectful submission, in Said 39 NSWLR 47 at 57 in the judgment of the District Court, the judgment of your Honour the Chief Justice setting the test as there being no “realistic possibility” of any other finding. I think it is at the top of page 57 but the futility argument has to be inevitably the same result.

Your Honours, lastly in relation to the form of the orders, it would probably be sufficient if the orders sought at the beginning of paragraph 11 – I am looking now at page 102 – that is:

That the appeal be allowed, the orders of the Court of Appeal be set aside –

and, despite, perhaps, the width of some of the other prayers for relief, originally – certiorari, quash the orders of the District Court - the matter, in our respectful submission, would be remitted because if the Director‑General wanted to agree to the appeal being allowed by the District Court, that would be a matter for him but it could not just be left ‑ ‑ ‑

CALLINAN J:   He could do that and then start all over again if he wanted.

MR ROBERTSON:   Well, he could, but ‑ ‑ ‑

CALLINAN J:   What do you say about costs in the District Court?

MR ROBERTSON:   I was just going to come to that, your Honour.  If the District Court has made an error, as we would submit, then there are two alternatives, really.  One is that the second respondent pay the appellants’ costs or the matter could be left to the District Court.  If there were to be a further hearing it might abide the event of a further hearing.

CALLINAN J:   Do you say there has been costs thrown away anyway because of the approach of the District Court judge?

MR ROBERTSON:   Yes, quite so, that would be so.

CALLINAN J:   Which you will not recoup unless you get an order either there or here.

MR ROBERTSON:   Yes, so that, in that event the whole of the first hearing would have miscarried.  So we would submit that an order as in 7 on page 103 would be appropriate.  If your Honours please.

GLEESON CJ:   Thank you.  We will reserve our decision in this matter.  We will adjourn until 10.15 on Tuesday.

AT 12.36 PM THE MATTER WAS ADJOURNED